Real Estate Glossary - A

Abandonment - Failure to occupy and use property, which may result in a loss of rights.

Abrogate - To repeal, annul, nullify, abolish, or otherwise bring to an end by official or formal action.

Abstract of Judgment - A document summarizing the essential provisions of a court judgment which, when recorded, creates a lien on the judgment debtor's real property.

Abut - To touch, border on, be adjacent to, or share a common boundary with.

Accelerations Clause - A provision in a promissory note or security instrument allowing the lender to declare the entire debt due immediately if the borrower breaches one or more provisions of the loan agreement. Also referred to as a call provision.

Acceptance - 1. Agreeing to the terms of an offer to enter into a contract, thereby creating a binding contract. 2. Taking delivery of a deed from the grantor.

Accession - The acquisition of title to additional property by its annexation to real estate already owned. This can be the result of human actions (as in the case of fixtures) or natural processes (such as accretion and reliction).

Accord and Satisfaction - An agreement to accept something different than (and usually less than) what the contract originally called for.

Accretion - A gradual addition to dry land by the forces of nature, as when waterborne sediment is deposited on waterfront property.

Accrued Items of Expense - Expenses that have been incurred but are not yet due or payable; in a settlement statement, the seller's accrued expenses are credited to the buyer.

Acknowledgment - When a person who has signed a document formally declares to an authorized official (usually a notary public) that he or she signed voluntarily. The official can then attest that the signature is voluntary and genuine.

Acquisition Cost - The amount of money a buyer was required to expend in order to acquire title to a piece of property; in addition to the purchase price, this might include closing cost, legal fees, and other expenses.

Acre - An area of land equal to 43,560 square feet, or 4,840 square yards, or 160 square rods.

Addendum - An attachment to a purchase and sale agreement or other contract that contains additional provisions that apply to the transaction.

Adjacent - Nearby, next to, bordering, or neighboring; may or may not be in actual contact.

Adjusted Basis - For income tax purposes, the initial bass plus capital expenditures, less any depreciation deductions.

Adjustment Period - The interval at which an adjustable-rate mortgage borrower's interest rate or monthly payment is changed.

Administrator - A person appointed by the probate court to manage and distribute the estate of a deceased person, which no executor is named in the will or there is no will.

Ad Valorem - A Latin phrase that means "according to value," used to refer to taxes that are assessed on the value of property.

Adverse Possession - Acquiring title to real property that belongs to someone else by taking possession of it with out permission, in the manner and for the length of time prescribed by statute.

Affiant - One who makes an affidavit.

Affidavit - A sworn statement made before a notary public (or other official authorized to administer an oath) that has been written down and acknowledged.

Affiliated Licensee - A salesperson or associate broker who is licensed under a particular broker.

Affirm - 1. To confirm or ratify. 2. To make a solemn declaration that is not under oath.

Age, Actual - The age of a structure from a chronological standpoint (as opposed to its effective age); how many years it has actually been in existence.

Age, Effective - The age of a structure indicated by its condition and remaining usefulness (as opposed to its actual age). Good maintenance may increase a building's effective age, and poor maintenance may decrease it; for example, a 50-year-old home that has been well maintained might have an effective age of 15 years, meaning that its remaining usefulness is equivalent to that of a 15-year-old home.

Agency - A relationship of trust created when n e person (the principal) grants another (the agent) authority to represent the principal in dealings with third parties.

Agency, Apparent - When third parties are given the impression that someone who has not been authorized to represent another is that person's agent, or else given the impression that an agent has been authorized t perform acts which are in fact beyond the scope of his or her authority. Also called ostensible agency.

Agency, Dual - When an agent represents both parties to a transaction, as when a broker represents both the buyer and the seller.

Agency Coupled with an Interest - When an agent has a claim against the property that is the subject of the agency, so that the principal cannot revoke the agent's authority.

Agent - A person authorized to represent another (the principal) in dealings with third parties.

Agent, General - An agent authorized to handle of the principal's affairs in one area or in specified areas.

Agent, Gratuitous - An agent who does not have a legal right to claim compensation for his or her services (such as a broker who does not have a written employment contract with the seller).

Agent, Special - An agent with limited authority to do a specific thing or conduct a specific transactions.

Agent, Universal - An agent authorized to do everything that can be lawfully delegated to a representative.

Air Lot - A parcel of property above the surface of the earth, not containing any land; for example, a condominium unit on the third floor.

Air Rights - The right to undisturbed use and control of the airspace over a parcel of land; may be transferred separately from the land.

Alienation - The transfer of ownership or an interest in property from one person to another, by any means.

Alienation, Involuntary - Transfer of an interest in property against the will of the owner, or without action by the owner, occurring through operation of law, natural processes, or adverse possession.

Alienation, Voluntary - When an owner voluntarily transfers an interest to someone else.

Alienation Clause - A provision in a security instrument that gives the lender the right to declare the entire loan balance due immediately if the borrower sells or otherwise transfers the security property. Also called a due-on-sale clause. A provision in a promissory note or security instrument allowing the lender to declare the entire debt due immediately if the borrower breaches one or more provisions of the loan agreement. Also referred to as a call provision.

Alluvion - The solid material deposited along a river bank or shore by accretion. Also called alluvium.

Amendment - A written modification to a contract that occurs after both parties have signed the document.

Amenities - Features of a property that contribute to the pleasure or convenience of owning it, such as a fireplace, a beautiful view, or its proximity to a good school.

Americans with Disabilities Act - A federal law requiring facilities that are open to the public to ensure accessibility to disabled persons, even if that accessibility requires making architectural modifications.

Amortization, Negative - When unpaid interest on a loan is added to the principal balance, increasing the amount owed.

Amortize - To gradually pay off a debt with installment payments that include both principal and interest.

Annexation - Attaching personal property to real property, so that it becomes part of the real property (a fixture) in the eyes of the law.

Annexation, Actual - When personal property is physically attached to real property, so that it becomes part of the real property.

Annexation, Constructive - When personal property becomes associated with real property in such a way that the law treats it as a fixture, even though it is not physically attached; for example, a house key is constructively annexed to the house.

Annual Percentage Rate (APR) - All of the charges that the borrower will pay for the loan (including the interest, loan fee, discount points, and mortgage insurance costs), expressed as an annual percentage of the loan amount.

Annuity - A sum of money received in a series of payments at regular intervals (often annually) over periods of time.

Anticipation, Principle of - An appraisal principle which holds that value is created by the expectation of benefits to be received in the future.

Anticipatory Repudiation - When one party to a contract informs the other before the time set for performance that he or she does not intend to fulfill the contract.

Antitrust Laws - Laws that prohibit any agreement that has the effect of restraining trade, including conspiracies.

Appeal - When one of the parties to a lawsuit asks a higher court to review the judgment or verdict reached in a lower court.

Appellant - The part who files an appeal because he or she is dissatisfied with the lower court's decision. Also called the petitioner.

Appellee - In an appeal, the party who did not file the appeal. Also called the respondent.

Apportionment - A division of property (as among tenants in common when the property is sold or partitioned) or liability (as when responsibility for closing cost is allocated between the buyer and seller) into proportionate, but not necessarily equal, parts.

Appraisal - An estimate or opinion of the value of a piece of property as of a particular date. Also called valuations.

Appraiser - One who estimates the value of property, especially an expert qualified to do so by training and experience.

Appreciation - An increase in value; the opposite of depreciation.

Appropriation - Taking property or reducing it to personal possession, to the exclusion of other.

Appropriation, Prior - A system of allocation water rights, under which a person who wants to use water from a certain lake or fiver is required to apply for a permit; a permit has priority over other permits that are issued later.

Appropriative Rights - The water rights of a person who holds a prior appropriation permit.

Appurtenances - Rights that go along with ownership of a particular piece of property, such as air rights or mineral rights; they are ordinarily transferred with the property, but may, in some cases, be sold separately.

Appurtenances, Intangible - Rights that go with ownership of a piece of property that do not involved physical objects or substances; for example an access easement (as opposed to mineral rights).

APR - Annual Percentage Rate

Area - 1. Locale or region. 2. The size of a surface, usually in square units of measure, such as square feet or square miles.

ARM - Mortgage, Adjustable-Rate

Arm's Length Transaction - 1. A transaction in which both parties are informed of the property's merits and shortcomings, neither is acting under unusual pressure, and the property has been exposed on the open market for a reasonable length of time. 2. A transaction in which there is no pre-existing family or business relationship between the parties.

Artificial Person - A legal entity such as a corporation, which the law treats as an individual with legal rights and responsibilities; as distinguished from a natural person, a human being. Sometimes called a legal person.

Assemblage - Combining two or more adjoining properties into one tract. Also called assembly.

Assessment - The valuation of property for purposes of taxation.

Assessor - An official who determines the value of property for taxation.

Asset - Anything of value that a person owns.

Assets, Liquid - Cash and other assets that can be readily turned into cash (liquidated), such as stock.

Assets, Section 1231 - Properties used in a trade or business or held for the production of income (a reference to Section 1231 in the fede4ral income tax code).

Assign - To transfer rights (especially contract rights) or interests to another.

Assignee - One to whom rights or interests have been assigned.

Assignment - 1. A transfer of contract rights from one person to another. 2. In the case of a lease, when the original tenant transfers his or her entire leasehold estate to another.

Assignment of Contract and Deed - The instrument used to substitute a new vendor for the original vendor in a land contract.

Assignor - One who has assigned his or her rights or interest to another.

Assumption - When a buyer takes on personal liability for paying off the seller's existing mortgage or deed of trust.

Assumption Fee - A fee paid to the lender, usually by the buyer, when a mortgage or deed of trust is assumed.

Attachment - Court-ordered seizure of property belonging to a defendant in a lawsuit, so that it will be available to satisfy a judgment if the plaintiff wins. In the case of real property, attachment creates a lien.

Attachments, Natural - Plants growing on a piece of land, such as trees, shrubs, or crops.

Attorney General - The principal legal advisor for state agencies and employees, including the Department of Licensing.

Attorney in Fact - Any person authorized to represent another by a power of attorney; not necessarily a lawyer (an attorney at law).

Attractive Nuisance - A property feature that is dangerous and inviting to children, and a potential source of liability to the property owner.

Auditing - Verification and examination of records, particularly the financial accounts of a business or other organizations.

Authority, Actual - Authority actually given to an agent by the principal, either expressly or by implication.

Authority, Apparent - Authority to represent another that someone appears to have and that the principal is estopped from denying, although no actual authority has been granted.

Authority, Implied - An agent's authority to do everything reasonably necessary to carry out the principals express orders.

Automatic Renewal Clause - A lease provision that ensures automatic renewal of the lease unless the tenant or the landlord gives the other party notice of intent to terminate.

Avulsion - 1. When land is suddenly (not gradually) torn away by the action of water. 2. A sudden shift in a watercourse.

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