Contracts, regulations, compliance, entity structures, zoning, permits, and landlord-tenant law.
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Foundation terms you need to know first (89 terms)
Development costs are all the expenses incurred during the process of acquiring land, designing, constructing, and preparing a real estate project for use or sale, from start to finish.
Base rent is the fixed, minimum rent amount paid by a tenant to a landlord for the use of a property, excluding additional charges like operating expenses, taxes, or utilities.
An absolute auction is a type of real estate auction where the property is sold to the highest bidder, regardless of the price, with no minimum bid or reserve price set by the seller.
The Lease Commencement Date is the official date specified in a lease agreement when the tenant's rights and obligations, including rent payments and property responsibilities, legally begin.
An application fee is a non-refundable charge paid by a prospective tenant to a landlord or property manager to cover the costs associated with processing a rental application, including background and credit checks.
Complex strategies and professional concepts (117 terms)
An Equity-for-Property Swap is an advanced real estate investment strategy where an investor exchanges equity in one or more properties or entities for direct ownership of another property, often to achieve tax deferral, portfolio restructuring, or strategic asset acquisition.
The accounting process of recognizing the estimated cost of an Asset Retirement Obligation (ARO) as a liability and capitalizing a corresponding asset, which is then depreciated over its useful life, reflecting the future costs associated with retiring a long-lived asset.
A legally binding contract that alters the priority of liens on a property, allowing a senior lienholder to voluntarily place their claim in a junior position to another, typically to facilitate new financing or complex transactions.
Unrelated Business Income Tax (UBIT) is a tax levied on the net income of a tax-exempt organization, including certain real estate investment vehicles, derived from a trade or business regularly carried on and not substantially related to its exempt purpose.
Inverse condemnation is a legal action initiated by a private property owner against a government entity to recover "just compensation" for a taking of their property, where the government has not formally exercised its power of eminent domain but has effectively deprived the owner of beneficial use or value.
A cure period is a specified timeframe granted to a borrower in default to remedy a breach of a loan agreement, typically before the lender can initiate more severe actions like foreclosure or invoke an acceleration clause.
A Cure or Quit Notice is a legal document issued by a landlord to a tenant, demanding that a specific lease violation be remedied within a set timeframe or the tenant must vacate the property. It is a prerequisite for eviction in many jurisdictions.
Curing title refers to the legal process of identifying and resolving defects or "clouds" on a property's title to ensure clear, marketable ownership, essential for real estate transactions.
A Debt-for-Property Swap is an advanced real estate transaction where a debtor transfers ownership of a property to a creditor in full or partial satisfaction of an outstanding debt, often used in distressed situations or for strategic asset acquisition.
A Declaration of Trust is a legally binding document that formally acknowledges the beneficial ownership of a property, distinguishing it from the legal title holder. It clarifies the rights and responsibilities of all parties involved, particularly in co-ownership or nominee arrangements.
Decommissioning costs are expenses incurred at the end of a property's useful life to dismantle, remove, or restore the site to a specified condition, particularly relevant for industrial, energy, or specialized assets with environmental or structural obligations.
A deed is a legal document that formally transfers ownership of real property from one party (grantor) to another (grantee), serving as tangible evidence of title transfer.
Deed recording is the official process of filing a legal document, such as a deed, with the county recorder's office to provide public notice of property ownership transfer and establish legal priority.
A Deed of Release is a legal instrument used in real estate to formally remove a lien, mortgage, or other encumbrance from a property's title, typically after the underlying debt or obligation has been fully satisfied. It clears the property of the specific claim, ensuring a clean title.
A Deed-in-Lieu of Foreclosure is a voluntary agreement where a homeowner transfers property ownership to their mortgage lender to satisfy a mortgage debt and avoid the formal foreclosure process.
Defeasance is a complex financial and legal process in commercial real estate where a borrower substitutes a portfolio of U.S. Treasury securities for the original property as collateral, effectively releasing the property from the mortgage lien, typically to facilitate a sale or refinancing when the loan contains a lockout period or strict prepayment penalty.
A deficiency judgment is a court order holding a borrower personally responsible for the remaining balance on a loan after the collateral, such as real estate, sells for less than the outstanding debt, typically following a foreclosure or short sale.
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