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Real Estate Glossary S [Part 3]
Solar easement
An easement that protects a property owner’s right to light and sun. No one has a right under common law to light and air on their property. So, if a neighbor’s tree or a proposed nearby condo blocks the sun and makes an owner’s solar heating system useless, the owner would have no legal recourse other than to try to buy an easement to stop the tree or condo from blocking the sun.
Some places are trying to pass laws about solar easements to encourage property owners to use energy systems that are more efficient. A law in California says that plants that block the sun from a solar collector are a “nuisance.” In some places, builders who make sure that solar panels can be used are rewarded. For example, a builder could get a density bonus of up to 20% if he or she planned streets, lots, and buildings so that people could get to the sun.
Solar gain
The quantity of solar energy absorbed by a landscape surface or environment.
Solar heating
The process of producing heat by absorbing sunlight.
A way to heat your home that uses the sun’s energy. There are both local and federal tax breaks for homeowners who use these energy-efficient systems.
Sole plate
In a frame wall, the bottom horizontal member.
Sole proprietorship
All cash flow and income tax consequences go directly through to the individual’s income tax return, avoiding taxes at the entity level.
In contrast to corporate, joint, or partnership ownership, a method of business ownership in which one person owns the entire business and reports all profits and losses directly on a personal income tax return.
A sole proprietorship or sole proprietorship is widely used in real estate brokerage since it is simple to form and flexible to operate. Individual proprietors with a valid broker’s license may operate a brokerage firm. As required by state law, proprietors may use their own name or an already registered false name.
There is an increasing trend for sole proprietors to incorporate their businesses in order to take advantage of certain tax and fringe benefits, such as pension and profit-sharing programmes.
A type of ownership in which just one person owns the property.
Solid bridging
A strong element put at the middle of the span between adjacent floor joists to prevent joists or rafters from twisting.
Solstice
The dates when the sun’s declination is at 23.27 degrees north latitude (the Tropic of Cancer) and 23.27 degrees south latitude (the Tropic of Capricorn) are June 21-22 and December 21-22, respectively.
Sonotube Round
Large cardboard tubes that are used to keep wet concrete in place until it hardens.
Sound attenuation
The process of soundproofing a wall or flooring with fibreglass insulation.
Sources and applications of funds
The financing study looks at where the money comes from and how it is used.
Space analysis
An examination of a current office scenario in order to identify problem areas and offer a foundation for making decisions about substantial adjustments. It might also take the shape of a planning tool that the customer will utilize to construct a planned situation.
Space heat
Heat given to a living space, such as a room or a building’s living area.
Space market
Rents and other costs associated with renting a place to live.
Space plan
Draft by an architect that shows how the floor plan of a rented space will be set up to meet the needs of the tenant.
Space planning
The act of planning out and creating space to meet the demands of a tenant.
Space time
A four-dimensional idea that combines three dimensions of space and a fourth dimension of time. Real estate services are often offered in units of space-time.
Spacing
The separation of distinct units, shingles, or members.
Span
The unobstructed gap between structural supports that a frame member can carry a load without support.
Spatial data
Data containing implicit or explicit location information.
Spec home
A house that is constructed before it is sold. The builder believes he can sell it for a profit.
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A house that was built on a guess.
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A model home.
Special agent
One whose power to act is restricted to a certain job or duty. Typically, a real estate broker serves as a special agent.
A person who has been given authorization by a principal to undertake a certain business transaction or perform a specific role. Special agents are real estate brokers and salespeople.
One who is given permission by a principal to do a specific act or transaction, but not for long-term service like a general agent. The real estate broker is usually a special agent hired by the seller to find a buyer for a property who is ready, willing, and able to buy. A limited power of attorney makes the attorney-in-fact a special agent.
Special assessment
A legal levy levied against real property by a governmental body to pay for public amenities such as lamps, sidewalks, and other street improvements.
A tax or levy that is usually only put on the specific pieces of property that will benefit from a proposed public improvement, as opposed to a general tax on the whole community. Because the proposed change will make the affected homes more valuable, only the owners of those homes must pay this special lien.
The main difference between special assessments and property taxes is that property taxes are used to pay for the government’s general functions, while special assessments are used to pay for specific local improvements like streets, sewers, irrigation, and drainage. Special assessments are often used to pay for things like water, sidewalks, sewers, and parks and other recreational facilities. In some cases, improvement districts charge special assessments on a regular basis. In other cases, only the city and county charge special assessments for a specific work or improvement.
Owners usually either pay the special assessments in full or in installments over a few years. If there is a sales contract, it should say who is responsible for paying any assessments at the time of closing. Most of the time, though, the seller pays for all improvements that are mostly done by the closing date. This is because the improvements usually make the property worth more. Most of the time, the buyer takes responsibility for improvements that have been approved or are in the process of being done. In any case, this is something that the buyer and seller can talk about.
Most of the time, special assessments are divided up based on the benefits received rather than the value of the land and buildings being assessed. This is called the “assessment-roll spread” most of the time. In a residential subdivision, for example, the cost of installing storm drains, curbs, and gutters is calculated by the front foot. The property owner is charged for each foot of his or her lot that is next to the street that is being fixed.
At the moment, you can deduct real estate taxes from your income tax. Special assessments, on the other hand, are not directly deductible because they raise the value of the property and, like any other capital expenditure, add to the cost or basis of the property. The assessment, on the other hand, is not usually eligible for depreciation. In some cases, an investor or taxpayer can deduct a special assessment if they can show that all or part of the assessment is for maintenance, repairs, or interest charges.
A charge established by a government entity against real estate to cover the proportionate cost of an improvement, such as a street or sewer.
Property taxes levied to fund specific improvements for the benefit of neighboring property owners. For example, property owners in a subdivision could be compelled to contribute to the cost of installing sanitary sewers on their property.
Special benefit
The value that a government improvement adds to a certain property or a small number of properties. Some courts use the market value of the property taken plus severance damages, minus any special benefits, to figure out what is fair compensation for a property that is taken in part by condemnation. Other courts may think that just compensation is the difference, if any, between the property’s value before the crime and its value after the crime, taking into account any special benefits. So, if the state takes a part of a property to make an improvement and the improvement actually raises the value of the rest of the property, the court may take into account the value of the special benefit and reduce the just compensation in the same way.
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Special conditions
Before a real estate sales contract becomes legally binding, many conditions must be met. The following are examples of typical circumstances:
- Purchaser takes out a first mortgage of $95,000 at a maximum interest rate of 7% for a maximum amortization period of 30 years.
- A written credit report from the buyer must be submitted within [number of calendar days] after the buyer accepts this offer.
- All agreed-upon repairs [or additions] must be completed and approved in writing by the buyer and seller prior to the closing date.
- Written inventory items such as furnishings, plants, and the like must be accepted by the buyer.
- Closing with all of the appliances, plumbing fittings, and electrical systems functioning properly
- If a reliable pest control provider provides a Wood Destroying Insect Inspection Report showing that no termites or other wood-destroying insects have infested the improvements, the seller must provide it.
Special lien
A mortgage, an attachment, or a mechanic’s lien are all examples of liens or charges against specific parcels of property. Also known as a specific lien. A general lien, on the other hand, is a charge against all of the debtor’s property.
A lien that solely affects or is linked to a single plot of land or a single piece of property.
Special purpose building
A facility, such as a restaurant or a bowling alley, that is intended to meet the specific demands of its occupants.
Special purpose property
A piece of land with buildings on it that can only be used for one thing because of how it was built. This could be a church, nursing home, school, post office, or hospital.
Special use permit
Zoning authority permission to allow a special exception in the zoning ordinance to be used on a specific piece of land. For example, a residential zoning ordinance may permit churches, hospitals, or country clubs to use specific special uses, provided that a permit is first obtained. The difference between a variance and a special use is that the latter is a permitted exception to the zoning ordinance, whereas the former is not. For a variance, the requirements are much more stringent than the requirements for a special-use permit." “Variance” refers to a deviation from the norm.
Special warranty deed
A deed in which the grantor warranties or guarantees title only against flaws that arise during his or her possession of the property and not against prior problems.
The covenant against encumbrances is similar to that of a general warranty deed, except that it only applies during the grantor’s ownership of the land.
A deed in which the grantors only guarantee the title against problems that come up during the time they own the property and not against problems that were already there before they bought it. Most of the time, the words “by, through, or under the grantor, but not otherwise” are used to describe this kind of deed. A special warranty deed is often used when a fiduciary like an executor or trustee transfers the property of the principal because the fiduciary usually doesn’t have the power to guarantee against the actions of his predecessors in title. This is sometimes used in a divorce decree when one spouse gives property to the other spouse.
The grantor does not assure against any title defects in a deed in which the grantor confines the title warranty offered to the grantee to anybody claiming by, from, through, or under him, the grantor.
Specialty contractor
Authorized to do a special task.
Specialty shopping center
Many of these institutions are located in downtown neighborhoods or refurbished historic structures and have a distinct theme or image. A variation on this subject is outlet malls.
Specific asset syndication
A sort of syndication in which the promoter acquires possession of a property and then brings together a group of investors.
Specific lien
Property tax and assessment liens, mortgages, and mechanics’ liens are all examples of liens that arise directly from events relating to a property.
Specific performance
When a party defaults on a contract, a legal action is brought in an equity court to compel that party to carry out the full obligations of the contract rather than settle for damages, for example.
An action taken in a court of equity to force a party to adhere to the terms of a contract in exceptional circumstances. When a seller breaks a real estate contract, an equity court has jurisdiction because land is unique and legal damages alone will not be enough to compensate the buyer. If a broker agrees to find a buyer, the courts can’t specifically enforce the agreement; nor can they enforce a contract that is illegal, ambiguous or lacking sufficient consideration.
Buyers have the right to ask a court to enforce a contract and force a seller to deed the property under threat of contempt of court if a seller refuses to sell to them as stipulated in the contract of sale. In the same way, a deceased seller’s heirs can be compelled by a judge to carry out a contract of sale by the buyer.
If land values have dropped, a seller may be able to compel a defaulting buyer to buy the property. It is difficult to prove that money damages are not adequate relief in most cases, and a seller must show this inadequacy in order to obtain specific performance relief from a buyer.
An activity that compel the fulfillment of a contract.
Specifications or Specs
Materials, measurements, colours, and other elements of a proposed structure are included in written directions to a building contractor. The designs and working drawings are supplemented by specifications.
A set of instructions that includes working drawings that show the materials used and how the property will be built.
A detailed list of materials, methods, model numbers, colours, allowances, and other information that adds to what is on the blue prints.
Specified fund
A fund where the properties to be bought have already been chosen.
Speculation
Assumption of business risk in the aim of profit; acquisition or sale of assets with the hope of profiting from market swings.
The purchase of a property with the intention of reselling it for a large profit within a short period of time.
Speculative building
A structure that is being constructed without the participation of a major tenant or tenants.
Speculative construction
A business technique in which a developer/builder begins building before any residences are sold in the hopes of generating enough market demand to make the project viable.
Speculator
A gambler who buys property with the intention of later selling it for a bigger profit.
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A person who studies the real estate market and buys properties with the hope that prices will go up a lot and make them a lot of money when they sell. Many states have laws that stop certain kinds of land speculation. Some states tax the profit from the sale or exchange of land that has been owned for less than a certain amount of time (“anti speculation tax”). The tax goes up the more money you make and the less time you own the land before you sell it.
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An owner-builder who builds homes without a specific buyer in mind (called “spec homes”) and hopes to sell them when they are done. People often call this “building on spec.”
Spend thrift trust
A trust is set up to provide a source of money for the maintenance and support of a specific beneficiary and to protect the property from the beneficiary’s carelessness or lack of responsibility. Real estate that brings in money is sometimes put into a spendthrift trust. These trusts have rules against the beneficiary or creditors taking the money out of the trust.
Spin-off
Transfer of an organization’s assets to a newly formed subsidiary. A corporation may swap a portion of its assets to a new corporation in exchange for stock in the new business, which is subsequently distributed to the parent company’s investors.
Spite-fence
A fence that a neighbor doesn’t like because of its height or style. Some states have laws that say fences can’t be higher than, say, ten feet. Some people don’t agree on whether or not a fence that was put up illegally and is shorter than the law allows can be taken down.
Splash block
Most of the time, a portable concrete channel is put under an outside sill cock (water faucet) or downspout to collect roof drainage from downspouts and send it away from the building.
Split-fee financing
A type of joint venture in which the lender buys the fee land that will be used in the development project and rents it to the developer. The lender will also pay for the changes that will be made to this leasehold.
Split-level
A house with two or more floors that are usually right on top of each other and one or more floors that are at a different level right next to them.
Split-loan
In a split loan, more than one part of the total loan amount is split up, so that different loan features can be used on different parts of the loan. A loan could be split up so that some of it has a fixed interest rate and some of it has a variable rate.
Split-rate
Capitalization rates were used to figure out the value of land and improvements separately.
Splitting fees
The act of distributing money. Only the buyer or seller, another licensed broker in the broker’s own state, or a broker from another state who did not participate in any talks within the first broker’s state can split a commission with a broker in another state. The broker’s license could be suspended or revoked if he or she pays any compensation to an unlicensed person for suggesting a client. This means that the money must be transferred through the salesperson’s employing broker in order for brokers to split fees with licensed agents. See collaborating broker, finder’s fee for further information.
Sponsor
The sponsor is the person who builds or owns the property and starts the process of changing it from a single-ownership property to a cooperative or condominium property.
Spot loan
A loan made on a specific property, usually a condominium unit, by a lender who has never financed a condominium project before. Many lenders are unwilling to lend money for a single unit in a large condominium development due to the extensive background work and investigation required to investigate the entire condominium project and inspect all relevant documents. Other lenders make spot loans to cover legal and other service fees incurred while analyzing the loan.
Spot survey
It’s a survey that shows all of the structures, improvements and easements on a property, including any adjacent property lines that might encroach on the property being surveyed. A spot survey and a legal description of the land may be required by a lender before lending money to a project, particularly a large one.
Spot zoning
A change in the local zoning ordinance allowing a particular use that is inconsistent with the area’s zoning classification; the reclassification of a small area of land in such a way that it disturbs the tenor of the surrounding neighborhood, such as a change to allow one multi unit structure in an area zoned for single-family residential use; also known as a variance.
The law does not favor spot zoning. Spot zoning is vulnerable to challenge and will not be permitted by the courts if it affects only a small area and is not consistent with the comprehensive general plan for that area (for example, a chemical factory in a residential neighborhood). A permissible spot zone might allow a small grocery store or convenience store to provide easy access to nearby residential areas. Also known as contract zoning.
Sprawl
A derogatory word for several characteristics of suburban development. A more limited definition of the word refers to unregulated real estate growth outside of key urban centres, as well as “leap-frog” development.
Spread
The gap between home loan interest and interest given to depositors by financial intermediaries.
The difference between an investment’s predicted yield and that of a riskless Treasury instrument with a similar maturity.
Spreading agreement
A deal to “extend” or “spread” an existing mortgage lien over more than one property so that the lender has more security on the loan.
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Spur track
The section of rail track that branches off a main line or drill track to serve an industrial facility or site and is typically owned by the industry that uses it.
Square
In the government’s (rectangular) survey of land, a 24-mile-by-24-mile area is sometimes called a “quadrangle.”
A roofing and siding material measurement unit of 100 square feet. A condition in which two elements are at right angles to each other.
An imperial area measuring unit.
Square foot method
Construction cost per square foot multiplied by the floor area of a building to get an estimate of its construction, reproduction, or replacement expenses.
Square footage
The size of the area is expressed in square feet.
The size of a piece of property in square feet. Square footage can be measured in a number of different ways, and the numbers are usually just estimates.
Squaretab shingles
Shingles where all of the tabs are the same size and level of exposure.
Squatter’s right
The right of a person occupying real property in an unlawful manner. There must be an actual, open, obvious, exclusive and continuous period of time for a squatter’s possession to be deemed legal.
Squeegie
Before pouring concrete, fine pea gravel is used to grade the floor.
Stabilization
When a new property has reached its goal occupancy level.
Stack (trusses)
To place trusses on the walls in the proper area.
Staging
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A temporary structure that workers and materials stand on while building.
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The process by which a licensed real estate agent or a staging specialist helps the seller choose, design, rearrange, or make changes to the home so that it looks better to buyers and, hopefully, sells for more money. This is also called “prepping a property.”
Staging area
A place outside at a construction site or inside a building, usually near the loading doors, where materials, tools, equipment, or goods are gathered or put together before being moved to where they will be used or stored.
A location where items and equipment can be stored and worked on before being moved into the space where they will be utilized.
Stakeholder
Individuals and/or organizations participating in or affected by project activity.
Staking
A method for defining the borders of a parcel of property that involves inserting stakes or pins in the ground or painting markers on stone walls or rocks. As opposed to a border survey, staking does not reveal the property’s total dimensions (or the existence of potential encroachments).
Stamp duty
Stamp duty is a fee that must be paid to the state government when you buy a house. The amount of money you have to pay varies from state to state.
Standard deduction
The amount of deductible expenses that a taxpayer may claim in lieu of itemizing authorized personal expenditures, as determined by Congress.
Standard deviation
A measure of dispersion around the mean of a probability distribution that is widely used to assess the risk of an investment endeavor. The variance’s square root.
The square root of the variance is used to calculate the dispersion of a distribution around its anticipated value.
Standard error (SE)
A statistic’s standard deviation, such as an estimated mean value or a regression coefficient, is the sampling distribution’s standard deviation.
Standard error of the forecast
The level of confidence in a projected value for a dependent variable. Similar in concept to the same metric determined in basic linear regression.
Standard metropolitan statistical area (SMSA)
A federally declared geographically defined metropolitan region characterized by consistent patterns of trade, communication, employment, and transportation.
A very important label that the federal Office of Management and Budget gives to counties that have at least one city with 50,000 or more people living in its centre. Instead of whole counties, SMSAs in New England are made up of groups of cities and townships. A lot of government grants, like the Community Development Block Grant, use the SMSA designation as a qualification standard.
Under the Interstate Land Sales Act, the buyer of a subdivision with fewer than 300 lots whose main home is in the same SMSA as the subdivision may be able to get out of having to register the subdivision.
Standard parallel
In the government’s (rectangular) system for describing land, one of a series of east-west lines that are usually 24 miles apart and run north and south of the base lines and parallel to them. Parallels like these are used to set township boundaries every 24 miles and fix mistakes caused by the earth’s shape. They are also called “correction lines.”
At 24-mile intervals, imaginary lines running parallel with base lines (east-west lines) are utilized as reference points in surveys using the rectangular survey technique.
Standard tenant improvement allowance
A provision for the construction of tenant improvements at no additional expense to the tenant.
Standard variable rate (SVR)
In this case, the rate that lenders charge for their “premium” home loans. It has features like a redraw facility, portability, a salary account, and a mortgage offset.
Standards of practice
A set of moral rules made by the National Association of REALTORS Professional ®’s Standards Committee. Some parts of the REALTORS® Code of Ethics are expanded in these Standards of Practice. A charge that a REALTOR® is accused of breaking the Code of Ethics should say that the REALTOR® is accused of breaking one or more articles of the code. You can only bring up a Standard of Practice to prove that the article was broken.
Standby fee
A large amount paid by a borrower when a standby commitment letter is issued. This is to compensate the lender for the risk and responsibility of agreeing to the loan. If the loan is not paid off within a certain amount of time, the standby fee is lost. Most courts agree that the forfeiture of the standby fee is a legal form of damage and not an unfair punishment.
A charge that a borrower pays to a lender in exchange for a standby loan.
Standby financing
A loan agreement in which a lender commits to maintain a particular amount of money available to a potential borrower for a set length of time.
Standby forward commitment
An arrangement to acquire mortgage notes in the future at predetermined yield rates. These commitments are sold by Fannie Mae and are obligatory on them, but they are voluntary for the holders of the commitments.
Forward commitments in mortgage lending in which the mortgage banker has the right, but not the responsibility, to sell a predetermined dollar amount of a specific loan type to the seller of the commitment at a predetermined price.
Standby loan
For a set period of time, the lender commits to maintain a particular amount of money available to the borrower, usually a developer. To put it in layman’s terms, the developer has the right to borrow money but is not compelled to do so. Standby commitments normally include onerous conditions in order to dissuade the developer from exercising their loan, therefore it amounts to a promise of future loans if the borrower can’t secure better financing elsewhere. Non-institutional lenders are the most common source of standby loans, which typically have a period of 18 to 24 months. The annual standby cost is normally between 2% and 3% of the loan amount. As part of the standby loan agreement, developers should be aware of any situations that will exempt them from their obligations, such as building site condemnation or a building permit refusal.
A loan that is made accessible to a borrower at a certain interest rate for a set length of time in the future.
Standby loan commitment
A binding option sold by a lender to a borrower for a non returnable standby fee under which the lender agrees to lend a particular amount on specified terms to the borrower at any time during a specified future period. The borrower has the choice to exercise it or not.
Standing loan
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A promise made by interim or construction lenders to keep the money they have already invested in the project for a specified period of time after the interim loan expires, usually until permanent takeout financing is secured. For example, a lender may agree to provide an interim construction loan for one year and a standing loan for two years from the date the one-year loan is terminated. This typically allows the borrower to construct and rent a shopping centre or office building prior to obtaining permanent financing, increasing the likelihood of obtaining favorable permanent financing.
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A straight mortgage (one that requires only interest payments and no amortization during the term, with the entire principal due at maturity). Until satisfied, the entire principal “stands.”
Start date
The starting point of an action, frequently characterized by one of the following terms: actual, planned, estimated, scheduled, early, late, goal, baseline, or current.
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