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 nominee owner is an individual or entity that holds legal title to a property on behalf of another party, the beneficial owner, who retains all rights and responsibilities associated with ownership.
A non-monetary transaction in real estate involves the exchange of assets or services without the direct use of cash, often for strategic, tax-deferred, or operational benefits. These transactions require careful valuation and adherence to specific legal and tax regulations.
A non-recourse loan is a type of secured debt where the lender's claim for repayment is limited solely to the collateral property, protecting the borrower's personal assets from seizure in the event of default.
Non-recurring expenses are one-time or infrequent costs associated with a real estate investment, distinct from regular operating expenses. These often include acquisition, renovation, or disposition costs.
A Non-Traded REIT (Real Estate Investment Trust) is a type of REIT that is not listed on a national securities exchange, offering investors access to real estate portfolios without the daily price volatility of publicly traded stocks.
Normal wear and tear refers to the expected deterioration of a rental property over time due to ordinary use and aging, for which landlords are responsible for repairs.
Notarization is the official process of verifying a signature's authenticity and the signer's identity on a document, performed by an impartial Notary Public to prevent fraud and ensure legal validity.
A notice period in real estate is the legally mandated or contractually agreed-upon timeframe one party must give to another before taking a specific action, such as terminating a lease or increasing rent.
A Notice of Default (NOD) is a public record filed by a lender or trustee when a borrower fails to make timely mortgage payments, initiating the formal foreclosure process in non-judicial foreclosure states. It serves as a legal declaration of default and intent to sell the property if the debt is not cured.
A formal legal document issued by a landlord to a tenant demanding payment of overdue rent within a specified period or vacating the property, serving as the first step in the eviction process for non-payment.
A formal written statement from a landlord to a tenant, or vice versa, indicating the intention to terminate a lease agreement and vacate the property by a specific date, adhering to legal requirements.
An offer strategy is a comprehensive plan developed by a real estate buyer to present a purchase offer, encompassing price, contingencies, and terms tailored to market conditions and seller motivations.
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