T
Takeout Commitment – A commitment by a lender to grant a takeout loan to a developer when construction of a project is completed.
Takeout Loan – a long term (“permanent”) loan promised by a lender to a developer upon completion of construction to replace an interim construction loan.
Tax – A charge or burden, usually pecuniary, laid upon persons or property for public purposes; a forces contribution of wealth to meet the public needs of a government.
Tax Lien - Claim against a property for unpaid taxes.
Tax Rate – The amount of tax imposed on personal or corporate income, capital gains, gifts, sales, etc..
Tax Sale – A sale of property for non-payment of taxes assessed against it.
Tenancy by the Entirety – A form of joint tenancy held by only husbands and wives in which each spouse (tenant) holds an equal, undivided interest in the whole property. The most important characteristic of a tenancy by the entirety is the right of survivorship which exists in behalf of each tenant (spouse); upon the death of one spouse, the surviving spouse automatically acquires ownership in severalty of the entire property without the need for probate.
Tenancy for Years – See Estate for Years.
Tenancy in Common – A form of concurrent ownership of real property by two or more persons. Each tenant in common is the owner of an undivided, fractional interest in the whole property. The estate or interests of tenants in common need not be identical or equal; upon the death of a tenant in common his undivided interest descends to his heirs and there is no right of survivorship in the other co-tenants.
Tenancy in Severalty Ownership – Property owned by one person alone. See also Severalty Ownership.
Tenant – Technically, one who holds any estate in property, whether freehold or less than freehold. In a popular sense and as most commonly used, a “tenant” is one who, under a lease, has the temporary use and occupation of lands or tenements that belong to another; a lessee.
Tenant Security Deposit – See Security Deposit.
Tenant Security Deposit Act – Residential tenants are entitled to certain protections with respect to security deposits under this Act (NC Gen Stat. Sections 42-50 through 42-55). These protections include limitations on the amount of the security deposit, standards regarding refund, and other requirements with which a land lord must comply.
Tenancy - The right to use and occupy all or part of a property under a rental agreement.
Tenements – A common law term that signifies anything that was the subject of tenure at common law and includes “lands” as well as certain intangible rights, such as easements, issuing out of or annexed to lands.
Termite Inspection Report – See Wood Destroying Insect Inspection Report
Term - The length of time during which you pay a specific interest rate on your mortgage loan. You may not have paid off your entire mortgage principal at the end of a term because your amortization period will likely be longer than the term.
Term Loan - A loan that comes due on a given date, often before the periodic payments would pay the loan out.
Testate – The condition of one who leaves a valid will at his death.
Timber Deed – A deed that conveys the right to harvest standing timber.
Time Is of the Essence – A phrase meaning that time is of crucial and vital importance and that failure to meet time deadlines will be considered a failure to perform the contract.
Time Share – Under the North Carolina Time Share Act, a time share is “…a right to occupy a unit or any of several units during five or more separated time periods over a period of at least five years, including renewal options, whether or not coupled with a freehold estate or an estate for years in a time share project or a specified portion thereof, including, but not limited to, a vacation lease, prepaid hotel reservations, club membership, limited partnership, or vacation bond.”
Time Share Act – The North Carolina law that governs the registration of time share projects, the licensing of time share salespersons, establishes standards of conduct for time share developers and salespersons, provides for certain consumer rights, and provides for disciplinary action against developers and salespersons who violate its provisions. See NC Gen. Stat §93A-39 through §93A-59. The enforcing agency is the North Carolina Real Estate Commission. See also Time Share.
Timesharing – A concept utilized chiefly in resort developments whereby a purchaser receives ownership of or the right to use a physical area for a limited segment of time each year. See also Time Share.
Title (Freehold or Leasehold) - A freehold title is evidence of ownership of land and buildings for an indefinite period of time. A leasehold title is evidence of a right to sue and occupy land and buildings for a defined period of time. In a leasehold arrangement actual ownership of the land (and perhaps buildings) remains with the landlord.
Title Assurance – The various ways by which purchasers, lenders, and others dealing with real property ascertain whether a seller or owner has title, determine the quality of title, and protect title.
Title Examination – A search conducted by a licensed attorney to ascertain the status of title to real property; accomplished by searching the public records.
Title Insurance – A policy of insurance whereby a title insurance company agrees to indemnify the holder of an interest in real property for any loss sustained as a result of defects in the title. Policies of title insurance frequently except from their coverage and do not insure against certain types of defects, restrictions, liens, and encumbrances.
Title Theory – The theory underlying the method of pledging real estate as collateral for a loan that provides for the borrower to convey legal title to real property to a trustee to hold for the benefit of the lender until the loan is paid. The borrower holds equitable title to the property. The legal instrument used to accomplish the transfer of legal title is a “deed of trust”. See also Lien Theory.
Torrens System – A rarely used system of land registration authorized by the North Carolina General Statutes, Chapter 43.
Tort – A wrongful at, injury, or violation of legal right to the person or property of another.
Total Circumstances Test – Legal test to determine whether items of personal property affixed to real property are fixtures and thus a part of the real estate; the factors to be examined are the intention of the annexor, character of the annexation, adaptability of time to use of the land, and relationship of annexor to the real property.
Total Debt Service Ratio (TDS) - The percentage of gross annual income required to cover all payments for housing and all other debts such as car payments.
Townhouse – A unit in a non-vertically attached, multi unit complex where the owner of the unit owns in severalty both the unit (including the entire physical structure) and the land on which the unit rests. The common areas are owned by the unit owner’s association. A secondary meaning refers to a sytle of construction, that being a multi level unit in a mult unit residential complex, as distinguished from a single level (“garden”) style of unit in such complexes. Compare Condominium.
Trade Fixture – A fixture attached to realty by a tenant under a commercial lease to further his business. In most cases, trade fixtures are removable by the tenant at the end of the lease. See also Fixture.
Trust – A relationship under which one person (called the trustee) holds legal title to property for the benefit of another person (called the cestui que trust or “trust beneficiary”).
Trust Account – A special checking account maintained by a broker at an insured bank or savings and loan association for the purpose of holding trust funds received on behalf of or from his principal or other persons. Also called an escrow account.
Trust Deed – See Deed of Trust
Trustee – A person in whom some estate, interest, or power in or affecting property of any description is vested for the benefit of another.
Trustee’s Deed – A conveyance of property by a trustee under a deed of trust who has completed foreclosure proceedings.
Trust Funds – Funds of others which are received by or entrusted to a real estate agent in connection with a real estate transaction (e.g. earnest money, down payments, tenant security deposits, and rents).
Truth in Lending Act – A federal law which requires lenders or “arrangers of credit” to disclose various information concerning the cost of credit to borrowers or customers in connection with consumer loans, including real estate loans; Title I of the Consumer Credit Protection Act.
Type Of House - These definitions apply to the different types of housing on the market
1. Single Family Detached: This is what most American's want. It is free standing on its own lot and is occupied by one family.
2. Semi-detached: One of two single-family houses joined by a common wall.
3. Duplex: Two dwelling units, one above the other. Often the owner lives in one unit and rents the other. Row or town house: One of several single-family homes joined by common walls.
4. Link or carriage homes: Row houses where homes are joined by garages or carports which provide access between the front and rear yards. Builders sometimes join basement walls so that, when see above ground, link houses look like singles on small lots.
5. High-rise buildings: Multistory residential buildings containing apartments for rent or condominium units.
6. Mobile or manufactured housing: A factory-built, single family dwelling designed to be transported to its ultimate site. They come in single widths or multiple widths which have to be joined on site.
Note: A condominium is not a type of house. It is a type of ownership. Condominiums are most often in high-rise buildings or in row houses arrangements.
U
Underimprovement – An improvement that is not the highest and best use for the site on which it is placed due to deficient size or cost.
Underwriting - In mortgage lending, the process of determining the risks involved in a particular loan and establishing suitable terms and conditions for the loan.
Underwriting Fees - A sum of money collected by some lenders to offset expenses incurred in the lending transaction.
Undivided Ownership – Ownership of a fractional interest (such as a one third, one quarter, or one half) in specific property by sharing possession of the whole (undivided) property with one or more other owners. For example, tenants in common have undivided ownership in NC. If Erin and Tracy own equal interests in a tract of land as tenants in common, each owns an undivided one half share in the whole tract.
Undue Influence – The improper influence over the mind and will of another to such an extent that the grantor does not act freely in signing the deed, but signs it because of a third person who is exerting excessive influence.
Unfair or Deceptive Trace Practices Act – Under NC Gen. Stat. §75-1.1, certain unfair or deceptive practices in a trade or business are prohibited. Prohibitions include the rendering of a misleading opinion or false inducement, failure to disclose a material fact, engaging in misleading advertising, and misrepresenting the nature or extent of a guarantee or warranty. Real estate brokers and salespersons are subject to the provisions of this statute.
Unencumbered Property - Land that has no claims, liens or mortgages registered against it.
Uniform Commercial Code – A set of uniform laws adopted in almost all of the United States governing dealings in commercial matters. Matters relating to banking transactions, sales of goods, and numerous other commercial topics are covered. Real estate brokers will cross paths most frequently with the U.C.C. in the area of security agreements affecting fixtures.
Uniform Electronic Transactions Act (UETA) – The common name for the Uniform Electronic Transactions Act, located at Article 40, Chapter 66 of the NC General Statutes. This legislation validates electronic contracts, other documents and signatures and provides that they will not be denied validity and enforceability solely because they are in electronic form. See also E-Sign.
Uniform Residential Appraisal Report – A widely used standardized form for presenting an appraisal of residential property. The form was created jointly by the Federal National Mortgage Corporation and the Federal Home Loan Mortgage Corporation and is now used additionally by the U.S. Department of Housing and Urban Development, the Veterans Administration, and the Farmers Home Administration.
Uniform Settlement Statement (HUD-1 Form) – A standardized settlement statement to be used in all residential real estate closings subject to RESPA.
Uniform Vendor and Purchaser Risk Act – A statute adopted in NC (NC Gen Stat. §39-30) that allocates the risk of loss between seller and buyer under an executory sales contract where the contract is silent on the subject. If, for example, the building should be destroyed by fire prior to the closing date, this statute would govern in the absence of a contractual provision on the subject.
Unilateral Contract – A contract under which one party promises to perform a specified act without receiving in return any express promise of performance by the other party; a contract whereby Party X promises to perform (e.g., pay some valuable consideration) upon the performance of some act by Party Y; in such case, Party X is obligated to perform (pay) only if Party Y actually performs the act called for in the contract, and Party Y has no obligation to perform.
Unimproved Land – Land that is vacant or lacking improvements; undeveloped land.
Unit Ownership – A legal term used to describe ownership in a condominium unit.
Uninsurable title - Ownership of land which is subject to flaws such that a title insurance company refuses insure it.
Unity of Person – The requirement that only a husband and wife can hold property as tenants by the entirety, based on the fiction that they are one person.
Unity of Possession – An incident of all forms of concurrent ownership that gives each cotenant the equal right to possess the entire property.
Universal Agent – An agent who is authorized to transact all of the principal’s business of every kind.
Upfitting Improvements – The providing of improvements to a commercial property by the lessor at the lessor’s expense.
Urban renewal - The process of acquiring and redeveloping property for the purposes of increasing its profitability or utility. May be conducted by government, private interests or a combination of the two.
Urban Sprawl - Slang term for the growth of cities in an unplanned and often wasteful manner.
Useful Life – See Economic Life.
Usury – The lending, or practice of lending, money at a rate of interest above the maximum legal rate prescribed by North Carolina law.
Utilities - Services, such as gas, electricity, water, sewers, which are required in any dwelling and for which the owner must pay separately. In some jurisdictions, arrears in payment of charges for utilities may form a lien on the property.
V
Vacancy and Collection Loss – The loss in potential rental income due to vacancies and the inability to collect rent due from tenants.
Vacation Leases or Licenses – A form of time share whereby resot property is leased (or obtained under a license) for a limited segment of time during each year and for the duration of a certain number of years. See also Time Share.
Valid – Having force, or binding force; legally sufficient and authorized by law.
Valuation – An estimate or opinion of value, normally market value. Also, the process of deriving a conclusion as to value. See also Appraisal.
Value – The quantity of one commodity that can be obtained in exchange for another (“value in exchange”); also, the utility or usefulness of a commodity (“value in use”). As applied to property, the present worth, usually expressed in terms of money, of all rights to future benefits arising from ownership.
VA Mortgage – A mortgage loan guaranteed by the Veterans Administration.
Variable Rate - Interest rate that changes periodically in relation to an index.
Variance - An exception to a zoning ordinance which may be granted by the governmental zoning authority authorizing a property use which is prohibited under the zoning ordinance.
Variable Rate Mortgage (Floating Rate) - A mortgage where payments can be fixed from one to five years, but the interest rate could change from month to month depending on market conditions. If interest rates go down, the monthly principal is reduced; if rates go up, the monthly payments might not cover the interest owing and payments may be increased for the next term. Most variable rate mortgages allow prepayment of any amount (with certain minimums) on any monthly payment date and usually without penalty.
Vendee - A purchaser; a buyer; the person to whom a thing is rendered or sold.
Vendor - The Seller or Purchasee. the person who disposes of a thing for a consideration.
Vendor Financing (Balance of Sale) - The seller sometimes takes the mortgage at a rate lower than market rates. Most of these arrangements are not renewable nor transferable to the next owner.
Vendor Take Back Mortgage - Mortgage financing arranged between the seller of the property and the buyer. The title is transferred to the buyer. Often this type of loan is a second mortgage which the seller is willing to arrange at below market rates to ensure the buyer can make the purchase of the house. Most of these arrangements are not renewable nor can they be transferred to the next owner of the house.
Veterans Administration (VA) - The federal agency that administers a wide range of programs, including housing programs, for the benefit of military veterans.
Visible Easements Doctrine - A doctrine stating that a purchaser of real estate takes title subject to certain visible easements even though the written sales contract and deed do not except the visible easement from the warranties of title.
Void - Null, not legally enforceable.
Voidable - That which is capable of being adjudged void, but is not void unless action is taken to make it so.
Voidable Contract - A contract with a defect that can be raised by one of the parties in order to avoid performance. If the defect is not raised, the contract is valid and enforceable.
Void Contract - An agreement that is treated as a complete nullity by the law.
Voluntary Alienation - A voluntary transfer of ownership of real property to another, usually by deed. Distinguish from Involuntary alienation.
W
Waiver - Voluntary relinquishment or surrender of some right or privilege.
Warranty Deed - A deed that transfers ownership of real property and in which the grantor guarantees that his title is free and clear of all encumbrances. Term normally used to refer to a General Warranty Deed.
Waste - A destruction or material alteration or deterioration of the land or buildings thereon done or permitted by any person in rightful possession to the lasting injury of the interest of the owner of the fee simple title, reversioner, or remainderman.
Water rights - The legal right to use water from a water course or body of water on a property.
Water table - The natural accumulation of water either above or below ground, often used for well purposes. May also refer to the distance from the surface of the land to the location of the water.
Will - A written document which, when property executed, signed, and witnessed, is effective at the death of the maker to dispose of his property according to the terms of the document.
Willful Misrepresentation - (a) The intentional misrepresentation of a material fact by a party with “actual knowledge” of the truth of the matter being misrepresented; (b) The misrepresentation of a material fact by a party who does not have actual knowledge of the fact being represented, but who acts “without regard for the actual truth of the matter.”
Willful Omission - The intentional failure to disclose a material fact about which a party has actual knowledge.
Wood Destroying Insect Inspection Report - A report provided by a licensed pest control operator indicating that an improved property has been inspected and reporting any visible evidence of infestation and structural damage by various wood destroying insects (including termites), as well as conditions conductive to such pests. Sometimes referred to by the old term “termite inspection report” or by the term “pest inspection report”.
Wraparound mortgage - A secondary financing option in which new money borrowed is blended with money already owed and registered on title to the property. A second mortgage is registered as security for the new money but the old mortgage remains in existence and the rate of interest is a blend of the rate chargeable on the old mortgage and the rate chargeable on the newly borrowed money. A second junior mortgage in which the secured indebtedness (face amount of second mortgage note) is the sum of the new financing desired plus the principal balance due on the first mortgage. Such a second mortgage is thus said to “wrap around” the first mortgage.
Writ of Execution - A claim or lien which is registered with the local enforcement officer to enforce a judgement of a court. The officer is then required to enforce the judgment against the judgment debtor and any property owned by that debtor in the jurisdiction.
X
X - An X may be used as a substitute for a signature in certain instances. An individual who cannot write his or her name can indicate the intention to sign by marking an X in the place for signature. A witness would then write the name of the signer alongside the “X”.
Y
Yard - A unit of measurement equaling three feet. The open, unoccupied space on the plot between the property line and the front, rear or side wall of a building.
Yield - The ratio of investment income to the total amount invested over a given period of time.
Yield Capitalization - A collective term used to describe various methods of estimating the present value of a property by discounting future benefits (cash flows plus reversion) to the property using an appropriate yield rate. Also known as “discounted cash flow analysis” or “annuity capitalization”. See also Direct Capitalization, Capitalization, Capitalization Rate, and Income Capitalization Approach.
Yield to Maturity - The lender's percentage of annual return on actual funds loaned, assuming that the loan will be paid in full at maturity.
Z
Z - Zero Lot Line - A zoning regulation which allows certain properties to have buildings placed up to the line dividing separate properties.
Zoning - A process that allocates and prescribes uses of land in various areas of a city or county by dividing the land within a particular governmental entity into districts or “zones” and then specifying what uses of the land are permitted and which ones are prohibited in each zone.
Zoning Ordinances (or Zoning Regulations) - Local law establishing building codes and usage regulations for properties in a specified area. A local ordinance exercising the police power of a municipal corporation or county that divides land into use classifications by zone or area and also usually regulates lot size and the placement, bulk, and height of structures.
Zoning variance - One-time modification of existing zoning law