The Language of Real Estate

484 Pages·1993·46.511 MB·

by  John W. Reilly

Fourth Edition
ABATEMENT/ ABSENTEE OWNER/ ADVERSE POSSESSION/
AGENCY/ AMERICANS WITH DISABILITIES ACT/
APPRAISER/ BANK INSURANCE FUND/ BROKER/
BUILDING RESIDUAL TECHNIQUE/^ASH FLOW/ O^RCLA/
COMMINGLING/ DEED/ DEP#MTJiUSA/lilUSWW^D/
UA ll^Ar<7EWCY/ EASEMENT/
IVIRONMENTAL PROTECTION
RRORS
NGE/
HOUSING
IR
TION/ FEDERAL
US AGENT/
INSPECTION/
INDOOR POISONING/
LICENSE LAWS/ RIUM/
MULHPLE LB^lPSl^Bnj^B^BnKl B^SION/
:°|OnlllftfeGINATION FEE/
PAR ICIPATION
MORTGAGE/ POWER O ATE/
RADON/ RENEGOTIABLE rJK MMVJMI/HEflKUTION
TRUST CORPORATION/ SAFE HARBOR RULE/ SAVINGS
AND LOAN ASSOCIATION/ SICK BUILDING SYNDROME/
SINGLE AGENCY/ SUBAGENCY OPTIONAL/ SUPERFUND/
TAX SHELTER/ TITLE Xl/ USPAP/ UNIVERSAL AGENT/
URAR/VARIABLE-RATE MORTGAGE/VETERANS
ADMINISTRATION (VA) LOAN/ YIELD CAPITALIZATION/

\
.the
language
johnw...
reilly
Real Estate
Education Company
® adivisionofDearborn Financial Publishing. Inc.

.the
language
3al(^
'**"^^illy
ToKrist—ine. SeanPatrick, andJennifer, whotore, scribbledon. mutilated, crumpled,
chewed ^but.fortunately,didnotswallowtheoriginalmanuscript.
Whileagreatdealofcarehasbeentakentoprovideaccurateandcurrentinformation,
the ideas, suggestions, general principles and conclusions presented in thisbook are
subjecttolocal, state andfederallawsandregulations, courtcasesand anyrevisions
of s—ame. The reader is thus urged to consult legal counsel regarding any points of
law thispublication shouldnotbeusedasasubstituteforcompetentlegaladvice.
©1977, 1982, 1989, 1993byDearbornFinancialPublishing,Inc.
PublishedbyRealEstateEducationCompany/Chicago,adivisionofDearbornFinan-
cialPublishing,Inc.
All rights reserved. The text of this publication, or any part thereof, may not be
reproducedinanymannerwhatsoeverwithoutwrittenpermissionfromthepubhsher.
PrintedintheUnitedStatesofAmerica.
93 94 95 10 9 8 7 6 5 4 3 2 1
AcquisitionEditor: MargaretM.Maloney
AssociateDevelopmentEditor: ElizabethA.Ireland
ProjectEditor:JanetWebster
CoverDesign:DesignAlliance,Inc.
InteriorDesign:LucyJenkins
LibraryofCongressCataloging-in-PublicationData
Reilly,JohnW. W —
Thelanguageofrealestate/John Reilly. 4thed.
P-
ISBN0-79310-5—83-8(pbk.) —
1.Real—property UnitedSta—tes Dictionari—es. 2.Realestate
business Lawandlegislation UnitedStates Dictionaries.
I.Title.
KF568.5.R44 1993
346.7304'6'03—dc20 93-8367R
[347.3064603] CIP
Preface
TheLanguageofRealEstateistheresultofmanyyearsofdifficultandthorough
workinresearchingtheanswerstoeverydayproblemsinrealestate.Numerousbooks
andarticlesonrealestatetaxes,condominiums, appraisal, finance, law,contractsand
the like are good source materials forthereal estatebrokerorsalesperson, buttheir
volumerequires one to maintain an extensive andexpensive real estate library. This
bookisdesignedtoeliminatethatproblem.TheLanguageofReal—Estateismorethan
a dictionary; it is a totally functional real estate reference book a comprehensive,
single-volume, instant-answerbooktojustaboutanyproblemorquestionconcerning
realestateprinciplesandpracticeintheUnitedStates.
The real estate industry has undergoneconsiderablechangesince this book was
firstpublished in 1977. Thisfourtheditionhasbeencreatedtoreflectthosechanges.
Morethan 150 new terms havebeen addedtothebook, bringingthe total numberof
entriestoexceed2,800.Definitionsthatappearedinthefirstthreeeditionshavebeen
revised,andinmanycasesexpanded,toprovidethereaderthemostcurrentandprecise
answerspossible. Accompanyingeachwordisabasicdefinition,severalapplications
andcross-referencestoaidinunderstandingrelateditems.
TheLanguageofRealEstatealsocontainsseveralhelpfulspecialfeatures:
Acompletesubjectclassificationoftermstoassistthosewhoareconcentrating
theirstudiesinspecificareas.
Alistofmorethan350abbreviationsandtheirmeanings,frequentlyencountered
intherealestatebusiness,suchasspecialwords,conceptsandorganizations.
TheRealtors®CodeofEthicsandStandardsofPracticeoftheNationalAssocia-
tionofRealtors®,includedinitsentirety.
A sample closing problem, featuring prorations and computations common to
most residential real estate transactions. The closing problem is illustrated on a
settlementstatementworksheetandonaRESPAsettlementstatement.
Digitized by tine Internet Arciiive
2009
in
littp://www.arcliive.org/details/languageofrealesOOreil
Acknowledgments
What started out 15 years ago as a basic 40-page glossary has evolved into the
comprehensiverealestatereferencebookyouarenowreading.Thebookisdesigned
toquicklyresolvethemanyquestionsaboutrealestateoftenposedtomeasarealestate
attorney, broker, instructorand lecturerin real estate law and practice. Many people
havehelpedalongthewayandtothemIextendawarm"Mahalo."
SpecialthankstoMs.JacquelineL.S.Earle,aHonoluluattorneyandRealtors®
who contributed aconsiderable amount oftime, energy and talent in the process of
puttingtogethertheoriginalversionofthebook.
Ialsowishtoacknowledgethetimeandeffortinreviewingtheentiremanuscript
oftwoexceptionalrealestateattorneysinthestateofHawaii:ThomasA.Boddenand
JeffreyS.Grad.ThanksalsogoestoAlanN.TonnonofBellevue,Washington.
Fortheirspecialassistanceandpatienceintypingthemanuscript,IthankYvonne
Gates,KarenHara,IreneHonjoandAileenNishimura.
Another special thanks goes to Peter A. Clarke and Paul Cramer ofthe San
Francisco firm of Clarke and Cramer, Inc., for their expertise in developing the
industrialandcommercial realestateterms.
For theircontributions to the new edition, I thank: AnnetteAbdill, Abdill Real
Estate School; James A. Ansalmi, CCIM, Academy Real Estate School; Patricia
Banta, Collin County Community College; Stuart Bernstein, Best School ofReal
Estate; Kenneth A. Bigelow, GRI, IFA, Real Estate Education Company; Roger
Bomar, Missouri Real Estate School; MauriceA. Boren, National InstituteofReal
Estate;FredBrodsky,BrodskySchoolofRealEstate;HughBurdick,BOAISchool
ofReal Estate; Leona Busby, Long & Foster Institute of Real Estate; Rose Mary
Chambers,FirstSchoolofRealEstate;JudyL.Clarke,MohaveCommunityCollege;
Robert J. Connole, Ph.D, Connole-Morton Real Estate School; Nancy K. Currey,
CurreyManagementInstitute;RalphDeMartino,GRI,PaducahCommunityCollege;
RexR.Denham,NorthWesternSchoolofRealEstate;JeniDurant,SpencerSchool
ofReal Estate; Kenneth Edwards, GRI, Community College instructorand author;
LindaJ. Fields, Professional Institute forReal EstateTraining; Thomas D. Fisher,
M.Ed.,CRB, GRI, Southern OhioCollege; RichardGarnitz, MontgomeryCollege;
Joe Giacoma, Jr., Neosho County Kansas Community College; Dolores C. Gick,
MontgomeryCollege;NormaGood,MaloneCollege;LindaH.Hamm,TheColum-
biaAcademyofReal Estate,Inc.;GeorgeR. Harrison,MSA;Vernon Hoven,Vern
HovenTax Seminars;Kennard RHowell,MAI,SRA; LeonE.Hustad,CRB,CRS,
GRI,LasVegasSchoolofRealEstate;CraigLarabee,LarabeeSchoolofRealEstate;
DebbieLevitz,FortMyersAssociationofRealtors®RealEstateSchool;DuaneA.
Lyman,A.J. Educational Services,Inc.; Bill Martin,Martin School ofReal Estate;
Anthony J. Martinez, IFAS, National Association ofIndependent Fee Appraisers;
John D. Mayfield,Jr.,The Southeast Real Estate Prep School; David N. McAlvey,
Hoosier-State Real Estate Education; John Michaels, Oakton Community College;
Susan G.Moseley,Moseley-FlintSchoolsofReal Estate; DianthaMuzingo,DREI,
Professional Real Estate Education; Patricia S. Norberg, Real Estate Exam Center;
D.D."Del"Nordstrom,PRO/ED;EdwardP.Norris,NorrisSchoolofReal Estate;
MikeRieder,GRI,CRS,GoldCoastSchoolofRealEstateII,Inc.;GerardA.Rivello,
G.A.R. School ofReal Estate; Dale E. Roach, DREI, Career Training; George R.
Safire, AlphaCollege ofReal Estate; Laura L. Selvy, Century 21 Continental Real
EstateAcademy;BenSimon,BerksRealEstateInstitute;JoshuaL.Simon,Attomey-
at-Law;Kathryn"Tootie"Smith,SmithRealEstateSchool;DawnM.Svenningsen,
viii Acknowledgments
DabbsAcademyofRealEstate,Inc.;RandallS.vanReken,SouthernNevadaSchool
ofRealEstate;JohnRWeidemer,UniversityofHouston; andTimothyM.Wyman,
TheProfessionalSchoolofBusiness.
IalsothankJohnD.Ballou,MoraineValleyCommunityCollege;W.DeanDavis,
William Rainey Harper Junior College; Barney Fletcher, Barney Fletcher Schools;
AndrewM.Gray,NIRESchoolsofRealEstate;WilliamR.Gray,ArizonaSchoolof
RealEstate;MelvynLissner,NewJerseyRealtyInstitute;LucySchissler,JonesReal
Estate Colleges, Inc.;John L. Schlapman,Wauwatosa RealtyCompany; Joseph E.
Spalding,J.E.SpaldingRealEstate;andRidgelyR.Ware,RutgersUniversity,fortheir
contributionstothepreviouseditions.
It is indeed a rareoccasion when an authorcan work with a publisherthat is so
well-versed in the subject. Real Estate EducationCompany retains ateamofexperts
inall phasesofreal estatepublication.They mademy writingjobarelatively simple
one.Itwasapleasureworkingwiththemanymembersoftheirteam.Thanksalsogoes
toBetsyIreland,whodirectedtheorganizationandproductionofthefourthedition.
Andlast,averyspecialwordofappreciationtomywife,Patty,forallhersupport
andencouragementthroughoutall stagesofthebook'sproduction.
The authorand the publisherwelcome any comments, criticisms or suggestions
fromreadersthatwill helpfuturerevisions.
JohnW.Reilly
Honolulu, Hawaii