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434 Cards in this Set

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Area of Triangle

1/2 X Base X Height

Area of a Rectangle

base x height

LTV

Loan to value ratio = loan amount /sales price or appraisal price (which ever is lower)

Interest

= Principal X Rate X Time (in yrs)

LTD Back End Ratio

= total monthly expenses/gross monthly income

PITI Front End Ratio

= monthly housing expenses/monthly gross income

Net Operating Income

= potential gross income - allowance for vacancies & uncollectable rents - annual operating expenses

Annual Depreciation

= (cost of property - residual value)/ useful life (in yrs)

Cap Rate

= Net Operating Income (NOI) / Market Value

1 Section

= 1 mile X 1 mile or 640 acres

1 Township

= 6 miles X 6 Miles or 36 sections

1 Rod

= 16 1/2 feet

1 Mile

= 5280 feet or 320 rods

1 Square Acre

= 208.7 ft X 208.7 ft

1 Acre

= 43,560 sq ft

1031 Exchange

Under IRS code - a tax deferred exchange of like kind properties

1099-S Reporting

Report submitted by escrow agents to report the sale of real estate, giving sellers name, ss#, & gross sale proceeds

Abandonment

The voluntary surrender or relinquishing of possession of real property without vesting this interest in another person

Abendum Clause

clause in deed, usually following the granting clause, & beginning with words "to have & to hold" that describes the type of estate being transferred

Absolute Deed

A deed used in lieu of a mortgage, also called a deed absolute

Abstract of Judgement

A document filed for record pursuant to a judgement by a court of competent jurisdiction that creates a general lien on all judgement debtors real estate in that county

Abstract of Title

a summary or digest of all recorded documents affecting title to a particular piece of property. Also defined as a history of title as shown by recorded instruments arranged in order of recording

Acceptance

The act of a person to whom a thing is offered or tendered by another, whereby he receives the thing with the intention of retaining it, such intention being evidenced by a sufficient act

Accession

The acquisition of additional property by the natural processes of accretion, reliction, or avulsion, or by the human processes of the addition of fixtures or improvements made in error

Accretion

Natural Process by which owner or riparian or littoral property acquires additional land by the gradual accumulation of soil through the action of water. Same as alluvium

Acknowledgement

A formal declaration before authorized officials by a person who executed an instrument, that it is his free act and deed

Abatement

a legal action to remove a nuisance

Acknowledgement of Satisfaction

written declaration signed by a person before a duly authorized officer (notary) acknowledging that a lien has been paid off in full & that the signing is voluntary

Acceleration Clause

clause in promissory note that states upon default the lender has the option of declaring the entire balance of outstanding principal & interest due and payable immediately

Accrued Depreciation

Depreciation that has happened prior to the date of valuation

Actual Agency

agency in which the agent is employed by the principal, either by express agreement, ratification, or implication

Actual Notice

A notice expressly and actually given or such as he is presumed to have received personally because the evidence within his knowledge was sufficient to put him upon inquiry

Adjusted Cost Basis

dollar amount assigned to a property after additions of improvements & deductions for depreciation & losses are made to the property's acquisition cost

Ad Valorem Tax Lien

A lien for real property taxes, which in Texas, is the highest priority lien

Ad Valorem Taxes

Real Estate Taxes levied in an amount determined according to the value of the real estate

Adaptation

The manner in which certain items of personalty are conformed to or made especially for a parcel of real estate

Additional Property Clause

Provision in a mortgage instrument providing for the mortgage to serve as additional security for any additional property to be acquired that will be attached to real estate

Adjusted Basis

the original basis plus the cost of capital improvements less any allowance for depreciation

Administrator

a representative, appointed by a court and not by a will, whose duties are to collect assets of the estate, pay its debts, and distribute residue to those entitled

Adverse Possession

An actual and visual appropriation of the land, commencing and continued under a claim of right inconsistent with and hostile to the claim of another

Affidavit

a written or printed declaration or statement of facts made voluntarily, and confirmed by the oath or affirmation of the party making it, taken before an officer having authority to administer such an oath

Affirmative Covenant

a contractual promise to do certain acts (ex: maintain a party wall)




the remedy for breach being either monetary damages or injunctive relief, not forfeiture

After Acquired Title Doctrine

A doctrine under which title acquired by a grantor, who previously attempted to convey title to land that he did not in fact own, inures automatically to the benefit of prior grantees

Agency by Ratification

The establishment of an agency relationship by the principal after the agency objective has been accomplished

Agency Coupled with an Interest

An irrevocable agency in which the agent has an interest in the property as part of all of his compensation

Agent

One who acts for or in the place of another by authority from the other party

Air Rights

the rights of one to that transparent substance that surrounds our globe

Air Space

commonly referred to as the "unit" in condominium ownership

Alienation

the act of conveying or transferring an ownership interest in real property

Alienation Clause

due on sale clause

Alluvium

addition to land acquired by the gradual accumulation of soil through the action of water, same as accretion

Ambulatory Instrument

document that can be changed or revoked (ex: will)

Amended Public Report

report that a sub-divider must apply for if, after the issuance of a final public report, new conditions arise that affect the value of the subdivision parcels

Annexation

1) as applied to fixtures, the manner in which the fixtures are attached to the real estate; 2) municipality's right to extend jurisdiction over contiguous property

Annual Percentage Rate (APR)

expresses the annual rate of cost of borrowing, which includes all finance charges. Derived from TILA. Expressed as a percentage

Antitrust Laws

Federal and State laws prohibiting monopolies and restraint of trade

Appraisal District

In Texas, the agency that appraises real estate for the taxing authorities

Appraisal Review Board

the appeals board for a taxpayer who chooses to protest the appraisal of his property

Appurtenant

Adjoining

Appurtenance

an object, right, or interest that is incidental to the land and goes with or pertains to the land

Assessed Value

the value the assessor and collector of taxes gives to a parcel of real property, which may be a percentage of or the same as the fair market value of the property. The tax rate is the amount of dollars per hundred dollars of value the land owner must pay in ad valorem taxes as determined by the local taxing authority

Assignee

A person to whom an assignment is made

Assignment

transfer of rights and obligations of one party to a contract to another party

Assignor

a person who assigns a right, whether or not he is the original owner thereof

Assumption of Mortgage

The taking of title to property by a grantee wherein the grantee assumes primary liability for payment of an existing note secured by a mortgage or deed of trust and would be primarily liable for the amount of any deficiency

Assumption

an adoption of an obligation that primarily rests on another person

Attachment

The act or process of taking, apprehending, or seizing persons or property by virtue of a writ or other judicial order and bringing same into the custody of the court. This is often done to compel an appearance or furnish security for debts or costs to satisfy a judgment that a plaintiff may obtain

Attachment Lien

a prejudgement lien on a property obtained to ensure the availability of funds to pay a judgement if the plaintiff prevails

Attorney-in-Fact

An agency relationship created by a power of attorney

Avulsion

The sudden and perceptible loss or addition to land by the action of water due to the sudden change in the bed or course of a stream; or process that occurs when a river or stream suddenly carries away part of a bank and deposits it downstream either on the same or opposite bank

Bargain and Sale Deed

a deed purporting to convey real property but without warranties

Base Lines

a set of imaginary lines running east and west in locating and describing land under the rectangular survey method

Basis

the dollar amount that the IRS attributes to an asset for purposes of determining annual depreciation or cost recovery, and gain or loss in sale

Bearings

directional designations used in metes and bounds legal descriptions

Benchmark

a permanent reference mark affixed to a durable object used as offical datum to set elevation or measurements

Beneficiary

1) One for whose benefit a trust has been created; 2) the lender in a deed of trust

Bequeath

to transfer PERSONAL property by will

Bequest

a gift of PERSONAL property by will

Bilateral Contract

a contract in which both the contracting parties are bound to fulfill obligations reciprocally toward each other

Bill of Sale

Instrument by which title to personalty is conveyed

Blanket Mortgage

mortgage used to finance 2 or more parcels of Real Estate

Blight

the decline of a property or neighborhood as a result of adverse land use, destructive economic forces, failure to maintain the quality of older structures, & failure to maintain foreclosed homes

Blind Ad

Advertisement that does not disclose the identity of the agent submitting the ad for publication

Blockbusting

illegal practice of representing that prices will decline, crime increase, or other negative effects will occur because of the entrance of minorities into particular areas

Board of Adjustment

a board appointed by a local revenue body allowed to make special exceptions to the terms of the zoning ordinance w/ the gen. purpose & intent & in accordance w/ the gen. or specific rules contained. The board also serves as an appellate board for any person aggrieved by a previous zoning decision or decision of any administrative officer of the municipality

Board of Directors

governing body of a corporation

Bona Fide Purchaser

a purchaser who acquires property without notice of any defects in title

Boycotting

refusing to do business with another in order to eliminate competition

Broker's and Appraiser's Lien

right of a broker or commercial broker or appraiser to put a lien on real estate for the commissions due

Buyer's Broker

a real estate licensee who represents the buyer rather than the seller

Buffer Zone

strip of land to separate or ease transition from one use to another (ex: park between residential and commercial zones)



Call Clause

Due on transfer clause

Capital Asset

property that is not stock-in-trade (inventory) used in a trade or business of a kind of subject to depreciation, as well as notes in accounts receivable acquired in the course of the trade or business

Capital Gains Tax Treatment

a special tax rate allowed by the IRS code for profits on the sale of capital assets

Cemetery Lot

a lot in a cemetery, graveyard, or burial ground

Certificate of Limited Partnership

a certificate that must be filed with the secretary of State that discloses certain facts concerning the limited partnership

Carryover

under adjustable rate loan - an increase in the interest rate not imposed because of an interest rate cap that is carried over to later rate adjustments

Chain of Title

successive conveyances, or other forms of alienation, affecting a particular parcel of land, arranged consecutively, from the govt or original source of title down to the present holder

Charges

in judicial parliaments, the instructions a judge gives the jury

Chattel

1) an article of personal property; 2) any species of property not amounting to a freehold or fee in land

Chattel Real

personal property that contains some interest in real property Ex: lease

Chattel Mortgage

a mortgage on chattels

Circuit Court of Appeals

the appellate court having jurisdiction in the federal court system to which appeals from the district court may be made

Civil Rights Act of 1866

Federal law that stated that people of any race may enjoy the right to enforce contracts, to sue, be parties & give evidence, to inherit, purchase, lease, sell, hold, & convey real & personal property to full & equal benefits of all laws

Civil Rights Act of 1968

Fair Housing Act - prohibited discrimination in housing based on race, creed, or national origin


1974 - amendment to include gender as protected class


1988 - amendment to include disability and familial status as protected classes

Clayton Antitrust Act

Federal statute that specifically prohibits price discrimination, exclusive dealing arrangements, certain corporate acquisitions of stock, and interlocking directorates

Closing

Final settlement of a real estate sale

Color of Title (1)

in adverse possession, a consecutive chain of such transfers down to such a person in possession, w/o being regular, as if one or more of the memorial or muniments be not registered, or not duly registered, or be only in writing, or such like defect as may not extend to or include the want of intrinsic fairness and honesty

Color of Title (2)

when a party in possession shall hold the same by certificate of headright, land warrant, or land scrip with a chain of transfer down to him in possession

Commercial Acre

the buildable part of an acre that remains after subtracting land needed for streets, sidewalks, & curbs

Commitment Fee

A fee paid to a lender to commit funds that would be advanced at a future date

Common Elements

generally includes all parts of the condominium project that are not reserved for a single or private use

Common Interest Development (CID)

subdivision in which purchasers own or lease a separate lot, unit, or interest, & have undivided interest or membership in a portion of the common area of the subdivision

Common - Law Marriage

a marriage that becomes operative by operation of law rather than one of formal decree or ceremony

Community Property

Property owned by husband and wife (or registered domestic partners), which is subject to joint management, control, and disposition

Community Property with Right of Survivorship

upon death of a spouse (or domestic partner) the property passes to the surviving spouse (or domestic partner) with out probate

Comprehensive Plan

a long term general plan for the physical development of the community, embodying information, judgements, and objectives collected and formulated by experts to serve as both a guiding and predicated force. such development is the basis of a comprehensive plan from which zoning ordinances are passed

Concurrent Jurisdiction

the jurisdiction of several different courts, each authorized to deal with the same subject matter

Condemnation (Proceeding)

the legal procedure utilized to exercise the right of eminent domain

Condition Subsequent

condition written into deed or a fee estate that if violated may "defeat" the estate and lead to its loss and reversion to the grantor

Conditional Use

zoning exception for special uses such as churches, schools, & hospitals that wish to locate to areas zoned exclusively for residential use

Condominium

the separate ownership of single units or apartments in a multiple unit structure or structures with common elements

Condominium Records

records in county clerks office to record condo declaration

Consideration

inducement to a contract. The cause, motive, price, or impelling influence that induces a contracting party to enter into a contract.

Constitutional Liens

liens that are established by the constitution of Texas

Construction Mortgages

short term loans made during the construction of a building, but prior to the permanent loan

Constructive Eviction

breach by landlord of the covenant of habitability or quiet enjoyment

Constructive Notice

1) notice provided by public records; 2) notice of info provided by law to a person who, by exercising reasonable diligence could have discovered the information

Commingling

mixing trust account funds with brokers personal funds

Conversion

unauthorized personal use of anothers funds

Contingent Remainder

a remainder limited so as to depend upon an event or condition that may never happen to be performed until after termination of the preceding estate

Contract

a promissory agreement between 2 or more persons that creates, modifies, or destroys a legal relation. An agreement upon sufficient consideration to do or not to do a particular thing

Contract Zoning

an agreement by a governing body to enact a change in land use classification in exchange for certain concessions to be granted by the developer or applicant

Contractual Liens

liens that arise as a result of a contract between the parties

Cooperative

a form of apartment ownership. Ownership of shares in a cooperative venture that entitles the owner to use, rent or sell a specific apartment unit

Co-Owner

in condos, a person, firm, corporation, partnership, association, trust, or other legal entity, or any combination thereof, who owns an apartment or apartments within the condo project

Corporate Charter

the official document indicating the existence of the corporation as authorized by the secretary of state

Corporation

An artificial person or legal entity created by or under the authority of the laws of the state in which it is incorporated

Corpus

Trust assets, the body of a trust

Correction Deed

used to correct a mutual mistake or clerical error made in the original deed; consideration is required

Cost Recovery

the re-coupment of the purchase price of a property through book depreciation


(tax concept of depreciation)

Coupled with an Interest

agent has a financial interest in the subject of the agency, which has the legal effect of making the appointment of the agent irrevocable

County Court

Court whose jurisdiction is in the county in which it is situated but has a ceiling on the dollar amount that can be litigated within its jurisdiction

Courts of Civil Appeals

in Texas, the level of courts above the district court that only appellate jurisdiction, that is they can only hear cases that have been previously tried in a district court

Covenant

contractual promise to do or not do certain acts


(remedy for breach is monetary damages or injunctive relief not forfeiture)

Covenant against Encumbrances

a covenant in a deed that provides that such estate is at the time of the execution of such conveyance free from encumbrances

Covenant of Seizin

a covenant in a deed that provides that previous to the time of execution of said conveyance, the grantor has not conveyed the same estate, or any right, title, or interest therein, to any person other than the grantee

Cubic - Foot Method

method of estimating replacement or reproduction cost of a structure. similar to sq ft method except it uses the volume of recently constructed similar buildings

Curable Depreciation

results from physical deterioration or functional obsolescence that can be repaired or replaced at a costs that is less than or equal to the value added to the property

Curtesy

the estate to which a man is entitled upon the death of his wife to the lands she seized in possession in fee during her marriage. it is a freehold estate for the term of his natural life

Dealer Property

Real property held for other than personal use

Deed

contract used to convey title to real estate

Deed in Lieu of Foreclosure

given to preempt a foreclosure by a lender

Deed of Trust

in Texas, a 3 party mortgage wherein the mortgagor conveys the property in a trust to a trustee as security for a debt owing the beneficiary (lender)

Deed Restrictions

Private covenants affecting the use of real estate, which are enforced by the grantor, affected property owners, or subdivision developer on purely contractual theory

Defeasance Clause

provision in a loan that states that when the loan debt has been fully paid the lender must release the property from the lien so that legal title free from the lien will be owned by the borrower

Delivery

the final and absolute transfer of a deed, properly executed, to the grantee, or to some person for his use, in such manner that it cannot be recalled by the grantor

Deficiency Judgement

judgement given to a lender in an amount equal to the balance of the loan minus the net proceeds the lender receives after a judicial foreclosure

Depository Institutions Deregulation & Monetary Control Act (DIDMC)

federal law that exempts from state usury laws interest paid on residential mortgage loans

Depreciation

a provision in the IRS code that allows for a deduction for the loss of value of an asset for tax purposes

Determinable Fee

Fee on conditional limitation

Devise

1) (noun) gift of REAL property by will.


2) (verb) to transfer REAL property by will

Disintegration

phase when a propertys usefulness is in decline and constant upkeep is necessary

District Courts

In Texas, state courts whose jurisdiction is within a statutorily defined district that is generally larger than that of the county. Its jurisdiction is, for the most part, similar to that of county courts, but there is no dollar limit on the amount that can be litigated

Divided Agency

agency in which the agent represents both seller and buyer with out containing consent of both

Doctrine of Merger

a doctrine by which the earnest money contract in a real estate transaction is extinguished by absorption into the deed or other instruments passed at closing.

Documentary Transfer Tax

imposed by counties and cities on the transfer of real property within their jurisdiction

Dominant Estate

an estate to which a servitude or easement is attached

Dominant Tenement

land that is benefited by an easement appurtenant

Dormer

a projecting structure built out from a sloping roof that is used to provide windows & additional headroom for the upper floor

Dower

a species of life estate that a woman is by law entitled to claim upon the death of her husband, also the lands of which he was seized and fee issued during the marriage and any that might possible have been inherited

Dual Agency

agency in which the licensee represents both the buyer and seller

Due Diligence

exercise of an honest and reasonable degree of care in performing ones duties or obligations;


investigate property as represented by seller and disclose accurate and complete info on the property

Due-on-Transfer Clause

a clause often found in mortgages that provides for the secured note to be accelerated to maturity if the property is conveyed

Due Process of Law

Law in its regular course of administration through courts of justice

Earnest Money

a payment made by a purchaser of real estate as evidence of good faith

Easement

a privilege, service, or convenience that one has in the property to another

Easement Appurtenant

an easement that is attached to and belongs to a dominant estate, which passes incident to it, being incapable of existence separate and apart from that dominant estate to which it is annexed.


It benefits and pertains to anothers land

Easement in Gross

more personal interest in and right to use the land of another, it is not appurtenant to any estate in land.

Easement by Necessity

arises as a creation of a court of law in certain cases where justice demands so, as in case where a buyer of a parcel of land discovers that the land he just purchased has no access except over the land of someone other than from the person from whom the parcel was purchased

Effective Demand

demand coupled with purchasing power sufficient to acquire the property from a willing seller in a free market

Effective Gross Income

income from a property after allowance for vacancies & uncollectable rents is deducted from gross income

Ejectment

legal action to recover possession of real property from a person who is not legally entitled to possess it, such as to remove an encroachment or to evict a defaulting buyer or tenant

Electronic Records in Global and National Commerce Act

a federal statute providing for the enforceability of contracts in electronic format

Emblements

growing crops, such as grapes, avocados, & apples, that are produced seasonally through a tenant farmers labor and industry

Eminent Domain

right of state to take, through due process proceedings (condemnation proceedings) private property for public use upon payment of just compensation

Employee

one who works for an employer who has the right to control and direct the employee as to the details and means by which a result is to be accomplished

Encroachment

thing affixed under, on, or above the land of another with out permission

Encumbrance

right or interest held by someone other than the owner the property affects or limits ownership of the property such as liens, easements, licenses, & encroachments

Entailments

a limitation by which property is different from the course it would take if the creator of the entailment would have allowed the general succession to his heirs in accordance with law. The creator of an entailment normally limits or abridges the fee to certain classes of issue instead of to all his descendants, generally

Environmental Impact Statement

written doc that fed agencies must prepare for any development project that a federal agency could prohibit or regulate, & any development project for which any portion is federally financed

Eo Instanti

latin term meaning immediately

Equal Credit Opportunity Act (ECOA)

federal law that prohibits a lender from discriminating against any applicant for credit on basis of race, color, religion, national origin, sex, marital status, age, or on basis that some income derives from a public assistance program

Equal Dignities Rule

Principle of agency law that requires the same formality to create the agency as is required for the acts the agent is hired to perform

Equilibrium

period of stability when property changes very little

Equitable Lien

lien that exists in equity. it is a mere floating and ineffective equity until such time as a judgement or decree is rendered actually subjecting property to the payment of the debt or claim

Equitable Maxim

generally accepted statement of equitable rules that are considered to be conclusions of common sense and reason

Equitable Title

1) the beneficial interest of one person in real property although legal title is vested in another


2) the right to possess and enjoy a property while the property is being paid for

Equity

a doctrine of fairness and honesty between 2 persons whose rights or claims are in conflict

Equity Courts

Courts that administer justice according to a system of equity

Equity of Redemption

right of the purchaser of an estate after it has been forfeited, at law, by a breach of the condition of the mortgage, upon paying the amount of debt, interest, and costs at the foreclosure sale

Erosion

the gradual washing away of land bordering on a stream or body of water by the action of the water. title to eroded land is lost as long as the erosion is imperceptible

Escalator Clause

provision in a lease that provides for periodic increases in rent in an amount based on some objective criteria not in control of either the tenant or landlord, such as the consumer price index

Escheat

Process whereby property passes to the state if the owner dies intestate without heirs or if property becomes abandoned

Escrow

the deposit of instruments and/or funds with instruction to a third party to carry out the provisions of an agreement or contract

Escrow Agent

disinterested 3rd party, typically in a closing

Estate

degree, quantity, nature, duration, or extent of interest one has in real property

Estate at sufferance

1) one that comes into the possession of land by lawful title but holds over by wrongful possession after the termination of his interest


2) leasehold that arises when lessee remains on the property after termination of the lease with out owners consent

Estate at Will

One who holds possession of premises by permission of owner or landlord, but without a fixed term

Estate for Years

an estate for one who has a temporary use and possession for lands and tenements not his own, by virtue of a lease or demise granted to him by the owner, for a determinate period of time, as for a year, or a fixed number of years

Estate from Period to Period

tenancy in which one holds lands or tenements under the demise of another where no certain term has been mentioned but a periodic rental has been reserved, normally rental from year to year or semi annually, which may be automatically renewed at the end of the term

Estoppel

legal principle that bars one from alleging or denying a fact because of ones own previous actions or words to the contrary


Express Grant

method of creating an easement

External Obsolescence

depreciation that results from things such as 1) changes in zoning laws, 2) proximity to undesirable influences such as traffic, airport flight patterns, etc. 3) general neighborhood deterioration

Express Reservation

method of creating an easement

Extraterritorial Jurisdiction

the unincorporated area, not a part of any other city, that is contiguous to the corporate limits to the city

Failure of Purpose

method for termination of easements

Federal District Courts

courts of the USA each having a territorial jurisdiction over a district, which may include a whole state or only part of a state

Federally Designated Targeted Area

federally designated locations where home ownership is encouraged and incentivized

Federal Truth in Lending Act (TILA)

federal statute that requires disclosure of specific loan information to the borrower before the obligation becomes effective

Fee on Condition Precedent

an estate that calls for a happening of some event or the performance of some act before the terms of the fee shall vest in the claimant.

Fee on Condition Subsequent

a fee estate that is to commence or terminate on some specified condition

Fee on Conditional Limitation


Fee Simple Deafeasible


Determinable Fee

an estate created with a special limitation that limits a duration of the estate in land






fee estate that is qualified by some condition that if violated, may 'defeat' the estate and lead to its loss & reversion to the grantor

Fee Simple Absolute Estate

greatest estate that law permits in land


owns all present and future interests in property

Fee Simple Estate

one in which the owner is entitle to the entire property with unconditional power or disposition during his lifetime and descending to his heirs and legal representatives upon his death intestate

FHA

Federal Housing Administration

FHFA

Federal Housing Finance Agency


created by the Housing Recovery Act of 2008 to oversee activities of Fannie Mae and Freddie Mac in order to strengthen the secondary mortgage market

Financing Statement

evidence of indebtedness secured by chattel and filed on record in the county courthouse or secretary of states office

Fixed Lease

Gross Lease

Fixture

an item of personalty that has been attached to real estate such that it becomes real estate

Fixture Filing

financing statement evidencing the fact that the chattel is or is to become fixtures

Forbearance

act of refraining from taking some action

Forcible Entry and Detainer

a proceeding for restoring the possession of the land to one who has been wrongfully deprived of the possession

Foreign Corporation

a corp organized under the laws of a state other than TX but authorized to do business in TX

Foreign Investment in Real Property Tax Act (FIRPTA)

requires buyer in a real estate transaction to determine whether the seller is a non-resident alien, & if so the buyer has the responsibility of withholding 10% of the amount realized from the sale & sending that 10% to the IRS

Four Corners Doctrine

establishes that an instrument is to be examined by reading the whole of it without reference to any one part more than any other

Four Unities

Joint tenancy requires Unity of:


Posession


time


interest


Title

Freehold Estate

An estate in land or other real property of certain duration that may be inherited. It is an estate for life or in fee

Fully Amortized Loan

installment payments are sufficient to pay off the entire loan by the end of the loan term

Fully Indexed Rate

on adjustable rate mortgage




= index rate + the margin

Functional Obsolescence

depreciation that results:


1) from deficiencies arising from poor architectural design, outdated style or equip, & changes in utility demand


2) from overimprovements, where the cost of the improvements was more than the addition to market value

Future Advance Clause

A clause that secures all items of indebtedness of a mortgagor that shall at any time be owing to the mortgage

Future Interest

interest in land in which the privilege of possession or enjoyment is future and not present, also called a remainder interest

Garn St. Germain Act

federal law that made enforceability of due on sale provisions a federal issue

General Agency

An agency relationship by which one is empowered to transact all business or principal at any particular time or particular place, a general manager. A general agent has the power to bind his principal

General Warranty Deed

A deed in which the grantor warrants or guarantees the title to real property against defects existing before the grantor acquired title or arising during the grantors ownership

Grantee

one to whom a grant is made

Granting Clause

conveyancing clause in a deed

Grantor

The person by whom a grant is made

Graduated Lease

similar to gross lease, except that it provides for periodic increases in rent often based on consumer price index

Gross Lease

tenant pays a fixed rental amount and landlord pays all of the operating expenses for the premises.

Gross Rent Multiplier

= estimated value of property divided by gross rental income

Gross Income Multiplier

# equal to the estimated value of a property divided by the gross income of the property




= estimated value divided by total gross income

Ground Lease

tenant leases land and agrees to construct a building or other significant improvement on the land. Usually longer terms than most leases

Warranty Of Habitability

Guarantee that premises occupied by a tenant are habitable.

HOEPA

Home Owners Equal Protection Act of 1994

Holographic Will

will written, dated, and signed by a testator in his or her own handwriting

Home Equity Line of Credit Loan

Mortgage allowing a homeowner to have a pre-approved loan that can be drawn down in increments

Homeowners Protection Act (HPA)

fed law that requires lenders to disclose to borrowers when the borrowers mortgages no longer require PMI

Homestead

a legal estate that is a place of residence for a family or a single adult person that is exempt from sale by creditors except under certain specified conditions

HUD - Code Manufactured Home

a structure transported in one or more sections, which is 8 body feet or more in width and 40 body feet or more in length

Horizontal Property Act

law that provides for the creation of condo's & establishes regulations regarding condo's and condo owners

Implication

1) an easement creation; 2) act of creating an agency relationship by an unauthorized agent who acts as if he or she is the agent of the principal, & principal reasonably believes that the unauthorized agent is acting as his actual agent

Implied Contract

not expressed by words but through action or inaction and understood by both parties

Implied Easement

arises by implication, ex: when a purchase of a mineral rights automatically acquires an implied right to enter the property to extract minerals

Inclusionary Zoning

zoning law that requires builders to set aside a specific portion of new construction for people of low to moderate incomes

Incorporeal Hereditaments

anything, the subject of property, which is inheritable and not tangible or visible

Independent contractor

one who, exercising independent employment, contracts to do a piece of work according to his own methods and without being subject to the control of his employer except as to the result of the work

Incurable depreciation

depreciation that results from: 1) physical deterioration or functional obsolescence that cant be repaired at a cost that is less than or equal to the value added to the property, & 2) economic obsolescence (which is beyond control of the owner)

Innocent Landowner Defense

defense to liability for cleanup of toxic waste under CERCLA by one who acquires contaminated property after contamination occurred or who inherited property

Installment Note

promissory note in which periodic payments are made, usually consisting of interest due, & some repayment of principal

Industrialized Housing

a residential structure designed for the use and occupancy of one or more families constructed in one or more modules built on location

Installment Land Contract or Contract for Deed

executory contract for sale of real estate, which usually lasts for a term of years

Installment Sale

seller receives at least 1 payment in a later tax period & may report part of the gain from the sale for the yr in which payment is received.




provision in IRS code by which profit on the sale of ones capital asset can be spread over a series of years

Integration

growth and development stage of property

Interpleader

action that allows for a neutral 3rd party to avoid liability to 2 or more claimants to the same money or property by forcing the claimants to litigate among themselves, letting the court determine who deserves what while not enmeshing the neutral 3rd party in the litigation

Interstate Land Sales Full Disclosure Act

fed consumer protection act that requires certain land developers register w/the consumer financial protection bureau if they offer across state lines parcels in subdivisions containing 100 or more lots. exempt if ea lot is 20 acres or more. Must give buyer property report & min of 7 days to rescind purchase agreement

Intestate Succession

transfer of property of one who dies with out a will

Inter Vivos Trust

a trust that is established during the lifetime of the trustor

Interlineations

the act of writing between the line of an instrument, also what is written between lines

IRS Code of 1986

body of laws that codify and delineate the levying, collecting, and enforcing of federal tax laws

Interval Ownership Condominiums

ownership of a condo by exclusive fee title for a period in which the owner is entitled to possession. Unlike timesharing condos, the fee title only vests for a period of time and does not change from year to year.

Inverse Condemnation

judicial or administrative action brought by landowners to force condemnation of the landowners land where nearby condemned land or land used for public purposes severely reduces the value of owners land

Joint Tenancy

estate held by 2 or more persons having one and the same interest, which includes a right of survivorship, the entire tenancy on the decease of any of the joint tenants remains to the survivors and, ultimately, fee will vest in the last survivor

Jones Vs Mayer

landmark 1968 US Supreme Court Case that held that the Civil Rights Act of 1866 was constitutional & act prohibited all racial discrimination, private or public, in sale or rental of property

judgement liens

created pursuant to a court judgement and perfected by filing an abstract of judgment in the appropriate county of records

Just Compensation

fair market value of a property as compensation for a 'taking'

Justice of the Peace Court

in Texas, a court administered by the justice of the peace, a judicial officer having very limited jurisdiction

Laches

an unreasonable delay in asserting one's rights

Land Trust

created solely for the ownership, operation, and management of real estate interests

Lateral Support

support soil receives land adjacent to it

Lateral Severance

separating mineral and surface rights

Law of Capture

legal right of landowner to all gas, oil, & steam produced from wells drilled directly underneath his property. even if migrated from a neighbors property

Leasehold Estate

an estate in realty held under a lease that is an estate for a fixed term of years or shorter duration

Legal Title

one that is complete and perfect in regard to the apparent right of ownership and possession enforceable in a court of law

Legatee

one who acquires PERSONAL property under a will

Less-than-Freehold Estate

holder has exclusive right to possession of land for a length of time (lessee or tenant)

Lien Stripping

method used in chap 13 bankruptcies to eliminate junior liens on debtors home

Lien Theory

mortgagor retains legal and equitable title to property


mortgagee has lien against property

Life estate

1) an estate whose duration is limited to the life of the party holding it or some other person


2) freehold estate the duration of which is measured by the life of a natural person

Limited Common Elements

common elements that are agreed upon by all of the co-owners to be reserved for the use of a certain number of apartments to the exclusion of the other apartments, such as special corridors, stairways, and elevators, sanitary services common to the apartments of a particular floor

Liquidated Damages

a sum agreed to upon by the parties to be full damage if an event of default occurs, so long as said amount is reasonable

Lis Pendens

a public notice indicating that a lawsuit has been filed because title to real estate is in controversy

Littoral Rights

rights of a property owner adjoining a large body of water

Margin

# or percentage points that is added to the index of ARM to arrive at the fully indexed rate

Mutual Assent

the meeting of the minds in a contract

Metes and Bounds

method of describing a parcel of land that uses physical features along with directions and distances to define the boundaries of the parcel

Negative Amortization

loan repayment in which outstanding principal balance of the loan increases because the installment payments do not cover the full interest due

Negative Covenant

contractual promise to not do certain acts




remedies are monetary damages or injunctive relief, not forfeiture

Net Lease

one in which tenant pays a fixed rental amt + some or all of the operating expenses, giving the owner a net amount of income

Nationwide Mortgage Licensing System and Registry (NMLS)

mortgage licensing system developed & maintained by the conference of state bank supervisors & the American Association of Residential Mortage regulators for state licensing and registration of state licensed loan originators

Net Listing

a listing in which the owner receives a net price for the sale of his property; the brokers commission, if any, is the amount that exceeds the net figure

Nonconforming Use

previously existing use that is inconsistent with the current zoning designation;


zoning exception for areas that are zoned for the 1st time or that are rezoned & where established property uses that previously were permitted to not conform to new requirements


-gen rule - existing prop grandfathered in

Nonfreehold Estate

a leasehold estate

Nonrecourse

creating no personal liability

Notario Publico

an authority appointed by the Sec of State to take acknowledgement or proofs of written instruments, protest instruments permitted by law to be protested, administer oaths, and take depositions, as is now or may hereafter be conferred by law upon county clerks

Notice of Cessation

written form that notifies all work on a piece of real property has ceased and that limits the time in which mechanics liens may be filed against property

Notice of Completion

written form that notifies all work of improvement of real property has been completed & limits time in which mechanics liens may be filed against property

Notice of Default

doc prepared by a trustee at the direction of a lender to begin a non-judicial foreclosure proceeding

Notice of Pendency of Action

provides constructive notice to potential purchasers or encumbrances of a piece of real property of the pendency of a lawsuit in which an interest in that piece of real property is claimed

Novation

The substitution of a new obligation/subject/contract etc for an old one. The previous obligor is released from liability

Nuncupative Will

an oral will

Old Age Tax Deferral

an exemption in Tx that prohibits the sale of a homestead for taxes if one or more of the occupants is 65 yrs or older

Ostensible Agency

1) principal intentionally causes a 3rd person to believe another to be his agent who was not actually employed by him;


2) such authority as a principal, intentionally or by want of ordinary care, causes or allows a 3rd party to believe that the agent possesses

Parol Evidence Rule

prohibits the introduction of extrinsic evidence of preliminary negotiations oral or written & of contemporaneous oral evidence, to alter the terms of a written agreement that appears to be whole.

Partially Amortized Loan

monthly payments pay all of the interest due but not enough of the principal to fully pay off the loan at the end of the term (results in balloon payments)

Partial Release Clause

clause in blanket mortgage that allows developer to sell off individual parcels & pay back only a proportionate amount of the blanket loan

Partition

court ordered or voluntary dividing of lands held by joint tenants, tenants in common, or other joint ownership to distinct portions so that they may hold them in severalty

Passive Income

income from rental activity or from a business in which the taxpayer does not materially participate

Passive Investor

does not actively contribute to the management of the business invested in

Patent

original land grant from the sovereign power

Land Patent

instrument used to convey government land

Percentage Lease

(used in shopping centers) pays a base rental amount + a % of gross receipts of tenants business

Perpetual Care Fund

a fund provided for by statute for maintaining cemeteries, which requires the creation of a fund that never ceases and is continuous for the maintenance of the cemetery or graveyard

Period of Redemption

period of time after a sheriffs sale in a judicial foreclosure proceeding during which the borrower may redeem his/her property by paying off entire debt + costs

Periodic Tenancy

an estate from period to period, indefinite duration

Points

1% of loan amount

Police Power

a right of a government, either federal, state, or local, to regulate the use of real estate;


impose restrictions on private rights for the sake of public welfare for which no compensation need be made

Power of Sale Clause

a provision normally impeded to a deed of trust that provides for a nonjudicial foreclosure sale in the event of default by the mortgagor

Prescription

method of acquiring an interest in property by use & enjoyment for 5 yrs or more

Prescriptive Easement in Texas

a mode of acquiring the right to use property by long continued enjoyment, at least for 10 continuous yrs

Price Fixing

a conspiracy by 2 or more participants to fix prices, goods, or services, effectively eliminating competition in the marketplace

Primogeniture

the exclusive right possessed by the eldest son of a family to succeed to the estate of his ancestor, exclusive of the rights of the other sons or children

Principle of Anticipation

value derived from a calculation of anticipated future benefits to be derived from the property not from past benefits, though past benefits may inform as to what might be expected in future

Principle of Balance

max value of property is created & maintained when land use by interacting elements of production are in equilibrium

Principle of Change

property values are in a constant state of flux

Principle of Competition

increased competition results in increased supply in relation to demand, & thereby to lower profit margins

Principle of Conformity

max value of land is achieved when there is a reasonable degree of social, economic, & architectural conformity in the area

Principle of Contribution

improvements made will contribute to value or lack of improvements will detract from value

Principle of Four Stage Life Cycle

property goes through process of


1) Growth


2) Stability


3) Decline


4) Revitalization

Principal of Plottage

assembling 2 or more parcels of land into 1 parcel results in larger parcel having a greater value than the sum of the values of the smaller parcels

Principle of Progression

value of a residence of less value tends to be enhanced by proximity to residences of higher value

Principle of Regression

value of residence of higher value tends to be degraded by the proximity to residences of lower value

Principle of Substitution

value of a property will tend toward the cost of an equally desirable substitute property

Principle of Supply and Demand

value of property in a competitive market is influenced by the relative levels of supply and demand

Principle of Highest and Best Use

the best use of a property in terms of value is the use most likely to produce the greatest net return

Privity of Contract

the connection or relationship that exists between 2 or more contracting parties

Privity of Estate

the connection or relationship that exists between 2 or more parties who hold interests in the same real property

Probate

legal procedure whereby a superior court where real property is located or where deceased resided oversees the distribution of decedents property

Procuring Cause

the cause originating a series of events, which, without breaking in their continuity, result in the accomplishment of the prime objective

Pur Autre Vie

for or during the life of another

Profit a Prendre

right to enter anothers land for such purposes as to drill for oil, mine for coal, or cut & remove timber

Public Dedication

gift of an interest in land to a public body for public use. Ex: street, park, easement access to beach

Public Grant

public land conveyed, usually for a small fee, to individuals or organizations such as railroads or universities

Purchase Money Loan

deed of trust or mortgage on a dwelling for not more than 4 families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of that dwelling, occupied entirely or in part by the purchaser

Qualified Intermediary

3rd party escrow agent used to facilitate tax-deferred exchanges

Quantum Meruit

an action found at common law founded on the implied promise on the part of the defendant to pay the plaintiff as much as he reasonably deserved to have for his labor

Quasi Contractual Recovery

obligation similar in character to that of a contract, which arises not from an express agreement of the parties, but rather from one that is implied by the court

Quitclaim Deed

No warranties of any kind, merely provides that interest that grantor has in property is transferred to the grantee

Ratification

act of creating agency relationship by a principal who accepts or retains the benefit of an act made by an unauthorized agent

Reconveyance Deed

deed executed by trustee of a deed of trust after promissory note is paid off in full by the borrower & the lender instructs the trustee to so execute the reconveyance deed which reconveys legal title to borrower

Redemption

a repurchase or a buying back

Regulation X

Federal Regulations passed establishing guidelines for RESPA

Regulation Z

establishes guidelines for TILA

Rejuvenation

phase when a property is rebuilt, remodeled, or otherwise revitalized to a new highest and best use

Reliction

increase in land area caused by the withdrawal of waters contiguous to it

Residual Value

estimate of reasonable fair market value of a property at end of its useful life

Respondeat Superior

principal is liable for the acts of an agent if those acts were performed within scope of agents authority

Retaliatory Eviction

eviction brought against tenant for making a habitability complaint or asserting other tenant rights

Reversion

residue of a freehold estate, future interests reverts to grantor at end of estate

Rezoning Amendment

amendment requested by owners when they feel their area has been improperly zoned

Right of Appropriation

legal right to take possession of and use for beneficial purposes water from streams or other bodies of water

Right of First Refusal

right to be given the 1st chance to purchase a property at the same price, terms, conditions as is offered to 3rd parties if and when the property is put up for sale

Right of Survivorship

right to succeed to the interest of a join tenant or community property;



Riparian Rights

rights of a property owner bordering a stream or river

Rule Against Perpetuities

Principle that no interest in property is good unless it must vest, if at all, no later than 21 yrs plus a period of gestation after some life or lives in being at the time of the creation of the interest. Constitutional Rule in TX

Rule in Shelley's Case

doctrine by which an ancestor takes an estate of freehold, in the same conveyance, the state is limited to his heirs in fee or entail such that the estate is limited to only heirs of that ancestor

Rule of Capture

allows the owner of the land to pump unlimited quantities of ground water from under the land

Separate Property

in TX, property acquired before marriage, or by gift, devise, or descent after marriage

Safe and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act)

designed to improve consumer protection & reduce mortgage fraud by setting minimum standards for the licensing and registration of mortgage loan originators

Sandwich Lease

leasehold interest that lies between a primary lease and a sublease

Self-Help Eviction

landlords denial of possession of leased premises to a tenant with out complying with legal process of eviction

Servient Tenement

land that is burdened by an easement

Severance


act of detaching an item of real property that changes the item to personal property

Severance damages

damages paid to an owner of land partially taken by eminent domain where the value of the remaining land is severely reduced by the severance of the condemned portion of owners land

Sheriff's Deed

deed given at foreclosure; no warranties, only transfers former owners interest in property

Sherman Anti-trust Act

federal law passed in 1890 that prohibits oral or written agreements that restrain free trade

Shifting Executory Use

use that is so limited that it will be made to shift or transfer itself from one beneficiary to another upon the occurrence of a certain event after its creation

Special Agency

an agency relationship by which one is employed to conduct a particular transaction or a piece of business for his principal or authorized to perform a specific act but does not have the power to bind his principal

Special Warranty Deed

grantor warrants or guarantees the title only against defects arising during his ownership of the property and not against defects existing before the time of his ownership

Spot Zoning

zoning of isolated properties for use different from uses specified by existing zoning laws

Spring Executory Use

use limited to arise on future event in which no preceding use is limited. it does not take effect in derogation of any interest of the grantor, and remains in the grantor in the meantime

Stand By Loan Commitment

commitment by lender to make a take out loan after construction on a property is completed

Statute of Frauds

Texas statute that provides that no suit or action shall be maintained on certain classes of contracts unless there shall be a note or memorandum thereof in writing and signed by the party to be charged or by his authorized agent. Its objective is to close the door to the numerous frauds and perjuries.

Statue of Limitations

requires particular type of lawsuits to be brought with a specific amt of time after occurrence of event giving rise to lawsuit

Straight Note

interest only periodic payments

Subjacent Support

support soil receives from land beneath it

Subject to

acquiring real property that is burdened by a mortgage with out becoming personally liable for the mortgage debt

Subordination Clause

mortgage or deed of trust will have lower priority than a mortgage or deed of trust recorded later

Subrogation

substitution of one party for another in regard to pursuing a legal right, interest, or obligation

Subsidence

when water advances to cover the previously dry land

subsurface rights

rights of the owner to use land below the surface

Tax Deed

deed executed at an ad valorem tax sale

Take Out Loan

loan that provides long term financing for a property on which a construction loan had been made

Taxpayer Relief Act of 1997

tax deduction provisions including large exemption for profits on sale of a personal residence

Tenancy

estate of a tenant whether it be in fee, for life, for years, at will, or otherwise

Tenancy by the entirety

special form of joint tenancy between married couple in which, there is right of survivorship but neither spouse may convey his/her interest in the property without consent of the other spouse

Tenancy in Common

form of joint ownership, owned by several non-married persons

Timeshare Condominiums

condos that are owned among several co tenants who have the right, by contractual agreement, to use the condo only for a certain time period

Title Theory

lender holds title until loan is paid

Torrens System

a method of evidencing title by registration, after a court decree, with a proper public official called the registrar of titles

Tri-Party Agreements

agreements to loan money involving the construction financing lender, the permanent lender, and the borrower. Each promises to undertake a certain phase of financing a construction project

Trustee's Deed

a deed executed by a trustee at a foreclosure sale

Tying Arrangement

seller conditions the sale of one product or service on the purchase of another product of service

Unlawful Detainer

legal action to regain possession of real property

Unity of Possession

joint possession of 2 or more rights by several titles

Unjust Enrichment

persons shall not be allowed to profit to enrich themselves inequitably at another's expense

Usury

charging of interest in excess of that allowed by law

Variance

use that literally violates the terms of the zoning ordinance but is permitted to stand because an otherwise unnecessary hardship would be created for the owner of a property

Vicarious Liability

liability imposed on someone because of acts of another

Writ

court order commanding specified person to act

Writ of attachment

seizure of property belonging to defendant to ensure availability of property to satisfy a judgement if plaintiff wins

Writ of Execution

to put in force the judgement or decree

Writ of Possession

commands a sheriff to restore the premises to the true owner