Village Realty
Group's
GLOSSARY
OF REAL ESTATE TERMS
Glossary of 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 AUTHORITY
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 persons whereby, 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 whic
it is 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 the contract 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 sa e 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.
POWER OF ATTORNEY
Delegated written authority
to a person to legally act on behalf of another.
POWER OF SALE
The right of a mortgagee
to force sale of the property without judicial proceedings should default occur.
PREPAYMENT CLAUSE
A clause inserted in a
mortgage, which gives the mortgagor the privilege of paying the mortgage debt
in advance of the maturity date, on stipulated terms.
PRINCIPAL
The employer of an agent
or brokerage, who gives the agent the authority to do some act for him/her.
PRINCIPAL AMOUNT
In mortgage law, this
term refers to the debt itself, as distinguished from interest.
PROSPECT
A potential buyer or customer.
QUIT CLAIM DEED
A general release of all
claims or rights to a parcel of land.
REAL ESTATE
"Real Estate"
includes real property, leasehold and business whether with or without premises,
fixtures, stock-in-trade, goods or chattels in connection with the operation
of the business.
REAL ESTATE BROKER
A brokerage who represents
a principal in a real estate trade. (See more formal definition in the Real
Estate and Business Brokers Act.)
REAL PROPERTY
The combination of the
tangible and intangible attributes of land and improvements. Value-wise, it
is the sum of the value of the real estate, considered as land and structure
and, for example, the tangible value arising by reason of a favourable lease.
The real estate, plus the rights that go with it.
REALTOR
A registered word which
may only be used by an active member of a real estate board affiliated with
the Canadian Real Estate Association.
RENT
The compensation paid
for the temporary use, and/or occupation of real estate.
RESTRICTED AREA BY-LAW
See Zoning
By-law.
RESTRICTIVE COVENANT
A limitation placed upon
the use of property, contained in the deed.
RIGHT
The interest one has in
a piece of property.
RIGHT OF SURVIVORSHIP
The distinguishing feature
of joint tenancies which provides that, where land is held in undivided portions
by co-owners, upon the death of any joint owner, his/her interest in the land
will pass to the surviving co-owner, rather that to his/her estate.
RIGHT OF WAY
The right to pass over
another's land, more or less frequently, according to the nature of the easement.
RIPARIAN RIGHTS
The rights of the owners
of lands on the banks of watercourses, to take advantageous use of the water
on, under, or adjacent to his land, including the right to acquire accretions,
wharf slips, and fish therefrom.
RUNNING WITH THE LAND
A covenant is said to
run with the land when it extends beyond the original parties to the agreement
and binds all subsequent takers to either liability to perform it or the right
to take advantage of it.
SALESPERSON
A licensee of a brokerage
authorized to trade in Real Estate (as defined within the Real Estate and Business
Brokers Act). Also can be referred to as a Sales Representative or an Associate
Broker.
SEALED AND DELIVERED
A term indicating that
a conveyor has received adequate consideration as evidenced by his/her voluntary
delivery. The word "sealed" adds more strength since under old conveyancing
law an official seal was used as a substitute for considerat on.
SERVIENT TENEMENT
Land over which an easement
exists in favour of the dominant tenement.
SET BACK
The distance from the
curb or other established line within which no buildings may be erected.
SHINGLE
A relatively thin and
small unit of roofing, partially laid in overlapping layers as a roof covering
or as cladding on the sides of buildings.
SPECIAL ASSESSMENT
An assessment which is
not customarily levied and which is made against only those specific parcels
of property directly benefiting therefrom.
SPECIFIC PERFORMANCE
A remedy in a court of
equity compelling a defendant to carry out the terms of an agreement or contract.
It is available only where the remedy of damages canot afford adequate relief
to the plaintiff.
STATEMENT OF ADJUSTMENTS
A statement prepared by
the solicitor for the vendor setting out, in balance sheet form the credits
to the vendor (e.g. purchase price, prepaid taxes, prepaid insurance, etc.)
and the credits to the purchaser (e.g. deposits, arrears in taxes prior to the
date of closing) and the balance due on closing, so that both the purchaser
and the vendor will have a record, at the date of closing of the financial breakdown
of the transaction.
STATUTE
A law established by an
act of the legislature.
STATUTE OF FRAUDS
A law which provides that
certain contracts must be in writing in order to be enforceable at law. It includes
real estate contracts.
STUCCO
Any cement-like material
used as an exterior covering for walls and the like, put on wet and drying hard
and durable.
STUDDING
One of the series of wood
structrual members used as supporting elements in walls and partitions. (Plural:
studs or studdings)
SUB-AGENT
An agent authorized by
the listing agent to assist in transacting the affairs of the principal (with
express or implied consent of principal).
SURVEY
The accurate mathematical
measurement of land and buildings thereon, made with the aid of instruments.
SYNDICATE
An association of individuals
formed for the purpose of owning, operating and managing large parcels of real
property for the mutual benefit of all, and organized as a corporation, limited
partnership or joint venture.
TENANCY-IN-COMMON
Ownership of land by two
or more persons; unlike joint tenancy in that interest of deceased does not
pass to the survivor, but is treated as an asset of the deceased's estate.
TENANT
One who occupies land
or tenement under a landlord.
TENURE
A system of land holdings
for a temporary time period.
TERM
In a mortgage "term"
is the actual length of time for which the money is loaned.
TERM MORTGAGE
A non-amortizing mortgage
under which the principal is paid in its entirety upon the maturity date.
TIME IS OF THE ESSENCE
Requires punctual performance
of a contract on closing date and is indicated by so stating as in an Agreement
of Purchase and Sale.
TITLE
The means of evidence
by which the owner of land has lawful ownership thereof.
TRANSFER
To convey from one person
to another.
TRUST or ESCROW ACCOUNT
An account separate and
apart from one's personal monies, as required by law in the case of a brokerage.
VALUATION
Estimated worth or price.
The act of ascertaining how much specific real property is worth.
VENDOR
A seller of real property.
VOID
Of no legal effect. A
nullity.
VOIDABLE
Where one party to a contract
is entitled to rescind the contract at his option.
ZONING BY-LAW
A by-law passed by a municipality
and approved by the Ontario Municipal Board, prohibiting the use of land in
certain areas for any purpose other than as set out in the by-law. In the Planning
Act, it is called a Restricted Area By-law.
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