- A -
Abstract of Title - A condensed history or summary of all
transactions affecting a particular tract of land.
Access - The right to enter and leave a tract of land from a
public way. Can include the right to enter and leave over the lands of another.
Accretion - The slow build-up of lands by natural forces such
as wind or water.
Acknowledgment - The act by which a party executing a legal
document goes before an authorized officer or notary public and declares the
same to be his or her voluntary act and deed.
Acre - A tract of land 208.71 feet square and containing
43,560 square feet of land.
Administrator - A person appointed by a probate court to
settle the affairs of an individual dying without a will. The term is
"administratrix" if such a person is a woman.
Adverse Possession - A claim made against the lands of another
by virtue of open and notorious possession of said lands by the claimant.
Affidavit - A sworn statement in writing.
Agent - A person or company that has the power to act on
behalf of another or to transact business for another, e.g., a title agent under
contract with Old Republic Title to issue policies of title insurance.
Air Rights - The right to ownership of everything above the
physical surface of the land.
ALTA - American Land Title Association, a national association
of title insurance companies, abstractors and attorneys specializing in real
property law. Its headquarters are in Washington, D.C.
Appurtenance - Anything so annexed to land or used with it
that it will pass with the conveyance of the land.
ARM - Adjustable Rate Mortgage. See "Variable Rate Mortgage."
Assessment - The imposition of a tax, charge or levy, usually
according to established rates.
Assessor - A public official who evaluates property for the
purpose of taxation.
Assignee - One to whom a transfer of interest is made. For
example, the assignee of a mortgage or contract.
Assignor - One who makes an assignment. For example, the
assignor of a mortgage or contract.
Assumable Mortgage - A mortgage which, by its terms, allows a
new owner to take over its obligations.
Attachment -Legal seizure of property to force payment of a
debt.
Attorney in Fact - One who holds a power of attorney from
another allowing him or her to execute legal documents such as deeds, mortgages,
etc., on behalf of the grantor of the power.
- B -
Balloon Mortgage - A mortgage that is amortized over a
specific period of years, but requires a lump sum payment in full at an earlier
date.
Bankruptcy - A federal court proceeding in which debtors are
relieved of liability for their debts after surrender of their assets to a court
appointed trustee .
Bureau of Land Management - The branch of government in charge
of surveying and managing public lands.
- C -
C & R ' s - Covenants, Conditions and Restrictions.
See "Conditions and Restrictions ."
Chain - A term of land measurement that is 66 feet in length.
Chain of Title - A term applied to the past series of
transactions and documents affecting the title to a particular parcel of land.
Clear Title - One which is not encumbered or burdened with
defects.
Closing - Also known as "escrow" or "settlement." The process
of executing legally binding documents, such as deeds and mortgages most
commonly associated with the purchase of real estate and the borrowing of money
to assist in the purchase .
Clouded Title - An encumbered title.
Commitment to Insure - A report issued by a title insurance
company, or its agent, committing the title insurance company to issue the form
of policy designated in the commitment upon compliance with and satisfaction of
requirements set forth in the commitment.
Common Interest Community (CIC) - Ownership characterized by
mutual ownership of common areas, either jointly or through membership in an
association, e.g., condominiums, planned unit developments, and townhomes.
Company Loan - Loan by employer to facilitate relocation of
employee. Usually short term .
Condemnation - Taking private property for public use through
court proceedings .
Condition or Conditions - A proviso in a deed or will that,
upon the happening or failure to happen of a certain event, limits, enlarges,
changes or terminates the title of the purchaser or devisee.
Conditions and Restrictions - A common term used to designate
conditions and restrictions on the use of land. Includes penalties for failure
to comply. Commonly used by land subdividers on newly platted areas.
Condominium - A system of individual fee ownership of units in
a multi-unit structure, combined with joint ownership of common areas of the
structure and land.
Conservator - See "Guardian . "
Contract for Deed - An agreement to sell and purchase under
which title is held as security by the seller until such time as the required
payments to the seller have been completed.
Convey - The act of deeding or transferring title to another.
Conveyance - An instrument by which title is transferred; a
deed. Also, the act of transferring title.
Cooperative - A residential multi-unit building owned by a
corporation in which each unit is occupied by a member of the corporation
pursuant to a lease or occupancy agreement .
Covenant - An agreement written into deeds and other
instruments promising performance or non-performance of certain acts, or
stipulating certain uses or non-uses of the property.
Cul-de-Sac - The terminus of a street or alley. Usually laid
out by modern engineers to provide a circular turn around for vehicles.
- D -
Deed - A written document by which the ownership of land is
transferred from one person to another.
Deed of Trust - See " Mortgage."
Delivery - The final and absolute transfer of a deed from
seller to buyer in such a manner that it cannot be recalled by the seller. A
necessary requisite to the transfer of title.
Devise - The disposition of real property by will.
Due on Sale Clause - Provision in a mortgage or deed of trust
which requires loan to be paid in full if property is sold or transferred.
- E -
Earnest Money - Advance payment of part of the purchase price
to bind a contract for property.
Easement - An interest in land owned by another that entitles
its holder to a specific limited use, such as laying a sewer, putting up
electric power lines, or crossing the property.
Egress - The right to leave a tract of land. Often used
interchangeably with "access."
Eminent Domain - The power of the state to take private
property for public use upon payment of just compensation.
Encroachment - A trespass or intrusion onto another's
property, usually by a structure, wall or fence.
Encumber - To burden a parcel of land with a lien or charge,
e.g., a mortgage.
Encumbrance - A lien, liability or charge upon a parcel of
land.
Escheat - A reversion of property to the state in those cases
where an individual dies without heirs or devisees, and, in some states, without
a will.
Escrow - A pro c e d u re whereby a disinterested third party
handles legal documents and funds on behalf of a seller and buyer, and delivers
them upon performance by the parties.
Estate - A person's possessions. The extent of a person's
interest in real property.
Examination of Title - The investigation and interpretation of
the record title to real property based on the title search or abstract.
Exception - In legal descriptions, that portion of land to be
deleted or excluded. The term often is used in a different sense to mean an
objection to title or encumbrance on title.
Executor - A person appointed by the probate court to carry
out the terms of a will. The term is "executrix" if that person is a woman.
Extended Mortgage - One in which the due date of a mortgage is
extended for a longer period, often at a higher interest rate than the original
mortgage.
- F -
Fannie Mae - Federal National Mortgage Association (also FNMA)
is a private corporation, federally chart e re d to provide financial products
and services that increase the availability and affordability of housing by
purchasing mortgage loans.
Fee Simple Estate - The greatest interest in a parcel of land
that it is possible to own. Sometimes designated simply as "Fee."
Federal Housing Administration (FHA) Guarantee - An insurance
contract in which HUD through FHA insures that the named lender will recover a
specific percentage of the loan amount from the insurer (FHA) in the event that
the loan goes bad.
Financing Statement - A document filed with the Register of
Deeds or Secretary of State securing the title to personal property.
Fixtures - Any item of property so attached to real property
that it becomes a part of the real property.
Flood Certification - A common term for a Federal Emergency
Management Agency (FEMA) Standard Flood Hazard Determination Form (SFHDF). This
determines whether land or a building is located within a Special Flood Hazard
Area for purposes of flood insurance requirements under the National Flood
Insurance Pro g r a m .
Forfeiture of Title - Provision in a deed creating a condition
which will cause title to be passed to another should certain circumstances
occur.
Freddie Mac - Federal Home Loan Mortgage Corporation (also
FHLMC) is a stockholder owned corporation chartered by Congress that purchases
mortgage loans.
- G -
Ginnie Mae - Government National Mortgage Association (also
GNMA) is a wholly-owned United States corporation that guarantees privately
issued securities backed by pools of mortgages insured by FHA (Federal Housing
Administration), FMHA (Farm e r s Home Administration) or VA (Veterans
Administration).
Graduated Payment Mortgage - A loan in which monthly payments
are relatively small in the beginning and gradually increase in dollar amount
over the life of the mortgage.
Grantee - A person who acquires an interest in land by deed,
grant, or other written instrument.
Grantor - A person, who, by a written instrument , transfers
to another an interest in land.
Guardian - One appointed by the court to administer the
affairs of an individual not capable of administering his or her own affairs.
- H -
Harbor Line - An arbitrary line set by authorities on
navigable rivers, beyond which wharves and other structures may not be built.
Also designated as line of navigation.
Heir - One who might inherit or succeed to an interest in land
of an individual who dies without leaving a will (intestate).
Hiatus - A gap or space unintentionally left, when attempting
to describe adjoining parcels of land.
Home Equity Conversion Mortgage - A reverse or reverse annuity
mortgage in which HUD through FHA guarantees that the borrower will receive
monthly payments from the insurer (FHA) in the event the lender is unable to
make payments to the borrower.
Home Repair Loan - Used for repairs and additions to existing
structures without affecting existing mort g a g e . Typically 10 years or less
in length.
HUD 1 - A form settlement (closing) statement required by the
U.S. Department of Housing and Urban Development (HUD) where federally related
mortgages are being made on residential properties. It is a balance sheet
showing the source of funds and the distribution of funds in connection with the
purchase and/or mortgaging of residential property.
- I -
Improvements - Those additions to raw lands tending to
Inchoate Dower - The imperfect interest which the law gives a
wife in the lands of her husband. This is an interest which upon the death of
the husband may ripen into possession and use. Most states have abolished dower
rights.
Inchoate Curtesy - The imperfect interest which the law gives
a husband in the lands of his wife. This is an
Indemnify - To make payment for a loss.
Ingress - The right to enter a tract of land. Often used
Insurance - A contract of indemnity against specified perils.
Insurance Loan - When cash value of a life insurance policy is
borrowed by the insured.
Interim Financing - Temporary or short term loans. Often used
with new construction. Usually replaced with a permanent long-term mortgage.
Intestate - Designates the estate or condition of failing to
leave a will at death. "To die intestate."
- J -
Joint Tenancy - An estate where two or more persons hold real
estate jointly for life, the survivors to take the
Judgment - A decree of a court. In practice this is the lien
or charge upon the lands of a debtor resulting from the Court 's award of money
to a creditor.
See "Judgment Lien."
Judgment Docket - The record book of a County Clerk where a
judgment is entered in order that it may become a lien upon the property of the
debtor.
Judgment Lien - The charge upon the lands of a debtor
resulting from the decree of a court properly entered into the judgment docket.
- L -
Land Contract - See "Contract for Deed ."
Landmark - Any conspicuous object that helps establish land
boundaries.
Lease - A grant of the use of lands for a term of years in
consideration of the payment of a monthly or annual rental.
Lender's Policy - A form of title insurance policy which
insures the validity, enforceability and priority of a lender's lien. This form
does not provide protection for the owner.
Lessee - One who takes lands upon a lease.
Lessor - One who grants lands under a lease.
Lien - A hold, claim, or charge allowed a creditor upon the
lands of a debtor. Some examples are mortgage liens, judgment liens, mechanics'
liens.
Life Estate - A grant or reservation of the right of use,
occupancy and ownership for the life of an individual.
Link - A term of land measurement being 1/100th of a chain or
66/100ths of a foot.
Lis Pendens - A notice recorded in the official records of a
county to indicate that a suit is pending affecting the lands where the notice
is recorded.
Loan Policy - See " Lender's Policy ."
Loss Payable Clause - Provision added to a Fire and Casualty
Policy which says any loss will be paid to two or more parties as their interest
may appear. Usually the owner and the mortgage lender.
Lot - A part of a subdivision or block having fixed boundaries
ascertainable by reference to a plat or survey.
- M -
Majority - The age at which a person is entitled to handle his
or her own affairs.
Marketable Title - A good title about which there is no fair
or reasonable doubt.
Mechanic's Lien - A lien allowed by statute to contractors,
laborers and material suppliers on buildings or other structures upon which work
has been performed or materials supplied.
Metes and Bounds - A description of land by courses and
distances.
Minor - One who because of insufficient age or status is
legally incapable of making contracts.
Monument of Survey - Visible marks or indications left on
natural or other objects indicating the lines and boundaries of a survey. May be
posts, pillars, stones, cairns, and other such objects. May also be fixed
natural objects, blazed trees, roads and even a water course.
Mortgage -An instrument used to encumber land as security for
a debt.
Mortgage-Backed Security - A security evidencing either the
ownership of an interest in a mortgage loan or pools of mortgage loans, or a
separate obligation secured by a mortgage loan or pool of mortgage loans.
Mortgage Banker - A specialized lending institution that lends
money solely with respect to real estate and secures its loans with mortgages on
the real estate.
Mortgage Broker - A person or company that buys and sells
mortgages for another on commission or who arranges for and negotiates mortgage
contracts.
Mortgage Revenue Bonds - Issued by communities as a means of
providing lower cost mortgage funds to certain qualified borrowers.
Mortgagee - The mortgage lender.
Mortgagee's Policy - See "Lender's Policy ."
Mortgagor - The mortgage borrower.
- N -
Negative Amortization - An actual increase in the principal
amount of real estate loan because of the addition of matured but unpaid
interest to the loan balance. Usually the result of monthly payments which a re
temporarily set at a lower than needed level.
Notary - One authorized to take acknowledgments.
See "Acknowledgment."
Note - The instrument evidencing the indebtedness secured by a
security instrument such as a mortgage or deed of trust.
- O -
Owner's Policy - A policy of title insurance which
Ownership - The right to possess and use property to the
exclusion of others.
- P -
Patent - A document or grant by which the federal or state
government originally transferred title to public lands to an individual. The
first in the series of transfers by which title comes down to present owners.
Personal Representative - A person appointed by the probate
court to administer a decedent's estate.
See also "Executor" or "Administrator."
Plat or Plot - A map representing a piece of land subdivided
into lots with streets shown there on.
P.M.I. - Private Mortgage Insurance. An insurance contract
which insures that the named lender will re cover a specific percentage of the
loan amount from the insurer in the event the loan goes bad. Many lenders
require this on higher percentage loans.
Points - A one-time special fee or extra charge paid to a
lender in order to secure a loan. Expressed as a percentage of face amount of
mortgage.
Policy - A written contract of title insurance.
Policyowner - The insured on a title insurance policy.
Power of Attorney - An instrument authorizing another to act
on one's behalf as his or her agent or attorney.
Power of Sale - A clause in a will, mortgage, deed of trust or
trust agreement authorizing the sale or transfer of land in accordance with the
terms of the clause.
Prorate - To allocate between seller and buyer their
proportionate share of an obligation paid or due. For example, a proration of
real property taxes or fire insurance premiums.
- Q -
Quiet Title - An action in a proper Court to remove record
defects or possible claims of other parties named in the action.
- R -
Range - A part of the government survey, being a strip of land
six miles in width, and numbered east or west of the principal meridian.
Real Property - Land, together with fixtures, improvements and
appurtenances.
Realtor® -A federally registered collective membership mark
which identifies a real estate professional who is a member of the National
Association of Realtors ® a n d subscribes to its strict Code of Ethics.
Realty - A brief term for real property.
Redeem - Literally "to buy back." The act of buying back lands
after a mortgage foreclosure, tax foreclosure, or other execution sale.
Registered Land - See " Torrens Ti t l e ."
Reinsurance - To insure again by transferring to another
insurance company all or part of an assumed liability, thus spreading the loss
risk any one company has to carry.
REIT - Real Estate Investment Trust. A product of federal tax
legislation formed as a business trust, under a special state REIT statute or as
a corporation for the purpose of investing in real estate or mortgages on real
estate.
REMIC - Real Estate Mortgage Investment Conduit. A product of
1986 federal tax legislation in which a business entity such as a corporation,
partnership, or trust in which substantially all of the assets consist of
qualified mortgages and permitted investments, elects to be treated as a REMIC.
Qualification avoids treatment as a corporation for tax purposes.
Reverse or Reverse Annuity Mortgage - A mortgage for which the
borrower pledges home equity in return for regular (monthly) payments, rather
than a lump sum distribution of loan proceeds. Repayment is usually not required
until the home is sold or the borrower's estate is settled, provided the
borrower continues to live in the home and keeps current all taxes and
insurance.
See also "Home Equity Conversion Mortgage."
Right - of - Way - The right which one has to pass across the
lands of another. An easement.
Riparian - Rights to use of water and waterways in adjoining
lakes or rivers.
- S -
Second Mortgage - A second loan on real estate that a l ready
has a mortgage. It is subordinate to the first mortgage. Usually of shorter term
and often at a higher interest rate.
Section or Section of Land - A parcel of land comprising one
square mile or 640 acres.
Set Back Lines - Those lines which delineate the required
distances for the location of structures in relation to the perimeter of the
property.
Sub-surface Right - The right of ownership to things lying
beneath the physical surface of the property.
Survey - The process of measuring land to determine its size,
location and physical description and the resulting drawing or map.
- T -
Tenancy by the Entirety - Ownership by married persons where
each owns the entire estate, with the survivor taking the whole upon the other's
death.
Tenancy in Common - An estate or interest in land held by two
or more persons, each having equal rights of possession and enjoyment, but
without any right of succession by survivorship between the owners.
Tenant - Any person occupying real property with the owner's
permission.
Testament - Another term for a will. Commonly referred to as
"last will and testament."
Testate - The estate or condition of leaving a will at death.
"To die testate."
Testator - A man who makes or has made a testament or will.
Testatrix - A woman who makes or has made a testament or will.
Title - The evidence of right which a person has to the
ownership and possession of land. Commonly considered as a history of rights.
Title Defect - Any legal right held by others to claim
property or to make demands upon the owner.
Title Insurance - Insurance against loss or damage resulting
from defects or failure of title to a particular parcel of real property.
Title Plant - The total facilities - records, equipment,
fixtures, and personnel - required to function as a title insurance operation.
Technically, the organization of official records affecting real property into a
system which allows quick and efficient recovery of title information.
Title Search - An examination of public records, laws, and
court decisions to disclose the current facts regarding ownership of real
estate.
Torrens Title - A system whereby, after court proceedings, a
certificate is issued setting forth the extent of the applicant's estate in land
subject to the exceptions shown. Most popular in the early 1900's, the system
was adopted in 19 states. It is presently used only in parts of six states.
Township - A division of territory six miles square,
containing 36 sections or 36 square miles.
Tract - A particular parcel of land.
Trust - A property right held by one as a fiduciary for the
benefit of another.
Trustee - A person holding property in trust as a fiduciary
for the benefit of another.
- V -
VA Guarantee - An insurance contract in which the Veterans
Administration (VA) insures that the named lender will recover a specific
percentage of the loan amount from the insurer in the event the loan goes bad.
Variable Rate Mortgage - A loan in which the interest rate
fluctuates with the cost of funds or some other index.
Vendee - A purchaser of real property under land contract.
Vendor - A seller of real property under land contract.
Vest - To pass to a person an immediate right or interest.
Title may be said to vest in John Smith.
Vestee - A nonlegal term used by title insurers to indicate
the owner of real property in a policy or report.
- W -
Warranty - A promise by the grantor of real property that he
or she is the owner and will be responsible to the buyer if title is other than
as represented.
Will -A written document providing for the distribution of
property owned by a person after his or her death.
- Z -
Zoning - The right of a municipality to regulate and determine
the compatible character and use of property.
