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Real Estate Glossary A [Part 6]
As Is
It’s the same with a property that doesn’t come with any promises, like when you buy it.
Words in a contract that say that the seller is selling the property as is, with no changes or improvements. This is usually a way to say that the seller isn’t making any promises or promises. Courts are now trying to protect buyers by not allowing sellers to use as-is language in a contract to avoid fraud charges for not telling buyers about known material flaws in the property.
While an as-is clause may give a little protection to the seller from unknown problems, when the seller actively misrepresents how well a property is taken care of, that clause doesn’t work. It doesn’t work that way.
As-Built Drawings
Architectural drawings show how the building will be built and where the equipment and utility lines will be put in. Drawings called “as-built” are often made by an architect with help from the project’s main contractor.
Asbestos
Rocks are made up of mineral fibers that are found inside of them. It is hard for natural processes to break down or destroy asbestos fibers, so they can’t be easily burned or degraded. Among the things that use asbestos are appliances, ceilings, wall and pipe coverings and floor tiles. They also use roofing and siding materials. The Environmental Protection Agency says that, based on studies of people who have been exposed to asbestos, the fiber has been found to cause lung and stomach cancer. People who sell real estate, especially people who work in commercial sales, must tell the buyer if there is any asbestos on the property. Asbestos removal and containment usually requires the help of contractors who have been specially trained and licensed to do this work.
Asbestos Abatement
A way of getting rid of asbestos from a building.
Asbestos-Containing Materials (ACMS)
In this case, ACMs are made up of asbestos and other materials. They can be nonfriable (sheathed and/or crumbling) or friable, which can be crumbled by hand pressure. Friable ACM is thought to be more dangerous because the asbestos particles can be loosened and spread through the air.
Ash Dump
Under a fireplace, there is a container where ashes can be put for a short time. An “ash cleanout door” will come in handy when it’s time to remove the ashes.
Asking Price
The selling price is determined by the amount of value a property owner assigns to it.
In real estate, the price at which a piece of land is offered for sale or rent to the public is called the “list price.” An asking price is different from a set price because it implies that there is some room for negotiation. For this reason, some sellers don’t want their listing agent to use the phrase “asking price” when advertising their home.
Asking Rent
The rent for a home that is listed.
Aspect
A slope’s horizontal direction, often indicated as compass direction (for example, North, Northeast) or degrees clockwise from North.
Assemblage
The sale of two or more properties as if they were one.
To make one big lot out of two or more small lots that are next to each other This is usually done to raise the value of the individual lots because a bigger building that can make a bigger profit can be built on a bigger lot. The plottage value is the sum of the added value. The developer often uses option contracts to make sure that he or she has the right to buy the next-door land that they want. Care must be taken to avoid gaps or strips between the parcels that were bought through faulty legal descriptions. Exact surveys must be done to avoid this.
Assessed Valuation
It is the value of real property that is used to figure out how much you have to pay in real property taxes. In general, the value or assessment of property for tax purposes is done by county and township assessors. The land is usually valued separately from the building, and the value of the building is usually based on a manual or set of rules that cover unit costs and depreciation rates. Some states require that assessments be a certain percentage of the true or market value, but this isn’t always the case (assessment ratio). State laws may say that property should be reassessed from time to time. Each taxing district has its own way of making sure that its assessments are always up to date, but most use a mix of building permit records, on-site inspections, and conveyance tax records. Property owners who say that mistakes were made when figuring out how much their property was worth can usually go to the local boards of appeal or boards of equalization to make their case for why they were wrong.
Assessed Value
The amount of money that a public tax assessor puts on a property so that it can be taxed.
The local taxing authority’s assessment of a property’s worth.
The value determined as the basis for calculating an owner’s property tax burden, commonly expressed as a percentage of market value.
Assessment
A tax imposed on the value of an asset or the asset itself.
A specific payment or tax imposed by a local taxing authority on a property.
The allocated rates or taxes for a certain property
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A property’s official value for tax purposes, based on an appraisal by a local government official. The term is the same as “assessed value.” Land values are based on the sales prices of similar land, while building values are based on the difference between the improvement’s replacement cost and how much it has depreciated.
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The process of figuring out how much each person should pay for a common expense, such as when the owners of condominium or cooperative units are charged for their share of unusual building maintenance costs that benefit the whole project but aren’t covered by regular maintenance fees.
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A tax for a specific reason, like adding curbs or sewers to a neighbourhood.
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An official decision about how much a property owner should be paid for taking his or her land for a public purpose (condemnation).
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An extra amount of money that shareholders of a company or members of a partnership or association put in to cover a capital expense.
The rate or tax levied on a property, such as rate assessment or land tax assessment.
Assessment Lien
Local governments use liens to guarantee that individuals who gain the most from community improvements pay their "fair share.
Assessment Ratio
The proportion of a property’s assessed value to its market value.
Assessment Rolls
Public records that show how much land and buildings in a certain area are worth are called tax records. When owners compare their property’s assessed value to that of other properties in the same neighbourhood, they can ask for the value to be changed if they think their property was overvalued.
Assessor
A trained official who determines the property’s fair market value.
A local government authority (official) who determines property taxes.
People who work for the government are called appraisers. Only the assessed value, not the tax rate, is set by the official.
One whose job it is to appraise property for ad valorem taxes, insurance claims, and so on.
Assessor data
Assessor data is a collection of information that tax assessor offices have made publicly available and that may subsequently be compiled into specialised reports at different levels of geography.
Asset
Things like bank accounts, stocks, real estate, personal property, etc. that have a monetary value.
Everything monetary that an individual, group, or business owns
Someone owns something of value. The types of assets are either financial (cash or bonds), tangible or not tangible, or physical (real or personal property). Accountants look at financial balance sheets, which are made up of assets and liabilities, to figure out how much money a company has, or how much money it has left over.
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Asset Depreciation Range System (ADR)
The part of IRS regulations that talks about how to figure out how long an asset should be depreciated over. This is because the ADR lets the taxpayer choose whether to depreciate the property over a shorter or longer time than the guideline period.
Asset Management
A systematic approach to the acquisition, maintenance, operation, rehabilitation, and disposal of one or more assets that integrates asset utilization and performance with asset owners’ or users’ business requirements.
Asset Manager
The property owner’s representative in charge of managing managers and advising owners on crucial strategic choices regarding properties.
A person who manages investment portfolios, including but not limited to real estate and upgrades, by balancing risk and reward. Asset managers either supervise or are directly responsible for property management.
Asset Register
A list of items deemed worthy of being identified as discrete assets. An asset register contains details about each asset, such as the type of construction, technical specifications, date of acquisition, original cost, accumulated depreciation, written down value, and so on.
Asset Valuation
This expression is used in the real estate market to describe the valuation of land, buildings, and/or plant and machinery for incorporation into company accounts. The asset’s ownership is not necessarily transferred in such cases, but the valuation is of interest to shareholders or is required for company takeovers, public listings, or mortgages. Aside from the real estate market, this term generally refers to the valuation of an asset for sale, purchase, or other purposes in other markets.
Asset-Backed Securities (ABS)
Bonds or notes that are backed by a collection of financial assets. Banks and other credit providers will often originate such financial assets, which will have predictable revenue flows (for example, credit card receivables or automobile loans).
Assets
Everything a person or other entity owns that can be used to pay back a debt.
The total value of a person’s real and personal property, including stocks and bonds.
Real and personal property with value in which a person has unencumbered ownership or equity.
Assignee
A person to whom a property interest is transferred.
One to whom an interest is transferred.
Assignment
Transfer of mortgage title.
A property, a lease, rights or an interest, and occasionally a liability is transferred from one party to another.
Another tenant is affected by the transfer of the original lessee’s lease rights. If rent is not paid on time, both the previous lessee and the new renter may be held accountable.
A property, a lease, rights or an interest, and occasionally a liability is transferred from one party to another.
The right, title, and interest of one person (the assignor) are given to another person (the assignee) (the assignee). Among the things that are given away in this way are mortgages and sales contracts, as well as contracts for the deed and leases.
Most contracts have rights and responsibilities that, unless they are personal, can usually be delegated or given to someone else. Contracts that form an agency relationship are, for example, personal and can’t be given to another person without the person who is being represented giving their permission. Because rent isn’t personal, it’s often given to someone else. Contracts for real estate are usually transferable, unless they say otherwise. It is illegal for some sellers to give away their sales contract. They don’t want buyers “trading on the equity,” especially if there is a long closing time.
In any assignment, the assignee is now the main person who is liable, and the assignor is still liable as a surety, unless there is a novation agreement that removes the assignor from liability. When someone assigns a contract, they get the same rights, title, and interest in the contract as the person who gave the contract to them.
If someone tries to give someone a mortgage lien without the promissory note, they don’t give them anything. But if someone gives someone the note but not the mortgage, they give them the right to get the security. There is a “constructive notice” when someone records an assignment of a mortgage or trust deed (a deed of trust). This notice is given to all people who might be interested in the assignment. There is no protection for the assignor if payments are mistakenly made to him by the mortgagor. The assignee must then be paid (the original mortgagee).
Many contracts for deeds say that buyers can’t give away their share of the contract without the seller’s written permission. Even if the seller doesn’t agree, the assignment is still legal between the buyer and the buyer.
Anti Assignment clause: When the seller wants this clause, the buyer should make sure it’s in the sales contract. The contract for deed should say that the seller’s consent to a proposed assignment will not be unreasonably withheld.
Mortgagees often use non assignment clauses in mortgages to keep the obligation from being transferred. This could help the seller decide whether to use a land contract or a purchase money mortgage. People can’t give away their rights to money payments due under a contract, but that doesn’t mean they can’t give away claims for damages caused by a breach of that contract. The prohibition is for the benefit of the vendor (seller, lender), who can waive it either by saying so or by acting like they don’t care (such as by accepting payments directly from the assignee).
People who want to buy property that already has leases should get a written assignment of the seller’s rights in those leases in a form that can be legally recorded.
Most leases allow the tenant to sublet or assign the lease without the landlord’s permission, unless it says otherwise in the written rental agreement. This is true unless it says otherwise. As a landlord, the most important difference between an assignment and a sublease from his point of view is that the landlord can’t directly sue the sublessee, but it can be done with the assignee.
Contractual rights are transferred from one contracting party (the assignor) to another (the assignee) who is not a party to the contract.
Transfer of property in general, such as an assignment of interest under a will, an assignment of rights in a patent, or an assignment of a lease or mortgage. An assignment of contract is an act in which one party to a contract replaces another party as a party to that contract for some or all of the contract’s purposes. Contract law restricts the assignment of rights and liabilities. A lease assignment must be in writing.
Assignment Of Contract
Contract signing and delivery (Note: In general, liabilities under contract cannot be assigned without the consent of the other party.)
Assignment Of Contract Or Lease
The transfer of a lease’s entire title, right, and interest in a piece of real estate.
Assignment Of Lease
The transfer of all rights, title, and interest that a lessee has in a piece of land. It is called an assignment of lease rather than a deed to transfer a lease.
The assignee of a lease is liable because the assignee owns the land, which is called privity of estate. The assignor is liable because he or she is in the same business as the landlord.
Landlords can’t be unreasonable or arbitrarily stop someone from taking over their lease. Assignment of a lease that breaks an agreement not to give it away is not void, but the lessor can choose to void it. In this case, the assignor and the assignee will be happy with it. The lessor can only raise the issue that it is invalid because the lessor didn’t give it the go ahead.
A lender may ask for the assignment of the leases as collateral before giving you a loan for the leased space. The lessor may even be able to get the rent money from the renters.
The assignment of a tenant’s interest to another person, with the latter becoming the tenant in the place of the assignor.
Assignment Of Rents
This is an agreement between a person who owns real estate and a person who owns a mortgage. The mortgagee gets the right to collect rents from people who rent from the person who owns real estate. The person who owns real estate still has sole responsibility for their tenants under the terms of their lease.
Assignor
A person who assigns an interest in real estate.
Someone gives out a task.
Associate Broker
Persons who have qualified as real estate brokers but still work for and are supervised by another broker may be called broker-salespersons, broker associates, or affiliate brokers in some states. They work for and are supervised by another real estate broker.
Associate Licensee
An affiliate licensee is another name for a real estate salesperson who has been certified by the state to sell real estate.
Association
Tax law may treat a group of people who work together as if they were a corporation. In some cases, the Internal Revenue Service (IRS) may try to treat a partnership or limited partnership as if it were a corporation. The IRS runs this test: If the organisation has more corporate characteristics than non-corporate characteristics, it will be taxed as a corporation, which has bad tax consequences. These are four of the main characteristics of a company: continuity of life, centralization of management, limited liability, and transferability of interest.
Association Of Unit Owners
All the people who own units in a condominium work together to run the project, in line with the declaration and bylaws. The group of unit owners can be incorporated or not incorporated.
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Assumable Loan
When a property is resold, the loan might be taken over by a new borrower. The new borrower will take over all of the original borrower’s obligations.
A pre-existing debt that can be kept by the buyer rather than reimbursed by the seller when title to the mortgaged property changes hands.
Assumable Mortgage
When a house is sold, the buyer can take over the mortgage.
Assume Liability
To become legally accountable for a debt. Signing a contract, such as a bank note, does this.
Assumption (Loan)
Permits a buyer to assume and assume responsibility for an existing debt (mortgage) instead of obtaining a new debt.
Assumption Clause
A clause in which mortgagors agree not to sell mortgaged property subject to the mortgage or have a buyer take an existing mortgage without the mortgagee’s prior agreement.
Assumption Fee
A cost charged by a lender to allow a mortgage to be transferred.
A cost levied by a lender as a condition for allowing a party other than the original mortgagor to assume mortgage obligation. When interest rates rise, mortgagees can adapt their rates of return to the current market.
Assumption Of Mortgage
When you buy property that already has a mortgage and agree to be personally responsible for all of the terms and conditions of the mortgage, you become the owner. In practice, the buyer (grantee) is now the main guarantor on the mortgage note and is primarily responsible for the amount of any deficiency judgment that comes from a default and foreclosure on the home. If the grantee doesn’t pay, the original mortgagor (grantor) still has to pay. Usually, when a person buys a house, they agree to pay the mortgage debt. This is called an “assumption clause” ( or assignment of lease if a leasehold mortgage is involved). In most cases, only the person who gave the deed needs to sign it. When there’s an assumption clause, both the buyer and the seller have to sign the deed so that the buyer is personally bound by the assumption. When a buyer agrees to take on a mortgage, the seller usually asks for a higher price for the home. The seller is, in effect, trading on the low interest rate of the existing mortgage. This means that the lender is a third-party beneficiary of the agreement to assume the debts.
Any changes in the assumed loan balance should be made to either the down payment or to the amount of the second mortgage.
A lender has very little reason to let the original seller off the hook for a note that he or she assumed.
For this reason, most lenders prefer to keep everyone who buys or sells something liable for the debt. In some cases, however, the lender will let the seller off the hook by making a novation. Keep in mind that if the mortgagee changes any of the mortgage terms with the new owner, the original mortgagor may not be liable for the note at all! The lender usually charges a fee for taking on debt. When interest rates rise, few lenders will let you take on the debt unless you can change the terms of the loan, raise the interest rate, and/or charge a fee. There have been some cases where courts have upheld the lender’s right to ask for a “assumption fee” and to change the interest rate on a mortgage when it waives the right to start the loan early.
Assumptions
Things that are thought to be true but have not been tested or confirmed.
Astragal
A wood molding or strip with a half-circle shape in the middle.
At Risk
Those funds that are at risk of being misplaced. Limited partnership investors can only claim tax deductions if they can show the IRS that there is a probability they will never make a profit and will lose their investment.
At Risk Rules
The tax regulation that restricts the amount of money that an investment can lose as a result of a tax loss.
Special rules set up by the IRS to limit the amount of leverage an individual can use are meant to limit the taxpayer’s deductible losses to the amount of money the individual has “at risk.” Generally, a taxpayer is at risk to the extent that he or she gives money or borrows money for which the taxpayer is responsible for paying back with money from his or her own money (recourse debt).
To put it another way, the act extends the at-risk rules to real estate investment losses that happen after December 31, 1986, with a few caveats. It says that if the loan is made by someone who regularly and actively lends money to people who buy and sell real estate, then the amount of the loan that isn’t repaid is at risk. Whether the loan comes from a friend or a business partner doesn’t matter. As long as the terms of the loan are commercially reasonable and almost exactly the same as a loan from a non-business partner, it’s fine. Seller financing of real estate of any kind, except in very rare cases, will not be a risk.
As soon as a taxpayer has taken all of the deductions that apply to a single piece of property, the taxpayer can no longer take any more deductions on the property. The amount for which the taxpayer is at risk increases. Because of the at-risk rule, losses that aren’t allowed to be deducted in a taxable year don’t go away. They are carried forward indefinitely and can be used as a deduction in a future tax year as long as there is more risk in the activity that caused them.
In order to limit how much money a person can use as leverage, the IRS has set up rules that limit the amount of money a person can write off as a loss to the amount the person has “at risk.” Generally, a taxpayer is at risk to the extent that he or she gives money or borrows money for which the taxpayer is responsible for paying back with money from his or her own money (recourse debt).
To put it another way, the act extends the at-risk rules to real estate investment losses that happen after December 31, 1986, with a few caveats. It says that if the loan is made by someone who regularly and actively lends money to people who buy and sell real estate, then the amount of the loan that isn’t repaid is at risk. Whether the loan comes from a friend or a business partner doesn’t matter. As long as the terms of the loan are commercially reasonable and almost exactly the same as a loan from a non-business partner, it’s fine. Seller financing of real estate of any kind, except in very rare cases, will not be a risk.
As soon as a taxpayer has taken all of the deductions that apply to a single piece of property, the taxpayer can no longer take any more deductions on the property. The amount for which the taxpayer is at risk increases. Because of the at-risk rule, losses that aren’t allowed to be deducted in a taxable year don’t go away. They are carried forward indefinitely and can be used as a deduction in a future tax year as long as there is more risk in the activity that caused them.
ATER
The equity reversion after taxes
Atomistic Markets
A market in which no single individual or organisation has a measurable influence on market pricing. Market participants are just price takers in the sense that they have the option of accepting current pricing or not engaging in the market at all.
Atrium
In most cases, the main parts of a building have a translucent roof that lets light into the inside.
Attach
To encumber real estate with debt.
Attached Housing
Party walls separate two or more homes (for example, townhouses or stacked flats).
Attachment
A legal seizure of property to compel debt repayment.
Attachment
The legal process of taking the real or personal property of a person who is being sued and keeping it as a form of payment for a judgment. The lien is then made by the law, not by a private agreement. The plaintiff can get this property in any case where there was a contract, whether it was written or implied.
A copy of the writ of attachment is put in the public record. Before a judge makes a decision, the attachment puts a lien on the property. This way, the plaintiff can be sure that there will be enough money to pay the judge’s decision. After a judge rules in favor of the plaintiff, the lien can be enforced by putting out an execution.
It can happen when someone files a lawsuit for money to be paid on a contract that isn’t secured by a bond. Sellers and lienholders can’t get rid of the attachment until they pay the plaintiff’s claim and costs, or they must put up a cash bond that’s equal to the plaintiff’s claim. When one party wants to get paid for a secured debt, an attachment isn’t available (mortgage).
Attestation
People who are subscribing witnesses watch a person sign an instrument.
Attic
Room between the ceiling and the bottom of a roof where people can get in and out. A structural cavity is a space that can’t be reached.
Attic access
A room or building’s basement is the area directly below the building’s pitched roof.
Attic Ventilators
A ventilation system that controls the amount of heat in an attic by letting hot air out.
Attorney Fees
An attorney charges a fee for his or her work. Unless a statute or a contract says otherwise, an aggrieved party can’t usually get back their lawyer’s fees. If there is a dispute over a contract, it’s important to add a clause to all contracts (especially promissory notes) that says that the party who wins will get back all of their lawyer fees and costs if there is a lawsuit.
Attorney-In-Fact
A competent and uninterested person who has been given the authority to act in her place by someone else. If someone is going to buy or sell real estate, an attorney-in-fact who has a “fiduciary” relationship with the person who wants to buy or sell should be able to do so. This is called a power of attorney. As a rule, people give their lawyers power of attorney. The person who is the attorney-in-fact doesn’t have to be an attorney at law.
An attorney-in-fact can have general or specific power, but even if he has general power, he can’t do anything bad for the person he’s representing (for example, sell the person’s property for less than it’s worth) or do something good for himself (for example, give the person’s land to himself). To avoid conflicts of interest, the listing broker should think very carefully before agreeing to take on a client’s power of attorney. He or she should also think about having separate written instructions outlining exactly what the broker can do and how.
a minor can’t make someone else a “attorney in fact.” That person can’t legally give someone else the title to real estate that the minor owns, though.
A husband can’t be his wife’s attorney-in-fact when she wants to give up her dower rights.
Attornment
A renter’s formal agreement to become a new landlord’s tenant.
Landlords who have been foreclosed on can ask tenants to become their tenants again. This is called “attorning.” New tenancy is set up with the mortgagee as the landlord, and attornment is used as a defense against a debtor’s claim for rent.
An attornment agreement is usually signed by someone who is subletting land for a long time. This agreement is usually signed by someone who is subletting land for a long time and a person who owns the land and has a mortgage on it. Attempting to keep his property from being destroyed when the master lease is terminated early or when the mortgage is foreclosed on when the sublessor does not pay. A clause in the attornment agreement says that, if a sublease is terminated for any reason, the owner or the mortgagee will still be the lessor in a lease with the sublessee for a term equal to the unexpired term of the sublease and on the same terms.
Attraction Principle
One or more factors that make a commercial business centre draw people in, such as how well it sells things. A shopping centre, which is made up of many different businesses, has a lot of appeal to people.
Attractive Nuisance
Those who keep their property in a way that is both dangerous and could be dangerous to children have a legal duty to take reasonable steps to protect children from the danger. There are many situations where an owner could be held responsible for the injuries of trespassing children who are in their pool, in an unmarked pit, or when they throw away a fridge or freezer. Construction sites should be well-protected to keep curious kids from getting hurt.
Attribute
An entity’s specified feature (for example, topographic slope).
Attribute Value
An characteristic that has a defined quality or amount given to it (for example, 15 percent slope).
Attributes
Bedrooms, bathrooms, garage spaces, sundeck, pools, gardens, aspect, vistas, accessibility to services and facilities, land area, and floor area are all elements of a property.
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