GLOSSARY OF REAL ESTATE TERMINOLOGIES

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1. ABSOLUTE FEE SIMPLE TITLE – refers to a title that is unqualified it is best proof of real property
ownership free from all conditions, limitations, restrictions, liens and encumbrances of any kind
whatsoever.
2. ABSTRACT OF TITLE – a summary digest of the conveyance, transfer and any other facts relied as
evidence of title, together with any immediately due and payable upon the happening of a certain
event.
3. ACCELERATION OF CLAUSE – refers to a clause in a trust deed or mortgage giving the lender the
right to call all sums owing him to be immediately due and payable upon the happening of a certain
event.
4. ACCELERATION OF DEBT - the calling for immediately due of all future installment on a debt
because of a contractual default.
5. ACCEPTANCE – it is the whereby the seller or the principal’s agent agrees to the terms and
conditions of sale and approves the negotiations thereof and acknowledged receipt of the deposit to
subscribed the agreement of sale.
6. ACCRETION – the act of gradually increasing a land area by a gradual deposit of solid material
through the movement of waters or the river’s current
7. ACCRUED DEPRECIATION – in appraisal, it the loss of utility that causes the value of a property
to be less than its acquisition cost or the reproduction cost for a new one.
8. ACKNOWLEDGMENT – a formal declaration before a Notary Public or duly authorized officer by
a person who executed an instrument acknowledging the execution thereof to be his act and deed.
9. ACQUISITION – is the act of acquiring or procuring property by a person.
10. ACQUISITION COST – the amount or cost of money or other valuable consideration needed to
obtain title to a property, it includes registration fees, transfer expenses, documentary stamps,
insurance, attorney’s fees, surveying fees and other cost relative to the direct procurement of a
property in addition to the purchase price
11. ACTUAL/EFFECTIVE AGE – refers to the number of years that elapsed since the structure’s
construction or building construction.
12. ACTUAL PRICE – the contract price stated in the Sales Contract or the actual amount paid for the
sales transactions
13. ACTUAL USE – refers to the purpose for which the property is principally or predominantly
utilized by the person in possession thereof.
14. AD VALOREM – a form of tax according to valuation.
15. ADJUSTABLE RATE MORTGAGE (ARM ) – used to describe any type of mortgage that does not
have a fixed rate for the term.
16. ADJUSTMENT FOR FINANCING POINTS – refers to the adjustments made by the Appraiser
based on the markets reactions. But not based on a straight “dollar for – dollar” adjustment.
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17. ADMINISTRATOR – a person appointed by the probate court to manage and settle the estate of
a decrease person who left no valid or a testator who has no executor, it also refers to a person
entrusted to administer the property in favor of another person.
18. ADVERSE LAND USE – it means land use having an unfavorable effect on nearby property, like:
a junkyard in the minds of expensive country estates.
19. ADVERSE POSSESSION – is a mode of acquiring title to land by having an open notorious and
uninterrupted possession thereto. It also refers to the right of an occupant to obtain title of a land
from the real owner without the owner consent, where possession has been actual, hostile, visible,
open and continuous for the statutory period.
20. AFFIDAVIT – a sworn written statement or declaration.
21. AFFIRM – to confirm, ever ratify or verify
22. AFFIRM JUDGMENT – it is when an appellate court ratifies and confirms the judgment, decree
or order of a lower court.
23. AFTER TAX CASH FLOW – means that net cash flow after deducting the tax payments
24. AGE-LIFE-METHOD – a method of computing depreciation based on the ratio of the
effective age as the projected economic life of the structure.
25. AGENCY – a legal relationship, whereby a person (the agent) acts for on in behalf of another (the
principal) with the latter’s authority.
26. AGENT – is one who performs functions or who represents another from whom the authority
was granted.
27. AGREEMENT OF SALE OR CONTRACT OF SALE – is a written agreement between the Seller and
the Buyer on the terms and conditions or the stipulations of the contract.
28. AGRICULTURE – refers to the science and art of farming.
29. AIR RIGHTS – is the ownership right to the space, or a portion thereof above the property. It also
refers to the rights of the property owner to use, control or occupy the air space over the property,
subject to the aerial navigation and governmental regulations.
30. ALIENATION – is the act of transferring property possessions from one person to another.
31. ALLUVION/ALLUVIUM – refers to the land formed by the process of accretion.
32. AMENITIES – in realty development, it is anything that adds to one’s comfort and convenience.
It also refers to tangible and intangible features that enhance or adds value to a real estate.
33. AMENITY – benefits or other attractions of property such a view, pride of ownership, fireplace
and others.
34. AMORTIZATION – refers to the liquidation of a financial obligation by installment payments
wherein the principal sum of the debt is reduced over its life. It is also a systematic reduction of the
principal balance of a loan.
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35. AMORTIZATION RATE – is the ratio or percentage to be applied to loan payment for the
reduction of the principal balance.
36. AMORTIZATION TERM – is the period of time needed to fully pay the principal amount of
the loan.
37. ANCHOR TENANT – a major tenant in a retail property, who serves as a magnet in attracting
customers.
38. ANNUAL DEBT SERVICE – the total yearly payments on a loan.
39. ANNUALIZED SQUARE FOOT RENT – the annual rent divided by the total area
40. ANNUITY – is a yearly payment of a sum of money chargeable to the land or other property
charge. It is the present value of a series of equal payments made at fixed intervals over a fixed period
of time.
41. ANTICHRESIS – is an accessory contract, whereby the right to receive the fruits over the debtor’s
property is given to the creditor with the obligation to apply the proceeds of sales thereof to the
payment of the interest and thereafter to the principal obligation.
42. ANTICIPATION PRINCIPLE – the principal holding which value is determined by the present
worth of benefits and what one expects to receive in the superior court to review the case and correct
or reverse it.
43. APPEAL – the bringing of the case from an inferior court to a higher court alleging commissions
of error or injustice and asking the superior court to review thereof and correct or reverse it
44. APPRECIATION – refers to the increase in value due to economic causes or inflation. It is also a
temporary or permanent increase in the property value due to the economic causes. It is the opposite
of depreciation.
45. APPURTENANCE – it is something annexed to another thing which may be transferred incidental
to it. It is also a property right which is attached to the property that will go with the title thereto
such as: easement, barn, garage, orchard, etc. it is also define as the incidental rights and interest to
the land and its improvements.
46. ARMS-LENGTH TRANSACTION a transaction between parties who are knowledgeable =,
capable and not under pressure.
47. ASSESSED VALUATION – a valuation placed upon property by a public officer or board, as a basis
for taxation.
48. ASSESSED VALUE – the value placed on taxable property by the Assessor for ad valorem tax
purposes or as a basis for taxation.
49. ASSESSMENT – the act or process of determining the value of a property or proportions thereof,
subject to tax including the discovery, listing and appraisal of properties. It is also the determination
by the government on the value of the property for taxation purposes.
50. ASSESSMENT LEVEL – is the percentage to the fair market value (FMV) to determine the taxable
or assessment or assessed value of theproperty.
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51. ASSESSOR – the official who has the responsibility of determining assessed value of real
properties.
52. ASSET – property that is owned and has value
53. ASSET VALUATION – valuation of land, buildings, plant, equipment and machinery generally for
incorporation into business accounts.
54. ASSIGNS OR ASSIGNEE – one to whom property is assigned or transferred, also a person
empowered to act for another.
55. ASSIGNMENT – is the transfer of any property or property right to another either real or personal
property.
56. ASSIGNOR – one who assigns or transfers property
57. ASSUMED MORTGAGE – is an existing mortgage whereby a property buyer assumes the
obligation of paying the mortgage.
58. ASSUMPTION OF MORTGAGE – the taking of title to a property by a grantee, who assumes
liability for payment of an existing note secured by a mortgage or deed of trust overt the property
and becoming a co-guarantor for the payment thereof.
59. ATTACHMENT – is the seizure of property by court order to satisfy judgment for the settlement
of debt.
60. ATTORNEY-IN-FACT – one who is authorized to perform certain acts in behalf of another under
a power of attorney either limited to specific act(s) or general.
61. AUTHORITY TO SELL/AUTHORITY TO NEGOTIATE FOR SALE – is a listing contract between
the seller and the broker to produce a buyer for the property.
62. AUTOMATIC REDEMPTION CLAUSE – is a stipulation in a blanket mortgage which provide that
when a buyer of one or more lots pays in full the purchase price, part of the payment shall be applied
to the mortgage obligations and correspondingly, the mortgage shall release the said lot(s) from the
mortgage.
63. AVULSION – is the sudden loss or removal of land by the action of water flowing over it. This is
the opposite of accretion. It also refers to the abrupt loss of land from the property owner to that of
another.
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64. BACKFILL – is the replacement of excavated earth in a hole or against a structure.
65. BALANCE PRINCIPLE – the principal that holds that value is educated to the amount and utility
of real estate.
66. BALLOON PAYMENT – is a term used when the final installment payment of a note is greater
than the preceding installment payments and it pays the note in full.
67. BASE AND MERIDIAN – is the imaginary lines used by surveyors to find and describe the location
of both private and public lands.
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68. BASELINE – a horizontal line measured with special accuracy to provide a base for survey by
triangulation. It is also an imaginary line through the initial point of a principal meridian used to
establish the location of township lines in the government survey system.
69. BENCH MARKS – refers to the durable markers used by surveyors to mark boundary locations.
70. BENEFICIARY – the person designated to receive the benefit of some transactions, like: trust, the
proceeds of a life or accident insurance policy, etc.
71. BEQUEATH – to give, to hand down or leave by a will, given by the terms of the will.
72. BETTERMENT – an improvement that adds to the value of real estate, such as sidewalks,
sewerage’s, etc.
73. BILL OF SALE – a formal document used to transfer title of a personal property.
74. BINDER – an agreement of earnest money deposited for the purchase of real estate as evidence
of good faith on the property of the buyer.
75. BLANKET MORTGAGE – is a single mortgage covering more than one piece of real estate.
76. BLIGHTED AREA – is a declining area which a real property value is seriously affected by
destruction of economic forces, such as: encroachment in harmonious usages, infiltration of lower
social and economic classes of inhabitants, rapidly depreciating buildings, etc.
77. BONAFIDE – refers to legitimacy in good faith and without fraud.
78. BOOK VALUE – is the worth of a property as reflected in the financial report.
79. BREACH – is the breaking of a law or failure of duty either by omission or by commission, such
as breach of peace, breach of contract, breach of trust, etc.
80. BUFFER STRIP – a strip of land located between two types of land use areas, i.e separation
between residential and industrial. Often, this parcel is unimproved except for landscaping and its
primary function is to lessen friction resulting from two incompatible or inharmonious land uses.
81. BUILDING CODE – is a local rule regulating the construction of buildings. It also refers to
ordinance passed by local government units setting minimum standards for real estate
improvements.
82. BUILDING EFFICIENCY – refers to the ratio of rentable space to gross building area.
83. BUILDING LINE – a line established by law at a certain distance from a street line or from the
front and sides of a lot beyond which no building can project. It is also called as setback lines.
84. BUNDLE OF PERMIT – a document issued within certain jurisdiction granting permission to
build or construct a structure on a particular location or site.
85. BUNDLE OF RIGHTS – the collection of rights usually found in ownership of real estate, including
rights to possess, use, quiet enjoyment, and sale of the property.
86. BUSINESS VALUATION – the act or process of arriving at an opinion or estimation of the value
of a business or entity or an interest therein.
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87. BUSINESS VALUER/APPRAISER – a person who by education, training and experience is

qualified to perform a valuation of a business, business ownership interest, security and/or
intangible assets.
88. CAP RATE – a rate used to convert an income stream into value.
89. CAPRICIOUS VALUE – value estimate derived by observing completed transactions involving a
large degree or amenities or other personal and unpredictable factors.
90. CAPITAL GAINS – is the amount of net proceeds from the sale of capital asset that exceeds its
book value. It is also the profits resulting in the sale of capital investment, such as: stocks, real estate,
etc. which are taxed as income.
91. CAPITALIZATION – in appraisal, it is the process of determining the present value of property
by dividing the net income by the capitalization rate to arrive at an estimate of the present worth of
expected future incomes.
92. CAPITALIZATION RATE – a reasonable percentage rate or return based on net income. The
capitalization rate is used to determine value.
93. CASH FLOW – refers to the cash remaining in a business after all operating expenses and debt
services have been paid out, but no the income taxes and deductions for depreciation yet.
94. CASH FLOW ANALYSIS – a study of the anticipated movement of cash inflows and outflows of an
investment.
95. CAVEAT – is a notice or warning not proceed and not to do an act.
96. CAVEAT EMPTOR – means let the buyer beware, hence, he should examine the properties as he
is buying at his own risk.
97. CEASE AND DESIST ORDER – an order from a government authority directing a person violating
the law to refrain from performing further act or continuance of an existing act(s)
98. CERTIFICATE OF TITLE – is the transcript of the decree of registration made by the Register of
Deeds in the Registry in favor of a person signifying ownership of property.
99. CHAIN OF TITLE – a history of conveyances, encumbrances and other transactions and
documents affecting a title from the time the original patent was granted or as far back as records
are available.
100. CHATTEL – refers to the personal property or any item both movable and immovable which are
not real property.
101. CHATTEL MORTGAGE – refers to the mortgage of personal property.
102. CLEAR HEIGHT – from the floor to lower surface of roof that supports the beams.
103. CLEAR, FREE AND UNENCUMBERED – a legal expression which means that a property is free
from any liens or claims against it.
104. CLIENT – refers to any party for whom an appraiser or any professional performs a service.
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105. CLOSED MORTGAGE – is a mortgage which cannot be paid until its maturity or unless the
creditor consents to earlier payment.
106. CLOSED-END MORTGAGE – refers to a mortgage that no provision of increasing the balance. It
is the opposite of open-end mortgage.
107. CLOUD ON THE TITLE – an outstanding claim or encumbrance revealed by a title search which
is actually invalid or inoperative, but affects or impairs the owner’s title to a property unless removed
by a quit-claim or court action.
108. COLLATERAL SECURITY – a separate obligation attached to a contract to guarantee its
performance, such as the transfer of property or other contracts or valuables to insure the
performance of a principal agreement
109. COLLUSION – is an agreement between two or more persons to defraud another of his rights or
to obtain an object forbidden by law.
110. COLOR OR TITLE – is one which appears to be a good title but which is not a title in fact.
111. COMMERCIAL PAPER – bills of exchange used in commercial trade.
112. COMMISSION – an agent’s compensation for performing the duties of his agency; in real estate
practice, a percentage of the selling price of property, percentage of rentals, etc.
113. COMMITMENT – refers to a pledge, promise or firm agreement.
114. COMMON AREAS – is area set aside in a particular development for the enjoyment and
utilization of all the property owners which area is often improved as recreational facilities.
115. COMMON LAW – is the body of law created by the positive declaration of the legislature, or by
custom and decided cases rather than from codified law.
116. COMMUNITY OR CONJUGAL PROPERTY – refers to the properties accumulated through the
joint efforts of a husband and wife living together.
117. COMPACTION – a process of tamping down loose and soft soil, usually added to fill-in low places
or to raise it level in order to compress or condense it to carry the weight of any structure that will
be built on top.
118. COMPARABLE INTEREST – refers to comparison of properties that are of similar nature.
119. COMPONENT VALUE – value of those components, created by the separation of property
interest.
120. CONDEMNATION – is the act of the government of taking private property for public use in the
exercise of eminent domain power.
121. CONDITIONAL SALE – refers to the sale where delivery is made to the buyer however title
thereto remains in the seller until the fulfillment of the agreed condition(s).
122. CONDITIONAL SALE CONTRACT – is a contract for the sale of the property stipulating that
delivery of the subject property can be made to the buyer, but title thereof shall remain with seller
until the fulfillment of the condition of the contract.
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123. CONSIDERATION – the material cause which moves or induces the contracting party to enter
into a contract, the price that the buyers pays in buying the property and the seller is willing to accept.
124. CONSTRUCTIVE NOTICE – is an information or notice given by the public records
125. CONSULTING – the act of providing realty information, analysis of realty data, conclusions and
recommendation on diversified realty problems other than estimating the value.
126. CONTRACT RENT – the rent for the lease of property as stipulated by the lessor and the lessee.
127. CONVERSION – is a change from one character to another.
128. CONVEYANCE – is the transfer of a property from one another. It denotes an instrument by
which the transfer is made.
129. CORNER INFLUENCE – the added desirability or utility of a property due to its frontage to two
streets, which provides better ventilation for residential purposes, easier accessibility and more
commercial and industrial utilization.
130. CORNER LOTS – refers to the lot with two streets in front of it. It is more valuable than interior
lots.
131. CORPORATION – is a creature of law, having certain powers and duties of a natural person.
Having been created by law, it may continue for any length of time as the law prescribed.
132. CORPOREAL – is a tangible real estate like: land and buildings.
133. CORRELATION – refers to the bringing into a mutual relation with another thing and the
showing of their relationship.
134. COVERED PARKING – refers to the garages, carports, or underground parking facilities.
135. CROSS-EXAMINATION – the examination of a witness in a disposition or trial by the opposing
party to the one who produces him/her following the direct examination for the purpose of testing
its truth and for impeachment of the witness.
136. CURABLE DEPRECIATION – is a depreciation that may be corrected at a cost less than its
contributory value.

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137. DEBT SERVICE – is the payment of principal and interest for a loan.
138. DEED – a legal instrument being executed and delivered that conveys an estate or an interest
thereof.
139. DEED OF TRUST – is a mortgage instrument where a third party called trustee holds title to the
real estate for the benefit of a lender.
140. DEFAULT – refers to a failure for the fulfillment of a contractual obligation.
141. DEFERRED MAINTENANCE – means a postponement of a repair or rehabilitation.
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142. DEPONENT – a person who testifies under oath, which testimony is reduced to a written record
called transcript at a formal hearing called a deposition.
143. DESCENT – is the transfer of property at death in the absence of a will.
144. DEVISE – an act of transferring a property at death by means of a will.
145. DIMINISHING RETURNS – point at which returns fail to increase in proportion to increased
investments.
146. DIRECT CAPITALIZATION – value income of a property based on one-year income stream.
147. DIRECT EXAMINATION – the first examination of a witness is court by the party on whose
behalf the witness was called.
148. DISCLAIMER – is a denial of any interest or agreement.
149. DISCOUNT POINTS – a fee charged by lenders when the loan is made to increase the yield. Each
one-percent of the loan is termed a “point”.
150. DISCOUNTING – a converting future cash flows worth of a future income stream.
151. DISCOVERY – is a legal process and techniques by which one party to a lawsuit obtains
information from the adverse party.
2018. DOCUMENTATION – a written evidence of the facts contain.

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152. EASEMENT – is a right, privilege or interest to a specific purpose that one party has in the land
of another.
153. ECONOMIC RENT – the rental of property should receive by the property condition, in contrast
to its calendar age.
154. EFFECTIVE GROSS INCOME – is the potential gross income/receipts less allowance for
vacancies and collection losses.
155. EFFECTIVE MONTHLY RATE – the sum of the number of month’s rent actually paid multiplied
by the price per square foot, divided by the number of months’ rent due under the lease (nominal
rent).
156. EMINENT DOMAIN – is a legal act of the government power to acquire private property for
public use after paying just compensation. It is sovereign power of the State to acquire or appropriate
private property for public use with just compensation.
157. EMPTIO SPEI – the sale of hope or expectation
158. ENCROACHMENT – is an unlawful intrusion of another adjacent property. Any extension over
one’s property line which intrudes or invades in a highway or sidewalk; the building of structure or
construction of any improvement partly or wholly on the property of another; trespass upon
property of another.
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159. ENCUMBRANCE – is a lien, charge, claim or any restriction attached to and binding upon real
property which lessens or limits its value. Liens are money encumbrances which make the property
as a security for the payments of an obligation, such as: mortgages, or taxes. Anything which affects
or limits the fee simple title to a property, such in the case of easement, right of way, mortgages or
restrictions of any kind. Any claim, lien, charge, or liability attach to and binding on real property
which may lessen its value, or burden, obstruct, or impair the use of a property but not necessarily
prevent transfer of title, a right or interest in a property held by one who is not the legal owner of the
property.
160. EQUITY – is the interest or value which an owner has in real estate over and above the liens
against it.
161. EQUITY (DIVIDEND) OR EQUITY CASH FLOW – it is the Net Operating Income minus the
annual debt services.
162. EQUITY DIVIDEND RATE - the sum of the Net Operating Income minus the annual debt
services, divided by the equity (down payment).
163. EQUITY OF REDEMPTION – is the right to redeem property during the foreclosure period. In
judicial, the mortgagor’s right to stop the auction sale of his mortgaged property by paying the
mortgage obligation within 90 days from receipt of the Court’s judgment or even thereafter provided
payment is made before the foreclosure sale is CONFIRMED by the Court.
164. EROSION – is the wearing a way of lands by the action of the water or wind.
165. ESCALATION/ESCALATOR CLAUSE – a clause in a contract which provides for increase or
decreases in certain items to cover unpredictable changes, like: adjustments in tax rates or operating
costs or to cover specified contingencies. When applied to interests, it should be coupled with a de-
escalation provision. An agreement in a lease contract allowing for increases in rent based on some
event.
166. ESCHEAT – a written agreement which places the property to the care of a third party (escrow
agent) and not be put into effect any agreement until certain conditions are fulfilled. Is the revision
to the estate of a deceased person when there is no valid will and there is no longer heir.
167. ESCROW – money, document or any item delivered to a neutral person to be held by him, and
transferred to the grantees only upon the fulfillment of a specified precedent condition. It also refers
to the deposit of instrument and funds with instructions to a third neutral party to carry out the
provisions of an agreement or contract.
168. ESTIMATE – is an opinion of a competent person based on analysis of data.
169. ESTOPPEL – a legal prevention whereby a party who by his own intentional or deliberate
declaration, act or omission prompted another to believe a particular thing to be true and made that
person act on the faith of such representation, cannot latter on be permitted to falsify such
declaration, act or omission.
170. EVALUATION – is a study of the nature, qualify or utility of a parcel of real estate or interest in
real property.
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171. EVICTION – is the act of depriving a person of his possession in a real property by a process of
law and in pursuance of a court order.
172. EXCLUSIVE AGENCY LISTING – is a written instrument giving one agent the right to sell
property for a specified time.
173. EXCLUSIVE RIGHT TO SELL LISTING – a written agreement an owner and an agent giving the
agent the right to collect a commission even of the property is sold by the owner himself or by anyone
other than broker during the term of the agreement.
174. EXECUTE – to complete, to make, to do, follow up. To execute a deed is to make a deed, including
the signing, selling, and delivering. To execute a contract is to perform the stipulations thereto, to
follow out, to end and to complete.
175. EXECUTOR – the person named in a will with authority to carry out its provisions.
176. EXPERT WITNESS – a person possessing training, education and experience in a specialized
field or profession who testifies in deposition or at the lawsuit proceedings.
177. EXTERNAL OBSOLESCENCE OR ECONOMIC OBSOLESCENCE – is loss in the use or value of
property arising from external factors, surroundings land uses or environmental force.

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178. FACTOR – is the reciprocal (one divided by a number) of a given rate.
179. FEASIBILITY ANALYSIS – is a study of a cost-benefit relationship of an economic endeavor.
180. FEASIBILITY STUDY – refers to the study or analysis of a proposed a project property with
emphasis on it attainable revenue, it probable expenses, its advantageous usage and design. It is often
used by developers to entice investors to put money for a proposed development. Such a study is
required by some mortgage investors and lending institutions prior to granting a loan commitment.
181. FEE SIMPLE – in modern estates, the term “FEE” and “FEE SIMPLE” are substantially
synonymous. “Fee Simple Absolute” is an estate in real property by which the owner has the greatest
power over the title which is possible to have, being an absolute estate. In modern use, it is expressly
established as the little of real property in the owner, without limitations. With Fee Simple, the owner
may dispose the property by sale, trade, or will. It is an absolute ownership of realty free from all
conditions, limitations or end.
182. FEE SIMPLE ESTATE – is the greatest interest one can have in real property. An estate that is
unqualified, with indefinite duration, freely transferable and inheritable.
183. FIDUCIARY – is a person in a position of a trust and confidence. In real estate, the principal and
the broker has a fiduciary relationship under the rule of agency.
184. FIXTURES – appurtenances attached to the land or improvements which usually cannot be
removed without agreement, since it became part of the real property. Example: Plumbing fixtures,
store built into the property, etc..
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185. FORECLOSURE – is the legal procedure where a property pledge as security for a debt is sold
to at public auction and the proceeds thereof shall be applied as payment of debt.
186. FORFEITURE – is the loss of money or anything of value, due to failure to perform an agreement
of purchase or sale.
187. FRACTIONAL APPRAISAL – is an appraisal of portion of fractional interest in real estate.
188. FRAUD – the international and successful employment of cunning, deception or artifice used to
deceive or cheat person who acted in good faith, which resulted to loss or injury.
189. FREEHOLD ESTATE – is an estate in land held for life or with the right to pass it on through
inheritance.
190. FRONTAGE – refers to the length of a property, abutting a street, with few numbers of feet that
fronts the street. Frontage differs from width which sometimes decreases or increases as the lot
extends back from the street.
191. FUNCTIONAL OBSOLESCENCE – is the loss of value because of changes in market standard and
outmoded characteristics of the property.

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192. GENERAL WARRANTY DEED – a conveyance containing the grantor’s full warranty of good
title promising to warrant and defend forever the title conveyed against the lawful claims of all
persons whatsoever. A deed carrying the seller’s warranty that title is good in fee, that it is free and
clear of all liens and encumbrances, and giving that grantor’s assurance that he will defend the title
against the claims of all persons.
193. GIFT DEED – a deed where there is no material cause but the only consideration is love and
affection.
194. GRANTEE – is the buyer who by means of a deed, receives title or takes title to property. Is a
person receiving title in deed, usually the owner- seller.

195. GRANTOR – is a person who conveys title of a property to another person (grantee) by means
of a written agreement.
196. GROSS INCOME MULTIPLIER (GIM ) – a figure or ratio computed by dividing the annual gross
income of a rental property into the sales price. This figure, when multiplied by gross income, can be
useful in estimating market value of unsold real properties. Is the result of dividing the sales price by
the annual gross income.
197. GROSS RENT MULTIPLIER (GRM ) – is the result of dividing the sales price by the monthly
gross rent.
198. GROUND FLOOR BUILDING AREA – is the first floor square footage or the building “footprint”.
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199. GROUND RENT – refers to the net earnings of an improved property after deducted the direct
expenses thereof. This is also called as an economic rent.

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200. HABENDUM CLAUSE – is the “to have and to hold” clause of a deed which defines or limits the
estate granted.
201. HEREDITAMENTS – the largest and most inclusive classification of property which includes
any and all real or personal property, or property rights, tangible or intangible, practically anything
and everything capable of being inherited. This term is now without legal importance.
202. HOLD-OVER CLAUSE – a provision in a listing agreement which entitles the broker to receive
the commission even if the sale is closed after the period of authority, provided that he/she has
negotiated with said buyer and has given notice to the seller during the period of his authority.
203. HOMESTEAD – is the house and lot that constitute family residence.
204. HOMESTEAD EXEMPTION – the law exempting a homestead from seizure or forced sale to
meet debts but excluding valid mortgages and tax liens.
205. HYPOTHECATE – to pledge a property to another as security of the mortgage. To give
something as security without the necessity of giving up its possession.

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206. IMPOUND – funds or payments taken from a mortgagor and held by a lender or fiduciary for
purpose of paying property taxes, assessment and insurance. The money can be withheld from the
mortgage payments to further protect the mortgagee against adverse claims and increased risk
resulting from non-payment of taxes or insurance.
207. IMPROVED LAND – land or which construction or development work has been initiated or
completed. The term can also be applied to land improved by roads, sewage and water lines, shell
cabins, houses, outbuildings, etc.
208. IMPROVEMENTS – is a change or addition to land or real property to make it more valuable,
example: sewer, fence, roads, etc. it also refers to buildings, structures and other things permanently
attached to the land.
209. INCHOATE – meaning not yet completed or still imperfect, e.g., contracts are inchoate until
executed by all the parties who should join the execution.
210. INCOME APPROACH – an approach to valuation of property based on concept that value is
relative to income. It refers to the reliance of the analysis, which converts anticipated earnings to
derive from the ownership of the property into value estimate.
211. INCOME TO EXPENSE RATIO – refers to the percentage of income after the expenses is divided
by gross income.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

212. INCOMPETENT – not capable, e. g. any insane person or thought not insane, by reason of old
age, disease, weakness of mind or any other cause is unable, if unassisted to take care of himself or
manage and take proper care of his property and by reason thereof will be likely to be deceived by
unscrupulous persons.
213. INCORPOREAL – is an intangible and opposite of corporeal.
214. INDORSEMENT – is the act of signing one’s name on the back of a check or a note, with or
without further qualification.
215. INHERITANCE – is a legacy, bequest, or something inherited.
216. INJUNCTION – is a writ or court order that either prohibits a person or groups from carrying
out an action or orders an action to be done.
217. INSTALLMENT NOTE – refers to a note that provides an installment payment of a particular
sum of money to be paid on a specified dates.
218. INSTRUMENT – a sworn written document created to affect the rights of the parties, like:
contract of sale, lease, deed, will, etc.
219. INTEREST – is the forbearance of money for its use.
220. INTERNAL RATE OF RETURN (IRR ) – the rate at which discounted return equals the cost of
the investment. The discount rate at which a series ofcash flows equals the amount of the original
investment or project anticipated, defending on the market.
221. INTESTATE – is one whereby the decedents have no will or having made a will which is
defective in form.
222. INVESTMENT ANALYSIS – is a study that reflects the relationship between acquisition price
and anticipated future benefits of real estate investments.
223. INVESTMENT VALUE – it relates to the individual investor and considers the value of property,
financing terms, and potential future uses and value.
224. INVOLUNTARY LIEN – is a lien imposed upon a property without the owner’s consent, like:
taxes, special assessment, etc.
225. IRREVOCABLE – means it is incapable of being recalled or revoked.

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226. JOINT NOTE – a note signed by two or more persons who have equal liability for payment.
227. JOINT TENANCY – joint ownership by two or more persons with the right of survivorship, all
joint tenants own equal interest and have equal rights in the property.
228. JUDGMENT – the official and authentic decision of a court, determination the rights and claims
of each party to the lawsuit submitted for its determination.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

229. JUDGMENT LIEN – Is a lien on property resulting from a court decree in favor of a creditor or
another person.
230. JUDGMENT – the final determination of a court of competent jurisdiction on matters presented
to it, money judgments that provides for the payment of claims as presented to the court or is award
of damages, etc.
231. JUNIOR MORTGAGE – is a mortgage second in lien to a previous mortgage.
232. JURISDICTION – is territorial area which is controlled by laws or courts. It is the authority by
which judicial officers take cognizance and decide cases. It is right and power which a judicial officer
has to enter upon the inquiry for the determination of a case.

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233. KEY LOT – is a lot adjoining a corner, at the right angle to it and fronting the intersecting streets.

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234. LACHES – is the unreasonable delay or negligence in asserting one’s legal rights which serves
to lose those rights.
235. LAND – refers to the earth’s surface, the natural growth and timber attached to it and the
mineral beneath it.
236. LAND CONTRACT – a contract ordinarily used in connection with the sale of property in cases
where the seller does not wish to convey title until all or certain part of the purchase price is paid by
the buyer, often used when the property is sold on a small down payment. It is contract of a real
property financed by the seller, without giving the title thereof until all payments are completely
made.
237. LAND DEVELOPER – refers to the person who develops or improves the subdivision project or
condominium project for and in behalf of the owner or as owner thereof.
238. LAND OWNER- refers to the registered owner of the land.
239. LANDS, TENEMENTS AND HEREDITAMENTS – is a purchase used in early in English law to
express all sort of property of the immovable class. At present, it refers to the real estate with all fixed
improvements therein.
240. LEASE CONTRACT – is a contract between the lessor and the lessee of a property.
241. LEASEHOLD – is the interest or estate which a lessee has over a real estate by virtue of the lease.
242. LEGAL DESCRIPTION – is the description by which a property can be definitely be located by a
government and approved recorded maps.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

243. LESSEE – a tenant or one who contracts to rent a property under a lease contract. A person to
whom a property is leased.
244. LESSOR – is the owner who enters into a lease with a tenant. It is landlord. He is the person who
provides the lease property.
245. LEVEL ONE INSPECTION – an inspection of real estate and improvements using only the senses
(Sight, smell feel) for a evidence of environmental hazards.
246. LEVERAGE – a means of obtaining a potentially greater rate of return on capital investment
through the use of borrowed funds. When purchasing real property, greater leverage is obtained
when there is a comparatively low down-payment relative to loan size.
247. LIEN – is a claim of a person upon the property of another as security for the payment of
obligation or debt.
248. LIFE ESTATE – an estate or interest in property held during the life of a specified natural person.
249. LIKE-KIND PROPERTIES – the term is used to describe properties that can be exchanged or
traded to gain exemption from capital gains taxation. It includes all kinds of real estate except the one
owned by a dealer.
250. LIQUIDATION VALUE – refers to an amount that would be realized from disposition of the
property in the used market assuming for a relative short period of time.
251. LIS PENDENS – literally, a pending suit. It is an annotation in the record of property title that
serves as a warning that one who acquires an interest over said property does so at risk or subject to
the eventually of the litigation.
252. LISTING – is an agreement between the property owner and the agent for the latter to negotiate
the property sale at stated rate of commission.
253. LITIGATION – is the act of carrying a lawsuit.
254. LOAN TO VALUE RATIO (LTV) – is the relationship between the amount borrowed and the
appraised value of the property.
255. LOCK-IN PERIOD – is a length of time during which prepayment on a note is not allowed by the
Lender. During the period, a borrower is prohibited from selling or transferring the property secured
by the note.

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256. MARGINAL LAND – is land which barely pays the cost working on it or using it.
257. MARKET ANALYSIS – is a study of real estate market conditions for a specific type of property.
259. MARKET PRICE – the price actually paid or the amount received by the seller for his property
regardless of outside pressures or influence.
260. MARKETABLE TITLE – is a title free and clear of objectionable liens or encumbrances.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

261. MASS APPRAISAL – is the process of valuing an inverse of properties at a given date and
allowing for statistical testing.
262. MASS APPRAISAL MODEL – a mathematical expression of how supply and demand factors
inter-act in a market.
263. MASTER PLAN – is a basic comprehensive plan for dealing with the effects on a community of
social and economic changes. It is an incorporated plan of ways and means of adjusting to the
changing situation based on the phase of time. It is a comprehensive plan to guide the long-term
physical development of a particular area or of a particular realty project.
264. MATCHED FAIR – two recently sold properties selected for their similarities, which may be
compared to determine the value of dissimilarities.
265. MATERIAL FACT – a fact is material if it one which the agent should realize would be likely to
affect the judgment of the principal in giving his consent to the agent to enter into the particular
transaction on the specified terms.
266. MECHANICS LIENS – a lien created by law which exists in favor of persons who have performed
services or furnished materials in the erection or repair of the building.
267. METES AND BOUNDS – is the measurements and boundaries. A method of legally describing
land setting forth all boundary lines together with their directions, distances, terminal points and
angles.
268. MONUMENT – is a fixed object and point established by surveyors to establish and location.
269. MORATORIUM – is the temporary suspension, usually by statute, of the enforcement of liability
for debt.
270. MORTGAGE – a contract by which the debtor guarantees to the creditor the fulfillment of a
principal obligation, subject for the faithful compliance with a real property in case of non-fulfillment
of the said obligation at the stipulated time.
271. MORTGAGE CONTRACT – is the legal documents that pledges the property of borrower
(mortgagor) to a creditor-lender (mortgagee) as security for the payment of a debt or loan.
272. MORTGAGEE – is the creditor to whom a property is pledged or encumbered as security for a
loan granted
273. MORTGAGOR – is the debtor who owns a property and encumbers it (to the mortgagee) as
security of a granted loan.
274. MULTIPLE LISTING – a written agreement (usually an Exclusive Right to Sell) between a broker
and his client being placed in a pool of listings on arrangement among association members and if
sold, the professional fee/commission will be divided between the listing broker and the selling
broker giving a portion of the professional fee/commission to the association.
275. NEGATIVE CASH FLOW – it would exist if debt service exceeds the Net Operating income.
276. NEGOTIABLE – is capable of being negotiated, assign or transferred in the ordinary course of
business.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

277. NET LEASE – is a lease where the tenant pays certain operating and maintenance expenses in
addition to rent.
278. NET LISTING – a listing where the owner will dell his property not less than the price given at
which instance the broker will not receive any commission but may retain a compensation for the
services rendered.
279. NET OPERATING INCOME (NOI) – net income derived from gross income after deducting the
property operating expenses and reserves or all expenses.
280. NON-RECOURSE NOTE – a note signed by the debtor that does not carry any personal
responsibility in case of default. When this note is secured by real estate, the property becomes the
sole security for the debt.
281. NOTE – a signed written instrument acknowledging a debt and promising payment thereof. It
is a promissory note or a written promise to pay a certain sum of money to the order of a certain
person or to bearer on demand or on a specified date.
282. NOTICE TO QUIT – a notice to tenant(s) to vacate the rented property.

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283. OBSOLESCENCE – is a loss in value due to reduced desirability and usefulness of a structure
because of obsolete design and construction or of becoming old-fashioned and not keeping with
modern needs with the consequent loss of income.
284. OFFSET STATEMENT – a statement by the property owner or the owner of a lien against a
property, setting forth the present status of liens against said property.
285. OPEN LISTING – is a non-exclusive an authorized given by a property owner to a real estate
agent for the sale of the property. It also refers to a listing given to more than one broker/agent
without liability to compensate anyone; except, the one who was able to perfect or consummate the
sale.
286. OPEN MORTGAGE – a mortgage that can be paid any time even before its maturity.
287. OPEN-END LOAN – a secured loan that promise the borrower to obtain additional sums of
money at any time; hence, allowing a continuous source of credit.
288. OPEN-END MORTGAGE – is a mortgage containing a clause which permits the mortgagor to
borrow additional money after the loan has been reduced, without rewriting the mortgage.
289. OPTION – is a right given for a consideration to purchase or lease a property upon specified
terms within a specified time.
290. ORAL CONTRACT – is a verbal agreement or one which is not reduced to writing.
291. ORDINANCE – is a local government statue or regulation, such as: zoning ordinance.
292. OVER IMPROVEMENT – an improvement which is not suitable to the site where it is placed due
to excessive size or costs.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

293. OWNERSHIP – refers to the right by which a property belongs at the exclusions of all other
persons.

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294. PACTO DE RETRO SALE – is a sale with right to repurchase the property within a fixed period.
295. PACTUM COMMISSION – an agreement of forfeiture. It is also an agreement giving the creditor
the power to appropriate the security without going to the formality of foreclosure proceedings and
public sale because of non-fulfillment of an obligation.
296. PACTUM DE NON ALIENDO – a stipulation in a mortgage by which the mortgagor agrees not
to alienate or encumber the mortgaged property at the prejudice of the mortgagee.
297. PAR VALUE – refers to the market value or nominal value.
298. PARTITION – is the legal process of dividing property and giving separate titles to the
respective owners whose title is in common.
299. PARTNERSHIP – by the contract of partnership two or more persons bind themselves to
contribute money, property, or industry to a common fund, with the intention of dividing the profits
among themselves.
300. PARTY WALL – a wall erected on the line between two adjoining lots owned by both parties
and used by each for his own benefit.
301. PATENT – refers to a conveyance of title of a government land.
302. PERCENTAGE LEASE – a lease of property in which the rental is based upon the volume of sales
made of the leased property.
303. PERFORMANCE BOND – is a kind of insurance required for the performance of an agreed tasks
as provided in the terms of the contract.
304. PERIMETER – is the outer boundary of an area.
305. PERSONAL PROPERTY – identifiable, portable and tangible objects which are considered by
the general public as being “personal” e.g., furnishing artworks, antiques, gems and jewelry,
collectibles, machinery and equipment or all properties not classified as real estate.
306. PHYSICAL DEPRECIATION – is the loss in value due to impairment of physical condition.
307. PLANNING BOARD – a group of people, generally appointed by elected officials who are
responsible for the preparation and adoption of measures dealing with the orderly development of
land within its jurisdiction.
308. PLANS AND SPECIFICATION – Plans includes all the drawings pertaining to the development
under consideration like: the building, the mechanical and the electrical drawings and the like.
Specification includes the written instructions, workmanship, style, fabrication, colors and finishes
which supplement the details appearing on the working drawings.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

309. PLAT – a map or plan (usually a survey) of a piece of land showing divisions (into lots) of
property lines, easements, etc. and entered into the public records.
310. PLOTTAGE – is the total value which a large parcel of land enjoys over and above the sum of
the value of the lots, if standing individually.
311. POLICE POWER – is the right of the state to enact laws and enforce them for the order, safety,
health, morals, and general welfare of the public.
312. POPULATION DENSITY – refers to a term relating to the average number of permanent
residents within a given area, such as per square mile.
313. POWER OF ATTORNEY – is the written instrument by which the authority of another as his
attorney-in-fact is set forth. It may be limited to specific act(s) or may be general. A written
instruments authorizing a person, mentioned as the attorney-in-fact to act as the agent in behalf of
another to the extent indicated in the instrument.
314. POWER OF SALE – is an authority given to the mortgagee for the right to sell the mortgaged
property upon default by the mortgagor without any subsequent right of redemption
315. PRELIMINARY PLATS – refers to a tentative map of a subdivision submitted by a developer to
local planning officials for study and approval.
316. PREPAYMENTS CLAUSE – refers to a provision in a loan contract that allows the borrower to
prepay the debt under certain conditions. If this clause is described as “prepayment privilege” then
there is no penalty for early payments. But if the debts contract contains a “prepayment penalty” the
borrower must pay a fee for the right to prepay.
317. PRESCRIPTION – is the mode of acquiring title by actual use which has been open, notoriously
hostile to the legal owner, and continuous for the statutory period of 10 or 30 years.
318. PRICE PER SQUARE FOOT – is the product of dividing the total price by the total area.
319. PRIMA FACIE EVIDENCE – refers to evidence which is presumptive on its face. It is one which
is sufficient in law and in substance of an established a facts, unless rebutted.
320. PRINCIPAL – is the employer of an agent. It refers to the capital amount of a loan or investment.
321. PRIVITY – a mutual relationship to the same property rights of a contractual relationship.
322. PROBATE – is a proceeding of a probate court on the will of the Testator relative to matters on
the registration and certification of a will, the administration of estates and the guardianship of
minors and incompetents, etc.
323. PROCURING CAUSE – is the act of a broker leading to the meetings of minds between the parties
to a transaction for the consummation of a transaction
324. PROFESSIONAL – is an individual that engaged in an occupation with high standards.
325. PROGRESSION PRINCIPLE – is the association of a property with inferior properties that will
tend to lower the value of the former.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

326. PROPERTY – any project of value that a person may lawfully acquire and hold. It may either
real or personal property.
327. PRORATION OF TAXES – is to divide or share the taxes equally or proportionately.
329. PROXIMATE CAUSE – that cause which is natural and continuous sequence, unbroken by any
new cause, produced an event, without which such event would not have happened.
330. PUBLIC INSTRUMENT – any document notarized by a notary public or by a competent public
official with all the solemnities required by law.
331. PURCHASE MONEY MORTGAGE – a mortgage given as part of all of the purchase consideration
for the property bought. It is a mortgage given by a buyer to the seller as partial payment of the
purchase price of real estate.
332. PURCHASE MONEY OR TRUST DEED – is a trust deed or mortgage given as part of call of the
purchase consideration for the property
333. PURCHASER IN GOOD FAITH – is one who buys property with the belief that the person from
whom he received title of the property is the owner thereof and has the right to covey the same.

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334. QUALIFICATION – is a description of the qualities or characteristics of an occupation.
335. QUANTITY SURVEY METHOD – computation of the costs of all the quantity and quality of all
materials used and of all labor costs and other fees for contractors and architects.
336. QUIETING OF TITLE – is a court action brought about to establish title or to remove a cloud on
the title
337. QUIT CLAIM DEED – is a conveyance containing no warranties of title, conveying only the
interest of the grantor. It is a deed which conveys the grantor’s right or interest in realty without
guaranteeing or warranting such title.

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338. RANCH – a large farm with its building and land used to raise livestock in large numbers.
339. RAW LAND – refers to the lands that has not been improved or develop.
340. REAL ESTATE – is an identified parcel or tract of land, including the improvements thereon. It
also refers to the real property and its improvement.
341. REAL ESTATE DEALER – refers to any person directly engaged as a principal in the business of
buying, selling or exchanging real estate property whether on a full time or part time basis. It is either
a natural or juridical person who performs any of the acts comprised in real estate brokerage with
reference to his own property. It is the owner/developer of a land, subdivision, condominium, resort,
country club, memorial parks, owner/lessor of an apartment, commercial building or other income-
generating properties, sells, mortgages and exchanges real properties.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

342. REAL ESTATE INVESTMENT TRUSTS – a method of holding real estate in trust from where
investors can enjoy limited liability similar to a corporation.
343. REAL ESTATE OR REAL PROPERTY – refers to land and/or building, improvements, including
rights and interest therein
344. REAL RIGHTS – are interest, benefits and rights which are inherent to ownership of real estate.
It is also the power of a person to be exercised over a specific property against a determined person
and the whole world.
345. REALTY – a collective term used to designate real estate.
346. Re-Appraisal validates and updates the appraisal values of lot and housing unit.
347. RECONCILIATION – is the adjustment process between comparable property utilities
equivalent to that of being appraised but constructed with modern materials and according to the
current standards, design and layout.
348. RECONVEYANCE – is the transfer of the title of land from one person to the immediate
preceding owner.
349. REDEMPTION – is the right of an owner to reclaim his property within the statutory period
after losing it at a tax or extra-judicial foreclosure sale of mortgaged property.
350. REFORMATION – is an action to correct a mistake in a deed or any other document.
351. REGRESSION PRINCIPLE – in real estate, a tremor principle alluding to the decrease in value
of certain houses in a particular neighborhood caused by the expected construction or condition of
interior dwellings in the area. It connotes diminished value through disadvantages anticipated in the
future, such as planned low-cost housing development in an area of high-priced homes.
352. RELEASE CLAUSE – a stipulation that upon the payment of a specific sum of money to the holder
of a trust deed or mortgage, the lien of the instrument as specifically described shall be removed from
the blanket lien of the whole area.
353. REMAINDER – refers to an expectancy of estate which is not in actual possession thereto, when
land is conveyed by the same deed to a person during his lifetime, and at his death to another and to
the heirs.
354. RENT – is a compensation for the use of the real estate.
355. REPLACEMENT COST – the cost that would be incurred on the basis of current prices in
acquiring and equally desirable substitute property or the Cost of reproducing a new replica property
on the basis of current prices with the same or closely similar material.
356. REPLACEMENT RESERVES – used in the income approach as reduction from the effective gross
income. It is for a capital replacement and not expenses.
357. REPORT – is any written or oral communication of an appraisal or a review or analysis of
documents that is transmitted by the Appraiser to the client upon completion of an assignment.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

358. REPRODUCTION COST – cost of reproducing a particular property at a particular time. It is the
cost of replacing the subject improvement with one that is the exact replica, having the same quality
of workmanship, design and layout or it is the cost to duplicate and asset.
359. RESCISSION – refers to the cancellation or annulment of the contract for cause by court order
or by a notarial act
360. RESERVATION – is a right retained or reserved by a grantor in conveying property.
361. RESIDENCE – is the place where one lives with no intention of removing there from.
362. RESTRICTION – in realty, it means the owner of a real property is restricted or prohibited from,
doing certain things related to the property for certain purposes. It also refers to a legislative
ordinance affecting all properties in a given area, like: requiring street curb is a restriction by
operation of law.
363. RESTRICTIVE COVENANT – is an agreement written into a contract limiting the use and
occupancy of property, which covenant is binding to the subsequent owner(s) of the property but
may be rendered nugatory by zoning laws or other police power legislations.
364. REVERSIONARY INTEREST – is the interest which a person has in his lands or other property
upon the termination of the estate.
365. REVIEW – is the act or process of critically studying a report prepared by another.
366. REVOCATION – is the act of recalling a power of authority.
367. RIGHT OF SURVIVORSHIP – is the right to acquire the interest of a deceased joint owner.
368. RIGHT OF WAY – a privilege operating as an easement upon a property, whereby the owner
does by grant or by agreement, give another the right to pass over his land. It also means to construct
a roadway over or use as roadway a specific portion of the land for telephone, telegraph or electric
power lines, or the right to place underground water mains or sewers. The right or privilege acquired
through accepted usage or by contract to pass over a designated portion of another’s property. A
right-of-way may either be used as the highway or street or safe access to public places, like: beaches.
369. RIPARIAN RIGHT – is the right of a land owner adjoining a watercourse to enjoy the water
adjacent or water on or water under one’s land.
370. ROW HOUSE – refers to a series of individual homes having architectural unity and a common
wall between each unit.
371. RURBAN LAND – is that land that partake the nature of both rural and urban land. It is one
which has the characteristics and atmosphere of a province while enjoying the amenities of an urban
community.

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372. SALE – a contract where one party (Seller) obligates himself to transfer the ownership of a
property and to deliver thereof; while the other party (Buyer) obligates himself to pay the price
certain in money or its equivalent.
373. SALE AND LEASEBACK – a contract wherein a property buyer agrees to lease the subject
property to the seller.
374. SALES CONTRACT – is a document or a contract by which a buyer and a seller manifested their
agreement on the terms of the sale.
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375. SALVAGE VALUE – is the amount that might be realized from sale of property after the
economic life thereof.
376. SANDWICH LESSEE – a lease created by the lessee by sub-leasing the leased property.
377. SATISFACTION – is the fulfillment of a condition or of an obligation
378. SCRAP VALUE – is the amount that could be realized from sale of a dismantled asset to be
removed for used wholly or partially
379. SEAL – an impression made to attest the execution of an instrument.
380. SERVICE INCOME – the type of income collected for the services rendered.
381. SETBACK – the distance from the curb or other established line which no building can be
erected.
382. SHERIFF’S DEED – is a deed given to a purchaser who buys at a judicial or extra-judicial
foreclosure sale to satisfy a judgment or obligation.
383. SIMPLE SUBDIVISION PLAN – refers to a subdivision plan of a registered land wherein streets
passage ways or open spaces are delineated on the plan.
384. SINKING FUND – a method of calculating replacement reserves by multiplying the total cost by
a factor.
385. SITE – generally, a parcel of land suitable for building that fronts on a road and has access to
utilities. Also refers to and ready for development or with improvements.
386. SOUND VALUE – is an appraisal value for the price that a property would sale based on quick
sales.
387. SPECIAL ASSESSMENT – an assessment made against a particular property to pay for public
improvements which assessed property has been especially benefited.
388. SPECIFIC PERFORMANCE – is a court remedy ordering the defendant to carry out the terms of
his contract of appointment.
389. STAKING – a method of identifying the boundaries of a parcel of land by placing stakes or pins
in the ground or by painting marks on stones walls or rocks.
390. STATUTE OF LIMITATIONS – a statute limiting the period within which a specific legal action
may be taken.
391. STEWARDSHIP CONCEPT OF OWNERSHIP – is the constitutional provision that an owner
must use his property in a manner that will benefit not only his own interest but also the general
welfare. And when the property ownership is not conductive to general welfare, then the State can
exercise its power and authority to regulate or control ownership.
392. STRAIGHT-LINE METHOD – a method of calculating a replacement cost or a method of
determining the depreciation cost of an asset.
393. SUB-CONTRACTOR – a builder or contractor who enters into an agreement with a developer
or the prime contractor to perform a special portion of
the construction work, such as electrical, plumbing, or air conditioning installation. The
subcontractor does not deal directly with the landowner; however, if not paid by the prime
contractor, the subcontractor can assert a mechanic’s lien against the property within a certain time
after a notice of completion is published.
394. SUBDIVISION – a tract of land divided into lots for sale suitable for home building purposes.
395. SUBDIVISION LOT – it mean any of the lots, whether residential, commercial, industrial,
recreational in a subdivision project.
396. SUBDIVISION PROJECT – shall mean a tract or parcel of land partitioned primarily into
individual lots for residential purposes either with or without improvements and offered to public
for sale. It includes residential, commercial, industrial and recreational areas as well as open spaces
and other community and public areas in the project.
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397. SUBLETTING – transfer by the lessee of all or part of his lease interest to another person who
sub-leases the leased property.
398. SUBORDINATION CLAUSE – is a clause in a junior or second lien permitting retention of
priority for prior liens. Also used in a first deed of trust permitting it to be subordinated to a
subsequent liens.
399. SUBPOENA – refers to a court order that obliges a person or a witness to appear in court and to
give testimony. A legal order of the court compelling the person who is named and upon who it is
served to appear and to give testimony at a specific location and time.
400. SUBPOENA DUCES TECUM – a subpoena ordering the person on whom it is served to appear
at the designated time and location and to bring certain specified location and time.
401. SUBROGATION – is the substitution of one creditor by another, along with the transfer of the
claims and rights of the former creditor.
402. SUBSTITUTION PRINCIPLE – the value of a replaceable property tends to be indicated by the
value of an equally desirable substitute property.
403. SURETY – refers to one who guarantees the performance of another called guarantor.
404. SURVEY – the process by which a parcel of land is measure and its area ascertained. It is the
process of measuring and determining land boundaries, its site measurement, and existing
encroachments.
405. SURVIVORSHIP – it is a distinguished feature of a joint tenancy which upon the death of one
joint tenant the full title to the estate remains in the surviving tenant. The last surviving joint tenant
automatically takes all the property.
T
406. TAX RATE – percentage applied to assessed value to determine tax due.
407. TAX SALE – is the forced sale of real estate by local taxing authorities to cover delinquent
property taxes.
408. TENANCY IN COMMON – a form of estate held by two or more persons who owns undivided
share without the joint right of survivorship. If one dies, his share goes to his estate.
409. TENANT – is one who holds or possesses real estate by any kind of title, either in fee, for life, for
years or at will. It is one who temporarily uses the real estate of another.
410. TENANT AT SUFERRANCE – is a person who stays in possession of real estate after his lease
has expired.
411. TENDER – an offer of money or payment of an obligation.
412. TENEMENT – a collective term which means the land plus everything of a permanent nature
attached to it, including the rents.
413. TENURE IN LAND – is the mode or manner by which a man acquires an estate in lands.
414. TESTATE – a property owner called Testator who dies leaving a legal will prescribing the
methods by how and to whom his/her property will be transferred after death. The condition of a
deceased person who has left a valid will.
415. TILLABLE – is the condition of land allowing cultivation
416. TIME IS OF THE ESSENCE – one of the essential requirements in forming a binding contract
that contemplates punctual performance
417. TITLE – in real estate, it is an evidence of land ownership that has lawful right and possession
thereof. It is a document of ownership right over a parcel of land. It encompasses all that bundles of
rights an owner to possess and the totality of rights and property by a person. Title is a common term
used to denote the fact, which if proved would enable a person to recover or retain possession of
something.
418. TITLE INSURANCE – is insurance written by a title company to protect a property owner
against loss if the title is imperfect
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

419. TOPOGRAPHY – is the nature of the surface of land which may either be level, rolling or
mountains.
420. TORRENS SYSTEM – is the legal system of registering land title by the Register of Deeds.
421. TORRENS TITLE – certificate of ownership issued under the Torrens System of registration by
the government through the Registry of Deeds, naming and declaring the owner in fee of the real
property described therein, free from all lines and encumbrances as may be expressly noted there or
otherwise reserved by law.
422. TRIAL DE NOVO – a new trial or re-trial in an appellate court of the entire case as if no trial had
taken place in the lower court.
423. TRANSCRIPT – an official typewritten copy made, usually by a court stenographic, of the
testimony of evidence at deposition or trial, which becomes the official record of the case.
424. TRUST DEED – a deed given by a borrower to a trustee to be held pending fulfillment of an
obligation, ordinarily repayment of a loan to a beneficiary.
425. TRUSTEE – is one who holds property in trust for another to secure for the performance of an
obligation.
426. TRUSTOR – is one who holds property to a trustee as security until the performance of an
obligation or terms in a deed of trust.

U
427. UNDER IMPROVEMENT – refers to an improvement by reason of its small size or low cost failed
to bring the property to its highest and best use.
428. UNEARNED INCREMENT – increases in value of real property without any effort or cost to the
owner.
429. UNLAWFUL DETAINER – refers to the unauthorized possession or holding of a property due to
the termination of the right to hold possession thereof.
430. URBAN PROPERTY – property located at the city or those closely settled thereat.
2296. USUFRUCT – the right to enjoy the property of another with the obligation of preserving the
property’s from and substance, unless required otherwise by law of contract.
431. UTILITIES – refers to the basic service system required by developed areas, such as: telephone,
electricity, water, gas and the like. Utility easements are usually gross easements running on, over,
or under the property.
432. UTILIZATION – is the quality of the property’s usefulness and using the best advantage of it.

V
434. VALID – having binding force and effect or it is legally sufficient and authorized by law.
435. VALUATION – estimated worth or price estimation; the act of valuating by an appraisal.
436. VALUE – is the ability to serve useful purposes or to command goods including money, in
exchange; utility; desirability. The power of goods in exchange for the present worth of future rights
to its income or amenities; the present worth to typical users and investors of future benefits arising
out ownership of a property; the money deemed to be the equivalent in worth of the subject property.
It also refers to the worth of a thing in money or goods at a certain time. The Net operating income
divided by the cap rate (V = I – R)
437. VACANCY ALLOWANCE – that the amount deducted from potential annual gross income to
reflect the probably vacancies and non-payment of rent.
438. VENDEE – is one who purchase or buys any kind of property.
439. VENDOR – is one who sells any kind of property, in consideration of money.
440. VENDOR’S LIEN – an equitable lien which the vendor of the land has for the unpaid balance.
441. VERBATIM – means exactly the same words.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

442. VERIFICATION – is a sworn statement before a notary public manifesting as to the correctness
of contents of an instrument.
443. VESTED – means bestowed upon someone or secured by someone.
444. VOID – to have no force or effect or that is unenforceable.
445. VOIDABLE – not absolutely void but may be voided, as a voidable contract that is binding upon
the parties unless annulled by a proper action in court.
446. VOLUNTARY LIEN – is any lien place in the property with the consent or as a result of the
voluntary act of the owner.

W
447. WAIVE – to relinquish or abandon; to forego a right to enforce or require anything.
448. WAIVER – is the voluntary abandonment or surrender of a claim, right or privilege.
449. WARRANTY – an implied or express promise or statement concerning the quality and/or
character of the property sold.
450. WARRANTY DEED – a conveyance of land in which the grantor agrees to protect the grantee
against all adverse claims. He also warrants or guarantees that he is the legal owner and has all lawful
right to sell.
451. WILL – a species of conveyance whereby a person is permitted, with the formalities prescribed
by law, to control in a certain degree the disposition of his property after his death. A written
instrument made by the property owner (called the Testator) to convey title to the property after
his/her death. The Testator must be of sound mind be of legal age, not be acting made duress and
have the will witnessed when it was prepared.
452. WITHOUT RESOURCE – words used in endorsing a note or bill to denote that the future holder
is not to look the endorser in case of non-payment.

Y
453. YIELD – the return on an investment or the amount of profit which is sometimes stated as a
percentage of the amount invested or the rate of the return. In a real estate, yield on income of the
property is the ratio of the annual net income from the property divided by the cost of market value
of the property.

Z
454. ZONE – the area set-off by the proper authority for a specific use, subject to certain restrictions
or restraints.
455. Zoning – refers to the exercise of police power of the local government authorities in specifying
and regulating the use of which real estate maybe put in specific areas.
456. DEFERRED MAINTENANCE – means a postponement of a repair or rehabilitation.
457. DEPONENT – a person who testifies under oath, which testimony is reduced to a written record
called transcript at a formal hearing called a deposition.
458. DESCENT – is the transfer of property at death in the absence of a will.
459. DEVISE – an act of transferring a property at death by means of a will.
460. DIMINISHING RETURNS – point at which returns fail to increase in proportion to increased
investments.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

461. DIRECT CAPITALIZATION – value income of a property based on one-year income stream.
462. DIRECT EXAMINATION – the first examination of a witness is court by the party on whose
behalf the witness was called.
463. DISCLAIMER – is a denial of any interest or agreement.
464. DISCOUNT POINTS – a fee charged by lenders when the loan is made to increase the yield. Each
one-percent of the loan is termed a “point”.
465. DISCOUNTING – a converting future cash flows worth of a future income stream.
466. DISCOVERY – is a legal process and techniques by which one party to a lawsuit obtains
information from the adverse party.
467. DOCUMENTATION – a written evidence of the facts contain.

E
468. EASEMENT – is a right, privilege or interest to a specific purpose that one party has in the land
of another.
469. ECONOMIC RENT – the rental of property should receive by the property condition, in contrast
to its calendar age.
470. EFFECTIVE GROSS INCOME – is the potential gross income/receipts less allowance for
vacancies and collection losses.
471. EFFECTIVE MONTHLY RATE – the sum of the number of month’s rent actually paid multiplied
by the price per square foot, divided by the number of months’ rent due under the lease (nominal
rent).
472. EMINENT DOMAIN – is a legal act of the government power to acquire private property for
public use after paying just compensation. It is sovereign power of the State to acquire or appropriate
private property for public use with just compensation.
473. EMPTIO SPEI – the sale of hope or expectation
474. ENCROACHMENT – is an unlawful intrusion of another adjacent property. Any extension over
one’s property line which intrudes or invades in a highway or sidewalk; the building of structure or
construction of any improvement partly or wholly on the property of another; trespass upon
property of another.
475. ENCUMBRANCE – is a lien, charge, claim or any restriction attached to and binding upon real
property which lessens or limits its value. Liens are money encumbrances which make the property
as a security for the payments of an obligation, such as: mortgages, or taxes. Anything which affects
or limits the fee simple title to a property, such in the case of easement, right of way, mortgages or
restrictions of any kind. Any claim, lien, charge, or liability attach to and binding on real property
which may lessen its value, or burden, obstruct, or impair the use of a property but not necessarily
prevent transfer of title, a right or interest in a property held by one who is not the legal owner of the
property.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

476. EQUITY – is the interest or value which an owner has in real estate over and above the liens
against it.
477. EQUITY (DIVIDEND) OR EQUITY CASH FLOW – it is the Net Operating Income minus the
annual debt services.
478. EQUITY DIVIDEND RATE - the sum of the Net Operating Income minus the annual debt
services, divided by the equity (down payment).
479. EQUITY OF REDEMPTION – is the right to redeem property during the foreclosure period. In
judicial, the mortgagor’s right to stop the auction sale of his mortgaged property by paying the
mortgage obligation within 90 days from receipt of the Court’s judgment or even thereafter provided
payment is made before the foreclosure sale is CONFIRMED by the Court.
480. EROSION – is the wearing a way of lands by the action of the water or wind.
481. ESCALATION/ESCALATOR CLAUSE – a clause in a contract which provides for increase or
decreases in certain items to cover unpredictable changes, like: adjustments in tax rates or operating
costs or to cover specified contingencies. When applied to interests, it should be coupled with a de-
escalation provision. An agreement in a lease contract allowing for increases in rent based on some
event.
481. ESCHEAT – a written agreement which places the property to the care of a third party (escrow
agent) and not be put into effect any agreement until certain conditions are fulfilled. Is the revision
to the estate of a deceased person when there is no valid will and there is no longer heir.
482. ESCROW – money, document or any item delivered to a neutral person to be held by him, and
transferred to the grantees only upon the fulfillment of a specified precedent condition. It also refers
to the deposit of instrument and funds with instructions to a third neutral party to carry out the
provisions of an agreement or contract.
483. ESTIMATE – is an opinion of a competent person based on analysis of data.
484. ESTOPPEL – a legal prevention whereby a party who by his own intentional or deliberate
declaration, act or omission prompted another to believe a particular thing to be true and made that
person act on the faith of such representation, cannot latter on be permitted to falsify such
declaration, act or omission.
485. EVALUATION – is a study of the nature, qualify or utility of a parcel of real estate or interest in
real property.
486. EVICTION – is the act of depriving a person of his possession in a real property by a process of
law and in pursuance of a court order.
487. EXCLUSIVE AGENCY LISTING – is a written instrument giving one agent the right to sell
property for a specified time.
488. EXCLUSIVE RIGHT TO SELL LISTING – a written agreement an owner and an agent giving the
agent the right to collect a commission even of the property is sold by the owner himself or by anyone
other than broker during the term of the agreement.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

489. EXECUTE – to complete, to make, to do, follow up. To execute a deed is to make a deed, including
the signing, selling, and delivering. To execute a contract is to perform the stipulations thereto, to
follow out, to end and to complete.
490. EXECUTOR – the person named in a will with authority to carry out its provisions.
491. EXPERT WITNESS – a person possessing training, education and experience in a specialized
field or profession who testifies in deposition or at the lawsuit proceedings.
492. EXTERNAL OBSOLESCENCE OR ECONOMIC OBSOLESCENCE – is loss in the use or value of
property arising from external factors, surroundings land uses or environmental force.

F
493. FACTOR – is the reciprocal (one divided by a number) of a given rate.
494. FEASIBILITY ANALYSIS – is a study of a cost-benefit relationship of an economic endeavor.
495. FEASIBILITY STUDY – refers to the study or analysis of a proposed a project property with
emphasis on it attainable revenue, it probable expenses, its advantageous usage and design. It is often
used by developers to entice investors to put money for a proposed development. Such a study is
required by some mortgage investors and lending institutions prior to granting a loan commitment.
496. FEE SIMPLE – in modern estates, the term “FEE” and “FEE SIMPLE” are substantially
synonymous. “Fee Simple Absolute” is an estate in real property by which the owner has the greatest
power over the title which is possible to have, being an absolute estate. In modern use, it is expressly
established as the little of real property in the owner, without limitations. With Fee Simple, the owner
may dispose the property by sale, trade, or will. It is an absolute ownership of realty free from all
conditions, limitations or end.
497. FEE SIMPLE ESTATE – is the greatest interest one can have in real property. An estate that is
unqualified, with indefinite duration, freely transferable and inheritable.

498. FIDUCIARY – is a person in a position of a trust and confidence. In real estate, the principal and
the broker has a fiduciary relationship under the rule of agency.
499. FIXTURES – appurtenances attached to the land or improvements which usually cannot be
removed without agreement, since it became part of the real property. Example: Plumbing fixtures,
store built into the property, etc..
500. FORECLOSURE – is the legal procedure where a property pledge as security for a debt is sold
to at public auction and the proceeds thereof shall be applied as payment of debt.
501. FORFEITURE – is the loss of money or anything of value, due to failure to perform an agreement
of purchase or sale.
502. FRACTIONAL APPRAISAL – is an appraisal of portion of fractional interest in real estate.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

503. FRAUD – the international and successful employment of cunning, deception or artifice used to
deceive or cheat person who acted in good faith, which resulted to loss or injury.
504. FREEHOLD ESTATE – is an estate in land held for life or with the right to pass it on through
inheritance.
505. FRONTAGE – refers to the length of a property, abutting a street, with few numbers of feet that
fronts the street. Frontage differs from width which sometimes decreases or increases as the lot
extends back from the street.
506. FUNCTIONAL OBSOLESCENCE – is the loss of value because of changes in market standard and
outmoded characteristics of the property.

G
507. GENERAL WARRANTY DEED – a conveyance containing the grantor’s full warranty of good
title promising to warrant and defend forever the title conveyed against the lawful claims of all
persons whatsoever. A deed carrying the seller’s warranty that title is good in fee, that it is free and
clear of all liens and encumbrances, and giving that grantor’s assurance that he will defend the title
against the claims of all persons.
508. GIFT DEED – a deed where there is no material cause but the only consideration is love and
affection.
509. GRANTEE – is the buyer who by means of a deed, receives title or takes title to property. Is a
person receiving title in deed, usually the owner- seller.

510. GRANTOR – is a person who conveys title of a property to another person (grantee) by means
of a written agreement.
511. GROSS INCOME MULTIPLIER (GIM ) – a figure or ratio computed by dividing the annual gross
income of a rental property into the sales price. This figure, when multiplied by gross income, can be
useful in estimating market value of unsold real properties. Is the result of dividing the sales price by
the annual gross income.
512. GROSS RENT MULTIPLIER (GRM ) – is the result of dividing the sales price by the monthly
gross rent.
513. GROUND FLOOR BUILDING AREA – is the first floor square footage or the building “footprint”.
514. GROUND RENT – refers to the net earnings of an improved property after deducted the direct
expenses thereof. This is also called as an economic rent.

H
515. HABENDUM CLAUSE – is the “to have and to hold” clause of a deed which defines or limits the
estate granted.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

516. HEREDITAMENTS – the largest and most inclusive classification of property which includes
any and all real or personal property, or property rights, tangible or intangible, practically anything
and everything capable of being inherited. This term is now without legal importance.
517. HOLD-OVER CLAUSE – a provision in a listing agreement which entitles the broker to receive
the commission even if the sale is closed after the period of authority, provided that he/she has
negotiated with said buyer and has given notice to the seller during the period of his authority.
518. HOMESTEAD – is the house and lot that constitute family residence.
519. HOMESTEAD EXEMPTION – the law exempting a homestead from seizure or forced sale to
meet debts but excluding valid mortgages and tax liens.
520. HYPOTHECATE – to pledge a property to another as security of the mortgage. To give
something as security without the necessity of giving up its possession.

I
521. IMPOUND – funds or payments taken from a mortgagor and held by a lender or fiduciary for
purpose of paying property taxes, assessment and insurance. The money can be withheld from the
mortgage payments to further protect the mortgagee against adverse claims and increased risk
resulting from non-payment of taxes or insurance.
522. IMPROVED LAND – land or which construction or development work has been initiated or
completed. The term can also be applied to land improved by roads, sewage and water lines, shell
cabins, houses, outbuildings, etc.
523. IMPROVEMENTS – is a change or addition to land or real property to make it more valuable,
example: sewer, fence, roads, etc. it also refers to buildings, structures and other things permanently
attached to the land.
524. INCHOATE – meaning not yet completed or still imperfect, e.g., contracts are inchoate until
executed by all the parties who should join the execution.
525. INCOME APPROACH – an approach to valuation of property based on concept that value is
relative to income. It refers to the reliance of the analysis, which converts anticipated earnings to
derive from the ownership of the property into value estimate.
526. INCOME TO EXPENSE RATIO – refers to the percentage of income after the expenses is divided
by gross income.
527. INCOMPETENT – not capable, e. g. any insane person or thought not insane, by reason of old
age, disease, weakness of mind or any other cause is unable, if unassisted to take care of himself or
manage and take proper care of his property and by reason thereof will be likely to be deceived by
unscrupulous persons.
528. INCORPOREAL – is an intangible and opposite of corporeal.
529. INDORSEMENT – is the act of signing one’s name on the back of a check or a note, with or
without further qualification.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

530. INHERITANCE – is a legacy, bequest, or something inherited.

531. INJUNCTION – is a writ or court order that either prohibits a person or groups from carrying
out an action or orders an action to be done.
532. INSTALLMENT NOTE – refers to a note that provides an installment payment of a particular
sum of money to be paid on a specified dates.
533. INSTRUMENT – a sworn written document created to affect the rights of the parties, like:
contract of sale, lease, deed, will, etc.
534. INTEREST – is the forbearance of money for its use.
535. INTERNAL RATE OF RETURN (IRR ) – the rate at which discounted return equals the cost of
the investment. The discount rate at which a series ofcash flows equals the amount of the original
investment or project anticipated, defending on the market.
536. INTESTATE – is one whereby the decedents have no will or having made a will which is
defective in form.
537. INVESTMENT ANALYSIS – is a study that reflects the relationship between acquisition price
and anticipated future benefits of real estate investments.
538. INVESTMENT VALUE – it relates to the individual investor and considers the value of property,
financing terms, and potential future uses and value.
539. INVOLUNTARY LIEN – is a lien imposed upon a property without the owner’s consent, like:
taxes, special assessment, etc.
540. IRREVOCABLE – means it is incapable of being recalled or revoked.

J
541. JOINT NOTE – a note signed by two or more persons who have equal liability for payment.
542. JOINT TENANCY – joint ownership by two or more persons with the right of survivorship, all
joint tenants own equal interest and have equal rights in the property.
543. JUDGMENT – the official and authentic decision of a court, determination the rights and claims
of each party to the lawsuit submitted for its determination.
544. JUDGMENT LIEN – Is a lien on property resulting from a court decree in favor of a creditor or
another person.
545. JUDGMENT – the final determination of a court of competent jurisdiction on matters presented
to it, money judgments that provides for the payment of claims as presented to the court or is award
of damages, etc.
546. JUNIOR MORTGAGE – is a mortgage second in lien to a previous mortgage.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

547. JURISDICTION – is territorial area which is controlled by laws or courts. It is the authority by
which judicial officers take cognizance and decide cases. It is right and power which a judicial officer
has to enter upon the inquiry for the determination of a case.

K
548. KEY LOT – is a lot adjoining a corner, at the right angle to it and fronting the intersecting streets.

L
549. LACHES – is the unreasonable delay or negligence in asserting one’s legal rights which serves
to lose those rights.
550. LAND – refers to the earth’s surface, the natural growth and timber attached to it and the
mineral beneath it.
551. LAND CONTRACT – a contract ordinarily used in connection with the sale of property in cases
where the seller does not wish to convey title until all or certain part of the purchase price is paid by
the buyer, often used when the property is sold on a small down payment. It is contract of a real
property financed by the seller, without giving the title thereof until all payments are completely
made.
552. LAND DEVELOPER – refers to the person who develops or improves the subdivision project or
condominium project for and in behalf of the owner or as owner thereof.
553. LAND OWNER- refers to the registered owner of the land.
554. LANDS, TENEMENTS AND HEREDITAMENTS – is a purchase used in early in English law to
express all sort of property of the immovable class. At present, it refers to the real estate with all fixed
improvements therein.
555. LEASE CONTRACT – is a contract between the lessor and the lessee of a property.
556. LEASEHOLD – is the interest or estate which a lessee has over a real estate by virtue of the lease.
527. LEGAL DESCRIPTION – is the description by which a property can be definitely be located by a
government and approved recorded maps.
558. LESSEE – a tenant or one who contracts to rent a property under a lease contract. A person to
whom a property is leased.
559. LESSOR – is the owner who enters into a lease with a tenant. It is landlord. He is the person who
provides the lease property.
560. LEVEL ONE INSPECTION – an inspection of real estate and improvements using only the senses
(Sight, smell feel) for a evidence of environmental hazards.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

561. LEVERAGE – a means of obtaining a potentially greater rate of return on capital investment
through the use of borrowed funds. When purchasing real property, greater leverage is obtained
when there is a comparatively low down-payment relative to loan size.
562. LIEN – is a claim of a person upon the property of another as security for the payment of
obligation or debt.
563. LIFE ESTATE – an estate or interest in property held during the life of a specified natural person.
564. LIKE-KIND PROPERTIES – the term is used to describe properties that can be exchanged or
traded to gain exemption from capital gains taxation. It includes all kinds of real estate except the one
owned by a dealer.
565. LIQUIDATION VALUE – refers to an amount that would be realized from disposition of the
property in the used market assuming for a relative short period of time.
566. LIS PENDENS – literally, a pending suit. It is an annotation in the record of property title that
serves as a warning that one who acquires an interest over said property does so at risk or subject to
the eventually of the litigation.
567. LISTING – is an agreement between the property owner and the agent for the latter to negotiate
the property sale at stated rate of commission.
568. LITIGATION – is the act of carrying a lawsuit.
569. LOAN TO VALUE RATIO (LTV) – is the relationship between the amount borrowed and the
appraised value of the property.
570. LOCK-IN PERIOD – is a length of time during which prepayment on a note is not allowed by the
Lender. During the period, a borrower is prohibited from selling or transferring the property secured
by the note.

M
571. MARGINAL LAND – is land which barely pays the cost working on it or using it.
572. MARKET ANALYSIS – is a study of real estate market conditions for a specific type of property.
573. MARKET PRICE – the price actually paid or the amount received by the seller for his property
regardless of outside pressures or influence.
574. MARKETABLE TITLE – is a title free and clear of objectionable liens or encumbrances.
575. MASS APPRAISAL – is the process of valuing an inverse of properties at a given date and
allowing for statistical testing.
576. MASS APPRAISAL MODEL – a mathematical expression of how supply and demand factors
inter-act in a market.
577. MASTER PLAN – is a basic comprehensive plan for dealing with the effects on a community of
social and economic changes. It is an incorporated plan of ways and means of adjusting to the
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

changing situation based on the phase of time. It is a comprehensive plan to guide the long-term
physical development of a particular area or of a particular realty project.
578. MATCHED FAIR – two recently sold properties selected for their similarities, which may be
compared to determine the value of dissimilarities.
579. MATERIAL FACT – a fact is material if it one which the agent should realize would be likely to
affect the judgment of the principal in giving his consent to the agent to enter into the particular
transaction on the specified terms.
580. MECHANICS LIENS – a lien created by law which exists in favor of persons who have performed
services or furnished materials in the erection or repair of the building.
581. METES AND BOUNDS – is the measurements and boundaries. A method of legally describing
land setting forth all boundary lines together with their directions, distances, terminal points and
angles.
582. MONUMENT – is a fixed object and point established by surveyors to establish and location.
583. MORATORIUM – is the temporary suspension, usually by statute, of the enforcement of liability
for debt.
584. MORTGAGE – a contract by which the debtor guarantees to the creditor the fulfillment of a
principal obligation, subject for the faithful compliance with a real property in case of non-fulfillment
of the said obligation at the stipulated time.
585. MORTGAGE CONTRACT – is the legal documents that pledges the property of borrower
(mortgagor) to a creditor-lender (mortgagee) as security for the payment of a debt or loan.
586. MORTGAGEE – is the creditor to whom a property is pledged or encumbered as security for a
loan granted
587. MORTGAGOR – is the debtor who owns a property and encumbers it (to the mortgagee) as
security of a granted loan.
588. MULTIPLE LISTING – a written agreement (usually an Exclusive Right to Sell) between a broker
and his client being placed in a pool of listings on arrangement among association members and if
sold, the professional fee/commission will be divided between the listing broker and the selling
broker giving a portion of the professional fee/commission to the association.
589. NEGATIVE CASH FLOW – it would exist if debt service exceeds the Net Operating income.
590. NEGOTIABLE – is capable of being negotiated, assign or transferred in the ordinary course of
business.
591. NET LEASE – is a lease where the tenant pays certain operating and maintenance expenses in
addition to rent.
592. NET LISTING – a listing where the owner will dell his property not less than the price given at
which instance the broker will not receive any commission but may retain a compensation for the
services rendered.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

593. NET OPERATING INCOME (NOI) – net income derived from gross income after deducting the
property operating expenses and reserves or all expenses.
594. NON-RECOURSE NOTE – a note signed by the debtor that does not carry any personal
responsibility in case of default. When this note is secured by real estate, the property becomes the
sole security for the debt.
595. NOTE – a signed written instrument acknowledging a debt and promising payment thereof. It
is a promissory note or a written promise to pay a certain sum of money to the order of a certain
person or to bearer on demand or on a specified date.
596. NOTICE TO QUIT – a notice to tenant(s) to vacate the rented property.

O
597. OBSOLESCENCE – is a loss in value due to reduced desirability and usefulness of a structure
because of obsolete design and construction or of becoming old-fashioned and not keeping with
modern needs with the consequent loss of income.
598. OFFSET STATEMENT – a statement by the property owner or the owner of a lien against a
property, setting forth the present status of liens against said property.
599. OPEN LISTING – is a non-exclusive an authorized given by a property owner to a real estate
agent for the sale of the property. It also refers to a listing given to more than one broker/agent
without liability to compensate anyone; except, the one who was able to perfect or consummate the
sale.
600. OPEN MORTGAGE – a mortgage that can be paid any time even before its maturity.
601. OPEN-END LOAN – a secured loan that promise the borrower to obtain additional sums of
money at any time; hence, allowing a continuous source of credit.
602. OPEN-END MORTGAGE – is a mortgage containing a clause which permits the mortgagor to
borrow additional money after the loan has been reduced, without rewriting the mortgage.
603. OPTION – is a right given for a consideration to purchase or lease a property upon specified
terms within a specified time.
604. ORAL CONTRACT – is a verbal agreement or one which is not reduced to writing.
605. ORDINANCE – is a local government statue or regulation, such as: zoning ordinance.
606. OVER IMPROVEMENT – an improvement which is not suitable to the site where it is placed due
to excessive size or costs.
607. OWNERSHIP – refers to the right by which a property belongs at the exclusions of all other
persons.

P
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

608. PACTO DE RETRO SALE – is a sale with right to repurchase the property within a fixed period.
609. PACTUM COMMISSION – an agreement of forfeiture. It is also an agreement giving the creditor
the power to appropriate the security without going to the formality of foreclosure proceedings and
public sale because of non-fulfillment of an obligation.
610. PACTUM DE NON ALIENDO – a stipulation in a mortgage by which the mortgagor agrees not
to alienate or encumber the mortgaged property at the prejudice of the mortgagee.
611. PAR VALUE – refers to the market value or nominal value.
612. PARTITION – is the legal process of dividing property and giving separate titles to the
respective owners whose title is in common.
613. PARTNERSHIP – by the contract of partnership two or more persons bind themselves to
contribute money, property, or industry to a common fund, with the intention of dividing the profits
among themselves.
614. PARTY WALL – a wall erected on the line between two adjoining lots owned by both parties
and used by each for his own benefit.
615. PATENT – refers to a conveyance of title of a government land.
616. PERCENTAGE LEASE – a lease of property in which the rental is based upon the volume of sales
made of the leased property.
617. PERFORMANCE BOND – is a kind of insurance required for the performance of an agreed tasks
as provided in the terms of the contract.
618. PERIMETER – is the outer boundary of an area.
619. PERSONAL PROPERTY – identifiable, portable and tangible objects which are considered by
the general public as being “personal” e.g., furnishing artworks, antiques, gems and jewelry,
collectibles, machinery and equipment or all properties not classified as real estate.
620. PHYSICAL DEPRECIATION – is the loss in value due to impairment of physical condition.
621. PLANNING BOARD – a group of people, generally appointed by elected officials who are
responsible for the preparation and adoption of measures dealing with the orderly development of
land within its jurisdiction.
622. PLANS AND SPECIFICATION – Plans includes all the drawings pertaining to the development
under consideration like: the building, the mechanical and the electrical drawings and the like.
Specification includes the written instructions, workmanship, style, fabrication, colors and finishes
which supplement the details appearing on the working drawings.
623. PLAT – a map or plan (usually a survey) of a piece of land showing divisions (into lots) of
property lines, easements, etc. and entered into the public records.
624. PLOTTAGE – is the total value which a large parcel of land enjoys over and above the sum of
the value of the lots, if standing individually.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

625. POLICE POWER – is the right of the state to enact laws and enforce them for the order, safety,
health, morals, and general welfare of the public.
626. POPULATION DENSITY – refers to a term relating to the average number of permanent
residents within a given area, such as per square mile.
627. POWER OF ATTORNEY – is the written instrument by which the authority of another as his
attorney-in-fact is set forth. It may be limited to specific act(s) or may be general. A written
instruments authorizing a person, mentioned as the attorney-in-fact to act as the agent in behalf of
another to the extent indicated in the instrument.
628. POWER OF SALE – is an authority given to the mortgagee for the right to sell the mortgaged
property upon default by the mortgagor without any subsequent right of redemption
629. PRELIMINARY PLATS – refers to a tentative map of a subdivision submitted by a developer to
local planning officials for study and approval.
630. PREPAYMENTS CLAUSE – refers to a provision in a loan contract that allows the borrower to
prepay the debt under certain conditions. If this clause is described as “prepayment privilege” then
there is no penalty for early payments. But if the debts contract contains a “prepayment penalty” the
borrower must pay a fee for the right to prepay.
631. PRESCRIPTION – is the mode of acquiring title by actual use which has been open, notoriously
hostile to the legal owner, and continuous for the statutory period of 10 or 30 years.
632. PRICE PER SQUARE FOOT – is the product of dividing the total price by the total area.
633. PRIMA FACIE EVIDENCE – refers to evidence which is presumptive on its face. It is one which
is sufficient in law and in substance of an established a facts, unless rebutted.
634. PRINCIPAL – is the employer of an agent. It refers to the capital amount of a loan or investment.
635. PRIVITY – a mutual relationship to the same property rights of a contractual relationship.
636. PROBATE – is a proceeding of a probate court on the will of the Testator relative to matters on
the registration and certification of a will, the administration of estates and the guardianship of
minors and incompetents, etc.
637. PROCURING CAUSE – is the act of a broker leading to the meetings of minds between the parties
to a transaction for the consummation of a transaction
638. PROFESSIONAL – is an individual that engaged in an occupation with high standards.
639. PROGRESSION PRINCIPLE – is the association of a property with inferior properties that will
tend to lower the value of the former.
640. PROPERTY – any project of value that a person may lawfully acquire and hold. It may either
real or personal property.
641. PRORATION OF TAXES – is to divide or share the taxes equally or proportionately.
642. PROXIMATE CAUSE – that cause which is natural and continuous sequence, unbroken by any
new cause, produced an event, without which such event would not have happened.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

643. PUBLIC INSTRUMENT – any document notarized by a notary public or by a competent public
official with all the solemnities required by law.
644. PURCHASE MONEY MORTGAGE – a mortgage given as part of all of the purchase consideration
for the property bought. It is a mortgage given by a buyer to the seller as partial payment of the
purchase price of real estate.
645. PURCHASE MONEY OR TRUST DEED – is a trust deed or mortgage given as part of call of the
purchase consideration for the property
646. PURCHASER IN GOOD FAITH – is one who buys property with the belief that the person from
whom he received title of the property is the owner thereof and has the right to covey the same.

Q
647. QUALIFICATION – is a description of the qualities or characteristics of an occupation.
648. QUANTITY SURVEY METHOD – computation of the costs of all the quantity and quality of all
materials used and of all labor costs and other fees for contractors and architects.
649. QUIETING OF TITLE – is a court action brought about to establish title or to remove a cloud on
the title
650. QUIT CLAIM DEED – is a conveyance containing no warranties of title, conveying only the
interest of the grantor. It is a deed which conveys the grantor’s right or interest in realty without
guaranteeing or warranting such title.

R
651. RANCH – a large farm with its building and land used to raise livestock in large numbers.
652. RAW LAND – refers to the lands that has not been improved or develop.
653. REAL ESTATE – is an identified parcel or tract of land, including the improvements thereon. It
also refers to the real property and its improvement.
654. REAL ESTATE DEALER – refers to any person directly engaged as a principal in the business of
buying, selling or exchanging real estate property whether on a full time or part time basis. It is either
a natural or juridical person who performs any of the acts comprised in real estate brokerage with
reference to his own property. It is the owner/developer of a land, subdivision, condominium, resort,
country club, memorial parks, owner/lessor of an apartment, commercial building or other income-
generating properties, sells, mortgages and exchanges real properties.
655. REAL ESTATE INVESTMENT TRUSTS – a method of holding real estate in trust from where
investors can enjoy limited liability similar to a corporation.
656. REAL ESTATE OR REAL PROPERTY – refers to land and/or building, improvements, including
rights and interest therein
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

657. REAL RIGHTS – are interest, benefits and rights which are inherent to ownership of real estate.
It is also the power of a person to be exercised over a specific property against a determined person
and the whole world.
658. REALTY – a collective term used to designate real estate.
659. Re-Appraisal validates and updates the appraisal values of lot and housing unit.
660. RECONCILIATION – is the adjustment process between comparable property utilities
equivalent to that of being appraised but constructed with modern materials and according to the
current standards, design and layout.
661. RECONVEYANCE – is the transfer of the title of land from one person to the immediate
preceding owner.
662. REDEMPTION – is the right of an owner to reclaim his property within the statutory period
after losing it at a tax or extra-judicial foreclosure sale of mortgaged property.
663. REFORMATION – is an action to correct a mistake in a deed or any other document.
664. REGRESSION PRINCIPLE – in real estate, a tremor principle alluding to the decrease in value
of certain houses in a particular neighborhood caused by the expected construction or condition of
interior dwellings in the area. It connotes diminished value through disadvantages anticipated in the
future, such as planned low-cost housing development in an area of high-priced homes.
665. RELEASE CLAUSE – a stipulation that upon the payment of a specific sum of money to the holder
of a trust deed or mortgage, the lien of the instrument as specifically described shall be removed from
the blanket lien of the whole area.
666. REMAINDER – refers to an expectancy of estate which is not in actual possession thereto, when
land is conveyed by the same deed to a person during his lifetime, and at his death to another and to
the heirs.
667. RENT – is a compensation for the use of the real estate.
668. REPLACEMENT COST – the cost that would be incurred on the basis of current prices in
acquiring and equally desirable substitute property or the Cost of reproducing a new replica property
on the basis of current prices with the same or closely similar material.
669. REPLACEMENT RESERVES – used in the income approach as reduction from the effective gross
income. It is for a capital replacement and not expenses.
670. REPORT – is any written or oral communication of an appraisal or a review or analysis of
documents that is transmitted by the Appraiser to the client upon completion of an assignment.
671. REPRODUCTION COST – cost of reproducing a particular property at a particular time. It is the
cost of replacing the subject improvement with one that is the exact replica, having the same quality
of workmanship, design and layout or it is the cost to duplicate and asset.
672. RESCISSION – refers to the cancellation or annulment of the contract for cause by court order
or by a notarial act
673. RESERVATION – is a right retained or reserved by a grantor in conveying property.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

674. RESIDENCE – is the place where one lives with no intention of removing there from.
675. RESTRICTION – in realty, it means the owner of a real property is restricted or prohibited from,
doing certain things related to the property for certain purposes. It also refers to a legislative
ordinance affecting all properties in a given area, like: requiring street curb is a restriction by
operation of law.
676. RESTRICTIVE COVENANT – is an agreement written into a contract limiting the use and
occupancy of property, which covenant is binding to the subsequent owner(s) of the property but
may be rendered nugatory by zoning laws or other police power legislations.
677. REVERSIONARY INTEREST – is the interest which a person has in his lands or other property
upon the termination of the estate.
678. REVIEW – is the act or process of critically studying a report prepared by another.
679. REVOCATION – is the act of recalling a power of authority.
680. RIGHT OF SURVIVORSHIP – is the right to acquire the interest of a deceased joint owner.
681. RIGHT OF WAY – a privilege operating as an easement upon a property, whereby the owner
does by grant or by agreement, give another the right to pass over his land. It also means to construct
a roadway over or use as roadway a specific portion of the land for telephone, telegraph or electric
power lines, or the right to place underground water mains or sewers. The right or privilege acquired
through accepted usage or by contract to pass over a designated portion of another’s property. A
right-of-way may either be used as the highway or street or safe access to public places, like: beaches.
682. RIPARIAN RIGHT – is the right of a land owner adjoining a watercourse to enjoy the water
adjacent or water on or water under one’s land.
683. ROW HOUSE – refers to a series of individual homes having architectural unity and a common
wall between each unit.
684. RURBAN LAND – is that land that partake the nature of both rural and urban land. It is one
which has the characteristics and atmosphere of a province while enjoying the amenities of an urban
community.

S
685. SALE – a contract where one party (Seller) obligates himself to transfer the ownership of a
property and to deliver thereof; while the other party (Buyer) obligates himself to pay the price
certain in money or its equivalent.
686. SALE AND LEASEBACK – a contract wherein a property buyer agrees to lease the subject
property to the seller.
687. SALES CONTRACT – is a document or a contract by which a buyer and a seller manifested their
agreement on the terms of the sale.
688. SALVAGE VALUE – is the amount that might be realized from sale of property after the
economic life thereof.
689. SANDWICH LESSEE – a lease created by the lessee by sub-leasing the leased property.
690. SATISFACTION – is the fulfillment of a condition or of an obligation
691. SCRAP VALUE – is the amount that could be realized from sale of a dismantled asset to be
removed for used wholly or partially
692. SEAL – an impression made to attest the execution of an instrument.
693. SERVICE INCOME – the type of income collected for the services rendered.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

694. SETBACK – the distance from the curb or other established line which no building can be
erected.
695. SHERIFF’S DEED – is a deed given to a purchaser who buys at a judicial or extra-judicial
foreclosure sale to satisfy a judgment or obligation.
696. SIMPLE SUBDIVISION PLAN – refers to a subdivision plan of a registered land wherein streets
passage ways or open spaces are delineated on the plan.
697. SINKING FUND – a method of calculating replacement reserves by multiplying the total cost by
a factor.
698. SITE – generally, a parcel of land suitable for building that fronts on a road and has access to
utilities. Also refers to and ready for development or with improvements.
699. SOUND VALUE – is an appraisal value for the price that a property would sale based on quick
sales.
700. SPECIAL ASSESSMENT – an assessment made against a particular property to pay for public
improvements which assessed property has been especially benefited.
701. SPECIFIC PERFORMANCE – is a court remedy ordering the defendant to carry out the terms of
his contract of appointment.
702. STAKING – a method of identifying the boundaries of a parcel of land by placing stakes or pins
in the ground or by painting marks on stones walls or rocks.
703. STATUTE OF LIMITATIONS – a statute limiting the period within which a specific legal action
may be taken.
704. STEWARDSHIP CONCEPT OF OWNERSHIP – is the constitutional provision that an owner
must use his property in a manner that will benefit not only his own interest but also the general
welfare. And when the property ownership is not conductive to general welfare, then the State can
exercise its power and authority to regulate or control ownership.
705. STRAIGHT-LINE METHOD – a method of calculating a replacement cost or a method of
determining the depreciation cost of an asset.
706. SUB-CONTRACTOR – a builder or contractor who enters into an agreement with a developer
or the prime contractor to perform a special portion of
the construction work, such as electrical, plumbing, or air conditioning installation. The
subcontractor does not deal directly with the landowner; however, if not paid by the prime
contractor, the subcontractor can assert a mechanic’s lien against the property within a certain time
after a notice of completion is published.
707. SUBDIVISION – a tract of land divided into lots for sale suitable for home building purposes.
708. SUBDIVISION LOT – it mean any of the lots, whether residential, commercial, industrial,
recreational in a subdivision project.
709. SUBDIVISION PROJECT – shall mean a tract or parcel of land partitioned primarily into
individual lots for residential purposes either with or without improvements and offered to public
for sale. It includes residential, commercial, industrial and recreational areas as well as open spaces
and other community and public areas in the project.
710. SUBLETTING – transfer by the lessee of all or part of his lease interest to another person who
sub-leases the leased property.
711. SUBORDINATION CLAUSE – is a clause in a junior or second lien permitting retention of
priority for prior liens. Also used in a first deed of trust permitting it to be subordinated to a
subsequent liens.
712. SUBPOENA – refers to a court order that obliges a person or a witness to appear in court and to
give testimony. A legal order of the court compelling the person who is named and upon who it is
served to appear and to give testimony at a specific location and time.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

713. SUBPOENA DUCES TECUM – a subpoena ordering the person on whom it is served to appear
at the designated time and location and to bring certain specified location and time.
714. SUBROGATION – is the substitution of one creditor by another, along with the transfer of the
claims and rights of the former creditor.
715. SUBSTITUTION PRINCIPLE – the value of a replaceable property tends to be indicated by the
value of an equally desirable substitute property.
716. SURETY – refers to one who guarantees the performance of another called guarantor.
717. SURVEY – the process by which a parcel of land is measure and its area ascertained. It is the
process of measuring and determining land boundaries, its site measurement, and existing
encroachments.
718. SURVIVORSHIP – it is a distinguished feature of a joint tenancy which upon the death of one
joint tenant the full title to the estate remains in the surviving tenant. The last surviving joint tenant
automatically takes all the property.
T
719. TAX RATE – percentage applied to assessed value to determine tax due.
720. TAX SALE – is the forced sale of real estate by local taxing authorities to cover delinquent
property taxes.
721. TENANCY IN COMMON – a form of estate held by two or more persons who owns undivided
share without the joint right of survivorship. If one dies, his share goes to his estate.
722. TENANT – is one who holds or possesses real estate by any kind of title, either in fee, for life, for
years or at will. It is one who temporarily uses the real estate of another.
723. TENANT AT SUFERRANCE – is a person who stays in possession of real estate after his lease
has expired.
724. TENDER – an offer of money or payment of an obligation.
725. TENEMENT – a collective term which means the land plus everything of a permanent nature
attached to it, including the rents.
726. TENURE IN LAND – is the mode or manner by which a man acquires an estate in lands.
727. TESTATE – a property owner called Testator who dies leaving a legal will prescribing the
methods by how and to whom his/her property will be transferred after death. The condition of a
deceased person who has left a valid will.
728. TILLABLE – is the condition of land allowing cultivation
729. TIME IS OF THE ESSENCE – one of the essential requirements in forming a binding contract
that contemplates punctual performance
730. TITLE – in real estate, it is an evidence of land ownership that has lawful right and possession
thereof. It is a document of ownership right over a parcel of land. It encompasses all that bundles of
rights an owner to possess and the totality of rights and property by a person. Title is a common term
used to denote the fact, which if proved would enable a person to recover or retain possession of
something.
731. TITLE INSURANCE – is insurance written by a title company to protect a property owner
against loss if the title is imperfect
732. TOPOGRAPHY – is the nature of the surface of land which may either be level, rolling or
mountains.
734. TORRENS SYSTEM – is the legal system of registering land title by the Register of Deeds.
735. TORRENS TITLE – certificate of ownership issued under the Torrens System of registration by
the government through the Registry of Deeds, naming and declaring the owner in fee of the real
property described therein, free from all lines and encumbrances as may be expressly noted there or
otherwise reserved by law.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

736. TRIAL DE NOVO – a new trial or re-trial in an appellate court of the entire case as if no trial had
taken place in the lower court.
737. TRANSCRIPT – an official typewritten copy made, usually by a court stenographic, of the
testimony of evidence at deposition or trial, which becomes the official record of the case.
738. TRUST DEED – a deed given by a borrower to a trustee to be held pending fulfillment of an
obligation, ordinarily repayment of a loan to a beneficiary.
739. TRUSTEE – is one who holds property in trust for another to secure for the performance of an
obligation.
740. TRUSTOR – is one who holds property to a trustee as security until the performance of an
obligation or terms in a deed of trust.

U
741. UNDER IMPROVEMENT – refers to an improvement by reason of its small size or low cost failed
to bring the property to its highest and best use.
742. UNEARNED INCREMENT – increases in value of real property without any effort or cost to the
owner.
743. UNLAWFUL DETAINER – refers to the unauthorized possession or holding of a property due to
the termination of the right to hold possession thereof.
744. URBAN PROPERTY – property located at the city or those closely settled thereat.
2296. USUFRUCT – the right to enjoy the property of another with the obligation of preserving the
property’s from and substance, unless required otherwise by law of contract.
745. UTILITIES – refers to the basic service system required by developed areas, such as: telephone,
electricity, water, gas and the like. Utility easements are usually gross easements running on, over,
or under the property.
746. UTILIZATION – is the quality of the property’s usefulness and using the best advantage of it.

V
747. VALID – having binding force and effect or it is legally sufficient and authorized by law.
748. VALUATION – estimated worth or price estimation; the act of valuating by an appraisal.
749. VALUE – is the ability to serve useful purposes or to command goods including money, in
exchange; utility; desirability. The power of goods in exchange for the present worth of future rights
to its income or amenities; the present worth to typical users and investors of future benefits arising
out ownership of a property; the money deemed to be the equivalent in worth of the subject property.
It also refers to the worth of a thing in money or goods at a certain time. The Net operating income
divided by the cap rate (V = I – R)
750. VACANCY ALLOWANCE – that the amount deducted from potential annual gross income to
reflect the probably vacancies and non-payment of rent.
751. VENDEE – is one who purchase or buys any kind of property.
752. VENDOR – is one who sells any kind of property, in consideration of money.
753. VENDOR’S LIEN – an equitable lien which the vendor of the land has for the unpaid balance.
754. VERBATIM – means exactly the same words.
755. VERIFICATION – is a sworn statement before a notary public manifesting as to the correctness
of contents of an instrument.
756. VESTED – means bestowed upon someone or secured by someone.
757. VOID – to have no force or effect or that is unenforceable.
758. VOIDABLE – not absolutely void but may be voided, as a voidable contract that is binding upon
the parties unless annulled by a proper action in court.
 GLOSSARY OF REAL ESTATE TERMINOLOGIES

759. VOLUNTARY LIEN – is any lien place in the property with the consent or as a result of the
voluntary act of the owner.

W
760. WAIVE – to relinquish or abandon; to forego a right to enforce or require anything.
761. WAIVER – is the voluntary abandonment or surrender of a claim, right or privilege.
762. WARRANTY – an implied or express promise or statement concerning the quality and/or
character of the property sold.
763. WARRANTY DEED – a conveyance of land in which the grantor agrees to protect the grantee
against all adverse claims. He also warrants or guarantees that he is the legal owner and has all lawful
right to sell.
764. WILL – a species of conveyance whereby a person is permitted, with the formalities prescribed
by law, to control in a certain degree the disposition of his property after his death. A written
instrument made by the property owner (called the Testator) to convey title to the property after
his/her death. The Testator must be of sound mind be of legal age, not be acting made duress and
have the will witnessed when it was prepared.
765. WITHOUT RESOURCE – words used in endorsing a note or bill to denote that the future holder
is not to look the endorser in case of non-payment.

Y
766. YIELD – the return on an investment or the amount of profit which is sometimes stated as a
percentage of the amount invested or the rate of the return. In a real estate, yield on income of the
property is the ratio of the annual net income from the property divided by the cost of market value
of the property.

Z
767. ZONE – the area set-off by the proper authority for a specific use, subject to certain restrictions
or restraints.
768. Zoning – refers to the exercise of police power of the local government authorities in specifying
and regulating the use of which real estate maybe put in specific areas.