Ameraco

JOINT AND SEVERAL LIABILITY:
When two or more people agree to take on the same obligation (such as a loan), they may each be responsible for a certain portion of the obligation or they may each be responsible for the entire obligation. When the contract states that liability is ‘joint and several’, it means that all parties together are responsible for the obligation (‘joint’) but also that each party individually is responsible for the entire obliga­tion on their own (‘several’). The creditor may sue all of them or just one for the debt.

JOINT OWNERSHIP AGREEMENT:
A contract between two or more people who have an interest in the same piece of property which sets out their respective rights and obligations with regard to the property and also may set out the way in which the parties agree to manage the property.

JOINT TENANCY:
A way in which two or more people may hold title to property together. Owning as joint tenants means each owner has an equal right to the entire property, that none of the owners may sell, bequeath or encumber their portion of the property without the consent of the other owners and that, in the event of the death of one of the owners, the surviving owners automatically retain title to the entire property by ‘Right of Survivorship’. Compare with ‘tenants in common’.

JOINT TENANTS:
See ‘joint tenancy’.

JOINT VENTURE:
A project which to or more persons undertake together, sharing the cost, the risk and the reward.

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Tags: Real Estate Terminology

IMPLIED CONTRACT:
An agreement which is not reduced to writing but is created, under the common law, on the basis of the behavior of the parties which suggests that they are acting under an agreement.

IMPLIED WARRANTY:
A guarantee of the condition of a thing or the truth of a statement which is created as a result of the actions of a party but not written down.

IMPROVEMENTS:
Things added to vacant land with the view to increasing its usefulness and value, such as buildings, parking areas, drainage works, etc.

IMPROVEMENT RATIO:
A comparison of the value of the improvements of a property with the value of the property without the improvements.

INCOME APPROACH:
An appraisal technique whereby the potential of the property to produce income is used to assess its value.

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Tags: Real Estate Terminology

HANDYMAN’S SPECIAL:
A descriptive term for a property which requires significant work to bring it up to normal standards of condition and repair. Often marketed at a lesser price.

HIDDEN AMENITIES:
Qualities of a property which may not be immediately noticeable but add to the value of the property, such as high quality materials used in construction.

HOLD HARMLESS CLAUSE:
Also known as ‘save harmless clause’. A clause in a contract in which one party releases another party for legal liability for a stated risk.

HOME INSPECTION (REPORT):
The written statement of the results of the inspection of a given property by a professional home inspector. Will show problems and potential problems with the property not always visible to an average purchaser (i.e. a deteriorating roof, an ancient furnace, termites, wood rot, basement seepage). Many purchasers make their offer to purchase conditional upon obtaining a satisfactory Home Inspection report.

HOME INSPECTOR:
A person who offers a service of making a physical inspection of homes. Qualifications may vary.

Tags: Real Estate Terminology

GST CERTIFICATE:
Document, required under the standard form of Agreement of Purchase and Sale, signed by a Vendor upon which the Purchaser may rely stating that Goods and Services Tax is not payable on the purchase price of the property because the subject property is a ‘used residential premises’. GST is payable on new homes, substantially renovated properties, properties which are bought and sold as part of a business of trading in properties and properties for which the Vendor claimed an input tax credit under the Excise Tax Act.

GST REBATE:
Percentage of the GST payable on a new home which a Purchaser is entitled to have refunded, rebate is often signed over to the Vendor in exchange for the inclusion of the GST in the purchase price.

GENERAL LIEN:
A registered claim against property which, instead of attaching just to one property, attaches to all properties owned by the party against whom the claim has been made.

GOOD AND MARKETABLE TITLE:
Ownership of a property which is free of competing claims and interests.

GOOD FAITH:
A term to describe a party’s legitimate and honest efforts to meet her obligations in a given situation.

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Tags: Real Estate Terminology

FAIR MARKET VALUE:
The value of an item as established by a consideration of how much an independent buyer would pay to an independent seller in a completely free transaction for the item.

FEES:
1) The money required at the outset by a lender from the borrower or held back from the mortgage advance. 2) The amounts charged by a professional for services rendered.

FINAL VALUE ESTIMATE:
The product of a real estate appraiser’s completed work, an assessment of the value of a property based on all factors and taking into consideration the different evaluation methods available.

FINDER’S FEE:
Commission paid to a mortgage broker for placing a mortgage with a specific institution.

FIRM AND BINDING:
Description of a legal contract once all conditions have been removed. It is now legally enforceable by the parties to it.

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Tags: 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 but the Listing Agent, and credited to Purchaser off purchase price. May be forfeited if Purchaser fails to complete transaction.

ENCUMBRANCE:
Any right, interest or other claim against land which is registered on title and affects the owner’s ability to sell the property.

EQUITY:
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 ‘owner’s interest’.

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.

ESCAPE CLAUSE:
Any provision in a contract that allows one or more parties to end the contract upon the occurrence of certain events.

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Tags: Real Estate Terminology

DATE OF APPRAISAL:
The precise day, month and year upon which an assessment of the value of a property has been given.

DATE OF INSTRUMENT:
The specific day, month and year a legal document was signed or prepared.

DATE OF REGISTRATION:
The specific day, month and year upon which an instrument was registered on title to the property.

DECLARATION OF TRUST:
A signed statement by a trustee acknowledging that she holds legal title to property on behalf of someone else (the beneficiary of the trust).

DEED:
The instrument by which title to property is conveyed from one person to another. In USA, also known as a transfer.

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Tags: Real Estate Terminology

CANCELLATION CLAUSE:
Provision in a contract that gives one or more parties the right to terminate the contract if a specific event occurs.

CAPITAL IMPROVEMENT:
Value enhancing work carried out on a capital property.

CAPITAL:
The working money in a business venture.

CARRYING CHARGES (COSTS):
The expense required to maintain a property over a given period of time, including property taxes, maintenance, insurance payments, interest charges on financing, etc.

CASH FLOW:
Description of the net income from a property after all expenses of holding and carrying the property are paid.

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B:

BACKUP CONTRACT

An Agreement of Purchase and Sale for a particular property which is conditional (becomes binding) upon the failure of another Agreement for the same property.

BETTERMENT

The improvement of real estate that results in a rise in market value. Also, a legal concept of civil law: when a court award, judgment or order in favor of an injured party places that party in a better position than he would have been had his original injury never taken place.

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Tags: real estate

A:

ABANDONMENT
Abandonment occurs when a person with a right or interest in a property voluntarily gives up that right or interest, either by physically ‘abandoning’ the property or by showing the intention to give up the right or interest.

ABATEMENT
A decrease or reduction in the price of a property (or in rent chargeable to a tenant). Usually occurs as a result of the discovery of a negative fact about the property which decreases its value from the price originally agreed upon by the parties.

ABSTRACT OF TITLE
A summary listing of the documents registered in the local land registry office and which affect title (ownership) of a particular property.

ACCEPTANCE
A positive response to an offer or a counter-offer that creates a binding agreement between the parties. Acceptance may be conditional upon the occurrence of certain events.

ACCESS
The right to enter a property. Access may be restricted to certain times, to certain persons and to certain purposes (i.e. access for the purpose of inspection).

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Tags: Real Estate Terminology