- General Agent
A general agent refers to the entity that has full authority over a property of the principal, such as a property manager.
- General Lien
A general lien is a lien that attaches to all of the property of a person within the court’s jurisdiction.
- General Warranty Deed
A general warranty deed is a deed denoting an unlimited guarantee of title.
- Ginnie Mae
Ginnie Mae is the nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.
A girder is the main beam in a structure that spans the distance from one side of the foundation to the other.
- Good Faith Estimate
A Good Faith Estimate is an estimate of the fees a mortgage borrower will be required to pay at closing. It is required by Federal law that the lender provides the Good Faith Estimate within three business days of the initial loan application.
- Grace Period
In a mortgage, the grace period refers to a specified time frame in which payment may be made without the borrower being in default.
- Graduated Lease
A graduated lease is a lease in which the rent changes from period to period over the lease term. This type of lease is usually used by a new business tenant whose income will increase over time.
- Graduated Payment Mortgage (GPM)
A graduated payment mortgage has payments that are lower in the early years but increase on a scheduled basis until they reach a level of amortization.
- Grandfather Clause
A “grandfather clause” allows an activity to continue that was once considered acceptable or legal, but has since had the rules or laws changed. An example of this is when a building once allowed pets, but subsequently changed the House Rules to not allow pets. The existing tenants or owners are allowed to keep their pets, but new occupants to the building are not allowed to bring them in. The existing pets and owners are “grandfathered”.
A grant is a transfer of title to real property by deed.
- Gross Lease
A gross lease is a lease in which the lessor pays all costs of operating and maintaining property, including the property taxes.
- Ground Lease
A ground lease is a long-term lease of unimproved land and is usually for construction purposes.
- Habendum Clause
The habendum clause is the statement in a deed that begins with the words “to have and to hold” and describes the estate granted.
- Half Bath
A half bath, or powder room, has a sink and toilet, but does not have a bathtub or shower.
Headers are wooden reinforcements for the placement of doors and windows.
A hectare is the metric system equivalent to 2.47 acres.
- Holding Period
Holding period refers to the length of time a property is owned.
- Holdover Tenant
A holdover tenant is a tenant that remains in possession of a property after a lease terminates.
- Home Equity Loan
A home equity loan is a loan made against the equity in a home.
- House Rules
House rules are building rules regulating the conduct and responsibilities of homeowners as they affect the building’s common areas and services.
- Housing Expense Ratio
The housing expense ratio is the relationship of a borrower’s monthly payment obligation on housing (principal, interest, taxes, insurances and other applicable housing expenses) divided by gross monthly income, expressed as a percentage. It is also referred to as top ratio.
HVAC is an acronym that stands for heating, ventilation and air conditioning.
- Hydronic System
A hydronic system is a process in an HVAC system where liquids are heated or cooled.
Hypothecate is to pledge property as security for the payment of a debt without giving up possession.
Improvements are changes or additions made to a property. These typically increase the value of the property.
Indemnification is the reimbursement or compensation paid to someone for a loss already suffered.
Index is a benchmark, usually a published interest rate, such as a one-year London Interbank Offered Rate (LIBOR) security yields, used to calculate the interest rate of an adjustable rate mortgage when rate is scheduled to change. Generally, a margin stated in loan documents is added to the index to determine the new interest rate.
- Index Lease
An index lease is a lease with a method of determining rent by an index, such as the LIBOR index.
An ingress is the right to enter a parcel of land, usually used as “ingress and egress”, or both entering and leaving.
An injunction is a court instruction to discontinue a specified activity.
- Insider Rights
Special rights offered to tenants occupying apartments in a building in the process of converting to a co-op or condo, giving them the exclusive right to buy their apartments for a limited period of time and normally at a discounted price.
- Installment Land Contract
See Contract For Deed.
- Installment Sale
An installment sale is a property sale in which the purchaser pays the purchase price over a period of years. The seller recognizes gain for tax purposes by the proportion of the profit (determined by the profit divided by the nest sales price of the asset) received on each payment as it is received.
- Insurable Interest
Insurable interest is the amount of property qualifying for insurance.
- Insured Value
The insured value is the amount that a structure is insured and should include the cost of replacing the structure if completely destroyed.
- Interest-Rate Spread
The interest-rate spread is the differential between the retail interest rate charged to a borrower and the wholesale rate accepted by the financial industry when acquiring home mortgage loans. The spread is the profit to the bank.
- Interest Rates
The interest rate is the cost of borrowing money from a lender. Rates will vary and will change over time.
- Interim Financing
Interim financing is a short-term or temporary loan such as a construction or bridge loan.
- Interim Interest
Interim interest is interest owed by the borrower to the lender on the mortgage loan from the day of the closing top the date covered by the first payment.
Intestate is the condition that occurs when someone dies without a valid will.
- Involuntary Alienation
Involuntary alienation is the transfer of title to real property as a result of a lien foreclosure sale, adverse possession, filing a petition in bankruptcy, condemnation under power of eminent domain, or, upon the death of the titleholder, to the state if there aren’t any heirs.
A New York City program giving tax breaks for the substantial rehabilitation of an existing property. The program provides for an abatement of tax on a formula based on the level of improvement and an exclusion from additional tax due to the change in use of the property.
- Joint Tenancy
Joint tenancy is a form of co-ownership that includes the right of survivorship.
A joist is a wooden framing member used in the construction of floors and ceilings.
- Judgment Lien
A judgment lien is a general lien resulting from a court decree.
- Jumbo Loan
A mortgage issued in an amount exceeding the threshold stipulated under Fannie Mae (FNMA) regulations for a conforming loan.
- Land Lease
A land lease is a situation in which a building and other land improvement are rented for a term of years. At the end of the lease term, the right of possession is extinguished and reverts back to the landowner. At the time, the tenant loses any remaining equity interest in the property.
Landmark status is the designation given to a building or neighborhood that is under government protection for purposes of preservation.
- Landmarks Commission
The Landmarks Commission is a city governmental agency assigned responsibility for recommending properties and neighborhoods to be landmarked and ensuring that landmarks are properly preserved.
A lease is a written agreement to rent a property or part of a property from an owner.
- Letter of Adequacy
A letter (usually issued by a managing agent) found in the offering plan of a building converting to cooperative or condominium ownership affirming that the income and expenses, as expressed in the proposed budget, are adequate to cover the costs of running the building. This expert evaluation is required by the New York State Martin Act.
A liability is a debt or claim that is owed.
- LIBOR Index
Stands for “London Interbank Offered Rate”, and is the average yield of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market. LIBOR is a common index used as a benchmark for adjusting mortgage interest rates in adjustable-rate mortgages.
A lien is an encumbrance on property which acts as security for the payment of a debt or the performance of an obligation. A mortgage is a lien. A lender will want most, if not all, liens on a property removed before making a mortgage loan.
- Lien Foreclosure Sale
A lien foreclosure sale is the sale of property without consent of the owner, as ordered by a court or authorized by state law due to a debt resulting in a lien.
- Life Estate
Life estate is a freehold estate created for the duration of the life or lives of certain named persons. It is a non-inheritable estate.
- Life Estate in Remainder
A life estate in remainder is a form of life estate in which certain persons are designated to receive the title upon termination of the life tenancy.
- Like-Kind Exchange
The like-kind exchange is an exchange of similar property, as defined in the Internal Revenue Code that can be performed without recognition of taxable gain at the time of transfer.
- Limited Liability Company
A form of organization that is similar to a partnership, in that recognition of income and expenses flow directly through to the owners for tax purposes (without a corporate tax), but that still permits insulation from liability similar to that of a corporation.
- Liquidated Damages
Liquidated damages are the agreed amount to be paid as compensation for a breach of contract.
Liquidity refers to the ability of assets that are readily convertible to cash.
- Lis Pendens
Lis pendens means a “lawsuit pending”. See Notice of Lis Pendens.
The term used by brokers to market an apartment for sale or rent.
- Listing Broker
The listing broker represents the interests of the seller or landlord in the sale or rental of his or her property.
- Loan Commitment
The loan commitment is the written obligation from a lending institution to provide a mortgage to a borrower.
- Loan Origination Fee
The loan origination fee is the financing charge required by a lender.
- Loan-to-Value Ratio (LTV)
The loan-to-value ratio is the mortgage amount divided by the lower of the purchase price or the appraised value of the property. This ratio is expressed as a percentage. A lender will use this ratio in determining the maximum mortgage loan that it will make on the property.
- Lock-In / Rate Lock Agreement
A lock-in is an agreement by the lender guaranteeing the applicant a specified interest rate on the mortgage loan provided the loan closes within a set period of time.
A loft refers to an open living space that was converted from commercial space to residential space. Lofts contain very high ceilings, large windows and open space. In New York City, most lofts and converted commercial space are located in downtown Manhattan.
The monthly charge levied on owners by a cooperative corporation to cover the building’s operating costs, real estate taxes, and the debt service on the building’s underlying mortgage.
- Managing Agent
In New York City, most of the cooperative and condominium buildings are managed by an outside company, or managing agent, which is responsible for the building operations.
- Mansion Tax
A mansion tax is a New York State tax of 1% of the selling price levied on the buyer of any residence costing in excess of $1,000,000.
- Market Value
The market value of a property is an estimation of the price for a property in relation to the current real estate market.
- Martin Act
Martin Act is the New York State law regulating the conversion of properties to cooperative or condominium ownership, and is also referred to as Section 352eee and 352eeee of New York State’s General Business Law.
- Master Deed
A master deed is the instrument that legally establishes a condominium. It is also referred to as a condominium declaration.
- Mechanic’s Lien
A mechanic’s lien is a statutory lien available to anyone supplying labor or material to the construction of an improvement of land that ahs not been properly compensated.
- Metes and Bounds
Metes and bounds is a system of land description with distances and directions.
- Monolithic Slab
A monolithic slab is a type of foundation in which the footing and slab are poured at the same time.
A mortgage is a pledge of real estate collateral to secure a debt. Also, it is a legal document describing and defining the pledge. The mortgage may also include the terms of repayment of the debt. It is also referred to as a deed of trust.
- Mortgage Banker
A mortgage banker is an institution that performs services similar to those of a mortgage broker. However, a mortgage banker is also legally permitted to lend its own funds.
- Mortgage Broker
A real estate professional who represents an array of banks seeking to issue mortgages. The mortgage broker meets with a customer, assists with the application, and facilitates the mortgage process on behalf of the borrower and the bank. Generally, in the case of residential mortgages, the mortgage broker is paid a fee by the bank for this service.
- Mortgage Insurance (or Private Mortgage Insurance / PMI)
Mortgage insurance is insurance that protects the lender in case the home buyer does not make their mortgage payments. Typically, a borrower would be required to pay a fee for mortgage insurance if their down payment is less than 20%.
- Mortgage Note
A mortgage note is a document signed at closing which states the borrower’s promise to re-pay a sum of money. The note states an interest rate and a fixed period of time (term) for repayment.
- Mortgage Satisfaction
Mortgage satisfaction refers to the full payment of a mortgage loan.
The mortgagee is the lender in a mortgage transaction.
The mortgagor is the borrower in a mortgage transaction.
- Multiple Dwelling
A multiple dwelling is a structure with two or more residential units.
- Multiple Listing Service (MLS)
A MLS is a central service for real estate listings available to member brokers.
- National Association of Realtors (NAR)
The NAR is the largest and most prominent trade organization for real estate brokers and agents.
- Negative Amortization
This occurs when a loan permits the borrower to make a payment that is less than the full amount required to cover the interest charge on the open balance and the shortfall is added to the mortgage principal.
- Negative Pledge
A negative pledge is when the condominium places restrictions on the unit deed and trust agreement restricting the right of an owner to finance a condominium unit for more than a specified amount.
- Net Lease
A net lease refers to a type of lease in which the tenant pays a fixed rent plus the operational costs of the property.
- Net Listing
A net listing is a method of establishing the listing broker’s commission as the entire amount above specified new amount to the seller. This method of establishing a broker’s commission is illegal in New York State.
- Net Worth
Net worth is your assets less your liabilities.
- Nonconforming Use
A nonconforming use refers to the utilization of land that does not conform to the zoning ordinance for the area.
- Nonrecourse Note
A nonrecourse note is a type of note in which the borrower has no personal liability for payment.
Some legal documents, including certain leases and contracts of sale, are notarized by a certified Notary Public to verify the authenticity of a signature.
- Notice of Lis Pendens
Notice of lis pendens is a public record warning all concerned parties that title to a property is the subject of a lawsuit and any lien resulting from the suit will attaché to the title.
An offer is made to purchase a property at a specific price. Once an offer is accepted, then a contract of sale is issued by the seller’s attorney.
- Offering Plan
- Open-ended Listing Contract
An open-ended listing contract is a contract between a seller and a real estate broker that does not have a termination date.
- Open-end Mortgage
An open-end mortgage is a mortgage that may be refinanced without rewriting the mortgage contract.
Origination is the first step in the mortgage loan process consisting of the completion of the application.
An ordinance is a law enacted by the local government.
- Open Listing
An open listing is an apartment for sale for which the owner has not signed an exclusive agreement with a real estate broker. Many brokers may represent the seller, or the seller can promote the property independently.
- Option to Renew
An option to renew is a provision in a lease that states the method and terms of a lease renewal.
- Origination Fee
The origination fee is a service charge by a lending institution for a mortgage.
- Ownership in Severalty
Ownership in severalty is title to real property held in the name of one person only.
A parcel is a specific portion of land such as a lot.
Partition refers to the legal proceeding that divides property of co-owners so each will hold title in severalty.
- Party Wall
Party wall refers to the wall in common between two adjoining structures, such as in townhouses and brownstones.
- Passive Loss
A passive loss is a loss generated by investment real estate when real estate is not the taxpayer’s primary business. Loss in excess of income may not be fully recognized for tax purposes in the year it was incurred.
A penthouse apartment refers to the apartment on the highest floor in a luxury, high-rise building.
- Percentage Lease
A percentage lease refers to a lease that has a rental amount that is a combination of a fixed amount plus a percentage of the lessee’s gross sales.
Percolation is the movement of water through soil.
- Percolation (Perc) Test
A perc test determines if the soil is sufficiently porous for the installation of a septic tank.
- Perfecting a Loan
When a loan is issued against a personal property, it is recorded in the county clerk’s office against the name of the borrower. The recording process perfects a security position against the collateral.
- Periodic Tenancy
A periodic tenancy lease automatically renews for successive periods unless terminated by either party. It is also called an estate from year to year.
- Phantom Gain
A sale of real estate in which income is recognized for tax purposes but no money has been received correlating to the gain amount. This can occur when the property’s basis has been depreciated below the property’s mortgage amount.
Pied-a-terre is a term that refers to an apartment that is not the primary residence of the owner. The term refers to an apartment that is used only sporadically throughout the year.
PITI is an acronym for a mortgage payment that includes principal, interest, taxes and insurance.
A plat is a property map that is part of the public record.
- Platform Framing
Platform framing is the most common type of framing in residential construction in which the framing of the structure rests on a subfloor platform.
Points refer to the payment made to a lender as consideration for issuing a mortgage, usually based on a percentage of the loan amount. Each point is equal to 1% of the principal of the mortgage.
A post-war building is one that was built after World War II, typically between the 1950s and 1970s. They vary in size, but are usually taller than pre-war buildings, are often constructed of white, red or brown brick and have few architectural details. The rents are usually lower than in pre-war or newer buildings.
- Powder Room
A powder room is also referred to as a half-bath, and only has a toilet and sink.
A pre-approval is a process in which a conditional commitment is issued after a loan profile is underwritten with all standard documentation except a property appraisal and a title search.
A pre-qualification is a process in which a loan officer calculates the housing-to-income ratio and the total debt-to-income ratio to determine an approximate maximum mortgage loan amount.
A pre-war building is one that was built before World War II, and mainly prior to 1929, since there were few residential buildings built during the 1930s. Buildings are less than 20 stories and usually have large rooms, mouldings, hardwood floors and high ceilings.
- Price-to-Earnings Ratio (P/E Ratio)
The price-to-earnings ratio is the common metric used to assess the relative valuation of equities. To compute the P/E ratio in the case of a rented house, divide the price of the house by its potential earnings or net income, which is the market rent of the house minus expenses, which include maintenance and property taxes. This formula is:
House P/E Ratio = House Price / Rent-Expenses
Compare this ratio to the simpler but less accurate price-rent ratio.
- Price-to-Income Ratio
It is the basic affordability measure for housing in a given area. It is generally the ratio of median house prices to median familial disposable incomes, expressed as a percentage or as years of income. This ratio, applied to individuals, and also referred to as “attainability”, is a basic component of mortgage lending decisions.
- Price-Rent Ratio
The price-rent ratio is the average cost of ownership divided by the received rent income (if buying to let) or the estimated rent that would be paid if renting (if buying to reside). This formula is:
House Price-Rent ratio = House Price / Monthly Rent x 12
- Primary Residence
Generally, a primary residence of an owner or renter is one that they occupy the majority of time, usually considered to be 6 months and 1 day out of every year.
The principal in the mortgage is the amount that is borrowed and on which interest is paid or received.
- Private Mortgage Insurance (PMI)
See Mortgage Insurance.
Processing is the second step in the mortgage application process which involves the verification of information stated on the application. Credit reports and the appraisal are also ordered at this time.
- Profit Exemption
Current tax rules permit the profit on the sale of a primary residence to be tax exempt for up to $250,000 for an individual, or $500,000 for a married couple.
- Property Condition Disclosure Form
This form is a comprehensive checklist pertaining to the condition of the property including its structure and any environmental issues in and around the property.
- Property Description
The property description is an accurate, legal description of the land.
- Property Tax
The tax issued by a municipality on the ownership of a property.
- Proprietary Lease
The lease issued by a cooperative corporation to each tenant-shareholder prescribing his or her right to occupy a specific apartment and his or her general obligations as an owner and tenant.
- Pro-Rata Share
In relation to a co-op, the pro-rata share is your apartment’s share of the building’s underlying mortgage. The share is determined by dividing the amount of the underlying mortgage by the number of shares in the building then multiplying the per-share amount by the number of shares for your apartment. The lower of either the appraised value or purchase price then divides that number.
A document issued by a sponsor in the process of converting a building to a cooperative or condominium ownership. It is intended to provide “full disclosure” of all relevant facts associated with evaluating an investment in the property, and is also referred to as the offering plan or black book.
A quadruplex is an apartment with four levels.
Radon is a colorless, odorless gas present in soil that enters a home through small spaces and openings.
- Rate Cap
A rate cap is the limit on interest rates during the term of an adjustable rate mortgage.
Ratios are guidelines applied by the lender during underwriting a mortgage loan application to determine how large a loan to grant an applicant. The ratios the lenders use are generally the Loan-to-Value Ratio, Housing-to-Income Ratio, and Debt-to-Income ratio.
- Real Estate Broker
A real estate broker is an individual employed on a fee or commission basis as an agent to bring buyers and sellers together and assist in negotiating real estate contracts between them.
- Real Estate Investment Trust (REIT)
An REIT is a trust owned by shareholders that buys and initiates mortgage loans.
- Real Estate Salesperson
A real estate salesperson performs any of the acts of a real estate broker but while associated with and supervised by a broker.
- Real Estate Settlement Procedures Act (RESPA)
RESPA is a federal law that regulates the activities of lending institutions in making mortgage loans.
- Real Property Tax Lien
This lien is a tax levied against real property by the local government and has priority over all other liens.
When investment real estate has been depreciated for tax purposes, the gain on the sale includes a “recapture” of the previously written-off depreciation as gain. In certain cases, this can result in a tax liability that exceeds the cash received. See “Phantom Gain”.
- Recognition Letter
A recognition letter is a letter from the cooperative corporation’s board of directors recognizing the secured rights of a lender to the shares of stock and the proprietary lease on a specific apartment.
Recording is registering the ownership, lien, or claim of a party to a specific parcel of real estate with the local county.
- Recording Fees
Recording fees are the fees charged by the recorder’s office to record a document such as a mortgage, deed of trust, deed and UCC Financing Statement.
Redlining is the resistance of lending institutions to make loans for the purchase, construction, or repair of a dwelling due to the socio-economic conditions of the property’s location.
- Referral Fee
A referral fee is a percentage of a broker’s commission paid to another broker for the referral of a buyer or seller.
Refinancing are the proceeds of a new loan used to pay off an existing mortgage on the same property.
A rental is the possession, but not ownership, of a property for a limited duration of time under defined terms and conditions.
- Rental Building
A rental building only has apartments for rent and not for purchase.
- Rent Control
A form of rent regulation, rent control occurs when an apartment has tenants that have been in continual residence since July 1, 1971, or other qualified occupants that have been in residence with the original tenant continuously for either two years (immediate relative) or five years (non-relative). Rent control limits the amount of rent landlords can charge for apartments and restricts their ability to evict.
- Rent Stabilization
Another form of rent regulation, rent stabilization usually applies to buildings built before 1974 and apartments removed from rent control. After the rent has legally been raised to over $2,500 per month, or the household income of the tenants is over $200,000 per year, rent stabilization is no longer in effect. The amount that landlords are legally allowed to increase the rent every year is regulated by the NYC Rent Guidelines Board. It also covers buildings that receive J-51 and 421-A tax benefits, so there are newer buildings with apartments that have higher rent that also are regulated by rent stabilization.
- Reserve Fund
A reserve fund is the amount reserved to provide funds for future expenses in order to maintain a cooperative or condominium building and is managed by the building’s board.
- Residential Lead-based Paint Hazard Reduction Act
This act stipulates procedures to be followed in disclosing the presence of lead-based paint in the sale or rental of properties built prior to 1978.
- Reverse Annuity Mortgage
A reverse annuity mortgage is a type of mortgage that retirees on fixed incomes can use to generate income out of the equity in their homes while they continue to live in the home.
- R-Factor or R-Value
The R-Factor is a rating that measures the degree of resistance to heat transfer.
A rider is an addendum to a document that covers supplemental issues.
- Ridge Beam
A ridge beam is the highest part of framing in a structure and forms the apex of the roof.
- Right of Assignment
The right of assignment allows the lender to sell a mortgage at any time and obtain money invested rather than wait for the completion of the loan term.
- Right of First Refusal
A condition contained in many condominium master deeds that permits the board to review any party seeking to purchase or rent an apartment and to refuse the applicant if it so desires. If the board refuses the applicant, it must thereafter purchase or rent the apartment under the same terms and conditions stipulated in the contract.
- Right of Survivorship
The right of survivorship is the right of an owner to receive the title to a co-owner’s share upon death of the co-owner, as in the case of joint tenancy and tenancy by the entirety.
Right-of-way is an easement allowing someone to use the land of another for a specific purpose.
- Riparian Rights
Riparian rights are the rights of an owner of property adjoining a watercourse such as a river, including access to and use of the water.
Apartment size may be described by number of rooms. A room in NYC must be at least 100 sq. ft. and have a window, except in the case of a kitchen. Most kitchens are counted as rooms, unless they are Pullman types, which are part of the living room. Baths are not counted as rooms. A three room apartment consists of a living room, bedroom and kitchen. A four room apartment could have two bedrooms, or a bedroom and dining room, a living room and kitchen.
- Running with the Land
Running with the land refers to rights that are passed with the title of property from the grantor to the grantee.
- Sale Price
The sale price, also referred to as the purchase price, refers to the amount of money paid by the purchaser to the seller.
- Sales Comparison Approach
The sales comparison approach is an appraisal tool for estimating the value of a property with other similar properties that have sold recently.
- Satisfaction of Mortgage
The satisfaction of mortgage indicates that a mortgage has been paid in full.
- Schedule A
A list in the offering plan of all the apartments being sold in a newly-constructed building or one that is undergoing conversion. It presents allocated shares or unit-percentage interest, room count, and other material cost elements, including the projected maintenance charge and the tax-deductible portion of the maintenance.
- Schedule B
The projected cost of operating a cooperative or condominium during its first year of operation and is part of the offering plan.
- Section 421 A
A New York City tax program intended to stimulate new construction by permitting a phase-in of the real estate tax over a period of ten years.
- Security Deposit
The security deposit is the payment required by the landlord that guarantees that the tenant will meet their financial obligations under the terms of the lease. Besides guarding against any unpaid rent, it also guards against any potential damage that may be incurred by the tenant.
- Seller Contribution
The seller contribution is a payment by the seller of a property of some, or all, of the buyer’s closing costs.
- Seller’s Agent
A seller’s agent is the listing agent that works in the best interests of the seller.
- Service Drop
A service drop is the above-ground electrical cables that come from the nearest electrical pole connecting the electrical service of the house.
- Service Lateral
Service lateral are the underground electrical wiring connecting the electrical service of the house.
Servicing are activities the lender performs such as collecting the payments and/or paying taxes and insurance from an escrow account.
- Servient Tenement
Servient tenement refers to land encumbered by an easement.
The setback is the distance from the front or interior property line to the point where the structure is located.
Severalty refers to ownership by only one person.
When purchasing in a cooperative building, the apartment is not actually purchased directly as real estate but rather shares in the cooperative corporation are purchased. The amount of shares represent the portion of the building owned based on the size and location of the unit in the apartment. A proprietary lease is then issued by the corporation for a specific unit to the purchaser.
A soffit is the area under the roof extension of a structure that can be made of wood, vinyl or aluminum.
- SONYMA (Sonny Mae)
SONYMA or State of New York Mortgage Agency raises money from the sale of New York tax-free bonds and uses these funds for mortgage loans.
The sponsor is the developer or owner of the property that initiates the conversion of a property from single ownership to cooperative or condominium ownership.
- Square Footage
The area measured in square feet of a certain property. Square footage can be measured in different ways and is usually considered approximate. Condominium apartments have specific laws that determine the way in which the apartment is measured and usually more accurately reflect the actual square footage within a property.
A standing mortgage is an interest-only mortgage with no principal reduction over time. See “Balloon Mortgage”.
- Subject to Financing
A clause in the contract of sale for a cooperative apartment stipulating that the agreement is conditioned upon the buyer’s obtaining financing from a financial institution in an agreed-upon amount.
A sublet is when the owner of an apartment or the main lease holder decides to rent the apartment to a sub-tenant.
- Super Jumbo Loan
This is a loan that exceeds $1,000,000.
A survey is a document indicating measurements, boundaries and the area of a property.
- Tax Abatement
A tax abatement is a financial incentive offered by a local or municipal government to stimulate development in a particular area. The owner of the property and/or the developer has reduced taxes for a specific period of time, typically 10-15 years. The taxes are raised incrementally to the full tax burden over the period of a few years.
- Tax Deductible
A tax deductible expense helps to reduce taxable income. The tax deductible expenses related to real estate are interest payments on mortgages and real estate taxes.
- Tenancy by the Entirety
Tenancy by the entirety refers to co-ownership limited to husband and wife, with the right to survivorship.
- Tenancy in Common
Tenancy in common is co-ownership that does not include the right of survivorship.
- Term, Amortization
The amortization term is the period of time in which the interest and principal payments of a loan must be made.
- Term Mortgage
A term mortgage is a mortgage with interest payments only during the mortgage term, with the principal due at the end of the term.
The title of a property is the evidence or documentation that an owner is in lawful possession of the property, such as a property deed.
- Title Insurance
Title insurance is an insurance policy protecting the insured from financial loss caused by a defect or question about the title to real property.
- Title Search
Title search is a process that examines local public records, laws and related court decisions to determine if any other parties have valid claims against the subject property (such as past due taxes, judgments or mechanics’ liens). It also discloses past and current facts about the subject property’s ownership.
- Title Transfer Tax
Title transfer tax is a tax imposed on the conveyance of title to real property by deed.
A townhouse is a private residence where at least one wall is shared with another residence.
- Treasury Index
The Treasury Index is the weekly average yield on US Treasury securities adjusted to a constant maturity of one, three or five years, as made available by the Federal Reserve Board.
- Triple Mint
Triple mint condition refers to a residence that is in immaculate condition.
- Triple Net Lease
Triple net lease refers to a condition when the lessee pays all the expenses associated with the property in addition to the rent.
A triplex is an apartment that has three levels.
- Truth-in-Lending Disclosure
Federal law requires that the lender must give this document to the home buyer within three business days after the loan application. This disclosure gives details of the mortgage payments along with the corresponding APR and finance charges.
- 12 MAT Index
Stands for “12-month average Treasury index” and is a 12-month average of the one-year U.S. Treasury rates used for one form of a monthly adjustable mortgage. Since it is based on historical experience, this index lags current interest rates.
In mortgage lending, underwriting is the decision-making process used to determine whether the loan risk is acceptable to the lender. Underwriting involves the satisfactory review of the property appraisal and examination of the borrower’s ability and willingness to repay the debt and sufficiency of collateral value of the property.
- Unencumbered Property
Unencumbered property is property that is free of any lien.
- Unity of Interest
Unity of interest occurs when co-owners all have the same percentage of ownership in a property.
- Unity of Possession
Unity of possession occurs when all co-owners have the right to possess any and all portions of the property owned, without physical division.
- Unity of Time
Unity of time occurs when co-owners receive title at the same time in same conveyance.
- Unity of Title
Unity of title occurs when co-owners have the same type of ownership in a property.
- Unrelated Business Taxable Income (UBTI)
A special federal tax levied on investment income generated from property held in a pension plan in which there is a mortgage. The property ownership is allocated between the cash investment and the mortgage, and all gain allocable to the mortgage portion is subject to UBTI tax.
- Unsold Shares
Shares of stock in a cooperative corporation transferred to the sponsor at the completion of the conversion process. The sponsor normally gets special rights to rent and/or sell these shares (representing special apartments) without board approval.
- U.S. Department of Housing and Urban Development (HUD)
A federal agency that administers funding for projects related to housing.
- Useful Life
Useful life is the period of time that a property is expected to be economically useful.
- Use Variance
Use variance is the permission to use the land for a purpose which, under the current zoning restrictions, is prohibited.
Usury is charging a rate of interest higher than the rate allowed by law.
- Vacancy Rate
The vacancy rate is the projected rate of the percentage of rental units that will be vacant in a given year.
- VA Guaranteed Loan
A VA guaranteed loan is a mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veteran Affairs.
Valuation establishes an opinion of value utilizing an objective approach based on facts related to the property, such as age, square footage, location, cost to replace, etc.
- Value in Use
Value in use is the present worth of the future benefits of ownership.
A variance is a deviation from specific requirements of a zoning ordinance due to special conditions of the property.
- Vendor’s Affidavit
A vendor’s affidavit is a document signed under oath by the seller stating that the seller has not encumbered title to real estate without full disclosure to the purchaser.
- Vesting Options
Vesting options are choices buyers have in how to acquire property.
- Vicarious Liability
Vicarious liability is one person being responsible for the actions of another.
- Walk-up Building
A walk-up building is a building that does not have an elevator and are usually four or five stories.
- Walk-Through Inspection
The walk-through inspection of a property occurs right before a closing to ensure that the property is being delivered as stipulated in the contract of sale.
Wetlands are federal and state protected transition areas between uplands and aquatic habitats that provide flood and storm water control, surface and groundwater protection, erosion control, and pollution treatment.
- Words of Conveyance
Words of conveyance is a stipulation in a deed demonstrating the definite intent to convey a specific title to real property to a named grantee.
- Wraparound Mortgage
A wraparound mortgage is a junior mortgage in an amount exceeding a first mortgage against the property.
- Writ of Attachment
A writ of attachment is a court order preventing any transfer of attached property during litigation.
The yield refers to the return on an investment.
An area of a municipality or specific building that is zoned for a specific use, such as residential, commercial, etc.
Zoning are the laws regulating land use.
- Zoning Ordinance
Zoning ordinance is a statement settling forth the type of use permitted under each zoning classification and specific requirements for compliance.