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Real Estate Glossary

(DISCLAIMER) The terms compiled in this glossary are provided for general reference only and are not intended to represent technical variations and differences in meaning and usage which may exist in different states and local jurisdictions, as well as revisions enacted to state statutes and regulations, and federal statutes and regulations.

A

Abstract of Title

A condensed chronological summary of all documents and transactions recorded in the public records which affect a specific parcel of real property. Also referred to as an abstract.

Abstractor

A person or company that makes abstracts.

Abstractor's Certificate

A certificate which appears at the end of an abstract in which the abstracter states the time, period, and scope of the search made for in- struments in the public records. In some states, the certificate limits the abstracter's liability.

Abut

To touch or border upon a parcel of real estate. In a subdivision, the individual lots abut each other.

Acceleration Clause

A clause in a deed of trust, promissory note, or mortgage which advances the time period for payment of the debt and gives the lender the right to demand immediate payment of the entire loan when the borrower breaches a condition of the contract such as failing to make a monthly payment.

Acceptance

An oral or written assertion by a party receiving an offer that he is willing to be legally bound by the terms of the offer.

Access

A general or specific right to enter or leave a particular property from a street or highway.

Accretion

A natural increase of land along the shores of a body of water.

Accrued Depreciation

The difference between the cost to replace property new, as of the date of an appraisal, and the present appraised value of the property.

Accrued Expenses

Expenses that are incurred but not yet payable such as interest on a promissory note or real property taxes.

Acknowledgment

A written declaration made by a person, before a notary public or other person authorized by law to witness the execution of legal documents, that their action was voluntary and free of duress.

Acre

A measurement of land which equals 160 square rods, 4,840 square yards, or 43,560 square feet.

Acre foot

A term used in measuring the volume of water, equal to the quantity of water required to cover one acre foot deep, or 43,560 cubic feet.

Actual Notice

Express knowledge of a fact or event gained through direct experience or information.

Additional Advance

An instrument or a clause in an instrument which increases the amount of a loan from the amount stated in the original deed of trust.

Adjustable Rate Loan

Deed of trust or mortgage with an interest rate that increases or decreases depending on a national financial indicator such as the current interest rate of treasury bills issued by the U.S. Government.

Administrator

A person appointed by the court to administer the estate of a deceased person who died without leaving a will (an intestate estate).

Ad Valorem

Latin term meaning "according to value" which is normally used to describe a tax based on the assessed value of real property.

Adverse Possession

The right of an occupant of land to acquire superior title to the real estate against the record owner where the possession has been actual, notorious, hostile, visible, and continuous for the required statutory period which is 18 years in Colorado. Adverse possession promotes the productive use of land by giving title to the one using the land.

Affidavit

A written statement or declaration, sworn to or affirmed by some officer who has the authority to administer an oath or affirmation.

Agency

A legal relationship resulting from an agreement or contract, either expressed or implied, oral or written, where one person, the agent is employed by another called the principal, to perform certain acts in dealing with a third party.

Agent

Any person, partnership, association, corporation, or other legal entity authorized or employed by another called the principal, to act for, on behalf of, and subject to the control and direction of the principal.

Agreement

A legally binding contract made between two or more parties.

Air rights

The rights a real property owner has to use the air space above the physical surface of his land.

Alienation

The transfer of real property by a person or legal entity to another person or legal entity.

Allodial Tenure

The absolute ownership of real estate which is subject to inheritance by the owner's heirs or to disposition by the owner as he determines.

Alluvion

The increasing of land, especially along the shore or banks of a river caused by the natural deposit and buildup of sediment. This sediment is called alluvium.

ALTA Title Insurance Forms

Title insurance forms designed by the American Land Title Association to insure standardization and uniformity in the title insurance industry.

Amenities

Features such as prime location, neighborhoods, outlook or close access or proximity to schools, parks, lakes, or shopping malls which enhance the desirability and promote the value of the real estates.

American Land Title Association (ALTA)

An association of title insurance company agents, abstractors, and real estate attorneys whose objective is to promote real property ownership and real property interests by providing information and education to consumers as well as continuing education to its members. The association also maintains professional standard and ethics within the title insurance industry.

Amortization

The liquidation or gradual payment of a financial obligation by periodic installments.

Amortization Schedule

A chart which displays the amount of the payments, interest and principal, and the unpaid balance of the loan after each payment is made.

Ancillary Closing Services/Fees

Those additional services to the closing process such as courier/overnight mail, tax certificate, wire transfer, release of deed of trust processing / tracking, cashier's check, escrow setup, E-Loan Docs, E-Recording, etc. that also bear additional costs to the actual closing fee.

Annual Percentage Rate (APR)

The total interest of all finance charges, interest, points, and other fees a borrower pays for a loan computed over the term of the loan.

Annuity

The annual payment of income paid to individuals under specific types of insurance policies or under the provisions of wills and trust estates.

Appraisal

A written report which describes an estimate of the quality or value of specific real property and states the basis for such evaluation. This report is prepared by a state licensed real estate appraiser.

Appreciation

This is a temporary or permanent increase in the value of real property. based on economic factors.

Appropriation

The act of taking and reducing to personal possession the water in a stream or other body of water, and applying such water to beneficial use.

Appropriator

A person who diverts and puts to beneficial use the water of a stream or other body of water under a water right obtained through appropriation.

Approved Attorney

A practicing lawyer whose examination of titles and title opinions are accepted by a title insurance company as a basis for issuance of its title insurance policies.

Appurtenance

Something adapted to the use of the real property to which it is connected or attached and is intended to be a permanent addition to the land. Appurtenances pass with the title to the land. Examples of appurtenances are a house, garage, barn, or right-of-way access.

Appurtenant

Belonging to, or accessory to, or incident to real property.

Arbitration

The process by which a dispute is submitted to an impartial third party, as opposed to a court of law, to render a decision and final disposition of of the issues of disagreement.

Arbs

This is a term used in the title insurance industry used primarily in abstract plants and title plants which refers to simplified forms of land description arbitrarily used for indexing purposes instead of the more complex descriptions contained in deeds, mortgages, and other real estate instruments.

Arrears

Expenses which are paid after the end of the period for which they are due such as taxes and loan interest.

Assessor

A public official who evaluates property for purposes of taxation.

Assessed Valuation

An estimate of value of real property determined by a unit of government such as a city or county assessor's office.

Assessment

The valuation of real property in order to levy a tax upon it.

Assignee

The party to whom a legal right has been assigned or transferred.

Assignment

The transfer to another of a legal right.

Assignor

The party who assigns or transfers a legal right.

Assignment of Rents

Additional security taken by the lender in connection with a deed of trust or mortgage which pledges any income derived from renting the property.

Assumption of Mortgage

A buyer who assumes a mortgage acquires title to real property by agreeing to assume primary liability for payment of the loan originally made by the seller.

Assumption Fee

The fee a lender charges a borrower for assuming an existing loan.

Attachment

A type of encumbrance permitted only under special circumstances which is placed against the real estate of a defendant in a pending lawsuit for money damages.

Attorney's Opinion

The written opinion of an attorney-at-law evaluating the marketability of title to real property based upon an examination of the abstract of title or the records in the county clerk and recorder's office.

Avigation Easement

Also known as an aviation easement, this is an easement over private property which abuts and extends out from the end of airport runways. This easement restricts the graduated height of agricultural crops, trees, and other objects in the take off and landing path of aircraft.

Avulsion

A change or shift in a water boundary resulting in loss of land by an owner and the acquiring of such land by another party.

B

Balance Sheet

A statement showing a company's financial position at the end of an accounting period by listing assets, liabilities, and owner's equity.

Balloon Payment

A final lump sum payment of an installment debt, much larger than all previous installments, and which pays the debt in full prior to its full amortization.

Bankruptcy

A proceeding in the U.S. District court, Bankruptcy Division, where the assets of a debtor unable or unwilling to pay his debts are applied by an officer of the court (the trustee) in satisfaction of creditor claims.

Bargain and Sale Deed

Any deed that recites consideration and purports to convey the real estate. A bargain and sale deed with a covenant against the grantor's acts warrants only that he or she has done nothing to harm or cloud the title.

Base and Meridian

An imaginary set of lines running east and west used surveyors for reference in locating and describing private and public lands.

Basis

A mathematical computation for establishing real property value by computing the original cost, plus capital expenditures, minus depreciation. The Internal Revenue Service uses basis to determine taxable gains and losses and annual depreciation.

Bearing Wall

A wall that supports any vertical load in addition to its own weight.

Beneficiary

The person who benefits from certain acts, e.g. a will; one receiving benefits, profits, or advantage; one for whose benefit a trust is created.

Bequeath

To leave personal property to another by means of the provisions in a will.

Bequest

Personal property received under the provisions in a will.

Bill of Sale

A written instrument by which a person transfers right, title, or interest in personal property to another.

Binder

This is a preliminary report as to the condition of a title and a commitment to issue a specific title insurance policy when certain requirements and conditions have been satisfied.

Blanket Mortgage

A mortgage that covers more than one piece of property.

Bond

A written promise to pay to the bearer or owner of a certificate of debt, such as an interest coupon, a stated sum of money at a specified time.

Broker

A duly licensed person, firm. partnership, limited liability company, association, or corporation who, in consideration of compensation or with the intent of receiving such compensation, facilitates a real property transaction for another party.

Building Code

Local government regulations specifying structural requirements for buildings.

Building Line

A line inside the boundary lines of a piece of real estate beyond which no building may be constructed. Building lines may be created by municipal ordinances, restrictions, and subdivision plats.

Bundle of Rights

The legal rights or interests which an owners holds in property. The right to control, use, possess, enjoy an dispose of the property.

Bureau of Land Management (BLM)

The federal agency in charge of administering public lands.

Buyer's Agent

A broker engaged by and representing the buyer in a real estate transaction.

C

Capital Gain

Taxable income generated from the sale of an asset.

Capitalization Rate

A percentage rate of change applied in the income approach to value.

Cash basis Accounting

Recognizing revenue and expense when cash is received or disbursed rather than when earned or incurred. A service business not dealing in inventory has the option of using the cash or accrual basis of accounting. Individual taxpayers must use the accrual basis.

Cash Flow

Cash receipts minus cash disbursements from an operation or asset. An annual cash flow statement shows total return after taxes.

Caveat Emptor

Latin phrase meaning "let the buyer beware" which formerly imposed a duty on the buyer to examine the products or property and accepting them "as is."

CCR's

An abbreviation for covenants, conditions and restrictions.

Certificate of Reasonable Value

The Veterans Administration's certified appraisal of the value of real property.

Certificate of Taxes

A written guaranty of the condition of the taxes on a certain property made by the county treasurer where in the property is located. Any loss resulting from an error in a tax certificate shall be paid by the county that the treasurer represents.

Chain of Title

Beginning with the conveyance out of the original source of title, such as a government patent, each succeeding deed, will, or other document which conveys and transfers title to succeeding owners constitutes a link in the chain of title. The chronological compilation of all links constitutes the chain of title.

Chapter 7

A provision of the 1994 Bankruptcy Reform Act that covers liquidations under a court appointed trustee.

Chapter 11

A provision of the 1994 Bankruptcy Reform Act that covers reorganizations where the debtor remains in control of the of the business and its operations under a court appointed trustee.

Chapter 13

A provision of the 1994 Bankruptcy Reform Act that covers an individual debtor who files a wage earner plan under a court appointed trustee.

Chattel

Property other than real estate such as personal property which is moveable and is not an appurtenance.

Check

Also known as a quadrangle, this is a square tract of land in the U.S. Governmental Survey System which measures 24 miles on on each side.

Codicil

An amendment, revision, supplementation, or cancellation of a will usually in written form.

Claim

A right to assert or to demand something such as the delivery of possession of property based on an ownership right or contract provision.

Clear Title

Title to property that is free from liens, defects, or other encumbrances except those which the buyer has agreed to accept.

Closing

The process of completing a real estate transaction. Deeds, mortgages, trust deed, leases, and other required instruments are executed and delivered to the parties in the transaction by the escrow agent who gives a written accounting to the parties, disburses funds, and completes all other conditions related to the transaction.

Closing Costs

Expenses of the sale which the buyer pays in addition to the purchase price and are deducted from the proceeds of the sale which the seller receives. Certain costs are prorated as of the date the title to the buyer takes title to the real property.

Closing Protection Letter

A letter issued to a lender, seller, buyer or borrower by a title insurance underwriter providing additional assurances outside the scope of a title insurance policy that protects a lender, seller, buyer or borrower from loss incurred by the actions of an underwriter's authorized title agent from fraud, dishonesty or negligence in the handling of monies, documents or failure to follow closing instructions.

Closing Statement

A written summation, similar to an accounting balance sheet, prepared by the escrow agent which shows the amounts of debits and credits to which each party to a real estate transaction is entitled.

Cloud on Title

An outstanding claim or encumberance that affects or impairs title to the property.

Cognovit Note

A promissory note which contains a confession of judgment (waiver of due process) by the borrower.

Collateral Security

Security pledged in addition to the personal obligation of the borrower, as a chattel mortgage or trust deed.

Co-Insurance

Two or more policies of title insurance issued by different title companies with each covering a portion of the same risk, with interlocking provisions when taken together provide total coverage of the risk.

Colorado Association Of Realtors (CAR)

The state organization of real estate licensees whose goal is the professional advancement of the real estate industry and whose membership is comprised of local real estate associations or boards.

Commingling

Mixing money belonging to others with personal or business funds. Illegal commingling is using the money of one beneficiary for the benefit of another or failing to maintain such money in identified escrow accounts.

Commission

The compensation due a real estate broker or mortgage loan broker for services performed in such capacity.

Common Interest Community

Real estate described in a declaration which obligates an individual unit owner to pay property tax, insurance premiums, maintenance or improvement on some declared real property owned in common. Ownership does not include a leasehold interest of less than forty years, measured from the date the intial term commences, including renewal options.

Common-Law

Law evolving from usage, custom, and judicial interpretation rather than legislated by statute. Common law originated in old English courts.

Community Property

Property acquired by a husband and wife, or either, during a marriage, by their industry and not by gift. belonging equally to husband and wife.

Comparable Sales

Compiling recently sold properties, similar to a specific property being appraised to indicate a reasonable fair market value for the subject property. In the real estate industry, these properties are also called "comps" or "comparables."

Competent

A person who has the legal capacity to take action on his own behalf.

Compound Interest

Interest which is paid on the original principal and on the accumulated accrued and unpaid interest.

Condemnation

The process by which real property of a private owner is taken for public use, with compensation paid to the owner, under the governmental right of eminent domain.

Conditions

Provisions in real estate instruments which make a particular right contingent upon the occurrence of a future event or action.

Condominium

A common interest community in which portions of the real estate are designated for separate ownership and the remainder of which is distributed for common ownership solely among separate owners. A common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.

Condominium Unit

A unit owned or leased in a condominium complex.

Condominium Declaration

A declaration which describes condominium ownership. It's provisions commit the real property to a condominium development with the ownership of air spaces, the general common elements and limited common elements, and establishes the basic rights an obligations of the owners. A management association with the authority to collect common expenses and otherwise act for the benefit of the owners is also established.

Confiscation

Governmental seizing of property with compensation.

Consideration

A promise or an act of legal value bargained for and received in return for a promise; one of the essential elements of a contract.

Construction Loan

A short-term loan used to finance the building of a structure.

Constructive Notice

The conclusive presumption that all persons have knowledge of the contents of a recorded instrument. This is also known as legal notice.

Constructive Eviction

The inability of a purchaser or lessee to obtain possession because of an outstanding right or superior title.

Contract

An agreement, enforceable at law, between two or more competent persons, having a legal purpose, wherein the parties agree to act in a certain manner.

Controller

The chief accounting executive of an organization responsible for the following duties: financial reporting, tax administration, management audits, planning controls, and developing accounting systems and procedures.

Conventional Loan

A mortgage or deed of trust securing a loan made by private investors without government participation as in F.H.A.-insured or V.A.-guaranteed loans.

Conversion

Unauthorized appropriation of ownership rights over goods or property belonging to another; also altering one form of property to another such as changing a leasehold apartment building to freehold condominium ownership.

Conveyance

An instrument in writing by which a person transfers some estate or interest in real estate to another, such as a deed of trust.

Colorado Coordinate System

A method of land description based on measurements from the intersection of statutorily defined north-south and east-west axes. This method is applied only in Delta and Ute counties.

Covenant

A promise or agreement, usually in writing, to do or not do certain acts; also stipulations in a real estate conveyance document governing the use of the property.

Cubage

The product of multiplying width x height x depth (or length) of an object.

Cubic Foot per Second

A unit of discharge for measurement of flowing liquid, equal to a flow of one cubic foot per second past a given section. Also called "second foot."

Cul-de-Sac

A street which is open at one end only with a circular turnaround.

Curtesy

A common law life estate in all of a wife's real property given to the husband upon her death, provided a child was born from their marriage. This estate is abolished in Colorado.

Customer

A party to a real estate transaction with whom the broker has no broker relationship because such party has not engaged or employed the broker.

D

Declaration

A recorded instrument that defines boundaries and common elements of a condominium and establishes basic rights and obligations of the owners. It also provides for the creation of an owners' association including a board of directors with authority to collect common expenses and otherwise act for the benefit of all owners.

Debenture

Bonds issued without specific security and are secured only by the overall equity of the issuer.

Dedication

Transfer of land from private to public use, as streets in a platted subdivision.

Deed

A legal instrument in writing, duly executed and delivered, whereby the owner (grantor) conveys to another (grantee) some right, title, or interest in or to the real estate.

Deed book

A book in the public records in which deeds are recorded.

Deed in Lieu of Foreclosure

A deed from a debtor in default conveying to the lender the title to real property given as collateral by the debtor to secure a deed of trust. In consideration for the conveyance, the lender agrees to forego statutory or judicial foreclosure proceedings.

Deed Restriction

A provision in a deed controlling or limiting a use of the land.

Default

A omission or failure to perform a legal duty; failure to meet an obligation when due.

Defeasible Fee

A fee interest in land that is capable of being defeated or terminated upon the happening of a specified event.

Defect of Record

Any encumbrance or lien on the title to real property recorded in the public records.

Deficiency judgment

A lien against a borrower's remaining assets in an amount equal to the shortage between a foreclosure sale price less the indebtedness owed.

Depreciation

Loss in value due to deterioration from ordinary wear and tear, action of the elements, functional or economic obsolescence.

Designated Broker

An employing or employed broker designated in writing by an employing broker to serve as a single agent or transaction broker for a seller, landlord, buyer, or tenant in a real estate transaction; does not include a real estate brokerage firm that consists of only one licensed natural person.

Devise

A gift of real property by the last will and testament of a donor.

Dispossess

To deprive a party of the possession and use of real estate.

Diversion

Illegal or unauthorized use of entrusted funds.

Documentary Fee

Also known as a "doc fee", a statutory Colorado tax of one percent per one hundred dollars (sale price x .0001) of consideration paid by the real estate buyer when the instrument of conveyance is recorded with a county clerk and recorder.

Dominant Estate

The property for which the benefit of a right-of-way exists across another's adjoining piece of land is said to be the dominant estate. The land across which the easement runs is the "servient:" estate.

Donee

The receiver of a gift.

Donor

The giver of a gift.

Dower

A common law estate consisting of a one-third interest in a husband's real property given to his wife upon his death. This estate has been abolished in Colorado.

Draw

A partial advance of the proceeds of a construction loan mortgage to which the borrower is entitled when construction reaches a specified stage.

Due-on-Sale Clause

A provision in a mortgage or trust deed which allows the lender to call a promissory note due and payable in full immediately upon the sale or transfer of a secured property. This clause allows a lender to raise the interest rate or force other changes in terms upon assumption of the loan.

Duress

Forcing action or inaction upon a person against their will.

E

Earnest Money Deposit

The down payment made by a purchaser of real estate to the seller as evidence of good faith.

Easement

A right or interest in real property of another entitling the holder of the interest to limited use of another's land for a specific purpose such as a right-of-way.

Economic Life

The period of time over which improved property may be profitably used.

Economic Obsolescence

A loss in value resulting from factors that exist outside of the property itself.

Effective Interest Rate

The percentage of interest the borrower actually pays for the use of the money.

Egress

The right to a path or right-of-way over which a person may leave from its own real estate.

Ejectment

Eviction or dispossession from real property.

Eminent Domain

A governmental right to take private property for public use through the process of condemnation, and with payment of just compensation.

Employing Broker

A license level qualifying a broker to employ other licensees, requiring two years of active licensed experience, a 24 hour "brokerage administration" course if licensed after December 31, 1996 and passage of the Colorado part of the broker licensing exam if upgrade to broker associate from salesperson was by means of the broker transition course.

Encroachment

Illegal intrusion of an improvement or other real property onto another's property.

Encumberance

A claim, lien, charge, or liability attached to and binding upon real property, such as a judgment, mortgage, mechanic's lien, a lien for unpaid taxes, or right-of-way.

Endorsement

A written modification or addition clarifying the coverage of a title insurance commitment or policy.

Equitable Rights

Legal rights established primarily by court decisions upon principles of fairness, honesty, justness, and morality and not upon enacted law of common law.

Equity

The value of an owner's interest in real estate exceeding encumbrances.

Equity of Redemption

The right of a person who has mortgaged their property to redeem that property upon payment of the mortgage debt, and the right to redeem with in a reasonable time after the due date of the obligation.

Erosion

The deterioration of land surface by forces of nature such as wind and water.

Escheat

Reversion of property to the state when an owner dies without leaving a will or legal heirs to whom the property may pass by lawful descent.

Escrow

The state or condition of money or a deed held unconditionally by a third party, called the escrow agent, pending the performance or the fulfillment of some act or condition.

Escrow Account

Any checking, demand, passbook, or statement account insured by an agency of the United States government maintained in a depository for money that belongs to others.

Escrow Agent

An impartial third party, usually a title company, who holds money and documents pertaining to a real estate transaction. The escrow agent disburses the funds and delivers documents to the rightful parties when all conditions of the transaction have been fulfilled.

Escrow Agreement

A written agreement whereby a grantor, promissory, or obligor delivers certain instruments or property to an escrow agent to be held until the occurrence of a contingency or performance of a condition, and then to be delivered to the grantee, promise or obligee.

Estate

The degree, quantity, nature, and extent of a person's interest in real property such as a fee simple, absolute estate or an estate for years.

Estate at Sufferance

An estate in land arising when the tenant wrongfully holds over after the expiration of the tenant's term. The landlord has the choice of evicting the tenant as a trespasser or accepting such tenant for a similar term and under the conditions of the tenant's previous holding.

Estate at Will

Also known as a tenancy at will, this is an interest in land terminable at the will of either the tenant or the landlord.

Estate by Entireties

An estate or interest in real estate based upon the legal fiction that a husband and wife are one person. Upon the death of either husband or wife, full title passes to the survivor.

Estate for Years

Also known as a tenancy for years, this is an interest in land for a fixed period of time such as one day or 99 years.

Estate from Period-to-Period

Also known as a periodic tenancy, this is an interest in land with no contract date of termination. The rental period (week, month, or year, etc.) renews by payment of the contract rent.

Estoppel

A legal restraint which stops or prevents a person from contradicting or reneging on his previous assertions or representations.

Et al.

The Latin abbreviation for "et allus", meaning "and others."

Et ux

The Latin abbreviation for "et uxor", meaning "and wife."

Eviction

Dispossession by process of law; the act of depriving a person of the possession of land pursuant to a court judgment.

Examiner

A person who examines and determines the condition and status of real property titles. Also referred to as a title examiner.

Examination

This is the review and evaluation of instruments and documents incident to a chain of title by a title examiner to determine their effect and condition in order to reach a conclusion as to the status of the title.

Exception

A title industry term which is a provision in a title insurance commitment, binder or policy that excludes liability regarding a specified title defect or an outstanding lien or encumbrance.

Exclusive Agency Listing

A listing whereby the owner engages a real estate brokerage as sole broker for a specified period of time, while retaining the right to sell the property to a buyer that the owner finds without paying the broker a commission.

Exclusive Right-to-Sell Listing

A listing whereby the owner engages one real estate brokerage as the sole broker for a specified period of time, entitling the broker to a commission regardless of who sells the property, including the owner.

Execution

A writ issued by a court to the sheriff directing seizure and sale of a property to satisfy a debt. It is also the act of signing a contract and refers to completion of the terms of a contract.

Executor

A person named in a will to carry out its provisions.

F

Falsification

The forging, altering, or counterfeiting a document, or knowingly making untruthful statements or misrepresentations.

Fee simple Absolute

Also known as "fee" or "fee simple", this is the most comprehensive ownership or real property under law; the largest bundle of ownership rights possible.

Fee Tail

This is an estate in land which cannot be conveyed but which must descend to the heirs of the holder; abolished in Colorado.

Federal Deposit Insurance Corporation

The agency of the federal government which insures deposits at commercial banks.

Federal Home Loan Mortgage Corporation

An affiliate of the Federal Home Loan Bank, also known as the FHLMC or "Freddie Mac", which creates a secondary market in conventional residential loans, FHA loans, and VA loans by purchasing mortgages from members of the Federal Reserve System and the Federal Home Loan Bank System.

Federal Housing Administration

An agency of the federal government, also known as the FHA, which insures private loans for financing of new and existing housing under government approve programs.

FHA Insured Mortgage

A mortgage under which the Federal Housing Administration insures approved lenders against loan default.

Federal National Mortgage Association

A federally sponsored private corporation, also know as the FNMA or "Fannie Mae," which provides a market for government secured mortgages held by primary lenders and provides them with a ready market to permit a greater turnover of money for loans.

Fiduciary

A person in a position of trust relative to another party. It is confidential as in a fiduciary relationship between an agent and a principal. A fiduciary bears a special relationship of trust and responsibility to others as in the case of a personal representative of a probate estate.

Financing Statement

An encumbrance securing an indebtedness which is recorded or filed to indicate that certain personal property or fixtures are encumbered with a debt.

First Deed of Trust

This is a deed of trust which has priority as a lien over any other deed of trust or lien on the same property.

First Mortgage

This is a mortgage which has priority as a lien over any other mortgage or lien on the same property.

Fixture

An item of personal property installed in or attached to land or and an improvement in a permanent manner, so that it is considered part of the real estate.

Foreclosure

Termination of property rights due to some default by the borrower; a judicial or public trustee process whereby secured property is sold to satisfy a debt.

Foreclosure Decree

A decree issued by a court which concludes the foreclosure of a mortgage, deed of trust, contract or other liens.

Forgery

A fraudulent or counterfeit execution of an instrument.

Fraud

A deliberate deception made in order to obtain an unfair or unlawful gain.

Freehold

A fee simple estate or life estate.

G

Grant

A transfer of real estate between parties by deed. A transfer of real estate from the U.S. government by patent.

Grantee

A person to whom real estate is conveyed; the buyer.

Grantor

A person who conveys real estate; the seller.

Grazing District

An administrative subdivision of the range lands under the jurisdiction of the Bureau of Land Management ("BLM") established pursuant to section 3 of the Taylor Grazing Act to facilitate management of BLM forage resources.

Grazing Lease Section 15

A lease authorizing the use of public lands outside of grazing districts (Taylor Grazing Act) for the grazing of livestock for a specified period of time.

Grazing License

A permit for the grazing of a set number and class of livestock on a designated area of grazing district lands for a specific time, usually less than one year.

Grazing Permit

A permit to craze a certain number and class of livestock on a designated area of grazing district lands during specified seasons each year for a period of usually 10 years.

Grazing Preference Multiplier

A request to graze certain numbers and classes of livestock upon a national forest for a specified time and subject to rules and regulations adopted by the United States Forest Service.

Gross Income

A number used in the income approach to value used to compare potential desirability of income properties, and calculated by dividing the sales price by gross annual income.

Ground Water

A pervious formation with sides and bottom of relatively impervious material in which ground water is held or retained; also called subsurface water basin.

Guardian

A person appointed by a court who is legally responsible for the care and management of a person or property of one who is legally incompetent to manage his own affairs.

H

Habendum Clause

The provision in deed which begins with the words "to have and to hold" and which defines the quality of the estate or interest which is being conveyed by the grantor to the grantee.

Hazard

In the title insurance industry, a hazard is a risk that is assumed under a title insurance policy.

Hazard Insurance Policy

A homeowners insurance policy.

Heir

A person who inherits or who is entitled to inherit real estate under the provisions or a will or as determined by statute.

Hereditaments

Any and all kinds of estates, interests, an rights in real estate which can be inherited.

Hiatus

A title industry term which describes a separation, gap, or unaccounted for area of land.

Holdover Tenant

One who fails to vacate leased property after the lease has expired.

Homestead Exemption

A fixed statutory sum exempt from execution by creditors, and intended to protect a family home from foreclosure or sale for debts. Also known as homestead right.

I

Improvements

Additions made to real estate for the purpose of increasing its value such as streets, sewers, or buildings.

Improvement Location Certificate

A drawing which shows the location of improvements and easements on a specific parcel of real estate.

Indemnify

To insure against possible loss or damage. A title insurance policy is a contract to indemnify.

Injunction

A writ or order issued by a court to restrain one or more parties to a legal proceeding from taking action which will cause legal harm to the rights of a party or parties in the proceeding.

Installment Land Contract

An agreement for the purchase of real estate on an installment basis, where the deed is withheld until all or a specified portion of the purchase price is paid.

Instrument

A written document.

Inter Alia

Latin meaning "among other things."

Interests

Estates, rights or legal claims in and to real property.

Interest Only Payments

This is a mortgage where only interest on the loan is paid on a monthly basis without paying down the principal amount of the loan.

Intestate

Dying without leaving a valid will.

Involuntary Lien

A lien against property taken by a governmental agency to enforce its right to collect taxes, special assessments, and income taxes.

J

Joint Tenancy

A type of co-ownership of real property featuring a right of survivorship and four unities of ownership: time, title, interest, and possession.

Joint and Several Liability

The liability by two or more persons for the same obligation which each person having legal liability for the entire obligation.

Joint Venture

Two or more individuals or legal entities joining together on a single project.

Judgment

Final declaration of the rights of the parties by a court.

Judgment Lien

A general lien placed on real and personal property belonging to a debtor.

Junior Mortgage

A mortgage which holds a lower lien priority than a first mortgage.

Jurisdiction

The power and authority of a court to hear and render a decision which binds the parties to a lawsuit.

K

L

Laches

A legal principle under which one is barred from asserting a claim or right because of material delay or negligence in the timely assertion of these rights.

Land

Real property; all below the surface, the surface and the airspace above it, and that which is affixed to it permanently. Synonymous with "real property", "realty", and "real estate." Terms often used to mean only the unimproved surface of the land.

Land Economics

The production, distribution, and consumption of wealth deriving from land classification and use.

Landlord

An owner who has leased an estate-in-land to a tenant.

Landlord Agent

A broker engaged by and representing a landlord as an agent in a leasing transaction.

Lease

An agreement under which a tenant receives possession and use of real property for a certain period of time and the landlord receives the payment of rent and/or the performance of other conditions.

Leasehold

An estate or right in real property held under a lease.

Legal Description

A description recognized by law that is sufficient to locate and identify a specific piece of real property without oral testimony.

Lessee

A party who possesses an estate in realty under a lease and is commonly referred to as the tenant.

Lessor

A party who conveys a right or estate in realty to a lessee under a lease and is commonly referred to as the landlord.

License

The permission to go upon the land of another which does not constitute an interest in the land.

Lien

A right given by law to a creditor to have a debt or charge satisfied out of the value of real or personal property owned by the debtor.

Life Estate

An estate or interest in real property held for the duration of the life of some other person.

Liquidated Damages

An amount agreed upon by the parties to be considered full damages owed by the defaulting party upon the occurrence of an event that constitutes a default under the contract.

Lis Pendens

A filing against specific real property giving public notice that an action at law is pending and may affect the title to the land.

Listing

An agreement or contract of employment, either oral or written, whereby the owner authorized the real estate broker to sell, exchange, or lease real estate.

Litigation

A lawsuit in which a dispute is submitted to a court for determination.

Loss

A title industry term which refers to damage suffered resulting from defects or liens upon the title to real estate. Loss also refers to money paid by a title insurance company in settlement of policy claims.

Loan Origination Fee

The finance fee charged by a lender to make a loan which is generally computed as a percentage of the face amount of the loan.

Lot

A specific measured parcel of land with fixed boundaries.

Loan Application

A document listing the assets, debts, earning history, and other economic factors of a borrower used by the lender to evaluate the level of risk he assumes in making a loan.

M

Marketable Title

A title free from reasonable doubt of defect which can be readily sold or mortgaged to a reasonably prudent person. a marketable title is free from material defects or grave doubts and reasonably free from potential litigation.

Market Value

The price which a ready, willing, and able buyer would pay and which a ready, willing, and able seller would accept, absent duress or coercion to either party, assuming both parties are fully informed, act reasonably, and have sufficient time to consider the transaction with due care.

Mechanic's Lien

A lien created by statute which exists against real property in favor of persons who have performed work or furnished materials for the I improvement of the real estate.

Metes and Bounds

A method of describing or locating real property. Metes are measures of length and bounds are boundaries. This method starts from a well-marked point of beginning and follows the boundaries of the land until it returns once more to the point of beginning.

Mill

Some states use a mill rate to compute property taxes. The value of a mill is one-tenth of a cent. A tax rate of one mill on the dollar or one-tenth of one percent of the assessed value of the property. (assessed value x .001)

Minor

A person under the age of 18 years old.

Mortgage

A conditional conveyance of property as security for the payment of a debt or the fulfillment of some obligation. Upon payment of the debt or performance of the obligation, a mortgage automatically becomes void.

Mortgagee

A lender or creditor to whom property is conveyed under a mortgage or deed of trust as security for repayment of a loan or a fulfillment or an obligation.

Mortgagee Policy

A policy of title insurance which insures the holder of a mortgage against loss resulting from the impairment or invalidity of the lien of such mortgage or because of defect, superior liens, or unmarketability of the title.

Mortgagor

A borrower who gives a mortgage conveying interest to the lender as security for the obligation to repay a loan or fulfill some obligation.

Multiple Listing Service (MLS)

A marketing arrangement among real estate brokers whereby a seller authorizes the listing broker to share information, with a predetermined portion of a commission to any broker cooperating in the sale of the property.

Mutual Assent

Agreement of the parties to the contract, known as a "meeting of the minds," mutually consenting to be bound by its exact terms. Mutual assent is an essential contract element.

N

National Association of REALTORS (NAR)

A national association of real estate personnel whose goal is the professional advancement of the real estate industry and whose membership is comprised of state and local real estate associations or boards.

National Forest

A forest or watershed reservation administered by the Forest Service, United States Department of Agriculture.

Negotiable Instrument

A written instrument containing a promise of payment which can be endorsed from one person to another.

Net Listing

A listing contract whereby the owner is to receive a certain net price with the broker receiving any excess over and above the net price as commission.

Note

A written instrument acknowledging a debt and promising payment.

Notice of Default

A written notice to a borrower from a lender that a default has occurred and that legal action may be taken.

O

Obsolescence

Impairment of desirability and usefulness of the property resulting from economic, functional, physical, fashion, or other changes.

Offer

To present for sale or a proposal presented for acceptance or rejection which, if accepted will form a binding contract.

Offeree

One to whom the offer is made.

Offeror

One who makes an offer.

Open Listing

A non-exclusive employment agreement in which an owner retains the right to list the property with other brokers.

Option

A temporary right for a specified time and for which consideration is paid, during which an optionee may purchase or lease property at a set price.

Optionee

One who requests, receives, or stands to benefit from an option.

Optionor

One who grants an option to another, usually the landowner.

Owner's Policy

A policy of title insurance which indemnifies an owner of real estate against loss resulting from defects in, liens against, or an unmarketable title.

P

Party Wall

A wall erected on a line between adjoining properties for the use of both properties.

Partition

A lawsuit between joint owners of real estate in which the court either divides the property between them or orders the property sold and divides the proceeds between them.

Patent

An instrument of conveyance of government-owned land to an individual.

Percentage Lease

A commercial lease of property in which the rent is based upon a percentage of the sales volume derived from the leased premises.

Percolation Test

A test that determines if soil will take sufficient water seepage for use as a septic tank. Also known as a perc test.

Periodic Tenancy

An interest in land with no contract date of termination. The rental period renews by payment of the contract rent. Also known as an estate from period-to period.

Personal Property

All that is not real property; items of a temporary or movable nature.

Planned Unit Development (PUD)

A planned unit development or PUD is a zoning classification that provided applicants with more flexibility by allowing a mixture of land uses and types of dwellings. A PUD is characterized by a high density of dwellings and maximum utilization of open spaces.

Plat

A parcel or plot of land; also a method of land description referring to a recorded map (plat) of a subdivision or town which lays out boundaries, streets, and easements etc.

Plat Book

A set of books maintained in the public record in which maps, plats, and copies of surveys are recorded.

Police Power

The governmental right to enact legislation deemed necessary to protect and promote the health, safety, and general welfare of the Public. (License law is supported by this legal theory.)

Power of Attorney

A legal instrument authorizing another person to act in place of the person executing the instrument.

Prime rate

The interest rate which banks charge their preferred customers.

Principal

A person, partnership, association, corporation, or other legal entity who authorizes or employs another called an agent to do certain acts on behalf of the principal.

Property

Anything which may be owned and its bundle of ownership rights; the right to use, possess, enjoy, and dispose of a thing in every legal way and to exclude everyone else from interfering with these rights. Property is generally classified into two groups: personal and real.

Public Trustee

An elected county official to whom borrowers convey title to real property by trust deed for the benefit of the beneficiary (lender).

Purchase Money Mortgage

A mortgage given by the purchaser to secure a loan for part or all of the purchase price. This mortgage becomes a lien becomes a lien on the property simultaneously with the passing of title, and if immediately recorded becomes prior to any lien against the purchaser.

Q

Quadrangle (Check)

A square tract of land in the U.S. Governmental Survey System which measures 24 miles on each side.

Quiet Enjoyment

Assurance that one's title, possession, or use of real estate will not be disturbed or disrupted by legitimate cause or adverse right.

Quiet Title Suit

An action in court to remove a defect, cloud, or suspicion regarding the owner's legal rights to a parcel of real estate.

Quitclaim Deed

A deed in which the grantor warrants nothing, conveying only the grantor's present interest, if any.

R

Range

A six mile wide strip of land that runs in a north-south direction. Ranges are determined by government survey and are numbered in numerical order east or west of a principal meridian.

Rate Lock

A written commitment by a lender which guarantees a specific interest rate, at a specific cost, for a specified period of time.

Real Estate

Real property, realty, land.

Real Estate Settlement Procedures Act (RESPA)

A federal law which ensures that the buyer and seller in a real estate transaction have knowledge of all settlement costs when financing is through a federal loan program or sold by the lender to a federal agency.

Real Property

The surface of the earth and whatever is erected, growing upon or affixed to the land, including that which is below it and the airspace above it.

Realtor

A registered trade name exclusive to members of the National Association of REALTORS.

Realty

Real property, land, real estate.

Receiver

A court-appointed custodian who holds property pending final disposition of the matter before the court.

Recording

Entering of filing an instrument in a book of public records in the office of the county clerk and recorder. Recording constitutes "constructive notice" to all persons of the rights of claims contained in the instrument.

Rectangular Survey System

See U.S. Government Survey System.

Redemption

The right of an owner to redeem or reclaim real estate by paying the debt or charge (such as mortgage or tax lien) after default, together with interest and costs. Specifically, equity of redemption is the right to redeem the property after default but before foreclosure. Statutory right-of-redemption refers to the right to redeem the property after foreclosure, or other enforcement action, within a certain time specified by statute. In Colorado, a mortgagor has a statutory right ro redeem property any time within 75 days for residential and six months for agricultural property or three year after a tax sale.

Reduced Rate

In the title insurance industry, this refers to a reduced rate of title insurance premium applicable in cases where the owner of the land has been previously insured in an owner's policy by the insurer within a specific time period.

Release

The relinquishment or surrender of a right, claim, or interest.

Release of Lien

The discharge or release of specific property from the charge or lien of a of a judgment, mortgage or other claim.

Restrictive Covenant

A clause in a deed limiting the use of a property.

Right of Survivorship

A characteristic of joint tenancy whereupon the death of one tenant triggers an automatic and immediate transfer of the decedent's property rights equally among the surviving tenant(s).

Right-of-Way

An easement or right to pass over another's land. Also the strip of land used as roadbed by a railroad or used for a public purpose by other public utilities.

S

Salesperson

An inactive license status in Colorado; in other jurisdictions, a license level authorized to perform real estate activity on behalf of a licensed real estate broker.

Seisin

Actual possession of real estate by a freehold estate owner; a typical warranty deed covenant.

Seller's Agent

A broker engaged by and representing the seller in a real estate transaction.

Settlement Statement (HUD1)

A settlement form printed by the Department of Housing and Development (HUD) which lists all charges paid by the buyer and seller and the disbursement of funds at the real estate closing.

Single Agent

A broker engaged by and representing only one party typically the buyer, seller, tenant, or landlord in a real estate transaction.

Special Assessment

A tax against real property made by a unit of government to cover the proportionate cost of an improvement such as a street or sewer.

Special Warranty Deed

A deed in which the grantor warrants title only against defects arising during the grantor's ownership.

Specific Performance

A remedy compelling a party to perform or carry out the terms of a valid, existing contract.

State Lease

An agreement between the state of Colorado and other parties for the use of lands under the jurisdiction of the Sate Board of Land Commissioners for grazing, agriculture, and other lawful purposes.

Statutory Right of Redemption

See redemption.

Subordination Clause

A clause in a mortgage or lease stating that the rights of the holder shall shall be secondary to a subsequent encumbrance or right of another person.

Surrender

In leases, the cancellation of a lease by mutual consent of lessor and lessee.

Survey

The measurement of a parcel of land and its characteristics. This also refers the map or plat drawn by a surveyor which represents the property surveyed and shows the results of a survey.

T

Taylor Grazing Act

Administered under the jurisdiction of the Bureau of Land Management to facilitate management of their forage resources.

Tenancy at Sufferance

See estate at sufferance.

Tenancy at Will

See estate at will.

Tenancy-in-Common

A type of co-ownership of an estate in land entitling each tenant to full possession of the property (unity of possession) regardless of the proportionate share owned. Tenancy-in-common has no right of survivorship.

Tenant Agent

A broker engaged by and representing the tenant in a leasing transaction.

Testate

The condition of death characterized by the decedent who has left no no valid will.

Time-Share

An interval interest in real estate which limits ownership or occupancy rights to specified time periods. Ownership may be either fee simple (deeded) or "right to use" (contractual or membership).

Title

In real property, title is the right, or evidence of the right, to ownership.

Title Insurance

Indemnification of a policyholder from loss due to a title defect, provided the loss does not result from a defect excluded by the policy provisions.

Title Insurance Commitment

A report issued by a title insurance company which sets forth the conditions of the title and commits the title insurance company to issue the form of policy designated in the commitment upon compliance with and satisfaction of requirements stated in the commitment.

Title Policy

A policy of title insurance which indemnifies the holder for loss sustained by reason of a defect in the title provided the loss does not result from a defect excluded by the policy provisions.

Title Search

An examination of public records and court records to disclose the current facts regarding ownership of the real estate.

Torrens System

A system of land registration in which the registrar of Torrens, a public official, similar to a clerk and recorder, keeps and maintains the records pertaining to real property.

Tort

A negligent or intentional wrong done to another for which the law will grant money damages in a civil action.

Transaction Broker

A broker who assists one or more parties throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms, and closing without being an agent or advocate for the interests of any party.

Treasurer

A county official responsible for property tax administration and the collection of taxes.

Treasurer's Deed

A deed for property sold at public sale by the county for non-payment of taxes by the owner.

Trust Deed

A loan security instrument by which a borrower conveys title to a public trustee, to be held for the protection of the lender as security for repayment of the debt. Upon payment of the debt, a trust deed must be specifically released by the trustee.

Truth-in-Lending

A federal law that requires lenders to fully disclose in writing the terms and conditions of a mortgage.

U

United States Government Survey System

This is a land description based on reference to governmental surveys. It is based on pairs of principal meridians and base lines with each pair governing the survey in a designated area.

Usury

Charging more than the legal rate of interest for the use of money.

V

VA Mortgage

This is a mortgage backed by the Veterans Administration guaranteed to the lender for a percentage of the loan amount.

Vendee

Buyer.

Vendor

Seller.

Vicarious Liability

A principal's liability for an agent's acts performed within the scope of the agency; specifically excluded by Colorado statute from a principal's liability unless the act or omission was approved, directed, or ratified.

W

Waiver

Abandonment of some right or claim.

Warehousing

A title industry term which refers to the temporary funding an holding by lending institutions of mortgages originated by a mortgage broker until such time as the mortgage market improves or until the mortgage broker accumulates a sufficient amount of mortgages to interest a permanent mortgage purchaser.

Warranty Deed

A deed by which the grantor warrants or guarantees the title to real property against defects during the grantor's ownership and as far back as the chain of title can be established.

Writ of Execution

A court order directing an officer of the court, usually the sheriff, to carry out the judgment or decree of the court.

X

Y

Z

Zoning Laws

These are laws passed by local governments regulating the size, type, nature of structure, and use of buildings. Also known as zoning ordinances.

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