Glossary

Abstract of Title
A condensed history or summary of all transactions affecting a particular tract of land.

Acknowledgment
The act by which a party executing a legal document goes before an authorized officer or notary public and declares the same to be his voluntary act and deed.

Agent
A person or company that has the power to act on behalf of another or to transact business for another, e.g., a title Agent under contract to issue policies of title insurance.

ALTA
American Land Title Association. A national association of title insurance companies, abstracters and attorneys specializing in real property law which speaks for the title insurance and abstracting industry, with headquarters in Washington, D.C.

Appurtenance
Anything so annexed to land or used with it that it will pass with the conveyance of the land.

Assessment
The imposition of a tax, charge or levy, usually according to established rates.

Assignee
One to whom a transfer of interest is made. For example, the assignee of a mortgage or contract.

Assignor
One who makes an assignment. For example, the assignor of a mortgage or contract.

Attachment
Legal seizure of property to force payment of a debt.

Chain of Title
A term applied to the past series of transactions and documents affecting the title to a particular parcel of land.

Clear Title
One which is not encumbered or burdened with defects.

Closing
Also known as “escrow” or “settlement.” The process of executing legally binding documents such as deeds and mortgages most commonly associated with the purchase of real estate and the borrowing of money to assist in the purchase.

Clouded Title
An encumbered title.

Commitment to Insure
A report issued by a title insurance company, or its Agent, committing the title insurance company to issue the form of policy designated in the commitment upon compliance with and satisfaction of requirements set forth in the commitment.

Convey
The act of deeding or transferring title to another.

Conveyance
An instrument by which title to property is transferred; a deed.

Covenant
An agreement written into deeds and other instruments promising performance or non performance of certain acts, or stipulating certain uses or non-uses of the property.

Cul De Sac
The terminus of a street or alley. Usually laid out by modern engineers to provide a circular turn around for vehicles. In French ‘the bottom of the sack.’

Deed
A written document by which the ownership of land is transferred from one person to another.

Deed of Trust
See Mortgage below.

Delivery
The final and absolute transfer of a deed from seller to buyer in such a manner that it cannot be recalled by the seller. A necessary requisite to the transfer of title.

Due on Sale Clause
Provision in a Mortgage or Deed of Trust which requires loan to be paid in full if property is sold or transferred.

Earnest Money
Advance payment of part of the purchase price to bind a contract for property.

Easement
An interest in land owned by another that entitles its holder to a specific limited use, such as laying a sewer, putting up electric power lines, or crossing the property.

Eminent Domain
The power of the state to take private property for public use upon payment of just compensation.

Encroachment
A fixture, such as a house, wall or fence, which intrudes upon another’s property.

Encumber
To burden a parcel of land with a lien or charge such as a mortgage.

Encumbrance
A lien, liability or charge upon a parcel of land.

Escrow
A procedure whereby a disinterested third party handles legal documents and funds on behalf of a seller and buyer.

Examination of Title
The interpretation of the record title to real property based on the title search or abstract.

Exception
In legal descriptions that portion of lands to be deleted or excluded. The term is often used in a different sense to mean an objection to title or encumbrance on title.

Fee Simple Estate
The greatest interest in a parcel of land that it is possible to own.

Forfeiture of Title
Provision in a Deed creating a condition which will cause title to be passed to another in the event certain circumstances occur.

Grantee
A person who acquires an interest in land by deed, grant, or other written instrument.

Grantor
A person, who, by a written instrument, transfers to another an interest in land.

HUD 1
A form settlement (closing) statement required by HUD where federally related mortgages are being made on residential properties. It is a balance sheet showing the source of funds and the distribution of funds in connection with the purchase and/or mortgaging of residential property.

Indemnify
To make payment for a loss.

Joint Tenancy
Where two or more persons hold real estate jointly for life, the survivors to take the interest of who dies.

Judgment
A decree of a court. In practice this is the lien or charge upon the lands of a debtor resulting from the Court’s award of money to a creditor. (See Judgment Lien)

Judgment Lien
The charge upon the lands of a debtor resulting from the decree of a court properly entered in the judgment docket.

Landmark
Any conspicuous object that helps establish land boundaries.

Lease
A grant of the use of lands for a term of years in consideration of the payment of a monthly or annual rental.

Lender’s Policy
See Mortgagee’s Policy

Lessee
One who takes lands upon a lease.

Lessor
One who grants lands under a lease.

Lien
A hold, a claim or a charge allowed a creditor upon the lands of a debtor. Some examples are mortgage liens, judgment liens, mechanic’s liens.

Lis Pendens
A notice recorded in the official records of a county to indicate that a suit is pending affecting the lands where the notice is recorded.

Mechanic’s Lien
A lien allowed by statute to contractors, laborers and material-men on buildings, or other structures upon which work has been performed or materials supplied.

Metes and Bounds
A description of land by courses and distances.

Monument of Survey
One who because of insufficient age or status is legally incapable of making contracts.

Mortgage
An instrument used to encumber land as security for a debt.

Mortgage Banker
A specialized lending institution that lends money solely with respect to real estate and secures its loans with mortgages on the real estate.

Mortgage Broker
A person or company that buys and sells mortgages for another on commission or who arranges for and negotiates mortgage contracts.

Mortgagee
A designation for the mortgage lender on lands.

Mortgagee’s Policy
A form of title insurance policy which insures the validity, enforceability and priority. This form does not provide protection for the owner.

Mortgagor
A designation for the mortgage borrower on lands.

Notary
One authorized to take acknowledgments. (See Acknowledgments)

Owner’s Policy
A policy of title insurance which insures a named owner against loss by reason of defects, liens and encumbrances or lack of marketability of the title. The company also agrees to defend covered claims made against the title.

Ownership
The right to possess and use property to the exclusion of others.

Plat or Plot
A map representing a piece of land subdivided into lots with streets shown thereon.

Policy
A written contract of title insurance.

Policy owner
One who owns a title insurance policy.

Power of Attorney
An instrument authorizing another to act on one’s behalf as his agent or attorney.

Prorate
To allocate between seller and buyer their proportionate share of an obligation paid or due. For example, a prorate of real property taxes or fire insurance premiums.

Quiet Title
An action in a proper Court to remove record defects or possible claims of other parties named in the action.

Range
A part of the government survey, being a strip of land 6 miles in width, and numbered east or west of the principal meridian.

Real Property
Land and that which is affixed to it.

RealtorĀ®
A federally registered collective membership mark which identifies a real estate professional who is a member of the National Association of RealtorsĀ® and subscribes to its strict Code of Ethics.

Realty
A brief term for real property.

Redeem
Literally “to buy back.” The act of buying back lands after a mortgage foreclosure, tax foreclosure, or other execution sale.

Registered Land
See Torrens Title below

Reinsurance
To insure again by transferring to another insurance company all or part of an assumed liability, thus spreading the loss risk any one company has to carry.

REIT
Real Estate Investment Trust. A product of federal tax legislation formed as a business trust, under a special state REIT statute or as a corporation for the purpose of investing in real estate or mortgages on real estate.

REMIC
Real Estate Mortgage Investment Conduit. A product of 1986 federal tax legislation in which a business entity such as a corporation partnership or trust in which substantially all of the assets consist of qualified mortgages and permitted investments elects to be treated as an REMIC. Qualification avoids treatment as a corporation for tax purposes.

Right-of-way
The right which one has to pass across the lands of another. An easement.

Riparian
Rights to use of water and waterways in adjoining lakes or rivers.

Second Mortgage
A second loan on real estate that already has a mortgage. It is subordinate to the first mortgage. Usually of shorter term and often at higher interest rate.

Set Back Lines
Those lines which delineate the required distances for the location of structures in relation to the perimeter of the property.

Sub-surface Right
The right of ownership to things lying beneath the physical surface of the property.

Survey
The process of measuring land to determine its size, location and physical description and the resulting drawing or map.

Tenancy in Common
An estate or interest in land held by two or more persons each having equal rights of possession and enjoyment but without any right of survivorship between the owners.

Tenant
Any person in possession of real property with the owner’s permission.

Testament
Another term for a will. Commonly referred to as “last will and testament.”

Testate
The estate or condition of leaving a will at death. “To die testate.”

Testator
A man who makes or has made a testament or will.

Testatrix
A woman who makes or has made a testament or will.

Title
The evidence or right which a person has to the ownership and possession of land. Commonly considered as a bundle or history of rights.

Title Defect
Any legal right held by others to claim property or to make demands upon the owner.

Title Insurance
Insurance against loss or damage resulting from defects or failure of title to a particular parcel of real property.

Title Plant
The total facilities: records, equipment, fixtures, and personnel: required to function as a title insurance operation. Technically, the organization of official records affecting real property into a system which allows quick and efficient recovery of title information.

Title Search
An examination of public records laws and court decisions to disclose the current facts regarding ownership of real estate.

Torrens Title
A system whereby, after court proceedings, a certificate is issued setting forth the extent of the applicant’s estate in land subject to the exceptions shown. Most popular in the early 1900’s, the system was adopted in 19 states. It is presently used only in parts of six states.

Township
A division of territory 6 miles square, containing 36 sections or 36 square miles.

Tract
A particular parcel of land.

Trust
A property right held by one for the benefit or another.

Trustee
A person holding property in trust.

VA Guarantee
An insurance contract in which the Veterans Administration (VA) insures that the named lender will recover a specific percentage of the loan amount from the insurer in the event the loan goes bad.

Variable Rate Mortgage
A loan in which the interest rate fluctuates with the cost of funds or some other index.

Vendee
A purchaser of real property under land contract.

Vendor
A seller of real property under land contract.

Vest
To pass to a person an immediate right or interest. Title may be said to vest in John Brown.

Vestee
A non-legal term used by title insurers to indicate the owner of real property in a policy or report.