Real Estate Glossary PDF

# Glossary ## Acceptance by Ratification The acceptance of lease terms that occurs when a tenant takes possession of the property but does not sign a lease. This form of acceptance is recognizable by the courts. ## Accord and Satisfaction When all parties have agreed to a change in one or more of...

# Glossary ## Acceptance by Ratification The acceptance of lease terms that occurs when a tenant takes possession of the property but does not sign a lease. This form of acceptance is recognizable by the courts. ## Accord and Satisfaction When all parties have agreed to a change in one or more of the terms of a contract. ## Actual Eviction Court action initiated by the lessor to have a tenant removed from the premises. ## Administrative Law Judge (ALJ) A judge who hears complaints and considers evidence regarding violations of the Fair Housing Act. ## Agency The legal relationship created when one person represents another. ## Air Rights Rights to use the space above the surface of land upward into the sky. ## Airspace The space above the surface extending into infinity. ## Americans with Disabilities Act of 1990 A comprehensive civil rights law for the protection of persons with physical and mental disabilities. This law mandates equal access to jobs, public accommodations, government services, public transportation and telecommunications. ## Assignment The act of one party to a contract allowing someone else to assume all of his/her rights under the contract. ## Bilateral Contract A contract in which two parties exchange promises. ## Blockbusting Inducing an owner to sell or rent a dwelling by making representations regarding entry of persons of a protected class, also referred to as “panic peddling.” ## Breach of Contract The action or lack of action of one party to a contract which violates the terms of the agreement. ## Brokerage Agreement The relationship created between a sponsoring broker and any member of the public who is receiving real estate services through the sponsoring broker or the broker's sponsored licensees. ## Chattel Personal property, or objects which are not permanently affixed to land. ## Civil Rights Act of 1866 Guaranteed property rights to all citizens regardless of race. This act specifically provides that all citizens shall have the same right to inherit, purchase, sell or lease real and personal property. ## Client A person who is being represented by a licensee. ## Commingling Depositing personal funds in a special escrow account established to hold funds belonging to others. ## Compensation Anything of value that is given in exchange for real estate services. ## Compensatory Damages Money paid with the intent to return the injured party of a defaulted contract to the financial condition they were in before the breach occurred. ## Competent Parties Parties to a contract who are of legal age, sane and sober. ## Concurrent Ownership Ownership of property by two or more individuals or entities. ## Condemnation Action The court action used to exercise the power of eminent domain, allowing the government to purchase property against the wishes of the owner. ## Confidential Information Information that could harm the client's negotiating position. ## Consideration The promise offered in exchange for an action, something of value or another promise. ## Constructive Eviction A defense used by the lessee to avoid paying rent and vacate the property when the lessor allows the premises to become uninhabitable for an unreasonable amount of time in violation of the lease agreement. ## Consumer A person or entity seeking or receiving real estate brokerage services. ## Contract A legally binding promise or set of promises, generally setting the terms of a business arrangement like an apartment lease. ## Customer A consumer who is not being represented by a licensee. ## Designated Agency Representation of either the purchaser/lessee or the seller/lessor, as assigned by the licensee's sponsoring broker. ## Designated Managing Broker A managing broker who has supervisory responsibilities for licensees who has been appointed as such by the sponsoring broker. ## Destruction Clause A lease clause that describes what rights and responsibilities the lessor and lessee have if the premises is partially or completely destroyed. ## Discharged Contract A contract in which all the terms have been fulfilled, also called an "executed contract." ## Dual Agency The practice of representing both the buyer/lessee and the seller/lessor in a real estate transaction. ## Duress The use of force to induce another to act against his/her will. ## Eminent Domain Government police power that allows the taking of private property for public purpose. ## Exclusive Brokerage Agreement A written agreement between a sponsoring broker and a client who will receive exclusive representation. ## Executed Contract A contract in which all of the terms have been fulfilled. ## Executory Contract A contract in which all of the terms have not been fulfilled. ## Express Contract Specific oral or written agreements of two or more parties. ## Fair Housing Act Title VIII of the Civil Rights Act of 1968. This act bans discrimination on the basis of race, color, sex, religion, national origin, disability and familial status. ## Fair Housing Amendments Act of 1988 Enacted to expand coverage of the Fair Housing Act and to enhance its enforcement. The two major additions to the act include the protection of families with children (referred to as "familial status") and handicapped persons in real estate activities. This act also modified HUD complaint procedure, removed the cap for punitive damages and increased the available damages and civil penalties. ## Fixture Personal property that becomes real property when it is permanently affixed to the land. It is included in the lease or sale of land unless otherwise specified. Tests to determine fixture include the method of attachment, the customization to the underlying real property, the intent of individual attachment of the object and the specific agreement of the parties to the sale or lease. ## Fraud When one party intentionally misrepresents or conceals facts relevant to the contract. When fraud is committed, the contract is enforceable or voidable by only the injured party. ## Holdover Tenancy A lease that is created when a lessor accepts rent from a tenant whose lease has terminated. ## IDFPR The Illinois Department of Financial and Professional Regulation. ## Implied Contract A contract that is formed by the actions of the parties and is not written. ## Improvement Clause A lease clause that states which rights the lessor will have to enter the premises to make improvements. It will also state what the tenant is allowed to do with regard to improvements to the property. ## Improvements Man-made objects directly attached to the land. ## Injunction A court order that forces someone to stop doing a specific act. ## Involuntary Termination The cancellation of a lease against the tenant's wishes through actual eviction, constructive eviction, eminent domain, mortgage foreclosure or bankruptcy proceedings. ## Joint Tenancy A form of co-ownership in which ownership interests of a deceased owner become the property of the surviving owners. ## Land The surface, subsurface and airspace, along with that which is permanently attached. ## Lease A bilateral contract in which the lessor (landlord) promises to provide exclusive possession of the property in return for the lessee's (tenant's) promise to pay rent. ## Leasehold Estate or Interest The rights a tenant acquires in the lessor's property, also known as a "tenancy." ## Legal Purpose An act or use that is allowed by law. ## Lessee The person receiving the lease, also known as the “tenant." ## Lessor The owner or landlord providing the lease. ## Menace The threat to use force to induce another to act against his/her will. ## Misrepresentation The omission or distortion of facts. ## Monetary Damages Money awarded to the injured party of a breached contract by the court system. ## Novation All parties to the contract agree to a substitution of one of the parties to the contract by creating a new agreement. ## Offer and Acceptance The parties' agreement to the terms of a contract. A "meeting of the minds." ## Offeree A person receiving the offer. ## Offeror A person making an offer. ## Option A contract to hold an offer open for a specified period of time. ## Ownership in Severalty Individual ownership of property by one person or entity with no co-owners. ## Panic Peddling Inducing an owner to sell or rent a dwelling by making representations regarding entry of persons of a protected class. Also referred to as “blockbusting." ## Parol Evidence Rule The legal rule that prohibits courts from allowing oral evidence to change the terms of a written contract. ## Periodic Tenancy A lease that has no specific ending date, will automatically renew itself, and goes from period to period, as in month-to-month. ## Personal Property Property not permanently affixed to the land, also called "chattel" or "personalty.” ## Place of Public Accommodation A privately owned business or facility that affects commerce and falls within at least one of several specified categories from the Americans with Disabilities Act. ## Protected Class A group of individuals protected under the Fair Housing Act. ## Provisions of Law Statements required by local, state and federal laws. Fair housing and human rights provisions would be part of these laws. ## Punitive Damages Money awarded by the court to an injured party of a breached contract to punish the party who caused the breach. ## Purchase Option A lease clause that gives the lessee the right to purchase the property under certain conditions. ## Radon A colorless, odorless, radioactive gas that comes from naturally occurring uranium in the soil. It is one of the leading causes of lung cancer. The only way to know the level of radon in a building is to test for it. ## Real Estate Land and all leaseholds and other interest in land. ## Real Property Land and improvements that are permanently attached to the land. ## Realty See Land. ## Renewal Option A lease clause that gives the lessee the right to extend the lease term under certain conditions. ## Rent Money paid for use of leased property. ## Repair and Maintenance A lease clause that clearly states which repairs or maintenance tasks are the responsibility of the lessor and of the lessee. ## Rescind An agreement between parties that a contract is to be cancelled and treated as if it never existed. ## Security Deposit Money deposited for or by the tenant with the lessor to be forfeited if the lessee defaults or damages the property. ## Source of Income Earnings from non-wage income (example: Social Security payments, Section 8 vouchers) ## Specific Performance Legal remedy for breach of contract that forces the party who defaulted on the contract to perform as originally agreed. ## Statute of Frauds Law requiring that all real estate contracts be in writing in order to be enforceable by the courts. In Illinois, leases of one year or less are an exception to this law and can be enforced through the courts even if oral. ## Statute of Limitations A law limiting the amount of time a party can wait before bringing action against another party who has committed fraud or violated the terms of a contract. ## Steering The action of an agent/licensee to direct a prospective buyer or tenant toward or away from specific neighborhoods and units within a housing complex or building. ## Stigmatized Property Property that might be undesirable because it was the site of a presumably negative event that did not impact physical condition. ## Subagency The practice of a listing agent allowing other agents to bring in a buyer and to perform duties of the agency. It's important to note that a subagent's primary duty is to the seller. ## Sublet The transfer of a portion of the lease term, most often the premises, with reversion to the lessee. A right acquired by the lessee unless otherwise denied. ## Subsurface The space beneath the surface extending to the center of the earth. ## Subsurface Rights The rights to use the space beneath the surface of land to the center of the earth, including mineral rights, oil rights, gas rights and water rights. ## Surrender and Acceptance Mutual agreement between parties to terminate a lease or other contract. ## Tenancy The rights a tenant acquires in the lessor's property, also known as a "leasehold estate or interest." ## Tenancy At Sufferance A lease that is created by law when a tenant continues to occupy property after his/her rights have expired, wrongfully possessing the owner's property. ## Tenancy At Will A lease with no definite duration which can be terminated by either party at any time. ## Tenancy For Years A lease that has a specific ending date. Its timeframe can be hours, days, weeks, months or years. ## Tenancy in Common A form of co-ownership in which ownership interests of a deceased owner can be passed along to the owner's chosen heirs. ## Tenant The person receiving the lease, also known as the “lessee.” ## Termination Clause A lease clause stating the method and procedure for ending the lease. ## Testers People who pose as prospective tenants or purchasers to test how two tenants with equal buying power of a protected class will be treated by the same licensee in a real estate transaction. ## Trade Fixtures An item of personal property that is attached to real property for a business purpose, such as a sink in a barbershop. ## Undue Influence The use of a position of trust, authority and confidence to cause a party to enter into a contract that he/she would not otherwise choose to do. ## Unenforceable Clause A lease clause that makes each clause separate. If one clause is deemed incorrect or unenforceable, it will not invalidate or affect any other part of the lease. ## Unenforceable Contract A contract that has all of the necessary elements for a binding contract but lacks the provisions necessary to have the court enforce its terms. ## Unilateral Contract A contract in which one party makes a promise to induce the action of a second party. For example, a reward is offered to the person who finds a lost dog. ## Valid Contract A contract that fulfills all the requirements of the law. It is binding and enforceable on and by both parties. ## Void Contract A contract that lacks legally required provisions and is not binding on either party. An example would be a contract for an illegal purpose. ## Voidable Contract A contract that has the elements of a valid contract but only one party has the right to enforce or withdraw from the agreement. ## Voluntary Termination The cancellation of a lease or other contract at the end of its term or through surrender and acceptance any time during its term.