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ABANDONMENT: To
relinquish or give up a
right or any further interest.
ABSTRACT OF JUDGMENT: A condensation
or summary of the essential provisions of a court
judgment.
ABSTRACT OF TITLE: A condensed
history or a summary of the condition of title based
on an examination of public records.
ACCELERATION CLAUSE: A clause
in an installment note or trust deed permitting the
payee or beneficiary to declare the entire unpaid
balance immediately due and payable upon the occurrence
of a stated event, such as the failure to pay an
installment when due.
ACCESS RIGHT: The right of an
owner of land to have ingress and egress to and from
his property to a public street.
ACTUAL NOTICE: Notice which a
party has received in fact or in reality, as compared
with constructive notice which is implied or inferred.
ADMINISTRATOR: A person appointed
by a probate court as the representative of a decedent’s
estate where the decedent left no will.
ADVANCES: Money advanced by the
beneficiary under a trust deed to pay real estate
taxes, hazard insurance premiums, and other items
needed to protect the beneficiary’s interest
under the trust deed.
AFFIDAVIT: A written sworn statement
made before an authorized official.
AFFIDAVIT OF DEATH OF JOINT TENANT: The
sworn statement recorded to evidence the death of
a person whose title to property is held in joint
tenancy.
AGENCY: The contractual relationship
between a principal and an agent in which the agent
is employed to act on behalf of the principal in
dealings with third parties.
AGENT: A person who acts on behalf
of a principal.
A.K.A.: This abbreviation refers to “also known
as” and is used in instances where confusion
exists concerning the identity of a party on the
vesting.
ALIENATION CLAUSE: A clause in a note
or trust deed permitting the payee or beneficiary
to declare the entire balance immediately due and
payable upon a transfer of the property. Also referred
to as a "due on sale" clause.
A.L.T.A.: American Land Title
Association, commonly used in reference to a form
of title policy required by lenders.
AMORTIZATION: Paying on an installment
basis at stated times for a stated period until the
debt is paid in full.
APPRAISAL: An opinion as to the
fair market value of property.
ASSESSED VALUE: Value placed
on property as a basis for taxation.
ASSESSMENTS: Special taxes imposed
to pay for public improvements beneficial to a limited
area.
ASSIGNEE: The person being assigned
the position. For example, in a sale transaction,
the Buyer’s Assignee will complete the transaction
in place of the Buyer.
ASSIGNMENT: A transfer in writing of
a person’s interest.
ASSIGNOR: The person who assigns
or transfers property.
ASSUMPTION: The taking over by
one party of an obligation that was originally incurred
by another, as in the assumption of an existing trust
deed by the new owner when property is sold.
ATTORNEY-IN-FACT: An agent authorized
to act for another as granted in a Power of Attorney
document.
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BALLOON
PAYMENT: The final
payment on an installment
note which is greater
than the preceding payments
and which pays the note
in full. Also, a payment
that exceeds the normal
payment program.
BENEFICIARY: As used in a trust deed
loan, the Beneficiary is the lender. The Beneficiary
is the party who obtains the benefit of the security.
BENEFICIARY DEMAND: A statement
setting forth the amount required to payoff a loan
in full.
BENEFICIARY STATEMENT: A statement supplied
by a lender for purposes of verifying the loan balance,
present status, and terms of the loan. In the case
of a sale transaction in which the buyer is assuming
the loan, the statement will often provide the lender’s
loan transfer requirements and a list of required transfer
fees.
BILL OF SALE: A written instrument
evidencing the transfer of title to personal property.
BINDER: A report issued by a title
insurance company binding or committing the title insurance
company to issue a policy within a specified time.
BLANKET MORTGAGE OR TRUST DEED: A
mortgage or trust deed which covers more than one lot
or parcel of real property, often an entire subdivision. |
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C.A.R.: California
Association of Realtors.
This Association guides
the activities of the real
estate licensees in the
State of California.
C.C. & R’s: Covenants,
Conditions and Restrictions are those matters that
limit the use and enjoyment of property usually by
agreements contained in deeds and other documents.
C.E.A.: California Escrow Association.
An active, State-wide organization providing guidance
and services for escrow personnel, including training
seminars and materials.
CHAIN OF TITLE: The sequence
of ownership or title on the property as evidenced
by a chronological list of recorded instruments affecting
the title to land.
CLOUD ON TITLE: A defect in chain
of title or in documentation keeping the title from
being clear and easily conveyed.
COLLATERAL: The item used to
secure a loan to assure the lender of repayment or
provide a source of repayment in the event of default.
COMMUNITY PROPERTY: Property acquired
by husband or wife or both during marriage when not
acquired as separate property.
CONDOMINIUM (CONDO’S): A form of
ownership of a property wherein certain parts (units)
of the property are in fee title to individuals and
a portion of the property is owned “in common” with
the other owners.
CONFIRMATION OF SALE: Court approval
of the sale of property by an executor, administrator,
guardian or conservator.
CONSERVATOR: A person appointed
by the court to take care of the person or property
of an adult person needing such care.
CONSIDERATION: The inducement
for entering into a contract sometimes known as the
sales price.
CONSTRUCTIVE NOTICE: Notice given by
the public records of a claim of ownership or interest
in property.
CONTINGENCY: A condition of closing
which is dependent upon an uncertain future event.
Such conditions may prevent close of escrow by one
of the principals in the event the contingency cannot
be removed, such as Buyer obtaining a new loan, a
Seller being able to purchase a new house, or a Buyer
being able to sell an existing house.
CONTRACT: An agreement by which
a person undertakes to do or not to do a certain
thing.
CONVENTIONAL LOAN: A mortgage loan which
is not insured or guaranteed by a governmental agency.
CONVEYANCE: A written instrument
transferring the title to or interest in real estate
from one person or entity to another.
CORPORATION: An artificial being,
created by law, possessing certain rights, privileges,
and duties of natural persons. |
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DECLARATION
OF HOMESTEAD: Document
recorded by a homeowner
to protect his home from
a forced sale up to a
prescribed amount in
satisfaction of certain
types of creditors.
DECREE: A type of court order.
DEED: Written instrument by which the
ownership of land is transferred from one person
to another.
DEED OF TRUST: Written instrument
by which title to land is transferred to a trustee
as security for a debt or other obligation. Also
known as a trust deed.
DEFAULT: Failure to perform a
duty or to discharge an obligation.
DEPOSIT RECEIPT: A document used
when accepting “earnest money”
DOCUMENTARY TRANSFER TAX: A State tax
on the sale or conveyance of real property located
in any county in the state. Applies when the consideration
exceeds $100. Tax is computed at the rate of $.55
for each $500.00 of consideration or fraction thereof.
Some cities have their own City Transfer Taxes.
D.R.E.: Department of Real Estate.
The agency which regulates real estate licensees
and the sale of property by developers in the State
of California.
DUE-ON-SALE CLAUSE: A provision
in a real estate loan calling for automatic maturity
at the lender’s option upon the sale or transfer
of the real property to a third party. Also called
an alienation clause or acceleration clause. |
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EARNEST MONEY: Funds
given as a part of the purchase
price to bind a bargain,
usually the initial good
faith deposit of the Buyer.
EASEMENTS: A right or interest
in the land of another which exists apart from the
ownership of the land, such as a right to cross over
another person’s property. Examples include utilities
easements and ingress and egress easements.
EGRESS/INGRESS: An easement right
of way for egress (exit) and ingress (entry) to a property
owned by another.
EMINENT DOMAIN: The right or power
of the government to take property for a public purpose
upon payment of just compensation.
ENCROACHMENT: The extension of
an improvement onto the property of another, for example,
a garage, fence or driveway that crosses over a lot
line.
ENCUMBRANCE: A lien or charge on a property
encumbering the subject parcel.
ENDORSEMENT: As to a title insurance
policy, a rider or attachment forming a part of the
insurance policy expanding or limiting coverage. Endorsement
also refers to the act of signing a name of the back
of a check or promissory note to evidence its transfer.
EQUITY: Property value in excess of mortgages
and other liens.
ESCHEAT: The transfer of unclaimed
funds to the State of California.
ESCROW: A transaction in which an impartial
third party (escrow holder) acts upon written instructions
for both seller and buyer (or for borrower and lender)
by holding and delivering documents and disbursing
funds when certain conditions have been fulfilled.
ESCROW ACCOUNT: An account in which
the borrower’s monthly deposits for taxes, hazard
insurance, and mortgage insurance, if any, are held
in trust by the lender for the future payment of these
items as they become due. Also known as an Impound
Account.
ESCROW ANALYSIS: The periodic examination
of escrow accounts to determine if monthly deposits
will provide sufficient funds to pay tax and insurance
bills when due.
ESCROW HOLDER: The escrow officer, escrow
company or escrow agent.
EXECUTOR: A person who is designated
in a will as the representative of a decedent‘s
estate.
EXECUTRIX: Feminine of executor. |
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FIDUCIARY: One
who holds a position of trust
and confidence. As an example:
an escrow holder.
FORECLOSURE: A proceeding to enforce
a lien by a sale of the property in order to satisfy
the debt. |
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GRANT: A
transfer of real property.
GRANT DEED: A written instrument transferring
title to real property.
GRANTEE: The person to whom a grant
is made.
GRANTOR: The person who makes a
grant.
GUARDIAN: A person appointed by
the court to care for the person or estate of a minor
or incompetent person. |
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HOMESTEAD: A
residence upon which the
owner has recorded a Declaration
of Homestead under California
law.
HYPOTHECATE: To mortgage or pledge without
delivery of the security to the lender. To give something
as security without parting with possession. |
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IMPOUND ACCOUNT: Funds
retained by a lender to cover
such items as taxes and hazard
insurance premiums. Also
known as Escrow Account.
INDEMNITY: Insurance against possible
loss or damage. A title insurance policy is a contract
of indemnity.
INSTALLMENT NOTE: A promissory
note providing for payment of the principal in two
or more fixed amounts at different stated times.
INSURANCE CERTIFICATES: On condominium
or townhome properties, an insurance certificate is
the evidence that the unit owner and lender, if any,
are insured under the terms of a Master Insurance Policy. |
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JOINT
TENANCY: Title
held by two or more persons
in equal shares with
right of survivorship.
JOINT VENTURE: A business undertaking
by two or more persons to conduct a single enterprise
for profit.
JUDGMENT LIEN: A statutory lien
created by recording an abstract of judgment.
JUNIOR LIEN: A subordinate lien.
JURAT: The sworn statement form
of the notary public certificate. The clause at the
end of an affidavit with the date, location and person
before whom the statement was sworn. |
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LAND
SALES CONTRACT: A
contract used in connection
with the sale of real
property where the seller
retains legal title until
all or a certain part
of the purchase price
is paid by the buyer.
LEASE: A
contract for the possession
of land in consideration
of payment of rent.
LEASEHOLD INTEREST: Having possession
of a property by virtue of a Lease.
LESSEE: The tenant under a lease.
LESSOR: The landlord under a
lease.
LIEN: A charge, claim, or liability
upon property for the payment of a debt or performance
of an obligation. Examples include taxes, special
assessments, judgments, mortgages, and mechanic's
liens.
LIFE ESTATE: An estate measured
by the life of a natural person.
LIMITED PARTNERSHIP: A partnership
composed of partners whose contribution and liability
are limited.
LIQUIDATED DAMAGES: An agreed-to
sum of money to be paid under a contract in the event
of a breach where it would be difficult to prove
the amount of actual damages.
LIS PENDENS: A legal notice recorded
against property to show that litigation is pending,
typically used to control or stop the transfer of
the property when a conflict arises between parties
in a transaction. |
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MECHANIC'S
LIEN/CONTRACTOR'S LIEN: A
statutory lien in favor
of laborers and suppliers
who have contributed
to a work of improvement.
MORTGAGE: A written document
executed by the owner of land by which the land is
given as security for the payment of a debt or performance
of an obligation.
MORTGAGEE: The party who obtains the
benefit of a mortgage.
MORTGAGOR: The party who executes
a mortgage.
MUTUAL WATER COMPANY: A water
company organized by or for the benefit of water
users in a given district with the object of securing
an ample water supply at a reasonable rate. Shares
of stock are issued to the users. |
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NOMINEE: A
party designated to act in
place of the original buyer
in a real estate transaction.
NOTE: A written acknowledgment
of a debt by a borrower including a promise of payment
in accordance with specified terms. Also known as Promissory
Note.
NOTICE OF DEFAULT: Recorded notice that
a default has occurred under a deed of trust.
NOTICE OF SALE: A notice recorded
by the Trustee of a Deed of Trust stating that a foreclosure
action has begun and giving the date of the proposed
foreclosure sale. |
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OFFSET STATEMENT/ESTOPPEL
CERTIFICATE: Statement
obtained to verify or substantiate
terms of an agreement or
sums of money. As an example:
A Tenant Offset or Estoppel
is a statement signed by
the Tenant giving monthly
rental sum, security deposits,
last month rent paid, and
describing any special
agreements with the Lessor
(Landlord). |
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PARTNERSHIPS: A
voluntary association of
two or more persons to
carry on as co-owners of
a business for profit.
PERSONAL PROPERTY: Movable property
such as furniture, clothing, or a car. Property which
is not real property.
PLAT MAP: A drawing giving the
general physical lay-out of the land covered and
included in the preliminary title report.
P.M.I.: Private Mortgage Insurance.
It is obtained by a lender at the borrower's expense
as insurance covering the payment of the loan.
POWER OF ATTORNEY: A document
authorizing another to act on one's behalf as his
agent.
PRELIMINARY TITLE REPORT: The initial
report issued by a title insurer reflecting results
of the search of title. This report sets out the
terms upon which a title insurer is willing to insure
the title, provides a description of the property,
the vesting of the title, and any liens and encumbrances
against which the company is not willing to insure.
PREPAYMENT PENALTY: A provision
in a note providing for the payment of a penalty
in the event the note is paid off prior to its due
date
PRINCIPAL: One who employs an
agent to act on his behalf, such as the seller and
buyer in an escrow transaction. Also, an amount of
debt or the face value of a note or mortgage.
PROBATE: The official proving
of a will as authentic or valid in a probate court.
PROPERTY PROFILE: A informational
package furnished by title companies to real estate
agents which usually provides copies of the current
vesting deed, the tax parcel number, copies of trust
deeds, and a plat map.
PRORATE: To divide equally or proportionately
as to the time of use. In a sales escrow, it is the
custom to prorate taxes, interest, rents, and hazard
insurance premiums between buyer and seller in accordance
with the respective periods of ownership.
PUBLIC REPORT: A report issued
by the Department of Real Estate containing information
of interest to a buyer about newly subdivided property.
PURCHASE MONEY DEED OF TRUST: A deed
of trust to secure payment of all or a portion of
the purchase price of real property.
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QUALIFIED
INTERMEDIARY: A
person or entity serving
as an intermediary in an
exchange transaction.
QUIET TITLE: A legal action to
establish title to real property usually used to obtain
clear title on a property that is clouded by an issue
of title.
QUITCLAIM DEED: A deed which conveys
whatever present right, title or interest the grantor
may have in real property but not containing any warranty
of a valid interest on title in the grantor. |
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REAL PROPERTY: Land
and buildings affixed to
the land, including the air
space above and mineral rights
below, as opposed to personal
property or chattels.
RECONVEYANCE: A document releasing the lien of a deed
of trust.
RECORDATION: Filing a document
for record in the office of the county recorder, thereby
making the document part of the public record.
RENT STATEMENT: A detailed statement
provided by the seller covering the rental income of
a property and amounts of deposits. The statement is
used in escrow for rent proration purposes and for
making adjustments between the parties for deposits.
REQUEST FOR NOTICE OF DEFAULT: A notice
recorded by the holder of a junior lien requesting
that he be notified in the event that a Notice of Default
is recorded under a senior deed of trust. If the deed
of trust is foreclosed, the person requesting the notice
will be notified of the foreclosure by the trustee
processing the foreclosure.
R.E.S.P.A.: The Real Estate Settlement
Procedures Act enacted by Congress in 1974, provides
protective measures for borrowers, including establishing
the manner in which closing costs are disclosed. Lenders
are required to use the R.E.S.P.A. settlement statement
at closing. In common usage, this form is called a
'H.U.D." statement.
RIGHT OF WAY: A right to cross
over a parcel of land. |
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SATISFACTION
OF JUDGMENT: Evidence
of the payment in full
of a judgment lien.
SECURITY DEPOSIT: A deposit made
to assure performance of an obligation, usually by
a lessee.
STATEMENT OF INFORMATION FORM: A
brief statement of facts relied upon by title insurers
to assist in the proper identification of persons.
SUBESCROW AGENT: An approved
agent to receive and disburse funds on behalf of
the escrow holder or a lender, usually the title
company named in the escrow.
SUBORDINATION: The procedure of allowing
a new loan or obligation to take priority over an
existing encumbrance.
SUBORDINATION AGREEMENT: An agreement
under which a prior lien is given a lower priority
to an otherwise junior lien.
SURVEY: A map or plat containing a statement
of courses, distances and quantity of land and showing
boundary lines of real property. Also, a process
of measuring a parcel of land and ascertaining its
area and boundaries.
SWING LOAN: A short-term loan
obtained on a Seller's equity for the purpose of
purchasing a second property. |
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TAX
SERVICE: A service
which provides notification
to a lender of whether
or not a borrower is
paying the real property
taxes. Companies who
perform this service
audit the tax rolls and
issue notices to lenders
when taxes are delinquent.
TENANCY IN COMMON: Ownership
of property by two or more persons in an undivided
interest without right of survivorship.
TITLE: The evidence of ownership.
TITLE INSURANCE: An insured statement
of the condition of title or ownership of real property.
For a one-time-only premium, the named insured and
their heirs are protected against title defects,
liens, and encumbrances existing as of the date of
the policy and not specifically excluded from coverage.
In the event of a claim, the title company provides
legal defense for the policyholder and pays any covered
losses incurred as a result of such claim.
TRUST: A fiduciary relationship
in which one party (trustee) holds the title to property
for the benefit of another party (beneficiary).
TRUST AGREEMENTS: A fiduciary
relationship in which a trustee holds title to property
for the benefit of a beneficiary.
TRUST DEED: A three-party security
instrument conveying title to land as security for
the performance of an obligation. The three parties
are the Trustor (borrower), Trustee (acts only at
time of payoff and in case of foreclosure), and Beneficiary
(lender).
TRUSTEE: The acting principal
named in a Trust Agreement or the third party named
in a trust deed.
TRUSTEE'S DEED: In a case of
a foreclosure, the deed given by the trustee under
a deed of trust when the property is sold under the
power of sale. TRUSTOR: The person who conveys property
in trust or the borrower under a deed of trust. |
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UNINCORPORATED
AREA: Property located
outside the limits of any
city.
UNLAWFUL DETAINER: A legal action
to recover possession of real property.
USURY: Charging more interest than
the law allows on a loan. |
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VEST: To
give title to or to pass
ownership to property. |
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WILD
DOCUMENT: A commonly
used expression for a
document that is recorded
against a property but
seems to have no basis
for application or connection
with the property.
WILL: A disposition of property effective
upon the maker's death often referred to as a "last
will and testament". |
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ZONING:
Governmental regulations
relating to the use of
real property. |
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