Real Estate Terms

Bundle of Rights

Right & Interest of having title such as possession, control, exclusion, sell, and enjoyment.

Real Property

-Goes with the property
-Generally immovable

Personal Property

-Goes with the person
-Generally movable

Chattel Real

Cows Mooove-Personal property

Fixture

-Was personal and is now real
-M.A.R.I.A. (Method• Adaptability• Relationship• Intention• Agreement.)

Trade Fixure

Personal, because it goes with a business

Riparian Rights

River-moving body of water.

Littoral Rights

Lake-body of water standing still.

Accretion

additional of land.

Avulsion

Tearing away of land.

Reliction

Gradual recession of water leaving land permanently uncovered.

Appurtenances

Runs with the land.

Freehold Estate

No fixed duration.

Fee Simple Estate

-Highest possible ownership
-Also known as a fee simple absolute

Fee Simple Defeasible

Possesses the property as a fee simple subject to a condition.

Life Estate

Ownership of land for the duration of a person's life.

Less than Freehold Estate

Limited period of time.

Estate for Years

-Defined period of time.
-For example ( 6 months or July 3rd - September 8th)

Periodic Tenancy

Period to period such as month to month.

Estate at Will

End at any time.

Estate at Sufferance

Landlord is suffering as tenant is in possession passed agreed upon time.

Lease

-possession but not ownership from lessor to lessee.

Percentage Lease

Based on a percentage of gross receipts.

Net Lease

Tenant pays taxes, insurance and maintenance.

Gross Lease

Tenant pays fixed amount.

Sandwich Lease

A lease in which a party rents property from the property owner and then subsequently leases it out to another tenant. In this type of lease, the primary party is both a lessee and a lessor, meaning that the party both collects rent and pays rent. Not all property owners allow this sort of arrangement.

Tenant Improvement Allowance

Allowance to customize generally for business purposes.

Abandonment

The Voluntary Surrender of property, owned or leased, without naming a successor as owner or tenant

Subleases

Grants possession but not responsibility

Assignment

Grants possession and responsiblity.

Surrender

Agreement to return the property to the owner (landlord) before the lease ends.

Constructive Eviction

Landlord fails to do something that he/she has a legal duty to provide.

Deeds

Evidence of transfer.

A Grant Deed

Transfer of real property from one person or entity to another person or entity. Each party transferring an interest in the property, or "grantor" is required to sign it.

A Quitclaim Deed

Deed releasing a person's interest with no warranties. Typically in non-sale situations.

Warranty Deed

Deed that guarantees a clear title to the buyer of real property.

Special Warranty Deed

Seller only warrants or guarantees the title against defects that may have arisen during the period of ownership of the property.

General Warranty Deed

Seller warrants or guarantees the title against defects that may have arisen during the entire life of the property.

Title

Ownership

Chain of Title

History of Ownership which shows conveyances and encumbrances.

Abstract of Title

is the condensed history (or a historical summary) of all the recorded instruments and proceedings that affect the title of the property

*It consists of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.

Cloud on Title

Defect in title (ex. single women married)

A quiet Title Action

Lawsuit in order to establish a party's title.

Alienation of Title

Capacity of property or a property right to be sold or transferred.

Title Insurance

Ensure clear and marketable title.

Standard Policy of Title Insurance

Standard coverage includes:
-Defects that are found in public records
-Forged documents
-Incompetent grantors
-Incorrect marital statements
-Improper delivery of deeds.

ALTA (American• Land• Title• Association) Policy of Title Insurance

Protects real property owners and mortgage lenders against losses from defects in titles.

Extended Policy of Title Insurance

Includes everything in a standard policy plus defects found in a property inspection. Which would include unrecorded rights of parties in possession, examination of survey. Unrecorded liens, not known by a policy holder.

Severalty

Sole ownership

Concurrent Estate

Ownership with others

Joint Tenancy

Right of survivorship ....A form of ownership in which tenants own a property equally. (*Remember TTIP (Time• Title• Interest• Possession). To create this type of Tenanc there has to be unity of TTIP.

Tenancy in Common

Unity of Possession- or an undivided ownership in real estate by two or more persons. The interest need not be equal, and, in the event of the death of one of the owners, no right of survivorship in the owners exist.

Survivorship

Gaining an interest in property by outliving (surviving) another who had the interest.

Encumbrances

Limitation or a claim, or liability against real estate. This can include liens, deed restrictions, easements encroachments or licenses.

Easement

Right to cross- or the legal right to use another's land for a specific limited purpose. In other words, when someone is granted \___________he/she is granted the legal right to use the property, but the legal title to the land itself remains with the owner of the land (most commonly \__________are granted to utility companies to run power lines and cable lines..you may also grant an \_________to your neighbor if your property is in the way of his access to a road.

Dominant Tenement

Gaining the benefit of the easement. (Ex. An easement exsists of parcel A for access to parcel B. Parcel B is the \_______________ tenement; parcel A is the servient tenement.

Survient Tenement

Suffers the burden of an easement.

Easement by Prescription

Granted after used the property in a hostile, continuous and open manner for a statutorily prescribed number of years ( In other words the user gets an \_______________by openly, adversely, continuously, and exclusively using the land for a number if years specified by state statue.

Appurtenant Easement

Right to use adjoining property that transfers with the land. (a type of easement that stays with the property even if the owners change.)

Easement in Gross

No dominent tenament ( an \______________is one that is tied to the current owner and to the beneficiary. (*It is a type of permission that is considered void if the underlying propery is sold, transferred ir inherited by a party outside the easement in gross agreement).

Government Powers

(Remember P•E•T•E)- Police Power, Escheat, Taxation, Eminent Domain

Police Powers

The states ability to regulate for the betterment of the health, safety, morals and general welfare of community.

Zoning

Police power that divides and into areas for designated uses.

Variance

Exception to the roll ( is a request to deviate from current zoning requirements. If granted, it permits the owner to use his land in a way that is ordinarily not permitted by the zoning ordinance.)

Down Zoning

Commercial to Residential ( or the process by which an area of land is rezoned to a usage that is less dense and less developed than its previous usage. This is typically done to limit sprawl and overgrowth of cities, and to help concentrate areas of development into smaller sections to prevent over zoning a community.)

Grandfather Clause

Exempt from new rule (or a provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases. Those exempt from the new rule are said to have grandfather rights or acquired rights, or to have been grandfathered in).

Nonconforming use

A type of zoning variance where a parcel of land may be given an exception from current zoning ordinances due to improvement made by a prior owner or before the current zoning ordinances made the desired use non-conforming under local law.

Building Codes

Protect public health, safety and general welfare. (or A comprehensive set of laws which control the construction of buildings, including design, materials used, construction, use, repair, remodeling, and other similar factors.)

Escheat

Reversion of property to the state when the owner dies without heirs.

Intestate

Has no will (Without leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by direction of the deceased.)

Testate

Has a will (Having written a last will and testament).

Probate

Executor for the estate of a deceased person sells property in order to divide the property among beneficiaries.

Holographic Will

A will written and executed entirely in the handwriting of the testator.

Taxation

Financial Charge by a state to fund various public expenditures.

Marginal Tax Rate

Percentage taken from your next dollar of taxable income.

1031 Tax Deferred Exchange

-Defer taxes.
-Identify 45 days, acquire within 180 days of closing previous property.

IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange.

Boot

Fair market value of other property received in an exchange. is cash or other property added to an exchange to make the value of the traded goods equal. Cash boot is allowed to be part of a nonmonetary exchange under U.S. Generally Accepted Accounting Principles.

Ad Valorem

Latin for according to value

Eminent Domain

Government ability to take private property for public use.

Condemnation

Process of compensating a person when property is taken by eminent domain.

Inverse Condemnation

Sueing the government for just compensation when property is taken.

Encroachment

When a structure is built in part on a neighbor's property.

Liens

Money owned

General Liens

Lien against all personal property.

Specific Liens

Lien that is on a single property.

Voluntary Lien

lien that exists because an action taken by a debtor ( or A lien placed against real property by the voluntary act of the owner. Most commonly, a mortgage or deed of trust.)

Involuntary Lien

Liens that were imposed on an individual i.e...taxes and judgement liens. (A lien, such as a tax lien, judgment lien, etc., which attaches to property without the consent of the owner, rather than mortgage lien, to which the owner agrees.

Mechanics Lien

A lien on behalf of those who have supplied labor or materials that improve the property (A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.

Judgement Lien

Lien placed by the court (A lien against the property of a judgment debtor. An involuntary lien.)

Lis Pendis

A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.

Injunctions

Court order that compels a party to do or refrain from specific acts. (An order by a court preventing one from acting or restraining one from continuing some action.)

Constructive Notice

Signifies that a person should have known as a reasonable person should have. (Notice given by publishing in a newspaper, recording, or other method which legally notifies the parties involved, but may not actually notify them.)

Actual Notice

Personally given to somebody (Notice actually and expressly, or by implication, given and received.)

Escrow

Neutral third party.

is a contractual arrangement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties, or an account established by a broker for holding funds on behalf of the broker's principal or some other person until the consummation or termination of a transaction;[1] or, a trust account held in the borrower's name to pay obligations such as property taxes and insurance premiums.

Debit

Money owed (.An accounting term used to designate a payment or owing, as opposed to a credit which is a receiving or being owed.

Credit

Money Received (An accounting term designating money received or receivable, as opposed to debit which is money payed or payable.)

Short Rate

A higher periodic rate for a shorter term than what was originally contracted. (The relatively higher insurance premium rate charged for coverage when one cancels a policy earlier than originally agreed upon.)

Impounds

Money se aside by a lender to pay for reoccurring costs that take priority over the loan such as taxes and insurance.

RESPA
(REAL ESTATE• SETTLEMENT• PROCEDURES• ACT)

Eliminating kickbacks and referral fees which add unnecessary costs to settlement services.

A federal statute effective June 20, 1975, requiring disclosure of certain costs in the sale of residential (one to four family) improved property which is to be financed by a federally insured lender.

TILA
TRUTH•IN•LENDING•ACT

-Inform use of consumer credit
-Require disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

Federal legislation designed to protect borrowers by requiring lenders to furnish information regarding the cost of the loan. The law requires interest to be expressed as the annual percentage rate (APR) to the nearest 1/8 of one percent. The APR must include charges such as loan fees, discount points, servicing fees, etc., as well as interest. The law applies to 1 to 4 family residential property only. Also applies to other consumer loans.