Continued from…
Real Estate Glossary A [Part 1]
AC
The abbreviation for air conditioning or air conditioner.
AC Condenser
A central air conditioner’s condenser unit usually has a heat exchanger section that cools down incoming refrigerant vapor and turns it into a liquid.
AC Disconnect
The main power source besides the air conditioner condenser.
Accelerated Cost Recovery System (ACRS)
The Economic Recovery Act of 1981 introduced a technique of depreciation that determines the useful life of various types of property.
The Economic Recovery Tax Act of 1981 came up with a simple way to depreciate things. It was meant to replace the old “ADS class life” system. People who live in certain classes or own certain types of things can write off some of the costs over a certain amount of time. People who bought or used a lot of things between 1980 and 1987 were subject to ACRS.
The Tax Reform Act of 1986 made a lot of changes to the ACRS rules. After December 31, 1986, the changes were mostly effective. See “MACRS,” the Tax Reform Act of 1986, for more information.
Accelerated Depreciation
A depreciation method in which the asset is written off faster than using the straight line method.
Depreciation is a way to write off the cost of certain things that people own and things that people make to real property faster for tax purposes than if they used the straight-line method. In order for the property to be taxed, it must be used in a trade or business or held for the purpose of making money. This method is based on the idea that an asset deteriorates more quickly in its first years of life.
For a description of the basic methods, see the SOYD method and the declining balance method.
In the case of property that has already been put to use, the original period and method of depreciation or cost recovery will stay in place as long as the same owner keeps the property in service for an eligible use. This means that some people will figure out depreciation for things that were put into use before 1981, ACRS things that were put into use between 1981 and 1986, and things that were put into use after 1986.
Accelerated Method
A technique of calculating depreciation or cost recovery allowances in which substantial yearly allowances are claimed in the first years of ownership, offset by lesser allowances in subsequent years.
Acceleration Clause
A clause in a contract that allows the lender to demand repayment of all or part of an outstanding loan if certain conditions are not met.
If the mortgagor defaults on any of the requirements, a clause in the mortgage agreement gives the mortgagee the authority to accelerate full repayment of the debt.
A provision that allows the mortgagee to declare the entire amount of a loan due and payable if the mortgagor fails to meet any of the agreed-upon requirements.
A clause that requires all future payments to be made in the event of a single loan failure. When a single payment is late, the lender is not required to litigate for each payment.
In the case of a mortgage, trust deed, promissory note, or contract for deed (agreement of sale), there is a clause that gives the lender the right to call all the money that is due and owed before the agreed-upon payment date. This could happen if someone doesn’t pay an installment, the property is destroyed, an encumbrance is put on it, or the property is sold or given away. The payee usually has the option to speed up the note if he or she doesn’t pay any installment of interest or principal when it’s due, as long as he or she gives enough notice and gives the person who owes the money a chance to fix the problem. It can also happen if the payee doesn’t pay taxes and assessments or keep the property insured and in good condition. Also, if the borrower (mortgagee) does not have good title to the property he or she is borrowing, the lender may be able to move forward with the loan. For example, if all or part of the property is taken away, the lender may be able to move forward with the loan.
If it isn’t written in the mortgage or contract for the sale, there is no way to speed up the process. There should be a match between the acceleration clauses in the mortgage and the ones in the promissory note. A due-on-sale clause or alienation clause is also called an acceleration clause when it says that the payment will be made faster when the property is sold, so it is called that. There are times when an acceleration clause won’t be valid because it’s too much of a restraint on the sale of a home.
The seller of a contract for deed usually adds a clause that says that if the buyer doesn’t fix a problem, the whole balance is due and must be paid. If this clause was not in place, the seller would have to sue the buyer when each installment payment was due and the buyer did not pay it.
A provision in a mortgage document that requires the immediate repayment of the entire balance at any time should the mortgage’s terms be violated. This could be the result of a missed mortgage payment or the absence of building insurance.
Acceleration Principle
An occurrence that has a higher impact on demand or prices than may be directly attributed to that event. The driving force that draws trade, business, and/or industry to a specific location.
Accelerator
Something that speeds things up, like the hydration of concrete, mortar, grout, or plaster.
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Acceptable Referee
Accountants, solicitors, magistrates, doctors, and the justice of the peace are all in this group.
Acceptance
To accept an offer or contract’s terms and conditions.
The act of a party to whom a thing is provided, in which he or she accepts the object with the aim of keeping it.
The goal is to agree to the terms and conditions of a deal or offer
- A person who accepts an offer (such as the seller in a real estate deal) says that they will follow the terms of the offer. It must be told to the person who made the offer that you have agreed to it (offeror, such as a buyer). The communication doesn’t have to be written. It could be a simple nod of the head. If the offer is written and the acceptance is written, too, it must be written to be valid.
After making an offer, a buyer can cancel it at any time before the seller tells them that they’ve accepted it. Even if the buyer has said that they want to keep the offer open for a certain amount of time. Since the sales contract should say that it must be agreed to at a specific time and that acceptance should be communicated to both buyer and seller as soon as possible, this is what you should write in there. Getting the message across is very important because after a seller accepts your deal, but before you hear about it from them, you could effectively revoke your offer and not be able to buy the thing.
It must also be done within the time limit set out in the offer. If there is no time limit, the acceptance is valid if it is made in a reasonable amount of time, which varies from case to case and from community to community. Some offers say that if you accept the deal, you won’t be able to close the deal until the offeror or broker gets a signed copy from you within a certain amount of time.
You can’t accept an offer unless you use the method that the offer says you can use to accept it, like by facsimile or by e-mail. For example, if you accept a mailed offer, it becomes a legally binding contract when it is sent through the mails. The law assumes that the buyer choose the post office as the person who would get the acceptance notice. When the acceptance is sent in an unusual way, like by posting it in a newspaper ad, the contract isn’t valid until the buyer gets the acceptance in a reasonable amount of time.
You don’t have to accept an offer for the price you put on your home if you put it on the market through a broker. The listing is not an offer to sell, but a job offer. Because it doesn’t give the buyer any power of acceptance, it doesn’t work. Because the owner may owe the broker money, however, they may have to pay them money.
Silence is usually not enough to show that you want to accept, but sometimes it can be. Even though the community might be more used to 7 percent, some people think that the broker agreed to another 4 percent commission rate when he or she handled many sales for a developer at a 4 percent commission rate.
- The grantee must willingly and unconditionally accept a deed in order for the deed to be valid. A grantee who doesn’t want to own the property doesn’t have to accept the deed. Constructive acceptance: When a beneficial transfer to a person who can’t agree is made, the courts often assume that the grantee will accept it. This is called a deed to a minor or an incompetent person. Taking the deed, recording the deed, paying the sales price, encumbering the title, or any other act of ownership shows that the grantee has agreed to the deal.
As an example, a court probably wouldn’t assume that the grantor had agreed to give his $ 100,000 farm, which was heavily in debt and had building code violations, to a grantee who died without ever hearing about it. As long as there was a valid delivery, the property would go to his estate if there was no debt or code violations on it.
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Access
A technique of approaching a property or an entry into or upon a property. Additionally, access can refer to a broad or specific right of admission and egress to a certain property. Generally, a property owner has the right of access to and from his or her land to a public street or highway adjacent to the property, including the right to unrestricted light and air movement from the roadway to the property. Additionally, the term access refers to a riparian owner’s right of passage to and from the waters that border his or her property.
Numerous state statutes provide that a residential tenant may not withhold consent from the landlord to enter the dwelling unit to inspect the premises, make necessary or agreed-upon repairs, provide agreed-upon services, show the dwelling unit to prospective purchasers, mortgagees, or tenants, or to demand rent. However, the landlord may not misuse this right of access or use it to harass the tenant and should enter only after providing adequate notice to the tenant, in an emergency, or when doing so is impractical.
Condominium rules establish easements and other rights that allow owners access to their units via shared features.
Approach or approach method In the case of a property, access may be via a driveway, an alley, or a boat/jetty if it has only water access.
Access Right
The ability to enter and exit a property.
The right to enter and exit a property from an existing street or highway. On Certificates of Title, both parties granting and receiving the right will be identified.
Accessibility
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How easy it is to get to a site and where it is in relation to different transportation facilities is an important factor in deciding if a site is good for a certain use.
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The ability of a person with a disability or handicap to get to and use things more easily and on their own. Making doors wider, increasing the radius of a wheelchair and installing grab bars, audible and visual signals as well as the like are all examples of things that can be done.
Accession
Acquiring title to extra land or improvements through annexation of fixtures or alluvial deposits along the banks of streams. For instance, if Ben Brown constructs a fence on his neighbor’s land without first obtaining permission from the neighbour to remove it, ownership of the fence passes to the neighbour, until the neighbour wants its removal.
Accessory Building
It is a building that is not the main building on the same lot. If, for example, a garage, pump house, or storage shed is built on the same piece of land as the main building on the property, it would be called an “accessory building,” not the main building.
Accommodating Party
A person or corporation that agrees to take title to a property in return for tax benefits under Section 1031. Additionally referred to as the middleman.
Accommodation Party
Without receiving any remuneration, a party signs a negotiable document (such as a promissory note) as maker, acceptor, or endorser in order to accommodate another party and strengthen the paper’s creditworthiness by giving his name as additional security. For instance, a brother who co-signs a bank note with his sister in order for her to borrow money to purchase a house is considered an accommodation party to the lending arrangement.
Account Payable
A debt (liability) is an amount of money that a person owes to another person, usually because they bought something, like goods, supplies, or services. It’s not always due right away.
Account Receivable
A debtor has a claim against the debtor, which usually comes from sales or service that the debtor has paid for. Because an account receivable is the opposite of an account payable, it isn’t always due or late at any given time.
Accounting
The agent’s fiduciary obligation is to safeguard and protect the principal’s property and funds. The agent is responsible for maintaining accurate records of funds and papers received.
Accredited Investor
A wealthy investor who is not one of the 35 investors allowed to invest in a private limited partnership under Securities and Exchange Commission Regulation D. To be eligible, an investor must have a net worth of at least $1,000,000, an annual income of at least $200,000, or a minimum investment of $150,000 in the deal, with the investment not exceeding 20% of the investor’s net worth.
Accredited Land Consultant (ALC)
The REALTORS® Land Institute bestows this professional qualification (RLI).
Accredited Management Organization (AMO)
A professional title bestowed upon management groups that adhere to the Institute of Real Estate Management’s requirements (IREM).
Accredited Purchasers
Investors who are either (1) sufficiently rich to ensure that a proposed stock acquisition (of $150,000 or more) does not exceed 20% of their net worth. (2) have a net worth of more than $1 million, or (3) have a two-year earnings record of more than $200,000 each year and expect current earnings to surpass $200,000.
Accredited Resident Manager (ARM)
A title given by the Institute of Real Estate Management (IREM).
Accredited Rural Appraiser (ARA)
The American Society of Farm and Rural Appraisers gives this title to people who work in the field of farm and rural value.
Accretion
Because of soil deposited by wave and current action, the land area close to a body of water gradually grows.
Land expands in size as a result of the addition or accumulation of soil to it through time through natural deposits.
Alluvial deposits of soil that move with the flow of water, such as when a stream or river moves the shoreline. Land that is added to a stream, whether it is navigable, is owned by the person who owns the land next to it. Any existing mortgages also apply to this new land. However, if land is slowly washed away by erosion, the owner can lose the right to the land.
The increase or acquisition of land through natural processes, such as the deposition of sand or soil by the sea or a river, or the gradual retreat of water from its normal water mark. Alluvion is the land added by accretion and is the opposite of erosion.
Accrual Basis
Income and costs are recognised when they are earned or incurred, even if they have not yet been received or paid, according to this accounting technique.
Accrual Method
Income and expenses are reported in this way even if the expenses or income were not paid or the money was not received. This is an accounting method. The right to get, not the fact that you got it, is what makes the money count as gross income. Expenses are also deducted when the taxpayer’s liability is set and clear, not when the taxpayer pays the expense. Most of the time, businesses can use the accrual method. Individuals can’t use it, though.
Accrued
Amounts that have been built up over time, like accrued depreciation, accrued interest, or accrued expenses. There are costs that have already been paid, like real estate taxes. It’s called a “closing statement,” and it shows how much money the buyer owes to the seller. The buyer will pay this money back at a later date.
Accrued Depreciation
A decrease in value as a result of physical degradation, functional obsolescence, and economic or geographical disadvantages.
The process of determining and quantifying decreases in a property’s current market value from today’s reproduction cost in cost appraisal.
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In accounting, a bookkeeping account that shows how much depreciation has been taken off an asset since it was bought. This is also called accumulated depreciation.
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It’s important for an appraiser to figure out how much it would cost to make the property again and how much it’s worth now, so that they can figure out how much it’s worth. In this case, accrued depreciation is called “diminished value.”
The difference between the cost to replace improvements and their current value.
Accrued Interest
Interest that is due but has not yet been paid.
Accumulated Depreciation
The entire amount of depreciation taken thus far.
Accuracy
The similarity of observations, calculations, or estimations to true values or values regarded as true.
Acknowledgment
An individual’s assertion that he has signed a paper voluntarily.
A notary public or other relevant public official certifies that the grantor indicated before the official that he or she executed the recognised instrument.
Confirmation that a deed represents the grantor’s purpose and behavior.
A statement made in front of a person who is legally allowed to do so, usually a notary public, by a person who has signed a document. Also, the document that the person signed. An acknowledgment is meant to stop fake and fraudulent documents from taking effect. The officer makes sure that the person who signed is someone who is known to the officer or who has the right identification. As usual, the person does not need to sign in front of the officer. The officer is liable for any damages caused by his or her negligence in not being able to identify the person correctly. For example, if someone forges someone’s name because the officer accepted verification over the phone.
In most states, a document can’t be recorded unless it’s been signed by the person who wrote it. If a foreign acknowledgment (one that took place outside of the state where it is to be recorded) is valid where it was made, it is likely to be valid where it is to be recorded. When a foreign official signs an acknowledgement, it shows that it was done in accordance with the laws of the place where it was done and that the officer had the right to take the acknowledgement. This means that the document can be recorded and, if necessary, read into evidence in any judicial proceeding without having to show that it is real. However, for documents signed outside of the United States, many states require that the acknowledgment be made by an official at a U.S. Consulate Office, but this is not always the case.
It’s important for the officer to sign the document if it has been changed or crossed out, even if it has been agreed to by everyone. Otherwise, the document might not be able to be recorded. Signs should be made in black ink because modern methods of making copies of documents make them easier to read.
Companies, partnerships, trustees, and attorneys-in-fact use different types of acknowledgment forms, and there are also different forms for each of these groups.
Acoustical Plaster
A material composed of fibers or aggregate that absorbs sound.
Acquired Immunodeficiency Syndrome (AIDS)
A very bad disease of the body’s immune system. Federal and state laws don’t allow people who have acquired immunodeficiency syndrome to be discriminated against because of their condition. The fact that someone has AIDS isn’t considered a material fact in many states, so they can’t say that a broker tried to hide a fact. People who have AIDS-related complex (ARC) or human immunodeficiency virus infection are also safe (HIV).
Acquisition
The procedure for acquiring real estate.
Acquisition Appraisal
The process of figuring out how much a piece of land is worth in the real world so that it can be used for a public good. The goal of the appraisal is to figure out what the market value is so the government can figure out how much the property owner should get. See appraisal, condemnation, and market value for more.
Acquisition Cost
The whole cost of purchasing a piece of real estate, including all fees, closing costs, and renovation expenditures.
In order to get the right to own something, money or other valuable things had to be spent. Closing costs, appraisal fees, and title insurance are some of the things that come with the purchase price.
Acquisition Fee
A fee paid to a syndicator in return for their assistance in the acquisition of a property.
Acre (AC)
43,560 square feet, 160 square rods, 10 square chains, or 4840 square yards are the dimensions of a piece of land.
An important land area measurement (containing 43,560 square feet).
43,560 square feet, or 208.71 feet by 208.71 feet, is a unit of land area. Equivalent to 4,840 square yards (4,047 square metres), 160 square rods (160 square rods), or 0.4047 hectare. A square mile is equivalent to 640 acres (25.6 hectares).
Acre Foot
One cubic yard is the same amount of water, sand, or minerals that would fill an area of one-acre with a depth of one foot. It is used to measure irrigation water. There are 325,850 gallons in each one of these things.
Acreage Zoning
By requiring big building lots, zoning was designed to limit residential density. Additionally referred to as large-lot zoning or snob zoning.
Act Of God
A natural disaster that is uncontrollable by humans, such as a tidal wave, flood, storm, volcanic eruption, or earthquake. Numerous contracts have a force majeure provision, which temporarily or permanently releases the parties from contract performance in the event that an act of God destroys or damages the subject matter of the contract or prevents performance. This clause, referred known as the destroyed or materially damaged clause, releases the parties to a real estate sales contract from obligation if an act of God damages the property’s improvements prior to title transfer.
Active Income
Taxable income generated through salaries, wages, commissions, fees, and bonuses under US income tax law.
Activity
Another name for a task or the work completed throughout the course of a project.
Actual Age
The building’s chronological age, which is the opposite of its effective age, is based on how well and how well it works. A building that is only 15 years old might have an effective age of 20 years because it hasn’t been kept up.
The number of years since a structure’s initial construction.
Actual Cash Value
An insurance term for how much money an improvement would be worth. In order to figure out how much a property is worth in cash, you subtract the value of the physical wear and tear from the cost of replacing the property.
The price at which a property will sell on the open market after all reasonable efforts to find a buyer willing to pay the highest price have been exhausted. When applied to real estate, the term actual cash value is synonymous with market value.
Actual Damages
Damages that a court of law will acknowledge as a direct result of an act of wrongdoing. By contrast, courts award exceptional or punitive damages as a deterrence and as a sanction.
Actual Eviction
The process of physically evicting a tenant after the court rules in favor of the owner and the tenant doesn’t want to leave. It is sometimes called eviction or taking back something. People who are evicted are shown in this picture
Actual Notice
An open, continuous, and obvious expression of real property claims to those who study the property.
Express knowledge or information; what is known; actual knowledge. Constructive notice, on the other hand, is the kind of knowledge that is required by law. It is the kind of knowledge that the law says you should know.
In most cases, a person who is aware of a third party’s rights to a piece of land takes the land with that third party’s rights in mind. A person can’t get the benefits of the recording law if they buy a piece of land with knowledge of a previously signed but unrecorded document. There is also a type of notice called a “inquiry notice,” which is used when there are circumstances, appearances, or rumors that make it clear that someone else owns the property. This type of notice can be used to find out if someone else owns the property.
Actual Rent
The amount of rent paid to the owner of a property.
Actuary
A person who works for an insurance company or savings and loan group, and who is good at figuring out how much life interests, pension plans, and annuities are worth.
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