Glossary of Real Estate Terms


ABSTRACT

A written history of the title to a parcel of real estate as recorded in a Land Registry Office.


ACRE

A measure of land equalling 160 square rods, or 4,840 square yards, 43,560 square feet, or .4 hectares.


ADVERSE POSSESSION

When an individual, not the owner, takes actual possession of the property, hostile to, and without the consent of the owner.


AGENCY

The relationship between principal and agent which arises out of a contract, written or oral wherein an agent is employed and authorized by the principal to represent him/her in business transactions with a third party.


AGENT

One who is authorized by a principal to represent him/her in business transactions with a third party, In the real estate profession it refers to a licensed brokerage.


AGREEMENT for SALE

An agreement for the purchase of real property wherein the purchase price is paid in installments and title is not conveyed to the purchaser until the purchase price is paid in full.


AGREEMENT OF PURCHASE AND SALE

A contract by which one party agrees to sell and another agrees to purchase.


AGREEMENT TO LEASE

A contract by which one party agrees to rent real estate to another party for a rental fee or other compensation.


AMORTIZATION

The gradual retirement of a debt by means of partial payments of the principal at regular intervals.


APPRAISAL

The act of process of estimating value.


APPURTENANCE

Somethimg which is outside the real propety itself, but belongs to the land and is joined thereto. It adds to greater enjoyment of the land. A right-of-way is an appurtenance.


ASSESSED VALUE

A valuation placed upon property as a basis for municipal taxation.


ASSESSOR

An official who has the responsibility of determining assessed value for tax purposes.


ASSUMPTION OF MORTGAGE

The taking of title to property by a grantee, wherein grantee assumes liability for an existing mortgage against a property and becomes personally liable for the payment of such mortgage debt.


AUTHORITY

The legal power or right given by a principal and accepted by the agent to act on the principal's behalf in business transactions with a third party.


BALANCE DUE ON COMPLETION

The amount of money the purchaser will be required to pay to the vendor to complete the purchase, after all adjustments have been made.


BREACH OF CONTRACT

Failure to fulfill an obligation under a contract. Breach confers a right of action on the offended party.


BROKER

See Real Estate Broker.


BUILDING CODES

Regulations established by local governments providing for structural requirements for building.


BUILDING LINE

A line fixed at a certain distance from the front and/or sides of a lot, beyond which no building can project.


BUILDING PERMIT

A document issued by the municipal authority certifying the blueprints for construction and allowing work to commence.


BUNDLE OF RIGHTS

A concept in which rights of possession, use, enjoyment, and disposition comprise the rights of ownership.


BUSINESS

Any undertaking for the purpose of profit, including any interest in any such undertaking.


CAVEAT EMPTOR

"Let the buyer beware." The buyer must examine the goods or property he/she is buying and he/she, therefore, buys at his/her own risk.


CHARGE

The name given to a mortgage document when title is registered under the Land Titles Act.


CHATTEL

Personal property which is tangible and moveable.


CLOSING

See "Date of Completion."


CLOUD ON TITLE

Any encumbrance or claim that affects title to real property.


COMMISSION

Remuneration paid to an agent on sale or lease of property, usually as a percentage of the amount involved.


COMMITMENT

See Mortgage Commitment.


COMMON LAW

That part of the law formulated, developed and administered by the old common law courts, based originally on common customs and mostly unwritten.


COMPENSATION

Payment or reward for performance of service.


COMPOUND INTEREST

Interest on both the original principal and on interest accrued.


CONDITION PRECEDENT

A condition in a contract which calls for the happening of some event, or performance of some act, before the agreement become binding on the parties.


CONDITION SUBSEQUENT

A condition referring to a future event upon the happening of which the contract becomes no longer binding on the parties.


CONDOMINIUM

The fee ownership of a specified amount of space (the unit) in a multiple dwelling or other multi-occupancy building with tenancy-in-common ownership of portions used jointly with other owners (the common elements.)


CONSIDERATION

Something of value given by a promisee to a promisor to make the promise binding.


CONSTRUCTION LIEN

See Mechanics Lien


CONTRACT

A contract is a legally binding agreement between two or more capable persons for consideration or value, to do or not to do some lawful and genuinely intended act. If affecting real estate it must be in writing.


CONVEYANCE

The transfer of an interest in property from one person to another.


COVENANT

An agreement contained in a deed and creating an obligation. It may be positive, stipulating the performance of some act. It may be negative or restictive, forbidding the commission of some act.


CREDITOR

A person to whom a debt is owed by another person termed the debtor.


DAMAGES

Compensation or indemnity for loss owing for breach of contract, or a tort (civil wrong.)


DATE OF COMPLETION

The date specified in the agreement of purchase and sale, when the purchaser is to deliver the balance of money due and the vendor to deliver a duly executed deed and vacant possession of the property (unless otherwise agreed.)


DEED

An instrument in writing, duly executed and delivered, that conveys title or an interest in real property.


DEED RESTRICTION

An imposed restriction in a deed for the purpose of limiting the use of the land.


DEFAULT

Failure to fulfill an obligation.


DEPOSIT

Payment of money or other valuable consideration as pledge for fulfillment of contract.


DEPRECIATION

A loss in value due to any cause.


DESCRIPTION

A legal identification of land or premises.


DEVELOPER

One who engages in the subdivision or improvement of land.


DOR

See Notice DOR.


DOMINANT TENEMENT

The estate (i.e. property) which derives benefit from an easement over a servient tenement, as in a Right-of-way.


DUPLEX

A two-family dwelling or house.


DWELLING

Residence.


EASEMENT

A right enjoyed by one landowner over the land of another.


ECONOMICS

The study of how persons and society choose resources which have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future, among various people and groups in society.


ENCROACHMENT

The unauthorized extention of the boundaries of land.


ENCUMBRANCE

Outstanding claim or lien recorded against property or any legal right to the use of the property by another person who is not the owner.


EQUITY

The interest an owner of real property has in its total assets after allowing for encumbrances and creditors' claims.


EQUITY OF REDEMPTION

The right of the mortgagor to reclaim clear title to the property upon full repayment of the debt.


ESCHEAT

The reversion of property to the state in the event the owner thereof dies leaving no will and having no legally qualified heir to whom the property may pass by lawful descent.


ESTATE

An interest in land.


ESTOPPEL

A bar to alleging or denying a fact because of one's own previous actions or words to the contrary.


ETHICS

Rules of behaviour made and accepted by business to provide fair and moral practice.


EXCLUSIVE LISTING

The giving of the sole right to offer the described property for sale according to the terms of the agency agreement.


EXPRESS AUTHORTIY

Authority delegated by the principal which clearly sets forth in exact, plain, direct and well-defined limits those acts and duties which the agent is empowered to perform on behalf of the principal, e.g. an exclusive listing.


EXPROPRIATION

Taking of private property by the state for public use, with fair compensation to the owner, through the exercise of the right of eminent domain.


EXTRAS

Chattels included in the sale.


FEE SIMPLE

The highest estate or absolute right in real property.


FIXTURES

Permanent improvements to property that may not be removed at the expiration of the term of lease or tenure.


FLASHING

Sheet metal or other material used in roof and wall construction to shed water.


FOOTING

The widened section, usually concrete, at the base or bottom of a foundation wall, pier or column.


FORECLOSURE

Remedial court action taken by a mortgagee, when default occurs on a mortgage, to cause forfeiture of the equity of redemption of the mortgagor.


FRAMING

The rough timber work of a house, including the flooring, roofing, partitioning, ceiling and beams.


GRANT

A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in land.


GRANTEE

The party to whom an interest in real property is conveyed.


GRANTOR

The party who conveys an interest in real property by deed.


GDS RATIO

Gross Debt Service Ratio. Lender's allowable ratio of gross monthly payment to gross monthly income of mortgage applicant.


GUTTER

An eavestrough used to convey rainwater from the roof to the downspout.


INDEMNIFY

To secure against hurt, loss or damage; to make compensation to for incurred hurt, loss or damage.


INDENTURE

A document or deed, usually in duplicate, expressing certain objects between the parties.


INFANT

A person who is a minor, under the age of eighteen, and thus incapable of the independent judgment necessary to undertake a legal obligation.


INJUNCTION

A judicial process or order requiring the person to whom it is directed to do, or refrain from doing, a particular thing.


INSTRUMENT

A form of written legal document.


INTEREST RATE

The percentage which is charged for the use of borrowed money.


INTESTATE

A person who dies without a will, or leaves one which is defective in form, in which case his estate descends by operation of law to his heirs or next of kin.


IRREVOCABLE

Incapable of being recalled or revoked; unchangeable, unalterable.


JOINT TENANCY

Ownership of land by two or more personswhereby, on the death of one, the survivor or survivors take the whole estate.


JOIST

One of a series of horizontal wood members used to support a floor, ceiling or roof.


JUDGEMENT

The decision of the Court.


LANDLORD

The persosn from whom another holds tenancy.


LEASE

Contract between landlord (lessor) and tenant (lessee) for the occupation or use of the landlord's property by the tenant for a specified time and for a specified consideration (rental).


LEGAL DESCRIPTION

A written description by which property can be located, definitely.


LESSEE

Tenant under a lease.


LESSOR

The person who grants use of property under lease to a tenant.


LIEN

A right, given to a creditor, creating an interest in the real property until the debt is discharged.


LINTEL

A horizontal structural member (beam) that supports the load over an opening such as a door or window.


LIS PENDENS

A legal document giving notice that an action or proceeding is pending in the courts which affects the title to the designated property.


LISTING

An oral or written agreement between a property owner and a broker authorizing the brokerage to offer the owner's real property for sale or lease.


MARKETABLE TITLE

A title which a court of equity considers to be so free from defect that it will enforce its acceptance by a purchaser.


MARKET VALUE

(Formal Definition)The highest price in terms of money, which the property will bring to a willing seller if exposed for sale on the open market allowing a reasonable time to find a willing purchaser, buying with the knowledge of all the uses to which itis adapted and for which it is legally capable of being used, and with neither party acting under necessity, compulsion or peculiar and special circumstances.


MECHANIC'S LIEN (CONSTRUCTION)

A claim filed in the land registry office by an individual, or company, for labour or material, or both, supplied for the improvement of the property.


METES AND BOUNDS

A system of land description whereby all boundary lines are set forth by use of terminal points and angles - mete referring to a limit or limiting mark, and bounds referring to boundary lines.


METROPOLITAN AREA

That area which includes not only the entire chief urban core of a city (the central city) but also the outlying suburbs which are appended thereto.


MILL

One-tenth of one cent, a measure used to indicate the property tax rate, e.g. a tax rate of one mill per dollar is the same as 0.10 per cent of the assessed value.


MINOR

A person who is under the age of legal competence, which is eighteen years in Ontario .


MORE OR LESS

Term often found in a property description intended to cover slight, unimportant or unsubstantial inaccuracies of which both parties are willing to assume the risk.


MORTGAGE

A conveyance of property to a creditor as security for payment of a debt with a right of redemption upon payment of the debt.


MORTGAGEE

The one to whom property is conveyed as security for the payment of a debt; the lender or creditor.


MORTGAGOR

The one who makes the mortgage; the borrower or debtor.


MORTGAGE COMMITMENT

A formal indication, by a lending institution that it will grant a mortgage loan on property, in a certain specified amount and on certain specified terms


MULTIPLE LISTING

An arrangement among brokerages, usually real estate board members, whereby each brokerage presents its listings to the other members, who may negotiate the transaction.


NOTICE DOR

Notice filed in court by mortgagor under foreclosure proceedings that he desires an opportunity to redeem.


OFFER AND ACCEPTANCE

The basic requisite of any contract is a proposal by one party, called the offeror, to another party, called the offeree, to accept the basic terms of the Agreement. If the offeree indicates assent to the proposal, there is an acceptance and thecontract will bind both parties to its terms.


OPEN LISTING

A listing given to any numer of brokerages without liability to compensate any except the one who first acquires a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer; the sale of the property automatically terminates the listing.


OPTION

A right given by the owner of property to another (for valuable consideration) to buy certain property within a limited time at an agreed price.


PERSONAL PROPERTY

All property, except land and the improvements thereon.

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