Continued from…
Real Estate Glossary B [Part 3]
Business day
A weekday, excluding Saturdays, Sundays, and holidays; a typical working day. The word business day is used over the terms banking day or working day due to recognized tradition and practice.
Some regulations demand notification within five business days, such as when a renter fails to pay rent; other laws apply to calendar days. A disagreement may emerge if a contract fails to specify whether the notice must be given within business days or calendar days, while the typical understanding is that it must be given within calendar days unless otherwise indicated.
Business energy property tax credit
A tax credit to encourage companies to invest in or buy solar water heating, solar space heating, solar thermal electric, solar thermal process heat, photovoltaics, geothermal electric, fuel cells, solar hybrid lighting, direct-use geothermal, or microturbines. Fuel cells and microturbines built in 2006 and 2007, as well as hybrid solar lighting systems constructed on or after January 1, 2006, are now eligible for the credit under the Energy Policy Act of 2005. The tax credits range between 10% and 30%.
Business interruption insurance
Insurance that compensates losses suffered as a result of a business owner’s incapacity to do business while a building is being repaired after a fire or other covered disaster.
Business life insurance
A commercial entity purchases life insurance on the life of one of its employees. It is frequently purchased by partnerships to protect surviving partners from loss caused by a partner’s death, or by corporations to pay them for loss caused by the death of a key employee. Key employee insurance is another name for it.
Business opportunity
Any form of business that is up for purchase. The selling or leasing of an existing business, enterprise, or opportunity’s business and goodwill, including the sale of all or nearly all of a corporation’s assets or shares, or the assets of a partnership or sole proprietorship.
A real estate broker’s license is usually necessary to sell a business that has real property as an asset. However, because a broker may be unaware of many of the unique issues that arise when selling a business, consulting with an experienced business counselor or attorney may be beneficial. Both the seller and the buyer should be informed of how the bulk transfer regulations apply to the sale of a firm. They should also be aware that any contract involving the sale of products valued at $500 or more must be in writing to be enforceable under the Uniform Commercial Code.
Business Park
A subdivision or development intended for office, warehouse, or similar purposes. It is an offshoot of industrial parks and is also known as an office park.
Business risk
Risk resulting from the prospect of making poor business judgments or misjudging the economic implications of activities.
The uncertainty about whether or not a business venture will make money.
Butt edge
The shingle tabs’ bottom border.
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Butt hinge
One leaf is attached to the door’s edge, while the other is attached to the door’s jamb.
Butt joint
The point at which the ends of two timbers meet, as well as where drywall sheets meet on the 4 foot edge.
Buy down
A subsidy (typically paid by a builder or developer) used to lower monthly mortgage payments.
Buy-back agreement
A clause in a sales contract that states that if a specific event occurs, such as the buyer being moved out of the region, the seller (and, in certain situations, the broker) will buy back the property within a given time frame, generally for the original selling price.
Buy-back sales agreement
A clause in a sales contract in which the seller commits to buy the property again in the future.
Buy-sell agreement
A contract between two parties in which one of them can buy the other’s interest.
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A contract between partners or shareholders in which one party sells and another buys a company stake at a certain price if a predetermined event occurs. This type of buy-sell agreement is used in closely held firms and partnerships to cover the risk of a key participant’s death or disability. To guarantee that money are available to complete the buyout, life insurance is typically employed.
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When a building is finished, an interim and permanent lender engage into an arrangement for the sale and assignment of a mortgage to the permanent lender. On the assumption that the mortgagor would have a contractual right to require that the permanent lender acquire the mortgage, the mortgagor is frequently a party to this arrangement.
Buy/rent threshold
The point at which changing market conditions make it clear that money is being spent less on owner-occupied housing and more on rental housing (or vice versa).
Buydown
The deposit of new revenue in order to lower the interest rate on a loan.
A type of financing that lowers the monthly payment for a house buyer during the first few years. In certain buydown schemes, a residential developer, builder, or seller would pay a lender a subsidy (in the form of points) to “buy down,” or reduce, the effective interest rate paid by the homebuyer, lowering monthly payments for their buyers for a fixed period of time while diminishing their own profit.
The interest supplement may be constant for the duration of the buydown, or it may be graded, with the subsidy amount decreasing each year. Buydowns are expensive: for example, a three-year buydown with some lenders may pay 2. 7 points for each one-percentage-point decline in interest.
Buyer agency agreement
A real estate brokerage contract between a buyer and a real estate agent. The broker is paid if he or she successfully locates a property for the buyer to purchase.
Buyer’s advocate
A service that helps people find a home that fits their needs.
Buyer’s agent
A person who locates and negotiates a property purchase on behalf of a potential buyer for a fee.
Buyer’s broker
In a statutory or fiduciary position, a broker represents the buyer. Some buyer’s brokers use single agency, which means they only represent buyers or sellers in the same transaction. Buyer brokers that represent just buyers and direct prospective sellers to other brokers are known as exclusive buyer brokers. The buyer, or the seller or listing broker, pays the broker at closing, if all parties agree.
Because buyer representation is now widely accepted, the listing company is likely to have a buyer-client interested in one of its listings. Many businesses decide whether to continue representing both customers under a consensual dual agency arrangement or to practice single agency by directing one of the parties to another brokerage.
Buyer’s market
When there are more sellers than buyers in a property market, the buyer has the option to negotiate the best purchase rates and terms.
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A scenario in which the supply of available properties for sale outnumbers the demand. As a result, in order to attract purchasers, sellers are sometimes obliged to cut their prices and occasionally aid with financing (through purchase-money mortgages).
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A price drop as a result of an overstock.
The state that exists when, under competitive conditions, supply and demand pressures are such that market prices are relatively low, giving the buyer an advantage. Prices are falling as a result of an oversupply.
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Buyers advocate
A property consultant who works exclusively for the buyer, sourcing suitable properties and representing the buyer throughout the purchasing process.
Buying commission
The fee you pay an agent to assist you in acquiring a specific style of building
By operation of law
Property rights are defined by some affirmative rule or change, by which someone may gain or lose rights without any action on his behalf. For example, the law of dower allows a wife to gain a one-third life interest in her husband’s real estate.
Byfold doors
Doors that open in a smaller area than typical swing doors because they are hinged in the centre. Closet doors are frequently made of this material.
Bylaws
A system of rules by which a company or organisation conducts its operations or activities.
A condominium owners’ association or corporation’s regulations, rules, or laws governing the condominium’s management and functioning. The procedure of selection of the board of directors, as well as the duties and obligations of the corporate members, are all covered by the bylaws. These self-imposed guidelines are considered private law. A corporate resolution relates to a single act of the company, but a bylaw is a permanent norm that must be followed on all future occasions. Bylaws for condominiums are created by the developer and are susceptible to modification once the owners’ association takes possession. As stated in the original condominium declaration, the bylaws may be amended.
Bypass doors
Closet doors are sliding doors that move past each other.
Bi
Built-in.
Bics
Built-in cupboards.
BIR
Built-in wardrobes.
Bond (rental)
Consideration is usually held as part of a lease to make sure that the terms and conditions of the lease are met. Most of the time, you can get your money back if you return the property in good shape.
Br
Bedroom.
Building code of Australia (BCA)
For regulatory purposes, sets minimum community standards for buildings in terms of health, safety, and comfort. The Australian Building Codes Board made them (ABCB).
Business broker
A licensed and certified real estate agent who can sell businesses.
BV
Brick exterior.
B lender or b loan holder or b note holder
The Lender in an AB Arrangement that owns the B Loan.
B loan or b note
The inferior tranche of an AB structure, which is not held in a CMBS but may be in a CRE CDO.
B piece holder
A person who holds a B Piece. Frequently, the phrase is confused with B Lender.
Backstop facility
A resource made available by a highly regarded body that may be used if the primary payer is unable to make their payment.
Balance sheet lender
A bank or other financial organisation that generates loans with the intention of keeping such loans on its balance sheet until they are paid back. As opposed to this, a bank may create loans with the intention of selling them as part of a CMBS transaction using the OTD model, so eliminating those loans off its balance sheet.
Balance-sheet CDO
A CDO deal in which the sponsor securitizes possessions of its own.
Bank for international settlements (BIS)
A global bank with its headquarters in Basel, Switzerland, that disseminates guidelines for worldwide bank regulation and keeps track of and gathers information on global banking activity.
Bankruptcy-remote
A description of an entity that is shielded from third-party creditors’ claims of insolvency, bankruptcy, or similar processes, or is unlikely to be the target of such claims. In many commercial mortgage loan transactions and securitizations, a bankruptcy remote entity is employed to reassure the transaction participants that the bankrupt remote entity’s credit risk is isolated.
Basel committee
The Basel Committee on Banking Regulation. the group that carries out consultation and works to create capital standards that take into account the risks that the banking industry faces.
Basel I, II, III
The Basel Committee on Banking Supervision has made suggestions for banking rules and regulations known as the Basel Accords. The goal of the Basel rules is to give national regulators a set of requirements to make sure that banks have enough capital for the risk that their lending and investing operations expose them to. The letters (I, II, and III) stand for different iterations of the Accords.
Basel I: Also known as the Basel Accord, is a set of international banking laws that were established in 1988 by the Basel Committee. Its main objective was to reduce credit risk by defining the minimal capital requirements for financial institutions.
Basel II: Basel I was revised to make it more risk-sensitive and reflective of contemporary bank risk management techniques. By the Capital Requirements Directive (Directives 2006/48/EC and 2006/49/EC), Basel II was adopted in the European Union.
Basel III: A revision to Basel II that aims to tighten capital requirements and add additional regulatory standards for bank leverage and liquidity.
BBA
The BBA is in charge of issuing the daily LIBOR rates among other things.
BCO
Offices British Council. a company that studies, creates, and disseminates best practises for the office industry.
Bifurcation
Creating a senior and junior tranche out of a loan.
BIPRU
The Prudential Sourcebook for Banks, Building Societies, and Investment Companies published by the FSA.
Blind-pool funds
The resources of Private Equity Real Estate Funds or other investment vehicles that aren’t decided upon and/or disclosed to investors at the time of investing.
Blockers
Entities used to prevent specific investors (typically specified types of feeders) or another fund as a whole from receiving certain actions (such as specific tax impacts) from one fund (often special subsidiary entities).
Borrower
The organisation taking out a loan from a Lender.
BPF
Federation of British properties. This membership-based organisation represents the interests of those involved in real estate investment and ownership.
Bracket
Dividing loans into groups based on a single characteristic. For instance, all loans in a term bracket will have the same average life.
Break option or break clause
An option included in a lease that permits the landlord, tenant, or often both, to end the agreement before the agreed-upon expiration date. It normally requires a notice period, and in the case of a tenant, it may also need a premium payment. Some leases include a clause for a rolling break option, which can be exercised with notice at any time after a specific date.
Bridge finance
Funding made available to a borrower on a temporary basis until finance of a more long-term type is put in place.
British banking association or BBA
An organisation representing the UK banking and financial services industry, responsible for releasing the daily LIBOR rate among other things, and representing the interests of over 200 banking members from 60 different nations on a complete range of UK and worldwide banking problems.
Broker’s opinion of value (BOV)
A prediction of the market price at which an asset will trade.
Brownfield site
A location that has already been developed yet is open to new development. These locations might be contaminated.
Building society
A financial company that provides banking and other financial services and is owned by its members. The Building Societies Act of 1986 authorises building societies.
Bull run
A period of consistently excellent performance. It’s possible to use this phrase to describe a market, a sector, or a particular Security.
Buy to let
Real estate that has been bought with the goal of renting it out to tenants for profit.
Below-grade
Any building or part of a building that is underground or below the top level of the land around it.
Build-out
The changes made to the space based on what the tenant wanted. Takes into account how much Tenant Finish Allowance the lease says the tenant can have.
Building classifications
Most markets use the terms Class “A”, “B”, “C”, and sometimes “D” to describe buildings. Even though the rating of a building is very subjective and based on the market, Class “A” properties are usually newer buildings with better construction and finish in great locations with easy access that are attractive to tenants with good credit and offer many amenities like on-site management or covered parking. The rent for these houses is, of course, the most expensive in their area. As the building’s “Class” goes down (from “A” to “B” to “C” to “D”), one thing about it, like its age, location, or construction, becomes less desired. Note that a Class “A” building in one sub-market might rank lower if it were in a different sub-market just a few miles away that had a higher-end product.
Building or “Core” Factor
Shows how much of the building’s Nett Rentable Square Feet are used for shared areas like lobbies, bathrooms, and hallways. This factor can be worked out for the whole building or just one floor. It is also called a Loss Factor or a Rentable/Usable (R/U) Factor. It is determined by dividing the square footage that can be rented by the square footage that can be used.
Building standard improvement allowance
The landlord gives a detailed list of the building standards, materials, and prices that are needed to get the place ready to live in. The tenant is then given an agreed allowance to change or improve the materials.