Real Estate Glossary T [Part 1]

Terms Beginning With - T

Property Development & Investment Glossary, Terms & Definitions

T & G, tongue and groove

A tight flush junction formed by a tongue that fits into a similar groove in the edge of another board.

T bar

Ribbed in the shape of a “T,” with a flat metal plate at the bottom that is hammered into the ground. Chain link fence poles were used to identify the location of a water metre pit.

T hinge

The short member is attached to the jamb, and the long member is attached to the door.

T-bar

A graphical representation of the ebb and flow of cash from an investment in real estate.

T&M

Both time and money.

Tab

Cut-outs on strip shingles designate the exposed area of the roof.

Taber abrader

A tool used to measure how resistant a material is to wear.

Table of residuals

A list of disparities between actual and anticipated values for a variable from a regression equation.

Table saw

The saw remains motionless on a table while the material to be cut passes beneath it.

Tack weld

A tiny weld to momentarily join steel pieces.

Tacking

  1. Adding or combining different periods of continuous occupancy of real property by adverse possessors, so that someone who hasn’t been in possession for the full time required by law can still claim adverse possession. For one person’s possession to be added to that of another, both possessions must have been continuous and uninterrupted, and the two people must have been successors in interest, such as ancestor and heir, landlord and tenant, or seller and buyer.

  2. For tax purposes, the ability to carry over holding periods. For example, in a tax-deferred exchange or a replacement of principal residences, the holding period of the new property or principal residence includes the holding period of the old property.

Tail beam (Tail Joist)

A wall at one end and a header joist at the other support a brief beam, joist, or rafter.

Take down

To borrow or use money that a lender has already put up, as in a construction loan.

Take off

Estimating how much of each material is needed to build a building.

The supplies required to finish a task.

Take-out commitment

A long-term lender’s agreement to disburse permanent loan funds after a project’s construction is completed according to specifications.

Take-out financing

Permanent long-term finance. In the normal large construction project, the developer acquires two sources of finance. The first is the interim loan, a short-term loan to pay building costs. Before granting any money, however, the interim lender generally requires a promise by a permanent lender to agree to “take out” the interim lender, in which the lender pays off the construction loan and leaves the developer with a permanent long-term loan when the project has been completed. Such a pledge, called a takeout commitment or a takeout letter, normally represents the second phase of funding a development.

Take-out mortgage loan

A construction loan that is taken out over a set period of time.

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Taking

Refers to the “takings clause” of the Fifth Amendment, which says, “Private property shall not be taken without just compensation for public use.”

Tandem plan

A mortgage subsidy programme occasionally offered by Congress through Ginnie Mae. Ginnie Mae is authorized to purchase certain mortgages at below-market interest rates when assistance is required so that borrowers (builders and developers of non-profit public housing) can receive low-interest loans. Ginnie Mae then sells these loans on the secondary market at steep discounts, with the amount of the discount loss representing the subsidy. When these programmes are available, they are typically administered under a contract with Fannie Mae and Freddie Mac in conjunction with local mortgage lenders.

Tangible assets

Automobiles, clothing, land, and buildings are examples of physical things.

Tangible characteristics

Qualities that can be reduced to numbers and used as evidence or statistics.

Taping

The procedure for using paper tape and joint compound to cover drywall joints.

The process of using paper tape to cover drywall joints.

Target market

Potential tenants or buyers whose requirements are a good fit with the property’s amenities. If you’re a user advocate, on the other hand, your niche is the specific category of real estate that meets your user-requirements. client’s

Task

A phrase used to characterize a project’s activity, effort, or needs.

Task relationship

The relationships that exist between two or more project activities. Logical connections may be divided into four types:

  • Finish-to-start means that the ‘from’ action must be completed before the ‘to’ activity may begin.
  • Finish-to-finish means that the ‘from’ action must be completed before the ‘to’ activity may be completed.
  • The ‘from’ action must begin before the ‘to’ activity may begin.
  • Start-to-finish-the ‘from’ action must begin before the ‘to’ activity can be completed.

Tax

A charge collected by the government on a regular basis and depending on the relative worth of the thing levied.

Tax abatement

A reduction in a property owner’s taxes for a specified time period. As an economic stimulant, a municipality may grant abatements as an incentive for developers to build and buyers to purchase. When the tax abatement expires, property taxes will increase.

A monetary reward provided by a local or municipal government to encourage growth in a specific area.

Tax and lien search

A search for a property’s title that is registered in the Torrens system. The tax and lien search is used to find out about things like real property taxes, city and county assessments, federal tax liens, and bankruptcies that are not shown on the Torrens certificate of title. A lien letter is another name for the report that a title insurance company sends out.

Tax assessor

The local governmental authority in charge of determining the taxable value of property in the jurisdiction as the foundation for property taxation. In certain states, this officer is known as the county property appraiser.

Tax auction

A method of selling tax-delinquent land or real estate in which verbal or written bids are accepted and the property is sold to the highest bidder.

Tax base

All of a jurisdiction’s taxable properties.

  1. The total assessed value of all real property in a taxed area for property tax purposes. This would not apply to exempt property owned by the church or the government.

  2. The amount of money that is subject to income tax.

Tax bracket

The amount of tax a person has to pay on income over a certain amount. Individual tax rates are set up so that they go up as income goes up.

Tax certificate

The document that is given to a person as a receipt for paying the back taxes on real property that belongs to someone else. It gives the person the right to get a deed to the property if the property is not redeemed within a certain amount of time.

Unpaid tax obligations are auctioned by taxing jurisdictions in an attempt to collect the sum owed. To receive title to the property, the property owner or any future buyer must pay off the tax certificates.

Tax clearance

A form that a state requires the estate of a person who has died to fill out if that person owned real estate in that state. The form is used to make sure that the property does not have any outstanding inheritance tax liens.

Tax conduit

Tax-deductible losses “flow through” the partnership “conduit” and are reported by each partner in line with his or her individual ownership position in the partnership.

Tax credit

A dollar-for-dollar offset against taxes due. The IRS sometimes uses tax credits to encourage the building of low-income housing, housing for the elderly, or housing in historic buildings. Tax credits are also used to encourage businesses to make changes that comply with ADA rules.

Direct offsets against a taxpayer’s income tax burden, granted as a financial incentive to inspire behavior deemed to be in the best interests of the country.

Tax deductible

A cost that may result in a reduction in taxable income.

Taxable income is decreased by an expense that is tax deductible. Mortgage interest payments and real estate taxes are real estate-related costs that are tax deductible.

Tax deductions

Taxable income is reduced.

Tax deed

A deed to property that has been confiscated by the government for non payment of taxes and auctioned at auction in accordance with the law.

The legal document used to transfer ownership of property auctioned by a government agency for nonpayment of taxes. An auction sale can be held if the tax lien remains unpaid for a specified period of time and sufficient notice is given. As soon as a property is sold at tax auction, the delinquent taxpayer has a window of opportunity to reclaim it. Generally, a tax deed serves as presumptive evidence of the sale’s legality and must be registered.

Tax deferred income

The cash flow received in a particular year for which no taxes are now owed due to tax sheltering.

Tax depreciation

According to IRS rules, the reduction in annual taxable income is designed to represent the wear and tear that income properties endure over time.

Tax impact

How taxes affect investment earnings and return.

Tax liability

Multiplying the tax rate by the taxable income from real estate.

Tax lien

A government lien placed on a taxpayer’s property for non-payment of taxes.

A lien imposed by statute against real property for nonpayment of taxes that remains on the property until the taxes are paid, even if the property is transferred to another party. Local tax liens for unpaid real estate taxes have priority over all other liens on the property, regardless of whether they were recorded prior to the state tax lien. If owners of out-of-state properties fail to pay their real estate taxes on time, they may find that their property has been sold at a tax sale and they have lost ownership.

Failure to pay an Internal Revenue Service tax, including income tax, estate tax, and payroll tax, results in a federal tax lien. A federal tax lien is a general lien on all property and property rights of the person liable, but its priority depends on the number of previously recorded liens at the time notice is recorded.

Tax map

A scaled map that shows the location of real property, tax keys, size, shape, and dimensions, among other things, to make it easier to find, value, and assess the property. Most of the time, these maps are kept in tax map books, which are made by local tax departments and held by them.

A map depicting the location and size of property lots liable to property taxes.

Tax option corporation

A qualified corporation whose shareholders have chosen to be taxed directly for their portions of corporate income rather than the corporation incurring income tax obligation. Subchapter S of the Internal Revenue Code contains the relevant provisions. An S corporation is another name for a limited liability company.

Tax participation clause

A clause in a commercial lease that says the tenant has to pay a pro rata share of any increases in taxes or assessments over an established base year.

Tax preference

A possible part of the taxpayer’s alternative minimum income tax calculation.

Tax preference item

Tax deductions or exemptions that are added back to adjusted gross income in order to compute the alternative minimum tax burden.

The alternative minimum tax is calculated by adding certain forms of income or deductions to the adjusted gross income.

Tax rate

The rate that is used to a property’s assessed value to determine its annual property tax. The tax rate is determined by the assessed value, which varies according to property use.

The proportion of tax levied to the amount levied.

The amount of property tax paid divided by the taxable value of the properties. The proportion that, when multiplied by the taxable value of a property, yields the tax burden.

Tax reform act of 1986

In 1986, the federal government passed a landmark tax law that made a lot of changes. The law changed the rules for becoming a real estate investment trust and how REITs are taxed. It also got rid of tax breaks for capital gains and made it harder for people to use tax shelters. It made it take longer for most depreciable assets to get their money back. For residential rental property put into use after December 31, 1986, the recovery period is 27.5 years, and for nonresidential real property, it is 39 years. In real estate, the accelerated method is no longer an option. The only method that can be used is the straight-line method.

The Tax Reform Act also made an alternative depreciation system (ADS), which must be used for property that is mostly used outside the United States, for property that is leased to a tax-exempt entity or paid for with tax-exempt bonds, and to figure out the amount of depreciation that is treated as a tax preference for the purposes of the corporate and alternative minimum taxes. ADS real estate is written down over a period of 40 years. Even if a taxpayer doesn’t fit into any of the above groups, they can still choose to use ADS.

Tax relief act of 1997

Tax regulations that offered tax relief to individuals selling their primary residence, investment property, farms, and small businesses. The act altered the capital gains tax rules for the sale of a primary residence. If the owners have lived in and occupied the home for two of the previous five years, gains up to $250,000 for individuals and $500,000 for married couples filing jointly are exempt from tax.

Tax roll

All taxable properties’ tax amounts, assessed values, and millage rates are documented in public records.

Tax sale

The process by which a government unit sells real property to pay off unpaid real property tax liens. This is often followed by a set amount of time for the owner to pay the taxes.

The sale of a property that has been seized due to non-payment of taxes.

Tax savings (annual expense)

Complete the tenant’s Cash Flow Projection. The renter can deduct all of their annual outlays. The tenant’s net tax savings can be calculated by multiplying the annual deduction by their effective tax rate.

Tax savings (capital expenditure)

Cash flow form entry for the tenant. In this context, “capital expenditure” refers to any major, unusual business expense incurred by the tenant in order to make the new office efficient for the business, as well as any tax savings associated with that expense. Multiplying the yearly deduction by the tenant’s tax rate yields the total tax savings.

Tax schedule income

When using the Internal Revenue Service’s tax rate schedules, the amount of taxable income utilized as a reference for calculating income tax due.

Tax search

A part of a title search that checks to see if there are any unpaid taxes or special assessments that could be a lien on the property being looked at.

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Tax shelter

This phrase is often used to describe some of the tax benefits of real estate or other investments, such as noncash deductions for cost recovery (depreciation), interest, taxes, and the postponement or even elimination of certain taxes. The tax shelter may not only lower the investor’s tax bill related to the real estate investment, but it may also lower the investor’s other regular income, which lowers the investor’s overall tax bill.

The Tax Reform Act also made an alternative depreciation system (ADS), which must be used for property that is mostly used outside the United States, for property that is leased to a tax-exempt entity or paid for with tax-exempt bonds, and to figure out the amount of depreciation that is treated as a tax preference for the purposes of the corporate and alternative minimum taxes. ADS real estate is written down over a period of 40 years. Even if a taxpayer doesn’t fit into any of the above groups, they can still choose to use ADS.

Income that does not have to be taxed.

The tax benefits of real estate investments come from the ability to deduct certain expenses.

Tax stop clause

A clause in a lease that says the lessee is responsible for any increase in taxes over the base or first year’s taxes. This is also called a “tax-escalation clause.” It should say in the lease that this extra amount will be considered extra rent.

Tax stops

Lease restrictions that oblige renters to pay all property taxes over a certain threshold.

Tax-deferred exchange

A transaction in which some or all of the realized gains from the exchange of one property for another may not have to be immediately recognised for tax purposes. Section 1031 of the Internal Revenue Code says that the exchange is not tax-free; the taxes are just put off until a later transfer.

Both the property you get in exchange and the property you give up must be held for productive use in a business or trade or as an investment (not as your main home), and they must be “of the same kind.”

Tax-exempt properties

Churches, synagogues, public schools, and government property are examples of properties that local governments cannot charge taxes against.

Tax-free exchange

An exchange of property for similar property that has no immediate tax consequences since the taxes are delayed.

Taxable income

The amount of income that is due to tax after all permissible deductions have been made.

Gross income adjusted for tax withholding and other personal allowances.

Taxable value

To calculate the amount of property tax payable, subtract the assessed value from any applicable exemptions.

Taxation

The bearing that tax regulations and statutes have on an investment.

Teaser rate

If it is less than the index rate + the margin at the time of origination, the starting interest rate on an adjustable rate mortgage.

Teaser rate mortgage

A mortgage with an interest rate that changes over time and starts out with a lower rate than the market rate. Before the housing crisis of 2009, many people who didn’t qualify for a loan at the market rate were tricked into taking out a mortgage that was bigger than they could afford. When the rates went up, they couldn’t pay it, so they went into default.

Technical analysis

Attempting to forecast future market value changes by studying historical market activity.

Technical components

Those features of a site or location that make it conducive to a specific purpose.

Technical feasibility

Highest and best use refers to the determination of the possible uses of a particular site as based on technical considerations, whereas site selection refers to the evaluation of multiple sites to determine which sites should be considered further based on their physical limitations, regulatory requirements, and environmental and legal considerations.

Teco

The top wall plate is fastened to the roof rafters and trusses using metal straps.

Teco metal

Straps that attach to the top horizontal wall plate and hold the roof rafters and trusses in place with nails.

Tee

A plumbing fitting with a “T” form.

Telephone consumer protection act

A law meant to stop telemarketers from calling people without their permission. Under rules from the Federal Trade Commission, people who have signed up for the National Do Not Call Registry can’t get sales calls over the phone. Calls to sell things can only come in between 8 am and 9 pm. Real estate licensees can only contact a seller who is selling their home on their own if they already have a buyer for the property. A licensee can get in touch with the owner of a company whose listing has expired up to 18 months after the listing has ended. Also, it is against the law to send advertisements by fax unless the people who were contacted asked for them.

Tempered strengthened

Tempered glass, like an automobile window, will “pelletize” rather than shatter.

Tenancy

The length of time a property is rented.

Tenancy at sufferance

Wrongful occupation, which can be terminated at any moment by the property owner.

When a tenant who is meant to depart fails to do so but continues to pay rent and the landlord accepts it.

In the event of an unintentional tenant holdover, such as when the tenant fails to vacate the premises following the expiration of their lease agreement without the landlord’s permission, a tenancy (or estate) arises. Landlords may evict tenants without notice in a tenancy at sufferance, which is the lowest form of real estate ownership. The purpose of this type of tenancy is to protect the tenant from being labeled a trespasser while also preventing the tenant from gaining ownership of the property through adverse possession. The landlord hasn’t given his or her explicit agreement to the relationship, but it’s there through implication. There is no estate that tenants can transfer; they just have naked possession.

The Tax Reform Act also created an alternative depreciation system (ADS), which must be used for property that is primarily used outside of the United States, for property that is leased to a tax-exempt entity or financed with tax-exempt bonds, and to calculate the portion of depreciation treated as a tax preference for the corporate and alternative minimum tax. ADS. Real estate owned by ADS has a 40-year depreciation period. Even if a taxpayer does not fall into one of the aforementioned categories, they can still use ADS.

When a lease expires and the tenant stays on the premises, a tenancy is created.

Tenancy at will

A tenancy with no set duration and in which either the landlord or the tenant may terminate at any time or within the time specified by legislation, which is generally 30 days.

A tenancy extended by landlords to renters that allows them to continue in possession despite the lack of a written agreement.

Either the landlord or the tenant has the right to terminate the tenancy at any time.

A tenancy or estate in which a person holds or uses real estate with the owner’s permission for an undetermined or uncertain amount of time (i.e., there is no fixed term to the tenancy).

The main things about the tenancy are that it isn’t clear how long it will last and that it is still a permissive situation. The tenancy cannot be transferred, but the tenant can usually sublease the space. If the tenant tries to transfer the tenancy, the tenancy is usually ended. Unlike a tenancy at sufferance, a tenancy at will has all the duties and responsibilities of a landlord-tenant relationship, and either party can end it by giving notice.

In common law, either party could end the contract whenever they wanted. Most modern laws now require a certain amount of time to give notice, like 30 days. Tenancies at will are different from other leasehold estates in that they end when either the landlord or the tenant dies or when the property is sold (the sale results in conveyance of the reversion).

A permission granted by the owner to use or occupy his or her property at his or her discretion.

Tenancy by the entirety

For husband and wife, a type of joint tenancy ownership.

A sort of joint tenancy that may only exist between couples, in which the wife and husband transfer the tenancy interest in common, with that interest recognized as a single, indivisible unit and the survivor continuing to maintain the tenancy as a matter of right.

Special joint tenancy between a legally married husband and wife that places all title to property (real or personal) in the marital unit, with each spouse holding an equal, undivided interest in the entire property. Essentially, each spouse owns the entire estate; neither spouse owns a fractional share, but rather the property ownership is an undivided whole. Upon the death of one spouse, the surviving spouse inherits the entire estate, to the exclusion of the deceased spouse’s heirs and creditors, and without the need for probate. Sometimes, tenancy by the entirety is referred to as a “poor man’s will.” In contrast to a joint tenancy, neither spouse can convey an interest or force a partition during the other’s lifetime without their consent.

Less than one-third of property ownership in the United States is tenancy by the entirety. Under modern law, which recognizes women’s separate property rights from those of their husbands, the original common-law theory that husband and wife are one person has been abandoned.

Both spouses can convert the tenancy to a tenancy in common or a joint tenancy voluntarily. The tenancy by the entirety may only be terminated by mutual agreement, divorce, or joint conveyance; a spouse’s attempt to transfer his or her interest does not terminate the tenancy. Even if an attempted unilateral transfer fails, the transferor may still be liable to the transferee for breach of contract damages. When divorce terminates the joint tenancy, the parties become tenants in common (even where the entire purchase price was paid by one party). Upon the demise of a spouse, the survivor must file a “affidavit of surviving tenant by the entirety” confirming the demise.

An estate that exclusively exists between a husband and wife, with equal rights of possession and pleasure and the right of survivorship for their combined lifetimes.

Restricted co-ownership with the right of survivorship for husband and wife.

Tenancy for life

A freehold estate with an unknown length of time that is not an inherited estate; a life estate.

Tenancy for years

A leasehold interest for a set amount of time that is longer than a year.

A leasehold estate (or tenancy) in which the property is leased for a set amount of time, such as 60 days, any fraction of a year, a year, or ten years. In most states, this kind of tenancy can only be made with an explicit agreement, which should be written if it lasts longer than a year. The year-long lease must have a clear start and end date, which are written in the lease. If there is no law or contract, the tenancy is treated as personal property and goes to the tenant’s heirs when the tenant dies. The lease ends on the last day of the term, and neither party needs to give notice of the end of the lease. A holdover tenant or a tenant at sufferance is a renter who stays in the house even though they don’t want to. Most ground leases and business leases are for a long time.

A lease that is for a specific amount of time.

Tenancy from period to period

A tenancy by one who has a leasehold interest for an unspecified term and pays rent on a regular basis, with each payment functioning as a renewal for another period. This is frequently the outcome of the continuation of a prior specified-term lease for which rent was paid on a monthly basis.

CONTINUED-AT

Continued at…
:point_right: Real Estate Glossary T [Part 2]