Glossary of Real Estate Terms — F through L +10New York · Real Estate · English

Fee Simple (Fee Absolute) is absolute ownership with unconditional power of disposition, descending to heirs. A Fiduciary transacts business or handles money/property for another's benefit, implying great confidence and trust. Fixtures are personal property so attached to land that they become real property.

• ✓Fee simple is the highest, most complete form of ownership
• ✓A fiduciary owes duties of confidence and trust to the principal
• ✓Fixtures are attached personal property that becomes part of the real property

Foreclosure is a procedure where property pledged as security is sold to pay the debt upon default. The Grantee receives title; the Grantor conveys real estate by deed (the seller). A Gross Lease has the lessor meeting all property charges of ownership.

• ✓Foreclosure sells pledged property to satisfy debt after default
• ✓The grantor conveys and the grantee receives title
• ✓In a gross lease, the lessor pays all property charges

A Group Boycott is an agreement among trade members to exclude others from fair participation. Market Allocation is an agreement to refrain from competition in specific market areas. These are prohibited anticompetitive practices.

• ✓Group boycotts to exclude competitors are illegal restraints of trade
• ✓Market allocation agreements dividing up territories are prohibited
• ✓Both are anticompetitive practices under antitrust principles

Joint Tenancy is ownership by two or more persons each with an undivided interest and the right of survivorship. A Junior Mortgage is second in lien to a previous mortgage. An Involuntary Lien is imposed without owner consent (e.g., taxes, special assessments).

• ✓Joint tenancy includes the right of survivorship
• ✓A junior mortgage is subordinate to an existing prior mortgage
• ✓Involuntary liens (taxes, assessments) arise without the owner's consent

A Lease is a contract transferring possession rights for rent for life, a term of years, or at will. A Leasehold is the lessee's estate interest. The Lessee rents property under a lease; the Lessor rents it to another. A Lien is a legal claim on property until a debt is satisfied.

• ✓A lease transfers possession for consideration (rent)
• ✓The lessee is the tenant and the lessor is the landlord under a lease
• ✓A lien attaches to property until the underlying debt is satisfied

A Listing is an employment contract between principal and agent authorizing the agent to perform services involving the principal's property. A Life Estate conveys title for the duration of the grantee's life; the Life Tenant holds it. Littoral Rights relate to land bordering a body of water like a lake or ocean.

• ✓A listing is an employment contract authorizing an agent to act for the owner
• ✓A life estate lasts only for the duration of a person's life
• ✓Littoral rights apply to land bordering lakes, oceans, or seas

A Mortgage creates a lien on real estate as security for a debt. The Mortgagee lends money and takes the mortgage; the Mortgagor borrows and gives the mortgage. A Mortgage Commitment is a formal indication that a lender will grant a loan on specified terms. A Mechanic's Lien secures the price of labor and materials for improvements.

• ✓The mortgagor is the borrower; the mortgagee is the lender
• ✓A mortgage creates a lien as security for the debt
• ✓A mechanic's lien secures payment for labor and materials on improvements

A Net Listing sets a price below which the owner will not sell; the broker keeps any excess over the net amount as commission (see Rule 175.19). An Open Listing is given to any number of brokers, with only the broker who first produces a ready, willing, and able buyer earning compensation; a sale terminates the listing automatically.

• ✓In a net listing, the broker's commission is the excess over the owner's net price (see Rule 175.19)
• ✓An open listing pays only the broker who first secures a ready, willing, and able buyer
• ✓A sale automatically terminates an open listing

A Nonsolicitation Order is a rule adopted by the Secretary of State prohibiting all types of solicitation toward homeowners in a defined area, adopted after a public hearing when solicitations caused owners to fear declining values due to persons of different race, ethnic, religious, or social backgrounds moving in.

• ✓A nonsolicitation order requires a public hearing before adoption
• ✓It targets areas where solicitations exploited fears based on race/ethnicity/religion
• ✓It prohibits any or all solicitation of homeowners in the defined geographic area

Price Fixing is conspiring to establish fixed fees or prices for services or products — a prohibited antitrust violation. The Principal is the employer of an agent or broker (the client). Proration allocates closing costs and credits between buyers and sellers.

• ✓Price fixing is an illegal conspiracy to set fees or prices
• ✓The principal is the broker's client and employer
• ✓Proration allocates closing costs and credits at closing

Market Value is the most probable price a property should bring in an open market over a reasonable time, with informed buyer and seller, neither under duress. Marketable Title is so free from defect that a court of equity will enforce its acceptance by a purchaser. Market Price is the actual selling price.

• ✓Market value assumes informed parties acting without duress in an open market
• ✓Market price is the actual selling price, distinct from market value
• ✓Marketable title is free enough of defects to compel a purchaser's acceptance

Multiple Listing is an arrangement among Real Estate Board members where each broker shares listings so that if a sale results, the commission is divided between the listing broker and the selling broker (see Rule 175.24).

• ✓Multiple listing shares listings among board members
• ✓Commission is split between the listing broker and the selling broker
• ✓Multiple listing is governed by Rule 175.24

An Option is a right, given for consideration, to purchase or lease within a specified time; if not exercised, the holder has no liability, but if exercised, the grantor must perform. A Power of Attorney authorizes an agent to act on another's behalf. Percentage Lease rent is based on a percentage of sales volume with a usual minimum rental.

• ✓An option gives a right to buy/lease without obligation, for consideration
• ✓If an option is exercised, the grantor must perform
• ✓A percentage lease bases rent on sales volume, usually with a minimum

Police Power is the government's right to enact and enforce laws for public order, safety, health, morals, and welfare. Points are discount charges imposed by lenders to raise their loan yields. A Purchase Money Mortgage is given by a grantee as part payment of the purchase price.

• ✓Police power underlies zoning and building codes for public welfare
• ✓Points are lender discount charges that increase loan yield
• ✓A purchase money mortgage is given by the buyer toward the purchase price

The revocation or suspension of a broker's license operates to suspend the license of each salesperson associated with that broker, pending change of association or expiration of the broker's suspension. Such suspension is deemed a discontinuance of association.

• ✓Broker's revocation/suspension suspends all associated salespersons' licenses
• ✓Salesperson may change association to lift suspension
• ✓Suspension deemed discontinuance of association with broker

Before denying an application, the department must notify the applicant in writing of reasons and afford opportunity to be heard. Applicant must request a hearing in writing within 30 days or the denial becomes final. Before revoking/suspending or fining, the department must notify the licensee at least 10 days prior to the hearing.

• ✓Applicant must request hearing within 30 days of notification
• ✓10 days prior notice required before revocation/suspension hearing
• ✓Department may suspend a license pending a hearing
• ✓Salesperson's broker must also be notified of charges

Revocation or suspension of a broker's license operates to suspend the license of each associated salesperson, pending a change of association or expiration of the broker's suspension period. This is deemed a discontinuance of association.

• ✓Broker's revocation/suspension suspends all associated salespersons
• ✓Salesperson may change association to restore license
• ✓Suspension is deemed discontinuance of association

Before denying an application, the department must notify the applicant in writing of reasons and afford an opportunity to be heard. Applicant must request a hearing within 30 days or the denial becomes final. Before revoking/suspending, at least 10 days notice of charges must be given.

• ✓Applicant must request hearing within 30 days of denial notice
• ✓At least 10 days notice required before revocation/suspension hearing
• ✓Broker must be notified when a salesperson's application/license is affected

A Lease is a contract where, for consideration (rent), one entitled to possession transfers such rights to another for life, term of years, or at will. The Lessor (Landlord) rents to another; the Lessee (Tenant) is the one to whom property is rented. Rent is compensation paid for the use of real estate.

• ✓A lease transfers possession for consideration (rent)
• ✓The lessor/landlord rents property; the lessee/tenant receives possession
• ✓A tenant is given possession for a fixed period or at will

A Gross Lease requires the lessor to meet all property charges from ownership. A Percentage Lease bases rent on a percentage of sales volume, usually with a minimum. Graduated Leases provide graduated rent changes at stated intervals, used in long-term leases. Ground Rent is earnings of improved property credited to the ground itself.

• ✓In a gross lease the lessor pays all property charges
• ✓A percentage lease bases rent on a percentage of sales volume
• ✓Graduated leases change rent at stated intervals over time

Eviction is a legal proceeding by a landlord to recover possession. Actual Eviction is being put out of possession by force or process of law. Constructive Eviction is a disturbance by the landlord rendering premises unfit for their leased purpose. Dispossess Proceedings are summary process to oust a tenant for nonpayment or breach. Surrender is cancellation of a lease by mutual consent. A Holdover Tenant remains after lease expiration; a Tenant at Sufferance keeps possession after lawful title ends.

• ✓Constructive eviction occurs when the landlord renders premises unfit for their purpose
• ✓Dispossess proceedings oust tenants for nonpayment or breach
• ✓Surrender cancels a lease by mutual consent of lessor and lessee

A Demising Clause is where the landlord leases and the tenant takes the property. A Cancellation Clause allows a party to terminate obligations upon a specified contingency. Subletting is a leasing by a tenant to another who holds under the tenant. Quiet Enjoyment is the right to use property without interference of possession.

• ✓Subletting is a lease by a tenant to another party who holds under the tenant
• ✓Quiet enjoyment protects the possessor's use without interference
• ✓A cancellation clause lets a party terminate obligations on a set contingency

A Mortgage is a written instrument creating a lien on real estate as security for a specified debt, usually in the form of a bond. The Mortgagee lends money and takes the mortgage; the Mortgagor borrows and gives the mortgage as security. A Bond is evidence of a personal debt secured by a mortgage or lien.

• ✓A mortgage creates a lien on real estate as security for a debt
• ✓The mortgagee is the lender; the mortgagor is the borrower
• ✓A bond is evidence of the personal debt secured by the mortgage

Foreclosure is the procedure whereby pledged property is sold to pay a debt on default. A Deficiency Judgment is entered when the security does not fully satisfy the debt. Equity of Redemption is the owner's right to reclaim property before the foreclosure sale by paying debt, interest, and costs. Redemption also covers reclaiming property after a tax sale.

• ✓Foreclosure sells pledged property to satisfy a defaulted debt
• ✓A deficiency judgment covers the shortfall when security fails to satisfy the debt
• ✓Equity of redemption allows reclaiming property before the foreclosure sale by paying debt, interest, and costs

A Purchase Money Mortgage is given by a grantee in part payment of the purchase price. A Blanket Mortgage covers more than one property, often used in subdivision financing. A Junior Mortgage / Second Mortgage is second in lien to a prior mortgage. A Wraparound Loan encompasses existing loans. An Equity Loan is a junior loan based on a percentage of equity.

• ✓A purchase money mortgage is given by the buyer as part payment of the price
• ✓A blanket mortgage covers more than one property
• ✓A junior/second mortgage ranks behind a prior mortgage in lien priority

A Defeasance Clause lets the mortgagor redeem property upon paying the obligation. An Alienation (Due on Sale) Clause lets the lender require full payoff if the collateral is sold. A Prepayment Clause allows paying off the debt before it is due. A Subordination Clause permits a later mortgage to take priority over an existing one. A Release Clause in a blanket mortgage frees a portion of property upon partial payment.

• ✓An alienation (due on sale) clause requires full payoff when collateral is sold
• ✓A prepayment clause permits paying off the mortgage before it is due
• ✓A subordination clause lets a later mortgage take priority over an existing one

Amortization is gradual paying off of debt by periodic installments. Points are discount charges imposed by lenders to raise loan yields. Usury is charging interest greater than legally permitted. A Mortgage Commitment is a lender's formal indication it will grant a loan on specified terms. An Estoppel Certificate / Mortgage Reduction Certificate sets forth the balance due on the mortgage. A Satisfaction Piece records payment of a mortgage debt.

• ✓Usury is charging interest above the legally permitted rate
• ✓Points are lender discount charges that raise loan yield
• ✓A satisfaction piece records and acknowledges payment of a mortgage debt

A broker may only pay commission shares to a licensed salesperson associated with them, another licensed broker, or an out-of-state broker. Brokers cannot pay part of a commission to a party to the transaction for licensed activity, but may offer rebates to buyers/sellers/tenants/landlords not for licensed activity.

• ✓Commissions may only be split with licensed salespersons/brokers or out-of-state brokers
• ✓No commission split to a party to the transaction for licensed activity
• ✓Rebates to buyer/seller/landlord/tenant permitted if not for licensed activity

Department actions granting, refusing, revoking, suspending, fining, or reprimanding a license are subject to review under Article 78 of the Civil Practice Law and Rules at the instance of the applicant, holder, or aggrieved person.

• ✓Department actions reviewable under CPLR Article 78
• ✓Review available to applicant, license holder, or aggrieved person

Racial Steering is the unlawful practice of influencing a person's housing choice based on race. Red-Lining is the illegal refusal to lend money within a specific area for various reasons. Both are prohibited fair housing violations.

• ✓Racial steering illegally directs buyers based on race — it is prohibited
• ✓Red-lining (refusing to lend in specific areas) is illegal
• ✓Both practices violate fair housing law

The Statute of Frauds is a state law requiring certain contracts to be in writing to be enforceable. The Statute of Limitations bars all right of action after a set period from when the cause of action arises. A Special Assessment is levied against property to pay for a public improvement that benefits it. Specific Performance compels a party to carry out contract terms.

• ✓The Statute of Frauds requires certain real estate contracts to be in writing
• ✓The Statute of Limitations bars actions after a set time period
• ✓Specific performance is an equitable remedy compelling contract completion

A Quit Claim Deed conveys only the grantor's rights or interest without any covenants, often used to remove a cloud from title. A Referee's Deed conveys property sold under judicial order (e.g., foreclosure or partition). A Quiet Title Suit removes a defect, cloud, or suspicion regarding legal rights of an owner.

• ✓A quit claim deed conveys interest with no warranties and is used to clear title clouds
• ✓A referee's deed results from a court-ordered sale like foreclosure
• ✓A quiet title suit removes clouds affecting an owner's legal rights

Redemption is a mortgagor's right to redeem property by paying the debt after the expiration date but before a foreclosure sale, and an owner's right to reclaim property after a tax sale. Right of Survivorship allows a surviving joint owner to succeed to the deceased owner's interest — a feature of joint tenancy and tenancy by the entirety.

• ✓Equity of redemption lets a mortgagor reclaim property before foreclosure sale by paying the debt
• ✓Right of survivorship passes a deceased joint owner's interest to the survivor
• ✓Right of survivorship characterizes joint tenancy and tenancy by the entirety

A Subordination Clause permits placing a later mortgage that takes priority over an existing one. Subletting is a leasing by a tenant to another who holds under the tenant. A Subagent is an agent of a person already acting as an agent of a principal. A Second Mortgage is made in addition to an existing first mortgage.

• ✓A subordination clause lets a new mortgage take priority over an existing one
• ✓Subletting creates a tenancy under the original tenant
• ✓A subagent works for the principal through another agent

A Riparian Owner owns land bordering a river or watercourse. Riparian Rights grant reasonable use and enjoyment of water flowing past the property (from 'riverbank'). A Sales Contract is an agreement by buyer and seller on terms of sale. A Satisfaction Piece records payment of a mortgage debt.

• ✓Riparian rights apply to land bordering flowing watercourses like rivers
• ✓Littoral rights apply to standing water (lakes/oceans); riparian to flowing water
• ✓A satisfaction piece acknowledges and records payoff of a mortgage

The department's action in granting, refusing, renewing, revoking, suspending, fining or reprimanding a license is subject to review by a proceeding under Article 78 of the Civil Practice Law and Rules, at the instance of the applicant, license holder, or person aggrieved.

• ✓Review is via Article 78 CPLR proceeding
• ✓Available to applicant, license holder, or person aggrieved
• ✓Covers granting, refusing, revoking, suspending, fining and reprimand actions

No broker shall pay any part of a commission for real estate services to any person unless that person is a duly licensed salesperson regularly associated with the broker, a duly licensed broker, or a person regularly engaged in real estate brokerage in a state outside New York. A broker may offer part of a commission to buyer/seller/landlord/tenant, but not for performing licensed activities.

• ✓Commission may only be split with licensed salespersons/brokers or out-of-state brokers
• ✓May pay unlicensed corporation/LLC if all its shareholders/members are associated as licensees
• ✓Broker may not pay a party to the transaction for licensed activities
• ✓May offer commission portion to buyer/seller/landlord/tenant not for licensed activity

No salesperson shall receive or demand compensation of any kind from any person other than a duly licensed real estate broker with whom the salesperson is associated, for any service rendered in appraising, buying, selling, exchanging, leasing, renting or negotiating a loan upon real estate.

• ✓Salesperson may only receive compensation from the broker they are associated with
• ✓Cannot receive compensation directly from clients or other persons
• ✓Applies to all real estate service work

No salesperson shall receive or demand compensation from anyone other than the licensed broker with whom they are associated for services in appraising, buying, selling, exchanging, leasing, renting, or negotiating a loan.

• ✓Salesperson may only receive compensation from their associated broker
• ✓No direct compensation from buyers/sellers permitted

When a salesperson's association is terminated, the broker must notify the Department of State. A salesperson cannot perform brokerage acts after termination until associated with a new licensed broker.

• ✓Broker must notify DOS when salesperson's association terminates
• ✓Successor broker must notify DOS of change with $1 fee
• ✓Salesperson cannot act until associated with a new broker

A broker is not liable for a salesperson's violations unless the broker had actual knowledge or retained the benefits after notice of misconduct. A broker is guilty of a misdemeanor for having an unlicensed salesperson.

• ✓Broker liable only with actual knowledge or retention of benefits after notice
• ✓Broker guilty of misdemeanor for employing unlicensed salesperson

No person may bring an action to recover compensation for real estate services without alleging and proving they were a duly licensed broker or salesperson on the date the cause of action arose.

• ✓Must be licensed on date cause of action arose to sue for commission
• ✓Applies to all buying/selling/leasing/loan negotiation services

Tenancy in Common is ownership by two or more persons each with an undivided interest but WITHOUT the right of survivorship. Tenancy by the Entirety exists only between husband and wife with equal possession and the right of survivorship. Tenancy at Will is a license to occupy at the owner's will.

• ✓Tenancy in common has no right of survivorship
• ✓Tenancy by the entirety exists only between spouses and includes survivorship
• ✓Tenancy at will lasts only at the owner's pleasure

Valid means having binding force and legally sufficient. Void means having no force or effect and unenforceable. Voidable means capable of being adjudged void but not void unless action is taken to make it so. A Variance authorizes property development in a manner not otherwise permitted by zoning.

• ✓A valid contract is legally binding and enforceable
• ✓A void contract has no legal effect at all
• ✓A voidable contract is enforceable until a party acts to void it

Testate means dying with a valid will. Title is evidence of lawful ownership. Title Insurance indemnifies the holder for loss from title defects. A Title Search examines public records to determine ownership and encumbrances. A Tie-in Arrangement is a contract where one transaction depends on another.

• ✓Testate means dying with a valid will (opposite of intestate)
• ✓Title insurance protects against losses from title defects
• ✓A title search reveals ownership and encumbrances in public records

A Transfer Tax is charged under certain conditions on property belonging to an estate. Usury is claiming a rate of interest greater than that permitted by law on a loan. A Tax Sale is the sale of property after a period of nonpayment of taxes.

• ✓Usury is charging interest above the legal maximum
• ✓A tax sale occurs after nonpayment of taxes
• ✓Transfer tax may apply to estate property under certain conditions

A Zone is an area set off for specific use subject to restrictions. A Zoning Ordinance specifies the type and use to which property may be put in specific areas. A Variance authorizes development contrary to zoning. A Waiver is renunciation or surrender of a claim, right, or privilege. A Warranty Deed warrants title to the grantee.

• ✓A zoning ordinance regulates permitted uses of property by area
• ✓A variance permits use not otherwise authorized by zoning
• ✓A warranty deed provides the grantor's guarantee of good title