Legal Sub-glossary

Glossary | Broker | Investor | Legal | Mortgage | Owner | Renter

An abstract of title is a title-insurance-search report of a property’s history and current status.

 

As is” in a real-estate contract to purchase maintains that the property is sold without warranty, any guarantee as to its condition­­­­—what you see is what you get.

 

A bill of sale is a document or instrument that transfers title of a property.

 

Boilerplate is a standard word, phrase, or uniform clause found in legal documents.

 

A breach of contract is a failure to perform.

 

Broom-swept condition indicates that an apartment is conveyed to its new owner empty and clean.

A caveat is a detraction regarding a property that might affect fair market value; caveat emptor—let the buyer beware—is a cautionary warning.

clear title is one that is legal and lien-free.

closing takes place when a deed, or a co-operatively-owned apartment house’s shares and proprietary lease, is transferred and monetary settlements are conducted.

Closing costs are monetary amounts paid by either a buyer or seller during a settlement process.

The closing statement accounts for each receivable and disbursement payment made at the time of transfer.

A cloud on the title refers to any form of uncertainty, by claim or condition, which could affect a transaction.

Collateral is property or securities pledged to protect the interests of the lender.

A contingency refers to any and all conditions to be met before a contract to purchase is deemed binding; mortgage approval is a prime example.

A contract rent is, archaically, the agreed-upon amount paid to a landlord by a renter.

A contract to purchase is an agreement, which including terms and conditions, between competent parties to buy and sell real property.

Conveyance occurs when real property is transferred; also, the document or instrument effecting the transfer.

A covenant is a written promise.

A deal memo, generated by a seller or their representative, is provided to the seller’s attorney, the buyer’s attorney, and the buyer’s representative, and contains information identical to an agreement to purchase.

A deed is the written instrument that transfers title for real property.

To default is to fail to perform an obligation.

A deposit, also known as goodwill or earnest money, is funds held in a seller’s attorney’s escrow account, which demonstrates serious intent to purchase.

Due diligence is the investigation of potential legal liabilities, hidden caveats, and an apartment house’s overall financial health by a buyer’s attorney, by reviewing the recent meeting minutes, the original offering plan and prospectus, amendments, house rules and policies, and financial statements for the previous two years.

An encumbrance is any binding liability, whether an unpaid claim, lien, or attachment.

Escrow is a buyer’s funds held by a seller’s attorney, and applied to the purchase price at closing.

Eviction is the lawful expulsion of an occupant or occupants.

Fee-simple ownership is the enjoyment of full rights to real property.

A fixture is personal property that cannot be separated from real property, because it is semi-permanently attached and can only be removed when specifically excluded in the contract to purchase.

A foreclosure proceeding seeks to enforce a past-due mortgage or lien payment.

Fraud refers to an intentional misstatement of material fact.

Grace period is the span of 30 days following the receipt of written board of directors’ approval, in which time the seller’s attorney schedules to close at the convenience of the principals, their lenders, and the apartment house’s management company.

A ground lease, or, in Manhattan terminology, land lease, is a long-term agreement as to the use of land.

Homeowner’s insurance is combined personal-liability and hazard protection, which covers damage to an owner’s apartment and its contents caused by another owner, as in the case of a water leak or fire, or which augments a general-ownership insurance policy.

An instrument is a legal document.

What is irrevocable cannot be canceled; what is invalid is not enforceable.

Joint tenancy is ownership between two people that includes the right of survivorship, or sole ownership by the survivor, whereas severalty connotes a title in a single name.

A judgment is a court decision requiring payment of a debt; placing a judgment, or claim, against real property is making a property collateral—security that the debt will be paid.

A land-lease apartment house was built based upon rights by lease rather than title to land.

Liabilities are financial obligations.

 

A lien is a claim against a property.

 

A lis pendens, or pending lawsuit, involving real property is recorded as a notice of lis pendens, or a general warning that a property title is the subject of legal action.

 

A misrepresentation is a false oral representation or written statement, or an intentional omission of fact.

 

Mutual assent means that parties to a contract have come to an agreement: an offer has been made and accepted.

 

A novation contract is one substituted for a prior contract.

 

Null and void indicates that a contract is invalid.

 

Occupancy is the right to possess a property; an occupant is the person(s) residing.

 

An offering plan and prospectus, along with subsequent amendments and a proprietary lease, are the legal documents regarding co-ownership submitted to the New York State Attorney General’s Office.

 

Ownership is the right to possess and control, or to dispose of, a property at will.

 

Personal property is any item other than a real-estate property, referred to as real property.

 

Possession is the occupancy of a property, with the legal right to do so; in broker’s parlance, it refers to the time a purchaser or tenant may occupy a property.

 

Power of attorney, abbreviated as P.O.A., is the appointment of a third party to act in lieu of an individual.

 

Proration is the settling of unused prepaid expenses, such as utilities and— especially—real-estate taxes, between a buyer and seller at closing.

 

The prospectus, offering plan, and amendments is a bundle of general descriptions and an outline of specifications, prepared as required by the Attorney General’s Office in order to sell co-ownership units.

 

A qualified fee-simple title includes language to the effect of “as long as.”

 

Quiet-enjoyment rights have special meaning in multiple dwellings, in that no titleholder has an enforceable right to disturb their co-owners.

 

Real property is anything attached to land, and its interest, benefits, and inherent rights.

 

Reality of consent connotes that two parties are ready, willing, and able to sell or to buy real property.

 

Recording is the registering of a deed and title for public record.

 

Repossession is the taking back of a property due to breach of a contract, particularly associated with nonpayment of a mortgage loan.

 

Rescission is the cancelation of a contract.

 

Revocation is the withdrawal of an offer.

 

A sales contract is interchangeable with contract to purchase.

 

Self-dealing activity, especially disclosure of an interest in a property, is illegal.

 

A settlement, or closing, is the transfer of title deed to a buyer.

 

A settlement statement, to an out-of-towner, is the closing statement.

 

Severalty connotes that one person is on the title; joint tenancy includes the right of survivorship for either party within a couple.

 

Tax-deductible expenses are deducted from gross income to derive net income.

 

Terms are limitations to sales contracts and the conditions regarding the sales price or the form of payment.

 

A time is of the essence letter, from either a buyer or seller’s attorney to the corresponding attorney, indicates that a grace period is ending and that a closing date must be agreed to and set.

 

A title is evidence of ownership; also, the right to possess real property.

 

Title insurance protects both a buyer and lender from losses due to a disputed or defective title, and is issued by a title company, which takes responsibility for the title search, to ensure that “the seller” is, in fact, the owner, and to certify that no unpaid liens or claims are in place.

 

Title-transfer tax is a levy on property transactions by deed; co-operativeapartment-house share transfers are not taxed; condominium title transfers are.

 

Transfer of ownership is real property’s changing hands; transferability is the ability of a seller to actuate a sale.

 

Unencumbered property is free of any lien or claim.

 

A valid contract is one that is legally enforceable.

 

Valuable consideration is any factor, particularly desirable attributes, which add to a property’s value, such as a fully protected water or park view.

 

A contract that is void has no legal effect.

 

A voidable contract may be abrogated without legal consequence.

 

A walk-through is the final property inspection by the buyer and takes place immediately before closing.

 

A warranty is a guarantee as stated.