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 legal document issued by a lienholder acknowledging that a debt has been fully paid and the lien on a property has been removed. It is crucial for clearing title and enabling property transfers.
A Life Estate is a form of property ownership where an individual (the life tenant) holds the right to possess and use a property for their lifetime, after which ownership automatically transfers to a designated third party (the remainderman).
Limited liability is a legal protection that shields an investor's personal assets from the debts and liabilities of their business, typically achieved by operating through a separate legal entity like an LLC or corporation.
A Limited Liability Company (LLC) is a business structure that protects its owners' personal assets from business debts and liabilities, while offering flexible taxation options.
A business entity composed of at least one general partner (GP) who manages the business and assumes unlimited liability, and at least one limited partner (LP) who contributes capital but has limited liability and no management authority.
Liquidated damages are a pre-determined amount of money specified in a real estate contract, agreed upon by both parties, to be paid by the breaching party to the non-breaching party as compensation for anticipated losses in the event of a contract breach.
Liquidation preference is a contractual right granted to certain investors, typically preferred equity holders, that dictates the order and amount of payout they receive upon a liquidity event, such as a sale or refinancing, before common equity holders.
Lis Pendens is a recorded legal notice indicating that a lawsuit has been filed concerning the title to or possession of specific real property, warning that any subsequent interest in the property will be subject to the outcome of the litigation.
A listing agreement is a legally binding contract between a property owner and a real estate broker, granting the broker authority to sell the property and outlining the terms of their compensation and responsibilities.
Litigation in real estate refers to the process of resolving disputes through the legal system, typically involving lawsuits filed in court. It addresses disagreements over property ownership, contracts, landlord-tenant issues, and other real estate matters.
A loan application is a formal document submitted to a financial institution to request borrowed funds, providing detailed personal and financial information for credit assessment.
Loan assumption allows a buyer to take over an existing mortgage from a seller, often retaining the original interest rate and terms, which can be advantageous in rising interest rate environments.
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