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 property sale is the legal process of transferring ownership of real estate from one party (the seller) to another (the buyer) in exchange for money or other agreed-upon consideration. It involves several steps, including listing, negotiation, and closing.
A property setback is the minimum required distance between a building or structure and the property line, enforced by local zoning ordinances to regulate land use and ensure adequate space and safety.
A property survey is a detailed map or drawing created by a licensed surveyor, accurately depicting property boundaries, dimensions, and the location of improvements, easements, and other features. It is a critical legal document for understanding and protecting real estate investments.
Property tax is a recurring tax levied by local governments on real estate, calculated based on the property's assessed value, and used to fund public services. It is a significant ongoing expense for property owners and investors.
Property tax assessment is the process by which local government appraisers determine the taxable value of real estate, serving as the basis for calculating annual property taxes.
Property taxes are recurring taxes levied by local governments on real estate, based on its assessed value, to fund public services and infrastructure.
Property title is the legal right of ownership to a piece of real estate, granting the owner the right to possess, use, and transfer the property. It is distinct from a deed, which is the physical document used to transfer title.
Prorations are the proportional division of expenses and income between a buyer and seller at a real estate closing, ensuring each party pays or receives their fair share for the period they owned the property.
A formal legal document required for certain investment offerings, providing comprehensive details about the investment, its risks, and the issuing entity to help potential investors make informed decisions.
Protected classes are groups legally shielded from discrimination in housing under federal, state, and local laws, primarily the Fair Housing Act, ensuring equal access to housing opportunities.
A public tender is a formal, competitive process through which government agencies or public entities solicit bids from interested parties for the sale of assets, including real estate, or for the provision of goods and services.
Public use is the legal justification for the government to exercise its power of eminent domain, allowing it to acquire private property for projects that serve the general public, even if the property owner does not wish to sell.
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