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Condominium Super Lien
A law improving a condominium association's right to collect unpaid condominium fees in the case of a foreclosure. It allows the association to collect up to six months of overdue fees after taxes and municipal debts are paid, but before any mortgage obligations are paid.
Another name for a growing-equity mortgage.
Blue Sky Laws
State and federal laws that define and regulate the offering and sale of securities to protect the public from fraud.
Right of First Refusal
The right that allows an existing tenet to be offered the purchase of a property first if the owner decides to sell at a future date.
A document that transfers all rights given to a trustee through a deed of trust back to the grantor after a loan has been fully repaid. Also called a deed of reconveyance.
A person that organizes a real estate project and recruits investors. They are usually a real estate broker, accountant, or lawyer that specializes in real estate.
A term that includes collecting and crediting monthly payments, collecting funds to be held in escrow (i.e. real estate taxes and hazard insurance payments), paying real estate taxes and insurance premiums, collecting late fees, and debt collections.
Physical Characteristics of Land
Immobility, permanence (indestructibility), and uniqueness (nonhomogeneity).
Economic Characteristics of Land
Relative scarcity, improvements, permanence of investment, and area preferences (situs).
A legal term for property deterioration, abuse, or destruction, generally done by a negligent tenet.
Local regulations that determine how a parcel of land can be used (whether it is residential, commercial, industrial, or a combination of these), the minimum lot size required for construction, minimum setbacks from lot lines, and other basic usage restrictions.
Fee Simple Defeasible
A type of freehold estate in which the holder of the property is entitled to all rights of property ownership, subject to the occurrence (or non-occurrence) of a particular event. There are two types: 1) subject to a condition subsequent and 2) qualified by a special limitation.
Conventional Life Estate
A type of freehold estate limited to the lifetime of the owner or someone else as designated. It is "ordinary" if it is limited to the owner's lifetime, and "pur autre vie" if it is limited to the lifetime of someone else.
A person designated to receive a property upon the prerequisite death outlined in a conventional life estate.
A setting for the purchase and sale of existing mortgages. They are packaged and sold to Fannie Mae, Freddie Mac, and private investors.
A loan that does not meet the minimum standards set by Fannie Mae and Freddie Mac.
Deeds Executed to Carry Out a Court Order
Statutory deeds that are used to convey a property's title by court order or as a result of a will. They must conform to the laws of the state where the property is located. *This deed is not used in Massachusetts.*
Transfer Tax Stamps
A Massachusetts state-imposed excise tax on any conveyance of real estate for a consideration greater than $100. The amount is based upon the full purchase price, and is typically paid by the seller. The seller receives a device that is then attached to the deed before it is recorded.
Conveyance Tax Stamps
Another name for Transfer Tax Stamps, which are a Massachusetts state-imposed excise tax on any conveyance of real estate for a consideration greater than $100. They are also called revenue stamps or excise tax stamps.
Occurs when a lender forces a borrower into a loan with a higher interest rate than necessary, or with unfavorable terms.
A loan characterized by a fluctuating interest rate.
Broker Price Opinion
An estimate of value prepared by a real estate licensee. It is most often requested by a lender to determine that the property actually exists. It is not an appraisal.
Covenants, Conditions, and Restrictions
Private restrictions on use of real property found in subdivisions or condominium communities.
Comprehensive Environmental Response, Compensation, and Liability Act
A law that established Superfund to clean up hazardous waste sites and to collect the costs from certain defined responsible persons (PRPs) associated with the sites.
Consumer Price Index
A measure of the average change over time in the prices paid by urban consumers for a variety of consumer goods and services. In MA, it affects how much rent can be increased for existing renters in a rental-property-to-condominium conversion.
Equal Credit Opportunity Act
A federal law that prohibits discrimination in the extending of credit due to race, color, nationality, religion, sex, age, or marital status.
Federal Housing Finance Agency
The organization that supervises and regulates Fannie Mae, Freddie Mac, and Federal Home Loan Banks.
Uniform Residential Landlord and Tenet Act
A model law establishing standards for landlord-tenet relations. It has been adopted in some form by most states, but is not used under this name in Massachusetts.
Uniform Electronics Transactions Act
A model law created by the National Conference Commissioners on Uniform State Laws. It is the basis for most state laws concerning electronic documents and signatures, including in Massachusetts. It contains the E-Sign Act of 2000 to protect consumers.
Rural Housing Service
The organization that channels credit to farmers and homeowners in small rural communities. It replaced the Farmers Home Administration (FmHA), and is operated under the Dept. of Agriculture.
Real Estate Settlement Procedures Act
A federal law controlled by HUD. It applies only to new first mortgage loans that are federally funded, and requires: 1) buyer to receive the HUD booklet "Settlement Costs and You", 2) a good-faith estimate of settlement costs, 3) use of a HUD-1, and 4) a prohibition against illegal rebates and kickbacks by providers of settlement services. It was created to ensure buyers and sellers have knowledge of all settlement costs.
Massachusetts Consumer Protection Act
A regulation that outlaws unfair and deceptive acts or practices in the conduct of any trade or commerce, real estate. It increases the broker's responsibility for their statements and omissions, who can be held responsible for *any* untrue claims made to the buyer, whether intentional or not.
A ratio of debt to the value of the property. Lenders will often require mortgage insurance if the loan-to-value ratio is over 80%.
Home Equity Conversion Mortgage
The name for an FHA reverse-annuity mortgage.
An enterprise in which the government retains a supervisory role and allows tax benefits in return. Ex: Fannie Mae and Freddie Mac.
A type of urban expansion that focuses on walk-able community design in order to reduce day-to-day dependence on automobiles. Often centers around mass-transit, and includes residential, commercial, and sometimes light industrial uses.
A zoning exception that is granted to allow special use of a property that is in the public's interests.
A term that encompasses both the acquisition of private property by the government through eminent domain and the negative impact on a property by either excessive government regulations, or through government-approved changes to adjacent properties. In all cases, the government is responsible for justly compensating the property owner.
Community Reinvestment Act
A law that states banks must make a reasonable percentage of their loans to customers in their own community area. It is designed to reduce redlining and discrimination.
Mortgage Disclosure Improvement Act
A regulation that requires the disclosure of certain estimated settlement costs. A lender cannot require an application fee or appraisal fee from a customer until these disclosures are made.
A mineral once commonly used as insulation in residential and commercial construction because of its fire-resistant and heat-containing qualities. Its use was banned in 1978 because inhalation of the mineral can cause a variety of respiratory diseases.
The process of sealing off disintegrating asbestos, which may be preferable to its removal.
A period of 12 months, with each month having 30 days.
A sum of money set aside to be used later for a particular purpose.
Mortgage Reduction Certificate
A document issued by the lender when the buyer is assuming the seller's existing loan. It states the exact balance due on the loan, the interest rate, and the date the last payment was made.
A document provided by the seller's lender that indicates the exact dollar amount required to satisfied the existing loan through to the date of settlement.
Environmental Site Assessment
An audit done by a professional to determine the existence of any environmental issues that might affect the use of the property or impose future liability on the new owner.
Economically depressed urban areas that are stigmatized by the potential of being contaminated by hazardous waste.
Small Business Liability Relief and Revitalization Act
Also known as the Brownfields Law, this act states that the current owners of a property are not liable for cleanup of environmental contaminants on their property if they did not cause or contribute to the contamination.
An enormous hole lines with an impermeable membrane to prevent leakage of contaminants into local groundwater. The hole is then used for the disposal of trash and debris, and when full, it is covered with sand and soil.
A mutual misunderstanding in negotiations between parties.
A document used to make minor changes to the sales contract. For instance, changing the closing date. It must be signed and agreed to by both parties.
A guarantee payment of rent that safeguards against a tenet's destruction of the property. It may be established by: contracting for a lien on the tenets property, requiring the tent to pay a portion of the rent in advance, requiring the tenet to pay post security, or requiring the tent have a third party guarantee the payment of the rent.
The amount of rent a property would command in a fully competitive marketplace. It is usually the same as the contract rent at the time the lease is created. It is sometimes called market rent.
A type of agricultural lease in which the landlord, in lieu of a regular rent payment, accepts a preset percentage of the profits from the sale of the crops.
A type of lease used when a tenet wants to purchase the property but is currently unable to do so, due to lack of financing or problems with the title. The purchase agreement is primary and the lease is secondary.
An amount that is used to correct general inequalities in statewide tax assessments.
This type of lien is levied against a property automatically. It is a statutory lien that is given priority over all other liens on a property.
Occurs when a court orders a property to be sold to pay delinquent levies.
A tax levied at the time a property is conveyed to a new owner. Also known as a grantor tax.
Capital Gains Tax
A federal tax imposed on the profits resulting from the ownership and/or sale of real estate.
Being unable to pay debts
A written statement that prevents its issuer from asserting different facts at a later date. It is often requested by a mortgagor from the borrower so that the mortgage can be sold to an investor. Also called a certificate of no defense.
Proof in the form of written or printed papers.
Insurance policies that offer protection from a range of potential perils, such as those of a fire, hazard, public liability, and casualty
Evaluation and selection of appropriate courses of action to minimize legal liability; also the selection of appropriate insurance coverage
Alterations to the interior of a building to meet the functional demands of the tenant.
In property management, comparing one type of equipment with another based on both purchase cost and operating cost over its expected useful lifetime
A method of calculating depreciation for tax purposes, computed by dividing the adjusted basis of a property by the estimated number of years of remaining useful life.
The appraisal method of estimating building costs by calculating the cost of all of the physical components in the improvements, adding the cost to assemble them, and then including the indirect costs associated with such construction
The appraisal method of estimating building costs by multiplying the number of square feet in the improvements being appraised by the cost per square foot for recently constructed similar improvements
growing equity mortgage (GEM)
A loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the principal balance outstanding and thus shorten the overall term of the loan.
Farm Service Agency (FSA)
An agency of the federal government that provides credit assistance to farmers and other individuals who live in rural areas. Formerly known as the Farmers Home Administration.
The relationship between the amount of the mortgage loan and the value of the real estate being pledged as collateral.
Community Reinvestment Act (CRA)
A federal law established in 1977 that prescribes certain activities for financial institutions to help meet the needs in their communities for lowand moderate-income housing.
A unit of measurement used for various loan charges; one point equals 1 percent of the amount of the loan.
A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until a future date, which may not be until final payment. Also called a contract for deed or articles of agreement for warranty deed
Additional material attached to and made part of a document, as in a supplement that is added to an agreement of sale.
agreement of sale
An offer to purchase that has been accepted by the seller and has become a binding contract.
A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as violent crime, gang-related activity, illness, or personal tragedy.
A hidden structural defect that is not discovered by ordinary inspection and that threatens the property's soundness or the safety of its inhabitants. Sellers and licensees have a duty to inspect for and disclose latent defects.
buyer agency representation (agency)
A principal/agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.
Pennsylvania Human Relations Act (PHRA)
The state law that prohibits discrimination in the sale or rental of real estate, both housing and commercial properties, on the basis of race, color, religion, ancestry, national origin, sex, familial status, handicap or disability, or use of guide or support animal due to a handicap or disability.
Americans with Disabilities Act(ADA)
A federal law passed in 1990 to open doors, both figuratively and literally, for people with disabilities to become part of the economic and social mainstream of society. The law mandates equal access to employment and goods and services. Title I prohibits discriminatory employment practices. Title III requires anyone providing goods and services to the public to make them accessible by removing architectural and communications barriers and, if that is not readily achievable, to provide reasonable accommodations to people with disabilities.
code of ethics
A written system of standards for ethical conduct.
The system of moral principles and rules that becomes the standards for professional conduct.
A licensee who provides services to a consumer without an agency relationship.
The first contact between a licensee and a consumer of real estate-related services where a substantive discussion about real estate occurs. Pennsylvania law contemplates that this will be the first face-to-face meeting. However, because in today's practice, substantive conversations could evolve by telephone or e-mail, licensees are required to provide a disclosure statement to ensure that a consumer is aware that personal information should not be divulged to a licensee who is not, and may not become, the consumer's agent.
A specific form adopted by the Real Estate Commission in Pennsylvania to disclose information about permitted business relationships and specific agency procedures in real estate transactions. This notice must be presented at an initial interview to any consumer of real estate services.
One or more licensees designated by the employing broker to act exclusively as agent(s) on behalf of the principal to the exclusion of all other licensees within the broker's employ.
An agency relationship in which the broker-agent appoints other brokers as subagents to help perform client-based functions on behalf of the principal. The subagent assumes the same fiduciary responsibilities as the agent. In Pennsylvania, the principal must authorize the broker to engage subagents
A licensee who has entered into an agency relationship with a consumer buyer of real estate, as defined in Pennsylvania license law. This relationship is normally established by a buyer agency agreement
The broker in a multiple-listing situation from whose office a listing agreement is initiated.
Any licensee who has entered into an agency relationship with a seller of real estate.
A person who is the recipient of any real estate service, as defined by Pennsylvania's licensing law. This person may receive client or customer services, depending on the nature of the relationship established with the real estate broker.
The person who is the principal who hires the agent and delegates to the agent the responsibility of representing the principal's interests. In a real estate transaction, the client may be the seller/property owner or buyer/tenant who has an agency relationship with the broker.
The effort that brings about the desired result. Under an open listing the broker who is the procuring cause of the sale receives the commission.
Payment to a broker for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property.