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 beneficiary is an individual, group, or entity designated to receive assets, property, or benefits from a will, trust, life insurance policy, or other legal instrument.
A bid bond is a financial guarantee provided by a surety company to a project owner, ensuring that a bidder will enter into a contract if awarded, and provide the required performance and payment bonds. It protects the owner from financial loss if the winning bidder defaults on these obligations.
The bid process in real estate is the structured procedure through which a prospective buyer submits a formal offer to purchase a property, and the seller evaluates and responds to that offer.
A bilateral contract is a legally binding agreement where two parties exchange mutual promises to perform specific actions, making it the most common type of contract in real estate transactions.
A Bill of Exchange is a legally binding written order from one party (the drawer) to another (the drawee) to pay a specified sum of money to a third party (the payee) on demand or at a predetermined future date, serving as a negotiable instrument in sophisticated financial transactions, including real estate.
A blanket mortgage is a single loan secured by multiple parcels of real estate, often used by developers or investors acquiring several properties simultaneously, featuring a crucial release clause for individual property sales.
Blockchain technology is a decentralized, distributed ledger system that records transactions across a network of computers, ensuring immutability, transparency, and security through cryptographic hashing and consensus mechanisms, fundamentally altering real estate transaction paradigms.
Blockchain in real estate applies distributed ledger technology to enhance transparency, efficiency, and security in property transactions, ownership, and management through innovations like tokenization and smart contracts, fundamentally transforming the industry.
A Board of Directors (BoD) is a group of individuals elected to oversee the management of a company, representing the interests of its shareholders and ensuring ethical and effective operations.
A borrowing base is a dynamic calculation used in asset-based lending (ABL) to determine the maximum amount a borrower can draw from a credit facility, based on the value of eligible collateral assets, primarily real estate in investment contexts.
A breach of contract occurs when one party fails to fulfill their obligations as specified in a legally binding agreement, leading to potential legal and financial consequences for all involved parties.
A breach of lease is a violation of any term or condition in a rental agreement by either the landlord or the tenant, potentially leading to legal action, financial penalties, or lease termination.
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