EGGHEAD PUBLISHERS, LLC. © 2015 Except as permitted under the copyright Act of 1976, this glossary may not be reproduced in whole or part, in any manner. Real Estate Glossary of Terms A A ABANDONMENT. The act of voluntarily relinquishing or surrendering possession of real property, without the transfer of title to someone else. ABANDONMENT OF EASEMENT. The obvious and intentional surrender of an easement. ABANDONMENT OF HOMESTEAD. A legal document that proves a homestead was abandoned. In order to obtain a homestead on a new property, the owner must file an abandonment of homestead on the old property. ABATEMENT. A decrease or reduction in worth or amount (usually applies to taxes or rent). ABATEMENT OF NUISANCE. Extinction or termination of a nuisance. ABLE. Refers to financial ability; as in ready, willing, and able buyer. ABOVE GRADE IMPROVEMENTS. Improvements built above the ground level. ABROGATION. The rescission, revocation, or annulling of a contract by mutual consent of the parties to the contract, or for cause by either party to the contract. ABSENTEE OWNER. A property owner who does not live on the property, and who may rely on a property manager to manage or oversee its maintenance. ABSOLUTE NET LEASE. Lease requiring the tenant to pay for all the expenses of operating and maintaining the property, including capital expenditures and major repairs. ABSOLUTE OWNERSHIP. The greatest interest that one can have in real property. An estate that is unqualified, of indefinite duration, freely transferable and inheritable. Also known as Fee Simple Estate. ABSORPTION ANALYSIS. A study of the number of units of residential or non- residential property that can be sold or leased over a given period of time in a defined location. ABSORPTION BED. A shallow trench containing a pipe that carries treated sewage or other liquid waste away from the septic tank into an open area, where it is absorbed into the soil. 1 EGGHEAD PUBLISHERS, LLC © 2015_rev4 Real Estate Glossary of Terms A ABSORPTION PERIOD. The estimated time period required to sell, place in use, lease, or trade the subject property in its marketing area at prevailing rental rates or prices. ABSORPTION RATE. The rate at which a type of property is either bought or leased; absorbed by the market. ABSTRACT OF JUDGMENT. The summary of a court judgment that creates a lien against a property when filed with the county recorder. ABSTRACT OF TITLE. A summary or digest of all transfers, conveyances, legal proceedings and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title. ABSTRACTION. A method of valuing land. The indicated value of the improvement is deducted from the sale price. ABSTRACTOR. A person who searches historical records affecting the title to real property and summarizes the results in a report called an Abstract of Title. ABUTTER’S RIGHTS. The reasonable right to light, air and visibility that a property enjoys from another. ABUTTING PROPERTY. Property that touches or is contiguous to another property; as opposed to being near to another property. ACCELERATED COST RECOVERY SYSTEM (ACRS). The system for figuring depreciation (cost recovery) for depreciable real property acquired and placed into service after January 1, 1981. ACCELERATED DEPRECIATION. A method of cost write-off in which depreciation allowances are greater in the first few years of ownership than in subsequent years. This permits an earlier recovery of capital and a faster tax write-off of an asset. ACCELERATION CLAUSE. A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as sale of the property, or a delinquency in the repayment of the note. ACCEPTANCE. The act of agreeing or consenting to the terms of an offer thereby establishing the “meeting of the minds” that is an essential element of a contract. 2 EGGHEAD PUBLISHERS, LLC © 2015_rev4 Real Estate Glossary of Terms A ACCESS. Any means by which a person can enter property. ACCESSIBILITY. The degree to which a building or site allows access to people with disabilities. ACCESSION. An addition to property through the efforts of man or by natural forces. ACCESSORY BUILDINGS. Structures on a property that are secondary to the main building, such as sheds and garages. ACCESS RIGHT. The right of an owner to have ingress and egress to and from owner’s property over adjoining property. ACCESS TO PROPERTY. A seller must provide reasonable access to the property to the buyer, inspectors representing the buyer, and representatives of the lending institutions for appraisal purposes, or for any other purpose relating to the sale. ACCIDENT AND HEALTH PREMIUM. Additional insurance to insure mortgage payments in the event of the Borrower’s disability. ACCOMMODATION RECORDING. The recordation of an instrument without consideration and without assumption of responsibility for correctness or validity. ACCORD AND SATISFACTION. The discharge of an existing obligation by acceptance of a substitute agreement in which the creditor accepts less than the full amount owed as satisfaction of the debt. ACCOUNTING. The process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information. ACCOUNTING METHOD. A set of rules used to determine when and how income and expenses are reported (GAAP-Generally Accepted Accounting Practices). ACCREDITED MANAGEMENT ORGANIZATION (AMO). A property management designation offered by the Institute of Real Estate Management (IREM) to property management companies that meet prescribed high standards. ACCREDITED RESIDENTIAL MANAGER (ARM). A property management designation offered by the Institute of Real Estate Management (IREM) to individuals. Requirements for designation include management experience, additional training, and adherence to a code of ethics. 3 EGGHEAD PUBLISHERS, LLC © 2015_rev4 Real Estate Glossary of Terms A ACCRETION. Accession by natural forces, e.g., alluvium. ACCRUAL METHOD. An accounting method that reports revenue when earned and expenses when incurred. ACCRUE. To accumulate, grow, or mature over a period of time; as in accrued interest on a loan. ACCRUED DEPRECIATION. The difference between the cost of replacement new as of the date of the appraisal and the present appraised value. ACCRUED ITEMS OF EXPENSE. Those incurred expenses which are not yet payable. The seller’s accrued expenses are credited to the purchaser in a closing statement. ACID RAIN. Precipitation containing harmful amounts of nitric and sulfuric acids formed primarily by sulfur dioxide and nitrogen oxides released into the atmosphere when fossil fuels are burned. ACKNOWLEDGMENT. A formal declaration made before an authorized person, e.g., a notary public, by a person who has executed an instrument stating that the execution was his or her free act. In this state an acknowledgment is the statement by an officer such as a notary that the signatory to the instrument is the person represented to be. ACOUSTICAL TILE. Blocks of fiber, mineral or metal, with small holes or rough- textured surface to absorb sound, used as covering for interior walls and ceilings. ACQUISITION. The act or process by which a person procures property. ACQUISITION APPRAISAL. An appraisal that estimates the market value of a property facing condemnation under the government's powers of eminent domain. The appraisal is performed to determine the amount of just compensation due to the owner. ACQUISITION COST. The total cost of acquiring property. In addition to the purchase price, other costs include escrow fees, title insurance, lenders fees, etc. ACRE. A measure of land equaling 160 square rods, or 4,840 square yards, or 43,560 square feet, or a tract about 208.71 feet square. ACRE FOOT. The volume of material needed to cover an acre of land one foot deep. ACREAGE. A large piece of property that is usually unimproved. Acreage may be used for agricultural, industrial, residential or commercial uses. 4 EGGHEAD PUBLISHERS, LLC © 2015_rev4 Real Estate Glossary of Terms A ACREAGE ZONING. Zoning that reduces residential density by requiring large building lots. ACTION. A lawsuit brought to court. ACTION IN REM. An action in which judgment is sought against property to determine its status. ACTIVE SOLAR SYSTEM. A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use. ACT OF GOD. An act attributable to nature without human interference; include tidal wave, flood, hurricane, volcanic eruption, earthquake, and fire. ACTUAL AGE. The number of years a structure has been standing. ACTUAL AUTHORITY. Authority expressly given by the principal or given by the law and not denied by the principal. ACTUAL CASH VALUE. The monetary worth of an improvement. The cost of replacing the improvement, less any depreciation. ACTUAL DAMAGES. Damages a court of law recognizes, as the result of a wrong. ACTUAL DEPRECIATION. Depreciation occurring as a result of physical, functional, or economic forces, causing loss in value to a structure. ACTUAL FRAUD. An act intended to deceive another, e.g., making a false statement, making a promise without intending to perform it, suppressing the truth. ACTUAL NOTICE. Notice in fact or in reality to or by a party directly and personally based on things actually seen, heard, read, or observed. ADAM E. LEE. The eight ways to terminate an easement: Abandonment, Destruction, Adverse possession, Merger, Express agreement, Lawsuit, Estoppel, and Excessive use. ADDENDUM. An addition or change to a contract. ADDITIONAL DEPOSIT. Additional earnest money given with a purchase agreement. ADDITIONAL PRINCIPAL PAYMENT. Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan. 5 EGGHEAD PUBLISHERS, LLC © 2015_rev4 Real Estate Glossary of Terms A ADD-ON INTEREST. The interest a borrower pays on the principal for the duration of the loan.