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.
Real Estate Tokenization is the process of converting real estate assets into digital tokens on a blockchain, representing fractional ownership or economic rights, and enabling enhanced liquidity and accessibility for investors.
A real estate transaction is the comprehensive process of buying, selling, or transferring ownership of real property, involving multiple legal, financial, and administrative steps from initial agreement to final closing.
A real estate trust is a legal arrangement where a property owner transfers title to a trustee, who holds and manages the property for the benefit of designated beneficiaries, offering advantages like privacy, asset protection, and streamlined estate planning.
Real estate wholesaling is an investment strategy where an investor contracts a property from a motivated seller and then assigns that contract to an end buyer for a fee, without ever taking ownership of the property.
A reasonable accommodation is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, as mandated by the Fair Housing Act.
Reasonable cause is a valid justification recognized by the IRS for failing to meet tax obligations, such as filing or paying on time, which can lead to the abatement of associated penalties.
The amount of compensation an S-Corporation owner, who also works for the business, must pay themselves that is comparable to what an unrelated party would be paid for similar services, to comply with IRS regulations and avoid reclassification of distributions.
Receivables management in real estate is the strategic process of optimizing rent collection, minimizing delinquencies, and managing tenant accounts to maximize cash flow and protect asset value.
A type of loan where the lender can seize not only the collateral but also other assets of the borrower if the collateral value is insufficient to cover the debt after a default.
A legally defined timeframe after a foreclosure sale during which the original homeowner can reclaim their property by paying the full outstanding debt, plus costs and interest.
Redevelopment is the process of transforming an existing, often underutilized or distressed, property or land into a more productive and valuable asset, typically involving significant renovation, demolition, or a change in use.
A Registered Agent is a designated individual or entity responsible for receiving legal and tax documents on behalf of a business entity, such as an LLC or corporation, in the state where it operates.
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