Glossary of Terms
Don't be confused about the terminology used in the industry, find out what it all means here.
The estimated monetary value of the injury a person suffers as a result of an unlawful act or negligent act of another person. Once proven, damages may be awarded by a Court.
DATE OF APPRAISAL
The precise day, month and year upon which an assessment of the value of a property has been given.
DATE OF INSTRUMENT
The specific day, month and year a legal document was signed or prepared.
DATE OF REGISTRATION
The specific day, month and year upon which an instrument was registered on title to the property.
Also known as Cul de Sac. A street which is closed at one end so that traffic cannot flow through it.
Similar to a car dealer, a person who offers a collection of properties for sale to the public.
An entry on a financial statement which reflects payments or disbursements made on behalf of a party for which the party is responsible (opposite of Credit).
That obligation which is created by borrowing.
DEBT COVERAGE RATIO (DCR)
A comparison of the net income of a property with the cost of payments (principal and interest) on the mortgage on the property, used to assess the ability of the property to generate enough income to pay for itself.
DEBT EQUITY RATIO
A comparison of the amount owing on a property with the equity (value of property minus amount owing).
Paying for the purchase of a property with credit.
Also known as Debt-to-Income ratio. A comparison of the total monthly payments of all of the borrowers debts (including the mortgage) with the gross monthly income of the borrower, used to assess borrowers ability to pay mortgage.
A person who has borrowed and therefore owes (opposite of Creditor).
DECLARATION OF RESTRICTIONS
A Statement made by a developer of a new subdivision which sets out the restrictions of general application throughout the new development.
DECLARATION OF TRUST
A signed statement by a trustee acknowledging that she holds legal title to property on behalf of someone else (the beneficiary of the trust).
DECREE OF FORECLOSURE
An order of the Court setting out the amount outstanding on a delinquent mortgage and ordering the sale of the property to pay the mortgagee.
Often required under subdivision or development agreements, the donation of parcels of land to the municipality for a public use, such as a street, a park or a school.
The instrument by which title to property is conveyed from one person to another.
The permanent record of deeds registered in a particular jurisdiction. Also known as libers.
DEED IN LIEU OF FORECLOSURE
A legal instrument in which a borrower conveys property to a lender under a mortgage to save the expense of foreclosure. See also quit-claim deed.
DEED IN TRUST
A legal instrument conveying legal title to a property to a trustee, may contain statements as to powers of trustee, duties of trustee etc.
DEED OF RECONVEYANCE
A legal instrument which conveys title from a trustee back to the borrower under a mortgage once the mortgage has been paid out.
DEED OF RELEASE
A legal instrument signed by lien claimants or mortgagees which gives up their claim to the property. See Discharge and Quit Claim Deed.
DEED OF SURRENDER
A legal instrument in which a person with a life interest gives up that interest to the person with underlying title.
DEED OF TRUST
A legal instrument which secures the payment of a loan or mortgage, used in some states instead of mortgages.
A legal instrument which conveys title and is made by only one party.
A clause in a deed which limits the use of the property in certain respects.
Failure. In mortgages, the failure to make payments in full, on time or at all or to live up to any other obligations placed on the borrower by the loan agreement.
A decision rendered by a Court when the defendant has failed to respond to the claim.
A clause in a mortgage which ensures that, once the borrower has met all of her obligations under the terms of the mortgage and paid out the entire principle and interest borrowed, the lenders legal interest in the property is extinguished.
Able to be revoked in the case of the occurrence (or non-occurrence) of a certain event or the performance (or failure) of a condition.
DEFECT OF RECORD
A registered claim on title which serves to interfere with the marketability of the owners title to the property.
Ownership of property which is subject to some competing claim.
The person against whom a claim is asserted in a Court action.
Interest which is not paid as it accumulates but which is added, instead, to the loan principle.
DEFERRED INTEREST MORTGAGE
A technique for reducing the amount of each periodic payment on a mortgage monthly by postponing the payment of a portion of the interest until a certain date in the future (or to when the property is sold), at which time the interest postponed is added to the principle owing.
A nice way to say that the property has not been kept up and is depreciating both physically and in value.
A Court order against a borrower under a mortgage to pay to the lender an amount sufficient to make up for the difference between what the borrower owes under the mortgage and the amount the lender sold the property for under a mortgage remedy action.
One 360th of a circle. One 90th of a right angle. Used in astronomic bearings in metes and bounds descriptions of land.
The condition of being late on a payment but not yet in default.
The act of turning over any legal document (including a Deed) to another party so as to make it legally operative and no longer revocable.
A type of loan where the lender may require payment in full of the principal (and accumulated interest) at any time.
A conveyance of an interest in property for a set period of time (such as in a lease).
The portion of the entire property which is leased to a particular tenant.
A measure of the number of a certain thing within a defined space. Population density, for example, measures the number of people in a given area (a square-mile, an acre etc.)
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)
A federal agency focusing on programs regarding housing and renewal of city communities.
DEPARTMENT OF VETERANS AFFAIRS (VA)
An independent federal agency which oversees programs for military veterans, including loan and mortgage programs.
The money paid up-front by a purchaser as security for her completing the transaction. Also known as good faith money or earnest money.
DEPOSIT OF TITLE DEEDS
When a lender requires ownership documents to be left with it as further security for a loan.
The initial acquisition cost of an improvement on land, used for income tax purposes. Land may not be depreciated but the improvements (buildings, etc.) may be.
An estimation of the useful, valuable life of certain assets (such as buildings or production machinery).
A tax adjustment accounting for the reduction in value of an asset (a building or a piece of machinery) over time.
The gradual receding of water, leaving more land than was there previously.
A transfer of property made to correct or confirm an earlier conveyance.
The conveyance of property to those heirs of a deceased person as dictated by the laws of the jurisdiction when no will is left behind.
Also known as Legal Description. The manner in which a piece of land is identified. May involve metes and bounds measurements using astronomic bearings or may simply set out Lot and Plan numbers in a specific municipality. Most jurisdictions require description of land to be included in all instruments to be registered on title to that property.
DESIGNATED REAL ESTATE BROKER
Person designated by a corporation to oversee all real estate activities of that corporation. Must meet requirements for real estate brokers license.
DESIGNATED REAL ESTATE INSTRUCTOR (DREI)
Any person who has met the requirements of the Real Estate Educators Association for this designation.
DETACHED SINGLE-FAMILY HOME
A free-standing dwelling that is designed to house one family unit.
The impact of time and wear and tear on a dwelling or other building which results in a decrease in its value if nothing is done to counteract it.
A person or company who makes a business of turning vacant or underused parcels of land into new housing (or business, commercial or industrial) surveys.
A loan specifically designed to finance the transformation of a vacant tract into a new survey. May provide for money to be advanced as the stages of the development are completed.
The legal ability to develop a parcel of land, usually purchased from the owner of a vacant tract of land by the developer. Title to the property does not change hands until the new survey of properties is sold to third-party purchasers.
The act of leaving a piece of land to another person in a will.
The beneficiary under a will who receives a gift of real estate under the will.
The deceased person under whose will the beneficiary receives real estate. More commonly called the testator.
Short form for Double Income, No Kids. A description of a type of Purchaser in the real estate market.
Those expenses in the improvement of property which can be directly attributed to the improvement itself (i.e. labor, material, taxes, etc.). Also known as hard costs.
DIRECT REDUCTION MORTGAGE
A kind of mortgage where the principal and interest to be paid are based on the principal remaining. An amortized mortgage.
A document containing written instructions to a person to do a certain thing in a certain way.
DIRECTION REGARDING FUNDS
A direction made by a party who is entitled to money to the party who is obligated to pay the money which sets out how the receiving party wishes the money paid.
DIRECTION REGARDING TITLE
Also known as Title Direction. A direction made by the Purchaser to the Vendor of property setting out how the Purchaser wishes to take title. May include the full legal name, the birthdate (if necessary), the address for service of the Purchaser and, if there are more than one Purchaser, the capacity in which they wish to share title ( i.e. as Joint Tenants or Tenants in Common).
A factor in the value of undeveloped land, the direction in which an urban center tends to expand.
To refuse to accept a decision already made, to revoke consent, assent or agreement already given.
An expenditure of money.
A document registered to remove a mortgage from title to a property.
A statement of refusal of responsibility of a legal right etc.
The person on whose behalf an agent is acting when that persons identity is made know to the person with whom the agent is dealing.
Sometimes known as Vendors Disclosure, a legal requirement in some jurisdictions in which the Vendor of a property must provide a written statement to a prospective purchaser setting out defects in the property known to the Vendor.
A document issued by a lender to a borrower in which the lender sets out the terms and conditions of the loan. Often required under legislation.
A sum of money held back from a mortgage advance as prepaid interest.
See point. Each point is equal to 1% of the principal.
A benchmark for interest rates, the rate charged by the Federal Reserve System on loans to banks.
DISCOUNT REAL ESTATE BROKER
A licensed real estate broker who charges a commission at a lower rate.
To remove a person from occupation of a property by a legal action.
The legal action taken to dispossess a person of property.
A landlords action for recovering arrears in rent by taking possession of and selling the tenants personal property.
The right of a party to sell the real or personal property of another party to pay for arrears in rent or loan payments.
A property which is to be sold in order to pay arrears on a mortgage.
A terms used to classify neighborhoods according to their use residential, commercial, industrial, etc.
A paper which establishes certain facts or attempts to bring about a certain result.
A levy paid to the local government for registration of a document (a deed or mortgage) in the public records, often calculated as a percentage of the purchase price or the value of the mortgage.
A slang term for a property that, as a result of factors such as poor condition, poor location or poor design, is slow to sell.
The place where a person legally resides.
The property which enjoys the benefit of an easement over another property (known as the servient estate).
The person who receives a gift, bequest, or who is named an attorney in a power of attorney.
The person who gives a gift, bequest, gives power of attorney or who settles property in a trust for another person (the beneficiary).
Ownership of land which is questionable as a result of a possibly valid competing claim.
The interest enjoyed by a wife in real property her husband acquired during his life time. The right becomes exercisable upon the death of the husband. Dower still exists in some jurisdictions but has been abandoned in most.
The amount of money provided by the Purchaser toward the total price of the property (not including legal fees or other acquisition costs). In general, downpayment plus mortgage equals purchase price.
The reduction of the density allowed for a certain property under zoning by-laws, such as from high density (high rise apartment) to medium density (low rise or individual homes).
A term of a mortgage which establishes the subject property as security for the present and for all future debts of the owner to the lender.
A means, whether natural or otherwise, by which water is allowed to flow off a property.
Also known as non-recourse loan because the lender has no personal right of action against the property owner in the event of default. The lender may only sell the property to enforce the loan obligation.
A breach of agency rules which must be disclosed to the parties. Where one agent (often a real estate broker or agent) represents both sides in a contract (i.e. the Vendor and the Purchaser) such that the agent has a conflict of interest.
The date established in the loan agreement upon which all moneys then outstanding on the loan become due and payable in full.
DUE ON SALE CLAUSE
A clause in a mortgage which requires that the mortgage be paid out in full upon the sale of the property against which it is secured. A mortgage with this clause may not be assumed by a purchaser.
Slang term for the trustee in an undisclosed trust situation where a nominee holds legal title of property for an unnamed principal.
A building which houses two separate dwelling units.
A state in which the improper, threatening or coercive actions of another place a person in a disadvantage psychological position. A person is not bound by a contract she enters while under duress.
A house, home, living unit. Generally refers to a building designed for use as a living space.