Terms for: Q
A form of deed which conveys only the present interest a person or entity may have in a particular property without making any representations or warranties of title. Such a deed is useful in clearing up doubtful claims such as possible disputed liens.
Terms for: R
(1) The right to pass over property owned by another, usually based upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which facilities such as highways, railroads or power lines are built.
Calculation is in underwriting (usually hotels) where the gross income is divided by the total number of rooms available (both occupied and unoccupied).
The Delegated Underwriting and Servicing Reserve Agreement. This is a contractual agreement among Fannie Mae, the custodian, and the lender, in which the lender agrees to establish a lender reserve and to pledge collateral to Fannie Mae to secure the lender’s obligations under Delegated Underwriting and Servicing. The Reserve Agreement also gives Fannie Mae contractual rights in the pledged reserve and provides Fannie Mae certain contract remedies to enforce the reserve requirements.
A contract which one insurer makes with another to protect the first insurer, wholly or partially, against loss or liability by reason of a risk under a separate and distinct contract as insurer of a third party. Reinsurance differs from coinsurance in that, in the case of reinsurance, only one insurer has a direct contractual relationship with the insured, and that insurer (commonly referred to as the “lead insurer”) purchases reinsurance in order to lessen or spread the risk. The “lead insurer” will assume a risk up to a limit (the amount of which is referred to as the “retention”) and any loss which exceeds this limit would be borne by the reinsurers. In the case of coinsurance, each coinsurer has a direct contractual relationship with the insured, and the risk is shared in agreed-upon proportions from the first dollar of loss.
Various account(s) maintained (typically by the Lender) to provide funds for anticipated expenditures required to maintain a building. A reserve account usually is required by a lender in the form of an escrow to pay upcoming taxes and insurance costs. A replacement reserve may be maintained to provide for replacement cost of short-lived components, such as carpets, heating equipment or roofing. Also, a tenant improvement and leasing commission account may be required for future changes in tenancy.
The Tax Reform Act of 1986 provides a 20% tax credit for rehabilitating certified historic structures, and a 10% credit for other buildings that were placed in service after 1936.
The ability of a lender to recover money from a borrower in default, in addition to the property pledged as collateral.
An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as collateral security for a debt. Most commonly used upon payment in full of a trust deed. Also called a deed of reconveyance or release.
(Immovable) Land, from the center of the earth and extending above the surface indefinitely, including all inherent natural attributes and any man-made improvements of a permanent nature place thereon. For example: minerals, trees, buildings, and appurtenant rights.
The potential buyers and sellers of real property at the current time. It includes markets for various property types, such as office market, housing market, land market and condominium market.
A real estate mutual fund, established by income tax laws to avoid the corporate income tax. It sells shares of ownership and must invest in real estate or mortgages. It must meet certain other requirements, including minimum number of shareholders, widely dispersed ownership, and certain asset and income tests.
Land and everything more or less attached to it. Ownership below to the center of the earth and above to the heavens.
Revenue derived from the rental of sleeping rooms, no-show charges, early departure and late checkout fees, pet fees, and charges for rollaway beds and cribs.
Revenues from the rental of stores or other space in the hotel for activities not operated by the hotel. Also includes income from interest, cash discounts, cancellation and attrition penalties, and other services provided to guests by outside firms for which the hotels receives a commission or concession.
Includes salaries, wages, and benefits for the front desk personnel, reservations staff, housekeeping and laundry workers, bell staff, and concierge personnel. In addition, rooms department expenses include linen, guest supplies, commissions to travel agents, complimentary breakfast and social hour costs, and reservation system charges assessed by franchise companies.
Terms for: S
The exchange of one asset or liability for a similar asset or liability to lengthen or shorten maturities, also raise or lower coupon rates, or exchange fixed and variable payment streams.
The process by which the precise physical boundaries of a parcel of land are measured. Legal descriptions appear in title reports, sales contracts, deeds, mortgages, notes, and other instruments involving rights and interests in real estate. When land is conveyed from one party to another, the survey provides a visual representation of the legal description. An ALTA survey additionally delineates the exact location of all improvements, encroachments, easements and other matters affecting the title to the property in question. A survey may be required by a title insurance company whenever the company is requested to issue an ALTA Extended Coverage Policy.
A land (ground) lease in which the rent payment due from the lessee (borrower) to the lessor (land owner) is subordinated to the debt service owed by the lessee (borrower) to the mortgagee (lender). Normally, a ground lease contains a subordination clause because without it, construction of improvements may be more difficult. A mortgage lender will consider the full value of the property only with a subordinated ground lease.
Term associated with the operation of a property wherein the income and expenses have achieved and maintained a consistent level of performance. The minimum is usually established when the property has performed at specific minimum for ninety (90) days.
The difference between the rate at which money can be borrowed and the rate at which it is loaned. Typically the rate (percentage amount) that is added to the Treasury Bill by a Lender when quoting a rate to a borrower.
The periodic (monthly or annual) payment made by the purchaser of a mortgage (Lender) to the mortgage banker (correspondent) who originally made the loan for servicing the loan. The fee, which varies from one-eight to one-half percent of the outstanding loan balance, covers the administrative costs of servicing such as collection and payment of property taxes and property insurance premiums. Servicing rights may be bought and sold along with the loan.
Real property owned by one spouse exclusive of any interest of the other spouse.
A mortgage loan that requires level annual payments sufficient to meet the interest requirements and fully repay the entire principal over its term.
The means by which existing first mortgages are bought and sold. The secondary mortgage market provides a lender with an opportunity to sell a loan before its maturity date, thereby providing greater availability of funds for additional mortgage lending.
A method of estimating the value of real property by comparing recent sales of comparable properties to the subject property after making appropriate adjustments for any differences. The comparable properties chosen should be substantially similar to the subject property and should be arms-length transactions.
A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.
Expenditures to sell and promote the hotel’s services and enhance its image to the general public. These include salaries, wages, benefits, media advertising, agency fees, e-commerce, outside sales representation, outdoor advertising, trade shows, and public relations. Also included in this expense category are payments made to franchisors and referral agencies for franchise royalties, marketing assessments, and guest loyalty programs. Does not include payments made for reservation services and/or systems.
Terms for: T
A conveyance of real estate to a third party to be held for the benefit of another. Commonly used in some states in place of mortgages that conditionally convey title to the lender.
A commercial lease in which the tenant is required to pay all operating expenses of the property and the landlord receives a net rent amount each month.
A review of all recorded documents affecting a specific parcel of land to determine the present condition of title. An experienced title officer or attorney reviews and analyzes all material relating to the search, then determines the sufficiency and status of title for insurance of a title insurance policy.
Insured statement of the condition of title or ownership of real property. For a one-time-only premium, the named insured and their heirs are protected against title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from it. In the event of a claim, the title company provides legal defense from the policyholder and pays any covered losses incurred as a result of such claim.
(1) A combination of all the elements that constitute a legal right to own, possess, use, control, enjoy and dispose of real estate or a right or interest therein. (2) The rights of ownership recognized and protected by the law.
Reports required by a mortgage lender prior to funding a loan that include MAI Appraisal, Phase I Environmental and Physical Condition reports.
An account required by a mortgage lender and established at the time of closing for the purpose of reserving funds estimated to be necessary to improve retail and office space. Funded through monthly contributions and maintained by the Lender.
An account required by a mortgage lender and established at the time of closing to fund annual property tax assessments and hazard insurance premiums for the mortgaged property. Funded through monthly contributions and maintained by the Lender.
Properties with rent and occupancy restrictions which meet or exceed the following requirements:
- at least 20 percent of all units have restricted rents affordable to households earning no more than 50 percent of area median income as adjusted for family size; or
- at least 40 percent of all units have restricted rents affordable to households earning no more than 60 percent of area median income as adjusted for family size.
A written agreement from a Lender to provide permanent financing following construction of a planned project. The takeout commitment usually contains specific conditions for occupancy and income, such as a certificate of occupancy and/or a certain percentage of unit sales or leases in place and paying rent. Most construction lenders require takeout financing prior to beginning construction.