Continued from…
Real Estate Glossary H [Part 1]
Homeowner’s association (HOA)
A subdivision or condominium property forms an organization to enforce deed restrictions and maintain shared components.
A non-profit homeowners’ organization formed in response to a declaration of restrictions or protective covenants for a subdivision, PUD, or condominium. A homeowners’ association, like other nonprofit organizations, has members rather than shareholders.
In a typical subdivision development, a developer documents a declaration of restrictions, covenants, and easements to assure the subdivision’s orderly and harmonious development and to protect against future value depreciation due to neighborhood deterioration. After the lots are sold, the developer typically passes the right to enforce the limitations, liens, and covenants to the HOA. In the case of condominiums, the association is also in charge of maintaining common elements such as the swimming pool and elevators, as well as appointing a management agent to carry out its regulations.
The Tax Reform Act of 1976 allows two types of housing associations—condominium management associations and residential real estate management associations - to choose to be tax-exempt for taxable years beginning after 1973. This tax-exempt status, however, shields the association from taxation solely on its exempt function income, such as membership dues, fees, and assessments collected from member-owners of residential units in the particular condominium or subdivision in question. The association is taxed at corporate rates on any net income that is not exempt function income, but is not eligible for the corporate surtax exemption provided to regular domestic corporations.
Some HOAs are now established nonprofit associations since an unincorporated association could expose its members to endless responsibilities, such as reparations for personal injuries to others. Another advantage of a nonprofit company is the existing body of law that may be used to guide the corporation’s operations.
Homeowners’ insurance
A policy for homeowners that covers both their property and their liability. There are different packages of policies for owners of single-family homes, renters, and condo owners. Extra coverage, like inflation guard and workers’ compensation, can be added to a homeowner’s policy (to cover servants or contractors). This policy doesn’t cover rising water, which is also known as flooding. For that, you have to buy a separate policy.
Homeowners’ Warranty Program (HOW)
A private insurance scheme that provides a ten-year warranty to new home buyers against specific physical problems such as faulty roofing, heating, electrical services, and plumbing. The one-time insurance premium can be paid in full by the broker, seller, or buyer, or it can be split.
Homestead
A plot of land owned and occupied as a family residence. In many places, a portion of the acreage or value of this land is protected or exempt from debt judgements, and the family is safeguarded from eviction by general creditors. It protects each spouse separately by requiring both husband and wife to sign any deed conveying the homestead property. State law expressly defines the homestead value that is immune from creditors’ claims. In some areas, a single person can claim the same homestead exemption as a married couple. In certain states, the homestead interest attaches by operation of law, while in others, it must be safeguarded by filing a notice as required by local statute. Generally, state statutes do not exempt homesteads from annual real estate taxes assessed against the property or from a mortgage for the cost of purchase or improvements. The rights to occupy the homestead and enjoy the exemption benefits normally last for the life of the husband, wife, and survivor, as well as minor children. Both husband and wife must sign a deed to surrender homestead rights. Homestead rights in property can be lost through abandonment, such as when a home is sold and the householder wants to relocate. The intention of the householder is an important consideration in the legal creation of a homestead.
Some states allow a probate homestead to be established out of the decedent’s property to give a residence for the surviving children and minor children.
Homestead exemption
A provision in some jurisdictions that permits qualified taxpayers (typically owners of their primary full-time residences) to request for a reduction of a set amount from the property’s assessed value for computing yearly property tax due.
A decrease in assessed property value on one’s primary house is permitted in some jurisdictions.
Homogeneous
This is an appraisal term that means the same or something similar. This term is used in real estate appraisal to describe an area or neighborhood where the property types or uses are similar and fit together well, and where the people who live there come from similar cultural, social, and economic backgrounds. A neighborhood where everyone is the same tends to keep property values stable.
Honey combs
Hollow gaps in the foundation wall around concrete windows, which give the concrete a rocky, weathered look.
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Honeymoon rate
Term used to describe loans that are for a short time. Rates for the first 12 months of the loan can be fixed or capped, but they may also be variable. At the end of the term, the rate on the loan goes back to the standard variable rate.
Horizon
A layer in the soil formed by the separation of particles and chemicals as a result of moisture flow within the soil column.
Horizontal property acts
The name given to the corpus of regulations governing condominiums that allow ownership of a specific horizontal layer of airspace, as opposed to the traditional way of vertical ownership of property from the earth below to the sky above. The horizontal planes appear as the floor and ceiling in a condominium, while the vertical planes seem as the walls. Condominium property regimes are another name for condominium property regimes.
A developer must normally reveal (through a declaration) all plans to a state real estate commission or other legal regulatory authority for approval to ensure that each unit is qualified for the individual rights of private property in terms of taxation and conveyance. If clearance is granted, the regulating body normally publishes a public report of its conclusions, which each buyer of a single unit must read and sign a receipt for. When the condominium building is finished, it is passed over to the owners (via the owners’ association) to administer and manage in accordance with the rules developed in accordance with broad guidelines required by the law.
Horizontal property laws
A law that permits condominium property ownership.
Hose bib
A cock on the sill or a faucet on the exterior wall.
Hose wire
This is a black cable that is used to send electrical current to another device.
Hospitality property
A category of property that comprises hotels, motels, and many sorts of eateries.
Hostile possession
Possession of real property by one individual that is in opposition to the title owner’s possession. The term hostile does not imply hatred, but rather that the possessor’s claim neither recognizes nor is subject to the genuine owner’s title. One of the basic components required to establish a claim to title under adverse possession is hostile possession.
Hotel
A building or group of attached or detached buildings having lodging units, with 50% or more of the units being accommodation units, as defined in several zoning rules. A hotel has a lobby, a clerk’s desk or counter with 24-hour clerk service, and facilities for hotel guest registration and record keeping.
Although booking hotel rooms does not necessitate a real estate license, renting out real properties must. The line might be blurred at times, especially for resort properties.
House
A single, standalone home that is unattached to other structures. In order to protect people from the elements and attackers, a house typically consists of enclosing walls and a roof.
House rules
Owners and residents of condominiums are expected to follow the rules of behavior established by the condominium board of directors. As a rule, these restrictions are implemented by a resident manager and the board’s support. Because amending the condominium bylaws is more difficult, condominium associations frequently rely on house rules to impose restrictions on the usage of common spaces like picnic grounds, pools, and visitor parking, or to prohibit pets or loud sounds in specified locations.
The listed house rules are frequently enforced by apartment building landlords. All tenants should be subject to the same set of house rules.
House size
The square footage of a house is determined by the size of the home, which affects the property’s value, taxes, and future upgrades.
Household
A building or house that has one or more people living in it at a specific address (that is, a social unit comprised of one or more individuals living together in the same dwelling or place).
Household insurance
All kinds of risks, like theft, weather damage, and fire, are covered by insurance. Since the buyer becomes the legal owner as soon as the contracts are signed, home insurance should be bought at this time.
Household population
Total number of homes in a particular area, segmented by demographic and socioeconomic factors.
Housing and Urban Development (HUD)
A federal agency established in 1965 to aid in the construction of housing in the United States.
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Housing codes
Minimum construction standards laws with the goal of improving public health, safety, or welfare.
Local governments create codes that provide minimum home safety and sanitary requirements.
Housing commission
State governments founded in the postwar period to offer low-income families with affordable housing.
Housing demand
Housing unit demand is calculated by taking the number of occupied households in a market and dividing by one less than the market’s vacancy rate (where demand is affected by the rate at which new households are being added to the market, allowing for a normal level of vacancy).
Housing expense ratio
A ratio used to measure a borrower’s ability to repay debt; defined as the monthly payment of principal and interest on the loan plus monthly payments into an escrow account for property taxes and hazard insurance divided by the borrower’s gross monthly income.
Housing for the elderly
A project made just for older people (at least 55 years old) that includes living units and shared space for social and recreational activities. It may also include other facilities and space for health and nursing services for the residents of the project.
Housing starts
The total number of house permits issued in a certain location over a given period of time.
As opposed to building permits, housing units that are actually being built. Using national and regional statistics on housing starts is a good way to look at trends in real estate and mortgages. It’s a key economic indicator.
HUD
HUD is a federal cabinet department that is officially known as the United States Department of Housing and Urban Development. It is involved in national housing projects. Urban renewal, public housing, model towns, rehabilitation loans, FHA-subsidy programmes, and water and sewer grants are among its many projects. HUD is in charge of the Office of Interstate Land Sales Registration, as well as the Federal Housing Administration (FHA) and Ginnie Mae. HUD is also in charge of Fannie Mae and Freddie Mac, as well as the Community Development Block Grant and Section 8 programmes, as well as Indian housing. http://www.hud.gov/
HUD Code
The National Manufactured Housing Building and Safety Standards Act of 1974 established a standard for the construction of all manufactured homes (also known as Red Label).
HUD-1 form
A form utilized during closings for all federally associated loans, including FHA, VA, FDIC-insured money, and loans sold to Fannie Mae or Freddie Mac. Cash sales, assumed loans, and seller-financed loans are examples of exempt closings (carryback financing). The form has been three pages since December 2009, and it requires a comparison of charges first reported on the Good Faith Estimate (GFE) to those actually levied at closure. The third page demands information about the loan’s terms.
Humidifier
Water vapour dispersion device that can be mounted on the furnace or used as a portable unit. Its purpose is to raise the relative humidity in a space.
Hundred percent location
It usually means the spot in the downtown business district where the land is worth the most. This kind of location usually has the most expensive rent and the most cars and people walking by. The term is sometimes used to describe the site that is best for a certain user.
Hurdle Rate
The necessary return rate.
The lowest acceptable return on investment capital. Projects that are not projected to generate at least the investor’s hurdle rate are turned down.
Hurricane clip
Nailed metal straps, also known as Teco clips, are used to hold trusses and roof rafters to the top of horizontal wall plates.
HVAC
Heating, ventilation, and air conditioning is abbreviated as HVAC.
An abbreviation for a building’s heating, ventilation, and air-conditioning systems.
Heating, ventilation, and air conditioning (HVAC)
Hybrid ARM
An adjustable-rate mortgage loan with a fixed interest rate and hence fixed payments for a set length of time before the interest rate becomes adjustable. The fixed interest rate term is commonly three to 10 years.
Hybrid REIT
A real estate investment trust with a portfolio that includes both mortgage and equity securities.
A property investment trust that buys and sells both real estate and mortgages.
Hydric Soil
Soil with damp conditions or saturation for most of the year; generally organic in nature.
Hydrograph
A streamflow graph that depicts the change in discharge over time, often in hours or days.
Hydrologic Cycle
The water system of the world, as defined by the passage of water from the seas to the atmosphere, then to the continents, and back to the oceans.
Hypothecate
To pledge specified real or personal property as security for a debt without giving up possession. A long-term renter, for example, could hypothecate the tenant’s leasehold rights as collateral for a loan. The lender might even use its receivable mortgage rights as collateral for a loan to the lender.
In a conventional home purchase, the purchasers pay a portion of the purchase price out of their own pockets and borrow the rest from a lending institution. The lender requires the buyers to hypothecate or pledge the property as security for loan repayment, which is performed through the use of a mortgage or trust deed. The debtors retain custody and control of the pledged property, while the lender secures an underlying equitable claim in it.
Head rent
The rent paid to the Freeholder by the Head Lessee under the terms of a Head Lease.
Heads of terms
A document that outlines the essential commercial terms of a deal. In a typical real estate Loan transaction, the Heads of Terms would specify the Interest Rate, Loan Term, Repayment Schedule, Fees, Events of Default, Financial Covenants, and Conditions Precedent. Sometimes called a Terms Sheet.
Hedge counterparty
The party with which a Lender enters into a Hedging arrangement.
Hedging documents
Documents that describe the Hedging arrangements made between the Borrower and the Hedge Counterparty, which will typically contain an ISDA Master Agreement and Schedule, a Confirmation, and perhaps a CSA.
Hissas
A phrase used in Islamic finance to describe the sale and purchase of partnership interests amongst partners.
HMRC (UK)
Revenue & Customs, H.M. The 18 April 2005 merger of the Inland Revenue and HM Customs & Excise resulted in the formation of this government department. The government agency responsible for tax collection and the payment of some forms of public assistance.
Hot desking
Employees share a desk rather than having their own desk, which is a relatively new idea in open space use. It is becoming increasingly common in businesses when a large number of employees are absent at any given moment.
Housing associations
Independent, non-profit UK organisations that primarily provide low-cost social housing.
Hybrid
A whole-business securitisation is referred to by this word. The risks connected with such a transaction are a combination of pure corporate risk and the risks associated with traditional securitisations backed by financial assets or diversified pools of corporate credits.
Hybrid debt
Participating Mortgages, convertible Mortgages, and convertible participating Mortgages are examples of investments that combine equity and debt.
Hyper-amortisation
Accelerated paydown of a CMBS class accomplished by allocating all principal and interest to that class.
Hold over rent
Rent that a tenant owes to a landlord for staying in a leased space after the lease term has ended. It is often stated as a multiple of the base rent that was charged right before the lease term ended.
Hold over tenant
A tenant who stays in the rented space even after the lease is over.