NALA ACP Real Estate key terms

The most complete ownership interest in real property. It lasts indefinitely, can be inherited, and is not limited by a condition or future interest held by someone else.

An ownership interest that lasts only for the lifetime of a named person. When that person dies, the property passes to the holder of a remainder or returns to the grantor.

A form of concurrent ownership in which two or more people hold undivided shares of real property. There is no right of survivorship, so a deceased owner's share passes to their heirs.

Concurrent ownership by two or more people with a right of survivorship. When one owner dies, that owner's share automatically passes to the surviving owners rather than to the deceased owner's heirs.

A concurrent ownership form available only to married couples in some states. Each spouse owns the whole property, and the survivor takes the entire interest when the other spouse dies.

A right to use another person's land for a specific purpose, such as a driveway or utility line. It is a nonpossessory interest, so the easement holder does not own or occupy the land exclusively.

A promise in a deed or subdivision plan that limits how land may be used, such as banning commercial activity. If it runs with the land, later owners are bound even without signing it.

A doctrine allowing a person to gain title to another's land by possessing it openly, notoriously, hostilely, and continuously for a statutory period. The possession must be without the owner's permission.

A contract in which a seller agrees to convey real property and a buyer agrees to pay the price. It sets the closing date, contingencies, and other terms before the deed is delivered.

A deposit a buyer gives the seller when signing a real estate contract. It shows the buyer's good faith and may be applied to the purchase price or kept as damages if the buyer defaults.

A contract condition that must be satisfied before a party is obligated to complete the purchase. Common examples include financing approval, a satisfactory inspection, or a clear title report.

A state law requiring certain contracts, including agreements to sell land, to be in writing and signed by the party to be charged. It prevents enforcement of unwritten land sale promises.

An equitable remedy in which a court orders a breaching party to carry out the contract as promised. Because each parcel of land is unique, buyers often seek this remedy instead of money damages.

A written instrument that transfers an interest in real property from a grantor to a grantee. To be valid, it must identify the parties and land, show intent to convey, and be delivered.

A deed in which the grantor makes promises about title, usually including the covenants of seisin, right to convey, against encumbrances, quiet enjoyment, warranty, and further assurances. It gives the buyer the most protection.

A deed that transfers whatever interest the grantor may have in the property without promising that the title is valid or free of defects. The grantee takes the risk of existing title problems.

The recorded sequence of deeds and other conveyances showing how ownership of a parcel passed from one owner to the next. A title search examines this chain to identify breaks or conflicting claims.

A state statute that determines whose interest prevails when competing conveyances of the same land are not recorded. Common types are race, notice, and race-notice statutes.

A buyer who purchases property for value without notice of another person's prior claim or interest. Under recording statutes, this buyer may take title free of the undisclosed interest.

Title that is free from reasonable doubt and from defects that would expose the buyer to litigation or loss. A seller under a typical sale contract must deliver marketable title at closing.

An insurance policy that protects a buyer or lender against financial loss from title defects, such as undisclosed liens or forged documents, that existed before the policy date.

An arrangement in which a neutral third party holds money or documents until agreed conditions are met. In a sale, escrow often holds the earnest money and closing documents before transfer.

The final settlement of a real estate transaction, where the deed is delivered, funds are paid, and documents are recorded. It transfers ownership and completes the parties' contractual obligations.

A security interest in real property given by a borrower to a lender to secure repayment of a loan. If the borrower defaults, the lender may foreclose on the property.

A security instrument in which a borrower conveys title to a trustee to hold for the lender until the loan is paid. It often allows nonjudicial foreclosure through a power of sale.

A written promise by a borrower to repay a loan according to stated terms, including the principal amount, interest rate, and payment schedule. The mortgage or deed of trust secures this obligation.

The legal process by which a lender sells property used as collateral after a borrower defaults. The sale proceeds pay the loan, and the buyer receives title subject to applicable redemption rights.

A clause in a deed of trust or mortgage authorizing the lender or trustee to sell the property without going to court after default. It is used in nonjudicial foreclosure states.

A foreclosure conducted through a court action, typically used when no power of sale exists or state law requires court supervision. The court confirms the sale and may address deficiency claims.

A court order holding a borrower personally liable for the amount by which the foreclosed loan balance exceeds the property's sale price. Some states restrict or prohibit these judgments.

A contract that gives a tenant the right to possess and use real property for a period in exchange for rent. It creates a landlord-tenant relationship and defines each party's duties.

A leasehold estate that lasts for a fixed period stated in the lease, such as six months or five years. It ends automatically at the stated date without either party giving notice.

A leasehold estate that renews automatically at set intervals, such as month-to-month, until either party gives proper notice to terminate. The notice period is often set by statute.

A landlord's substantial interference with the tenant's use and enjoyment of the premises, such as failing to repair a serious defect, that makes the property uninhabitable. The tenant may treat the lease as ended.

A legal promise in residential leases that the landlord will keep the premises safe and fit for human habitation. It applies even if the lease does not mention repairs or conditions.

Local government regulation that divides land into districts and controls allowed uses, building size, and density. Zoning ordinances must follow state enabling law and constitutional limits.

An administrative exception allowing a landowner to depart from a zoning rule because strict application would cause unnecessary hardship. The owner must usually show the hardship is unique to the property.

A use of land that existed lawfully before a zoning ordinance was adopted but does not comply with current zoning rules. Many ordinances allow it to continue, with limits on expansion.