Virginia Real Estate Practice in Law
continuing education
An approved course of study that meets the requirements for maintenance of a real estate license.
parol evidence
Evidence of facts and circumstances not included in the deed or contract.
caveat emptor
"Let the buyer beware." Requires the buyer to examine the property before purchase and to take responsibility for its condition.
beneficiary
(1) The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. (2) A lender in a deed of trust loan transaction.
house location survey
A boundary survey with the location of the house shown.
actively engaged
A broker or salesperson having active licensure with a licensed real estate firm or sole proprietorship and active for an average of at least 40 hours per week. The REB may waive the 40-hour-per-week requirement at its discretion.
dual agent
A broker who simultaneously has a client relationship with both seller and buyer or landlord and tenant in the same real estate transaction.
power of sale clause
A clause in the deed of trust which gives the trustee the right to sell the property (foreclosure) without going to court.
loan origination fee
A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a percentage of the loan amount.
promissory note
A financing instrument that states the terms of the underlying obligation, is signed by its maker, and is negotiable (transferable to a third party).
Closing Disclosure (CD)
A five-page statement of final loan terms and closing costs.
conciliation
A form of alternative dispute resolution in which a conciliator meets with each of the parties separately to help them settle their differences voluntarily, without the formality of a hearing or trial.
informal fact-finding conference (IFFC)
A hearing conducted at the offices of DPOR; presided over by an REB member and supported by DPOR staff.
as-built survey
A house location survey with all other physical features of the subject property shown, including water courses, utility lines, fence lines, outbuildings, and similar features.
homestead exemption
A householder is entitled to hold a certain amount of real or personal property exempt from unsecured debts.
condemnation
A judicial or an administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and justly compensates the owner.
civil action
A lawsuit that can be brought by a person who feels wronged or injured by another person
eviction
A legal process to oust a person from possession of real estate.
land surveyor
A licensed architect or engineer when surveying is incidental to a particular project.
limited service agreement
A licensee acting only on the duties in a written brokerage agreement. The status as a limited services agent must be in writing noting a list of the services that will be provided, along with a list of the duties required of a standard agent.
landlord's lien
A lien on a tenant's property for the satisfaction of unpaid rent or property damage.
broker's lien
A lien on the rent paid by the tenant in the amount of the compensation (commission) agreed on by the owner and the broker.
net listing
A listing based on the net price the seller will receive if the property is sold. Under a net listing, the broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states.
lot-and-block (recorded plat) method
A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat.
hoarding
A newly classified mental disability pertaining to the difficulty of discarding or parting with possessions feeling the need to keep them.
purchase-money financing
A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate.
client
A person who has entered into a brokerage relationship with a broker license.
handicap
A person who suffers from a physical or mental impairment that substantially limits one or more major life activities.
grace period
A provision in most loan and insurance contracts which allows payment to be received for a certain period of time after the actual due date. During this period no late fees will be charged, and the late payment will not result in default or cancellation of the loan.
due-on-sale clause
A provision in the mortgage that states that the entire balance of the note is immediately due and payable if the mortgagor transfers (sells) the property.
lis pendens
A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or a federal court.
cooperative
A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of people living within the building who are the beneficial owners of the trust or shareholders of the corporation, each possessing a proprietary lease to a property unit.
mechanic's lien
A statutory lien on the real property of another, created to ensure payment for work performed and materials furnished in the repair or improvement of real property, such as a building.
Loan Estimate (LE)
A three-page form you receive after applying for a mortgage which includes important details about the requested loan.
land trust
A trust in which property is conveyed, and in which real estate is the only asset.
holographic will
A will that is written, dated, and signed in the testator's handwriting.
property management agreement
A written agreement between a property manager and the owner of real estate for the management of the real estate.
conflict of interest
Acting for more than one party in a transaction without written consent.
four corner doctrine
All agreements must be present within the "four corners" of the contract in order to be valid. An oral agreement between builder and buyer is not valid.
principle of uniformity
All property shall be levied at fair market value and shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax (i.e., residential, commercial).
easement by prescription
An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law.
easement by necessity
An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land.
deed of trust
An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called a trust deed.
nuncupative will
An oral will declared by the testator in his or her final illness, made before witnesses and afterward reduced to writing; not permitted by all states.
attorney-in-fact
An unbiased third party appointed by another person to act in that person's place.
active license
Any broker or salesperson under the supervision of a principal or supervising broker performing real estate brokerage activities.
inactive license
Any broker or salesperson who is not under the supervision of a principal broker or supervising broker, who is not affiliated with a firm or sole proprietorship, or who is not performing any real estate activities.
dwelling
Any building or part of a building designed for occupancy as a residence by one or more families.
cloud on the title
Any document, claim, unreleased lien, or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title.
firm
Any real estate business entity, including but not limited to a corporation, partnership, limited liability company, and sole proprietorship.
concurrent license
Brokers who are active in more than one legal entity, that is, who work for more than one brokerage firm.
reasonable accommodation
Changes to existing rules and procedures that may be needed in order for the tenant to enjoy full use of the dwelling place.
brokerage relationship
Describes both client and customer relationships with the broker.
law of descent and distribution
Establishes the rights of ownership to property by a surviving spouse and others.
Megan's Law
Federal legislation that promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children, or commits sexually violent crimes.
elderliness
For purposes of the fair housing law, elderly persons are those individuals who have attained their 55th birthday.
nonjudicial foreclosure
Gives the trustee the right to sell the property (foreclose) without going to court.
defective drywall
Imported drywall, commonly referred to as Chinese drywall. Some consumers who live in homes with defective drywall have reported problems including a strong sulfur smell (like rotten eggs), health issues (irritated and itchy eyes and skin), difficulty breathing, a persistent cough/headaches, and premature corrosion or deterioration of certain metal components in their homes (air conditioner coils and wiring behind electrical outlets and inside electrical panel boxes).
broker
In Virginia, any person or business entity, including, but not limited to, a partnership, association, corporation, or limited liability corporation, who, for, compensation or valuable consideration (i) sells or offers for sale, buys or offers to buy, or negotiates the purchase or sale or exchange of real estate, including units or interest in condominiums, cooperative interest... or time-shares in a time-share program... or (ii) leases or offers to lease, or rents or offers for rent, any real estate or the improvements thereon for others.
principal broker
In a brokerage, the broker who is responsible for all the activities of both the firm and all its licensees.
automated survivorship
Intended to place joint tenants in the same situation as tenants in common as far as augmented estates were concerned. Has been abolished in Virginia.
power of attorney
Legal document that gives individuals the right to sign legal documents for another. In Virginia, a specific power of attorney is generally preferred for real estate transactions, rather than a general power of attorney. The power of attorney must be notarized and recorded with the deed.
metes and bounds
Legally sufficient real property description that surveys a property's boundaries by courses and distances with and identifiable starting point.
qualified residential mortgage (QRM)
Loan terms and practices that regulatory agencies have determined are less likely to end up in default; meets standards set by Consumer Financial Protection Bureau.
familial status
One or more individuals under age 18 living with a parent or guardian. It also includes pregnant women and anyone in the process of assuming custody of a child under 18.
designated agent
One or more licensees affiliated with a broker who are assigned by the broker to represent solely one client to the exclusion of all other clients in the same transaction and to the exclusion of all other licensees affiliated with the broker.
agent
One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent.
Government Sponsored Enterprises (GSEs)
Organizations created by the federal government (Fannie Mae, Freddie Mac, Farmer Mac, Ginnie Mae) to help increase loan opportunities for homebuyers.
joint tenancy
Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of a joint tenant, the decedent's interest passes to the surviving joint tenant or tenants by the right of survivorship.
home equity line of credit (HELOC)
Permits the note holder to make advances from time to time, secured by the real estate described in the deed.
mixed-use developments
Properties that accommodate more than one use, such as commercial, residential, retail, office, or parking.
equitable title
Property ownership rights held by the purchaser in conjunction with transferring legal title to the lender by a security deed. Owner retains a right of redemption to reacquire the legal title from the lender when the loan is paid off.
post-licensing education
Proscribed by the Real Estate Board as that education required to obtain the first renewal of a real estate salesperson license.
prepaid rent
Rent paid more than one month in advance of the rent due date
consent order
Resolution of a matter by accepting, making a counteroffer, asking for exhibits, or requesting an IFFC (if one has not been held).
ministerial acts
Routine acts that a licensee can perform for a person that do not involve discretion or the exercise of the licensee's own judgment.
deferred purchase money
Sellers with no immediate need for cash from the proceeds of a sale may choose to defer the income of the sale and obtain an installment tax treatment by creating an annuity in this form of deed of trust, held by the seller.
boundary survey
Shows the boundary or perimeter of the parcel as taken from and applied to the ground. Corner stakes or other physical landmarks appear.
judicial foreclosure
Some states require the use of a mortgage instead of a deed of trust, which requires court action to foreclose.
grantor tax
Tax the seller pays on the transfer of property.
estate
That which is owned by a person including insurance policies, retirement benefits (exclusive of Social Security), annuities, pension plans, deferred compensation arrangements, and employee benefit plans.
condominium
The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners.
adverse possession
The actual, open, notorious, hostile, and continuous possession of another's land under a claim of title. Possession for a statutory period may be a means of acquiring title.
elective share
The amount of a decedent's estate that a surviving spouse is entitled to claim by law. This prevents a person from disinheriting a spouse, unless the spouse agrees to receive less than the elective share.
independent contractor
The broker-licensee relationship where at least 75% of the compensation is based on commissions earned and the broker does not withhold payroll taxes.
alienation clause
The clause is a mortgage or deed of trust stating that the balance of the secured debt becomes immediately due and payable at the lender's option if the property is sold by the borrower. In effect, this clause prevents the borrower from assigning the debt without the lender's approval.
interstate
The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs as provided in the state law of descent.
just compensation
The fair market value of the property at the time of the taking.
judgment
The formal decision of a court upon the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant.
money judgment
The formal decision of a court upon the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant.
pay or quit notice
The landlord may issue a written notice giving the tenant five days to pay the rent or vacate the property.
distress warrant
The order to seize tenant property.
grantor
The owner transferring title to or an interest in real property to a grantee.
complainant
The person or entity who files an administrative complaint accusing someone of violating Virginia fair housing law.
agency
The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.
eminent domain
The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner.
chain of title
The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.
customer
The third party or non represented consumer for whom some level of service is provided.
place of business
Where the business of real estate brokerage is normally transacted and where business calls can be directed and received.
public offering statement
Written document providing a full property disclosure to purchasers. The sale of a cooperative, a condominium, or a time-share requires the POS to fully and accurately disclose the characteristics of the project. Additionally, the Virginia Property Owners Association Act may require the use of the POS.
