Appendix A Real Estate Math 591 MATH
Documentary Transfer Tax
Each county, upon the transfer of property, may charge a documentary transfer
tax. As you recall, the amount of the transfer tax is stamped in the upper
right-hand corner of a recorded deed. The amount of the tax is based on $1.10
per $1,000 or $.55 per $500 of transferred value. When a sale is all cash, or
a new loan is obtained by the buyer, the tax is calculated on the entire sales
price. When an existing loan is assumed by a buyer, the tax is calculated on
the difference between the assumed loan and the sales price.
Practice Problem #13
Denise sold her home for $250,000, with the buyer obtaining a new loan.
What is the amount of the documentary tax?
Known – Sales Price and Tax Rate
Sales price = $250,000
The sale involves a new loan so the tax is based on entire sales price
Tax rate = $1.10 per $1,000
Unknown – Amount of Tax Due
What we do not know is the amount of the tax due.
Calculation – Tax Due = Sales Price ÷ $1,000 x $1.10
Tax due = $250,000 ÷ $1,000 = $250.00
Tax due = $250.00 x $1.10
Tax due = $275.00
MATH 592 California Real Estate Principles
Square Footage and Area Calculations
Occasionally you may be asked to solve problems about square footage.
Square footage problems are fairly simple and can be solved easily using these
simple formulas.
The concept for square footage and area calculations.
As you recall, the way to determine the value of a building using the cost
method is to measure the square footage (buildings are measured on the
outside). Then check with a contractor to determine the standard cost to
build per square foot. Multiply that cost by the square footage of the building
to derive the cost to build new, or the upper limit of value.
Review - Basic Area Formulas
The Area of a Square = Length x Width
The Area of a Rectangle = Length x Width
The Area of a Right Triangle = Altitude x Base ÷ 2
Appendix A Real Estate Math 593
Practice Problem #14 MATH
The concept for Practice Problem #14.
Fred owned four acres of land with a front footage of 500 feet along the street.
What is the depth of the land?
Known – Area and Width
Area = 4 acres or 174,240 sq. ft. (43,560 sq. ft. per acre x 4 acres)
Width = 500 feet
Unknown – Length
What we do not know is the length (depth) of the parcel.
Formula – Length = Area ÷ Width
Length = 174,240 sq. ft. ÷ 500 feet
Length = 348.48 feet
All buildings are not square or rectangular and therefore may be irregular in
shape. Always reduce the building to squares, rectangles and triangles, for
which you know the formula to determine the square footage.
MATH 594 California Real Estate Principles
Practice Problem #15
Kelly and Sam bought a lot, with the intention of building a house on it.
They needed to determine how much it would cost them to build the house.
They were told by contractors the cost to build was $40 per square foot for
a garage and $80 per square foot for a home.
Kelly and Sam had plans drawn for the house. They used the total square
footage of the house and garage to figure the cost to build.
The concept for Practice Problem #15.
Known – Measurements of structure and cost per square foot.
Unknown – The cost to build the house and garage
To find the square footage of the house, divide the diagram into imaginary
rectangles and use the formula: Area = Width x Length
1. Calculate the area of the house
Rectangle A = 35' x 30' = 1,050 square feet
Rectangle B = 70' x 30' = 2,100 square feet
Rectangle C = 30' x 35' = 1,050 square feet
Area of house = 4,200 square feet
2. Calculate the area of the garage
Garage = 15' x 30' = 450 square feet
3. Calculate the cost to build the house and garage
House: 4,200 square feet x $80 per square foot = $336,000
Garage: 450 square feet x $40 per square foot = $18,000
Total cost to build house and garage = $354,000
Appendix C
Glossary
A causes such as alluvial deposits along the banks of streams GLOSSARY
by accretion. (2) A process by which there is an addition to
A.L.T.A. owner’s policy property by the efforts of man or natural forces.
An owner’s extended title insurance policy.
accretion (aumento)
A.L.T.A. title policy A buildup of soil by natural causes on property bordering a
A type of title insurance policy issued by title insurance river, lake, or ocean.
companies that expands the risks normally insured against
under the standard type policy to include unrecorded accrued
mechanic’s liens; unrecorded physical easements; facts a Accumulated over a period of time.
physical survey would not show; water and mineral rights;
and rights of parties in possession, such as tenants and buyers accrued depreciation (depreciación acumulada)
under unrecorded instruments. The difference between the cost to replace the property and
the property’s current appraised value.
abandonment (abandono)
The obvious and intentional surrender of the easement. acknowledgment (reconocimiento)
(1) A signed statement, made before a notary public, by
abandonment of homestead (abandono de casa) a named person confirming the signature on a document
A legal document that proves a homestead was abandoned. and that it was made of free will. (2) A formal declaration
An owner must file an abandonment of homestead on to a public official (notary) by a person who has signed an
the old property in order to obtain a homestead on a new instrument which states that the signing was voluntary.
property.
acquisition (adquisición)
abatement of nuisance The act or process by which a person procures property.
Extinction or termination of conduct or activity that inter-
feres with use or enjoyment of property. acre
(1) A measure of land equaling 160 square rods, or 4,840
abrogation (abrogación) square yards, or 43,560 square feet. (2) A tract about 208.
(1)The rescission or annulling of a contract. (2) The 71 feet square.
revocation or repealing of a contract by mutual consent of
parties to the contract, or for cause by either party to the action
contract. (Pronounced ab-ro-ga-tion) A lawsuit brought to court.
abstract of judgment (extracto del juicio) action in ejectment (acción en el ejectment)
A summary of a court decision. (1) The legal remedy to remove a tenant. (2) Also known
as unlawful detainer action.
abstract of title (titulo de sumario)
Written summary of all useful documents discovered in a actual age (edad real)
title search. (1) The chronological age of a building. (2) Real age of a
building.
abstractor (abstractor)
A person who, historically, searches out anything affecting actual authority (autoridad real)
the title to real property and summarizes the information Authority expressly given by the principal or given by the
in the findings. law and not denied by the principal.
acceleration clause (cláusula de aceleración) actual notice (aviso real)
A clause in a loan document describing certain events that A fact, such as seeing the grand deed or knowing a person
would cause the entire loan to be due. inherited a property by will.
acceptance (aceptación) ADAM E. LEE
An unqualified agreement to the terms of an offer. The mnemonic for the eight ways to terminate an easement:
Abandonment, Destruction, Adverse possession, Merger,
accession (accesión) Express agreement, Lawsuit, Estoppel, and Excessive use.
(1) The acquisition of title to additional land or to improve-
ments as a result of annexing fixtures or as a result of natural ad valorem (el anuncio valoren)
A Latin prefix meaning according to value. (Pronounced
California Real Estate Principles, 17th Edition, 2nd Printing adva-lo-rem)
597
598 California Real Estate Principles
GLOSSARY addendum agent (agente)
Additional documents attached to and made part of a A person who acts for and in the place of another, called a
contract. principal, for the purpose of affecting the principal’s legal
relationship with third persons.
adjustable rate mortgage (hipoteca de tarifa
adjustable) agreement
A note whose interest rate is tied to a movable economic A mutual exchange of promises (either written or oral).
index. Although often used as synonymous with contract,
technically it denotes mutual promises that fail as a contract
adjusted cost basis (adjused base del coste) for lack of consideration.
Original basis plus capital improvements and costs of the
sale, less depreciation if income producing. agreement of sale
(1) A contract for the sale of real property where the seller
administrator (administrador) gives up possession, but retains the title until the purchase
A person appointed by the probate court to administer price is paid in full. (2) Also called contract for sale or land
the estate of a deceased person. His or her duties include contract.
making an inventory of the assets, managing the property,
paying the debts and expenses, filing necessary reports and agricultural property
tax returns, and distributing the assets as ordered by the Property zoned for use in farming, including the raising of
probate court. crops and livestock.
advance fees (honorarios anticipados) air rights (derechos aéros)
A fee paid in advance of any services rendered. Sometimes The rights in real property to the reasonable use of the air
unlawfully charged in connection with an illegal practice space above the surface of the land.
of obtaining a fee in advance for the advertising of property
or businesses for sale, with no intent to obtain a buyer, by airspace (espacio aéreo)
persons representing themselves as real estate licensees, or The interior area which an apartment, office or condominium
representatives of licensed real estate firms. occupies. Airspace is considered real property to a reasonable
height. For example, an owner or developer of condominiums
adverse possession (posesión adversa) may sell the airspace as real property.
Acquiring title to property owned by someone else by
continued possession and payment of taxes. alienate
(1) To transfer, convey, or sell property to another. (2) The
affirm (afirme) act of transferring ownership, title, or interest.
(1) To conform, to aver, to ratify, to verify. (2) To make a
declaration. alienation clause (cláusula de enajenación)
(1) A clause in a loan document that would allow the lender
after-acquired title (titulo despues-adquirido) to call the balance of the loan due upon the sale of the
Any benefits that come to a property after a sale must follow property. (2) Also called the due-on-sale clause.
the sale and accrue to the new owner.
all-inclusive trust deed
agency (agencia) A purchase money deed of trust subordinate to but still
A legal relationship in which a principal authorizes an agent including the original loan.
to act as the principal’s representative when dealing with
third parties. alluvial deposit (depósito alluvial)
Sand or mud, carried by water and deposited on land.
agency coupled with an interest (agencia juntada
con un interés) alluvium (alluvium)
An agent acquires an interest in the subject of the agency The gradual build-up of soil.
(the property).
amenities (amenidades)
agency relationship (relación de la agencia) Features that add value to a property.
A special relationship of trust by which one person (agent)
is authorized to conduct business, sign papers, or otherwise Americans with Disabilities Act
act on behalf of another person (principal). This relationship Federal law passed in 1990 that prohibits discrimination
may be created by expressed agreement, ratification, or against individuals with disabilities.
estoppel.
amortization (amortización)
The liquidation of a financial obligation on an installment
basis.
Appendix C Glossary 599
amortized loan (préstamo amortizado) arm’s-length transaction GLOSSARY
(1) A loan to be repaid, interest and principal, by a series of A transaction, such as a sale of property, in which all parties
regular payments that are equal or nearly equal, without any involved are acting in their own self-interest and are under
special balloon payment prior to maturity. (2) Also called a no undue influence or pressure from other parties.
level payments loan.
arranger of credit
anchor bolt A person who is not party to the real estate transaction, but
(1) Attaches mud sill to foundation. (2) Embedded in will be compensated for arranging the credit, negotiating
concrete foundation. the credit terms, completing the credit documents, and
facilitating the transaction.
annual (anual/per annum)
Once per year. articles of incorporation
An instrument setting forth the purposes, power and basic
annual percentage rate rules under which a private corporation is formed.
The relationship of the total finance charge to the total
amount to be financed as required under the Truth-in- “as is”
Lending Act. Term stating the seller will not be responsible for the cost of
repairing any defect.
anticipation, principle of
Affirms that value is created by anticipated benefits to be asbestos
derived in the future. A mineral fiber used in construction which has been found
to cause lung and stomach cancer.
appraisal (avalúo)
An act or process of developing an opinion of value. Usually assemblage (ensambladura)
for a specific property’s value on a given date. The process of putting several smaller less valuable lots
together under one ownership.
appraisal process
An orderly systematic method to arrive at an estimate of assessed value
value. Value placed on property by a public tax assessor as a basis
for taxation.
appraisal report (información de la evaluación)
A written statement where an appraiser gives his or her assessment (tasación)
opinion of value. The valuation of property for the purpose of levying a tax
or the amount of the tax levied.
appraiser (tasador)
A person qualified by education, training and experience assessment roll (rodillo del gravamen)
who is hired to estimate the value of real and personal A list of all taxable property showing the assessed value of
property based on experience, judgment, facts, and use of each parcel; establishes the tax base.
formal appraisal processes.
assessor
appreciation (aprecio) The official who has the responsibility of determining
(1) An increase in the worth or value of property. (2) The assessed values.
increase in market value of real estate. (3) An increase in
property value with the passage of time. assignee (cesionario)
Party to whom a lease is assigned or transferred.
appropriation
The right to use water for a beneficial use by diverting assignment (asignación)
surface water. The transfer of entire leasehold estate to a new person.
appurtenance assignor (transferidor)
Anything used with the land for its benefit. The person transferring a claim, benefit or right in property
to another.
appurtenant
Belonging, appended or annexed to. Appurtenant items associate licensee
transfer with the land when property is sold. Another term used for a licensed real estate salesperson
employed by a licensed real estate broker.
architectural style
Generally the appearance and character of a building’s design assumption clause (cláusula de la asunción)
and construction. A clause in a document that allows a buyer to take over
the existing loan and agree to be liable for the repayment
of the loan.
GLOSSARY 600 California Real Estate Principles bench mark (marca de fija)
Location indicated on a permanent marker by surveyors.
assumption fee (honorarios de la asunción)
A lender’s charge for changing over and processing new beneficiary (beneficiario)
records for a new owner who is assuming an existing loan. The lender under a deed of trust.
assumption of mortgage (asunción de la hipoteca) beneficiary statement (declaración del
The taking of a title to property by a grantee wherein grantee beneficiario)
assumes liability for payment of an existing note secured by A statement of the unpaid balance of a loan and describes
a mortgage or deed of trust against the property, becoming the condition of the debt.
a co-guarantor for the payment of a mortgage or deed of
trust note. bequeath (legar)
To convey real or personal property by will.
attachment (embargo)
The process by which the court holds the property of a bequest
defendant pending outcome of a lawsuit. A gift of personal property by will. (See legacy)
attachment lien (embargo preventivo del accesorio) bilateral contract (contrato bilateral)
(1) The process by which the court holds the real or An agreement in which each person promises to perform an
personal property of a defendant as security for a act in exchange for another person’s promise to perform.
possible judgment pending the outcome of a lawsuit.
(2) Also known as writ of attachment. bill of sale
A written agreement used to transfer ownership in personal
attorney-in-fact (abogado en hecho) property.
(1) The person holding the power of attorney. (2) A
competent and disinterested person who is authorized by blanket loan (préstamo cubre)
another person to act in his or her place in legal matters. A loan secured by several properties. The security
instrument used can be a blanket deed of trust or a blanket
avulsion (avulsion) mortgage.
The sudden washing or tearing away of land by the action
of water. blighted area (area marchitada)
A section of a city, generally the inner city, where a majority
B of the buildings are run-down, and the property values are
extremely low.
backfill (relleno)
Soil that is used to fill in holes or support a foundation. blind advertising
Advertising that fails to disclose that the party is a licensee
balloon payment (pago de globo) acting as an agent.
Under an installment loan, a final payment that is substan-
tially larger than any other payment and repays the debt blind pool
in full. A type of syndication where money is raised for unspecified
properties that meet specific investment criteria.
bankruptcy (bancarrota)
A court proceeding to relieve a person’s or company’s blockbusting (rompe cuadras)
financial insolvency. The illegal practice of telling people that property values in
a neighborhood will decline because of a specific event, such
base and meridian as the purchase of homes by minorities.
Imaginary lines used by surveyors to find and describe the
location of public or private lands. board foot (pie de tablero)
A unit of measurement for lumber equal to the volume
baseline (linea de fondo) of the board: one foot wide, one foot long, one inch thick
A survey line running east and west, used as a reference (144 cubic inches).
when mapping land.
bona fide purchaser
beam Bona fide means good faith (auténtico), so a bona fide
A long thick piece of wood, metal or concrete, used to support purchaser is one who pays fair value for property in good
weight in a building. faith, and without notice of adverse claims.
bearing wall book value (valor de la libro)
A wall that supports a vertical load as well as its own The current value (for accounting purposes) of a property,
weight. calculated as the original cost, plus capital improvements,
minus accumulated or accrued depreciation.
Appendix C Glossary 6 01
boot Business and Professions Code GLOSSARY
Extra cash or non like-kind property put into an exchange. The statute regulating the conduct of real estate brokers and
establishing the Bureau of Real Estate.
bracing
Diagonal board nailed across wall framing to prevent sway. business opportunity
Any type of business that is for lease or sale.
breach of contract (abertura del contrato)
A failure to perform on part or all of the terms and buyer’s agent
conditions of a contract. A broker employed by the buyer to locate a certain kind of
real property.
bridge loan
(1) A loan to bridge the gap between the termination of C
one mortgage and the beginning of another, such as when
a borrower purchases a new home before receiving cash C.L.T.A. standard policy
proceeds from the sale of a prior home. (2) Also known as A policy of title insurance covering only matters of record.
a swing loan.
calendar year
British Thermal Unit Starts on January l and continues through December 3l of
(1) A measurement that calculates heat; the amount of heat the same year.
needed to raise one pound of water one degree Fahrenheit.
(2) Also known as BTU. California Fair Employment and Housing Act
State law that prohibits discrimination in the sale, rental or
broker (corredor) financing of practically all types of housing.
An agent who earns income by arranging sales and other
contracts. A real estate broker is an individual licensed California Land Title Association
by the state of California to arrange the sale or transfer of A trade organization of the state’s title companies.
interests in real property for compensation.
CAL-VET Program
broker’s trust fund account A program administered by the State Department of Veterans
An account set up by a broker; withdrawals from this account Affairs for the direct financing of farm and home purchases
may be made only by the broker. by eligible California veterans of the armed forces.
brokerage (corretaje) CAN-SPAM laws
An activity involving the sale of something through an inter- Federal and state law regulating commercial e-mail messages.
mediary who negotiates the transaction for payment.
capital (capital)
brownfield Money and/or property owned or used by a person or business
An abandoned commercial or industrial site or under-utilized to acquire goods or services.
neighborhood where redevelopment is complicated by actual
or perceived contamination. capital gain
At resale of a capital item, the amount by which the net sale
building manager proceeds exceed the adjusted cost basis (book value). Used
A person employed by a property manager or directly by for income tax computations. Gains are called short or long
an owner, and usually manages a single large building or term based upon length of holding period after acquisition.
office complex. Usually taxed at lower rates than ordinary income.
building paper capitalism
Waterproof paper used between sheathing and roof covering. An economic system in which most of the economy’s
resources are privately owned.
bulk transfer law
The law concerning any transfer in bulk (not a sale in the capitalization (capitalización)
ordinary course of the seller’s business). (1) The process that can be employed to convert income
to value. (2) An economic system in which most of the
bundle of rights economy’s resources are privately owned.
An ownership concept describing all the legal rights that
attach to the ownership of real property.
GLOSSARY 602 California Real Estate Principles closing (cierre)
(1) Process by which all the parties to a real estate transac-
capitalization rate (tasa de capitalización) tion conclude the details of a sale or mortgage. The process
(1) The rate of interest which is considered a reasonable includes the signing and transfer of documents and distribu-
return on the investment, and used in the process of tion of funds. (2) Condition in description of real property
determining value based upon net income. It may also by courses and distances at the boundary lines where the
be described as the yield rate that is necessary to attract lines meet to include all the tract of land.
the money of the average investor to a particular kind of
investment. (2) It is sometimes call the cap rate. closing costs
The miscellaneous expenses buyers and sellers normally
carryback financing incur in the transfer of ownership of real property over and
Financing by a seller who takes back a note for part of the above the cost of the property.
purchase price.
closing statement
cash flow An accounting of funds made to the buyer and seller
The net income generated by a property before depreciation separately. Required by law to be made at the completion
and other non cash expenses. of every real estate transaction.
caveat emptor (caveat emptor) cloud on title
“Let the buyer beware”. Any condition that affects the clear title of real property
or minor defect in the chain of title which needs to be
CC&Rs removed.
(See covenants, conditions, and restrictions)
COALD
certificate of eligibility The mnemonic for the five duties an agent owes a principle:
Issued by Department of Veterans Affairs; evidence of Care, Obedience, Accounting, Loyalty, and Disclosure.
individual’s eligibility to obtain VA loan.
Code of Ethics (código de ética)
certificate of reasonable value (certificado del A set of rules and principles expressing a standard of
valor razonable) accepted conduct for a professional group and governing
The Federal VA appraisal commitment of property value. the relationship of members to each other and to the
organization.
certificate of title (certificado de título)
A written opinion by an attorney that ownership of the codicil
particular parcel of land is as stated in the certificate. A change in a will before the maker’s death.
chain of title (cadena de título) cold calling
A chronological history of property’s ownership. The practice of making unsolicited calls to people you do
not know in order to get new business.
change, principle of
Holds that it is the future, not the past, which is of prime collateral
importance in estimating value. Change is largely the result Something of value given as security for a debt.
of cause and effect.
color of title
chattel That which appears to be good title but which is not title
Personal property. in fact.
chattel real commercial acre
An item of personal property which is connected to real (1) The area remaining from an acre of newly subdivided land
estate; for example, a lease. after deducting the area devoted to streets, sidewalks, alleys,
curbs, etc. (2) Also known as a buildable acre.
chattels
(1) Personal property. (2) This term is sometimes used in commercial e-mail message
law to describe any interest in real or personal property other Any electronic mail message whose primary purpose is the
than a freehold. commercial advertisement or promotion of a commercial
product or service.
client (cliente)
The person who employs an agent to perform a service for commingling
a fee. The illegal practice of depositing client’s funds in a broker’s
personal or general business account.
closed sheathing
Foundation for exterior siding; boards nailed to studding.
Appendix C Glossary 6 03 GLOSSARY
commission comparison approach
A fee for services rendered usually based on a certain (1) A real estate comparison method which compares a given
percentage of the sales price of a property. property with similar or comparable surrounding properties.
(2) Also called market comparison.
commission split
The previously agreed upon division of money between a compensating balance
broker and sales-associate when the brokerage has been paid When a borrower deposits funds with the bank in order to
a commission from a sale made by the associate. induce the lender into making a loan.
common area competent
An entire common interest subdivision except the separate Legally qualified.
interests therein.
competition, principle of
common interest development Holds that profits tend to breed competition and excess
A common-interest development combining the individual profits tend to breed ruinous completion.
ownership of private dwellings with the shared ownership of
common facilities of the entire project. complete escrow
All terms of the escrow instructions have been met.
common interest subdivision
Individuals owning a separate lot or unit, with an interest in compound interest
the common areas of the entire project. The common areas Interest paid on original principal and also on the accrued
are usually governed by a homeowners’ association. and unpaid interest which has accumulated as the debt
matures.
common law dedication
When a property owner implies through his or her conduct, comps
the intent that the public use the land. A term used by real estate agents and appraisers to mean
comparable properties.
common law
A body of unwritten law that was developed in England concurrent ownership
from the general customs and usage that was adopted in (1) When property is owned by two or more persons or enti-
the United States. ties at the same time. (2) Also known as co-ownership.
community property condemnation
All property acquired by a husband and wife during a valid (1) The process by which the government acquires private
marriage (excluding certain separate property). property for public use, under its right of eminent domain.
(2) The proceeding to exercise the power of the government
community property with right of survivorship to take private property from an owner for the public good,
A law allowed a husband and wife to hold title to their paying fair market value. (3) The proceeding to exercise the
property. power of eminent domain.
compaction condition
Extra soil that is added and compressed to fill in the low Condition similar to a covenant, a promise to do or not to do
areas or raise the level of the parcel. something. The penalty for breaking a condition is return
of the property to the grantor.
company dollar
The amount a broker has left after all commissions have condition precedent
been paid. A condition which requires something to occur before a
transaction becomes absolute and enforceable; for example,
comparable sales a sale that is contingent on the buyer obtaining financing.
(1) Sales which have similar characteristics as the subject
property and are used for analysis in the appraisal process. condition subsequent
(2) Commonly called comps, they are recent selling prices A condition which, if it occurs at some point in the future,
of properties similarly situated in a similar market. can cause a property to revert to the grantor. For example, a
requirement in a grant deed that a buyer must never use the
comparative market analysis (análisis del mercado property for anything other than a private residence.
comparative o competitivo)
A comparison analysis that real estate brokers use while conditional use permit
working with a seller to determine an appropriate listing Allows a land use that may be incompatible with other uses
price for the seller’s house. existing in the zone.
604 California Real Estate Principles
GLOSSARY condominium (condominio) contract, a contract of sale, an agreement of sale, a conditional
A housing unit consisting of a separate fee interest in a particu- sales contract, or a land sales contract.
lar specific space, plus an undivided interest in all common or
public areas of the development. Each unit owner has a deed, contract rent
separate financing and pays the property taxes for their unit. The amount actually paid by a renter for use of the premises.
conduit contribution, principle of
A flexible pipe in which electrical wiring is installed. The worth of an improvement and what it adds to the entire
property’s market value, regardless of the actual cost of the
conformity improvement. Holds that maximum values are achieved when
When land uses are compatible and homes are similar in design the improvements on a site produce the highest (net) return,
and size, the maximum value is realized. commensurate with the investment.
consideration conventional loan
Something of value—such as money, a promise, property or Any loan made by lenders without any government guarantees
personal services. (FHA insured or VA guaranteed).
constructive fraud conversion
A breach of duty legally declared fraudulent because it deceives The appropriation of property or funds belonging to another;
others despite no dishonesty nor deceptive intent. as in a broker using a client’s money.
construction loan convey
An interim loan made to finance the actual construction To transfer ownership or title.
or improvement on land. Funds are usually disbursed in
increments as the construction progresses. conveyance (escritura de traspaso)
The transfer of title to land by use of a written instrument.
constructive eviction
Conduct by a landlord that impairs tenant’s possession of the cooperating agent
premises making occupancy hazardous. A selling agent who assists another broker by finding a
buyer.
constructive notice
Notice given by recording a document or taking physical cooperative
possession of the property. (1) Ownership of an apartment unit in which the owner has
purchased shares in the corporation that holds title to the
Consumer Credit Protection Act entire building. (2) A residential multi-family building.
A federal law that includes the Truth-in-Lending Law.
corner influence
consumer goods Commercial properties benefit from more exposure on a
Goods sold or purchased primarily for personal, family, or corner lot.
household purposes.
corner lot
contiguous A lot found at the intersection of two streets. It may be
In close proximity. desirable because of its accessibility, but may also be noisy
and expensive to maintain because of the increased frontage.
contour
The surface configuration of land. Shown on maps as a line corporation (corporación)
through points of equal elevation. A legal entity whose rights in business are similar to that of
an individual.
contract (contrato)
A legally enforceable agreement made by competent parties, correlation
to perform or not perform a certain act. (1) A step in the appraisal process involving the interpretation
of data derived from the three approaches in value (cost, market
contract date and income) leading to a single determination of value. (2)
The date the contract is created. The contract is created when Also frequently referred to as reconciliation.
the final acceptance was communicated back to the offeror.
cost
contract of sale (contrato decompraventa) The expenses in money, labor, material or sacrifices in
(1) A contract for the sale of real property where the seller acquiring or producing something.
gives up possession but retains title until the total of the
purchase price is paid off. (2) Also called installment sales
Appendix C Glossary 6 05
cost approach (acer camiento del coste) curable depreciation GLOSSARY
An appraisal method whereby a value estimate of a property Items of physical deterioration and functional obsolescence
is derived by estimating the replacement cost of the which are customarily repaired or replaced by a prudent
improvements, deducting the estimated accrued depreciation, property owner.
then adding the market value of the land.
customer
cost basis A prospective buyer of real estate; not to be confused with a
Original price paid for a property. property seller, who is the listing broker’s client.
counteroffer (contraoferta) D
(1) The rejection of an original offer that becomes a new
offer. (2) The rejection of an original purchase offer and the debt service
submission of a new and different offer. The sum of money needed for each payment period to amortize
the loan or loans.
covenant
A promise to do or not do certain things. debtor (deudor)
A person who is in debt; the one owing money to another.
Covenants, Conditions, and Restrictions (CC&Rs)
Restrictions are placed on certain types of real property and DEC
limit the activities of owners. Covenants and conditions are The mnemonic for the three disclosure requirements: Disclose,
promises to do or not to do certain things. The consequence Elect, and Confirm.
for breaking those promises may either be money damages
in the case of covenants, or the return of the property to the deciduous
grantor, in the case of conditions. Plants and trees that lose their leaves seasonally in the fall.
crawlspace decimal point
Exterior or interior opening permitting access underneath a The period that sets apart a whole number from a fractional
building, as required by building codes. part of that number.
credit (credito) Declaration of Homestead
A bookkeeping entry on the right side of an account, record- The recorded document that protects a homeowner from
ing the reduction or elimination of an asset or an expense, or foreclosure by certain judgment creditors.
the creation of an addition to a liability or item of equity or
revenue. Declaration of Restrictions
A written legal document which lists covenants, conditions
credit reporting agency and restrictions (CC&Rs). This document gives each owner
A company that researches the credit records of consumers and the right to enforce the CC&Rs.
summarizes the findings in a factual credit report.
dedication
credit scoring The giving of land by its owner to a public use and the
An objective, statistical method that lenders use to quickly acceptance for such use by authorized officials on behalf of
assess the borrower’s credit risk. the public.
credit unions deed (escritura de propiedad)
An association whose members usually have the same type A formal transfer by a party.
of occupation.
deed in lieu of foreclosure
cripple A deed to real property accepted by a lender from a defaulting
Stud above or below a window opening or above a doorway. borrower to avoid the necessity of foreclosure proceedings by
the lender.
cubic-foot method
Similar to the square-foot method, except that it takes height as deed of trust
well as area into consideration. The cubic contents of buildings (See Trust Deed)
are compared instead of just the square footage.
deed restrictions (limitaciones en la escritura)
cul-de-sac lot Limitations in the deed to a property that dictate certain uses
A lot found on a dead-end street with the same way for ingress that may or may not be made of the property.
and egress.
606 California Real Estate Principles
GLOSSARY default desk cost
Failure to pay a debt on a contract. (1) Profitability measure calculated by dividing the total
operating expenses of the firm by the number of licensed sales
defeasible associates. (2) Shows how much each sales associate must earn
Capable of being defeated. A defeasible estate is one that has to cover expenses.
a condition attached to the title, which if broken causes the
termination of that estate. devise
A gift of real property by will.
deferred maintenance
Negligent, postponed, care of a building. directional growth
The location or direction toward which the residential sections
deficiency judgment of a city are destined or determined to grow.
A judgment against a borrower for the balance of a debt owed
when the security or the loan is not sufficient enough to pay discharge of contract
the debt. The cancellation or termination of a contract.
defined channel disclosure statement
Any natural watercourse, even if it is dry during a good portion The statement required by the Truth-in-Lending Law whereby
of the year. a creditor must give a debtor a statement showing the
finance charge, annual percentage rate, and other required
definite and certain information.
Precise acts to be performed are to be clearly stated.
discount (rebaja)
delivery (of a deed) (1) To sell a promissory note before maturity at a price less than
The unconditional, irrevocable intent of a grantor immediately the outstanding principal balance of the note at the time of
to divest (give up) an interest in real estate by a deed or other sale. (2) Also an amount deducted in advance by the lender
instrument. from the nominal principal of a loan as part of the cost to the
borrower of obtaining the loan.
demand (demanda)
The desire to buy or obtain a commodity. discount points
The amount of money the borrower or seller must pay the
demise lender to get a mortgage at a stated interest rate. This amount
(1) To convey as an estate by will or lease. (2) To transmit by is equal to the difference between the principal balance on
succession or inheritance. the note and the lesser amount which a purchaser of the note
would pay the original lender for it under market conditions.
demographics A point equals 1% of the loan.
Information from a variety of sources used to create a broad
profile of any community. discount rate
The interest rate that is charged by the Federal Reserve Bank
demography (demografía) to its member banks for loans.
The statistical study of human populations.
discounting a note
deposit receipt Selling a note for less than the face amount or the current
Contract that acts as the receipt for earnest money given by the balance.
buyer to secure an offer, as well as being the basic agreement,
between the buyer and seller. disintermediation
The process of depositors removing funds from savings.
depository institution
An institution that accepts deposits in the form of savings dividend
accounts, and makes loans using their depositors’ monies. A number to be divided by another number.
depreciation (depreciación) divisor
(1) Loss in value from any cause. (2) A tax advantage of A number by which another number is divided.
ownership of income property.
do-not-call
depth table Federal ad state regulations regarding unsolicited telephone
A statistical table that may be used to estimate the value of calls.
the added depth of a lot.
doctrine of correlative-rights
deregulation Owner may use only a reasonable amount of the total under-
A process whereby regulatory restraints are gradually relaxed. ground water supply for his or her beneficial use.
Appendix C Glossary 607
documentary transfer tax easement by prescription GLOSSARY
A state enabling act allowing a county to adopt a documentary Created by continuous and uninterrupted use, by a single party,
transfer tax to apply on all transfers of real property located in for a period of five years. The use must be against the owner’s
the county. Notice of payment is entered on face of the deed wishes and be open and notorious. No confrontation with the
or on a separate paper filed with the deed. owner is required and property taxes do not have to be paid.
The party wishing to obtain the prescriptive easement must
document (documento) have some reasonable claim to the use of the property.
Legal instruments such as mortgages, contracts, deeds, options,
wills, bills of sale, etc. easement in gross
An easement that is not appurtenant to any one parcel; for
dominant tenement example, public utilities to install power lines.
The property that benefits from an easement.
eaves
downzoning The part of roof that hangs over the exterior walls.
A zone change from a high density use to a lower density use.
For example, a commercial zone to a light industrial zone. economic age (vida económica)
Age of a building determined by its condition and usefulness.
drywall
Gypsum panels used in place of wet plaster to finish the inside economic life (valor económica)
of buildings. (1) The estimated period over which a building may be profit-
ably used. (2) Also known as effective life.
dual agency
An agency relationship in which the agent acts concurrently economic obsolescence
for both principals in a transaction. (1) A type of depreciation occurring because of forces outside
the property. (2) Changes in the social or economic make-up
dual agent of the neighborhood, zoning changes, over-supply of homes,
A broker acting as agent for both the seller and the buyer in under-supply of buyers, recession or legislative restrictions can
the same transaction. cause economic obsolescence.
due-on-sale clause economic rent
An acceleration clause granting the lender the right to demand What a leased property would be expected to rent for under
full payment of the mortgage upon a sale of the property. current market conditions if the property were vacant and
available for rent.
duress (coerción)
The use of force to get agreement in accepting a contract. effective age
The age of a building based on its condition and usefulness.
DUST
The mnemonic for Demand, Utility, Scarcity, and effective demand
The desire coupled with purchasing power.
Transferability.E
effective gross income
E The amount of net income that remains after the deduction
from gross income of vacancy and credit losses.
18-month conditional license
Initial license issued to real estate salesperson who has only effective interest rate
completed the Real Estate Principles course. The percentage of interest that is actually being paid by the
borrower for the use of the money, distinct from nominal
earnest money (adelanto) interest.
(1) Down payment made by a purchaser of real estate as
evidence of good faith. (2) A deposit or partial payment. effective life
The estimated period over which a building may be profitably
easement used.
(1) An interest owned by one person in the land of another
person, such as a right-of-way across a parcel of land. (2) egress
The right to enter or use someone else’s land for a specified The right to exit from a property using an easement.
purpose.
elevation sheet
easement appurtenant Drawing that shows front and side exterior views of a building
An easement that enhances land; usually a right-of-way. as it will be when finished.
608 California Real Estate Principles
GLOSSARY emancipated minor escrow (en custodia de tercero persona)
Someone who is legally set free from parental control/ A small and short-lived trust arrangement.
supervision.
escrow agent
emblements The neutral third party holding funds or something of value
Growing crops that are cultivated annually for sale. in trust for another or others.
eminent domain escrow holder
(1) The right of the government to take private property Acts as a neutral agent of both buyer and seller.
from an owner, for the public good, paying fair market value.
(2) Also known as condemnation or a taking. escrow instructions
Written directions, signed by a buyer and seller, detailing the
employee procedures necessary to close a transaction and directing the
Someone who is under the control and direction of a broker. escrow agent how to proceed.
encroachment estate
The unauthorized placement of permanent improvements that (1) The ownership interest or claim a person has in real
intrude on adjacent property owned by another. property. (2) A legal interest in land; defines the nature,
degree, extent and duration of a person’s ownership in land.
encumbrance
An interest in real property that is held by someone who is estate at sufferance
not the owner. A tenancy created when one is in wrongful possession of real
estate even though the original possession may have been
energy efficient ratio legal.
(1) A measurement of the efficiency of energy; used to
determine the effectiveness of appliances. (2) Also known estate at will
as EER. The tenancy that may be ended by the unilateral decision
of either party. There is no agreed upon termination date,
Environmental Impact Report (declaración de and either party must give 30-days notice before ending the
impacto ambiental) tenancy.
(1) A study of how a development will affect the ecology of its
surroundings. (2) Also known as EIR. estate for life
A possessory, freehold estate in land held by a person only for
Equal Credit Opportunity Act the duration of his or her life or the life or lives of another.
Federal act to ensure that all consumers are given an equal
chance to obtain credit. estate for years
(1) A leasehold estate with a definite end date that must be
equitable title renegotiated. (2) Commonly used for commercial leases.
(1) The interest held by the trustor under a trust deed.
(2) Selling a note for less than the face amount or the current estate from period to period
balance. (1) A leasehold estate that is automatically renewed for the
same term; a conveyance for an indefinite period of time.
equity This does not need to be renegotiated upon each renewal.
The difference between the appraised value and the loan. (2) Commonly a month-to-month rental.
equity buildup estate in fee
The gradual increase of the borrower’s equity in a property (1) The most complete form of ownership of real property.
caused by amortization of loan principal. (2) A freehold estate that can be passed by descent or by will
after the owner’s death. (3) Also known as estate of inheritance
equity of redemption or fee simple estate.
(1) The right of a debtor, before a foreclosure sale, to reclaim
property that had been given up due to mortgage default. estate of inheritance
(2) Also known as the right of redemption. (1) An estate which may descend to heirs. (2) Also known
as perpetual estate.
erosion
The gradual wearing away of land by natural processes. estate tax
Federal tax on the transfer of assets owned by the estate of a
escheat person who has died.
A legal process where property reverts to the state because the
deceased left no will and has no legal heirs. The state must
wait five years before trying to claim the property. (Pronounced
es-cheat)
Appendix C Glossary 609 GLOSSARY
estoppel expedientes
(1) A legal doctrine which prevents a person from denying Land grants recorded by the Mexican government in
something to be true or a fact which is contrary to previous California.
statements made by that same person. (2) Also known as an
implied or ostensible agency. expenses
Certain items which appear on a closing statement in
estuary connection with a real estate sale.
Where sea water and fresh water mix together.
express agreement
et al A written agreement, usually in the form of a listing contract
And others. which authorizes the broker to represent the seller in finding
a ready, willing, and able buyer.
et ux
(1) Abbreviation for et uxor. (2) Means “and wife.” express contract
Parties declare the terms and put their intentions in words,
ethics either oral or written.
A set of principles or values by which an individual guides his
or her own behavior and judges that of others. extended policy
An extended title insurance policy.
eviction (evicción)
The legal process of removing a tenant from the premises for external obsolescence
some breach of the lease. Any influence negatively affecting a property’s value that falls
outside of the specific property site (i.e., a property located
eviction notice under an airport flight pattern).
Written notice from the landlord to the tenant requesting
that he or she move out of the property within three days or F
meeting the landlord’s requirements.
fair market value
evidence of title (1) The price the property would bring if freely offered on
Proof of property ownership. the open market with both a willing buyer and a willing seller.
(2) Also known as market value and objective value.
exclusive authorization and right-to sell listing
An exclusive contract where the seller must pay the listing false promise
broker a commission if the property is sold within the time A false statement of fact.
limit by the listing broker, any other person, or even by the
owner. Fannie Mae
Fannie Mae buys loans that conform to Fannie Mae guidelines
exclusive listing (listado exclusivo) from lenders, and, by doing so, puts mortgage money back into
An exclusive contract where the seller must pay the listing the system so lenders can make more loans.
broker a commission if any broker sells the property.
farm
execute A specific geographical location in which an agent walks
(1) To perform or complete. (2) To sign. every month in order to obtain listings.
executed contract Federal Deposit Insurance Corporation (FDIC)
All parties have performed completely. The Federal Deposit Insurance Corporation (FDIC) insures
depositors for at least $250,000 per insured bank if a bank or
execution sale thrift institution fails.
The forced sale of a property to satisfy a money judgment.
Federal Fair Housing Act
executor/executrix (albacea) This law, amended in 1988, was created to provide fair housing
A person named in a will to handle the affairs of a deceased throughout the United States.
person.
Federal Housing Administration
executory contract A federal government agency that insures private mortgage
A contract in which obligation to perform exists on one or loans for financing of homes and home repairs.
both sides.
610 California Real Estate Principles
GLOSSARY Federal Reserve System (Systema de la Reserva finance charge
Federal) The dollar amount the credit will cost and is composed of any
The federal banking system of the United States under the direct or indirect charge as a condition of obtaining credit.
control of a central board of governors (Federal Reserve
Board) involving a central bank in each of twelve geographical financial intermediary
districts with broad powers in controlling credit and the (1) An organization that obtains funds through deposits and
amount of money in circulation. then lends those funds to earn a return such as savings banks,
commercial banks, credit unions and mutual savings banks.
fee (2) Lenders that make real estate loans.
See estate in fee or fee simple absolute.
financing statement
fee simple (1) A written notice filed with the county recorder by a
The greatest possible interest a person can have in real estate. creditor who has extended credit for the purchase of personal
property; establishes the creditor’s interests in the personal
fee simple absolute property which is security for the debt. (2) A document used
(1) The largest, most complete ownership recognized by to record debt.
law. (2) An estate in fee with no restrictions on its use. (3)
Property transferred or sold with no conditions or limitations finder’s fee
on its use. (1) Money paid to a person for finding a buyer to purchase
a property or a seller to list property. (2) Also known as a
fee simple defeasible referral fee.
Also known as fee simple qualified.
fire stop
fee simple estate Boards nailed between studs to block the spread of fire in
The most complete form of ownership. the walls.
fee simple qualified first trust deed
(1) An estate in which the holder has a fee simple title, A legal document pledging collateral for a loan (see trust deed)
subject to return to the grantor if a specified condition occurs. that has first priority over all other claims against the property
(2) Also known as fee simple defeasible. except taxes and bonded indebtedness. This trust deed is
superior to any other.
fictitious business name
(1) A business name other than the name of the person who fiscal year
has registered the business. (2) Also known as assumed name. Starts on July 1 and runs through June 30 of the following year
(3) A name that does not include the last name of the owner (used for real property tax purposes).
in the name of the business. (4) Also known as DBA or
doing business as. fixed rate full amortized loan
A loan with two distinct features. First, the interest rate
fictitious trust deed remains fixed for the life of the loan. Second, the payments
Recorded trust deed containing details which apply to later remain level for the life of the loan and are structured to repay
loan documents. the loan at the end of the loan term.
fiduciary fixed rate loan
A relationship that implies a position of trust or confidence. The most common type of loan. The principal and interest are
calculated for the term of the loan. Payments are determined
fiduciary duty by dividing the total by the number of payments in the
That duty owned by an agent to act in the highest good faith term of the loan. Regular payments of fixed amounts, to
toward the principal and not to obtain any advantage over include both interest and principal are made. This payment
the latter by the slightest misrepresentation, concealment, pays off the debt completely by the end of the term.
duress of pressure.
fixture
fiduciary relationship (1) Personal property that has become affixed to real estate.
A relationship that implies a position of trust or confidence. (2) Real property that used to be personal property.
final tract map flag lot
A map indicating any changes required by the planning A lot that looks like a flag on a pole. The pole represents
commission and is recorded in the county where the property the access to the site, which is usually located to the rear of
is located. another lot fronting a main street.
Appendix C Glossary 6 11
flashing Freddie Mac GLOSSARY
Sheet metal or other material that keeps the water from A shareholder-owned corporation that purchases, secures, and
seeping into a building. invests in home mortgages.
flood (100-year) freehold
Boundary indicating areas of moderate flood hazards. The full use of real estate for an indeterminate time. It differs
from leasehold, which allows possession for a limited time.
flood hazard boundary maps
Maps that identify the general flood hazards within a freehold estate
community. An estate in real property which continues for an indefinite
period of time.
floodplain
Low land adjacent to a river, lake or ocean. front foot
The width of a property on the side facing the street.
floodwater
Water that overflows a defined channel. front money
The minimum amount of money necessary to initiate a real
footing estate venture, to get the transaction underway.
(1) The spreading part at the base of a foundation wall or pier.
(2) A footing is an extended part of the foundation at the base frontage
or bottom of a foundation wall, pier or column. The length of a property along a street.
forbearance fructus industriales
(1) Refraining from action by a creditor against a debt or after Crops produced by human labor such as lettuce and grapes.
the debt has become due. (2) Forgiving a debt or obligation.
fructus naturales
foreclosure Naturally occurring plant growth such as grasses.
A legal procedure by which mortgaged property in which
there has been default on the part of the borrower is sold to fully amortized note
satisfy the debt. A note that is fully repaid at maturity by periodic reduction
of the principal.
foreclosure action
After a mechanic’s lien is recorded, the claimant has 90 days functional obsolescence
to bring foreclosure action to enforce the lien. If he or she A type of depreciation stemming from poor architectural
does not bring action, the lien will be terminated and the design, lack of modern facilities, out-of-date equipment,
claimant loses the right to foreclose. changes in styles of construction, or changes in utility demand.
foreclosure sale functional utility
A sale where property is sold to satisfy a debt. The combined factors of usefulness with desirability.
formaldehyde G
A chemical organic compound found in building materials
which may be a carcinogen. gable roof
A pitched roof with two sloping sides.
foundation
The base of a house; usually concrete. gambrel roof
Typically seen in Dutch colonial architecture, is a curbed roof,
foundation plan with a steep lower slope with a flatter one above.
Drawing that shows foundation, sub-floors, footing, and pier
placement. general agent
A person authorized by a principal to perform any and all
franchise (franquicia) tasks associated with the continued operation of a particular
A right or privilege awarded by law to operate a business using project.
another company’s name and products. In real estate, there are
franchised brokerages such as Century 21® and ERA®. general lien
A lien on all the property of a debtor.
fraud
An act meant to deceive in order to get someone to part with general plan
something of value. A measurement of length, rather than area (square foot) or
volume (cubic foot).
612 California Real Estate Principles
GLOSSARY gift deed grantor
Used to make a gift of property to a grantee, usually a close The person conveying or transferring the property.
friend or relative.
gratuitous agent
gift tax A person not paid by the principal for services on behalf of
Tax that can be due when you give property or other assets the principal, who cannot be forced to act as an agent, but
to someone. who becomes bound to act in good faith and obey a principal’s
instructions once he or she undertakes to act as an agent.
Ginnie Mae
An agency of HUD, which functions in the secondary mortgage gross domestic product
market, primarily in social housing programs. The measure of goods and services produced by the nation
during any one calendar year.
gold rush
A large migration of people to a newly discovered gold field. gross income
Total income from property before any expenses are deducted.
good consideration
Gifts such as real property based solely on love and affection. gross income multiplier
A figure which, when multiplied by the annual gross income,
goodwill will theoretically determine the market value. A general
An intangible, salable asset arising from the reputation of a rule of thumb which varies with specific properties and areas
business; the expectation of continued public patronage. (industrial and commercial).
government survey gross lease
A method of specifying the location of parcels of land (1) A gross lease is also called a flat, fixed or straight lease. The
using prime meridians, base lines, standard parallels, guide tenant pays an agreed-upon sum as rent and the landlord pays
meridians, townships, and sections. any other expenses such as taxes, maintenance, or insurance.
(2) The tenant pays an agreed-upon sum as rent, plus certain
grace period agreed-upon expenses per month (i.e., taxes, insurance and
An agreed-upon time after the payment of a debt is past due, repairs).
during which a party can perform without being considered
in default. gross national product (GNP)
The total value of all goods and services produced in an
graduated payment mortgage economy during a given period of time.
(1) A loan with partially deferred payments of principal at
the start of the term, increasing as the loan matures. (2) Also gross rent
known as the flexible rate mortgage. Income (calculated annually or monthly) received from rental
units before any expenses are deducted.
grandfather clause
An expression used in law that permits the continuation of gross rent multiplier
a use or business to proceed because the current law denies A method used by real estate agents and appraisers to quickly
permission. convert gross-rent into market value. It is used for income-
producing properties and is an easy way to get a rough
grant estimate of the value of rental units.
(1) A technical legal term in a deed of conveyance bestowing
an interest in real property on another. (2) The words ground lease
convey and transfer have the same effect. A lease for only the land.
grant deed ground rent
A type of deed in which the grantor warrants that he or she (1) Earnings of improved property credited to earnings of
has not previously conveyed the property being granted, has the ground itself after allowance is made for earnings of
not encumbered the property except as disclosed, and will improvements. (2) Also called economic rent.
convey to the grantee any title to the property acquired
later. growing equity mortgage
A mortgage that has a fixed interest rate of increasing monthly
grantee payments.
The person receiving the property, or the one to whom it is
being conveyed. guarantee of title
An assurance of clear title.
Appendix C Glossary 613
H holder in due course GLOSSARY
A person who has obtained a negotiable instrument (promis-
habendum clause sory note, check) in the ordinary course of business before it
The to have and to hold clause which may be found in a deed. is due, in good faith and for value, without knowledge that it
has been previously dishonored.
handicap
Any physical or mental impairment which substantially limits holographic will
one or more major life activities. Written in the maker’s own handwriting, dated and signed
by the maker.
hard money loan
Any loan made on real property in exchange for cash. home equity loan
A cash loan made against the equity in the borrower’s home.
hazard insurance
A property insurance policy that protects the owner and homeowners’ association (asociación de los
lender against physical hazards to property such as fire and dueños)
windstorm damage. A group of property owners in a condominium or other subdivi-
sion neighborhood, who manage common areas, collect dues,
hazardous household waste and establish property standards.
Consumer products such as paints, cleaners, stains, varnishes,
car batteries, motor oil, and pesticides that contain hazardous homeowners’ exemption
components. A $7,000 tax exemption available to all owner-occupied
dwellings.
hazardous waste
Materials—chemicals, explosives, radioactive, biological— homestead
whose disposal is regulated by the Environmental Protection A piece of land that is owned and occupied as a family
Agency (EPA). home.
header Hoskold Tables
The horizontal, load-bearing, board over a doorway or window A method used to value an annuity that is based on reinvest-
opening. ing capital immediately; used by appraisers to valuate income
property.
hedge against inflation
Real property appreciation keeps pace or exceeds inflation houseboat
rates. A barge that is designed and equipped for use as a dwelling.
heir (heredero) housing inventory
One who inherits property at the death of the owner or if the Housing units that are available for sale or in the process of
owner has died without a will (intestate). being made ready for sale.
highest and best use HVAC
An appraisal phrase meaning that use which at the time of an The mnemonic for Heating, Ventilation, and Air Conditioning.
appraisal is most likely to produce the greatest net return to
the land and/or buildings over a given period of time; that use hypothecation
which will produce the greatest amount of amenities or profit. A process which allows a borrower to remain in possession of
This is the starting point for appraisal. the property while using it to secure a loan.
hip roof I
A pitched roof with sloping sides and ends.
intestate (intestado)
hold harmless clause Dying without leaving a will.
Protects the broker from incorrect information.
implied contract
Holden Act An agreement shown by acts and conduct rather than written
(1) A law designed primarily to eliminate discrimination in words.
leading practices based upon the character of the neighborhood
in which real property in located. (2) Also known as Housing implied warranty of habitability
Financial Discrimination Act of 1977. (See redlining) The property will be maintained to meet bare living
requirements.
holder
The party to whom a promissory note is made payable.
614 California Real Estate Principles
GLOSSARY impound account interest only loan
A trust account set up for funds set aside for future costs A straight, non-amortizing loan in which the lender receives
relating to a property. only interest during the term of the loan and principal is
repaid in a lump sum at maturity.
improvements (hacer reformas)
Valuable additions made to property to enhance value or interest rate
extend useful remaining life. The percentage charged for the use of money.
income approach interim loan
Estimates the present worth of future benefits from ownership A short-term, temporary loan used until permanent financing
of a property. is available, e.g., a construction loan.
independent contractor interim use
A person who is hired to do work for another person but (1) When the highest and best use is expected to change.
who is not an employee of that person. (2) A short-term and temporary use of a property until it is
ready for a more productive highest and best use.
infill development
The development of vacant parcels in existing urban and interior lot
suburban areas. A lot that is surrounded by other lots, with a frontage on the
street. It is the most common type lot and may be desirable
inflation or not, depending on other factors.
The increase in the general price level of goods and services.
intermediation
ingress The process of transfer capital from those who invest funds to
The right to enter onto a property using an easement. those who wish to borrow.
inheritance tax interpleader action
A tax levied by states on inherited property and paid by the A court proceeding initiated by the stakeholder of property
person receiving the property. who claims no proprietary interest in it for the purpose of
deciding who among claimants is legally entitled to the
injunction (requerimiento judicial) property.
A court order forcing a person to do or not do an act.
intestate succession (sucesión intestada)
innocent misrepresentation When a person inherits property as a result of someone dying
When a person unknowingly provides incorrect information. without a will.
installment note inverse condemnation
A note which provides for a series of periodic payments of When a private party forces the government to pay just
principal and interest, until amount borrowed is paid in full. compensation, if the property value or use has been
This periodic reduction of principal amortizes the loan. diminished by a public entity.
installment sales involuntary lien
Where payments are made, by the buyer, to the seller, over a When the owner does not pay taxes or the debt owed, a lien may
period of more than one year. be placed against his or her property without permission.
institutional lenders Inwood tables
A financial intermediary, such as a savings and loan Means by which an income stream can be converted into
association, commercial bank, or life insurance company, present value; used by appraisers to valuate income property.
which pools money of its depositors and then invests funds in
various ways, including trust deed and mortgage loans. irrigation districts
Quasi-political districts created under special laws to provide
instrument (instrument) for water services to property owners in the district; an
A formal legal document such as a contract, deed or will. operation governed to a great extent by law.
insurance company
Major supplier of money for large commercial loans
to developers and builders.
interest (interés)
The charge for the use of money.
Appendix C Glossary 615
J L GLOSSARY
joint and several liability laches
(1) A legal term used in reference to a debt or a judgment for Delay or negligence in asserting one’s legal rights.
negligence, in which each debtor or each judgment defendant
is responsible for the entire amount of the debt or judgment. land
(2) An activity involving the sale of something through an Includes airspace, surface rights, mineral rights, and water
intermediary who negotiates the transaction for payment. rights.
joint tenancy LAND
When two or more parties own real property as co-owners, The mnemonic for the four elements of a valid lease: Length
with the right of survivorship. of time, Amount of rent, Names of parties, and Description
of the property.
joint venture (contrato de asociación en participación)
When two or more individuals or firms join together on a land contract
single project as partners. (1) A contract for the sale of real property where the seller
gives up possession, but retains the title until the purchase
joists price is paid in full. (2) Also known as a contract of sale or
Parallel boards supporting floors or ceilings. The boards agreement of sale.
supporting them are girders, beams or bearing walls.
land project
judgment Subdivisions located in sparsely populated areas (fewer than
The final legal decision of a judge in a court of law regarding 1,5000 registered voters within the subdivision or within two
the legal rights of parties to disputes. miles of its boundaries), made up of 50 parcels or more.
judgment lien landlocked
The final determination of the rights of parties in a lawsuit Property surrounded by other property with no access to a
by the court. public road, street or alley.
judicial foreclosure landlord (arrendador)
Foreclosure by court action. (1) Lessor. (2) Property owner.
junior mortgage lateral support
A second mortgage; one that is subordinate or has an inferior The support which the soil of an adjoining owner gives to a
priority to the first mortgage. neighbor’s land.
junior trust deed lease (arrendamiento)
Any trust deed that is recorded after a first trust deed, whose (1) A contract between owner, (lessor or landlord) and a lessee
priority is less than that first trust deed. (tenant) which gives the tenant a tenancy. (2) Also known
as a rental agreement. (3) A contract between an owner and
just compensation tenant. (4) A movable document describing the temporary
Fair and reasonable payment due to a private property owner possession and use of the property.
when his or her property is condemned under eminent
domain. leased-fee estate
The interest of the lessor in property.
K
leasehold
key lot (1) An agreement, written or unwritten, transferring the right
A lot that resembles a key fitting into a lock, is surrounded by to exclusive possession and use of real estate for a definite
the back yards of other lots. It is the least desirable because period of time. (2) Also known as a rental agreement or lease.
of the lack of privacy.
leasehold estate
kiosk A tenant’s right to occupy real estate during the term of the
A free-standing small booth, such as a jewelry stand or a lease. This is personal property interest.
newsstand.
legacy
A gift of personal property by will.
616 California Real Estate Principles
GLOSSARY legal description lis pendens
(1) A land description recognized by law. (2) A description (1) A recorded notice that indicates pending litigation affecting
by which property can be definitely located by reference to title on a property. (2) Also called a pendency of action.
government surveys or approved recorded maps. (Pronounced lis pendenz)
legal title listing
Title that is complete and perfect regarding right of ownership. A contract between an owner of real property and an agent
who is authorized to obtain a buyer.
lessee
(1) Tenant. (2) The one to whom property is rented or listing agent
leased. A broker who obtains a listing from a seller to act as an agent
for compensation.
lessor
(1) Landlord. (2) Property owner. (3) The person who owns listing agreement
the property and signs the lease to give possession and use to A written contract by which a principal, or seller, employs a
the tenant. broker to sell real estate.
less-than-freehold estate littoral
(1) The lessee’s interest. (2) An estate owned by a tenant who Land bordering a lake, ocean or sea as opposed to land
rents real property. (3) Also known as a leasehold estate. bordering a stream or river (running water). (Pronounced
lit-to-ral)
leverage
Using a lender’s money to finance a sale. loan assumption
A buyer assumes the existing loan when a property is sold. The
license (licencia) buyer takes over primary liability for the loan, with the original
(1) A permission granted by competent authority to engage borrower secondarily liable if there is a default.
in a bueinsss or occupation. (2) Permission to use a property,
which may be revoked at any time. loan-to-value ratio (LTV)
The percentage of appraised value to the loan.
license law
Another term for the Real Estate Law. lot, block and tract system
(1) A process where developers divide parcels of land into lots.
lien (gravamen) Each lot in a subdivision is identified by number, as is the block
(1) A claim on the property of another for the payment of a in which it is located; each lot and block is in a referenced
debt. (2) A legal obligation to pay. tract. This process is required by the California Subdivision
Map Act. (2) Also known as lot and block system, subdivision
LIEN$ system or recorded map system.
The mnemonic for the dollar sign and to show that lien$
involve money. love and affection
Consideration used in a gift deed.
life estate
An estate that is limited in duration to the life of its owner or M
the life of another designated person.
maker
limited liability company (LLC) The borrower who executes a promissory note and becomes
An alternative business that has characteristics of both primarily liable for payment to the lender.
corporations and limited partnerships.
management contract
limited partnership A contract that shows the terms of the agreement between the
A partnership of at least one general partner and one limited owner and the property manager.
partner.
mansionization
linear foot A new trend of home remodeling and construction that is
A measurement of length rather than area (square foot) or emerging in older neighborhoods with small to medium-sized
volume (cubic feet). homes.
liquidated damages clause manufactured home
Clause in a contract that allows parties to the contract to A home built in a factory after June 15, 1976 and must conform
decide in advance the amount of damages to be paid, should to the U.S. government’s Manufactured Home Construction
either party breach the contract. and Safety Standards.
Appendix C Glossary 6 17
MARIA services such as roads, sewers, parks, schools and fire stations GLOSSARY
The mnemonic for the five tests of a fixture: Method of in new developments may be financed under this law.
attachment, Adaptation, Relationship of the parties, Intention,
and Agreement of the parties. menace
Using the threat of violence to get agreement in accepting a
market comparison approach contract.
(1) An appraisal method using the principles of substitution
to compare similar properties. (2) A means of comparing meridian
similar type properties, which have recently sold, to the subject A survey line running north and south, used as a reference
property. (3) Also called market data approach. when mapping land.
market price metes and bounds
The price paid regardless of pressures, motives or intelligence. Land description that delineates boundaries and measures
distances between landmarks to identify property.
market rent
The rent a property should bring in the open market. minerals
Land elements found beneath the ground such as gold and coal
market value (valor de mercado) and owned as real property. Fugitive substances that are not
(1) The highest price a property would bring if freely offered solid such as oil or gas must be taken from the ground. Once
on the open market, with both a willing buyer and a willing these elements are taken from the ground, they become the
seller. (2) Sometimes called objective value. personal property of whoever removed them.
marketable title mineral rights
Good or clear saleable title reasonably free from risk of litigation The legal interest in the valuable items found below the
over possible defects. surface of a property (i.e., gold and coal).
material fact minor (menor de edad)
Any fact that would seem likely to affect the judgment of A person under l8 years of age.
the principal in giving consent to the agent to enter into the
particular transaction on the specified terms. misplaced improvements
Improvements on land which do not conform to the most
maximum allowable rent profitable use of the site.
The maximum legal rent that a landlord may charge for a
controlled rental unit. misrepresentation
(1) Making a false statement or concealing a material fact.
mechanic’s lien (gravamen de una constructora o de (2) A false statement of fact.
un constructor)
A lien placed against a property by anyone who supplies labor, mistake
services, or materials used for improvements on real property (1) An agreement was unclear or there was a misunder-
and did not receive payment for the improvements. standing in the facts. Mistake does not include ignorance,
incompetence or poor judgment. (2) An error or
median home price misunderstanding.
The price that is middle value of a sample of sales with one-half
of the sales below and one-half of the sales above the median mnemonics
home price. The following memory aids may be found alphabetically in this
Glossary: ADAM E. LEE, COALD, DEC, DUST, LAND,
megalopolis LIEN$, MARIA, NDFA, NIMBY, PANCHO, PEPS, PETE,
A large densely populated metropolitan area consisting of a PITI, SCI, TIMMUR, T-TIP, and UPTEE.
number of major urban areas and smaller surrounding cities.
mobilehome
Mello-Roos Act A factory-built home manufactured prior to June 15, 1976,
Allows developers to make improvements (roads, parks, constructed on a chassis and wheels, and designed for
schools, fire stations) while making each homeowner pay permanent or semi-attachment to land.
for the improvements. These improvements are listed in the
property taxes. mobilehome park
Any area or tract of land where two or more mobile home
Mello-Roos District lots are rented or leased or held out for rent or leased to
An area where a special assessment is imposed on those real accommodate manufactured homes or mobilehomes used for
property owners within a Community Facilities District. Public human habitation.
618 California Real Estate Principles
GLOSSARY monetary policy mutual rescission
The actions taken by the federal government to influence When all parties to a contract agree to cancel an agreement.
the availability and cost of money and credit as a means of
promoting national economic goals. mutual water company
A water company organized by or for water users in a given
money encumbrance district with the object of securing an ample water supply at a
An encumbrance that affects the title. reasonable rate; stock is issued to users.
month-to-month tenancy N
A tenant rents property for a month at a time, under a periodic
tenancy that continues for successive months until terminated naked legal title
by proper notice. Title lacking the rights and privileges commonly associated
with ownership may be held by trustee under a trust deed.
monument
A fixed landmark used in a metes and bounds land description. narrative appraisal
A summary of all factual materials, techniques, and appraisal
mortgage (hipoteca) methods used by the appraiser in setting forth his or her value
A legal document used as security for a debt. conclusion.
mortgage banker NDFA
A person whose principal business is the originating financing, The mnemonic for No Darn Fooling Around.
closing, selling, and servicing of loans secured by real property
for institutional lenders on a contractual basis. negative amortization
Occurs when monthly installment payments are insufficient
mortgage loan disclosure statement to pay the interest, so any unpaid interest is added to the
A statement that informs the buyer of all charges and expenses principal due.
related to a particular loan.
negligent misrepresentations
mortgage yield Untrue statements made without facts to back them up.
The amount received or returned from an investment expressed
as a percentage. negotiable
Capable of being negotiated, assignable or transferable in the
mortgage-backed securities ordinary course of business.
Pools of mortgages used as collateral for the issuance of securi-
ties in the secondary market. negotiable instrument
Any written instrument that may be transferred by endorsement
mortgagee (acreedor hipotecario) or delivery.
The lender under a mortgage.
net lease (arrendamiento neto)
mortgagor (deudor hipotecario) The tenant pays an agreed-upon sum as rent, plus certain
The borrower under a mortgage. agreed-upon expenses per month (i.e., taxes, insurance and
repairs).
multiple-listing service
A cooperative listing service conducted by a group of brokers net listing
(usually members of a real estate association) to provide an An employment contract in which the commission is not
inventory of all available properties in the area. definite. The broker receives all the money from the sale of the
property that is in excess of the selling price set by the seller.
mutual assent The broker must disclose the selling price to both buyer and
(1) An agreement between the parties in a contract. (2) The seller within 30 days after the transaction.
offer and acceptance of a contract.
net operating income (NOI) (ingreso neto de
mutual consent operación)
(1) The offer by one party and acceptance by another party. The balance remaining after deducting gross receipts of all
(2) Also known as mutual assent or meeting of the minds. fixed expenses.
mutual mortgage insurance net worth
A fee for an insurance policy charged to the borrower to The value of all assets minus all liabilities.
protect lender under an FHA loan, in the event of foreclosure
on the property. neutral depository
An escrow business conducted by someone who is a licensed
escrow holder.
Appendix C Glossary 619
NIMBY O GLOSSARY
The mnemonic for Not In My Backyard.
1 month
no fault eviction For escrow purposes, 30 days.
A lawful eviction in which the tenant is not at fault. This
includes whether the owner wants to occupy the apartment 1 year
or to get out of the rental housing business. For escrow and proration purposes, 360 days, 12 months, or
52 weeks.
no notice of completion
If the owner does not record a notice of completion when work 1031 exchange
is finished, all claimants have a maximum of 90 days from the (1) A method of deferring tax liability. (2) Also known as a
day work was finished to record a mechanic’s lien. tax-deferred exchange.
nominal interest rates obligor
The interest rate that is named or stated in loan documents. (1) One how is bound by a legal obligation. (2) A person,
delinquent in paying child support, whose name is listed by
non-conforming use (uso no conforme) the Child Support Services.
Legal use of property that at one period was established and
maintained at the time of its original construction but no obsolescence (obsolescencia)
longer conforms to the current zoning law. Loss in value due to reduced desirability and usefulness of a
structure because its design and construction became obsolete;
notary public loss because old-fashioned and not in keeping with modern
A licensed public officer who takes or witnesses the acknowl- needs, with consequent loss of income. May be functional
edgement. or economic.
note offer
An evidence of a debt. A presentation or proposal for acceptance to form a contract.
notice of completion offer to purchase
A notice filed by the owner or general contractor after comple- The proposal made to an owner of property by a potential buyer
tion of work on improvements, limiting the time in which to purchase the property under stated terms.
mechanic’s liens can be filed against the property.
offeree
notice of default The party receiving an offer.
A notice to a defaulting party that there has been a nonpay-
ment of a debt. offeror (oferente)
The party making an offer.
notice of non-responsibility
When an owner discovers unauthorized work on the property, open end loan
he or she must file a notice. This must be recorded and posted A loan where the borrower is given a limit up to which may
on the property to be valid. The notice states the owner is not be borrowed, with each advance secured by the same trust
responsible for work being done, and releases the owner from deed.
the liability for work done without permission.
open house (casa abierta)
notice of trustee’s sale A common real estate practice of showing listed homes to the
Notice given, and published, that a trustee’s sale will be held general public during established hours.
to sell a property to satisfy a debt.
open housing law
notice to pay rent or quit Congress passed the Federal Fair Housing Act in April 1968
(1) A written notice from the landlord to the tenant inform- which prohibits discrimination in the sale of real estate because
ing him or her to move out of the property within three days of race, color, or religion of buyers. Its amendment in 1988
or meet the landlord’s requirements. (2) Also known as an added: Those physically and mentally handicapped and those
eviction notice. children under 18 years of age.
novation (novación) open listing
The substitution by agreement of a new obligation for an A listing agreement that gives any number of brokers the right
existing one. to sell a property.
null and void open sheathing
Of no legal validity or effect. Boards nailed to rafters to form foundation for the roof.
620 California Real Estate Principles
GLOSSARY option (opción) partial reconveyance
(1) A contract to keep open, for a set period of time. (2) An A clause in a trust deed or mortgage permitting the release
offer to purchase or lease real property. of a parcel or part of a parcel from the lien of that security
instrument. The release usually occurs upon the payment of
optionee a specified sum of money.
The person who wants to purchase or lease (lessee) the
property. partially amortized note
A promissory note with a repayment schedule that is not
optionor sufficient to amortize the loan over its term.
The person who owns the property (seller, lessor).
partition action
or more clause A court action to divide a property held by co-owners.
A clause in a mortgage or trust deed that allows a borrower to
pay it off early with no penalty. partnership
A form of business in which two or more persons join their
orientation (orientación) money and skills in conducting the business.
The placement of a building on its lot in relation to exposure
to sun, prevailing wind, traffic, and privacy from the street. party wall
A wall erected on the line between two adjoining properties,
ostensible agency which are under different ownership, for the use of both
An agency relationship created by the actions of the parties parties.
rather than by an express agreement.
patent
ownership The legal document that transmits real property from the state
(1) The right of one or more persons to possess and use property or federal government to a person.
to the exclusion of all others. (2) A collection of rights to the
use and enjoyment of property. PEPS
The mnemonic for the four forces influencing value: Physical
ownership in severalty characteristics, Economic Influences, Political (governmental)
Property owned by one person or entity. regulations, and Social ideals.
P percentage lease
The tenant pays a percentage of gross monthly receipts in
package loan addition to a base rent.
A type of loan on real property used in home financing cover-
ing land, structures, fixtures, and other personal property. percolating water
Underground water not flowing in a defined channel.
PANCHO
The mnemonic for the six requirements for adverse possession: percolation test
Possession, Adverse, Notorious, Continuous, Hostile, and Test used to determine the ability of the land to absorb
Open. and drain water and is frequently used when installing septic
systems.
paramount title
Title which is superior or foremost to all others. personal property
Anything movable that is not real property.
parcel map
Map showing a parcel of land that will be subdivided into less PETE
than five parcels or units, and shows land boundaries, streets, The mnemonic for four types of government controls: Police
and parcel numbers. power, Eminent domain, Taxation, and Escheat.
parol evidence rule physical deterioration
(1) Oral or written negotiations made prior to a dispute (1) A type of depreciation caused by wear and tear, negligent
about an executed contract and brought forward to influence care, damage by dry rot or termites or severe changes in
the executed contract. Parol mean oral or by word of mouth temperature. (2) Also known as deferred maintenance.
but in this case means any evidence outside of the written
agreement. (2) Prohibits introducing any kind of outside pier
evidence to change or add to the terms of deeds, contracts or A column of masonry used to support other structural
other writing once they have been executed. members.
pitch
The slope, incline, or rise of a roof.
Appendix C Glossary 6 21
PITTI power of attorney (energía del abogado) GLOSSARY
The mnemonic for Principles, Interest, Taxes, and Insurance. A legal document that gives another person the legal authority
to act on his or her behalf.
planned development
(1) A planning and zoning term describing land not subject to power of sale
conventional zoning to permit clustering of residences or other A clause in a trust deed or mortgage that gives the holder
characteristics of the project which differ from normal zoning. the right to sell the property in the event of default by the
(2) Sometimes called a planned unit development (PUD). borrower.
planning commission preliminary notice
An agency of local government charged with planning the A written notice that must be given to the owner within 20
development, redevelopment or preservation of an area. days of first furnishing labor or materials for a job by anyone
eligible to file a mechanic’s lien.
plat map
Map of a subdivision indicating the location and boundaries preliminary title report
of individual lots. An offer to issue a policy of title insurance in the future for
a specific fee.
pledge
The transfer of property to a lender to be held as security for prepaid items of expense
repayment of a debt. The lender takes possession of property. Prorations of prepaid items of expense which are credited to
the seller in the closing escrow statement.
pledged savings account mortgage
A borrower has a large amount of money in a savings or thrift prepayment clause
account, and uses this money to maintain the account as A clause in a trust deed that allows a lender to collect a certain
security for a lender. The lender requires a certain ratio of percentage of a loan as a penalty for an early payoff.
the new loan amount to the balance in the account. The
borrower must keep that amount in the account for a prepayment penalty
specified length of time. The lender can release the pledge (1) Penalty for the payment of a note before it actually becomes
account when the property has acquired enough equity due. (2) A fee or charge imposed upon a debtor who desires
to qualify under normal loan-to-value ratios. to pay off their loan before its maturity.
plottage increment prescription
Putting several smaller, less valuable parcels together under The process of acquiring an interest, not ownership, in a
one ownership to increase value of total property. certain property.
pocket listing price
A list that is kept by the listing broker or salesperson, and is What the property actually sold for.
not shared with other brokers in the office or other multiple
listing service members. This is discouraged by the real estate prima facie
profession and is prohibited by many broker’s offices. Latin meaning first sight, a fact presumed to be true until
disproved.
points
Charges levied by the lender based on the loan amount. primary mortgage market (mercado de hipote
Each point equals 1% of the loan amount; for example, primario)
two points on a $100,000 mortgage is $2,000. Discount Lenders make mortgage loans by lending directly to borrowers.
points are used to buy down the interest rate. Points can
also include a loan origination fee, which is usually one point. principal
(See Discount Points) (1) In a real estate transaction, the one (seller) who hires
the broker to represent him or her in the sale of the property.
police power (2) The amount of money borrowed.
The power of the state to enact laws within constitutional
limits to promote the order, safety, health, morals and general priority
welfare of our society. The order in which deeds are recorded.
potable water (agua potable) private grant
Fresh water that is safe and agreeable for drinking. The granting of private property to other private persons.
private mortgage insurance (seguro hipotecario
privado)
Mortgage guarantee insurance available to conventional
lenders on the first part of a high risk loan.
622 California Real Estate Principles
GLOSSARY private restrictions Public Land Survey System (PLSS)
Created at the time of sale or in the general plan of a A land description method that uses imaginary lines to form
subdivision. a grid to locate land.
pro rata public record
In proportion; according to a certain percentage or proportion (1) A document disclosing all important facts about the
of a whole. property, its marketing and the financing of the subdivision.
(2) Also known as public report.
probate
The legal process to prove a will is valid. puffing
(1) A statement of opinion about property that is not factual.
probate sale (2) Exaggerated comments or opinions not made as representa-
A court-approved sale of the property of a deceased person. tions of fact, thus not grounds for misrepresentation.
procuring cause pur autre vie
A broker who produces a buyer ready, willing and able to (1) For another’s life. (2) A life estate created on the life of a
purchase the property for the price and on the terms specified designated person.
by the seller, regardless of whether the sale is completed.
purchase money mortgage or trust deed
progression, principle of A trust deed or mortgage given as part or all of the purchase
The worth of a lesser valued residence tends to be enhanced by consideration for real property. In some states the purchase
association with higher valued residences in the same area. money mortgage or trust deed loan can be made by a seller
who extends credit to the buyer of property or by a third party
promissory note (nota promisoria) lender (typically a financial institution) that makes a loan
The evidence of the debt. to the buyer of real property for a portion of the purchase price
to be paid for the property. In many states there are legal
promulgate limitations upon mortgages and trust deed beneficiaries
To publish or make laws known. collecting deficiency judgments against the purchase money
borrower after the collateral hypothecated under such
property security instruments has been sold through the foreclosure
Anything that may be owned and gained lawfully. process. Generally no deficiency judgment is allowed if
the collateral property under the mortgage or trust deed is
property management (administración de propiedad) residential property of four units or less with the debtor
(1) A specialty in which real estate brokers manage homes and occupying the property as a place of residence.
large real estate projects such as industrial complexes, shopping
centers, apartment houses and condominiums. (2) The branch Q
of the real estate business involving the marketing, operation,
maintenance and day-to-day financing of rental properties. quantity survey method (estudio de costas)
A detailed estimate of all labor and materials used in the
property taxes components of a building. Items such as overhead, insurance
Taxes used to operate the government in general. and contractor’s profit are added to direct costs of building.
This method is time consuming but very accurate.
proprietary lease
The lease used in co-op apartment buildings. quiet enjoyment
Right of an owner or tenant to the use of the property without
prorate (proratear) interference from the acts or claims of third parties.
(1) The division and distribution of expenses and/or income
between the buyer and seller of property as of the date of closing quiet title action
or settlement. (2) The process of making a fair distribution of (1) A court proceeding to clear a cloud on the title of real
expenses, through escrow, at the close of the sale. property. (2) Also known as action to quiet title.
prospecting quitclaim deed
The process of identifying potential customers. Transfers any interest the grantor may have at the time the
deed is signed with no warranties of clear title.
public dedication
When private property is intended for public use. There
are three types of public dedication: common law dedication,
statutory dedication, or deed.
public grant
The transfer of title by the government to a private
individual.
Appendix C Glossary 623
R Real Estate Investment Trust (Fideicomiso de GLOSSARY
Inversiones en Bienes Raíces)
radon A special arrangement under federal and state law whereby
Colorless, odorless, gas that is a carcinogen detected by a investors may pool funds for investments in real estate and
spectrometer. mortgages and yet escape corporation taxes, profits being
passed to individual investors who are taxed.
rafters
Slanted boards of a roof that are designed to support the roof Real Estate Law
boards and shingles. To strengthen the load bearing factor (1) The law that affects the licensing and conduct of real estate
of a roof, the rafters should be placed closer together. licensees. (2) Another name for the Business and Professions
Code, Part 1 entitled Licensing of Persons.
range
A land description used in the U.S. government survey Real Estate Recovery Fund
system consisting of a strip of land located every six miles A separate account funded through collection of a fixed
east and west of each principal meridian. amount from each license fee. It was established to pay
judgments against real estate licenses.
range lines
Government survey imaginary vertical lines six miles east real estate salesperson
and west of the meridian to form columns. A person with a real estate license who must be employed by
a real estate broker in order to perform any of the activities
rate that requires a license.
The percentage of interest charged on the principal.
Real Estate Settlement Procedures Act
ratification A federal law requiring disclosure to borrowers of settlement
The approval of a previously authorized act, performed (closing) procedures and costs by means of a pamphletand
on behalf of a person, which makes the act valid and legally forms prescribed by the United States Department of Housing
binding. and Urban Development.
ratified real estate syndicate
Approved after the fact. An organization of investors usually in the form of a limited
partnership who have joined together to pool capital for the
ready, willing, and able buyer acquisition of real property interests.
A person who is prepared to enter into a purchase contract,
really wants to buy, and meets the financing requirements Real Estate Transfer Disclosure Statement
of purchase. A document that the seller must provide to any buyer of
residential property (one-to-four units).
real estate (bienes raices)
Land and whatever physical property is on it, including real property (biene inmueble)
buildings and structures. Current usage makes the term real Land (air, surface, mineral, water rights), appurtenances and
estate synonymous with real property. anything attached, and immovable by law. Also included in
real property are the interests, benefits and rights inherent in
Real Estate Advisory Commission owning real estate, i.e., the bundle of rights. Current usage
A 10-member commission to offer advice to the Commis- makes the term real property synonymous with real estate.
sioner on matters pertinent to the Bureau of Real Estate.
real property loan law
real estate agent Article 7 of Chapter 3 of the Real Estate Law under which a
A broker licensed by the Bureau of Real Estate who real estate licensee negotiating loans secured by real property
negotiates sales for other people. within a specific range is required to give the borrower a
statement disclosing the costs and terms of the loan and
real estate broker which also limits the amount of expenses and charges that a
Someone holding a broker license issued by the Bureau of borrower may pay with respect to the loan.
Real Estate and permitted by law to negotiate real estate
transactions between principals to employ persons holding real property sales contract
salesperson or broker licenses. An agreement to convey title to real property upon satisfaction
of specified conditions which does not require conveyance
Real Estate Commissioner within one year of formation of the contract.
A person appointed by the governor to determine adminis-
trative policy and enforce the provisions of the Real Estate
Law and the Subdivided Lands Law.
624 California Real Estate Principles
GLOSSARY Realtist release clause
A member of a national organization, generally composed of A provision found in many blanket mortgage or trust deeds
African-American real estate brokers, known as the National enabling the borrower to obtain partial release from the loan
Association of Real Estate Brokers (NAREB). of specific parcels.
REALTOR® reliction
A real estate broker holding active membership in a real When land covered by water becomes uncovered because of
estate board affiliated with the National Association of alluvial deposits along the banks of streams.
REALTORS® (NAR)
remodeling
reconciliation Changes the basic design or plan of the building to correct
(1) The adjustment process of weighing results of all three deficiencies.
appraisal methods to arrive at a final estimate of the subject
property’s market value. (2) Also known as correlation. renegotiable rate mortgage
A type of loan in which the interest rate is renegotiated
reconveyance deed periodically.
Conveys title to property from a trustee back to the borrower
(trustor) upon payment in full of the debt secured by the trust rent (alquiler)
deed. Payment for the use of a property, generally under a lease
agreement.
recording
The process of placing a document on file with a designated rent control
public official for public notice. This public official is usually a (1) Laws in some communities that limit or prohibit rent
county officer known as the County Recorder who designates increases. (2) Also known as rent stabilization.
the fact that a document has been presented for recording
by placing a recording stamp upon it indicating the time of day rental agreement
and the date when it was officially placed on file. Another name for lease.
red flag replacement cost (costo de reposicíón)
Something that alerts a reasonably observant person of a The cost of replacing improvements with modern materials
potential problem. and techniques.
redemption period reproduction cost (costo de reproducción)
A period of time established by state law during which a The current cost of building a replica of the subject structure,
property owner has the right to recover real estate after a using similar quality materials.
foreclosure or tax sale by paying the sales price plus interest
and costs. request for notice
A notice that is sent, upon request, to any parties interested
redlining in a trust deed, informing them of a default.
(1) The illegal lending policy of denying real estate loans on
properties in older, changing urban areas, usually with large rescission
minority populations, because of alleged higher lending Legal action taken to repeal a contract either by mutual
risks, without due consideration being given by the lending consent of the parties or by one party when the other party
institution to the creditworthiness of the individual loan has breached a contract.
application. (2) The illegal use of a property’s location to
deny financing. resident manager
A person employed to manage an apartment building on a
refinancing part or full-time basis.
Paying off an existing obligation and assuming a new
obligation in its place. To finance anew, or extend or renew residential ceiling height measurements
existing financing. Minimum - 7.5 feet; normal - 8 feet
rehabilitation residential lease
The restoration of a property to its former or improved A lease used for single-family homes and duplexes.
condition without changing the basic design or plan.
restricted license
reinstate A type of probationary license issued when a license has been
To bring current and restore. suspended, revoked or denied after a hearing.
Appendix C Glossary 6 25
restriction sale-leaseback GLOSSARY
A limitation placed on the use of property and may be placed A financial arrangement where at the time of sale the seller
by a private owner, a developer or the government. It is usually retains occupancy by concurrently agreeing to lease the
placed on property to assure that land use is consistent and property from the purchaser. The seller receives cash while
uniform within a certain area. the buyer is assured a tenant and a fixed return on buyer’s
investment.
retaliatory eviction
An eviction that occurs in revenge for some complaint made sales associate
by the tenant. (1) A licensed real estate salesperson or broker whose license
is held by an employing licensed broker. (2) Also known as
return associate licensee.
(1) Profit from an investment. (2) The yield.
sales contract
reversionary interest A contract by which buyer and seller agree to terms of a sale.
(1) The right of the landlord to reclaim the property. (2) A
future interest. sales tax
Collected as a percentage of the retailing sales of a product, by
revocation a retailer, and forwarded to the State Board of Equalization.
The canceling of an offer to contract by the person making
the original offer. sandwich lease
A lease agreement created when a tenant sublets the property
revoke to another person, thus creating a sublessor-sublessee
Recall and make void. relationship. The person in the sandwich is a lessee to the
owner and a lessor to the sublessee.
ridge board
The highest structural part of a frame building. satisfaction
Discharge of a mortgage or trust deed from the records upon
right of replevin payment of the debt.
The tenant has a legal right to recover personal property
unlawfully taken by the landlord. savings and loan association
A lending institution created as a mutual organization or as a
right of survivorship stock institution. Deposits are insured by the Federal Deposit
(1)The right of a surviving tenant or tenants to succeed to the Insurance Corporation (FDIC).
entire interest of the deceased tenant. (2) The distinguishing
feature of a joint tenancy. scarcity
(1) The availability of a commodity in the marketplace.
riparian rights (2) A lack of supply of some type of real property resulting
The rights of a landowner whose land is next to a natural in increased value when deman exceeds supply.
watercourse to reasonable use of whatever water flows past
the property. schematics
Preliminary drawings and sketches by an architect, such as site
rollover mortgage plans and elevations.
A loan that allows the rewriting of a new loan at the
termination of a prior loan. SCI
The mnemonic for three approaches to value: Sales compari-
R-value son approach, Cost approach, and Income approach.
A rating that measures how well insulation resists heat.
second trust deed
S The evidence of a debt that is recorded after a first trust deed;
a junior trust deed.
S corporation
A corporation that operates like a corporation but is treated secondary mortgage market (mercado de hipote
like a partnership for tax purposes. secundaria)
The buying and selling of existing mortgages.
safety clause
Protects the listing broker’s commission, if the owner
personally sells the property to someone who was show the
property or made an offer during the term of the listing.
626 California Real Estate Principles
GLOSSARY secret profit servient tenement
Undisclosed profit made by a broker at their principal’s The property that is burdened by an easement.
expense.
setback
section The distance a building must be set back from the property line,
An area of land, one square mile, or 640 acres; 1/36 of a street, or curb usually determined by local building codes.
township.
severalty
security (garantía) Ownership of real property by one person or entity.
Evidence of obligations to pay money.
shared appreciation mortgage
security agreement (contrato de garantía) Lender and borrower agree to share a certain percentage of
A document commonly used to secure a loan on personal the appreciation in market value of the property.
property.
sheriff’s deed
security deposit A deed given to a buyer when property is sold through court-
Money given to a landlord to prepay for any damage other action in order to satisfy a judgment for money or foreclosure
than just normal wear and tear. of a mortgage.
security interest shoreline
The interest of a creditor (lender) in the property of a debtor The intersection of the land with the water (mean high water
(borrower). line).
seller’s market short fund
The market condition which exists when a seller is in a more When a home is sold and the homeowner’s insurance policy
commanding position as to price and terms because demand is cancelled, the seller or owner of the policy receives a refund
exceeds supply. which is less than the credit they would receive if the buyer
were to take over the existing homeowners’ insurance.
seller’s permit
Allows a retailer to buy the product at wholesale prices side yard setback
without paying sales tax. The retailer must then collect the The distance a building must be set back for the lot line at the
proper sales tax from customers and pay it to the State Board side of the property.
of Equalization.
sill (mud sill)
selling agent The lowest part of the frame of a house. It is fastened with
The broker who finds a buyer and obtains an offer for the bolts to the foundation and supports the upright studs of the
real property. frame.
semiannual simple interest
Twice per year at six month intervals. Interest computed on the principal amount of a loan only as
distinguished from compound interest.
semimonthly
Twice a month. single agency
The representation of only one party in a real estate transaction.
separate property
Property owned by a married person in his or her own sinking fund
right outside of the community interest, including property A fund set aside from the income from property which, with
acquired by the spouse (1) before marriage, (2) by gift or accrued interest, will eventually pay for replacement of the
inheritance, (3) from rents and profits on separate property, improvements.
and (4) with the proceeds from other separate property.
site
septic tank The position, situation or location of a piece of land in a
A sewage settling tank which must be at least five feet away neighborhood.
from the improvements.
situs
servicing loans A term used to describe the physical location of a property.
Supervising and administering a loan after it has been made.
This involves such things as collecting the payments, keeping
accounting records, computing the interest and principal,
foreclosure of defaulted loans, and so on.
Appendix C Glossary 6 27
smart growth standby commitment GLOSSARY
Reconciling the needs of development with the quality of A letter that promises to deliver a takeout loan in the future.
life. Smart growth focuses on revitalizing older suburbs and
older city centers. State Housing Law
Outlines the minimum construction and occupancy
soil pipe requirements for dwellings.
A pipe that carries waste from the house to the main sewer
line. statute of frauds
A state law which requires that certain contracts must be
Soldiers’ and Sailors’ Civil Relief Act (SSCRA) in writing to prevent fraud in the sale of land or an interest
A federal law designed to protect persons in the military in land.
service from loss of property when their ability to make
the payment has been affected by their entering military statute of limitations (ley de prescripción)
service. The period of time limited by statute within which certain
court actions must be brought by one party against another.
sole plate
(1) A board, usually 2” x 4”, on which wall and partition studs statutory
rest. (2) A support for studs. Regarding laws created by the enactment of legislation as
opposed to law created by court decisions.
sole proprietorship
A business owned and operated by one person. steering
The illegal practice of only showing clients property in
special agent certain areas.
A person employed to perform a specific task.
stigmatized property
special assessments (1) Property buyers or tenants may avoid for reasons
Taxes used for specific local purposes. unrelated to physical conditions or features. The most
common are those in which there have been murders,
special power of attorney suicides, or criminal activity. (2) Also known as psychologically
A written instrument where a principal confers limited impacted property.
authority upon an agent to perform certain prescribed acts on
behalf of the principal. stock cooperative
A corporation formed for the purpose of owning property.
specific lien
A lien placed against a certain property, such as a mechanic’s straight-line depreciation
lien, trust deed, attachment, property tax lien or lis pendens. A method of depreciation under which improvements are
depreciated at a constant rate throughout the estimated
specific performance useful life of the improvement.
An action brought in a court to compel a party to carry out
the terms of a contract. straight note
(1) A promissory note in which payments of interest only
specific plan are made periodically during the term of the note, with the
A particular development site or area of the general plan. principal payment due in one lump sum upon maturity.
(2) This may also be a note with no payments on either
square-foot method principal or interest until the entire sum is due.
The most common method used by appraisers and real estate
agents to estimate the cost of construction. Street Improvement Act of 1911
A law that empowers cities and counties to levy a special
standard depth assessment to repair streets.
Generally the most typical lot depth in the neighborhood.
studs
standard policy Vertical supporting 2" x 4" boards in the walls spaced 16" on
A policy of title insurance covering only matters of record. the center.
standard subdivision subagent
A land division with no common or mutual rights of either A broker delegated by the listing agent (if authorized by the
ownership or use among the owners of the parcels created by seller) who represents the seller in finding a buyer for the
the division. listed property.
628 California Real Estate Principles
GLOSSARY Subdivided Lands Law supply and demand, principle of (oferta y demanda)
A state law protecting purchasers of property in new sub- In appraising, a valuation principle stating that market value
divisions from fraud, misrepresentation or deceit in the is affected by intersection of supply and demand forces in the
marketing of subdivided property. market as of the appraisal date.
subdivision (subdivisión) surplus productivity, principle of
The division of land into five or more lots for the purpose of The net income that remains after the proper costs of labor,
sale, lease, or financing. organization, and capital have been paid, which surplus is
imputable to the land and tends to fix the value thereof.
Subdivision Map Act
The law that authorizes a city or county to control the orderly surrender
and proper development of the community. When a tenant voluntarily gives up a lease before the expiration
of its term.
subdivision system
Also known as a recorded map system. suspend
(1) Temporarily make ineffective. (2) The Real Estate
subject to clause Commisioner may suspend a real esate license for a violation
A buyer takes over the existing loan payments, without of the licensing law.
notifying the lender. The buyer assumes no personal liability
for the loan. swing loan
(1) A short-term loan used to enable the purchaser of a new
subjective value property to buy that property on the strength of the equity from
Value given for personal reasons. the property the purchaser is now selling. (2) Also known as
a bridge loan.
sublease (subarrendamiento)
Transfers less than the entire leasehold, with the original syndicate
lessee being primarily liable for the rental agreement. (1) Two or more individuals who come together for the business
purpose of managing an investment. (2) Also known as a real
subleasee estate syndicate.
The new person who has possession of a leased property.
T
sublessor
The original tenant of a leased property. They are still primar- takeout loan
ily liable for paying the rent to the owner for the sublease. The permanent loan that pays off a construction loan.
subordination clause tax deed
A clause in which the holder of a trust deed permits a A deed given to a successful bidder at a tax auction.
subsequent loan to take priority.
tax-deferred exchange
subrogation (subrogación) The trade or exchange of one real property for another without
Replacing one person with another in regard to a legal right the need to pay income taxes on the gain at the time of trade.
or obligation. The substitution of another person in place of
the creditor, to whose rights he or she succeeds in relation to tax delinquent property
the debt. The doctrine is used very often where one person Property that has unpaid taxes.
agrees to stand surety for the performance of a contract by
another person. tax lien (gravamen de tributación)
When income or property taxes are not paid.
substitution, principle of
Affirms that the maximum value of a property tends to be tax sale
set by the cost of acquiring an equally desirable and valuable Sale of property after a period of non-payment of taxes.
substitute property, assuming no cost delay is encountered in
making the substitution. tenancy
(1) The interest of a person holding property by any right or
succession title. (2) A mode or method of ownership or holding title to
The legal transfer of a person’s interest in real and personal property.
property under the laws of descent.
tenancy in common
When two or more persons, whose interests are not necessarily
equal, are owners of undivided interests in a single estate.
Appendix C Glossary 629
tenancy in partnership TIMMUR GLOSSARY
Ownership by two or more persons who form a partnership The mnemonic for Taxes, Insurance, Management,
for business purposes. Maintenance, Utilities, and Reserves.
tenant (arrendatorio ) T-intersection lot
A renter. A lot that is fronted head-on by a street. The noise and glare
from headlights may be detractors from this type of lot.
tender
An offer by one of the parties to a contract to carry out his or title (título)
her part of the contract. Evidence that the owner of land is in lawful possession.
tentative tract map title companies
A map of the proposed subdivision that is submitted to a Companies that perform a title search on the property and
planning commission for approval or disapproval. It is used to issue a title policy for the lender and the purchaser to ensure
make sure that the improvements, such as lot layouts, sizes, that there is a valid mortgage lien against the property and
and configurations; grading plans; traffic access and street title is clear.
alighments; storm drainage, sewers, and water facilities; and
other project features have been designed to conform to city title insurance (seguro de título)
or county general plans. The approval or disapproval of An insurance policy that protects the named insured against
the planning commission is noted on the map. Therefore, loss or damage due to defect in the property’s title.
a final map of the tract embodying any changes requested
by the planning commission is required to be filed with the title plant
planning commission. The storage facility of a title company in which it has accumu-
lated complete title records of properties in its area.
testate
A person who dies leaving a valid will. title report
A report which discloses condition of the title, made by a title
testator / testatrix (testador / testadora) company preliminary to issuance of title insurance policy.
A person who has made a will.
to let, to demise
third party (terceros) These phrases mean the same as to rent.
A person who may be affected by the terms of an agreement
but who is not a party to the agreement. topography
Nature of the surface of land; topography may be level, rolling,
tidelands and mountainous.
Lands that are covered and uncovered by the ebb and flow
of the tide. tort
A violation of a legal right, or a civil wrong such as negligence,
tight money libel, or nuisance.
An economic situation in which the supply of money is
limited, and the demand for money is high, as evidenced by townhouse
high interest rates. One of a row of houses usually of the same or similar design
with common side walls or with a very narrow space between
time adjacent side walls.
The duration of a loan.
township (municipio)
timely manner A grid of squares-each six miles by six miles (36 square
An act must be performed within certain time limits described miles).
in a contract.
township lines
time is of the essence clause Imaginary lines drawn every six miles north and south of the
A clause in a contract that emphasizes punctual performance base line to form a horizontal row or tier of townships.
as an essential requirement of the contract.
trade association
timeshare project A voluntary nonprofit organization of independent and
A form of subdivision of real property into rights to the competing business units engaged in the same industry or trade,
recurrent, exclusive use or occupancy of a lot, parcel, unit, or formed to help solve industry problems, promote progress, and
segment of real property, on an annual or some other periodic enhance service.
basis, for a specified period of time.
630 California Real Estate Principles
GLOSSARY trade fixture undue influence
An item of personal property, such as a shelf, cash register, Using unfair advantage to get agreement in accepting a
room partition or wall mirror, used to conduct a business. contract.
transferability unearned increment
The title must be marketable with an unclouded title. An increase in value to real estate that comes about from
forces outside the control of the owners, such as a favorable
trust account shift in population.
An account separate and apart and physically segregated
from broker’s own funds, in which broker is required by law unemployment rate
to deposit all funds collected for clients. The percentage of the people classified as unemployed as
compared to the total labor force.
trust deed
A security instrument that conveys naked legal title of real unenforceable contract
property. A contract that was valid when made but either cannot be
proved or will not be enforced by a court.
trust funds
Money or other things of value received from people by a Uniform Commercial Code (UCC)
broker to be used in real estate transactions. A code that establishes a unified and comprehensive method
for regulation of security transactions in personal property.
trustee (fideicomisario)
Holds naked legal title to property as a neutral third party unilateral contract (contrato unilateral)
where there is a deed of trust. A contract where a party promises to perform without expecta-
tion of performance by the other party.
trustee’s deed
A deed given to a buyer of real property at a trustee’s sale. unilateral rescission
Legal action taken to repeal a contract by one party when the
trustee’s sale other party has breached a contract.
The forced sale of real property, by a lender, to satisfy a
debt. unit-in-place method
Cost of units in the building as installed is computed and
trustor applied to the structure cost. The total costs of walls in place,
The borrower under a deed of trust. heating units and roof are figured on a square-foot basis,
including labor, overhead, and profit. This is the most
Truth in Lending Act (ley de Veracidad en los detailed method of estimating value.
Préstamos)
(1) A federal law that requires borrowers to be informed about unity
the cost of borrowing money. (2) Also known as Regulation Equal right of possession or undivided interest. For example,
Z. each tenant has the right to use the whole property. None of
the owners may exclude any co-owner from the property, nor
T-TIP claim any portion of the property for exclusive use.
The mnemonic for the four unities of joint tenancy: Time,
Title, Interest, and Possession. unjust enrichment
The situation where a person has received and keeps money
turnkey projects or goods that belongs to another. A lawsuit may be necessary
Investors purchase projects that are ready for occupancy. to get back the property.
two-year grace period unlawful detainer action
A period of time after the expiration of a license that renewal (1) The legal remedy to remove a tenant. (2) Also called an
is allowed as long as all real estate activity has ceased during action in ejectment.
that time and a late fee is paid at the time of renewal.
Unruh Civil Rights Act
U State law that prohibits discrimination by businesses.
underwriting UPTEE
The process of evaluating a borrower’s risk factors before the The mnemonic for the five ownership rights in the Bundle of
lender will make a loan. Rights: Use, Possess, Transfer, Encumber, and Enjoy.
undivided interest
The buyer receives an undivided interest in a parcel of land
as a tenant in common with all the other owners.
Appendix C Glossary 631
urban sprawl vesting GLOSSARY
The unplanned and often haphazard growth of an urban area The way title will be taken.
into adjoining areas.
Veterans Exemption
useful life Entitles a resident of California who has been in the military
The time frame when an asset (e.g., a building) is expected during wartime to take a $4,000 real estate tax emption. Be-
to remain economical to the owner. cause the Homeowners’ Exemption of $7,000 is greater, most
California veterans choose the Homeowners’ Exemption.
usury (usura)
The act of charging a rate of interest in excess of that void
permitted by law. An agreement which is totally absent of legal effect.
utility (utilidad) void contract
The ability of a property to satisfy a need or desire, such as A contract that has no legal effect due to lack of capacity or
shelter, income or amenities. illegal subject matter.
utility value voidable
The usefulness of the property to its owner. An agreement which is valid and enforceable on its face, but
may be rejected by one or more of the parties.
V
voluntary lien
vacancy factor When an owner chooses to borrow money, using the property
Loss of income because of a vacant unit. as security for the loan.
VA loan W
A loan made to qualified veterans for the purchase of real
property wherein the Department of Veterans Affairs wainscoting
guarantees the lender payment of the mortgage. The bottom portion of a wall that is covered with wood
siding; the top part is treated with another material.
valid
Legally binding waive
(1) To abandon. (2) To relinquish a right to enforce or
valid contract require anything.
(1) A binding and enforceable contract. (2) A document that
has all the basic elements required by law. waiver
The relinquishment or refusal to accept a right.
valuable consideration
Each party to a contract must give up something to make the walk-up
agreement binding. An apartment of more than one story with no elevator.
valuation warehousing
The process of estimating market value. The process of assembling into one package a number of
mortgage loans, prior to selling them to an investor.
value
(1) The present and future anticipated enjoyment or profit warranty deed
from the ownership of property. (2) Also known as worth. No longer used in California; a deed used to transfer title to
property, guaranteeing that the title is clear and the grantor
variance (variación) has the right to transfer it.
An exception granted to existing zoning regulations for
special reasons. WASTO
The mnemonic for five ways to acquire or convey property:
vendee Will, Accession, Succession, Transfer, or Occupancy.
The buyer under a contract of sale (land contract).
water
vendor Water on the surface flowing in a stream or underground
The seller under a contract of sale (land contract). (percolating) is real property. If it is taken and bottled, then
it becomes personal property.
vested
Owned by.
632 California Real Estate Principles
water pressure test Z
Water pressure can be tested by turning on all faucets and
flushing all toilets at the same time. zoning
The regulation of structures and uses of property within
water table selected districts.
The natural level at which water will be found, either above zoning ordinance
or below the surface of the ground. Regulates land use for individual projects.
wear and tear Z
Depreciation of an asset due to ordinary usage.
GLOSSARY
wetlands
Areas where water covers the soil, or is present either at or
near the surface of the soil all year or for varying periods of
time during the year, including the growing season.
will (testamento)
A written instrument whereby a person makes a disposition
of his or her property to take effect after their death.
witnessed will
Will usually prepared by an attorney and signed by the maker
and two witnesses.
wraparound loan
(1) A method of financing where a new loan is placed in a
secondary position; the new loan includes both the unpaid
principal balance of the first loan and whatever sums are
loaned by the lender. (2) Sometimes called an All-Inclusive
Trust Deed (AITD).
writ of execution
A legal document issued by a court forcing the sale of a
property to satisfy a judgment.
writ of possession
A legal action granted by the court to the landlord if the
tenant does not move out or answer a lawsuit.
X
“X”
A person who cannot write may execute a document by
placing an “X” (his or her mark) where the signature is
normally placed. Beneath the mark a witness then writes the
person’s name and signs his or her own name as a witness.
Y
yield (rédito)
(1) The interest earned by an envestor or an investment
(or by a bank on the money it has loaned). (2) Also called
a return.
yield rate
(1) The yield expressed as a percentage of the total
investment. (2) Also called rate of return.
Index
A age discrimination, 349 INDEX
Agency Relationship Disclosure Act, 111
abandonment confirmation of agency, 112, 115
easements, 64 disclosure requirements, 111-116, 182
homesteads, 69 election of agency, 112
leases, 168 agency
ABC, mnemonic explained, 242 agents, 106-108
ABC (Department of Alcoholic Beverage Control), 498 agreements, 117-118
abstract of judgment, 47, 61 coupled with an interest, 120
acceleration clauses, 283 creation, 117-120
acceptance defined and described, 106
contracts, 90 dual agency, 108
deeds, 74 election of agency, 112
accession, 71 escrow agents, 228
accretion, 71 estoppel, 118
accusations, 548 legal obligations of agents, 122-128
acknowledgments, 47, 74 legal obligations of principals, 129-132
action in ejectment, 170 principal parties 106
actual age of property, 382 ratification, 118
actual notice, 48 single agency, 107
ADA (American with Disabilities Act), 471 termination, 120
adaptation, 32 third parties, 107, 110, 128
addendums to agreements, 229 violations, 127
Adjustable Rate Mortgages (ARMs), 280 Agent Visual Inspection Disclosure, 183
adjusted cost basis, 264 agents
Administrative Procedure Act, 547 authority, 106
administrator or administratrix of wills, 70 buyer’s agents, 108
adobe clay soils, 423 defined and described, 106-111
ad valorem, 258 disclosure responsibility, 112
adverse possession, 64, 71 dual agents, 107-119, 517, 550
advertising duties and obligations, 182, 546, 550
“bait and switch” violations, 548 escrow agents, 228
bulk sale notice, 497, 499 fiduciary duty, 106, 108-109, 119
false advertising, 531 general agents, 106
faxing advertisements, 461 listing agents, 107
Federal Fair Housing Law, 469-475 powers of attorney, 106, 107
guidelines, 463 sales associates (associate licensees), 110-112,
HUD oversight, 472
legal cases regarding, 466 442-444, 530
logotypes, 472 selling agents, 108
name and license status disclosure, 464 special agents, 106
penalties for false advertising, 466 subagents, 107, 109
sign regulations, 466 agriculture
Truth in Lending Act, 344-345 agricultural properties, 494-495
affordability index, 11 Rangeland, Grazing Land, and Grassland
Protection Act, 410
California Real Estate Principles, 17th Edition, 2nd Printing
633
INDEX 634 California Real Estate Principles attachment liens, 61
attorneys-in-fact, 89, 107
“Right to Farm” ordnances, 189 autodialers, 461
tax exemptions, 260 automated underwriting, 339
AIDS, disclosure of stigmatized properties, 471 avulsion, 71
airspace rights, 31
AITDs (All Inclusive Trust Deeds), 306 BB
Alcoholic Beverage Control Act, 496, 498-499
alienation (due-on-sale) clauses, 287 backfill, 423
alluvial deposits, 71 “bait and switch” violations, 548
Alquist-Priolo Earthquake Fault Zoning Act, 197 balance, principle of, 370
amenities, 364 balloon payments, 278
American Land Title Association (A.L.T.A.), 248 bankruptcy, 79
American with Disabilities Act (ADA), 471 bare or naked legal title, 281
amortization, 277 baselines, 251
anchor bolts, 423 bearing walls, 425
annual percentage rate (APR), 276, 345 beneficiaries, as party in trust deed, 281
anticipation, principle of, 370 beneficiary statements, 241
Appraisal Institute (AI), 388 bequests, 69
appraisals bilateral contracts, 88, 93
certification, 374 bills of sale, 29, 94
cost approach, 378-383 blanket loans, 308
defined, 362-363 blighted areas, 366
income approach, 383 blockbusting, 471, 474, 483, 560
licensing of appraisers, 387-388 board foot, measurement of lumber, 425
process described, 371 book value, 383
purposes, 362 boot, 505
reconciliation or correlation of value, 375 bounds, 256
sales comparison method, 376-378 branch offices, 539
site analysis, 373-374 breach of contract, 96
Appraiser Qualifications Board (AQB), 387-388 liquidation of damages, 153
appreciation, 11 bridge loans, 310
appropriation of water, 31 British Thermal Units (BTUs), 422
appurtenances, 35 brokerages, 440
appurtenant easements, 62 business models, 440
APR (annual percentage rate), 276, 345 defined and described, 440
architecture, roof types, 426-427 operations, 442
ARMs (Adjustable Rate Mortgages), 280 selecting a brokerage, 457
arm’s length transactions, 377 brokers, 183
arranger of credit, 352 broker-asociates, 442
asbestos, 200 defined and described, 530
“as is” sales, 183 duties, 442
assemblage of property, 366 independent contractors, 451
assessment rolls, 259 licensing, 536
assignees, 95 trust accounts, 444-448
assignment brownfields, 509-510
contracts, 95 buildable acres, 410
leases, 169 building codes, 367, 401, 420-421
associate licensees, 110 uniform codes vs. local codes, 421
assumption clauses, 287
Index 635
building paper, 423 chain of title, 74 INDEX
building permits, 184, 509 Chapter 7 bankruptcy, 78
buildings, 372 child support obligors and payments, 540-541
Bulk Transfer Act, 496-498 Civil Rights Act (1866), 469
bundle of rights, 28 clean-up order, 192
Bureau of Real Estate Appraisers (BREA), 387 Clean Water Act (CWA) of 1977, 409
Business and Professions Code, 528 closing. See escrow
business climate, 366 closing costs, 236, 242, 264, 284, 297, 347
business opportunities, 495 Closing Disclosure, 345
buyer representation agreements, 118 clouds on title, 76
buyers, as parties in escrow, 236 CLUE Report, 193
Buyer’s Affidavit of Residency, 219 COALD, mnemonic explained, 122
buyer’s agents, 108 coastal development, 405, 409
coastal wetlands, 409
C Code of Ethics and Standards of Practice of the
National Association of REALTORS® , 388, 467
calendar year vs. fiscal year, 259 cold calling, 460
California Association of REALTORS® (C.A.R.), collateral, 274, 303
12, 143, 229, 468 Combined Hazards Book, 200
California Coastal Act, 408 commercial acres, 410
California Department of Child Support Services, 540 commercial banks, 301, 311, 323, 328
California Environmental Quality Act (CEQA), 412 commercial e-mail messages, 462
California Fair Employment and Housing Act commingling of funds, 129, 446, 550
(Rumford Act), 473-474 Commissioner, California Real Estate, 416-418
California Farm and Home Purchase Program Commissioner of Corporations, 244-245
(Cal-Vet) loans, 293 commissions, 71-117
California Land Title Association (C.L.T.A.), 248 agreement, 121
California Residential Purchase Agreement and Joint commission split, 458-459
Escrow Instructions (RPA-CA), 143 compensation for referral of customers, 554
California Sales and Use Tax, 498 defined, 129, 220
California Statute of Frauds, 158 disclosure, 220
California Usury Law, 276 escrow companies and payment, 228, 244, 534
Cal-Vet (California Veterans Loans), 298
CAN-SPAM Act, 462-463 net listings, 122
capital gains, 264, 503 safety clauses, 132
capitalization of income, 384 trust funds, 446
capitalization rate, 386 common interest developments (CIDs), 418
capital losses, 504 common law dedication and public use, 78
carbon monoxide detectors, 211, 215 community apartment projects, 205, 418, 420
carry-back financing, 286 community property, 45-47
caveat emptor, term explained, 181 company dollar, 449
CC&Rs (Conditions, Covenants, and Restrictions), comparable properties, 377
66, 418, 419, 467 Comparative Market Analysis (CMA), 461
ceilings, residential ceiling height measurement, 420 compensating balances, 329
CEQA (California Environmental Quality Act), 412 competition, principle of, 368
Certificate of Eligibility for VA Loans, 297 Comprehensive Loss Underwriting Exchange, 193
Certificate of Occupancy for Mobile Homes, 487 concurrent ownership, 42-47
Certificate of Reasonable Value (CRV), 297 community property, 45-47
certificate of title, 246, 487 joint tenancy, 43
636 California Real Estate Principles
INDEX partition action, 43, 79 execution, 88
tenancy in common, 42 executory contracts, 88
tenancy in partnership, 47 express contracts, 88
with right of survivorship, 45 implied contracts, 88
condemnation, 80 listings, 93
conditional commitments from FHA, 294 management contracts, 511
conditional delivery of transfer documents, 229 novation, 95
conditional use permits, 407 offers, 90
condition precedent, 66 options, 92
Conditions, Covenants, and Restrictions (CC&Rs), 67 performance, 95
condition subsequent, 37 ratification, 118
condominiums, 419 requirement for valid contract, 89-93
Confirmation Real Estate Agency Relationships, 112 specific performance, 95
conflict of interest, 553 statute of frauds, 93-94
conforming loans, 290 Statute of Limitations, 97
conformity, principle of, 369 termination, 90
consideration, 92 time issues, 154
acceptable consideration, 92 title and vesting, 153
contracts, 92-93 unenforceable contracts, 89
love and affection, 78 unilateral contracts, 88
construction and building styles, 428-429 unilateral rescission, 96
construction loans, 311 valid contracts, 89
constructive notice, 48 waivers, 95
Consumer Credit Protection Act of 1968, 344 writing, 93-94
Consumer Price Index (CPI-W), 166 contribution, principle of, 370
consumer protection laws, 181, 327 conversion, 129
contaminated property, 189 conveyance, 72
contingencies, 152-153 cooperating brokers, 108
continued misrepresentation, 550 corner influence, 365
contract rents, 384 corner lots, 373
contracts, 88-97 corporate real estate licenses, 531
acceptance, 90-91 corporations, 244-245
assignment, 95 Corporations Code, 553
bilateral contracts, 88 cost basis, 264
binding contracts, 89 counteroffers, 90
breach of contract, 96 covenants, 66
California Residential Purchase Agreement and crawlspace, 423
credit reports, 293, 338
Joint Escrow Instructions (RPA-CA), 143 credit scores, 338
closing and occupancy in, 152 credit unions, 331
consideration, 92 crops, 33-34
contingencies in, 152-153 cubic-foot method of cost estimation, 380
contract of sale, 282 cul-de-sacs, 373
counteroffers, 90 customers. See clients
defined and described, 88
discharge, 95 D
dispute resolution, 153
employment contracts, 117 DBA (doing business as), 78
escrow and purchase contracts, 228
death, disclosure of stigmatized properties, 191
deciduous plants, 425
Declaration of Homestead, 68 Index 637 INDEX
Declaration of Restrictions, 66
Deed of Reconveyance, 281 deregulation, 301, 326
deeds desk cost, 449
acceptance, 90 deterioration, 367, 381
all-inclusive trust deeds (AITDs), 306 developers, 219
fictitious trust deeds, 281 devises, 69
first trust deeds, 298 directional growth, 367
gift deeds, 78 disabilities, 471
grant deeds, 72-76 discharge of contracts, 95
junior trust deeds, 298 discharge of salesperson for violation, 555
partial reconveyance, 308 disclosure, See Unit 7
parties to trust deeds, 281 discounting a note, 305
priority of recording, 49, 298 discount rates, 325
quitclaim deeds, 76 discrimination, 473-474
reconveyance, 281 dishonest dealing, 550
recording, 74, 77 disintermediation, 326
sheriff’s deeds, 78, 286 dispute resolution, 153
tax deeds, 260 diversity, See Unit 1
transfer, 72 DMV (Department of Motor Vehicles), 487
trust deeds, 281 Doctrine of Correlative User, 30
trustee’s deeds, 284 documentary transfer tax, 262
warranty deeds, 78 dominant tenement, 62
deeds of trust. See trust deeds under deeds “do-not-call” and “do-not-fax” rules, 460-461
default, 76 down payments, 339
defects, 128, 183 down zoning, 66
deferred maintenance, 381 drug-lab disclosure, 192
deficiency judgments, 284 dry rot, 129, 381
defined channel, 30 drywall, 425
definite termination date, 118, 128, 550 dual agency, 107-108, 550
delinquent tax accounts, 260 violations, 550
demand, 368 due diligence, 117, 142
demand for pay-off, 241 due-on sale (alienation) clauses, 287
demand sources vs. supply sources, 368 duress, 92
demise, 158 DUST, explained, 365
demographics, 15
Department of Alcoholic Beverage Control (ABC), E
496, 498
Department of Housing and Community Development earnest money, 93, 127
(HCD), 487-489 earthquake
Department of Motor Vehicles (DMV), 487 disclosure of natural hazard, 198-204
Department of Veterans Affairs, VA Loans, 296, 298 water heater’s security certification, 212-213
depository institutions, 326, 328 easements, 35, 41, 62-65
deposit receipts, 46, 142 easements in gross, 63
depreciation, Easton v. Strassburger, 128, 182
cost basis, 264, 383 ECOA (Equal Credit Opportunity Act), 347
straight line, 502 economic index, 280
taxes, 501 economic life, 382
depth tables, 365 economic obsolescence, 382
economic rent, 384
education, 529, 536, 542
638 California Real Estate Principles
INDEX effective age, 382 proration, 239
effective demand, 364 reconciliation statements, 243
effective gross income, 384 requirements for valid escrow, 229
egress, 62 settlement during, 242
elevation sheets, 425 termination, 244
eLicensing, 541 escrow companies, 228, 244
emancipated minors, 89 estates
emblements, 34 condition subsequent, 36
eminent domain, 80, 402 defined, 35-41
Employment Development in fee, 36
Department (EDD), 457 fee simple estates, 36
employees, defined and described, 442 freehold estates, 39
employing or paying an unlicensed of inheritance, 36
person, 534, 554 leasehold estates, 40-41, 50, 169
employment agreements, 452 life estates, 37-39
employment relationships, 449 perpetual estates, 36
encroachments, 67 in remainder, 39
encumbrances, 58 reserving a life estate, 38
energy conservation, disclosure, 215-216 in reversion, 38
energy efficiency, 296, 422, 486 types, 35-41
Energy Efficient Ratio (EER), 422 estate tax, 507
enforcement of real estate law, 546 estoppel, defined, 65, 117-119
environmental forces, 365-366 ethics, 467
environmental hazards, disclosure of, 189-190 et ux., 73
environmental impact reports (EIRs), 412 evictions, 167, 168, 170-171
environmentally sensitive lands, 408 examinations, 535-536
Environmental Protection Agency (EPA), 201 exchanges (tax-free exchanges), 504-505
Equal Credit Opportunity Act (ECOA), 347 exclusive agency listing, 121
Equifax® credit reporting agency, 338 exclusive authorization and right-to-sell listing, 121
equitable title, 281 Exclusive Right to Represent Buyer Agreement, 118
equity, 262 execution
buildup, 500 contracts, 88
defined, 262 trust deeds, 281
home equity loans, 302 execution sales, 79
equity funds (down payments), 339 executor or executrix of wills, 70
erosion, 71 executory contracts, 88
escheat, 80 Experian® credit reporting agency, 338
escrow express contracts, 88
agents, 228 express covenant, 78
closing, 243 express (written) agreements, 63
commissions, 129
complete escrow, 232-233 F
conditional delivery, 232
defined and described, 228 Fair Credit Reporting Act, 348
document preparations, 239 Fair Housing Act, 469
impound accounts, 243 fair housing laws, 469-475
instructions, 228-229, 232-233 fair market value, 363-364
open escrow, 238 false advertising, 531
principles and rules, 233 false promise violations, 549
Fannie Mae, 334
Index 639
faxes, client prospecting, 461-462 formaldehyde, 184, 200-201
Federal Deposit Insurance Corporation (FDIC), 326
Federal Emergency Management Agency formal hearings, 547
(FEMA), 194
Federal Home Loan Banks (FHL Banks), 336 forms
Federal Housing Administration (FHA), 293
FHA loans, 293, 294 Alienation or Due on Sale Clause, 288
federally chartered banks, 327
Federal Open Market Committee (FOMC), 324 All-Inclusive Trust Deed or Wrap-Around
Federal Reserve Bank System (the Fed), 322
Federal Reserve Board, 294, 346 Mortgage, 307
fee simple estates, 36
fee simple absolute, 36 California Residential Purchase Agreement and Joint
fee simple, subject to condition subsequent, 36
FHA, 293 Escrow Instructions (RPA-CA), 144-151
FICO® scores, 338
fictitious business names, 73 Carbon Monoxide Detector Notice, 214
Fictitious Business Name Statement, 531
fictitious persons as grantees, 73 Confirmation Real Estate Agency
fictitious trust deeds, 281
fiduciary duties, 106-109 Relationships, 115
Fifth Amendment of U.S. Constitution, 81, 402-403
final tract maps, 413 Counteroffers, 155
financial institutions
commercial banks, 301 Disclosure Regarding Real Estate Agency
credit unions, 331
institutional lenders, 328, 329 Relationships, 113-114
insurance companies, 331
mutual savings banks, 330 grant deed form, 75
non-institutional lenders, 331
savings and loans, 325 ,326, 329-330 Independent Contractor Agreement, 453-456
thrifts, 329
financing statements, 496-498 Installment Note - Interest Included (Balloon
finders fees, 345
fingerprints, 539 Payment), 279
FIRREA (Congress of the Financial Institutions Reform,
Recovery and Enforcement Act), 326 Lead-Based Paint Hazards Disclosure, 202-203
first trust deeds, 298
fiscal year and taxation, 259 Manufactured Home Transfer Disclosure
fixed interest rates, 276
fixtures, 31 Agreement, 490-492
flag lots, 374
flood hazard boundary maps, 194 Market Conditions Advisory, 217
floods, 194
floor area ratio (FAR), 509 Mello-Roos Disclosure, 206
footings, 423
Foreign Investment in Real Property Tax Act Move In /Move Out Inspection, 512-516
(FIRPTA), 209
Natural Hazard Disclosure Statement
(NHD), 195-196
Notice of Your “Supplemental” Property
Tax Bill, 208
Option Agreement, 157
Purchase Agreement Addendum, 230-231
quitclaim deed form, 77
Receipt for Public Report, 416
Request for Notice of Delinquencies Under
Section 2924e Civil Code, 285
Residential Lease or Month-to-Month Rental
Agreement form, 160-165
Residential Listing Agreeement 123-127
Seller’s Affidavit of Nonforeign Status, 210
Supplemental Statutory and Contractual
Disclosures, 190
Transfer Disclosure Statement, 186-188
Trust Bank Account Record for all Trust
Funds, 448
Uniform Residential Appraisal Report, 389-390d
Uniform Residential Loan Application, 340-343d
VA Loan Summary Sheet, 299-300 INDEX
Water Heater and Smoke Detector Statement
of Compliance, 213
INDEX 640 California Real Estate Principles hold harmless clauses, 91
holdover tenancy, 41
Wraparound mortgage rider, 307 holographic will, 70
“For Sale” sign regulations, 466-467 Home Equity Conversion Mortgages (HECM), 296
foundations, 182 home equity line of credit (HELOC), 302-304
franchise investment law, 553 home equity loans, 302, 329
fraud, 91 homeowner’s associations, 418
Freddie Mac, 336 homeowners’ exemption, 260
freehold estates, 36 Homeowner’s Guide to Earthquake Safety, 200
fructus industriales, 34 homesteads, 68-69
fructus naturales, 34 houseboats, 493
fugitive substances, 31 household hazardous waste, 201
full cash value, property assessment, 257 Housing and Economic Recovery Act (HERA), 327
functional obsolescence, 381 Housing and Urban Development (HUD), 218, 293
functional utility, 364 Equal Housing Opportunity Notice, 469-471
Fair Housing Act, 469-471
GG Housing Financial Discrimination Act (Holden Act),
350, 478
GDP (Gross Domestic Product), 7 Humboldt Baseline and Meridian, 251, 253
general agents, 106 hypothecation, 274
General Plan, 404
general power of attorney, 106 II
gentleman farmer syndrome, 494
genuine assent, 91-92 illegal controlled substance disclosure, 189, 192
gift tax, 507 implied contracts, 88
Ginnie Mae, 336-337 implied agency, 117, 119
good cause evictions, 518 implied warranty of habitability, 167
goodwill, 495 impound accounts, 243
grace period, 542 improvements, 31
Graduated Payment Mortgage (GPM), 295 income, from investment properties, 505
grandfather clauses, 67, 407 incompetence, 552
grant deeds, 72 increased deposits, 152
granting clause, 73 independent contractors, 450-451
grantors and grantees, 72 industrial use disclosure, 192
Gross Domestic Product (GDP), 7 infill development, 509
gross leases, 159 inflation, 11, 326, 366, 378, 500
gross rent, 384, 386 ingress easements, 62
gross rent multiplier, 386 inheritance
ground leases, 159 community property, 44
guarantee of title, 247 succession, 70
tax, 507
H wills, 69
initial deposits, 152
handicaps, 470-475 innocent misrepresentation, 91, 130
hazardous waste, 201 installment sales, 282, 504
headers, 423 institutional lenders, 328
health and sanitation regulations, 415 instruments, 72
heating/cooling systems (HVAC), 422 insulation, 215, 422
HERS booklet (Home Energy Rating System), 204
highest and best use, principle of, 365, 369, 373, 376
Holden Act, 350, 475
holders in due course, 275
insurance Index 641 INDEX
fire insurance, 242
flood disaster insurance, 194 L
hazard insurance policies, 264
Mutual Mortgage Insurance (MMI), 294 land description, 250
private mortgage insurance (PMI), 290 landlords (lessors), 158
short rate cancellation fees, 242 landmarks, 256
title insurance, 74, 97, 153, 218, 247 land projects, 418
workers’ compensation coverage, 457 latent, 183
intended use, 363 lawful objective, 92
interest and interest rates, 11 lawsuits
accrued interest, 277, 304 for money damages, 96
annual percentage rate (APR), 276, 345 for specific performance, 96-97
discount rate, 325 lead-based paint, 184, 200-201, 204
fixed interest rates, 276 leasehold estates, 40-41
index rate, 304 periodic tenancy, 40
loans, 276 tenancy at sufferance, 41
margin, 280 tenancy at will, 41
points, 280 tenancy for years, 40
usury, 276 tenancy, 40
interest-only loans, 277 lease options, 156
interim loans, 311 leases
Interim Occupancy Agreements, 152 assignment, 169
interim use, 369 defined, 156
interior lots, 373 duration, 158-159
intermediation, 326 evictions, 167-174
internal rate of return (IRR), 386 gross leases, 159
Interstate Land Sales Full Disclosure Act, 220 ground leases, 159, 173
intestate, 46, 70 implied warranty of habitability, 167
inventory of housing units, 11 landlord’s rights, 156, 158-159, 166-167
inverse condemnation, 80 net leases, 159
investing in real estate, 500-501 percentage leases, 159
investment companies, 333 proprietary leases, 159
involuntary liens, 59 rent payments, 159
IRR (internal rate of return), 386 residential leases, 160-165
sandwich leases, 169
J security deposits, 166
short- vs. long-term leases, 159
joint tenancy, 43 subleases, 169
Jones v. Mayer, 469 surrender, 170
judgments, 61 tenant’s rights, 168
jumbo loans, 290 termination, 169-171
junior loans, 301 transfer, 169
just compensation, 80 types, 159
legacy, 71
KK lender compensation disclosure, 350
lending institutions, 328-333
key lots, 374 lessors (landlords), 158, 167, 518
kiosks, 425 less-than-freehold estates. See leasehold estates
leverage, 501
L
INDEX 642 California Real Estate Principles listing brokers, 107
littoral owners, 30
licenses and licensing, 13 LLCs (limited liability companies), 441
advertising and license status, 463-466 Loan Estimate, 347, 352
application process, 536 loans. See also mortgages
appraisal licenses, 388, 391 acceleration clauses, 283
associate licensees, 110 application process, 337
branch offices, 531 assumption, 93
broker licenses, 530-531 balloon payments, 278
CalBRE oversight of licensing, 530 beneficiary statements, 241
contractor licensing, 421 blanket loans, 308
corporate real estate licenses, 531 Cal-Vet loans, 298
education requirements, 536 clauses, 283-301
eLicensing, 541 collateral, 274
employing or paying an unlicensed person, 554 conforming loans, 290, 312
escrow company licensing, 244 construction loans, 311
examination for real estate license, 537-539 conventional loans, 289-290
exemptions, 534 debt consolidation loans, 287
legal status of licensed salespersons, 450 default, 284
liquor licenses, 498 demand for pay-off, 241
mobile home sales requirements, 488-489 deregulation, 301
out-of-state applications, 540 electronic application and processing, 339
partnership licenses, 531 escrow and new loans, 242
penalties for lack, 534 escrow and existing loans, 241
real estate licenses, 530-533 fully-amortized fixed-rate notes, 277
renewal, 540-545 fully-amortized installment loans, 277
requirements, 531, 533-538 governmental loans, 293-298
restricted licenses, 535-537 hard money loans, 287
revocation, 546-548 home equity loans, 302
salesperson licenses, 532, 536 hypothecation, 274
liens, 58-62 interest-only loans, 277
attachment liens, 61-62 interest rates, 276
lis pendens, 61 interim (bridge or swing) loans, 311
mechanic’s liens, 59-61 jumbo loans, 290
Mello-Roos liens, 207 junior loans, 301
mortgages, 59 long-term loans, 311
specific vs. general, 59 Minimum Property Requirements (MPRs), 420
tax liens, 61 negotiable instruments, 275
voluntary vs. involuntary, 58-59 non-conforming loans, 290
life cycle of properties, 368 open-end loans, 308
life estates, 37-39 package loans, 308
life insurance companies, 331 partially amortized installment notes, 278
like-kind property, 505 prime loans, 290
limited liability companies (LLCs), 441 promissory notes, 275
linear foot measurement, 425 purchase money loans, 286
liquidated damages, 153 reinstatement, 284
liquidation bankruptcy, 79 repayment plans, 276
liquor licenses, 496, 498 right of rescission or cancellation, 346
lis pendens (pendency of action), 61
listing agents, 107
The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
Discover the best professional documents and content resources in AnyFlip Document Base.
Search
Principals of Real Estate
- 1 - 50
- 51 - 100
- 101 - 150
- 151 - 200
- 201 - 250
- 251 - 300
- 301 - 350
- 351 - 400
- 401 - 450
- 451 - 500
- 501 - 550
- 551 - 600
- 601 - 650
- 651 - 660
Pages: