Real Estate Insurance Terms - P

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PACKAGE MORTGAGE - Mortgage covering both real and personal property.

PANE - The glass portion of a door or window.

PANEL - (1) A section, raised, lowered, or level, of a wall, ceiling, fence, etc., self contained, and usually in a border or frame. (2) Sheets of gypsum, plywood or other material in similar form.

PANEL HEATING - Space heating by electric coils, hot air, hot water or steam pipes, which are built into walls, ceilings or floor panels. Also called radiant heating.

PAPER - A mortgage, deed of trust, or land contract, which is given instead of cash. A seller would take back "paper" if he or she received a mortgage, deed of trust or land contract as part of the purchase price.

PAR - (1) Average, equal, normal, etc. (2) Face value, as in negotiable instruments.

PARAPET - A short wall along the edge of a platform such as a roof, terrace, etc., to protect the edge and divert rainwater.

PARCEL - A general term meaning any part or portion of land.

PARGING - Coating cement on a masonry wall, usually for water proofing.

PARISH - A political division in Louisiana, comparable to a county.

PARKWAY - (1) A highway through a park, usually restricting vehicles over a certain weight. (2) A freeway or expressway.

PARQUET FLOOR - Patterned, hardwood flooring, especially parquetry (a geometric design).

PARTIAL RELEASE - A release of a portion of property covered by a mortgage. A subdivider will obtain a partial release as each lot is sold, upon payment of an agreed upon amount. In areas where the subdivider is not usually the builder, it may be necessary to sell groups of lots to obtain a partial release. In areas where deeds of trust are used instead of mortgages, a "partial reconveyance" is the document used.

PARTIAL TAKING - The taking of part of an owner's property under the laws of eminent domain. Compensation must be based on damages or benefits to the remaining property as well as the part taken.

PARTICIPATION CERTIFICATES - Mortgage securities, rather than mortgages. The advantage of the certificate is that it is readily marketable or pledgeable.

PARTITION - (1) Any division of real or personal property between co-owners, resulting in individual ownership of the interests of each. (2) A wall, sometimes moveable, and not load bearing, used to divide a room or building.

PARTNERSHIP - As defined by the Uniform Partnership Act, "An association of two or more persons to carry on as co-owners, a business for profit". The business must be lawful and the partners must agree to share in the profit or loss (but not necessarily equally).

PARTY WALL - A wall erected on a property boundary as a common support to structures on both sides, which are under different ownerships.

PAR VALUE - (1) Concerning stock. The face value of a share of stock. (2) With reference to mortgages or trust deeds, the value of the mortgage based on the balance owing, without discount.

PATIO - Originally, a courtyard, enclosed by columns, or an open courtyard. Modernly, a paved area adjoining a house, used for relaxation, outdoor cooking, eating, etc.

PAYMENT CAP-A maximum amount for a payment under an Adjustable Mortgage Loan, regardless of the increase in the interest rate. If the payment is less than the interest alone, negative amortization is created.

PAYOFF - The payment in full of an existing loan or other lien.

PAYOFF ESCROW - An escrow, specifically for the purpose of paying off an existing lien. Usually part of an existing escrow and called a sub escrow.

PEDESTRIAN OVERPASS - A bridge over a highway, railway, etc., for pedestrian traffic.

PEDESTRIAN UNDERPASS - A tunnel, under a highway, used for pedestrian traffic.

PENNY - Most popularly applied to nails. A measure of length, symbolized by the letter "d".

PENSTOCK - (1) A valve to regulate or direct the flow of water. (2) A conduit for a similar purpose.

PENTHOUSE - (1) A condominium or apartment on the roof of a building used as a residence. (2) A small building on a roof, which houses elevator machinery, ventilating equipment, etc.

PER ANNUM-Yearly, annually.

PER CAPITA - Literally, by heads. Commonly, as individuals. In the right to receive a portion of the estate of a deceased person, one claiming a per capita right would claim an equal share as an individual and not a divided share as part of a family (per stirpes).

PERCENTAGE LEASE - A lease, generally on a retail business property, using a percentage of the gross or net sales to determine the rent. There is usually a minimum or "base" rental, in the event of poor sales.

PERCOLATION - The absorption of liquid into soil by seepage.

PERCOLATION (PERK) TEST - The test to determine the capability of the soil to absorb liquid, both for construction and septic systems.

PER DIEM - Daily.

PERFECT ESCROW - A complete escrow. When the escrow agent has all instrument and instructions necessary to carry out the transaction (purpose of the escrow).

PERFORMANCE BOND - A bond posted by a builder to insure completion of a project.

PERIMETER - (1) The boundary lines of a parcel of land. (2) The length of said boundary lines.

PERISTYLE - A colonnade around a building or courtyard.

PERMANENT MORTGAGE - A mortgage on completed construction for a long period of time, usually over ten years.

PERPETUITY - Continuing forever. Legally, pertaining to real property, any condition extending the inalienability of property beyond the time of a life or lives in being plus twenty-one years.

PER SE - By itself; of itself; inherently.

PERSONAL PROPERTY - Any property which is not designated by law as real property.

PER STIRPES - As a representative, and not as an individual. In the laws of descent and distribution, one who takes because of a deceased ancestor. For example: A leaves equally to B and C per stirpes. C dies, leaving three children. The estate goes one half to B, one half to be divided among the three children of C.

PHYSICAL LIFE - The normal life of an improvement, if properly maintained.

PI (PRINCIPAL AND INTEREST) - Used to indicate what is included in a monthly payment on real property. If the payment includes only principal and interest, property taxes and hazard insurance would make the total payment higher.

PICTURE WINDOW - A large window used to let in light and a view, but not air.

PIER - (1) A structure extending from a solid land out into the water of a river, lake, harbor, etc., to afford convenient passage for persons and property to and from vessels along its sides. (2) A heavy, vertical support member of masonry, wood or metal.

PIGGYBACK LOAN - A loan made jointly by two or more lenders on the same property under one mortgage or trust deed. A 90% loan, for example, may have one lender loaning 80% and another (subordinate) lender loaning the top 10% (high risk portion).

PILASTER - A pier or column, which partly protrudes from a wall, or is attached to a wall as a decoration. If not strictly decorative, it may be a support member.

PILE - A vertical support member, driven into the ground (or bottom, if in water). May be of concrete, metal or wood.

PILLAR - A vertical support member, usually the main support. Is not attached at its sides.

PIPELINE-An extended connection of pipes for transporting liquids or gases, such as oil or natural gas.

PITCH - (1) A mixture or resins; a black tar substance. (2) To incline, such as a sloping roof. The rate of incline is the pitch.

PITI (PRINCIPAL, INTEREST, TAXES AND INSURANCE) - Used to indicate what is included in a monthly payment on real property. Principal, interest, taxes and insurance are the four major portions of a usual monthly payment.

PLAINTIFF - The party bringing a civil action against a defendant.

PLANK - Lumber 2" to 4" in thickness, 8" or more in width.

PLANNED (UNIT) DEVELOPMENT - A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels. The lots are generally small, being the exact size of the improvements, or slightly larger.

PLANNING COMMISSION - A board of a city, county or similar local government, which must approve proposed building projects. Often must be confirmed by a higher board, such as council.

PLANS - All drawings necessary to a construction project, including the subcontractors' drawings.

PLASTER OF PARIS - Gypsum heated to form a fine white powder which, when wet, will dry hard.

PLAT (PLAT MAP) - A map dividing a parcel of land into lots, as in a subdivision.

PLAT BOOK - A book which contains the plat maps for a given area.

PLEDGE - The depositing (bailment) of goods (personal property) with a creditor as security for a debt.

PLEDGED ACCOUNT LOAN - A loan partially secured by the buyer or third party depositing funds into a savings account as collateral security for the loan. A portion of the monthly payment is drawn from the account over the first years of the loan.

PLOT - (1) An area of ground for a specific use, such as a cemetery plot. (2) Ground on which an improvement is to be built.

PLOT PLAN - A plan of the location of improvements on a parcel of land. Also called a plot map. Don't confuse with plat.

PLOTTAGE INCREMENT - The increase in value created by joining smaller adjacent properties into one large parcel, under a single ownership.

PLUMB - (1) To provide plumbing. (2) A weight used on a line (plumb line) to determine the exact right angle to the ground or a floor.

PLUMBING - The pipes, fixtures, etc., necessary for the flow of water to a building and flow of sanitary waste from a building.

PLY - A layer or fold. Commonly used to describe the thickness of any built-up surface, such as plywood, veneers, tires, etc.

PLYWOOD - A wood sheet made of layers (piles) of thin sheets, clued to a center sheet of thicker wood, the grain running at right angles.

POCKET CARD - A card issued by a state showing that an individual is licensed as a real estate broker or salesperson.

POINT - One percent of the amount of the loan.

POINT LETTER - A letter from a lender which guarantees the number of points on a loan for a given time.

POINT OF BEGINNING (POB) -- A term used in metes and bounds descriptions. The description will start with the words "Beginning at a Point" and end with "to the point of beginning".

POLICE POWER - The power of the state which abridges individual rights for the safety, health and general welfare of society. Condemnation would fall in this category.

PORCH - An extension from a structure, usually serving as part of the entrance. May be large enough for relaxation and most often has its own roof, rather than a part of the structure roof.

POSSESSION - Being in physical control of land or personal property, whether the owner or not. Possession may be lawful or wrongful.

POSSIBILITY OF REVERTER - The term shows no estate (interest) in property, but only the chance that an estate will exist at a future time. If a property were sold on the condition that it be used for park, and if not used for park, would revert back to the seller, the seller would have a possibility to reverter.

POST - (1) To give public notice by attaching to a post or wall or displaying in a public place. (2) After. (3) A vertical support. (4) To enter into ledgers or books, such as posting to an account.

POST AND LINTEL - A system of construction based on vertical supports with horizontal cross beams. No arches are used.

POSTDATED - Dating an instrument after the actual date of execution. Most often thought of in connection with checks, but sometimes used in states where certain days (Sundays and holidays) cannot be used to contract. The contract is still not legal if postdated for this reason.

POST-STRESSED CONCRETE - Placing cables, in metal casing, in wet concrete. When the concrete dries, the cables are stretched and the casing filled with grout. When the grout dries, the cables are released, transmitting the stress to the concrete.

POWER OF ATTORNEY - An authority by which one person (principal) enables another (attorney in fact) to act for him. (1) General Power - Authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special Power - Specifies property, buyers, price and terms. How specific it must be varies in each state.

POWER OF SALE - Clause in a mortgage or deed of trust giving the mortgagee or trustee the power to sell the property in the event of default. There are laws which govern the sale, which must be at public auction, but there is no court action necessary (judicial foreclosure).

PRE-EMPTION RIGHT - The right given to settlers upon the public lands of the United States, to purchase the lands at a limited price in preference to others. Modernly, equivalent to a first refusal right.

PREFABRICATED HOUSE - A house constructed of manufactured components, assembled partly at the site, rather than totally on the site. Also called a modular house.

PRELIMINARY TITLE REPORT - A report showing the condition of title before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued.

PREMISES - (1) Buildings and immediately surrounding areas. (2) In conveyancing, the part of a deed giving the names of the grantor and grantee, the consideration, and description of the property conveyed.

PREMIUM - (1) Money paid for an insurance policy. (2) A bonus. The opposite of a discount.

PREPAID INTEREST - Interest paid before becoming due.

PREPAID ITEMS - Those expenses of property which are paid in advance and will usually be prorated upon sale, such as taxes, insurance, rent, etc.

PREPAYMENT PENALTY - A penalty under a note, mortgage or deed of trust, imposed when the loan is paid before it is due.

PREPAYMENT PRIVILEGE - The right to prepay a loan without penalty, either in full or in part.

PRESCRIPTIVE EASEMENT - The granting of an easement by a court, based on the presumption that a written easement was given (although none existed), after a period of open and continuous use of land.

PRESERVATIVE - A chemical covering for wood or metal, preventing insect destruction or rot in the former and rust in the latter.

PRESTRESSED CONCRETE - Stretching wire or other reinforcement in wet concrete, then releasing it after the concrete has dried, causing the tension (stress) toward compaction of the concrete.

PRESUMPTION - An interference reached by probability and reasoning in the absence of absolute fact. A presumption of law is the required drawing of an inference from existing facts. The presumption may be rebuttable or conclusive, no facts may be presented, as in estoppel.

PRICE - Modernly, the amount of money paid for property which is purchased, although the word is general enough to include anything given (not necessarily money) in exchange for something else.

PRIMA FACIE - At first sight; on the face of it. Presumed true unless disproved.

PRIME LENDING RATE - The most favorable interest rates charged by a commercial bank on short term loans (not mortgages).

PRIMER - A coat of sealant or other preparatory substance, applied to a surface before a finish coat.

PRIME TENANT - The major tenant in a building, shopping center etc. It may be necessary to have a prime tenant in order to obtain construction financing. The tenant may be considered "prime" because of its financial strength, rather than by the amount of space it occupies.

PRINCIPAL - The person who gives authority to an agent or attorney. (2) Amount of debt, not including interest. The face value of a note, mortgage etc.

PRIORITY - That which come first in time or importance. Regarding liens, the time of recording establishes priority.

PRIORITY CLAUSE - A clause in a junior lien, acknowledging the priority of a prior lien.

PRIVATE LAND GRANT - A grant of public land to an individual.

PRIVATE MORTGAGE INSURANCE - Insurance against a loss by a lender in the event of default by a borrower (mortgagor). The insurance is similar to insurance by a governmental agency such as FHA, except that it is issued by a private insurance company. The premium is paid by the borrower and is included in the mortgage payment.

PRIVATE PROPERTY - Property owned by a person, group, corporation or other entity, not a governmental body.

PRIVITY - Mutual or successive relationship to the same rights of property, such as heir and ancestor, assignee and assignor.

PROBATE - Originally, the proving that a will was valid. Modernly, any action over which probate has jurisdiction.

PROBATE COURT - A court having jurisdiction of estates, whether of a deceased, a minor or an incompetent person.

PROBATE SALE - Sale of property from an estate. Must be done under supervision and procedures of the probate court.

PROCURING CAUSE- A direct cause of an event or the direct cause of a series of causes leading to an event. A broker is entitled to a commission under an open listing if proven to be the procuring cause of a sale.

PROFIT - The difference of income less expenses. Further broken down into net profit and gross profit.

PROFIT AND LOSS STATEMENT- A statement showing the income and expenses of a business over a stated time, the difference being the profit or loss for the period.

PROFIT A PRENDRE - A right to take from the soil, such as by logging, mining, drilling, etc. The taking (profit) is the distinguishing characteristic from an easement, although easement is frequently used as a synonym.

PROMISEE - One to whom a promise has been made, such as the lender under a promissory note.

PROMISOR - One who makes a promise. The borrower under a promissory note.

PROMISSORY NOTE -- A promise in writing, and executed by the maker, to pay a specified amount during a limited time, or on demand, or at sight, to a named person, or on order or to bearer.

PROPERTY - Anything which is owned by someone.

PROPERTY BRIEF - An expression, not nationally used, meaning a description of a property for sale, which is submitted to a prospective purchaser.

PROPERTY LINE - The boundary line of a parcel of land.

PROPERTY MANAGEMENT AGREEMENT - The contract between an owner and property manager (or management company), setting forth the duties of and payment for said manager.

PROPERTY TAX - Generally, a tax levied on both real and personal property; the amount of the tax is dependent on the value of the property.

PROPRIETARY LEASE - Most commonly used in relation to stock cooperatives, whereby the owners of stock lease units (apartments).

PRO RATE - To divide in proportionate shares, such as taxes, insurance, rent, or other items which buyer and seller share as of the time of closing or other agreed upon time.

PRORATION - To divide (prorate) property taxes, insurance premiums, rental income, etc. between buyer and seller share proportionately as of the time of closing or other agreed upon time.

PROSCENIUM - Originally the stage of a theater. Modernly, the portion of the stage on the audience side of the curtain.

PROSPECT - A potential buyer, seller, or tenant, rather than one which is actually in the process of buying, selling or leasing.

PROSPECTUS - A brochure, presenting for a prospective investor the details of an offering.

PROXY - Although the term legally encompasses and agent, it is most frequently used in connection with representation at a meeting, especially when voting is concerned. The written authority to act is called a proxy, as well as the person acting.

PUBLIC HOUSING - A governmental housing project, usually to accommodate low income families.

PUBLIC LAND - Lands belonging to the federal government, not reserved for government use but subject to sale or other disposal.

PUBLIC LAND SYSTEM - Legal descriptions of land by reference to the public land survey. Often called sectional property descriptions.

PUBLIC RECORDS - Usually at a county level, the records of all documents which are necessary to give notice. The records are available to the public. All transactions for real estate sales should be recorded.

PUBLIC REPORT - A report given to prospective purchasers in a new subdivision, stating the conditions of the area (costs of common facilities, availability of schools, noise factor if near an airport, etc.), issued by the real estate commission.

PUBLIC SALE - Sale at auction, open to the public. May be a foreclosure sale tax sale, excess state land sale, or other type. A "public" sale generally requires notice (advertising) and must be held in a place accessible to the general public.

PUBLIC UTILITY - A company such as the telephone company, electric company or gas company, which supplies a necessity in our modern life and monopolizes the industry. Such companies are under the control of the Public Utilities Commission.

PUFFER - One hired to make false bids at an auction in order to raise the price of property being sold.

PUR AUTRE VIE - For (during) the life of another. A life estate measured not by the life of the grantee, but by the life of another person. The life of a famous person is commonly used, such as a young member of a royal family known for its longevity.

PURCHASE AGREEMENT - A agreement between a buyer and seller of real property, setting forth the price and terms of the sale.

PURCHASE MONEY BOND - A bond having a purchase money mortgage as security.

PURCHASE MONEY MORTGAGE - (1) A mortgage given from buyer to seller to secure all or a portion of the purchase price. (2) Any mortgage from which the funds are used to purchase the property.

PURLIN - A horizontal supporting beam of a roof frame, parallel to the ridge line and placed under the rafters.

PUTTY - A soft clay-like mixture used as a filler for cracks, joints and to install window panes.

PYLON - (1) A monumental mass which flanks an entrance, such as pillars at a gateway. (2) A tower, such as the steel towers which support high tension wires.

PYRAMID ROOF-A roof resembling a pyramid; having four sloping sides, either forming a point, as a church steeple, or running at a lesser angle to a horizontal ridge, as is common on free standing garages.

PYRAMID ZONING - Zoning allowing less restricted uses to be automatically allowable in more restricted. Example: The automatic inclusion of residential zoning in property zoned industrial.