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Knowing relinquishment of
one's right or claim to property without passing
rights to another and with no intention to reclaim
Abstract of Title:
A condensed history of the
title to a property, consisting of the summary
of the original grant and all subsequent encumbrances
relating to the particular parcel of real estate.
The clause in a mortgage
or trust deed that stipulates that the entire
debt is due immediately if the borrower defaults
under the terms of the contract.
A fiduciary relationship
in which one party represents another by the latter's
Agreement: A meeting of minds;
a consensus between two or more parties which
affect their legal rights and duties.
The systematic repayment
of a loan by periodic installments of principal
and interest over the entire term of the loan
The increase in the value of property for reasons
other than improvements.
A phrase denoting a thing is being sold or leased
just as it is seen, with no promise from the seller
or lessor that it is in perfect condition.
The transfer of the right, title and interest
in the property of one person, known as the Assignor,
to another, known as the Assignee.
The financing of a real estate purchase by taking
over, or assuming, full responsibility for the
The recognition of a third party as an acceptable
successor to a contract, especially the agreement
in which a tenant agrees to pay rent to a new
owner of a property.
Requires the payment of a specified portion or
the entire principal balance owed at a designated
The basis of a property is used as a baseline
in determining appreciation (gain) or depreciation
(loss) of value over time, and is used for taxing
Bundle of Rights:
Describes the owner's limits of control over property.
Money or goods used to acquire other money or goods.
Capital Expenditure, Capital
Money spent to improve a property.
The taxable profit derived from the sake of a capital
asset. Postponement can be achieved through an IRS
section 1031 exchange or by a sale on an installment
A method of estimating a property's value by considering
net annual income as a percentage of a required
rate of return on an investment.
The net spendable income from an investment, determined
by deducting all operating and interest expenses
from the gross income.
Derived by dividing Net Income before depreciation
by the owner's cash investment.
Central Business District
An agglomeration of businesses and services in the
center of a city - "Downtown".
Title free from any obstruction, encumbrance, burden,
Property, real or personal, pledged as security
to back up a promise to repay a debt.
Common Area, Loss, Load:
In landlord-tenant law, the portion of premises
used in common by all tenants; e.g. stairways, elevators,
lobbies, entrance areas which the landlord controls
and for which the landlord is liable. This factor
is represented by the percentage of the property
attributed to these common areas.
The process of taking private property for public
use under the power of Eminent Domain. The owner's
consent is not necessary, but just compensation
must be paid.
A written instrument which transfers real property
or the right to real property.
Non-performance of a duty; failure to meet an obligation
Loss of value due to all causes, but usually considered
to include physical deterioration, functional obsolescence
and economic obsolescence.
Discounted Cash Flows:
This is the present value of a series of receipts
The interest or value that an owner has in real
estate over and above any mortgage against it.
A process by which a third-party agent receives,
holds and/or disperses certain funds or documents
on the performance of certain conditions; also the
third-party agent who conducts the escrow.
A bar which prevents a person from denying or asserting
anything that contradicts what he has, in contemplation
of law, established to be true.
To trade like properties, thus avoiding tax liability.
A relationship that implies a position of trust
or confidence wherein one person is usually entrusted
to hold or manage property or money for another;
a person who represents another in a position of
trust or confidence; an agent.
This is the total income from a property before
any expenses are deducted.
A lease of property under the terms of which the
landlord pays all property charges regularly incurred
through ownership, including repairs, taxes, insurance
and operating expenses.
The period after the expiration date of a lease
when the tenant maintains occupancy, but has no
formal extension or agreement to extend their lease.
Improvement on land-any structure, usually privately
owned, erected on a site to enhance the value of
a property; for example, buildings, fences and driveways.
Ownership of real estate by two or more parties
who have been named in one conveyance as joint tenants.
On the death of a joint tenant, his or her interest
passes to the surviving joint tenant or tenants
by the rights of survivorship.
The joining of two or more people in a specific
Land purchased and held for future development.
A written or oral contract between a landlord (lessor)
and a tenant (lessee) transferring the right to
exclusive possession and use of the landlord's real
property to the lessee for a specified period of
time and for a stated consideration (rent). Leases
for more than one year must be in writing to be
The tenant's legal interest in a property.
The use of borrowed money to finance the bulk of
A legal claim that one party has against the property
of another as security for a debt.
This is a legal entity that includes a general partner,
who actively manages the investment, and limited
partners, whose personal liability is only their
investments and income taxes at each individual
partner's level of taxation.
The highest price for which a property would sell,
assuming a reasonable time for the sale and a knowledgeable
buyer and seller acting without duress.
A claim against buildings and legal property, created
by statute, to secure payment to those who provide
labor and materials in constructing or repairing
A lease requiring the tenant to pay rent as well
as all the costs of maintaining the building, including
taxes, insurance, repairs and other expenses of
Gross income less exemptions and deductions permitted
A document that can protect a tenant from eviction
should the property owner default on their mortgage.
Lack of personal liability, often used in reference
to commercial loans.
A signed instrument acknowledging a debt and promising
These are the periodic and necessary expenses essential
to the continuous operation and maintenance of an
An agreement to keep open an offer to sell or purchase
property for a set period.
An association of two or more individuals who carry
on a continuing business for profit as co-owners.
A contract under which a tenant pays a fixed percent
of the gross income against a stipulated minimum
Personal Property, Personalty:
Moveable property that does not fit the definition
of real estate.
A clause in a mortgage or trust deed that provides
for a penalty to be levied against a borrower who
repays a loan before a specified date.
The exclusive right one has to possess, use, enjoy
and dispose of anything he owns.
A branch line constructed to an industrial project
for dockside loading and unloading,
A portion of the earth's surface, extending downward
to the center of the earth and upward into space,
including all things permanently attached thereto
by nature or man, and all legal rights therein.
Real Estate Investment
An unincorporated trust set up to invest in real
estate that must have at least 100 investors, with
management, control, and title to the property in
the hands of trustees.
A decrease or termination of rent for a specified
period of time.
Perquisites offered to entice new tenants, such
as free rent for a few months or build-out in the
form of partitions or paint.
A portion of business earnings or bank assets set
aside to cover possible losses.
A private agreement (usually contained in a deed)
that restricts the use and occupancy of real property.
Return on Investment (ROI):
An annual percentage derived from dividing cash
invested into net after-tax income.
Right of First Offer:
The right of a person or entity to have the first
opportunity to either purchase or lease a specific
parcel of real property.
Right of First Refusal:
The right of a person or entity to match and convert
an opportunity of another party to either purchase
or lease a specific parcel of real property.
This is a financing structure in which an investor
purchases real estate owned and used by an entity
and then leases the property back to the entity;
this may include a buy-back option.
Security; Security Deposit:
Something given or pledged to make secure the fulfillment
of an obligation, usually the repayment of a debt,
also known as "earnest money".
One who analyzes a real property market and acquires
properties with the expectation that prices will
greatly increase, at which time he or she can sell
at a large profit.
When a primary tenant rents a property to another
tenant. Usually requires continued liability of
the primary tenant.
The cancellation of a lease by mutual consent between
the tenant and landlord.
A descriptive term for a group off two or more people
united for the purpose of making and operating an
investment. A syndicate may operate as a corporation,
general partnership or limited partnership.
A phrase often used to describe some of the tax
advantages of real estate investment, such as deductions
for depreciation, interest, taxes and so forth.
This is a community's technique of offering a reduction
in tax liabilities to entice new industry.
The net income, after allowable deductions and adjustments,
on which the tax rate is applied.
Tenancy at Sufferance:
An individual who continues to possess real estate
after the right to possess has terminated.
Tenancy at Will:
A license to occupy or use lands and buildings at
the will of the landlord.
Tenancy by the Entireties:
The joint ownership, recognized in most states,
of property acquired by husband and wife during
marriage. On the death of one spouse, the survivor
automatically becomes the owner of the property.
Tenancy in Common:
A form of co-ownership under which each owner holds
an undivided interest in real property as if he
or she were sole owner. Each individual owner has
the right to partition. Unlike a joint tenancy,
there is no right of survivorship.
A loan to be paid in full at a specified time; not
an amortizing loan.
A policy insuring the owner or mortgagee against
loss by reason of defects in the title to a parcel
of real estate other than those encumbrances, defects
and other matters that are specifically excluded
by the policy.
Commercial Code (U.C.C.):
A compilation of laws dealing with most aspects
of commercial transactions such as sales, bank deposits
and collections, letters of credit and investment
The area actually used upon which the rental rate
is applied, e.g. 6,000 square feet @ $20.00 per
square foot per year equals a rental of $10,000
The percentage of the total space that is unoccupied,
e.g. five percent (5%) vacancy.