Real Estate Glossary - L

Laches, Doctrine of - A legal principle holding that the law will refuse to protect those who fail to assert their legal rights within the time period prescribed by the statute of limitations, or (if there is no applicable statue of limitations) within a reasonable time.

Land - In the legal sense, it is the solid part of the surface of the earth, everything affixed to it by nature or by man, or anything on it or in it, such as minerals and water; real property.

Landlocked Property - A parcel of land without access to a road or highway.

Landlord - A landowner who has leased his or her property to another. Also called a lessor.

Landmark - A monument, natural or artificial, set up on the boundary between two adjacent properties, to show where the boundary is.

Land Residual Process - A method of appraising vacant land.

Latent Defects - Defects that are not visible or apparent (as opposed to patent defects).

Lawful Object - An objective or purpose of a contract that does not violate the law or a judicial determination of public policy.

Lease - A conveyance of a leasehold estate from the fee owner to a tenant; a contract in which one party pays the other rent in exchange for the possession of real estate. Also called a rental agreement.

Lease, Fixed - A lease in which the rent is set at a fixed amount, and the landlord pays most or all of the operating expenses (such as utilities, taxes, insurance, and maintenance cost). Also called a flat lease, gross lease, or straight lease.

Lease, Graduated - A lease in which it is agreed that the rental payments will increase at intervals by a specified amount or according to a specified formula.

Lease, Ground - A lease of the land only, usually for a long term, to a tenant who intends to construct a building on the property.

Lease, Net - A lease requiring the tenant to pay all the costs of maintaining the property (such as taxes, insurance, and repairs), in addition to the rent paid to the landlord.

Lease, Percentage - A lease in which the rent is based on a percentage of the tenant's monthly or annual gross sales.

Lease, Sandwich - A leasehold interest lying between the property owner's interest and the interest of the tenant in possession; for example, when the tenant in a ground lease constructs a building and rents out space in the building, he or she is sandwiched between the landowner's interest and the interest of his or her building tenant.

Leasehold - A possessory interest in real property that has a limited duration, such as an estate for y ears or a periodic tenancy. Also called a less-than-freehold estate.

Legacy - A gift of personal property by will. Also called a bequest.

Legal Description - A precise description of a parcel of real property; may be a lot and block description, a metes and bounds description, or a government survey description.

Legatee - Someone who receives personal property (a legacy) under a will.

Lender, Institutional - A bank, savings and loan, or similar organization that invests other people's funds in loans; as opposed to an individual or private lender, which invests its own funds.

Lessee - One who leases property from another; a tenant.

Lessor - One who leases property to another; a landlord

Leverage - The effective use of borrowed money to finance an investment such as real estate.

Levy - To impose a tax.

Liability - 1.A debt or obligation. 2.Legal responsibility.

Liability, Joint and Several - A form of liability in which two or more persons are responsible for a debt both individually and as a group.

Liability, Limited - When a business investor is not personally liable for the debts of business, as in the case of a limited partner or a corporate shareholder.

Liability, Vicarious - A legal doctrine stating that a principal can be held liable for harm to third parities resulting from an agent's actions.

Liable - Legally responsible.

License - 1.Offical permission to do a particular thing that the law does not allow everyone to do. 2.Revocable, non-assignable permission to use another person's land for a particular purpose. Compare: Easement.

License, Inactive - Any real estate license that has been turned over to the Director temporarily. The holder of an inactive license is not permitted to engage in activities requiring a license.

LID - Local Improvement District.

Lien - A nonpossessory interest in real property, giving the lienholder the right to foreclose if the owner doesn't pay a debt owed to the lienholder; a financial encumbrance on the owners' title.

Lien, Attachment - A lien intended to prevent transfer of the property pending the outcome of litigation.

Lien, Construction - A lien on property in favor of someone who provided labor or materials to improve it. Also called a mechanic's lien or materialman's lien.

Lien, Equitable - A lien arising as a matter of fairness, rather than by agreement or by operation of law.

Lien, General - A lien against all the property of a debtor, rather than a particular piece of his or her property. Compare: Lien, Specific.

Lien, Involuntary - A lien that arises by operation of law, without the consent of the property owner. Also called a statutory lien.

Lien, Judgment - A general lien against a judgment debtor's property, which the judgment creditor creates by recording an abstract of judgment in the country where the property is located.

Lien, Materialman's - A construction lien in favor of someone who supplied materials for a project (as opposed to labor).

Lien, Property Tax - A specific lien on property to secure payment of property taxes.

Lien, Specific - A lien that attaches only to a particular piece of property (as opposed to a general lien, which attaches to all of the debtor's property).

Lien, Tax - A lien on property to secure the payment of taxes.

Lien, Voluntary - A lien placed against property with the consent of the owner; a deed of trust or a mortgage.

Lienholder , Junior - A secured creditor whose lien is lower in priority than another's lien.

Lien Priority - The order in which liens are paid off out of the proceeds of a foreclosure sale.

Lien Theory - The theory holding that a mortgage or deed of trust does not involve a transfer of title to the lender, but merely creates a lien against the property in the lender's favor. Compare: Title Theory.

Life Estate - A freehold estate that lasts only as long as a specified person lives. That person is referred to as the measuring life.

Life Tenant - Someone who owns a life estate; the person entitled to possession of the property during the measuring life.

Limited Liability Company - A form of business entity that offers both limited liabilities for its owners and certain tax benefits.

Liquidity - The ability to convert an asset into cash quickly.

Lis Pendens - A record notice stating that there is a lawsuit pending that may affect title to the defendant's real estate.

Listing - A written agency contract between a seller and a real estate broker, stipulating that the broker will be paid a commission for finding (or attempting to find) a buyer for the seller's property. Also called a listing agreement.

Listing Broker - The broker who takes a listing, and thus represents the seller.

Listing, Exclusive - Either an exclusive agency listing or an exclusive right to sell listing.

Listing, Exclusive Agency - A listing agreement that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term.

Listing, Exclusive Right to Sell - A listing agreement that entitles the broker to a commission if anyone-including the seller-finds a buyer for the property during the listing term.

Listing, Multiple - A listing (usually an exclusive right tot sell listing) that includes a provision allowing the broker to submit the listing to his or her multiple listing service for dissemination to cooperating brokers.

Listing, Net - A listing agreement in which the seller sets a net amount he or she is willing to accept for the property; if the actual selling price exceeds that amount, the broker is entitled to keep the excess as his or her commission. This is not legal in Washington .

Listing, Open - A nonexclusive listing, given by a seller to as many brokers as he or she chooses. If the property is sold, a broker is only entitled to a commission if he or she was procuring cause of the sale.

Littoral Land - Land that borders on a stationary body of water (such as a lake, as opposed to a river or stream). Compare: Riparian Land.

Littoral Rights - The water rights of an owner of littoral land, in regard to use of the water in the lake.

Loan, Amortized - A loan that requires regular installment payments of both principal and interest (as opposed to an interest-only loan). It is fully amortized if the installment payments will pay off the full amount of the principal and all of the interest by the end of the repayment period. It is partially amortized if the installment payments will cover only part of the principal, so that a balloon payment of the remaining principal balance is required at the end of the repayment period.

Loan, Called - A loan that has been accelerated by the lender.

Loan, Conforming - A loan made in accordance with the standardized underwriting criteria of the major secondary market agencies, Fannie Mae and Freddie Mac , and which therefore can be sold to those agencies.

Loan, Construction - A loan to finance the cost of construction a building, usually providing that the loan funds will be advanced in installments as the work progresses. Also called an interim loan.

Loan, Conventional - An institutional loan that is not insured or guaranteed by a government agency.

Loan, FHA - A loan made by institutional lender and insured by the Federal Housing Administration, so that the FHA will reimburse the lender for losses that result if the borrower defaults.

Loan, Fixed-Rate - A loan on which the interest rate will remain the same throughout the entire loan term. Compare: Mortgage, Adjustable-rate.

Loan, Guaranteed - A loan in which a third party has agreed to reimburse the lender for losses that result if the borrower defaults.

Loan, Home Equity - A loan secured by the borrower's equity in the home he or she already owns.

Loan, Interest-Only - A loan that requires that borrower to pay only the interest during the loan term, with the principal due at the end of the term.

Loan, Participation - A loan in which the lender receives some yield on the loan in addition to the interest, such as a percentage of the income generated by the property, or a share in the borrower's equity.

Loan, Rollover - A loan in which the interest rate is renegotiated at specified intervals.

Loan, Seasoned - A loan with an established record of timely payment by the borrower.

Loan, Take-out - Long-term financing used to replace a construction loan (an interim loan) when construction has been completed. Also called a permanent loan.

Loan, VA-Guaranteed - A home loan made by an institutional lender to an eligible veteran, where the Veterans Administration will reimburse the lender for losses if the veteran borrower defaults.

Loan Correspondent - An intermediary who arranges loans of an investor's money to borrowers, and then services the loans.

Loan Fee - A loan origination fee, an assumption fee, or discount points.

Loan Term - The length of time over which a mortgage will be repaid.

Loan-to-Value Ratio (LTV) - The relationship between the loan amount and either the sales price or the appraised value of the property (whichever is less), expressed as a percentage.

Lock-in Clause - A clause in a promissory note or land contract that prohibits repayment before a specified date, or prohibits it altogether.

Lot - A parcel of land; especially, a parcel in a subdivision.

Lot and Block Description - The type of legal description used for platted property; it states the property's lot number and block number and the name of the subdivi9sion, referring to the plat map recorded in the county where the property is located. Sometimes called a maps and plats description.

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