Real Estate Glossary U [Part 1]
Uniform simultaneous death act
A statute adopted by the majority of states to address the situation in which two joint tenants perish in a common disaster. In essence, the statute stipulates that the deceased parties were co-tenants with equal shares. Typical expressions are as follows:
When there is insufficient evidence that two joint tenants died other than simultaneously, the property shall be divided 50/50 as if each had survived. If there are more than two joint tenants and they all pass away, the property shall be divided in proportion to the number of joint tenants.
Obviously, if there are multiple joint tenants and all but one die in the same disaster, the statute does not apply, and the surviving joint tenant continues to own the entire property, now as a tenant in severalty.
Uniform Standards of Professional Appraisal Practice (USPAP)
The Appraisal Standards Board of the Appraisal Foundation develops rules that govern the appraisal process and reporting of valuations. These regulations and criteria must be followed by appraisers by law.
In response to congressional criticism that the appraisal industry lacked uniform standards, an ad hoc committee composed of representatives from several appraisal associations developed ten standards in 1987, which are now updated annually. The Appraisal Standards Board of the Appraisal Foundation oversees the development and communication of appraisals and analyses, and the majority of state appraiser regulatory bodies have adopted the standards.
Uniform vendor and purchaser risk act
A law that has been adopted in many states to determine who bears the risk of loss if property is damaged or destroyed before legal title passes to the vendee under a contract for sale. Unless otherwise specified in the purchase agreement, the risk of loss does not pass from vendor to vendee until either legal title or possession is transferred to the vendee. Once title or possession passes to the vendee, the vendee must pay the full purchase price if the property is destroyed or taken by eminent domain without the vendor’s fault. Unfortunately, the act does not address what the parties do after a loss when the vendee chooses not to rescind and instead insists on the vendor rebuilding and specifically performing the contract obligations.
A term used in tax assessment practice to describe assessed values that have the same relationship to market value and, therefore, imply the equalization of tax burdens.
A contract in which one party makes a promise to do something, but the other party doesn’t promise to do anything in return. One person makes a promise in exchange for another person doing something. That person doesn’t have to keep the promise unless the other person does. One example is an open listing contract, in which the seller agrees to pay a commission to the first broker who brings a ready, willing, and able buyer. The promise to perform is not enough to make a contract; the promisee must actually do what was asked of them. Keep in mind that a unilateral contract only has one promise, while a bilateral contract has promises on both sides.
Before the act is done, a promise is just an offer from one person to another. When the act is done, this one-sided offer and the act itself create a one-sided contract. The broker doesn’t promise to do anything, like advertising, or to do it. The broker can sign a one-sided contract and bind the seller only if he or she actually brings a buyer to the table. (Many standard exclusive-right-to-sell listings are now written as two-way contracts in which the broker agrees to make reasonable efforts to find a buyer and the seller agrees to pay a commission if the property is sold by the broker, the seller, or anyone else.)
A newspaper ad offering a reward for the return of a lost dog is a classic example of a unilateral contract. The person who gets the reward money doesn’t have to look for the dog, but if they do find the dog and bring it back, the person who gave the reward money owes the money. Through multiple listing services (MLS), listing agents offer to work with and pay participating brokers, but none of them are required to find a buyer who is ready, willing, and able to buy. A unilateral contract is also an option, in which the seller agrees to sell for a certain amount of time and on certain terms, as long as the buyer follows through and pays the option price.
An obligation made by one party that is conditional on the performance of another party, although the second party is under no duty to perform.
Unimproved capital value
the market worth of an unimproved piece of land.
Land devoid of structures, improvements, streets, and so on. All disclosure statements promoting subdivided land must clearly state that the property is unimproved.
Land that hasn’t been improved in any way.
A statutory notion of worth, mostly used for rating and taxing purposes, that considers the land to remain in its virgin state while still benefiting from any outside influences that affect its value at a particular time. the value of a piece of property as though all present improvements, including site work, had never been constructed or made, while taking into account the current conditions of all other properties, which includes all current improvements, roads, services, and amenities.
The term “unimproved value” is typically used to describe land. It refers to the value of the property (typically for rates and taxation purposes) without taking into account the value of any structures or other development or improvements. It is the worth of a piece of land in its natural state, that is, before it has undergone any development, such as the construction of structures, roads, or utilities like electricity and water.
A gathering of individuals for religious, scientific, fraternal, or recreational purposes. Unless they explicitly assume liability in writing, members of such associations are not personally liable for debts incurred in the acquisition or leasing of real property used by the association. Typically, the association does not hold title to its own property; any title is held by a trustee. When dealing with unincorporated associations, such as churches, it is crucial that the broker verify that the individual representing the association has the authority to convey title to the property. The majority of condo associations are unincorporated.
The Internal Revenue Code permits condominium management associations and residential real estate management associations to elect tax-exempt status. However, this tax-exempt status only protects the association from tax 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. For example, the association is taxed at corporate rates on any net income that is not from exempt functions, but is not eligible for the corporate surtax exemption granted to regular domestic corporations.
A plumbing fitting that connects pipes end to end to enable easy and rapid pipe removal without welding. A nut, a female end, and a male end make up the three components of a typical union pipe.
A unit in a building that is normally owned under a strata (or company) title.
Commonly, the individual units in a condominium, as opposed to the common areas. Typically, a unit consists of the non-load-bearing walls and partitions within the perimeter walls of a condominium, the inner decorated or furnished surfaces of all walls, floors, ceilings, doors, windows, or panels along the perimeters, and all original fixtures. The specific condominium declaration must be consulted for the unit’s precise definition.
In a limited company, a prorated portion of ownership. A solitary residence.
Value or price based on a unit of measurement, like $20 per square foot, $200 per front foot, and so on.
A method of estimating replacement costs in which an appraiser estimates the cost of building components separately, developing a unit cost for each component and including overhead and profit allocation estimates as well as direct labor and materials cost, and then adds all costs together to reach total cost and thus replacement cost.
A method of calculating replacement cost; also known as the segregated cost method, which uses prices for various building components, as installed, based on specific units of use, such as square footage or cubic feet. These costs include labor, overhead expenses, and profit. Insulation may cost $0.07 per square foot, drywall may cost $1.50 per square yard, and painting may cost $0.08 per square foot, etc. Multiplying the total in-place cost of each unit (unit value) by the total number of units in the building yields the total replacement cost for the entire structure. Examples of building components include the roof, the floor, the concrete, the electrical, the plumbing, and the parking area.
Unity (joint tenancy)
A meeting of specific requirements. In accordance with the rules of common law, the formation of a joint tenancy requires four unities: interest, title, time, and possession. In other words, the tenants must have one and the same equal interest; the interests must stem from the same conveyance instrument from the same grantor; they must begin at the same time; and the property must be held by one and the same undivided possession.
In many states, however, a property owner can transfer the property to himself or herself and another person as joint tenants, thus altering the common law rule requiring unity of title. The only unity in a tenancy in common is possession.
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Unity of interest
Unity of interest is when everyone who owns a property has the same amount of ownership.
Unity of possession
When all co-owners are granted the unrestricted right to possess all of the jointly owned property, this is known as unity of possession.
Unity of time
When co-owners gain title in the same conveyance at the same moment, this is known as unity of time.
A person to whom a principal assigned the authority to act in place of the principal in all subjects that can be delegated.
A general agent is someone who is authorized to act on behalf of another person. An attorney-in-fact under a general power of attorney, for example.
Agents who are authorized to conduct all legal activities on behalf of their principals.
Universal design is the practice of creating products and environments that are usable by as many people as possible without adaptation or specialized design.
The whole population of information from which sample is chosen in statistics.
The conditions under which a person has received and retained money or property that, according to fairness and justice, belongs to another. It may be necessary to file a lawsuit to recover such funds or property.
Unlawful detainer action
A legal proceeding that allows for the eviction of a tenant who has violated the terms of the lease; a summary proceeding to recover possession of the property.
The item was purchased with cash.
A limited partnership that invests in a property that is debt-free or has a mortgage of less than 50%.
Unlevered cash flows
The anticipated flow of NOIs and the anticipated net selling profits (NSP). Before deducting the percentage of the cash flows that must be sent to the lender to service or repay the loan, this shows the property’s income-producing ability.
Unlisted real estate investments
Investments in real estate that are not traded on exchanges.
A title to property that has major flaws, like unreported encroachments, building code violations, easements, or a dower that hasn’t been paid. Until a quiet title suit is brought, it is usually not possible to sell a title that was gained through adverse possession.
In some cases, a title insurance company might insure a title even though there are some small claims to the title. The title can then be insured, but it can’t be sold. This can cause problems if a title examiner later objects to the title and stops the property from being sold again. Since there has been no real loss, the coverage from the original title insurance policy does not apply.
Unpaid mortgage principal
The loan’s outstanding balance.
The difference between the present market value and the cost of an item that has not yet been sold.
Unreasonably withheld consent
Numerous legal documents, including leases and contracts for deed, contain a transfer clause stating that the property may only be transferred with the owner’s consent, “which consent shall not be unreasonably withheld.” There is no adequate definition of unreasonableness. For instance, a lessor could reasonably refuse to transfer a lease to a new tenant whose business would directly compete with another tenant in the same shopping centre complex (i.e., poor tenant mix).
In the context of a contract for deed, it would be unreasonable for the vendor to refuse an assignment or demand a share of the profits when the assignee is an equal or better credit risk than the assignor-vendor.
To avoid lawsuits, it is preferable to include criteria for reasonable consent within the transfer clause.
A valid deed between the grantor, grantee, and anyone with knowledge of the property’s ownership. A wild deed is distinct from an unrecorded deed ( one not properly recorded).
The property’s title does not show that it is unregistered.
Unrelated business taxable income (UBTI)
A unique federal tax imposed on investment income derived from real estate owned by a pension plan and secured by a mortgage.
A debt instrument, such as a debenture, that is only supported by the debtor’s promise to pay.
The difference in portfolio returns that can be avoided by owning stocks and other investments with returns that are not completely correlated. As a result of being exposed to microeconomic risk factors, the following are the outcomes.
Up-front financing costs
Loan origination costs, discount points, appraisal fees, and survey fees are all expenses incurred by the property owner in order to get mortgage financing. For tax purposes, these costs on a rental property investment are amortized throughout the term of the loan.
The property that the taxpayer buys as a replacement in a Section 1031 tax-deferred exchange; usually, the taxpayer trades up.
A road or path that goes from one level to the next at an angle or slope. It is often used to get people or vehicles from the ground level to the floor level of a dock-high building.
A reclassification of a property’s zoning from a lower to a higher use.
Changes to the property’s layout or improvements made after it was bought but before the closing date, such as adding appliances, carpeting, or fixing the roof. The costs of making such changes would be paid for by the buyer.
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A date specified in a contract that specifies when a building must be occupied or when the buyer has the option to terminate the agreement.
A minimum price set by a court in a judicial foreclosure, below which the property cannot be sold at a public auction by a court-appointed commissioner. This is the lowest price the court will accept for the property after having it appraised. At the time of foreclosure, the upset price shouldn’t be more than what the house is worth on the market. Sometimes the upset price is so high that no one bids, and the whole process leading up to the public auction has to start all over again. Because of the time and money it takes and costs, many lawyers set up nonjudicial foreclosure proceedings through a power of sale in the mortgage instrument.
A financial situation in which there is not enough equity in the property to pay the outstanding liens. Also called a “underwater mortgage.”
Upward only rent review
A provision in a lease that indicates explicitly that the rent can only be increased to the greater of the previous rent or the current market rent. Rent can never go down but can always stay the same. This is a regular clause in the majority of UK leases.
Urban enterprise zone
A depressed neighborhood, usually within an urban area, in which business enterprises are given tax incentives (reduced property taxes) and exemptions from many governmental restrictions (no rent control) in an attempt to stimulate new business activity, provide jobs, and revitalize the area. Rather than providing direct government subsidies, the emphasis is on removing government financial burdens.
An rise in the intensity with which land resources are used. This may or may not result in a rise in the population of a metropolitan region. Higher capital investment per unit of land employed is often connected with enhanced productivity related with urban economic processes.
Urban land institute (ULI)
Project reference files contain lessons learned, development obstacles, and project data; books and other sources of information on urban planning, land use, and real estate development; (including photos and site plans).
A technical and political process dealing with the use of land and the planning of the urban environment, including the use of air, water, and infrastructure that enters and exits cities, such as transportation and distribution systems.
Property in a city or densely populated area.
redevelopment, notably in the more run-down areas of cities
A process of upgrading degraded neighborhoods through demolition and redevelopment, rehabilitation, and the installation of new public improvements, or by modernizing existing structures. Urban renewal activities may be supported by a combination of federal and local funds, or by private funds alone.
The FHA 229(d) (3) programme, for instance, insures mortgages for rent-subsidy housing projects in approved urban renewal areas and subsidizes mortgage interest for qualified housing sponsors.
Urban service area
A defined area around a community where the local government intends to offer public services and facilities but urban development is discouraged or forbidden.
Unplanned growth of a municipality across a vast geographical area.
Urban system (city as a system)
The aggregated or organized parts and activities of a large urban environment in order to fulfil a common purpose and/or meet the needs and wants of the people who live in and depend on that environment.
Things that need to be fixed on a house so that it is “fit to live in.”
The portion of an office building that is solely owned by the tenant.
The gross area minus core space on a multitenancy floor. The square footage used for public corridors, stairwells, washrooms, elevators, electrical and janitorial closets, and fan rooms is referred to as core space. The usable area on a single-tenant floor is the gross square footage, excluding the building lobby and all penetrating shafts (that is, ducts, stairwells, and elevators).
Any space on a specific floor that a tenant may use. This region encompasses the space between the perimeter glass line and the demising walls, as well as the column spaces inside that space.
A clause in a lease that specifies how the leased space will be utilized.
A tax that is paid by the person who buys or imports tangible personal property to sell, use, or consume.
The subjective value of a property designed to meet the specific needs of the owner but having little or no utility for another owner. Also known as value-in-use, it includes the valuation of a property’s amenities.
Obtaining approval to use the property for a use that is illegal according to the present zoning regulations
Space available for lease minus shared building amenities in an office complex (such as corridors, storage facilities, and bathrooms). In office buildings, it is also used to refer to the space that is reserved for the tenant alone. Rentable space multiplied by the building’s efficiency percentage yields usable space.
Usable square footage
The area that the tenant solely rents and uses. It comprises the square footage of any exclusive tenant-only spaces, such as storage space and private restrooms.
The federal agency in charge of running programmes that offer farmers services.
The length of time that a property will benefit the owner’s trade or business.
The expected length of time that an asset, such as a building, will remain economically viable for its owner. Because the annual amount of tax depreciation results from a proportional allocation of the building’s investment over its useful life, it has traditionally been crucial to determine the correct useful life; the shorter the life, the greater the annual deductions. Currently, the IRS dictates the useful life of both new and used property purchases.
The genuine economic value of a structure in terms of years of usage to the owner, as determined through appraisal for the purpose of selling.
The time frame over which a property is anticipated to be economically valuable is known as its useful life.
Referring to the process of locating and categorizing properties, as well as assessing the viability of potential sites, in light of the user’s unique business requirements and the use and zoning restrictions imposed by a given municipality.
Owner-occupants and tenants, as well as renters, are all fighting for physical location and space.
The right to use, enjoy, and make money from someone else’s property, like an easement or profit a prendre.
When you charge a rate of interest that is higher than what the law allows. Some states have set a specific interest limit that is higher than what would be considered usury. Other states have what is called a “floating interest rate,” which is usually set each month at a certain percentage above a changing economic indicator like the interest rate on long-term Treasury notes or the Federal Reserve discount rate. In some states, it may be illegal or possible to get out of a loan agreement with a high interest rate. Loan sharking is a crime that can be either a misdemeanor or a felony. It happens when someone charges or gets usurious interest rates on loans. In some states, the penalty for usury is that the lender can’t get any interest and has to use all interest money to pay down the loan’s principal.
State usury laws don’t apply to transactions like VA and FHA transactions. Under the federal Depository Institutions Deregulation and Monetary Control Act of 1980, the federal government took precedence over state usury limits for conventional residential first mortgage loans related to the federal government, unless a state passes a law that overrides the federal law.
A lender’s charge of excessive interest, as defined by state law.
Charging an interest rate that is higher than what is permitted by law.
A developed area’s basic service system, such as telephone, electricity, water, and gas. Utility easements are typically gross easements that run on, over, or through the property.
Electricity, gas, water, sewage, and telephone are examples of essential services.
A phrase used in economics to describe the ability of an item or service to satisfy a person’s desire.
A right-of-way for the purpose of laying the utilities.
A legal privilege allowing a utility company access to and usage of a certain part of a property.
A date specified in a contract that specifies when a building must be occupied or when the buyer has the option to terminate the agreement.
The value that an owner-user places on the way he or she uses a property, which includes the value of any extras that come with it. This is also called “subjective value.”