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 legal remedy in contract law, particularly real estate, where a court orders a party to fulfill their contractual obligations, rather than merely paying monetary damages, due to the unique nature of the asset.
A real estate Sponsor is the active manager of a real estate investment, typically a syndication, responsible for identifying, acquiring, managing, and exiting the property, while also raising capital from passive investors.
The Spousal REPS Strategy allows married couples filing jointly to qualify for Real Estate Professional Status (REPS) if one spouse materially participates in real estate activities, enabling the deduction of passive real estate losses against active income.
State tax laws for real estate are specific regulations enacted by individual states that govern property ownership, transactions, and income generated from real estate investments within their borders, significantly impacting investor profitability and compliance.
A Statute of Limitations is a law that sets the maximum time after an event within which legal proceedings may be initiated, effectively limiting the period during which a party can sue another party.
Straight-line rent is an accounting method that averages total contractual rent payments over the entire lease term, recognizing a constant rent expense or revenue each period, regardless of the actual cash payments made.
Structural integrity refers to a building's capacity to withstand loads and forces without failure, ensuring its safety, stability, and long-term durability. It is a critical factor in real estate investment, directly impacting property value and potential liabilities.
A subcontractor is an individual or company hired by a general contractor (or property owner) to perform a specific, specialized task or part of a larger real estate construction or renovation project.
Subdivision is the legal process of dividing a single parcel of land into two or more smaller parcels, typically for the purpose of development, sale, or lease. It involves navigating local zoning ordinances, planning regulations, and infrastructure requirements.
Subject-To investing is an advanced real estate strategy where an investor acquires a property by taking over payments on the seller's existing mortgage, without formally assuming the loan or notifying the lender.
Subject-To real estate is an advanced acquisition strategy where an investor takes title to a property with an existing mortgage, agreeing to make payments without formally assuming the loan, leaving the original financing in the seller's name.
Subleasing occurs when a tenant leases out all or part of their rented property to another tenant, known as a subtenant, while still remaining responsible to the original landlord under the primary lease agreement.
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