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 pest inspection is a professional examination of a property to detect the presence of wood-destroying organisms like termites and other pests, as well as conditions conducive to infestations.
Phantom equity is a compensation structure that grants employees or partners a financial stake in a company's future value appreciation without conferring actual ownership, voting rights, or direct equity. It mirrors the economic benefits of equity ownership, typically tied to specific performance metrics or exit events.
A legal doctrine allowing courts to disregard the limited liability protection of a corporation or LLC, holding its owners personally responsible for the entity's debts or actions, typically due to abuse of the corporate form.
A Planned Unit Development (PUD) is a type of real estate development that allows for a mix of land uses and housing types within a single, master-planned community, offering design flexibility and integrating common open spaces and amenities.
A plat map is a detailed drawing that divides a parcel of land into lots, blocks, and streets, showing property boundaries, easements, and other features essential for legal property descriptions and development.
Police power refers to the inherent right of state and local governments to regulate private property for the protection of public health, safety, morals, and general welfare, without providing compensation to the property owner.
A policy premium is the amount of money an individual or entity pays to an insurance company for coverage against specific risks, typically paid regularly (monthly, quarterly, or annually).
The Post-Foreclosure Stage is the period after a property has been legally repossessed by a lender and becomes a Real Estate Owned (REO) asset, often presenting investment opportunities for buyers.
A Power of Attorney (POA) is a legal document authorizing an agent to act on behalf of a principal in financial, legal, or real estate matters, ensuring continuity even during absence or incapacitation.
A period after a homeowner defaults on their mortgage but before the property is officially repossessed by the lender, offering a critical window for resolution or investment opportunities.
Pre-leasing is the practice of securing lease agreements with tenants for a property that is still under construction or undergoing significant renovation, prior to its completion and readiness for occupancy.
A prepayment penalty is a fee charged by a lender if a borrower pays off a loan earlier than scheduled, compensating the lender for lost future interest income.
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