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 Public-Private Partnership (PPP) is a long-term contract between a public entity and a private company for the provision of public assets or services, leveraging private sector expertise and capital to deliver infrastructure and services traditionally provided by the government.
A punch list is a document compiled at the end of a construction or renovation project, detailing work that needs to be completed or corrected before final acceptance and payment. It ensures all contractual obligations and quality standards are met.
A Purchase Agreement is a legally binding contract that outlines the terms and conditions of a real estate transaction, formalizing the buyer's offer and the seller's acceptance.
Purchase Price Allocation (PPA) is an accounting procedure used in real estate acquisitions to assign the total cost of an acquired property to its individual identifiable assets and liabilities, impacting financial reporting, tax basis, and future depreciation schedules.
A legally binding contract outlining the terms and conditions between a buyer and seller for a real estate transaction, crucial for protecting both parties' interests and ensuring a smooth transfer of ownership.
A Qualified Intermediary (QI) is a neutral third party that facilitates a 1031 exchange by holding sale proceeds from a relinquished property and using them to acquire a replacement property, preventing the taxpayer from having constructive receipt of funds and ensuring tax deferral.
A qualified tenant is an applicant who meets a landlord's specific criteria for renting a property, demonstrating financial stability, a positive rental history, and a clean background.
Qualifying income is the total verifiable and stable income a borrower can demonstrate to a lender to secure financing, primarily used to assess repayment capacity for mortgages and real estate loans.
A Quiet Title Action is a legal proceeding to establish or confirm a party's ownership of real property against any adverse claims, thereby clearing any clouds on the title and making it marketable.
A legal document used to transfer an interest in real property from one party to another without providing any warranties or guarantees regarding the title's validity or clarity.
Radon testing identifies the presence and concentration of radioactive radon gas in a property, a crucial step in real estate due diligence to protect health and property value.
Real estate agents and brokers are licensed professionals who facilitate property transactions, representing buyers, sellers, or both, and are compensated primarily through commissions.
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