Real Estate Glossary F [Part 3]
The blueprints illustrate how a building’s floors are organized, down to the precise dimensions of each room and how they connect to one another. In many states, developers must submit a set of floor plans and elevations of a project, together with a verified statement from an architect or engineer, when they register the declaration.
It is critical to examine the floor plan in order to arrive at an accurate valuation of a property. Due to functional obsolescence, a bad floor plan or room arrangement could devalue the property.
The organization of rooms in a structure.
In this horizontal section drawing of a structure, numerous spaces are seen to be linked together.
The overall floor area of a building divided by the total building parcel area.
This is the passageway through which smoke, heated air, and gases ascend in a chimney. Clay or terracotta pipe is commonly used for flues.
Gas water heaters, furnaces, and fireplaces all have vent pipes that allow exhaust gases to escape.
A substantial pipe that permits gas from a fireplace, water heater, or furnace to vent.
When the heat flue pipe exits the roof, a metal ring is placed around the pipe to keep it secure.
When the burner is turned off, a door inside the furnace automatically closes to prevent heat loss.
A type of fire clay used to line the interior of chimneys before the brickwork is applied to the exterior.
Gas-filled glass tube with phosphorus-coated interior.
Roofing sheathing and lookouts support the gable overhang’s rafters at the ends.
A thorough examination of a document, especially the abstract of title, in order to find any errors in the formatting or the content. Even flyspecks should be visible with thorough searching, according to theory.
A market analysis tool in which a moderator asks a group of eight to twelve persons a series of well prepared questions in order to acquire precise, specific information about consumer attitudes and preferences.
A light metre is a device that measures the amount of light in a room. It’s the same as the amount of light emitted by a single candle at a distance of one foot.
A measurement of light intensity. A foot-candle is the amount of light measured on a surface one foot away from the source of one candle. As a result, the light level in an office environment could be defined as 85 foot-candles.
Footer / footing
The foundation wall is supported by a thick concrete pad.
Foundation footings that sit on firm ground and are wider than the building they support, such as a chimney or a column. The purpose of footings is to distribute the structure’s weight evenly across the ground.
The foundation of a building is supported by a concrete base that is below the frost line.
Industries in which enterprises are not geographically constrained by transportation costs. These businesses usually choose areas with a ready supply of workers or with low labor expenses.
The area of a site covered by the first level of a structure.
The shape and layout of a structure.
For sale by owner (FSBO)
An owner who is trying to sell their home on their own without the assistance of a real estate agent is known as an unrepresented seller. Many property owners work with and pay a broker who is representing a potential purchaser. Unrepresented sellers should receive written confirmation from their prospective agent as to whether or not they are being represented by that agent. Buying directly for one’s own account is also a kind of this.
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In the event that a mortgage or deed of trust is in arrears, it is common practice to avoid legal action. In most cases, a borrower can only get a deferment if they can come up with a solid plan for paying off their arrears in the future.
Force and effect of law
Administrative regulations have the same legal weight as legislative acts, according to this term. When a rule implementing a state’s licensing legislation is adopted by the real estate commission, it has the same legal force as the state’s licensing statute.
Unpredictable and uncontrollable force that can neither be predicted nor controlled; a word first used in the insurance law (a “vis major”). To put it another way, it refers to a phrase present in many construction contracts that is designed to safeguard both parties in the event that a component of the contract can’t be completed or a time frame for completion is extended due to circumstances beyond their control. Subcontractors may agree to pay $500 per day in damages if the installation of the plumbing is not completed by December 31, unless the delay is due to acts of God, labor conflicts, an inability to get supplies or fire, and the like. The subcontractor would not be liable for the $500 per day if the plumbing lines were delayed by 30 days due to a shipping strike, at least until January 31.
For tenants who are required to finish an improvement by a specified date, ground leases may include a “force majeure” clause, which protects the tenant from a default caused by unavoidable delays in the project.
Force majeure clause
A condition in a construction contract that provides for extra time to finish a structure owing to an unavoidable reason for delay, such as bad weather, labor conflicts, or accidents.
Forced air heating
In the United States, this is a common method of heating.
A forced sale that occurs as a result of the owner’s inability or unwillingness to make timely payments to his or her creditors.
Future-period financial statements that are based on projections of uncertain future events.
Projection of a possible future state or result.
The soon-to-be-arrived time frame for which a prognosis is to be made.
Predicting a future value based on previously known, relevant facts.
Removing the owner’s right, title, and interest in a piece of property or an item, typically as a result of a missed payment.
A court or out-of-court process initiated by a lender with a mortgage on real property to allow the lender to sell the property and utilize the sale profits to repay the owner for payments outstanding under the linked loan.
A process that requires a public auction of property to pay a late borrower’s financial obligations to a lender. The legal goal is to terminate ownership claims and any subordinate liens so that title may be transferred to a buyer.
In Australia, this is referred to as ‘mortgagee in possession,’ and it occurs when a mortgagee has exercised their rights under the mortgage and has gained ownership of the property from the mortgagor.
the legal procedure to take possession of a property taken by a mortgagee when a mortgagor defaults on payments
In the event of nonpayment of the mortgage note or other terms of the mortgage instrument, a legal procedure in which property used as security for a debt is sold to cover the debt. When a mortgage is foreclosed, the property’s title is transferred from its current owner to the new owner, who may be the mortgage holder or a third party interested in purchasing the property at the foreclosure sale. Nonjudicial foreclosure, judicial foreclosure, and strict foreclosure are all forms of foreclosures.
In states where “power of sale” is not mentioned in the mortgage instrument, judicial foreclosure ensures that the property can be sold by court order if sufficient public notice is given. Mortgagees have the right to assert their rights if a borrower fails to make payments or otherwise fails to comply with the terms of the mortgage, such as paying taxes. Initially, the mortgagee may want to move the due dates of all remaining monthly payments forward. The mortgagee’s lawyer can then launch a lawsuit to foreclose the mortgage’s lien. The property is sold by a court order after the facts have been presented in court… The property is put up for auction and sold to the highest bidder following an open, well-publicized sale.
In some states, a power of sale clause in a mortgage or trust deed gives the lender (or the trustee in the case of a deed of trust) the ability to foreclose on a mortgaged property without having to go through the time and expense of a court action. The deletion of the statutory redemption period occasionally allowed in the court procedure drastically reduces a borrower’s redemption time. When a trustee files a notice of default with the county recorder’s office, the public is notified of the auction’s upcoming date and time. The amount owed and the date of the public sale are advertised in public media, not to notify the defaulting mortgagor. In some cases, A copy of the notice of sale or affidavit of foreclosure may be required to be filed by the mortgagee or trustee after the property is sold.
Some states allow lenders to seize mortgaged property through a stringent foreclosure process, even if judicial and nonjudicial foreclosures are the more common. Following adequate notification to the delinquent borrower and preparation and filing of all necessary documents, the court sets a fixed deadline for the full payment of the defaulted obligation. A borrower’s equitable and statutory redemption rights may be renounced if full payment is not completed, in which case the court awards entire legal title to the lender, depending on the specifics of each case. In stringent foreclosure situations, there can be no deficiency judgment.
There are only a few states that allow for a foreclosure by entrance and seizure. Assuming that the mortgagee retains possession for the duration of the redemption period, the loan is considered paid in full.
Due to the fact that all preceding and subsequent mortgage creditors must be joined as parties to the judicial action, and because junior federal tax liens are not unloaded by nonjudicial foreclosure processes, a current title report should be obtained in order to prepare a foreclosure proceeding. The mortgagee cannot exercise its power of sale if the state statute of limitations for real estate actions has expired.
After the foreclosure sale, most states give a defaulted mortgagee a window of opportunity to buy back their home. The court may appoint a receiver to take care of the property, collect rentals, or pay operational expenditures during this statutory redemption term (which may be as long as one year). When a borrower is able to raise the required cash to redeem the property within the statutory time frame, the court receives the redemption funds as a payment. The mortgagor is able to take possession of the property because the mortgage debt was paid from the sale profits. The “equitable right of redemption” was abolished by the court auction in the old chancery processes, and the right of redemption was inherited. To offer the mortgagee an opportunity to recover the property, many states provide a statutory redemption term that begins after sale. As long as a payment is received from an indebted borrower after default and before their right of redemption expires, the mortgagee is generally regarded as forfeiting the right to proceed with foreclosure. The winning bidder at the auction receives a deed to the property, known as a commissioner’s deed, if redemption is not made or if state law does not provide for a redemption period. Form of deed that may be executed by a sheriff or master-in-chancery in order to transfer the title of the mortgagor to the new owner at the time of the sale of the property. In this case, the title passes “as is” with no warranties, but the former failed mortgage is no longer attached to the property. Mortgagor’s title is no better than that of the buyer.
After deducting fees, any remaining proceeds from the foreclosure auction are paid to the mortgagee. If the foreclosed debt is not fully repaid by the sale profits, the debtor may face additional legal action to recover the deficiency. The court can enter a shortfall judgment as a general lien on the debtor’s assets if the deficiency occurs during a judicial foreclosure. Non Judicial foreclosures can result in a deficiency, but the mortgagee must begin new processes to get a deficiency judgment.
Foreclosure has tax ramifications. Defaulting homeowners are deemed to have sold their property for the amount of the outstanding debt at the time of disposition under tax regulations. Owners who default on their mortgages may be entitled to a taxable gain from the foreclosure sale, even if they get no money from the sale of their property. Legal precedent holds that this norm applies to defaults under contracts for deed as well as terminations under mortgage and trust deed agreements. In addition, whatever depreciation that has occurred at a faster rate is recouped.
By filing Chapter 13 bankruptcy, the foreclosure process can be substantially slowed down. It is illegal for creditors to pursue action against the debtor outside of bankruptcy court once the bankruptcy petition has been filed Foreclosure proceedings are therefore automatically postponed (or delayed) while a bankruptcy is being processed through the court system. The sale might also be nullified if the foreclosure sale price is much less than what the secured property is actually worth. This is true even if the sale occurs within one year of the bankruptcy filing.
The mortgagee can accept a deed in lieu of foreclosure from the borrower as an alternative to foreclosure. Foreclosures that are settled by agreement rather than via legal action are known as “friendly foreclosures.” Foreclosure, on the other hand, eliminates any and all junior liens, as well as the right to sue for the difference between the value of the property and the amount of money owed on it.
A legal procedure in which the rights of a property owner who has defaulted on a loan payment are forfeited.
The procedure of transferring a delinquent property to the lender so that it can be sold to collect the loan.
Foreclosure by sale
Mortgaged property is sold at public auction as a result of the mortgagor’s default. The equitable right of redemption is extinguished when a mortgage is foreclosed by sale.
A court ruling that specifies the specific time period (specified by state legislation) during which the equity of redemption will exist.
The legal definition of an out-of-state or out-of-country corporation that does some of its business in another state or country. To conduct business in a state, all foreign corporations must generally meet the state’s requirements and get an annual license to conduct business in the state.
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Foreign Investment in Real Property Tax Act (FIRPTA)
Nonresident aliens and foreign corporations are subject to U.S. income tax on gains from the disposition of a U.S. real property interest in (1) real property located in the United States and (2) any domestic corporation that was a “United States real property holding corporation” at any time during the five-year period preceding the interest’s disposition, or during the period the taxpayer held the interest after June 18, 1980, whichever is shorter.
A U.S. real property corporation is a local or foreign corporation that owns 50% or more of its total assets in the United States. The test appears to be possible on any day of the year.
A nonresident foreigner or foreign corporation is classified as “engaged in a trade or business within the United States” for tax purposes, and the gain is treated as “effectively linked” with the U.S. trade or business. As a result, a foreign investor is liable to regular taxation. Expenses related to the gain can be deducted.
Nonresident foreign people’ gains from the sale of an interest in U.S. real estate are taxed at 30% of certain capital gains during any tax year in which they are present in the United States for 183 days or more, unless a tax treaty provides for a lower rate of taxation.
If the seller is a resident alien, the responsible listing broker will demand the seller to sign an affidavit. Otherwise, the broker may be held accountable for failing to inform the customer of the obligatory I 0 percent withholding. These restrictions are intricate, and brokers should adopt a clear policy for dealing with international listings and sales. Nonresident sellers are subject to withholding regulations in some states.
It is only during low tide that a piece of land becomes above water. This terrain experiences dry and rainy spells on a regular basis due to the tides.
If an obligation or condition is not met, the right to something is forfeited. There is a strong public policy against enforcing forfeitures since a forfeiture loss frequently has little link to the damages authorized by law. Contract terms requiring the defaulting party to forfeit all monies paid under an installment purchase contract are commonly refused enforcement by courts (that is, a contract for deed). Although some courts allow forfeitures, the right to forfeiture must be explicitly stated in the contract, or else rescission is the only recourse.
Forfeiture may be inequitable when buyers default on a mortgage or trust deed in which they have substantial equity. Upon proper application, a judge may block forfeiture and order the property to be sold, with the proceeds of the sale going to the mortgagee and the rest going to the mortgagor.
Forfeiture can be used to acquire real property, such as when a grantor transfers real estate with a subsequent condition attached. If the condition isn’t met, the grantor has the ability to reclaim the property through forfeiture.
When a real estate licensee fails to pay the required renewal fees or complete any continuing education requirements, the license may be forfeited. Foreclosure, rescission, and the Drug Enforcement Act (DEA)
The money loss or other possessions as a result of a contract’s failure to perform.
Counterfeiting, alteration, or falsification of a document is a criminal offense that is punishable by up to five years in prison. To make a fraudulent deed lawful, it must be recorded, but that does not make it so. Even if a subsequent buyer for value buys the property without being aware of the preceding forged deed, the buyer does not gain a legitimate title to the property in question… (i.e., the forged owner [ or heirs] would still have legal title). Forgery in the chain of title is compensated by a title insurance policy for such a buyer.
During the placement and initial hardening of concrete, a temporary framework is used to hold the concrete in.
Formal (or geographic) data
Formal regions are used to organize and present the data and information. Look up formal region while you’re at it.
It happens when the lender formally accepts your loan application and gives you a 100% guarantee.
A delineated area, either legally or because of the presence or absence of certain features or traits.
Every modern construction material, especially freshly created or renovated properties are likely to include this colorless organic chemical because it is easily recognized and quantifiable, with a strong, noticeable stench. A “probable human carcinogen,” formaldehyde has yet to be classified by the EPA. “Sick building syndrome” is exacerbated by formaldehyde.
When a fire-retardant wallboard, veneer, or veneered plywood panel is needed, a plastic substance with this brand name is what you’re looking for. Other brands use the same or very similar materials.
Arbitration can take place in a variety of settings: in a court, an administrative agency (such as a state real estate commission) or a private group (such as a board of REALTORS® arbitration panel).
Forum shopping clause
There is an agreement language specifying which state’s laws will apply and where the cases will be brought. The following is a typical example of how people talk: “If a lawsuit arises out of or in connection with this contract, it will be brought in the state courts of the Home State. The decision of the State Supreme Court is final and binding on all parties involved.”
If the selected state and/or state statute(s) have any connection to the place where the original contract was made or performed, then this clause is usually upheld.
A contract that commits a mortgage lender or investor to acquire or fund a loan at a later date on preset conditions.
Calculate the early start and late completion dates for all network activity.
Structural support for the first floor of an apartment building.
First-floor construction’s foundational framework.
Foundation drain line
The foundation footing is surrounded by a clay pipe to help with water drainage.
When concrete is poured, the foundation wall panels and rebar are held in place by metal wires.
The major structural support for a building’s frame is provided by the masonry or concrete walls below ground. The basement’s foundation walls serve as the basement’s side walls.
Moisture protection of the highest calibre. That is used to keep out water and prevent rusting.
A portion of a property’s rights that is less than the whole bundle (e.g., a sub leasehold interest).
In exchange for paying a monthly fee, customers obtain a deed to a vacation home located in a popular resort area. Owners get a piece of the equity growth and can resell their stake in the company. Fractional ownerships, unlike timeshares, are linked to a specific property or collection of properties, most commonly pricey vacation houses.
Unusually large sections in government surveys, maybe due to errors in the survey or partial submersion under water, are common.
Building code compliance and structural integrity are two aspects of the house inspection process.
Integrity inspections and code compliance checks are part of home buying procedure.
Construction of the property’s wood structure is carried out by the carpenter contractor, who repairs lumber, erects structures, and instals beams.
Studs, joists, and rafters are all examples of structural wood.
A legal right or privilege, such as a state charter that lets corporations form and stay in business. A franchise is the right to run a service business, like a taxi company.
The private contractual right to run a business using a certain trade name and the operating procedures of a parent company (the franchisor), such as McDonald’s restaurant. In order to get a loan for a rental property, a franchise may be worth something as extra security. It could also go to the lender.
Since the early 1970s, companies like Century 21, ERA, and Realty World have run national franchised brokerages. They do not own the individual offices outright, but instead license their standard trade names, reputations, operating procedures, and referral services to brokerages that are independently owned and run. These referral services take the idea of a multiple listing service one step further by being able to send potential customers anywhere in the city or the country.
The pros and cons of real estate franchises that are usually mentioned are summed up in the following paragraphs.
Advantages: Using a well-known trademark and trade name to identify a market, which can be done through mass advertising. Brokers also benefit from a referral system in which franchise members share leads and listings, get volume discounts on things like advertising, find it easier to hire sales staff, get help from management, and have access to good sales training programmes that would not be available otherwise.
Disadvantages: Fees, such as an initial fee or a royalty override, may be too high for the benefits they bring. There is a loss of original identity that can’t be got back. Many brokers think that some bookkeeping requirements are too much trouble. Because some activities, especially those that have to do with marketing, need group approval, it can be hard to agree on actions that everyone will do together. Referrals can sometimes make it hard for franchisees to get along in large market areas. It’s harder to pick business partners, especially when franchisors care more about quantity than quality. In some cases, a franchisor might not live up to what they said they would do. A trade name and trademark might not be as good as a local name that has been used for a long time.
The Federal Trade Commission has made a rule about business and franchises to stop “widespread evidence of unfair practices in connection with the sale of franchises” when a franchisee uses the trade name of a franchisor or when a franchisor has a lot of control over or helps a franchisee a lot. The FTC rule goes much further than many state laws that cover franchises and gives franchisees a whole new set of protections. The FTC rule was made to stop franchisors from abusing their power while letting the franchise system, which is becoming a more mature and dynamic business activity, continue to grow.
The use of deceit, cunning, breach of confidence, or misrepresentation to obtain an unfair or dishonest advantage over another person. Due to the dishonest nature of fraud, it is distinct from negligence in that the injured parties must have relied on a major misstatement of a fact that was either known to be untrue, or was done so with the aim to deceive or with reckless disregard for the truth of the matter. If the buyer asks about termites, for example, the seller will produce an altered termite report to satisfy their curiosity. Silence may not always be golden when it comes to not exposing known flaws or being “quiet.”
When determining whether a transaction has been fraudulently induced or fraudulently executed, it is critical to distinguish. Contracts can be voided if a party’s agreement to sign is induced by deception, even though the party is aware of what he is signing. void if the party is tricked as to what she is signing, and if she did not intend to enter into a contract at all. A void contract, on the other hand, has no legal standing and cannot be revoked.
If a court action is brought because of fraud, the state’s statute of limitations is usually calculated as of the date of fraud or as of the period at which the victim of fraud could or should have discovered the deception.
Code of ethics dictates that REALTORS® are responsible for protecting their clients from fraud, deception, or unethical actions in real estate. Brokers’ licenses can be suspended or revoked under all state licensing regulations if they commit fraud.
Real Estate Glossary F [Part 5]