Property Management & Real Estate Glossary

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24 hour Notice to Enter: Landlords should give 24 hours’ notice to enter property. This is done by sending an email or text message with the date and time of access, which ensures landlords will have their properties entirely prepared for renters when they arrive.

Acquisition cost: Acquisition cost is the total amount of money required to purchase a specific piece of real estate, which includes not just the purchase price, but also various fees and expenses associated with the acquisition process. These expenses may include legal fees, title insurance, survey costs, and appraisal fees.
In situations where the purchaser is an investor or developer who intends to renovate or develop the property, acquisition cost may also include repair and improvement expenses required to bring the property up to the desired standard.
Considering acquisition cost is a crucial aspect for anyone looking to invest in real estate since it can significantly impact the overall profitability of the investment. By analyzing all of the expenses and associated costs carefully, investors and developers can make informed decisions about which properties to purchase and how much to pay for them.

Alienation Clause: An alienation clause, or a due-on-sale clause, is a provision that is frequently included in real estate loan agreements. The clause requires the borrower to pay off the entire amount of the loan when the property is sold or transferred.
The primary objective of the alienation clause is to safeguard the lender’s interests by guaranteeing that the loan is paid back in full if the property changes ownership.
While this clause can restrict the borrower’s ability to sell the property or obtain additional financing, it is a common component of real estate loan agreements and is intended to safeguard the lender’s interests.
It is vital for borrowers to meticulously scrutinize and comprehend the terms of the loan agreement that contains an alienation clause and assess the potential implications this clause could have on their capacity to sell or transfer the property in the future.

Apartment: An Apartment is a type of housing unit that is typically found in a multi-unit complex. An apartment unit usually consists of one or more bedrooms, a kitchen, a living room, and a bathroom. Apartment units are usually leased from the owner of the complex by the individual tenant. An apartment complex may be owned by a single individual, a company, or multiple entities. Apartment complexes are typically located close to similar complexes and have schools, public transportation, and other amenities near them.

Appraisal: An appraisal is a process that determines the value of a real estate property by evaluating various factors such as the property’s physical characteristics, location, and overall condition. A licensed appraiser usually conducts the appraisal using a range of approaches, including the sales comparison, income, and cost approaches.
A property appraisal is a significant step in the real estate buying and selling process, as it guarantees that the property is priced appropriately and reasonably. It is also an essential component of the mortgage loan approval process, with lenders requiring an appraisal to ensure that the property is worth the amount being borrowed.

Appraisal Report: An appraisal report is a crucial document that provides an estimate of the value of a real estate property. This report is prepared by a licensed appraiser, who evaluates the property’s physical characteristics, location, and overall condition to determine its value.
To determine the value of the property, the appraiser uses various methods, such as the sales comparison approach, income approach, and cost approach. The findings of the appraiser are then explained in detail in the appraisal report.
The appraisal report is an essential tool for all parties involved in a real estate transaction, including buyers, sellers, and lenders. Lenders usually require an appraisal report before approving a mortgage loan, while buyers and sellers can use the report to negotiate a fair price for the property.

Assignment of Rent: The Assignment of Rent is a legal contract that enables the lender to collect rent if you default on your mortgage. It must be signed by both the borrower and lender when renting out property.

Average Annual Return (AAR): Average Annual Return (AAR) is associated with investments and is used as a performance benchmark. AAR captures the compounded yearly growth rate of an investment over a specified period of time. AAR helps investors understand how an investment has performed in the past and indicates how it may perform in the future. AAR is crucial for long-term planning purposes and retirement planning.

Backup Offer: A backup offer is an additional proposal submitted by a potential buyer for a property that is already under contract with another buyer. The backup offer serves as a safety net for the seller in case the first buyer’s contract falls through due to issues such as financing, inspection, or title problems.
A backup offer is a legally binding contract and includes the same terms and conditions as the primary offer. The seller can choose to accept or reject the backup offer, but if accepted, it becomes the primary offer and the transaction proceeds accordingly.
Submitting a backup offer can be beneficial for a buyer as it keeps them in the running for a property they’re interested in, and it can also save them time and money by not having to search for another property.

Balloon Loan: A balloon loan in real estate refers to a type of loan that requires a large, final payment at the end of the loan term to repay the remaining balance. Balloon loans are typically used for short-term financing, such as for real estate investment properties or for small business loans, and have a term of 5 to 7 years.
In a balloon loan, the borrower makes regular, smaller payments during the loan term, but the majority of the debt remains outstanding until the end of the loan term. At that time, the borrower must make a large payment, called the “balloon payment,” to repay the remaining balance of the loan.
Balloon loans are often used by real estate investors and small business owners because they offer lower monthly payments and more flexible terms than other types of loans. However, they also carry higher risk, as the large balloon payment at the end of the loan term can be difficult for some borrowers to repay.

Beneficiary: A beneficiary is a party who receives benefits from a property or trust. Beneficiaries can be individuals, groups, or organizations who may receive financial or other benefits from the property.
Typically, in a real estate trust, the beneficiary holds the beneficial interest in the trust, while the trustee holds legal title to the property. The beneficiary may receive income generated by the property or be entitled to a portion of the property’s proceeds upon sale.
In some cases, the beneficiary may also have certain rights and responsibilities with respect to the property, such as the right to approve or veto certain decisions made by the trustee.

Bilateral Contract: A bilateral contract in real estate refers to a type of agreement between two parties that involves an exchange of promises. In a bilateral contract, one party makes a promise in exchange for a promise from the other party. This type of contract creates legally binding obligations for both parties and, once entered into, is enforceable by law.
In real estate transactions, a bilateral contract typically involves a buyer making a promise to purchase a property and a seller making a promise to transfer ownership of the property to the buyer. The terms and conditions of the contract, such as the purchase price, closing date, and any contingencies, are agreed upon by both parties and are binding once the contract is executed.

Bill of sale: A bill of sale is a legal document that transfers ownership of personal property from one person to another. In real estate, a bill of sale may be used to transfer ownership of personal property that is included in the sale of a property, such as furniture, appliances, or other personal items.
The bill of sale typically includes the name and address of the buyer and seller, a description of the item being sold, the sale price, and any other relevant terms and conditions. The document should be signed by both the buyer and the seller and should include any supporting documentation, such as receipts or invoices.
In addition to transferring ownership of the property, a bill of sale also provides evidence of the sale and can be used to prove the ownership of the property in the event of a dispute.

Binder: A binder in real estate refers to a preliminary agreement between a buyer and a seller that outlines the terms and conditions of a future real estate transaction. A binder is not a legally binding contract, but it does provide a record of the agreed-upon terms and serves as a commitment from the buyer to move forward with the purchase.
The binder typically includes information such as the sale price, the closing date, and any contingencies that must be met before the sale can be completed. For example, the binder may state that the sale is contingent upon the buyer obtaining a mortgage loan or the property passing a home inspection.
The purpose of a binder is to establish a clear understanding between the buyer and the seller and to avoid any confusion or misunderstandings about the terms of the sale. The binder also provides a starting point for the final contract, which will be drawn up by a real estate attorney or agent and will include all the details of the sale.

Blanket Insurance Policy: A blanket insurance policy is a type of insurance policy that provides coverage for multiple assets or properties under one policy. This is particularly beneficial for property owners who have several assets that need insurance coverage.
With a blanket insurance policy, all assets are covered regardless of their individual values or location. This policy can also lead to additional benefits such as more comprehensive coverage, simpler underwriting processes, and lower premiums.
Blanket insurance policies are particularly beneficial for property managers and real estate investors who own or manage multiple properties, as it can help simplify their insurance coverage and provide protection for their investments.

Blanket Mortgage: A blanket mortgage is a type of mortgage that is used to finance multiple properties with a single loan. Unlike a traditional mortgage, which is secured by just one property, a blanket mortgage is secured by several properties and covers a larger real estate portfolio.
A blanket mortgage is typically used by real estate investors who own several rental properties, as it provides a convenient and cost-effective way to finance their real estate portfolio. The loan amount, interest rate, and repayment terms for a blanket mortgage will depend on the value of the properties being used as collateral and the creditworthiness of the borrower.
The purpose of a blanket mortgage is to simplify the financing process for real estate investors who own multiple properties. Rather than obtaining separate loans for each property, a blanket mortgage allows the investor to pool their assets and secure a single loan that covers all of their properties. This can help reduce the overall cost of borrowing and simplify the management of the mortgage.

Breach of Contract: A breach of contract is a failure to fulfill the terms of an agreement between two or more parties. In real estate, a breach of contract can occur when one party fails to fulfill their obligations under a real estate purchase agreement, lease agreement, or another type of real estate contract.
Breaches of contract can take many forms, including failing to make a required payment, failing to complete repairs or renovations, failing to transfer title to a property, or failing to follow through on any other term outlined in the contract.
If a breach of contract occurs, the non-breaching party may have several options for resolving the issue. They may be able to seek damages for any losses they incurred as a result of the breach, or they may be able to terminate the contract and seek alternative solutions.
In some cases, the parties may be able to negotiate a resolution to the breach of contract, either through mediation or direct negotiations. However, if the parties are unable to reach a resolution, they may need to take legal action in order to enforce the terms of the contract.

Building Permit: A building permit is a legal authorization issued by a local government agency that allows property owners or developers to begin new construction or make significant modifications to an existing building. The process of obtaining a building permit usually involves submitting detailed plans and specifications for review by the local government agency.
The primary purpose of the building permit is to ensure that the proposed construction or modifications comply with the relevant building codes and zoning regulations, as well as safety standards. Upon approval, the building permit authorizes the property owner or developer to commence construction or modifications on the property, and failure to obtain one can result in legal penalties, fines, or even demolition of the structure in some cases.
A building permit is a critical requirement for anyone seeking to undertake construction projects, as it ensures compliance with laws and regulations and ensures the safety of the building occupants.

Capital Expenditure: Capital expenditures in real estate refer to investments in property, improvements, or equipment that are intended to increase the value, productivity, or efficiency of the property over a long period of time. These expenditures are usually large investments that provide a significant improvement to the property, such as adding a new building, upgrading existing infrastructure, or making major renovations.
Capital expenditures differ from operating expenses, which are regular and recurring expenses associated with the day-to-day operation of a property, such as utilities, maintenance, and salaries. Capital expenditures are usually planned and budgeted for in advance and are made with the expectation that they will provide a return on investment over time.

Cash-on-Cash Return: Cash on cash return is a rate used by investors to calculate the return they make when buying property. It measures the ratio of annual income made by a real estate investor to the amount of mortgage paid during the same year.

Certificate Of Occupancy: The Certificate Of Occupancy is a legal document that ensures the building’s integrity and safety.
It’s necessary for several reasons, including making sure there are no leaks or other structural issues with the building in question and ensuring all safety standards have been met on site as well.

Certificate of Title: The certificate of title is a legal document that identifies the owner(s) and their property.
It allows you as the owner or prospective buyer peace-of mind that there are no outstanding debts against them, so it’s time for excitement.

Co-Applicant: The co-applicant is an individual who can add their voice to that of another party, such as in underwriting and approval.

Co-Signer: A co-signer is a person who signs a loan or credit agreement with the borrower. The co-signer becomes legally obligated to repay the debt if the borrower fails to do so. Co-signers are typically used when the borrower has a poor credit history or no credit history at all. By signing with a co-signer, the borrower is essentially saying that they are confident in their ability to repay the debt. Co-signers can be close friends or family members, but they can also be strangers. It is important to note that being a co-signer is a big responsibility and should not be taken lightly. If you are considering becoming a co-signer, make sure you understand all of the risks involved before you sign any agreements.

Co-Tenant: Co-tenancy is a legal relationship between two or more people who share possession and use of property, like an apartment, office, or land. Co-tenants each have an undivided interest in the property and are jointly responsible for its care and upkeep. In most cases, co-tenants must also agree unanimously on any decisions regarding the property, such as whether to sell or sublet it. Co-tenancy can be formed intentionally, like when friends decide to move in together, or unintentionally, like when siblings inherit property from their parents. Regardless of how it is created, co-tenancy gives all tenants equal rights to use and enjoy the property.

Commingling: Commingling refers to the mixing of funds from different sources or accounts into a single account, without proper documentation or segregation. In the context of real estate, commingling can occur when a real estate agent or broker mixes their personal funds with their clients’ funds, such as escrow funds or rent payments, without keeping them separate and accounted for.
Commingling is considered unethical and illegal in many jurisdictions, as it can result in a conflict of interest and put the client’s funds at risk. It is also considered a breach of trust, as clients expect their funds to be kept separate and protected in accordance with the law and industry standards.

Commitment: A commitment refers to a formal agreement between a lender and a borrower that outlines the terms and conditions of a loan. A commitment is typically issued by a lender, such as a bank or mortgage company, after the borrower has applied for a loan and the lender has reviewed and approved the loan application.
A commitment letter outlines the terms of the loan, including the loan amount, interest rate, repayment terms, and any other relevant conditions. It also specifies the loan’s closing date and any contingencies that must be met in order for the loan to close.
A commitment is a binding agreement between the lender and the borrower, and it is an important step in the loan process. It provides the borrower with the security of knowing that they have been approved for a loan and what the terms of the loan will be. It also provides the lender with the assurance that the loan will close according to the agreed-upon terms.

Condominium: The condominium (also called a ” condo”) is a large property complex that consists of individual units. It is an ideal place for those who want independence, privacy, and space in one package.
The condominium offers more control and flexibility than other types of housing, such as apartments or townhouses, but with less space per unit (and higher prices).

Credit History: Credit history is a record of a person’s ability to repay debts. It includes information about late payments, bankruptcies, and other financial problems that may make lenders reluctant to give someone a loan. Good credit history can be essential for getting a mortgage, a car loan, or even a job. Credit history is also important for businesses. If a company has a poor credit history, it may be unable to get loans or lines of credit from banks. Credit history is generally maintained by credit bureaus, which collect information from lenders and other sources. This information is then used to generate credit scores, which are used by lenders to assess borrowers’ risk. A person with a higher credit score is generally seen as being more likely to repay a loan than someone with a lower score.

Debt Coverage Ratio: Debt coverage ratio (DCR) is a financial metric used in real estate to measure a property’s ability to generate enough cash flow to cover its debt payments. It is calculated by dividing the property’s net operating income (NOI) by its total debt service, which includes both the principal and interest payments on any loans used to purchase or finance the property.
A high DCR is considered a positive sign and indicates that a property is generating enough cash flow to comfortably cover its debt obligations. A low DCR, on the other hand, may indicate that a property is generating insufficient cash flow to cover its debt obligations and could be at risk of default.

Distressed Property: A distressed property is a real estate property that is in a state of financial distress, often as a result of factors such as foreclosure, bankruptcy, or default on a mortgage loan. These properties are typically sold at a discounted price compared to similar properties in the same market due to the urgency of the seller to dispose of the property and the perceived risk associated with purchasing a distressed property.
There are two main types of distressed properties: pre-foreclosure and post-foreclosure. Pre-foreclosure properties are typically owned by individuals who have fallen behind on their mortgage payments and are at risk of losing their homes to foreclosure. Post-foreclosure properties, on the other hand, have already gone through the foreclosure process and are now owned by the lender or other financial institution.
Investing in distressed properties can be a lucrative opportunity for investors who are willing to take on the risk and are able to make necessary repairs and renovations to improve the value of the property. However, investing in distressed properties can also be a risky proposition, as the property may have significant hidden problems that are not immediately apparent and could result in substantial additional costs.

Dominant tenement: A dominant tenement is a property that has the right to use another property (the servient tenement) for a specific purpose, such as for access or utilities. This relationship is established through an easement, a legal right granted to the owner of the dominant tenement to use a portion of the servient tenement for a specific purpose.
For example, if a property is landlocked and does not have direct road access, the owner may have the right to use a neighboring property for access through an easement. The property with the right to use the neighboring property is the dominant tenement, and the neighboring property is the servient tenement.
The rights and obligations of the dominant and servient tenements are defined in the easement agreement and are legally binding. The dominant tenement is entitled to use the servient tenement for the specific purpose defined in the easement, but is not allowed to interfere with the servient tenement’s use or enjoyment of its property.

Down Payment: A down payment is a payment made by a buyer towards the purchase of a property, typically in addition to a loan from a lender such as a bank or a mortgage company. The down payment represents a portion of the total purchase price of the property and is usually paid at the time of closing.
The size of the down payment can vary, but it is typically a percentage of the purchase price, with the loan from the lender covering the remaining balance. The amount of the down payment can affect the size of the loan and the monthly mortgage payment, as a larger down payment can result in a smaller loan and lower monthly payments.
In many cases, the down payment requirement can be as low as 3% of the purchase price, but it can also be higher, depending on the type of loan and the lender’s requirements. Down payments can be made in a variety of ways, including cash, savings, or even a gift from a relative.

Duplex: A duplex is a building that contains two separate living units. Duplexes are often owner-occupied, with the owner living in one unit and renting out the other. However, they can also be investment properties, with both units being rented to tenants. Duplexes can come in a variety of different layouts, but they typically have two entrances and two levels of living space. While duplexes are usually found in urban areas, they can also be found in suburban and rural areas. Duplexes offer several advantages over other types of rental properties, such as townhouses and apartments. For one, they tend to be more affordable than single-family homes. Additionally, duplexes offer more privacy than apartments, as each unit has its own entrance and living space. Finally, duplexes offer the opportunity for passive income, as the owner can generate rental income from the other unit.

Effective Gross Income: Effective Gross Income (EGI) refers to the total income that a property generates after taking into account all of its expenses, vacancies, and other losses. Property owners or managers determine EGI by subtracting any vacancy losses and operating expenses from the gross rental income. Operating expenses can include property management fees, property taxes, insurance, maintenance, and repairs, as well as utility costs.
EGI is a significant factor in evaluating the profitability and value of a property, as it indicates the actual income the property is producing after all expenses have been accounted for.

Effective Rent: Effective rent is a key metric used by landlords and tenants to measure the value of a rental property. Effective rent is the sum of the base rent plus any additional charges, such as utility fees, pet fees, and parking fees. Effective rent can also be expressed as a percentage of the property’s market value. For example, if a property has an effective rent of $1,500 and a market value of $200,000, the property’s effective rent would be 0.75%. Effective rent is an important metric because it allows landlords and tenants to compare different properties and assess their relative value. Additionally, effective rent is a useful tool for evaluating lease terms and determining whether or not a property is fairly priced.

Estoppel Certificate: An Estoppel Certificate is a document that is used to verify that certain agreements or understandings between parties are accurate and still in effect. It is typically used in situations where one party is relying on the representations of another, such as in a real estate transaction. The Estoppel Certificate will set forth the relevant agreements between the parties and confirm that they are still in force. This can provide valuable peace of mind to the party who is relying on the representations contained in the Estoppel Certificate. In some cases, an Estoppel Certificate may also be used to modify or terminate an existing agreement between parties. For example, if a tenant agrees to vacate the property by a certain date, an Estoppel Certificate can be used to memorialize this agreement. Estoppel Certificates can be used in a variety of situations, and they can provide valuable protection for all parties involved.

Eviction: Eviction is the legal action undergone by a landlord in order to remove tenants who are not fulfilling their end of the deal.

Eviction Notice: The eviction notice is a legal document for landlords and property owners to start the process of evicting someone from their home.

Fair Housing Act: The Fair Housing Act is a federal law that protects your right to live anywhere you want without being judged by who are or what faith practices. It also ensures religious freedom, which means no one can force their views on others through housing policies.

Fixed expenses: Fixed expenses are the regular expenses incurred in maintaining and operating a property. These expenses do not change significantly over time, regardless of the property’s occupancy rate or usage.
Fixed expenses may include property taxes, insurance premiums, maintenance and repair costs, property management fees, utilities, and other costs associated with the property’s day-to-day operation.
Property owners and investors need to consider fixed expenses when managing a property, as they make up a significant portion of the total operating expenses and can affect the property’s profitability and overall financial performance.

Flood Insurance: Flood insurance is an insurance policy that offers protection to property owners against financial losses caused by flooding. It provides coverage for damages to a property and its contents as a result of flooding, which is usually not covered by regular homeowners’ insurance policies.
In general, flood insurance is mandatory in areas that are considered high-risk flood zones. The cost of flood insurance premiums is often determined by factors such as the property’s location, flood risk, and overall value.

Floor Area Ratio (FAR): The Floor Area Ratio (FAR) is a measurement that indicates the amount of a building’s floor area that is dedicated to a specific use, such as residential, commercial, or industrial. It is calculated by dividing the total floor area of the building by the area of the land on which it is situated. The higher the FAR, the more densely built-up an area is. FARs are used in urban planning to control the density of development and to ensure that adequate open space is available. In general, areas with higher FARs are more likely to have a greater variety of uses, while areas with lower FARs tend to be more residential.

Foreclosed Home: A foreclosed home refers to a property that has been taken over by a lender because the homeowner has failed to make mortgage payments. Foreclosure is a legal process that allows the lender to take possession of the property and sell it to recover the outstanding debt.
Foreclosed homes are usually sold at a discounted price because the lender wants to recover their losses quickly. However, purchasing a foreclosed home can have certain risks, such as potential hidden liens or necessary repairs.

Foreclosure: Foreclosure is the legal process by which a borrower in default on their mortgage loan is relieved of their obligation to make payments and the property securing the loan is sold to pay off the outstanding balance. Foreclosure proceedings can be initiated by the lender or, in some cases, by the borrower. In most jurisdictions, foreclosure proceedings are judicial, meaning they must be initiated by a court order. However, non-judicial foreclosure proceedings are also possible in some cases. Foreclosure is often seen as a last resort for lenders, as it can be costly and time-consuming. However, in some cases, foreclosure may be the best option for all parties involved.

Graduated Lease: A graduated lease is a type of lease agreement that involves predetermined rent increases over a set period. This is typically done by landlords to offset the impact of inflation and increasing property expenses while providing tenants with predictable rent increases.
The lease usually includes a schedule of rent increases that can be based on a fixed percentage or a predetermined amount. Graduated leases can be used in both commercial and residential settings, providing a certain degree of flexibility for both landlords and tenants.

Gross Lease: A gross lease is a type of lease agreement where the tenant is responsible for paying all expenses related to the property, in addition to their regular monthly rent payment. These expenses can include utilities, taxes, insurance, and maintenance. The main advantage of a gross lease is that it simplifies budgeting for the tenant, as they know exactly how much they will need to pay each month. Additionally, gross leases often result in lower overall costs for the tenant, as the landlord typically covers many of the expenses that would be passed on to the tenant under a different type of lease agreement.

Gross Lease: A gross lease is an agreement where the tenant pays a fixed rental amount to the landlord, and the landlord is responsible for all property operating expenses, such as property taxes, insurance, repairs, and utilities. This type of lease is commonly used in commercial real estate, where the landlord wants to maintain control over the property and ensure that all expenses are covered. Tenants benefit from the simplicity of a gross lease, as they only need to pay a fixed rent each month without having to worry about additional expenses. However, tenants may end up paying more in the long term, as the landlord may include the operating expenses in the rent.

Gross Rent: Gross rent is a term used in real estate to describe the total amount of rent paid for a property before any deductions are made. This includes any payments made for utilities, parking, or other amenities. Gross rent is often used as a baseline for comparison when shopping for rental properties. For instance, if two properties have identical monthly rental rates, but one includes utilities while the other does not, the property with the higher gross rent will be more expensive overall. Gross rent can also be used to calculate a property’s potential return on investment (ROI). For example, if a property’s monthly gross rent is $1,000 and its purchase price is $100,000, its ROI would be 1%.

Ground Lease: A ground lease is a type of lease in which the tenant rents land from the landlord. The landlord retains ownership of the land, but the tenant has the right to use the land for a specific purpose, such as building a house or a store. Ground leases are often used when the tenant wants to build something on the land that will become a permanent part of the property, such as a swimming pool or a garage. The term of a ground lease is typically much longer than a traditional lease, often lasting for 99 years or more. Ground leases can be an attractive option for both landlords and tenants, as they provide the landlord with long-term income and security while giving the tenant the ability to improve the property.

Guarantor: A guarantor is a person who agrees to be held responsible for another person’s debt or obligation if they are unable to meet their financial obligations. Guarantors can be individuals or businesses, and they may be asked to guarantee a loan, contract, or other financial obligation. In many cases, a guarantor will be required to provide collateral, such as property or cash, to secure the debt. If the primary debtor fails to repay the debt, the guarantor is responsible for repaying it. Guarantors are typically used when the primary debtor has bad credit or no collateral. Guarantors can also be used in business transactions to guarantee that a product will be delivered as promised.

Holdover Tenant: A holdover tenant is a tenant who remains in possession of a rental unit after the expiration of their lease. In most cases, holdover tenants are treated as month-to-month tenants, which means they are required to pay rent every month. However, in some cases, holdover tenants may be required to pay a higher rate of rent or may be subject to other special terms and conditions. Holdover tenants also have the right to terminate their tenancy at any time without cause. However, if a holdover tenant fails to pay rent or violates the terms of their lease, they may be subject to eviction.

Home Inspection: A home inspection is a comprehensive assessment of a property’s condition, carried out by a professional inspector. The inspector evaluates the safety, structural soundness, plumbing, electrical, and heating and cooling systems, as well as the overall functionality of the property. The inspection report provides a detailed analysis of the property’s condition, highlighting any defects or potential issues that may require attention.
Home inspections are usually conducted during the buying or selling process, giving buyers the opportunity to make informed decisions about the property’s condition and negotiate repairs or price adjustments.

Home Warranty: A home warranty is a service contract that homeowners can purchase to provide coverage for repairs or replacement of home appliances and systems that may fail due to regular wear and tear. A home warranty typically covers items such as heating and cooling systems, plumbing, electrical systems, and home appliances.
Homeowners opt for a home warranty to safeguard against unexpected repair expenses and to ensure the proper functioning of their home appliances and systems. The service provider of home warranties may charge an annual fee in addition to a service fee for each repair request.

Homeowners Insurance: Homeowners insurance is a type of insurance that provides financial protection for property owners against damages or losses to their property or personal belongings. This type of insurance typically covers natural disasters such as fire, theft, vandalism, and weather-related events.
Homeowners insurance policies may also cover medical expenses or legal fees in the event that someone is injured on the property, and may include liability coverage for accidents that occur on the property. Homeowners insurance is generally required by mortgage lenders and is purchased by homeowners on an annual basis. The cost of homeowners insurance premiums may vary depending on factors such as the property’s location, value, and the coverage limits chosen by the homeowner.

Homeowners’ Warranty: A homeowners’ warranty, also known as a home warranty, is an agreement between a homeowner and a warranty company to cover the cost of repairs or replacements for certain home systems and appliances in case of malfunction.
It typically covers major home systems such as HVAC, plumbing, and electrical systems, as well as appliances like refrigerators, ovens, and dishwashers, among others.
Homeowners’ warranties are usually purchased by home sellers or buyers to safeguard against unexpected repairs or replacements that may arise after the sale of a home.
Besides covering the cost of repairs or replacements, a homeowners’ warranty may also provide additional benefits, such as access to repair technicians, discounted rates for services not covered by the warranty, and 24/7 customer service.

House Rules Addendum: A House Rules Addendum is a specific regulation that a tenant must follow to rent a property. A House Rules Addendum is a document that outlines these rules and is typically signed by both the landlord and the tenant before the lease is executed. The addendum may cover topics such as quiet hours, pet restrictions, parking, and outdoor noise levels. House rules are designed to help tenants feel comfortable in their new homes while also respecting the rights of their neighbors. By signing a House Rules Addendum, tenants are agreeing to abide by these rules for the duration of their lease.

Housing Discrimination: Housing discrimination occurs when individuals are treated unfairly or differently based on their protected characteristic, such as their race, ethnicity, national origin, religion, gender, age, familial status, or disability, during any stage of the housing process, including renting, buying, financing, or other housing-related activities.
Examples of housing discrimination can include rejecting a rental application based on someone’s religion or race, providing different terms or conditions for a lease agreement based on familial status, or offering varying mortgage rates based on the borrower’s age or gender.
Housing discrimination is prohibited by federal and state laws, and those who experience discrimination may file complaints with government agencies or seek legal action.

Income Property: Income property refers to real estate that is specifically bought and managed for the purpose of generating rental income. This type of property can include a variety of different assets, such as apartments, office buildings, retail spaces, storage facilities, and more. The goal of owning income property is to earn a return on investment through rental income and appreciation of the property over time.
When considering purchasing an income property, investors must also take into account other factors, such as the location and condition of the property, the current real estate market, and the demand for rental properties in the area. The financial stability and creditworthiness of potential tenants also play an important role, as the ability to consistently generate rental income is crucial for the success of the investment.

Index Lease: An index lease is a lease agreement where the rent amount is connected to a particular index, like the consumer price index. The rent can either increase or decrease based on the changes in the index value, which can offer flexibility to both the landlord and tenant. This type of lease can be advantageous for landlords since it can protect against inflation and market fluctuations. For tenants, index leases can provide more predictable rent increases compared to other types of leases.

Indirect costs: Indirect costs are expenses incurred during the development or construction of a real estate project that are not directly tied to the actual construction work. These costs are associated with the planning and preparation of the project and can include things like feasibility studies, permits, site surveys, and architectural and engineering fees.
Indirect costs are typically a significant portion of the total cost of a real estate project and are often overlooked or underestimated. They can have a significant impact on the overall budget and success of the project, making it important for real estate developers and investors to accurately estimate and budget for these costs.
Examples of indirect costs include project management, legal fees, marketing and advertising, and insurance. These costs are important to consider when determining the overall cost and profitability of a real estate project. Accurately estimating indirect costs is essential for ensuring the success and profitability of a real estate development or construction project. By accurately accounting for indirect costs investors can make informed decisions and avoid costly mistakes.

Inspection Checklist Addendum: An Inspection Checklist Addendum is a tool that can be used by inspectors to supplement a standard checklist. Inspection checklists are used to assess the condition of a property, and the addendum can be used to document specific issues that are not covered by the standard checklist. The addendum can also be used to provide additional information about an item on the checklist. For example, an inspector might use the addendum to note the severity of a problem or to provide recommendations for repairs. In some cases, the Inspection Checklist Addendum might also be used to describe conditions that were not apparent during the inspection, such as hidden damage or previous repairs that have not been properly documented. Ultimately, the Inspection Checklist Addendum is a valuable tool that can help inspectors more thoroughly document the condition of a property.

Inspection Report: An inspection report is a comprehensive document that outlines the results of a property examination conducted by a professional inspector. It offers a detailed analysis of a property’s condition, highlighting any potential issues or problems that need to be addressed. The report typically covers various aspects of a property, including its structural integrity, electrical, plumbing, and heating and cooling systems, as well as an assessment of the overall safety and functionality of the property. Inspection reports are commonly used during the home buying and selling process, allowing buyers to make informed decisions about the property’s condition and negotiate repairs or price adjustments.

Investment Return: Investment return is a measure of the profitability of an investment and is commonly expressed as a percentage. It represents the amount of money that an investor earns on their investment over a certain period of time. The investment return is the difference between the amount invested and the amount received in return, expressed as a percentage of the initial investment.
There are several factors that can impact investment return, including rental income, appreciation, financing costs, taxes, and expenses.
Investment return is an important consideration for real estate investors because it helps them to determine the viability of a potential investment.
Real estate investors use investment return to evaluate the potential risk and reward of a particular investment, and to compare the performance of different investments. A higher investment return generally indicates a more profitable investment, but it is important to consider other factors, such as market conditions and the quality of the property, when evaluating the potential investment return of a real estate investment.

Joint Tenancy: Joint tenancy is a type of co-ownership in real estate that involves two or more individuals holding an ownership interest in a property. In a joint tenancy, each owner holds an undivided interest in the property and has an equal right to use and possess the entire property.
One of the key features of joint tenancy is the right of survivorship. This means that if one joint tenant dies, their interest in the property automatically passes to the surviving joint tenants, bypassing the deceased joint tenant’s estate. This allows the property to pass to the surviving joint tenants without the need for probate, which can be a time-consuming and expensive process.
Joint tenancy is often used by family members, business partners, or other individuals who want to hold property together.

Judgment lien: A judgment lien is a legal claim that a creditor can place on a property in order to secure payment of a debt. A judgment lien is created when a court issues a ruling in favor of the creditor, ordering the borrower to pay a specific amount of money. If the borrower does not pay the debt, the creditor can enforce the judgment lien by foreclosing on the property and selling it to collect the debt.
In most cases, a judgment lien is placed on a borrower’s real estate, including their primary residence, vacation home, or investment property. Once the lien is recorded with the county or local government, it becomes a legally binding claim on the property and can be used to collect the debt, even if the borrower sells or refinances the property.
Judgment liens can have a significant impact on a borrower’s ability to sell or refinance their property, as they may make it more difficult to obtain financing or sell the property for a fair market value.

Jumbo Mortgage: A jumbo mortgage is a type of home loan that is designed for financing high-priced or luxury properties. The term “jumbo” refers to the size of the loan, which exceeds the conforming loan limits set by government-sponsored entities such as Fannie Mae and Freddie Mac.
Jumbo mortgages typically have stricter eligibility requirements and higher interest rates compared to conforming loans. This is because they are considered higher risk due to their larger loan amounts.
Borrowers who are looking to finance a high-priced property, or who need to borrow more than the conforming loan limit, may need to consider a jumbo mortgage. However, it is important for borrowers to carefully consider the terms and conditions of a jumbo mortgage, as well as their overall financial situation and ability to repay the loan, before applying for this type of loan.

Key money: Key money is a payment that tenants make to landlords in exchange for the right to lease a property. This payment is separate from the first month’s rent and security deposit and is usually a lump sum paid at the beginning of the lease term. The amount of key money varies depending on factors such as location and the desirability of the property. In some areas, it can be several months’ worth of rent. Key money is often found in high-demand rental markets, such as large cities or near universities. While key money can be a financial burden for tenants, it can provide an additional source of income for landlords, who can use it to cover expenses related to property upkeep and management. It’s important to note that key money is not legal in all regions and jurisdictions, so tenants and landlords should consult local laws and regulations before including it in a lease agreement.

Kick-out clause: A kick-out clause is a provision that allows a seller to accept a buyer’s offer, but continue to advertise the property for a specified period, usually 48 to 72 hours. This gives the seller the option to “kick out” the first buyer and accept a better offer that comes in during this time. While this clause can give the seller more flexibility in a competitive market, it can be a disadvantage to the buyer who may lose the property despite having their offer accepted. It’s important to note that kick-out clauses are not universally accepted and legal in every state, so it’s essential to review local real estate laws before using them. Real estate agents can guide buyers and sellers on the potential advantages and disadvantages of including a kick-out clause in a contract.

Knockdown-rebuild: Knockdown-rebuild refers to a construction strategy where an existing property is demolished, and a new structure is built in its place. This approach is often used when the existing property is no longer suitable for the needs of the owner, such as when the property is outdated, unsafe, or has structural issues. It is also a popular option for those who wish to construct a custom-built home on their existing property. The process involves obtaining necessary permits and approvals from local authorities, as well as hiring contractors to carry out the demolition and construction work. Although knockdown-rebuild can be a complex and costly undertaking, it provides a unique opportunity to create a modern, tailored living space without the need to relocate to a new property. Moreover, it can add value to the property and enhance its livability, making it a viable choice for homeowners seeking to upgrade their homes.

Landlord insurance: Landlord insurance is a specialized insurance policy designed for individuals who choose to lease out their own residential properties.
This specialized insurance is an indispensable fortress that safeguards landlords from a diverse array of risks and intricacies entangled with property ownership. By providing unwavering financial security and liberating landlords from cumbersome responsibilities, landlord insurance empowers property owners to steer their investments with resolute confidence and tranquility.
Determining the right level of coverage for your rental property involves several key factors. These include the size of the building, the estimated cost of rebuilding or replacement, and the presence of multiple tenants and structures on the premises. Whether your property is furnished or unfurnished, it carries its own set of unique risks that must be carefully evaluated.
Landlord insurance does not provide coverage for a tenant’s personal belongings. In the unfortunate event of a fire, where a tenant may lose their car or furniture it’s crucial to note that landlord insurance does not extend protection to these items. It is highly recommended that tenants secure their own renter’s insurance to adequately safeguard their belongings.

Lead-Based Paint Disclosure: A Lead-Based Paint Disclosure is a form that must be provided to any prospective buyer of a property built before 1978. The form discloses the presence of lead-based paint or lead-based paint hazards in the home and informs the buyer of the risks associated with lead exposure. Lead-based paint is a serious health hazard and can cause a range of problems, from learning disabilities to behavioral problems. The Lead-Based Paint Disclosure form is required by law and helps to ensure that buyers are aware of the risks associated with lead-based paint before they purchase a property.

Lease Commencement Date: The lease commencement date is the date on which the tenant officially takes possession of the rental property and is responsible for paying rent. This date is typically stated in the lease agreement. In some cases, the landlord may allow the tenant to take possession of the property before the lease commencement date. However, the tenant will not be liable for rent until the official start date of the lease. Depending on the situation, the landlord may prorate the rent or require that the full month’s rent be paid upfront. If you are unsure about your lease commencement date, be sure to ask your landlord for clarification.

Leasehold Estate: A leasehold estate is a property interest held by a tenant for a set period of time, as stipulated in a lease agreement. The lease agreement will also set out the terms of the tenancy, such as the rental amount and any rules or restrictions on the use of the property. The leasehold estate is created when the lease agreement is signed and becomes effective on the date specified in the agreement. The leasehold estate expires on the date specified in the agreement, at which point the tenant must vacate the property. If the tenant remains on the property after the expiration of the leasehold estate, they may be considered a trespasser.

Lessor: A lessor is a person who transfers a lease of property to another person for the management, use, or enjoyment of that property for a specific period of time. The lessor is responsible for ensuring that the property is suitable for the lessee’s use and for maintaining the property during the term of the lease. The lessee typically pays rent to the lessor for use of the property. At the end of the lease term, the lessee may have the option to purchase the property from the lessor.

Mediation: Mediation is a process in which two or more parties attempt to resolve a dispute with the assistance of a neutral third party. Mediation is typically used in situations where the parties are seeking to avoid litigation, or where they have already engaged in litigation but wish to avoid going to trial. The mediator’s role is to facilitate communication between the parties and help them reach an agreement. Mediation is confidential and often less formal than litigation, which makes it an appealing option for many parties. However, mediation is not binding, which means that if the parties are unable to reach an agreement, they can still go to trial.

Modified Gross Lease: A modified gross lease is a type of lease agreement where the tenant is responsible for paying a portion of the property taxes, insurance, and operating expenses in addition to their monthly rental rate. The base rental rate is typically lower than a similar property that uses a full-service gross lease, however, the modified gross lease gives the tenant more control over their monthly expenses. In most cases, the landlord will still be responsible for maintaining the property and common areas. Modified gross leases are popular with office and retail tenants who want to have more control over their budgets.

Month-to-month lease: The month-to-month lease is an agreement that can be set up between landlords and tenants, establishing occupancy without a specific end date for either party involved.

Multi-Family Home: A multi-family home is a type of residential property that typically consists of two or more separate units. Multi-family homes can come in a variety of sizes and layouts, but they all have one thing in common: they provide tenants with their own private living space. Multi-family homes are a popular choice for renters because they offer many of the same amenities as single-family homes, but at a lower price point. Multi-family homes also offer tenants the opportunity to live close to their neighbors, which can be beneficial for people who enjoy a sense of community. Multi-family homes are an important part of the housing market and they provide an affordable housing option for many families.

Net Operating Income (NOI): Net operating income (NOI) is a key metric used in real estate investing. It is defined as the total revenue from a property minus the operating expenses, and it is used to assess the profitability of an investment. A property with a high NOI is typically considered to be a good investment, as it is generating a significant return after all expenses are paid. Conversely, a property with a low NOI may be less desirable, as it may be struggling to cover its costs. For investors, understanding NOI is essential to making informed decisions about which properties to invest in.

Notice of Lease Violation: A Notice of Lease Violation is a formal notice given to a tenant that outlines one or more specific violations of the lease agreement. The notice provides the tenant with an opportunity to correct the violation (or violations) within a specified period of time, typically ranging from 7—30 days. If the tenant fails to take action to remedy the situation within the timeframe outlined in the notice, they may be subject to eviction proceedings. Notice of Lease Violations can be generated for a variety of reasons, including (but not limited to) failure to pay rent, damage to property, disruptive behavior, and unauthorized occupants. In most cases, Notice of Lease Violations are issued by the landlord or property manager; however, in some cases, they may also be issued by the local police or code enforcement officials. Regardless of who issues the notice, it is important to take prompt action to avoid potential eviction.

Notice of Rent Increase: A Notice of Rent Increase is a notice given by a landlord to a tenant informing the tenant that the rent for the property is going to be increased. The notice must be served on the tenant at least 90 days before the proposed date of the rent increase. The notice must also specify the amount of the proposed rent increase and the date on which it will take effect. If the notice is not served on the tenant under the law, then the proposed rent increase will not be effective.

Occupancy: Occupancy refers to the number of people who are present in a space at any given time. It is an important factor to consider when determining the capacity of a room or building. Occupancy can also be used to refer to the use of a space, such as residential occupancy or commercial occupancy. Spaces with high occupancy rates are typically well-utilized and generate more revenue than spaces with low occupancy rates. Occupancy can also be used as a metric for safety, as it can help to identify areas that are more likely to experience crowding or congestion.

Open Listing: An open listing is a type of real estate listing agreement where a property owner works with multiple real estate agents to sell their property. In an open listing, the property owner retains the right to sell the property on their own, without owing any commission to the agent. The first agent who successfully sells the property earns the commission, and any subsequent agents who sell the property to the same buyer do not earn a commission.
Open listings are in contrast to exclusive listings, where the property owner works exclusively with one real estate agent, who has the exclusive right to sell the property and earn the commission. With an open listing, the property owner has the flexibility to work with multiple agents, increasing the chances of a quick sale, but the property owner takes on more of the responsibility for marketing and selling the property.

Operating Expenses: Operating expenses are the costs associated with running and maintaining a property. These expenses can include property management fees, utilities, insurance, property taxes, maintenance and repair costs, and any other costs that are required to keep the property in good condition and ready for use.
For commercial properties, operating expenses are typically calculated as a percentage of the total rentable space in the building, and are passed on to tenants as part of their monthly rent. For residential properties, operating expenses are typically the responsibility of the homeowner, and are not typically passed on to tenants.

Origination Fee: An origination fee is a fee charged by a lender for processing a loan application and originating a loan. The fee is typically expressed as a percentage of the loan amount and is paid by the borrower at the time of closing.
The origination fee covers the lender’s costs for underwriting the loan, including conducting a credit check, verifying income and employment, and evaluating the property being used as collateral. The fee can range from 0.5% to 1% of the loan amount, but may be higher or lower depending on the lender and the type of loan.

Percentage Rent: Percentage rent is a term used in commercial leasing that refers to the amount of rent that is based on a percentage of the tenant’s sales. The percentage is typically outlined in the lease agreement, and it may be renegotiated if the tenant’s sales exceed or fall below certain thresholds. Percentage rent is typically only charged on net sales, which means that returns, discounts, and other deductions are subtracted from the total before the percentage is applied. For example, if a tenant has a 5% percentage rent clause in their lease and they generate $100,000 in net sales over a year, their landlord would be entitled to $5,000 in percentage rent. Percentage rent can be a significant source of income for landlords, particularly in retail leases where sales volumes are high. As such, it is important for tenants to carefully review any percentage rent clauses in their lease agreements before signing.

Pet Addendum: A Pet Addendum is an addendum to a lease agreement that outlines the rules and regulations regarding pets. This may include specifying the type of pets allowed, limiting the number of pets per unit, or requiring pet rent or a pet deposit. The Pet Addendum should be signed by both the tenant and landlord before move-in.
The Pet Addendum is a way for the landlord to minimize their liability if a pet causes damage to the property or injures another tenant. It is also an opportunity for the landlord to set ground rules regarding pet ownership so that all tenants are on the same page. By having a clear Pet Addendum in place, landlords can provide peace of mind for all parties involved.

Pet Deposit: A pet deposit is an additional security deposit that a landlord may require from a tenant who intends to keep a pet on the premises. The deposit is usually equal to one month’s rent, and it is intended to cover any damage that the pet may cause to the property. In some cases, the deposit may be non-refundable. Pet deposits are separate from the security deposit, and they are typically due at the time of signing the lease.

Property Management Agreement (PMA): A Property Management Agreement (PMA) is a legally binding contract between a property owner and a property manager. In the agreement, the property owner appoints the property manager as their agent to manage the property. The agreement sets out the duties of the property manager, as well as their rights and responsibilities. The PMA should be customized to fit the specific needs of the property owner and the property being managed. For example, some PMAs may specify that the property manager is responsible for marketing and leasing the property, while others may give the property manager more general authority to manage the property as they see fit. Ultimately, the PMA should be clear about what is expected of both parties to avoid misunderstandings or disputes down the road.

Quantity surveyor: A quantity surveyor is a professional who specializes in estimating construction costs and managing budgets for building projects. Their main responsibility is to calculate the costs of materials, labor, and equipment required for a construction project, as well as oversee expenses throughout the construction process. Quantity surveyors play a crucial role in ensuring that projects are completed within the allotted time and budget, and they may also be involved in negotiating contracts with suppliers and contractors.

Quiet enjoyment: Quiet enjoyment is a legal concept that safeguards a tenant’s right to use and inhabit a rental property without any interference or disturbance from the landlord or other tenants. It means that tenants are entitled to enjoy their living space in a peaceful and undisturbed manner, free from unreasonable disturbances or harassment. The right to quiet enjoyment is typically incorporated in lease agreements and is considered a fundamental aspect of a tenant’s rights. Landlords are obligated by law to ensure that tenants can peacefully enjoy their living space and can be held accountable for any violation of this obligation. In the event that a landlord infringes a tenant’s right to quiet enjoyment, the tenant may be eligible for compensation or even termination of the lease agreement.

Quiet title: Quiet title is a legal procedure used to establish clear ownership of a property and remove any conflicting claims or liens. It is commonly employed when there is a dispute over ownership or an unclear chain of title. A quiet title action can be initiated by either the property owner or a third party who claims an interest in the property. The process involves filing a lawsuit in court and presenting evidence to prove the claimant’s right to the property. If the court rules in favor of the claimant, any conflicting claims or liens are eliminated, and the property owner is granted the clear title. Although the quiet title action can be time-consuming and complex, it is a crucial step in ensuring that the property can be sold or transferred without any legal disputes.

Quitclaim deed: A quitclaim deed is a legal document used to transfer ownership of a property from one party to another. Unlike warranty deeds, a quitclaim deed does not provide any warranties or guarantees regarding the condition or ownership of the property. Instead, it simply transfers any interest or claims the grantor has in the property to the grantee. Quitclaim deeds are often used in situations where the transfer of ownership is between family members, in cases of divorce, or to resolve title issues. However, it’s important to note that a quitclaim deed provides no protection to the grantee, as the grantor does not guarantee that they own the property or that there are no liens or claims against it. Therefore, both parties should conduct due diligence and consult with an attorney or title company to ensure that the transfer of ownership is legal and that there are no outstanding claims or debts on the property.

Real estate market: The real estate market refers to the buying and selling of real estate properties, including residential, commercial, and industrial properties. It is a complex and dynamic system that is influenced by a wide range of factors, including economic conditions, demographic trends, and government policies.
In a healthy real estate market, there is a high level of demand for properties, and prices tend to rise as a result. Conversely, in a weak market, demand is low, and prices tend to fall. The real estate market can also be affected by changes in interest rates, lending standards, and government regulations, as well as factors such as natural disasters and economic downturns.
The real estate market is a critical component of the overall economy, as it generates employment, investment, and tax revenues.

Reconveyance: Reconveyance refers to the transfer of ownership of a property from one party to another, usually in the context of a mortgage or loan. In real estate, reconveyance occurs when a borrower pays off a mortgage or loan and the lender transfers the ownership of the property back to the borrower.
For example, if a borrower takes out a mortgage to purchase a property, the lender will hold the title to the property as collateral. When the borrower pays off the mortgage, the lender must reconvey the property back to the borrower by transferring ownership of the property back to the borrower.

Rent Control: Rent control is a system that limits how much rent landlords can charge for their properties. Rent control is implemented by local or state governments in order to keep housing affordable for people with low incomes. Rent control laws vary from place to place, but they typically involve setting a maximum amount that landlords can charge for rent, as well as limits on how often and by how much rent prices can be increased. Rent control can be an effective way to make sure that everyone has access to affordable housing, but it can also lead to problems, such as a decrease in the quality of housing, as landlords may be less likely to maintain their properties if they are not able to charge higher rents.

Rent Increase: A rent increase is when a landlord raises the amount of rent that a tenant pays. Rent increases can happen for many reasons, such as when the lease is up for renewal or when the cost of living in the area goes up. Landlords must typically give their tenants at least 30 days notice before raising the rent, and the new rent amount cannot be more than 10% higher than the old rent amount. Rent increases can be a major financial burden for tenants, so it’s important to budget carefully and have a backup plan in place in case of an unexpected increase.

Rent Roll: A rent roll is a list of all the tenants in a rental property, along with the corresponding rental amount due each period. Rent rolls are an important tool for landlords and property managers, as they provide a clear overview of who is renting which unit and for how much. Rent rolls can also be used to track late payments, identify problem tenants, and assess overall rental income. In addition, rent rolls can be helpful when it comes time to renew leases or discuss rent increases with tenants. By keeping a rent roll for each property, landlords and property managers can stay organized and on top of their rental business.

Rental Verification: Rental verification is the process of verifying that an individual actually lives at the address that they have given. Rental verifications are often used by landlords to verify that a tenant resides at their property and to confirm that the tenant is who they say they are. Rental verifications can also be used by businesses to verify an individual’s address for shipping purposes, or by financial institutions to verify an individual’s identity and address. Rental verifications can be conducted online, by phone, or in person, and usually require the individual to provide some form of identification, such as a driver’s license or passport.

Renters insurance: Renters insurance is an important type of insurance for anyone who rents their home. This type of insurance can provide coverage for your belongings, liability, and even living expenses if you have to evacuate your home due to a covered event.

Rescission: Rescission refers to the cancellation or undoing of a contract or transaction. In real estate, rescission can occur when one or both parties involved in a real estate transaction wish to terminate the agreement and undo any actions taken as part of the transaction.
For example, if a buyer and seller enter into a contract to purchase a property, but the buyer later decides they no longer want to purchase the property, they may initiate a rescission of the contract. In this scenario, the contract is cancelled, and any money or property exchanged as part of the transaction is returned.
Rescission can occur for a variety of reasons, including fraud, misrepresentation, or a breach of contract by one of the parties. In order to be valid, rescission must be made within a specific time frame, which is typically specified in the terms of the original contract.

Reversion: Reversion refers to the return of ownership of a property to its original owner or to their heirs after a specific period of time. In real estate, reversion is often used in the context of long-term leases or rental agreements, where the tenant has temporary use of the property for a set period of time. At the end of the lease or rental agreement, the property reverts back to the original owner.
Reversion can also occur in the context of a transfer of ownership, where the original owner retains the right of reversion, meaning that if certain conditions are not met, the property will revert back to the original owner.
For example, a property owner may transfer ownership of a property to a family member, with the condition that if the family member fails to use the property for a certain purpose (such as operating a business), the property will revert back to the original owner. In this scenario, the original owner retains a right of reversion, which allows them to regain control of the property if the conditions specified in the transfer agreement are not met.

Rules Addendum: A Rules Addendum is a document that is often used in conjunction with a standard residential lease agreement. The Rules Addendum outlines specific rules and regulations that the tenant must follow during their tenancy. These rules may include restrictions on pets, smoking, noise levels, and guests. The Rules Addendum is not a standalone document. It must be attached to and become a part of the Residential Lease Agreement in order for it to be enforceable. While the Rules Addendum gives the landlord greater flexibility to tailor the rules of each individual tenancy, it is important to remember that any rules included must be reasonable and cannot violate state or federal law.

Second Mortgage: A second mortgage is a type of loan that is secured by a property that already has a first mortgage in place. The second mortgage is typically a smaller loan than the first mortgage and is used to obtain additional financing for various purposes, such as home improvements, debt consolidation, or financing for large expenses. The second mortgage is known as a subordinate mortgage, as it is secondary to the first mortgage in the event of default or foreclosure. In the event of a default or foreclosure, the proceeds from the sale of the property are used to pay off the first mortgage before the second mortgage.

Security Deposit: A security deposit is a sum of money that is paid by the tenant to the landlord at the start of the tenancy. The security deposit is held by the landlord as security against any damage that may be caused to the property during the tenancy. The security deposit is not used to pay rent and cannot be used by the landlord as a way to evict a tenant. In most cases, the security deposit will be returned to the tenant at the end of the tenancy, provided that there has been no damage to the property. If there has been damage to the property, the landlord may withhold some or all of the security deposit to cover the cost of repairs.

Self-Eviction: Self-eviction occurs when a tenant is forced to leave a rental property by the actions of the landlord, rather than through an eviction notice or court order. Self-evictions can take many forms, but they all involve the landlord making it difficult or impossible for the tenant to remain in the rental unit. For example, the landlord may shut off utilities, remove the front door, or change the locks. Self-evictions are illegal in most jurisdictions, and tenants who have been subjected to self-eviction may have recourse against the landlord through the legal system.

Severalty: Severalty refers to the ownership of a piece of property as an individual, separate from ownership as part of a group or community. In real estate, the term is used to describe the exclusive ownership of a piece of property, meaning that the owner has full and complete control over the property and the right to use, sell, or transfer the property as they see fit. When property is owned in severalty, there is only one owner, and no co-owners or tenants in common are involved.
Severalty is a fundamental concept in real estate law and is used to determine the rights and responsibilities of property owners. For example, in the case of a sale or transfer of property, the seller must have clear and unencumbered ownership in severalty in order to transfer the property to the buyer. The principle of severalty also affects property rights and ownership interests in the event of death or divorce, as well as issues related to property taxes, zoning, and land use.

Single-Family Home: A single-family home is a standalone dwelling that houses one family unit. Unlike an apartment or condo, a single-family home does not share any wall or common space with another unit. As a result, families who live in single-family homes have more privacy and space than those who live in multi-family dwellings. In addition, single-family homes typically have yards, which provide additional outdoor space for families to enjoy. Because of their privacy and extra space, single-family homes are often more expensive than other types of housing. However, for families who value their privacy and need extra room to grow, a single-family home can be the perfect solution.

Smoke-Free Addendum: A Smoke-Free Addendum is a document that can be added to a lease agreement to make the premises a smoke-free zone. The addendum outlines the rules and regulations regarding smoking on the property, and may also include penalties for violations. Smoke-free addendums are becoming increasingly common as more people are looking for ways to protect themselves from secondhand smoke. In some cases, Smoke-Free Addendums may be required by state or local law. However, even in areas where they are not legally mandated, Smoke-Free Addendums can be a valuable tool for landlords and tenants alike. By clearly defining the smoking policy for a property, Smoke-Free Addendums can help to prevent conflicts and ensure that everyone enjoys a clean and healthy living environment.

Spec House: Spec houses are a type of investment property that is built speculatively, without a specific buyer in mind. This means that the builder takes on all the risk, rather than the buyer. Spec houses are usually built to flip them for a profit, but they can also be rented out or sold to owner-occupiers. The main advantage of investing in a spec house is that it can be a quick and easy way to make money. However, there are also a lot of risks involved, as the builder may not be able to sell the property for a profit. If you are considering investing in a spec house, it is important to do your research and speak to a professional before making any decisions.

Special Assessment: A special assessment is a fee imposed on property owners to pay for specific improvements or services within a community or municipality. Special assessments are separate from property taxes and are usually assessed based on the value or size of the property. They can also be used to pay for services such as garbage collection, water, and sewer services. In real estate, special assessments can have an impact on the value of a property and can be a consideration for buyers and investors.

Standard Lease Agreement: A standard lease agreement is a contract between a tenant and a landlord that outlines the terms of renting a property. The standard lease agreement is designed to protect both the tenant and the landlord by clearly specifying the rights and responsibilities of each party. The agreement should be read carefully before signing, and all questions should be answered honestly to avoid any misunderstanding or conflict down the road. By signing a standard lease agreement, both the tenant and the landlord agree to uphold their respective obligations under the contract. This includes, but is not limited to, paying rent on time, maintaining the property in good condition, and following all applicable laws and regulations. By adhering to the terms of the standard lease agreement, both parties can enjoy a smooth and hassle-free tenancy.

Subagent: A subagent, in the context of real estate, is a real estate agent who works under another real estate agent, known as the listing agent. The subagent represents the interests of the listing agent and acts as an intermediary between the listing agent and the buyer or tenant. The subagent is typically responsible for showing the property to prospective buyers or tenants, communicating with the buyer or tenant about the property, and negotiating offers on behalf of the listing agent.

Subcontractor: A subcontractor is an individual or company hired by a general contractor to perform a specific task or part of a construction project. The general contractor is responsible for overseeing the overall construction project and coordinating the work of the subcontractors. Subcontractors are typically hired for their expertise in a specific area and are paid for their services directly by the general contractor.

Sublease: A sublease is defined as an agreement between the tenant of a property and a third party, whereby the tenant agrees to let all or part of the property to the third party for a specified period of time and subject to the terms of the tenancy agreement. The sublease must comply with the terms of the head lease and cannot be for a longer period than the unexpired term of the head lease. The sublease can be assigned without the consent of the landlord. This arrangement is often used when the tenant wants to move out before the end of their tenancy agreement but does not want to lose their security deposit or be liable for breaking their lease. Subleasing can also be a way for tenants to make some extra money by renting out part of their home.

Sublet: Subletting is the act of renting out a property that you are currently leasing from a landlord. This can be done with the landlord’s permission or without it, although most leases will specify whether or not subletting is allowed. Sublets are typically short-term arrangements, lasting anywhere from a few weeks to a few months. They can be a great option for people who need to relocate temporarily for work or other reasons. However, it’s important to be aware that subletting comes with its own set of risks and responsibilities. For example, if the subtenant damages the property, the landlord may hold the original tenant responsible. As such, it’s important to carefully screen potential subtenants and read your lease carefully before subletting your apartment or house.

Sweat Equity: Sweat equity refers to the value added to a property through improvements made by the homeowner or a buyer. These improvements can include remodeling, renovations, or upgrades that increase the property’s value and marketability. Sweat equity can be seen as an investment of time, effort, and personal resources into a property, rather than an investment of money.

Tenant Screening: Tenant screening is the process of checking a prospective tenant’s background to ensure that they are likely to make a good and reliable renter. This typically includes running a credit check and criminal background check, as well as verifying employment history and rental references. Tenant screening can be an important tool for landlords in finding responsible tenants and avoiding problem renters. By taking the time to screen tenants, landlords can help protect their property and investment, while also providing peace of mind to themselves and their other tenants.

Tiny House: A tiny house is defined as a dwelling of 400 square feet or less, excluding loft space. The typical dimensions of a tiny house are 8 feet wide by 20 feet long, but there is no standard size. Tiny houses can be built on a variety of foundations, including wheels so they can be easily moved, and are often designed to be highly energy efficient. The term “tiny house” is also used to describe a lifestyle choice of living simply with fewer possessions and minimal impact on the environment. For many people, tiny houses provide an alternative to traditional housing that is more affordable, flexible, and sustainable.

Townhome: Townhomes are a type of housing that is similar to an apartment but has its own private entrance and is usually part of a row of similar homes. Townhomes are usually less expensive than single-family homes and offer many of the same amenities, such as a yard or garage. Townhomes are a popular choice for families or individuals who want the privacy of their own homes but don’t want the hassle of maintaining a large property.

Tract Home: A tract home is a type of housing that is mass-produced by a builder or developer in a specific geographical area, usually in a planned community or suburban neighborhood. Tract homes are typically built on a large scale, with multiple units constructed at once, and are designed to be affordable and appealing to a broad range of homebuyers. They are often characterized by a limited range of floor plans, standardized finishes, and similar exterior architectural styles. Tract homes can be a good option for first-time homebuyers, families, or anyone looking for a well-built, affordable home in a convenient location.

Transfer Tax: A transfer tax, in the context of real estate, is a tax imposed by local, state, or federal government on the transfer of ownership of real property. This tax is typically based on a percentage of the sale price of the property and is due at the time of transfer. The purpose of the transfer tax is to generate revenue for the government and to regulate the transfer of property ownership. For example, some states may impose a higher transfer tax on the sale of luxury properties. Understanding and complying with transfer tax requirements is an important aspect of real estate transactions, as failure to pay the transfer tax can result in fines, penalties, or legal action.

Triple Net Lease: A triple net lease is a type of commercial lease in which the tenant is responsible for all of the property’s operating expenses, including insurance, taxes, and maintenance. The term “net” refers to the fact that these expenses are typically paid by the tenant on a monthly basis in addition to the base rent. Triple net leases are often used for industrial or retail properties, as they provide the landlord with a higher degree of financial security. In addition, triple net leases often give the tenant more control over the property as they are responsible for its upkeep. As a result, triple net leases are a popular choice for many businesses.

Triplex: A triplex is a three-unit apartment building. Triplexes are usually smaller than other types of apartment buildings, such as duplexes or larger structures. Triplexes may be owner-occupied, with the owner living in one unit and renting out the other two units, or they may be fully rented. Triplexes can also be found in a variety of architectural styles, from historic to contemporary. Regardless of their style, triplexes provide an efficient way to house multiple families while still maintaining a sense of privacy and independence.

Turnkey Property: A turnkey property is a type of investment property that is ready to be leased or rented out. Turnkey properties are usually sold as-is, meaning that the buyer does not have to put any additional money into the property to get it rent-ready. For investors, turnkey properties can provide a way to generate income without having to put forth a lot of effort. However, it is important to remember that turnkey properties are still investments, and there is always the potential for tenants to damage the property or fail to pay rent. As such, turnkey properties are not appropriate for everyone. Before making a decision, investors should carefully consider their own risk tolerance and financial goals.

Undivided interest: Undivided interest refers to a type of ownership interest in real property that is held by two or more individuals. In an undivided interest ownership arrangement, each owner holds an interest in the property as a whole, rather than in a specific portion of the property.
For example, if two individuals own an undivided interest in a piece of land, they both have the right to use the entire property and to share in the profits and losses of the property. They may also be responsible for paying expenses related to the property, such as property taxes and insurance.
Undivided interest ownership can be useful in a variety of circumstances, such as when individuals want to co-invest in real property without dividing the property into separate portions. However, undivided interest ownership can also be complex, as it requires all owners to make decisions and take actions with respect to the property in a coordinated manner.

Unilateral contract: A unilateral contract, in the context of real estate, is a type of contract in which one party makes a promise in exchange for the other party’s performance. In this type of contract, only one party is bound to perform, while the other party has the option to fulfill the terms of the contract or not. For example, in a real estate transaction, a buyer may make a promise to pay the full purchase price of a property only if the seller agrees to transfer ownership and complete the sale. If the seller agrees to transfer ownership, the buyer is obligated to pay the full purchase price, but if the seller does not transfer ownership, the buyer is not required to pay. Unilateral contracts are often used in real estate transactions as a way to provide security for both parties and to ensure that the transaction is completed as agreed upon.

Unsecured Loan: An unsecured loan is a type of loan that is not backed by collateral. This means that the loan is not secured by any property or assets of the borrower, and the lender is relying solely on the borrower’s creditworthiness and ability to repay the loan.
Examples of unsecured loans include personal loans, credit card debt, and student loans. With an unsecured loan, the lender assesses the borrower’s credit score and financial history to determine the risk of loan default. If the lender determines that the borrower is a high risk, they may charge a higher interest rate or reject the loan application.

Vacancy Rate: Vacancy rate is a metric used to measure the availability of rental units in a specific real estate market or property. It is calculated as the number of vacant units divided by the total number of units in a given property or market. A high vacancy rate indicates a surplus of available rental units, while a low vacancy rate signals a tight rental market with limited availability. Vacancy rates are important indicators of supply and demand in the real estate market and can affect rental prices, property values, and the overall health of the real estate market. Landlords and investors use vacancy rates to determine the potential profitability of a rental property.

Valid contract: A valid contract is a legally binding agreement between two or more parties that outlines the terms and conditions of a transaction. In real estate, a valid contract typically refers to a purchase agreement that outlines the terms and conditions of a property sale. For a contract to be considered valid, it must include all essential elements, such as the identities of the parties involved, a clear description of the property being sold, and the terms of payment. The contract must also be executed voluntarily by all parties involved and must not be the result of fraud, duress, or undue influence. A valid contract is enforceable by law and is a critical component of successful real estate transactions.

Variable Rate: A variable rate, in the context of real estate, refers to an interest rate that changes periodically over time in response to fluctuations in the financial markets. In contrast to a fixed-rate mortgage, where the interest rate remains constant over the life of the loan, a variable rate mortgage has an interest rate that can go up or down depending on market conditions.

Vendee: A Vendee is a buyer in a real estate transaction. The term is commonly used in reference to the party who is acquiring ownership of a property through a purchase agreement. The Vendee is responsible for paying the purchase price agreed upon in the agreement and is entitled to take ownership of the property once all terms and conditions of the agreement have been satisfied.

Vendor: A Vendor is the seller in a real estate transaction. The term is used to refer to the party who is transferring ownership of a property to a buyer (known as the Vendee). The Vendor is responsible for negotiating the sale of the property and transferring ownership to the Vendee upon completion of the transaction, in accordance with the terms of the purchase agreement.

Verification of Deposit: Verification of Deposit (VOD) is a document that provides information about an individual’s current balance and recent account activity on their deposit accounts, such as savings and checking accounts. This document is commonly used by lenders, landlords, and other parties to verify an individual’s ability to pay rent or repay a loan. The VOD typically includes information such as account balances, deposit history, and account ownership. The purpose of a VOD is to provide assurance that the individual has access to sufficient funds to meet their financial obligations.

Voidable Contract: A voidable contract is a type of agreement that can be either enforced or rejected by one of the parties involved. Unlike a valid contract, a voidable contract is not necessarily legally binding, as one of the parties may have the option to void the agreement if they have a valid reason, such as duress, fraud, or lack of capacity. In real estate, a voidable contract might refer to a purchase agreement that can be cancelled by either the buyer or the seller, depending on the specific terms and conditions outlined in the agreement. It is important for both parties to carefully review the terms of a voidable contract to ensure that their rights and interests are protected and that the agreement is legally binding.

Warranty Deed: A warranty deed is a legal document that is used to transfer ownership of real property from one person to another. The warranty deed contains some important provisions, including a guarantee that the property is free from any encumbrances or liens. This means that the person receiving the warranty deed can be confident that they will have clear title to the property. The warranty deed also includes several protections for the buyer, such as the right to sue the seller if there are any problems with the property. As a result, warranty deeds are often used in situations where there is a high degree of trust between the parties involved.

Welcome Letter: Welcome letters are documents that landlords write to new tenants. In the welcome letter, the landlord generally introduces themselves and welcomes the tenant to the property. The welcome letter may also contain important information about the property, such as the rules and regulations that tenants are expected to follow. Welcome letters are intended to help make the transition to a new rental property as smooth as possible for tenants. By providing clear and concise information about what to expect, welcome letters can help reduce stress and anxiety for both tenants and landlords.

Workforce Housing: Workforce housing is a type of housing that is affordable for workers in a specific community or region. Workforce housing developers work with employers, government agencies, and other partners to ensure that workers have access to quality, affordable housing. Workforce housing often includes a mix of apartments, townhomes, and single-family homes. Workforce housing developments may also include community amenities, such as parks, public transportation, and childcare facilities. Workforce housing is an essential part of ensuring that workers can live near their jobs and have the stability they need to succeed.

Yard: A yard refers to the outdoor space surrounding a property. This area typically includes a lawn, garden, landscaping, or other features such as a patio or deck. The size and condition of a yard can play a significant role in the value and desirability of a property, especially for homeowners who enjoy spending time outdoors or entertaining guests. Yards are subject to zoning laws and other regulations that control their use, such as restrictions on fence height or the types of plants that can be grown. Urban areas may have smaller or nonexistent yards, while rural areas may offer larger lots with expansive yards. The maintenance and appearance of a yard can also affect the upkeep and resale value of a property.

Yield: Yield is a term commonly used in real estate to refer to the return on investment of an income-generating property. It is calculated as the annual income generated by the property divided by the total investment, expressed as a percentage. Yield is a critical metric for real estate investors as it helps them evaluate the potential profitability of a property. A higher yield suggests a more profitable investment, while a lower yield may indicate a less attractive property. Yield is influenced by various factors, such as the rental income generated by the property, its location, condition, and market conditions. Real estate investors and analysts use yield as one of several measures to assess the potential performance of an investment property.

Yield spread premium: A yield spread premium (YSP) is a fee paid by a lender to a mortgage broker for securing a loan at a higher interest rate than what the borrower may have qualified for. This fee is typically a percentage of the loan amount and is paid to the broker at the loan’s closing. However, the YSP has been a controversial issue in the mortgage industry as it creates a potential conflict of interest for the broker. The broker may be motivated to steer borrowers towards higher-interest loans to earn a higher fee.

Zero Lot Line: Zero lot line is a term used in real estate to describe a type of building design where a structure is built on or very close to the property line. In this arrangement, the building takes up much of the available lot, leaving little or no yard or open space.
Zero lot line buildings are often used to maximize the use of space in densely populated areas or in urban environments where land is scarce. They are also popular in some residential communities, where they offer low-maintenance living in close proximity to neighbors.
In some cases, the building design may allow for a small patio or other outdoor living space, but the overall concept is to maximize the interior living space and minimize the exterior space.

Zoning: Zoning is the process of dividing a municipality or county into areas or districts, each with its own set of regulations and guidelines for the use of land and buildings. In real estate, zoning regulations dictate the type of buildings and activities that are permitted in a specific area, such as residential, commercial, industrial, or agricultural. Zoning regulations also specify the standards for building height, lot size, and other factors that can impact the development and use of a property.

Zoning ordinance: A zoning ordinance is a set of laws and regulations that dictate the use of land and buildings within a specific geographical area, such as a municipality or county. In real estate, zoning ordinances are used to regulate and manage the development of property and to ensure that the use of land and buildings is in accordance with the goals and policies of the local government. Zoning ordinances can also regulate the placement and use of structures, such as setbacks, parking requirements, and access to public roads.

These resources are for informational purposes only and should not be construed as legal advice. Landlords and Tenants are encouraged to seek specific legal advice for any of the issues as found in this blog.

Property Management & Real Estate Glossary

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