Real Estate Exam Vocabulary List

Real estate vocabulary can feel overwhelming because many terms sound similar but have very different legal or financial meanings. The most effective approach is to learn each term in context, compare commonly confused concepts, and practice applying definitions to short scenarios. For additional real estate licensing and education resources, visit Leap Real Estate.

State licensing exams include both national and state-specific content. The national portion commonly covers general real estate principles, while the state portion may test local license law, agency rules, disclosures, contracts, forms, and regulations. Always compare this list with your state’s candidate handbook and exam outline.

Property and Real Estate Fundamentals

• Real estate: Land, anything permanently attached to the land, and the legal rights associated with ownership.
• Real property: Real estate plus the bundle of legal rights connected to owning, using, possessing, transferring, and encumbering the property.
• Personal property: Movable property that is not permanently attached to land, such as furniture, clothing, and removable appliances.
• Land: The earth’s surface, the area below the surface, the air above it, and certain natural rights associated with it.
• Improvements: Man-made additions to land, such as buildings, fences, sidewalks, driveways, and landscaping.
• Fixture: Personal property that has become attached to real estate and is generally treated as real property.
• Trade fixture: An item installed by a commercial tenant for business purposes. Trade fixtures usually remain the tenant’s property if removed according to the lease and before surrendering possession.
• Emblements: Annual crops produced by cultivation that are generally treated as the personal property of a tenant farmer.
• Fructus naturales: Natural products of the land, such as trees, grass, and perennial plants.
• Fructus industriales: Products of the land that require annual cultivation, such as wheat, corn, and vegetables.
• Chattel: An item of tangible personal property.
• Annexation: The process of attaching personal property to real estate so that it may become a fixture.
• Severance: The process of converting real property into personal property, such as removing a built-in cabinet.
• Bundle of rights: The rights of possession, control, enjoyment, exclusion, and disposition associated with property ownership.
• Accession: The acquisition of additional property or an increase in property value through natural causes, improvements, or attachment.
• Water rights: Legal rights to use water adjoining or flowing through real property. Rules vary depending on whether the property involves rivers, lakes, groundwater, or oceanfront areas.
• Air rights: The right to use and control the space above a parcel, subject to laws, easements, zoning, and other restrictions.
• Subsurface rights: Ownership or use rights involving the area below the earth’s surface, including minerals when those rights have not been separated from the land.

Practical exam tip

When a question asks whether an item is a fixture, use the MARIA test:

• M — Method of attachment: How permanently is the item attached?
• A — Adaptability: Was the item specially adapted to the property?
• R — Relationship of the parties: Is the dispute between a buyer and seller, or a landlord and tenant?
• I — Intention: Did the person installing it intend for it to remain?
• A — Agreement: Does a written agreement address the item?

A written contract usually controls when it clearly identifies what stays and what goes.

Economic and Physical Characteristics of Land

• Scarcity: The limited supply of land in a particular area.
• Utility: The ability of property to satisfy a need or provide a benefit.
• Transferability: The ease with which ownership rights can be transferred.
• Demand: The desire and ability of buyers or users to purchase or occupy property.
• Permanence of investment: The idea that land and improvements are relatively durable investments, although their value can change.
• Indestructibility: The physical land itself cannot be destroyed, although improvements and value can be damaged.
• Immobility: Land cannot be moved from one location to another.
• Uniqueness: No two parcels of land are exactly identical.
• Situs: The location of a property and the economic benefits created by that location.
• Modification: The tendency of land and improvements to change over time.
• Conformity: The principle that property generally retains more value when it conforms to surrounding land uses and neighborhood standards.
• Progression: The principle that a less expensive property may gain value from being located near more expensive properties.
• Regression: The principle that a more expensive property may lose value when surrounded by less expensive properties.
• Contribution: The principle that the value of an improvement depends on how much it adds to the property’s overall value, not necessarily what it cost.
• Anticipation: The expectation of future benefits that can influence current property value.
• Competition: The principle that excessive competition tends to reduce profits, while insufficient competition may allow profits to increase.
• Change: The principle that property value is affected by changing economic, social, governmental, and environmental conditions.

Estates and Forms of Ownership

• Estate: An interest in real property that includes a right to possession.
• Freehold estate: An estate involving an uncertain duration of ownership.
• Leasehold estate: A tenant’s right to possess and use property for a specified period under a lease.
• Fee simple absolute: The highest form of private ownership, generally involving the broadest bundle of rights and an indefinite duration.
• Fee simple defeasible: Ownership that may end if a stated condition occurs.
• Fee simple determinable: A defeasible estate that ends automatically when a specified event occurs. Words such as “so long as,” “while,” or “until” often signal this estate.
• Fee simple subject to a condition subsequent: An estate that may be terminated by the grantor after a condition is violated, usually through legal action.
• Life estate: An ownership interest measured by the life of a person.
• Pur autre vie: A life estate measured by the life of someone other than the estate holder.
• Remainder interest: A future interest that becomes possessory after a prior estate ends.
• Reversion: A future interest retained by the grantor that returns to the grantor after a temporary estate ends.
• Estate in severalty: Ownership by one individual or legal entity.
• Tenancy in common: Ownership by two or more people, with each owner holding an undivided interest. Interests may be unequal, and there is generally no right of survivorship.
• Joint tenancy: Ownership by two or more people with a right of survivorship, subject to state law and proper creation.
• Right of survivorship: The surviving co-owner’s right to receive a deceased co-owner’s interest automatically.
• Tenancy by the entirety: A form of ownership available to married couples in some states.
• Community property: A marital ownership system recognized in certain states in which qualifying property acquired during marriage may belong to both spouses.
• Condominium: A form of ownership involving individual ownership of a unit and shared ownership of common elements.
• Cooperative: A property arrangement in which a corporation owns the building and residents own shares that provide a right to occupy a unit.
• Time-share: A right to use or occupy property for specified periods, often under a recurring schedule.
• Trust: A legal arrangement in which a trustee holds property for the benefit of another party.
• Partnership: A business association in which two or more persons share ownership, profits, and responsibilities.
• Corporation: A legal entity that can own, transfer, and encumber real estate.
• Limited liability company: A business entity that may provide liability protection and flexible management for its owners.

Common ownership mistake

Do not assume that joint tenancy exists merely because two people own property together. The ownership form depends on the deed, state law, and whether the required language and conditions were satisfied.

Legal Descriptions and Land Measurement

• Legal description: A precise method of identifying a parcel of real estate that is sufficient for a deed or other legal document.
• Metes and bounds: A legal description using directions, distances, monuments, and a point of beginning.
• Monument: A fixed natural or artificial reference point used in a legal description.
• Point of beginning: The point where a metes-and-bounds description starts and ends.
• Rectangular survey system: A land-description system using principal meridians, base lines, townships, and sections.
• Principal meridian: A designated north-south survey line used in the rectangular survey system.
• Base line: A designated east-west survey line used with a principal meridian.
• Township: A six-mile-by-six-mile square in the rectangular survey system.
• Section: A one-square-mile division of a township, normally containing 640 acres.
• Government lot: An irregular parcel created when standard rectangular survey measurements do not fit the land.
• Recorded plat: A map showing the division of land into lots, blocks, streets, and easements.
• Lot and block system: A legal-description method that refers to a recorded subdivision map.
• Benchmark: A permanent reference point used by surveyors to establish elevation.
• Acre: A unit of land containing 43,560 square feet.
• Square foot: A unit of area equal to a square measuring one foot on each side.
• Front footage: The measurement of a parcel along a street or other frontage.

Legal Descriptions: Exam Calculations

Remember these common conversions:

• One acre equals 43,560 square feet.
• One section equals 640 acres.
• One township contains 36 sections.
• One square mile equals 640 acres.
• One-half of a section equals 320 acres.
• One-quarter of a section equals 160 acres.
• One-quarter of a quarter-section equals 40 acres.

For a rectangular parcel:

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]

For a commission calculation:

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]

For loan-to-value ratio:

[
\text{LTV}=\frac{\text{loan amount}}{\text{property value or sales price}}\times 100
]

The exam may require careful attention to whether the question uses the sales price, appraised value, assessed value, or loan amount.

Encumbrances

• Encumbrance: A claim, lien, charge, restriction, or right held by someone other than the property owner that affects title or use.
• Lien: A monetary claim against property used to secure payment of a debt.
• Voluntary lien: A lien created intentionally, such as a mortgage.
• Involuntary lien: A lien imposed by law, such as a tax lien or judgment lien.
• Specific lien: A lien attached to one particular property.
• General lien: A lien that may attach to multiple properties or assets of a debtor.
• Superior lien: A lien with priority over other liens.
• Mortgage lien: A voluntary lien securing repayment of a real estate loan.
• Property tax lien: A lien for unpaid real estate taxes. It commonly has priority over many other liens.
• Mechanic’s lien: A lien claimed by contractors, laborers, or suppliers who were not paid for work or materials.
• Judgment lien: A lien resulting from a court judgment.
• Lis pendens: A recorded notice that litigation may affect title to real property.
• Easement: A nonpossessory right to use another person’s land for a specific purpose.
• Easement appurtenant: An easement benefiting one parcel and burdening another. The benefited parcel is the dominant estate, and the burdened parcel is the servient estate.
• Easement in gross: An easement benefiting a person or organization rather than another parcel of land.
• Easement by necessity: An easement created when access is necessary, often because a parcel would otherwise be landlocked.
• Easement by prescription: An easement acquired through open, notorious, continuous, hostile, and adverse use for the period required by state law.
• Easement by condemnation: An easement created through the government’s power of eminent domain.
• License: A personal, revocable permission to use another person’s land.
• Encroachment: An unauthorized physical intrusion onto another property, such as a fence crossing a boundary.
• Restrictive covenant: A private limitation on the use of property.
• Deed restriction: A restriction written into a deed or related recorded document.
• Covenants, conditions, and restrictions: Rules governing the use and appearance of property, often associated with a homeowners association.
• Party wall: A wall located on or near a property boundary and shared by adjoining owners.
• Encumbered title: Title affected by a lien, easement, restriction, or other encumbrance.

Deeds and Title

• Title: The legal concept of ownership and the rights associated with ownership.
• Deed: A written instrument used to transfer an interest in real property.
• Grantor: The person or entity transferring property.
• Grantee: The person or entity receiving property.
• Conveyance: The transfer of an interest in real property.
• Voluntary alienation: A voluntary transfer of property, usually by deed.
• Involuntary alienation: A transfer that occurs without the owner’s voluntary action, such as foreclosure, condemnation, or adverse possession.
• General warranty deed: A deed in which the grantor provides the broadest warranties of title.
• Special warranty deed: A deed in which the grantor warrants title only against claims arising during the grantor’s ownership.
• Quitclaim deed: A deed that transfers whatever interest the grantor may have without warranties of title.
• Bargain-and-sale deed: A deed that generally implies the grantor has title but may provide limited or no warranties, depending on state law.
• Deed of trust: A security instrument involving a borrower, lender, and trustee in states that use a trust-based mortgage system.
• Habendum clause: The deed provision that describes the extent of the ownership being conveyed, often introduced by “to have and to hold.”
• Granting clause: The section of a deed that states the grantor’s intention to convey the property.
• Legal covenant: A promise or warranty contained in a deed.
• Cloud on title: A claim, defect, or uncertainty that may impair marketable title.
• Marketable title: Title reasonably free from significant defects and acceptable to a prudent buyer.
• Chain of title: The historical record of ownership transfers affecting a property.
• Abstract of title: A summary of recorded instruments and events affecting title.
• Title search: An examination of public records to identify ownership, liens, restrictions, and other title issues.
• Title insurance: Insurance protecting against covered title defects or claims.
• Marketable record title: Title established through public records under applicable state law.
• Constructive notice: Legal notice presumed because information is properly recorded or publicly available.
• Actual notice: Direct, personal knowledge of a fact.
• Recording: Entering a document into public records to provide notice and establish priority under state law.
• Estoppel certificate: A signed statement confirming facts such as lease terms, rent, or the status of an agreement.

Contracts

• Contract: A legally enforceable agreement between competent parties supported by consideration.
• Express contract: An agreement in which the parties explicitly state the terms.
• Implied contract: An agreement inferred from the parties’ actions or circumstances.
• Bilateral contract: A promise exchanged for a promise.
• Unilateral contract: A promise exchanged for an act or performance.
• Valid contract: A contract that satisfies legal requirements and can be enforced.
• Void contract: A contract with no legal effect.
• Voidable contract: A contract that may be rejected or canceled by one party because of a legal defect.
• Unenforceable contract: An agreement that may be valid in substance but cannot be enforced because of a legal or procedural problem.
• Executory contract: A contract in which one or more obligations remain incomplete.
• Executed contract: A contract in which all required obligations have been performed.
• Offer: A proposal made with the intent that acceptance will create a binding agreement.
• Acceptance: Agreement to the exact terms of an offer.
• Counteroffer: A new offer that changes or rejects the terms of the original offer.
• Consideration: Something of value exchanged by the parties.
• Competent parties: Parties legally capable of entering into a contract.
• Meeting of the minds: Mutual agreement on the essential terms of a contract.
• Assignment: The transfer of a party’s rights under a contract to another party.
• Novation: The substitution of a new contract or party, generally releasing the original party from obligations.
• Breach of contract: Failure to perform a contractual obligation.
• Rescission: Cancellation of a contract and restoration of the parties, as far as possible, to their prior positions.
• Specific performance: A court-ordered remedy requiring a party to perform as promised.
• Liquidated damages: An amount agreed in advance as compensation for a breach.
• Statute of frauds: A law requiring certain agreements, including many real estate contracts, to be in writing.
• Statute of limitations: The period during which a legal action must be filed.
• Contingency: A contract condition that must be satisfied before a party is required to complete the transaction.
• Addendum: An additional document or provision added to a contract.
• Amendment: A change made to an existing contract after it has been formed.
• Rider: An attachment that changes or supplements a contract.
• Option: A contract giving one party the right, but not the obligation, to buy or lease property within a specified period.
• Right of first refusal: A right allowing a party to match an offer before the owner accepts an offer from another buyer.
• Earnest money: A buyer’s deposit demonstrating good faith. The deposit is not automatically the seller’s property if the transaction fails.
• Equitable title: A buyer’s interest in a property under a valid purchase contract before legal title transfers.
• Default: Failure to perform a contractual duty, such as making a required payment.
• Acceleration clause: A loan provision allowing the lender to demand the entire unpaid balance after a specified default.
• Alienation clause: A provision allowing the lender to demand repayment when the property is transferred, commonly called a due-on-sale clause.

Common contract mistake

An offer is not the same as a contract. A binding contract generally requires an offer, acceptance, consideration, competent parties, lawful purpose, and compliance with applicable writing requirements.

Agency and Brokerage

The term “agency” describes the legal relationship in which one party represents another. Agency duties and terminology can vary by state, so state-specific rules must be studied carefully. The National Association of REALTORS® describes buyer representatives, seller representatives, subagents, disclosed dual agents, designated agents, and transaction brokers as distinct agency relationships.

• Agency: A fiduciary relationship in which an agent represents a principal.
• Principal: The party who authorizes an agent to act on the principal’s behalf.
• Agent: A person authorized to represent a principal.
• Client: A principal represented by a real estate licensee.
• Customer: A person receiving services without an agency relationship.
• Fiduciary: A person required to act with loyalty and care for another person’s benefit.
• Listing agent: The agent representing the seller.
• Buyer’s agent: The agent representing the buyer.
• Cooperating agent: A licensee or brokerage that assists in a transaction, often representing the buyer or working with the buyer as a customer.
• Subagent: An agent who represents the principal through another agent or broker.
• Disclosed dual agency: Representation of both buyer and seller in the same transaction with required disclosure and consent.
• Designated agency: A structure in which different licensees affiliated with the same brokerage are designated to represent different clients.
• Transaction broker: A licensee who assists one or more parties without creating a traditional agency relationship, where permitted by state law.
• Universal agent: An agent authorized to perform nearly all acts that the principal could legally perform.
• General agent: An agent authorized to perform a range of acts for a principal within a specific business or relationship.
• Special agent: An agent authorized to perform a specific task or transaction.
• Express agency: Agency created through an oral or written agreement.
• Implied agency: Agency created by the parties’ conduct rather than an explicit agreement.
• Agency by ratification: Agency created when a principal accepts or approves an unauthorized act after it occurs.
• Agency by estoppel: Agency imposed when a principal’s conduct causes a third party to reasonably believe an agency relationship exists.
• Fiduciary duties: Duties commonly summarized as loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.
• Loyalty: The duty to place the client’s interests above the agent’s personal interests, subject to law and ethical obligations.
• Disclosure: The duty to provide required information and disclose material facts.
• Confidentiality: The duty to protect a client’s confidential information, even after the agency relationship ends when required by law.
• Accounting: The duty to properly handle money, documents, and property entrusted to the agent.
• Reasonable care: The duty to perform competently and follow applicable laws and professional standards.
• Procuring cause: The uninterrupted series of events that results in a successful transaction.
• Commission: Compensation paid for brokerage services, typically based on a negotiated agreement.
• Brokerage relationship: The legal relationship between a brokerage, its affiliated licensees, and clients or customers.
• Independent contractor: A worker classified under an agreement and applicable law as operating independently rather than as an employee.
• Broker price opinion: A broker’s estimate or opinion of a property’s likely price, when permitted by state law and distinct from a licensed appraisal.

Fair Housing and Consumer Protection

The Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, and disability. Exam questions often test both the protected classes and examples of prohibited conduct.

• Fair Housing Act: Federal law prohibiting discrimination in covered housing transactions.
• Protected class: A group protected from discrimination under federal, state, or local law.
• Blockbusting: Inducing owners to sell by suggesting that protected-class members are moving into a neighborhood.
• Redlining: Denying or limiting lending, insurance, or real estate services in an area based on protected characteristics or another prohibited basis.
• Steering: Directing buyers or renters toward or away from neighborhoods based on protected characteristics.
• Disparate treatment: Intentional unequal treatment of people because of a protected characteristic.
• Disparate impact: A facially neutral practice that disproportionately harms a protected group and lacks sufficient legal justification.
• Reasonable accommodation: A change in rules, policies, practices, or services needed to allow a person with a disability equal opportunity to use and enjoy housing.
• Reasonable modification: A structural change to a property that may be necessary for a person with a disability to use and enjoy the premises.
• Familial status: Protection generally covering households with children under 18, pregnant individuals, and people obtaining custody of children.
• Red flag: A fact or conduct that may signal illegal discrimination, such as directing a buyer based on neighborhood demographics.
• Advertising compliance: The requirement that housing advertisements avoid discriminatory language, preferences, limitations, or targeting.

Fair housing study tip

Focus on the action, not the speaker’s claimed intention. Telling a buyer that a neighborhood is “best for families” or “not a good fit for people like you” may create a steering problem even if the licensee believes the comment is helpful.

Financing and Mortgage Vocabulary

The Consumer Financial Protection Bureau identifies common mortgage terms such as adjustable-rate mortgage, annual percentage rate, Closing Disclosure, debt-to-income ratio, down payment, and earnest money in its consumer mortgage materials.

• Mortgage: A loan secured by real property.
• Mortgagor: The borrower who gives a mortgage as security.
• Mortgagee: The lender receiving the mortgage as security.
• Deed of trust: A security instrument using a borrower, lender, and trustee.
• Promissory note: The borrower’s written promise to repay the loan.
• Principal: The amount borrowed or the outstanding loan balance, excluding interest.
• Interest: The cost of borrowing money.
• Loan term: The period over which the loan is scheduled to be repaid.
• Amortization: The gradual repayment of a loan through scheduled installments.
• Fully amortized loan: A loan paid off through regular payments over its scheduled term.
• Negative amortization: A condition in which unpaid interest is added to the principal balance.
• Balloon payment: A large final payment due at the end of a loan term.
• Fixed-rate mortgage: A loan with an interest rate that remains constant for the loan term.
• Adjustable-rate mortgage: A loan whose interest rate may change according to an index, adjustment schedule, and contract terms.
• Initial interest rate: The starting rate on a loan, which may differ from the long-term rate.
• Rate cap: A limit on how much an adjustable interest rate or payment can change.
• Index: A financial benchmark used to determine changes in an adjustable interest rate.
• Margin: The lender’s fixed percentage added to the index on an adjustable-rate loan.
• Annual percentage rate: A broader measure of borrowing cost that may include the interest rate, points, broker fees, and certain other charges.
• Discount point: A fee paid to the lender, commonly equal to 1% of the loan amount, in exchange for a lower interest rate.
• Origination fee: A charge for processing or making a loan.
• Loan-to-value ratio: The loan amount compared with the property value or purchase price.
• Debt-to-income ratio: Monthly debt obligations divided by gross monthly income.
• Down payment: The portion of the purchase price paid by the buyer rather than borrowed.
• Equity: The owner’s interest in property after subtracting liens and debt from value.
• Private mortgage insurance: Insurance that protects the lender against certain losses when a conventional loan has a relatively high loan-to-value ratio.
• Mortgage insurance premium: Mortgage insurance associated with certain government-backed loan programs.
• Conventional loan: A loan not insured or guaranteed by the federal government.
• FHA loan: A loan insured by the Federal Housing Administration.
• VA loan: A loan guaranteed by the Department of Veterans Affairs for eligible borrowers.
• USDA loan: A loan program designed to support eligible rural home purchases under federal program rules.
• Construction loan: Short-term financing used to fund construction or major improvements.
• Bridge loan: Temporary financing used to cover a gap between transactions, often when buying before selling.
• Blanket mortgage: A loan secured by more than one parcel or property.
• Package mortgage: A loan secured by real property and personal property.
• Wraparound mortgage: A junior loan that includes or “wraps around” an existing loan.
• Assumption: The buyer takes over the seller’s existing loan, subject to lender approval and loan terms.
• Novation of a loan: Replacement of the original borrower or loan obligation with a new agreement that releases the original party.
• Prepayment penalty: A charge for paying off a loan early, when allowed by the loan terms and applicable law.
• Foreclosure: A legal process through which a lender enforces its rights after a borrower defaults.
• Short sale: A sale for less than the amount owed, usually requiring lender approval.
• Deed in lieu of foreclosure: A voluntary transfer of ownership to the lender to avoid foreclosure. The Consumer Financial Protection Bureau identifies this as a possible loss-mitigation arrangement.
• Refinancing: Replacing an existing loan with a new loan.
• Loan estimate: A disclosure showing estimated loan terms, projected payments, and closing costs.
• Closing Disclosure: A required form providing final details about a mortgage loan, including loan terms, projected payments, and fees.
• Escrow: Money or documents held by a neutral third party until specified conditions are met.
• Impound account: An account used by a lender or servicer to collect and pay property taxes and insurance.
• Truth in Lending: Federal consumer-credit disclosure requirements now primarily implemented through Regulation Z.
• Real Estate Settlement Procedures Act: Federal law addressing settlement-service disclosures, certain referral practices, escrow procedures, and related mortgage requirements.

Valuation and Appraisal

• Value: The estimated worth of a property under a particular definition and set of conditions.
• Market value: The most probable price a property should bring in a competitive and open market under specified conditions.
• Price: The amount paid or agreed to be paid for property.
• Cost: The amount required to create, replace, or reproduce an improvement.
• Appraisal: A formal opinion of value prepared by a qualified appraiser.
• Appraiser: A professional who develops an opinion of value using recognized methods and standards.
• Assessment: The value assigned by a taxing authority for property-tax purposes.
• Assessed value: The value used to calculate property taxes, which may differ from market value.
• Comparables: Similar properties used to help estimate the value of a subject property.
• Sales comparison approach: A valuation method that compares the subject property with recently sold similar properties.
• Cost approach: A valuation method based on land value plus the cost to construct or replace improvements, less depreciation.
• Income capitalization approach: A valuation method that converts expected income into an indication of value.
• Gross rent multiplier: A ratio derived by dividing a property’s sale price by its gross rental income.
• Capitalization rate: The relationship between a property’s net operating income and value.
• Net operating income: Income remaining after operating expenses but before debt service, income taxes, and depreciation.
• Reconciliation: The process of weighing indications from different valuation approaches to reach a final opinion.
• Highest and best use: The reasonably probable, legally permissible, physically possible, and financially feasible use that produces the greatest value.
• Depreciation: A loss in value from any cause.
• Physical deterioration: Loss in value caused by wear, aging, or damage.
• Functional obsolescence: Loss in value caused by an outdated design, layout, or feature.
• External obsolescence: Loss in value caused by conditions outside the property, such as noise, pollution, or unfavorable land use.
• Effective age: The apparent age of a property based on condition and utility rather than its actual chronological age.
• Replacement cost: The cost to construct a building with similar utility using modern materials and standards.
• Reproduction cost: The cost to construct an exact or nearly exact duplicate.
• Plottage: Increased value created by combining adjoining parcels.
• Assemblage: The process of combining two or more parcels into one larger parcel.
• Regression analysis: A statistical method sometimes used to analyze market data and estimate relationships among variables.

Leases and Property Management

• Lease: A contract in which a landlord gives a tenant possession and use of property for a specified period in exchange for rent.
• Lessor: The landlord or property owner.
• Lessee: The tenant.
• Estate for years: A leasehold estate with a definite beginning and ending date.
• Periodic tenancy: A tenancy that continues for successive periods until properly terminated.
• Tenancy at will: A tenancy that continues with the consent of the landlord and tenant but has no definite ending date.
• Tenancy at sufferance: A tenancy created when a tenant remains after the lawful expiration of the lease without the landlord’s consent.
• Gross lease: A lease in which the landlord typically pays most operating expenses.
• Net lease: A lease in which the tenant pays some or all property expenses in addition to rent.
• Triple-net lease: A lease in which the tenant commonly pays real estate taxes, insurance, and maintenance.
• Percentage lease: A lease requiring base rent plus a percentage of the tenant’s sales, common in retail.
• Variable lease: A lease in which rent changes according to stated conditions.
• Ground lease: A long-term lease of land, often allowing the tenant to construct improvements.
• Security deposit: Money held to cover certain tenant obligations, subject to the lease and state law.
• Rent: Payment made by a tenant for possession and use.
• Gross potential income: The maximum rental income a property could produce if fully occupied and all rents were collected.
• Effective gross income: Gross potential income plus other income minus vacancy and collection losses.
• Operating expenses: Costs of operating and maintaining an income-producing property.
• Vacancy and collection loss: Income lost because space is vacant or tenants fail to pay.
• Property manager: A person or company hired to operate, maintain, and manage property.
• Constructive eviction: A condition in which the landlord’s actions or failure to act substantially interfere with the tenant’s use, potentially allowing the tenant to leave.
• Actual eviction: Removal of a tenant from possession through legal process.
• Covenant of quiet enjoyment: A tenant’s right to use the leased premises without improper interference.
• Habitability: A legal standard requiring residential premises to meet basic health and safety requirements.
• Rent control: Government regulation limiting rent increases or rents in covered properties.
• Fair housing compliance: The obligation to apply rental standards, advertising, screening, and lease terms without unlawful discrimination.

Land Use, Zoning, and Government Powers

• Police power: The government’s authority to regulate property use to protect public health, safety, morals, and general welfare.
• Zoning: Local regulation dividing land into districts and controlling permitted uses, density, building size, and other characteristics.
• Zoning ordinance: The written law establishing zoning requirements.
• Zoning district: An area subject to a particular set of zoning rules.
• Comprehensive plan: A long-range plan guiding community development and land use.
• Variance: Permission to depart from a zoning requirement because strict compliance would create unnecessary hardship.
• Conditional-use permit: Permission for a use that may be allowed if specified conditions are met.
• Nonconforming use: A lawful use that existed before a zoning change made the use nonconforming.
• Spot zoning: Zoning that singles out a small parcel for treatment different from surrounding property, often raising legal concerns.
• Building code: Regulations establishing minimum construction and safety standards.
• Certificate of occupancy: Government approval that a building may be occupied for a specified use.
• Subdivision: The division of land into two or more parcels.
• Subdivision regulations: Rules governing the design, approval, and development of subdivisions.
• Impact fee: A charge imposed on development to help fund infrastructure or public services.
• Eminent domain: The government’s power to acquire private property for public use with payment of just compensation.
• Condemnation: The legal process used to exercise eminent domain.
• Inverse condemnation: A claim by a property owner alleging that government action effectively took or damaged property without proper compensation.
• Taxation: The government’s power to impose charges on property or other sources of revenue.
• Ad valorem tax: A tax based on the assessed value of property.
• Special assessment: A charge imposed on selected properties benefiting from a public improvement.
• Escheat: Transfer of property to the state when an owner dies without a valid will or heirs under applicable law.
• Building moratorium: A temporary pause on specified development or construction activities.

Environmental and Property-Condition Terms

• Environmental hazard: A substance or condition that may harm people, property, or the environment.
• Lead-based paint: A regulated hazard commonly associated with residential housing built before 1978. Federal disclosure requirements apply to many such transactions.
• Radon: A naturally occurring radioactive gas that can accumulate in buildings.
• Asbestos: A fibrous mineral once used in many building materials and associated with health risks when disturbed.
• Mold: Fungal growth that may occur where moisture is present.
• Underground storage tank: A tank located below ground that may pose contamination risks if it leaks.
• Hazardous waste: Waste that may be dangerous or harmful to health or the environment.
• Superfund site: A contaminated site addressed under federal environmental cleanup authority.
• Wetlands: Areas saturated or covered by water often subject to environmental regulation.
• Floodplain: Land susceptible to flooding.
• Flood insurance: Insurance designed to cover certain flood-related losses that ordinary homeowners insurance may exclude.
• Phase I environmental site assessment: A preliminary investigation of a property’s environmental conditions and potential contamination.
• Brownfield: Property whose redevelopment may be complicated by actual or suspected contamination.
• CERCLA: Federal environmental law commonly associated with hazardous-substance cleanup and liability.
• Environmental impact statement: A detailed analysis of the environmental effects of a proposed federal action.
• Latent defect: A hidden material defect that a reasonable inspection may not reveal.
• Material defect: A condition that could significantly affect value, desirability, safety, or a reasonable buyer’s decision.
• Patent defect: