Real Estate Terms, Definitions, & Explanations
DEFINITIONS
Real Estate Terms and Definitions
Welcome to Schorr’s Law glossary! A source for real estate terms, definitions, and explanations. You may find the terminology used by industry professionals to be confusing or overwhelming. That is why we have created this glossary – to help you better understand the language of real estate and make informed decisions when it comes to your real estate needs and real estate disputes.
Our glossary is a valuable resource that covers a wide range of real estate terms, from basic concepts like “appraisal” and “mortgage” to more specialized terminology like “easement” and “title insurance.”
We strive to make our glossary user-friendly and easy to navigate, with clear definitions and examples of how each term is used in the context of real estate. For more information, you can often click through to a blog posts that goes into greater detail on the term, issue or concept.
So, whether you are looking to brush up on your real estate vocabulary or simply curious about the terminology used by industry and legal professionals, we invite you to explore Schorr’s Law glossary and deepen your understanding of this complex and dynamic field.
Glossary
A
- Asset Any valuable property owned by an individual or entity, including real estate, that can generate income or appreciate in value.
- Abstract of Judgment A post judgment lien against real property that the debtor currently owns, or may try to purchase in the future. This is recorded in the county recorder’s office in every county where the debtor may now own or later acquire property.
- Adverse Possession The legal process by which someone gains legal title to real property by the actual, open, hostile, and continuous possession of it and payment of taxes on it for 5 years.
- After-acquired Title Doctrine A legal principle that automatically transfers ownership of property acquired by a seller after the sale if the seller had earlier transferred rights they didn’t fully own at the time of the sale. In other words, it perfects a transfer of title that could not occur earlier because the transferor did not have title to convey.
- Appraisal An estimate of the fair market value of a property, typically conducted by a professional appraiser. There are different types of appraisals depending on what is being appraised and methodology.
- As Is A condition in which a property is sold without the seller making repairs or warranties about its condition. The buyer accepts the property in its current state. An “as is” sale does not eliminate a seller’s obligation to disclose known defects—people often confuse this point.
- Appreciation An increase in the value of a property over time.
- Arbitration A method of alternative dispute resolution in which the parties’ disputes are resolved through a private arbitration hearing in front of typically a retired judge. Similar to a court trial, witnesses and evidence are presented to a neutral arbitrator who acts in a similar capacity as a judge would in the trial.
- Assessment The process of determining the value of a property for tax purposes. The assessment can also be used to determine a property’s assessor’s parcel number.
- Attorney-in-fact A person legally authorized to act on behalf of another under a power of attorney, often in real estate transactions to sign documents or make decisions.
- Attornment A tenant’s formal acknowledgment of a new landlord, often occurring when property ownership changes.
B
- Beneficial Ownership The right to enjoy the benefits of ownership of property even if the legal title is in another name. This term is often used in the context of trusts, where the trustee holds the title, but the beneficiaries enjoy the use and benefits of the property. This is the true ownership interest either now or in the future.
- Beneficiary A person who inherits or benefits from a trust. It is someone for whose benefit a trust is created. A person or entity can be a beneficiary of a revocable trust, irrevocable trust, or even a deed of trust.
- Bona Fide Encumbrancer A person or entity that holds a legal interest in a property, such as a mortgage or lien, that was obtained in good faith and for valuable consideration. The term "bona fide" means genuine, sincere, or made in good faith, and an encumbrancer is someone who has a claim or lien against a property. This would be a lender who placed a lien on title without notice that there is some problem with the title.
- Boundary Disputes Disputes between neighboring owners of real estate concerning the property boundary lines and whether either owner has the right to extend beyond their legal property lines.
- Breach of Contract When one party fails to fulfill any of the obligations outlined in a valid contract without a legal excuse. In real estate transactions, contracts are commonly used for buying or selling property, leasing agreements, construction contracts, and property management agreements, among others.
- Broker A broker is the person the principal designates to buy or sell property in California. All real estate agents in California have to have a supervising broker in order to buy and sell real estate.
- Buyer’s Agent The agent in a real estate purchase and sale deal who represents the buyer. The buyer’s agent is often called the selling agent, which can be confusing. The agent actually selling the property is then called the listing agent.
- Buyer’s Agent The agent in a real estate purchase and sale deal who represents the buyer. The buyer’s agent is often called the selling agent, which can be confusing. The agent actually selling the property is then called the listing agent.
- Bylaws Bylaws are typically the covenants, conditions and restrictions in planned communities otherwise known as Home Owners Associations. Typically, a developer creates a series of rules (bylaws) that are recorded against the entire community as CC&Rs.
C
- Caveat Emptor A legal principle meaning "let the buyer beware," which places the responsibility on buyers to conduct due diligence before purchasing a property. In California, it really does not exist as sellers have certain statutory disclosure obligations.
- Claim of Right An assertion of ownership or rights over a property that is adverse to the interests of the true owner. In adverse possession claims, a person must demonstrate they have possessed the property under a claim of right, openly and notoriously, for a statutory period to acquire legal ownership.
- Cloud on Title A claim or encumbrance that affects the ownership of a property. It can be a lien, an easement, or a competing claim to ownership.
- Clear Title A property title free from liens, encumbrances, or legal disputes, ensuring the owner has full ownership rights.
- Color of Title A situation where someone has a document that appears to give them title to property, but the document is actually legally defective. It may refer to a claim to title that appears valid but may be legally insufficient due to a defect, such as a missing signature or improper recording.
- Contingent (status) A property listing status where the seller has accepted an offer, but its completion depends on specific conditions (e.g., inspections, financing) being met. Oftentimes contingent escrows depend on the sale of another property. For example, a buyer may make an offer to buy that is first contingent on the buyer selling their current property.
- Condemnation The legal process by which the government seizes private property for public use, typically through eminent domain. The government must pay for the property but sometimes the valuation becomes an issue.
- Conveyance The legal transfer of property ownership from one party to another, usually through a deed.
- Common Use Ownership A form of property ownership where multiple parties share the use and ownership rights of a property. This can apply to shared spaces in condominium complexes, co-ops, and certain types of easements where the property is used and maintained collectively by all owners. In theory, this could also refer to a type of co-tenancy.
- Community Property All of the assets acquired by a married couple during the marriage which are presumed to be owned equally upon divorce.
- Condominium (Condo) A type of housing where individual units are owned by residents, while common areas are shared.
- Covenants, Conditions, and Restrictions (CC&Rs) Rules governing a property or community, often set by a homeowners’ association (HOA) to maintain uniformity and property values. The CC&Rs are recorded in the county recorder’s office and bind property owners.
D
- Deed A legal document that transfers ownership of a piece of property from one party to another. It is a legal tool that is used when owners of real property transfer, sell or give real property to another (the grantee) by executing a writing instrument (the deed) that satisfies statutory requirements. There are various forms of deeds including quitclaim deeds, grant deeds, warranty deeds, and easement deeds.
- Deed of Trust A legal document in which the borrower (trustor) conveys a lien on a piece of property to a trustee as security for a loan from a lender (beneficiary).
- Dual Agent A real estate agent or broker who represents both the buyer and seller in a transaction, requiring full disclosure and consent from both parties. In California, even a common broker creates dual agency even if there are different agents on the sell and buy side of the transaction.
- Default Provision A contractual clause outlining conditions either party may face if they fail to perform their listed obligations.
- Deposition A pre-trial procedure where a witness undergoes sworn out-of-court testimony. This process is part of the discovery phase of litigation and allows attorneys to gather information and testimonies that may be used in court. This is the verbal questioning process.
- Dominant Tenement A parcel of real property that is benefitted by an easement over a neighboring property. This parcel benefits from the easement.
E
- Easement The non-exclusive right to use or access someone else's property for a specific purpose.
- Easement Appurtenant A type of easement that is attached to a specific piece of property and benefits another property.
- Easement by Necessity A type of easement that is granted when a property is landlocked and the owner needs access to a public road or utility.
- Easement by Prescription A type of easement that is acquired through open and continuous use for a certain period of time, without the owner's permission.
- Easement in Gross A type of easement that benefits a specific person or entity rather than a specific piece of property.
- Eminent Domain The power of the government or its agent to take private property for public use, with just compensation to the property owner.
- Encroachment A situation where a structure or improvement on one property extends onto an adjacent property without permission. Encroachments can include fences, buildings, driveways, or other structures and can lead to disputes and potential legal actions to resolve boundary issues.
- Encumbrance A limit on how the owner can use real estate. It can come in the form of a lien, lease, easement or other claim impacting title.
- Equitable Easement A type of easement established to address fairness and equity in specific situations where the court, sitting in equity, balances the relative hardships to the parties in deciding whether to allow an encroachment to remain. A key factor is that the party seeking the equitable easement cannot have been negligent in allowing the encroachment in the first place.
- Equitable Servitude In the context of real property, it describes a non-possessory interest in land that operates much like a covenant running with the land or like a restriction on the use of land.
- Equitable Title The right of a person to obtain full legal title to a property, even though the legal title is held by someone else. It represents a beneficial interest in the property, including the right to use and enjoy the property, receive the benefits of ownership (such as rental income), and sell or transfer the interest to another party. Imagine a situation where someone buys a property for your benefit but places title in their name in order to obtain a loan or a more favorable loan.
- Escrow A third party intermediary who holds documents, money, and or an asset such as real property until contractual conditions agreed upon by a grantor and grantee have been fulfilled. In real estate escrow typically holds the title to the seller’s real property until the buyer pays funds sufficient to purchase the property.
- Estoppel Certificate A signed and sword legal document from a tenant where the tenant declares their understanding of the present state of the tenancy. The document establishes the lease agreement from the tenant’s perspective. The tenant is then estopped or barred from contradicting this statement in the future.
- Eviction The legal process by which a landlord removes a tenant from a rental property.
- Exclusive Use Provisions A clause used in commercial leases to grant or prohibit a tenant from a specific use within a common property such as a plaza, or shopping center. The exclusivity provisions are used to limit the number or type of tenants who may be offering a particular product or service that may conflict with the interests of the common property, or another tenant. For example, a common exclusive use provision could be the right to sell coffee or have a coffee shop so as to prohibit other coffee shops from coming into the same business center.
- Estate The total sum of a person's real and personal property, often referenced in the context of inheritance and probate.
- Escheat A legal process where ownership of a property transfers to the state when the owner dies without a will and has no legal heirs. This process is not automatic.
F
- Fair Market Value The price that a property would sell for on the open market under normal conditions, with both the buyer and the seller being reasonably knowledgeable about the property and the transaction, and neither being under any pressure to buy or sell. It is an objective estimate of the property's worth based on factors such as its location, size, condition, and comparable sales in the area.
- Fiduciary Duty A duty owed by trusted advisors, agents and family members to the principal. The duty is generally the duty of the utmost care, to put yourself in the shoes of the person you owe the duty to, and to avoid any self dealing. This duty is common in real estate in that agents and brokers owe fiduciary duties to their clients.
- First in Time, First in Right Intervenor A legal principle that is often applied in real estate and property law. It means that when there are competing claims or interests in a property, the person or entity who first asserts their claim or interest has priority over others who assert their claims later, regardless of the strength or nature of the competing claims. This is part of California’s race-notice method of determining property rights.
- Foreclosure The legal process by which a lender takes possession of a property when the borrower defaults on their mortgage loan.
G
- General Warranty Deed A type of deed in which the grantor warrants that they have good title to the property and will defend it against any legal claims.
- Grant Deed A legal tool that “grants” an interest in real property to the grantee.
- Grantor The person or entity who conveys property by a deed.
- Grantee The person or entity to whom property is conveyed by a deed.
H
- Heggstad Petition A probate petition to add a property to a trust after a person dies with a trust but where an asset was inadvertently not placed in the trust.
- Home Inspection A legal tool that “grants” an interest in real property to the grantee.
- Homeowners Association (HOA) An organization of homeowners in a planned community or condominium development that is responsible for enforcing covenants and restrictions and maintaining common areas.
- Homestead Exemption This provides a certain amount of equity in a property that is immune from judgment collection provided certain formalities are observed by the debtor.
- Heir A person legally entitled to inherit property upon the death of its owner, typically under a will or state intestacy laws.
- Holdover Tenant A tenant who remains in a rental property after their lease has expired, continuing to occupy the space without the landlord’s formal approval or under a month-to-month arrangement.
I
- Implied Warranty A warranty that is not explicitly stated but is assumed to exist due to circumstances or the nature of the transaction. In real property certain deeds, like a grant deed, has an implied warranty that the grantor is conveying good title.
- Incurable Defect A significant issue with a property that cannot be feasibly repaired or rectified. This type of defect is typically severe enough that it cannot be remedied or fixed within reasonable cost or effort. Incurable defects are often disclosed to potential buyers during a real estate transaction because they can significantly impact the value or desirability of the property.
- Inequitable Conduct Actions that are considered unfair, deceptive, or unethical in the context of a real estate transaction. This can include a wide range of behaviors that violate principles of fairness or good faith in real estate dealings. Inequitable conduct in real estate can lead to legal disputes and may result in financial or legal consequences for the party engaging in such conduct. It is important for all parties involved in a real estate transaction to act honestly and ethically to avoid potential issues.
- Ingress/Egress The right to enter and exit a property, often referring to access rights over a neighboring property. These rights are typically dealt with via an easement where the property owner who needs ingress and egress - the right to come and go - is granted that right over a neighboring property.
- Inheritance The process by which ownership of real estate or other property is passed from a deceased person to their heirs or beneficiaries. This process is typically governed by the terms of the deceased's will or, in the absence of a will, by state intestacy laws.
- Inspection Contingency A clause in a purchase agreement that allows the buyer to have a property inspected by a professional inspector and themselves within a specified period, usually a few days after the offer is accepted. The purpose of the inspection contingency is to protect the buyer by giving them the opportunity to uncover any issues with the property and to negotiate repairs, request concessions before the sale is finalized or back out of the deal without penalty if there is something they discover during their inspections.
- Interested Party Any person or entity that has a vested interest in a real estate transaction or property. Interested parties can include buyers, sellers, agents, brokers, lenders, attorneys, and any other individual or organization directly involved in or affected by the transaction.
- Interpleader This is the process where a third party who is holding funds deposits those funds with the court so as to avoid being the middle man in the dispute between the two parties asserting ownership claims to the funds. For example, if two parties are fighting over funds held in escrow, escrow could choose to interplead the funds by having them deposited with the court.
- Interspousal Transfer Grant Deed A legal document used to transfer real property between spouses in California. This type of deed allows one spouse (the grantor) to transfer ownership of property to the other spouse (the grantee) without the need for consideration (payment).
- Intestate Dying without a valid will, resulting in property distribution according to state laws of intestacy.
- Intestate Succession The process by which property is distributed when a person dies without a valid will. State laws of intestacy determine the heirs and the distribution of the deceased's estate, typically prioritizing close relatives such as spouses, children, and parents.
- Inverse Condemnation A legal concept entitling a property owner to seek compensation when their property is damaged or its valuation is negatively affected by direct or indirect actions of a government agency or utility.
- Investment Property Real estate purchased with the intent of generating income or appreciation, rather than for personal use. All types of property have the potential to be investment property, it really just depends on what the owner is going to do with the property.
- Involuntary Lien A lien placed on property without the consent of the property owner, such as a tax lien or mechanic's lien. A lis pendens is also a type of an involuntary line.
- Irrevocable Trust A trust that cannot be modified or revoked by the grantor after it is established, often used in estate planning to pass assets to beneficiaries. Irrevocable trusts are somewhat rare because the person who creates the trust no longer owns the property. Transferring a property into an irrevocable trust can be a form of asset protection.
- Infrastructure The physical structures and facilities necessary for the functioning of a community or development. This includes essential services and facilities such as roads, bridges, water and sewer systems, electrical grids, and telecommunications networks. Improvements can be a part of a property’s infrastructure (typically in the commercial context).
J
- Joint Tenancy In California, this is a way of holding title to a property where two or more individuals own the property together with equal rights of ownership. The key to joint tenancy is that when one owner dies the remaining owners automatically receive the deceased person’s ownership interest in the property.
- Judgment A court determination of respective rights between parties that are enforceable through the court system. Even though it is a piece of paper it opens the door to collection steps and enforcement of judgment tools.
- Judgment Lien A lien placed on a property as a result of a court judgment, often used to enforce the payment of a debt. If the debtor does not pay, then the holder of the judgment lien may be able to foreclose on it.
- Jurisdiction The legal authority or power of a court or other governmental entity to make decisions and judgments over a particular geographic area or type of legal cases, including real estate matters. It determines which court or authority has the power to hear and decide a case.
- Just Compensation The fair market value of property that is taken by the government through eminent domain or condemnation, as required by the Fifth Amendment to the U.S. Constitution. This is often the subject of great debate when a property is subject to eminent domain.
K
- Key Money 1. Commercial Real Estate: In the context of commercial leases, key money is an upfront payment that a tenant might agree to pay to a landlord to secure a lease on a particularly desirable property. This term is more commonly used in some markets than others and can represent a premium paid for the right to lease a space, often in highly competitive or desirable locations.
2. Residential Real Estate (Especially in Certain International Markets): Key money can also refer to a non-refundable payment made by a tenant to a landlord or a previous tenant to secure a rental property. This practice is more common in some countries than others. For example, in Japan, “key money” (reikin) is a customary payment made to a landlord as a gesture of goodwill when renting an apartment or house. - Knowledge of Condition A legal principle in real estate that holds a seller responsible for disclosing known defects or issues with a property to potential buyers. If someone has knowledge of a condition that impacts the value of a property they have a duty to disclose it regardless of what their contract states.
L
- Landlocked A term used to describe a piece of property that has no access to a public road or utility.
- Lease A legal agreement between a landlord and tenant that gives the tenant the right to occupy a property for a specific period of time or periods of time in exchange for rent.
- Lot A defined parcel of land, often part of a larger subdivision, intended for residential or commercial development.
- Landlord An individual or entity that owns and leases property to tenants in exchange for rent.
- Lien A legal claim or encumbrance on a property used as collateral to secure a debt, such as a mortgage, tax lien, or mechanic’s lien.
- A detailed description that identifies a specific parcel of real estate in a way that distinguishes it from all other parcels. This description is used to legally identify and convey the property and is typically required in legal documents such as deeds, mortgages, and contracts. The legal description consists of metes and bounds typically done by a survey.
- Letter of Intent This is a deal points memo that is often used in commercial leasing and purchase and sale transactions where the parties begin to negotiate terms of the deal. It can be binding or non-binding.
- Lien A legal claim against a piece of property that must be satisfied before the property can be sold or transferred.
- Lis Pendens A legal notice that is recorded with the county assessor’s office, notifying the public that a lawsuit affecting the title to a piece of property is pending. The notice establishes the priority of the lawsuit and makes the property subject to the lis pendens typically not marketable for sale or refinance.
- Limited Warranty In real estate, a limited warranty deed conveys property with some warranties, but not all. Typically, it guarantees that the seller holds the title and has the right to sell the property, and that the property was not encumbered during the seller’s ownership, but it does not protect against any claims prior to the seller's period of ownership.
- Liquidated Damages A specific sum of money agreed upon by parties to a contract, which is designated as the total amount of compensation that will be payable in the event of a breach of contract. This predetermined amount is typically stated in the contract itself. The purpose of liquidated damages is to provide certainty and avoid disputes over the amount of compensation due in case of a breach.
- Litigation The process of taking legal action or resolving disputes through the court system. In real estate, litigation can involve disputes over property boundaries, title issues, landlord-tenant disagreements, contract breaches, and other related matters.
- Litigation Guarantee This is a title policy on a litigation. You can actually buy title insurance that provides litigant protection on the identification of lien holders on a property.
- Living Trust A legal arrangement where a property owner places assets, including real estate, into a trust during their lifetime, allowing for management and transfer of the property to beneficiaries without going through probate.
M
- Mechanics Lien A type of lien that can be recorded against a property by anyone who supplied labor or materials for the improvement of that property, to secure payment of a claim. When recorded, a mechanics lien has priority over any subsequent lien, mortgage, or trust deed.
- Mediation The use of a third party disinterested person to help the parties mutually agree upon a resolution of a dispute. Mediation is not-binding, meaning that there is no resolution of the dispute unless the parties all agree to resolve the dispute. Mediation typically takes place with a retired judge or an attorney.
- Mediator’s Proposal A suggestion or settlement offer made by a neutral third party, known as a mediator, to help resolve a dispute between two parties. The mediator is appointed to assist the parties in reaching a mutually acceptable agreement.
In a real estate context, a mediator's proposal may be used to settle disputes related to property transactions, landlord-tenant issues, boundary disputes, or other real estate matters. The proposal is typically based on the mediator's assessment of the strengths and weaknesses of each party's case and is intended to encourage the parties to reach a settlement. The way a mediator’s proposal works is the mediator makes a proposal to the parties in the dispute. The parties then have a deadline to accept the proposal. If either party fails to accept the proposal then there is no deal. The mediator does not communicate whether the other party accepted unless all parties accept and there is a settlement. - Metes and Bounds A method used in legal descriptions of real estate. It is a system that defines the boundaries of a property by describing its shape, boundary lines, and measurements. This method relies on physical features of the land, such as landmarks, distances, and directions, rather than lot numbers or subdivision names.
- Misrepresentation The act of providing false or misleading information about a property, either intentionally or unintentionally. This can include statements about the property's condition, features, or history that are not true or are intended to deceive. Misrepresentation can occur in various forms, such as providing inaccurate square footage measurements, hiding defects in the property, or misstating the property's boundaries. It is considered a serious issue in real estate transactions and can lead to legal consequences for the party responsible. In real estate deals a misrepresentation is generally the equivalent to fraud.
- Mortgage Amortization Paying off debt over a period of time in equal payments.
- Municipality A city.
N
- NHD Report A document that provides information about natural hazards that may affect a property. This report is typically required in real estate transactions in California and some other states. The NHD report discloses potential risks such as flood zones, earthquake fault zones, wildfire areas, and other natural hazards that could impact the property. It is intended to inform buyers about potential risks associated with a property so they can make an informed decision about purchasing it.
- Neighborhood A defined residential or commercial area within a city or town that shares common characteristics, amenities, or zoning regulations.
- Non-Conforming Use This is use that would not be allowed under current building guidelines but was allowed when the property was originally built under the then existing codes and guidelines. This is what is commonly referred to as “grandfathered in”.
- Notarize To certify or attest to the authenticity of a document and the identity of a person signing.. In order to have a document recorded at the County Recorder’s Office, the document must be notarized. Notaries are required to take an exam and they certify that the person signing is the true person through verification of their identity by signature, driver’s license and thumb print.
- Novation The substitution of a new contract or agreement for an existing one, often used in the context of assuming a mortgage. If there is a novation, a new person switches in for the contracting party usually with consent of all of the parties.
- Nuisance Anything that causes discomfort, harm, or obstructs the rights and free usage of property.
- Null and Void Anything that causes discomfort, harm, or obstructs the rights and free usage of property.
O
- Offer An offer is a formal attempt to enter a binding deal. For example, in residential real estate transactions the buyer will present an initial offer to buy a seller’s home.
- Offer and Acceptance The mutual agreement between a buyer and seller on the terms of a real estate transaction, forming a binding contract.
- Operating Expenses The ongoing costs associated with owning, operating, and maintaining a property. These expenses are distinct from capital expenses, which are costs incurred for the acquisition, improvement, or replacement of long-term assets. Common operating expenses include property taxes, mortgage payments and insurance.
- Option A contract that gives one party (the option holder) the right, but not the obligation, to buy or sell a property at a predetermined price within a specified period of time. The party granting the option (the optionor) is obligated to sell or buy the property if the option holder decides to exercise the option.
- Oral Agreement A contract or agreement between parties that is spoken and not recorded in writing. In real estate transactions, oral agreements are generally not recommended because they can be difficult to prove and enforce in court. In fact, the statute of frauds provides that real estate related contracts need to be in writing to be enforceable (subject to a few limited exceptions).
- Order for Possession A legal document issued by a court that instructs a person or party to vacate or give up possession of a property. This type of order is often used in landlord-tenant disputes, where a landlord seeks to regain possession of a rental property from a tenant who has breached the terms of the lease or rental agreement, such as by failing to pay rent or causing damage to the property. In California, the order for possession usually comes as a Writ of Possession.
- Ownership Rights The legal rights of possession, control, and use of real estate, including the right to sell, lease, or transfer ownership. In real estate we often refer to ownership rights as a bundle of rights.
P
- Partition Action A lawsuit that comes about when two or more owners of real property cannot agree on whether or how to sell the property.
- Pending (status) A property listing status where the property is in escrow but escrow has not closed.
- Property A broad term referring to anything owned by an individual or entity, including real estate and personal possessions.
- Personal Property Movable assets that are not permanently attached to real estate, such as furniture, vehicles, and equipment. Personal property is different from real property (land).
- Real Estate Land and any permanent structures on it, such as homes, buildings, or improvements.
- Power of Attorney A legal instrument designed to appoint and give someone authorization to act on your behalf in medical, financial, and other affairs.
- Principal (power of attorney context) The person who grants authority to an attorney-in-fact to act on their behalf through a power of attorney document.
- Precondemnation The period before a formal condemnation action is initiated by a government entity to acquire private property through eminent domain. During this phase, the government typically conducts studies, evaluations, and negotiations with property owners to assess the feasibility and impact of a potential project that would require acquiring the property.
- Probable Compensation The amount of money that an individual or entity is likely to receive as a result of a legal claim or dispute. This could include compensation for damages, losses, or injuries suffered, and is often determined based on various factors such as the severity of the harm, the extent of liability, and relevant legal principles. In legal contexts, probable compensation is an estimate of what a court or other adjudicating body may award to the claimant based on the evidence and arguments presented. We most typically see this term in eminent domain disputes.
- Puffing Exaggerated or extravagant statements made by a seller or agent about a property. These statements are subjective and not considered factual representations. Puffing is generally not illegal, as long as it does not involve misrepresentation or concealment of material facts. Examples of puffing include describing a property as "the best house on the block" or "a perfect family home." These are more flattering opinions as opposed to expressions of fact.
- Proposition 13 A California ballot measure passed in 1978 that significantly limited property taxes by restricting their annual increase to a maximum of 2% of the assessed value, unless the property is sold or undergoes significant improvement. The measure also requires a two-thirds majority vote in the state legislature to increase certain state taxes.
- Public Utility Easement Easements that are expressly dedicated for public utility purposes.
- Probate The legal process by which a person's will is proved to be valid and their assets are distributed according to the terms of the will.
Q
- Quarter Section A unit of land measurement equal to one-fourth of a section, or approximately 160 acres. This deals with surveying.
- Quiet Enjoyment The right of a tenant to use and enjoy leased property without interference from the landlord or others. This is an implied term in most leases.
- Quiet Title Action A legal process in which a property owner (Plaintiff) seeks to confirm, clarify, and “quiet” any competing claims to a specific real property or interest in that property by other parties (Defendants).
- Quitclaim Deed A document that is used to convey some interest in property from one person to another.
R
- Real Estate Land and any permanent structures on it, such as homes, buildings, or improvements.
- Real Estate Agent A licensed professional who represents buyers or sellers in real estate transactions. You can look up if a person is a real estate agent on the California Department of Real Estate website.
- Real Property Land and anything permanently attached to it, such as buildings, trees, minerals, and other improvements.
- Record of Survey A detailed map or plat that shows the boundaries, dimensions, and other physical features of a parcel of land. It is created by a licensed surveyor and is used to establish or reestablish the boundaries of a property. A proper record of survey is recorded at the county recorder’s office and subject to peer review.
- Recording The act of submitting a real estate document, such as a deed, mortgage, or lien, to the appropriate government office for official recording - the county recorder’s office. The purpose of recording is to provide public notice of the document's existence and to establish its priority among other similar documents.
- Rent Payment made by a tenant to a landlord in exchange for the right to occupy and use a property.
- Rent-back An arrangement where the seller of a property agrees to rent the property back from the buyer for a specified period of time after the sale has been completed. This arrangement allows the seller to continue occupying the property temporarily while transitioning to a new home or situation.
- Resident A person who lives in a specific property, whether as an owner, tenant, or occupant.
- Rescission The cancellation or annulment of a contract, such as a real estate transaction, typically due to a legal defect or failure to meet contractual obligations.
- Reverse Mortgage A type of loan that is generally procured by elderly homeowners where the lender makes payments to the borrower based on the value or equity in the borrower’s owner-occupied principal residence.
- Revocable Living Trust A legal instrument that you put your assets into and is administered for your benefit during your lifetime.
- Right of Survivorship A legal concept in joint property ownership where, upon the death of one owner, their share of the property automatically passes to the surviving co-owners. This is commonly seen in joint tenancy and tenancy by the entirety, avoiding the need for probate proceedings.
- Right of Way The legal right to pass through a property owned by another person, typically for access or utilities.
S
- Seller The individual or entity transferring property ownership to a buyer in exchange for payment.
- Seller Disclosure A legally required document in which a home seller provides information about known defects or issues with the property, ensuring transparency for potential buyers. In California, sellers often provide their disclosure via the Real Property Transfer Disclosure Statement and the Seller Property Questionnaire.
- Servient Tenement A parcel of real property subject to an easement or burdened with an easement.
- Sheriff’s Instructions When you get a judgment against a defendant the judgment is not self-executing. What that means is if the defendant does not voluntarily pay, the plaintiff has to take steps to enforce the judgment. One step is to get a writ from the court which allows the judgment creditor to go after money or property. After you obtain a writ, you then send the writ to the Sheriff’s office with instructions (Sheriff’s instructions) on what to do with the write. In other words, the Sheriff’s office becomes the enforcement agent of the court and the judgment creditor.
- Specific Performance A common remedy for a failed purchase and sale of real property.
- Successor A person or entity that follows another in ownership or interest in real estate property. For instance, when a property owner dies, their heir or beneficiary becomes their successor in owning the property.
- Survey A map used to define the boundary lines of a property based on the county records and legal descriptions of said property.
T
- Tenant A person or entity that leases or rents property from a landlord for residential or commercial use.
- Tenancy in Common It is an interest in real or personal property that is owned by several persons, though not in a joint ownership or in partnership.
- Time is of the Essence (Clause) This is a contract term that helps specify that the deadlines are hard fixed deadlines and cannot be moved. This is important if timely performance is needed.
- Title It is a legal term that signifies ownership of a property. It represents the bundle of rights that comes with owning a property, including the right to use, possess, transfer, and enjoy the property.
- Title Insurance A type of insurance that protects against financial loss from defects in the title to real property and from the invalidity or unenforceability of mortgage liens. It is meant to protect both property owners and lenders against loss or damage they might experience because of liens, encumbrances, or defects in the title to the property.
- Transfer on Death Deed A future conveyance that provides that a certain person will get the property upon their transferor’s death.
- Transmutation of Community Property Refers to the change in the character of property from community property to separate property.
- Trust An arrangement that creates fiduciary relationship to property that is held and administered by one party for the benefit of another.
- Trustee A trustee is an individual, or a firm that holds and administers property or assets, that have been set aside in a trust, for the benefit of a third party.
- Trustor A person or entity that creates a trust. In the context of real estate transactions, the trustor is often the property owner who transfers legal title to a trustee for the benefit of a beneficiary. The trustor is responsible for creating the trust agreement, which outlines the terms and conditions of the trust, including the powers and duties of the trustee, the rights of the beneficiary, and the distribution of the trust assets.
U
- Under Contract A stage in a property transaction where a seller has accepted an offer from a buyer, and both parties have signed a contract outlining the terms of the sale. At this point, the property is considered "under contract" until the closing process is completed.
- Unlawful Detainer A lawsuit initiated by a commercial or residential landlord where the landlord seeks to evict a tenant. The Unlawful Detainer court has the ability to process these claims on an expedited basis when possession of the property is still at issue.
- Unrecorded Deed An unrecorded deed is simply a deed that never gets recorded in the county recorder’s office. The deed is still effective but it may not establish priority and does not put the world on notice of its existence they way a recorded deed does. The failure to record a deed means that a subsequent purchaser can purchase or encumber the property often without being subject to the terms of the unrecorded deed if they do not otherwise have notice of it.
- Upzoning This is a change in zoning rights in a particular jurisdiction to increase the amount of development that is allowed - to broaden development rights.
- Utility Essential public services such as water, electricity, gas, sewage, and telecommunications necessary for property functionality.
V
- Variance A variance is an exception to the zoning law. This occurs where the owner can demonstrate a need for relief from the strict application of the zoning laws.
- Vendor A vendor in the real estate context is typically a seller of real estate - the seller themselves. A vendor in the construction context may simply be someone who worked on the property.
- Vested Rights A vested right is when the persons has an absolute right to do something or own something. This means that there are no conditions before you can exercise the right.
- Vesting Title This is how legal title is held and recorded at the county recorder’s office. There are many ways individuals, entities, trusts and other organizations can take title. The manner in which title vests often controls ownership rights.
W
- Walk-Through A final inspection of a property before closing to ensure that any agreed-upon repairs have been completed and the property is in the expected condition.
- Waiver Waiver is the intentional relinquishment of a known right. In the law, if someone waives something that means they give up the ability to enforce the thing that they have waived. In real estate deals, for example, a buyer usually waives a contingency. That means the buyer gives up the right to back out of a deal due to the thing the buyer waives.
- Will A type of instrument used to prepare when planning how to distribute your assets when you pass away.
- Write A written command in the name of a court or legal authority to act, or keep from acting, in some way.
X
- Xeriscaping A landscaping method that reduces or eliminates the need for irrigation by using drought-resistant plants and materials.
Y
- Yield The income generated by an investment property, usually expressed as a percentage of the property's value. In leasing it can deal with cap rates or returns on investment.
Z
- Zero - Lot Lines A zero lot line property is a property that has a physical structure built out all the way to the property line. In other words, zero lot line properties have no setbacks.
- Zoning Are a series of laws or ordinances that set forth how real property can be held and developed. For example a zoning designation of R(1) would generally mean that only single family homes are allowed. R(2) would allow for a duplex on a lot.
- Zoning Ordinance A set of laws and regulations that govern land use and development within a specific jurisdiction, typically including zoning districts, permitted land uses, and development standards.
- Zoning Variance A special permission granted by a local zoning authority to allow a property to be used in a way that is not permitted by current zoning regulations.
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