Glossary A – D

Glossary of commonly used real estate industry terms

ABATEMENT OF NUISANCE:
Extinction or termination of a nuisance.

ABSTRACT OF TITLE:
A condensed history or summary of all transactions affecting a particular tract of land. A complication in orderly arrangement of the documents of record affecting the title to a specific piece of land, issued under an abstractor"s certificate certifying to the matters contained therein. A history book of the subject property. Does not guarantee title.

ACCELERATION CLAUSE:
A clause in a contract by which the time for payment of a debt is advanced, usually making the obligation immediately due and payable, because of the breach of some condition, such as failure to pay an installment when due.

ACCEPTANCE:
The indication or manifestation by the party receiving an offer he is willing to be bound by the terms of the offer. ACCESS: The right to enter and leave a tract of land from a public way. Oftentimes the right to enter and leave over the lands of another.

ACCRETION:
An addition to land from natural causes. The slow buildup of lands caused by natural forces such as the ocean, rivers, wind or flow of water. ACCRUED DEPRECIATION: The difference between the cost of replacement new as of the date of the appraisal and the present appraised value.

ACCRUED ITEMS OF EXPENSE:
Those incurred expenses, which are not yet payable. The seller"s accrued expenses are credited to the purchaser on a closing statement. Example: taxes for that portion of the year during which the seller owned the property which are payable by the seller but not due yet.

ACKNOWLEDGEMENT:
A declaration made by a person to a notary public, or other public official authorized to take acknowledgments, that the instrument was executed by them and that it is their free and voluntary act.

ACRE:
A measure of land equaling 160 square rods, or 4,840 square yards, or 43,560 square feet, or a tract about 208.71 feet square.

ACRE FOOT:
A term used in measuring the volume of water, equal to the quantity of water required to cover one acre one foot in depth, or 43,560 cubic feet.

ACTUAL NOTICE:
Knowledge of a fact or occurrence acquired directly through information received or personal experience. See also, "notice" and "constructive notice".

ADDITIONAL ADVANCE:
An instrument evidencing an increase in the amount of a loan from what appears on the original Deed of Trust or Mortgage.

AD VALOREM:
According to valuation. Ad Valorem taxes on real property are based on the assessed value of the property. Latin meaning "according to value".

ADVERSE POSSESSION:
Possession of real property which is actual, hostile, open, notorious, exclusive, uninterrupted and continuous for the prescriptive period stipulated by state law. (In Colorado 18 years plus 2 years for disability.) Possessor usually has some claim or color of title, but does not have good record title.

AFFIDAVIT:
A statement or declaration reduced to writing and sworn to or affirmed before some officer who has authority to administer an oath or affirmation.

AFFIRM:
To confirm, to ratify and to verify.

AFTER-ACQUIRED TITLE:
Real property rights, which are acquired by the seller of the property after title to the property has been conveyed. Example: A defect in the chain of title may impair the title held by the apparent owner of a parcel. Subsequent to that owner"s conveyance by deed to another, a corrective instrument may be recorded which cures the defect, thereby conveying after acquired title to the former owner (and to the present owner, unless title was acquired by quit claim deed). NOTE: A Quit Claim Deed does not convey after-acquired title, but a Warranty Deed, Special Warranty Deed or Bargain and Sale Deed does.

AGENCY:
A legal relationship resulting from an agreement or contract, either, expressed or implied, written or oral, whereby one person, called the agent, is employed by another called the principal, to do certain acts in dealing with a third party on behalf of the principal.

AGENT:
Any person, partnership, association, or corporation authorized or employed by another, called the principal, to act for, on behalf of, and subject to the control of the latter.

AIR RIGHTS:
The rights of an owner of a real property to use the air space above the physical surface of the land.

AKA:
"Also known as" - if a person has some interest in real property by one name, but also uses another name - i.e.; MARY JONES aka MARY HARDING JONES.

ALTA:
American Land Title Association. An Association of title insurance companies, abstractors, and attorneys specializing in real property law, which speaks for the title insurance and abstracting industry and established standard title policies and procedures, with headquarters in Washington, D.C.

ALIENATION:
The transferring of property to another; the transfer of property and possession of lands, or other things, from one person to another.

ALLODIAL TENURE:
A real property ownership system where ownership may be complete except for those rights held by government. Allodial is in contrast to feudal tenure.

ALLUVION (ALLUVIUM):
Soil deposited by accretion. Increase of earth on a shore or bank of a river.

ALTA/TITLE POLICY (AMERICAN LAND TITLE ASSOCIATION):
A type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy to include unrecorded mechanic"s liens; unrecorded physical easements; facts a physical survey would show; water and mineral rights; and rights of parties in possession, such as tenants and buyers under unrecorded instruments.

AMENITIES:
In real estate, amenities refer to such circumstances, in regard to location, outlook or access to a park, lake, highway, view, etc., which enhance the pleasantness or desirability of real estate, and which contribute to the pleasantness or desirability of real estate, and which contribute to the pleasure and enjoyment of the occupants.

AMORTIZATION:
The liquidation or gradual retirement of a financial obligation by means of systematic payments over a specific period of time. Also, recovery, over a period of time, of cost or value.

AMORTIZED LOAN:
A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. Also called a Level Payments Loan.

AMORTIZATION SCHEDULE:
A chart or table, which sets out the amount of the payments, interest and principal, and the balance on the loan after the payment has been made.

ANNUAL PERCENTAGE RATE (APR):
All finance charges, interest, points, and other fees computed over the term of the loan. APR must be disclosed to the borrower as a result of the Federal Government"s "Truth In Lending" Laws. "Regulation Z" requires that when a real estate loan is made to a natural person and not for business purposes, the APR must be disclosed.

ANNUITY:
A series of assured equal or nearly equal payments to be made over a period of time or it may be a lump sum payment to be made in the future. The installment payments due to the landlord under a lease are an annuity. So are the installment payments due to a lender. In real estate finance, we are most concerned with the first definition.

APPRAISAL:
An estimate of the quality or value of property; the process by which conclusions on the value of property are obtained; also refers to the report setting forth the estimate of value together with the basis for such conclusions.

APPURTENANCE:
Improvements, rights and privileges which are not necessarily a part of actual real property, but which are normally conveyed with the real property, i.e., buildings, rights of way, easements.

ARBS:
Arbitrarily assigned numbering systems to quickly identify parcels or tracts of land, which have no other easy means of identification. (i.e., metes and bounds parcels subdivided out of a large tract of land.)

ARREARS:
Items paid after the end of the period for which they are due, such as taxes for last year are paid this year; interest is paid on the loan payment for the month past.

ASSESSED VALUE:
The value of real property estimated for the purpose of computing real property taxes.

ASSESSMENT:
The imposition of a tax, charge or levy, usually according to established rates. Special Assessment: A charge against real property made by a unit of government to cover the proportionate cost of an improvement, such as a street or sewer.

ASSESSOR:
A public official who evaluates property for the purpose of taxation.

ASSIGNMENT:
A transfer of some right, title or interest by one person or entity (assignor) to another (assignee). Assignments of Deed of Trust, leases, options, contracts, and other items are seen in a chain of title.

ASSIGNOR:
One who assigns or transfers property, real or personal

ASSIGNEES:
Those to whom property rights title or interests shall have been transferred.

ASSIGNMENT OF RENTS:
Additional security taken usually in connection with a mortgage or deed of trust which pledges any income from rent or leases in addition to the actual property.

ASSUMPTION AGREEMENT:
An agreement by one party to assume liability for payment of a debt or obligation primarily resting upon another person. Example: A buyer of real property may assume the existing mortgage previously given by the seller.

ASSUMPTION FEE:
A lender"s charge for changing over and processing new records for a new owner who is assuming an existing loan.

ASSUMPTION OF MORTGAGE:
The taking of title to property by a grantee, wherein he/she assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property; becoming a co-guarantor for the payment of a mortgage or deed of trust note.

ATTACHMENT:
A type of lien, permitted only under special circumstances, which is placed against the real estate of a defendant in a pending law suit for money damages. Legal seizure of property to force payment of a debt.

ATTEST:
To affirm that a fact of document is true or genuine; an official act establishing authenticity.

ATTORNEY IN FACT:
One who holds a Power of Attorney from another allowing them to execute legal documents such as deeds, mortgages, etc., on behalf of the grantor of the power. Power of Attorney may be limited to a specific act or acts, or it may be a general Power of Attorney.

ATTORNEY"S OPINION:
In real estate, the written opinion of an attorney at law regarding the marketability of title to real property based upon an examination of the abstract of title or the records in the County Clerk Recorder"s Office.

BACKFILL:
The replacement of excavated earth into a hole or against a structure.

BALLOON PAYMENT:
When credit is advanced by note or contract and payment is required in regular equal installments and the note or contract will mature before the note is paid in full, a payment, which may be larger than the regular payment, will fall due. This larger payment is called a "balloon payment".

BANKRUPT:
A person who, through a court proceeding, is relieved for the payment of all his debts after surrender of all assets to a court appointed trustee.

BARGAIN AND SALE DEED:
Any deed that recites a consideration and purports to convey the real estate; By Colorado statute, a deed, which contains no warranties of title but does convey after acquired title.

BAR STANDARDS: 
(Title Standards): Rules or standards promulgated by the Colorado Bar Association to resolve problems of title examination for which there is no statutory solution.

BASE AND MERIDIAN:
Imaginary lines used by surveyors to find and describe the location of private or public lands.

BASELINE: 
Imaginary east-west lines that intersect meridians to form a starting point for the measurement of land.

BASIS: 
The original cost of a property, plus capital expenditures for improvements, minus depreciation. Basis is the means by which the Internal Revenue Service determines taxable gains, losses and annual depreciation.

BEARING WALL OR PARTITION: 
A wall or partition supporting any vertical load in addition to its own weight.

BENCH MARK: 
A mark on a permanent object indicating elevation and serving as a reference in land surveys.

BENEFICIARY: 
The person who receives or is to receive the benefits resulting from certain acts; one receiving benefits, profits or advantage; one for whose benefit a trust is created, the title of which is vested in a trustee. The lender on the security of a note and deed of trust.

BEQUEATH: 
To leave personal property to another by will, as a bequest. To give or hand down by will.

BEQUEST:
That which is given by the terms of a will.

BETTERMENT: 
An improvement upon property which increases the property value and is considered as a capital asset as distinguished from repairs or replacements where the original character or cost is unchanged.

BILL OF SALE:
A written instrument by which one person transfers or conveys right, title or interest in personal property to another.

BINDER:
A title binder is a title commitment. An insurance binder for hazard insurance gives immediate hazard insurance protection until a policy can be issued. Also, an agreement to consider a down payment for the purchase of real estate as evidence of good faith on the part of the purchaser.

BLIGHTED AREA:
A declining area in which real property values are seriously affecting by destructive economic forces, such as encroaching inharmonious property usages, infiltration of lower social and economic classes of inhabitants, and/or rapidly depreciating buildings.

BONA FIDE:
In good faith, without fraud.

BOND:
An obligation under seal. (A real estate bond is a written obligation issued on security of a mortgage or deed of trust).

BREACH:
The breaking of a law, or failure not clear to perform a duty owed to another, either by omission or commission.

BROKER:
A person employed by another for a fee to carry on any of the activities listed in the license law definition of a broker, including selling, buying, leasing or negotiating the sale of real property.

BUILDING CODE:
A systematic regulation of construction of buildings within a municipality established by ordinance of law.

BUILDING LINE:
A line set by law a certain distance from a street line in front of which an owner cannot build on his lot. (A setback line).

BUILDING, MARKET VALUE OF:
The sum of money, which the presence of that structure adds to or subtracts from the value of the land it occupies. Land valued on the basis of highest and best use.

BUNDLE OF RIGHTS:
The legal rights or interests that an owner holds in a property. The right to control, use, possess, enjoy and dispose of real or personal property.

BUREAU OF LAND MANAGEMENT: (BLM): 
The government agency in charge of surveying and administering public lands.

CAPITAL GAIN: 
Income from a sale of an asset rather than from the general business activity. Capital gains are generally taxed at a lower rate than ordinary income.

CASH FLOW:
The net income generated by a property before depreciation and other non-cash expenses.

CAVEAT EMPTOR: 
Let the buyer beware. The buyer must examine the goods or property and buy at his own risk.

CENTER OF INFLUENCE:
One, who, by the nature of his relationships, is in a position to sway others.

CERTIFICATE OF REASONABLE VALUE:
Commonly referred as a "CRV". Veteran"s Administration"s certified appraisal of value of real property.

CCR"S:
Abbreviation for covenants, conditions and restrictions.

CERTIFICATE OF SATISFACTION:
A certificate issued by the Clerk of the Court certifying that a judgment has been satisfied.

CERTIFICATE OF TAXES DUE:
A written statement of guaranty of the condition of the taxes on a certain real property, made by the County Treasurer of the County wherein the property is located. (Any loss resulting to any person from an error in a tax certificate shall be paid by the county which such treasurer represents.) True?

CHAIN:
A unit of measurement used by surveyors. A chain consists of 100 links equal to 66 feet.

CHAIN OF TITLE:
A term applied to the past series of transactions and documents affecting the title to a particular parcel of land. A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available.

CHATTEL:
Any item of property other than real estate, usually referred to as personal property; an item of movable property.

CHATTEL MORTGAGE:
A claim on personal property (instead of real property) used to secure or guarantee a promissory note. (See definition of Security Agreement and Security Interest).

CHATTEL REAL:
An estate related to real estate, such as a lease on real property.

CHECK: See "QUADRANGLE".

CLEAR TITLE:
One which is not encumbered or burdened with defects.

CLOSING STATEMENT:
An accounting of funds made to the buyer and seller separately. Required by law to be made at the completion of every real estate transaction. Itemizes all funds received from or credited to and all payments made or debited to the party for whom the statement is prepared.

CLOUD IN TITLE:
An outstanding claim or encumbrance, which, if valid, would affect or impair the title of the owner of the real property.

COGNOVIT NOTE:
Note containing a confession of judgment by the borrower.

COLLATERAL SECURITY:
Often called simply "collateral". In banking parlance, it means some security given in addition to the personal obligation of the borrower, as a chattel mortgage or deed of trust.

COLLUSION: 
An agreement between two or more persons to defraud another of his rights by the use of lawful means, or to obtain an object forbidden by law.

COLOR OF TITLE:
That which appears to be good title but which is not title in fact. Example: A deed from a party, which was not entitled to convey the property.

COLORADO ASSOCIATION OF REAL ESTATE BOARDS:
The state association of real estate sales personnel whose goal is the professional advancement of the real estate industry and whose membership is comprised of the local real estate boards. Often abbreviated as CAR.

COMMERCIAL ACRE: 
A term applied to the remainder of an acre of newly subdivided land after the area devoted to streets, sidewalks and curbs, etc. has been deducted from the acre.

COMMINGLING: 
Mixing money belonging to others with personal or business funds.

COMMITMENT TO INSURE: 
A report issued by a title insurance company, or its agent, showing the condition or the title and committing the title insurance company to issue a form policy as designated in the commitment, upon compliance with and satisfaction of requirements set forth in the commitment.

COMMON LAW: 
The principles and rules of law, originating from usage and custom, sanctioned by the courts, which are not dependent upon legislative expression or enactment for their authority; also that body of law, based on custom and usage, developed and formulated by the old English courts.

CONDITIONAL SALE CONTRACT: 
A contract for the sale of property stating that delivery is to be made to the buyer, title to remain vested in the seller until the conditions of the contract have been fulfilled.

CONDOMINIUM:
A system of individual fee ownership of units in a multi-unit structure, combined with joint ownership of common areas of the structure and the land.

CONDOMINIUM DECLARATION: 
A declaration describes condominium ownership. It commits the property to condominium development, defines the complex and the air spaces, the general common elements and limited common elements and establishes the basic rights and obligations of the owners. In addition, it provides for the creation of a management association with the authority to collect common expenses and otherwise act for the benefit of all owners. It makes it possible for the assessor to tax each unit separately.

CONFIRMATION OF SALE:
A court approval of the sale of property by a Personal Representative, Guardian or Conservator.

CONFISCATION:
The seizing of property without compensation.

CONSERVATION: 
The process of utilizing resources in such a manner as to minimize depletion.

CONSERVATOR/CONSERVATRIX: 
A person appointed by the court to protect and preserve the lands and property of an individual physically incapacitated or otherwise not able to handle his own affairs.

CONSIDERATION: 
One of the essential elements of a contract; a promise or an act of legal value bargained for and received in return for a promise.

CONSTANT: 
The percentage which, when applied directly to the face value of a debt, develops the annual amount of money necessary to pay a specified net rate of interest on the reducing balance and to liquidate the debt in a specified time period. For example, a 6% loan with a 20-year amortization has a constant of approximately 8½%. Thus, a $10,000.00 loan amortized over 20 years requires an annual payment of approximately $850.00. CONTRACT: An agreement, enforceable at law, between two or more competent persons, having for its object a legal purpose, wherein the parties agree to act in a certain manner.

CONTRACT FOR DEED: 
An agreement to sell and purchase, under which title is withheld for the purchaser until such time as the required payments to the seller have been completed. Commonly referred to as an Installment Land Contract.

CONSTRUCTION LOANS:
Loans made for the construction of homes or commercial buildings. Usually funds are disbursed to the contractor-builder during construction and after periodic inspections. Disbursements are based on an agreement between borrower and lender.

CONSTRUCTIVE EVICTION: 
Breach of a covenant of warranty or quiet enjoyment, i.e., the inability of a lessee to obtain possession because of a paramount defect in title, or a condition making occupancy hazardous.

CONSTRUCTION MORTGAGE OR DEED OF TRUST: 
A short-term mortgage or deed of trust used to finance the building of a structure.

CONSTRUCTIVE NOTICE:
Often called "legal notice"; the conclusive presumption that all persons have knowledge of the contents of an instrument recorded in the office of the county clerk and recorder.

CONTOUR: 
The surface configuration of land.

CONVENTIONAL MORTGAGE OR DEED OF TRUST: 
A mortgage or deed of trust securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed.

CONVERSION: 
Change from one character or use to another. Example: Apartment house converted to Condominiums.

CONVEY: 
The act of deeding or transferring title to another.

CONVEYANCE: 
An instrument in writing by which some estate, interest or title in real estate is transferred for one person to another such as a deed or mortgage or deed of trust.

COOPERATIVE OWNERSHIP: 
A form of apartment ownership. Ownership of shares in a cooperative venture, which entitles the owner to use, rent or sell a specific apartment. The corporation usually reserves the right to approve certain actions such as a sale or improvement (distinguish condominium ownership).

COORDIANATE SYSTEM: 
A method of land description using measurements from an intersection of a defined north-south axis and a defined east-west axis.

CORPORATION: 
A group or body of persons established and treated by law as an individual or unit with rights and liabilities or both, distinct and apart from those of the persons composing it. A corporation is an entity having certain powers and duties of a natural person. Being created by law, it may continue for any length of time the law prescribes.

CORPOREAL RIGHTS: 
Possessory rights in real property.

CORRECTION LINES: 
A system of compensating for inaccuracies in the Government Rectangular Survey System due to the curvature of the earth. Every fourth township line, 24 mile intervals, is used as a correction line on which the intervals between the north and south range lines are re-measured and corrected to a full six miles.

COST:
A historical record of past expenditures, or an amount, which would be given in exchange for other things.

COTERMINUS: 
Adjacent; adjoining; having a common boundary.

COURSES AND DISTANCES:
A method of describing or locating real property. This description gives a starting point and the direction and length of lines to be run, practically indistinguishable for metes and bounds description.

COVENANTS:
An agreement written into deeds and other instruments promising performance or non-performance of certain acts, or stipulating certain uses or non-uses of the property.

CUBIC FOOT PER SECOND: 
A unit of discharge for measurement of flowing liquid, equal to a flow of one cubic foot per second past a given section. Also called Second-Foot.

CUL DE SAC: 
The terminus of a street or alley. Usually laid out by modern engineers to provide a circular turn around for vehicles. A passage way with one outlet. Streets in newer subdivisions are sometimes built in cul-de-sac fashion.

CURTESY:
An interest in the lands of a wife allowed to a husband by force of law. A common law estate in land given to the husband upon his wife"s death, consisting of a life estate in all the property owned by the wife during the marriage, provided a child was born alive from their marriage. It is a life estate created by law. Abolished in Colorado.

DAMAGES: 
The amount of compensation recoverable by a person who has sustained an injury, either in his person, property or relative rights, through the act or default of another.

DBA: 
"Doing Business As". John Doe dba "Joe"s Sporting Goods". Note: Usually will have filed a Trade Name Affidavit reciting the John Doe is doing business under the assumed name of "Joe"s Sporting Goods". DEBENTURE: Bonds issued without security.

DEBTOR: 
This is the party who "owns" the property, which is subject to the Security Interest. Previously he/she was known as the mortgagor or the pledgor, etc…

DECREE OF FORECLOSURE: 
Decree by a court in the completion of foreclosure of a mortgage, contract, deed of trust or other liens.

DEDICAITON: 
An appropriation of land to some public use, made by the owner, and accepted for such use by or on behalf of the public, such as streets in a platted subdivision. A designation by the owner that property is deemed to be public property.

DEED: 
A legal instrument in writing, duly executed, and delivered, whereby the owner of real property (grantor) conveys to another (grantee) some right, title or interest in or to real estate. A written document by which the ownership of land is transferred for one person to another.

DEED IN LIEU OF FORECLOSURE: 
A deed for a debtor to a lender conveying title to real property given by the debtor as collateral to secure a mortgage or deed of trust for the benefit of the lender, on which obligation the debtor is in default. The deed is given in consideration of the lender"s cancellation of the debtor"s obligation in lieu of statutory or judicial foreclosure proceedings.

DEED RESTRICTION: 
A provision in a deed controlling or limiting the use of the land.

DEED OF TRUST: 
The recorded document, which secures a loan to the owner of the property. In Colorado given to the Public Trustee (second party) of the county in which the property is located for the benefit of the lender (secured party). Similar to a mortgage.

DEFAULT: 
The non-performance of a duty; the omission or failure to perform a legal duty; failure to meet an obligation when due.

DEFEASANCE CLAUSE: 
The clause in a mortgage that gives the mortgager the right to redeem his property upon the payment of his obligations to the mortgagee.

DEFEASIBLE FEE: 
Sometimes called a base fee or qualified fee; a fee simple absolute interest in land that is capable of being defeated or terminated upon the happening of a specified event.

DEFERRED MAINTENANCE: 
Existing but unfulfilled requirements for repairs and rehabilitation.

DEFERRED PAYMENT OPTIONS: 
The privilege of deferring income payments to take advantage of the tax statutes.

DEFICIENCY JUDGEMENT: 
A judgment given when the value of security pledged for a loan does not satisfy the debt upon its default.

DELIVERY: 
The final and absolute transfer of a deed from seller to buyer in such a manner that the seller cannot recall it. A necessary requisite to the transfer of title.

DEPRECIATION: 
Loss of value in real property brought about by age, physical deterioration or functional or economic obsolescence. Broadly, a loss in value from any cause.

DESIST AND REFRAIN ORDER: 
An order directing a person to desist and refrain from committing an act in violation of the real estate law.

DEVISE: 
A gift of real property by the last will and testament of the donor. The disposition of land by will. A term used for land alone and never for personal property.

DEVISEE: 
One who receives a bequest made by will.

DEVISOR:
One who bequeaths by will.

DISCOUNT: 
An amount deducted in advance from the principal before the borrower is given the use of the principal.

DISPOSSESS: 
To deprive one of the uses of real estate.

DOCUMENTARY FEE: 
A Colorado state law requiring a fee of one cent for each one hundred dollars of consideration paid by the person recording an instrument of conveyance to the Clerk and Recorder.

DOWER: 
An interest in the lands of a husband allowed to a wife by force of law. A common law estate in land given to the wife in her husband"s real property upon his death, consisting of a life estate in one-third of all the real estate owned by the husband during the marriage. Abolished in Colorado.

DURABLE POWER OF ATTORNEY: 
A power of attorney, which is not affected by the disability of the person giving the power to his attorney in fact (must be specifically recited in the power of attorney).

DURESS: 
Unlawful constraint exercised upon a person whereby he is forced to do some act against his will.

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