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 secured loan is a debt backed by collateral, such as real estate, which the lender can seize if the borrower defaults, offering lower interest rates due to reduced risk.
Securities fraud involves deceptive practices, material misrepresentations, or omissions in the sale or purchase of securities, often leading to financial losses for investors and violating federal and state securities laws.
The Securities and Exchange Commission (SEC) is an independent agency of the U.S. federal government responsible for protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation. It regulates publicly traded securities, including those related to real estate.
A security agreement is a legal document that grants a lender a security interest in specified collateral, typically real estate or other assets, to secure the repayment of a debt. It outlines the terms under which the collateral can be claimed if the borrower defaults.
A security deposit is a refundable sum of money collected by a landlord from a tenant at the start of a lease to cover potential damages, unpaid rent, or other lease violations.
A specialized bank account where a landlord holds a tenant's security deposit, separate from their personal funds, to ensure compliance with legal requirements and protect both parties' interests.
Security deposit laws are state and local regulations that dictate how landlords must collect, hold, and return security deposits, including limits, allowable deductions, and return timelines, to ensure fair practices in rental agreements.
A security instrument is a legal document that pledges a borrower's property as collateral for a loan, giving the lender the right to seize the property if the borrower defaults on the debt.
Segment reporting is a financial disclosure requirement that provides disaggregated financial information about an entity's operating segments, enabling investors to better understand the various business activities and geographical areas in which a company operates.
Self-dealing occurs when a fiduciary acts in their own best interest rather than the best interest of the person or entity they represent, creating a conflict of interest.
A specialized retirement investment structure where a Self-Directed IRA owns an LLC, granting the account holder "checkbook control" to directly invest in alternative assets like real estate, while maintaining tax-advantaged growth.
A self-help eviction occurs when a landlord attempts to remove a tenant from a rental property without following the legally mandated eviction process, often by changing locks or shutting off utilities, which is illegal in most jurisdictions.
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