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APR 12
The Admission to Practice Rule 12 was adopted by the Washington State Supreme Court to authorize certain lay persons to select, prepare and complete legal documents incident to the closing of real estate transaction .
Abandonment
The voluntary relinquishment of rights of ownership or another interest (such as an easement) by failure to use the property, coupled with intent to abandon (give up the interest).
Abstract
A summary.
Abstract of Title
A summary prepared by a title insurance company of all documents recorded in the public records where the land is located. An abstract in some states or areas is reviewed by an attorney or other experienced title examiner to determine the status of title. Virtually every title company today provides actual copies of the records rather than an abstract of each document
Abatement
A reduction or decrease. Usually applies to a decrease of assessed valuation of ad valorem taxes after the assessment, and levy.
Acceleration Clause
Clause in a deed of trust or mortgage, which "accelerates," or hastens, the time when the indebtedness becomes due. For example, some deeds of trust contain a provision (an acceleration clause) stating that the note shall become due immediately upon the sale of the land or upon failure to pay interest or an installment of principal and interest.
Accommodation Recording
Recording of instruments with the county recorder by a title company merely as a convenience to a customer and without assumption of responsibility for correctness or validity.
Acknowledgement
A formal declaration before a duly authorized officer (such as a notary public) by a person who has executed an instrument that such execution is his own act and deed. An acknowledgment is necessary to entitle an instrument (with certain specific exceptions) to be recorded, to impart constructive notice of its contents and to entitle the instrument to be used as evidence without further proof. The certificate of acknowledgment is attached to the instrument or incorporated therein.
Adjustable Mortgage Loans (AML)
Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARM'S), Flexible Rate Loans, and Variable Rate Loans.
Administrator
A person appointed by the probate court to carry out the administration of a decedent's estate when the decedent has left no will. If a woman is appointed, she is called an administratrix. Also known as a Personal Representative.
Adverse Possession
A process of acquiring title to real property by possession for a certain (statutory) period of time, in addition to fulfilling other conditions.
Affidavit
A written statement or declaration, sworn to before an officer who has authority to administer an oath.
Agent
One who has authorization, either expressed or implied, to act for or represent another party, usually in business matters, such as issuing title insurance policies on behalf of a title insurer for a portion of the premium.
All-Inclusive Rate
Rate which includes charges for title insurance, searching or abstract fees and examination fees.
All Inclusive Trust Deed (AITD/Wrap-Around)
A junior Deed of Trust securing a promissory note, the face amount of which is the sum of the liability secured by prior Trust Deeds plus the cash or equity advanced by the AITD lender.
ALTA
American Land Title Association Organization composed of title insurance firms which set standards for the industry, including title insurance policy forms used on a national basis.
Amendment
A change to alter, add to, or correct part of an agreement without changing the principal idea or essence.
Amortization
Provision for the payment of a debt as to both principal and interest in equal installments, over a period of time.
Amortized Loan
A loan that is paid off, both interest and principal, by regular payments that are equal or nearly equal.
Annual Percentage Rate (APR)
The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For example: 6% add-on interest would be much more than 6% simple interest, even though both would say 6%. The A.P.R. is disclosed as a requirement of federal truth in lending statutes.
Appraisal
An opinion as to the fair market value of land and the improvements on it.
Assessed Value
The value placed on land and improvements as a basis for taxation.
Assessments
Special and local levies upon property in the immediate vicinity of an improvement. Assessments can be imposed by such entities as street lighting districts which serve an area.
Assignee
One to whom a transfer of interest is made. For example, the assignee of the Deed of Trust or contract.
Assignor
One who makes an assignment. For example, the assignor of a Deed of Trust or contract,
Assignment
The transfer, in writing, of a person's interest to another person or entity in an asset, such as an assignment of a stock, a Deed of Trust, and note or a lease.
Assumption
The act of conveying real property; taking title to a property with the Buyer assuming liability for paying an existing note secured by a deed of trust against the property.
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Bankruptcy
A special proceeding under federal, or in some instances state, laws by which the property of a debtor is protected by the court and may be divided among the debtor's creditors and the debtor.
Beneficiary
As used in a Deed of Trust, the Beneficiary is the Lender.
Beneficiary's Statement
A report from the lender, usually in writing, setting forth the terms and conditions of a loan already of record, such as amounts still owed, interest rate, monthly payments, etc.
Bill of Sale
A written instrument evidencing the transfer of title of personal property.
Blanket Mortgage or Deed of Trust
A mortgage or trust deed that covers more than one lot or parcel of real property, and often an entire subdivision. As individual lots are sold, a partial reconveyance from the blanket mortgage is ordinarily obtained.
Branch
A subordinate or division office, as opposed to an affiliate, agent, subsidiary or underwritten firm associated with the Company.
Breach of Contract
Failure to perform a contract, in whole or part, without legal excuse.
Building Contract
An agreement between an owner or lessee and a building contractor, setting forth terms relative to the construction of a proposed structure.
Buydown
A payment to the lender from the seller, buyer, third party, or some combination of these, causing the lender to reduce the interest rate during the early years of a loan. The buydown is usually for the first one to five years of the loan. (See also: Certificate Backed Mortgage).
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Capitalization Rate
The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.
Certificate of Compliance
A notice that a Housing Code Violation has been remedied.
Certified Closing Agent
Any sole proprietorship, firm, association, partnership or corporation holding a certificate of registration as an escrow agent under the provisions of RCW (revised code of Washington ) 18.44.
Certificate of Title
A certification of the ownership of land, based on the examination of the title of record.
Close of Escrow
The date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.
Closing
The final procedure in the real estate sales process, where the sale and pertinent loan are completed by the execution of documents for recording. In some areas, this procedure is known as the closing of escrow.
Closing Costs
The expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day.
Cloud on Title
An irregularity, possible claim, or encumbrance which, if valid, would adversely affect or impair the title.
Collateral Security
Most commonly used to mean some security in addition to the personal obligation of the borrower.
Commitment
A binding contract with a title company to issue a specific title policy, showing only those exceptions contained in the commitment and any intervening matters after the date of the commitment and prior to the effective date of the policy. The commitment contains all information included in the preliminary title report, plus a list of the title company's requirements to insure the transaction. It also includes the standard exceptions from coverage that will appear in the policy.
Community Property
Property acquired by husband, wife or both during marriage which gives each spouse an interest in the property whether each appears in title or not.
Comparable Sales
Sales that have similar characteristics as the subject property, used for analysis in the appraisal. Commonly called "comps."
Condemnation
The taking of private property by the government for public use - as for a street or a storm drain - upon making just compensation to the owner. This right or power of government to take property for a necessary public use is called "eminent domain."
Conservator (Guardian)
A person appointed by the court to care for the person and/or property of an incompetent adult or an adult unable to care for their person or property because of health.
Constructive Notice
Notice imparted by the public records of the county when documents entitled to recording are recorded.
Contingent
Dependent upon conditions or events specified but not yet accomplished. Property may be sold contingent upon the seller or buyer meeting a predetermined condition
Conveyance
An instrument in writing, such as a deed or deed of trust, used to transfer (convey) title to property from one person to another.
Corporation
An entity authorized by law and established by a group of people, the stockholders, which is endowed with certain rights, privileges and duties similar to an individual.
County Assessor
One who sets value of property for taxation purposes.
Covenant
(1) A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as the covenant of warranty in a warranty deed. (2) Agreements or promises contained in deeds and other instruments for performance or nonperformance of certain acts, or use or nonuse of property in a certain manner.
Covenants, Conditions and Restrictions
Commonly called "CC & R's" the term usually refers to a written recorded declaration which sets forth certain covenants, conditions, restrictions, rules or regulations established by a subdivider or other landowner to create uniformity of buildings and use within tracts of land or groups of lots. The restrictions also can be established by deed. CC & R's are sometimes referred to as private zoning.
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Debt
Money owing from one person to another.
Debtor
One who owes a debt.
Decree of Distribution
A probate court decree which determines how the estate of a decedent shall be distributed.
Deed
Written document by which an estate or interest in real property is transferred from one person to another. The person who transfers the interest is called the "grantor." The one who acquires the interest is called the "grantee." Examples of deeds are grant deeds, administrators' deeds, executors' deeds, quit claim deeds, etc. The deed to use depends on the language of the deed, the legal capacity of the grantor and other circumstances.
Deed of Trust or Trust Deed
A written document by which the title to land is conveyed as security for the repayment of a loan or other obligation. It is a form of mortgage. The landowner or debtor is called the "trustor." The party to whom the legal title is conveyed (and who may be called on to conduct a sale thereof if the loan is not paid) is the "trustee." The lender is the "beneficiary." When the loan is paid off, the trustee is asked by the beneficiary to issue a "recon" or reconveyance. This reconveyance corresponds to the release that the holder of a mortgage executes when the mortgage is paid off.
Deed Restrictions
Limitations in the deed to a property that dictate certain uses that may or not be made of the property.
Default
Failure to perform a duty or to pay an obligation.
Defect
A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.
Defective Title
(1) Title to a negotiable instrument obtained by fraud. (2) Title to real property which lacks some of the elements necessary to transfer good title.
Deficiency Judgment
A personal judgment in a judicial foreclosure action for the remaining amount due after a sale of the security.
Demand Note
A note having no date for repayment, but due on demand of the lender.
Deposit
Money given by the buyer with an offer to purchase. Shows good faith. Also called earnest money.
Description
The exact location of a piece of real property stated in terms of lot, block, tract, part lot, metes and bounds, recorded instruments, or U.S. Government survey (sectionalized). This is also referred to as legal description of property.
Designated Escrow Officer (DEO)
A person licensed under the Escrow Agent Registration Act (RCW 18.44) as an Escrow Officer. The Designated Escrow Officer is personally responsible, above and beyond the company, for the accuracy of the trust account.
Direct Lender
Direct lenders can approve and lend their own money. They able to make loan commitments as well as give loan approvals. Direct lenders are capable of dealing directly with the customer.
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Earnest Money Deposit
Down payment made by a purchaser of real estate as evidence of good faith; a deposit or partial payment.
Easement
A right or interest in the use of the land of another which entitles the holder to some use, privilege or benefit, such as to place pole lines, pipe lines or roads thereon.
Effective Demand
A qualifying term meaning the ability to pay as well as desire to buy.
Eminent Domain
The right of a government to take privately owned property for public purposes under condemnation proceedings upon payment of its reasonable value. See Condemnation.
Encroachment
The presence of an improvement such as a building, a wall, a fence or other fixture which overlaps onto the property of an adjoining owner.
Encumbrance
A right or claim upon real property (land) held by one other than the property owner. Encumbrances are divided into two classes, as follows: a) Liens (mortgages, deeds of trust, mechanics' liens, local taxes, assessments, judgments, attachments, etc.). b) Encumbrances other than liens which are limitations on the ownership of the land (such as conditions, restrictions, reservations, easements, etc.).
Endorsement
Addition to or modification of a title insurance policy which expands or changes coverage of the policy, fulfilling specific requirements of the insured.
Equity
(1) A legal doctrine based on fairness, rather than strict interpretation of the letter of the law. (2) The market value of real property, less the amount of existing liens. If for example, you put 20 percent down on a house, you have 20 percent in your property. Over time, you earn more equity as you pay down the balance of your loan. (3) Any ownership investment (stocks, real estate, etc.) as opposed to investing as a lender (bonds, mortgages, etc.).
Escheat
The reversion of property to the state when an owner dies leaving no legal heirs, devisees or claimants.
Escrow
Escrow: any transaction wherein any person or persons, for the purpose of effecting and closing the sale, purchase, exchange, transfer, encumbrance, or lease of real or personal property to another person or persons, delivers any written instrument, money, evidence of title to real or personal property, or other things of value to a third person to be held by such third person until the happening of a specified event or the performance of a prescribed condition or conditions, when it is then to be delivered by such third person in compliance with instructions under which he is to act, to a grantee, grantor, promisee, promisor, obligee, obligor, lessee, bailee, bailor or any agent or employee thereof.
Escrow Agent
An independent third party, such as C&E Settlement, who performs, for compensation, the duties of the third person (see Escrow) by carrying out instructions of the Buyer, Seller, Real Estate Agents and Lender.. An Escrow Agent facilitates the execution and disbursing of documents and funds.
Estate
(1) The interest or nature of the interest which one has in property, such as a life estate, the estate of a decreased, real estate, etc.
Exception
An interest in real property which is excluded from the conveyance and remains in the grantor or which had been excluded in a prior conveyance.
Excise Tax
A tax which is levied on the transfer of land ownership. It is usually charged to the seller as it is only charged when real property, or an interest in real property is sold. The current tax rate for most of Washington State is 1.78% (as of 04/04).
Executor
A person appointed in a will and affirmed by the probate court to cause a distribution of the decedent's estate in accordance with the will. (The one who makes the will is called a "testator.") If a woman is appointed, she is referred to as the "executrix."
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Fee Simple
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.
FHLMC ("Freddie Mac")
Federal Home Loan Mortgage Corporation. The original purpose was to help the failing savings and loan associations. Today, it is authorized to purchase conventional loans from any type of lender.
Fiduciary
One who is in a position to which they owe another party loyalty and a higher standard of good faith than is owed to third parties (e.g. lawyer/client, agent/principal, etc.) Typically, fiduciaries will hold documents, money, or other such information in trust on behalf of another.
File and Use
In most states, title insurers file rate schedules, title insurance policies and endorsement forms with the State Insurance Department or other state agency and then may use such items or rates starting within a specified period of time after filing. Rates so filed usually are mandatory.
FIRPTA
Foreign Investment in Real Property Tax Act. Whereas a seller is, or may be, a non-resident alien or a foreign corporation, partnership, trust or estate for the purposes of United States taxation. The seller may be subject to additional income tax withholding
Fixed Rate Mortgage
A mortgage having a rate of interest which remains the same for the life of the mortgage.
FNMA ("Fannie Mae")
Federal National Mortgage Association. A privately owned corporation created by Congress that buys mortgage notes from local lenders and is responsible for the guidelines a majority of lenders use to qualify borrowers.
Foreclosure
The sale of property used as security for a debt after default in payment.
Forfeiture of Title
A common penalty for the violation of conditions or restrictions imposed by the seller upon the buyer in a deed or other proper document. For example, a deed may be granted upon the condition that if liquor is sold on the land, the title to the land will be forfeited (that is, lost) by the buyer (or some later owner) and will revert to the seller.
Full Disclosure
In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose known defects in the property for sale or lease.
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GNMA ("Ginnie Mae")
Government National Mortgage Association created to take over the previous responsibilities of FNMA. It provides government guaranteed securities for large blocks of FHA and VA loans.
"Good Faith" or "Mortgage Savings" CLAUSE
A clause in CC & R's which provides that " a violation thereof shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value."
Good Faith Purchaser or Mortgagee
A person who buys or lends in good faith, that is, without notice of any existing problem, where value is paid or lent.
Grant
A transfer of real estate, between individuals, by deed. A transfer of real estate from a sovereign is accomplished by patent or royal decree.
Grantee
See Deed.
Grantor
See Deed.
Guardian
A person appointed by a court to manage the person and/or property of one who is legally incompetent to handle his/her own affairs.
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Hazard Insurance
Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.
Homestead
A statutory protection from execution or the establishment of title by occupation of real property in accordance with the laws of various states or the Federal Government.
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Impounds
A trust type of account established by lenders for the accumulation of borrower's funds to meet periodic payments of taxes, mortgage insurance premiums, and/or future insurance policy premiums, required to protect their security.
Indemnity
Insurance against possible loss or damage. A title insurance policy is a contract of indemnity.
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Judgment
A summary of money judgment obtained in court. When this summary or abstract is recorded in the county recorder's office, in some states the judgment becomes a lien on the debtor's property, both presently owned and after-acquired.
Judgment Lien
A lien against the property of a judgment debtor. An involuntary lien.
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Lease Option
An agreement by which an owner of real property (lessor) gives the right of possession to another (lessee), for a specified period of time (term) and for a specified consideration (rent).
Legal Description
A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire piece of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
Lender
Any person or entity advancing funds which are to be repaid. A general term encompassing all mortgagees, and beneficiaries under deeds of trust.
Lessee
The tenant under a lease.
Lessor
The landlord under a lease.
Lien
An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all encumbrances are not liens.
Limited Practice Officer (LPO)
An individual licensed under APR 12 whereby they have authority to select, prepare and/or complete certain legal documents for the closing of a real estate transaction.
Lis Pendens
A notice recorded in the official records of a county to indicate that a lawsuit is pending affecting the lands described in the notice.
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Mechanics Lien
A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
Metes and Bounds
A term used in describing the boundary lines of land setting forth all the boundary lines together with their terminal points and angles.
Mortgage
(1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan.
Mortgage Broker
Mortgage brokers arrange residential mortgages. They don't lend money and can't approve loans or make loan commitments. Their role is to bring borrowers and lenders together. Brokers keep tabs on the mortgage market through ties to local, regional and national lenders and can refer a future borrower to a mortgage banker, saving institutions or commercial banks.
Mortgagee
The party lending the money and receiving the mortgage.
Mortgagor
The party who borrows the money and gives the mortgage.
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Note
A unilateral agreement containing an express and absolute promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust deed.
Notice of Default
Recorded notice that a default has occurred under a Deed of Trust and/or Note.
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Obligee
One to whom an obligation (promise) is owned.
Obligor
One who legally binds (obligates) oneself, such as the maker of a promissory note.
Original Cost
The purchase price of property, paid by the present owner. The present owner may or may not be the first owner.
Owner's Policy
A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against or unmarketability of the owner's title.
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Parcel
Any area of land contained within a single description.
Partnership
An association of two or more persons who have contracted to join in business and share the profits.
Party Wall
A wall generally erected on a property boundary or between two lots for the common benefit and use of the property owners on either side.
Patent
A conveyance of title to land by the Federal or State Government.
Personal Property (movable)
Any property that is not designated by law as real property (i.e., money, goods, evidences of debt, rights of action, furniture, automobiles).
PITI
A payment that combines Principal, Interest, Taxes, and Insurance.
Plat
A plan, map or chart of a tract or town site dividing a parcel of land into lots.
Points
A one time-only fee you pay in connection with your loan when obtaining a purchase loan or a refinance loan. One point equals one percent of the total amount you plan to borrow.
Pooled Trust Account
An account separate from the agent's own operating account in which funds on deposit for all transactions are held together.
Power of Attorney
A document by which one person (called the "principal") authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in designated transactions.
"PRELIM" OR Preliminary Report
A written report issued by a title company, preliminary to issuing title insurance, which shows the recorded condition of title of the property in question. See Commitment.
Prepayment Penalty
An agreement to pay a penalty for the payment of a note before it actually becomes due.
Priority
The order of preference, rank or position of the various liens and encumbrances affecting the title to a particular parcel of land. Usually, the date and time of recording determine the relative priority between documents.
Priority Inspection
A title term referring to the type of inspection made in connection with insuring a new construction loan. In making the inspection of the property, the title company must be assured that the work of improvement had not yet begun when the lender's deed of trust was recorded.
Proration
The allocation of property taxes, interest, insurance premiums, rental income, homeowner's dues, etc. between buyer and seller proportionate to time of use.
Public Domain
Land owned by the government and belonging to the community at large.
Public Records
The transcriptions in a recorder's office of instruments which have been recorded, including the indexes pertaining to them.
Purchase and Sale Agreement
A written contract entered into between the seller (vendor) and buyer (vendee) for sale of real property (land) on an installment or deferred payment plan. It is also known as an agreement to convey, a real estate installment contract.
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Quitclaim Deed
A deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.
Quiet Title
To free the title to a piece of land from the claims of other persons by means of a court action called a "quiet title" action. The court decree obtained is a "quiet title" decree.
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Real Property (immovable)
Land, from the center of the earth and extending above the surface indefinitely, including all inherent natural attributes and any man-made improvements of a permanent nature place thereon. For example: minerals, trees, buildings, appurtenant rights.
Reconveyance
An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as collateral security for a debt. Most commonly used upon payment in full of a trust deed. Also called a deed of reconveyance or release.
Recording
Filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.
Reinsurance
A contract which one insurer makes with another to protect the first insurer, wholly or partially, against loss or liability by reason of a risk under a separate and distinct contract as insurer of a third party. Reinsurance differs from coinsurance in that, in the case of reinsurance, only one insurer has a direct contractual relationship with the insured, and that insurer (commonly referred to as the "lead insurer") purchases reinsurance in order to lessen or spread the risk. The "lead insurer" will assume a risk up to a limit (the amount of which is referred to as the "retention") and any loss which exceeds this limit would be borne by the reinsurers. In the case of coinsurance, each coinsurer has a direct contractual relationship with the insured, and the risk is shared in agreed-upon proportions from the first dollar of loss.
Restrictions
Often called restrictive covenants. Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation or improvement of the land.
Right of Way
(1) The right to pass over property owned by another, usually based upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which facilities such as highways, railroads or power lines are built.
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Sale and Leaseback
A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.
Search
In title industry parlance, a careful exploration and examination of the public records in an effort to find all recorded instruments relating to a particular chain of title.
Separate Property
Real property owned by one spouse exclusive of any interest of the other spouse.
Shared Driveway
A driveway which is jointly owned, used and maintained by two or more persons. Usually, a portion of each owner's property is burdened by the driveway.
Specific Performance
A legal remedy in which the court orders someone who has breached a contract to actually perform as agreed in said contract, rather than paying monetary damages.
Squatter
One who settles upon unoccupied land without legal claim or authority. (See Adverse Possession.)
Starter
A copy of the last policy or report issued by a title insurer which described the title to land upon which a new search is to be made. In some states, this is called a back title letter or back title certificate.
Statement of Identity
A document often required by a title insurance company to clear any confusion regarding judgments or matters against persons with similar names to the parties in title or about to acquire title to a parcel of land for which they desire title insurance coverage,
Street Improvement Bonds
Interest-bearing bonds issued, usually by a city or county, to secure the payment of assessments levied against land to pay for street improvements. The property owner may pay off the particular assessment against the property, or may allow the assessment to "go to bond" and pay installments of principal and interest over a period of years, usually at the city or county treasurer's office. The holder of a bond received payments from these offices.
Subdivision
An area of land laid out and divided into lots, blocks, and building sites, and in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities.
Subordination Agreement
An agreement by which one encumbrance (for example, a mortgage) is made subject to another encumbrance (for example, a mortgage) is made subject to another encumbrance (perhaps a lease). To "subordinate" is to "make subject to," or to make of lower priority.
Surface Rights
Rights to enter upon and use the surface of a parcel of land, usually in connection with an oil and gas lease or other mineral lease. They may be "implied" by the language of the lease (no explicit reservation or exception of the surface rights) or "explicitly" set forth.
Survey
The measurement by a surveyor of real property which delineates the boundaries of a parcel of land. An ALTA survey additionally delineates the exact location of all improvements, encroachments, easements and other matters affecting the title to the property in question. A survey may be required by a title insurance company whenever the company is requested to issue an ALTA Extended Coverage Policy.
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Table Funding
A procedure common on the East Coast whereby the buyer and seller meet at the same time to sign documents and exchange money. In Washington State , it means that a Lender may fund the loan without reviewing the signed Loan Documents.
Tax Deed
A deed executed by the tax collector to the state, county or city when no redemption is made from a tax sale.
Tax Sale
Property on which current county taxes have not been paid is "sold to the state." No actual sale takes place - the title is transferred to the state and the owner may redeem it by paying taxes, penalties and costs. If it has not been redeemed within five years, the property (referred to as "tax sold property") is actually deeded to the state. (Similar "sales" to cities take place for unpaid city taxes.)
Tax Service Fee
A fee for a service contracted by the lender to obtain annual tax billings or status of taxes on a secured property.
Testate
Leaving a legally valid will at death. See Intestate.
Title
(1) A combination of all the elements that constitute a legal right to own, possess, use, control, enjoy and dispose of real estate or a right or interest therein. (2) The rights of ownership recognized and protected by the law.
Title Insurance
Insured statement of the condition of title or ownership of real property. For a one-time-only premium, the named insured and their heirs are protected against title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from it. In the event of a claim, the title company provides legal defense from the policyholder and pays any covered losses incurred as a result of such claim.
Title Report
See Preliminary Report.
Title Search
A review of all recorded documents affecting a specific parcel of land to determine the present condition of title. An experienced title officer or attorney reviews and analyzes all material relating to the search, then determines the sufficiency and status of title for insurance of a title insurance policy.
Trustee
See Deed of Trust. Trustor: See Deed of Trust.
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Underwriter
The person who evaluates a loan application to determine the probability that the applicant will repay the loan, and matches the risk to an appropriate rate of return.
Underwritten Company
A title firm which conducts title searches but is not qualified to insure, and therefore issues policies of a qualified title insurer (underwriter) in return for a portion of the premium.
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- V -
Variable Interest Rate
An interest rate that fluctuates with the current cost of money; subject to adjustment if the prevailing rate moves up or down.
Vendor's Lien
An implied lien given by law to a vendor for the remaining unpaid and unsecured part of a purchase price.
Venue
Neighborhood; often used to refer to the county or place in which an acknowledgment is made before a notary; also refers to the county in which a lawsuit may be filed or tried.
Vesting
The names, status and manner in which title of ownership is held with a fixed or determinable interest in a particular parcel of real property; also that portion of a title report or policy setting forth the above.
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- W -
Waive
To voluntarily and intentionally relinquish a known right, claim or privilege.
Warranty Deed
A deed used in many states to convey fee title to real property.
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- Z -
Zoning
Local government regulations relating to the use of property.
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