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 capitalization table, or cap table, is a detailed record of a company's or real estate project's equity ownership, including who owns what, the type of equity, and their respective ownership percentages.
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.
Carried interest is a share of the profits of an investment fund, typically a private equity real estate fund or syndication, paid to the general partners (GPs) or managers after limited partners (LPs) have received their initial capital and a preferred return.
Cash for Keys is a voluntary agreement where a landlord offers a tenant money to vacate a property quickly and amicably, often used to avoid the costly and lengthy formal eviction process.
A Certificate of Occupancy (C of O) is a legal document issued by a local government agency certifying that a building or structure is safe, compliant with all applicable codes, and fit for legal occupancy or use.
A chronological record of ownership transfers for a specific property, detailing all legal documents that have affected its title from its origin to the present day.
A change order is a formal amendment to a construction contract that modifies the original scope of work, cost, or schedule of a real estate development or renovation project.
Channel stuffing is a deceptive business practice where a company inflates its sales figures by inducing customers, often distributors or related parties, to buy more products or services than they can realistically sell or utilize, typically through aggressive incentives or unsustainable terms, to meet short-term financial targets.
A legal remedy obtained by a creditor to seize a debtor's interest in a partnership or LLC, allowing the creditor to receive distributions without becoming a member or partner.
Checkbook control grants the administrator of a self-directed retirement account, typically an IRA or 401(k), direct authority to manage and invest funds by writing checks or initiating electronic transfers from a dedicated LLC, bypassing traditional custodian approvals for each transaction.
A clear title signifies undisputed legal ownership of a property, free from any liens, claims, or other legal encumbrances, ensuring the seller has the full right to transfer ownership to a buyer.
A client agreement is a legally binding contract between a real estate investor or professional and their client, outlining the scope of services, responsibilities, fees, and terms of engagement.
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