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.
Lease renewal is the process where a landlord and tenant agree to extend an existing lease agreement beyond its original term, often involving new terms like rent adjustments.
The lease term is the specific duration or length of time, defined in a lease agreement, for which a tenant agrees to rent a property from a landlord.
A property ownership arrangement where an investor holds rights to use and occupy land or a building for a specified period, as defined by a lease agreement, without owning the underlying fee simple title.
A legal addendum is a document added to an existing contract to modify, clarify, or add specific terms and conditions without altering the original agreement's core structure.
A legal description is a precise, legally sufficient identification of a parcel of land, defining its exact boundaries and location for official records and transactions.
Lender's interest refers to the financial stake a lender holds in a property or asset that serves as collateral for a loan, ensuring their investment is protected until the debt is fully repaid.
A Letter of Intent (LOI) is a non-binding document outlining preliminary terms for a real estate transaction, signaling serious interest and guiding future negotiations before a formal purchase agreement.
A liability is a financial obligation or debt owed by an individual or entity to another, representing claims against assets that must be settled in the future.
Liability insurance protects property owners from financial losses due to claims of injury or property damage caused to others on their property, covering legal costs and settlements.
Liability isolation is a legal strategy used by real estate investors to separate personal assets from investment liabilities, typically achieved through the formation of specific legal entities.
Liability protection encompasses legal and financial strategies used by real estate investors to safeguard personal assets from claims, lawsuits, or debts originating from their investment properties. It creates a crucial barrier between business risks and personal wealth.
A lien is a legal claim or right against a property, granted to a creditor, which serves as security for a debt or obligation until it is satisfied.
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