REAL ESTATE | LEGAL | FINANCIAL
ABSTRACT
A written history of the title to a parcel of real estate as recorded in a Land Registry Office.
ACRE
A measure of land equalling 160 square rods, or 4,840 square yards, 43,560 square feet, or .4
hectares.
AGENT
One who is authorized by a principal to represent him/her in business transactions with a
third party, in the real estate profession it refers to a licensed brokerage.
AGREEMENT for SALE
An agreement for the purchase of real property wherein the purchase price is paid in
installments and title is not conveyed to the purchaser until the purchase price is paid in full.
AGREEMENT OF PURCHASE AND SALE
A contract by which one party agrees to sell and another agrees to purchase.
AGREEMENT TO LEASE
A contract by which one party agrees to rent real estate to another party for a rental fee or
other compensation.
APPRAISAL
The act of process of estimating value.
APPRAISED VALUE
An estimate of the value of the property. Conducted by a certified appraiser for the purpose of
mortgage lending.
APPURTENANCE
Something which is outside the real property itself, but belongs to the land and is joined
thereto. It adds to greater enjoyment of the land. A right-of-way is an appurtenance.
ASSESSED VALUE
A valuation placed upon property as a basis for municipal taxation.
ASSESSOR
An official who has the responsibility of determining assessed value for tax purposes.
BROKER
See Real Estate Broker.
BUILDING CODES
Regulations established by local governments providing for structural requirements for
building.
BUILDING LINE
A line fixed at a certain distance from the front and/or sides of a lot, beyond which no building
can project.
BUILDING PERMIT
A document issued by the municipal authority certifying the blueprints for construction and
allowing work to commence.
CHARGE
The name given to a mortgage document when title is registered under the Land Titles Act.
CLOSING
See Date of Completion
CLOUD ON TITLE
Any encumbrance or claim that affects title to real property.
COMMISSION
Remuneration paid to an agent on sale or lease of property, usually as a percentage of the
amount involved.
COMPENSATION
Payment or reward for performance of service.
CONDOMINIUM
The fee ownership of a specified amount of space (the unit) in a multiple dwelling or other
multi-occupancy building with tenancy-in-common ownership of portions used jointly with
other owners (the common elements.)
CONDOMINIUM FEE
A common payment made by owners that is allocated to pay expenses.
CONSTRUCTION LIEN
See Mechanics Lien.
CONVEYANCE
The transfer of an interest in property from one person to another.
DATE OF COMPLETION
The date specified in the agreement of purchase and sale, when the purchaser is to deliver
the balance of money due and the vendor to deliver a duly executed deed and vacant
possession of the property (unless otherwise agreed.)
DEVELOPER
One who engages in the subdivision or improvement of land.
DOMINANT TENEMENT
The estate (i.e. property) which derives benefit from an easement over a servient tenement, as
in a Right-of-way.
DUPLEX
A two-family dwelling or house.
DWELLING
Residence.
ESTATE
An interest in land.
EXCLUSIVE LISTING
The giving of the sole right to offer the described property for sale according to the terms of
the agency agreement.
EXPROPRIATION
Taking of private property by the state for public use, with fair compensation to the owner,
through the exercise of the right of eminent domain.
EXTRAS
Chattels included in the sale.
FEE SIMPLE
The highest estate or absolute right in real property.
FIXTURES
Permanent improvements to property that may not be removed at the expiration of the term of
lease or tenure.
FLASHING
Sheet metal or other material used in roof and wall construction to shed water.
FOOTING
The widened section, usually concrete, at the base or bottom of a foundation wall, pier or
column.
FRAMING
The rough timber work of a house, including the flooring, roofing, partitioning, ceiling and
beams.
GRANT
A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in
land.
GUTTER
An eavestrough used to convey rainwater from the roof to the downspout.
JOIST
One of a series of horizontal wood members used to support a floor, ceiling or roof.
LAND TRANSFER TAX , DEED TAX OR PROPERTY PURCHASE TAX
A fee paid to the municipal and/or provincial government for the transferring of property from
seller to buyer.
LANDLORD
The person from whom another holds tenancy.
LEASE
Contract between landlord (lessor) and tenant (lessee) for the occupation or use of the
landlord's property by the tenant for a specified time and for a specified consideration (rental).
LESSEE
Tenant under a lease.
LESSOR
The person who grants use of property under lease to a tenant.
LINTEL
A horizontal structural member (beam) that supports the load over an opening such as a door
or window.
LISTING
An oral or written agreement between a property owner and a broker authorizing the brokerage
to offer the owner's real property for sale or lease.
MARKET VALUE
The highest price in terms of money, which the property will bring to a willing seller if exposed
for sale on the open market allowing a reasonable time to find a willing purchaser, buying with
the knowledge of all the uses to which it is adapted and for which it is legally capable of being
used, and with neither party acting under necessity, compulsion or peculiar and special
circumstances.
METES AND BOUNDS
A system of land description whereby all boundary lines are set forth by use of terminal points
and angles - mete referring to a limit or limiting mark, and bounds referring to boundary lines.
METROPOLITAN AREA
That area which includes not only the entire chief urban core of a city (the central city) but
also the outlying suburbs which are appended thereto.
MULTIPLE LISTING
An arrangement among brokerages, usually real estate board members, whereby each
brokerage presents its listings to the other members, who may negotiate the transaction.
OPEN LISTING
A listing given to any number of brokerages without liability to compensate any except the
one who first acquires a buyer ready, willing and able to meet the terms of the listing, or
secures the acceptance by the seller of a satisfactory offer; the sale of the property
automatically terminates the listing.
OPTION
A right given by the owner of property to another (for valuable consideration) to buy certain
property within a limited time at an agreed price.
PERSONAL PROPERTY
All property, except land and the improvements thereon.
PROSPECT
A potential buyer or customer.
REAL ESTATE
"Real Estate" includes real property, leasehold and business whether with or without
premises, fixtures, stock-in-trade, goods or chattels in connection with the operation of the
business as defined in the Real Estate and Business Brokers Act of Ontario.
REAL ESTATE BROKER
A brokerage that represents a principal in a real estate trade. (See more formal definition in
the Real Estate and Business Brokers Act.)
REAL PROPERTY
The combination of the tangible and intangible attributes of land and improvements.
Value-wise, it is the sum of the value of the real estate, considered as land and structure and,
for example, the tangible value arising by reason of a favourable lease. The real estate, plus
the rights that go with it.
REALTOR
A registered word which may only be used by an active member of a real estate board
affiliated with the Canadian Real Estate Association.
RENT
The compensation paid for the temporary use, and/or occupation of real estate.
RIGHT
The interest one has in a piece of property.
SALESPERSON
A licensee of a brokerage authorized to trade in Real Estate (as defined within the Real
Estate and Business Brokers Act). Also can be referred to as a Sales Representative or an
Associate Broker.
SET BACK
The distance from the curb or other established line within which no buildings may be erected.
SHINGLE
A relatively thin and small unit of roofing, partially laid in overlapping layers as a roof covering
or as cladding on the sides of buildings.
SPECIAL ASSESSMENT
An assessment which is not customarily levied and which is made against only those specific
parcels of property directly benefiting therefrom.
STUCCO
Any cement-like material used as an exterior covering for walls and the like, put on wet and
drying hard and durable.
STUDDING
One of the series of wood structural members used as supporting elements in walls and
partitions. (Plural: studs or studdings)
SUB-AGENT
An agent authorized by the listing agent to assist in transacting the affairs of the principal
(with express or implied consent of principal).
SURVEY
The accurate mathematical measurement of land and buildings thereon, made with the aid of
instruments.
TENANT
One who occupies land or tenement under a landlord.
TENURE
A system of land holdings for a temporary time period.
VALUATION
Estimated worth or price. The act of ascertaining how much specific real property is worth.
VENDOR
A seller of real property.
ZONING BY-LAW
A by-law passed by a municipality and approved by the Ontario Municipal Board, prohibiting
the use of land in certain areas for any purpose other than as set out in the by-law. In the
Planning Act, it is called a Restricted Area By-law.
REAL ESTATE | FINANCIAL
ADVERSE POSSESSION
When an individual, not the owner, takes actual possession of the property, hostile to, and
without the consent of the owner.
AGENCY
The relationship between principal and agent which arises out of a contract, written or oral
wherein an agent is employed and authorized by the principal to represent him/her in
business transactions with a third party.
AGENT
One who is authorized by a principal to represent him/her in business transactions with a
third party, In the real estate profession it refers to a licensed brokerage.
AGREEMENT for SALE
An agreement for the purchase of real property wherein the purchase price is paid in
installments and title is not conveyed to the purchaser until the purchase price is paid in full.
AGREEMENT OF PURCHASE AND SALE
A contract by which one party agrees to sell and another agrees to purchase.
AGREEMENT TO LEASE
A contract by which one party agrees to rent real estate to another party for a rental fee or
other compensation.
APPURTENANCE
Something which is outside the real property itself, but belongs to the land and is joined
thereto. It adds to greater enjoyment of the land. A right-of-way is an appurtenance.
AUTHORITY
The legal power or right given by a principal and accepted by the agent to act on the
principal's behalf in business transactions with a third party.
BREACH OF CONTRACT
Failure to fulfill an obligation under a contract. Breach confers a right of action on the offended
party.
BUNDLE OF RIGHTS
A concept in which rights of possession, use, enjoyment, and disposition comprise the rights
of ownership.
BUSINESS
Any undertaking for the purpose of profit, including any interest in any such undertaking.
CAVEAT EMPTOR
"Let the buyer beware." The buyer must examine the goods or property he/she is buying and
he/she, therefore, buys at his/her own risk.
CHARGE
The name given to a mortgage document when title is registered under the Land Titles Act.
CHATTEL
Personal property which is tangible and moveable.
CLOUD ON TITLE
Any encumbrance or claim that affects title to real property.
COMMON LAW
That part of the law formulated, developed and administered by the old common law courts,
based originally on common customs and mostly unwritten.
COMPENSATION
Payment or reward for performance of service.
CONDITION PRECEDENT
A condition in a contract which calls for the happening of some event, or performance of some
act, before the agreement become binding on the parties.
CONDITION SUBSEQUENT
A condition referring to a future event upon the happening of which the contract becomes no
longer binding on the parties.
CONSIDERATION
Something of value given by a promisee to a promisor to make the promise binding.
CONSTRUCTION LIEN
See Mechanics Lien
CONTRACT
A contract is a legally binding agreement between two or more capable persons for
consideration or value, to do or not to do some lawful and genuinely intended act. If affecting
real estate it must be in writing.
CONVEYANCE
The transfer of an interest in property from one person to another.
COVENANT
An agreement contained in a deed and creating an obligation. It may be positive, stipulating
the performance of some act. It may be negative or restictive, forbidding the commission of
some act.
DAMAGES
Compensation or indemnity for loss owing for breach of contract, or a tort (civil wrong.)
DEED
An instrument in writing, duly executed and delivered, that conveys title or an interest in real
property.
DEED RESTRICTION
An imposed restriction in a deed for the purpose of limiting the use of the land.
DEFAULT
Failure to fulfill an obligation.
DESCRIPTION
A legal identification of land or premises.
DOR
See Notice DOR
DOMINANT TENEMENT
The estate (i.e. property) which derives benefit from an easement over a servient tenement, as
in a Right-of-way.
EASEMENT
A right enjoyed by one landowner over the land of another.
ENCROACHMENT
The unauthorized extension of the boundaries of land.
ENCUMBRANCE
Outstanding claim or lien recorded against property or any legal right to the use of the
property by another person who is not the owner.
ESCHEAT
The reversion of property to the state in the event the owner thereof dies leaving no will and
having no legally qualified heir to whom the property may pass by lawful descent.
ESTATE
An interest in land.
ESTOPPEL
A bar to alleging or denying a fact because of one's own previous actions or words to the
contrary.
ETHICS
Rules of behaviour made and accepted by business to provide fair and moral practice.
EXPRESS AUTHORITY
Authority delegated by the principal which clearly sets forth in exact, plain, direct and
well-defined limits those acts and duties which the agent is empowered to perform on behalf
of the principal, e.g. an exclusive listing.
EXPROPRIATION
Taking of private property by the state for public use, with fair compensation to the owner,
through the exercise of the right of eminent domain.
FORECLOSURE
Remedial court action taken by a mortgagee, when default occurs on a mortgage, to cause
forfeiture of the equity of redemption of the mortgagor.
GRANT
A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in
land.
GRANTEE
The party to whom an interest in real property is conveyed.
GRANTOR
The party who conveys an interest in real property by deed.
INDEMNIFY
To secure against hurt, loss or damage; to make compensation to for incurred hurt, loss or
damage.
INDENTURE
A document or deed, usually in duplicate, expressing certain objects between the parties.
INFANT
A person who is a minor, under the age of eighteen, and thus incapable of the independent
judgment necessary to undertake a legal obligation.
INJUNCTION
A judicial process or order requiring the person to whom it is directed to do, or refrain from
doing, a particular thing.
INSTRUMENT
A form of written legal document.
INTESTATE
A person who dies without a will, or leaves one which is defective in form, in which case his
estate descends by operation of law to his heirs or next of kin.
IRREVOCABLE
Incapable of being recalled or revoked; unchangeable, unalterable.
JOINT TENANCY
Ownership of land by two or more persons whereby, on the death of one, the survivor or
survivors take the whole estate.
JUDGEMENT
The decision of the Court.
LAND TRANSFER TAX , DEED TAX OR PROPERTY PURCHASE TAX
A fee paid to the municipal and/or provincial government for the transferring of property from
seller to buyer.
LEASE
Contract between landlord (lessor) and tenant (lessee) for the occupation or use of the
landlord's property by the tenant for a specified time and for a specified consideration (rental).
LEGAL DESCRIPTION
A written description by which property can be located, definitely.
LESSEE
Tenant under a lease.
LESSOR
The person who grants use of property under lease to a tenant.
LIS PENDENTS
A legal document giving notice that an action or proceeding is pending in the courts which
affects the title to the designated property.
MARKETABLE TITLE
A title which a court of equity considers to be so free from defect that it will enforce its
acceptance by a purchaser.
MECHANIC'S LIEN (CONSTRUCTION)
A claim filed in the land registry office by an individual, or company, for labour or material, or
both, supplied for the improvement of the property.
MINOR
A person who is under the age of legal competence, which is eighteen years in Ontario.
MORE OR LESS
Term often found in a property description intended to cover slight, unimportant or
unsubstantial inaccuracies of which both parties are willing to assume the risk.
NOTICE DOR
Notice filed in court by mortgagor under foreclosure proceedings that he desires an
opportunity to redeem.
OFFER AND ACCEPTANCE
The basic requisite of any contract is a proposal by one party, called the offeror, to another
party, called the offeree, to accept the basic terms of the Agreement. If the offeree indicates
assent to the proposal, there is an acceptance and thecontract will bind both parties to its
terms.
OFFER TO PURCHASE
The legal agreement which outlines what your are willing to pay, and what you expect to
receive with the home
OPEN LISTING
A listing given to any number of brokerages without liability to compensate any except the
one who first acquires a buyer ready, willing and able to meet the terms of the listing, or
secures the acceptance by the seller of a satisfactory offer; the sale of the property
automatically terminates the listing.
PERSONAL PROPERTY
All property, except land and the improvements thereon.
POWER OF ATTORNEY
Delegated written authority to a person to legally act on behalf of another.
POWER OF SALE
The right of a mortgagee to force sale of the property without judicial proceedings should
default occur.
QUIT CLAIM DEED
A general release of all claims or rights to a parcel of land.
RESTRICTED AREA BY-LAW
See Zoning By-law
RESTRICTIVE COVENANT
A limitation placed upon the use of property, contained in the deed.
RIGHT
The interest one has in a piece of property.
RIGHT OF SURVIVORSHIP
The distinguishing feature of joint tenancies which provides that, where land is held in
undivided portions by co-owners, upon the death of any joint owner, his/her interest in the land
will pass to the surviving co-owner, rather that to his/her estate.
RIGHT OF WAY
The right to pass over another's land, more or less frequently, according to the nature of the
easement.
RIPARIAN RIGHTS
The rights of the owners of lands on the banks of watercourses, to take advantageous use of
the water on, under, or adjacent to his land, including the right to acquire accretions, wharf
slips, and fish therefrom.
RUNNING WITH THE LAND
A covenant is said to run with the land when it extends beyond the original parties to the
agreement and binds all subsequent takers to either liability to perform it or the right to take
advantage of it.
SEALED AND DELIVERED
A term indicating that a conveyor has received adequate consideration as evidenced by
his/her voluntary delivery. The word "sealed" adds more strength since under old
conveyancing law an official seal was used as a substitute for consideration.
SERVIENT TENEMENT
Land over which an easement exists in favour of the dominant tenement.
SET BACK
The distance from the curb or other established line within which no buildings may be erected.
SPECIFIC PERFORMANCE
A remedy in a court of equity compelling a defendant to carry out the terms of an agreement
or contract. It is available only where the remedy of damages cannot afford adequate relief to
the plaintiff.
STATEMENT OF ADJUSTMENTS
A statement prepared by the solicitor for the vendor setting out, in balance sheet form the
credits to the vendor (e.g. purchase price, prepaid taxes, prepaid insurance, etc.) and the
credits to the purchaser (e.g. deposits, arrears in taxes prior to thedate of closing) and the
balance due on closing, so that both the purchaser and the vendor will have a record, at the
date of closing of the financial breakdown of the transaction.
STATUTE
A law established by an act of the legislature.
STATUTE OF FRAUDS
A law which provides that certain contracts must be in writing in order to be enforceable at
law. It includes real estate contracts.
SYNDICATE
An association of individuals formed for the purpose of owning, operating and managing large
parcels of real property for the mutual benefit of all, and organized as a corporation, limited
partnership or joint venture.
TENANCY-IN-COMMON
Ownership of land by two or more persons; unlike joint tenancy in that interest of deceased
does not pass to the survivor, but is treated as an asset of the deceased's estate.
TIME IS OF THE ESSENCE
Requires punctual performance of a contract on closing date and is indicated by so stating as
in an Agreement of Purchase and Sale.
TITLE
The means of evidence by which the owner of land has lawful ownership thereof.
TRANSFER
To convey from one person to another.
VOID
Of no legal effect. A nullity.
VOIDABLE
Where one party to a contract is entitled to rescind the contract at his option.
ZONING BY-LAW
A by-law passed by a municipality and approved by the Ontario Municipal Board, prohibiting
the use of land in certain areas for any purpose other than as set out in the by-law. In the
Planning Act, it is called a Restricted Area By-law.
REAL ESTATE | LEGAL
AGREEMENT for SALE
An agreement for the purchase of real property wherein the purchase price is paid in
installments and title is not conveyed to the purchaser until the purchase price is paid in full.
AMORTIZATION
The gradual retirement of a debt by means of partial payments of the principal at regular
intervals.
AMORTIZATION PERIOD
The number of years it will take to pay your mortgage loan.
APPRAISAL
The act of process of estimating value.
APPRAISED VALUE
An estimate of the value of the property. Conducted by a certified appraiser for the purpose of
mortgage lending.
ASSESSED VALUE
A valuation placed upon property as a basis for municipal taxation.
ASSESSOR
An official who has the responsibility of determining assessed value for tax purposes.
ASSUMABILITY
Allows the buyer to take over the seller's mortgage on the property.
ASSUMPTION OF MORTGAGE
The taking of title to property by a grantee, wherein grantee assumes liability for an existing
mortgage against a property and becomes personally liable for the payment of such mortgage
debt.
BALANCE DUE ON COMPLETION
The amount of money the purchaser will be required to pay to the vendor to complete the
purchase, after all adjustments have been made.
CLOSED MORTGAGE
A mortgage that locks you into a specific payment schedule. A penalty usually applies if your
repay the loan in full before the end of the term.
COMMITMENT
See Mortgage Commitment.
COMPOUND INTEREST
Interest on both the original principal and on interest accrued.
CONVENTIONAL MORTGAGE
A mortgage loan issued for up to 75% of the property's appraised value or purchase price,
whichever is less.
CREDITOR
A person to whom a debt is owed by another person termed the debtor.
DEPOSIT
Payment of money or other valuable consideration as pledge for fulfillment of contract.
DEPRECIATION
A loss in value due to any cause.
DOWN PAYMENT
The buyer's cash payment toward the property. The difference between the purchase price
and the amount of the mortgage loan.
ECONOMICS
The study of how persons and society choose resources which have alternative uses, to
produce various commodities over time and distribute them for consumption now and in the
future, among various people and groups in society.
EQUITY
The interest an owner of real property has in its total assets after allowing for encumbrances
and creditors' claims.
EQUITY OF REDEMPTION
The right of the mortgagor to reclaim clear title to the property upon full repayment of the debt.
FORECLOSURE
Remedial court action taken by a mortgagee, when default occurs on a mortgage, to cause
forfeiture of the equity of redemption of the mortgagor.
GDS RATIO
Gross Debt Service Ratio. Lender's allowable ratio of gross monthly payment to gross
monthly income of mortgage applicant.
HIGH RATIO MORTGAGE
A mortgage that exceeds 75% of the home's appraised value. These mortgages must be
insured.
INTEREST RATE
The percentage which is charged for the use of borrowed money.
LIEN
A right, given to a creditor, creating an interest in the real property until the debt is
discharged.
MATURITY DATE
The end of the term, at which time you can pay off the mortgage or renew it for another.
MILL
One-tenth of one cent, a measure used to indicate the property tax rate, e.g. a tax rate of one
mill per dollar is the same as 0.10 per cent of the assessed value.
MORTGAGE
A conveyance of property to a creditor as security for payment of a debt with a right of
redemption upon payment of the debt.
MORTGAGEE
The one to whom property is conveyed as security for the payment of a debt; the lender or
creditor.
MORTGAGOR
The one who makes the mortgage; the borrower or debtor.
MORTGAGE COMMITMENT
A formal indication, by a lending institution that it will grant a mortgage loan on property, in a
certain specified amount and on certain specified terms
MORTGAGE INSURANCE
A policy that applies to high-ratio mortgages to protect the lender against loss if the borrower
is unable to repay the mortgage.
MORTGAGE LIFE INSURANCE
A policy that pays off the mortgage if the borrower dies.
OPEN MORTGAGE
Allows partial or full payment of the principal at any time, without penalty.
PORTABILITY
A mortgage option that enables borrowers to take their current mortgage with them to another
property, without penalty.
POWER OF SALE
The right of a mortgagee to force sale of the property without judicial proceedings should
default occur.
PRE-APPROVED MORTGAGE
Qualifies you for a mortgage before you start shopping. You know exactly how much you can
spend and are free to make a firm offer when you find the right home.
PREPAYMENT CLAUSE
A clause inserted in a mortgage, which gives the mortgagor the privilege of paying the
mortgage debt in advance of the maturity date, on stipulated terms.
PRE-PAYMENT PRIVILEGE
Voluntary payments in addition to regular mortgage payments.
PRINCIPAL
The employer of an agent or brokerage, who gives the agent the authority to do some act for
him/her.
PRINCIPAL AMOUNT
In mortgage law, this term refers to the debt itself, as distinguished from interest.
REFINANCING
Paying off the existing mortgage and arranging a new one or renegotiating the terms and
conditions of an existing mortgage.
RENEWAL
Renegotiation of a mortgage loan at the end of a term for a new term.
SECOND MORTGAGE
Additional financing. Usually has a shorter term and higher interest rate than the first
mortgage.
STATEMENT OF ADJUSTMENTS
A statement prepared by the solicitor for the vendor setting out, in balance sheet form the
credits to the vendor (e.g. purchase price, prepaid taxes, prepaid insurance, etc.) and the
credits to the purchaser (e.g. deposits, arrears in taxes prior to the date of closing) and the
balance due on closing, so that both the purchaser and the vendor will have a record, at the
date of closing of the financial breakdown of the transaction.
TERM
In a mortgage "term" is the actual length of time for which the money is loaned.
TERM MORTGAGE
A non-amortizing mortgage under which the principal is paid in its entirety upon the maturity
date.
TRUST ACCOUNT
An account separate and apart from one's personal monies, as required by law in the case of
a brokerage.
VARIABLE-RATE MORTGAGE
A mortgage with fixed payments, but fluctuating interest rates. The changing interest rate
determines how much of the payment goes towards the principal.
VENDOR TAKE BACK (VTB) MORTGAGE
A mortgage type wherein the seller provides some or all of the financing. |
