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 gross lease is a rental agreement where the tenant pays a fixed, all-inclusive rent, and the landlord covers most or all of the property's operating expenses, such as taxes, insurance, and utilities.
Gross negligence is a severe form of carelessness, demonstrating a conscious and voluntary disregard for the safety or rights of others, often leading to significant harm or loss in real estate contexts.
Habitability refers to the legal standard that a rental property must be safe, sanitary, and fit for human living, ensuring basic living conditions for tenants. It is enforced through the Implied Warranty of Habitability, obligating landlords to maintain essential services and structural integrity.
Habitability standards are legal requirements that mandate landlords provide and maintain rental properties in a safe, healthy, and livable condition, ensuring essential services and structural integrity for tenants.
Hard costs are the direct, tangible expenses associated with the physical construction or renovation of a real estate property, encompassing materials, labor, and equipment.
Held for Sale Classification is an accounting designation for non-current assets or disposal groups whose carrying amount will be recovered primarily through a sale transaction rather than through continuing use, requiring specific criteria to be met under GAAP and IFRS.
A highest and best offer is a request from a seller or their agent for all interested buyers to submit their strongest financial and contractual proposals by a specific deadline, typically in a competitive market.
A holding company is a corporate entity that owns controlling interests in other companies or assets, primarily used in real estate for advanced asset protection, liability segregation, and tax optimization across a portfolio.
A holdover tenant is a lessee who remains in possession of a rental property after their lease agreement has expired, without the landlord's explicit consent. This situation creates a tenancy at sufferance, with specific legal implications for both parties.
A home inspector is a professional who evaluates a property's condition to identify defects in its structure and systems, providing crucial information for buyers, especially real estate investors, to make informed purchasing decisions and mitigate risks.
Homeowner's insurance is a comprehensive property insurance policy that protects a homeowner's dwelling, personal belongings, and liability against various perils like fire, theft, and natural disasters.
A Homeowners Association (HOA) is a private organization that establishes and enforces rules for a planned community, maintaining common areas and collecting fees from property owners.
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