DC Real Estate key terms

The District agency that licenses real estate brokers, salespersons, and property managers, adopts regulations governing their conduct, and hears certain disciplinary matters. It operates alongside the Department of Licensing and Consumer Protection.

The District of Columbia department that administers professional and business licensing, including real estate license applications, renewals, and complaints. It supports the Real Estate Commission and enforces consumer protection laws.

A licensed individual who performs real estate brokerage activities under the supervision of a responsible broker. A salesperson may not independently operate a brokerage or accept compensation directly from clients.

A licensed individual authorized to operate a real estate brokerage, supervise affiliated licensees, and perform brokerage services independently. A broker may sponsor salespersons and is responsible for the office's compliance.

The licensed broker designated by a brokerage to supervise its affiliated licensees and ensure compliance with licensing laws and Commission rules. This person is accountable for the office's brokerage activities.

Mixing client funds, such as earnest money or security deposits, with a licensee's personal or business operating funds. Commingling is prohibited because client money must be held separately in a trust account.

A separate bank account used by a brokerage to hold client funds, such as earnest money deposits, until they are properly disbursed. Records must identify each transaction and owner of the funds.

A legal relationship in which a licensee represents a client and owes that client fiduciary duties. It is created by a written agreement and defines who the licensee represents in a transaction.

The heightened legal obligation an agent owes a client, including loyalty, care, obedience, disclosure, accounting, and confidentiality. These duties require the agent to act in the client's best interest.

A situation in which the same brokerage represents both the buyer and seller in one transaction, or two buyers competing for the same property. District rules generally require written disclosure and informed consent.

Information that could reasonably affect a person's decision to buy, sell, rent, or lease property, or the price or terms. Licensees must disclose known material facts to their clients and, in some cases, to other parties.

A written notice explaining whom a licensee represents and what duties are owed before a consumer shares confidential information or enters a brokerage relationship. District rules specify timing and content.

A written contract between a property owner and a brokerage authorizing the brokerage to market and sell or lease the property. It establishes the agency relationship, compensation, and duration.

A listing arrangement in which the broker earns a commission no matter who procures the buyer during the listing period, including the owner. It is the most common type of residential listing.

A written contract between a prospective buyer and a brokerage that establishes the brokerage's agency duties, the buyer's obligations, compensation terms, and the agreement's duration and geographic scope.

A written contract in which a seller agrees to convey real property and a buyer agrees to pay a specified price, subject to negotiated terms and contingencies. It typically sets settlement, possession, and deposit terms.

Money a buyer submits with an offer to show good faith and create a remedy if the buyer defaults. It is usually held in a trust account and applied to the purchase price or returned under contract terms.

A contract condition that must be satisfied or waived before a party is obligated to complete the transaction. Common examples include financing, appraisal, home inspection, and sale-of-buyer's-home contingencies.

A District-required written disclosure in which a residential seller reports known conditions and defects affecting the property. It helps buyers make informed decisions and may create remedies if inaccurate.

A written legal instrument that transfers an interest in real property from a grantor to a grantee. In the District, it must be recorded with the Recorder of Deeds to give public notice.

A security instrument used in the District instead of a mortgage. It conveys legal title to a trustee to secure repayment of a loan, with foreclosure powers if the borrower defaults.

The process of finalizing a real estate transaction, including signing documents, funding the purchase price, clearing title, and recording the deed. In the District, settlement agents often handle escrow and disbursements.

A standardized federal disclosure a lender must provide shortly after a mortgage application. It summarizes estimated loan terms, closing costs, and cash needed to close.

A standardized federal disclosure a lender must provide before consummation of most mortgage loans. It lists final loan terms, closing costs, and cash to close for comparison with the Loan Estimate.

The four main components of a monthly mortgage payment: principal, interest, property taxes, and homeowners insurance. Lenders use PITI to evaluate affordability and may include escrow payments.

The loan amount divided by the property's appraised value or purchase price, expressed as a percentage. Higher ratios generally indicate greater lender risk and may require mortgage insurance.

The proportional division of expenses such as property taxes, rent, or utilities between buyer and seller based on the settlement date. It ensures each party pays for the period they own or occupy.

A District tax imposed when a deed or other recordable instrument is filed with the Recorder of Deeds. It is typically based on the consideration paid and may be reduced for eligible first-time buyers.

A District tax imposed on the transfer of real property, usually paid by the seller. The rate depends on the consideration and property type, and it is separate from the recordation tax.

A periodic rent owed under a long-term lease of land, common in parts of the District. The ground rent owner has rights against the leasehold owner, and the rent may be redeemed under District law.

A form of co-ownership in which each owner holds a separate, undivided share of the property. Shares may be unequal, and an owner may transfer their interest without the others' consent.

A form of ownership in which a person owns an individual unit and shares an undivided interest in common elements. The condominium association governs maintenance, budgets, and rules under the District's condominium law.

A right to use another person's land for a specific purpose, such as access, utilities, or drainage. It is an encumbrance that runs with the land and may be created by deed or prescription.

An administrative exception from a specific zoning regulation granted by the Board of Zoning Adjustment when strict application would cause exceptional practical difficulty or hardship. It is property-specific and must meet legal standards.

The District's Tenant Opportunity to Purchase Act, which gives qualified tenants and tenant organizations rights to receive an offer, negotiate, and purchase before certain residential properties are sold. It imposes notice and timing requirements.

The District law prohibiting discrimination in housing and other areas based on protected traits. It is enforced by the Office of Human Rights and covers more protected classes than federal fair housing law.

A protected characteristic under District fair housing law that includes lawful income such as wages, benefits, vouchers, and rental subsidies. Landlords generally may not refuse a tenant because of this income.

A change in rules, policies, practices, or services needed so a person with a disability can use and enjoy housing. Housing providers must grant requests that are reasonable and necessary, absent undue hardship.

Directing prospective buyers or tenants toward or away from neighborhoods based on protected characteristics such as race, national origin, or familial status. Steering is a fair housing violation even without an explicit refusal.

The District's Consumer Protection Procedures Act, which prohibits unfair or deceptive trade practices in consumer transactions, including real estate services. It allows consumers to seek remedies for unlawful practices.