Real Estate Insurance Terms - A

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ACID SOIL - A soil with an acid rather than an alkaline base. This can determine its suitability for farming.

ACKNOWLEDGMENT - A written declaration by a person executing an instrument, given before an officer authorized to give an oath (usually notary public), stating that the execution is of his own volition.

ACQUISITION APPRAISAL - An appraisal to determine market value of a property to be taken by eminent domain, in order to justly compensate the owner.

ACQUISITION COSTS - Costs of acquiring property other than purchase price: escrow fees, title insurance, lenders fees, etc.

ACRE - A measure, usually of land. Equal to 160 square rods (43,560 sq ft.) in any shape.

ACREAGE - Any parcel of land which may be measured in terms of acres. Usually qualified by its zoning or usage, such as residential acreage, industrial acreage, etc.

ACTION TO QUIET TITLE - A court action to establish ownership to real property. Although technically not an action to remove a cloud on title, the two actions are usually referred to as "Quiet Title" actions.

ACT OF GOD - Damage caused by nature (floods, winds, etc.) rather than destruction by man.

ADDENDUM - Something added. A list or other material added to a document, letter, contractual agreement, escrow instructions, etc.

ADDITION - (1) A portion of a building added to the original structure; (2) a synonym for subdivision in certain legal descriptions.

ADDITIONAL DEPOSIT - A buyer of real property will generally give a small deposit in an offer, and a more substantial deposit after the offer has been accepted. The second deposit is the "additional deposit".

AD HOC - Latin meaning "for this". For a single purpose only.

ADJACENT - Close to. May or may not be contiguous (touching).

ADJOINING - Touching or contiguous to.

ADJUDICATION - A judgment or decision by a court.

ADJUSTABLE MORTGAGE LOANS - Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARMs), Flexible Rate Loans, Variable Rate Loans.

ADMINISTRATOR - A person given authority by a proper court to manage and distribute the estate of a deceased person when there is no will.

ADMINISTRATOR'S DEED - A deed issued by the administrator of an estate.

ADULT - One old enough to legally act without the consent of a parent or guardian. One over 18 years old, except in some states for the purchase of alcohol, which is limited to those over 21 years old.

AD VALOREM - "According to value". A method of taxation using the value of the thing taxed to determine the amount of tax. Taxes can be either "Ad Valorem" or "Specific". Example: a tax of $5 per $1000 of value of house is "Ad Valorem"; a tax of $5 per house ( irrespective of value") is "Specific".

ADVANCE FEE - A fee charged by a broker to a seller to cover all or a portion of the broker's costs of promoting the property. The fee is generally credited against commissions but is not refunded if no commissions are received. Most frequently used in connection with large offerings which require a substantial outlay of funds for promotion.

ADVERSE LAND USE - A use which causes surrounding property to lose value, such as an industrial development in a residential area.

ADVERSE POSSESSION - A method of acquiring title by possession under certain conditions. Generally possession must be actual, under claim of right, open, continuous, notorious, exclusive and hostile (knowingly against the rights of the owner). Exact time (years) of possession and specific requirements (such as payment of property taxes) vary with the statutes of each state.

AFFIANT - One who makes an affidavit. Also called a deponent, although technically not the same.

AFFIDAVIT - A written statement or declaration, sworn to before an officer who has authority to administer an oath.

AFFIRMATION - A substitution for an oath when a person objects to taking an oath (Quakers, atheists, etc.). A lie after an affirmation is still perjury.

AFFORESTATION - The growing of a forest where none previously existed, as opposed to reforestation (the replanting of a harvested or destroyed forest).

A-FRAME - A type of construction usually found in resort areas. The exterior framing of the building is shaped like the letter A.

AFTER ACQUIRED PROPERTY - As applied to a judgment lien, it means that the lien will attach to property of the debtor acquired after the judgment.

AFTER ACQUIRED TITLE - Legal doctrine by which property automatically vests in a grantee when the grantor acquires title to the property after the deed has been executed and delivered

AGRARIAN - Relating to land, or to a division or distribution of land.

AGRICULTURAL LIEN - A lien against crops (only), to secure money or payment for materials used to grow the crop.

AGRICULTURAL PROPERTY - (1) Land which is zoned agricultural; (2) Land used for growing of agricultural products or raising of livestock.

AIR RIGHTS - The right to the uses of the air space above property without the right to use the surface of the property. However, air rights may restrict surface rights, especially height of improvements.

ALCOVE - A recessed part or addition to a room.

ALIAS - Latin for "otherwise". Commonly meaning that a person is known by more than one name. In some states, indicated by the letters AKA (also known as).

ALIENATION - Transfer of property from one owner to another.

ALIENATION CLAUSE - A type of acceleration clause, calling for a debt under a mortgage or deed of trust to be due in its entirety upon transfer of ownership of the secured property. Also called a "due-on-sale" clause.

ALKALI - The chemical opposite of acid. Heavy concentrates of alkaline salts in soil may damage crops.

ALKALINE SOIL - Soil which has an alkali, rather than an acid base.

ALLEGATION - The assertion or statement of a party to an action, setting forth that which he expects to prove.

ALLEY - A narrow right of way, either public or private, used for access (usually to garages, loading platforms, etc.)

ALLODIUM - Land owned by individuals, as opposed to the feudal system of ownership of all land by a king or ruler.

ALLOTMENT - A small parcel of land, sold or given to a farm worker for cultivation as a supplementary source of income. Popular in the 1900s before World War II.

A.L.T.A. (AMERICAN LAND TITLE ASSOCIATION) - An organization, composed of title insurance companies, which has adopted certain insurance policy forms to standardize coverage on a national basis.

ALTERATIONS - Changes in the interior or exterior of a building, but without changing the exterior dimensions.

AMENDMENT - A change, either to correct an error or to alter a part of an agreement without changing the principal idea or essence.

AMENITIES - Those settings or improvements to property which increase the desirability or enjoyment rather than the necessities of the residents. For example, a pool, a view, etc.

AMERICAN BANKERS ASSOCIATION - A national organization formed in 1875 as a professional association for banks and other financial institutions.

AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS - A professional institute to promote the quality of the appraisal industry through education of its members. The institute is associated with the National Association of Realtors.

AMORTIZATION -- Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments.

AMORTIZATION SCHEDULE - A schedule showing each payment of a loan to be amortized and breaking down the payment into the amount applied to principal and the amount applied to interest.

AMORTIZE - To reduce a debt by regular payments of both principal and interest, as opposed to interest only payments.

AMPERE - A measure of electrical current equal to the current produced by the force of one volt through a resistance of one ohm.

ANCHOR TENANT - The most reliable, and usually the largest, tenant in a shopping center. The strength of the anchor tenant greatly effects the availability of financing for the shopping center. The term may also be used to describe a tenant in an office building, industrial park, etc.

ANNEXATION - Permanently affixing to real property, such as a city adding additional land to increase its size.

ANNUAL PERCENTAGE RATE (A.P.R.) - The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For example: 6% add-on interest would be much more that 6% simple interest, even though both would say 6%. The A.P.R. is disclosed as a requirement of federal truth in lending statutes.

ANNUITY - (1) A payment of money yearly for life or a given period of years; (2) A fixed amount given or left by will, paid periodically, not necessarily yearly.

ANTICIPATION - Appraisal method using the principle that value is created by anticipated future benefits.

ANTICIPATORY BREACH - One party to a contract informing the other of his or her intent not to perform before performance is due. A legal action may be brought even though the original contract (not yet due for performance) has not been breached. Example: The buyer informs the seller before the closing date of his or her intent not to buy.

APARTMENT - One or more rooms of a building used as a place to live, in a building containing at least one other unit used for the same purpose. Usually has, at least cooking facilities, a bathroom and a place to sleep. Those who live in these units pay rent for their use usually on a monthly basis.

ARM'S LENGTH - Legal slang meaning that there existed no special relationship between the parties involved in any matter which would taint the result.

ARREARS - (1) Payment made after it is due is in arrears; (2) Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance, as is rent. Example: A rental payment made July 1 pays the rent to August 1. An interest payment made July 1 pays the interest to July 1.

ARTERIAL HIGHWAY - Any major highway or thoroughfare.

ARTESIAN WELL - A well bored in to a subterranean body of water, which, being under pressure, rises naturally to the surface without artificial pumping.

ARTICLES OF INCORPORATION - Documentation filed with the state which sets forth general information about a corporation. More specific rules of the corporation would be contained in the by-laws.

ASBESTOS - A fire and heat resistant material used in insulation, roofing, etc.

ASHLAR (ASHLER) - A stone which is cut in squares and used both as a facing for masonry walls and in foundations.

"AS IS" CONDITION - Premises accepted by a buyer or tenant in the condition existing at the time of the sale or lease, including all physical defects.

ASKING PRICE - The price at which the seller is offering property for sale. The eventual selling price may be less after negotiation with a buyer.

ASSESSED VALUE - Value placed upon property for property tax purposed by the tax assessor.

ASSESSMENT - (1) The estimating of value of property for tax purposes: (2) A levy against property in addition to general taxes. Usually for improvements such as streets, sewers, etc.

ASSETS - Everything owned by a person or corporation which can be used for the payment of debts.

ASSIGN - To transfer property, or an interest in property.

ASSIGNEE - One who receives an assignment.

ASSIGNMENT - A transfer to another of any property, real or personal, or of any rights or estates in said property. Common assignments are of leases, mortgages, deeds of trust, but the general term encompasses all transfers of title.

ASSIGNOR -One who makes an assignment.

ASSUMPTION FEE - Lender's charge for paperwork involved in processing records for a new buyer assuming an existing loan.

ATTACHMENT - An act of seizing persons or property by judicial order to bring them within the custody of the court. Most commonly the seizure of property to furnish security for a debt in connection with a pending action.

ATTEST - To witness, to affirm to be true or genuine; to certify

ATTIC - The space under the roof of a structure but before the top story. May be simply an air space or improved and used.

ATTRACTIVE NUISANCE - Anything on a property which may attract small children and is dangerous to them. Reasonable care must be used to prevent injury to the children.

AUCTION - A public sale of land or goods to the highest bidder.

AUXILIARY LANE - A paved shoulder of a highway, usually designed for emergency stopping.

AVENUE - Originally, a broad passageway bordered by trees. Now synonymous with street or road and of no special significance.

AVULSION - A sudden and substantial tearing away of land by water and the deposit of said land as an addition to the land of another owner. The original boundaries apply and ownership of the land in question remains in the original owner.

AZIMUTH - Distance in degrees from North to an object, or, in the Southern hemisphere, from South to an object. A surveying term.