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CA Real Estate Principles Glossary


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A person who supervises the keeping of financial records pertaining to properties being managed. Generally more qualified than a bookkeeper.
Accredited Residential Manager (ARM)
A property management designation offered by the Institute of Real Estate Management (IREM).
Accredited Management Organization (AMO)
A property management designation offered by the Institute of Real Estate Management (IREM) to property management companies that meet prescribed high standards.
Administrative Assistant
A position that assists any of the executive or middle management personnel in the achievement of their job objectives.
Agricultural Land
Land used for farming purposes including growing crops and raising livestock.
The American Hotel and Motel Association the only trade association representing the lodging industry.
AIDA Formula
In marketing a formula for writing an ad that is designed to get maximum results. A=Attention I=Interest D=Desire A=Action.
Airport Hotel
A lodging accommodation to meet travelers' needs at the beginning or end of a journey. The modern ones include conference rooms fitness centers and restaurants.
All-Suite Hotel
A hotel offering full suites to its guests similar to a one-bedroom apartment.
American Land Title Association
A.L.T.A. Owner's Policy
American Land Title Association policy of extended title insurance
Abstract of Title
A full summary of all consecutive grants, conveyances, wills, records and judicial proceedings affecting title to a specific parcel of real estate
A person who, historically, searches out anything affecting the title to real property and summarizes the information in the findings
Acceleration Clause
A clause in a loan document describing certain events that would cause the entire loan to be due
An unqualified agreement to the terms of an offer
The acquisition of title to additional land or to improvements as a result of annexing fixtures or as a result of natural causes such as alluvial deposits along the banks of streams by accretion
Accommodation recording
I hand you herewith executed by-to which you are authorized to use in connection with the subject escrow. It is agreed that shall assume no responsibility in connection with recording of said- on my behalf as an accommodation to the undersigned. Affix $ documentary transfer tax (if a Deed) as total consideration is $-. Charge $-for transfer tax if applicable and for recordation of document.
A buildup of soil by natural causes on property bordering a river, lake or ocean
Accumulated over a period of time
Accrued Depreciation
The difference between the cost to replace the property and property's current appraised value
A signed statement, made before a notary public, by a named person confirming the signature on a document and that it was made of free will
A lawsuit brought to court
Actual Age
The real age of a building
Actual Depreciation
That depreciation occurring as a result of physical, functional or economic forces, causing loss in value to a building
Actual Notice
Knowledge gained based on an actual observance, as opposed to Constructive Notice
Additional Interest Due/Payoffs
The buyer and seller agree that disbursement of any payoffs for encumbrances being paid off at close of escrow must be received by the Lender by a specific date to avoid further accrual of interest. You are instructed to forward payoff funds to the lender and charge the appropriate account any fees at close of escrow. In the event the lender demands additional funds after the close of escrow buyer or seller agrees to deposit additional funds according to lender's instructions.
Ad Valorem
A Latin prefix meaning 'according to value.' Local governments levy real property tax based on the assessed value; property taxes are known as ad valorem taxes
Adjustable Rate Mortgage (ARM)
A loan which allows for the interest rate to adjust periodically in relationship to a predetermined index based on the maintenance of a pre-established margin
Adjusted Cost Basis
Original basis plus capital improvements and costs of the sale, less depreciation if income producing
Administrator / Administratrix
A person appointed by the court to handle the affairs of a deceased person when there is no one mentioned in a will to do so
Adverse Possession
Acquiring title to property by continued possession and payment of taxes
After Acquired Title
Any benefits that come to a property after a sale must follow the sale and accrue to the new owner
A relationship in which one party (principal) authorizes another party (agent) to act as the principal's representative in dealing with third parties
A person who acts for and in the place of another, called a principal, for the purpose of affecting the principal's legal relationship with third persons
Agency Relationship Confirmation
The following agency relationship is hereby confirmed for this transaction: The selling agent is the agent of the buyer exclusively; or seller exclusively; or both the buyer and seller.
Agreement of Sale
A contract for the sale of real property where the seller gives up possession, but retains the title until the purchase price is paid in full
Transfer ownership or sell
Alienation Clause
A clause in a loan document that would allow the lender to call the entire loan due upon the sale of the property
All-Inclusive Trust Deed
A purchase money deed of trust subordinate to-but still including-the original loan
Alluvial Deposit
Sand or mud, carried by water and deposited on land
Soil that builds up as a result of accretion
Amending Previous Instructions
These instructions supersede and amend any previous instructions in your escrow no.- relative to the terms set forth. These instructions shall be your authority to act as directed in your capacity as escrow agent.
Americans with Disabilities Act (ADA)
A law passed by Congress in 1990 requiring any business or public facility to be accessible to everyone including those with disabilities.
Americans with Disabilities Act Accessibility Guidelines (ADAAG)
A document which provides standards to be observed in the design, construction, and alteration of buildings that come under the jurisdiction of the ADA.
Annual Net Income
Also called net operating income the amount of income left from an income -producing property after all expenses have been deducted.
Annual Percentage Rate (APR)
The relationship of the total finance charge to the total amount to be financed as required under the Truth-in-Lending Act
An estimate or opinion of value supported by factual information as of a certain date
Appraisal Report
A written report stating an appraiser's estimate of a subject property's value
An increase in value
Those rights, privileges and improvements that belong to and pass with the transfer of real property but are not necessarily a part of the actual property
Arm's Length Transaction
A transaction, such as a sale of property, in which all parties involved are acting in their own self-interest and are under no undue influence or pressure from the other parties
Asbestos Hazard Emergency Response Act (AHERA)
A law passed by Congress in 1986 which amends the Toxic Substances Control Act (TSCA). It requires all public schools to be inspected for the presence of asbestos and to remedy the problem if it is likely to be hazardous to people's health.
Assessment Roll or Tax Roll
A list of all taxable property showing the assessed value of each parcel; establishes the tax base
Asset Manager
An executive who oversees the firm's real estate resources setting goals and strategies with ownership interests. Also called a portfolio manager.
The person to whom a claim, benefit or right in property is made
The transfer of a claim, benefit or right in property from one person to another
Assignment of Rents
An agreement between a property owner and the holder of a trust deed or mortgage by which the holder receives, as security, the right to collect rents from tenants of the property in the event of default by the borrower
The person transferring a claim, benefit or right in property to another
Assistant Manager (Hotel)
The manager who relieves the general manager of selected duties and interfaces with department heads.
Assumption Clause
A buyer takes over the existing loan and agrees to be liable for the repayment of the loan
Attorney Fees
If the buyer seller or broker brings an action to enforce his or her rights under this agreement including an action to recover commissions the prevailing party shall be entitled to receive from the defaulting party a reasonable attorney fee to be determined by the court or arbitrator.
Attorney in Fact
A competent and disinterested person who is authorized by another person to act in his or her place in legal matters
The sudden washing or tearing away of land by the action of water
Back-End Ratio
The ratio of all fixed debt including housing expenses to gross income.
Back- of-the -House
Operations of the hotel business that are preparatory in nature and take place behind the scenes out of the view of guests.
Balance Sheet
A report showing the assets of a business the liabilities and the net worth.
Balloon Payment
Under an installment loan, a final payment that is substantially larger than any other payment and repays the debt in full
Balloon Payment Clause
This note provides that the holder of this note shall give written notice to Trustor (borrower) of prescribed information at least 90 and not more than 150 days before any balloon payment is due.
Balloon Payment Disclosure
All parties agree that they have not received or relied upon any statements or representations made to them by the broker regarding availability of funds or rate of interest at which funds might be available when buyer is obligated to refinance or pay off the remaining balance of any loan which is part of this agreement.
Band of Investment
A method of determining the capitalization rate in which the return demanded by investment money in various positions is calculated and combined.
Banquet Director
The person in charge of all physical aspects of a banquet.
Base Line
A survey line running east and west, used as a reference when mapping land
Bed & Breakfast Inn
A lodging accommodation generally converted from a large house or hotel with personal service to offer a pleasant get-away experience.
Bell Captain
The second-ranking job in the service department in charge of the bellhops.
A service assistant in a hotel to usher guests to their rooms, carry baggage and offer other personal services.
The lender under a deed of trust
Beneficiary Statement
A statement of the unpaid balance of a loan and the condition of the debt, as it relates to a deed of trust
A gift of personal property by will; see legacy
Bilateral Contract
A contract in which each party to the contract promises to perform some act or duty in exchange for the promise of the other party
Bill of Sale
A written agreement used to transfer ownership in personal property
Blanket Loan
A loan secured by several properties
Block Busting
Causing panic selling by telling people that values in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities
Book Depreciation
An accounting concept which refers to an allowance taken to provide for recovery of invested capital
A person who keeps financial records on properties being managed.
Book Sale
A sale of real property to the state, in name only, when a taxpayer is delinquent in paying property tax
Book Value
The initial cost of the property plus capital improvements minus the total accrued depreciation
Money or any 'non-like' property put into a sale by an investor to balance the equities in a l03l tax deferred exchange; cash or mortgage relief in an exchange
Breach of Contract
A failure to perform on part or all of the terms and conditions of a contract
Listing broker, selling broker, cooperating brokers, and all sales persons.
Broker Buying As Principal
Seller acknowledges that buyer is a licensed real estate broker (salesperson) acting as a principal for his or her own account.
The occupation of a broker; the business of selling real estate through a broker who negotiates the sale for a commission
Broker Representing Both Parties
By placing their initials here: buyer and seller agree that the broker in this transaction represents all parties with the consent and knowledge of all parties.
Building Engineer
A position that inspects the structured components and the permanent systems of a building to ensure safety and compliance with all government regulations.
Bulk Transfer Law
The law concerning transfer in bulk (not a sale in the ordinary course of the seller's business)
Bundle of Rights
An ownership concept describing all the legal rights that attach to the ownership of real property
Business Cycle
The constant fluctuation of levels of income employment and the amount of goods and services produced in a given fiscal year.
Business Opportunity
Any type of business that is for lease or sale
Buyer's Market
A stage in the real estate market in which the ready willing and able buyer is in the minority and is in control of the market. A time of oversupply and decreased demand. Prices decline during this stage of the cycle.
Rules and regulations that govern the activities of a homeowner's association.
California Land Title Association
Calendar Year
Starts on January l and continues through December 3l of the same year
California Land Title Association
A trade organization of the state's title companies
Legitimate legal status to enter into a contract (not mentally incompetent nor under-age) one of the legal essentials of a valid contract.
Cap Rate
A term sometimes used when referring to capitalization rate
Capital Improvements
Any permanent improvement made to real estate for the purpose of increasing the useful life of the property or increasing the property's value
The process of calculating the present worth of a property on the basis of its capacity to continue to produce an income stream
Capitalization Rate
The desired rate of return on an income producing property expressed as a decimal or percentage indicating the relationship between the value and the income.
Cash Flow Statement
A report showing cash flow after distribution for various categories of expense.
Covenants conditions and restrictions placed on certain types of real property which limit the activities of owners.
The Comprehensive Environmental Response Compensation and Liability Act; a law passed by Congress in 1980. Establishes two trust funds to help finance the cleanup of properties that have been impacted by the release of hazardous wastes and substances. Commonly known as superfund.
Certified Apartment Maintenance Technician (CAMT)
A designation offered by the National Apartment Association (NAA).
Certified Apartment Manager (CAM)
A designation offered by the National Apartment Association (NAA).
Certified Apartment Property Supervisor (CAPS)
A designation offered by the National Apartment Association (NAA).
Certified International Property Specialist (CIPS)
A property management designation offered by FLABCI-USA.
Certified Leasing Specialist (CLS)
A designation offered by the International Council of Shopping Centers (ICSC).
Certified Manager of Community Associations (CMCA)
A designation offered by the Community Associations Institute (CAI).
Certified Marketing Director (CMD)
A designation offered by the International Council of Shopping Centers (ICSC).
Certified Property Manager (CPM)
The most advanced property management designation offered by the Institute of Real Estate Management IREM).
Certified Shopping Center Manager (CSM)
A designation offered by the International Council of Shopping Centers (ICSC).
Chain of Title
A chronological history of property's ownership
Personal property
Chattel Real
An item of personal property which is connected to real estate; for example, a lease
Classified Ad
A small ad designed to give basic information.
Clean Water Act
A law passed by Congress in 1972 to prohibit the discharge of pollutants into our natural waters.
A position in a hotel devoted to the detailed attention to one or more specific functions such as reservations or floor activities.
The person who employs an agent to perform a service for a fee
Closing Costs
On or before - or within- days of acceptance all parties shall deposit with Escrow Holder all funds and instruments necessary to complete the sale. Escrow fee to be paid by _ Documentary Transfer Tax if any to be paid by
A change in a will before the maker's death
Something of value given as security for a debt
Commercial Property
A property where commerce is conducted such as an office building or retail shopping center.
To deposit client funds in the broker's personal account
A commission is to be paid to the broker at the close of escrow as directed by the terms of the commission agreement.
Commission Split
The previously agreed upon division of money between a broker and sales-associate when the brokerage has been paid a commission from a sale made by the associate
Common Interest Developments (CIDs)
Real property developments that include common interests and shared common areas.
A term used by real estate agents and appraisers to mean comparable properties
Community Apartment Project
One type of CID in which the owner has an undivided interest in the land with the exclusive right to occupy a particular unit.
Community Center
A retail center anchored by a small department store and supported by up to 50 smaller stores. At least 5,000 households are usually needed to support a community center.
A method of determining the capitalization rate by looking to the operational capitalization rate of similar properties in the area.
Compliance Clause
A clause in a lease designating which party is responsible for complying with various laws.
An employee in a large hotel who makes special arrangements for guests such as procuring theater tickets.
Concurrent Recording
The closing of this escrow is contingent upon the concurrent closing of escrow no- . Neither escrow may close without the simultaneous closing of the other escrow.
A common name for eminent domain, or the right of the government to take private property from an owner for the public good, paying fair market value
A limiting restriction in the ownership of real property the violation of which could cause the owner to lose title or have his or her estate modified in some way
Condition Precedent
A condition which requires something to occur before a transaction becomes absolute and enforceable; for example, a sale that is contingent on the buyer obtaining financing
Condition Subsequent
A condition which, if it occurs at some point in the future, can cause a property to revert to the grantor; for example, a requirement in a grant deed that a buyer must never use the property for anything other than a private residence
A structure for either residential industrial or commercial use whereby the owner owns the interior airspace of the unit plus an undivided interest in the common areas.
Something of value-such as money, a promise, property or personal services
Constructive Notice
Recordation of deed or possession of property
Contingency (waived/satisfied)
Escrow holder is instructed that when the condition concerning has been (satisfied/waived) escrow holder is to proceed with the completion of this escrow. If the contingency is waived all parties should consent in writing.
Contract of Sale
A contract for the sale of real property where the seller gives up possession but retains title until the total of the purchase price is paid off
Contract Rent
The amount of rental income due from the tenant as agreed in the lease agreemen
Contractual Intent
Intention to be bound by an agreement, thus preventing jokes and jests from becoming valid contracts
Convention Hotel
A large hotel designed to accommodate thousands of guests for attendance at conferences.
The appropriation of property belonging to another
To transfer ownership or title
The transfer of title to land from one person to another by use of a written instrument
Corner Lot
A lot found at the intersection of two streets
Corrections and Deletions
Any corrections and deletions must be approved by all principals.
Court Confirmation
This escrow is subject to court confirmation. A certified copy of the court order confirming the transfer is to be recorded concurrently with or prior to the recording of other documents of the sale.
Represents expenses in money, labor, material or sacrifices in acquiring or producing something
Cost Basis
Usually the price paid for a property
The rejection of an original offer that becomes a new offer
A promise or assurance set forth in a written agreement allowing or disallowing certain activities on the part of the owner.
Cul-De-Sac Lot
A lot found on a dead-end street
A prospective buyer of real estate
Damage or Destruction Clause
A clause in a lease detailing how the partial or total destruction of the property would be handled between the parties to the lease.
Default Clause
A clause in a lease setting forth the lessor's remedies in the event of a default by the lessee.
The study of statistics relating to populations especially in the areas of demand for certain types of real estate.
Date of Acceptance
Means the date the seller accepts the offer or the buyer accepts the counter offer.
Decimal Point
The period that sets apart a whole number from a fractional part of that number
Declaration of Homestead
The recorded document that protects a homeowner from foreclosure by certain judgment creditors
Deed of Trust - Priority clause
This Deed of Trust is given to secure a portion of the purchase price of the subject property and is junior to a Deed of Trust in the amount of $_in favor of recording concurrently. OR This Deed of Trust is junior to that certain Deed of Trust for $_ in favor of _which recorded on as Instrument#_ Official Records of _County.
Deed of Trust Securing Installment Note Interest Included
A Deed of Trust to record executed by buyer securing an installment note for $_in favor of payable at _with interest from at the rate of _percent per annum principal and interest payable $_ or more on the day of each month beginning and continuing until at which time all principal and interest has been paid in full. At close of escrow escrow holder is instructed to list the interest rate accrual date first payment date and maturity date on the reverse of the executed note according to the instructions of the parties.
Failure to pay a debt or on a contract
Deferred Maintenance
Negligent care of a building
Deficiency Judgment
A judgment against a borrower for the balance of a debt owed when the security for the loan is not sufficient enough to pay the debt
Definite and Certain
Precise acts to be performed are to be clearly stated
A conveyance of an estate in real property to someone for a certain length of time, as in a lease; to let
Deposit Increase in Cash
Initial deposit to be increased to $- within days from acceptance of this agreement.
Escrow holder should note the form in which the deposit is received: Cash personal check certified check cashier's check.
Deposit Receipt
Also known as a sales contract; the primary document used to present an offer on real property
Loss in value from any cause
A rare stage in the business cycle following a recession characterized by extremely high unemployment and very little purchasing power.
A process where financial institutions that formerly had been restrained in their lending activities by the law are allowed to compete freely for profits in the marketplace
A gift of real property by will
Violating someone's right to fair housing opportunity on the basis of who they are such as characteristics of race color sex religion familial status marital status disability or national origin.
The process of depositors removing funds from savings
Display Ad
A large expansive ad that may use graphics and pictures to tell a more complete story.
A number to be divided by another number
A number by which another number is divided
Doctrine of Correlative User
Owner may use only a reasonable amount of the total underground water supply for his or her beneficial use
Dominant Tenement
The property that benefits from an easement
Door Attendant
An employee in a large hotel who assists guests through entrances and exits and keeps foot traffic moving.
Double Net Lease
An arrangement whereby the tenant pays the rent utilities property taxes special assessments and insurance premiums.
Downtown Hotel
An older hotel with a downtown location.
Dual Agent
An agent who represents both parties in a transaction
Due on Sale Disclosure
If there is a due on sale clause in any existing loan the lender may demand full payment of the entire loan as a result of this transfer. All parties agree that they are not relying on any representation by the other party or the broker about the enforceability of such a clause in existing notes or deeds of trust to be executed as a result of this sale. All parties have been advised by the broker to seek legal advise.
The use of force to get agreement in accepting a contract
The right to use another's land for a specified purpose, sometimes known as a right-of-way
Easement in Gross
An easement that is not appurtenant to any one parcel; for example, public utilities
Economic Life
The estimated period over which an improved property may be profitably used to yield a return
Economic Rent
What a leased property would be expected to rent for under current market conditions if the property were vacant and available for rent
Economic Rent Increase
An increase in rent prompted by a shrinking supply of comparable rental units in an area and the ability of tenants to afford the increase.
Related to real estate a study of the factors that cause people to prosper and create a viable demand for real property.
Effective Age
The years or age shown by the condition and utility of a structure, rather than its actual or chronological age
Effective Gross Income
Also known as adjusted gross income the income actually collected after deducting for collection losses.
Elevator Operator
Nearly obsolete an employee in a large period hotel who adds authenticity and keeps traffic moving.
Emancipated Minor
Someone who is legally set free from parental control/ supervision
Annual crops produced for sale
Eminent Domain
The right of the government to take private property from an owner, for the public good, paying fair market value
The placement of permanent improvements on adjacent property owned by another
Environmental Impact Report (EIR)
A study of how a development will affect the ecology of its surroundings
Environmental Protection Agency (EPA)
A federal agency estab-lished in 1970 to ensure the enforcement of the National Envi-ronmental. Policy Act (NEPA).
Equal Credit Opportunity Act
A federal law that requires lenders to assure that credit is available with fairness, impartiality and without discrimination
Equitable Title
The interest held by the trustor or vendee
The value remaining in a property after payment of all liens
Equity of Redemption
Also known as the right of redemption; the right of a debtor, before a foreclosure sale, to reclaim property that had been given up due to mortgage default
The gradual wearing away of land by natural processes
Escalation Clause
A clause in a lease that allows for rent increases based on the occurrence of a certain event.
The deposit of funds or documents with a neutral third party who is instructed to carry out the provisions of an agreement
Escrow Holder
An independent third party legally bound to carry out the written provisions of an escrow agreement; a neutral, bonded third party who is a dual agent for the principals; sometimes called an escrow agent
Escrow Instructions
Written directions, signed by a buyer and seller, detailing the procedures necessary to close a transaction and directing the escrow agent how to proceed
A legal interest in land; defines the nature, degree, extent and duration of a person's ownership in land
Estate at Sufferance
A tenancy created when one is in wrongful possession of real estate even though the original possession may have been legal
Estate at Will
The tenancy may be ended by the unilateral decision of either party; no agreed upon termination date, however, and either party must give 30 days notice before ending the tenancy
Estate for Years
A leasehold estate with a definite end date; must be renegotiated; commonly used for commercial leases
Estate from Period to Period
A leasehold estate that is automatically renewed for the same term; a conveyance for an indefinite period of time; does not need to be renegotiated upon each renewal; commonly a month to month rental
Estate in Fee
The most complete form of ownership of real property; a freehold estate that can be passed by descent or by will after the owner's death; also known as estate of inheritance or fee simple estate
Estate of Inheritance
See estate in fee
A legal doctrine which prevents a person from denying something to be true or a fact which is contrary to previous statements made by that same person
A set of principles or values by which an individual guides his or her own behavior and judges that of others
The legal process of removing a tenant from the premises for some breach of the lease
Exchange Reserving Right to
The buyer and seller agree to complete a 'like kind' tax deferred exchange under Section 1031 of the Internal Revenue Code and acknowledge that escrow holder has made no representations as to the sufficiency or effect of this exchange as it relates to Federal and State or Tax law.
Exchange Tax consequences
Escrow holder has recommended that buyer and seller obtain legal counsel as to the tax consequences and other effects of this transaction. Escrow holder shall be held harmless from any loss which buyer and seller may sustain in the event this transaction is audited and disallowed by the Internal Revenue Service as a tax deferred exchange.
Exchange: Agree To Cooperate
Buyer and seller agree to cooperate with each other in completing all documents required to effect their respective exchange. All parties agree that neither party is to be at any additional expense or liability in connection with the other party's tax deferred exchange.
To perform or complete; to sign
Executed Contract
A contract in which the obligations have been performed on both sides of the contract and nothing is left to be completed
Completion of an act or process, such as an escrow
Executive Manager
An executive who oversees the entire operation of a property management firm.
Executor / Executrix
A person named in a will to handle the affairs of a deceased person
Executory Contract
A contract in which obligation to perform exists on one or both sides of the contract
Existing Loans
within three (3) days of acceptance of this offer seller shall provide buyer with all notes and Deeds of Trust to be assumed or taken subject to and within five (5) days after receiving them buyer shall give approval or disapproval of the terms of the documents in writing. Seller shall submit a Statement of Condition on the above loan within three (3) days after buyer's acceptance. All loans in the transaction will be current at close of escrow as per seller warranty.

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