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Glossary of Real Estate Terms
This Glossary has
been provided as a courtesy to assist you in
gathering information relative to real estate.
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Landlord’s Lien:
A type of lien that can be created by contract
or by operation of law. Some examples are: (1) a
contractual landlord’s lien as might be found in
a lease agreement; (2) a statutory landlord’s
lien; and (3) landlord’s remedy of distress (or
right of distraint), which in not truly a lien
but has a similar effect. |
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Landlord’s Lien or Warrant:
A warrant from a landlord to levy upon a
tenant’s personal property (e.g., furniture,
etc.) and to sell this property at a public sale
to compel payment of the rent or the observance
of some other stipulation in the lease. |
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Lease:
An agreement whereby the owner of real property
(i.e., landlord/lessor) gives the right of
possession to another (i.e., tenant/lessee) for
a specified period of time (i.e., term) and for
a specified consideration (i.e., rent). |
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Lease Agreement:
The formal legal document entered into between a
Landlord and a Tenant to reflect the terms of
the negotiations between them; that is, the
lease terms have been negotiated and agreed
upon, and the agreement has been reduced to
writing. It constitutes the entire agreement
between the parties and sets forth their basic
legal rights. |
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Lease Commencement Date:
The date usually constitutes the commencement of
the term of the Lease for all purposes, whether
or not the tenant has actually taken possession
so long as beneficial occupancy is possible. In
reality, there could be other agreements, such
as an Early Occupancy Agreement, which have an
impact on this strict definition. |
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Leasehold Improvements:
Improvements made to the leased premises by or
for a tenant. Generally, especially in new
space, part of the negotiations will include in
some detail the improvements to be made in the
leased premises by Landlord. |
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Legal Description:
A geographical description identifying a parcel
of land by government survey, metes and bounds,
or lot numbers of a recorded plat including a
description of any portion thereof that is
subject to an easement or reservation. |
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Legal Owner:
The term is in technical contrast to equitable
owner. The legal owner has title to the
property, although the title may actually carry
no rights to the property other than as a lien. |
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Letter Of Attornment:
A letter from the
grantor to a tenant, stating that a
property has been sold, and directing rent to be
paid to the
grantee (buyer). |
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Letter Of Credit:
A commitment by a bank or other person, made at
the request of a customer, that the issuer will
honor drafts or other demands for payment upon
full compliance with the conditions specified in
the letter of credit. Letters of credit are
often used in place of cash deposited with the
landlord in satisfying the security deposit
provisions of a lease. |
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Letter Of Intent:
A preliminary agreement stating the proposed
terms for a final contract. They can be
"binding" or "non-binding". This is the
threshold issue in most litigation concerning
letters of intent. The parties should always
consult their respective legal counsel before
signing any Letter of Intent. |
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Lien:
A claim or
encumbrance against property used to
secure a debt, charge or the performance of some
act. Includes liens acquired by contract or by
operation of law. Note that all liens are
encumbrances but all encumbrances are not liens. |
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Lien Waiver (Waiver of Liens):
A waiver of
mechanic’s lien rights, signed by a
general contractor and his
subcontractors, that is often required
before the general contractor can receive a draw
under the payment provisions of a construction
contract. May also be required before the owner
can receive a draw on a construction loan. |
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Like-Kind Property:
A term used in an exchange of property held for
productive use in a trade or business or for
investment. Unless cash is received, the tax
consequences of the exchange are postponed
pursuant to Section 1031 of the Internal Revenue
Code. |
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Limited
Partnership:
A type of partnership, created under state law,
comprised of one or more general partners who
manage the business and who are personally
liable for partnership debts, and one or more
special or limited partners who contribute
capital and share in profits but who take no
part in running the business and incur no
liability over and above the amount contributed. |
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Listing Agreement:
An agreement between the owner of a property and
a real estate broker giving the broker the
authorization to attempt to sell or lease the
property at a certain price and terms in return
for a commission, set fee or other form of
compensation. |
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Long Term Lease:
In most markets, this refers to a lease whose
term is at least three years from initial
signing until the date of expiration or renewal
option. |
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Lot:
Generally, one of several contiguous parcels of
land making up a fractional part or subdivision
of a block, the boundaries of which are shown on
recorded maps and
“plats”. |
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Low Rise:
A building with fewer than 4 stories above
ground level. |
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Lump-Sum Contract:
A type of construction contract requiring the
general contractor to complete a building or
project for a fixed cost normally established by
competitive bidding. The contractor absorbs any
loss or retains any profit. |
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