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Acknowledgement

answer

A formal declaration made before a duly authorized officer, usually a notary republic, by a person who has signed a document.

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Adverse posession

answer

The actual, open, notorious, hostile and continuous possession of another's land under a claim of title. Possession for a statutory period may be a means of acquiring title.

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Alienation

answer

The act of transferring property to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.

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Bargain and sale deed

answer

A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed.

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Deed

answer

A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

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Deed in trust

answer

An instrument that grants a trustee under a land trust full power to sell, mortgage, and subdivide a parcel of real estate. The beneficiary controls the trustee's use of these powers under the provisions of the trust agreement.

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Devise

answer

A transfer of real property by will. The dependent is the divisor, and the recipient is the devisee.

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Exception

answer

The exclusion of a part of the property conveyed.

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Execution

answer

The signing and delivery of an instrument. Also, a legal order directing an official to enforce a judgement against the property of a debtor.

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Formal will/witnessed will

answer

A document having written instructions of property disbursements upon the death of the owner. The document must be signed and witnessed

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Gap

answer

A defect in the chain of title of a conveyance that raises doubt as to the present ownership of the land

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General warranty deed

answer

A deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, offers the greatest protection of any deed

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Good and indefeasible title

answer

A title that cannot be annulled or rendered void

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Grantee

answer

A person who receives a transfer of real property from a grantor

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Granting clause

answer

Words in a deed of conveyance that state the grantor's intention to convey the property at the present time. This clause is generally worded as "convey and warrant"; "grant; "grant, bargain, and sell"; or the like

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Grantor

answer

The owner transferring title to or an interest in real property to a grantee

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Habendun clause

answer

That part of a deed beginning with the words "to have and to hold," following the granting clause and defining the extent of ownership the grantor is conveying

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Intestate

answer

The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs, as provided in the state law of decent

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Notorization

answer

Certification by a notary or other authorized official of the validity of a signature on a document

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Offeror/Offeree

answer

The person who makes the offer. The person whom the offer is made

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Probate

answer

A legal process by which a court determines who will inherit a decedent's property and what the estate's assets are

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Quitclaim deed

answer

A conveyance that transfers whatever interest the grantor has in the specified real estate, without warranted or obligations

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Reconveyance deed

answer

A deed used by a trustee under a deed of trust to return title to the trustor

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Reservation

answer

Something that is retained by the seller (life estate or an access easement)

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Satisfaction

answer

Release or discharge when a note has been fully paid returning the borrower of all interest in the real estate originally conveyed to the lender. Entering this release in the public record shows that the debt has been removed from the property

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Special warranty deed

answer

A deed in which the grantor warrants, guarantees the title only against defects arising during the period of the grantor's tenure and ownership before that time, generally using the language, "by, through, or under the grantor but not otherwise."

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Tax deed

answer

An instrument, similar to a certificate of sale, given to a purchaser at a tax sale.

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Testate

answer

Having made and left a valid will

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Testator

answer

A person who has made a valid will. A woman might be referred to as a testatrix, although testator can be used for either man or a woman.

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Title

answer

1) The right to ownership or the ownership of land 2)The evidence of ownership of land

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Transfer tax

answer

Tax stamps required to be affixed to a deed by state and/or local law

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Trust deed

answer

An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called a deed of trust

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Trustee's deed

answer

A deed executed by a trustee conveying land held by a trust

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Will

answer

A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called the testator

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Abstract of title

answer

The condensed history of the recorded ownership of a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property a certification by the abstractor that the history is complete and accurate

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Action to quiet title

answer

A court action that establishes ownership when ownership cannot be traced through an unbroken chain of title

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Actual notice

answer

Express information or fact; that which is known; direct knowledge

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American Land Title Association (ALTA) policy

answer

A title insurance policy that protects the interest in a collateral property of a mortgage lender who originated a new real estate loan

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Attorney's opinion of title

answer

An abstract of title that an attorney has examined and has certified to be, in the attorney's opinion, an accurate statement of facts concerning the property's ownership

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Certificate of title

answer

A statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records

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Chain of title

answer

The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title

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Constructive notice

answer

Notice given to the world by recorded documents. All persons are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property

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Evidence of title

answer

Proof of ownership of property; commonly a certificate of title, an abstract of title with lawyer's opinion, title insurance, or a Torrens registration certificate

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Marketable title

answer

Good or clear title, reasonably free from the risk of litigation over possible defects

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Priority

answer

The order of possession or time. Liens are generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have priority even over previously recorded liens

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Quiet title

answer

A court action to remove a cloud on the title

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Recording

answer

The act of entering documents affecting or conveying interests in real estate I the recorder's office established in each county. Until recorded, a deed or mortgage ordinarily is not effective against subsequent purchasers or mortgagees

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Subrogation

answer

The right acquired by the title company to any remedy or damages available to the insured when a title company makes a payment to settle a claim covered by a policy

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Suit to quiet title

answer

A court action intended to establish or settle the title to a particular property, especially when there is a cloud on the title

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Title insurance

answer

A policy insuring a property owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy

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Title search

answer

The examination of public records relating to real estate to determine the current state of the ownership

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Torrens system

answer

A part of the deed in which a seller warrants the title conveyed to the buyer

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Accrued depreciation

answer

Loss in a property's value resulting from physical deterioration, external depreciation, and functional obsolescence

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Anticipation

answer

The appraisal principle holding that value can increase or decrease based on the expectation of some future benefit or deferment produced by the property

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Appraisal

answer

An estimate of the quantity, quality, or value of something. The process through which convulsions of property are obtained

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Appraisal report

answer

An opinion of a property's market value given to a lender or client with detailed market information

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Appraiser

answer

An independent person trained to provide an unbiased estimate of value

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Appraiser Independence Requirements (AIR)

answer

Regulations issued by Fannie Mae that must be followed by appraisers to ensure accurate and objective appraisals

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Assemblage

answer

The combination of two or more adjoining lots into one larger tract to increase their total value

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Balance

answer

The appraisal principle stating that the greatest value in a property will occur when the type and size of the improvements are proportional to each other as well as the land

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Broker's price opinion (BPO)

answer

An opinion of real estate value commissioned by a bank or an attorney and provided by a broker

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Capitalization

answer

A mathematical process for estimating the value of a property using a proper rate of return on the investment and the annual net operating income expected to be produced by the property. The formula is expressed as follows: income/rate=value

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Capitalization rate

answer

The rate of return a property will produce on the owner's investment

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Change

answer

The appraisal principle that holds that no physical or economic condition remains constant

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Comparables

answer

Properties used in a appraisal report that are substantially equivalent to the subject property

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Competition

answer

The appraisal principle stating that excess profits generate competition

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Conformity

answer

The appraisal principle holding that the greater the similarity among properties in an area, the better they will hold their value

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Contribution

answer

The appraisal principle stating that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value

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Cost approach

answer

The process estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation

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Depreciation

answer

In appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence, and external obsolescence. In real estate investment, a deduction for tax purposes taken over the period of ownership of income property, based on the property's acquisition cost

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Economic life

answer

The number of years during which an improvement will add value to land

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External depreciation

answer

Reduction in a property's value caused by outside factors (those off the property I.e., land fill)

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External obsolescence

answer

Incurable depreciation caused by factors not on the subject property, such as environmental or economic factors

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Functional obsolescence

answer

A loss of value to an improvement to real estate arising from problems of design or utility

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Gross income multiplier (GIM)

answer

A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property's value; usually used for commercial property

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Gross rent multiplier (GRM)

answer

The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value; usually used for single-family residential property

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Highest and best use

answer

The legally permitted and physically possible use of a property that would produce the greatest net income and, thereby, develop the highest value

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Income approach

answer

The process of estimating the value of an income producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life

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Law of diminishing returns

answer

Point at which additional property improvements do not increase the property's income or value

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Law of increasing returns

answer

Applies as long as money being spent on property improvements produces an increase in the property's income or value

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Market data approach

answer

Also known as the sales comparison approach. An estimate of value obtained by comparing property being appraised with recently sold comparable properties

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Market value

answer

The most probable price that a property would bring in an arm's-length transaction under normal conditions on the open market

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Net operating income (NOI)

answer

The income projected for an income-producing property after deducting anticipated vacancy and collection losses and operating expenses

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Physical deterioration

answer

A reduction in a property's value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear

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Plottage

answer

The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one larger lot

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Progression

answer

An appraisal principle that the value of a lesser quality property is favorable affected by the presence of a better quality property

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Reconciliation

answer

The final step in the appraisal process, in which the appraiser considers the estimates of value received from the sales comparison, cost, and income approaches to arrive at a final opinion of market value for the subject property

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Regression

answer

An appraisal principle that the value of a better quality property is affected adversely by the presence of a lesser quality property

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Replacement cost

answer

The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original

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Reproduction cost

answer

The construction cost at current prices of an exact duplicate of the subject property

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Sales comparison approach

answer

The process of estimating the value of a property by examining and comparing sales and listings of comparable properties

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Sales price

answer

The amount of money paid to a seller for the product sold

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Substitution

answer

An appraisal principle that the maximum value of a property tends to be set by the cost of purchasing an equally desire able and valuable substitute property, assuming that no costly delay is encountered in making the substitution.

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Supply and demad

answer

The appraisal principle that follows the interrelationship of the supply of and demand for real estate. Because appraising is based on economic concepts, this principle recognizes that real property is subject to the influences of the marketplace as with any other commodity

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Uniform Residential Appraisal Report (URAR)

answer

The appraisal for created by Fannie Mae and Freddie Mac that is required for most residential real estate transactions

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Uniform standards of professional appraisal practice (USPAP)

answer

A set of standards developed by the Appraisal Foundation that details information required for a property appraisal

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Value

answer

The power of a good or service to command other goods in exchange for the present worth of future rights to its income or amenities

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Demonominator

answer

The number written below the line in a fraction

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Divisor

answer

A number or quantity divided into another

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Habitability

answer

A property that is suitable for living in or on

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Numerator

answer

The number written above the line of a fraction representing the number to be divided by the denominator

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Percent

answer

One part in a hundered

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Quotient

answer

The number resulting from dividing one number by another

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Subjective value

answer

The perceived value of an item based on the benefits given to the owner

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Volume

answer

The amount of space of a three dimensional object

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X-bar method

answer

A math tool used to save percentage problems, indicating what values to multiply or divide to arrive at the unknown value

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Administrative law judge (ALJ)

answer

The official who presides over a hearing involving a government agency and someone affected bus decision of that agency. They hear evidence, including the testimony of witnesses, and render a decision.

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Americans with disabilities act (ADA)

answer

Addresses rights of individuals with disabilities in employment and public accommodations

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Blockbusting

answer

the illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or prospective entry of persons of a particular race or national origin into the neighborhood

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Civil rights act of 1866

answer

Prohibits racial discrimination in the sale and rental of housing

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Conciliation

answer

A form of alternative dispute resolution in which a someone meets with each of the parties separately to help them settle their differences voluntarily,without the formality of a hearing or trial

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Department of Housing and Urban Development (HUD)

answer

Federal agency that has established rules and regulations that further interpret the practices affected by federal law; for example , they distribute an equal housing opportunity poster

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Fair housing act

answer

The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status, and national origin

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Fair Housing Amendments Act of 1988

answer

Expansion Includes families with children and those with physical or mental disabilities

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Familial status

answer

One or more individuals under age 18 living with a parent or guardian; also includes a woman who is pregnant and anyone who is in the process of assuming custody of a child under age 18

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Housing for Older Persons Act of 1995 (HOPA)

answer

Amended the Fair Housing Act to provide that housing intended for persons aged 55 or older no longer needs to have significant facilities and services designed for the elderly

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Niche marketing

answer

The target marketing of specific demographic populations, within the bounds of fair housing laws

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Redlining

answer

The illegal practice by a lending institution of denying loans or restricting their number for certain areas of a community

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Steering

answer

The illegal practice of channeling home seekers to particular areas based on their race, national origin, religion, or other protected classification

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Stigmatized property

answer

A property that has acquired an undesirable reputation due to an even that occurred on or near it, such as a violent crime, gang-related activity, illness, or personal tragedy. Some states restrict the disclosure of information about these properties

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Title VIII of Civil Rights Act of 198 (Fair Housing Act)

answer

As since amended, prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status, or disability

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Automatic extension clause

answer

A listing agreement clause stating that the agreement will continue automatically for a certain period of time after its expiration date. In many states, use of this is discouraged or prohibited

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Buyer representation agreement

answer

A principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer

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Comparative market analysis (CMA)

answer

A comparison of the prices of recently sold homes that are similar to a listing seller's home in terms of location, style, and amenities

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Controlled business arrangement

answer

An arrangement that offers consumers a package of services (e.g., a real estate firm, title insurance company, mortgage broker, and home inspection company)

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Exclusive agency listing

answer

A listing contract under which the owner appoints a real estate professional as her exclusive agent for a designated period of time to sell the specified property, on the owner's stated terms, for a commission. The owner reserves the right to sell the property without paying anyone a commission if the sale is to a prospect who has not been introduced or claimed by the real estate professional

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Exclusive buyer representation agreement

answer

Agreement in which the buyer works with only one broker, although the broker is free to represent other buyer clients

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Exclusive right-to-sell listing

answer

A listing contract under which the owner appoints a real estate professional as his exclusive agent for a designation period of time to sell the specified property on the owner's stated terms and agrees to pay the real estate professional a commission when the property is sold, whether by the real estate professional, the owner, or another real estate professional

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Multiple listing clause

answer

A provision in an exclusive listing for the authority and obligation on the part of the listing agent to distribute the listing to other real estate professionals in a multiple listing organization

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Multiple listing service (MLS)

answer

A market organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring buyers for their properties more quickly.

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Net listing

answer

A listing based on the net price the seller will receive if the property is sold.

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Open listing

answer

A listing contract under which the real estate professional's compensation is contingent on the real estate professional producing a buyer before the property is sold by the seller or another real estate professional

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Acre

answer

A measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods, or 0.40.47 hectares

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Air lots

answer

Designated airspace over a piece of land. This type of property, just like surface property, may be transferred

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Area

answer

A level surface or piece of ground; the size of a surface; the amount of a two-dimensional object

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Base line

answer

The main imaginary line running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description

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Benchmarks

answer

Permanent reference marks or points established for use by surveyors in measuring differences in elevation

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Datum

answer

A horizontal plane from which heights and depths are measured

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Front footage

answer

The measurement of a parcel of land by the number of feet of street or road frontage

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Frontage

answer

The length of property along the street or waterfront

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Legal description

answer

A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it

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Linear measurement

answer

Measurement in a straight line

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Lot-and-block (recorded plat) method

answer

A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat.

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Meridian

answer

One of a set of imaginary lines running north and south and crossing a base line at a definite point, used in the rectangular (government) survey system of property description

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Metes-and-bounds method

answer

A method used to describe a parcel of land that begins at a well-marked point and follows the property's boundaries, using directions and distances around the tract, back to the place of beginning

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Monument

answer

A fixed natural or artificial object used to establish real estate boundaries for metes-and-bounds description

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Plat map

answer

A map of a tow, section, or subdivision indicating the location and boundaries of individual properties

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Point of beginning (POB)

answer

In a metes-and-bounds legal description, the starting point of the survey, situated in one corner of the parcel; all metes-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning

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Principal meridian

answer

The main imaginary line running north and south and crossing a base line at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal desription

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Range

answer

A strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description

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Recorded plat

answer

A map of a subdivision filed as a public record showing the location and boundaries of the individual parcels

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Rectangular (government) survey system

answer

A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines

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Section

answer

A portion of a township under the rectangular (government) survey system. A township is divided into 36 sections, numbered 1 through 36. A section is a square with mile-long sides and an area of one square mile, or 640 acres

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Spot survey

answer

A survey that shows the location, size, and shape of buildings on the lot, in addition to the lot's legal descripton

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Survey

answer

The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements.

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Tiers

answer

Strips of land that are six miles wide, extending east and west and numbered north and south according to their distance from the base line in the rectangular (government) survey system of legal description

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Township

answer

The principal unit of a rectangular (government) survey system. A township is a 6-mile square of 36 square miles

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Township lines

answer

All the lines in a rectangular survey system that run east and west, parallel to the base line and six miles apart

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Uniqueness

answer

The idea that no matter how identical they may appear, no two parcels of real estate are ever exactly alike

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Blanket loan

answer

A mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien upon repayment of a definite portion of the debt

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Certificate of reasons value (CRV)

answer

A form indicating the appraised value of a property being financed with a VA loan

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Community reinvestment act of 1977 (CRA)

answer

Under the act, which was revised most recently in 2008, financial institutions are expected to meet the deposit and credit needs of their communities; participate and invest in local community development and rehabilitation projects; and participate in loan programs for housing, small businesses, and small farms

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Conventional loan

answer

A loan that requires no federally sponsored insurance or gurantee

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Equal credit opportunit act (ECOA)

answer

The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age, marital status, or receipt of public assistance

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Fannie Mae

answer

A government-supervised enterprise established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders

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Farmer Mac

answer

The federal agricultural mortgage corporation-a privately owned and publicly traded company established by congress to create a secondary market for agricultural mortgage and rural utilities loans and the portions of agriculture and rural development loans guaranteed by the U.S. Department of Agriculture (USDA)

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Federal Deposit Insurance Corporation (FDIC)

answer

An independent federal agency established by Congress to examine and supervise financial institutions, manage receiverships, and insure deposited (currently up to $250,000 per depositor per financial institution)

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Federal funds rate

answer

The rate recommended by the Federal Reserve for the member banks to charge each other on short-term loans. These rates for the basis on which the banks determine the percentage rate of interest they will charge their loan customers

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Federal Reserve System (FED)

answer

The country's central banking system, which establishes the nation's monetary policy by regulating the supply of money and interest rates

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FHA-insured loan

answer

A loan insured by the Federal Housing Administration and made by an approved lender in accordance with FHA regulations

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Fiscal policy

answer

The government's policy in regard to taxation and spending programs. The balance between these two areas determines the amount of money the government will withdraw from or feed into the economy, which can counter economic peaks and slumps

question

Freddie Mac

answer

A government-supervised enterprise established to purchase primarily conventional mortgage loans in the secondary mortgage market

question

Ginnie Mae

answer

A government agency that plays an important role in the secondary mortgage market. It guarantees mortgage-backed securities using FHA-insured and VA-guaranteed loans as collateral

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Government-sponsored enterprises (GSEs)

answer

organizations created by the federal government to help increase loan opportunities for homebuyers (Fannie Mae, Freddie Mac, Farmer Mac, Ginnie Mae)

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Home equity loan

answer

A loan under which a property owner uses the property as collateral and can then draw funds up to a prearranged amount against the property. Also called a home equity line of credit, or HELOC

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Interim financing

answer

A short-term loan usually made during the construction phase of a building project (often referred to as a construction loan)

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Monetary policy

answer

Governmental regulation of the amount of money in circulation through such institutions as the Federal Reserve Board

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Mortgage broker

answer

An agent of a lender who brings the lender and the borrower together. The broker receives a fee for this service

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Mortgage insurance premium (MIP)

answer

The FHA insurance that is a percentage of the loan amount that the borrower is charged as a premium

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Office of the comptroller of the currency (OCC)

answer

Government agency which sets standards and regulations for fiduciary lenders

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Open-end loan

answer

A mortgage loan that is expandable by increments up to a maximum dollar amount, with the full loan being secured by the same original mortgage

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Package loan

answer

A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliance

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Patent

answer

A grant or franchise of land from the U.S. Governmetn

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Primary mortgage market

answer

The mortgage market in which loans are originated,consisting of lenders such as commercial banks, savings associations, and mutual savings banks

question

Private mortgage insurance (PMI)

answer

Insurance provided by a private carrier that protects a lender against a loss in the event of a foreclosure and deficiency

question

Real estate settlement procedures act (RESPA)

answer

The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment of receipt of kickbacks and certain kinds of referral fees

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Regulation Z

answer

Implements the Truth in Lending Act, requiring credit institutions to inform borrowers of the true cost of obtaining credit

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Resolution Trust Corporation (RTC)

answer

Created in 1989 by the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) to liquidate the assets of failed savings and loan associations.

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Sale-and-leaseback

answer

A transaction in which the owner sells improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises

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Secondary mortgage market

answer

A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages.

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Triggering terms

answer

Specific credit terms, such as down payment, monthly payment, and amount of finance charge or term of loan

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Truth in Lending Act (TILA)

answer

Federal government regulates the lending practices of mortgage lenders through this act

question

VA-guaranteed loan

answer

A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the U.S. Department of Veterans Affairs in order to limit the lender's possible loss

question

Wraparound loan

answer

A method of refinancing in which the new mortgage is placed in a secondary, or subordinate, position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender

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Budget comparison statement

answer

Compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses

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Cash flow report

answer

A monthly statement that details the financial status of the proerty

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Community association management

answer

Provides a team of property managers, accounting staff, office staff, and property consultants to manage proerty

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Corrective maintenance

answer

Correction of problems after they have occurred

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Covenant of quiet enjoyment

answer

Implied by law by which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenant's possession or use of the property

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Life cycle costing

answer

In property management, comparing one type of equipment with another based on both purchase cost and operating cost over its expected useful lifetime

question

Management agreement

answer

A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority

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Management plan

answer

A highly detailed plan that lays out the owner's objectives for a property, as well as what the property manager wants to accomplish and how, including all budgetary information

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Multiperil policies

answer

Insurance policies that offer protection from a range of potential perils, such as fire, hazard, public liability, and casualty

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Operating budget

answer

A property's anticipated financial performance in the present and future. It gives the owner a sense of expected profit

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Preventative maintenance

answer

Small repairs that help prevent bigger problems and expenses

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Profit and loss statement

answer

A general financial picture based on the monthly cash flow reports; does not include itemized information

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Property manager

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Someone who manages real estate for another person for compensation. Duties include collecting rents, maintaining the property, and keeping up all accounting

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Risk managment

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Evaluation and selection of appropriate property and other insurance

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Routine maintenance

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Day-today duties such as cleaning common areas, performing minor carpentry and plumbing adjustments, and providing regularly scheduled upkeep of heating, air-conditioning, and landscaping

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Surety bonds

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An agreement by an insurance or bonding company to be responsible for certain possible defaults, debts, or obligations incurred by an insured party; in essence, a policy insuring one's personal and/or financial integrity

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Tenant improvements

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Alterations to the interior of a building to meet the functional demands of the tenant. Also known as build-outs

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Workers' compensation acts

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State laws that require an employer to obtain insurance coverage to protect employees who are injured in the course of their employment

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Buffer zone

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A strip of land, usually used as a park or designated for a similar use, separating land dedicated to one use from land dedicated to another use

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Building code

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An ordinance that specifies minimum standards of construction for buildings to protect public safety and health

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Building permit

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Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zooming ordinances

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Certificate of occupancy

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Permission by the municipal inspector to occupy a completed building structure after being inspected and having complied with building codes

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Conditional-use permit

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Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area

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Covenants, conditions, and restrictions (CC&Rs)

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Private agreements that affect land use. They may be enforced by an owner of real estate that benefits from them and can be included in the seller's deed to the buyer

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Deed restrictions

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Clauses in a deed limiting the future uses of the property. They may limit the density of buildings, dictate the types of structures that can be erected, or prevent buildings from being used for specific purposes or even from being used at all

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Density zoning

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Zoning ordinances that restrict the maximum average number of housing units per acre that may be built within a particular area, generally a subdivision

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Developer

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One who attempts to put land to its most profitable use through the construction of improvements

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Development

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The construction of improvements that benefit land

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Enabling acts

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State legislation that confers zoning and other power on municipal governments

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Interstate land sales full disclosure act (ILSA)

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A federal law that regulates the sale of certain real estate in interstate commerce

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Laches

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An equitable doctrine used by courts to bar a legal claim or to prevent the assertion of a right because of undue delay or failure to assert the claim or ritht

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Master plan

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A comprehensive government plan to guide the long term physical development of a particular area

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Master-planned community

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A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision; also called a planned unit development (PUD)

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Mixed use

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Property that accommodates more than one use, such as commercial use and residential use

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Nonconforming use

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A use of property that is permitted to continue after the zoning ordinance prohibiting it has been established for the area

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Obsolescence

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The loss of value due to property features that are outmoded or less useful. Obsolescence may be functional or external

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Occupancy permit

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A permit issued by the appropriate local governing body to establish that the property is suitable for habitation by meeting certain safety and health standards

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Planned unit development (PUD)

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A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision

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Plat map

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A map of a town, section, or subdivision indicating the location and boundaries of individual proerties

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Property reports

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The mandatory federal and state documents compiled by subdividers and developers to provide potential purchasers with facts about a proerty prior to a purchase

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Restrictive covenant

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A clause in a deed that limits the way the real estate ownership may be used

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Setback

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The amount of space local zoning regulations require between a lot line and a building

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Spot zoning

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Granting a particular parcel a classification that differs from the classification of other land in the immediate are; may be considered illegal

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Subdivider

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One who buys undeveloped land, divides it into smaller, usable lots and sells the lots to potential users

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Subdivision

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A tract of land divided by the owner, known as the Subdivider, into blocks, building lots, and streets according to a recorded subdivision play, which must comply with local ordinances and regulations

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Subdivision and development ordinances

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Municipal ordinances that establish requirements for subdivisions and development

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Variance

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Permission obtained from zoning authorities to build structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances

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Waste

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An improper use or an abuse of a property by a possessor who holes less than fee ownership, such as a tenant, life tenant, or vender. Ordinarily impairs the value of the land or the interest of the person holding the title or the reversionary rights

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Zoning

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A regulatory tool that helps communities regulate and control how land is used

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Zoning board of appeals

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A board that must be formed when the local legislature adopts a new zoning law, to provide for property owners to object to the application of the law to their property

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Zoning ordinance

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An exercise of police power by a municipality to regulate and control the character and use of proeprty

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