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Real Estate Glossary of Terms
Looking for the definition of a real estate
term? Click on a letter of the alphabet below to go to that letter's
corresponding page of terms.
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Z LAND
- The surface of the earth extending down to the center and upward to the
sky, including all natural things thereon such as trees, crops, or water;
plus the minerals below the surface and the air rights above.
LAND
CONTRACT - Another name for an
installment purchase contract, by which the buyer obtains equitable title
(the right to use the property) while the seller retains legal title
(recorded title) as security for payment of the balance of the purchase
price.
LAND
DESCRIPTION - A description of a particular piece of real property.
LAND
LEASEBACK - A creative financing
device often used with raw land which a developer wants to improve, in which
the developer sells the land to an investor who leases the land back to the
developer under a long-term net lease and subordinates his fee ownership to
the lender providing development financing.
LAND,
TENEMENTS AND HEREDITAMENTS - A
feudal phrase used to describe all types of immovable realty including the
land, buildings and all appurtenant rights thereto.
LAND
TRUST - An association organized
by common owners of real property, which holds title to the real property in
the name of one or more trustees for the benefit of the owners, whose
beneficial interests may be represented by trust certificates.
LANDLOCKED - Real property having
no access to a public road or way.
LANDLORD - The lessor or the owner
of leased premises. The landlord retains a reversion interest in the
property so that when the lease ends the property will revert to the
landlord.
LANDMARK - A stake, stream, cliff,
monument or other object or feature which is used to fix or define land
boundaries; also a prominent feature of a landscape or property that is the
symbol for the place.
LANDSCAPING - Shrubs, bushes,
trees and the like, on the grounds surrounding a structure.
LATERAL AND SUBJACENT SUPPORT -
The support received by a parcel of real property from the land adjoining it
is called lateral support. Subjacent support is that support which the
surface of the earth receives from its underlying strata.
LAW
DAY - The date an obligation
becomes due; sometimes refers to the closing date.
LEASE
- A lease is both a contract between lessor (landlord) and lessee (tenant)
and a conveyance or demise of the premises by the lessor to the lessee. A
lease is a contract in that item bodies the agreement between the parties.
LEASEHOLD - A less-than-freehold
estate which a tenant possesses in real property.
LEGAL
DESCRIPTION - A description which is complete enough that an independent surveyor
could locate and identify a specific piece of real property.
LEGAL
NOTICE - That notice which is
either implied or required by law. Constructive notice under the recording
laws is also referred to as legal notice.
LEGAL
RATE OF INTEREST - The maximum
interest rate permitted bylaw, with anything above that rate being usury.
LESSEE - The person to whom
property is rented or leased; called a "tenant" in most residential leases.
LESSOR - The person who rents or
leases property to another. In residential leasing, the lessor is often
referred to as a landlord.
LESS-THAN-FREEHOLD ESTATE - An
estate held by one who rents or leases property. This classification
includes an estate for years, periodic tenancy, estate at will, and estate
at sufferance.
LETTER OF CREDIT - An agreement or commitment by a bank ("issuer") made at the request
of a customer ("account party") that the bank will honor drafts or other
demands of payment from third parties ("beneficiaries") upon compliance with
the conditions specified in the letter of credit.
LETTER OF INTENT - An expression of intent to invest, develop or purchase without
creating any firm legal obligation to do so.
LEVEL
PAYMENT MORTGAGE - A mortgage
which is scheduled to be repaid in equal periodic payments which include
both principal and interest.
LEVERAGE - The use of borrowed
funds to purchase investment property with the anticipation that the
property acquired will increase in return so that the investor will realize
a profit not only on his own investment, but also on the borrowed funds; the
employment of a smaller investment to generate a larger rate of return
through borrowing.
LICENSEE - A person who has a
valid license. A real estate licensee can be a salesperson or a broker,
active or inactive, an individual, a corporation, or a partnership.
LIEN
- A charge or claim which one person (lienor) has upon the property of
another (lienee) as security for a debt or obligation. Liens can be created
by agreement of the parties (mortgage) or by operation of law (tax liens).
LIFE
ESTATE - Any estate in real or
personal property which is limited in duration to the life of its owner or
the life of some other designated person.
LIMITED COMMON ELEMENTS - That
special class of common elements in a condominium reserved for the use of a
certain apartment(s) to the exclusion of other apartments.
LIMITED PARTNERSHIP - A partnership formed by two or more persons having as members one or
more general partners and one or more limited partners.
LINE
OF CREDIT - A maximum amount of
money a bank will lend one of its more reliable and credit worthy customers
without need for any formal loan submission.
LIQUIDATED DAMAGES - An amount predetermined by the parties to an agreement as the total
amount of compensation an injured party should receive in the event the
other party breaches a specified part of the contract.
LIQUIDITY - The ability to sell an
asset and convert it into cash at a price close to its true value.
LIS
PENDENS - A legal document
recorded in the Bureau of Conveyances, which gives constructive notice that
an action has been filed in either a state or federal court affecting a
particular piece of property. "Lis Pendens" is a Latin term which means
"action pending" and is in the nature of a quasi-lien.
LISTING - A written employment
agreement between a property owner and a broker authorizing the broker to
find a buyer or a tenant for a certain real property.
LITTORAL LAND - Land bordering on
the shore of a sea or ocean and thus affected by the tide currents.
LOAN
COMMITMENT - A commitment by a
lender of the amount he will loan to a qualified borrower on a particular
piece of real estate for a specified amount of time under specific terms.
LOAN-TO-VALUE RATIO - The ratio that the amount of the loan bears to the appraised value of
the property or the sales price, whichever is lower.
LOCUS
SIGILLI - Latin for "under seal",
used in the abbreviated form, "L.S.," at the end of signature line in some
formal legal documents; used instead of the actual seal.
LOSS
PAYEE - The person designated on
an insurance policy to be paid in case the insured property is damaged or
destroyed.
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