Glossary

Glossary of Real Estate and Investment-Related Terms

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Abandoned

A person, persons or entity that leave(s) a demised premises before the end of a lease term.

 

Abstract

A written history of the title to a parcel of real estate as recorded in a Land Registry Office.

 

Accrued Expense

Expenses incurred, but which are not yet payable, or have not yet been paid.

 

Acquisition Cost

The total cost for the purchaser of a property, including soft costs and sales costs.

 

Acre

A measure of land equalling 160 square rods, or 4,840 square yards, 43,560 square feet, or .4 hectares.

 

Additional Rents

Rents charged to a tenant for the maintenance, taxation, and insurance of any common areas.

Adverse Possession

When an individual, not the owner, takes actual possession of the property, hostile to, and without the consent of the owner.

 

After Tax Yield

The annual profit remaining after payment of income taxes, or the annual return on equity after payment of income taxes.

 

After Tax Yield Rate

The annual rate of return on equity after accounting for payment of income taxes.

 

Agency

The relationship between principal and agent which arises out of a contract, written or oral wherein an agent is employed and authorized by the principal to represent him/her in business transactions with a third party.

 

Agent

One who is authorized by a principal to represent him/her in business transactions with a third party, In the real estate profession it refers to a licensed brokerage.

 

Agreement of Purchase and Sale

A contract by which one party agrees to sell and another agrees to purchase.

 

Agreement to Lease

A contract by which one party agrees to rent real estate to another party for a rental fee or other compensation.

 

Amenities

Features that make a property more attractive, useful, desirable, and/or rentable and are usually included in the sale price or rent calculations.

 

Amortization

An accounting term that refers to the process of allocating the cost of an intangible asset over a period of time in an effort to deduct the used up portion of the asset from the revenue it is used to generate. It also refers to the repayment of loan principal over time, together with interest, usually with equal payments at regular intervals over a period of time.

 

Appraisal

The act of process of estimating value.

 

Appurtenance

Something which is outside the real property itself, but belongs to the land and is joined thereto. It adds to greater enjoyment of the land. For example, a right-of-way is an appurtenance.

 

Arrears

Money that is due, or past due, and has not been paid.

 

Assessed Value

A valuation placed upon property as a basis for municipal taxation.

 

Assessor

An official who has the responsibility of determining assessed value for tax purposes.

 

Assignment

The way a right, a specialty, or contract is transferred from one person to another.

Assumption of Mortgage

The taking of title to property by a grantee, wherein grantee assumes liability for an existing mortgage against a property and becomes personally liable for the payment of such mortgage debt.

 

Balance Due On Completion

The amount of money the purchaser will be required to pay to the vendor to complete the purchase, after all adjustments have been made.

Basic Rent

The rent agreed to through negotiation and does not include adjustments and additions.

 

BILD

The Building Industry and Land Development Association. Largest building industry association in Canada extending into 40 municipalities and 9 provinces. >MORE

Breach Of Contract

Failure to fulfill an obligation under a contract. Breach confers a right of action on the offended party.

 

Building Code

Minimum standards for building construction and safety.

Caveat Emptor

“Let the buyer beware.” The buyer must examine the goods or property he/she is buying and he/she, therefore, buys at his/her own risk.

Charge

The name given to a mortgage document when title is registered under the Land Titles Act.

Chattel

Personal property which is tangible and moveable.

Closing also referred to as “Date of Completion”

The date specified in the agreement of purchase and sale, when the purchaser is to deliver the balance of money due, and the vendor is to deliver a duly executed deed and vacant possession of the property (unless otherwise agreed.)

Date of Completion also referred to as “Closing”

The date specified in the agreement of purchase and sale, when the purchaser is to deliver the balance of money due, and the vendor is to deliver a duly executed deed and vacant possession of the property (unless otherwise agreed.)

Pre-approved Mortgage

A mortgage pre-approval, commonly referred to as a ‘pre-approved mortgage’ is a written statement from a lender, such as a bank, stating the lender’s preliminary determination as to whether a borrower would qualify for a particular loan amount under that lender’s policies and guidelines. The determination and loan amount are mostly based on debt-servicing ability, credit history information, and percentage of loan to value of the asset, usually a property, being acquired.

 

Projected Income

The estimated income from a property or investment.

 

Promissory Note

A written and signed document in which a debt is acknowledged with a promise to pay.

 

Quit Claim Deed

A general release of all claims or rights to a parcel of land.

 

Realtor®

A member of a provincial real estate association, or depending on the province, a member of both a local real estate board and CREA (Canadian Real Estate Association), who is licensed to represent buyers and sellers in transactions involving real estate.

 

Right of Survivorship

The right of a surviving partner in a joint tenancy ownership structure, where land is held in undivided portions by co-owners. Upon the death of any joint owner, that co-owner’s interest in the land will pass to the surviving co-owner(s), rather than his/her estate.

 

Single Family Dwelling

A residential property designed for occupancy by one family on land zoned specifically for that purpose.

 

Total Debt Service (TDS) Ratio

The percentage of gross income required to cover monthly payments for housing, all other debts, and financing obligations. It is usually used by lenders to measure your ability to meet mortgage debt obligations, as part of its lending considerations.