Definitions For Real Estate Terminology
EARNEST MONEY DEPOSIT
A sum of money paid by a potential purchaser as proof of her intention to complete the purchase transaction. Held in trust, usually by the Listing Agent, and credited to Purchaser off purchase price. May be forfeited if Purchaser fails to complete transaction.
The right of the owner of one parcel of land to use all or part of the land of another for a specific purpose. Runs with the land. Requires one property to be in dominant position (enjoys the benefit of the easement) and one property to be in servient position (is subject to the right).
EASEMENT BY NECESSITY
A land owners right to make use of the property of another (or a portion of it) for a specific purpose, when such use is required to allow the land owner to enjoy his own land.
EASEMENT BY PRESCRIPTION
The continuing, unchallenged use of all or part of a property by the owner of a neighboring or nearby property for a specific period of time (20 years in many jurisdictions) such that, by law, the using owner gains a legal right to continue that use.
A house which is remarkable for its three-dimensional ornamentation following a nineteenth-century style.
The commercial or industrial foundation of a community which provides opportunities for employment.
The decline in value of a property which is caused by reasons outside of the property itself.
The length of time an improvement to real estate can be expected to provide more value than its operating or upkeep costs.
An appraisal term for the age of improvements to a property based on an assessment of their current condition (i.e. a well-maintained 100-year-old house could have an effective age of 10 years while a ramshackle, unmaintained 20-year-old house could have an effective age of 50 years). Opposite of actual age.
EFFECTIVE GROSS INCOME
The actual amount of money earned from stable sources over a set period (i.e. a month) before taxes and expenses are deducted.
The actual rate (or interest or return) once all factors are accounted for (factors include compounding of interest or costs of earning the return).
A comparison of the space in a building available for lease to the total space of the building.
EFFICIENCY UNIT OR APARTMENT
A term for a small dwelling unit in which kitchen and sometimes bath areas are combined with the living area. Also known as bachelor apartment or studio apartment.
Means of exit from a room, building or property (often to a road).
Legal proceeding to evict a tenant without a lease.
ELIZABETHAN OR HALF TIMBER STYLE
A two-storey or two-and-a-half storey, English-style house which has the upper storey overhanging the first, often with stone and stucco walls and half-timber beams.
The right of a body of government (often a state) to expropriate private property, while paying appropriate compensation to the owner.
Middle-aged or older couples whose children have grown up and left the nest to live on their own. Often looking to sell a larger house and buy a smaller one.
The intrusion across the property line and into one property of an improvement to a neighboring property. May result in a claim for adverse possession if the encroachment is unchallenged for a long period of time.
Any right, interest or other claim against land which is registered on title and affects the owners ability to sell the property.
The person who signs a document to represent the transfer of property to another.
A description of a property which has special features aimed at reducing use of electrical or heating power (i.e. insulation, double-insulated windows, high-efficiency furnace, etc.).
ENERGY TAX CREDITS
A tax break given to property owners who took steps to save energy in their property such as installing insulation.
The legal right to a benefit or program.
ENVIRONMENTAL IMPACT STATEMENT (EIS)
A report on the anticipated effect of a development on the local environment. May be required for federal funding for the development.
ENVIRONMENTAL PROTECTION AGENCY (EPA)
U.S. government agency for the protection of the environment.
EQUAL CREDIT OPPORTUNITY ACT
U.S. federal law aimed at affording people of all races, genders, religions, ages etc. an equal chance to borrow money.
Agency with a mandate to ensure fairness in property tax assessments.
A common law doctrine which treats a Vendor under an Agreement for the sale of property as holding the property in trust for the Purchaser even before the transaction has been completed such that the Vendor is liable to the Purchaser for any damage negligently caused to the property.
The common law interest of the Purchaser in the property for which she has entered an Agreement to Purchase prior to the completion of the transaction.
The difference, in dollars, between the market value of a property and the principal owing on debts secured against the property. The amount of money the owner will be able to keep from a sale transaction once the mortgages are paid out. Also known as owners interest.
The increase over time of the owners interest in a property, the difference between the value of the property and the amount owed on the mortgage.
A loan to a home owner secured against the equity the owner enjoys in the property.
EQUITY OF REDEMPTION
The right a borrower has to pay out in full a mortgage against a property that has gone into foreclosure or power of sale proceedings, thus redeeming the property.
The gradual diminishing of land or soil as a result of the action of water, wind, rain, etc.
ERRORS AND OMISSIONS INSURANCE
Professional protection from liability for mistakes, negligence, etc.
Part of a net lease. A provision that increases the rent payable under a lease when certain costs of the building increase (i.e. taxes, utility charges, etc.).
Any provision in a contract that allows one or more parties to end the contract upon the occurrence of certain events.
The reversion of title to a property to the state. Can occur when an owner dies with no legal heirs or when a corporate owner is dissolved by act of law or by voluntary act while holding legal title to the property.
A state wherein consideration, benefits, legal rights, money, documents or other valuables are transferred to another party in advance of that partys legal entitlement to them, on the basis that the legal entitlement will arise at a given point in the future. A form of trust.
A form of trust account in which advance payments are held on behalf of the payor until the contract allows their use by the payee or a third party.
Any independent third party who receives items to be held in escrow, holds such items until transfer is allowed, and then delivers them.
The completion of a transaction whereby documents, consideration etc. are held in trust (either by the parties and their representatives or by an independent third party) pending the completion of certain conditions, at which time the items held in escrow are released and the transaction is completed.
Moneys taken in by the agent and set aside for future payments as required by the contract (i.e., in a mortgage situation, for taxes, insurance, etc. on the property). Also known as escrow deposits, impounds or reserves.
Similar to escrow collections, the deposit of funds for the purpose of future payments required under the contract.
The payment out of escrow funds of taxes, insurance, etc. as required by the contract. Also known as escrow payments.
The return to the borrower of left over funds held in escrow once the debt has been paid out.
The term used to described the collection of assets of a deceased person.
ESTATE AT SUFFERANCE
The continued occupation of a premises by a tenant after the lease has expired or after the landlord has taken legal and appropriate steps to remove the tenant.
ESTATE AT WILL
The occupation of a premises by a tenant for an undefined period, which either party may terminate at will.
ESTATE FOR LIFE
Also known as Life Estate. A legal interest in property which ends with the death of the person who is entitled to the interest.
ESTATE FOR YEARS
Entitlement to land which allows a person to occupy, use and enjoy the land for a specified period of time.
ESTATE IN REVERSION
The right of an owner to re-occupy land once the estate he has granted to another person (such as an estate for years or an estate for life) has come to an end.
A government levy against the property in the estate of a deceased person, payable out of the estate.
A legal doctrine which blocks a person from taking a position on any fact which is contrary to a position that same person previously took on that same fact. Also blocks a party from re-opening an issue that has previously been decided by a court.
A document issued by an interested party setting out certain facts to which the issuer agrees to be bound. May be issued by a Condominium Corporation (setting out the common element fees for a particular unit, the amount in the corporations reserve account, any special assessments against unit owners, etc.), by a mortgagor or mortgagee (setting out the terms, conditions, interest rate and principal outstanding) or by a tenant in a building to be purchased (setting out amount of rent, the amount of any rental deposit, etc.).
Latin meaning and husband.
Latin meaning and wife.
An analysis of a property regarding its potential uses rather than its current value.
The forced removal of a tenant from occupation of a property. Also known as Actual eviction. See also constructive eviction.
EVIDENCE OF TITLE
Instruments or documents that provide any proof or information regarding ownership of land.
EXAMINATION OF TITLE
Similar to a subsearch a review of the current title to a property for the purposes of establishing current apparent owners and encumbrances.
An exclusion from coverage in a policy of insurance, usually referring to a known risk or defect for which the insurer assumes no responsibility.
EXCLUSIVE AGENCY LISTING
A contract whereby the owner of a property grants a single agent or broker the right to market the property for sale.
The term of a mortgage giving the borrower the right simply to surrender the property to the lender as payment for the loan without personal liability to the borrower for any shortfall.
A contract which has been completely carried out by the parties.
The act of signing a legal document.
The person or people appointed in a will to give effect to the wishes of the testator (the maker of the will) as set out in the will. A female executor may be called Executrix.
A contract which has not yet been completely fulfilled by one or more of the parties.
A comparison of the costs of owning and operating something to its potential gross income.
A term used to describe the presence, through advertising, of a property that is for sale in the marketplace.
The postponement of the completion date of an Agreement, agreed to by the parties to the Agreement.
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