REAL
ESTATE TOOLS - GLOSSARY
A
B C D E F
G H I J L
M N O P Q
R S T V
A
Abstract
of Title
A condensed history or summary of all transactions affecting a
particular tract of land.
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Access
The
right to enter and leave a tract of land from a public way. Oftentimes the right
to enter and leave over the lands of another.
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Accretion
The
slow build up of lands by natural forces such as wind, waves or water.
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Acknowledgment
The
act by which a party executing a legal document goes before an authorized officer
or notary public and declares the same to be his voluntary act and deed.
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Acre
A
tract of land 208.71 feet square and containing 43,560 square feet of land.
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Administrator
A
person appointed by a probate court to settle the affairs of an individual dying
without a will. The term is administrative if such a person is a woman.
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Adverse
Possession
A claim made against the lands of another by virtue of open
and notorious possession of said lands by the claimant.
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Affidavit
A
sworn statement in writing. Agent ć A person or company that has the power to
act on behalf of another or to transact business for another, e.g., a title agent
under contract with Old Republic Title to issue policies of title insurance.
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Air
Rights
The right to ownership of everything above the physical surface
of the land.
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ALTA
American
Land Title Association. A national association of title insurance companies, abstracters
and attorneys specializing in real property law which speaks for the title
insurance
and abstracting industry, with headquarters in Washington, D.C.
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Appurtenance
Anything
so annexed to land or used with it that it will pass with the conveyance of the
land.
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ARM
Adjustable
Rate Mortgage. See Variable Rate Mortgage. Assessment ć The imposition of a tax,
charge or levy, usually according to established rates.
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Assessor
A
public official who evaluates property for the purpose of taxation.
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Assignee
One
to whom a transfer of interest is made. For example, the assignee of a mortgage
or contract.
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Assignor
One
who makes an assignment. For example, the assignor of a mortgage or contract.
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Assumable
Mortgage
A mortgage, which by its terms allows a new owner to take over
its obligations.
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Assumed
Mortgage
A loan in which the buyer assumes the obligations of an already
existing mortgage on a property.
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Attachment
Legal
seizure of property to force payment of a debt.
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B
Bankrupt
A
person, who, through a court proceeding, is relieved from the payment of all his
debts
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to a court appointed trustee.
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Bureau
of Land Management
The branch of government in charge of surveying and
managing public lands.
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C
CC&R's
Covenants,
Conditions and Restrictions. See Conditions and Restrictions below.
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Chain
A
term of land measurement being 66 feet in length.
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Chain
of Title
A term applied to the past series of transactions and documents
affecting the title to a particular parcel of land.
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Clear
Title
One which is not encumbered or burdened with defects.
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Closing
Also
known as "escrow" or "settlement." The process of executing legally binding documents
such as deeds and mortgages most commonly associated with the purchase of real
estate and the borrowing of money to assist in the purchase.
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Clouded
Title
An encumbered title.
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Commitment
to Insure
A report issued by a title insurance company, or its agent, committing
the title insurance company to issue the form of policy designated in the commitment
upon compliance with and satisfaction of requirements set forth in the commitment.
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Company
Loan
Loan by employer to facilitate relocation of employee. Usually short
term.
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Condemnation
Taking
private property for public use through court proceedings.
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Condition
or Conditions
A proviso in a deed or a will that upon the happening or
failure to happen of a certain event, the title of the purchaser or devisee will
be limited, enlarged, changed or terminated.
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Conditions
and Restrictions
A common term used to designate the uses to which land
may not be put and providing penalties for failure to comply. Commonly used by
land subdividers on newly platted areas.
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Condominium
A
system of individual fee ownership of units in a multi-unit structure, combined
with joint ownership of common areas of the structure and land.
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Consolidated
Mortgage
Occurs in refinancing. Remaining balance from original mortgage
is incorporated into new mortgage.
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Contract
for Deed
An agreement to sell and purchase under which title is withheld
from the purchaser until such time as the required payments to the seller have
been completed.
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Convey
The
act of deeding or transferring title to another.
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Conveyance
An
instrument by which title to property is transferred; a deed.
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Cooperative
A
residential multi-unit building owned by and operated for the benefit of persons
living within.
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Covenant
An
agreement written into deeds and other instruments promising performance or non
performance of certain acts, or stipulating certain uses or non-uses of the property.
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Cul
De Sac
The terminus of a street or alley. Usually laid out by modern engineers
to provide a circular turn around for vehicles. In French 'the bottom of the sack.'
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D
Deed
A
written document by which the ownership of land is transferred from one person
to another.
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Deed
of Trust
See Mortgage below.
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Delivery
The
final and absolute transfer of a deed from seller to buyer in such a manner that
it cannot be recalled by the seller. A necessary requisite to the transfer of
title.
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Device
The
disposition of land by will. A term used for land alone and never for personal
property.
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Due
on Sale Clause
Provision in a Mortgage or Deed of Trust which requires
loan to be paid in full if property is sold or transferred.
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E
Earnest
Money
Advance payment of part of the purchase price to bind a contract
for property.
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Easement
An
interest in land owned by another that entitles its holder to a specific limited
use, such as laying a sewer, putting up electric power lines, or crossing the
property.
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Egress
The
right to leave a tract of land. Often used interchangeably with access. (See Access)
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Eminent
Domain
The power of the state to take private property for public use upon
payment of just compensation.
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Encroachment
A
fixture, such as a house, wall or fence, which intrudes upon another's property.
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Encumber
To
burden a parcel of land with a lien or charge such as a mortgage.
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Encumbrance
A
lien, liability or charge upon a parcel of land.
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Escheat
A
reversion of property to the state in those cases where an individual dies without
heirs or devisees and without a will.
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Escrow
A
procedure whereby a disinterested third party handles legal documents and funds
on behalf of a seller and buyer.
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Estate
A
person's possessions
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Examination
of Title
The interpretation of the record title to real property based
on the title search or abstract.
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Exception
In
legal descriptions that portion of lands to be deleted or excluded. The term is
often used in a different sense to mean an objection to title or encumbrance on
title.
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Executor
A
person appointed by the probate court to carry out the terms of a will. The term
is executrix if such a person be a woman.
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Extended
Mortgage
One in which due date of mortgage is extended for longer period.
Often at higher interest rate than original mortgage.
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F
Fee
Simple Estate
The greatest interest in a parcel of land that it is possible
to own. Sometimes designated simply as Fee
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FHA
Guarantee
An insurance contract in which HUD through FHA insures that the
named lender will recover a specific percentage of the loan amount from the insurer
(FHA) in the event the loan goes bad.
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Financing
Statement
A document prepared for filing with the Register of Deeds or
Secretary of State indicating that personal property or fixtures is encumbered
with a debt.
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Fixtures
Any
item of property so attached to real property that it becomes a part of the real
property.
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Forfeiture
of Title
Provision in a Deed creating a condition which will cause title
to be passed to another in the event certain circumstances occur.
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G
Graduated
Payment Mortgage
A loan in which monthly payments are relatively small
in the beginning years and gradually increase in dollar amount over the life of
the mortgage
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Grantee
A
person who acquires an interest in land by deed, grant, or other written instrument.
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Grantor
A
person, who, by a written instrument, transfers to another an interest in land.
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Guardian
One
appointed by the court to administer the affairs of an individual not capable
of administering his own affairs.
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H
Harbor
Line
An arbitrary line set by authorities on navigable rivers, beyond which
wharves and other structures may not be built, also designated as line of navigation.
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Heir
One
who might inherit or succeed to an interest in land under the rules of law applicable
where an individual dies without leaving a will.
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Hiatus
A
gap or space unintentionally left between, when attempting to describe adjacent
parcels of land.
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Home
Repair Loan
Used for repairs and additions to existing structures without
affecting existing mortgage. Typically 10 years or less in length.
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HUD
1
A form settlement (closing) statement required by HUD where federally
related mortgages are being made on residential properties. It is a balance sheet
showing the source of funds and the distribution of funds in connection with the
purchase and/or mortgaging of residential property.
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I
Improvements
Those
additions to raw lands tending to increase value such as buildings, streets, sewer,
etc.
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Inchoate
Curtsey
The imperfect interest which the law gives a husband in the lands
of his wife. "This is an interest which upon the death of the wife may ripen into
possession and use.
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Inchoate
Dower
The imperfect interest which the law gives a wife in the lands of
her husband. This is an interest which upon the death of the husband may ripen
into possession and use.
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Indemnify
To
make payment for a loss.
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Ingress
The
right to enter a tract of land. Often used interchangeably with access. (See Access)
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Insurance
A
contract of indemnity against specified perils.
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Insurance
Loan
When cash value of life insurance policy is borrowed by insured.
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Interim
Financing
Temporary or short term loans. Often used with new construction.
Usually replaced with a permanent, long term mortgage.
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Intestate
Designates
the estate or condition of failing to leave a will at death. "To die intestate."
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J
Joint
Tenancy
Where two or more persons hold real estate jointly for life, the
survivors to take the interest of the one who dies.
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Judgment
A
decree of a court. In practice this is the lien or charge upon the lands of a
debtor resulting from the Court's award of money to a creditor. (See Judgment
Lien)
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Judgment
Docket
The record book of a County Clerk where a judgment is entered in
order that it may become a lien upon the property of the debtor.
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Judgment
Lien
The charge upon the lands of a debtor resulting from the decree of
a court properly entered in the judgment docket.
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L
Land
Contract
See Contract for Deed above.
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Landmark
Any
conspicuous object that helps establish land boundaries.
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Lease
A
grant of the use of lands for a term of years in consideration of the payment
of a monthly or annual rental.
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Lender's
Policy
See Mortgagee's Policy
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Lessee
One
who takes lands upon a lease.
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Lessor
One
who grants lands under a lease.
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Lien
A
hold, a claim or a charge allowed a creditor upon the lands of a debtor. Some
examples are mortgage liens, judgment liens, mechanic's liens.
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Life
Estate
A grant or reservation of the right of use, occupancy and ownership
for the life of an individual.
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Link
A
term of land measurement being 1/100th of a chain or 66/100ths of a foot.
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Lis
Pendens
A notice recorded in the official records of a county to indicate
that a suit is pending affecting the lands where the notice is recorded.
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Loss
Payable Clause
Provision added to a Fire and Casualty Policy which says
any loss will be paid to two or more parties as their interest may appear. Usually
the owner and the mortgage lender.
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Lot
A
measured parcel of land having fixed boundaries.
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M
Majority
The
age at which a person is entitled to handle his own affairs.
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Marketable
Title
A good title about which there is no fair or reasonable doubt.
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Mechanic's
Lien
A lien allowed by statute to contractors, laborers and material-men
on buildings, or other structures upon which work has been performed or materials
supplied.
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Metes
and Bounds
A description of land by courses and distances.
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Minor
One
who because of insufficient age or status is legally incapable of making contracts.
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Monument
of Survey
Visible marks or indications left on natural or other objects
indicating the lines and boundaries of a survey. May be posts, pillars, stones,
cairns, and other such objects, but may also be fixed natural objects, blazed
trees, roads and even a water course.
Mortgage ć An instrument used to encumber
land as security for a debt.
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Mortgage
Banker
A specialized lending institution that lends money solely with respect
to real estate and secures its loans with mortgages on the real estate.
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Mortgage
Broker
A person or company that buys and sells mortgages for another on
commission or who arranges for and negotiates mortgage contracts.
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Mortgage
Revenue Bonds
Issued by communities as a means of providing lower cost
mortgage funds to certain qualified borrowers.
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Mortgage-Backed
Security
A security evidencing either the ownership of an interest in a
mortgage loan or pools of mortgage loans, or a separate obligation secured by
a mortgage loan or pool of mortgage loans.
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Mortgagee
A
designation for the mortgage lender on lands.
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Mortgagee's
Policy
A form of title insurance policy which insures the validity, enforceability
and priority.
This form does not provide protection for the owner.
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Mortgagor
A
designation for the mortgage borrower on lands.
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N
Negative
Amortization
An actual increase in the principal amount of a real estate
loan because of the addition of matured but unpaid interest to the loan balance.
Usually the result of monthly payments which are temporarily set at a lower than
needed level.
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Notary
One
authorized to take acknowledgments. (See Acknowledgments)
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O
Owner's
Policy
A policy of title insurance which insures a named owner against
loss by reason of defects, liens and encumbrances or lack of marketability of
the title. The company also agrees to defend covered claims made against the title.
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Ownership
The
right to possess and use property to the exclusion of others.
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P
P.M.I.
Private
Mortgage Insurance. An insurance contract which insures that the named lender
will recover a specific percentage of the loan amount from the insurer in the
event the loan goes bad. Many lenders require this on higher percentage loans.
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Patent
A
document or grant by which the Federal or State government originally transferred
title to public lands to an individual. The first in the series of transfers by
which title comes down to present owners.
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Plat
or Plot
A map representing a piece of land subdivided into lots with streets
shown thereon.
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Points
A
one-time special fee or extra charge paid to a lender in order to secure a loan.
Expressed as a percentage of face amount of mortgage.
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Policy
A
written contract of title insurance.
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Policyowner
One
who owns a title insurance policy.
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Power
of Attorney
An instrument authorizing another to act on one's behalf as
his agent or attorney.
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Power
of Sale
A clause inserted in a will, mortgage, deed or trust or trust agreement
authorizing the sale or transfer of land in accordance with the terms of the clause.
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Prorate
To
allocate between seller and buyer their proportionate share of an obligation paid
or due. For example, a prorate of real property taxes or fire insurance premiums.
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Q
Quiet
Title
An action in a proper Court to remove record defects or possible
claims of other parties named in the action.
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R
Range
A
part of the government survey, being a strip of land 6 miles in width, and numbered
east or west of the principal meridian. Real Property ć Land and that which is
affixed to it.
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Realtor¬
A
federally registered collective membership mark which identifies a real estate
professional who is a member of the National Association of Realtors¬ and subscribes
to its strict Code of Ethics.
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Realty
A
brief term for real property.
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Redeem
Literally
"to buy back." The act of buying back lands after a mortgage foreclosure, tax
foreclosure, or other execution sale. Registered Land ć See Torrens Title below
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Reinsurance
To
insure again by transferring to another insurance company all or part of an assumed
liability, thus spreading the loss risk any one company has to carry.
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REIT
Real
Estate Investment Trust. A product of federal tax legislation formed as a business
trust, under a special state REIT statute or as a corporation for the purpose
of investing in real estate or mortgages on real estate.
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REMIC
Real
Estate Mortgage Investment Conduit. A product of 1986 federal tax legislation
in which a business entity such as a corporation partnership or trust in which
substantially all of the assets consist of qualified mortgages and permitted investments
elects to be treated as an REMIC. Qualification avoids treatment as a corporation
for tax purposes.
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Right-of-way
The
right which one has to pass across the lands of another. An easement.
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Riparian
Rights
to use of water and waterways in adjoining lakes or rivers.
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S
Second
Mortgage
A second loan on real estate that already has a mortgage. It is
subordinate to the first mortgage. Usually of shorter term and often at higher
interest rate.
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Section
or Section of Land
A parcel of land comprising one square mile or 640 acres.
Set Back Lines ć Those lines which delineate the required distances for the location
of structures in relation to the perimeter of the property.
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Sub-surface
Right
The right of ownership to things lying beneath the physical surface
of the property.
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Survey
The
process of measuring land to determine its size, location and physical description
and the resulting drawing or map.
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T
Tenancy
in Common
An estate or interest in land held by two or more persons each
having equal rights of possession and enjoyment but without any right of survivorship
between the owners.
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Tenant
Any
person in possession of real property with the owner's permission.
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Testament
Another
term for a will. Commonly referred to as "last will and testament."
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Testate
The
estate or condition of leaving a will at death. "To die testate."
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Testator
A
man who makes or has made a testament or will. Testatrix ć A woman who makes or
has made a testament or will.
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Title
The
evidence or right which a person has to the ownership and possession of land.
Commonly considered as a bundle or history of rights.
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Title
Defect
Any legal right held by others to claim property or to make demands
upon the owner. Title Insurance ć Insurance against loss or damage resulting from
defects or failure of title to a particular parcel of real property.
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Title
Plant
The total facilities: records, equipment, fixtures, and personnel:
required to function as a title insurance operation. Technically, the organization
of official records affecting real property into a system which allows quick and
efficient recovery of title information.
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Title
Search
An examination of public records laws and court decisions to disclose
the current facts regarding ownership of real estate.
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Torrens
Title
A system whereby, after court proceedings, a certificate is issued
setting forth the extent of the applicant's estate in land subject to the exceptions
shown. Most popular in the early 1900's, the system was adopted in 19 states.
It is presently used only in parts of six states.
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Township
A
division of territory 6 miles square, containing 36 sections or 36 square miles.
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Tract
A
particular parcel of land.
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Trust
A
property right held by one for the benefit or another.
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Trustee
A
person holding property in trust.
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V
VA
Guarantee
An insurance contract in which the Veterans Administration (VA)
insures that the named lender will recover a specific percentage of the loan amount
from the insurer in the event the loan goes bad.
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Variable
Rate Mortgage
A loan in which the interest rate fluctuates with the cost
of funds or some other index.
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Vendee
A
purchaser of real property under land contract.
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Vendor
A
seller of real property under land contract. Vest ć To pass to a person an immediate
right or interest. Title may be said to vest in John Brown.
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Vestee
A
non-legal term used by title insurers to indicate the owner of real property in
a policy or report.
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