Contracts, regulations, compliance, entity structures, zoning, permits, and landlord-tenant law.
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Foundation terms you need to know first (88 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 (103 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 construction project in real estate involves the systematic planning, design, financing, and execution of building new structures or significantly renovating existing ones, typically for investment or development purposes.
A legal doctrine allowing a tenant to terminate a lease and vacate a property without liability for future rent, due to a landlord's actions or inactions that render the premises uninhabitable or unsuitable for its intended purpose, breaching the covenant of quiet enjoyment.
Contingencies are conditions in a real estate contract that must be met for the agreement to be legally binding, protecting buyers and sellers from unforeseen issues.
A contingency clause in a real estate contract is a condition that must be met for the agreement to become legally binding, providing an escape route if specified terms are not satisfied.
A contingency event in real estate is a condition or action that must be met for a real estate contract to become legally binding. These clauses protect buyers and sellers by allowing them to back out of a deal without penalty if specified conditions are not satisfied.
A contingency plan in real estate investing is a proactive strategy to prepare for unexpected events or challenges that could negatively impact an investment, ensuring business continuity and financial protection.
A contingency-free offer is a real estate purchase bid submitted by a buyer that waives one or more standard conditions, making the offer more attractive to sellers, especially in competitive markets.
Contingent consideration refers to a portion of a real estate transaction's purchase price that is dependent on the occurrence of future events or the achievement of specific performance targets.
Contract law in real estate governs legally binding agreements between parties involved in property transactions, ensuring enforceability and defining rights and obligations.
Contract termination is the legal process by which parties to a real estate purchase agreement or other contract formally end their obligations before the agreement's full completion, typically due to unmet conditions, breaches, or mutual consent, leading to specific legal and financial consequences.
Contractor vetting is the systematic process of evaluating potential contractors for real estate investment projects to assess their qualifications, reliability, experience, and financial stability, ensuring project success and mitigating risks.
Contribution limits are the maximum amounts of money individuals can contribute to various tax-advantaged investment accounts, such as IRAs and 401(k)s, as set by the IRS annually. These limits are designed to regulate tax benefits and ensure equitable access to investment incentives.
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