Abstract of title – The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.
Acceleration clause – The clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or other covenant.
Accession – Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
Accretion – The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea.
Accrued items – On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property.
Acknowledgment – A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document.
Acre – A measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods, or 0.4047 hectares.
Actual eviction – The legal process that results in the tenant’s being physically removed from the leased premises.
Actual notice – Express information or fact; that which is known; direct knowledge.
Adjustable-rate mortgage (ARM) – A loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index.
Adjusted basis – The amount of any depreciation claimed as a tax deduction subtracted from the basis. See basis.
Ad valorem tax – A tax levied according to value, generally used to refer to real estate tax. Also called the general tax.
Adverse possession – The actual, open, notorious, hostile, and continuous possession of another’s land under a claim of title. Possession for a statutory period may be a means of acquiring title.
Affidavit of title – A written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in which the grantor (1) identifies himself or herself and indicates marital status, (2) certifies that since the examination of the title, on the date of the con tracts no defects have occurred in the title and (3) certifies that he or she is in possession of the property (if applicable).
Agency – The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.
Agency coupled with an interest – An agency relationship in which the agent is given an estate or interest in the subject of the agency (the property).
Agent – One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent.
Air lot – A designated airspace over a piece of land. An air lot, like surface property, may be transferred.
Air rights – The right to use the open space above a property, usually allowing the surface to be used for another purpose.
Alienation – The act of transferring property to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.
Alienation clause – The clause in a mortgage or deed of trust that states that the balance of the secured debt becomes immediately due and payable at the lender’s option if the property is sold by the borrower. In effect this clause prevents the borrower from assigning the debt without the lender’s approval.
Allodial system – A system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. Land is held under the allodial system in the United States.
American Land Title Association (ALTA) policy – A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.
Americans with Disabilities Act (ADA) – Act addresses rights of individuals with disabilities in employment and public accommodations.
Amortized loan – A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.
Annexation – Process of converting personal property into real property.
Annual percentage rate (APR) – The relationship of the total finance charges associated with a loan. This must be disclosed to borrowers by lenders under the Truth-in-Lending Act.
Anticipation – The appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property.
Antitrust laws – Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve either price-fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their areas of trade or dealing to certain areas or properties).
Appraisal – An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
Appraiser – An independent person trained to provide an unbiased estimate of value.
Appreciation – An increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation.
Appurtenance – A right, privilege, or improvement belonging to, and passing with, the land.
Appurtenant easement – An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor’s land.
Area preference – This refers to people’s preferences for one are over another, based on factors such as history, reputation, convenience, scenic beauty, and simple geography. Also known as situs.
Asbestos – A mineral once used in insulation and other materials that can cause respiratory diseases.
Assemblage – The combining of two or more adjoining lots into one larger tract to increase their total value.
Assessment – The imposition of a tax, charge, or levy, usually according to established rates.
Assignment – The transfer in writing of interest in a bond, mortgage, lease, or other instrument.
Assumption of mortgage – Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.
Attachment – The act of taking a person’s property into legal custody by writ or other judicial order to hold it available for application to that per son’s debt to a creditor.
Attorney’s opinion of title – An abstract of title that an attorney has examined and has certified to be, in his or her opinion, an accurate statement of the facts concerning the property ownership.
Automated underwriting – Computer systems that permit lenders to expedite the loan approval process and reduce lending costs.
Automatic extension – A clause in a listing agreement that states that the agreement will continue automatically for a certain period of time after its expiration date. In many states, use of this clause is discouraged or prohibited.
Avulsion – The sudden tearing away of land, as by earthquake, flood, volcanic action, or the sudden change in the course of a stream.
