BARRIE REAL ESTATE by GARY and CANDI GRANT - Experience the Dedication!

REAL ESTATE TERMS & DEFINITIONS


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 instalments 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 or process of estimating value.

APPURTENANCE: Something which is outside the real property 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.

AVOIDABLE: Where one party to a contract is entitled to rescind the contract at his option.

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 promise 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 restrictive, 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 extension 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.

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.

JUDGEMENT: The decision of the Court.

LANDLORD: The person 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.

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

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

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

MARKET VALUE: (Formal Definition) The highest price in terms of money, which the property will bring to a willing seller if exposed for sale on the open market allowing a reasonable time to find a willing purchaser, buying with the knowledge of all the uses to which 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 SERVICE®: 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 number of brokerages without liability to compensate any except the one who first acquires a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer; the sale of the property automatically terminates the listing.

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

PERSONAL PROPERTY: All property, except land and the improvements thereon.

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 as defined in the Real Estate and Business Brokers Act of Ontario.

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 there from.

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 consideration.

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 there from.

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 cannot 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.

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 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.

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.