Texas Real Estate Glossary Terms

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Abandonment

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Property that has been abandoned for a statutory period may also escheat to the state or county.

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Absorption

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The amount of available property that becomes occupied over a period of time.

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Affirmative Easement

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An easement allowing a use, such as right-of-way

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Alienation

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Transfer of title to real estate, occurs voluntarily and involuntarily

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Amendatory Instrument

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An instrument, for example a will, that it can be changed at any time during the maker’s lifetime.

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Anti-trust laws

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Laws designed to prevent monopolies and unfair trade practices.

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ARELLO

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ARELLO is the Association of Real Estate License Law Officials. ARELLO is an international association of real estate regulators. It promotes consistent policies and standards for license law and enforcement of license law.

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Asset Sale

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The purchaser takes possession of some or all of the assets of the business, as well as the real estate, in exchange for the sale price.

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Assignment

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an assignment of the lease is a transfer of the entire leasehold interest by a tenant, the assignor, to a third party, the assignee

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Attorney's opinion of abstract

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An attorney's opinion of abstract states that the attorney has examined a title abstract, and gives the attorney's opinion of the condition and marketability of the title.

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Beneficial interest

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The beneficiary's interest in a land trust is personal property, not real property

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Beneficiary Statement

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The holder of a note secured by a trust deed will provide a beneficiary statement that shows any unpaid balance

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Benefited party

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The receiver of the easement righ

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Blockbusting

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The practice of inducing owners in an area to sell or rent to avoid an impending change in the ethnic or social makeup of the neighborhood that will cause values to go down.

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Broker

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One who is authorized and licensed to operate a brokerage business. Even though contracts and legal rights of those involved in real estate transactions are concerns of the broker, brokers may not give legal advice.

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Bulk Sales Act

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The Bulk Sales Act protects creditors against loss of collateral in an indebted business through the undisclosed sale of the business' inventory.

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Burdened party

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The giver of the easement right

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Buyer's Walk-Through

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A final inspection of the property. Should be conducted as close to the closing date as possible.

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Chain of title

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Refers to the succession of property owners of record dating back to the original grant of title from the state to a private party.

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Civil Rights Act of 1866

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Prohibits discrimination in housing based on race. The prohibition relates to selling, renting, inheriting, and conveying real estate.

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Closing

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The culmination of the real estate transaction. Closing is where the buyer exchanges purchase price payment for the title to the property from the seller.

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Closing Agent

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person who compiles the financial details of the official settlement, divides the charges and expenses between parties and conducts the closing. Usually a representative of a title company, or a buyer or seller's attorney, but can be a broker

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Co-brokerage

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A transaction involving a cooperating subagent

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Co-ownership

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If more than one person, or a legal entity such as a corporation, owns an estate in land, the estate is held in some form of co-ownership

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Collusion

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The illegal practice of two or more businesses joining forces or making joint decisions, which have the effect of putting another business at a competitive disadvantage.

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Commercial Lease

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May be a net, gross, or percentage lease, if the tenant is a retail business

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Commingling

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The act of mixing the broker's personal or business funds with escrow funds

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Community property

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Property that belongs to both spouses equally

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Condominium

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A condominium is a hybrid form of ownership of multi-unit residential or commercial properties. It combines ownership of a fee simple interest in the airspace within a unit with ownership of an undivided share, as a tenant in common, of the entire property's common elements, such as lobbies, swimming pools, and hallways

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Constructive eviction

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In an instance where the landlord's negligence or disruptive action has rendered the property unoccupiable, a tenant may vacate the premises and declare that the lease is cancelled by default.

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Constructive notice

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Also known as legal notice, is knowledge of a fact that a person could have or should have obtained.

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Consulting Agreement

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An employment agreement that hires the seller to assist the buyer in taking over business operations.

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Contingency Period

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Also known as pre-closing period, this it the time period between contracting and closing

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Contract requirements

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State contract laws determine the requirements for a valid lease

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Conventional Life Estate

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A conventional life estate is created by a grant from a fee simple property owner to the grantee, the life tenant. Following the termination of the estate, rights pass to a remainderman, or revert to the previous owner. The two types of conventional life estate are the ordinary and the pur autre vie life estate

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Conversion

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Transforming real to personal property through severance, or personal to real property through affixing.

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Conveyance

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The use of a written instrument to transfer title

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Cooperative

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In a cooperative, or co-op, one owns shares in a non-profit corporation or cooperative association, which in turn acquires and owns an apartment building as its principal asset. Along with this stock, the shareholder acquires a proprietary lease to occupy one of the apartment units

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Cooperative Association

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A non-profit, tax-exempt alliance of individuals or companies formed to promote common goods or services. A cooperative association may not broker real estate

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Corporation for Profit

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Consists of one or more persons authorized to conduct business for profit

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Costs

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Those expenses necessary to generate and deliver the item to the market.

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Covenant clauses

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Present the grantor’s assurances to the grantee.

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Deed in lieu of foreclosure

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Defaulted borrower deeds property to lender to avoid foreclosure

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Deed of Conveyance

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A living owner making a private grant by means of a deed of conveyance.

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Deed Restriction

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A limitation imposed on a buyer's use of a property by stipulation in the deed of conveyance or recorded subdivision plat. Deed restrictions are either covenants or conditions.

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Deed Restriction - Condition

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A type of deed restriction that can only be created within a transfer of ownership. If a condition is later violated, a suit can force the owner to forfeit ownership to the previous owner.

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Deed Restriction - Covenant

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A type of deed restriction that can be created by mutual agreement.

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Demand

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The quantity of a product or service that is desired for purchase, lease, or trade at any given time.

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Devise

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The property transferred by a will.

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Devisee

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Also known as Heir, this person is the beneficiary of a will.

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Devisor

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Also known as testator. This person is the maker of a will.

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Documentary Stamp Tax

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State law usually requires payment of a documentary stamp tax on a conveyance of real property. The tax is based on the actual price of the property conveyed, thus enabling taxing authorities to ascertain current market value for ad valorem tax purposes.

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Dominant Estate

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Also known as dominant tenement. The property enjoying the usage right in an easement appurtenant

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Dominant Tenement

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Also known as dominant estate. The property enjoying the usage right in an easement appurtenant.

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Easement

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An interest in real property that gives the holder the right to use portions of the legal owner's real property in a defined way. Easement rights may apply to a property's surface, subsurface, or airspace, but the affected area must be defined.

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Easement Appurtenant

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Gives a property owner a right of usage to portions of an adjoining property owned by another party.

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Easement by necessity

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An easement appurtenant granted by a court of law to a property owner because of a circumstance of necessity, most commonly the need for access to a property.

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Easement in gross

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An easement in gross is a personal right that one party grants to another to use the grantor's real property. An easement in gross may be personal or commercial. A personal easement in gross is granted for the grantee's lifetime. A commercial easement in gross is granted to a business entity rather than a private party, and is not tied to someone's lifetime. An easement may be created by voluntary action, by necessity or prescriptive operation of law, and by government power of eminent domain.

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Emblements

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Plants or crops considered personal property since human intervention is necessary for planting, harvesting.

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Eminent domain

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Government entities can create easements through the exercise of eminent domain, wherein they condemn a portion of a property and cause it to be sold "for the greater good." Various government and public entities can transfer private property to the public sphere by the power of eminent domain. The transfer is involuntary, even though the owner receives compensation. State laws may allow a real property owner to lose legal title to an adverse possessor

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Encroachment

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The unauthorized, physical intrusion of one owner's real property into that of another

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Encumbrance

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if a private interest-holder does not have the right to possess, the interest is an encumbrance

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Encumbrance

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An interest in, and right to, real property that limits the legal owner's freehold interest.

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Enterprise Brokerage

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Concerns a larger company, usually a corporation, where the transaction involves the sale of stock and multiple real estate parcels leased or owned by the seller.

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Equal Credit Opportunity Act

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Requires lenders to be fair and impartial in determining who qualifies for a loan.

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Equal Opportunity Housing Laws

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Also known as Fair Housing Laws, give all people in the country an equal opportunity to live wherever they wish

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Equitable Lien

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An involuntary lien imposed by a court action

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Equitable title

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the interest or right to obtain legal title to a property in accordance with a sale or mortgage contract between the legal owner and a buyer or creditor.

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Escrow

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When closing a transaction, a third party called an escrow agent, receives funds and documents which are delivered pertaining to the conditions outlined in an escrow agreement.

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Escrow agreement

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The contract used when closing a transaction through an escrow. Spells out the duties of the escrow agent and the requirements and obligations of the principals

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Estate at sufferance

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a tenancy without consent

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Estate at will

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Has no specified lease term

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Estate for years

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Has a specific lease term

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Estate from period-to-period

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The lease term automatically renews

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Estate in common

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The tenancy in common, also known as the tenancy in common, is the most common form of co-ownership when the owners are not married.

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Estate in Land

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If the interest-holder enjoys the right of possession, the party is considered to have an estate in land, or familiarly, an estate.

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Estate in severalty

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If a single party owns the fee or life estate, the ownership is a tenancy in severalty. Synonyms are sole ownership, tenancy in severalty, and ownership in severalty.

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Estate in trust

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In an estate in trust, a fee owner-- the grantor or trustor-- transfers legal title to a fiduciary-- the trustee-- who holds and manages the estate for the benefit of another party, the beneficiary. The trust may be created by a deed, will, or trust agreement.

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Estoppel

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Prevents a person from claiming a right or interest that is inconsistent with the person's previous statements or acts. As a basis for involuntary alienation, the doctrine of estoppel can prevent an owner from re-claiming a property that was transferred under false pretenses

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Executive Order 11063

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In 1962, the President issued Executive Order 11063 to prevent discrimination in residential properties financed by FHA and VA loans

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Executor

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A personal representative who oversees the settlement of the estate.

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Fair financing laws

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Equal Credit Opportunity Act: no discrimination in housing finance based on race, color, religion, sex, marital status, age; Home Mortgage Disclosure Act: no redlining.

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Fair Housing Amendments Act of

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No discrimination based on sex or against the handicapped or families with children.

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Fair Housing Laws

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Also known as equal opportunity housing laws, give all people in the country an equal opportunity to live wherever they wish.

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Fee Simple Absolute

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The fee simple absolute estate is a perpetual estate that is not conditioned by stipulated or restricted uses.

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Fee Simple Defeasible

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The defeasible fee estate is perpetual, provided the usage conforms to stated conditions.

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Fee Simple Estate

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The fee simple freehold estate is the highest form of ownership interest one can acquire in real estate. There are two forms of fee simple estate: absolute and defeasible.

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Fixtures

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Real property converted from personal property by attachment to real estate.

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severance

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detaching an item from real property that changes the item to personal property.

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degree of attachment or annexation

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MARIA

Method of attachment

adaptability of attached item

relationship of parties

intent of person attaching item

agreement between parties

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trade fixtures

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often called a “chattel” fixture — is an object that a tenant attaches to real property for use in the tenant’s trade or business. Trade fixtures differ from other fixtures in that, even though they are attached with some permanence to real property, they may be removed at the end of the tenancy of the business, and, therefore, trade fixtures are personal property.

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Physical Characteristics of Land

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immobility

indestructibility

uniqueness- non homogeneity

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Real Property

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is that category of property that is immovable by law. Examples include load bearing walls, stock in a mutual water company, and minerals.

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Personal Property

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also known as “chattel” is that category of property that is generally movable. Personal Property can be Hypothecated, Alienated and become Real Property.

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Riparian Rights

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are water rights in regard to a moving body of water like a river or a stream as opposed to Littoral rights which are in regards to body of waters that stand still such as a lake.

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Appurtenances

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are said to “Run with the Land” and they require no separate conveyance. Appurtenances include Easements, Stock in a Mutual Water Company, Covenants, and Minerals. They are considered real property

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Freehold estate

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is an estate in which ownership is for an indeterminate length of time.

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Fee Simple Estate

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is also referred to as an “Estate of Inheritance.” a Fee Simple Estate is one type of Freehold Estate, and as such, is indefinite in duration. A Fee Simple

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Chattal

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Personal property.

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Fixtures

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Method

Adaptability

Relationship

Intention

Agreement

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Trade Fixtures

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Business fixtures. Dentist chair, restaurant equipment

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riparian rights

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water rights by moving body; navigable

River=Riparian

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Littoral Rights

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water rights by non moving body

lake, ocean

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Appurtenances

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are said to “Run with the Land” and they require no separate conveyance. Appurtenances include Easements, Stock in a Mutual Water Company, Covenants, and Minerals. They are considered real property

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Estate for Years

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can be for any fixed period of time (commencing on 03/12/06 and terminating on 10/01/06)

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estate at sufferance

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-Example: Cody

would apply to a tenant who continues to occupy the property after his rights have expired. A more commonly known term for this would be a “dead beat tenant”

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Life Estate

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is another type of Freehold Estate because it is indefinite in duration. A Life Estate has a duration that is measure by the length of someone’s life. For example, if the owner dies, you lose the estate ad thus the leases will terminate. You cannot devise a life estate

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Fee Simple Estate

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is also referred to as an “Estate of Inheritance.” a Fee Simple Estate is one type of Freehold Estate, and as such, is indefinite in duration. A Fee Simple Estate can also be sold or inherited, and is not free of Encumbrances. A Fee Simple Absolute is the most interest that one can hold in land.

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title

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ownership;

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Ownership in Severalty

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own on your own.

also known as is separate ownership by one individual (or one corporation)

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cotenancy-

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concept in property law, particularly derived from the common law of real property, which describes the various ways in which property can be owned by more than one person at a given time. There are three kinds of concurrent estate: that come up on the state exam: tenancy in common, joint tenancy, and community property.

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Joint Tenancy

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can be summarized with the word unity, unity of time, title, interest and possession. No matter how many joint tenants there are, there is still only One Title to the entire property. Each tenant must hold an Equal Interest in the property. If one Joint Tenant dies, the surviving Joint Tenants take the decedent’s interest automatically. [The surviving Joint Tenants take this interest free of unsecured debts– a joint tenant CANNOT will his interests.]

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Tenancy in Common

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is formed as the result of two or more persons owning an undivided interest in the property. Unity of Possession is the only unity required for a tenancy in Common. No Automatic Right of Survivorship: A Tenant in Common may bequeath his interest by will.

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Community Property

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own property with spouse

it is assumed that when the deed designates the co-owners of the property as “husband and wife” that Community Property applies. In other words, each spouse owns fifty percent (50%) of the property.

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Encumbrances

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on property burden the property in some fashion. An example of a burden that affects and/or limits title to the property would be an easement. It is a claim, lien, charge, or liability attached to and binding real property. It will not prevent the transfer of title.

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Easement

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is the right to use or enter another individual’s land for certain specified purposes and within definable limits. Any parcel of land having an easement on it is considered to be encumbered. Easements can be for any period of time. If wrongfully denied easements rights the offended party should file a quiet title suit.

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Easement by Prescription

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requires five (5) years of open, notorious, hostile, and continuous use). Confrontation with the owner is not a factor. Easement by Prescription can be terminated for non-use.

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easement can be terminated

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by the dominant tenement if they record a quitclaim deed. The dominant tenement benefits from the easement. The servient tenement is burden by it. Just think of what the word “dominant” means, it means they are in control, thus they have the right to end the easement.

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Police Power

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PETE

Police power

Escheat

Taxation

Eminent Domain

is the authority of local, state, and federal governments to regulate the use of or to purchase private property in order to achieve planning goals is derived from. The government’s ability to apply certain restrictions to property and divide them into districts is zoning. Zoning is a police power

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Building Codes

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establish minimum standards in construction for the purpose of public safety. Local Building Codes for the most part set the highest standard of construction, but in the event of the application of minimum housing requirements and/or state and federal codes, the Builder must adhere to the higher set standard.

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who is responsible for zoning and permits

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local department of building and safety

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Public Restrictions

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zoning laws