FLREPL_63HR_KeyTermsIndex.pdf

F LO RI DA R EAL ESTAT E PRE -L ICEN SE 1 Key Terms Index Key Term Definition Lev...

F LO RI DA R EAL ESTAT E PRE -L ICEN SE 1 Key Terms Index Key Term Definition Level, Ch. a property owner who does not occupy the property in question and therefore often utilizes a absentee owner L1, C4 property manager’s services an abbreviated history of a property, including information on any transfers, grants, wills, abstract of title L9, C5 conveyances, liens, and encumbrances a clause in a security instrument (mortgage/deed of trust) that makes the entire loan amount acceleration clause L12, C3 due immediately upon default acknowledgment a party’s notarized profession that they are signing a document voluntarily L9, C2 describes a license that is current, in good standing, and signifies that the license holder active L3, C3 meets all the requirements to practice real estate actual notice when an individual actually knows of a fact L9, C5 ad valorem taxes based on the assessed value of a property L18, C1 adjudication withheld when a court stays the imposition of a sentence and instead puts the defendant on probation L2, C3 adjustable-rate a mortgage with an interest rate that can be adjusted based on fluctuations in the cost L13, C4 mortgage (ARM) of money involuntary transfer of title from an owner who does not use or inspect their land for a adverse possession L9, C1 number of years to another person who has some claim to the land and takes possession an individual with authority to act on behalf of another; a state license is required to operate agent L4, C1 as an agent in real estate alienation the transfer of ownership (title) to real property; may be voluntary or involuntary L9, C1 a clause in the mortgage contract that triggers the right of the lender to demand payment in alienation clause L12, C3 full of the loan upon the sale or conveyance of the property; aka due on sale clause amortized a mortgage with equal monthly payments that contribute to both principal and interest until L13, C2 mortgage (fixed-rate) the entire loan is paid appraisal an official valuation given to a property by a licensed appraiser L1, C5 an individual who is trained and licensed to perform appraisals, which estimate the value of appraiser L1, C5 real property F LO RI DA R EAL ESTAT E PRE -L ICEN SE 2 appreciation the increase in value of a property L16, C2 a process whereby the parties to a dispute present their conflict to a disinterested third party arbitration L5, C4 and honor the third party’s binding judgment payment that occurs at the end of a period to compensate for charges accrued during arrears L14, C2 that time a naturally occurring mineral fiber that is commonly used in insulation but if airborne or asbestos L19, C3 inhaled, can cause severe respiratory health issues the combining of multiple contiguous pieces of real property into a single tract of land, often assemblage L19, C3 resulting in an increase in value the value of a property based on the value of other properties in the area, plus any assessed value improvements made to the home since purchasing it; can also take into account various L18, C1 property traits like location, size, condition, materials, square footage, year built, etc. assessment limitation limits how much the assessed value of a homesteaded property can increase per year; also L18, C1 (save our homes benefit) known as the Save Our Homes amendment to the Florida Constitution assignment the transference of rights and obligations in a contract from one party to another L9, C10 the process of transferring the obligation of the mortgagor to another party who takes over assumption L12, C7 the responsibility to pay the note attorney-in-fact a representative with power of attorney for another individual L11, C2 automated a computerized valuation of a property that takes into account comparables, tax assessors, L16, C6 valuation models nationwide market values, and sales history balloon payment a payment at the end of a loan period which includes the total outstanding balance of the loan L13, C5 a parallel used in reference to a meridian to identify ranges, tiers, and townships in the baseline L10, C2 rectangular survey method of land description the cost of purchasing a property plus the cost of any improvements, minus the amount basis L16, C2 of depreciation a permanent marker of known location and elevation above sea level as established by a benchmark L10, C1 government survey team (such as the USGS) bilateral contract a contract wherein both parties are obligated to perform in an exchange of promises L11, C4 a loan repayment plan where the borrower pays biweekly as opposed to monthly, saving the biweekly mortgage L13, C5 borrower on interest payments blanket mortgage a loan for which more than one collateral property acts as security L12, C7 an ad in which a license holder attempts to promote or solicit real estate activity without blind ad L5, C2 disclosing the fact that they are a license holder F LO RI DA R EAL ESTAT E PRE -L ICEN SE 3 the illegal act of causing owners to sell their homes by creating fear that members of a blockbusting L7, C1 protected class are moving into the area; aka panic peddling the breaking of a promise or obligation, and can be done through action, omission, default, breach of trust L6, C1 or nonperformance a person or business entity who is licensed to represent one of the parties in a real estate broker L2, C2 transaction in exchange for a commission or other valuable consideration an individual who meets the licensure requirements to be a real estate broker but provides broker associate L2, C2 real estate brokerage services as an independent contractor to a real estate broker broker price a broker’s opinion of the value of a piece of real property, given in writing L1, C5 opinion (BPO) buffer zone an area of land that separates two different land uses L19, C1 building code a set of regulations pertaining to building design, materials, safety, sanitation, and structure L19, C1 building inspection an assessment of a building site in which an inspector ensures that building code is followed L19, C1 permit that is issued after approval of the architecture and engineering drawings for a building permit L19, C1 new building a real estate transaction involving a business that already exists and includes both tangible business opportunity L1, C3 and intangible assets buydown the paying of money upfront to reduce a loan's interest rate and monthly payments L12, C6 buyer's market the condition of having fewer buyers than the supply of homes for sale in an area L15, C3 describes a license that has become null and void because the licensee voluntarily chose to canceled L3, C3 relinquish it capital gain (loss) the increase or decrease in the value of an asset L16, C2 the increase in the value of an asset; offset by the capital gains exemption in the sale of a capital gains L18, C2 principal residence the cash that an investment generates after accounting for the operating expenses, debt cash flow L16, C2 service, and taxes associated with the enterprise the concept that a buyer is responsible for verifying the quality and value of the goods prior to caveat emptor L2, C1 the purchase describes a license that is not active due to a failure to notify the Florida Real Estate cease to be in force L3, C3 Commission of an important change, such as a change in employer or address certificate of legal document from a local authority that authorizes a building to be occupied; issued after L19, C1 occupancy (CO) the building has passed all required inspections F LO RI DA R EAL ESTAT E PRE -L ICEN SE 4 chain of title the entire chronological record of a property’s ownership L9, C5 check a square 24 miles on each side created by intersecting guide meridians and correction lines L10, C2 issued for a minor violation and can be disputed by the subject of the complaint; fines range citation L6, C3 from $100 to $500 under this Act, it is, without exception, illegal to discriminate in housing on the basis of race or Civil Rights Act of 1866 L7, C1 color; became enforceable after Jones v. Mayer (1968) commingle the illegal act of mixing personal funds with a client’s funds L5, C4 community development a special district empowered to levy assessments on property owners to fund infrastructure L8, C6 district (CDD) and other projects comparative market a report that compares the prices of recently sold or listed homes (comparables) in order to L1, C5 analysis (CMA) estimate the market value of a similar property (the subject property) located in the same area compensation any valuable consideration directly or indirectly paid or promised, expressly or implied L2, C2 having the requisite ability, knowledge, or skill to do something successfully; a party's legal competent L11, C2 competency is required to enter into a valid contract complaint a claim against a real estate professional for an alleged violation L6, C2 concealment withholding information or a material fact L6, C1 a provision from Florida's Growth Policy Act requiring that certain infrastructure (sanitary concurrency sewers, potable water, and waste treatment facilities) be in place before any new L19, C1 development is permitted condemnation the legal process through which the government seizes land from a property owner L9, C6 property where each owner has a separate interest in their own unit and undivided interest in condominium L8, C6 the common areas opposing, unresolvable demands made by the buyer and seller in a transaction regarding conflicting demands L5, C4 escrowed property disbursement conforming loan a loan that meets the standards of purchase for Fannie Mae and Freddie Mac L13, C1 the disclosure notice the broker must have the client sign before a change in the agency consent to transition L4, C6 relationship from single agent to transition broker can occur a mechanic or materialman's right to impose a lien upon a property if the property owner construction lien fails to pay for materials or work done on the property, aka mechanics, materialman’s, or L9, C9 laborer’s lien when a property's ownership is recorded publicly, so everyone can know the contents of constructive notice L9, C5 recorded documents F LO RI DA R EAL ESTAT E PRE -L ICEN SE 5 a legally enforceable and binding agreement between parties wherein a promise to do or not contract L11, C1 do something is given in exchange for valuable consideration a sales contract in which the buyer pays the seller for the property in multiple installments for contract for deed a predetermined length of time, and the seller holds the title until the property has been fully L12, C7 (land contract) paid for; also known as an installment sales contract or land contract conventional a mortgage loan that is neither insured by the government nor guaranteed by the government L13, C2 mortgage loan conversion a license holder's personal use or misuse of money belonging to others L5, C4 property where each owner owns shares in a corporation that owns a building, then has a cooperative L8, C6 proprietary lease for their unit corporation (INC) a legally created business entity representing the interests of more than one person L5, C6 method of estimating the value of a property by determining how much it would cost to cost-depreciation replace the building or other improvements, minus the cost of depreciation, plus the value of L16, C4 approach the land itself credits a sum of money that is received L14, C2 negligent conduct that is not intentional but involves a disregard of the consequences that culpable negligence L6, C1 will likely result curable depreciation that can be fixed and that the cost of doing so would be reasonable L16, C4 current not expired L3, C3 an individual with whom a license holder has no fiduciary relationship but to whom customer accounting, honesty and fairness, and disclosure of not readily observable material facts L4, C1 about a property are still required a designated base reference point to elevation used by surveyors to determine the elevations of datum L10, C1 land or property in an area debits a sum of money that is owed L14, C2 amount of money needed for a specific time period in order to cover the payment of principal debt service L18, C2 and interest portions on a loan the legal document that, once filed, creates a condominium; in Florida one of the required declaration L8, C6 condo documents dedication a gift of land to the government for public use, gifted by the property owner L1, C6 deed the legal document that transfers real estate title from one party to another L9, C1 an alternative to foreclosure in which the defaulting borrower voluntarily transfers the deed in lieu of foreclosure L12, C8 property title to the lender and the borrower cancels the foreclosure F LO RI DA R EAL ESTAT E PRE -L ICEN SE 6 deed restriction a provision in a deed that restricts the land use of a property L9, C2 a clause in a security document that indicates that the loan has been satisfied and that either defeasance clause L12, C3 the title will be conveyed to the borrower or the lien on the borrower's title will be removed demand a measure of the general desire for an asset or commodity at a given time L15, C2 a payment made from one party to another that shows a sincerity to fulfill the transaction, aka deposit L5, C4 binder deposit or good-faith deposit depreciation a reduction in value for any reason L16, C4 sales associates designated by the broker to serve as single agents for the parties in an in- designated sales associate L4, C8 house nonresidential transaction at the request of the parties a loan fee that is one percent of the loan; lenders can charge borrowers for points for a variety discount points L12, C6 of reasons, including underwriting, processing applications, or for a lower interest rate disintermediation the process of money flowing out of banks L13, C1 the role of a licensee in an in-house transaction where the brokerage offers both parties dual agent L4, C1 fiduciary level representation; illegal in Florida earnest money funds paid to confirm or commit to a contract L5, C4 an interest in, or a right to use, another individual’s land or property, generally for a specific, easement L9, C8 limited purpose the length of time for which an improvement on property is expected to remain functional economic life L16, C4 and useful the power of government to seize private property for public use; government must pay eminent domain L9, C1 property owner just compensation for exercising power encroachment physical property that crosses the boundary into a neighboring landowner's property L9, C8 environmental a report prepared for a real estate holding that identifies potential or existing environmental L19, C4 impact statement contamination liabilities equity the portion of a property's total value owned outright by the holder to title L12, C6 a borrower in default's right to pay an entire mortgage (plus fees) and regain the property equity of redemption L12, C8 before foreclosure the legal doctrine by which the decedent’s property will pass to the state without their escheat consent if that individual dies without a will, a surviving spouse, lineal descendants, or other L9, C4 known heirs the account where a lender holds a borrower’s prepaid insurance and property tax payments escrow L12, C6 before the lender makes the payment on behalf of the borrower F LO RI DA R EAL ESTAT E PRE -L ICEN SE 7 accounts that allow for a process in which funds and/or financial documents are held by a escrow account disinterested third party on behalf of the other two parties in the real estate transaction until L5, C4 specific conditions are satisfied escrow disbursement the FREC’s decision regarding who should receive disputed escrow funds held in a brokerage L5, C4 order (EDO) escrow account estate for years a lease with a specific starting and ending date; aka tenancy for years L8, C5 estoppel certificate a written statement certifying the specifics of a mortgage; used during loan assumption L12, C2 exclusive right to an agreement in which the seller guarantees the named broker receives a commission if the L11, C8 sell listing property is sold, regardless of who brings the buyer an agreement in which the seller has an exclusive relationship with a broker but retains the exclusive-agency listing L11, C8 right to sell the property themselves properties that belong to churches and nonprofits; may be subject to taxes, but the property exempt properties L18, C1 owner is not obligated to pay them exempt property a property that has been homesteaded L8, C4 expungement removing a criminal record and destroying it L2, C3 failure to account the failure to deliver personal property (such as money, legal documents, or commission) to L6, C1 or deliver the person entitled to receive it a federal law that prohibits discrimination in housing based upon race, color, religion, or Fair Housing Act of 1968 L7, C1 national origin and was amended to include sex, disability, and familial status under the Fair Housing Act, a protected class composed of families who have children under familial status L7, C1 18, pregnant women, and people in the process of obtaining legal custody of a child a specific area a real estate associate chooses to specialize and become an expert in; aka farm area L1, C3 target market federally a real estate transaction that involves a government agency in its financing L16, C2 related transaction maximum ownership of real property; is of indefinite duration, freely transferable, and freely fee simple estate L8, C4 inheritable; aka fee or fee simple absolute an individual upon whom is placed the highest levels of trust and confidence when acting on fiduciary L4, C1 behalf of another FREC's final decision on innocence or guilt and decision on what penalties (if any) are to final order L6, C2 be administered an object that was once personal property but is now firmly attached to the land in such a fixture L8, C2 way that it is considered to be real property F LO RI DA R EAL ESTAT E PRE -L ICEN SE 8 a person who has resided (regardless of whether the place or base of residence is a Florida resident recreational vehicle, hotel, rental unit, or any other temporary or permanent situs) in Florida, L2, C3 continuously for a period of 4 calendar months or more, within the preceding one year the contact a sales associate makes with a buyer or seller after closing a real follow-up L1, C3 estate transaction formal or contains allegations of fact against a licensee; filed if probable cause is found L6, C2 administrative complaint fraud wrongful or criminal deception intended to result in financial or personal gain L6, C1 freehold estate a form of ownership with an indeterminate length L8, C4 a protection in which a grantor assures that, in the future, they will sign and deliver any further assurance L9, C3 conveyance tools needed to obtain a clear title an agent who is authorized to manage all of a principal's affairs within certain specified areas; general agent L4, C2 enjoys broader authority than that of a special agent but less than that of a universal agent a business entity consisting of two or more parties in which all co-owners actively share general partnership L5, C6 power, responsibilities, and profit general warranty deed a deed containing the strongest and broadest form of guarantee of title L9, C3 going concern value the value of a business including intangible assets like goodwill L17, C3 a doubt that is honest, honors the business contract, is free of fraudulent motive, and implies good-faith doubt L5, C4 an intent to fulfill the contract an intangible asset of a business that includes the company's brand, good name, and loyal goodwill L17, C3 customer base government a system of legal land description that uses the global lines of longitude and latitude to create L10, C2 survey system a surveyed grid of meridians, baselines, townships, and ranges to describe a piece of land grantee the person who receives a conveyance of real property in a transaction L9, C1 section of a deed identifying the property to be conveyed, the grantor, the grantee, and the granting clause L9, C2 grantor’s promise to transfer title to the grantee, aka words of conveyance grantor the person who conveys real property in a real estate transaction L9, C1 gross income the ratio of the price of investment property to its annual total income before considering L16, C5 multiplier (GIM) expenses like taxes and insurance, etc. a lease in which the tenant will be responsible for the payment of a fixed monthly charge, gross lease L9, C10 while the landlord is responsible for paying all operating expenses; aka full service lease gross rent the ratio of the price of investment property to its annual rental income before considering L16, C5 multiplier (GRM) expenses like taxes and insurance, etc. F LO RI DA R EAL ESTAT E PRE -L ICEN SE 9 ground lease the lease of bare, undeveloped land; aka land lease L9, C10 a license that allows a sales associate or broker associate to conduct real estate transactions group license L3, C3 for multiple entities owned by the same owner-developer a clause within a deed that clarifies the type and extent of interest conveyed by the habendum clause L9, C2 granting clause having a physical or mental impairment that substantially limits one or more major life handicap status activities, having the record of such impairment, or being regarded as having such an L7, C4 impairment; also known as disability status health ordinance regulations that control the sanitation and maintenance of public spaces L19, C1 the use of a property that is legal, physically possible, financially viable, and produces the highest and best use L19, C3 greatest yield a loan in which funds are borrowed using the homeowner’s equity for collateral; the funds can home equity loan L13, C5 be used for any purpose homeowner a corporation responsible for the operation of a development and with the power to charge L8, C6 association (HOA) fees and levy assessments; membership is mandatory a legal life estate that protects a homeowner from loss of their principal residence from the homestead claims of most creditors and require both spouses to execute any instruments of conveyance; L8, C4 in Florida it also includes tax exemptions household any person or group of persons occupying a separate housing space L15, C2 the pledging of an asset as collateral to secure a loan without delivery of title, possession, or hypothecation L12, C2 other ownership rights city, county, state, and federal government properties; do not get assessed, and the property immune properties L18, C1 owner does not have to pay property taxes a temporary, correctable status describing a license that does not enable the licensee to inactive L3, C3 engage in any professional real estate activities method of estimating the value of a property by applying a rate of return to the net income income approach L16, C5 it produces incurable depreciation that cannot be fixed and that the cost of doing so would be unreasonable L16, C4 index the benchmark rate that an adjustable-rate mortgage (ARM) is tied to L13, C4 buyer pays the seller for a property in pre-determined chunks for a pre-determined length installment sale of time, and the seller holds the title until the property has been fully paid for; also known as L18, C2 contract for deed interest additional money paid to a lender for the use of their money L12, C5 F LO RI DA R EAL ESTAT E PRE -L ICEN SE 10 intermediation the facilitation by a third party of a financial transaction between two parties L13, C1 a court procedure meant to resolve a dispute when a party holds funds they know they do not interpleader L5, C4 own, but to which multiple other parties lay claim intestate the name for conditions in which the owner of a property dies without having left a valid will L9, C4 describes a license that is inactive due to either a failure to meet renewal requirements or the involuntarily inactive L3, C3 lack of an employing broker co-ownership in which the parties have an equal and undivided interest in the property; joint tenancy L8, C3 includes the right of survivorship rather than inheritance the fair and reasonable value according to objective valuation methods; corresponds to just value L18, C1 market value a payment made to a licensee for a service unrelated to the real estate transaction or a service kickback L5, C5 that does not fall under the responsibility of the licensee the surface of the earth, including all permanently attached natural features, extending land L8, C1 downwards to the center of the earth and upwards to infinity land development loans loans given to developers to put infrastructure on land slated for new development L12, C7 an interest in the occupation of a property, established through a lease, aka non-freehold leasehold estate L8, C5 or less-than-freehold a description of a property that is distinct and precise enough to distinguish it from all legal description L10, C1 other properties contains ultimate facts about an alleged violation; one of two criteria for a complaint to legally sufficient L6, C2 be investigated repayment plan mortgage where monthly payments stay consistent throughout the life of level payment plan L13, C3 the loan leverage the use of a financial instrument or borrowed money to increase a return on investment L17, C2 license a license is granted when an applicant passes the state exam L2, C3 license authority voided license has been canceled and is no longer in use L3, C3 the claim made by a creditor against real or personal property pledged by a borrower lien L9, C9 as collateral employing security instruments that allow the borrower to retain title while the lender places lien theory L12, C2 a lien on the property to secure the loan life estate a type of estate limited to the duration of a measuring life L8, C4 F LO RI DA R EAL ESTAT E PRE -L ICEN SE 11 lifetime cap the maximum increase of interest over the life of the loan L13, C4 like-kind exchange the tax-deferred sale or exchange of one investment property for another similar one L18, C2 limited liability a business entity in which parties are protected against personal liability for business debts L5, C6 company (LLC) limited liability a business entity in which parties are protected from some liabilities while retaining L5, C6 partnership (LLP) other liabilities a business entity composed of both general and limited partners where the general partners limited partnership manage the business and assume most of the risk, while the limited partners are passive L5, C6 investors with limited risk the degree of representation provided by a transaction broker in Florida; is more than what limited representation a party receives with nonrepresentation but less than the fiduciary level representation of a L4, C5 single agent liquidated damages damages established by the contract to be paid as compensation in the event of default L11, C6 a business appraisal strategy that assigns a value to a business being liquidated — it sets liquidation analysis the value of any resellable assets against the cost of paying preferred stockholders and any L17, C3 other liabilities liquidity the relative difficulty of converting an asset to cash without loss of value L16, C2 a document recording at the courthouse giving notice that a lawsuit is pending on a particular lis pendens L12, C8 piece of property the legal process of resolving a dispute in court that involves an interpleader or litigation L5, C4 declaratory judgment loan origination fee a fee charged to a borrower by a lender or loan originator for creating the loan L12, C6 taking payments and doing other administrative tasks for loans; a way for lenders to make loan servicing L12, C6 additional money loan-to-value ratio the amount of money being loaned compared to the value of the property L12, C6 a system of legal land description that identifies a piece of platted property by referring to the lot and block L10, C1 section, lot, and block numbers in a subdivision margin a fixed percentage above the index which the borrower will pay L13, C4 market value the price for which a property will theoretically sell under typical conditions L19, C3 a fact that, if known, could cause someone to take a different course of action or make a material fact L6, C1 different decision regarding the property to be purchased an informal negotiation held by an independent third party to settle a dispute such as mediation L5, C4 conflicting demands F LO RI DA R EAL ESTAT E PRE -L ICEN SE 12 the fully agreed-upon exchange of promises by the parties to a contract; also known as meeting of the minds L11, C2 mutual agreement or mutual assent a land survey process in which a licensed land surveyor starts at a readily identifiable point metes and bounds of beginning and defines the boundaries of a property in terms of distances and compass L10, C1 directions, finally returning to the point of beginning mill 1/1000 of a dollar, or $0.001; used to express tax rate in Florida L18, C1 misrepresentation a statement, written or spoken, that is false or misleading L6, C1 a fixed landmark, whether natural or human-made, used as a reference point in a metes and monument L10, C1 bounds legal description conduct that goes against justice, honesty, good morals, or custom; also depraved, moral turpitude L6, C1 base behavior a legal agreement between a creditor and borrower in which the creditor lends money with mortgage interest to the borrower for the purchase of property with the condition that the creditor takes L12, C2 ownership of the title if the borrower defaults in repayment of the loan mortgage broker a licensed professional who originates mortgage loans that are then financed by a lender L13, C1 mortgage fraud when a borrower deceives a lender (for their own gain) L13, C8 mortgage insurance borrower-paid insurance required for FHA loans; insures lender in case of L13, C6 premium (MIP) borrower default/foreclosure mortgage loan originator the various businesses that create home loans in the primary mortgage market L13, C1 mortgagee the organization or person who lends the money in a loan (the lender) L12, C2 mortgagor the person who takes out the loan (the borrower) L12, C2 two or more licenses held by a single broker who conducts multiple business entities at the multiple licenses L3, C3 same time multiple listing a database in which local member brokers share listings so that fellow member brokers can L1, C3 service (MLS) procure buyers for those properties and establish compensation for properties sold jointly when a borrower's payment is not large enough to cover the interest due on a loan, the negative amortization L13, C2 unpaid interest is added to the principal balance net lease a lease in which the tenant pays a base rent rate plus all or part of the operating expenses L9, C10 an agreement in which the seller names a minimum sales price they will accept for a property, net listing L11, C8 with any excess paid to the broker as commission nolo contendere a plea where a defendant does not admit guilt to a crime they are accused of, but do accept L2, C3 (no contest) punishment as though they have been found guilty F LO RI DA R EAL ESTAT E PRE -L ICEN SE 13 nonconforming loan a loan that does not fit Fannie Mae or Freddie Mac guidelines L13, C1 type of land use that occurs when a property was operating within zoning law, but then the nonconforming use L19, C1 law changed in a way that prohibits the established use nonconventional loan any loan that is insured or guaranteed by the government L13, C2 also known as a no brokerage relationship, is one of Florida's three authorized brokerage nonrepresentation L4, C4 relationships; used when a buyer or seller of real estate opts out of representation a negotiable financial instrument that is evidence of a debt and a promise to pay that debt; note L12, C2 often referred to as a promissory note notice of noncompliance issued by the DBPR for a first-time, minor violation by a licensee L6, C3 a mutual agreement of the parties to replace an existing contract with a new one — often novation because there is also an agreement to substitute one party for another in the new contract; L11, C6 results in transference of rights and obligations from assignor to assignee null and void lacking legal or binding force; invalid L3, C3 a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the open listing L11, C8 right to sell the property a unilateral contract that gives the optionee a window of opportunity during which they can option contract L11, C13 exercise an exclusive right to buy or lease a property; an option fee is paid for this right the appearance that a partnership exists between two parties even though no partnership ostensible partnership L5, C6 was intentionally created over-improvement an improvement on a land in excess of the need L19, C3 a loan that includes the real estate as well as all personal property and appliances installed on package mortgage L13, C5 the premises partial release clause a clause that explains how a piece of collateral can be released (from a blanket loan) L12, C7 a loan with a short term, usually five or seven years, but with payments based on a longer partially amortized loan L13, C5 term, creating a balloon payment at the end of the term; aka balloon mortgage loan payment cap the maximum monthly payment a borrower can be charged L13, C4 type of (usually commercial) lease in which the tenant pays a base rent amount and a percentage lease L9, C10 percentage of their business profits to the landlord periodic cap the maximum amount an interest rate can change between adjustment periods L13, C4 an unattached, moveable asset not considered real estate, aka personalty; in business personal property L8, C2 opportunity brokerage, the non-real property items being sold with the business F LO RI DA R EAL ESTAT E PRE -L ICEN SE 14 PITI the components of a mortgage payment L12, C6 a subdivision that includes residential dwellings along with nonresidential real estate, planned unit development L19, C1 departing from normal zoning and subdivision regulations plottage an increase in overall value resulting from the successful assemblage of multiple plots L19, C3 point of beginning (POB) the starting point for a metes and bounds legal description L10, C1 point of a brokerage’s or an individual’s contact information in an advertisement, such as relevant L5, C2 contact information addresses or fax and telephone numbers the government right to regulate and restrict land use in order to protect the public; right police power L9, C6 includes the power to enforce zoning and building codes a walkthrough done to make sure the property's condition hasn't changed and that the preclosing inspection L14, C1 agreed-upon terms have been met by the selling party prepayment clause a clause in a mortgage that specifies whether there is a penalty for prepaying the loan L12, C3 prepayment penalty a fee charged to a borrower for prepaying a loan L12, C3 prima facie evidence evidence that in and of itself is sufficient to prove a fact L2, C3 in general usage, the client of an agent; in Florida real estate, the client of a single agent principal L4, C1 operating as a fiduciary; also, the amount borrowed in a loan from which interest is accrued a meridian used in reference to a baseline to identify ranges, tiers, and townships in the principal meridian L10, C2 rectangular survey method of land description the idea that the value of something is affected by the cost of getting a similar (substitute) principle of substitution L16, C4 item elsewhere probable cause reasonable grounds for prosecution L6, C2 professional two or more individuals who come together as a business corporation to provide a L5, C6 association (PA) professional service to others profit the amount of money received after taking into account costs and debts L14, C3 progression a bump in a property's value due to its proximity to properties of high value L19, C3 the vocation of renting or leasing someone else's real property on their behalf in exchange for property management L1, C4 compensation and in accordance with a property management employee contract a document that contains all essential information about the property, such as distance over paved roads to nearby communities, number of homes currently occupied, soil conditions property report affecting foundations and septic systems, type of title a buyer will receive, and existence of L7, C6 liens; under the Interstate Land Sales Full Disclosure Act, developers of 25 or more lots must provide the prospective purchaser with a property report before they sign the contract F LO RI DA R EAL ESTAT E PRE -L ICEN SE 15 proprietary lease long-term and exclusive lease given to resident and stock owner of a cooperative L8, C6 the act of dividing or allocating expenses between buyers and sellers based on the actual proration L14, C2 period of usage of the item or service a document prepared by a developer that summarizes what is in the condominium documents; prospectus L8, C6 required for condos with more than 20 units in Florida facilities open to the public (such as hotels, restaurants, retail merchants, doctor’s offices, golf courses, private schools, day care centers, health clubs, sports stadiums, movie theaters, public accommodation L7, C4 etc.); under the Americans with Disabilities Act, individuals with dis­abilities cannot be denied access to public accommodations, public transportation, and commercial facilities purchase-money instrument given by the purchaser to a seller who “takes back” a note for part or all of the L13, C5 mortgage purchase price a lessee's right to possess a property without interference from lessor, previous owner, or quiet enjoyment L9, C3 anyone else about the claim to the title a type of deed that conveys any interest, title, or right to a parcel of land the grantor has at the quitclaim deed L9, C3 time the deed is executed range the area of land between two consecutive range lines L10, C2 real estate land plus improvements L8, C1 the businesses of overseeing, consummating, and completing real estate transactions and real estate brokerage L1, C2 business by bringing together the parties to a transaction buying, selling, leasing, renting, auctioning, appraising, exchanging, negotiating for, or real estate services closing on real property or a business for compensation; advertising that you will do any of L2, C2 the aforementioned land from the surface to the center of the earth and upward into space, all attachments, and real property L8, C1 the bundle of legal rights of ownership a clause that allows a lender to take the income from an investment property that is in default receivership clause L12, C8 and apply it to the mortgage issued by an administrative law judge to FREC; includes their findings and recommended order L6, C2 recommended penalty the finding of a fair value using multiple appraised values, whether they be of different approaches reconciliation L16, C3 or the same redlining the illegal act of a lender refusing to issue mortgages in a specific area L7, C1 registration registration is the process of submitting information to the DBPR L2, C3 regression a drop in a property's value due to its proximity to properties of low value L19, C3 F LO RI DA R EAL ESTAT E PRE -L ICEN SE 16 remainderman the person who holds the remainder interest in a life estate L8, C4 replacement cost the actual cost of replacement without regard to the depreciation of the property L16, C4 the cost of procuring exact copies of the building's components, preserving the styles and reproduction cost L16, C4 materials used at the subject property's original construction the sale of improved property of four units or fewer; unimproved property intended for the residential sale L4, C8 use of four units or fewer; or agricultural property of 10 acres or fewer a financial arrangement where a homeowner pledges equity to a lender in exchange for reverse annuity mortgage periodic payments of the pledged equity; essentially selling off equity in their home in L13, C5 exchange for monthly payments the statutory principle of survivorship tenancy that provides that when one co-owner dies, right of survivorship L8, C3 their ownership interest reverts to the surviving co-owners a borrower in default's right to pay the missing mortgage payments, interest, and fees and be right to reinstate L12, C8 reinstated in the loan risk the likelihood that an investment will fail to return or increase the initial investment L16, C2 a real estate license holder who is associated with a licensed broker for the purpose of sales associate L2, C2 performing real estate brokerage acts on the broker’s behalf sales property appraisal method that estimates value by comparing the subject property to the L16, C3 comparison approach sales prices of similar properties in the same market area satisfaction of mortgage when a mortgage loan is fully paid off L12, C2 sealing putting a criminal record under highly restricted access L2, C3 section one of 36 equal square miles in a township L10, C2 seisin a protection in which the grantor states they hold the title conveyed in the deed, aka seizin L9, C3 a market condition in which the number of properties for sale does not meet the demand seller's market L15, C3 (number of people looking to buy) separate property property owned by a married person that is separate and not co-owned by their spouse L8, C3 short sale selling a property in default for less than the loan amount (with the lender's permission) L12, C8 a broker who represents, as a fiduciary, either the buyer or seller but not both in the single agent L4, C6 same transaction situs the economic significance of a property's location L15, C1 sole proprietorship ownership of a business by a lone individual L5, C6 F LO RI DA R EAL ESTAT E PRE -L ICEN SE 17 an agent with a limited scope of authority to act on behalf of their principal; usually towards a special agent L4, C2 single, specific objective, end, or goal that is not ongoing additional taxes levied on the homeowners in a neighborhood or area to pay for special assessment L18, C1 improvements that benefit the people living there special exception a variance that allows an out-of-zone use that benefits the community L19, C1 an area located in a 100-year floodplain that, in any given year, has at least a 1% chance of a special flood hazard area L19, C2 flood event special-purpose property a property created with a special, and often limited, purpose in mind L1, C3 a law that requires certain types of contracts, including those conveying interest in real statute of frauds L11, C3 property, to be in writing to be enforceable statute of limitations a legal concept that establishes time limits for bringing certain kinds of legal actions L11, C3 the illegal act of guiding prospective home buyers toward or away from certain steering L7, C1 neighborhoods because of their membership in a protected class; aka channeling a settlement between parties as to the facts of the case and the penalty reached; must be stipulation L6, C2 approved by FREC to be effective a form of agency that arises when an employing broker enlists the use of sponsored sales subagency L4, C1 associates and/or sponsored associate brokers to accomplish a client's goal the division of parcels of land into smaller units or lots; subdivisions containing less than 25 subdivided land L7, C6 lots are exempt from the Interstate Land Sales Full Disclosure Act the proposed map of a to-be-developed subdivision indicating proposed lots, streets, and subdivision plat map other important organizational information, created according to the layout of the existing L1, C6 parcel of real property subject property the property whose value is being determined L16, C3 a mortgage where title is transferred but the seller retains the loan; done without a subject to L12, C7 lender's consent a tenant’s transfer of part of their right of possession in a leased property to another person sublease L9, C10 for a period of the lease term a contract that gives a mortgage recorded at a later date priority over a previously subordination agreement L12, C3 recorded mortgage a written order commanding a person to appear in court to give testimony or produce records, subpoena L6, C2 under penalty for failure summary/emergency issued when the serious nature of a violation justifies suspending a license holder prior to L6, C2 suspension order their hearing F LO RI DA R EAL ESTAT E PRE -L ICEN SE 18 supply the amount of a product or service that is available for sale or lease at a given time L15, C2 the process and physical product of finding and measuring the boundaries of a piece of real survey L10, C1 estate, including the location of improvements, encroachments, and easements takeout commitment when a lender pledges to loan a developer money once a building project is completed L12, C7 the percentage of the value that is taxed; expressed in mills in Florida; used in property tax rate L18, C1 tax calculations any strategy used to minimize the amount of taxable income and, therefore, reduce taxes tax shelter L16, C2 owed to the government the amount of income that can be taxed, after all deductions and any other adjustments have taxable income L18, C2 been made taxable value the assessed value of a home minus homestead exemptions; used in property tax calculations L18, C1 teaser rate the low initial interest rate of an ARM loan L13, C4 a tenant’s occupancy of a property beyond their lease’s terms and without the landlord’s tenancy at sufferance L8, C5 consent, also called estate at sufferance tenancy at will a tenant’s occupancy of a property with the landlord’s consent L8, C5 tenancy by the entirety ownership by a married couple; requires five unities including the unity of person L8, C3 co-ownership with individual, undivided interest in the property; includes rights of inheritance tenancy in common L8, C3 rather than survivorship terminus final point in space L10, C1 testate the name for conditions in which the owner of a property dies having left a valid will L9, C4 tier the area of land between two consecutive baselines L10, C2 a form of co-ownership where each owner has use of the property at a different prescribed timeshare L8, C6 period of time; aka interval ownership the actual ownership of a real property that includes the bundle of rights in which a party may title L9, C1 own a legal or equitable interest; not an actual document conveying the title to the lender or, more commonly, to a third-party trustee (operating on title theory L12, C2 behalf of the lender) for the life of the loan township line line that runs east-west every 6 miles L10, C2 a square area of land with sides of six miles each, consisting of 36 square-mile sections and township, L10, C2 identified in reference to a meridian and baseline in the rectangular survey system F LO RI DA R EAL ESTAT E PRE -L ICEN SE 19 trade name a person or business entity’s unofficial or fictitious name L5, C1 a broker who provides limited representation to a buyer, a seller, or both, in a real estate transaction broker L4, C5 transaction, but does not represent either in a fiduciary capacity or as a single agent lacking the essential elements necessary to be legally binding and obligate performance of a unenforceable L11, C3 valid contract Uniform Standards of the generally recognized ethical and performance standards for the appraisal profession in Professional Appraisal L16, C2 the United States Practice (USPAP) a contract wherein one party makes a promise and is obligated to perform if a second party unilateral contract L11, C4 chooses to accept the offer and perform in exchange for that which was promised upfront mortgage the mortgage insurance premium of 1.75% the loan total charged to the borrower when an insurance L13, C6 FHA loan is taken out premium (UFMIP) an agency charged with overseeing, regulating, and promulgating real estate appraisals and USPAP L1, C5 appraisal practices; aka Uniform Standards of Professional Appraisal Practice vacancy rate the percentage of rental units that are unoccupied L15, C3 a contract possessing the essential elements necessary to be legally binding and valid contract L11, C3 obligate performance valuation the process of collecting information and developing an opinion of value for real property L19, C3 variable lease a leasehold agreement in which the base rent changes according to the lease agreement L9, C10 permission granted by the government so that property may be used in a manner not allowed variance L19, C1 by the current zoning void contract a contract lacking one or more of the essential elements, resulting in its having no legal effect L11, C3 voidable contract a contract wherein the wronged party has the option to perform, enforce, or void the contract L11, C3 describes a license that is inactive by choice; the licensee requests the status change from the voluntarily inactive L3, C3 DBPR voluntary relinquishment the subject of a complaint voluntarily turns in their license and therefore avoids a hearing and L6, C2 for permanent revocation other discipline; licensee can never practice real estate again a protection in which a grantor promises to defend the grantee’s title against any legal claim warranty forever L9, C3 and promises to do so forever a local law that controls how land is used and what structures can be built in a zoning ordinance L19, C1 designated district