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physical life

is the period of time that the improvement will likely continue to perform its basic function. Every improvement has a physical life and an economic life. Physical life is almost always longer than economic life. A car may only have an economic life of 5 years before it loses all book value. The physical life of the car may enable you to drive it for 15 years.

Planned Unit Development

is a zoning concept where an owner of a large tract of land can propose a blend of land uses which might include residential, retail, office, and/or industrial uses. Each use would be required to conform to the general zoning provisions for that type of use, and overall densities would be limited by PUD regulations.

plat map

A map of a town, section, or subdivision indicating the location and boundaries of individual properties.


is the incremental increase in value of assembled properties over the sum of the values of the individual sites.

police power

the power or right of the government to control and regulate numerous activities to protect the health, safety, morals and general welfare of the community. This power is exercised by governments at all levels – federal, state, county, and city.

Examples of federal and state regulation would encompass areas such as environmental protection, protected species acts, and protection of wetlands. Local governments concentrate on land use regulations, property use restrictions, and prohibition of certain activities by landowners.

This is one of the four powers of government which institutes public limitations on real property. The four powers are: Police power, Eminent domain, Taxation, and Escheat, remembered by the acronym PETE.

polychlorinated biphenyls (PCBs)

these were used in insulation materials and may be in electrical equipment. They stay in the air for a long period of time and can be the cause of health problems.

potential gross income

is the maximum income the property is capable of generating. It is the income resulting from 100% occupancy of the property at market rent.

Power of attorney

this allows someone (attorney-in-fact) to act as an agent on behalf of another person.

Prepaid Items

expenses to be prorated (such as fuel oil in tank) that have been prepaid by the seller but not fully used up. They are credits to the seller.

prepayment penalty

Some mortgage notes contain a prepayment clause that requires that the borrower pay a prepayment penalty against the unearned portion of the interest for any payments made ahead of schedule.

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