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#real estate

Waste

The destruction or material alteration or injury to premises by a tenant.

Regression

A principle in appraising that holds that a high valued property in an area of low valued properties seeks the level of the low valued properties.


The opposite action, i.e. a low valued property seeking the level of surrounding high valued properties, is called the Principle of Progression.

Record

The act of filing for the record in the county recorder's office. To record a document is to give constructive notice of the contents of the document to the world.

Prescription

A method of obtaining an easement although the owner of the land burdened by the easement has not agreed to grant the easement.


Easement by prescription is created only if the following conditions are met:
1. Continuous and uninterrupted use for five years;
2. Use is hostile and adverse to the owner;
3. Use is open and notorious;
4. Exclusive; and
5. Under some claim of right.

Patent

An original conveyance of title to real property from the federal government to a private owner.

Orientation

The placement of a house on a lot with regard to its relation to the sun, prevailing winds, privacy from the street, protection from outside noises, and other factors relating to comfort and privacy.

Breach

In real estate terminology, breach is the breaking of a law or failure to perform a duty or promise, either by omission or commission.

Appraisal

An estimate or opinion of value based on analysis of facts. Valuation of property is estimated by an authorized person.

Amortization

In real estate, amortization is payment of a debt or obligation in equal installments over a given period so that by the end of the period the debt is completely paid. It is the opposite of a balloon payment.

Deed

Deed is a written instrument which, when properly executed and delivered by a competent party, transfers title to real estate.


Trust Deed


A deed for carrying out fiduciary purposes in which the real property is conveyed to a trustee in a land trust. The power to sell, lease, and mortgage the property are given to the trustee under the provision of the trust agreement.


Deed of Reconveyance


The document that transfers legal title from the trustee to the trustor (the borrower under a note and trust deed) after a trust deed debt has been paid in full.

Covenant

Covenant is an agreement written into a deed or other instrument promising performance or nonperformance of certain acts or stipulating certain uses or non-uses of the property.


Restrictive Covenant


A covenant restricting or limiting property rights to land, or a deed restriction in which it is specified that ownership of the land cannot be transferred unless the new owner agrees to continue to abide by the covenant.

Lease

Lease is an agreement by contract whereby possession and use of land is transferred (by a lessor to a lessee) for an agreed upon period of time under certain specified conditions. It is considered an interest in real property. The property which has a lease is called a leasehold.


Below are types of real estate leases:


Graduated Lease


A lease which provides for a varying rental rate, such as a rental rate that increases or decreases in measured steps. Often based on some future determination, such as a periodic appraisal of the property.


Ground Lease


An agreement for the use of the land only, sometimes secured by improvements placed on the land by the user. Usually a net lease.


Gross Lease


A lease agreement in which the tenant pays one constant payment, with no additions for the landlord's operating expenses. However, gross leases--which are the most common type for residential properties--does not include tenant utilities, unless specifically stated in the lease.


Master Lease


A lease that allows the renter (master lessee) to relet the property to other renters. The master lessee is responsible for management and marketing the properties. Typically, the owner or master lessor is guaranteed a regular installment regardless of how well the master lessee is performing. The master lessee (renter) assumes all of the risk; however, the owner (master lessor) receives much less than if he or she were to manage the property directly.


Net Lease


A lease arrangement that assesses the tenant with a base rent plus an additional assessment for the tenant's share of building operating expenses (CAM), insurance or real estate taxes. Net leases are either Single-Net, Double-Net (NN) or Triple-Net (NNN), depending on the number of expenses (CAM, insurance or taxes) that the lessee must pay.


Percentage Lease


A lease in which the rent is computed as a percentage of the gross business of the tenant. Ranges from under 2% for supermarkets and discount stores to over 50% for parking lots. Such an arrangement would require continuous and full financial disclosure by the tenant of the tenant's business activities. This may be either a gross lease or net lease arrangement, but there is usually a minimum rent amount and a recapture clause allowing the lessor to reclaim the property if minimum sales are not met.


Sandwich Lease


In a subletting situation, the original lease between the lessor (landlord) and the initial lessee (tenant) is sometimes called a sandwich lease. Legally, that lease is held by the initial tenant. Thus, that tenant's lease rights are sandwiched between the lease rights of the subtenant and the ownership rights of the landlord.


Sublease


A lease given by a lessee. The original lessee is in the middle and is both a lessor to the new lessee and a lessee under the original lease.


Overage Lease


A lease arrangement that collects additional charges from the tenant, based on a percentage of sales that a tenant generates above a specified sales base. Shopping malls will sometimes use this arrangement as an incentive for the mall director to pursue optimum traffic to the center.


References

  • Own it real estate dictionary by William E Keeler - ISBN-13: 978-1503070349

Convey

Convey is transferring the title to property from one party to another. The document (usually a deed), which is used to transfer the title is called a conveyance.

Conversion

In real estate terminology, conversion is a change from one use to another. With regard to licensees, the changing of a principal's money, held in trust by a broker, to the broker's own use. This is illegal.

Contract

In real estate industry, a sales contract is an agreement by which property rights are transferred from one party to another.


Unilateral Contract


Unilateral contract is an agreement in which one party's obligations are contingent upon a second party's performance. However, the second party has no obligation to perform and faces no penalty for non-performance.


Back-Up Contract


A back-Up contract is a real estate purchase agreement that becomes effective only if a primary contract with another party fails to close. The buyer in the back-up contract understands that he or she may not be able to purchase the property, particularly if the primary buyer is able to complete a purchase.


Development Contract


A development contract is an agreement by which a developer agrees to construct a particular improvement and the client agrees to purchase the improvement and (normally) property upon completion.


Implied Contract


An implied contract is legally recognized contract established by actions taken, even if the contract is not written or spoken.


Installment Contract


An installment contract is an agreement between the buyer and the seller, which allows the buyer to purchase the property on installment. The seller, in fact, becomes the lender for the buyer's purchase. However, the property remains in the seller's name until the established price is fully paid.


With an installment contract, the buyer is allowed to move in; the buyer pays monthly payments. Most installment contracts are essentially balloon in structure, giving the buyer a limited amount of time to eventually procure mortgage refinancing.


Land Contract


A more common term for an installment purchase agreement.


Oral Contract


A legally binding verbal agreement. In general, oral contracts are just as valid as written ones, but some jurisdictions either require a contract to be in writing in certain circumstances (for example where real property is being conveyed), or that a contract be evidenced in writing (although the contract itself may be oral). An example of the latter is the requirement that a contract of guarantee be evidenced in writing, which is found in the Statute of Frauds.


References

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