A client needs to understand their attorney and proceedings of their case. Legal terminology revolving around real estate law can be tough to learn without experience with working for the law or property. The acronyms and long phrases can muddle and confuse a client and affect the case. SimpleLaw offers this mini ‘dictionary’ for our users to help prepare and familiarize them for the basic but least commonly understood terms for real estate cases.
Amenity: A feature of the property that benefits the buyer but isn't required to use the property. Think along the lines of a swimming pool.
Appraisal: A financial value of the property
Broker: Someone who negotiates the details of the real estate transaction. So think of price, closing date, etc.
Chapter 13 Bankruptcy: A type of bankruptcy that sets up a payment plan between the borrower and the creditor, through the courts.
Chapter 7 Bankruptcy: A type of bankruptcy that requires assets to be sold to settle the outstanding debt.
Covenants: Legally enforceable requirements that affect the use of property.
Delinquency: When a payment is overdue.
Disclosures: Relevant information about a property that may influence final sale. So, think of things on the property that may need attention, like new appliances or the age of a water heater or things like that.
Encroachments: A structure that extends over the legal property line to another property. So think of it as some other structure that either sits on or crosses your legal property line.
ECOA (Equal Credit Opportunity Act): A federal law requiring that lenders make credit available to creditworthy individuals equally, without discrimination based on race, color, religion, age, sex, or national origin.
Escape clause: What happens if someone chooses to get out of the agreement before finalizing it.
Fair Housing Act: Prohibition of discrimination in the home buying process based on race, color, national origin, religion, sex, familial status, or disability
Fixture: Moveable property that is so incorporated into a fixed property that it is considered part of it. An example could include an overhead light fixture or possibly appliances.
Forbearance: The option to not enforce a term of the agreement; most commonly in real estate, it gives the option to not foreclose if payments are late.
Home Warranty: Protection for mechanical systems, like an air conditioner or heater, and appliances against unexpected repairs not covered by insurance; think of a washing machine or dishwasher that breaks unexpectedly.
Joint Tenants: Two or more co-owners.
Mitigation: When referring to the financial transaction, loss mitigation is when the mortgage can be reworked, given new terms, to handle a delinquency. So terms of the original purchase agreement that can be reworked to solve a problem, if agreed.
Note: Written promise to pay a debt.
Perils: An event that can damage the property. Think of a home on some body of water. The peril of that location can be a higher risk for flooding.
Punch List: List of uncompleted items at the time of the final walk through of a newly constructed home. Punch lists are also relevant in purchase terms of an existing home. For example, you may ask that a new water heater is installed by the seller prior to closing. That could be something on the punch list.
RESPA (Real Estate Settlement Procedures Act): A law protecting consumers from abuses during the residential estate purchase and loan process by requiring disclosing of all settlement costs, practices, and relationships.
Right of Way: An easement over another persons property line that gives you right of passage.
Survey: A diagram that shows a property’s legal boundaries, easements, encroachments, rights of way, improvement locations, etc. Basically, a drawing of your legal property.
Variance: An exception to the standard local requirements for properties. So, as an example, a variance can be a fence that is higher than the local laws allow. Those exceptions, or variances, can be as simple as fence height or allowing commercial property in a residential neighborhood. Basically, it's an exception to a rule.
Zoning: Municipal or county regulation of land use through the creation and enforcement of zones. So, think of where most business are located. There aren't likely houses, or residential buildings, between the businesses. So the zone puts structure to the area. Businesses are allowed in one area; homes in another.
This A to Z guide explains commonly used words in real estate court cases that will make communicating with the attorney and paralegal services easier. SimpleLaw understands that clients can be quite nervous and unfamiliar with a lot of legal speak during the legal process and hope that this guide will help with some of that frustration. We hope this helps! Because it should be, well, Simple.