Abstract of Title Accession Ad Volerum

A method of acquiring original
A provision in a mortgage
The free and full ownership of title to property by open, no-
requiring full payment of the
rights in land by individuals, torious and hostile possession
debt upon the transfer of title
which is the basis of real prop- for a statutory period of time;
to the property, due on sale.
erty in the United States. also referred to as prescription.
Prevents loan assumptions.
Poach.
AlliedSchools.com AlliedSchools.com AlliedSchools.com
Allodial Alienation clause Adverse possession
The idea that the owner of land is
A prefix meaning “based on entitled to all that the soil produc- A history of the ownership
es or all that is added to the land
value.” Most local govern- of a parcel of land which lists
either intentionally or by mistake.
ments levy an ad valorem tax Trade fixtures not removed are transfers of title, rights, and
on property. “assessed” by the owner of the liabilities.
property.
Ad volerum Accession Abstract of title

Occurs in cases where there is A statement issued by an attor- The act of witnessing a per-
a sudden loss of land through ney after analyzing an abstract son’s signing of an instrument
nature. as to quality of title. by a notary public.
title
Avulsion Attestation
Attorney’s opinion of
Occurs between willing buyer
and willing seller with each party
Not on time; late in making completely knowledgeable about Any right or privilege which
payments or completing work. the market. A purchaser of prop- belongs to and passes with
Interest is paid in arrears. erty between relatives (i.e. father land.
and son) would not be an “arm’s
length transaction.”
Arrears Arm’s length transaction Appurtenance

Any activity which attempts to
A mortgage which covers more
drive prices down for the pur-
A means by which planners use than one piece of real estate.
pose of causing transition from
space to separate two adjoin- Often used by a developer in
one ethnic group to another.
ing districts which have incom- the financing of undeveloped
This is a violation of Federal
patible uses. lots. Contains a partial release
Fair Housing Laws. Also called
clause.
“panic selling.”
Buffer zone Blockbusting Blanket mortgage
The remaining balance, at
A contract in which a promise
An instrument conveying title maturity, on a loan that has
is given for the promise of
which recites a valuable con- not been completely repaid
another. It becomes binding
sideration and commonly uses through periodic payments.
when mutual promises are
the words “bargain and sale” Once paid, the outstanding
communicated. (A real estate
or words of similar import. balance is zero. Partially amor-
contract).
tized loan.
Bilateral contract Bargain and sale deed Balloon payment

A law which prohibits discrimi-
Any claim affecting title to
Adverse possession. nation in all real estate transac-
property.
tions based on race.
Color of title Cloud on title Civil Rights Act of 1866
The rights of an owner to pos-
sess, control, enjoy, sell, lease, Latin for “let the buyer be- A history of the ownership af-
mortgage, and dispose of the ware.” fecting title to a parcel of land.
property.
Bundle of rights Caveat emptor Chain of title

A method of estimating value A method of determining the
based on the economic principle value of property in which the
of substitution; the value of a
The transfer of title to land selling prices of similar prop-
building cannot be greater than
the cost of purchasing a similar from one party to another. erties are used as the basis
site and constructing a building of for estimating the value of the
equal utility. subject property.
Cost approach Conveyance Comparative analysis
Any property acquired in cer-
Illegally mixing deposits or
tain states by purchase, or as
monies, collected from a client, Property jointly owned on a
compensation by either spouse
with one’s personal or business pro–rata basis with other unit
during the period of marriage,
account. Taking money out too owners in a condominium
is considered to be owned in
soon or putting it into escrow regime.
an undivided half interest by
too late.
each.
Commingling Common elements Community property

A written instrument, usually
A deed to real property, which Given by lien holders, re-
under seal, which contains an
serves the same purpose as maindermen or mortgages to
agreement to transfer some
a mortgage, involving three relinquish their claims on the
property interest from a grant-
parties instead of two. property.
or to a grantee.
Deed of trust Deed of release Deed
A promise that no one has
superior or paramount title to Gives the assurance that the
that of the grantor; assures the grantor has the exact estate in The rights that a husband
grantee of peaceful possession the quantity and quality which acquires in the wife’s property
without fear of being ousted is being conveyed. “I own and upon her death.
by a person with a superior I have the right to sell it.”
claim to the property.
enjoyment
Covenant of seisin Curtesy
Covenant of quiet

A fee charged by the lender
at settlement that results in in- A decrease in value due to
creasing the lender’s effective Transferring title to real prop- physical deterioration, func-
yield on the money borrowed. erty by means of a will. tional or economic obsoles-
One discount point equals one cence.
percent of the loan amount.
Discount points Devise Depreciation
A necessary mortgage clause
Ownership with conditional re- A personal claim based on a ju-
in title theory states. When the
strictions which, if broken, can dicial order against the debtor.
debt is satisfied, this clause
result in title to the property This occurs when the property
causes title to pass automati-
reverting back to the grantor fails to bring in a price at the
cally back to the borrower. Sat-
or his heirs. (Also referred to foreclosure sale which covers
isfaction of mortgage; release
as, fee simple defeasible). the mortgage amount.
from records.
Defeasance clause Defeasible fee simple Deficiency judgment

A right to limited use or enjoy-
A sum of money given to bind An easement created to bene-
ment by one or more persons
an offer or agreement. fit adjacent land.
in the land of another.
Earnest money Easement Easement Appurtenant
A clause, included in many
mortgages, permitting the
The rights that a wife acquires The tract of land in an ease-
lender to require the borrower
in her husband’s fee simple ment appurtenant which bene-
to repay the outstanding bal-
property. fits from the easement.
ance when the property is sold.
Prevents loan assumption.
Due-on-sale clause Dower Dominant estate

The difference between the
The right of government to
theoretical economic life of a
Refers to crops which require acquire property, for a public
structure and its actual remain-
annual planting. purpose, after paying just com-
ing economic life. Maintaining
pensation.
the property.
Effective age Emblements Eminent domain
A loss in value due to factors
The time period over which
outside the subject property,
an improvement to land earns
such as changes in competition A personal right to use the
more income than the cost
or surrounding land use. Also land of another.
incurred in generating the
referred to as external obsoles-
income.
cence.
Economic obsolescence Economic life Easement in gross

Retention of possession with- An occupation of space, for an
The deposit of funds with
out the consent of the landlord indefinite period, which can be
a neutral third party who is
after the lease has expired; terminated by either the lessor
instructed to carry out the pro-
also referred to as tenancy at or lessee at any time. Also re-
visions of an agreement.
sufferance. ferred to as tenancy at will.
Escrow Estate at sufferance Estate at will
The right of government to A federal act, which prohib-
Any interest in, or claim on, the
ownership of property, which its discrimination by lenders
land of another, which in some
is left by a deceased property on the basis of sex or marital
manner burdens or diminishes
owner who leaves no will, and status in any aspect of a credit
the value of the property.
dies without descendants. transaction.
Opportunity Act
Escheat Encumbrance
Equal Credit

The owner employs only one
Under this listing arrangement, broker but retains the right to
personally sell the property, and
An agreement formed through the broker employed is enti-
thereby not pay a commission.
the oral or written words of the tled to a commission no matter However, if any other real estate
parties. who sells the property during company sells the property, the
the listing period. listing broker is still entitled to the
commission stipulated.
listing
Express contract Exclusive agency listing
Exclusive right to sell
A leasehold, which is automatical- A conveyance of realty for a
The maximum possible estate ly renewed for the same term as in definite stated period of time.
the original lease; also referred to
one can possess in real prop- The term may be one year,
as a periodic tenancy or an estate
erty; also referred to as fee from period to period. Month to one month, one week or even
simple or fee simple absolute. month rental. Notice needed to one day. No notice needed to
terminate. terminate.
period
Estate in fee Estate for years
Estate from period to

An estate which has been
A federal agency which over- The maximum possible estate
created to exist only until the
sees and regulates all feder- one can possess in real prop-
occurrence or non-occurrence
ally charted savings and loan erty; also referred to as fee
of a particular event. Returns
associations. simple or fee.
automatically.
Board (FHLBB)
Fee simple absolute Fee simple determinable
Federal Home Loan Bank
An act prohibiting discrimi-
The price negotiated for a par- A federal agency established
nation in the sale or rental of
cel of real estate in a compet- to insure the deposits in mem-
housing on the basis of race,
itive market where both buyer ber commercial banks. The
color, religion or national origin
and seller are free to act and current maximum insurance
sex, handicap, and familial
under no undue pressure. per account is $100,000.00.
status.
(FDIC)
of 1968
Fair market value Insurance Corporation
Federal Fair Housing Act
Federal Deposit

A loss in value due to condi-
One which is free from encum- Ownership of an estate which
tions within the structure which
brances such as liens, pend- continues for an indefinite
make the building outdated
ing litigation and other such period of time. For as “least a
when compared with a new
defects. lifetime or greater.”
building.
Good title Functional obsolescence Freehold estate
A misrepresentation of a
material fact, which is made
A mortgage on real estate in Claim with highest priority
with knowledge of its falsity,
which the lender’s rights are against property; also known
and with intent to deceive a
superior to the rights of subse- as a superior to the rights of
party who in fact relies on the
quent lenders. subsequent enders.
misrepresentation to his or her
detriment and injury.
Fraud First mortgage First lien

The legal use of a parcel of
Process of pledging something A method of appraising single
land, which when capitalized,
(house) as security, but retain- family or duplexes based on
will generate the greatest net
ing possession of it. the monthly gross income.
present value of income.
(GRM)
Hypothecate Highest and best use
Gross rent multiplier
d A method of appraising
This lease provides for period- The actual income received income–producing property
ic step increases in the rental from property before the de- based on a multiple of the an-
payments. duction for any expenses. nual gross income; also called
a gross rent multiplier.
provisions (GIM)
Gross income
Graduated lease Gross income multiplier

A form of concurrent owner-
The rental is tied to some com-
ship, which occurs when two
monly agreed to price index
or more persons own a single
such as the Consumer Price Dying without a will.
estate in land, with right of
Index or the Wholesale Price
survivorship. Must have equal
Index.
shares, right to partition.
Index lease Intestate Joint tenancy
Agency is created by implica-
tion when, from the behavior A traditional means of apprais-
Contract formed through the of the client and the behavior ing property based on the
acts or conduct of the parties of the agent that they act as assumption that value is equal
involved. if the agency exists by per- to the present worth of future
forming in such areas where an rights to income.
agency would exist.
Implied contract Implied agency Income approach

Estates in possession generally
referred to as leaseholds. Con-
The mortgage merely creates
Using borrowed capital to sidered to exist for a definite
a lien right on the mortgagee
finance the purchase of real period of time, or successive
with the mortgagor retaining
estate or other assets. periods of time, until terminat-
the title.
ed by notice; also known as
nonfreehold estates.
Lien theory state Leverage Less than freehold estate
An arrangement whereby part
An encumbrance, second in
of the rent payment is applied The charge upon the land of
priority, to a previously record-
to the purchase price, and a debtor, resulting from the de-
ed lien or to a lien to which the
when the prearranged total cree of a court, entered in the
encumbrance has been subor-
amount has been paid, title is judgment docket. Lawsuit.
dinated.
transferred.
agreement
Junior lien Judgment lien
Lease purchase

A method of land description
A notice filed for the purpose The relationship between the frequently used after land has
of serving constructive notice amount borrowed and the ap- been subdivided into building
that title, or some matter in- praised value of the property. lots; also referred to as the
volving particular real property, (Purchase price 100,000 – Loan recorded plat method. (Must
is in litigation. 80,000 = LTV 80%). have a plat map to find the
property).
(LTV)
Lis pendens Lot and block
Loan-to-value ratio
An agreed to sum, which A life estate in one person with An interest which only lasts for
will be paid if the contract is another person serving as the the term of a life, or lives, of
breached. measuring life. one or more persons.
Liquidated damages Life pur autre vie Life estate

A method of land description A statutory lien levied on prop-
which involves identifying erty by a person who is wrong- A program for the future
distances and directions and fully not compensated after development of a community
makes use of both the physical providing labor or material for which serves as the guideline
boundaries and measurements the improvement to land. Not for capital expenditures.
of the land. on personal property.
Metes and bounds Mechanic’s lien Master plan
A means of estimating value by The price at which a willing
comparing similar properties. buyer and a willing seller will One which is free from reason-
Used when there is an active agree upon, where neither is able doubts or objections, and
market and where compara- under any undue pressure and which the courts would compel
bles can be identified. Also both are negotiating at arm’s a purchaser to accept under
called comparable sales ap- length with complete knowl- the terms of a sales contract.
proach. edge of the market.
Market data approach Market value Marketable title

A financial middleman who, in
A person who brings together
addition to bringing the bor-
Physical evidence of a point– the user of capital (borrower)
rower and the lender together,
of–beginning established by and the supplier of capital
makes loans, packages them,
surveyors for use in locating (lender). For this service, a find-
and sells the packages to both
parcels of land. er’s fee is usually paid by the
primary and secondary inves-
borrower.
tors.
Monument Mortgage banker Mortgage broker
A tax rate stated in tenths of
An innocent or negligent a cent. For example, a millage
A mill is equal to one–tenth of
misstatement of a material fact rate of 150 mills on property
one cent (.001) and is used to
detrimentally relied upon by assessed at $100,000 would re-
state the property tax rate.
the other party. sult in a property tax of $1,500
($100,000 × .150).
Misrepresentation Millage rate Mill

Occurs when the person in a
A pre–existing use of land contract, to whom the duty was
A signed instrument acknowl- owed, expressly agrees to substi-
which does not conform to the
edging the existence of a debt tute the delegate, or new obligor,
zoning ordinance but which for a consideration, and agrees to
and the promise to pay.
may legally remain. discharge the old obligor from the
obligations under the contract.
Nonconforming use Note Novation
The broker agrees to sell the
property in order to achieve a net
Marketing service in which
price to the owner, and anything An offer and acceptance which
many brokers pool all of their
which is received above the net together form the terms of a
price is the broker’s commission. listings and establish proce-
contract.
A net listing is prohibited by the dures for sharing commissions.
licensing law in many states.
Net listing Mutual assent Multiple listing

A person who has been given
the appearance of being an
employee or acting for anoth- An accessory structure other A policy insuring the owner
er, which would make anyone than the main structure on of real estate against certain
dealing with the ostensible land. defects of title.
agent reasonably believe he/
she was an employee or agent.
Ostensible agency Outbuilding Owner’s title policy
An agreement between an owner
and many brokers. If a broker pro- A loss in value due to reduced
A loan containing a clause duces a ready, willing, and able
desirability and usefulness of
which allows the mortgagor to buyer, a commission is due. How-
a structure because its design
borrow additional money with- ever, the owner still has the right
to sell his/her property and is not and construction have become
out rewriting the mortgage.
obligated to pay a commission. obsolete.
Open-end mortgage Open listing Obsolescence

An agreement between a
A method of loan repayment The dividing of real estate held
mortgagee and a mortgagor
in which the balance of the by two or more people which
which provides the lender with
outstanding loan is not zero results in each of the parties
a certain percentage of own-
at maturity, and thus a balloon holding individual or severalty
ership in the project once the
payment is due at that time. ownership.
lender makes the loan.
mortgage
Participation mortgage Partition suit
Partially amortized
A part of a mortgage, which A mortgage used in the
provides for the release of part A rule of evidence designed to purchase of new residential
of the property (used as securi- achieve a degree of certainty property which, in addition to
ty in the loan) upon payment of in a transaction and to prevent real property, covers certain
a certain amount of the mort- fraudulent and perjured claims. personal property items and
gage. Blanket mortgage. equipment.
Partial release clause Parol evidence rule Package mortgage

An abbreviation which means
A type of exception, or special
“Principal, Interest, Taxes
use, permitted under many
and Insurance.” In residential A map showing the division of
modern zoning ordinances,
financing, it is common for the land into lots and blocks.
allowing a mixture of different
monthly mortgage to include
land uses or densities.
these four payments.
development (PUD)
PITI Plat
Planned unit
The lessor receives a percent-
Movables, which are not an-
Ability of soil to absorb water; age of the gross sales or net
nexed to or part of, the land;
used for septic systems. profits as the rental payment
also referred to as chattels.
for the lease of the property.
Personal property Percolation Percentage lease

An easement obtained by the The interest rate charged to a
A means of acquiring title to open, notorious, hostile and lender’s AAA customer. This is
property through open and continuous use of the property normally the base from which
continuous use. belonging to someone else for other interest rates are de-
a statutory period of time. rived.
Prescription Prescriptive easement Prime rate
Occurs when two or more sites
are combined, with the result
The charge levied by the lend- The right retained when a fee
that the value of the assem-
er for paying off a mortgage simple determinable is grant-
bled site is worth more than
prior to its maturity date. ed.
the value of the sum of each of
the individual sites.
Prepayment penalty Possibility of reverter Plottage

Dividing property taxes, hazard
The primary legal financing ob-
The actions by a broker which insurance and other expenses
ligation in which the borrower
result in the owner being able or income between the buyer
promises to pay back a sum of
to make a sale. and seller, as of date of settle-
money borrowed.
ment.
Procuring cause Promissory note Proration
A private insurance program
The process of proving a will
To divide or distribute propor- which insures the lender for
before a duly authorized court
tionately. loan amounts in excess of 80%
or person.
of value.
insurance
Probate Pro-rata
Private mortgage

The right of an owner or lessee
legally in possession of proper- Only conveys what present
ty, to uninterrupted use of the interest a person may have in a
A court action to remove a
property without interference particular property but makes
cloud on the title.
from the former owner, lessor no representations or warran-
or any third party claiming ties of title.
superior title.
Quiet enjoyment Quiet title Quitclaim deed
A mortgage given by the seller To exaggerate—for example,
The simultaneous buying of
to the buyer to cover all or part to refer to a house as having
property and leasing it back to
of the sale price. Seller financ- “the most gorgeous view in
the seller.
ing. the city.”
mortgage
Purchase and leaseback Puffing
Purchase money

A law that requires the lender
A court–appointed person who
to provide the loan applicant The recognition that states
is charged with preserving a
with pertinent information so give whereby a licensee of one
property, collecting rents and
that the borrower can make state can be involved in real
doing anything necessary to
informed decisions as to which estate transactions in other
maintain the property’s condi-
lender will be used to finance states.
tion.
the purchase.
Procedures Act (RESPA)
Receiver Reciprocity
Real Estate Settlement
A method of pooling invest-
ment money using the trust
The right of the landlord to A percentage relationship be-
form of ownership if certain
repossess leased property tween the investment price or
tax requirements are met. One
following the violation of the equity invested and the com-
advantage of the REIT is the
terms in the lease. posite returns.
avoidance of corporate tax
(thus no double taxation).
trust (REIT)
Re-entry Rate of return
Real estate investment

A renegotiated loan where the
The cost of substituting a sim-
maturity is fixed (for example,
The person who has a future ilar structure with utility equiv-
30 years), but the interest rate,
interest in a life estate once alent to the subject property
and hence the monthly pay-
the present estate terminates. but constructed with modern
ment, is renegotiated periodi-
materials.
cally.
mortgage
Remainderman Replacement cost
Renegotiable rate
Regulation Z requires disclo- Method of land description
sure of all costs of financing used in about 30 states based
The right of a mortgagor (bor-
the purchase of owner-occu- on imaginary lines of longitude
rower) to make good on the
pied residential purchases of (meridians) and latitude (base
default within a specified time
one to four units. It also re- lines); also referred to as the
and receive the property back.
quires disclosure of the annual U.S. government survey sys-
percentage rate of the loan. tem.
Regulation Z Redemption period Rectangular survey

A future interest in the grant-
A future interest a person has or, which occurs whenever the
The nullification of an offer to
in property after present pos- owner of real estate conveys
contract by the original offeror.
session is terminated. an estate of lesser duration
than the owner has.
Revocation Reversionary interest Reversion
Repealing a contract either by
A clause in a deed which mutual consent of the par- The cost of exactly duplicat-
restricts use of property for a ties to the contract or by one ing a structure using the same
specified time. party when the other party is in material and design.
breach of the contract.
Restrictive covenant Rescission Reproduction cost

Certain restrictions, easements A technique used by owners of
and covenants are part of the property as a means of raising
An instrument issued by the
ownership of land and thus are capital. The process involves
mortgagee (lender) when the
not terminated when title is the simultaneous selling and
mortgage has been paid in full.
transferred but remain in effect leasing back of the property
from owner to owner. usually through a net lease.
Run with the land Sale-leaseback Satisfaction of mortgage
The legal ability to buy back
A legal right of a landowner Upon the death of a joint
one’s property within the
who owns land next to a natu- tenant or tenant by the entirety
time specified in each state
ral watercourse to reasonable the interest does not pass to
after a judicial sale by paying
use of whatever water flows the tenant’s heirs but to the
the debt, interest and certain
past the property. other joint tenant(s).
costs.
Riparian rights Right of survivorship Right of redemption

A requirement in zoning ordi- A requirement in zoning ordi-
The tract of land burdened by nances in which all structures nances in which all structures
an easement. are to be a minimum distance are tobe a minimum distance
from property lines. from property lines.
Servient estate Setback lines Severalty ownership
The actual possession of land
A mortgage subordinate to a An instrument issued by a per-
by one who claims rightful
first mortgage; also referred to son holding a lien to indicate
ownership of a freehold estate
as a junior mortgage. lien is discharged.
therein.
Seisin Second mortgage Satisfaction piece

A promissory note evidencing
a loan in which payments of Every state has some form of
An equitable remedy in which
interest only are made peri- laws which require that certain
the court orders the contract
odically during the term of contracts must be in writing
to be performed as agreed to
the note, with the principal in order to be enforceable in
by the parties.
payment due in one lump sum court.
upon maturity.
Straight note Statute of frauds Specific performance
The grantor warrants against
One limited in authority to
defects that have occurred
transact a single business affair
after the grantor acquired title. Refers to the economic loca-
or a specific series of business
(No warrantee forever–only for tion of real estate.
affairs or to perform restricted
the time the grantor owns the
acts for the principal.
property).
Special warranty deed Special agent Situs

A tenancy which is created The rate, normally stated in
An occupation of space for an
when one is in wrongful pos- units of $100, multiplied by the
indefinite period which can be
session of realty, even though assessed value of property to
terminated by either the lessor
the original possession may determine the amount of the
or lessee at any time.
have been legal. property tax due.
Tenancy at will Tenancy at sufferance Tax rate
The substitution of a third
An arrangement to raise equity
The total tax–assessed value of person in place of a creditor to
capital for real estate purchas-
all real property in a particular whose rights the third person
es or for other types of invest-
jurisdiction. succeeds in relation to the
ments.
debt.
Tax base Syndicate Subrogation

A loan made on the signature Has the authority to do all acts
Charging more than the legal
and credit of the borrower, not that can be lawfully delegated
rate of interest for the use of
secured by collateral. Credit to a representative. (Power of
money.
card. (Debenture). attorney—attorney in fact).
Usury Unsecured loan Universal agent
Occurs when a person in
A 6–by–6 mile area containing The interest of co–owners in
a fiduciary capacity or in a
36 sections each 1 mile square. which individual interest is
position of authority misuses
A division of land in the rect- indistinguishable. (Everyone
the trust or power in order to
angular survey method of land owns part of the whole prop-
unfairly induce a party to enter
description. erty).
into a contract.
Township Undivided interest Undue influence

An encumbrance placed on
The amount of the purchase
The transfer of title by a deed. property through some willful
price still due to the seller.
act of the owner.
Vendor’s lien Voluntary alienation Voluntary lien
A type of safety valve to allow The interest rate charged by
Anything of value offered as
a property owner, who is the lender varies according to
an inducement. (Money, ring,
unfairly burdened by zoning some index not controlled by
boat, etc).
restrictions, to find relief. the lender.
mortgage (VRM)
Variance Valuable consideration
Variable interest rate

A police power device which
allows for legislative division of
A zoning law passed by a local space into districts and imposi-
The interest earned by an in-
government which consists of a tion of regulation prescribing use
and intensity of use to which land vestor on the investment.
text of regulations and a map.
within each designated district
may be put.
Zoning ordinance Zoning Yield
A junior mortgage which
A deed in which the grantor provides an owner additional
A court order to an officer to
makes formal assurance as to capital without refinancing the
carry out judicial decree.
quality of title. first mortgage. (The original
mortgage is not disturbed).
Warranty deed Wraparound mortgage Writ of execution


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