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Canadian Glossary of Real Estate Terms Go to Canadian Glossary of Real Estate Terms P to Z 
PAPER TRAIL - A well- documented paper trail is critical, should past events come under scrutiny. Poorly documented files are a source of risk for real estate practitioners. Research indicates that the weakest link in a paper trail can attract liability. Injured parties, be they customers or clients, frequently undertake a careful examination of all documentation prepared by salespeople and brokers. It is vital that agreements, listing and other documents are accurate and complete. PARTIAL DISCHARGE - A discharge of a finite portion of the mortgaged lands, usually given after the mortgagor has prepared a specific portion of the mortgage debt. PARTIES TO A CONTRACT - The parties to a contract are those individuals or corporations directly involved in, and having a vested interest in, an Agreement of Purchase and Sale as seller(s) or buyer(s), or as duly authorized representatives of the seller or buyer. The parties to a contract must be clearly identifiable. PARTNERSHIP - Must consist of at least two partners. These individuals pool their resources of capital, ability and effort. POSSESSION - Right of an owner to occupy property. When the property is occupied by a tenant, possession is transferred to the tenant; however, the owner has constructive possession by right of title. POSSESSION DATE - The date of completion/closing is normally possession date, unless otherwise provided in the Agreement. POSTPONEMENT - For mortgage purposes, a term used in relation to a contract between mortgagor and mortgagee, whereby the mortgagee agrees to maintain a position of subsequent priority in the event of rearrangement and registration of a prior mortgage. POWER OF SALE - The right of the mortgagee to force the sale of a property without judicial proceedings, should default occur. PRE-APPROVED PURCHASER - Pre-approved mortgage financing has become increasingly popular. It adds negotiating strength in the marketplace as the buyer becomes virtually a cash buyer, subject to the conditions of the pre-approval. PREMISES - This term most commonly appears in lease documents relating to retail space. It refers to the physical space leased and occupied by the tenant and specifically described by a site plan or similar schedule attached to and forming part of the lease document and often referenced as the demised premises in lease document. PREPAYMENT CLAUSES - A clause inserted in a mortgage that gives the mortgagor the privilege of paying the mortgage debt in advance of the maturity date based on stipulated terms. PREVENTIVE MAINTENANCE - A program of regular inspection and care that allows potential problems to be prevented or at least detected and solved before major repairs are needed. PRIME TENANT - A tenant who occupies a significant part of the space available within a given building. The more common term used is anchor tenant. PRINCIPAL AND AGENT - The relationship created by express or implied contract or by law, whereby one party delegates the transaction of some lawful business, with more or less discretionary power, to another who undertakes to manage the affair and render an account thereof. PRINCIPLE OF ANTICIPATION - Affirms that value is created by the anticipation of benefits (money or amenities) to be derived in the future. (Value may be defined as the present worth of all rights of future benefits). PRINCIPLE OF BALANCE - This principle holds that value is created and maintained in proportion to the equilibrium attained in the amount and location of essential uses of real estate. PRINCIPLE OF CHANGE - This principle holds that economic and social forces are constantly at work and that changes caused by these forces affect real property. PRINCIPLE OF COMPETITION - This principle, in terms of appraisal theory, states that excessive profits in any line of business will tend to breed competition that, in turn, tends to destroy profits. PRINCIPLE OF CONFORMITY - This principle states that to maintain maximum value, land must be utilized to reasonably conform with the existing standards of the area. The word reasonable is used to denote the degree of conformity. Too much conformity results in monotony, which could be as detrimental to value as not having any conformity at all. In residential areas, variety in the styling of buildings of the same quality presents a more pleasing appearance than rows of identical houses. Zoning regulations should protect a neighbourhood from conversion to or intrusion of inharmonious uses. This principle is particularly useful in detailing a neighbourhood analysis. PRINCIPLE OF CONSISTENT USE - When improved lands is in a state of transition to another highest and best use, it cannot be appraised with one use allocated to the land and another to the building or other improvements. If an appraiser is estimating the market value of a downtown parcel of land improved with an old house, and estimates that the highest and best use is for an office building development, then the appraisal should not accord any value to the house over that of the land. PRINCIPLE OF CONTRIBUTION - A valuation principle that states that the value of any component of a property is measured by how much it adds to the net income (or market value if the subject property is a single family dwelling) by reason of its presence, or detracts from the net income (or market value) by reason of its absence. In other words, the value of any factor in production depends upon its contribution to net income or value and not upon its cost. PRINCIPLE OF HIGHEST AND BEST USE - That use which, at the time of the appraisal, is most likely to produce the greatest net return in money or amenities to the land over a given period. The present use will continue, however, unless and until in its highest and best use exceeds the total value of the property in its existing use. PRINCIPLE OF INCREASING AND DECREASING (DIMINISHING) RETURNS - A valuation principle that states that when successive increments of one or more factors of production are added to fixed amounts of the other factors, there is a resulting enhancement of income (in dollars, benefits, or amenities), initially at an increasing rate to a point of maximum return and then decreasing until eventually the increment value becomes increasingly less than the value of the added factor (or factors). PRINCIPLE OF PROGRESSION - The principle of progression, as an extension of the principle of conformity, states that between properties that are dissimilar, the value of the poorer property will be affected positively by the presence of the property of more value. The principle of conformity states that land must be utilized to reasonably conform with the existing standards of the area. PRINCIPLE OF REGRESSION - The principle of regression is an extension of the principle of conformity. The principle of conformity states: To maintain maximum value, land must be utilized to reasonably conform with the existing standards of the area. The principle of regression extends that concept as follows: Between dissimilar properties, the value of the better property will be affected adversely by the presence of the property of lessor value. PRINCIPLE OF SUBSTITUTION - A valuation principle that states a prudent purchaser would pay no more for real property than the cost of acquiring an equally desirable substitute on the open market. PRINCIPLE OF SUPPLY AND DEMAND - A valuation principle that states that market value is determined by the interaction of the forces of supply and demand as of the date of the appraisal. According to this principle, if the supply increased but the demand remains constant, price will decrease. If the demand increases but the supply remains constant, price will increase. If both supply and demand increase or decrease proportionately, price will remain relatively stable. PRIVATE ACCESS - The term is commonly used by recreational practitioners when referencing private roads leading to cottages properties. PRIVITY OF CONTRACT - A basic principle of contract law, stating that, with few exceptions, only the parties to a contract can enforce or be bound by that contract. PRO FORMA STATEMENT - Pro forma is literally translated from Latin as according to form. For most purposes, the term refers to actual financing statements showing the projected costs and income of an existing or new project. A pro forma statement prepared by a real estate broker usually concentrates solely on cash flow. PROGRESS ADVANCES - Loan advances made on a property under construction whereby the lender makes advances while retaining an amount of the loan which in his/her opinion will be sufficient to complete the building should the borrower be unable to finish it. PROPERTY - Property is either real or personal. The distinguishing factor is mobility, with personal property being movable. Real property is the freehold ownership of land, including the tangible elements (physical elements) and intangible elements (rights that accrue from the ownership of physical real estate). Real estate usually refers to the physical tangible property, while real property is the more all encompassing term that includes both real estate and rights of ownership. PROPERTY CONDITION DISCLOSURE STATEMENT - During the past several years, various jurisdictions throughout North America have introduced property disclosure forms. These forms provide buyers with a statement from the seller regarding the condition of the main structures and systems in a house. The questions posed on any Seller Property Information Statement, or any similar document, should be carefully reviewed with the seller, completed and signed by the seller. It is important to note the completion of this form by the seller does not relieve the listing broker from those obligations that he/she would otherwise have with respect to ascertaining the condition on the form should be used to assist in meeting those obligations. It also does not relieve the buyer from carrying out their own due diligence. PROPERTY MANAGEMENT - Property management represents a specialty field within real estate. Real estate brokers usually become involved in property management as a result of rental or leasing activity. PROSPECTS - A common term often used to refer to potential buyers of a property. PROVINCIAL ASSOCIATIONS - In organized real estate, provincial associations are defined to mean any duly incorporated provincial association or territorial association that are members of the Canadian Real Estate Association (CREA) as set out in CREA Bylaw No.1, Appendix "A" Rules and Regulations. PROVISO - Exception or limitation relating to an overall statement or agreement.
QUIET ENJOYMENT - A covenant, usually inserted into leases and conveyances on the part of the grantor, promising that the tenant or grantee shall enjoy possession of the premises in peace and without disturbance. In mortgages (often referred as quiet possession), it refers to the mortgagor's right to uninterrupted use of the property when not in default. QUIT CLAIM DEED - A general release of all claims or rights to a parcel of land.
RADON - Is a naturally occurring radioactive gas resulting from the decay of uranium. Outdoors, radon is diluted, while indoor levels of concentration can reach hazardous levels. Measurement is the only way to determine the existence and extent of radon. RAFTERS - Commonly associated with sloped roofs, whereas a similar member under a flat roof is referenced as a roof joist. The rafter supports the roof sheathing and transmits the roof loads to bearing walls and beams below. RATIFICATION - A person may purport to act for someone knowing that authority to do so has not been granted, or that the limits of authority have not been exceeded. The subsequent adoption of the agent's acts by the principal is called ratification. This affirmation of the conduct of the agent after the fact puts the parties in the same legal position as if the agent always had authority to represent the principal. REAL ESTATE - The land and any improvements found on it. For purpose of the Real Estate Trading Act, real estate, in addition to including those things that are normally considered as real estate, also artificially includes a business and mobile homes. REAL ESTATE BROKER - An individual or firm licensed under the Real Estate Trading Act who represents a principal (e.g., a seller or buyer) in a real estate trade. REAL ESTATE COMMISSION - The regulatory body for the real estate industry created by a provincial statute, the Real Estate Trading Act. REAL ESTATE CYCLES - The real estate market generally moves through the same phases as overall business cycles. However, real estate may demonstrate more pronounced peaks and valleys. Prosperity can occasionally linger in the marketplace, buoyed by fervently optimistic consumers and speculators. Conversely, recessions deepen unnecessarily as developers flood an overheated market with units, only to see consumer demand vanish before their completion. On a more optimistic note, real estate markets have traditionally tended to be on the leading edge of the recovery cycle as improved economic conditions are evidenced within the overall economy. REAL ESTATE TRADING ACT - A provincial statute, proclaimed in January 1997 to create self-regulation of the real estate industry in Nova Scotia. REALTOR® - The term REALTOR® refers to real estate professionals in Canada who are members of the Canadian Real Estate Association (CREA). REFERRAL - a term commonly used in real estate brokerage referring to the act of a licensed salesperson or broker recommending or otherwise communicating a prospective buyer or seller to another licensed salesperson or broker operating within or beyond the referring salesperson's licensing jurisdiction, geographic area, or specific field of professional expertise. RELEASE - A discharge by an act and/or a written document in which some claim, right, or interest in a property is relinquished. RENT - The compensation paid for the temporary use and/or occupation of real estate. RENTABLE AREA - Most commonly associated with the measurement of office buildings and more specifically individual tenanted areas, and is best described as the usable area of the tenanted space plus an allocation of floor common areas (e.g., lobby, janitorial areas, washrooms, and electrical room) in proportion to that individual tenanted areas as it relates to the overall usable area on a particular floor. REPLACEMENT COST - The cost of construction, at current prices, of a building having utility equivalent to the building being appraised, but built with modern materials and according to current standards, design and layout. REPRESENTATIONS/WARRANTIES - It is important to note that recommended warranty clauses usually state the party represents and warrants. The two terms should be clearly differentiated. RESERVED FUND - A special fund established for the purpose of some contemplated future event(s). RESTRICTIVE COVENANT - A limitation placed upon the use of property contained in the deed or other written instrument in the chain of title. More specifically, a restrictive covenant is a contract between two landowners, by which the person obtaining the promise (the covenantee) acquires the right to restrain the covenantor from putting the land to certain specific uses. Such contracts between landowners run with the land. REVERSE MORTGAGE - A variation on the traditional mortgage concept that allows a homeowner to convert some or all of the equity (net value accumulated in the home) into cash or a stream of income payments, while retaining ownership and possession of the home. No repayment of the reverse mortgage or interest takes place until a specified time in the future: when the homeowner sells, when the homeowner moves permanently, when a preset period (perhaps 5 or 10 years) ends, or when a homeowner dies. REVERSE OSMOSIS - The removal of dissolved minerals ( e.g., chloride, sulphate) from a water supply that is frequently used in recreational properties. This process involves forcing water through a semi-permeable membrane. The membrane passes fresh water leaving behind mineral content. RIDER - An addition or amendment to a contract, and are frequently encountered in lease documents. RIGHT OF SURVIVORSHIP - The distinguishing feature of joint tenancies that provides that, where real property is held by joint tenants, upon the death of any joint owner, his or her interest in the real property will pass to the surviving co-owner(s) rather than to the estate of the deceased. RIGHT-OF-WAY - The right to travel over another's land, more or less frequently, according to the nature of the easement. RIGHT-OF-ACCESS - A clause that might be found in an Agreement of Purchase and Sale in which the buyer is contemplating the subdividing of the property and/or the erection of some structure(s) and consequently requires permission to enter the property for the purpose of surveying and conducting soil tests before the completion of the transaction. RISK & LIABILITY REDUCTION - According to research involving errors and omissions claims, liability for real estate practitioners is commonly found in three specific areas: unreliable documentation, inaccurate seller representations; and inaccurate and/or unverified seller representations; and inaccurate and/or unverified published listing information. Key problem areas have been identified in researching errors and omissions claims. The following are five areas causing particular difficulties for practitioners. ROAD ALLOWANCE - A tract of land dedicated for the purposes of public travel. ROOF PITCH - The pitch of a roof is really the slope of the roof. Convention dictates that the slope of the roof is defined as a ratio of rise over run. ROOF TRUSSES - Roof trusses perform the same function as rafters, collar ties, knee walls, and ceiling joists. The roof truss holds up the roof sheathing and shingles, transferring the roof loads to the outside or bearing walls. The bottom of the truss also supports the ceiling finish, upon which the insulation rests. Most trusses used in residential construction are made up of wood components. The top and bottom members of the truss are referred to as chords. The interior members of a truss are called webs. Individual wood members of the trusses are secured with gusset plates. RUNNING WITH THE LAND - A covenant is said to run with the land when it extends beyond the original parties to the agreement and binds all subsequent owners to liability concerning, requirement to perform, or the right to take advantage of that covenant.
SALESPERSON - According to the Real Estate Trading Act, a salesperson is a person employed, appointed or authorized by a broker to trade in real estate on behalf of that Brokerage. SEAL - An impression made on a document to confirm in a formal manner the signing of a contract. SECURITY DEPOSIT - Money advanced by a commercial tenant and held by an owner or manager for a specific period to cover possible damages and ensure faithful performance of the lease by the tenant. SEPTIC TANK - A watertight container usually made of concrete, steel or fiberglass. It serves as a holding tank that allows heavy solids to settle to the bottom of the tank. Lighter materials that float are also held in the tank. Within the tank, most solids are broken down to gases or liquids. The breakdown takes place as a result of bacteria action, both aerobic and anaerobic. The liquids are discharged from the tank into the tile bed. The gas escapes through plumbing vents. SERVIENT TENEMENT - Land over which an easement exists in favour of the dominant tenement. SILL - A level, continuous pad between the foundation top and the bottom of the framing system. SIMPLE INTEREST - Interest computed on the principal balance only. SITE - A parcel of land that is improved to the extent that it is ready for its intended purpose. SLAB - A reinforced concrete floor between beams, columns, or walls. Also, any large, thin area of concrete such as a wall, roof, or balcony, is a slab. SLIDER - A type of window normally identified by single panes of glass sliding on a wood or vinyl track with a simple locking device and pull knobs attached on the surface of the glass. This type of window was popular during the 1960's and is generally regarded as a poorer quality window. SMOKE CHAMBER - The smoke chamber is found above the damper in a fireplace and below the chimney. It is often covered with a special cement parging to provide a smooth surface. The side walls of the smoke chamber are sloped to direct the smoke from the wide damper opening into a narrow chimney flue. The slope of the smoke chamber wall should not be more than forty-five degrees off vertical and should slope evenly from both sides. The smoother the walls of the smoke chamber, the more likely the smoke is to move freely through it. SPECIFIC PERFORMANCE - A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract. It is available only where the remedy of damages cannot afford adequate relief to the plaintiff. SPECIFICATIONS - A detailed and exacting statement of what is to be done, including requirements, dimensions, and materials as in the case of a proposed building. SPECIAL ASSESSMENT - A tax or levy customarily imposed against only those specific parcels of realty, which will benefit from a proposed public improvement, as opposed to a general tax on the entire community. SPECIAL WARRANTY DEED - A deed in which the grantor warrants or guarantees the title only against defects arising during the period of his tenure and ownership of the property and not against defects existing before the time of his ownership. STANDING LOAN - A commitment by the interim or construction lender to keep the money already funded in the project for a specified period of time after the expiration of the interim loan, usually until permanent take-out financing is secured. STATEMENT OF ADJUSTMENTS - A statement, usually prepared by the solicitor for the seller, setting out in balance sheet form, all credits to the seller (e.g., purchase price, prepaid taxes, prepaid utilities etc.) and all credits to the buyer (e.g., deposits, arrears in taxes prior to the date of closing) and the balance due on closing. The Statements of Adjustments provides all parties to the transaction a financial breakdown as of the closing date. STATUTE OF FRAUDS - That law which requires certain contracts to be in writing and signed by the party to be charged therewith in order to be legally enforceable. STATUTE OF LIMITATIONS - That law pertaining to the period of time within which certain actions must be brought to court. STEP-UP-LEASE - A lease with fixed rent for an initial term and provision for predetermined rent increases at specified intervals and /or increases based upon periodic appraisals; sometimes called a graduated lease. STUDDING - One of the series of vertical wood structural members (usually 2-inch nominal thickness) used as supporting elements in walls and partitions. SUB AGENT - An agent authorized by the listing agent to assist in transacting the affairs of the principal (with express or implied consent of the principal) and having the same duties to the principal as the agent. SUBCONTRACTOR - A subcontractor performs a particular task under the direction and coordination of the general contractor, who takes on the responsibility of managing the project according to the construction documents. SUB FLOOR - Transmits the live loads of people and furnishings to the floor joists, and may be covered with a finish or may serve as a finished flooring itself. Historically, one-inch thick wood boards were used. More recently, plywood and wafer boards have been used. SUBJECTIVE VALUE - Is created and exists only in the minds of the potential buyers and sellers. It is the price that people will pay for a property, irrespective of its cost. This is differentiated from objective value in which value is associated with the cost of production or cost of creating the property. SUBJECT TO MORTGAGE - A grantee taking title to real property "subject to mortgage" is not personally liable to the mortgagee for payment of the mortgage note. In the event the grantor-mortgagor defaults in paying the note, the grantee could, however, lose property, and thus his equity, in a foreclosure sale. SUBLEASE - A lease executed by the lessee of a leasehold estate, to a third person, that conveys the same estate for a shorter term, or a portion of the real estate for the same or shorter term. SUBORDINATION AGREEMENT - An agreement whereby a prior mortgagee agrees to subordinate or give up their priority position to an existing or anticipated future lien. SUBROGATION - The act of replacing one person with another in regard to a legal right, interest, or obligation; substitution such as an insured transferring claim rights to the insurance carrier in return for direct payment of the loss. SUMMARY POSSESSION - A legal process used by a landlord to regain possession of the leased premises if the tenant has breached the lease or is holding over after the termination of tenancy. SURRENDER - A premature conveyance of a possessory estate to a person having a future interest, as when a lessee surrenders the leasehold interest to the owner of the reversion interest, the lessor, before the normal expiration of the lease. SURVEY - The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of houses in a lot including the determination of any existing encroachments or easements. SURVIVORSHIP - The right of survivorship is that special feature of a joint tenancy whereby all title, right and interest of a decedent joint tenant in certain property passes to the surviving joint tenants by operation of law, free from claims of heirs and creditors of decedent. SUSPENDED CEILING - Suspended ceilings are normally built using the exposed T-bar arrangement, but variations exist in which the T-shaped metal framing pieces are either recessed or invisible, following final installation of the suspended tiles or panels. This lightweight ceiling system has proven attractive, owing to its cost efficiency in installation, the ability to reduce unneeded height within buildings, sound deadening qualities and ease of access of mechanical parts of the building.
TAX LIEN - A general statutory lien imposed against real property for failure to pay taxes. TAX RATE - Based on the value of the property. The requirement that property tax be paid is one of the basic limitations upon the rights of ownership or real property. The basis of the real property tax system is the ad valorem or according to value system. The amount of property tax to be paid by a homeowner is simply a percentage of the value of the real property. To apply the system to any individual property, a municipality must be capable of determining two factors: (1) the value of the property (assessment), and the percentage of value to be paid (tax rate). TAX SHELTER - A phrase often used to describe some of the tax advantages of real estate investment, such as deductions for depreciation, interest, taxes, etc., which may offset the investor's other ordinary income to reduce the investor's overall tax payment. TENANCY AT SUFFERANCE - A tenancy which exists when a tenant wrongfully holds over after the expiration of a lease, without the landlord's consent, as where the tenant fails to surrender possession after termination of the lease. TENANCY AT WILL - A tenancy in which a person is in a possession of real estate with the permission of the owner, for a term of unspecified or uncertain duration, as when an owner permits a tenant to occupy a property until it is sold. TENANCY BY THE ENTIRETY - A special joint tenancy between a lawfully married husband and wife, which places all title to the property into the marital unit, with both spouses having an equal, undivided interest in the whole property. TENANCY FOR YEARS - A less-than-freehold estate in which the property is leased for a definite, fixed period of time, be it for 60 days or any fraction of a year, a year, ten years, etc. TENANCY IN COMMON - A form of concurrent ownership of property between two or more persons, in which each has an individual interest in the whole property; frequently found when the parties acquire title by descent or by will. TENANCY IN SEVERALTY - Ownership of property vested in one person alone, and not held jointly with another; also called Several Tenancy or Sole Tenancy. TENANT - In general, one who holds or possesses property, such as a life tenant or a tenant for years; commonly used to refer to a lessee under a lease. TENANTS-IN-COMMON - Ownership of land by two or more persons, but unlike joint tenancy the interest of a deceased person does not pass to the survivor, but is treated as an asset of the deceased's estate. Tenancy-in-common requires only the unity of possession as opposed to joint tenancy that has four unities. Tenants-in-common need not have equal shares of the property and can be terminated by the sale of one tenant's interest to the other tenant(s), the sale of the entire property to another party, or the dissolution of the tenant-in-common relationship by a court order. Upon the death of a tenant-in-common, the interest in the land passes to the individual's estate and does not automatically transfer to the remaining tenants-in-common.
TERMINATION OF AGREEMENT - Where conditions must be fulfilled and the appropriate party is unable to do so, a notification to the other party to the transaction is required that fulfillment of the condition is impossible and thus the Agreement is terminated. THERMO PANE - A brand name (now used generally) for a window-glass construction that has insulating qualities due to two layers of glass separated by an airspace: also called double-glazing, or insulating glass. TIME IS OF THE ESSENCE - The clause in a contract, which emphasizes that punctual performance is an essential requirement of the contract. TIMESHARE - A modern approach to communal ownership and use of real estate which permits multiple purchasers to buy undivided interests in real property (which is usually in a resort condominium or hotel) with a right to use the facility for a fixed or variable time period. Timeshare ownership, a relatively new concept in property ownership, generally falls under two broad categories: 1. Fee Ownership Interest - This carries with is the right to encumber, convey, or otherwise transfer the interest for all future time.
2. Right-to-Use Ownership - This is a non-fee interest in the designated property and the purchaser receives no registrable title. Instead, the owner of this interest has a contractual right to enjoy the use of the property for a specific period.
TITLE - The lawful ownership of property; also, the means of evidence by which the owner has lawful ownership thereof. TITLE INSURANCE - A comprehensive contract of indemnity under which the title company agrees to reimburse the insured for any loss if the title is not as represented in the policy. TITLE SEARCH - An examination of the public records to determine what, if any, defects there are in the chain of title. TOWNHOUSE - A type of dwelling unit, attached to two or more similar units, normally having two floors, with the living area and kitchens on the base floor and the bedrooms located on the second floor. TRADE FIXTURES - Articles of personal property annexed to leased premises by the tenant, as a necessary part of the tenant's trade or business. TRIPLE NET LEASE - A net, net, net clause, where in addition to the stipulated rent, the lessee assumes payment of all the expenses associated with the operation of the property. TOPOGRAPHY - Surface features of land, such as elevation, ridges, slope and contour. TOTAL DEBT SERVICE RATIO - The ratio of annual (or monthly) mortgage charges for principal, interest, and taxes; plus payments on various other debts (normally bank or finance company loans etc.), compared with annual gross income of the borrower. TRADING - Includes a disposition or acquisition of or transaction in real estate by sale, purchase, agreement for sale, exchange, option lease, rental or otherwise and any offer or attempt to list real estate for the purpose of such a disposition or transaction, and any act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of any disposition, acquisition, transaction, offer or attempt. TRADE FIXTURES - Articles installed by a commercial tenant under the terms of a lease and removable by the tenant before the lease expires. TRANSACTION BROKER - A person licensed under a regulatory act concerning the trade of real estate who assists one or more parties to the transaction, but not an agent for the interests of either party. TRAPS - Traps are provided below house plumbing fixtures and are designed to hold some water in the waste piping system and is designed to prevent sewer odours from coming back through the fixture drain when not in use. TRUST DEED - A real property security device (also called a deed of trust) very similar to a mortgage, except that there are three parties, the trustor, the trustee, and the beneficiary (the lender). TRUST-OWNERSHIP - Ownership in trust exists when the title is in the name of a registered owner who may, in fact, be holding title as a trustee for the real or beneficial owner. TRUST FUND ACCOUNT - An account set up by a broker at a bank or other recognized depository, into which the broker deposits all funds entrusted to him by his principal or others. TURNKEY PROJECT - A development term meaning the complete construction package from the ground breaking to the completion of the building. All that is left undone is to turn over the keys to the buyer.
UNILATERAL CONTRACT - A contract in which one party makes an obligation to perform without receiving in return any express promise of performance from the other party, such as an open listing contract, where the seller agrees to pay a commission to the first broker who brings in a ready, willing and able buyer. UPSET PRICE - A minimum price set by a court in a judicial foreclosure, below which the property may not be sold by a court appointed commissioner at public auction; the minimum price which can be accepted for the property after the court has had the property appraised. UREA FORMALDEHYDE FOAM INSULATION - Urea Formaldehyde is a colourless, chemical compound found in certain resins, glues and bonding agents. Its familiarity to real estate practitioners lies in its use for insulation.
UFFI is a low density foam made from plastic resins, a foaming agent and compressed air. At the time of installation, UFFI has the appearance and consistency of shaving cream. USEFUL LIFE - That period of time over which an asset, such as a building, is expected to remain economically feasible to the owner. USURY - Charging a rate of interest in excess of that permitted by law.
VACANCY AND BAD DEBT LOSSES - An allowance, often in the 5 % range but varying in specific locales, for vacancies in rental units and uncollectible rents from tenants. VACANCY FACTOR - An allowance or discount for estimated vacancies (unrented units) in a rental project. The vacancy rate is the ratio between the number of vacant units and the total number of units in a specified project or area. VALUABLE CONSIDERATION - Valuable consideration is anything to which a value can be attached, given by the promisee to the promiser. It may be: a. An act in return for an act; b. A promise in return for a promise; c. An act in return for a promise. VALUE - The power of a good or service to command other goods in exchange for the present worth of future rights to income or amenities; the present worth to typical users and investors of future benefits arising out of ownership of a property. VARIABLE RATE MORTGAGE - Mortgage in which the interest rate fluctuates during the term and either payments or balance outstanding are adjusted accordingly. VENDOR TAKE BACK MORTGAGE - Seller retains an interest, by way of a mortgage from the buyer, for the balance of funds owing to the seller upon closing. VARIANCE - Permission obtained from governmental zoning authorities to build a structure or conduct a use which is expressly prohibited by the current zoning laws; an exception from the zoning laws. VENDEE - The purchaser of realty; the buyer. The buyer under an agreement of Purchase and Sale. VENDOR - The seller of realty. The seller under an agreement of sale. VOID - Having no legal force or binding effect; a nullity; not enforceable. A contract for an illegal purpose (i.e. gambling) is void. VOIDABLE - A contract which appears valid and enforceable on its face, but is subject to rescission by one of the parties who acted under a disability, such as being a minor or being under duress or undue influence; that which may be avoided or adjudged void but which is not, in itself, void.
WAIVER - To voluntarily give up or surrender a right. WAIVER OF CONDITION - The relinquishment of some right as set out in a condition within an Agreement. WALK - UP - An apartment building of two or more floors where the only access to the upper floors is by means of stairways.
WARRANTY - A guaranty by the seller, covering the title as well as the physical condition of the property. WARRANTY DEED - A deed in which the grantor fully warrants good clear title to the premises. Also called a general warranty deed. WASTE - An improper use or abuse of property by one in possession of land, who holds less than the fee ownership, such as a tenant, life tenant, mortgagor, or vendee. WEAR AND TEAR - The gradual physical deterioration of property, resulting from use, passage of time and weather. Only property subject to wear and tear is depreciable. WOOD FRAME WALL - Load-bearing walls that carry the weight of the roof and floors down to the foundations. WORKING DRAWINGS - Detailed floor space plans that diagrammatically show all improvements to be made and are designed as instructions to the various contractors involved. WRAP-AROUND-MORTGAGE - A method of refinancing in which the new mortgage is placed in a secondary or subordinate position. In essence, it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount, without cashing out or distributing the existence of the first mortgage.
YEAR-TO-YEAR TENANCY - A periodic tenancy in which the rent is reserved from year to year. YIELD - The return on an investment or the amount of profit, stated as percentage of the amount invested. 
ZONING - The regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, types of structure permitted, building heights, setbacks, and density (the ratio of land area to improvement area). ZONING AMENDMENT - A change to an existing zoning bylaw to permit the development or use of a property tat does not comply with the existing zoning bylaw. ZONING BYLAW - A bylaw passed by a municipality to regulate the use of the land and specifically limiting the use of land in certain areas for any purpose other than as set out in the bylaw, and defines exactly what can take place on a parcel of land.
Go to Canadian Real Estate Glossary A to D US Real Estate Dictionary |
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