An A-frame is a post–World War II–style house built with a frame in the shape of one or more 'A's.' The steep roof typically extends nearly to the ground on both sides of the structure, offering structural strength and a distinctive, triangular appearance.
Air conditioning (A/C) refers to the system or process of controlling the temperature, humidity, and air quality of an indoor space to provide comfort. A/C systems are widely used in both residential and commercial real estate properties to maintain a comfortable living and working environment.
A AAA-Tenant, also referred to as a Triple-A Tenant, is a highly creditworthy and dependable tenant that typically includes large, established corporations or government entities. These tenants are deemed exceptionally low risk for defaulting on lease payments, making them highly desirable for property owners and investors.
Abandonment in real estate refers to the voluntary surrender of property, owned or leased, without naming a successor. Such property often reverts to an entity holding a prior interest or, if no owner is apparent, to the state. Abandonment does not negate obligations unless acknowledged by the obligee.
Abatement refers to a reduction in the amount, intensity, or duration of something. In the context of real estate, it typically applies to decreases in taxes, rents, or environmental harm.
In real estate, 'ABLE' refers to the financial capability of a buyer to complete a transaction. Being ABLE indicates that the buyer has the necessary funds or financing arrangements to proceed with the purchase of a property.
An abnormal sale refers to a property transaction that does not represent typical market conditions and hence, does not reflect the property's market value.
An abode refers to the place where someone lives. It can range from a simple shack to an opulent mansion.
Abrogate in real estate refers to the act of abolishing, withdrawing, canceling, retracting, revoking, or repealing certain laws, provisions, or regulations that govern property, land use, or zoning.
An absentee owner is a person or entity that owns a property but does not reside in or personally manage the property. They often delegate these tasks to property management companies or other individuals.
An absolute auction is a type of auction where the property is sold to the highest bidder without any minimum price requirement, meaning there's no reserve price set.
An Absolute Net Lease is a highly exhaustive type of Triple-Net Lease in which tenants bear almost all property-related expenses.
Absolute Net Rent is a leasing structure where the tenant is responsible for all property-related expenses, including taxes, insurance, and maintenance, leaving the landlord with no financial obligations related to the property.
Absolute Title refers to a clear and unequivocal ownership of property, devoid of any liens, judgments, or other encumbrances. It confirms that the titleholder has indisputable legal right to transfer ownership or use the property as they see fit.
The Absorption Rate is an estimate of the expected annual sales or new occupancy of a particular type of land use, providing a measurement of how quickly available real estate inventory is being sold or leased.
An 'Abstract of Title' is a comprehensive summary of all significant legal actions, including recorded instruments and court proceedings, that relate to a particular property's title. It serves as an essential document for title examination, providing potential buyers, investors, and lenders with a detailed history of property ownership and encumbrances.
An abstract update involves making current an existing, but old, Abstract of Title by adding all relevant documents recorded since the preparation or the most recent update of the existing abstract.
The abstraction method is a technique used to estimate the land value by subtracting the depreciated value of the improvements from the total market price of the property.
In real estate, 'abut' refers to properties that directly touch or share a common boundary line. Unlike adjacent properties, which are close but may not share a boundary, abutting properties are directly connected.
The term 'Accelerate (A Debt)' refers to invoking the acceleration clause in a loan agreement, making the full amount of the loan debt due immediately upon a borrower's default or other specified triggers.
Accelerated amortization refers to the practice of making larger payments towards the principal amount of a loan than is required by the contractual payment schedule. This results in shortening the loan term and reducing the total interest paid over the life of the loan.
The Accelerated Cost Recovery System (ACRS) is a method of depreciation that spreads the deduction of a property’s cost over specific periods. Originating from the Economic Recovery Tax Act of 1981 and later modified, ACRS was devised to provide significant tax incentives.
Accelerated depreciation is a method for allocating the cost of an asset in a manner that provides greater deductions in the earlier years of the asset's life. This method is advantageous for tax purposes, offering businesses the opportunity to defer tax payments.
An acceleration clause is a loan provision that allows the lender to demand full repayment of the outstanding loan balance if the borrower violates specific terms of the loan agreement.
Acceptance refers to the act of agreeing to accept an offer, thereby forming a binding contract when it comes to real estate transactions. It is a critical phase where a seller agrees to the buyer's offer under specified terms and conditions, leading to the formation of a sales contract.
Access right refers to the legal entitlement of property owners to reach their own property, ensuring unobstructed passage. It is a fundamental aspect of property law that supports the practical use and value of real estate.
Accessibility refers to the ease and convenience with which a property can be entered by customers, tenants, and other users, particularly through automobile access. It also entails building design and alterations that enable individuals with physical disabilities to enter and maneuver within the building.
Accession in real estate refers to additions made to a property, either through the incorporation of fixtures or natural deposits, thereby enhancing its value over time.
A separate living unit within or adjacent to a single-family home, often referred to as a secondary suite, which can be used by family members or rented out to non-family tenants. Typically includes its own bedroom, small kitchen, and bathroom.
An accommodating party is an intermediary in a Section 1031 exchange, often utilized in delayed (tax-free) exchanges to temporarily hold money or property to facilitate the exchange.
An accommodation party is an individual who signs an agreement or promissory note without receiving any value in return, for the sole purpose of lending their name to help another person secure a loan or other arrangement.
An accredited investor is an individual or entity that meets specific financial criteria set by regulations, allowing them to invest in certain types of high-risk or complex investments that are usually not accessible to the general public.
An Accredited Management Organization (AMO) is a prestigious designation awarded to property management firms by the Institute of Real Estate Management (IREM). This credential recognizes firms that meet high ethical and operational standards.
Accretion refers to the gradual increase of land by natural forces, often used in the context of real estate to describe the organic extension of a property boundary due to natural processes like sediment deposition from rivers or streams.
The accrual method is an accounting approach that records income when earned and expenses when incurred, regardless of when cash transactions occur.
Accrued depreciation, also known as accumulated depreciation, refers to the total amount of depreciation expense that has been recorded against a company's assets up to a specified point in time.
Accrued expense is a type of cost that has been incurred but not yet paid during an accounting period. These expenses are accounted for on the books until they are paid off.
Accrued interest refers to the interest that has been earned but not yet paid or received. It is often reported during interim periods between scheduled interest payments, and it accumulates from the date of issuance or the time of last interest payment.
Accumulated Depreciation is the total amount of depreciation expense that has been recorded for an asset to date. It represents the wear and tear or reduction in value of the asset over its useful life.
Acknowledgment in real estate refers to a formal declaration made before an authorized official by the person who signed a document, stating that it is their voluntary act.
An acknowledgment is a formal declaration by the person who has signed a document, stating that the signature is their voluntary act made in the presence of an authorized official, typically a notary public.
The American Council of Life Insurers (ACLI) is a trade association representing life insurance companies in the United States. ACLI advocates for the industry's policy positions, ensuring that insurers' interests are represented in legislative, regulatory, and judicial forums.
Asbestos-Containing Material (ACM) refers to any material or product containing more than one percent asbestos. Asbestos, used for its strength and heat-resistant properties, is harmful when inhaled, leading to serious health problems such as lung cancer, asbestosis, and mesothelioma.
Acquisition refers to the process of obtaining ownership of an asset through various means such as purchase, trade, or gift. It also encompasses the asset that has been acquired.
Acquisition appraisal, also known as acquisition valuation, refers to the evaluated market value of a property intended for acquisition, often for public use or eminent domain. This appraisal determines the compensation amount offered to the property owner.
The acquisition cost of a property is the total price and all associated fees required to complete the transaction and take ownership of the property.
An acquisition loan is a type of loan used specifically for the purchase of real estate properties. These loans are generally utilized by buyers to acquire commercial, residential, or undeveloped land.
An Acquisition, Development, and Construction (ADC) Loan is a short-term loan used to finance the acquisition of land, development of infrastructure, and construction of buildings.
An Acquisition, Development, and Construction (ADC) Loan is a specialized type of loan used to fund the acquisition of land, the development of building sites, and the construction of residential or commercial properties.
An acre is a standard unit of measurement used in the real estate and agriculture industries to denote a specific amount of land. It is used extensively in property transactions, valuations, and farming.
Acreage refers to the measurement of land specifically denoting parcels over one acre, commonly used in agricultural, rural, and development scenarios to define and quantify large plots of land.
Across the Fence is an appraisal technique used when evaluating property in condemnation situations, estimating the property's value based on the use of adjacent land.
The Accelerated Cost Recovery System (ACRS) was a method used to depreciate property for tax purposes at an accelerated rate. Introduced by the Economic Recovery Tax Act of 1981 (ERTA), it allowed for quicker cost recovery of investments in tangible property.
An Act of God is an unpreventable destructive occurrence that results from natural forces. Insurance and contract laws often include clauses to address losses resulting from such events.
An action to quiet title is a lawsuit brought to establish a party's title to real property and 'quiet' any challenges or claims to the property. This process resolves disputes and clarifies property ownership.
Active Participation is a type of investor position that influences how rental income is taxed. The requirements for active participation are less stringent than for material participation.
Active remediation is a form of environmental remediation that involves using direct action techniques to remove, contain, or neutralize pollutants from a contaminated site.
Active Solar Heating is a system that uses energy from sunlight to heat a structure and/or provide hot water. This system relies on pumps or fans to move the energy-transporting medium through the system, distinguishing it from passive solar heating.
In real estate appraisal, 'Actual Age' refers to the chronological age of a property or improvement, as opposed to its Effective Age, which can be altered by maintenance, renovation, and use.
Actual damages represent the compensation for losses incurred as a direct result of condemnation of private property. These damages cover only the tangible and concrete losses, excluding any indirect, severance, or consequential damages.
Actual Eviction is the legal process by which a landlord removes a tenant from rental property.
Actual Notice refers to the conveyance of information to a party relating to a fact or proceeding that concerns that party, delivered directly to ensure awareness.
Actual possession refers to the physical control or occupancy of a property, distinct from legal ownership, where a person or entity exercises real custody or control over a property.
Ad Valorem is a Latin term meaning 'according to value.' It describes a tax whose amount is based on the value of a transaction or a property.
An ad valorem tax is a tax based on the assessed value of an item such as real estate or personal property. This term is commonly used in the contexts of property tax, real estate transactions, and import duties.
Add-on interest refers to an interest amount that is calculated at the start of the loan term and then added to the loan principal, resulting in equal installment payments over the entire loan period. This method typically results in a higher cost of borrowing compared to other interest calculation methods.
An addendum, also known as a rider, is a supplemental document added to a primary contract to include additional terms or clarify existing conditions without rewriting the entire original document.
Additional first-year depreciation allows for extra depreciation allowances in the acquisition year of specific business properties, as mandated by federal income tax laws. This incentivizes the acquisition of certain types of business property. It is periodically updated by Congress, with varying limits, rates, and qualifying property.
An additional principal payment is a voluntary payment in addition to the established payment amount, applied directly against the loan principal. It helps in shortening the length of the loan term and reducing overall interest costs.
Additional Rent refers to the amounts of rent that are due above the minimum or base rent. This covers a variety of potential extra charges that a tenant may be responsible for, depending on the lease agreement.
Adjacent refers to properties or pieces of land that are nearby or close to each other but not directly touching. This term is commonly used in real estate transactions and planning to describe properties that are in close proximity.
The term 'adjoining contiguous' in real estate refers to properties that are attaching or sharing a common border, indicating they are adjacent to each other and touch or meet along a boundary.
Adjudication is the legal process by which a judge or adjudicator reviews evidence and argumentation to come to a decision or judgment regarding a contested matter. It is commonly used in real estate, eminent domain, landlord-tenant disputes, and property tax appeals.
An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. The rate is initially fixed for a specific period, after which it resets periodically, typically annually, based on an index that reflects the cost to the lender of borrowing on the credit markets.
An Adjustable-Rate Mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. The rate initially remains fixed for a period before adjusting at preset intervals.
Adjusted Basis refers to the net cost of an asset after adjusting for various factors such as improvements, depreciation, and damage, and is primarily used for calculating capital gains or losses upon the sale of the asset.
In real estate appraisal, the adjusted sales price refers to the indicated price of a comparable property after adjustments have been made to account for differences between comparable and subject properties.
The adjusted tax basis refers to the original cost or other basis of property, reduced by depreciation deductions and increased by capital expenditures.
An adjustment index is the published interest rate used to calculate the interest rate of an Adjustable-Rate Mortgage (ARM) at the time of origination or adjustment.
The adjustment interval refers to the frequency at which the interest rate of an adjustable-rate mortgage (ARM) is recalculated. It plays a crucial role in determining how often a borrower's mortgage payments may change.
Adjustments made at the settlement of a real estate transaction that outline expenses and fees charged to the buyer or seller.
Adjustments (in Appraisal) refers to the dollar value or percentage amounts added to or subtracted from the sales price of comparable properties to provide an indication of the value of the subject property. These adjustments compensate for variations in features between the comparable and the subject property.
Administrative expenses, also known as general and administrative expenses, are the overhead costs incurred by a company to manage and support its operations. These expenses do not directly associate with the production of goods or services.
An administrator is a person appointed by a court to administer the estate of a deceased person who left no will, ensuring the orderly distribution of the estate's assets according to state intestacy laws.
An Administrator’s Deed is a legal document used to transfer property of an individual who died intestate, meaning without a will. The deed is executed by an estate administrator appointed by the court.
An Administratrix refers to a female administrator, often designated by a court to manage the estate of a deceased person when there is no will or other legal representative available.
An adult is an individual who has reached the age of majority, which is defined as either 18 or 21 years old, depending on the state. This status grants the legal capacity to enter into binding contracts, including real estate transactions.
An advance in real estate is a form of loan disbursement given to real estate developers or builders. This is sometimes referred to as a 'draw,' where funds are released based on the completion of certain stages within a real estate project.
An advance commitment is a promise to take specific action at a future date with predefined terms. It's commonly used in real estate to secure financing for projects, often before completion. Understanding different types of advance commitments can be crucial for developers and investors.
Adverse possession is a legal principle that allows a person who occupies land without permission to claim legal title to that land under certain conditions, including actual, open, notorious, exclusive, hostile, and continuous occupancy for a specified period.
The Association of Equipment Manufacturers (AEM) is a North American-based international trade group representing off-road equipment manufacturers and suppliers, with a focus on sectors such as agriculture, construction, forestry, mining, and utilities.
Aesthetic Value refers to the increment of market or user value attributed to the appearance of a property, which can significantly increase its desirability and market price.
An affiant is an individual who signs or signifies to the truth of an affidavit under oath. This role is crucial in legal proceedings, as the affiant attests to the accuracy and truthfulness of the information contained within the affidavit.
An affidavit is a written statement made under oath or affirmation before an authorized officer, often used to authenticate facts pertaining to a real estate transaction.
AFFIRM in real estate refers to the act of confirming, ratifying or verifying an agreement or contract. This action solidifies the terms and obligates all the parties involved.
Affirmative lending refers to the practice of adjusting the demographic distribution of loan recipients to better match the demographics of area residents or depositors. This practice is mandated for federally chartered lending institutions under the Community Reinvestment Act (CRA). By improving access to credit for historically underrepresented groups, affirmative lending aims to reduce financial disparities and foster greater community investment.
Affirmative Marketing Agreement (AMA) guidelines are developed by the National Association of Realtors (NAR) to help its members comply with Federal Fair Housing laws in their marketing programs.
The Affordability Index is a measurement of housing affordability compiled by the National Association of Realtors® (NAR) and other organizations. It compares median income levels to the income required to purchase a median-priced home, providing insights into regional and national housing affordability.
Affordable housing refers to various public- and private-sector initiatives aimed at helping low- and moderate-income individuals and families purchase homes. These programs often feature lower down payments, eased loan-qualifying rules, and below-market interest rates.
An after acquired clause is a provision in a mortgage loan that includes property subsequently purchased as security on the existing mortgage. This can complicate future financing and the restructuring of loans as additional acquired property becomes part of the original security.
