H

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.

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.

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.

I

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.

J

Judgment Lien - A lien against the property of a judgment debtor. An involuntary lien.

L

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.

M

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).

N

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.

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.

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