Continued from…
Real Estate Glossary R [Part 5]
Radon system
Under the floor of the basement or structural wood floor is a ventilation system designed to fan radon gas out of the house.
Rafter, hip
This is the point where an external roof angle meets an internal roof angle.
Rafter, valley
Rafter at the point where an interior roof angle intersects.
Property Finance Made Easy
We specialise in Development funding | Commercial finance | Construction loans | Portfolio refinancing & Property investment loans in Australia.
Click Here to strategise with Amber
Rail
Panel door or sash cleat cross members.
Railroad tie
Wooden lumber about 6" X 8" and 6’8’ long that has been impregnated with tar and preservative.
Rake
Slope or incline.
Rake fascia
The sloping end of a roof eave’s vertical face.
Rake siding
Diagonal installation of lap siding
Ranch
A one-story, one-level residence.
Ranch house
A rambling, one-story house with a low-pitched gable or roofline.
Rate Cap
The maximum interest rate that can be charged on an adjustable-rate mortgage for the duration of the loan.
Rateable property
Rates can be put on real estate that has the power to be taxed.
Ratios
The lender’s guidelines for determining the amount of a loan to provide an applicant are used throughout the underwriting process of a mortgage loan application.
Ready mixed concrete
A ready-to-use concrete that has been pre-mixed in a facility or truck and is being transported to the construction site.
Real estate attorney
Lawyer who deals with real estate matters.
Real estate cycles (phases)
Recession, recovery, expansion, and oversupply make up the phases of the real estate market cycle, which is tied to the dynamics of the market and shifts in macroeconomic conditions.
Real estate fluctuations
Real estate market fluctuations that last only a few months and are triggered by things like natural disasters (such as tornadoes, hurricanes, floods, earthquakes, and wildfires) or increases or decreases in the local economy (such as the entry or exit of major employers).
Real estate market
The buying and selling of real estate, which is based on supply and demand and sets prices and values on the market.
Real estate trends
Demand fluctuations in commercial real estate that last for a significant amount of time (typically years or decades) and are associated with broader economic or business trends.
Real property tax lien
The local government has placed a tax lien on the property, and it takes precedence over all other liens.
Rebar
Strengthening the bar Foundation concrete walls, footers, and poured-in-place concrete buildings are strengthened by ribbed steel bars put into them. Various thicknesses and levels of strength are available.
Receptacle
When it comes to plugging in lamps, appliances, and air conditioners, most homes have 120-volt receptacles. However, some homes also have 240-volt receptacles.
Recession
Economic downturn that is not as severe or as prolonged as a depression, characterised by falling employment, production, sales, profits, and weak economic growth. This excess supply of units causes a slump in real estate sales, stagnant or falling property values and prices, and a virtual halt in the development of new stock.
Recognition letter
A letter from the board of directors of the cooperative business acknowledging the secured rights of a lender to stock and a proprietary lease on a specific apartment is known as a recognition letter.
Recording fee
Amount levied by a city, county, or other government agency for documenting the transfer of a property.
Recovery
A period of increased economic activity or a general economic upturn characterised by rising sales and recovering prices in real estate markets as a direct result of an external shock (such as a favourable tax code revision) or an increase in demand for commercial real estate, which in turn leads to the absorption of excess space. Before most of the surplus space is used up, or until affordable funding options become available, very little new construction occurs during this stage.
Redevelopment zone
A piece of land that has been marked by a planning scheme as a place where the current buildings will be torn down and replaced with new buildings of the same type as the planning scheme.
Redline red lined prints
Changes are noted in red on the blueprints to demonstrate their significance.
Reducer
To travel from a larger to a smaller pipe, one must utilise an adapter with two different sizes of apertures at either end.
Referral fee
Brokers pay each other a percentage of their compensation for bringing in a new client.
Reflective insulation
Aluminium foil is applied to one or both sides of the material.
Refrigerant
At low temperatures and pressures, it remains a gas and can be used to transmit heat.
Heating and cooling systems employ Freon as an example.
Regional center
This variety of shopping mall sells a wide range of non-specialty goods and services, the majority of which are clothing items. Anchor stores, such as traditional department stores, discount department stores, or fashion specialty shops, are the centre of attention there. A regional mall’s stores typically face inward along a central walkway, and parking is typically located around the mall’s outer periphery.
Register
Over a duct or return for cold air, a grill is installed.
Register of deeds
A local government official maintains a record of real estate deeds or other land titles.
Reglaze
Broken windows can be replaced.
Regulatory requirements
Design standards, building construction requirements, land use plans, occupancy codes, and zoning classifications are all examples of regulations that may be placed on the development or use of land, properties, or facilities by controlling or governing parties at the municipal or county levels.
Reinforced concrete
An suitable amount of reinforcing steel bars have been inserted into the concrete to provide tensile strength.
Relief valve
If it detects too much heat or pressure, it will open.
Remodeling contractor
A contractor who specialises in remodelling.
Remote
Digital readouts for electricity, gas, or water metres are located near the front of the house so that utility companies can readily monitor the usage of the service by the homeowner.
Rent escalators
Base rent, operating expenses, and taxes are examples of lease provisions that may be subject to increases at specified intervals or at a constant annual percentage.
Rent stabilization
Buildings constructed before 1974 and apartments exempt from rent control typically fall under this category.
Rentable-to-useable ratio
Calculated by dividing rentable square footage by usable square footage. The load factor, or multiplier, is another name for this concept.
Rental
Leasehold ownership is the right to occupy a certain piece of property for a predetermined period of time.
Rental building
The units in a rental building can only be rented, not purchased.
REO, Real estate owned
After a failed foreclosure auction, the property is now owned by a lender, typically a bank.
Residential leadbased paint hazard reduction act
For properties built prior to 1978, this law specifies how lead-based paint should be disclosed in the sale or rental of certain premises.
Residential tenancies tribunal
Specialized court that decides most things about residential leases, such as whether the landlord or the tenant broke the lease agreement. Usually, there are no lawyers involved.
Residual income
A person’s net income after paying off all of their personal debts, including their mortgage.
You are missing out if you haven’t yet subscribed to our YouTube channel.
RESPA
Regulation of mortgage lending by financial institutions under federal law.
Restoration
Restoring a building to the way it looked when it was first built is different from rehabilitation.
Resumption
The Crown or some other legal body seizing certain lands.
Retail gap analysis
An examination of the voids in a market’s retail square footage.
Retail gravity model
A gravity model that compares the sales and revenue potential of different stores in the same market.
Retail property
Commercial real estate whose sole purpose is to advertise and sell final consumer goods.
Retail trade area
A retail center’s catchment area, or service area, is the geographical or formal area from which a sufficient number of customers are drawn to sustain the center’s operations. This area depends on a variety of factors, such as the nature of the center’s location, the ease with which customers can reach the centre, the proximity of competing businesses, and the availability of public transportation.
Reticulation
When the main utility services, like water from a water main to each house, are set up, a network of individual lines is made to serve the urban land.
Reverse annuity mortgage
While still living in their houses, seniors on fixed incomes can take advantage of a sort of mortgage known as a “reverse mortgage.”
Reversion value
Gain or profit realised in a single monetary sum as a result of selling an investment.
Ribbon (girt)
To support the ceiling or second-floor joists, insert a 1 X 4 board horizontally into the studs.
In most cases, a 1 X 4 board is inserted horizontally into the studs in order to support the joists of the ceiling or second floor.
Ridge
At the intersection of two sloping roof surfaces, the horizon line.
Ridge beam
The roof’s apex is formed by a ridge beam, the structure’s highest point of framing.
Ridge shingles
Ridge boards were traditionally covered in shingles.
Right of assignment
The right of assignment permits a lender to sell a mortgage at any moment rather than wait until the conclusion of the loan term to recoup the money invested.
Right of way
Encroachment on another person’s land for a defined purpose is known as an easement.
Rim joist
It’s a joist that goes around the outside of the house and the joists that support the floor.
Rise
The distance from the eaves to the roof ridge, in feet. The vertical distance between each stair tread is also taken into consideration.
Riser and panel
During the “Rough Electric” stage, the electrician supplies and installs the vertical pipes and metal electric boxes (panels) on the exterior.
Road base
Sand and stone are mixed together as an aggregate.
Rock 1, 2, 3
The term “drywall” refers to the process of nailing and screwing drywall to the walls and ceilings before taping.
Roll roofing
Rolls of asphalt roofing material are produced. A total of 108 square feet of material is contained in 36-inch broad rolls.
Roll, rolling
To correctly arrange the floor joists or trusses.
Romex
Non-metallic encased electrical wire sold under a well-known brand name and commonly used for home wiring.
Roof jack
Black plumbing waste vent pipe sleeves that are attached to the roof sheeting with nails.
Roof joist
A flat roof’s rafters. Support for the roof sheeting and roof loads is provided by lumber.
Roof sheathing or sheeting
Attached to the roof framing, these wood panels or sheets are covered with shingles or another type of roof covering before being installed.
Roof valley
The “V” made where two sloping roofs meet.
Room
The number of rooms in an apartment can be used to gauge its size.
Rough opening
Prior to installing drywall or siding on a window or door, the width and height of the opening must be taken into consideration.
Rough sill
Member at the bottom of a rough aperture for a window’s frame member Below the rough opening, it is fastened to the cripple studs
Roughingin
A project’s initial stage in which all components that won’t be seen after the second finishing phase are assembled, such as plumbing, electrical, heating, and/or carpentry.
Row housing
A group of one- or two-story homes separated by fire-resistant party walls. Also called a terrace of homes.
Run, roof
From the eaves to the ridge, the horizontal distance.
Run, stair
From the nose of the tread to the top of the riser, the distance.
Running with the Land
The grantor’s rights were transferred to the grantee together with the property’s title.
Ratchet clause
A lease provision that protects the lessor from a drop in rental below an agreed-upon lower limit in the event of a decreased market value or CPI. Has an impact on rent reviews.
Rates
Property taxes collected on a regular basis by local and state governments (e.g. water rates).
RBA
Bank of Australia Reserve. The institution responsible for issuing Australian currency.
Reasonably efficient operator (Average competent management)
A market-based concept in which a prospective purchaser, and thus the Valuer, estimates the maintainable level of trade and future profitability that can be achieved by an efficient operator of a business conducted on the premises. The concept focuses on trading potential rather than actual trade volume under existing ownership, excluding personal goodwill.
Reference schedule
A part of the lease agreement, usually at the beginning, that lists all of the things that can change.
Rent free period
A period of occupancy during which no rent is demanded, which is typically used as an incentive to a new tenant at the start of a lease and varies depending on market conditions.
Rent review
A review of the rent under a lease that is done on a set schedule. For example, the price could go up based on the Consumer Price Index (CPI) or a market valuation.
A regular assessment of the rent under a lease using a set procedure. For instance, an increase in accordance with the Consumer Price Index (CPI) or a market valuation.
Rental determination
A valuation report issued by an independent valuer that establishes a rent in the event that a lessor and lessee are unable to reach an agreement.
In situations where a lessor and lessee are unable to negotiate an agreement, a valuation report by an impartial valuer setting a rent.
Required rate of return
The minimum rate of return an investment must have to make a person want to put money into it. Called Hurdle Rate of Return as well.
Residential tenancy database
Agents utilize a risk management programme to track down tenants who have a history of breaking tenancy laws.
Residual value
The estimated amount that an entity would receive from the disposal of an asset today, after deducting the estimated disposal costs, if the asset were already of the age and condition expected at the end of its useful life. The net amount that an entity expects to receive for an asset at the end of its useful life after deducting expected disposal costs. The value of an asset at the end of a specified time period (in this definition residual value is similar to scrap value).
Responsible entity
The trust is managed by the trust’s responsible entity. In an internal management structure, the responsible entity also manages the trust’s properties. See also: Stapled Securities.
Restricted assessment (Kerbside Or External)
On the client’s specific instructions, an assessment is made without conducting a full inspection of the asset.
Retention rate
The percentage or factor used in a discounted cash flow to reflect the likelihood of tenants renewing or exercising options when their current leases expire.
Reverse management
A kind of mortgage that enables you to borrow money with the use of the value of your house as security. Until the property is sold or the borrower passes away, at which point the equity (profit from the sale) is paid to the lender, the borrower is not required to make any payments on the mortgage.
Right of access
Where someone has been given the right to do something, usually to check on services, agistment, etc.
Whenever a permanent right of access has been granted, typically for the purpose of inspecting services, agistment, etc.
Right of entry
A landlord may inspect the premises if the tenant is given reasonable notice.
When a tenant has been given a reasonable amount of notice, a landlord is permitted to inspect the property.
Rolling internal rate of return
Internal rates of return are calculated from a fixed base and assume that the investment will be sold at the end of set periods, like the end of the first and second year.
Rabb ul-Maal
A term in Islamic finance that refers to partners in a mudaraba structure who provide capital in the form of cash or goods but don’t usually get involved in the management or service part of the business.
Rake bonds
Loan-specific securities are backed by a B Note, which is the junior part of a single commercial mortgage loan.
Ramp up
The amount of time after the closing of a Securitization (usually a CDO) that the Issuer can buy more Collateral to “ramp up” a Portfolio with a principal value at least equal to the amount of Securities that the Issuer sold.
Ramp up period
In a CDO, this is the amount of time that the issuer has to ramp up the portfolio. During the Ramping Up Period, some collateral tests are not done.
Rate creep
This happens when the principal amount is given to the senior loan before the junior loan. This causes the weighted average rate on the senior and junior loans set out in the intercreditor agreement to creep above the weighted coverage whole loan rate that the tenant pays. Because of this, there is a shortfall in available funds, and more and more of the junior loan interest can’t be paid back.
Rate step-ups
Rates of interest were agreed to go up. These can happen at certain times or if certain things happen, like if the borrower can’t get a signed sales contract for the property being used as collateral.
Rated obligations
A rating agency gives a rating to the obligation of an issuer to pay principal and interest based on how likely it is that they will be able to meet those obligations.
Real estate derivatives special interest group or red-sig
A US industry alliance was set up to help people understand how to use and implement US commercial property derivative products and to make it easier for people to share information about how to use and implement commercial property directives.
Realised loss
When a foreclosed loan is sold, the amount not recouped is equal to I the unpaid balance of the loan plus (ii) all unpaid scheduled interest plus (iii) all fees related to the sale of the property minus (iv) the amount made from the sale.
Recognised investment exchange
A market for stocks and bonds that has been approved by the UK Financial Services Authority as meeting their requirements.
Red book valuation
A new independent valuation that a loan servicer asked for.
Redemption
Repaying all of the money that is owed on Securities in a Securitisation. Redemption can happen at the end of the term, when an Event of Default happens, when the underlying assets are paid off early, at the option of certain classes of Noteholders when certain events happen, and when certain tax events happen.
Reinvestment period
The time frame in a CDO during which the Issuer can buy new assets and replace old ones with new ones.
REIT debt securities
Securities that a real estate investment trust puts out into the market. They are usually unsecured and may be lower on the issuer’s list of obligations than other securities.
Release provision
Either (a) a provision to release collateral under a mortgage for a pre-agreed amount or (b) a provision that says the borrower must prepay a portion of all other loans in the pool if it pays off the loan for one property in the pool that is consolidated and cross-collaterized (thereby stopping the borrower cherry picking properties in a pool).
Relevant information summary or RIS
RIS is a summary of any information about a loan or property that the Servicer or the Special Servicer believes will have a significant effect on the value of the loan (or whole loan as applicable).
Remittance report
A report about the current distribution that is sent to noteholders by the servicer on each distribution date.
Rent step-up
A lease in which the rent goes up at regular times for a set amount of time or for the length of the lease.
Rental growth
The rate at which a property’s estimated rental value goes up over a certain amount of time.
Rental income yield
A property’s rental income is shown as a percentage of the property’s value.
REOC
A business that runs real estate.
Repatriation
Returning a financial asset, like earnings, from a foreign country to the home country of an entity.
Representations and warranties
Clauses in an agreement in which the parties agree on certain facts and agree that, if those facts turn out to be false or wrong, they will take steps to make sure the statements are changed or pay the other parties in some other way because the statements are wrong. In a securitization, the representations and warranties usually cover the condition and quality of the assets at the time they are transferred from the originator to the SPE or an intermediate transferor. Most of the time, they also say what the SPE or the intermediate transferor can do if it turns out that any of the representations were not true. Even if the asset has been put into a securitized pool of assets, these may still be enforceable.
Reserve account
A funded account that a SPE can use for certain purposes and that is often used as a way to improve credit. Almost all reserve accounts are at least partially funded when the related transactions begin, but many are set up so that they can be built up over time with the extra cash flow that is left over after investors are paid.
Reserving
A sum of money that an insurer keeps in liquid form from its premium income in case it needs to pay out claims in the future. This amount may be required by an insurance regulator or kept by the insurer itself.
Resolution trust company (US)
A company owned by the US government that was in charge of selling off assets, mostly real estate, that had belonged to savings and loan associations that had gone bankrupt.
Retail sector
A type of commercial property that includes stores on main streets, shopping malls, and retail warehouses.
Retention of title
A clause in a contract that says the goods won’t become the buyer’s property until the full purchase price has been paid.
Reverse earn-out loans
Loans for which resizing plans are made at the start based on criteria that haven’t been met yet or haven’t been met consistently. Criteria will be set, and if they aren’t met by certain dates, the loan amount will go down. The borrower must pay down the difference between the original loan balance and the new balance.
Reversionary estate
When a property owner gives a property to someone else but keeps some right to the property in the future.
Reversionary rent/income
A change in income that will happen because the rent was raised, the lease was renewed, or the property was rented out again.
Reversionary yield
The return on an investment is given as a percentage and is found by dividing the reversionary income by the value or purchase price.
Revolving period
The time during which new loans or other receivables can be added to a revolving transaction’s pool of assets.
Riba
The word for interest in Islamic finance. Sharia’a law says that it is illegal to give or take riba.
RICS
The Royal Institution of Chartered Architects in the UK.
Right in personam
A right that can only be used against the person who first agreed to it. Personal or contractual Security is a promise by the borrower to pay the debt. It is usually backed up by a Right in Rem and real Security.
Right in rem
A right that can be used against everyone (i.e. a property right) except for a buyer without notice. This is different from a “right in personam,” which can only be used against one person. Real Security gives the Lender a right in rem that can be enforced against one of the Borrower’s assets.
Right of substitution
The right to switch out collateral, parties, or other parts of an agreement.
Right to cure
The right for a third party with an interest to take over the responsibilities of a party who has broken a contract in order to fix the problem and protect their own interests.
Risk based capital (RBC)
Amount of money or net worth that an investor must set aside to cover a possible loss on an instrument. The RBC amount varies by asset class and is usually given as a percentage of the total amount at risk.
Risk diversity
Putting together different kinds of loans to avoid and lower concentration risk.
Risk-weighting
The process of putting assets into groups based on how much risk they pose.
Risk-weighting bucket
A risk-weighting category that is made up of assets with about the same amount of risk.
Russell 2000 index
A stock market index put together by the Russell Investment Group in Tacoma, Washington. Russell makes its indexes by listing all companies in order of decreasing market capitalization adjusted for float, which is the actual number of shares that can be traded. This is done in a clear and rule-based way. In the US, the broad-cap Russell 1000 Index is made up of the stocks of the 3,000 largest companies, and the small-cap Russell 2000 Index is made up of the stocks of the 2,000 smallest companies.
Russell NCREIF index
The Frank Russell Company and the National Council of Real Estate Investment Fiduciaries put together a number of indexes on the performance of commercial real estate. In the US, it is often used as a measure of how well a real estate investment has done.