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.
Transient Occupancy Tax (TOT) is a local tax levied on the rent paid by guests for short-term accommodations, such as hotels and vacation rentals, typically for stays less than 30 consecutive days. It funds local services and infrastructure.
A trigger event in real estate is a predefined condition or occurrence that, when met, automatically initiates a specific action or consequence outlined in a contract, loan agreement, or other legal document.
A Triple Net Lease (NNN) is a commercial real estate lease where the tenant pays base rent plus property taxes, building insurance, and common area maintenance, making it a highly passive investment for landlords.
A trustee is an individual or entity legally entrusted with managing assets or property for the benefit of another party (the beneficiary) under the terms of a trust agreement, upholding strict fiduciary duties.
A Trustee's Sale is a public auction of a property to satisfy a defaulted debt, conducted by a trustee under a deed of trust without court intervention, common in non-judicial foreclosure states.
A USDA Loan is a zero-down payment mortgage program backed by the U.S. Department of Agriculture, designed to help eligible low-to-moderate income individuals purchase homes in designated rural areas.
An Umbrella Insurance Policy provides additional liability coverage beyond the limits of standard insurance policies, protecting personal assets from large claims and lawsuits.
An Umbrella Partnership Real Estate Investment Trust (UPREIT) is a structure where a publicly traded REIT owns its properties through a controlling interest in a private operating partnership (OP), allowing property owners to contribute real estate in exchange for OP units on a tax-deferred basis.
Underwriting is the process by which lenders assess the risk of lending money for a real estate transaction, evaluating the borrower's creditworthiness and capacity to repay, as well as the property's value and marketability.
Unearned revenue represents payments received by a real estate investor for goods or services that have not yet been delivered or performed, such as prepaid rent or security deposits. It is recorded as a liability on the balance sheet until the revenue is recognized.
Unlawful detainer is a specialized legal action initiated by a landlord to regain possession of real property from a tenant or occupant who is wrongfully withholding it, typically due to lease violations or non-payment of rent.
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.
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