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Real Estate Vocab 9
ASREB Real Estate School Vocabulary for Chapter A-9
| Term | Definition |
|---|---|
| Assignment | An assignment (Latin cessio) is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee. |
| Breach | Breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. |
| Commingling | In real estate, it is the illegal act of a broker combining clients' funds with personal funds because, by law, a broker is required to use a separate trust or escrow fund to temporarily hold a client's funds. |
| Conversion | Unauthorized appropriation of ownership rights over goods or property belonging to another; also altering one form of property to another such as changing a leasehold apartment building to freehold condominium ownership. |
| Co-Tennants | Retail lease contracts that allows tenants to get a reduction in rent from landlords if key / or a certain # of tenants leave the space. Co-tenancy clause provides tenant with some form of protection e.g. reduced rent to compensate for loss of traffic. |
| Crime Free Addendum Demise | Crime Free Multi-Housing Program lease addendum with a mission to help keep illegal activity off of rental property. |
| Distraint | Seizure of someone's property in order to obtain payment of money owed, especially rent. |
| Embezzlement | theft or misappropriation of funds placed in one's trust or belonging to one's employer. |
| Exculpatory Clause | Contract provision that relieves one party of liability if damages are caused during the execution of the contract. The party that issues the exculpatory clause is typically the one seeking to be relieved of the potential liability. |
| Estate | an extensive area of land in the country, usually with a large house, owned by one person, family, or organization. |
| Eviction | the action of expelling someone, especially a tenant, from a property; expulsion. |
| (Eviction) Actual | Is physical expulsion of a person from land or rental property. It is the physical ouster of a tenant from the leased premises. After actual eviction, the tenant is relieved of any further duty to pay. |
| (Eviction) Constructive | Term used in the law of real property to describe a circumstance in which a landlord either does/or fails to do something that he has a legal duty to provide (e.g. landlord refuses to give heat/water to the apartment) rendering the property uninhabitable. |
| Fiduciary (noun and adjective) | Involving trust, especially with regard to the relationship between a trustee and a beneficiary. |
| Fiduciary Account | Savings or deposit account the funds of which are owned by one party but are managed by another (such as an agent, bank, or trustee) for the owner's, or a beneficiary's, benefit. |
| Finder Fee | A commission paid to an intermediary or the facilitator of a transaction. Fee is rewarded because the intermediary discovered the deal and brought it forth to interested parties. Depending on circumstance, fee can be paid by either buyer or seller. |
| Forcible Detainer (Actual Eviction) | Courts commonly refer to eviction actions as "forcible entry and detainer" or "unlawful detainer" actions. |
| Forcible Entry and Detainer (FED) | FED process is for the possession of property only. Process is limited to the issue of possession. Issues about money or dmgs are typically not decided in an FED case, except that the court may award “prevailing party” the winner) costs & attorneys fees. |
| Holdover Tenant | Renter who remains in a property after the expiration of lease. If landlord continues to accept rent payments, the holdover can continue to legally occupy the property, state laws & court rulings determine the length of the holdover's new rental term. |
| Interest-bearing | Interest-bearing bank accounts are accounts at banks that pay interest to the account holder. When an individual deposits money at a bank, the bank is essentially borrowing money. Just like any other loan, the bank pays interest on the money saved |
| Landlord/Lessor | Landlord is the owner of a house, apartment, condominium, land or RE which is rented or leased to an individual or business, who is called a tenant (also a lessee or renter). When a juristic person is in this positiom, term is landlord (lessor & owner) |
| Lease | A contract by which one party conveys land, property, services, etc., to another for a specified time, usually in return for a periodic payment. |
| (Lease) Gross | Type of commercial lease where the landlord pays for the building's prop taxes, INS & maintenance.Gross lease can be modified to meet the needs of a particular building's tenants. EG, a gross lease may require the tenant to pay the utility bills. |
| (Lease) Index | Type of long-term, typically for commercial property, lease in which payments are variable and adjusted periodically to reflect changes in the property's appraised value or changes in a certain publicized benchmark rate, eg Consumer Price Index (CPI) |
| (Lease) Net | (triple-Net or NNN) is lease agreement on a property where the tenant or lessee agrees to pay all RE taxes, building INS & maintenance (the three nets) on the property in addition to any normal fees that are expected under the agreement (rent, utilities) |
| (Lease) Percentage | A type of lease where the tenant pays a base rent plus a percentage of any revenue earned while doing business on the rental premises. It is a term used in commercial real estate. |
| (Lease) Sale & Leaseback | Leaseback, short for "sale-and-leaseback," is a financial transaction in which one sells an asset and leases it back for the long term; therefore, one continues to be able to use the asset but no longer owns it. |
| (Lease) Sandwich Lease | A lease in which a party rents property from the property owner and then subsequently leases it out to another tenant. In a sandwich lease, the primary party is both a lessee and a lessor, meaning that the party both collects rent and pays rent. Not all p |
| (Lease) Sublease | Sublease Agreement is a lease or rental agreement between the original tenant who is currently leasing the premises and the new tenant, or subtenant, who will be moving in to all or a part of the premises. |
| Lessor's Interest | Present value of future lease income plus the leased asset's present value of its projected end of lease term value. |
| Lessee | a person who holds the lease of a property; a tenant. |
| Negligence | failure to take proper care in doing something. failure to use reasonable care, resulting in damage or injury to another. |
| Permit to Enter (PTE) | Permit to Enter (PTE) |
| Pro Rata | Proportional, "pro rata," which means proportionally |
| Property management | Is the operation, control, and oversight of real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its useful life and condition |
| Property Management Agreement | An agreement entered between owner of a property and manager of the property. The owner employs the services of manager to manage, operate, control, rent and lease the particular property. |
| Rent | a tenant's regular payment to a landlord for the use of property or land. |
| (Rent) Contract | A lease is a contract outlining the terms under which one party agrees to rent property owned by another. It guarantees the lessee( tenant) use of an asset and guarantees the lessor, the property owner or landlord, regular payments for a specified time |
| (Rent) Economic | Economic rent is an excess payment made to or for a factor of production over the amount required by the property owner to proceed with the deal. |
| (Rent) Excess | Excess rent is a term commonly understood by real estate appraisers to refer to contract rent that exceeds market rent at the date of an appraisal. |
| (Rent) Ground | As a legal term, ground rent specifically refers to regular payments made by a holder of a leasehold property to the freeholder or a superior Leaseholder, as required under a lease. |
| Revert / Reversionary | To come or go back (as to a former condition, period, or subject) 2 : to return to the proprietor or his or her heirs at the end of a reversion. |
| Security Deposit Vs. Earnest Money | The security deposit is paid by a tenant up-front to cover any default in the lease, including damage, whereas a buyer puts up an earnest money deposit at the time of the offer to purchase, to be forfeited in the event the buyer does not perform. |
| Security Deposit | A sum of money held in trust either as an initial part-payment in a purchasing process (often used to prevent the seller selling an item to someone else during an agreed period of time) |
| Earnest Money | Earnest money is a deposit made to a seller showing the buyer's good faith in a transaction. Often used in real estate transactions, earnest money allows the buyer additional time when seeking financing |
| Self-Help (Tennant's Repairs) | It’s called a self-help provision, and it’s language that’s added to your lease that will allow you the freedom to make any emergency repairs that your landlord fails to make. It also ensures that you get reimbursed for your expenses. |
| Subletting | To allow someone to use (an apartment, house, etc., that you are renting) for a period of time in return for payment. : to use (an apartment, house, etc., that is rented by someone) in return for payment |
| Tennant / Lessee | A lessee is the person who rents land or property from a lessor. Lessee "tenant", and must uphold specific obligations as defined in the lease agreement and by law. lease is a legally binding doct, and if violated tennant could be evicted. |
| Tenant Improvements (Commercial Property Management ) (TI) | Leasehold improvements, also known as tenant improvements (TI), are the customized alterations a building owner makes to rental space as part of a lease agreement, in order to configure the space for the needs of that particular tenant. |
| Trust Account | An account in which a bank or trust company (acting as an authorized custodian) holds funds for specific purposes such as to pay property taxes and/or insurance premiums associated with a mortgaged property. Also called escrow account. |
| Property Management Trust Account | A trust account is typically established by a property manager or real estate broker to hold and manage funds that are the property of their client (the property owner) |
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