Real Estate Insurance Terms - O

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OAKUM - A fiber used as a caulking, made by pulling apart hemp or rope.

OATH - An attestation by a person which binds him or her legally and morally. Usually attesting to the truth of something, as an affidavit, or the validity of one's signature. A promise to tell the truth. Also, a promise to carry out a duty with high morality. An oath has religious connotations and usually involves the word "swear" and may contain the phrase "so help me God", or require the one taking the oath to put his or her hand on a bible. An affirmation is still legally binding.

OBLIGATION BOND - A bond secured by a mortgage but over the mortgage amount. It creates a personal obligation on the part of the mortgager.

OBLIGEE - One to whom an obligation (promise) is owned.

OBLIGOR - One who legally binds (obligates) oneself, such as the maker of a promissory note.

OBSOLESCENCE - An appraisal term meaning that the age of a structure may cause it to become undesirable in use or appearance (old fashioned) and consequently lose income and value.

OCCUPANCY - With reference to land, the word has become synonymous with possession.

OFFER - A presentation, or proposal, for acceptance, in order to form a contract. To be legally binding, an offer must be definite as to price and terms.

OFFICE - A zoning designation allowing businesses to carry on their paperwork, rather than manufacturing or sale of inventory to the public on the site some businesses may be conducted entirely out of such space, when only paperwork is involved, such as insurance companies, law firms, accounting firms etc.

OFFSET - (1) A ledge across a wall (usually brick or masonry) formed by reducing the thickness of the wall above the ledge. (2) To balance, as claims in a law suite. Commonly called set-off (when a counter claim is made to off set damages, the counterclaim being made concerning different subject matter).

OFFSET STATEMENT - (1) A statement given to a buyer of rental property by a tenant, setting forth the amount of rent and terms of the rental agreement. (2) A statement by an owner or lien holder to a buyer, setting forth the balance due on existing liens against the property being purchased.

OFF-SITE - Not on property to be sold. For example: The developer of a housing tract sells only the house and lot, but must build the streets, sewers, etc., not on the lot.

OFF-SITE IMPROVEMENTS - Development of land to make adjacent property suitable for construction. Includes sidewalks, curbs, streets, sewers, streetlights, etc.

OHM - An electrical measure of resistance of the dissipating of one watt when one ampere passes through it.

OIL AND GAS LEASE - A lease giving the lessee the right to extract oil and gas from land. More like a mining lease than a land lease, in that the lessee has an ownership interest in a portion of the property (the oil and gas) rather than just the use of the property. The lessor is generally paid based on the oil and gas taken.

OMNIBUS CLAUSE - Clause in a will or decree of distribution passing all property not specifically mentioned.

"ONCE IN A LIFETIME" TAX EXCLUSION - A forgiveness of a portion of the tax due on the sale of a residence by a senior citizen. As the term denotes, the exclusion can be taken only once.

ON CENTER - A construction term referring to a measurement of distance from the center of one structural member to another, such as a stud, joist, etc. Abbreviated on construction drawings as O.C.

ONE HOUR DOOR - A fire resistant door; one which will hold back a fire for a minimum of one hour.

ONE HOUR WALL - A fire resistant wall; one which will hold back a fire for a minimum of one hour.

"ONE, TWO, THREE" FINANCING - A method of "creative" financing by which the buyer (1) assumes an existing loan, (2) secures a second loan from a third party lender, (3) takes a third loan from the seller.

"ON RAIL"-- Refers to a property (usually industrial) which is served by a railroad.

ON-SITE IMPROVEMENTS - Structures erected permanently for use on a site, such as buildings, fences, etc.

ON-SITE OFFICE - A real estate branch office specifically for a particular development and located at said development. May be a sales or leasing office.

OPEN BEAM CONSTRUCTION - A design using heavy roof beams as interior finish, exposed to give a roomy, heavy, rugged appearance to a room.

OPEN-END MORTGAGE - A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions, usually as to the assets of the mortgage.

OPEN HOUSE - A house which is open without an appointment to prospective buyers (or tenants) for inspection during certain hours and days of the week.

OPEN HOUSING - Housing made available to persons without regard to race, religion, sex, color or national origin.

OPEN LISTING - A written authorization to a real estate agent by a property owner, stating that a commission will be paid to the agent upon presentation of an offer which meets a specified price and terms. However, the agent has not exclusive right to sell and must bring in his offer before any other offer is presented or accepted.

OPEN MORTGAGE - A mortgage that can be prepaid without regard to race, religion, sex, color or national origin.

OPEN SPACE LAND - Land used for agriculture, recreation, scenic beauty, natural resources, water shed or wild life, and so designed on a map.

OPEN SPACE RATIO - Ratio of land area to floor area of an apartment building. Used in zoning requirements.

OPERATING EXPENSES - The cost of operating an income producing property, such as management, utilities, and similar day to day expenses, as well as taxes, insurance, and a reserve for replacement of items which periodically wear out.

OPTION - A right, which acts as a continuing offer, given for consideration, to purchase or lease property at an agreed upon price and terms, within a specified time.

OPTION FOR ADDITIONAL SPACE - An option given to a tenant to rent additional space at specified rental amount and terms.

ORAL CONTRACT - A contract, partly written and partly spoken, or not at all reduced to writing.

ORDER CONFIRMING SALE - Court order confirming the terms of a sale of property out of an estate.

ORDINANCE - A law or statute. The term used to designate the enactments of the legislative body of a municipal corporation or a county.

ORDINARY INCOME - A term having meaning only in relation to income tax. The regular graduated scale of tax is paid on income which is called "ordinary". As opposed to capital gains or any other income taxed differently.

ORDINARY REPAIRS - Repairs necessary to keep a property in good condition, against ordinary wear and tear, decay, etc.

ORDINATE - A point along the vertical the vertical axis of a curve. When in conjunction with a point on the horizontal axis (abscissas), the point is called the "co-ordinates".

ORIEL WINDOW - A window projecting outward similar to a bay window. However, an oriel window is supported by brackets or a cantilever, as opposed to bay window which is supported by the foundation.

ORIENTATION - Planning the most advantageous place on a parcel of land for an improvement to be located.

ORIGINAL COST - The purchase price of property, paid by the present owner. The present owner may or may not be the first owner.

ORIGINAL PAYEE -The person or entity to which a check or promissory note is originally payable.

ORIGINATION FEE - A fee made by a lender for making a real estate loan. Usually a percentage of the amount loaned, such as one percent.

OR MORE CLAUSE - A clause in a note, mortgage, or deed of trust allowing for additional payments to be made without penalty. The words "or more" come after the specified payment.

OSTENSIBLE AGENCY - An agency created by law when a principal acts (intentionally or negligently) as if one is an agent who in fact is not .

OVERAGE INCOME - Rental form a percentage of the operation of a business in excess of the base rental.

OVERBUILDING - Construction of an excessive number of similar properties (houses, apartments, etc.) so as to cause a surplus of supply over demands.

OVERHANG - An extension of a roof beyond the exterior walls, used as a shading or protection from rain, for a walkway.

OVERHEAD - The expenses of a business or property. Commonly referred to as the "nut".

OVER IMPROVEMENT - An improvement, excessive in cost or size in relation to land value or value of surrounding improvements.

OVERPASS - A bridge or road elevated to avoid intersecting with a roadway, railway, or other traffic carrier.

OVERRIDE - A rental amount paid due to sales of the tenant. For example: A lease for a service station may contain a provision for a certain addition to the rent for every gallon of gasoline over a certain amount sold each month. The amount over is called the override, such as two cents per gallon for every gallon over fifty thousand sold each month.

OVERT - Open, manifest, public action as distinguished from mere intention.

OWELTY OF EXCHANGE - Money necessary to equalize the value of the properties being exchanged.

OWELTY OF PARTITION - Money paid by one co-tenant to another when property is split, but the result is properties of unequal value.

OWNER - One who has the rights of ownership.

OWNER'S POLICY - Title insurance for the owner of property, rather than a lien holder.

OWNER WILL CARRY MORTGAGE - A term used to indicate that the seller is willing to take back a purchase money mortgage.