Real Estate: 160 Terms Defined

Real Estate Terms
Real Estate Terms

160 Real Estate Terms Defined

The following contains many real estate terms that have been defined for your information and further study in the subject of real estate.

Meaning of Real Estate Terms: A

Abstract– A written history of the title to a parcel of real estate as recorded in

a land registry office.

Acre– A measure of land equalling 160 perches, or four roods, or 43,560

square feet or 0.4047 hectares.

Adverse Possession– When an individual, not the owner, takes actual possession of the

the property, hostile to, and without the consent of the owner.

Real Estate Agency– The relationship between principal and agent arises from a contract, written or oral, wherein an agent is employed and authorized by a principal to represent him in business transactions with a third party.

Real Estate Agent- One who is authorized by a principal to represent him in business transactions with a third party.

Agreement to Purchase and Sale– Contract by which one party agrees to sell, and another decide to buy a property.

Agreement to Lease- A contract by which one party agrees to rent real estate to another party for a rental fee or other compensation.

Amortization- The gradual retirement of a debt utilizing partial payments of the principal at regular intervals.

Annex(e)- Something affixed or attached to the end of a document, also used as a verb. A supplementary building or extension to a building.

Appraisal- Not to be confused with a valuation, a review is an opinion of value from an agent, intended to guide the vendor to a fair price for the listing of his property. A salesperson will give an appraisal of cost based on his knowledge of the listing, the local area, recent sale prices and local real estate market conditions.

Appurtenance- Something outside the real property itself but belongs to the land and is joined to it. It adds to greater enjoyment of the

land, such as a right-of-way.

Assessed Value– A valuation placed upon property by the state as a basis for property taxation, accompanied by a unique Assessment No.

Assessor- An official who has the responsibility of determining an assessed value for taxation purposes.

Assumption of Mortgage: The taking of title to the property by a grantee, wherein he assumed liability for an existing mortgage against a property and became personally liable for the payment of such mortgage debt.

Authority– The legal power or right given by a principal and accepted by the agent to act on the principal’s behalf in business transactions with a third party.

Balance Due to Completion– The Amount of money the purchaser will be required to pay to the vendor to complete the purchase.

Bona Fide SubDivision- Parcel of land approved by Town & Country Planning Division for excision from a larger land parcel.

Breach of Contract– Failure to fulfill an obligation under a contract. Breach confers a right of action on the offended party.

Broker– See Real Estate Broker.

Building Codes– Regulations established by the local government providing for structural, material, and other requirements for the building.

Building Line- A line fixed a certain distance from the front and sides of a lot beyond which the building footprint may not extend. See Sef Back.

Building Permit– A document issued by the planning authority certifying the blueprints for construction and allowing work to commence.

Bundle of rights– A concept in which rights of possession, use, enjoyment, and disposition comprise the rights of ownership.

Bungalow– A single-story home.

Business– An undertaking for profit, including any interest in any such undertaking.

Meaning of Real Estate Terms: C

Cadastral: From the Latin ‘cadastre’, this is a public register of land in a country for fiscal purposes. It also refers to a large-scale survey plan or sheet.

Caveat Emptor– Latin phrase meaning “Let the buyer beware.” The buyer must examine the goods or property he is buying and therefore buys at his own risk.

Certificate of Title– A document showing beneficial ownership of land under the Real Property Act (R.P.A.) system of land registration. Formerly known as Real Property Ordinance (R.P.O.) title in Trinidad and Tobago.

Certificate of Assessment– A document applied for from the Board of Inland Revenue, which shows the registered owner of a parcel of land, its unique assessment number, the location and area of the land, and details of the boundaries and when the land tax was last paid.

Charge: The name given to a mortgage document when the title is registered under the Land Titles Act.

Chattel: Personal property that is tangible and movable.

Client Account: A bank account used to hold exclusively third-party funds pending a particular task’s performance or completion. (See

escrow’)

Closing Cloud on Title- see Date of Completion. Any encumbrance or claim that affects title to real property.

Commission– Remuneration paid to an agent on sale or lease of property, usually as a percentage of the full sale price.

Commitment: See Mortgage Commitment.

Common-Law– That part of the law formulated, developed and administered by the old ordinary law courts, based initially on common customs and mostly unwritten.

Compensation– Payment or reward for service performance and an indemnity for loss due to a breach of contract or injury.

Compound Interest– Interest on both the original principal and on interest accrued.

Commission Precedent- A condition in a contract that calls for the happening of some event or performance of some act before the agreement becomes binding on the parties.

Condition Subsequent- A condition referring to a future event upon which the contract becomes no longer binding on the parties.

Condominium (Condo) The fee ownership of a specified amount of space within the internal walls of the structure (the unit) in a multiple dwelling or other multi-occupancy building with tenancy-in-common ownership of portions used jointly with other owners, called common or shared elements.

Consideration Something of value, such as money, given by a promisee to a promisor to make the promise binding.

Contract – A contract is a legally binding agreement between two or more capable persons for consideration or value, to do or not to do some lawful and genuinely intended act.

Conveyance – The transfer of the title to land from one person to another. The written process by which legal title to a property is transferred.

Covenant– An agreement contained in a deed and creating an obligation. It may be positive, stipulating the performance of some act. It may

be harmful or restrictive, forbidding the commission of some action.

Creditor – A person to whom another person owes a debt termed the debtor. 

Meaning of Real Estate Terms: D

Damages– Compensation or indemnity for loss owing to a breach of contract or a tort (civil wrong) or injury.

Date of Completion- The date specified in the agreement to purchase and sell when the purchaser is to deliver the balance of money due and the vendor to provide a duly executed deed, and vacant possession of the property (unless otherwise agreed).

Deed- An instrument in writing, duly executed and delivered, that conveys title or an interest in real property.

Deed Restriction- An imposed restriction in a deed to limit the use of the land.

Default-Failure to perform a duty or to pay a sum of money (e.g., mortgage payment) when due.

Deposit- Payment of money or other valuable consideration as a pledge for fulfillment of the contract.

Depreciation-Amount by which property over some time has decreased in value, regardless of the cause.

Description -A legal identification of land or premises.

Developer- One who engages in the subdivision or improvement of land.

Dominant Tenement – The estate that derives from an easement over a servient tenement, as in a right-of-way.

Duplex- A residential building, divided horizontally or vertically into two apartments.

Dwelling- A house or other building or place in which somebody lives.

Meaning of Real Estate Terms: E

Easement- A right enjoyed by one landowner over the land of another.

Economics- The branch of knowledge concerned with the production, consumption, and transfer or distribution of wealth.

Encroachment- The unauthorized extension of the boundaries of the land.

Encumbrance– Outstanding claim or lien recorded against the property or any legal right to the property’s use by another person who is not the owner.

Equity –The differences between the property’s market value and the mortgages, liens, etc. against the property.

Equity of Redemption– The mortgagor’s right to redeem the property free of the loan upon the full repayment of the debt.

Escalator- Clause A provision in a lease or other agreement in which rent, installment payments, or alimony will increase from time to time in step with the cost of living index (or a similar gauge). Often there is a maximum amount or ‘cap’ on such increases.

Escheat-The reversion of property to the state in the event the owner thereof dies leaving no will and having no legally qualified heir to

whom the property may pass by lawful descent.

Escrow- Originally ‘escroll’ or deed in a third party’s hands, what will affect when a condition is fulfilled. Today, the term is

commonly used to describe a bank account used to hold third-party funds pending a specific task’s performance or completion. (See ‘client account’)

Estate- An interest in-land.

Ethics- Rules of behavior made and accepted by the business community to provide fair and moral practice.

Exclusive Listing — The giving of the sole right to offer the described property for sale according to the terms of the agency agreement.

Executor- The person nominated in a Will to administer the estate of a person who has died ‘testate.’ Unless there is a valid objection, the judge will appoint the person named in the will to be Executor. The Executor must ensure that the deceased person’s wishes are carried out as expressed in the will.

Express Authority– Authority delegated by the principal, which sets forth in the extract, plain, direct, and well-defined limits those acts and duties which the agent is empowered to perform on behalf of the principal, é.g. an exclusive listing.

 Expropriation- Taking private property by the state for public use, with fair compensation to the owner, through the exercise of the eminent domain’s right. Also called compulsory acquisition.

Extras- Chattels included in the sale.

 

Meaning of Real Estate Terms: F

Fee Simple – The highest estate or absolute right in real property. F.LU. Financial Intelligence Unit of the Ministry of Finance formed in 2010

and responsible for the administration of anti-money laundering legislation and compliance by listed or supervised businesses such as real estate agents, attorneys, accountants, and more.

Fixtures- Permanent improvements to the property that may not be removed at the expiration of the terms of lease or tenure.

Flashing- Sheet metal or other material used in roof and wall construction to shed water.

Footing- The widened section, usually concrete, at the base or bottom of a foundation wall, pier or column.

Foreclosure-Remedial court action taken by a mortgagee, when default occurs on a mortgage, to foreclose the equity of redemption of the |

mortgager.

Framing-The rough timberwork of a house, including the flooring, roofing, partitioning, ceiling, and beams.

Meaning of Real Estate Terms: G

Grant -A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in land.

Grantee –The party to whom an interest in real property is conveyed. |

Grantor The person who conveys an interest in real estate by deed. G.D.S. Ratio Gross Debt Service Ratio. Allowable ratio of gross monthly

payment to the gross monthly income of mortgage applicants, usually about 30%.

Gutter- An eaves trough used to convey rainwater from the roof to the downspout. Indenture A document or deed, usually in duplicate, expressing certain: objects between the parties.

Meaning of Real Estate Terms: I

Infant-A person who is a minor; under the age of eighteen and thus incapable of the independent judgment necessary to undertake a

legal obligation.

Injunction- A judicial process or order requiring the person to whom it is directed to do or refrain from doing a particular thing. :

Instrument A form of written legal document.

Interest Rate- The percentage which Is charged for the use of borrowed money.

Intestate A person who dies without a will, or leaves one which is defective in form, in which case his estate descends by operation of law to his heirs or next of kin.

Irrevocable -Incapable of being recalled or revoked; unchangeable, unalterable.

Joint Tenancy –Ownership of land by two or more persons each of whom has equal right to the entire property, and on the death of one, the survivor or survivors take the whole estate.

Joist- One of a series of horizontal wood members often 2 inches (5.1 centimeters) thick, used to support a floor, ceiling or roof.

Judgment-The decision of the court.

Landlord –The person from whom another holds tenancy.

Lease- Contract between landlord (lessor) and tenant (lessee) for the occupation or use of the landlord’s property by the tenant for a

specified time and for a specified consideration (rental).

Legal Description-  A written description by which property can be located precisely.

Lessee – Tenant under a lease.

Lessor- The person who grants use of property under lease to a tenant.

Lien – A right given to a creditor by law, whereby the debtor’s property may be sold, according to law, and the proceeds from such sale

applied to the payment of the debt.

Lintel- A horizontal structural member (beam) that supports the load over an opening, such as a door or window.

Lis Pendens- A Latin term (‘suit pending’) for a written notice that a lawsuit has been filed in the courts which affects title to real property or an interest in it. The lis pendens is filed with the clerk of the court, certified that it has been filed, and then recorded against the registered title deed in the Land Registry department so that it shows up if and when title is searched.

Listing- An oral or written agreement between a property owner and a broker authorizing the broker to offer the owner’s real property for sale or lease and on what terms.

Marketable title A title which a court of equity considers to be so free from defect that it will enforce its acceptance by a purchaser.

Market Value The RICS Valuation Professional Standards 2014 defines Market Value as “The estimated amount for which an asset or liability

should exchange on the valuation date between a willing buyer and a willing seller, in an arm’s length transaction, after proper marketing, and where the parties had each acted knowledgeably, prudently and without compulsion.”

Mechanic’s Lien-A claim filed in the land registry office by an individual or company for labor or material or both supplied for the improvement of the property.

Metes and Bounds- A system of land description whereby all boundary lines are set forth by use of terminal points and angles – mete referring to a limit or limiting mark, and bound referring to a boundary.

Metropolitan Area- That area which includes not only the entire chief urban core of a city (central city) but also the outlying and adjoining suburbs.

Mill- One-tenth of one cent, a measure used to indicate the property tax rate, .e. a tax rate of one mill per dollar is the same as 0.10 percent of the assessed value.

Minor –A person under the age of legal competence (18 years) who may not enter into an agreement to buy or sell property for example.

More or Less- Term often found in a property description intended to cover slight, unimportant or insubstantial inaccuracies of which both parties ar willing to assume the risk.

Mortgage- A conveyance of property to a creditor as security for payment of a debt with a right of redemption upon payment of the debt.

Mortgagee- The one to whom property is conveyed as security for the payment of a debt: the lender or creditor.

Mortgagor-  The one who makes the mortgage; the borrower or debtor.

Mortgage Commitment-  A formal indication by a lending institution that it will grant a mortgage loan on property, in a certain specified amount, and on certain specified terms.

Multiple Listing(M.L.S.) An arrangement or service among broker members of AREA whereby each broker presents his exclusive listings to the other members who may market the listing for sale or rent.

Notice D.O.R. Notice filed in court by the mortgagor under foreclosure proceedings that he desires an opportunity to redeem.

Offer and Acceptance -The basic requisite of any contract is a proposal by one party called the offeror, to another party called the offeree, to accept the basic terms of the agreement. If the offeree indicates his assent to the proposal, there is an acceptance and the contract will bind both parties to its terms.

Open Listing- A listing given to any number of brokers without liability to compensate any except the one who first acquires a buyer, ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer.

Option – A right given by a property owner to another person (for valuable consideration) to buy or rent within a timeframe, at an agreed price.

Meaning of Real Estate Terms: R

Personal Property- All property, except land and the improvements thereon.

Power of Sale- A clause generally inserted in mortgage deeds giving the mortgagee the right and power, on default in the payment of the

the debt secured, to advertise and sell the mortgaged property to satisfy the mortgage debt, without the necessity for judicial foreclosure proceedings.

Pre-payment Clause-A clause inserted in a mortgage, which gives the mortgagor the privilege of paying the mortgage debt in advance of the maturity date, on stipulated terms. 

Principal –The employer of an agent or broker, who gives the agent or broker the authority to do some act for him.

Principal amount- In mortgage law, this term refers to the debt itself, as distinguished from interest.

Probate- Process of proving a will is valid and then administering the estate of the deceased person according to the terms of their will.

Prospect- A potential buyer.

Quit Claim Deed- A general release of all claims or rights to a parcel of land.

Real Estate –“Real Estate” includes real property, leasehold, and business whether with or without premises, fixtures, stock-in-trade, goods or chattels in connection with the operation of the business.

Real Estate Broker- A person who represents a principal in a real estate transaction.

Real property -The combination of the tangible and intangible attributes of land and improvements. Value-wise, it is the sum of the value of the real estate, considered as land and structure and, for example, the tangible value arising by reason of a favorable lease. The real estate, plus the rights that go with it.

Realtor -Another term for a real estate agent or broker.

Rent-The compensation paid for the temporary use, and/or occupation of real estate.

Restricted –Area Bye-Law See Zoning Bye-Law.

Restrictive -Covenant A limitation placed upon the use of property, contained in the deed.

Right- The interesting one has in a piece of property.

Right of Survivorship- The distinguishing feature of joint tenancies which provides that, where land is held in undivided portions by co-owners, upon the death of any joint owner, his interest in the land will pass to the surviving co-owner(s), rather than to his estate.

Right-of-Way The right to pass over another’s land, more or less frequently according to the nature of the easement.

Riparian Rights- The rights of the owners of lands on the banks of watercourses, to take advantage of the water on, under, or adjacent to his land, including the right to acquire from it accretions, wharf slips and fish.

Running with the Land- A covenant is said to run with the land when it extends beyond the original parties to the agreement and binds all subsequent takers to either liability to perform it or the right to take advantage of it.

Sales Associate- An employee of a broker authorized to trade in real estate.

Sealed and Delivered- A term indicating that a conveyor has received adequate consideration as evidenced by his voluntary delivery. The word ‘sealed’ adds more strength since under old conveyancing law an official seal was used as a Substitute for consideration.

Servient Tenement- Land over which an easement exists in favor of the dominant tenement.

Set Back- The distance from the curb or other established line within which no buildings may be erected. See Building Line. Shingle A relatively thin, small unit of roofing, partially laid in overlapping layers as a roof covering or cladding on the sides of buildings.

Special Assessment An assessment which is not customarily levied and which is made against only those specific parcels of property directly benefiting therefrom.

Specific performance- A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract, available only where the remedy of damages cannot afford adequate relief to the plaintiff.

Stakeholder- A person (third party) holding money or property in which he has no interest, right or title, pending the outcome of an event. The stakeholder has a duty to deliver to the owner(s) the money, document or asset held, once the right to legal possession is established by judgment or agreement.

Statement of Adjustments- A statement prepared by the solicitor for the vendor setting out, in | balance sheet form, the credits to the vendor (e.g. purchase price, pre-paid taxes, pre-paid insurance) and the credits to the purchaser (e.g. deposits, arrears in taxes prior to the date of closing) and the balance due on closing, so that both purchaser and vendor will have a record at the date of closing of the financial breakdown of the transaction.

Statute – A law established by an act of the legislature.

Statute of Frauds- A law which provides that certain contracts must be in writing in order to be enforceable at law. It includes real estate contracts.

Stucco Any cement-like material used as an exterior covering for walls and the like, put on wet and drying hard and durable.

Studding- One of the series of wood structural members (usually 2″ nominal thickness) used as supporting elements in walls and partitions

(Plural: studs or studdings).

Sub-Agent- An agent authorized by the listing agent to assist in transacting the affairs of the principal (with the express or implied consent of the principal).

Survey Plan- A drawing, with accurate mathematical measurement, of land and buildings thereon, made with the aid of instruments.

Syndicate- An association of individuals formed to own, operating, and managing large parcels of real property for the mutual benefit of all, and organized as a corporation, limited partnership, or joint venture.

Tenancy-in-Common-  Ownership of land by two or more persons, unlike joint tenancy, in that the interest of the deceased does not pass to the survivor, but remains as an asset of the deceased’s estate.

Tenant-  One who occupies land or tenement under a landlord. The term in a mortgage, ‘term’ is the actual length of time for which the

money is loaned, at that particular rate of interest.

Term of Mortgage-  A non-amortizing mortgage under which the principal is paid in its entirety upon the maturity date.

Time is of the Essence- A clause in a standard sale/purchase agreement that requires punctual performance of a contract on the closing date.

Title – The means or evidence by which the owner of land has lawful ownership thereof, the highest form of which is ‘in fee simple’.

Townhouse- A townhouse is a residence built to share structural elements with other townhouses. Ownership of a townhouse entails control over the parts of the structure unique to the individual unit and the land underneath it.

Transfer- To convey from one person to another, as in the transfer of title inland. Under contract In the process of being sold or rented and therefore of the market, but the transaction has not yet been completed.

Trust – Account see ‘client account’ and ‘escrow.

Valuation- The estimated market value or price of the property established by a chartered valuator based on the property’s quality, condition, and desirability, or on the cost of its replacement at today’s prices.

Vendor-A seller of real property.

Void Of– no legal effect. A nullity.

Voidable-  Where one party to a contract is entitled to rescind the contract at his option.

WASA Clearance – A certificate of clearance from the Water and Sewerage Authority specifying the owner and location of a property, the assessment: number, and confirming there is no outstanding debt against the customer account in question.

Zoning Bye-Law- A Bye-Law passed by planning authorities prohibiting the use of land for any purpose other than as set out in the Bye-Law.

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