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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Realty Terms These terms are often used in real estate transactions. Though some terms may have other definitions, the definitions provided are those used in a real estate context.
A
Adjustment Date
Date agreed to by both parties of a real property transaction for the adjustment of property taxes, rent, interest, and other items.
Amortization
The number of years required to repay a loan through periodic payments of blended principal.
Appraisal
The estimated value of a legal interest in land.
Assessment
An appraisal usually for real property taxation purposes.
Assign
To transfer over to a different person (e.g. "I assign all rights, titles and interests in Vancouver to my wife.").
B
Bad Debt Allowance
An estimated amount of payments that may become uncollectable from the tenants of occupied units.
Balance Sheet
A financial statement listing assets, liabilities, and owner's equity at a specific point in time. Also known as a Statement of Financial Position or Statement of Assets and Liabilities.
Blended Payments
A loan repaid with equal and consecutive installments that includes both principal and interest.
Borrowers Qualifications
The process of determining the maximum amount that can be lent to a potential borrower, give their income and the lending value of the property to be purchased.
Breach of Contract
Failure without legal excuse to perform any promise which forms the whole or part of a contract.
Brokerage Fee
A fee charged by a mortgage broker for arranging a loan.
Builders' Lien
A claim registered against the title to land by a contractor, supplier of materials or workman with respect to work done or material supplied to improve that land.
C
Ceiling Price
The maximum price that a purchaser is willing to pay for a property. (See also: Floor Price.)
Closed Mortgage
A mortgage which cannot be fully paid out before expiry of its term without penalty. The interest rate is locked in for the entire term of the mortgage. Closed mortgages are usually for longer terms from six months to twenty-five years. With a closed mortgage, you usually get a lower interest rate than you would with a fixed-rate, open mortgage. (See also: Open Mortgage.)
Comparative Market Analysis (CMA)
An appraisal method which bases the value of the subject property on the price of similar properties which have sold recently.
Completion Date
Date on which the buyer's solicitor undertakes to the seller (or their solicitor) that they will pay the balance owing to the seller upon the Transfer of Title being accepted.
Condition
A fundamental term of a contract, a breach of which allows the injured party to terminate the contract and/or sue for damages or Specific Performance.
Contract
An agreement between two or more persons which creates an obligation to do or not to do a particular thing. This document is more than a receipt. A contract, when signed by all parties, is legally binding.
Contract of Purchase and Sale
A contract for the purchase or sale of land which contains the obligations of the seller and buyer.
Conveyance
The process of transferring an interest in land from one person to another by way of a transfer document. Conveyance usually refers to the transfer of title to land but also includes dealings such as assignments, leases, and mortgages.
Counter Offer
A statement by the recipient of the offer which has the legal effect of rejecting the offer and of proposing a new offer to the offeror (who then becomes the recipient of the "new" offer).
D
Deposit
An amount given to an agent by the buyer when an offer to purchase is made.
Disclosure Statement
A document prepared by the developer of a subdivision ensuring that investors or buyers have adequate information upon which to base a purchasing decision.
E
Easement
A limited right of use of another's land granted to another landowner for the benefit of their land. The land receiving the benefit is called the dominant tenement and the land granting the benefit is called the servant tenement.
Encroachment
A fixture, such as a wall or fence, which illegally intrudes into or invades on public or private property, diminishing the size and value of the invaded property.
Encumbrance
A judgment, mortgage or lien or any other claim which is registered against the title to the land.
F
Financial Statement
A numerical presentation of particular aspects of a business. Common financial statements include the Balance Sheet and the Income Statement.
Floor Price
The minimum price a seller is willing to accept for a property. (See also: Ceiling Price.)
Foreclosure
A legal action taken by a mortgagee to obtain possession of a property, by reason of the mortgagor's default in payment of the principal and/or interest of the mortgage debt.
G
Gross Lease
A lease in which the landlord pays for all the operating expenses. (See also: Net Lease, Triple Net Lease.)
Guarantor
One who becomes contingently or secondarily liable for another's debt or performance.
H
I
Improvement
A structural addition to land which can be considered to be a fixture.
Interest
The dollar value which represents the cost of borrowing or the benefit of lending money.
Interest Rate
The percentage rate that represents the cost of borrowing.
J
Joint Tenancy
Where two or more persons acquire an equal undivided interest in a property. When on person dies, that person's share automatically goes to the survivor or survivors.
K
L
Lending Value
The estimated value of a property for lending purposes. Lending value is a long-term, conservative estimate of the value of a loan's security as determined by the lender. Lending value may not equal Market Value or Sale Price.
Liability
Monies owed by a business or person. (See also: Asset.)
Lien
A claim or charge on real or personal property for payment of some debt, lien obligation, or duty.
Listing Agreement
A contract between an owner (seller) and a real estate licensee whereby the licensee agrees to try to find a buyer for the listed property in return for the seller paying a stipulated amount of commission should the licensee be successful.
M
Market Rate
The prevailing interest rate, at any given point in time, at which financing or refinancing can be expected.
Market Value (of a property)
In appraisal, the expected or forecasted sale price.
Maturity
The date on which the balance owing on a mortgage becomes due; the final day of the term of a mortgage.
Mortgage
A document evidencing a debt owed by the borrower (mortgagor) to the lender (mortgagee). Registration of the mortgage at a Land Title Office transfers the mortgagor's interest in land to the mortgagee as security for the repayment of the debt.
Mortgagee
The lender.
Mortgagor
The borrower.
N
Negligence
A legal term for the failure to use such care as a reasonably prudent and careful person would use under similar circumstances; the doing of some act which a person of ordinary prudence would not have done under similar circumstance.
Negligent Misrepresentation
A legal principle which provides that if, in the ordinary course of business, a person seeks information or advice form another who possesses special skills in circumstances in which a reasonable man would know that their special skills were being relied upon, and the person asked chooses to give the advice without clearly qualifying his answer so as to show that he does not accept responsibility if it is incorrect, then the advisor accepts a legal duty to exercise such care as the circumstances require. If the advisor is incorrect, he/she may be liable for their negligent misrepresentation.
Net Lease
A lease in which the tenant pays some or all of the operating expenses. (See also: Gross Lease, Triple Net Lease.)
O
Offer
A proposal to do or refrain from doing some specified thing usually followed by an expected acceptance, counter-offer, return promise or act. The person who makes the offer is called the offeror. The recipient of the offer is called the offeree.
Open Mortgage
A mortgage which may be fully paid out before expiry of its term without penalty. The interest rate may be variable or it may be locked in for the entire term of the mortgage. Open mortgages are usually for short terms from six months to two years. With an open mortgage, you usually pay a higher interest rate than you would with a closed mortgage. (See also: Closed Mortgage.)
Operating Expenses
The costs which must be incurred to keep a business operating. These costs may include fees for renting real property.
Option To Purchase
A right conferred by a contract to accept or reject an offer to buy property within a certain time.
P
Percentage Lease
A lease agreement which specifies that the tenant will pay the landlord: (i) a basic rent plus a percentage of gross sales or (ii) a basic rent or a percentage of gross sales.
Periodic Tenancy
A tenancy which automatically renews itself on the last day of the term for a further term of the same duration until terminated by either party.
Possession Date
Date on which a buyer is entitled to possession of a property.
Power of Attorney
A document conferring authority to one person to act as another's agent on his behalf.
Principal
That portion of the original amount borrowed which still has to be paid back to the lender.
Property Insurance
A guarantee to the registered owner or mortgagee of an interest in land that after a specified hazard (for example, a fire) the value of the interest in land will be restored.
Purchaser's Statement Of Adjustment
A closing statement in a real property transaction which indicates the balance of cash required from the buyer to complete the transaction.
Q
R
Real Estate Transaction
A term covering the sale of real estate, the negotiation and sale of loans on real estate, and property management.
Restrictive Covenant
An agreement limiting the use of the land of the Servant Tenement (covenantor) for the benefit of land belonging to the Dominate Tenement (covenantee). For example, a restriction on the height of a building on one piece of land so that adjacent or adjoining lands are not put in shadow.
S
Sale Price
Value in exchange; the price obtained in an actual transaction.
Specific Performance
The court, rather than granting damages in lieu of performance, orders that the terms of the contract be carried out by the party in default.
Stakeholder
Generally, a stakeholder is a third party chosen by two or more persons to keep money on deposit, the right to the money which may be contested between them.
Subject Property
The property to be appraised.
T
Tenancy Agreement
Contract between a landlord and tenant pertaining to the letting of residential premises.
Tenants in Common
Where two or more persons acquire interests in a single property. Each may sell or bequeath their interest and in the event of death, their interest becomes a part of their estate.
Term
With respect to mortgages, a time period at the end of which the outstanding balance of a mortgage is due and payable; the duration of the mortgage contract.
Trespass
A legal term for wrongfully entering, remaining on or placing something on another's land.
Triple Net Lease
A lease in which the tenant pays all operating expenses. (See also: Gross Lease, Net Lease.)
U
V
Vacancy Allowance
An estimate of the amount of rent that may be foregone because of unoccupied units.
Variable Rate Mortgage
A loan being repaid by payments which change as the market interest rate changes.
Vendor's statement of Adjustment
A closing statement that shows the net amount of proceeds to be received by the seller upon completion of a purchase transaction.
Vendor Take-Back Mortgage
A mortgage taken back by the seller from the buyer to facilitate a sale whereby the seller becomes the mortgagee and the buyer becomes the mortgagor.
Void Contract
A contract which never had any legal existence of effect and which is not capable of being enforced.
W
Wrap-Around Mortgage
A second mortgage, registered on title, which includes a prior existing mortgage. It may be written for an amount equal to the outstanding balance of the first mortgage or may also add additional funds creating a larger balance outstanding than currently exists. Payments under the new mortgage include the payments of the original mortgage. The new mortgagee undertakes the responsibilities as mortgagor under the original mortgage.
X
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