California Real Estate Principles Vocabulary
ad valorem
A Latin phrase meaning "according to value" that is used to describe a tax charge in relation to the value of the property taxed.
action to quiet title
A court proceeding brought to establish title to real property
actual fraud
A deliberate misrepresentation made in reckless disregard of its truth of falsity; the suppression of truth; a promise made without the intention to perform it; or any other act intended to deceive
affirmative fraud
A deliberate statement of a material fact that the speaker knows to be false and on which the speaker intends another person to rely on his or her detriment
bankruptcy
A federal possession of the assets of an insolvent debtor and sells the nonexempt assets of pay off creditors on a pora rata basis; title to the debtor's assets is held by a trustee in bamkruptcy
acknowledgment
A formal declaration made before an authorized person by a person who the execution of the instrument is the person's own act.
broker-office
A licensed broker who is an officer of a brokerage that is set up as a corporation and who is designated as the broker responsible for supervision of licensed employees of the brokerage
acre
A measure of land equaling 160 square rods, 4,840 square yards, or 43,560 square feet, or a tract about 208.71 feet square
adverse possession
A method of acquiring title to real property by occupying the property against the interest of the true owner and fulfilling other statutory requirements.
acceleration clause
A provision in a real estate financing instrument that allows the lender to declare the remaining indebtedness due and payable on the happening of certain conditions, such as the sale of the property or the borrower's default in payment
associate licensee
A real estate salesperson or broker who works as the employee of a real estate broker
brownfield
A site identified by the Environmental Protection Agency as containing hazardous substances, pollutants, or contaminants
abstract of title
A summary or digest of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show continuity of ownership and indicate any possible impairments to title.
arm's-length transaction
A transaction in which neither party acts under duress and both have full knowledge of the property's assets and defects, the property involved has been on the market a reasonable length of time, there are no unusual circumstances, and the price represents the normal consideration for the property sold, without unusual financing terms
assessed value
A valuation placed on a piece of property by a public authority as a basis for levying taxes on that property
accretion
Accession by natural forces, such as alluvion
blind ad
Ad in which the name of the person placing the ad is not mentioned
bilateral contract
Agreement in which both parties make a promise to do something or to refrain from doing something and both are obligated to fulfill the promise
alluvion
Alluvium; the increase of soil along the bank of water by natural forces
benefit assessment
Amount owed by owners of property that is enhanced by the construction or renovation of improvements
attorney-in-fact
An agent who has been granted a power of attorney by a principal
binding contract
An agreement that can be enforced in a court of law if one of the parties to the agreement fails to fulfill any of its terms
appraisal
An estimate of a property's monetary value on the open market; an estimate of a property's type and condition, its utility for a given purpose, or its highest and best use.
broker's price opinion (BPO)
An estimate of property value that is not an appraisal but is developed by a real estate broker based on comparable sales in the area
balloon payment
An installment payment on a promissory-usually the final payment-that is significantly larger than the other installment payments
bond
An obligation; a real estate bond is a written obligation issued on security of a mortgage or trust deed
assumption
An undertaking or adoption of a debt or an obligation resting primarily on another person
bulk transfer of goods
Any transfer of a substantial part of the materials, supplies, merchandise, equipment, or other inventory of a business that is not in the ordinary course of the business's activities
appurtenance
Anything affixed (attached) to or used with land for its benefit that is transferred with the land.
building permit
Approval granted by the appropriate municipal, county, or other governing authority of an improvement to real estate following review of the building plan submitted by the permit applicant and revision of the plan as required
capital assets
Assets of a permanent nature used in the production of income, such as land, buildings, machinery, and equipment; usually distinguishable under income tax law from "inventory," assets held for sale to customers in the ordinary course of the taxpayer's trade or business
apparent authority
Authority to act as an agent that someone appears to have but does not actually have, which will place no obligation on the party the agent claims to represent if that party is in no way responsible for the reprensentation
anchor blots
Bolts that fasten the sill plate of a wood-frame house to the house's foundation, required in California since 1931 for all new construction as an earthquake safety measure.
California Bureau of Real Estate (CalBRE)
California agency that administers the Real Estate Law, including the licensing of real estate brokers and salespeople
California Department of Public Health
California agency that regulates construction activities affecting the water supply and other public health issues; formerly part of the California Department of Health Services
California Department of Insurance
California agency that regulates insurers
California Department of Business Oversight (DBO)
California agency that regulates licensees and industries formerly under the control of the Department of Corporations and Department of Financial Institutions
Business and Professions Code
California code that contains the Real Estate Law, which includes real estate licensing, transaction requirements, and Subdivided Lands Law
California Franchise Tax Board
California department that collects state personal income taxes and bank corporation taxes
California Bureau of Real Estate Appraisers (BREA)
California office that licenses and regulates real estate appraisers
boot
Cash received in an exchange of property in addition to the property
basis
Cost basis is the dollar amount assigned to property at the time of acquisition under provisions of the Internal Revenue Code for the purpose of determining gain, loss, and depreciation in calculating the income tac to be paid on the sale or exchange of the property; adjusted cost basis is derived after the application of certain additions, such as for improvements, and deductions, such as for depreciation
backfill
Dirt placed against the foundation of a structure after the concrete used to create the foundation wall has cured and the wood forms in which the concrete was poured have been removed
beneficiary statement
Document provided by the lender if the buyer of a property encumbered by an existing loan will take title to the property subject to that loan
abstract of judgment
Document stipulating the outcome of a legal action, which can be filed in any county where the judgement debtor has property.
California Foreclosure Reduction Act
Effective January 1, 2013, revised procedure for nonjudicial foreclosures; also known as the California Homeowner Bill of Rights
anticipation, principle of
Expectation that property will offer future benefits, which tends to increase present value
adjustable-rate mortgage (ARM)
Finance instrument whose interest rate will vary according to the change in an identified index or rate such as the 11th District Cost of Funds
acquisition cost
For FHA-insured loans, the price to procure property, including purchase price and all nonrecurring closing costs, including discount points, FHA application fee, service charge and credit report, FHA appraisal, escrow, document preparation, title insurance, termite inspection, reconveyance, and recording fees
basis point
For financing and investing purposes, 1/100 of 1%
base value
For property tax assessment purposes, the full cash value of a parcel of real estate as of February 28, 1975, or the date of a subsequent sale or other reassessment event
abandonment
Giving up possession or ownership of property by non-use, usually accompanied by some affirmative act, such as removing one's belongings from an apartment.
CalVet loan
Home or farm loan procured through the California Veterans Farm and Home Purchase Program
Alien Registration Receipt Card
Identification card, referred to as the green card, that provides proof of the legal presence in the United States of someone who is a citizen of another country
after-acquired title
If title is acquired by a grantor only after a conveyance to a grantee, the deed to the grantee becomes effective at the time the grantor actually receives title.
base lines
Imaginary lines that run east-west and intersect meridians that run north-south to form the starting point of land measurement using the rectangular survey system of land description
adjusted gross income
Income from all sources less deductions for taxes, depreciation, and other allowable deductions
acceptance
Indication by the person to whom an offer is made (the offeree) of agreement to the terms of the offer. If the offer requires a writing, the acceptance must also be in writing
action for declaratory relief
Legal proceeding brought to determine the respective rights of the parties before a controversy arises
California finance lender and California Finance Lenders Law
Licensee under the California Finance Lenders Law who is in the business of making consumer loans or commercial loans in which personal property may be used as collateral
area
Measure of the floor or ground space within the perimeter of a building or land parcel
asbestos
Naturally occurring fibrous silicate mineral linked with various forms of cancer if inhaled and which, until the 1970s, was used for its insulating properties its spray-on and batting applications in homes and commercial structures; remediation can be by containment or removal and requires following strict procedures.
beneficiary
One on whose behalf a trustee holds property conveyed by a trustor; the lender under a deed of trust
agent
One who acts for and with authority from another person, called the principal; a special agent is appointed to carry out a particular act or transaction, and any other agent is a general agent (general agent)
California Residential Mortgage Lending Act
Part of the Financial Code that regulates mortgage bankers
assignor
Party making an assignment of rights to someone else
assignee
Party to whom an assignment of rights is made
Administrator
Personal representative of the estate of a decedent, appointed by the probate court. See also executor.
adjustable-rate note
Promissory note that serves as evidence of a debt that carries an interest rate that will vary according to the change in an identified index or rate, such as the 11th District Cost of Funds.
adjusted cost basis
Purchase price of property plus cost of specified improvements, less any depreciation deductions taken on the property
alienation clause
See due-on-sale clause
appropriation, right of
See right of appropriation
all-inclusive trust deed
See wraparound mortgage or trust deed
attorney-at-law
Someone licensed by the state to practice law
building code
Standards for building, planning, and construction established by state law and local ordiance
California Solar Initiative
State law effective January 1, 2008, that requires municipal utilities to offer a solar incentive program to customers
capital gain
The amount by which the net resale proceeds of a capital item exceed the adjusted cost basis of the item
business opportunity
The assets of an existing business enterprise, including its goodwill
actual authority
The authority an agent has because it is specified in the agency agreement, or that the agent believes he or she has because of an unintentional or a careless act of principal
balance, principle of
The combination of land uses that results in the highest property values overall
book value
The current value for accounting purposes of an asset expressed as original cost plus capital additions minus accumulated deprication
breach of contract
The failure of a duty imposed by law or by contract, either by omission or commission
bundle of rights
The legal rights of ownership of real property, including the rights of possession, use, disposition, and exclusion of others from the property
actual age
The number of years since completion of a building; also called historical or chronological age
assessor
The official responsible for determining assessed values
amortized loan
The payment of a financial obligation in installments; recovery over a period of time of cost or value. A loan has negative amortization when the loan payments do no cover all of the interest due, which then is added to the remaining loan balance
blockbusting
The practice on the part of unscrupulous speculators or real estate agents of inducing panic selling of homes at prices below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial makeup is changing or appears to be on the verge of changing
attachment
The process by which real or personal property of a party to a lawsuit is seized and retained in the custody of the court
accession
The process of manufactured or natural improvement or addition to property
air rights
The real property right to the reasonable use of the airspace above the surface of the land
agency
The relationship between a principle and the agent of the principle that arises out of a contact, whether express or impiled, written or oral, by which the agent is employed by the principal to do certain acts dealing with a third party
annual percentage rate (APR)
The relative cost of credit as determined in accordance with Regulation Z of the Consumer Financial Protection Bureau for implementing the federal Truth-in-Lending Act
avulsion
The tearing or washing away of land along the bank of a body of water by natural forces
alienation
The transferring of property to another, an involuntary transfer of title
bequest
Transfer of property, particularly person property, called a legacy, by will. See also devise
assignment
Transfer of rights from on party to another, usually for compensation
bracing
Use of one or more construction methods, such as plywood wall sheathing, to enable a structure to withstand the pressures caused by high winds and earth movement.
bill of sale
Written instrument that conveys title to person property
agency confirmation form
Written statement required for a residential transaction involving property of one to four residential units, in the wording required by the California Civil Code, and signed by the property seller as well as the listing agent and selling agent (if different from the listing agent), that indicates the seller's understanding of the relationship of the seller to the listing and selling in the transaction.
agency disclosure form
Written statement required for a residential transaction involving property of one to four residential units, using the wording required by the California Civil Code, and signed by both buyer and seller in a transaction, that explains the various relationships of those involved in a residential property