Glossary of Real Estate Terminology
Abatement
A reduction or decrease. Usually applies to a decrease of assessed valuation of ad valorem taxes after the assessment and levy.
Abstract
A summary; an abridgment. Before the use of photostatic copying, public records were kept by abstracts of recorded documents.
Abstract of Judgment
A summary of the essential provisions of a court judgment, which when recorded in the county recorder's office, creates a lien upon the property of the defendant in that county, both presently owned or after acquired.
Abstract of Title
A summary prepared by a licensed abstractor of all documents recorded in the public records of the political subdivision where the land is located. An abstract in some states or areas is reviewed by an attorney or other experienced title examiner to determine the status of title. Virtually every abstractor today provides actual copies of the records rather than an abstract of each document.
Abutting Owner
One whose land is contiguous to (abuts) a public right of way.
Acceleration Clause
Clause in a deed of trust or mortgage, which accelerates, or hastens, the time when the indebtedness becomes due. For example, some deeds of trust contain a provision (an acceleration clause) stating that the note shall become due immediately upon the sale of the land or upon failure to pay interest or an installment of principal and interest.
Access Right
A right to ingress and egress to and from one's property. May be express or implied.
Accommodation Recording
Recording of instruments with the county recorder by a title company merely as a convenience to a customer and without assumption of responsibility for correctness or validity.
Acknowledgement
A formal declaration before a duly authorized officer (such as a notary public) by a person who has executed an instrument that such execution is his own act and deed. An acknowledgment is necessary to entitle an instrument (with certain specific exceptions) to be recorded, to impart constructive notice of its contents and to entitle the instrument to be used as evidence without further proof. The certificate of acknowledgment is attached to the instrument or incorporated therein.
Ad Valorem
"According to value." A method of taxation using the value of the thing taxed to determine the amount of tax. Taxes can be either "ad valorem" or "specific." Example: a tax of $5.00 per $1000.00 of value per house is "ad valorem." A tax of $5.00 per house (irrespective of value is specific.
Addendum
Something added. A list or other material added to a document, letter, contractual agreement, escrow instructions, etc. (see also Amendment).
Additional deposit
A buyer of real property will generally give a small deposit with an offer, and a more substantial deposit after the offer has been accepted. The second deposit is the "additional deposit."
Adjacent
Close to. May or may not be contiguous (touching).
Adjoining
Touching or contiguous to.
Adjustable Mortgage Loans (AMLs)
Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARM'S), Flexible Rate Loans, Variable Rate Loans. (See also: Indexing, Rate Index).
Administrator
A person appointed by the probate court to carry out the administration of a decedent's estate when the decedent has left no will. If a woman is appointed, she is called an administratrix.
Administrator's Deed
A conveyancing instrument used by an administrator to transfer property from an estate. (See Administrator)
Adverse Land Use
A use which causes surrounding property to lose value, such as an industrial development in a residential area.
Adverse Possession
A method of acquiring title by possession under certain conditions. Generally, possession must be actual, under claim of right, open, continuous, notorious, exclusive, and hostile (knowingly against the rights of the owner). Exact time (years) of possession and specific requirements (such as payment of property taxes) vary with the statutes of each state.
Affiant
One who makes an affidavit. Also called a deponent, although technically not the same.
Affidavit
A written statement or declaration, sworn to before an officer who has authority to administer an oath.
Affidavit of Alimony and Child Support
A sworn statement of a separated or divorced person showing the amount (if any) of alimony or child support.
Affirmative Easement
An easement described from the benefited estate (dominant tenement). Also called a parcel 2 easement. The same easement described from the burdened estate (servient tenement) would be a negative easement.
Agency
Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the latter agency involving real property should be in writing, such as listings, trusts, powers of attorney, etc.
Agency agreement
(agency listing) - In some states, the term describing a listing under which the broker's commission is protected against a sale by other agents but not by a sale by the principal. Called a "not-exclusive" listing in some states.
Agent
One who is authorized to act for or represent another (principal), usually in business matters. Authority may be express or implied.
Agreement
A general term usually describing a common view of two or more people regarding the rights and obligations of each with regard to a given subject. Not necessarily a contract, although all contracts are agreements.
Agreement of Sale
A written contract entered into between the seller (vendor) and buyer (vendee) for sale of real property (land) on an installment or deferred payment plan. It is also known as an agreement to convey, a long form Security Agreement, or a real estate installment contract.
Alienation
Transfer of property from one owner to another.
Alienation Clause
A type of acceleration clause, calling for a debt under a mortgage or deed of trust to be due in its entirety upon transfer of ownership of the secured property. Also called a "due-on-sale" clause.
All-Inclusive Rate
Rate which includes charges for title insurance, searching or abstract fees and examination fees.
Allocation
A method for appraising a site (land) by comparing other site values as a percentage of total value of a site (including improvements). Property x has a total (improved) value of $100,000. The land is worth $35,000. The term is often (and incorrectly) used synonymously with abstraction.
ALTA
(American Land Title Association) - Organization composed of title insurance firms which sets standards for the industry, including title insurance policy forms used on a national basis.
Amendment
Changes to alter, add to, or correct part of an agreement without changing the principal idea or essence.
Amortized Loan
A loan that is paid off, both interest and principal, by regular payments that are equal or nearly equal.
Annual Percentage Rate (A.P.R.)
The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For example: 6% add-on interest would be much more than 6% simple interest, even though both would say 6%. The A.P.R. is disclosed as a requirement of federal truth in lending statutes.
Apartment
One or more rooms of a building used as a place to live, in a building containing at least one other unit used for the same purpose. Usually has, at least, cooking facilities, a bathroom, and a place to sleep. Those who live in these units pay rent for their use, usually on a monthly basis.
Appraisal
An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications.
Appraisal Methods
Generally, three major methods of appraisal: cost approach, income approach, market value (comparables) approach.
Appraisal Report
A written report by an appraiser containing his opinion as to the value of a property and the reasoning leading to this opinion. The factual data supporting the opinion, such as comparables, appraisal formulas, and qualifications of the appraiser, will also be set forth.
Appraised Value
An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.
Appraiser
One who is trained and educated in the methods of determining the value of property through analysis of various factors which determine said value.
Appreciation
An increased value of property due to either a positive improvement of the area or the elimination of negative factors. Commonly, and incorrectly, used to describe an increase in value through inflation.
Approved Attorney
An attorney whose opinion is acceptable to a title company as the basis for issuance of a title insurance policy by the insurer. The insurer, rather than the attorney, executes the policy.
Appurtenance
Something belonging to something else, either attached or not, such as a barn to a house, or an easement to the land. The appurtenance is part of the property and passes with it upon sale or other transfer.
Articles of Incorporation
Documentation filled with the state which sets forth general information about a corporation. More specific rules of the corporation would be contained in the by-laws.
Assess
To fix a value; to appraise. Most commonly used in connection with taxes.
Assessed Value
Value placed upon property for property tax purposes by the tax assessor.
Assessment
(1) The estimating of value of property for tax purposes. (2) A levy against property in addition to general taxes. Usually for improvements such as streets, sewers, etc.
Assets
Everything owned by a person or corporation which can be used for the payment of debts.
Assumption
The act of conveying real property; taking title to a property with the Buyer assuming liability for paying an existing note secured by a deed of trust against the property.
Assumption Fee
Lender's charge for paperwork involved in processing records for a new buyer assuming an existing loan.
Assumption of Mortgage
Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust. The lender usually must approve the new debtor in order to release the existing debtor (usually the seller) from liability.
Attorney at Law
An advocate, counsel, or official agent employed in preparing, managing, and trying cases in court. Must be licensed by the state.
Attorney-in-Fact
One who is appointed to act (as agent) for another (principal) under a power of attorney. The scope of the agent's authority is limited to that given by the power of attorney, which may be limited to one specific act or may be broader. (see also "Power of Attorney")
Back Title Letter
In states where attorneys examine title for title insurance purposes, this letter is given by a title insurance company to an attorney, giving to said attorney the condition of title as of a certain date. The attorney then begins his examination as of that date. Also called a starter or back title certificate. (see also "Starter")
Balloon
(1) The final payment of a balloon note. (2) A landlocked parcel of land.
Balloon Note
A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a "balloon" is due at maturity.
Bankrupt
One who is adjudicated a bankrupt by a court having proper jurisdiction. The bankruptcy may be voluntary (petitioned by the bankrupt) or involuntary (petitioned by the creditors of the bankrupt).
Bankruptcy
Proceedings under federal bankruptcy statutes to relieve a debtor (bankrupt) from insurmountable debt. The bankrupt's property is distributed by the court to the creditors as full satisfaction of the debts, in accordance with certain priorities and exemptions. Voluntary bankruptcy is petitioned by the debtor; involuntary by the creditors.
Base Line
(1) A survey line used in the government survey to establish township lines. The base line runs east and west through a principal meridian (line running north and south). (2) A horizontal elevation line used as the centerline in a survey for a highway route.
Base Map
A map having background information, such as state, county, or city boundaries, upon which more detailed data is plotted.
Base property
Private property owned by a cattle owner required before a permit will be issued to allow the cattle to graze on public land.
Base title
The result of an examination of title for the internal use of a title insurance company. Usually covers a large area and is done in anticipation of future sales or subdividing of the area.
Beneficiary
(1)One for whose benefit a trust is created. (2) In states in which deeds of trust are commonly used instead of mortgages, the lender (mortgagee) is called the beneficiary. See "Deed of Trust"
Binder
(1) Aa report issued by a title insurance company setting forth the condition of title to certain property as of a certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment. (see also preliminary title report). (2) a policy of title insurance (used primarily by investors) calling for a reduced rate for a future policy if the property is sold within a specified period.
Blanket Mortgage or Trust Deed
A mortgage or trust deed that covers more than one lot or parcel of real property, and often an entire subdivision. As individual lots are sold, a partial reconveyance from the blanket mortgage is ordinarily obtained.
Block
(1) In a city, a square or rectangular area enclosed by streets. (2) in some states, a part of a subdivision legal description, such as lot 1, block 1, tract 1. (3) a pulley in a frame. (4) an auctioneer's platform.
Blueprint
A plan of a building in such detail as to enable workmen to construct it from the print. The name comes from the photographic process which produces the plan in white on a blue background.
Bona Fide
A legal term which refers to any actions, situations, or persons that are honest, in good faith, and without fraud.
Bona Fide Purchaser
A purchaser in good faith, for valuable consideration, without notice or knowledge of adverse claims of others. Sometimes abbreviated to b.f.p.
Bond
(1) An insurance agreement by which one is insured against loss by acts or defaults of a third party. In construction, a performance bond insures that the builder will finish his project. The insured could be a lender, purchaser, or other interested party. (2) a method of financing long term debt, issued by a government or private corporation, which bears interest and has priority over stock in terms of security.
Bottom land
Low land along a river formed by alluvial deposits. Also low lying ground such as a valley or dale.
Boundary
A separation, natural or artificial, which marks the division of two contiguous properties.
Bounds
Boundaries.
Branch
A subordinate or division office of ABC Company, as opposed to an affiliate, agent, subsidiary or underwritten firm associated with the Company.
Breach of Contract
Failure to perform a contract, in whole or part, without legal excuse.
Broker, real estate
One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for his or her part in bringing together a buyer and seller, landlord and tenant, or parties to an exchange.
Brokerage
The act of bringing together principals (buyer-seller; landlord-tenant; etc.) For a fee or commission, rather than acting as a principal.
Building Contract
An agreement between an owner or lessee and a building contractor, setting forth terms relative to the construction of a proposed structure.
Buy-sell offer
An offer by one owner of a business or real estate (a partner or other shareholder), or to sell the offeror's interest at the same price or proportionate price if unequal ownership. Example: a and b each own a ½ interest in lot 1. A offers to buy b's interest for $10,000, or to sell a's interest to b for $10,000. Theoretically very fair, since b has the option to buy or sell. However, b's inters may be worth $12,000, but b is financially unable to buy a's interest (also worth $12,000).
Buydown
A payment to the lender from the seller, buyer, third party, or some combination of these, causing the lender to reduce the interest rate during the early years of a loan. The buydown is usually for the first one to five years of the loan.
Buyer
The purchaser; one who buys real estate.
Buyer's market
A market condition favoring the buyer. In real estate, when more homes are for sale than thee are interested buyers.
By-laws
Rules and regulations adopted by an association or corporation, which govern its activities.
By-pass
A road designed to avoid or pass by a high density area, such as a business section of a city, in order to ease traffic congestion. Also called a belt highway.
Cancellation clause
A clause in a lease or other contract, setting forth the conditions under which each party may cancel or terminate the agreement. The conditions may be as simples as giving notice or complex and require payment by the party desiring to cancel.
Cap
(1) A maximum amount of charge. Example: an adjustable rate mortgage with a 5% rate cap could not adjust the interest rate by more than 5% (2) a fitting used to seal, such as by a plumber to seal (cap) a pipe end. (3) a cornice, lintel, or top of a structural member such as a column.
Capitalization Rate
The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.
Cemetery
Large parcels of land used for burying deceased persons. May be public or private, the private usually being of a specific religious denomination.
Certificate
A writing, either from a court or other public body, giving assurances of existing conditions or facts, and giving rights or creating obligations.
Certificate of Occupancy
A certificate issued by a local building department to a builder or renovator, stating that the building is in proper condition to be occupied.
Certificate of Title
In areas where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney, stating that title is vested as stated in the abstract.
Certified Check
A personal check drawn by an individual which is certified (guaranteed) to be good. The bank holds the funds to pay the certified check and will not pay any other checks drawn on the account if such payment would impede payment of the certified check. The bank also will not honor a stop payment of a certified check.
Certified copy
A true copy, attested to be true by the officer holding the original.
Change of Name
When there is a name change of a party appearing on a document (deed, etc.), it may be reflected in several ways, such as: (1) mary smith, a married woman, w.a.t.a. (who acquired title as) mary jones, an unmarried woman. (2) mary smith, aka (also known as) mary jones. (3) mary smith, formerly mary jones. (4) mary smith, alias mary jones. Each may be applicable in different circumstances (how and why the name was changed).
Chattel
Personal property.
Claim
An assertion of some right or demand.
Close of Escrow
The date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.
Closing
(1) In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. (2) a selling term meaning the point at which the client or customer is asked to agree to the sale or purchase and sign the contract. (3) the final call in a metes and bounds legal description which "closes" the boundaries of the property.
Closing Costs
Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc.
Closing Service Letter
Also known as Closing Protection Letter. A letter of authorization from a Title Company, for an individual or agency conducting a settlement on behalf of the Title Company and Lender which includes the execution of all documents and disbursements of funds.
Closing Statement
The statement which lists the financial settlement between buyer and seller, and also the costs each must pay. A separate statement for buyer and seller is sometimes prepared.
Cloud
See "Cloud on Title".
Cloud on Title
An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. For example: a sells lot 1, tract 1, to b. The deed is mistakenly drawn to read lot 2, tract 1. A cloud is created on lot 2 by the recording of the erroneous deed. The cloud may be removed by quitclaim deed, or, if necessary, by court action.
Co-Trustee
One who shares the duties of trustee with one or more other trustees.
Code
A comprehensive set of laws drawn up to cover completely a given subject. Covers diverse subjects, such as the criminal code, and the building code.
Code of Ethics
See "Ethics".
Coinsurance
Ordinary coinsurance is defined as a transaction under which each of two or more insurers assumes a designated portion of the liability for the total risk and is liable for only such portion of any loss beginning at the first dollar of loss. (See Reinsurance.)
Collateral
By or at the side, additional or auxiliary. Mistakenly used to mean collateral security.
Collateral Security
Most commonly used to mean some security in addition to the personal obligation of the borrower.
Commission
An amount, usually as a percentage, paid to an agent (real estate broker) as compensation for his services. The amount to a real estate broker is generally a percentage of the sale price or total rental.
Commitment
A binding contract with a title company to issue a specific title policy, showing only those exceptions contained in the commitment and any intervening matters after the date of the commitment and prior to the effective date of the policy. The commitment contains all information included in the preliminary title report, plus a list of the title company's requirements to insure the transaction. It also includes the standard exceptions from coverage that will appear in the policy.
Commitment Fee
A fee paid for a loan commitment. (See "Commitment")
Common Area
The area owned in common by the owners of condominiums or planned unit development homes in a subdivision.
Common Law
The body of laws, originated and developed in england, which was adopted by most states and still prevails if not superseded by statutes. Also referred to as case law.
Common Wall
(See "Party Wall")
Community Driveway
A driveway which is jointly owned, used and maintained by two or more persons. Usually, a portion of each owner's property is burdened by the driveway.
Community Property
Property owned in common by a husband and wife, which was not acquired as separate property. A classification of property peculiar to certain states.
Community Reinvestment Act
Federal legislation of 1977 (and subsequent amendments) for the purpose of encouraging banks and thrifts (savings and loans) to make more loans in their local areas. The act created the national consumer cooperative bank to make loans to local banks and thrifts for community investment (loans) and also to guarantee certain loans made in the local community.
Comparable Sales
Sales that have similar characteristics as the subject property, used for analysis in the appraisal. Commonly called "comps".
Concrete
A cement mixture containing sand and gravel which is combined by mixing with water, poured to a desired shape, and hardens as it dries.
Condemnation
The taking of private property by the government for public use - as for a street or a storm drain - upon making just compensation to the owner. This right or power of government to take property for a necessary public use is called eminent domain.
Condominium
A structure of two or more units, the interior space of which are individually owned; the balance of the property (both land and building) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces (exclusive of paint or other finishes) of the exterior walls, floors, and ceiling the balance of the property is called the common area.
Condominium Conversion
The changing of rental property (two or more units) to condominium ownership. Physical changes, as well as paperwork, may be necessary to conform to building and safety codes.
Condominium Map (Plan)
A recorded map showing the condominium units and common area. The map includes both horizontal and vertical measurements of the units. It is important that the map agree with the declaration of restrictions (recorded at the same time).
Condominium Owner's Association
(See Home Owner's Association)
Conservator
A person appointed by the court to care for the person and/or property of an incompetent adult or an adult unable to care for their person or property because of health.
Consolidation
(1) The coming together, either through merger or partial ownership, of two or more companies. (2) the solidification of loose material or liquid, usually under pressure.
Constructive Notice
Notice imparted by the public records of the county when documents entitled to recording are recorded.
Contiguous
Near or close to, whether actually touching or not. Generally refers to actual touching or bordering on.
Contingency
Commonly, the dependence upon a stated event which ust occur before a contract is binding. For example: the sale of a house, contingent upon the buyer obtaining financing.
Contract
An agreement between two or more persons or entities which creates or modifies a legal relationship. Generally based upon offer and acceptance.
Conveyance
An instrument in writing, such as a deed or trust deed, used to transfer (convey) title to property from one person to another.
Corner Lot
A lot contiguous to two intersecting streets, and, for purposes of value, having access to both streets.
Corporation
A general term encompassing any group of people "incorporating" by following certain statutory procedures. Most common type of corporation is a private one formed to carry on a business. An entity authorized by law and established by a group of people, the stockholders, which is endowed with certain rights, privileges and duties similar to an individual.
Cotenancy
A general term covering both joint tenancy and tenancy in common.
County
A political division within a state, usually encompassing one or more cities or towns. There are exceptions such as new york city which contains more than one county. Louisiana uses the word parrish instead of county; new york uses both borough and county, as in kings county (the borough of brooklyn).
Covenant
(1) A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as the covenant of warranty in a warranty deed. (2) Agreements or promises contained in deeds and other instruments for performance or nonperformance of certain acts, or use or nonuse of property in a certain manner.
Covenants, Conditions and Restrictions
Commonly called CC & R's the term usually refers to a written recorded declaration which sets forth certain covenants, conditions, restrictions, rules or regulations established by a subdivider or other landowner to create uniformity of buildings and use within tracts of land or groups of lots. The restrictions also can be established by deed. CC & R's are sometimes referred to as private zoning.
Credit
(1) The financial worthiness of a borrower. The history of whether this borrower has met financial obligations on time in the past. (2) an accounting term designating money received or receivable, as opposed to debit which is money paid or payable.
Credit report
A report on the past ability of a loan applicant to pay installment payments. Several national and local companies make such reports.
Curb cuts
The part of a curb which lowers to street level to form the apron of a driveway.
Custodian
(1) One who is entrusted with the care and keepin gof real or personal property. (See also "Custody") (2) A janitor
Custody
The care and keeping of property (real or personal). For example: an escrow agent has custody of documents and funds until closing.
Customer
A buyer of good or services.
Damages
(1) Money recoverable by one suffering a loss or injury. (2) the loss of value to property adjoining a property taken in condemnation proceedings, rather than the value of the property taken.
Debt
Money owing from one person to another.
Debtor
One who owes a debt.
Declaration
(See "Declaration of Restrictions", "Restrictions", "Condominium Map")
Declaration of Restrictions
A set of restrictions filed by a subdivider to cover an entire tract or subdivision.
Declaration of Trust
A written acknowledgement by one holding legal title to property that the property is held in trust for the benefit of another.
Decree of Distribution
A probate court decree which determines how the estate of a decedent shall be distributed.
Deed
Written document by which an estate or interest in real property is transferred from one person to another. The person who transfers the interest is called the "grantor." The one who acquires the interest is called the "grantee." Examples of deeds are grant deeds, administrator's deeds, executor's deeds, quitclaim deeds, etc. The deed to use depends on the language of the deed, the legal capacity of the grantor and other circumstances.
Deed in Lieu
A deed from the owner (debtor) to a lender to prevent foreclosure. There are usually statutory provisions as to fairness of value and absence of coercion which must be recited on the deed.
Deed in Lieu of Foreclosure
A deed given by an owner/borrower ot a lender to prevent the lender from bringing foreclosure proceedings. The validity of the deed depends to some degree on "fairness" under the circumstances, and adequacy of consideration will be considered.
Deed of Reconveyance
(See "Reconveyance")
Deed of Trust or Trust Deed
A written document by which the title to land is conveyed as security for the repayment of a loan or other obligation. It is a form of mortgage. The landowner or debtor is called the "trustor." The party to whom the legal title is conveyed (and who may be called on to conduct a sale thereof if the loan is not paid) is the "trustee." The lender is the "beneficiary." When the loan is paid off, the trustee is asked by the beneficiary to issue a "recon" or reconveyance. This reconveyance corresponds to the release that the holder of a mortgage executes when the mortgage is paid off.
Deed Restrictions
Limitations on the use of property placed in the conveyancing deed by the grantor, which bind all future owners.
Default
An omission or failure to perform a legal duty.
Defeasible Title
Title which is not absolute but possibly may be annulled or voided at a later date. For example: Title conveyed to A with condition that if A marries before age 30, title will go to B. A's title may be good (doesn't marry) or may be defeated (marries before 30).
Defect
A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.
Defective Title
(1) Title to a negotiable instrument obtained by fraud. (2) Title to real property which lacks some of the elements necessary to transfer good title.
Defendant
The person against whom a civil or criminal action is brought.
Deferred Maintenance
Repairs necessary to put a property in good condition. A concern of a purchaser. An owner may have an account for such maintenance.
Demand Note
A note having no date for repayment, but due on demand of the lender.
Demise
A lease or conveyance for life or years. Loosely used to describe any conveyance, whether in fee, for life, or for years.
Demographics
Statistics. Commonly refers to statistical information required by certain businesses (especially chain stores) regarding a possible new location.
Department of Real Estate
That department of the state government responsible for the licensing and regulation of persons engaged in the real estate business. The person heading the department is usually called the real estate commissioner. Other names of the department are the division of real estate and the real estate commission.
Deposit
(1) Money given by the buyer with an offer to purchase. Shows good faith. Also called earnest money. (2) A natural accumulation of resources (oil, gold, etc.) which may be commercially recovered and marketed.
Depreciation
(1) Decrease in value to real property improvements caused by deterioration or obsolescence. (2) a loss in value as an accounting procedure to use as a deduction for income tax purposes.
Description
The exact location of a piece of real property stated in terms of lot, block, tract, part lot, metes and bounds, recorded instruments, or U.S. Government survey (sectionalized). This is also referred to as legal description of property.
Developer
(1) A builder. (2) one who prepares the raw land for construction and then sells lots to a builder.
Development
A planned construction project, rather than simply the building of unrelated buildings.
Dissolution
A cancellation or annulment of a contract or business associate, such as a partnership or corporation.
District
An area geographically set apart for a specific purpose, such as a congressional district or drainage district. The boundaries of one may overlap the other.
Dividend
A dividing into shares of a fund of money or property for distribution, as among shareholders of a corporation. The money or property distributed is the dividend.
Division Wall
(1) A wall between two buildings, but not a part of either. (2) a wall which divides a building into rooms. Differs from a partition in that it is load-bearing.
Divorce
The legal dissolution of a marriage, leaving the parties with the results of the marriage (includes alimony, child support, property settlements, etc.) Rather than an annulment which puts the parties in the position they were before the marriage.
Domicile
(1) A legal term signifying a place where a person has his permanent home. The most accurate meaning is the layman's understanding of the place where a person "lives", since this takes into consideration the intent of the person to make a particular property his "home". (2) the state or country in which a corporation is chartered (organized), such as a corporation "domiciled" in the U.S.
Double Escrow
Two concurrent escrows on the same property, having the same party as buyer and seller of the property. Example: escrow 1-a buys from b. Escrow 2-a sells the same property to c, a is using c's money to buy b's property. The process is illegal in many states unless full disclosure is made.
Down Payment
Cash portion paid by a buyer from his own funds, as opposed to that portion of the purchase price which is financed.
Duplex
(1) Any building containing exactly two dwelling units. Most commonly refers to the units which are side by side, with a common wall and roof. (2) an apartment on two floors or levels.
Earnest Money Deposit
Down payment made by a purchaser of real estate as evidence of good faith; a deposit or partial payment.
Easement
A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another. It is either for the benefit of land (appurtenant), such as right to cross a to get to b, or "in gross," such as a public utility easement.
Easement Appurtenant
An easement for the benefit of another parcel of land, such as the right to cross parcel a to reach b. The easement will pass with the transfer of property to a new owner.
Easement by Prescription
(See "Prescriptive Easement")
Easement in Gross
An easement for the benefit of a person or company, rather than for the benefit of another parcel of land. Commonly, such easements as for public utilities.
Easement of Necessity
An easement granted by a court when it is determined that said easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels.
Effective Demand
A qualifying term meaning the ability to pay as well as desire to buy.
Efficiency
An apartment consisting of one room, sectioned into areas for a kitchen, bedroom, etc.
Egress
A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress.
Eminent Domain
The right of a government to take privately owned property for public purposes under condemnation proceedings upon payment of its reasonable value. See "Condemnation".
Encroachment
The presence of an improvement such as a building, a wall, a fence or other fixture which overlaps onto the property of an adjoining owner.
Endorsement, Indorsement
The act of the holder of a note, bill, check, or other negotiable instrument, of assigning said instrument by signing the back of the instrument, with or without qualifications.
Entire Tenancey
(See "Tenancy by the Entirety")
Entity
A separate existence or being, most commonly referring to a corporation or other form of business, rather than an individual.
Equity
(1) A legal doctrine based on fairness, rather than strict interpretation of the letter of the law. (2) the market value of real property, less the amount of existing liens. (3) any ownership investment (stocks, real estate, etc.) As opposed to investing as a lender (bonds, mortgages, etc.).
Equity Build-up
The reduction of principal on a mortgage or deed of trust by periodic payments, which increases (builds-up) the difference (equity) between the property value and amount of the lien.
Equity Line of Credit
A combination of a line of credit and equity loan. A maximum loan amount is established based on credit and equity. A mortgage (deed of trust) is recorded against the potential borrower's property for said maximum loan amount. The potential borrower has the right to borrow, as needed, up to the amount of the mortgage.
Equity Loan
A loan based upon the equity in a property. The credit of the borrower is not a major factor. (See also "Personal Property Loan")
Erosion
The wearing away, over a prolonged period, of rock, earth, or other portions of land.
Errors and Omissions Insurance
Insurance covering losses caused by errors and omissions of professions other than medicine. Used by banks, real estate companies, escrow companies, etc
Escheat
A reversion of property to the state in the absence of an individual owner. Usually occurs when a property owner dies intestate, and without heirs.
Escrow
Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event. Modernly, in some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral) party, with instructions as to their use.
Escrow Instructions
Instructions which are signed by both buyer and seller, and which enable an escrow agent to carry out the procedures necessary to transfer real property, a business, or other assignable interest.
Escrow Officer
An escrow agent. In some sates, one who has, through experience and education, gained a certain degree of expertise in escrow matters.
Estate
(1) The interest or nature of the interest which one has in property, such as a life estate, the estate of a deceased, real estate, etc. (2) a large house with substantial grounds surrounding it, giving the connotation of belonging to a wealthy person.
Estate at Will
(See "Tenant at Will")
Estoppel
The prevention of one from asserting a legal right because of prior actions inconsistent with the assertion.
Ethics
With regard to professions, a code of professional standards, containing aspects of fairness and duty to the profession and the general public.
Examination
An inspection. In title, an inspection of the chain of title from the beginning of time to the present.
Exceptions
(1) specific items set forth in an insurance policy which are not covered by said policy. (2) any item specifically excluded.
Execution Sale
Sale of real property under a writ of execution by a court. A judicial mortgage foreclosure sale is in this category.
Executor
One who is appointed under a will to carry out (execute) the terms of the will.
Executor's Deed
A deed issued by the executor of an estate. (see "Executor")
Extended Coverage
With reference to insurance, coverage beyond the normal (standard) policy.
Extension
A continuing under the same conditions, as opposed to a renewal, which implies new terms or conditions.
Exterior Wall
The outer vertical surface of a structure, which encloses the entire structure, and the dimensions of which are used to find the gross area of the enclosure for appraisal purposes.
F.H.A. (Federal Housing Authority)
A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price.
Fair Market Value
Price that probably would be negotiated between a willing seller and willing buyer in a reasonable time. Usually arrived at by comparable sales in the area.
Federal Tax Lien
A lien attaching to property for nonpayment of a federal tax (estate, income, etc.). A federal tax lien differs from other liens in that it is not automatically wiped out by foreclosing o a mortgage or trust deed recoded before the tax lien (except by judicial foreclosure).
Fee
(1) Modernly, an not in strict legal terms, synonymous with fee simple or "ownership". (2) A charge made by a landlord to a tenant, which is not refundable. For example: A cleaning deposit would be refunded if the tenant left the rented property reasonably clean. A cleaning fee would be a charge by the landlord for cleaning the rented property and would not be refunded regardless of the condition of the property.
Fee Simple
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.
Fee Simple Absolute
A term now used synonymously with fee simple.
Fee Simple Conditional
(See "Defeasible Title")
Fee Simple Defeasible
(See "Defeasible Title")
Fee Tail
An estate of inheritance which specifies the descendants or classes or heirs of the devisee who may succeed to the said estate.
FHLMC (Freddie Mac)
Federal Home Loan Mortgage Corporation. A federal agency purchasing first mortgages, both conventional and federally insured, from members of the Federal Reserve System, and the Federal Home Loan Bank System.
Fiduciary
One acting in a relationship of trust, regarding financial transactions.
File and Use
In most states, title insurers file rate schedules, title insurance policies and endorsement forms with the State Insurance Department or other state agency and then may use such items or rates starting within a specified period of time after filing. Rates so filed usually are mandatory.
Final Decree
A decree completely deciding all pending matters before a court, and obviating the need for further litigation.
Financing Costs
The cost of interest and other charges involved in borrowing money to build or purchase real estate.
Financing Statement
A recorded instrument, taking the lace of personal property liens in some states. Used instead of chattel mortgages, inventory liens, pledges, etc.
First Refusal Right
A right, usually given by an owner to a lessee, which gives the lessee a first chance to buy the property if the owner decides to sell. The owner must have a legitimate offer which the lessee can match or refuse. If the lessee refuses, the property can then be sold to the offeror.
First User
A tax term signifying the one who builds or buys property and is the first one to put the buildings to use. Certain tax (depreciation) advantages are given to a first user. The term concerns only depreciable property (improvements) and prior use of the land only (farming) would not be considered.
Fixed Assets
Permanent assets, necessary for the operation of a business, such as buildings, heavy machinery, etc.
Fixed Expenses
Property expenses not effected by use or occupancy. Example: Property taxes would be fixed while maintenance would vary with use and occupancy.
Fixed Rate Mortgage
A mortgage having a rate of interest which remains the same for the life of the mortgage.
FNMA (Fannie Mae)
A private corporation dealing in the purchase of first mortgages, at discounts.
Footing
A foot-like projection at the base of a foundation wall, column, pier, etc., used to secure, support, and help eliminate settling or shifting.
Forbearance
The waiting for payment of a debt by a creditor after the debt becomes due.
Foreclosure
A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of property in order to sell the property to satisfy a lien against it.
Foreclosure Sale
A sale of property used as security for a debt, to satisfy said debt.
Forfeiture
The taking of an individual's property by a government, because the individual has committed a crime. IN the United States, private property cannot be taken, except by eminent domain upon payment of just compensation, or for nonpayment of taxes.
Forfeiture Of Title
A common penalty for the violation of conditions or restrictions imposed by the seller upon the buyer in a deed or other proper document. For example, a deed may be granted upon the condition that if liquor is sold on the land, the title to the land will be forfeited (that is, lost) by the buyer (or some later owner) and will revert to the seller.
Forgery
A false signature or material alteration with intent to defraud. The forged signature of the grantor will not pass title regardless of recording or lack of knowledge by the grantee or future grantees. Title insurance will insure against forgery. The word may extend beyond signatures (forged paintings, documents, etc.).
Fraud
A deception, intended to wrongfully obtain money or property from the reliance of another on the deceptive statements or acts, believing them to be true.
Free and Clear
Real property against which there are not liens, especially voluntary liens (mortgages).
Frontage
The linear measurement along the front of a parcel, that is, the portion facing a road, waterway, walkway, etc. that would be considered the most valuable measurement of the property.
Full Disclosure
A builder must give to a potential buyer the facts of his new development (are there adequate school facilities?; sewer facilities?; an airport nearby?; etc.). A broker cannot charge a commission to buyer and seller unless both know (disclosure) and agree. In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose known defects in the property for sale or lease.
Funds
Money available for a qualified purpose, such as loan funds for F.H.A. insured loans, conventional loan funds, etc.
Gain-Profit
Important for tax purposes when realized from the sale of a capital asset.
Gap Commitment
A commitment to loan the difference between the floor amount of a take out loan and the full amount. The commitment is issued to enable a construction lender to loan the full amount of a take out commitment, rather tan only the floor amount.
Gap Financing
(1) Interim financing. (2) A loan between the floor amount and full amount of a take out loan. (See "Gap Commitment")
Garnishment
A legal proceeding under which a person's money in control of another (such as salary) is taken for payment of a debt. The amount which may be taken is set by statute (usually as a percentage), and, in most states, a judgement is necessary before garnishment.
General Contractor
One who contracts for the construction of an entire building or project, rather than for a portion of the work. The general contractor hires subcontractors, such as plumbing contractors, electrical contractors, etc., coordinates all work, and is responsible for payment to the said subcontractors.
General Index (G.I.)
A title insurance company term for the books used to find liens against individuals which may effect real property, but which are not recorded against the property being insured, such as liens against a buyer.
General Lien
(1) A lien such as a tax lien or judgment lien which attaches to all property of the debtor rather than the lien of, for example, a trust deed, which attaches only to specific property. (2) The right of a creditor to hold personal property of a debtor for payment of a debt not associated with the property being held. Must be done under an agreement since against general precepts of law.
General Partner
A member of a partnership who has authority to bind the partnership and share sin the profits and losses. A partnership must have at least one general partner and may have more, as well as limited partners.
General Partnership
A partnership made up of general partners, without special (limited) partners. (See also "Limited Partnership", "Partnership")
Gift
A voluntary transfer of property without valuable consideration.
Gift Deed
A deed for nominal consideration.
Gift Letter
A letter to HUD from the donor (giver) stating that a gift of money has been made to the buyer in order to purchase specific property The relationship of the donor and donee is stated, as well as the amount of the gift.
Gift Tax
A federal and sometimes a state tax on inter vivos transfers without consideration.
GNMA (Ginnie Mae)
Government National Mortgage Association. A federal association, working with F.H.A., which offers special assistance in obtaining mortgages, and purchases mortgages in a secondary capacity.
Good Faith
Something done with good intentions, without knowledge of fraudulent circumstances, or reason to inquire further.
Good Faith or Mortgage Savings Clause
A clause in CC & R's which provides that " a violation thereof shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value."
Good Faith Purchase or Mortgage
A person who buys or lends in good faith, that is, without notice of any existing problem, where value is paid or lent.
Good Will
A salable asset of a business, based on its reputation rather than its physical assets.
Gore
A small parcel of land, usually triangular in shape, resulting form the failure of a legal description to join 2 tracts. (Also called Hiatus).
Governmant Lots
Irregularly shaped parcels of land, usually fronting on water, which could not practically be divided into sections under government survey.
Government Survey
The survey from which our present system of townships, sections, etc., was developed.
Graded Tax
A property tax designed to promote local development by increasing the tax rate on land and decreasing it on improvements.
Grandfather Clause
The clause in a law permitting the continuation of a use, business, etc., which, when established, was permissible but, because of a change in the law, is now not permissible. (See also "Nonconforming Use")
Grant
A transfer of real estate, between individuals, by deed. A transfer of real estate from a sovereign is accomplished by patent or royal decree.
Grant Deed
One of the many types of deeds used to transfer real property. Contains warranties against prior conveyances or encumbrances. When title insurance is purchased, warranties in a deed are of little practical significance.
Grantee
One to whom a grant is made. Generally, the buyer. See "Deed".
Grantor
One who grants property or property rights. See "Deed".
Grantor-Grantee Index
The record of the passing of title to all the properties in a county as kept by the county recorder's office. Property is checked by tracing the names of the sellers and buyers (chain of title). Title companies usually have more efficient methods by keeping records according to property description, rather than people's names.
Guardian
A person appointed by a court to manage the person and/or property of one who is legally incompetent to handle his/her own affairs.
Hazard Insurance
Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.
Home Owner's Association
(1) An association of people who own homes in a given area, formed for the purpose of improving or maintaining the quality of the area. (2) An association formed by the builder of condominiums or planned developments, and required by statute in some states. The builder's participation as well as the duties of the association are controlled by statute.
Homestead
A statutory protection from execution or the establishment of title by occupation of real property in accordance with the laws of various states or the Federal Government.
Impounds
A trust type of account established by lenders for the accumulation of borrower's funds to meet periodic payments of taxes, mortgage insurance premiums, and/or future insurance policy premiums, required to protect their security.
Indemnity
Insurance against possible loss or damage. A title insurance policy is a contract of indemnity.
Intestate
Without leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by the direction of the deceased.
Land Contract
An installment contract for the sale of land whereby the seller (vendor) holds legal title and the buyer (vendee) has equitable title until the sales price is paid in full.
Lease
An agreement by which an owner of real property (lessor) gives the right of possession to another (lessee), for a specified period of time (term) and for a specified consideration (rent).
Legal Description
A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire piece of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
Lender
Any person or entity advancing funds which are to be repaid. A general term encompassing all mortgagees, and beneficiaries under deeds of trust.
Lien
An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all encumbrances are not liens.
Limited Partnership
Used in many real estate syndications; a partnership consisting of one or more general partners who conduct the business and are responsible (liable) for losses, and one or more special (limited) partners, contributing capital and liable only up to the amount contributed.
Loan Policy
A title insurance policy insuring a mortgage, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.
Mechanics Lien
A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
Mortgage
(1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan.
Mortgagee
The party lending the money and receiving the mortgage (Lender).
Mortgagee's Title Insurance
(See "Loan Policy")
Mortgagor
The party who borrows the money and gives the mortgage (Borrower).
Nonconforming Use
A property which does not conform to the zoning of the area. Usually, the property was built in conformity and then the zoning was changed.
Note
A unilateral agreement containing an express and absolute promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust deed.
Obligee
One to whom an obligation (promise) is owed.
Obligor
One who legally binds (obligates) oneself, such as the maker of a promissory note.
Order
A request for a title insurance commitment.
Original Cost
The purchase price of property, paid by the present owner. The present owner may or may not be the first owner.
Owner's Policy
A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against or unmarketability of the owner's title.
Owner's Title Insurance
Title insurance for the owner of property, rather than a lienholder.
P.I.Q.
A title term referring to Property In Question.
Parcel
Any area of land contained within a single description.
Partnership
An association of two or more persons who have contracted to join in business and share the profits.
Party Wall
A wall generally erected on a property boundary or between two lots for the common benefit and use of the property owners on either side.
Patent
A conveyance of title to land by the Federal or State Government.
Personal Property (movable)
Any property that is not designated by law as real property (i.e., money, goods, evidences of debt, rights of action, furniture, automobiles).
Personal Property Loan
A loan which is secured by both real and personal property. The minimum ratio of personal to real property is set by law. The credit of the borrower is a major consideration in making the loan. (See also "Equity Loan")
PITI
A payment that combines Principal, Interest, Taxes, and Insurance.
Plat
A plan, map or chart of a tract or town site dividing a parcel of land into lots.
Power of Attorney
A document by which one person (called the "principal") authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in designated transactions.
Pre, Prelim or Preliminary Report
A written report issued by a title company, preliminary to issuing title insurance, which shows the recorded condition of title of the property in question. See
Prescriptive Easement
The granting of an easement by a court, based on the presumption that a written easement was given (although none existed), after a period of open and continuous use of land.
Priority
The order of preference, rank or position of the various liens and encumbrances affecting the title to a particular parcel of land. Usually, the date and time of recording determine the relative priority between documents
Priority Inspection
A title term referring to the type of inspection made in connection with insuring a new construction loan. In making the inspection of the property, the Title Company must be assured that the work of improvement had not yet begun when the lender's deed of trust was recorded.
Processor
One who prepares documents to facilitate closing.
Public Domain
Land owned by the government and belonging to the community at large.
Public Records
The transcriptions in a recorder's office of instruments which have been recorded, including the indexes pertaining to them.
Quiet Title
To free the title to a piece of land from the claims of other persons by means of a court action called a "quiet title" action. The court decree obtained is a "quiet title" decree.
Quitclaim Deed
A deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.
Real Property (immovable)
Land, from the center of the earth and extending above the surface indefinitely, including all inherent natural attributes and any man-made improvements of a permanent nature place thereon. For example: minerals, trees, buildings, appurtenant rights.
Realtor
A designation given to a real estate broker or sales-associate who is a member of a board associated with the National Association of Realtors® or with the National Association of Real Estate Boards.
Reconveyance
An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as collateral security for a debt. Most commonly used upon payment in full of a trust deed. Also called a deed of reconveyance or release.
Recording
Filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.
Reinsurance
A contract which one insurer makes with another to protect the first insurer, wholly or partially, against loss or liability by reason of a risk under a separate and distinct contract as insurer of a third party. Reinsurance differs from coinsurance in that, in the case of reinsurance, only one insurer has a direct contractual relationship with the insured, and that insurer (commonly referred to as the "lead insurer") purchases reinsurance in order to lessen or spread the risk. The "lead insurer" will assume a risk up to a limit (the amount of which is referred to as the "retention") and any loss which exceeds this limit would be borne by the reinsurers. In the case of coinsurance, each coinsurer has a direct contractual relationship with the insured, and the risk is shared in agreed-upon proportions from the first dollar of loss.
Requirement
A demand or need; in title insurance a requirement is listed on the commitment and must be satisfied before closing.
Restrictions
Often called restrictive covenants. Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation or improvement of the land.
Right of Way
(1) The right to pass over property owned by another, usually based upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which facilities such as highways, railroads or power lines are built.
Sale and Lease Back
A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.
Search
In title industry parlance, a careful exploration and examination of the public records in an effort to find all recorded instruments relating to a particular chain of title.
Seller
One who sells real estate.
Separate Property
Real property owned by one spouse exclusive of any interest of the other spouse.
Squatter
One who settles upon unoccupied land without legal claim or authority.
Starter
A copy of the last policy or report issued by a title insurer which described the title to land upon which a new search is to be made. In some states, this is called a back title letter or back title certificate.
Street Improvement Bonds
Interest-bearing bonds issued, usually by a city or county, to secure the payment of assessments levied against land to pay for street improvements. The property owner may pay off the particular assessment against the property, or may allow the assessment to "go to bond" and pay installments of principal and interest over a period of years, usually at the city or county treasurer's office. The holder of a bond received payments from these offices.
Subdivision
An area of land laid out and divided into lots, blocks, and building sites, and in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities.
Subordination Agreement
An agreement by which one encumbrance (for example, a mortgage) is made subject to another encumbrance (for example, a mortgage) is made subject to another encumbrance (perhaps a lease). To "subordinate" is to "make subject to," or to make of lower priority.
Surface Rights
Rights to enter upon and use the surface of a parcel of land, usually in connection with an oil and gas lease or other mineral lease. They may be "implied" by the language of the lease (no explicit reservation or exception of the surface rights) or "explicitly" set forth.
Survey
The measurement by a surveyor of real property which delineates the boundaries of a parcel of land. An ALTA survey additionally delineates the exact location of all improvements, encroachments, easements and other matters affecting the title to the property in question. A title insurance company may require a survey whenever the company is requested to issue an ALTA Extended Coverage Policy.
Tax Deed
A deed executed by the tax collector to the state, county or city when no redemption is made from a tax sale.
Tax Sale
Property on which current county taxes have not been paid is "sold to the state." No actual sale takes place - the title is transferred to the state and the owner may redeem it by paying taxes, penalties and costs. If it has not been redeemed within five years, the property (referred to as "tax sold property") is actually deeded to the state. (Similar "sales" to cities take place for unpaid city taxes.)
Tenancy by the Entirety
A form of ownership by husband and wife whereby each owns the entire property. In the event of the death of one, the survivor owns the property without probate.
Tenant at Will
One who holds possession of premises by permission of the owner or landlord, but without agreement for a fixed term of possession.
Testate
Leaving a legally valid will at death. See Intestate.
Title
(1) A combination of all the elements that constitute a legal right to own, possess, use, control, enjoy and dispose of real estate or a right or interest therein. (2) The rights of ownership recognized and protected by the law.
Title Insurance
Insured statement of the condition of title or ownership of real property. For a one-time-only premium, the named insured and their heirs are protected against title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from it. In the event of a claim, the Title Company provides legal defense from the policyholder and pays any covered losses incurred as a result of such claim.
Title Plants
A filing of all recorded information to real property, paralleling the records of the county recorder's office, although the filing system may be different.
Title Report
(See "Preliminary Report")
Title Search
A review of all recorded documents affecting a specific parcel of land to determine the present condition of title. An experienced title officer or attorney reviews and analyzes all material relating to the search, then determines the sufficiency and status of title for insurance of a title insurance policy.
Trustee
(See "Deed of Trust")
Trustor
(See "Deed of Trust")
Underwritten Company
A title firm which conducts title searches but is not qualified to insure, and therefore issues policies of a qualified title insurer (underwriter) in return for a portion of the premium.
Variable Interest Rate
An interest rate that fluctuates with the current cost of money; subject to adjustment if the prevailing rate moves up or down.
Vendee
(See "Agreement of Sale")
Vendor
(See "Agreement of Sale")
Vendor's Lien
An implied lien given by law to a vendor for the remaining unpaid and unsecured part of a purchase price.
Warrant
To legally assure that the title conveyed is good and possession will be undisturbed.
Warranty Deed
A deed used in many states to convey fee title to real property.
Will
A written expression of the desire of a person as to the disposition of that person's property after death. Must follow certain procedures to be valid.
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