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HAZARD INSURANCE Insurance that protects the owner and lender against physical hazards to property such as fire and windstorm damage. HEIRS Persons who succeed to the estate of someone who dies intestate (without a will). It sometime s indicates anyone who is entitled to inherit a decedent's property. HEREDITAMENT A term usually referring to real estate and all that goes with it as being incidental. HIGHEST AND BEST USE An appraisal phrase that means that use of real property that is most likely to produce the greatest net return on land or buildings, or both, over a given period of time. HIP ROOF A pitched roof with sloping side s and ends. HOLOGRAPHIC WILL A will that is entirely written, dated, and signed by the testator in the testator's handwriting. No witnesses are needed. HOMESTEAD (1) A home upon which the owner or owners have recorded Declaration of Homestead , as provide d by California statutes, that protects the home against judgments up to a specified amount. (2 ) A probate homestead is a similarly protected home property set aside by a California probate court for a widow or minor children. A special, limited exemption against certain judgments available to qualified homeowners. HUNDRED PERCENT LOCATION A retail business location considered the best available for attracting business. HYPOTHECATE To give something as security without giving up possession of it. To pledge property; to p ledge a security interest in property without the transfer of possession.

 

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JOINT NOTE A note signed by two or more persons who have equal liability for payment. JOINT TENANCY Joint ownership by two or more persons with right of survivorship .Four unities must be present: time, title, interest, and possession property held by two or m ore people with right of survivorship. JOINT VENTURE In legal effect it is a partnership for a limited, specific business project. JOISTS One of a series of parallel beams to which the boards of floor and ceiling laths or plaster board s are nailed and supported in turn by larger beams, girders, or bearing walls. JUDGMENT AFFIRMED A decision by an appellate court reaffirming, approving, and agreeing with an inferior court's decision. JUDGMENT DEBTOR A person who has an unsatisfied money judgment levied against him or her. JUDGMENT LIEN A money judgment that, because it has been recorded, has become a lien against the judgment debtor's real property. JUDGMENT REVERSED A decision by an appellate court disagreeing with an inferior court's decision and modifying the decision to conform with its findings. JUNIOR LIEN A lien lower in priority or rank than another or other liens. JUNIOR MORTGAGE A mortgage second in lien to a previous mortgage. JURISDICTION The authority of a court to hear and decide a particular type of case. The power of a court to hear and decide a case or issue ..

 

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LAND CONTRACT A contract used in the sale o f real property when the seller wishes to retain legal title until all or a certain part of the purchase price is paid by the buyer. It is also referred to as an installment sales contract or an agreement of sale. LANDLOCKED Property totally surround ed by other property with no means of ingress or egress. LAND SALES CONTRACT A contract for the sale of property, b y which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions. LATE CHARGE A charge made by a lender against a borrower who fails to make loan installments when due LATE SUPPORT The support that the soil of an adjoining owner gives to his or her neighbor's land. LEASE A contract between owner and tenant, setting forth conditions upon which the tenant may occupy and use the property and the term of the occupancy. LEASEHOLD ESTATE The estate of a tenant under a lease. (See Estate for Years.) LEGACY A gift of money by will. LEGAL DESCRIPTION A description recognized by law; a description by which property can be definitely located by reference to government surveys or approve d recorded maps. LESSEE A tenant; the person who is entitled to possession of property under a lease. LESSOR A landlord; the property owner who executes a lease. LETTER OF INTENT An expression of intent to invest, develop, or purchase without creating any firm legal obligation to do so. LEVY To exe cute upon ; to seize and s ell property to obtain money to satisfy a judgment. LIABILITIES Debts or claims that creditors have against assists. LICENSE Personal, non-assignable authorization to enter and perform certain acts on another's land. LICENSEE Under the law before 1968, which classified persons who entered upon others' land, a licensee was someone who entered upon land with the owner's express or implied permission for a business purpose. LIEN A lien makes the debtor's property security for the payment of a dept or the discharge of an obligation. A charge or claim against property as security for payment of a debt or obligation. LIFE ESTATE An estate in real property that continues for the life of a particular person. The "life" involved may be that of the owner or that of some other person. An estate in property whose duration is limited to and measured by the life of a natural person or persons. LIMITED PARTNERSHIP A partnership composed of some partners whose contribution and liability are limited. There must always be one or mo re general partners with unlimited liability and one or more limited partners with limited liability. A special partnership composed of limited and general partners. The general partners have un limited liability and total management, whereas the limited partners have to voice in the management and their only financial expo sure is to the extent of their investment. In some ways the limited partners' interest is similar to that of stockholder s in a corporation. LINTEL A horizontal board that supports the load over an opening such as a door or window. LIQUIDATED DAMAGES CLAUSE An agreement between the parties that in the event of a breach, the amount of damages shall be liquidated (set or fixed). The amount is set before the breach, usually at the time of making the contract, on the assumption that the exact amount of dam ages is difficult to determine because o f the nature of the contract. LIS PENDENS A notice of pending litigation recorded to give constructive notice of a suit that has been filed. A recorded notice that a lawsuit is pen ding, the outcome of which may affect title to property. LISTING An employment contract between a broker and his principal (client). LISTING AGREEMENT An employment contract authorizing a broker to sell, lease, or exchange an owner's property. LITIGATION A civil lawsuit; a judicial controversy. LOAN COM MITTEE The committee in a lending institution that reviews and approves or disapproves the loan applications recommended by a loan officer. LOAN CORRESPONDENT A loan agent usually used by distant lenders to help the lender make real estate loans. LOAN PACKAGE A group of documents prepared along with a loan application to give the prospective lender complete details about the proposed loan. LOAN VALUE The lender's appraised value of the property. LOUVER An opening with a series o f horizontal slats se t at an angle to permit ventilation without admitting rain, sunlight, or vision.

 

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NAR National Association o f Realtors. NAREB National Association of Real Estate Boards. This trade organization is now know n as the National Association of Realtors. NEGATIVE AMORTIZATION Occurs when normal payments on a loan are insufficient to cover all interest then due, so that unpaid interest is added to principal. Thus, even though payments are timely made, the principal grows with each payment. NEGLIGENCE Either the failure to act as a reasonable, prudent person, or the performance of an a ct that would not be done by a reasonable, prudent person. NEGOTIABLE INSTRUMENT A check or promissory note that meets specified statutory requirements an d is therefore easily transferable in somewhat the same manner as money. The negotiable instrument can be passed by endorsement and delivery (or in some cases by me re delivery), an d the transferee takes title free of certain real defenses (such as failure of consideration, fraud in the inducement) that might exist against the original maker of the negotiable instrument. NEPA Abbreviation for the National Environmental Protection Act, a federal statute requiring all federal agencies to prepare an Environmental Impact Statement an d meet other requirements whenever a major federal action is anticipated that could significantly affect the environment. NET LISTING A listing that provides that the agent may retain as compensation for his or her services all sums received over and above a stated net price to the owner. An employment agreement that entitles the broker to a commission only in the amount, if any, that the sales price of the property exceeds the listing price. NONFREEHOLD ESTATE A lease tenancy. (See under Estates for the four types o f leasehold e states.) NONJUDICIAL FORECLOSURE foreclosure and sale of property without resort to court action, by private sale. For deeds of trust the foreclosure provisions are outlined by the statutes and the requirements in the security instrument, which include a notice of default, right to reinstate, publication of sale, and trustee's sale. NOTARY PUBLIC An individual licensed by the state to charge a fee for acknowledging signatures o n instruments. NOTE A signed written instrument promising payment of a stated sum of money . Shortened name for a promissory note. NOTICE OF COMPLETION A notice recorded after termination of work on improvements, limiting the time in which mechanic's liens can be filed against the property. NOTICE OF DEFAULT A notice that is recorded in the county recorder's office stating that a trust deed is in default and that the holder has chosen to have the property sold. The trustor (property owner) has three months after the date of recording to reinstate the loan . Recorded notice that a trustor has defaulted on his secured debt. NOTICE TO QUIT A notice to a tenant to vacate rented property. Also called a three-day notice. Notice given to a tenant in default of his lease terms or on his rent, which directs him either to cure the default or to vacate the premises. NOVATION The acceptance of a new contract in substitution for the old contract, with the intent that the new contract will extinguish the original contract. Some times encountered in transfers of deeds of trust, where the new owner assumes the debt and the lender, through novation, releases the former owner from any liability under the original promissory note an d deed o f trust. NUISANCE Anything that is injurious to health or indecent or offensive to the senses, or any obstruction to the free use of property so as to interfere with the comfortable enjoyment of life or property or unlawfully obstructs the free passage or use, in the customary manner, o f any navigable lake or river, b ay, stream, canal, or basin, or any public park, square, street, or highway. A leg al wrong arising from acts o r use of one's property in a way that unreasonably interferes with another's use of hid property.

 

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PAROL EVIDENCE RULE A rule of courtroom evidence that once the parties make a written contract they may not then introduce oral agreements or statements to modify the terms of that written agreement. An exception exists for fraud or mistake, which will permit the parties to offer evidence to vary the terms of the writing. PARTIAL RECONVEYANCE In a deed of trust or mortgage, a clause that permits release of a parcel or part of a parcel from the effects and lien of that security instrument. The release usually occurs upon the payment of a specified sum o f money. PARTITION ACTION A legal action by which co-owners seek to sever their joint ownership . The physical division of property between co-owners, usually through court action. PARTNERSHIP An association of two or more persons to unite their property, labor or skill, or any one or combination thereof, in prosecution of some joint business, and to share the profits in certain proportions. An agreement of two or more individuals jointly to undertake a business enterprise. If it is a general partnership, all partners have unlimited liability and, absent other agreements, share equally in the management and profits of the business. PARITY WALL A wall erected on the line between two adjoining properties that are under different ownership for the u se of both owners. PATENT Conveyance of title to government land. PENNY The term , as applied to nails, that serves a s a measure of nail length and is abbreviated by the letter d. PERCENTAGE LEASE A lease on property, the rental for which is determine d by the amount of business done b y the tenant, usually a percentage of gross receipts from the business, with provision for a minimum rental. PERIODIC TENANCY A leasehold estate that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month lease. PERSONAL INJURY A term commonly used in tort (e.g. negligence cases) indicating an injury to one's being or body (for example , cuts or broken bones ) as opposed to injury to his property. PERSONAL PROPERTY Any property that is not real property. (See Real Property.) Property that is movable, as opposed to real property, which is immovable; also includes intangible property and leasehold estates. PETITIONER A person who petitions the court on a special proceeding or a motion. PLAINTIFF The party who initiates a lawsuit; the person who sues another. PLEDGE Deposition of personal property by a debtor with a creditor as security for a debt or engagement. PLEDGER One who gives a pledge as security. (See Debtor) PLOTTAGE INCREMENT The appreciation in unit value created by joining smaller ownerships into one large single ownership. POLICE POWER The right of the state to enact laws and regulations an d its right to enforce them for the order, safety, health, morals, and general welfare of the public. The power of the state to prohibit acts that adversely affect the public health, welfare, safety, or morals. (Zoning and building codes are example s of exercise o f the police power.) POWER OF ATTORNEY An instrument authorizing a person to act as the agent of the person granting it. A special power of attorney limits the agent to a particular or specific act, as a landowner may grant an agent special power of attorney to convey a single and specific parcel of property. POWER OF TERMINATION The future interest created whenever there is a grant of a fee simple subject to a condition subsequent estate. The future interest matures into a present interest estate only if the holder timely and properly exercises h is right upon a breach by the current holder of the fee estate. PREJUDGEMENT ATTACHMENT An attachment of property made before the trial, with the intent of holding that property as security, to have an asset to sell if the court judgment is favorable to the attaching p arty. PAYMENT CLAUSE A provision in a promissory note, deed of trust, or mortgage, permitting the debtor to pay off the obligation before maturity. PREPAYMENT PENALTY Penalty for the payment o f a note before it actually becomes due. A fee or charge imposed upon a debtor w ho desires to pay off his loan before its maturity. Not all prepayment clauses provide for a penalty, and in many real estate transactions the law regulates the amount of penalty that may be changed. PRESCRIPTION Securing of an easement by open, notorious, and uninterrupted use, adverse to the owner of the land for the period required by statute, which, in California, is five years. A method of obtaining an easement by adverse use over a prescribed period of time. PRESENT INTEREST An estate in land that gives the owner the right to occupy his property immediately; as opposed to a future interest, which grants only the right to occupy the premises at some future date. PRIMA FACIE (1) Presumptive on its face. (2) Assumed correct until overcome by further proof. Facts, evidence, or documents that are taken at face value and presumed to be as they appear (unless proven otherwise). PRINCIPAL The employer of an agent. Someone who hires an agent to act on his behalf. The term also refers to the amount of an outstanding loan (exclusive of interest). PRIVITY Closeness or mutuality of a contractual relationship. PROBATE Court supervision of the collection and distribution of a deceased person's estate. PROCURING CAUSE That event originating from another series of events that, without a break in continuity, results in a n agent's producing a final buyer. Proximate cause. A broker is the procuring cause of a sale if his or her efforts set in motion an unbroken chain of events that resulted in the sale. PROMISSORY NOTE A written promise to pay a designated sum of money at a future date. PRORATION OF TAXES Division of the taxes equally or proportionately between buyer and seller on the basis of time of ownership. PUNITIVE DAMAGES Money awarded by the court for the sole purpose of punishing the wrongdoer, and not designed to compensate the injured p arty for his dam ages. PURCHASE MONEY INSTRUMENT A mortgage or deed of trust that does not permit a deficiency judgment in the in the event of foreclosure and sale o f the secured property for less than the amount due o n the promissory note. It is called purchase money since the deed of trust and mortgage was used to buy all or part of the property. PURCHASE-MONEY MORTGAGE OR A mortgage or deed of trust given as part or all of the consideration PURCHASE-MONEY DEED OF TRUST for the purchase of property or given as security for a loan to obtain money for all or part of the purchase price.

 

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SAFETY CLAUSE In a listing agreement, a provision that if anyone found by the broker during his listing period purchases the property within a specified time after the expiration of the listing, the broker receives his full commission. SALE-LEASEBACK A situation in which the owner of a piece of property sells it and retains occupancy be leasing it from the buyer. SALES CONTRACT A contract between buyer and seller setting out the terms of sale. SALESPERSON An individual licensed to sell property, but who must at all times be under the supervision and direction of a broker. SANDWICH LEASE A leasehold interest that lies between the primary lease and the operating lease. Example: A leases to B; B subleases to C; C subleases to D. C's lease is a sandwich lease. SASH A wood or metal frame containing one or more windowpanes. SATISFACTION Discharge of a mortgage or deed of trust lien from the records upon payment of the secured debt. Discharge of an obligation or indebtedness by paying what is due. SEAL An impression mark or stamp made to attest to the execution o f an instrument. SECONDARY FINANCING A loan secured by a second mortgage or a second deed o f trust. SECTION A square mile of land, as established by government survey, containing 640 acre s. SECURED DEBT An obligation that includes property held as security for the payment of that debt; upon default, the property may be so ld to satisfy the debt. SECURITY AGREEMENT An agreement between the secured party and the debtor that creates a security interest in personal property. It replaced such term s as chattel mortgage, pledge, trust receipt, chattel trust, equipment trust, conditional sale, and inventory lien. DEPOSIT A deposit made to assure performance of an obligation, usually by a tenant. A sum of cash given as collateral to ensure faithful performance of specified obligations. SECURITY INTEREST A term designating the interest of a secured creditor in the personal property of the debtor. SEIZIN The possession of land under a claim of freehold. SENIOR LIEN A lien that is superior to or has priority over another lien. Also, the first deed of trust or lean o n a property. SEPARATE PROPERTY Property that is owned by a husband or wife and that is not community property. It is property acquired by either spouse prior to marriage or by gift or inheritance after marriage; also, in California, it is the income from separate property after marriage. Property held by a married person that is not community property; it includes property owned before marriage and property acquired after marriage by gift or inheritance. SERVIENT ESTATE That parcel of property which is burdened by and encumbered with an easement. SERVIENT TENEMENT An estate burdened b y an easement. SET-BACK ORDINANCE An ordinance prohibiting the erection of a building or structure between the curb and the set-back line. (see Building Line) SEVERALTY Sole ownership of property. Ownership by one person. SEVERALTY OWNERSHIP Ownership by only on e person; so le ownership. SHERIFF'S DEED A deed given by court order in connection with the sale of property to satisfy a judgment. SILL The board or piece of metal forming the lower side of an opening, such as a door sill or window sill. SINKING FUND (1) A fund set aside from the income from property that, with accrued interest, will eventually pay for replacement of the improvements. (2) A similar fund set aside to pay a debt. SMALL CLAIMS COURT A branch of the Municipal Court. The rules of this court forbid parties to be assisted by attorneys, dispense with most formal rules of evidence, and have all trials heard by judges. The monetary limit of cases before the court is $1,500. SOIL sole ownership carrying waste from the house to the main sewer line. SOLD TO THE STATE A bookkeeping entry on the county tax rolls indicating that the property taxes are delinquent. The entry begins the five-year redemption period, after which the property ma y be physically sold to the public for back taxes. SPAN The distance between structural supports, such as walls, columns, piers, beams, and girders. SPECIAL ASSESSMENT Legal charge against real estate by a public authority to pay the cost of public improvement, as distinguished from taxes levied for the general support of government. SPECIFIC PERFORMANCE A legal action to compel performance of a contract; for example a contact for the sale of land. A contract remedy by which one p arty is ordered by the court to comply with the terms of the agreement. SPOUSE A person's husband or wife. SRA The Society of Re al Estate Appraisers. STARE DECISIS A fundamental principle of law, which holds that courts should follow prior decisions on a point of law. A proper decision is a binding precedent on equal or lower courts having the same facts in controversy. STATUTE A written law. STATUTE OF FRAUDS The state law that provide s that certain contracts must be in writing in order to be enforceable in the courts. Examples: real property leas ed f or m ore than one year or a n agent's authorization to sell real estate. A law that require s certain con tracts (including most real estate contracts) to be in writing to be enforceable. STATUTE OF LIM ITATIONS A statute that requires lawsuits to be brought within a certain time to be enforceable. The basic periods are one year for personal injury, two ears for oral contracts, three years for damages to real or personal property, four years for written contracts, and three years from date of discovery for fraud. STEPPED-UP BASIS A higher, increased tax value of property given as the result of most sales or taxable transfers. The tax basis is used in computing capital gains and losses on the transfer of property. STOP NOTICE A notice served on the owner of property or custodian of funds. It requests, with certain penalties for noncompliance, that any funds due to a general contractor be paid to the claimant, laborer, or material man. STRAIGHT-LINE DEPRECIATION An accounting procedure that sets the rate of depreciation as a fixed percentage of the amount to be depreciated; the percentage stays the same each year. STRAIGHT MORTGAGE OR DEED OF A mortgage or deed of trust in which there is no reduction of the TRUST principal during the term o f the instrument. Payments to interest are usually made on an annual, semiannual, or quarterly basis. STRAIGHT NOTE A promissory note that is unamortized. The principal is paid at the end of the term of the note. STRING, STRINGER (1) A timber or other sup port for cross-members (2) In stairs, the support on which the stair treads rest. STUDS OR STUDDING Vertical sup porting timbers in walls and partition s.. SUB CHAPTER-S CORPORATION A corporation that, for federal tax purposes only, is taxed similarly to a partnership. The corporate entity is disregarded for most federal tax purposes, and the shareholders are gene rally taxed as individual partners. SUBJACENT SUPPORT Support that the soil below the surface gives to the surface of the land. SUBJECT TO (1) Burdened by and liable for an obligation. (2) A method of taking over a loan without becoming person ally liable for its payment. "SUBJECT TO" MORTGAGE OR DEED When a grantee takes a title to real property subject F TRUST to a mortgage or deed of trust, he or she is not responsible to the holder of the promissory note for the payment of any portion of the amount due. The most that he or she she can lose in the event of a foreclosure is his o r her equity in the property. In neither ca se is the original maker of the note released from his or her responsibility. (See also Assumption of Mortgagor Deed of Trust.) SUBLEASE A lease given by a tenant. SUBORDINATE To make subject or junior to. SUBORDINATION AGREEMENT In a mortgage or deed of trust, a provision that a later lien shall have a priority interest over the existing lien. It makes the existing lien inferior to a later lien, in effect exchanging priorities with that later lien. SUBORDINATION CLAUSE Senior lien that makes it inferior to what would otherwise be a junior lien. SUBROGATE To substitute one person for another's legal rights to a claim o r debt. SUBROGATION The substitution of another person in place of the creditor with regard to an obligation. SUCCESSION The inheritance of property. SUCCESSOR IN INTEREST The next succeeding owner of an interest in property. The transferee or recipient of a property interest. SUPERIOR COURT The principal trial court of the state; a court of unlimited monetary and subject matter jurisdiction, and an appeal court for decisions of municipal courts and small claims courts. SUPREME COURT The highest court in the California and the federal court structure. This court is almost exclusively an appeals court, accepting (by certiorari) only those cases that, in the court's desecration, involve issues of significant magnitude and social importance. SURETY One who guarantees the performance by another, a guarantor. SURVEY The process by which a parcel of land is located on the ground and measured. SYNDICATION A group of individuals pooling their re sources to purchase property through the holding vehicle of a partnership, corporation, or other association. Each individual owns share in the legal entity formed to acquire and hold title to the property.

 

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VALID (1) Legally sufficient and authorized by law. (2) Having force or binding force . Fully effective at law; leg ally sufficient. VALLEY The internal angle formed by the junction of two sloping sides of a roof. VALUATION (1) Estimated worth or price. (2) The act of valuing by appraisal. VARIABLE INTEREST RATE An interest rate that fluctuates in a set proportion to changes in an economic index, such as the cost of money. VARIANCE An exception or departure from the general rule. An exception granted to a property owner, relieving him from obeying certain aspects of a zoning ordinance. Its granting is discretionary with the zoning authorities and is based on undue hardship suffered by the property owner because of unique circum stances affecting his property. VENDEE Purchase r or buyer o r real property. VENDOR Seller of real property. VENEER Thin sheets of wood placed over another material. VENT A pipe installed to provide a flow of air to or from a drainage system or to provide a circulation of air within such system to protect trap seals from siphonage and back pressure. VENUE The location in which a cause of action occurs; it determines the court having jurisdiction to hear and decide the case. For real estate, the court having proper venue is one in the county in which the property is located. VERIFICATION A sworn statement before a duly qualified officer as to the correctness o f the contents o f an instrument. Written certification under oath and/o r penalty of perjury, confirming the truth of the facts in a document. VERSUS Against (abbreviated v. or vs.). Used in case names, with the plaintiff's name given first. VESTED Bestowed upon someone, such as title to property. Absolute, not contingent or subject to being defeated. VETERAN'S EXEMPTION A deduction from the annual property tax allowed to a qualified veteran residing on residential property. Since July 1978, it has amounted to $40 off the normal tax bill. VOID To have no legal force or effect; that which is unenforceable. Unenforceable, null, having no legal effect. VOIDABLE An instrument that appears to be valid and enforceable on its face but is, in fact, lacking some essential requirement. May be declared void, but is valid unless and un til declared void.. VOLUNTARY LIEN Any lien placed on property with the consent of the owner or as a result of the voluntary act of the owner.

 

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ZONE The area set off by the proper authorities in which the real property can be used for only specific purposes. ZONING Act of city or county authorities specifying the type of use to which property ma y be put in specific areas . A government's division of a city or other geographic area into districts, and the regulation of property use s within each district.