Real Estate Glossary

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L

land

the earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.

law of agency

defines the rights and duties of the principal and the agent. It applies to a variety of business transactions. Contract law and real estate licensing law combine with the law of agency to interpret the relationship between licensees and their clients.

lease

is a contract between the owner and the party who will occupy the real estate.

leased fee

is the owner’s interest in rented or leased property. The owner gives up his right of possession in exchange for the income from rent and the return of the property at the end of the lease. The tenant acquires a leasehold interest.

Fee Simple = Leased Fee + Leasehold

Keyword(s):

leasehold

is the is the tenant’s interest in real property. The tenant acquires the right of possession from the property owner in exchange for rent. Normally, the leasehold interest in rented property is worth nothing and the leased fee and fee simple are equal Fee Simple = Leased Fee + Leasehold

Keyword(s):

leasing agent

Agent is employed either by the owner directly or through the owner's property manager. Typical leasing agent services include:

market research to estimate a rental price for the property based on analysis of supply and demand in the market area and a comparative analysis between the property to be leased and the properties competing for the same tenants.
advertising the property
showing the property to prospective tenants
negotiating the lease terms under the owner's direction or the direction of the property manager
getting the lease signed

legal description

A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it.

legal will

is the device used to direct the distribution of an estate upon the death of the owner.

lessee

the tenant

lessor

the landlord

liability

In an accounting system, it's all amounts on the credit side, including the amounts owed.
It is legal responsibility for an act.

liability coverage

insurance provided to protect policyholder against financial losses resulting from claims of bodily injury or property damage.

license

(1)A privilege or right granted to a person by a state to operate as a real estate broker or salesperson.. (2)The revocable permission for a temporary use of land - a personal right that cannot be sold.

lien theory

Some states interpret a mortgage as being purely a lien on real property. The mortgagee has no right of possession but must forclose the lien and sell the property if the mortgagor defaults.

liens

are financial interests in real estate held by someone other than the owner of the property. Financial interests can be created voluntarily when borrowing money to finance real estate or involuntarily by creditors. Liens affect the real estate title and may affect the transfer of ownership.

The party holding the lien is called the lienor. The owner of the property subject to the lien is called the lienee.

Keyword(s):

life estate

is an interest in real estate with a duration that lasts the lifetime of the holder.

For estate planning - through a life estate, an owner can provide shelter for a loved one while retaining control of the ultimate disposition of the property. Life estates are generally not considered estates of inheritance because the life estate ends with the death of the estate holder.

Keyword(s):

Limited liability company

Is a hybrid comprised of the better features of a corporation and the better features of a partnership. They may have perpetual existence and offers limited liability to the owners (called “members”) along with pass-through of the business’s income to the member’s personal tax return as in a partnership.

Control - can manage business directly or may appoint non-member managers to operate.
Liability - limited liability in the same way shareholders do in the corporation.
Taxes - two or more members as a partnership for tax purposes.
Administrative obligations - resembles the creation of corporations.

Limited partnership

A partnership where there are general partners who operate and manage the business and limited partners who do not operate but are, in effect, investors in the business with an ownership interest.

Control - only the general partners may operate and manage the business
Liability - limited partners are typically liable only for the amount invested
Taxes- income from the partnership flows to each partner based on his or her share of ownership
Administrative obligations - requires registration with the secretary of state

limited warranty deed

A limited warranty deed (also known as a limited warranty deed) limits the grantor's warranty forever to title claims arising during the period of time that the grantor owned property.

Keyword(s):

linkage

is the factor(s) that cause neighbors to feel connected.

Linkages can be anything from a transportation system that permits easy movement within the neighborhood to the social bonds that encourage people to feel a part of the community. Examples include ties resulting from participation in religious exercises, local employment, schools, or other social interaction.

Keyword(s):

liquidated damages

are those damages specified in the contract as the remedy in the event of a default or breach of contract. Often for new construction a liquidated damages clause is included indicating a fee associated with each day the construction is not completed.

lis pendens

A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or a federal court.

listing agreement

A contract between an owner and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission.

littoral

rights granted to owners of land bordering on non-flowing waters such as large lakes and oceans to have access to the water for reasonable uses.

Keyword(s):

Loan Estimate (LE)

three page document that has the accounting for borrowers of the loan.

Loan origination fee

The processing of a mortgage application is known as loan origination. When a mortgage loan is originated, a loan origination fee, or transfer fee, is charged by most lenders to cover the expenses involved in generating the loan.

loan-to-value ratio

the ratio which expresses the relationship betweeen the amount of money borrowed and the value of the subject property.

Keyword(s):

Local Improvement District (LID)

An assessment (i.e., tax) on a local improvement district for a public improvement project the district has approved.

locational factors

is one of the four basic categories of adjustments; which are: terms and conditions of sale; date of sale; locational factors; and physical factors.

Locational factors permit adjustments for differences associated with advantages or disadvantages in location between the subject and comparables. Locational factors include physical, social, economic, and political differences that influence the prices paid for real estate.

Example: A subject is located at the entrance to the subdivision off a busy street. Comparables are all located within the same subdivision. The appraiser analyzes any affect from the subject property location against the comparable locations and makes appropriate adjustments for any difference in value.

lot-and-block (recorded plat) system

A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat.

Keyword(s):

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