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1743 Cards in this Set

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“As is”
Words in a contract of sale indicating that a property is sold without warranty as to condition.
Abandonment
The surrender or release of a right, claim, or interest in real property.
Absorption field
A system of narrow trenches through which the discharge from a septic tank infiltrates into the surrounding soil.
Abstract of title
A history of a title and the current status of a title based on a title examination.
Abutting land
Parcels of land next to each other that share a common border.
Acceleration clause
A provision in a mortgage or deed of trust that permits the lender to declare the entire principal balance of the debt immediately due and payable if the borrower is in default.
Acceptance
Voluntary expression by the person receiving the offer to be bound by the exact terms of the offer; must be unequivocal and unconditional.
Access
The right to go onto and leave a property.
Accession
Property owners’ rights to all the land produces or all that is added to the land, either intentionally or by mistake.
Accessory apartment
For example, an in-law apartment in a residential home.
Accessory uses
Uses that are incidental or subordinate to the main use of a building such as a laundromat.
Accretion
The gradual building up of land in a watercourse over time by deposits of silt, sand, and gravel.
Accrued expenses
Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes).
Acknowledgment
A fonnal statement before an authorized official (e.g., notary public) by a person who executed a deed, contract, or other document, that it was a free act.
Acquisition
The act of acquiring a property.
Acquisition cost
The basis used by the FT-IA to calculate the loan amount.
Acre
A land area containing 43,560 square feet.
Act of waste
Abuse or misuse of property by a life tenant.
Action to quiet title
A lawsuit to clear a title to real property.
Actual age
Chronological age.
Actual eviction
The removal of a tenant by the landlord because the tenant breached a condition of a lease or other rental contract.
Actual notice
The knowledge a person has of a fact. adjoining lands Lands sharing a common boundary line.
Ad valorem
Latin meaning “according to value”; real property is taxed on an ad valorem basis.
Adjustable rate mortgage (ARM)
One in which the interest rate changes according to changes in a predetermined index.
Adjusted sales price
The amount realized minus fix- up expenses.
Administrative law judge (AU)
A judge who hears complaints and makes decisions regarding statutory violations of law.
Administrator
A person appointed by a court to administer the estate of a one who has died intestate.
Administrator’s deed
One executed by an administrator to convey title to estate property.
Administratrix
A woman appointed by a court to administer the estate of a person who has died intestate.
Adverse possession
A method of acquiring title to real property by conforming to statutory requirement; a form of involuntary alienation of title.
Affirmative action
Policy expressed in some form of legislative act with respect to the handling of certain public or private acts or conduct.
Affirmative easement
A legal requirement that a servient owner permit a right of use in the servient land by the dominant owner.
Agency
The fiduciary relationship between a principal and an agent.
Agency disclosure form
See disclosure regarding agency relationships form.
Agent
A person authorized to act on behalf of another person.
Agreement
A contract requiring mutual assent between two or more parties.
Agricultural districts
Created and protected by New York statute; these areas are used for animal grazing and crop production.
Air rights
Rights in the airspace above the surface of land.
Alienage
The citizenship or immigration status of any person who is not a citizen or national of the U.S.
Alienation
Transfer of title to real property.
Alienation clause
A statement in a mortgage or deed of trust entitling the lender to declare the entire principal balance of the debt immediately due and payable if the borrower sells the property during the mortgage term. Also known as due-on-sale clause.
Allodial system
The type of land ownership existing in the United States whereby individuals may hold title to real property absolutely.
Alluvion
Increased soil, gravel, or sand on a stream bank resulting from flow or current of the water.
Americans with Disabilities Act
A federal law protecting the rights of individuals with physical or mental impairments.
Amortization
Applying periodic payments first toward the interest and then toward the principal to eventually pay off a debt.
Amortization schedule
Designation of periodic payments of principal and interest over a specific term to satisfy a mortgage loan.
Amortized mortgage
One in which uniform installment payments include payment of both principal and interest.
Amperage
The amount of current or electricity flowing through the wire.
Annexation
Addition of an area into a city.
Annual percentage rate (APR)
The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate.
Anticipation
The principle that property value is based on expectations or hopes of the future benefits of ownership.
Antitrust violations
Any business activity where there is a monopoly, a contract, a conspiracy, or a combination that negatively impacts an individual’s or a company’s ability to do business.
Apartment information vendor
A licensed individual who is paid to provide information concerning the location and availability of residential real property.
Apartment sharing agent
A licensed individual who is paid to arrange and coordinate meetings between current owners of real property who wish to share their housing with others.
Apportionment
The division of expenses between buyer and seller.
Appraisal
An estimate of value of particular property, at a particular time for a specified purpose.
Appraisal report
Documentation containing an estimate of property value and the data on which the estimate is based.
Appraiser
One who estimates the value of real property.
Appreciation
An increase in property value.
Appurtenances
All rights or privileges that result from ownership of a specific property and move with the title.
Appurtenant easement
See easement appurtenant.
Area variance
Permission to use land in a manner that is not normally allowed by the dimensional or physical requirements of a zoning ordinance.
Arrears
Delinquency in meeting an obligation; or, paid at the end of a period (e.g., at the end of the month) for the previous period. Payments in arrears include interest for using the money during the previous period.
Article 12-A
The section of the New York Real Property Law pertaining to real estate salespersons and brokers.
Article 78 proceeding
An appeal brought forth because of a ruling by a government agency.
Article 9-A
A section of the New York Real Property Law addressing the purchase or lease of vacant subdivided lands sold through an installment contract within or without New York.
Asbestos
A fibrous mineral found in many building materials and when improperly disturbed can cause serious lung illnesses.
Assessed value
The dollar amount of worth to which a local tax rate is applied to calculate the amount of real property tax.
Assessment
A levy against property.
Assessor
An official of local government who has the responsibility for establishing the value of property for tax purposes.
Assignee
One to whom contractual rights are transferred.
Assignment
Transfer of legal rights and obligations by one party to another.
Assignment of lease
Transfer by a lessee of the entire remaining term of a lease without any reversion of interest to the lessee.
Assignor
The person transferring contractual rights to another.
Associate real estate broker
A licensed real estate broker who chooses to work under the name and supervision of another licensed broker.
Assumable mortgage
One that does not contain an alienation clause and can be transferred from one party to another.
Attorney-in-fact
A person appointed to perform legal acts for another under a power of attorney.
Auction
A form of property sale in which people bid against one another.
Availability
An economic characteristic of land denoting that land is a commodity with a fixed supply base.
Avulsion
Sudden loss or gain of land as a result of water or shift in a bed of a river that has been used as a boundary.
Balloon framing
Method of construction that uses a single system of wall studs that run from the foundation through the first and second floors to the ceiling support.
Balloon mortgage
One in which the scheduled payment will not amortize the loan over the mortgage term; therefore, to fully satisfy the debt, it requires a final payment called a balloon payment, larger than the uniform payments.
Bargain and sale deed
A form of deed with or without covenants of title.
Base rent
The fixed or minimum rent portion in a percentage lease.
Bearing walls
Walls that support the ceiling and/or roof.
Beneficial title
Equitable title to real property retained by a mortgagor or trustor conveying legal title to secure a mortgage debt.
Beneficiary
(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.
Bequest
A gift of personal property by will.
Bilateral contract
An agreement based on mutual promises that provide the consideration.
Bill of sale
An instrument transferring ownership of personal property.
Binder
A written document for the purchase and sale of real property that does not generally contain all of the essential elements of a valid contract.
Blanket mortgage
One in which two or more parcels of real property are pledged to secure payment of the note.
Blind ad
An ad for real property placed by a real estate broker that does not indicate that the advertiser is a broker and does not include the name of the broker and telephone number.
Blockbusting
[The illegal practice of] for profit, inducing or attempting to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, or national origin.
Blueprint
A building plan that is a detailed architectural rendering of the structure.
Board of directors
Governing and decision-making board of a cooperative.
Bona fide
In good faith.
Book value
Dollar worth as it appears on the owner’s books, usually for tax purposes; also known as historic value.
Breach of contract
Failure, without legal excuse, to perform any promise that forms the whole or part of a contract.
Bridge loan
A loan for a short duration of time.
Broker’s agent
One who is hired through a broker to work for the principal.
Brokerage
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate.
BTU
Abbreviation for British thermal unit. The amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit.
Building codes
Public controls regulating construction.
Building envelope
The materials of a building that enclose the interior.
Building permit
Permission from the appropriate local government authority to construct or renovate any type of property.
Building specifications
Written narratives that explain the building plan.
Bundle of rights
The rights of an owner of a freehold estate to possession, enjoyment, control, and disposition of real property.
Buydown
The voluntary paying of discount points by a borrower to reduce mortgage interest rate at the time the loan is made.
Buyer agent
A real estate agent who works in the best interests of a buyer.
Buyer brokerage
An agency relationship between a buyer and a broker.
Capital gain
The profit realized from the sale of a real estate investment.
Capital improvement
An item that adds value to the property, adapts the property to new uses, or prolongs the life of property. Maintenance is not a capital improvement.
Capitalization rate
The percentage of the investment the investor will receive back each year from the net income from the property.
Cash flow
Income produced by an investment property after deducting operating expenses and debt service.
Caveat
A warning or caution that may be addended to a contract of sale such as a disclosure that a property lies in an Agricultural District.
Caveat emptor
Latin, meaning “let the buyer beware”. Does not apply when there is a fiduciary relationship.
Cease and desist list
A list of homeowners compiled by DOS in a cease and desist zone who do not wish to be solicited by real estate agents.
Cease and desist zone
A designation given by DOS to a certain geographic area that has been subject to intense and repeated solicitation by real estate agents. See cease and desist list.
Census tract
Small geographical areas established through cooperation between the local community and the Bureau of Census.
Certificate of occupancy
A document issued by a local government agency, after a satisfactory inspection of a structure, authorizing that the structure can be occupied.
Certificate of title opinion
A report, based on a title examination, setting forth the examiner’s opinion of the quality of a title to real property.
Cession deed
A deed used to relinquish real property to a municipality for a road or something of that nature.
Chain
In land measurement, a distance of 66 feet.
Chain of title
Successive conveyances of title to a specific parcel of land.
Change
The principle stating that change is continually affecting land use and therefore continually altering value.
Chattel
Personal property.
Chlordane
Chemical insecticide and termiticide that was banned in the early 1980s.
Chlorofluorocarbons (CFCs)
Man-made chemical substances that were used in hundreds of applications, including refrigerators and air conditioners.
Chronological age
Actual age of an item.
Circuit breaker
Devices that switch off the electrical power for a given circuit if the current is above the capacity of the system.
Civil action
A lawsuit between private parties.
Civil Rights Act of 1866
A federal law that prohibits all discrimination on the basis of race.
Civil Rights Act of 1964
Law that prohibited discrimination in any housing program receiving federal money.
Civil Rights Act of 1968
See Fair Housing Act of 1988.
Clayton Antitrust Act
Federal legislation including the imposition of civil and punitive damages for antitrust activities.
Client
The principal of the agent.
Closed mortgage
One that imposes a prepayment penalty.
Closing costs
Expenses incurred in the purchase and sale of real property paid at the time of settlement or closing.
Closing statement
An accounting of the funds received and disbursed in a real estate transaction.
Cloud on a title
A claim against a title to real property.
Cluster zoning
A form of zoning providing for several different types of land use within a zoned area.
Coastal Zone Management Program
A program coordinated by DOS to preserve and protect New York’s coastline.
Code of Ethics
A standard of conduct required by license laws and by the National Association of REALTORS.
Codicil
A supplement or an appendix to a will either adding or changing a bequest.
Coinsurance clause
A requirement of hazard insurance policies that property be insured for a certain percent of value to obtain the full amount of loss.
Collateral
Property pledged as security for payment of a debt.
Color of title
The deceptive appearance of claim to a title.
Commercial property
Property producing rental income or used in business.
Commercial zones
Uses that allow retail stores, restaurants, hotels, and service businesses.
Commingling
Mixing money or property of others with personal or business funds or other property.
Commission
A fee paid for the performance of services, such as a broker commission.
Commissioner’s deed
A form of judicial deed executed by a commissioner.
Commitment
A promise, such as that by a lending institution to make a certain mortgage loan.
Common areas
Property to which co-owners hold title as a result of ownership of a condominium unit.
Common elements
See common areas.
Common law
Law by judicial precedent or tradition, as contrasted with a written statute.
Common law dedication
An act by an owner allowing the public use of the property.
Community planning
A master plan for the orderly growth of a city or county to result in the greatest social and economic benefits to the people.
Community property
A form of co-ownership limited to husband and wife; does not exist in New York.
Community-based planning
A form of land use control originating in the grassroots of a community.
Comparative market analysis
An analysis of the competition in the marketplace that a property will face upon sale attempts.
Compensatory damages
The amount of money actually lost, which will be awarded by a court in case of a breached contract.
Competent parties
Persons and organizations legally qualified to manage their own affairs, including entering into contracts.
Competition
The principle stating that when the net profit a property generates is excessive, very strong competition will result.
Complete performance
Execution of a contract by virtue of all parties having fully performed all terms.
Condemnation
Exercise of the power of eminent domain; taking private property for public use.
Condemnation value
Market value of condemned property.
Condition
Any fact or event which, if it occurs or fails to occur, automatically creates or extinguishes a legal obligation.
Condominium
A form of ownership of real property, recognized in all states, consisting of individual ownership of some aspects and co-ownership in other aspects of the property.
Condominium declaration
The document that, when recorded, creates a condominium; also called a master deed.
Conforming loans
Those processed on uniform loan forms and according to FNMA / FHLMC guidelines.
Conformity
Homogeneous uses of land within a given area, which results in maximizing land value.
Consent decree
A compromise in civil lawsuits where the accused party agrees to stop the alleged illegal activity without admitting guilt or wrongdoing (called nolo contendere in criminal cases).
Consideration
Anything of value, as recognized by law, offered as an inducement to contract.
Construction loan
A short-term loan, secured by a mortgage, to obtain funds to construct an improvement on land.
Construction mortgage
A temporary mortgage used to borrow money to construct an improvement on land.
Constructive eviction
Results from some action or inaction by the landlord that renders the premises unsuitable for the use agreed to in a lease or other rental contract.
Constructive notice
One in which all affected parties are bound by the knowledge of a fact even though they have not been actually notified of such fact.
Consumer price index (CPI)
An index of the change in prices of various commodities and services, providing a measure of the rate of inflation.
Contingency
A condition in a contract relieving a party of liability if a specified event occurs or fails to occur.
Contract
An agreement between competent parties upon legal consideration to do, or abstain from doing, some legal act.
Contract buyer’s policy
Title insurance that protects contract buyer against defects in contract seller’s title.
Contract for deed
A contract of sale and a financing instrument wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called installment land contract and installment plan.
Contract rent
The amount of rent agreed to in a lease.
Conventional life estate
One created by intentional act of the parties.
Conventional mortgage loan
One in which the federal government does not insure or guarantee payment to the lender.
Conversion
Change in a form of ownership, such as changing rental apartments to condominium ownership.
Convey
To pass to another (as in title).
Conveyance
Transfer of title to real property.
Cooling-off period
A three-day right of rescission for certain loan transactions.
Cooperating broker or agent
One who participates in the sale of a property.
Cooperative
A form of ownership in which stockholders in a corporation occupy property owned by the corporation under a lease.
Co-ownership
Title to real property held by two or more persons at the same time; also called concurrent ownership.
Corporation
A form of organization existing as an entity.
Corporation franchise tax
A tax calculated on the net profit of the corporation.
Cost
The total dollar expenditure for labor, materials, and other items related to construction.
Cost approach
Appraisal method for estimating the value of properties that have few, if any, comparables and are not income-producing.
Counteroffer
A new offer made by an offeror rejecting an offer.
Covenant
A promise in writing.
Covenant against encumbrances
A promise in a deed that the title causes no encumbrances except those set forth in the deed.
Covenant for further assurances
A promise in a deed that the grantor will execute further assurances that may be reasonable or necessary to perfect the title in the grantee.
Covenant of quiet enjoyment
A promise in a deed (or lease) that the grantee (or lessee) will not be disturbed in the use of the property because of a defect in the grantor’s (or lessor’s) title.
Covenant of right to convey
A promise in a deed that the grantor has the legal capacity to convey the title.
Covenant of seisin
A promise in a deed ensuring the grantee that the grantor has the title being conveyed.
Covenant of warranty
A promise in a deed that the grantor will guarantee and defend the title against lawful claimants.
Credit
In a closing statement, money to be received or credit given for money or an obligation given.
Creditor
One to whom a debt is owed.
Cubic-foot method
A means of estimating reproduction or replacement cost, using the volume of the structure.
Cul-de-sac
A dead-end street with a circular turnaround at the dead end.
Cumulative-use zoning
A type of zoning permitting a higher-priority use even though it is different from the type of use designated for the area.
Curtesy
A husband’s interest in the real property of his wife. [See also “Dower”].
Customer
The party the agent brings to the principal as seller or buyer of the property.
Damages
The amount of financial loss incurred as a result of another’s action.
Debit
In a closing statement, an expense or money received against a credit.
Debt service
Principal and interest payments on a debt.
Decedent
A dead person.
Declaration
Master deed containing legal description of the condominium facility, a plat of the property, plans and specifications for the building and units, a description of the common areas, and the degree of ownership in the common areas available to each owner.
Declaration of restrictions
The instrument used to record restrictive covenants on the public record.
Decree
A court order.
Dedication
An appropriation of land or an easement therein by the owner to the public.
Dedication by deed
The deeding of a parcel of land to a municipality.
Deductible expenses
Costs of operating property held for use in business or as an investment. These expenses are subtracted from gross income to arrive at net income.
Deed
A written instrument transferring an interest in real property when delivered to the grantee.
Deed in lieu of foreclosure
Conveyance of title to the mortgagee by a mortgagor in default to avoid a record of foreclosure. Also called friendly foreclosure.
Deed restriction
Limitation on land use appearing in deeds.
Default
Failure to perform an obligation.
Defeasance clause
A statement in a mortgage or deed of trust giving the borrower the right to redeem the title and have the mortgage lien released at any time prior to default by paying the debt in full.
Defeasible
Subject to being defeated by the occurrence of a certain event.
Defeasible fee
A title subject to being lost if certain conditions occur.
Deficiency judgment
A court judgment obtained by a mortgagee for the amount of money a foreclosure sale proceeds were deficient in fully satisfying the mortgage debt.
DELETED: QUITCLAIM (unnecessary)
Delivery and acceptance
The transfer of a title by deed requiring the grantor to deliver and the grantee to accept a given deed.
Demise
To convey an estate for years; synonymous with lease or let.
Demography
The study of the social and economic statistics of a community.
Density
Number of persons or structures per acre.
Department of Housing and Urban Development (HUD)
See U.S. Department of Housing and Urban Development.
Depreciation
(a) Loss in value from any cause. (b) Deductible allowance from net income of property when arriving at taxable income.
Descent
The distribution of property to legally qualified heirs of one who has died intestate.
Description by monument
A legal description sometimes used when describing multiple-acre tracts of land and may refer to permanent objects such as a stone wall, large trees, or boulders.
Description by reference
A valid legal description that may be found on a deed that references a plat of subdivision or other legal document.
Devise
A gift of real property by will.
Devisee
The recipient of a gift of real property by will.
Direct cost
The cost of labor and materials.
Disability
The impairment of any life function.
Disclosure and informed consent
Explanation by a real estate agent of his position in the agency relationship and the verbal and written consent of the relationship by the client or customer.
Disclosure of information
The prompt and total communication to the principal by the agent of any information that is material to the transaction for which the agency is created.
Disclosure regarding real estate agency relationships form
Pursuant to Section 443 of the New York Real Property Law, this document must be presented by a licensee and signed by all parties at the first substantive meeting with prospective purchasers or sellers.
Disclosure statement
An accounting of all financial aspects of a mortgage loan required of lenders to borrowers in residential mortgage loans by Regulation Z of the Federal Reserve Board.
Discount points
A percentage of the loan amount the lender requires for making a mortgage loan.
Discriminatory advertising
Any advertising that states or indicates a preference, limitation, or discrimination on the basis of race, color, religion, sex, national origin, handicap, familial status, marital status, or age in offering housing or commercial property for sale or rent.
Disintermediation
The loss of funds available to lending institutions for making mortgage loans, caused by depositors’ withdrawal of funds for making investments that provide greater yields.
Distribution box
A part of a septic system that distributes the flow from the septic tank evenly to the absorption field or seepage pits.
Distribution panel
The location of circuit breakers or fuses.
Doctrine of laches
Loss of legal rights because of failure to assert them on a timely basis.
Dominant tenement
Land benefiting from an easement appurtenant.
Dower
A wife’s interest in her husband’s real property.
Dual agent
A broker/salesperson who attempts to represent both buyer and seller in the same transaction.
Due diligence
Investigation and review of a property to determine any legal liability.
Due-on-sale clause
See alienation clause.
Duress
The inability of a party to exercise free will because of fear of another party.
Duty of disclosure
A responsibility for revealing all information that affects the agency agreement.
Earnest money deposit
A deposit a buyer makes at the time of submitting an offer to demonstrate the true intent to purchase; also called binder, good faith deposit, escrow deposit.
Easement
A nonpossessory right of use in the land of another.
Easement appurtenant
A right of use in the adjoining land of another that moves with the title to the property benefiting from the easement.
Easement by condemnation
Created by the exercise of the government’s right of eminent domain.
Easement by grant
Created by the express written agreement of the landowners, usually in a deed.
Easement by implication
Arising by implication from the conduct of the parties.
Easement by necessity
Exists when a landowner has no access to roads and is landlocked.
Easement by prescription
Obtained by use of the land of another for the legally prescribed length of time.
Easement for light and air
A type of negative easement restraining a property owner from developing his or her property so as to block the view of another.
Easement in gross
A right of use in the land of another without the requirement that the holder of the right own adjoining land.
Eave
The lowest part of the roof that projects beyond the walls of the structure.
Economic depreciation
Physical deterioration of property caused by normal use, damage caused by natural and other hazards, and failure to adequately maintain property.
Economic life
The period of time during which a property is financially beneficial to the owner.
Economic obsolescence
Loss in value caused by things such as changes in surrounding land use patterns and failure to adhere to the principle of highest and best use.
Effective interest rate
Actual rate of interest being paid.
Egress
The right to leave a parcel of land entered (ingress) by law.
Electromagnetic field (EMF)
Created when electricity flows through a wire.
Emergency Tenant Protection Act
A law governing rent control and rent stabilization in New York.
Eminent domain
The power of government to take private property for public use.
Enabling acts
Laws passed by state legislatures authorizing cities and counties to regulate land use within their jurisdictions.
Encroachment
Trespass on the land of another as a result of intrusion by some structure or other object.
Encumbrance
A claim, lien, charge, or liability attached to and binding upon real property.
Enforceable
A contract in which the parties may be required legally to perform.
Environment Policy Act
A federal law that requires filing an environmental impact statement with the EPA prior to changing or initiating a land use or development.
Environmental impact statement (EIS)
A requirement of the State Environmental Quality Review Act prior to initiating or changing a land use that may have an adverse effect on the environment.
Environmental Protection Agency (EPA)
A federal agency that oversees land use.
Equal Credit Opportunity Act (ECOA)
A federal law prohibiting discrimination in consumer loans.
Equitable title
An interest in real estate such that a court will take notice and protect the owner’s rights.
Equity
The difference between the value of a property and its liabilities.
Equity of redemption
The borrower’s right to redeem the title pledged or conveyed in a mortgage or deed of trust after default and prior to a foreclosure sale by paying the debt in full, accrued interest, and lender’s costs.
Erosion
The wearing away of land by water, wind, or other processes of nature.
Escheat
The power of government to take title to property left by a person who has died without leaving a valid will (intestate) or qualified heirs.
Escrow
The deposit of funds or documents with a neutral third party, who is instructed to carry out the provisions of an agreement.
Escrow account
(a) An account maintained by a real estate broker in an insured bank for the deposit of other people’s money; also called trust account. (b) An account maintained by the borrower with the lender in certain mortgage loans to accumulate the funds to pay an annual insurance premium, a real property tax, or a homeowner’s association assessment.
Estate at sufferance
Continuing to occupy property after lawful authorization has expired; a form of leasehold estate.
Estate at will
A leasehold estate that may be terminated at the desire of either party.
Estate for years
A leasehold estate of definite duration.
Estate from year to year
A leasehold estate that automatically renews itself for consecutive periods until terminated by notice by either party; also called estate from period-to-period or periodic tenancy.
Estate in fee
An estate in fee simple absolute.
Estate in real property
An interest sufficient to provide the right to use, possession, and control of land; establishes the degree and duration of ownership.
Estoppel
Preventing a person from making a statement contrary to a previous statement.
Estoppel certificate
A document executed by a mortgagor or mortgagee setting forth the principal amount; executing parties are bound by the amount specified.
Estovers
The right of a life tenant or lessee to cut timber on the property for fuel or to use in making repairs.
Evaluation
A study of the usefulness or utility of a property without reference to the specific estimate of value.
Eviction
A landlord’s action that interferes with the tenant’s use or possession of the property. Eviction may be actual or constructive.
Exclusive agency listing
A listing given to one broker only (exclusive), who is entitled to the commission if the broker or any agent of the listing broker effects a sale, but imposes no commission obligation on the owner who sells the property to a person who was not interested in the property by efforts of the listing broker or an agent of the listing broker.
Exclusive right to rent
This contract is between an owner or a lessor and a broker/agent in the rental of residential property.
Exclusive right to sell listing
A listing given to one broker only, who is entitled to the commission if anyone sells the property during the term of the listing contract.
Exclusive use zoning
A type of zoning in which only the specified use may be made of property within the zoned district.
Executed contract
An agreement that has been fully performed.
Execution
Signing a contract or other legal document.
Execution of judgment
Judicial proceeding in which property of a debtor is seized (attached) and sold to satisfy a judgment lien.
Executor
A male appointed in a will to see that the terms of the will are carried out.
Executory contract
An agreement that has not been fully performed.
Executrix
A female appointed in a will to see that the terms of the will are carried out.
Exercise of option
Purchase of optioned property by the optionee.
Express agency
An agency relationship created by oral or written agreement between principal and agent.
Express contract
One created verbally or in writing by the parties.
Extended coverage
An insurance term referring to the extension of a standard fire insurance policy to cover damages resulting from wind, rain, and other perils.
External obsolescence
Changes in surrounding land-use patterns resulting in increased traffic, air pollution, and other hazards and nuisances.
Fair Housing Act of 1968
A federal prohibition on discrimination in the sale, rental, or financing of housing on the basis of race, color, religion, gender, or national origin.
Fair Housing Act of 1988
A federal prohibition on discrimination in sale, rental, financing, or appraisal of housing on the basis of race, color, religion, gender, national origin, handicap, or familial status.
Fair Housing Amendments Act of 1988
A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status.
Fair market value
A price for property agreed upon between buyer and seller in a competitive market with neither party being under undue pressure.
Familial status
Defined under Fair Housing Law as an adult with children under 18, a person who is pregnant, one who has legal custody of a child, or who is in the process of obtaining custody.
Family
An individual, or two or more persons related by blood or marriage or adoption, living together in one dwelling; or a group of up to three people who are not married, or blood relatives or adopted, living together as a single housekeeping unit; or one or more persons living together in a single housekeeping unit as distinguished by a hotel or club.
Fannie Mae
The shortened name for the Federal National Mortgage Association (FNMA), a privately owned corporation that purchases Fl-IA, VA, and conventional mortgages.
Fascia
In house construction, the area of material facing the outer edge of the soffit.
Federal Housing Administration (FHA)
The U.S. agency that insures mortgage loans to protect lending institutions.
Federal Reserve System
The U.S. banking system that regulates monetary policy and, thereby, the money supply and interest rates.
Federal Trade Commission
An administrative body that has the power to declare trade practices unfair, particularly with regard to antitrust legislation.
Fee simple absolute
An inheritable estate in land providing the greatest interest of any form of title.
Fee simple on condition
A defeasible fee (title), recognizable by words “but if.”
FHA-insured loan
A mortgage loan in which payments are insured by the Federal Housing Administration.
Fiduciary
A person, such as an agent, placed in a position of trust in relation to the person for whose benefit the relationship is created; essentially the same as a trustee.
Filtering down
The decline in value of properties in neighborhoods that were once middle or upper income.
Finance charge
An amount imposed on the borrower in a mortgage loan, consisting of origination fee, service charges, discount points, interest, credit report fees, and finders’ fees.
Fire insurance policy
See homeowner’s policy.
First mortgage
One that supersedes later recorded mortgages.
First substantive meeting
The first contact or meeting by a licensee when some detail and information about the property is shared with parties who express some interest in the real estate transaction.
Fixed expenses
Expenditures such as property taxes, license fees, and property insurance; subtracted from effective gross income to determine net operating income.
Fixed lease
One in which the rental amount remains the same for the entire lease term; also called flat, straight, or gross lease.
Fixed-rate mortgage
One in which the interest does not change.
Fixture
Personal property that has become real property by having been permanently attached to real property.
Flashing
A metallic material used in certain areas of the roof and walls to prevent water from seeping into the structure.
Flat lease
One in which the rental amount does not change during the lease term.
Flexible payment mortgage
A loan that allows smaller mortgage payments in the first years after purchase and then increases the amount of payment later on.
Flitch beam
A double top plate used to tie the walls together and provide additional support for the ceiling and roof system.
Floating slab
A type of foundation constructed by pouring the footing first and then pouring the slab.
Footing
The concrete base below the frost line that supports the foundation of a structure.
Forbearance
The act of refraining from taking legal action for payment of a mortgage despite the fact that it is due.
Foreclosure
The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.
Forfeiture
Relinquishing a portion of title to the government without compensation.
forfeiture clause
A statement in a contract for deed providing for giving up all payments by a buyer in default.
formal will
A will, in writing, signed by the testator or testatrix in front of two witnesses.
foundation walls
Poured concrete, masonry block, or brick sides of a structure.
framing members
Lumber with a nominal dimension of 2’ thick used for constructing the wooden skeleton of a building.
Fraud
An intentional false statement of a material fact.
Freddie Mac
A nickname for Federal Home Loan Mortgage Corporation (FHLMC), a corporation wholly owned by the Federal Home Loan Bank System that purchases FHA, VA, and conventional mortgages.
free market
An economic condition in which buyer and seller have ample time to negotiate a beneficial purchase and sale without undue pressure or urgency.
freehold estate
A right of title to land.
Freon
A refrigerant used in most home air conditioning units. Not hazardous to humans, but damages the ozone layer when released into the atmosphere (converts 2x molecules of O3 (ozone) into 3x molecules of O2 (molecular oxygen). Must be recovered (drained) from all A/C equipment before service or removal.
Friable
A quality of some asbestos that causes it to crumble, allowing toxic particles to escape into the air and lodge in the lungs.
frieze board
The wooden member fastened under the soffit against top of wall.
front foot
A linear foot of property frontage on a street or highway.
full covenant and warranty deed
A deed containing the strongest and broadest form of guarantee of title.
fully amortizing mortgage
One in which the scheduled uniform payments will pay off the loan completely over the mortgage term.
functional obsolescence
Flawed or faulty property rendered inferior because of advances and change.
Fuse
A device that is part of a wiring system that will melt and open the circuit, causing electrical power to stop when overheating occurs. Has been largely replaced by circuit breakers and/or fusible links, but still found in older homes.
future interest
The rights of an owner of an estate who will vest at some upcoming time.
Gender
definition of a person’s sex, either male or female.
general agent
One with full authority over one property of the principal, such as a property manager.
general lien
One that attaches to all of the property of a person within the court’s jurisdiction.
General Obligations Law
See Statute of Frauds.
general partnership
The partners are personally liable for partnership debts exceeding partnership assets.
general warranty deed
A deed denoting an unlimited guarantee of title.
Ginnie Mae
A nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.
Girder
The main carrying beam of a house that spans the distance from one side of the foundation to the other.
good faith estimate
Lender’s estimate of borrower’s settlement costs, required by RESPA to be furnished to borrower at time of loan application.
government loan
Mortgage guaranteed, insured, or funded by a government agency.
grace period
In a mortgage, a specified time frame in which the payment may be made without the borrower being in default.
graduated lease
One in which the rent changes from period to period over the lease term in stair-step fashion. Used for new business tenant whose income increases over time.
graduated payment mortgage (GPM)
One in which the payments are lower in the early years but increase on a scheduled basis until they reach an amortizing level.
Grant
A transfer of title to real property by deed.
Grantee
One who receives title to real property by deed. Opposite: grantor.
granting clause
The statement in a deed containing words of conveyance.
Grantor
One who conveys title to real property by deed. Opposite: grantee.
gross lease
One in which the lessor pays all costs of operating and maintaining the property and real property taxes.
ground lease
A long-term lease of unimproved land, usually for construction purposes.
Groundwater
Water obtained from underground.
group boycott
A conspiracy wherein a person or group is persuaded or coerced into not doing business with another person or group.
group home
A residential facility for five or more adults who have been institutionalized and then released.
habendum clause
The statement in a deed beginning with the words “to have and to hold” and describing the estate granted.
Habitable
Suitable for the type of occupancy intended.
Headers
Wooden reinforcements for the placement of doors and windows.
Hectare
Metric system equivalent to the U. S. measurement of 2.47 acres
Heirs
Persons legally eligible to receive property of a decedent.
Heterogeneous
A variety of dissimilar uses of property; nonhomogeneous.
Highest and best use
The use of land that will preserve its utility and yield a net income flow in the form of rent that, when capitalized at the proper rate of interest, represents the highest present value of the land.
Holding period
The length of time a property is owned.
Holdover tenant
A tenant who remains in possession of property after a lease terminates.
Holographic will
One handwritten by the testator.
Home Buyer’s Guide
A booklet explaining aspects of the loan settlement required by RESPA.
Home equity loan
A loan against the equity in a home.
Home occupation
A small business or occupation that may be conducted only by the residents of the dwelling and must be incidental and secondary to the use of the dwelling.
Homeowner’s policy
An insurance policy protecting against a variety of hazards.
Homeowner’s warranty (HOW)
An insurance policy protecting against loss caused by structural and other defects in a dwelling.
Homeowners’ association
An organization of owners having the responsibility to provide for operation and maintenance of common areas of a condominium or residential subdivision; also called property owners’ association.
Homestead
The land and dwelling of a homeowner.
Homogeneous
Similar and compatible, as in land uses.
HUD Form No. 1
A standard settlement form required by RESPA.
Human Rights Law
See New York State Human Rights Law.
HVAC
An acronym for heating, ventilation, and air conditioning.
Hydronic system
A process in a heating system where liquids such as water are heated or cooled.
Hypothecate
To pledge property as security for the payment of a debt without giving up possession.
Illiquid
An investment that is not easily convertible to cash.
Immobility
Incapable of being moved; fixed in location; an important physical characteristic of land.
Implied agency
Agency that exists as a result of actions of the parties.
Implied contract
One created by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.
Implied warranty
One presumed by law to exist in a deed, though not expressly stated.
Improvements
Changes or additions made to a property, such as walls or roads, and so on. These typically increase the value of a property, except in some cases of overimprovement.
Incentive zoning
Offers incentives to developers and property owners to construct amenities that would provide certain types of uses and enjoyment for the residents of the municipality.
Income approach
The primary method used to estimate the present value of properties that produce income.
Income property
One that produces rental income.
Incompetent
Describes a person who is not capable of managing his or her own affairs, under law.
Incorporeal
Intangible things such as rights.
Indemnification
Reimbursement or compensation paid to someone for a loss already suffered.
Independent contractor
Workers who hold nonemployee status under the law.
Indestructibility
A physical characteristic of land describing that land as a permanent commodity that cannot be destroyed.
Index lease
A method of determining rent on long- term leases where the rent is tied to an economic indicator such as an index.
Indirect cost
Costs that support a construction project, such as architectural fees.
Industrial zones
Uses that allow light or heavy manufacturing and warehouses.
Inflation
An increase in money and credit relative to available goods resulting in higher prices.
Informed consent
Agreement by a buyer or seller to a type of agency relationship after considering the various alternatives.
Infrastructure
Services and systems that support a community, such as hospitals, schools, and roadways.
Ingress
The right to enter a parcel of land; usually used as “ingress and egress” (both entering and leaving).
Injunction
A court instruction to discontinue a specified activity.
Installment land contract
See contract for deed.
Installment sale
A transaction in which the seller receives the sale price over a specified period of time.
Instrument
A written legal document such as a contract, note, or mortgage.
Insurable interest
The degree of interest qualifying for insurance.
Insured conventional loan
One in which the loan payment is insured by private mortgage insurance to protect the lender.
Insured value
The cost of replacing a structure completely destroyed by an insured hazard.
Interest
(a) Payment for the use of someone else’s money. (b) An ownership or right.
Interim financing
A short-term or temporary loan such as a construction loan.
Interspousal deed
Conveys real property from husband to wife or wife to husband.
Interstate Land Sales Full Disclosure Act
A federal law regulating the sale across state lines of subdivided land under certain conditions.
Intervivos trust
A trust set up while the parties are living.
Intestate
The condition of death without leaving a valid will.
Intestate succession
Distribution of property by descent as provided by statute.
Invalid
Not legally enforceable.
Investment
The outlay of money for income or profit.
Investment syndicate
A joint venture, typically controlled by one or two persons, hoping for return to all investors.
Investment value
The highest price an investor would pay in light of how well he believes a given property would serve his financial goals.
Involuntary alienation
Transfer of title to real property as a result of a lien foreclosure sale, adverse possession, filing a petition in bankruptcy, condemnation under power of eminent domain, or, upon the death of the titleholder, to the state if no heirs.
Involuntary lien
An act wherein a creditor places a claim on real and/or personal property of another to obtain payment of a debt.
Irrevocable
That which cannot be changed or canceled.
Joint tenancy
A form of co-ownership that includes the right of survivorship.
Joint venture
Participation by two or more parties in a single undertaking.
Joists
Wooden framing members used in the construction of floors and ceilings.
Judgment
A court determination of the rights and obligations of parties to a lawsuit.
Judgment lien
A general lien resulting from a court decree.
Judicial deed
One executed by an official with court authorization.
Judicial foreclosure
A court proceeding to require that property be sold to satisfy a mortgage lien. junior mortgage One that is subordinate to a prior mortgage.
Jurisdiction
The extent of authority of a court.
Kickback
Payment by a broker of any part of a compensation to a real estate transaction to anyone who is not licensed or who is not exempt from the license law.
L.S.
Abbreviation for locus signilli, a Latin term meaning “in place of the seal.”
Laches
See doctrine of laches.
Lally columns
Round steel and/or concrete columns that support the main carrying beam of a structure
Land
The surface of the earth, the area above and below the surface, and everything permanently attached thereto.
Land contract
See contract for deed.
Land grant
Conveyance of land as a gift for the benefit of the public.
Land patent
Instrument conveying public land to an individual.
Land trust
Type of trust in which title to land is held by a trustee for the benefit of others.
Land use controls
Governmental restrictions on land use (e.g., zoning laws and building codes).
Landlease
A type of lease that allows a lessee the right to use land for any purpose for a specified period of time.
Landlocked
Describes property with no access to a public road.
Lead
A toxic metal found in some homes in paint, dust, and water.
Lead agency
The governmental agency that oversees the environmental impact process and makes final decisions.
Lease
A contract wherein a landlord gives a tenant the right of use and possession of property for a limited period of time in return for rent.
Leased fee
Lessor’s interest in leased property.
Leasehold estate
Nonfreehold estate; of limited duration, providing the right of possession and control but not title.
Leasehold mortgage
One in which a leasehold (non- freehold) estate is pledged to secure payment of the note.
Legacy
A gift of personal property by will.
Legal capacity
The ability to contract.
Legal description
A description of land recognized by law.
Legal entity
A person or organization with legal capacity.
Legality of object
Legal purpose.
Legatee
Recipient of the gift of personal property by will.
Lessee
A tenant under a lease. lessor A landlord under a lease.
Leverage
The use of borrowed funds; the larger the percentage of borrowed money, the greater the leverage.
Levy
Imposition of a tax or [execution of] a lien.
License
A personal privilege to do a particular act or series of acts on the land of another.
Lien
A claim that one person has against the property of another for some debt or charge, entitling the lienholder to have the claim satisfied from the property of the debtor.
Lien foreclosure sale
Selling property without consent of owner who incurred the debt resulting in a lien, as ordered by a court or authorized by state law, and title conveyed to purchaser by judicial deed.
Lienee
One whose property is subject to a lien. [Opposite: lienor]
Lienor
The one holding a lien against another. [Opposite: lienee]
Life estate
A freehold estate created for the duration of the life or lives of certain named persons; a noninheritable estate.
Life estate in remainder
A form of life estate in which certain persons, called remaindermen, are designated to receive the title upon tennination of the life tenancy.
Life estate in reversion
A form of life estate that goes back to the creator of the estate in fee simple upon termination.
Life estate pur autre vie
An estate in which the duration is measured by the life of someone other than the life tenant. [pour autre vie – “for other life” in French].
Life tenant
One holding a life estate.
Limited partnership
An organization consisting of one or more general partners and several partners with lesser roles.
Liquidated damages
Money to be paid and received as compensation for a breach of contract.
Liquidity
The attribute of an asset’s being readily convertible to cash.
Lis pendens
Latin, meaning a lawsuit pending. See notice of lis pendens.
Listing contract
A contract whereby a property owner employs a real estate broker to market the property described in the contract.
Litigation
A lawsuit.
Littoral rights
Rights belonging to owner of land that borders a lake, ocean, or sea. [See also “riparian”]
Loan commitment
Obligation of a lending institution to make a certain mortgage loan.
Loan origination fee
Financing charge required by the lender.
Loan-to-value ratio
The relationship between the amount of a mortgage loan and the lender’s opinion of the value of the property pledged to secure payment of the loan.
Location (situs)
An economic characteristic of land [that has] the greatest effect on value in comparison to any other characteristic.
Margin
Measure of profit. marital status Either married or single.
Market allocation agreement
An agreement between competitors dividing or assigning a certain area or territory for sales.
Market value
A property’s worth in terms of price agreed upon by a willing buyer and seller when neither is under any undue pressure and each is knowledgeable of market conditions at the time.
Marketable title
One that is free from reasonable doubt and that a court would require a purchaser to accept.
master deed
The instrument that legally establishes a condominium; also called condominium declaration.
material fact
Important information that may affect a person’s judgment.
Materialmen’s lien
A statutory lien available to persons supplying material to the construction of an improvement on land if they are not paid.
Mechanics’ lien
A statutory lien available to persons supplying labor (mechanics) to the construction of an improvement on land if they are not paid.
Meeting of the minds
A condition that must exist for creation of a contract.
Merger
The absorption of one thing into another.
Merger clause
Clause in a real estate contract wherein the contract is fulfilled and the conveyed deed supersedes the contract.
Metes and bounds
A system of land description by distances and directions.
Mill
1/10th (one tenth) of a cent. [i.e. 1/1000th (one thousandth) of a dollar, from French “mille” (thousand)].
Mineral rights
A landowner’s ability to take minerals from the earth or to sell or lease this right to others.
Minor
A person who has not attained the statutory age of majority; in New York, age 18.
Misdemeanor
A crime punishable by up to a year in prison and/or a $1,000 fine.
Misrepresentation
(a) A false statement or omission of a material fact. (b) In real estate, making an intentionally false statement to induce someone to contract.
Monolithic slab
A type of foundation in which the footing and slab are poured at the same time. See also “floating slab”.
Moratorium
A delay in allowing development of property within the municipality.
Mortgage
A written instrument used to pledge a title to real property to secure payment of a promissory note.
mortgage assumption
The transfer of mortgage obligations to purchaser of the mortgaged property.
mortgage banker
A form of organization that makes and services mortgage loans.
mortgage broker
One who arranges a mortgage loan between a lender and a borrower for a fee.
mortgage insurance premium (MIP)
A payment for insurance to protect the lender and/or insurer against loss if default occurs.
mortgage loan value
The value sufficient to secure payment of a mortgage loan.
mortgage principal
The amount of money (usually the loan amount) on which interest is either paid or received.
mortgage satisfaction
Full payment of a mortgage loan.
Mortgagee
The lender in a mortgage loan, who receives a mortgage from the borrower (mortgagor).
mortgagee’s title insurance policy
A policy that insures a mortgagee against defects in a title pledged by a mortgagor to secure payment of a mortgage loan.
mortgaging clause
The statement in a mortgage or deed of trust that demonstrates the mortgagor’s intention to mortgage the property to the mortgagee.
Mortgagor
The borrower in a mortgage loan who executes and delivers a mortgage to the lender.
multiple dwelling
Residence rented to three or more families.
multiple listing service (MLS)
An organized method of sharing or pooling listings by member brokers.
mutual assent
The voluntary agreement of all parties to a contract as evidenced by an offer and acceptance.
mutual mistake
An error of material fact by both parties.
National Association of REALTORS (NAR)
The largest and most prominent trade organization of real estate licensees.
National Electric Code
National standard for electrical installation and service.
negative amortization
A situation found in adjustable-rate mortgages with a payment cap. When the interest rate rises, payments increase as well; due to the payment cap, the overlimit is added to the principal, resulting in the principal growing larger after the payment is made.
negative covenant
See restrictive covenant.
negative easement
A right in the land of another prohibiting the servient owner from doing something on the servient land because it will affect the dominant land.
Negligence
Legal term describing failure to use the care that a reasonable person would use in like circumstances.
net lease
One in which the lessee pays a fixed amount of rent plus the costs of operation of the property.
net listing
Not a type of listing but a method of establishing the listing broker commission as all money above a specified net amount to the seller; illegal in New York.
net operating income
Gross operating income less expenses.
New York City Commission on Human Rights
Deals with discrimination in the sale, rental, or lease of housing, land, and commercial space.
New York Real Property Law
See Article 12-A.
New York State Association of REALTORS (NYSAR)
Umbrella board for all of the real estate boards in New York and member board of the National Association of REALTORS.
New York State Department of Environmental Conservation (DEC)
An agency whose purpose is to protect the quality of land, water, scenery, and the health and diversity of fish and wildlife and their habitats in New York State.
New York State Energy Code
Regulations that set minimum requirements for the design of energy efficiencies for new buildings and renovations to existing buildings.
New York State Human Rights Law
Created to eliminate and prevent discrimination in residential and commercial real estate as well as in employment, public accommodations, places of amusement, and educational institutions.
New York State Office of Parks, Recreation, and Historic Preservation (OPRHP)
Oversees public recreational areas and administers federal and state preservation programs authorized by federal and state law.
New York State Uniform Fire Prevention and Building Code
Provides minimum standards for the construction and renovation of all types of buildings in New York.
nonconforming use
Utilization of land that does not conform to the use permitted by a zoning ordinance for the area; may be lawful or unlawful.
nonfreehold estate
Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as opposed to ownership in fee.
Nonhomogeneity
A physical characteristic of land describing that land as a unique commodity.
Nonpossessory
An individual does not occupy a property; easements imply a nonpossessory interest in land owned by another.
nonrecourse note
A note in which the borrower has no personal liability for payment.
nonsolicitation order
An order issued by the secretary of state prohibiting licensees from soliciting listings in certain areas of the state.
notary public
A person authorized by a state to take oaths and acknowledgments.
notice of us pendens
A statement on the public record warning all persons that a title to real property is the subject of a lawsuit and any lien resulting from the suit will attach to the title held by a purchaser from the defendant.
Novation
Substitution of a new contract for a prior contract.
null and void
Invalid; without legal force or effect.
Obligee
One to whom an obligation is owed. Opposite: Obligee.
Obligor
One who owes an obligation to another. Opposite: Obligor.
Obsolescence
Loss in property value caused by economic or functional factors.
Occupancy
Physical possession of property.
Offer
A promise made to another conditional upon acceptance by a promise or an act made in return.
offer and acceptance
Necessary elements for the creation of a contract.
Offeree
One to whom an offer is made. Opposite: Offeror.
Offeror
One making an offer. Opposite: Offeree.
open listing
A listing given to one or more brokers wherein the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner in the event the owner sells the property to someone who was not interested in the property by one of the listing brokers.
open mortgage
One that does not impose a prepayment penalty.
open-end mortgage
One that may be refinanced without rewriting the mortgage.
open-ended listing contract
A listing contract without a termination date.
operation of law
The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.
opinion of title
See certificate of title
option to purchase
A contract whereby a property owner (optionor) sells a right to purchase his or her property to a prospective buyer (optionee).
option to renew
A provision setting forth the method and terms for renewing the lease.
optionee
One who receives an option. Opposite: optionor.
Optionor
One who gives an option. Opposite: optionee.
oral will
A will usually restricted to the granting of personal property because it conflicts with the Statute of Frauds, which states that the conveyance of real property must be in writing.
Ordinance
A law enacted by a local government.
origination fee
A service charge by a lending institution for making a mortgage loan.
Overimprovement
An improvement to land that results in the land not being able to obtain its highest and best use.
owner’s title insurance policy
A policy insuring an owner of real property against financial loss resulting from a title defect.
Ownership
The right to use, control, possess, and dispose of property.
ownership in severalty
Title to real property held in the name of one person only.
package mortgage
One in which personal property as well as real property is pledged to secure payment of the note.
package policy
Insurance coverage for property damage and liability loss all within one premium.
Parcel
A specific portion of land, such as a lot.
parens patriae
The right of government to litigate and therefore protect in the name of the public good.
parol evidence rule
A concept allowing that oral explanations can support the written words of a contract but cannot contradict them.
participation mortgage
See shared equity mortgage.
Partition
A legal proceeding dividing property of coowners so each will hold title in severalty.
Partnership
A form of business organization in which the business is owned by two or more persons, called partners.
party wall
A common wall used by two adjoining structures.
payment cap
Imposition of an upper limit on monthly payments, if and when the interest rate increases. The overlimit amount (i.e. that which would have been paid if the cap was not in place) is added to the principal. This practice assures the borrower that payments will not rise beyond their ability to pay, but may ultimately result in negative amortization.
per se illegal
Legal doctrine that states that an activity is specifically not allowable under the law.
percentage lease
One in which the rental amount is a combination of a fixed amount plus a percentage of the lessee’s gross sales.
percolation
The movement of water through soil.
percolation (perc) test
A test of soil to determine if it is sufficiently porous for installation of a septic tank.
periodic tenancy
A lease that automatically renews for successive periods unless terminated by either party; also called an estate from year to year.
personal property
All property that is not land and is not permanently attached to land; everything that is movable; chattel.
Physical deterioration
Loss in value caused by unrepaired damage or inadequate maintenance.
Pitch
The slope of a roof.
PITI
Acronym denoting that a mortgage payment includes principal, interest, taxes, and insurance.
planned unit development (PUD)
A form of cluster zoning providing for both residential and commercial land uses within a zoned area.
Planning
A program for the development of a city or county designed to provide for orderly growth.
Plat
A property map, recorded on the public record in plat books.
platform framing
The most common type of framing in residential construction in which the framing of the structure rests on a subfloor platform.
Pledge
To provide property as security for payment of a debt or for performance of a promise.
pledged account mortgage
A type of mortgage in which the down payment is deposited in a savings account, with the lender and the borrower makes escalating payments to which are added withdrawal forms from the savings account.
Plottage
Combining two or more parcels of land into one tract that has more value than the total value of the individual parcels.
pocket card
Identification card issued by the Department of State to real estate licensees.
Points
See discount points.
police power
The power of government to regulate the use of real property for the benefit of the public.
polychlorinated biphenyls (PCBs)
A manmade, odorless, liquid organic compound and carcinogen appearing in groundwater and soil.
population density
The number of people within a given land area.
positive misrepresentation
A person’s actual statement that is false and known to be false.
Possession
One who either actively or constructively occupies a property; implies constructive notice that the possessor has certain legal rights.
Possessory
The act of occupying a property which implies certain rights. See nonpossessory.
post-and-beam framing
A type of construction in which the framing members are much larger than ordinary studs and larger posts can be placed several feet apart instead of 16” or 24” on center.
power of attorney
A legal instrument appointing an attorney-in-fact; creates a universal agency.
prepaid expenses
Costs that were paid by the seller in advance but were not fully used up (such as utility payments or property taxes due), shown as a credit to the seller and debit to the buyer.
prepaid items
Funds paid at closing to start an escrow account, as required in certain mortgage loans; also called prepaids.
prepayment penalty clause
A financial charge imposed on a borrower for paying a mortgage prior to expiration of the full mortgage term.
Prescription
A method of acquiring an easement by continuous and uninterrupted use without pennission.
prescriptive easement
An easement obtained by use of land without land owner’s permission for a legally prescribed period of time. Conceptually similar to the practice of squatting.
Price
The amount a purchaser agrees to pay and a seller agrees to accept under the circumstances surrounding a transaction.
price fixing
The illegal practice, by competitors in a group or industry, of conspiring to charge the same or very similar price for products or services.
prima facie case
A suit that is so factually strong that it can be defeated only by contrary evidence.
primary financing
The loan with the highest priority.
primary mortgage market
The activity of lenders’ making mortgage loans to individual borrowers.
prime rate
The interest rate a lender charges to the most creditworthy customers.
Principal
(a) In the law of agency, one who appoints an agent to represent themselves. (b) In finance, the amount of money on which interest is paid or received.
principal residence
The home the owner or renter occupies most of the time.
priority liens
Special liens that receive preferential treatment (such as mechanics’ liens).
private land use control
Regulations for land use by individuals or nongovernmental organizations in the form of deed restrictions and restrictive covenants.
private mortgage insurance (PMI)
A form of insurance coverage required in high loan-to-value ratio conventional loans to protect the lender in case the borrower defaults in the loan payment.
private property
That which is not owned by government.
privily of contract
An agreement that exists only between lessor and lessee for the right to demand and receive the specific benefit.
probate
The procedure for proving a will.
procuring cause
The basis for a direct action that results in successfully completing an objective.
Profit
The right to participate in profits of another’s land.
promissory note
A written promise to pay a debt as set forth in the writing.
Promulgate
To put in effect by public announcement.
property condition disclosure form
A comprehensive checklist pertaining to the condition of the property, including its structure and any environmental hazards in and around the property.
property description
An accurate legal description of land.
property management
Comprehensive, orderly, continuing program analyzing all investment aspects of a property to ensure a financially successful project.
property manager
One who manages properties for an owner as the owner’s agent.
property report
Disclosure required under the Interstate Land Sales Disclosure Act.
proprietary lease
A lease in a cooperative apartment.
Proration
Division of certain settlement costs between buyer and seller.
prudent avoidance policy
Regarding electromagnetic fields (EMF), the legal position of the State of New York, which advises people to avoid exposure to EMF, but does not specifically designate them as hazardous.
public grant
A grant of a power, license, or real property from the state or government to a private individual.
public land use control
Regulation of land use by government organizations in the form of zoning laws, building codes, subdivision ordinances, and environmental protection laws.
public open space
Land that is not intensely developed for residential, commercial, industrial, or institutional use.
public property
That which is owned by government, and available for use by the general public. See also private property, government property.
public record
Constructive notice, for all to see, of real property conveyances and other matters.
punitive damages
court-ordered awards that significantly exceed the actual damages; intended to punish the defendant for reckless and malicious behavior, and to deter others from committing similar acts in the future.
pur autre vie
Latin phrase meaning “for the life of another”. A life estate measured by the life of someone other than the life tenant.
purchase money mortgage
A mortgage given by a buyer to a seller to secure payment of all or part of the purchase price.
qualified fee simple
A defeasible fee (title), recognizable by words “as long as.”
quasi-judicial
Rulings that are subject to review and change in the state and federal courts.
quiet enjoyment
Use or possession of property that is undisturbed by an enforceable claim of superior title.
quiet title action
A lawsuit to remove a cloud on a title.
quitclaim deed
A deed of release that contains no warranty of title; used to remove a cloud on a title.
Radius
Distance from the center of a circle to the perimeter; part of a metes and bounds description.
Radon
A colorless, odorless, radioactive gas present in the soil that enters a home through small spaces and openings. Radon is created by the natural radioactive decay or uranium, is radioactive itself, and highly carcinogenic.
Rafters
Wooden framing members used in the roof.
rate cap
With adjustable rate mortgages, limits on interest rates during the lifetime of a loan.
Ratification
Affirming an implied agency by approving a broker’s actions.
ready, willing, and able
Describes a buyer who is ready to buy, willing to buy, and financially able to pay the asking price.
real estate
Land and everything permanently attached to land.
real estate broker
A person or an organization acting as agent for others in negotiating the purchase and sale of real property or other commodities for a fee.
real estate investment trust (REIT)
A form of business trust owned by shareholders making mortgage loans.
real estate market
A local activity in which real property is sold, exchanged, leased, and rented at prices set by competing forces.
real estate salesperson
A person performing any of the acts included in the definition of real estate broker but while associated with and supervised by a broker.
Real Estate Settlement Procedures Act (RESPA)
A federal law regulating activities of lending institutions in making mortgage loans for housing.
real property
The aggregate of rights, powers, and privileges conveyed with ownership of real estate.
real property tax lien
Taxes levied against real property by the local government and which have priority over all other liens.
reality of consent
Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress, fraud, undue influence, and misrepresentation.
realized gain
Actual profit resulting from a sale.
REALTOR®
A registered trademark of the National Association of REALTORS® (NAR); its use is limited to members only.
Realty
Land and everything permanently attached to land.
Reciprocity
Mutual agreement by certain states to extend licensing privileges to licensees in each state.
recognized gain
The amount of profit that is taxable.
Reconciliation
(a) The process of checking accounting of the settlement statement. (b) The adjustment process in appraising, whereby comparables are adjusted to the subject property.
Recordation
Written registration of an owner’s title in public records to protect against subsequent claimants.
Recording
Registering a document on the public record.
rectangular survey system
A type of land description utilizing townships and sections.
Redemption
See equity of redemption.
Redlining
The refusal of lending institutions to make loans for the purchase, construction, or repair of a dwelling because the area in which the dwelling is located is integrated or populated by culturally diverse people.
re-entry
The owner’s right to regain possession of real property.
referee’s deed
Used to convey real property when a court appointed individual (referee) acts as directed by the court in a bankruptcy or similar case.
reference to a plat
A description on a deed that may refer to a plat map and lot number as part of a recorded subdivision.
referral fee
A percentage of a broker commission paid to another broker for sending a buyer or seller to him or her.
Refinancing
Obtaining a new mortgage loan to pay and replace an existing mortgage.
Reformation
A doctrine that permits the court to correct a mistake and to rewrite a contract to express the true intentions of the parties.
Regulation Z
Requirements issued by the Federal Reserve Board in implementing the Truth-in-Lending Law, which is a part of the Federal Consumer Credit Protection Act.
Reject
To refuse to accept an offer.
release clause
A provision in a mortgage to release certain properties from the mortgage lien when the principal is reduced by a specified amount.
remainder interest
A future interest in a life estate.
Remainderman
One who has a future interest in a life estate.
Remise
To release or give up.
Repossession
Regaining possession of property as a result of a breach of contract by another.
Rescission
Cancellation of a contract when another party is in default.
Residential Leadbased Paint Hazard Reduction Act
Sets forth procedures to be followed in disclosing the presence of leadbased paint for sale of properties built prior to 1978.
restrictive covenant
Restriction placed on a private owner’s use of land by a nongovernmental entity or individual.
reverse annuity mortgage
A type of mortage where the lender makes payments to the borrower, for a contracted period of time. These payments are subtracted from the property’s equity, and are recaptured upon the death of the borrower or sale of property. This type of mortgage is commonly used by older people who need additional income and want to take advantage of the equity in their homes.
Reversion
Return of title to the holder of a future interest, such as the grantor in a life estate not in remainder.
reversionary interest
A provision stating the owner’s interest (possession of property) will go back to owner at end of lease.
Revocation
Withdrawal of an offer.
R-factor
Rating of insulation material’s resistance to heat transfer. The higher the rating, the more heat is blocked. Also called “R-value”.
Rider
Addendum to cover supplemental issues of an agreement.
ridge beam
Highest part of framing of a building; forms the apex of the roof.
right of assignment
Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.
right of first refusal
A statement in a lease or condominium articles of association that provides for a lessee or an association to have the first opportunity to purchase the property before it is offered to anyone else.
right of inheritance
The right for property to descend to the heirs of the owner as set out by will or by intestate succession.
right of survivorship
The right of an owner to receive the title to a co-owner’s share upon death of the co-owner, as in the case of joint tenancy and tenancy by the entirety.
right-of-way
An easement allowing someone to use the land of another.
riparian rights
The rights of an owner of property adjoining a moving watercourse such as a river, including access to, and use of, the water. See also “littoral”.
risk factor
The potential for loss.
risk management
Controlling and limiting risk in property ownership.
rule of reason
Legal doctrine that means that if an activity is reasonable, then it is allowable under law.
running with the land
Rights moving from grantor to grantee along with a title.
sale and leaseback
A transaction in which a property owner sells a property to an individual who immediately leases back the property to the seller.
sales comparison approach
Appraisal approach for estimating the value of single-family dwellings and vacant land; [-it] compares the subject property with other similar properties that have sold recently.
sales contract
An agreement between buyer and seller on the price and other terms and conditions of the sale of property.
satisfaction of mortgage
Legal document which states that a mortgage has been paid in full.
Scarcity
(a) An economic characteristic of real property. (b) In appraisal, supply of property in relation to effective demand.
second mortgage
One that is first in priority after a primary mortgage.
secondary mortgage market
The market in which lenders sell mortgages.
Security deposit
A sum of money that the landlord requires of the tenant prior to the lease, to be refunded at the end of the lease based upon the condition of the premises.
Seepage pit
A covered pit through which the discharge from the septic tank infiltrates into the surrounding soil.
Seisin (seizin)
Possession of a freehold estate in land.
Self-dealing
Illegal activity that can occur when a broker has an undisclosed interest in a property.
Seller agent
A listing agent, subagent, or broker’s agent who works in the best interests of the seller.
Separate ownership
Ownership in severalty by one’s spouse.
Separate property
Any property acquired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.
Septic system
A household wastewater treatment system consisting of a house sewer, septic tank, distribution box, and absorption field or seepage pit.
Service drop
Aboveground electrical cables that come from the nearest pole connecting to the service entrance conductors of a house. Related term: service lateral.
service lateral
Underground electrical wiring connecting to a house. Related term: service drop.
servient tenement
Land encumbered by an easement.
Setback
The distance from a front or interior property line to the point where a structure can be located.
severalty
Ownership by only one person.
Sexual Orientation Non-Discrimination Act (SON-DA)
Law that added sexual orientation as protected class under the New York Human Rights Law.
shared equity mortgage
A type of mortgage used in commercial lending where the lender participates in the profits generated by a commercial property.
Sheathing
A material such as plywood or sheetrock, which covers the framing members of a structure; also a type of insulation material.
Sherman Antitrust Act
Federal legislation including imposition of civil and punitive damages for antitrust activities.
sick building syndrome
A chemical illness that may be caused by the air quality inside a commercial building.
sill plate
The first wooden member of a structure used as the nailing surface for the floor system.
single agent
An agent who works only for the buyer or the seller.
Situs
Location of land.
slab-on-grade construction
A type of concrete flooring that is part of the foundation and is poured on a prepared and graded surface. Since the slab rests directly on the ground, there is no basement.
Soffit
A wood, vinyl, or aluminum material placed under the roof extension of a structure.
sole plate
A horizontal base plate, which serves as the foundation for the wall system.
sole proprietorship
A business owned by one individual.
SONYMA (Sonny Mae)
State of New York Mortgage Agency, which raises money from the sale of New York tax-free bonds and uses these funds for mortgage loans.
special agent
Agent with limited authority to act on behalf of the principal, such as created by a listing. See also “general agent”.
special assessment
A levy by a local government against real property for part of the cost of making an improvement to the property, such as street paving, installing water lines, or putting in sidewalks.
special purpose real estate
Category of real property created as a result of combining both the land and its improvements for a singular highest and best use.
special use permit
A permit for a use that is not permitted in the zone except with the special permission of the planning board or other legislative body.
specific lien
One that attaches to one particular property only.
specific performance
A court instruction requiring a defaulting party to a contract to buy and sell real property to specifically perform her obligations under the contract.
spot zoning
In New York, the illegal rezoning of a certain property in a zoned area to permit a different type of use than that authorized for the rest of the area.
Standards of Practice
Established practices set out in the Code of Ethics established by the NAR.
State Environmental Quality Review Act (SEQRA)
A New York law requiring preparation of an environmental impact statement on any projects that require government approval and that may have a significant effect on the enviromnent.
Statute of Frauds
A law in effect in all states; in New York, the General Obligations Law, requiring real estate contracts for more than one year to be in writing.
Statute of Limitations
Law establishing the time period within which certain lawsuits may be brought.
Statutory dedication
When a property owner files a plat marked with portions of the property dedicated to public use.
Steering
The illegal practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic make-up of these areas.
Straight-term mortgage
A loan in which the borrower pays interest only for a specified term and, at the end of the term, is required to pay the principal.
Studs
Wooden framing members used for forming the wall skeleton of a structure.
Subagent
A person appointed by an agent with permission of the principal to assist in performing some or all of the tasks of the agency.
subchapter S corporation
Corporate formation whereby corporate income and expenses flow through to shareholders as if a partnership.
subdivision regulation (ordinance)
Public control of the development of residential subdivisions.
Sublease
The transfer of oniy part of a lease term with reversion to the lessee; a lesser lease estate.
Subórdinate
(adjective) Lower in priority; also (verb) to subordináte.
subrogation of rights
The substitution of the title insurance company in the place of the insured for filing a legal action.
Substitution
The principle providing that the highest value of a property has a tendency to be established by the cost of purchasing or constructing another property of equal utility and desirability provided that the substitution can be made without unusual delay.
subsurface rights
Rights to the area below the earth’s surface.
supply and demand
The principle stating that the greater the supply of any commodity in comparison to demand, the lower the value; conversely, the smaller the supply and the greater the demand, the higher the value.
Survey
Document showing measurements, boundaries, and area of a property.
survivorship
The right of the surviving co-owner automatically to receive the title of a deceased co-owner immediately without probate.
Suspension
Right of the Department of State to deactivate a broker or salesperson license for wrongdoing.
swing loan
A type of interim loan wherein a borrower uses the equity in one property to obtain the money necessary to buy another property.
take-out loan
Permanent financing arranged to replace a short-term construction loan.
Taking
The act of a government body obtaining a property under its power of eminent domain.
taking title subject to a mortgage
Accepting a title pledged to secure a mortgage and with no personal liability for payment of the note.
tax deed
A deed conveying title to real property to a new owner that a municipality obtained from the original owner’s failure to pay real estate taxes.
Taxation
(1) A power of government to impose a fee upon the use and/or transfer of goods and services, including real property. (2) The action of instituting and enforcing regulation regarding abovementioned fees.
tax-deductible expense
An amount of money that may be deducted from gross income in arriving at net taxable income before depreciation, if any.
tenancy by the entirety
A form of co-ownership limited to husband and wife, with the right of survivorship.
tenancy in common
A form of co-ownership that does not include the right of survivorship.
tenant relocator
A person who arranges, for a fee, the relocation of conmercial or residential tenants from buildings that are to be demolished, rehabilitated, or remodeled.
Tenements
Right of ownership of real estate held by a person.
term mortgage
One that requires the mortgagor to pay interest only during the mortgage term, with the principal due at the end of the term.
testamentary trust
A trust set up within a person’s will and effective upon the death of the person who created the trust.
Testate
To have died leaving a valid will. Opposite: intéstate.
Testator
A male who has died and left a valid will.
Testatrix
A female who has died and left a valid will.
Testers
Volunteers from state or private agencies who enforce fair housing by claiming to be homeseekers, thereby finding out if brokers deal fairly with all clients or customers.
tie-in arrangement
Agreement between a party selling a product or service with a buyer that as a condition of the sale, the buyer will buy another product from the seller, or the buyer will not buy a product or use a service of another.
time is of the essence
A phrase indicating that closing must take place on or before the exact date stipulated in the contract.
Title
Evidence of the right to possess property.
title closing
The consummation of a real estate contract; a meeting in which the buyer, seller, and closing agent meet for execution of documents and disbursement of funds.
title examination
A search of the public record to determine the quality of a title to real property.
title insurance
An insurance policy protecting the insured from a financial loss caused by a defect in a title to real property.
title transfer tax
A tax imposed on the conveyance of title to real property by deed.
Topography
The physical features and contours of land.
Torrens system
A method of title recordation.
Tract
An area of land.
trade fixtures
Items that are installed by a commercial tenant and are removable upon termination of the tenancy.
Transfer of development rights
Purchase of the development rights of another property such as those of a historic property that cannot make use of them.
Transferability
The ability to transfer property ownership from seller to buyer.
Trespass
Unlawful entry on the land of another.
triple net lease
One in which the lessee pays all the expenses associated with the property in addition to the rent.
Trust
A legal relationship under which title to property is transferred to a person known as a trustee.
Trustee
One who holds title to property for the benefit of another.
Trustor
One who conveys title to a trustee.
Truth-in-Lending Simplification and Reform Act (TILSRA)
See Regulation Z.
U.S. Army Corps of Engineers
A division of the U.S. Army that oversees navigation, water resource activities, flood control, beach erosion, and dredging projects.
U.S. Department of Housing and Urban Development (HUD)
A federal agency that administers funding for projects related to housing.
underground storage tanks
Tanks located underground and utilized for the bulk storage of chemicals and petroleum.
Underimprovement
Use of land that is not at its highest and best use and thus does not generate the maximum income.
Underwriting
The act of reviewing loan documentation and evaluating borrower’s ability and willingness to repay the loan and sufficiency of collateral value of the property.
undisclosed principal
A principal whose identity may not be disclosed by an agent.
undivided interest
Ownership of fractional parts not physically divided.
undue influence
Any improper or wrongful influence by one party over another whereby the will of a person is overpowered so that he is induced to act or prevented from acting according to free will. See also “duress”.
unencumbered property
Property that is free of any lien.
unenforceable contract
One that appears to meet the requirements for validity but would not be enforceable in court.
Uniform Commercial Code (UCC)
A standardized and comprehensive set of commercial laws regulating security interests in personal property.
uniform irrevocable consent and designation form
Allows the courts to serve a summons or other legal documents on the New York secretary of state in place of personal service on out-of-state licensees.
unilateral contract
An agreement wherein there is a promise in return for a specific action, which together supply the consideration.
uninsured conventional loan
One in which the loan payment is not insured to protect the lender.
unintentional misrepresentation
An innocent false statement of a material fact.
unity of interest
Created when co-owners all have the same percentage of ownership in a property.
unity of possession
Created when all co-owners have the right to possess any and all portions of the property owned, without physical division.
unity of time
Created when co-owners receive title at the same time and in the same conveyance.
unity of title
Created when co-owners have the same type of ownership in a property.
universal agent
Agent that has complete authority over any activity of principal; for example, power of attorney.
urea-formaldehyde foam insulation (UFFI)
A type of foam containing formaldehyde, a gaseous compound used for home insulating until the early 1980s. Found to be potentially carcinogenic, and voluntarily discontinued by contractors.
use variance
Permission to use the land for a purpose that is prohibited under the current zoning restrictions.
useful life
The period of time that a property is expected to be economically useful.
Usury
Charging a rate of interest higher than the rate allowed by law.
Utility
(1) Capacity of serving a useful purpose. (2) A public works that supplies a product necessary for habitation (i.e. water, electricity, and gas).
vacancy rate
A projected rate of the percentage of rental units that will be vacant in a given year.
vacant land
Unimproved land that could include land brought back to its natural state, or land that does not possess improvements necessary to serve a purpose.
VA-guaranteed loan
A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veteran Affairs.
valid contract
An agreement that is legally binding and enforceable.
valuable consideration
Anything of value agreed upon by parties to a contract.
Valuation
Establishment of opinion of value utilizing an objective approach based on facts related to the property, such as age, square footage, location, cost to replace, and so on.
value in exchange
The amount of money a property may command for its exchange; market value.
value in use
The present worth of the future benefits of ownership; a subjective value that is not market value.
Variance
A permitted deviation from specific requirements of a zoning ordinance because of the special hardship to a property owner.
“As is”