Key Real Estate Terms

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1. 1031 exchange: “under Internal Revenue Code section 1031, a tax-deferred exchange of “like kind” properties.”

2. 1099-S Reporting: “a report to be submitted on IRS Form 1099-S by escrow agents to report the sale of real estate, giving the seller’s name, Social Security number, and the gross sale proceeds.”

3. abandonment: failure to occupy or use property that may result in the extinguishment of a right or interest in the property.

4. abatement: a legal action to remove a nuisance.

5. abendum clause: “a clause in a deed, usually following the granting clause and beginning with the words “to have and to hold,” that describes the type of estate being transferred.”

6. abstract of judgment: judgment that can be recorded in which the debtor owns property and to create a judgment lien against such properties.

7. abstract of title: summary of all grants, liens, wills, judicial proceedings, and other records that affect the property’s title. 8. abstractor: the person who prepares an abstract of title.

9. acceleration clause: “a clause in either a promissory note, a security instrument, or both that states that upon default the lender has the option of declaring the entire balance of outstanding principal and interest due and payable immediately.”

10. acceptance: consent (by an offeree) to an offer made (by an offeror) to enter into and be bound by a contract.

11. accession: “the acquisition of additional property by the natural processes of accretion, reliction, or avulsion, or by the human processes of the addition of fixtures or improvements made in error.”

12. accretion: a natural process by which the owner of riparian or littoral property acquires additional land by the gradual accumulation of soil through the action of water.

13. accrued depreciation: depreciation that has happened prior to the date of valuation.

14. acknowledgment: “a written declaration signed by a person before a duly authorized officer, usually a notary public, acknowledging that the signing is voluntary.”

15. acknowledgment of satisfaction or satisfaction of mortgage: “a written declaration signed by a person before a duly authorized officer, usually a notary public, acknowledging that a lien has been paid off in full and that the signing is voluntary.”

16. adjustable-rate mortgage (ARM): a mortgage under which interest rates applicable to the loan vary over the term of the loan.

17. administrator: a person appointed by a probate court to conduct the affairs and distribute the assets of a decedent’s estate when there was no executor named in the will or there was no will.

18. ad valorem: a Latin phrase meaning “according to value.” The term is usually used regarding property taxation.

19. advance fee: a fee charged in advance of services rendered.

20. adverse possession: the process by which unauthorized possession and use of another’s property can ripen into ownership of that other’s property without compensation.

21. agency: “an agency in which the agent is employed by the principal, either by express agreement, ratification, or implication.”

22. agent: a person who represents another.

23. alienation clause: a due-on-sale clause

24. alluvium: addition to land acquired by the gradual accumulation of soil through the action of water.

25. Americans with Disabilities Act: “a federal act that prohibits discrimination against persons with disabilities, where “disability” is defined as “a physical or mental impairment that substantially limits a major life activity.””

26. amortization: “in general, the process of decreasing or recovering an amount over a period of time; as applied to real estate loans, the process of reducing the loan principal over the life of the loan.”

27. annual percentage rate (APR): “expresses the effective annual rate of the cost of borrowing, which includes all finance charges, such as interest, prepaid finance charges, prepaid interest, and service fees.”

28. appraisal: an estimate of the value of property resulting from an analysis and evaluation made by an appraiser of facts and data regarding the property.

29. appreciation: an increase in value due to any cause.

30. appurtenance: “an object, right or interest that is incidental to the land and goes with or pertains to the land.”

31. asbestos: “a naturally occurring mineral composite that once was used extensively as insulation in residential and commercial buildings, in brake pads, and in fire-retardant products, such as furniture. As asbestos ages, it breaks down to small fibers that, if inhaled in sufficient quantity over sufficient time, can cause a variety of ailments, including a type of cancer known as mesothelioma.”

32. assignment: the transfer of the rights and obligations of one party (the assignor) to a contract to another party (the assignee); a transfer of a tenant’s entire interest in the tenant’s leased premises.

33. assumption: “an adoption of an obligation that primarily rests upon another person, such as when a purchaser agrees to be primarily liable on a loan taken out by the seller.”

34. attachment lien: “a prejudgment lien on property, obtained to ensure the availability of funds to pay a judgment if the plaintiff prevails.”

35. attorney in fact: a holder of a power of attorney.

36. average price per square foot: the average price per square foot for a given set of properties is arrived at by adding the per- square-foot cost of each property in the set by the number of properties in the set.

37. avulsion: “a process that occurs when a river or stream suddenly carries away a part of a bank and deposits it downstream, either on the same or opposite bank.”

38. balloon payment: “significantly greater” generally being considered as being more than twice the lowest installment payment paid over the loan term.

39. beam: “a horizontal member of a building attached to framing, rafters, etc., that transversely supports a load.”

40. bearing wall: “a wall that supports structures (such as the roof or upper floors) above it. In condominiums, non-bearing walls are owned by the individual condominium owners, whereas bearing walls usually are property owned in common.

41. bilateral contract: a contract in which a promise given by one party is exchanged for a promise given by the other party.

42. bill of sale: a written document given by a seller to a purchaser of personal property.

43. blanket mortgage: a mortgage used to finance two or more parcels of real estate.

44. blight: “as used in real estate, the decline of a property or neighborhood as a result of adverse land use, destructive economic forces, failure to maintain the quality of older structures, failure to maintain foreclosed homes, etc.”

45. blind ad: an advertisement that does not disclose the identity of the agent submitting the advertisement for publication.

46. blockbusting: “the illegal practice of representing that prices will decline, or crime increase, or other negative effects will occur because of the entrance of minorities into particular areas.”

47. bona fide: in good faith; authentic; sincere; without intent to deceive.

48. boot: cash or other not like-kind property received in an ex c hange.

49. bridge loan: a short-term loan (often referred to as a swing loan) that is used by a borrower until permanent financing becomes available.

50. broker: “a person who, for a compensation or an expectation of compensation, represents another in the transfer of an interest in real property. ”

51. brownfields: “as defined by the EPA, “real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, polluted, or contaminant.””

52. buffer zone: “in zoning, a strip of land to separate, or to ease the transition from, one use to another, such as a park separating a residential zone from a commercial zone, or a commercial or industrial zone separating residential zones from busy streets or highways.”

53. bundle of rights: rights the law attributes to ownership of property.

54. buyer’s agent: a real estate broker appointed by a buyer to find property for the buyer.

55. capital gain: the amount by which the net sale proceeds from the sale of a capital asset exceeds the adjusted cost value of the asset.

56. capitalization rate: The rate of return for an investor. “the annual net income of a property divided by the initial investment in, or value of, the property; the rate that an appraiser estimates is the yield rate expected by investors from comparable properties in current market conditions.”

57. CC&Rs: often used to refer to restrictions recorded by a developer on an entire subdivision.

58. certificate of occupancy: “a written document issued by a local governmental agency, stating that a structure intended for occupancy has been completed, inspected, and found to be habitable.”

59. chain of title: a complete chronological history of all of the documents affecting title to the property.

60. Civil Rights Act of 1866: “a federal law enacted during Reconstruction that stated that people of any race may enjoy the right to enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws.”

61. Civil Rights Act of 1968: “a federal law (often referred to as the Fair Housing Act) that prohibited discrimination in housing based on race, creed, or national origin.

62. client: an agent’s principal

63. closing: “in reference to an escrow, a process leading up to, and concluding with, a buyer’s receiving the deed to the property and the seller’s receiving the purchase money.”

64. cloud on title: “any document, claim, lien, or other encumbrance that may impair the title to real property or cast doubt on the validity of the title.”

65. coastal zone: a region where significant interaction of land and sea processes occurs.

66. Coastal Zone Management Act (CZMA): “a federal act intended to protect coastal zones, including the fish and wildlife that inhabit those zones, of the Atlantic, Pacific, and Arctic oceans, the Gulf of Mexico, Long Island Sound, and the Great Lakes from harmful effects due to residential, commercial, and industrial development.”

67. commingling: “regarding trust fund accounts, the act of improperly segregating the funds belonging to the agent from the funds received and held on behalf of another; the mixing of separate and community property.”

68. commission: “an agent’s compensation for performance of his or her duties as an agent; in real estate, it is usually a percent of the selling price of the property or, in the case of leases, of rentals.”

69. community property: “property owned jointly by a married couple or by registered domestic partners, as distinguished from separate property. As a general rule, property acquired by a spouse or registered domestic partner through his/her skills or personal efforts is community property.”

70. comparable property: “a property similar to the subject property being appraised that recently sold at arm’s length, where neither the buyer nor the seller was acting under significant financial pressure.”

71. comparative market analysis (CMA): “a comparison analysis made by real estate brokers using recent sales, and current listings, of similar nearby homes to determine the list price for a subject property.”

72. condemnation proceeding: a judicial or administrative proceeding to exercise power of eminent domain.

73. conditional use: “a zoning exception for special uses such as churches, schools, and hospitals that wish to locate to areas zoned exclusively for residential use.”

74. condominium: “a residential unit owned in severalty, the boundaries of which are usually walls, floors, and ceilings, and an undivided interest in portions of the real property, such as halls, elevators, and recreational facilities.”

75. conflict of interest: “a situation in which an individual or organization is involved in several potentially competing interests, creating a risk that one interest might unduly influence another interest.”

76. consideration: “anything of value given or promised, such as money, property, services, or a forbearance, to induce another to enter into a contract.”

77. construction mortgage: a security instrument used to secure a short-term loan to finance improvements to a property.

78. constructive eviction: a breach by the landlord of the covenant of habitability or quiet enjoyment.

79. constructive notice: “(1) notice provided by public records; (2) notice of information provided by law to a person who, by exercising reasonable diligence, could have discovered the information.”

80. contingency: “an event that may, but is not certain to, happen, the occurrence upon which the happening of another event is dependent.”

81. contract: a contract is an agreement to do or to forbear from doing a certain thing.

conventional loan: a mortgage loan that is not FHA insured or VA guaranteed.

82. cooperating broker: a broker who attempts to find a buyer for a property listed by another broker.

83. cost approach: an appraisal approach that obtains the market value of the subject property by adding the value of the land (unimproved) of the subject property to the depreciated value of the cost (if currently purchased new) of the improvements on subject property.

84. counteroffer: a new offer by an offeree that acts as a rejection of an offer by an offeror.

85. coupled with an interest: “an aspect of an agency that refers to the agent’s having a financial interest in the subject of the agency, which has the legal effect of making the appointment of the agent irrevocable.”

86. covenant: “a contractual promise to do or not do certain acts, such as on a property, the remedy for breach thereof being either monetary damages or injunctive relief, not forfeiture.”

87. crawlspace: the space between the ground and the first floor that permits access beneath the building.

88. debits: “in reference to an escrow account, items payable by a party. This definition of a debit does not conform to its use in double-entry bookkeeping or accounting.”

89. deed: a document that when signed by the grantor and legally delivered to the grantee conveys title to real property.

90. deed in lieu of foreclosure: a method of avoiding foreclosure by conveying to a lender title to a property lieu of the lender’s foreclosing on the property.

91. deferred maintenance: any type of depreciation that has not been corrected by diligent maintenance.

92. deficiency judgment: a judgment given to a lender in an amount equal to the balance of the loan minus the net proceeds the lender receives after a judicial foreclosure.

93. demand: the level of desire for a product.

94. deposit receipt: a written document indicating that a good-faithdeposit has been received as part of an offer to purchase realproperty; also called a purchase and sale agreement.

95. depreciation: the loss in value due to any cause.

96. depreciation deduction: an annual tax allowance for thedepreciation of property.

97. designated agent: “an agent authorized by a real estate broker to represent a specific principal to the exclusion of all other agents in the brokerage. This designated agent owes fiduciary responsibilities to the specified principal, but other agents in the brokerage may represent other parties to the same transaction that the specified principal is a party to without creating a dual agency situation. Where this practice of designated agency is allowed, disclosure of the designated agency relationship is required.”

98. devise: (1) (noun) a gift of real property by will; (2) (verb) to transfer real property by a will.

99. devisee: a recipient of real property through a will.

100. discounted rate: a rate (also called a teaser rate) on an adjustable-rate mortgage that is less than the fully indexed rate.

103. discount points: “a form of prepaid interest on a mortgage, or a fee paid to a lender to cover cost the making of a loan. The fee for one discount point is equal to 1% of the loan amount.”

104. documentary transfer tax: a tax imposed by counties and cities on the transfer of real property within their jurisdictions. 105. dominant tenement: land that is benefited by an easement appurtenant.

106. down payment: the amount of money that a lender requires a purchaser to pay toward the purchase price.
107. drywall: prefabricated sheets or panels nailed to studs to form an interior wall or partition.

108. dual agent: a real estate broker who represents both the seller and the buyer in a real estate transaction.

109. due diligence: the exercise of an honest and reasonable degree of care in performing one’s duties or obligations. A real estate agent’s due diligence involves investigating the property to ensure that the property is as represented by the seller and to disclose accurate and complete information regarding the property.

110. due-on-sale clause: “a clause in the promissory note, the security instrument, or both that states that the lender has the right to accelerate the loan if the secured property is sold or some other interest in the property is transferred.”

111. duress: unlawful force or confinement used to compel a person to enter into a contract against his or her will.

112. earnest money deposit: a deposit that accompanies an offer by a buyer and is generally held in the broker’s trust account.

113. easement: “a non-possessory right to use a portion of another property owner’s land for a specific purpose, as for a right-of- way, without paying rent or being considered a trespasser.”

114. easement appurtenant: “an easement that benefits, and is appurtenant to, another’s land.”

115. easement by necessity: “easement by necessity —arises as a creation of a court of law in certain cases were justice so demands, as in the case where a buyer of a parcel of land discovers that the land he or she just purchased has no access except over the land of someone other than from the person from whom the parcel was purchased.”

116. easement in gross: an easement that benefits a legal person rather than other land.

117. eaves: the overhang of a roof that projects over an exterior wall of a house.

118. economic life: the period of time that the property is useful or profitable to the average owner or investor.

119. emancipated minor: “a minor who, because of marriage, military service, or court order, is allowed to contract for the sale or purchase of real property.”

120. emblements: “growing crops, such as grapes, avocados, and apples, that are produced seasonally through a tenant farmer’s labor and industry.”

121. eminent domain: “right of the state to take, through due process proceedings (often referred to as condemnation proceedings), private property for public use upon payment of just compensation.”

122. encroachment: “a thing affixed under, on, or above the land of another without permission.”

123. encumber: To place a lien or other encumbrance on property. 124. encumbrance: “A right or interest held by someone other than

the owner the property that affects or limits the ownership of the property, such as liens, easements, licenses, and encroachments.”

125. Environmental Impact Statement (EIS): ” a written document that federal agencies must prepare for any development project that a federal agency could prohibit or regulate, and any development project for which any portion is federally financed. An EIS can include comments on the expected impact of a proposed development on such things as air quality, noise, population density, energy consumption, water use, wildlife, public health and safety, and vegetation.”

126. Equal Credit Opportunity Act (ECOA): “a federal law that prohibits a lender from discriminating against any applicant for credit on the basis of race, color, religion, national origin, sex, marital status, or age (unless a minor), or on the grounds that some of the applicant’s income derives from a public assistance program.”

127. equitable title: the right to possess or enjoy a property while the property is being paid for. An insurable interest for the buyer.

128. escalator clause: “a provision in a lease that provides for periodic increases in rent in an amount based on some objective criteria not in control of either the tenant or the landlord, such as the Consumer Price Index.”

129. escheat: “a process whereby property passes to the state if the owner of the property dies intestate without heirs, or if the property becomes abandoned.”

130. escrow: a neutral depository in which something of value is held by an impartial third party (called the escrow agent) until all conditions specified in the escrow instructions have been fully performed.

131. escrow agent: an impartial agent who holds possession of written instruments and deposits until all of the conditions of escrow have been fully performed.

132. escrow instructions: “the written instructions signed by all of the principals to the escrow (buyers, sellers, and lenders) that specify all of the conditions that must be met before the escrow agent may release whatever was deposited into escrow to the rightful parties.”

133. estate: “the degree, quantity, nature, duration, or extent of interest one has in real property.”

134. estate at sufferance: “a leasehold that arises when a lessee who legally obtained possession of a property remains on the property after the termination of the lease without the owner’s consent. Such a holdover tenant can be evicted like a trespasser, but if the owner accepts rent, the estate automatically becomes a periodic tenancy.”

135. estate at will: “an estate (or tenancy) in which a person occupies a property with the permission of the owner; however, the tenancy has no specified duration, and, in most states, may be terminated at any time by either the tenant or the owner of the property upon giving proper notice. ”

136. estate for years: “a leasehold that continues for a definite fixed period of time, measured in days, months, or years.”

137. estate from period to period: “a leasehold that continues from period to period, whether by days, months, or years, until terminated by proper notice.”

138. estoppel: “a legal principle that bars one from alleging or denying a fact because of one’s own previous actions or words to the contrary. Ostensible agency can be created by estoppel when a principal and an unauthorized agent act in a manner toward a third-party that leads the third party to rely on the actions of the unauthorized agent, believing that the actions are authorized by the principal.”

139. exclusive agency listing: a listing agreement that gives a broker the right to sell property and receive compensation (usually a commission) if the property is sold by anyone other than the owner of the property during the term of the listing.

140. exclusive right to sell listing: “a listing agreement that gives a broker the exclusive right to sell property and receive compensation (usually a commission) if the property is sold by anyone, including the owner of the property, during the term of the listing.”

141. executed contract: a contract that has been fully performed; may also refer to a contract that has been signed by all of the parties to the contract.

142. executor: a person named in a will to carry out the directions contained in the will.

143. executory contract: a contract that has not yet been fully performed by one or both parties.

144. express contract: “a contract stated in words, written or oral.” 145. external obsolescence: “depreciation that results from things

such as (1) changes in zoning laws or other government restrictions, (2) proximity to undesirable influences such as traffic, airport flight patterns, or power lines, and (3) general neighborhood deterioration, as might result from increased crime.”

146. false promise: a promise made without any intention of performing it.

147. Fannie Mae: a U.S. government conservatorship originally created as the Federal National Mortgage Association 8 to purchase mortgages from primary lenders.

148. fee simple absolute estate: the greatest estate that the law permits in land. The owner of a fee simple absolute estate owns all present and future interests in the property.

149. fee simple defeasible estate: “a fee estate that is qualified by some condition that, if violated, may “defeat” the estate and lead to its loss and reversion to the grantor.”

150. FHA: “the Federal Housing Administration is a federal agency that was created by the National Housing Act of 1934 in order to make housing more affordable by increasing home construction, reducing unemployment, and making home mortgages more available and affordable.”

151. FICO score: a credit score created by the Fair Isaac Corporation that ranges from 300 to 850 and is used by lenders to help evaluate the creditworthiness of a potential borrower.

152. fiduciary relationship: “a relationship in which one owes a duty of utmost care, integrity, honesty, and loyalty to another.”

153. first mortgage: a security instrument that holds first-priority claim against certain property identified in the instrument.

154. fixture: “an object, originally personal property, that is attached to the land in such a manner as to be considered real property.”

155. flashing: sheet metal or other material used in roof and wall construction to prevent water from entering.

156. flat fee listing: a listing in which the broker’s compensation is a set amount rather than a percentage of the sale price.

157. floodplain: “an area of low, flat, periodically flooded land near streams or rivers.”

158. flue: a channel in a chimney through which flame and smoke passes upward to the outer air.

159. footing: “concrete poured on solid ground that provides support for the foundation, chimney, or support columns. Footing should be placed below the frost line to prevent movement.”

160. foreclosure: “a legal process by which a lender, in an attempt to recover the balance of a loan from a borrower who has defaulted on the loan, forces the sale of the collateral that secured the loan.”

161. four unities in Joint tenancy: “refers to the common law rule that a joint tenancy requires unity of possession, time, interest, and title.”

162. Freddie Mac: a U.S. government conservatorship originally created as the Federal Home Loan Mortgage Corporation to purchase mortgages from primary lenders in the private mortgage money market.

163. freehold estate: an estate in land whereby the holder of the estate owns rights in the property for an indefinite duration.

164. fully amortized loan: a loan whereby the installment payments are sufficient to pay off the entire loan by the end of the loan term.

165. functional obsolescence: “depreciation that results (1) from deficiencies arising from poor architectural design, out-dated style or equipment, and changes in utility demand, such as for larger houses with more garage space, or (2) from over- improvements, where the cost of the improvements was more than the addition to market value.”

166. general agent: an agent who is authorized by a principal to act for more than a particular act or transaction. General agents are usually an integral part of an ongoing business enterprise. A property manager.

167. general lien: a lien that attaches to all of a person’s nonexempt property.

168. general partnership: a partnership in which each partner has the equal right to manage the partnership and has personal liability for all of the partnership debts.

169. gift deed: “a deed used to convey title when no tangible consideration (other than “affection”) is given. The gift deed is valid unless it was used to defraud creditors, in which case such creditors may bring an action to void the deed.”

170. Ginnie Mae: the Government National Mortgage Association is a wholly owned U.S. government corporation within HUD to guarantee pools of eligible loans that primary lenders issue as Ginnie Mae mortgage-backed securities.

171. graduated lease: “a lease that is similar to a gross lease except that it provides for periodic increases in rent, often based on the Consumer Price Index.”

172. grantee: one who acquires an interest in real property from another.

173. grantor: one who transfers an interest in real property to another.

174. gross income: total income from a property before any expenses are deducted.

175. gross income multiplier (GIM): a number equal to the estimated value of a property divided by the gross yearly income of the property.

176. gross lease: “a lease under which the tenant pays a fixed rental amount, and the landlord pays all of the operating expenses for the premises.”

177. gross rent multiplier (GRM): a number equal to the estimated value of a property divided by the gross monthly rental income of the property.

178. ground lease: a lease under which a tenant leases land and agrees to construct a building or to make other significant improvements on the land.

179. group boycott: “in antitrust law, the action of two or more brokers agreeing not to deal with another broker or brokers.”

180. heir: a person entitled to obtain property through intestate succession.

181. hip roof: a sloping roof that rises from all four sides of the house.

182. holographic will: “a will written, dated, and signed by a testator in his or her own handwriting.”

183. home equity line of credit (HELOC): a revolving line of credit provided by a home equity mortgage.

184. home equity mortgage: a security instrument used to provide the borrower with a revolving line of credit based on the amount of equity in the borrower’s home.

185. homestead: a homestead exemption that applies to a homeowner’s principal residence and that provides limited protection for the homeowner’s equity in that residence against a judgment lien foreclosure.

186. homestead exemption: the amount of a homeowner’s equity that may be protected from unsecured creditors.

187. HUD-1 Uniform Settlement Statement: an escrow settlement form mandated by RESPA for use in all escrows pertaining to the purchase of owner-occupied residences of 1-4 dwelling units that use funds from institutional lenders regulated by the federal government.

188. implied contract: “a contract not expressed in words, but, through action or inaction, understood by the parties.”

189. income approach: “an appraisal approach that estimates the value of an income-producing property as being worth the present value of the future income of the property through a three-step process: (1) determine the net annual income, (2) determine an appropriate capitalization rate, and (3) divide the net income by the capitalization rate to obtain the estimate of value.”

190. incurable depreciation: depreciation that results from (1) physical deterioration or functional obsolescence that cannot be repaired at a cost that is less than or equal to the value added to the property and (2) economic obsolescence (which is beyond the control of the property owner).

191. independent contractor: “a person who performs work for someone, but does so independently in a private trade, business, or profession, with little or no supervision from the person for whom the work is performed.”

192. index: “under an adjustable-rate mortgage, the benchmark rate of interest that is adjusted periodically according to the going rate of T-bills, LIBOR, or the like.”

193. innocent landowner defense: “a defense to liability for cleanup of toxic waste under CERCLA (the Superfund Law) by one who acquires contaminated property after the contamination occurred and who acquired the property by inheritance or bequest or who, prior to purchasing the property, performed “all appropriate inquiries” to determine that the property had not been contaminated.”

194. installment note: “a promissory note in which periodic payments are made, usually consisting of interest due and some repayment of principal.”

195. intentional misrepresentation: “the suggestion, as a fact, to a party that which is not true committed by another party who does not believe it to be true and who makes the suggestion with the intent to deceive the first party, who was deceived to his or her detriment, such as by being induced to enter into a contract.”

196. interest: the compensation fixed by the parties for the use of money.

197. interest-rate cap: “interest-rate cap —under an adjustable-rate mortgage, the maximum that the interest rate can increase from one adjustment period to the next or over the life of the entire loan.”

198. interpleader: “an action that allows for a neutral third party (such as a real estate agent) to avoid liability to two or more claimants (such as a seller and buyer) to the same money or property (such as an earnest money deposit) by forcing the claimants to litigate among themselves, letting the court determine who deserves what while not enmeshing the neutral third party in the litigation.”

199. Interstate Land Sales Full Disclosure Act: a federal consumer protection act that requires that certain land developers register with the Consumer Financial Protection Bureau if they offer across state lines parcels in subdivisions containing 100 or more lots. Subdivisions where each lot in the subdivision contains at least 20 acres are exempt from this registration requirement. A developer must provide each prospective buyer with a Property Report that contains pertinent information about the subdivision and that discloses to the prospective buyer that he or she has a minimum of 7 days in which to rescind the purchase agreement.

200. intestate: “not having made, or not having disposed of by, a will.”

201. intestate succession: transfer of the property of one who dies intestate.

202. inverse condemnation: a judicial or administrative action brought by a landowner to force the condemnation of the landowner’s land where nearby condemned land or land used for public purposes (such as for noisy airports) severely reduces the value of the landowner’s land.

203. involuntary lien: “a lien created by operation of law, not by the voluntary acts of the debtor.”

204. joint tenancy: “joint tenancy —a form of joint ownership which has unity of possession, time, interest, and title.”

205. joist: one of a series of parallel heavy horizontal timbers used to support floor or ceiling loads.

206. judgment: a court’s final determination of the rights and duties of the parties in an action before it.

207. judicial foreclosure: “a foreclosure carried out not by way of a power-of-sale clause in a security instrument, but under the supervision of a court.”

208. junior mortgage: “a mortgage that, relative to another mortgage, has a lower lien-priority position.”

209. land installment contract: a real property sales contract. The Seller retains legal title and the buyer is given equitable title until the loan is paid in full. During the time of the contract, the buyer has possession of the property.

210. leasehold estate: a less-than-freehold estate.

211. lease-option: “a lease (also referred to as a lease with an option to purchase) that provides the tenant with the right, but not the obligation, to purchase the leased property at a specified price within a specified period of time.”

212. lease-purchase: an agreement (also referred to as a lease with an obligation to purchase) that provides for the purchase of property preceded by a lease under which a portion of each lease payment is applied to the purchase price.

213. lease renewal: a continuation of tenancy under a new lease. 214. lessee: a person (the tenant) who leases property from another.

215. lessor: a person (the landlord) who leases property to another. 216. less-than-freehold estate: an estate in which the holder has the exclusive right to possession of land for a length of time. The holder of a less-than-freehold estate is usually referred to as a lessee or tenant.

217. leverage: a method of multiplying gains (or losses) on investments by using borrowed money to acquire the investments.

218. lien: “lien —an encumbrance against real property that is used to secure a debt and that can, in most cases, be foreclosed.”

219. lien priority: the order in which lien holders are paid if property is sold to satisfy a debt.

220. lien theory: “a legal theory of mortgage: the mortgagor retains both legal and equitable title of the property, including exclusive possession and use of the property. The mortgagee simply possesses a lien against the property (usually a lien of higher priority than certain other liens, such as judgment liens). Upon default, the mortgagee must go through a formal (judicial) foreclosure proceeding to obtain legal title and possession.”

221. life estate: “either by the life of the person holding the estate, or by the life or lives of one or more other persons.”

222. limited liability partnership: a partnership in which there is at least one general partner and one or more limited partners. The limited partners have no liability beyond their investment in and pledges to the partnership.

223. liquidated damages: “a sum of money that the parties agree, usually at the formation of a contract, will serve as the exact amount of damages that will be paid upon a breach of the contract.”

224. lis pendens: (Latin for “action pending”) a notice of pendency of action.

225. listing agreement: “a written contract between a real estate broker and a property owner (the principal) stipulating that in exchange for the real estate broker’s procuring a buyer for the principal’s property, the principal will compensate the broker, usually with a percentage of the selling price.”

226. loan modification: a restructuring or modification of a mortgage or deed of trust on terms more favorable to the buyer’s ability (or desire) to continue making loan payments.

227. loan-to-value ratio (LTV): the amount of a first mortgage divided by the lesser of (1) the appraised value of the property or (2) the purchase price of the property.

228. long-term capital gain: “the capital gain on the sale of a capital asset that was held for a relatively long period of time, usually more than one year.”

229. margin: “a number of percentage points, usually fixed over the life of the loan, that is added to the index of an adjustable-rate mortgage to arrive at the fully indexed rate.”

230. market allocation: “in antitrust law, the process of competitors agreeing to divide up geographic areas or types of products or services they offer to customers.”

231. market price: the price actually paid for a particular property. 232. market value: “as defined for appraisal purposes by HUD/FHA is: “The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.””

233. material fact: a fact that is likely to affect the decision of a party as to whether to enter into a transaction on the specified terms.

234. mechanics lien: a specific lien claimed by someone who furnished labor or materials for a work of improvement on real property and who has not been fully paid.

235. median price per square foot: the median price per square foot of a set of properties is the price per square foot of the property whose price per square foot is such that half of the properties in the set have an equal or lower price per square foot and half have an equal or higher price per square foot.

236. Megan’s Law: an informal name for various federal and state laws that provide for the registration of sex offenders and for the making available to the public information regarding the location of these offenders.

237. metes and bounds land description: “a method of describing a parcel of land that uses physical features of the locale, along with directions and distances, to define the boundaries of the parcel.”

238. moldings: “patterned strips, usually of wood, used to provide ornamental finish to cornices, bases, windows, and door jambs.”

239. mortgage banker: a primary lender that uses its own money in creating a mortgage loan.

240. mortgage broker: an individual or company that finds borrowers and matches them with lenders for a fee.

241. mortgagee: a lender or creditor to whom a mortgagor gives a mortgage to secure a loan or performance of an obligation.

242. mortgage loan originator (MLO): “a person who takes, or offers to take, a residential mortgage loan application or offers or negotiates terms of a residential mortgage application for compensation or gain or in expectation of compensation or gain.”

243. mortgagor: the borrower who gives a mortgage on his or her property to secure a loan or performance of an obligation.

244. multiple listing service: an organization (MLS) of real estate brokers who share their listings with other members of the organization.

245. mutual consent: refers to the situation in which all parties to a contract freely agree to the terms of the contract; sometimes referred to as a “meeting of the minds.”

246. National Association of Real Estate Brokers: a real estate trade association whose members are called Realtists®. They subscribe to a code of ethics.

247. National Association of Realtors®: “the largest real estate trade association in the United States, founded in 1908, whose members are called Realtors®.” They subscribe to a code of ethics.

248. National “Do Not Call” Registry: a registry established by the Federal Trade Commission to protect consumers from unwanted commercial telephone solicitations.

249. negative amortization: a loan repayment scheme in which the outstanding principal balance of the loan increases because the installment payments do not cover the full interest due.

250. negative amortized loan (NegAm loan): “the unpaid part of the interest due being tacked onto the principal, thereby causing the principal to grow as each month goes by.”

251. negligent misrepresentation: “an assertion not warranted by the information of the party making the assertion that an important fact was true, which was not true, relied on by another party to that party’s detriment.”

252. net income: income from a property remaining after expenses are deducted from gross income.

253. net lease: a lease under which the tenant pays a fixed rental amount plus some of the landlord’s operating expenses.

254. net listing: a listing agreement providing the broker with all proceeds received from the sale over a specified amount. Net listings are not legal in many states.

255. nonconforming loan: a loan not in conformance with FHFA guidelines .

256. nonconforming use: “a zoning exception for areas that are zoned for the first time or that are rezoned and where established property uses that previously were permitted to not conform to the new zoning requirements. As a general rule, such existing properties are “grandfathered in,” allowing them to continue the old use but not to extend the old use to additional properties or to continue the old use after rebuilding or abandonment.”

257. non-judicial foreclosure: “a foreclosure process culminating in a privately conducted, publicly held trustee’s sale. The right to pursue a non-judicial foreclosure is contained in the power-of- sale clause of a mortgage or deed of trust, which, upon borrower default and the beneficiary’s request, empowers the trustee to sell the secured property at a public auction.”

258. notice of completion: “a written form that notifies that a work of improvement on real property has been completed, and that limits the time in which mechanics liens may be filed against the property.”

259. notice of default (NOD): a document prepared by a trustee at the direction of a lender to begin a non-judicial foreclosure proc eeding.

260. notice of sale: a document prepared by a trustee at the direction of a lender that gives notice of the time and place of sale of an identified foreclosed property.

261. novation: “a substitution of a new obligation or contract for an old one, or the substitution of one party to a contract by another, relieving the original party of liability under the contract.”

262. nuisance: “anything that is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property.”

263. offer: a proposal by one person (the offeror) to enter into a contract with another (the offeree).

264. offeree: one to whom an offer to enter into a contract is made.

265. offeror: one who makes an offer to enter into a contract.

266. open listing: “a listing agreement that gives a broker the nonexclusive right to sell property and receive compensation (usually a commission) if, but only if, the broker is the first to procure a buyer for the property. ”

267. opinion of title: a written rendering of an opinion on the condition of ownership of title in a real estate transaction prepared by an attorney after examination of an abstract of title.

268. option contract: a contract that gives the purchaser of the option the right to buy or lease a certain property at a set price any time during the option term.

269. origination fee: “the fee a lender charges to cover expenses of processing a loan, such as purchasing credit reports, inspection reports and appraisals, and paying office expenses and salaries of personnel who interview borrowers and analyze the reports and appraisals.”

270. partially amortized loan: “an installment loan under which monthly payments pay all of the interest due but not enough of the principal to fully pay off the loan at the end of the loan term. In such a case, a balloon payment would be due at the end of the loan term.”

271. partial release clause: “a clause in a blanket mortgage that allows a developer to sell off individual parcels and pay back, according to a release schedule, only a proportionate amount of the blanket loan.”

272. partition: partition —a court-ordered or voluntary division of real property held in joint ownership into parcels owned in severalty.

273. passive income: “in general, income from either rental activity or from a business in which the taxpayer does not materially participate.”

274. passive investor: an investor who does not actively contribute to the management of the business invested in.

275. payee: the person to whom a promissory note is made out. 276. payment cap: “payment cap —under an adjustable-rate

mortgage, the maximum amount that installment payments may increase from one adjustment period to the next or over the life of the loan.”

277. percentage lease: “a lease, often used in shopping centers, under which the tenant typically pays a base rent amount plus a percentage of the gross receipts of the tenant’s business.”

278. periodic tenancy: an estate from period to period.

279. period of redemption: a period of time after a sheriff’s sale in a judicial foreclosure proceeding during which the borrower may redeem his or her property by paying off the entire debt plus costs.

280. physical deterioration: depreciation that results from wear and tear of use and from natural causes.

281. physical life: the period of time that the property lasts with normal maintenance.

282. pitch: the degree of inclination or slope of a roof.

283. plaintiff: the one who brings a lawsuit.

284. plaster: “a mixture of lime or gypsum, sand, water, and fiber that is applied to walls and ceilings and that hardens into a smooth coating.”

285. point: “in finance, a point is equal to 1% of the loan amount.

The term is used by lenders to measure discount charges and other costs such as origination fees and private mortgage insurance premiums.”

286. point of beginning: the fixed starting point in the metes and bounds method of land description.

287. police power: “the power of a government to impose restrictions on private rights, including property rights, for the sake of public welfare, health, order, and security, for which no compensation need be made.”

288. power of attorney: a special written instrument that gives authority to an agent to conduct certain business on behalf of the principal. The agent acting under such a grant is sometimes called an attorney in fact.

289. power-of-sale clause: “a clause contained in most trust deeds that permits the trustee to foreclose on, and sell, the secured property without going to court.”

290. preapproval: preapproval —an evaluation of a potential borrower’s ability to qualify for a loan that involves a credit check and verification of income and debt of the potential borrower.

291. predatory lending: “the imposition of unfair, deceptive, abusive, or fraudulent loan terms on borrowers.”

292. prepayment penalty: a fee charged to a borrower for paying off the loan faster than scheduled payments call for.

293. prequalification: an initial unverified evaluation of a potential borrower’s ability to qualify for a mortgage loan.

294. prescription: a method of acquiring an interest in property by use and enjoyment for five years.

295. prescriptive easement: an easement acquired by prescription.

296. price fixing: an agreement between competitors to set prices or price ranges.

297. price per square foot: the price per square foot of a specific property is determined by dividing the price (either selling or listing) by the property’s square footage. Appraisers determine the square footage of a property by using the outside measurement of the property.

298. primary financing: first mortgage property financing.

299. primary mortgage market: the market where mortgage loans are originated.

300. principal: the one whom an agent represents.

301. principle of anticipation: “principle that value is derived from a calculation of anticipated future benefits to be derived from the property, not from past benefits, though past benefits may inform as to what might be expected in the future.”

302. principle of conformity: “principle that the maximum value of land is achieved when there is a reasonable degree of social, economic, and architectural conformity in the area. ”

303. principle of contribution: “principle that improvements made to a property will contribute to its value or that, conversely, the lack of a needed improvement will detract from the value of the property.”

304. principle of four-stage life cycle: “principle that property goes through a process of growth, stability, decline, and revitalization.”

305. principle of plottage: states that assembling two or more parcels of land into one parcel results in the larger parcel having a greater value than the sum of the values of the smaller parcels.

306. principle of progression: principle that the value of a residence of less value tends to be enhanced by proximity to residences of higher value.

307. principle of regression: principle that the value of a residence of higher value tends to be degraded by the proximity to residences of lower value.

308. principle of substitution: principle that the value of a property will tend toward the cost of an equally desirable substitute property.

309. principle of supply and demand: “principle that the value of property in a competitive market is influenced by the relative levels of supply and demand: the greater level of demand in relation to the level of supply, the greater the value.”

310. principle of the highest and best use: principle that the best use of a property in terms of value is the use most likely to produce the greatest net return (in terms of money or other valued items).

311. private mortgage insurance (PMI): mortgage insurance that lenders often require for loans with an LTV more than 80%. 312. probate: a legal procedure whereby a superior court in the county where the real property is located or where the deceased resided oversees the distribution of the decedent’s property.

313. procuring cause: “a common law legal concept developed by the courts to determine the proportioning of commissions among agents involved in a real estate transaction In general, an agent who is a procuring cause of a sale originated a chain of events that resulted in the sale and is thereby entitled to at least some part of the total commission generated by the sale.”

314. promissory note: “a contract whereby one person unconditionally promises to pay another a certain sum of money, either at a fixed or determinable future date or on demand of the payee.”

315. property disclosure statement: “a statement filled out by the seller of residential property consisting of 1 to 4 dwelling units, disclosing to potential purchasers defects in the property that are known to the seller, or that should be known to the seller upon reasonable inspection.”

316. proration: an adjustment of expenses that either have been paid or are in arrears in proportion to actual time of ownership as of the closing of escrow or other agreed-upon date.

317. protected class: a group of people protected from discrimination by federal or state law.

318. public dedication: “a gift of an interest in land to a public body for public use, such as for a street, a park, or an easement to access a beach.”

319. public grant: “public land conveyed, usually for a small fee, to individuals or to organizations, such as to railroads or universities.”

320. puffing: the act of expressing a positive opinion about something to induce someone to become a party to a contract.

321. purchase money loan: “a deed of trust or mortgage on a dwelling for not more than four families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of that dwelling, occupied entirely or in part by the purchaser.”

322. pyramid roof a hip roof that has no ridge.: pyramid roof a hip roof that has no ridge.

323. quantity survey method: ” the most detailed method of estimating the replacement or reproduction cost of a structure, in which an estimate is made of the cost of all of the raw materials needed to replace the building. Such material-cost information is available in construction cost handbooks”

324. quiet title action: “see, suit to quiet title”

325. quitclaim deed: “a deed that contains no warranties of any kind, no after-acquired title provisions, and provides the grantee with the least protection of any deed; it merely provides that any interest (if there is any) that the grantor has in the property is transferred to the grantee.”

326. rafter: “one of a series of parallel sloping timbers that extend from the ridgeboard to the exterior walls, providing support for the roof.”

327. real estate investment trust (REIT): “a company that invests in and, in most cases operates, income-producing real estate and that meets numerous criteria, such as the necessity of being jointly owned by at least 100 persons.”

328. real estate owned (REO): property acquired by a lender through a foreclosure sale.

329. Real Estate Settlement Procedures Act (RESPA): “a federal law designed to prevent lenders, real estate agents, developers, title insurance companies, and other agents (such as appraisers and inspectors) who service the real estate settlement process from providing kickbacks or referral fees to each other, and from facilitating bait-and-switch tactics.”

330. real property sales contract: an agreement in which one party agrees to convey title to real property to another party upon the satisfaction of specified conditions set forth in the contract and that does not require conveyance of title within one year from the date of formation of the contract.

331. Realtist®: a member of the National Association of Real Estate Brokers. Subscribe to a code of ethics.

332. Realtor®: a member of the National Association of Realtors®. Subscribe to a code of ethics.

333. reconciliation: the process of ascertaining value by comparing and evaluating values obtained from comparables or from different valuation approaches; the process of comparing what is in a trust fund account with what should be in the account.

334. reconveyance deed: “a deed executed by the trustee of a deed of trust after the promissory note is paid off in full by the borrower and the lender instructs the trustee to so execute the reconveyance deed, which reconveys legal title to the borrower”

335. recorded map or plat system: “a method of land description that states a property’s lot, block, and tract number, referring to a map recorded in the county where the property is located. ”

336. rectangular survey system: a method of land description based on a grid system of north-south lines (“ranges”) and east- west lines (“tier” or “township” lines) that divides the land into townships and sections.

337. red flag: “a condition that should alert a reasonably attentive person of a potential problem that warrants further investigation. Examples include stains on ceilings or walls, the smell of mold, and warped floors or walls.”

338. redlining: the illegal practice of refusing to make loans for real property in particular areas.

339. Regulation Z: the set of regulations that implement the Truth- in-Lending Act (TILA).

340. reinforced concrete: “concrete poured around steel bars or metal netting to increase its ability to withstand tensile, shear, and compression stresses.”

341. rejuvenation: “the phase when a property is rebuilt, remodeled, or otherwise revitalized to a new highest and best use.”

342. reliction: a natural process by which the owner of riparian or littoral property acquires additional land that has been covered by water but has become permanently uncovered by the gradual recession of water.

343. remainder: “the residue of a freehold estate where, at the end of the estate, the future interest arises in a third person.”

344. remainderman: a person who inherits or is entitled to inherit property held as a life estate when the person whose life determines the duration of the life estate passes away.

345. replacement cost: “the cost of replacing improvements with those having equivalent utility, but constructed with modern materials, designs, and workmanship.”

346. reproduction cost: the cost of replacing improvements with exact replicas at current prices.

347. rescission: the cancellation of a contract and the restoration of each party to the same position held before the contract was entered into.

348. reserve account: “in reference to loan servicing, the escrow account from which the loan servicer typically pays, on behalf of the borrower, property taxes, hazard insurance, and any other charges (such as mortgage insurance) with respect to the loan.”

349. retaliatory eviction: an eviction action brought to retaliate against a tenant for making a habitability complaint or for asserting other of the tenant’s legal rights.

350. return on investment (ROI): an investor’s cash flow (net income minus financing charges) divided by the investor’s actual cash investment (as distinct from the purchase price).

351. reverse mortgage: “a security instrument for a loan for homeowners over the age of 62 who have a large amount of equity in their homes, usually designed to provide such homeowners with monthly payments, often over the lifetime of the last surviving homeowner who either moves out of the house or dies.”

352. reversion: “the residue of a freehold estate where at the end of the estate, the future interest reverts to the grantor.”

353. revocation: the withdrawal of an offer by the person who made the offer.

354. rezoning amendment: an amendment to a zoning ordinance that property owners may request if they feel that their area has been improperly zoned.

355. ridgeboard: a horizontal board placed on edge at the apex of a roof to which the upper ends of the rafters are attached.

356. right of first refusal: “the right to be given the first chance to purchase a property at the same price, terms, and conditions as is offered to third parties if and when the property is put up for sale.”

357. right of survivorship: “the right to succeed to the interest of a joint tenant or, if community property with right of survivorship, to succeed to the interest of a spouse or registered domestic partner. Right of survivorship is the most important characteristic of joint tenancy.”

358. riparian rights: “the rights of a landowner to use water from a stream or lake adjacent to his or her property, provided such use is reasonable and does not injure other riparian owners.”

359. robocall: “a pre-recorded, auto-dialed telephone call.”

360. R-value: “a measure of the resistance of insulation to heat

transfer. The FTC requires sellers of new homes to disclose the R-value of each home’s insulation. The higher the R-value, the greater is the effectiveness of the insulation.”

361. safety clause: “a provision in a listing agreement, providing that the broker will earn the full commission if the property is sold within a specified number of days after the termination of the listing to a buyer with whom the broker has dealt in certain specified ways regarding the property.”

362. sales comparison approach: an appraisal approach that compares recent sales of similar properties in the area to evaluate the market value of the subject property.

363. salesperson: a natural person who is employed by a licensed real estate broker to perform acts that require having a real estate license.

364. sandwich lease: a leasehold interest that lies between a primary lease and a sublease.

365. sash: frames that contain one or more windowpanes.

366. scarcity: a lack of abundance.

367. secondary financing: second mortgage and junior mortgage property financing

368. secondary mortgage market: the market where mortgages are sold by primary mortgage lenders to investors.

369. second mortgage: a security instrument that holds second- priority claim against certain property identified in the instrument.

370. secret profit: any compensation or beneficial gain realized by an agent not disclosed to the principal. Real estate agents must always disclose any interest that they or their relatives have in a transaction and obtain their principals’ consent.

371. section: “one square mile, containing 640 acres.”

372. security instrument: the written instrument by which a debtor pledges property as collateral to secure a loan.

373. seller carry back loan: a loan or credit given by a seller of real property to the purchaser of that property.

374. seller’s agent: a real estate broker appointed by the seller to represent the seller.

375. selling agent: the real estate agent who sells or finds and obtains a buyer for the property in a real estate transaction.

376. senior mortgage: “a mortgage that, relative to another mortgage, has a higher lien-priority position.”

377. separate property: “property that is owned in severalty by a spouse or registered domestic partner. Separate property includes property acquired before marriage or the registering of domestic partnership, and property acquired as a gift or by inheritance during marriage or registered domestic partnership.”

378. servient tenement: land that is burdened by an easement.

379. setback: “a designation of a governing body as to how far a structure must be situated from something else, such as a curb or a neighboring property.”

380. severalty: ownership of property by one person.

381. severance: “the act of detaching an item of real property that changes the item to personal property, such as the cutting down of a natural tree. Also, the act of terminating a relationship, such as the act of partitioning by court order for the transfer of an interest that changes a joint tenancy into a tenancy in common.”

382. severance damages: damages paid to an owner of land partially taken by eminent domain where the value of the remaining portion of the owner’s land is severely reduced by the severance of the condemned a portion of owner’s land.

383. Sherman Act: “the federal law passed in 1890 that prohibits agreements, verbal or written, that have the effect of restraining free trade.”

384. short sale: a pre-foreclosure sale made by the borrower (usually with the help of a real estate agent) with lender approval of real estate for less than the balance due on the mortgage loan.

385. short-term capital gain: “the capital gain on the sale of a capital asset that was held for a relatively short period of time, usually one year or less.”

386. sill: “the board or metal forming the lower side of the frame for a window or door; the lowest part of the frame of a house, resting on the foundation and providing the base for the studs.”

387. single agent: an agent who represents only one party in a given transaction.

388. situs: “the legal location of something; also refers to the preference for a particular location to live, work, or invest in”

389. special agent: an agent for a particular act or transaction.

390. special assessment: “a tax levied against properties in a particular area that are benefited by improvements such as for streets, water, and sewers.”

391. specific lien: a lien that attaches only to specific property.

392. specific performance: a court order that requires a person to perform according to the terms of a contract.

393. spot zoning: “spot zoning —refers to the zoning of isolated properties for use different from the uses specified by existing zoning laws. To spot zone a particular property may, in some cases, be a violation of the requirement that police power apply similarly to all property similarly situated, which in turn arises from the constitutional guarantee of equal protection under the law.”

394. square-foot method: “the most widely used method of estimating reproduction or replacement cost of a building, involving the collection cost data on recently constructed similar buildings and dividing the total cost by the square footage to obtain cost per square foot”

395. statute of frauds: “a law that requires certain types of contracts, including most real estate contracts, to be in writing and signed by the party to be bound in order for the contract to be enforceable.”

396. statute of limitations: a law that requires particular types of lawsuits to be brought within a specified time after the occurrence of the event giving rise to the lawsuit.

397. steering: “the illegal practice of directing people of protected classes away from, or toward, housing in particular areas.”

398. stigmatized property: a property having a condition that certain persons may find materially negative in a way that does not relate to the property’s actual physical condition.

399. stock cooperative: a corporation formed or availed of primarily for the purpose of holding title to improved real property either in fee simple or for a term of years.

400. straight-line depreciation: “the expensing of a property by equal amounts over the useful life of the property, determined by subtracting from the cost of the property the estimated residual value of the property and dividing that amount by the useful life of the property measured in years.”

401. straight-line method: a method of calculating annual depreciation of an improvement by dividing the cost of the improvement by the estimated useful life of a typical such improvement.

402. straight note: a promissory note under which periodic payments consist of interest only.

403. strict foreclosure: full title simply passes to the lender. 404. subagent: an agent of an agent.

405. subject to: acquiring real property that is burdened by a mortgage without becoming personally liable for the mortgage debt.

406. sublease: a transfer of a tenant’s right to a portion of the leased premises or to the entire premises for less than the entire remaining lease term.

407. subordination clause: a provision in a mortgage or deed of trust that states that the mortgage or deed of trust will have lower priority than a mortgage or deed of trust recorded later.

408. suit to quiet title: “a court proceeding intended to establish the true ownership of a property, thereby eliminating any cloud on title.”

409. tax deed: “the deed given to the successful buyer at a tax sale. A tax deed conveys title free and clear from private liens, but not from certain tax liens or special assessment liens, or from easements and recorded restrictions.”

410. tenancy by the entirety: “recognized in some states, a special form of joint tenancy between a married couple, in which, as in a joint tenancy, there is the right of survivorship, but in which, unlike in a joint tenancy, neither spouse may convey his or her interest in the property during the lifetime of the other spouse without the consent of the other spouse.”

411. tenancy in common: “a form of joint ownership that is presumed to exist if the persons who own the property are neither married nor registered domestic partners and they own undivided interests in property. Tenants in common may hold unequal interests; however, if the deed does not specify fractional interests among the tenants, the interests will be presumed to be equal.”

412. tenancy in partnership: a form of joint ownership in which the partners combine their assets and efforts in a business venture.

413. testament: a will.

414. testator: one who dies leaving a will.

415. time-share estate: an estate in real property coupled with the right of occupancy for certain periods of time.

416. time-share use: “a right to occupancy during certain periods of time, not coupled to an estate in real property.”

417. title search: “an examination of all relevant public documents to determine whether there exist any potential defects (such as judicial liens, lis pendens, or other encumbrances, including tax liens and special assessments) against the title.”

418. title theory: “a legal theory of mortgage, holding that a mortgage transfers legal title to the mortgagee (the lender) while the mortgagor (the borrower) retains equitable title to the property, which permits the mortgagor exclusive possession and use of the property. Upon default, the mortgagee is entitled to immediate possession and use (such as to collect rents) of the property.”

419. townhouse: “a form of condominium in which the individual units are connected by a common wall and, in general, (unlike in a high-rise condominium complex) a deed to the land beneath the townhouse is granted to the townhouse owner.”

420. township: “six square miles, containing 36 sections.”

421. trade fixtures: “objects that a tenant attaches to real property for use in the tenant’s trade or business. Trade fixtures differ from other fixtures in that, even though they are attached with some permanence to real property, they may be removed at the end of the tenancy of the business.”

422. transactional broker: “a nonagent middleman who brings the parties to a real estate transaction together and lets the parties do all of the negotiating among themselves. States that permit this kind of nonagent-facilitator status impose an obligation on the transactional broker to act fairly, honestly, and competently to find qualified buyers or suitable properties, but the transactional broker does not owe fiduciary legal obligations to any of the parties.”

423. transferability: the ability to transfer some interest in property to another.

424. triggering term: any of a number of specific finance terms stated in an advertisement for a loan that triggers Regulation Z disclosure requirements in the advertisement.

425. triple net lease: “a lease under which the tenant pays a fixed rent plus the landlord’s property taxes, hazard insurance, and all maintenance costs.”

426. trust account: “an account set up by a broker at a bank or other recognized depository in the state where the broker is doing business, into which the broker deposits all funds entrusted to the broker by principles or others.”

427. trust deed: “a three-party security device, the three parties being the borrower (trustor), the lender (beneficiary), and a third- party (trustee) to whom “bare legal title” is conveyed.”

428. trustee: “a person who holds something of value in trust for the benefit of another; under a deed of trust, a neutral third-party who holds naked legal title for security.”

429. trustor: a borrower who executes a deed of trust.

430. Truth-in-Lending Act (TILA): “a federal consumer protection law that was enacted in 1968 with the intention of helping borrowers understand the costs of borrowing money by requiring disclosures about loan terms and costs (in particular, the APR) and to standardize the way in which certain costs related to the loan are calculated and disclosed.”

431. tying arrangement: occurs in antitrust law when the seller conditions the sale of one product or service on the purchase of another product or service.

432. underwriter: “one who analyzes the risk of, and recommends whether to approve, a proposed mortgage loan.”

433. undivided interest: an ownership interest in property in which an owner has the right of possession of the entire property and may not exclude the other owners from any portion by claiming that a specific portion of the property is his or hers alone.

434. undivided interest subdivision: a subdivision in which owners own a partial or fractional interest in an entire parcel of land. The land in an undivided interest subdivision is not divided; its ownership is divided.

435. unenforceable contract: a contract that a court would not enforce.

436. Uniform Commercial Code (UCC): a set of laws that established unified and comprehensive regulations for security transactions of personal property and that superseded existing laws in that field.

437. unilateral contract: a contract in which one party gives a promise that is to be accepted not by another promise but by performance.

438. unit-in-place method: unit-in-place method — a method of estimating the replacement or reproduction cost of a structure by calculating the unit cost of components of the structure.

439. unlawful detainer: a legal action to regain possession of real property.

440. useful life: “the estimated period during which a property generates revenue (if the property is an income property) or usefulness (if the property, such as a private residence, has value other than income value).”

441. usury: the charging of interest in excess of that allowed by law.

442. utility: “the usefulness of property; its ability to satisfy a potential buyer’s need or desire, such as to provide shelter or income.”

443. VA: the Department of Veterans Affairs is a federal agency designed to benefit veterans and members of their families.

444. valid contract: a contract that is binding and enforceable in a court of law.

445. value: “the present worth to typical users or investors of all rights to future benefits, arising out of property ownership.”

446. variance: an exception that may be granted in cases where damage to the value of a property from the strict enforcement of zoning ordinances would far outweigh any benefit to be derived from enforcement.

447. vendee: the purchaser in a real property sales agreement

448. vendor: the seller in a real property sales agreement.

449. vicarious liability: “liability imposed on a person not because of that person’s own acts but because of the acts of another. (See, respondeat superior.)”

450. voidable contract: “a contract that, at the request of one party only, may be declared unenforceable, but is valid until it is so declared.”

451. void contract: a purported contract that has no legal effect.

452. voluntary lien: a lien obtained through the voluntary action of the one against whose property the lien attaches.

453. warranty deed: “a deed in which the grantor warrants that the title being conveyed is good and free from defects or encumbrances, and that the grantor will defend the title against all suits.”

454. wetlands: “as defined by the EPA, “areas that are soaked or flooded by surface or groundwater frequently enough or for sufficient duration to support plants, birds, animals, and aquatic life. Wetlands generally include swamps, marshes, bugs, estuaries, and other inland and coastal areas, and are federally protected.””

455. will: a document that stipulates how one’s property should be distributed after death; also called a testament.

456. writ of attachment: a writ ordering the seizure of property belonging to a defendant to ensure the availability of the property to satisfy a judgment if the plaintiff wins.

457. writ of execution: a writ directing a public official (usually the sheriff) to seize and sell property of a debtor to satisfy a debt 458. zoning: laws of a city or county that specify the type of land-use that is acceptable in certain areas.