Glossary of Terms
GLOSSARY OF CLT-RELATED TERMS
What is a community land trust (CLT)?
A community land trust (CLT) is
- a democratically controlled nonprofit organization that owns real estate in order to provide benefits to its local community—and in particular to make land and housing available to residents who cannot otherwise afford them.
- a nonprofit corporation that develops and stewards affordable housing, community gardens, civic buildings, commercial spaces and other community assets on behalf of a community.
- “CLTs” balance the needs of individuals to access land and maintain security of tenure with a community’s need to maintain affordability, economic diversity and local access to essential services.
- CTLs promotes strategic community development and permanently affordable housing to benefit lower income families.
501(c)(3) Status
Status as an organization that is recognized by the IRS as exempt from federal income tax under Section 501(c)(3) of the Tax Code. Achieved by most CLTs, it is the most advantageous type of federal tax exemption because donations to an organization with such status are tax-deductible for the donor.
INDEX
–A-
Abstract
An abbreviation of the cardinal aspects of all recorded deeds, mortgages, leases and other instruments affecting the title to a particular piece of land.
Abstracting
The process of making and compiling an abstract.
Abstracter
The person or company engaged in making abstracts.
Accreditation
Official organizational accreditation by the Land Trust Alliance.
Adverse Possession
The unauthorized occupation of land belonging to another, by a person who does not have the consent of the owner. Said occupier is said to hold possession adversely to the rights and interests of the owner. In most states, by operation of law, title to the land becomes vested in such occupier after a fixed number of years of peaceful occupancy.
Alienation
The transfer of title to property from one party to another. See restraints on alienation, below.
All-Inclusive Rate
This is a rate that includes the insurance premium, and at least some part of the cost of the title search, examination and the cost of conducting the closing/settlement.
ALTA
American Land Title Association, the national trade association for the title insurance industry. ALTA member companies include businesses that conduct your closing and issue you an Owner’s Policy of Title Insurance.
Amortization
The paying off of the principal of a debt, with interest, over time, usually through payments of a regular amount at regular intervals/ partial payments (e.g., monthly).
Annual Percentage Rate – APR
The yearly interest percentage of a loan as expressed by the actual rate of interest paid.
Appraisal
Determination of the fair market value of real property by a professional appraiser applying standardized methods.
An estimate of value of property from analysis of facts about the property; an opinion of value.
Appraisal-based Formula
A common type of CLT resale formula that allows the resale price of a home to increase beyond the base price by a specified percentage of any increase in the home’s value as measured by appraisals. Three types of appraisal-based formulas are distinguishedimprovements-only appraisal-based formulas, simple appraisal-based formulas, and compound appraisal-based formulas.
Appraisal Report
The Internal Revenue Code requires a “qualified appraisal” prepared by a “qualified appraiser” for gifts of property, including Conservation Easements, valued at more than $5,000.
Appreciation
increase in the value of an asset such as real estate.
Appurtenant Rights
Property rights that are attached to the ownership of a specific piece of real property. (For instance, an easement right of access from the specific parcel of land to a nearby street, granted so as to benefit any owner of that land, would be an appurtenant right to the land.)
Arbitration
A formal process outside of the court system designed to settle a dispute between two parties through the appointment of one or more “arbitrators” who hear evidence and decide how the dispute should be resolved.
Area Median Income (AMI)
The median household income in a particular metropolitan statistical area (MSA) or county, as calculated and adjusted for household size by HUD.
Articles of incorporation
The charter document establishing the existence, purposes, and general powers of a corporation as a legal entity when accepted for filing by a state.
Assessment
The determination of the value of a piece of property for the purpose of calculating property taxes. Assessed value is related to but not necessarily the same as “market value” as determined by appraisals.
Assignment
The transfer of specific rights (or of a document bestowing those rights) to a certain party. A CLT ground lease (and the leasehold interest that it bestows) can be assigned by the lessee to another party only with the permission of the CLT.
Attorney’s Opinion
The written statement of an attorney setting forth what he believes to be the condition of a real estate title.
-B-
Base Price (as used in stating resale formulas)
The price that a homeowner has actually paid for the home, including the downpayment and the principal amount of the first mortgage but excluding any mortgage loans that the homeowner is not required to repay; distinguished from settlement price.
Basic Rate
When referring to title insurance, the basic rate is the rate charged to a consumer who does not qualify for a reduced rate.
Bargain sale
Sale of a property at less than the fair market value. The difference between a bargain sale price and fair market value often qualifies as a tax-deductible charitable contribution.
Baseline Documentation Report
A record of the conservation values identified in the conservation easement and the relevant conditions of the property used to monitor and enforce the conservation easement. Contains maps, photographs and text, and is signed by the landowner and land trust at closing.
A compilation of information that documents the current condition and conservation values of the property at the time a conservation easement is granted.
Bequest
A gift made through a person’s will. Land can be given to a trust through a bequest. In such cases, the value of the land is excluded from estate tax calculations.
Board of Directors
A group of elected or appointed individuals who are collectively empowered to make major decisions for a corporation (either for-profit or not-for-profit), within guidelines established by the corporation’s bylaws. Also called “board of trustees.”
Broker
One who acts as an agent for another in negotiating sales or purchases in return for a fee or commission.
Brokerage
A fee or commission paid to a broker.
Buffer zone
A buffer zone is an area that is managed in order to increase the protection provided to a Protected Area. An effective buffer zone can prevent negative edge effects from impacting the core area, including the incursion of non-native species, hunting, and climatic changes such as reduced humidity in rainforests.
Bylaws
The duly adopted rules governing how an organization carries out the purposes and powers set out in its articles of incorporation. Bylaws deal with matters such as the rights and responsibilities of the members (in a membership organization), the board of directors and the officers, and the processes to be followed in holding elections, conducting meetings, etc.
-C-
Capital Gains
Profits made on the sale of land; the difference between the original cost of the land and the selling price. For example, if a woman buys a house for $10,000 and sells it for $15,000, she will owe taxes on the gain in capital of $5,000.
Certificate of Title
In areas where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney stating that title is vested as stated in the abstract.
Chain of Title
Beginning with a conveyance out of an original source of title such as a government, each succeeding deed, will or other medium which conveys and transfers the title to succeeding owners constitutes a link in the chain of title. The chain of title is the composite of all such links.
Claim
A right to assert, or the assertion of, a demand for payment of money due; or the surrender or delivery of possession of property or the recognition or some right. A demand for something as one’s rightful due.
Charitable Contribution
A gift of cash or property to a land trust (or other tax-exempt 501(c)(3) organization). In most cases, the donor can take an itemized tax deduction for the contributions.
Closing
Completion of a transaction conveying real property from one party to another through the signing of documents such as deeds, mortgages, ground leases, etc. evidencing the conveyance.
In some areas called a “settlement.” The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.
Closing Costs
Final payments made by the parties to a real estate transaction at the time of closing. Typically included are such payments as legal fees, title insurance fees, recording fees, loan origination fees, property taxes, and real estate transfer fees.
Closing Disclosure
The five-page Closing Disclosure must be provided to the consumer three business days before they close on the loan. The Closing Disclosure details all of the costs associated with their mortgage transaction.
Closing Statement
A summation, in the form of a balance sheet, made at a closing, showing the amounts of debits and credits to which each party to a real estate transaction is entitled.
Cloud on Title
An irregularity, possible claim, or encumbrance which, if valid, would affect or impair the title.
Commission
The amount due a real estate broker, mortgage loan broker or real estate professional for services performed in such capacity.
Community Housing Development Organization (CHDO)
As defined within the regulations of the federal HOME program, a CHDO is a tax-exempt nonprofit organization that has among its purposes the provision of decent housing that is affordable to low-income and moderate-income persons and that maintains its accountability to lowincome community residents by reserving at least one-third of its governing board’s membership for residents of low-income neighborhoods, other low-income community residents, or elected representatives of low-income neighborhood organizations. Under the HOME program, at least 15% of a Participating Jurisdiction’s annual grant must be invested in programs or projects sponsored by CHDOs. The 1992 Housing and Community Development Act defines CLTs as a variety of CHDO, while exempting new CLTs from the requirement that an organization must have a “demonstrated capacity” to develop affordable housing and a “history” of serving its community before it can be designated a CHDO.
Community Reinvestment Act
federal legislation, enacted in 1977, that holds federally regulated banks responsible for meeting the credit needs of the communities in which they do business, including low-income communities.
Compound Appraisal-based Formulas
A type of appraisal-based formula that allocates to the seller a specified percentage of the market appreciation of that portion of the combined value of land and improvements that the seller originally paid for through the base price.
Conditions
This refers to provisions in deeds and other real estate instruments that make a particular right contingent upon the occurrence of some future event.
Condominium
A building or set of buildings in which condominium units are individually owned while certain common elements are owned collectively by the unit owners.
Condominium association
An association of condominium unit-owners, which governs the use and management of common elements within a condominium.
Condominium Unit
An individually owned unit in a multi-unit building or complex. The owner holds sole title to the airspace occupied by the unit plus an undivided interest, with other unit owners, in the common elements of the complex.
Condominium Association
An association of condominium unit-owners, which governs the use and management of common elements within a condominium.
Condominium Unit
An individually owned unit in a multi-unit building or complex. The owner holds sole title to the airspace occupied by the unit plus an undivided interest, with other unit owners, in the common elements of the complex.
Conservation
Protection of land and related natural resources; may also refer to the management of resources to protect future value. (compare preservation)
Conservation is the preservation of threatened wildlife habitats and WLT does this by funding the purchase of vulnerable land and working with local project partners to protect it as private nature reserves. WLT also assists conservation by restoring habitats which have been lost in the past, as far as possible back to the natural habitat.
Conservation Easement
A legal agreement allowing a landowner to transfer selected property rights to a land trust. The landowner retains title to the property. The easement becomes part of the land deed, meaning that all future property owners will be bound by the terms of the easement.
100% donated, permanent restriction on the use of property to promote conservation.
Conservation Purposes
The purposes a conservation easement must serve to be a tax-deductible donation, as defined by Internal Revenue Code (IRC) s. 170(h) and the associated Treasury Regulations.
Construction Loan
A short-term loan to finance the construction of real estate improvements.
A short-term loan to finance the construction of real estate improvements.
Consummation
Consummation is not the same thing as closing or settlement. Consummation occurs when the consumer becomes contractually obligated to the creditor on the loan, not, for example, when the consumer becomes contractually obligated to a seller on a real estate transaction.
Contract
Same as “agreement,” but usually more formal.
Cooperative (coop, or co-op)
A housing cooperative is a corporation owned and controlled by a membership consisting of the occupants of housing owned by the corporation. Each occupant holds a share in the corporation and a “proprietary lease” from the corporation for the unit she occupies. In the case of a market-rate coop, an occupant can sell her share and proprietary rights for whatever amount the market will bear. In the case of a limitedequity coop, the amount that she can receive is limited by the coop’s bylaws in order to preserve the affordability of the unit.
Corporation
A legally established entity whose rights of doing business are in most respects the same as those of an individual. For-profit corporations are owned and controlled by those who hold stock in the corporation. Not-for-profit corporations are controlled by members, who are not stock-holders.
Corporate Purposes
The purposes for which a corporation has been established, as formally stated in the articles of incorporation. The corporate purposes are an important consideration for those establishing a new not-for-profit corporation.
Covenant
A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed.
Cure (to cure a default)
To remedy the failure (e.g., failure to make required payments) that has resulted in the default, thereby eliminating the condition of default.
-D-
Deed
A written instrument that, when signed by the grantor(s) and delivered to the grantee(s), conveys title to, or an interest in, real estate.
A legal document by which ownership to land and interests in land are transferred.
A written document by which title to real estate is conveyed from one party to another.
Deed Book
A book among the public records in which deeds are recorded.
Deed in lieu of foreclosure
When otherwise unable to avoid foreclosure, a homeowner/mortgagor may give the holder of the mortgage “a deed [to the mortgaged property] in lieu of foreclosure.” By thus avoiding foreclosure, the homeowner avoids a blight on his or her credit history, and the lender takes title to the collateral without the expense of foreclosure.
Deed of Trust or Mortgage Deed
A type of mortgage whereby the borrower conveys title conditionally to the lender, who holds it in trust as security for the loan. Whether a state uses a mortgage or a deed of trust is often a matter of the history of the property law in the particular state. Both are effective ways to give a lender security for a loan. See mortgage; also see title theory state.
Deed Restriction or Deed Covenant
Or “covenant that runs with the land,” a provision written into or attached to a deed, whereby the rights being conveyed to the grantee are limited in specified ways. CLTs sometimes use deed restrictions, rather than ground leases, to establish restrictions on the occupancy and resale of condominium units.
Default
Failure to meet a financial obligation or otherwise comply with the terms of an agreement.
Failure to perform a promised task or to pay an obligation when due.
Defect
A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.
Deferred Loan
A loan that the borrower is not required to repay for a specified period of time or until a specified event. Affordable housing subsidies are often structured as deferred loans (typically payable or assumable when the subsidized home is resold) rather than as outright grants.
Demise
To grant or transfer property by a will or a lease.
Depreciation
Loss in value occasioned by ordinary wear and tear, destructive action of the elements, or functional or economic obsolescence.
Disinvestment
The process by which the value of real estate in a given locality is diminished in the absence of sufficient “reinvestment.”
Dissolution
The termination of a corporation, accompanied by the distribution of its assets after all debts are paid. To qualify for 501(c)(3) status, organizations must place strict limitations in their articles of incorporation on the distribution of their net assets upon dissolution.
Donor
A person who makes a charitable contribution to a land trust. The contribution can be a gift of land, property rights or funding.
Downpayment
equity investment that is made by the buyer of real property at the time of purchase. In the purchase of owner-occupied homes, the minimum downpayment required of the prospective homebuyer typically ranges from 10% to 5% or sometimes 3% of the property’s purchase price. In some cases “downpayment assistance” programs may cover some portion of the required amount.
-E-
Earnest Money
Down payment or a small part of the purchase price made by a purchaser as evidence of good faith.
Easement
A right held by a person to enjoy or make limited use of another’s real property.
The right to go onto another person’s private property or use that property for a specific purpose; a right of way. An easement must be granted by the landowner. (see conservation easement)
Ecosystem
All of the factors that allow a healthy environment to function; the complex relationships among an area’s resources, habitats and residents. An ecosystem may include people, wildlife, fish, trees, water and several other living and non-living elements.
Encroachment
The extension of a structure from the real estate to which it belongs across a boundary line and onto adjoining property.
Egress
The right to a path or right-of-way over that a person may leave or go away from his own real estate.
Ejectment
(1) Eviction or dispossession. (2) A law suit to regain possession of real estate held by another.
Eminent Domain
The right of a governmental or quasi-public body to acquire property for public use through court action, with compensation to the owner determined by the court.
The right of a government to take privately owned property for public purposes under condemnation proceedings upon payment of its reasonable value.
Enumbrance
A claim, right or lien upon the title to real estate, held by someone other than the real estate owner.
Endorsement
Addition to or modification of a title insurance policy that expands or changes coverage of the policy, fulfilling specific requirements of the insured.
Environmental Assessment
report prepared by an environmental consultant to ascertain if there are pollutants on the property that could create environmental damage on the property or to adjacent properties.
Environmental Impact
A change in the environment that could have a negative effect on the ecosystem. Land trusts try to prevent environmental impacts by conserving sensitive lands.
Escrow
Technically, this term strictly refers to a deed delivered to a third person to be held by him until the fulfillment or performance of some act or condition by the grantee. In the title industry, it means the depositing with an impartial third party (typically an escrow agent or title company) of anything pertaining to a real estate transaction including money and documents of all kinds. The money and documents are to be disbursed and delivered to the rightful parties by the escrow agent or title company when all conditions of the transaction have been met.
Escrow Agreement
A written agreement usually made between buyer, seller and escrow agent, but sometimes only between one person and the escrow agent. It sets forth the conditions to be performed incident to the object deposited in escrow, and gives the escrow agent instructions with respect to the disposition of the object so deposited.
Estate
- A sizable piece of rural land usually with a large house and other pretentious improvements. (2) The whole of one’s possessions, especially all of the property, assets, debts, and liabilities left by a deceased or bankrupt person. (3) The nature and extent of an owner’s rights in real estate.
Estate Tax
When a person dies, all of the property and assets they leave behind are called an estate. The estate is evaluated and taxed before it is transferred to the dead person’s heirs. If a person died in 2001, with no assets except a piece of land valued at $1 million, the estate could owe $178,750 in taxes.
Equity
The value of property above and beyond any debt secured by the property.
Equity Limitation
The practice of limiting the amount of equity that can be claimed by the owner of a property, by establishing restrictions on the price for which the property can be sold, or, if the property is sold for an unrestricted market price, by requiring the seller to pay a part of the proceeds to a sponsoring governmental or nonprofit entity.
Equity-limitation formula
See resale formula.
Equity Trust, Inc.
The national organization established by the late Chuck Matthei (previously Executive Director of ICE) to promote models of limited equity ownership and community investment. When ICE transferred its loan fund to the National Housing Trust and ceased to exist as an independent organization, it transferred the rights to its technical publications to Equity Trust, Inc., which shares those rights with the National CLT Network.
Examination
In title industry terms, to peruse and study the instruments in a chain of title and to determine their effect and condition in order to reach a conclusion as to the status of the title.
Examiner
Usually referred to, in title industry terms, as title examiner. One who examines and determines the condition and status of real estate titles.
Execution
The signing and delivery of a legal instrument.
Exceptions
Insurance policies include a list of items excluded from coverage. Items excluded from coverage can be found in section two of Schedule B of the policy.
Exercise
To take an action that one is entitled to take as the holder of a particular right, often by giving a written notice to another party, as in the exercise of an option or right of first
refusal.
Expiration, the conclusion of a specified period of time, or the retirement of rights granted only for a specified period of time, as in the expiration of a lease. Distinguished from termination.
-F-
Fair Market Value
The price that a piece of property could earn if sold to an ordinary buyer on the open market.
Fair Rental Value
The amount of rental income that a given property can be expected to generate for a given period of time in given market conditions.
Fannie Mae (Federal National Mortgage Agency)
A federally chartered, shareholder-owned corporation that purchases mortgages on the secondary market, with funds raised by issuing “mortgage-backed” bonds. Fannie Mae policies allow for purchase of CLT leasehold mortgages on certain terms.
Fannie Mae Rider (Fannie Mae Uniform CLT Ground Lease Rider)
A document which, when attached to a CLT ground lease, somewhat modifies the terms of the lease to ensure that they are acceptable to Fannie Mae as a potential mortgagee.
Fee Simple
(also fee interest or fee simple interest) A way of describing full ownership of a piece of land, including all of the legal rights of the property. The word “fee” comes from an old English word meaning “land that can be inherited.” Less than fee interest is ownership with restricted rights. A person buying land that already has a conservation easement is getting less than fee interest.
The highest degree of ownership that a person can have in real estate. An interest in real estate that gives the owner unqualified ownership and full power of disposition.
Fee simple ownership
The maximum possible set of rights to real property on a permanent basis.
Fee interest
A conventional ownership interest. In the case of the CLT’s ownership structure, the fee interest is held by the CLT while a leasehold interest is held by the ground lessee.
FHA/Federal Housing Administration
A division of the U.S. Department of Housing and Urban Development that insures high loan-to-value (low-down-payment) mortgages.
Floodplain
A floodplain is the area adjacent to a river or stream which floods when the water level rises and overflows the river’s banks. They provide an important ecosystem service by preventing flooding in other areas, and can be very important sites for biodiversity, since flooding leaves behind high levels of nutrients.
First Mortgage
A mortgage having priority as a lien over any other mortgage or lien on the same property.
Fixed-rate Formula
a resale formula that allows the resale price to increase by the annual application of a fixed rate of “interest” to the base price.
Foreclosure
The legal procedure, when a borrower has defaulted, whereby the borrower’s ownership of property used to secure the debt is terminated by the lender, usually by a public sale or auction, to provide for repayment of the debt to the lender. (See also, deed in lieu of foreclosure.)
A legal proceeding for the collection of real estate mortgages and other types of liens on real estate, which results in cutting off the right to redeem the mortgaged property and usually involves a judicial sale of the property to pay the mortgage debt.
Formula Price (in the Model CLT Ground Lease)
The potential maximum resale price that is determined by the resale formula. The purchase option price is then the lesser of the formula price or appraised value. See Model CLT Lease, Article 10, and related commentary.
Freddie Mac
Similar to Fannie Mae (above), a federally chartered, shareholder-owned corporation that purchases mortgages on the secondary market, with funds raised by issuing “mortgage-backed” bonds.dsf
–G-
General Warranty
A warranty provision in a deed or mortgage or other real estate instrument containing all of the common law items of warranty. Also known as a full warranty.
Gentrification
A term coined in the 1960s to describe the process by which inner-city neighborhoods that have undergone disinvestment and decline begin to experience reinvestment, accompanied by the in-migration of a relatively affluent population and the displacement of the lower-income population that had been the neighborhood’s former inhabitants.
Geographic Information System (GIS)
computer system designed for spatial data.
Grantee
One to whom something of value is transferred (with or without compensation).
Grantor
One who transfers something of value to another (with or without compensation).
Ground Lease
A lease whereby the right to use and possess a parcel of land is transferred from
the owner of the fee interest in the land (the lessor) to another party (the lessee) for a limited (but often lengthy, such as 99-year) period of time. Usually a ground lease provides for outright ownership of improvements on the land by the lessee.
Greenspace A term applied to certain urban areas, including parks, preserves and public or private lands. In general these places are over an acre large, are well separated from manmade developments and contain forests, gardens, grass or other foliage.
Greenway
An area with a critical mass of nearby and connected open spaces which together afford a community substantial benefits such as wildlife habitat corridors, sweeping scenic views, recreational corridors that can support long nature trails and other major outdoor opportunities, agricultural corridors, long buffers for critical water supplies, etc. Fragmentation of nearby open spaces, caused by development, is one of the greatest threats to a greenway. Conserving key open spaces within a greenway with perpetual conservation easements is thus very strategic.
Ground lease
A lease whereby the right to use and possess a parcel of land is transferred from the owner of the fee interest in the land (the lessor) to another party (the lessee) for a limited (but often lengthy, such as 99-year) period of time. Usually a ground lease provides for outright ownership of improvements on the land by the lessee.
Ground lease fee or ground rent
The amount of money that the ground lessee is obligated by the terms of a ground lease to pay to the ground lessor for the use of the leased land. Usually paid on a periodic basis (e.g., monthly, quarterly or annually).
-H-
Hazard Insurance
Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. The buyer often adds liability insurance and extended coverage for personal property.
Heir
A person who inherits or who is entitled to inherit real estate by provisions of law or under the provisions of a will.
HOME Program
A federal program administered by the Department of Housing and Urban Development, providing block grants to states and qualifying municipalities for use in developing or sponsoring affordable housing. Also see Community Housing Development Organization, above.
HUD
U.S. Department of Housing and Urban Development.
-I-
Improvements
(1when applied to real estate) buildings and other permanent products of human effort that increase the usefulness or value of a parcel of land; (2when applied to buildings) additions to or modifications of the structures that increase their value, as distinguished from replacements and repairs that replace but do not increase value.
improvements-only appraisal-based formulas
A type of appraisal-based formula that allocates to the seller a specified percentage of the appreciated market value of only the improvements (excluding land value).
income-qualified (person or household)
A person or household qualifying for certain benefits on the basis that the income of the household is below a certain threshold (usually defined as a percentage of area median income as adjusted by HUD for the particular household size).
Incorporation
The legal process of creating a corporation.
indexed formula
A type of resale formula that allows the resale price to increase beyond the base price in proportion to changes in a specified index, such as a consumer price index or area median income.
Ingress
The right or permission to enter; also the means or place of entry such as a right-of-way across adjoining land.
In Perpetuity
Always; forever.
Intestate
Dying without leaving a legal will.
Institute for Community Economics (ICE)
The national organization that developed and promoted the CLT model and that developed and published the “Community Land Trust Legal Manual,” (including the original Model CLT Ground Lease). ICE transferred the rights to this published material to Equity Trust, Inc. when ICE ceased to exist as an independent organization. Equity Trust, Inc. shares these rights with the National CLT Network, which has revised and expanded the contents of the CLT Legal Manual as the present “CLT Technical Manual.”
Itemized formula
A type of resale formula that determines the maximum resale price of a property by adding to or subtracting from the base price such specific factors as the value of improvements made by the owner and/or annual depreciation.
-J-
Joint Tenants
Two or more persons who hold title to real estate jointly, with equal rights to share in its enjoyment during their respective lives with the provision that upon the death of a joint tenant, his share in the property passes to the surviving tenants, and so on, until the full title is vested in the last survivor. A joint tenant cannot legally sell or encumber his interest without the consent or joinder of all of the other joint tenants.
Judgment
A conclusion or determination by a court of law usually awarding the payment of money or relief of some kind to one of the parties to a lawsuit.
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-L-
Land (as property)
A space including the surface of the earth and extending downward to the center of the earth and upward infinitely into space.
Land Conserved with a Deed Restriction
Land encumbered by deed restrictions and owned by a qualified holder organization, but the land lacks a perpetual conservation restriction held by an outside qualified holder organization.
Land Conserved with Conservation Intent Alone Land owned by a qualified holder organization with the intent to keep the land in conservation but the land lacks deed restrictions or a perpetual conservation restriction held by an outside qualified holder organization. This is a weak level of protection because there is a lack of checks and balances and intentions change regularly. Good conservation is like good government, it requires checks and balances!
Land Trust Alliance
national umbrella organization for land trusts.
Land-use plan
A blueprint for the future development of a state, county or city, intended to help manage growth. A plan may consider roads, public facilities, the use of commercial, residential and industrial, and the need for open space.
Land Valuation
value of donated land or easement determined by appraisal or assessment by community government.
Legal Defense Fund
funds set aside for potential future legal expenses incurred in defense of an easement.
Lease
A contract between a landlord (lessor) and a tenant (lessee) transferring the right to use and possess the landlord’s property to the lessee for a specified period of time and for specified compensation.
An agreement granting the use or occupancy of land during a specified period in exchange for rent.
Leased fee
The ownership interest retained by a lessor after transferring a leasehold interest to a lessee.
Leased premises
The specific real property (which could be land, a portion or all of a building, or both) the use and possession of which is conveyed by a lessor to a lessee.
lease fee, see ground lease fee above.
Leasehold estate, or leasehold interest
The ownership interest or bundle of rights conveyed by a lessor to a lessee for the term of the lease. CLTs usually describe the CLT homeowner as holding a leasehold interest in the land and a fee interest in the improvements. In describing leasehold mortgages, however, lenders and appraisers normally define the leasehold estate as including the improvements, regardless of whether the lessee owns the improvements outright.
Leasehold mortgage
A mortgage on the leasehold estate, including the improvements (see above).
Lease rider
See rider, below, and Fannie Mae Rider above.
Lessee
The party to whom a leasehold interest is conveyed by a lessor. In the 2011 Model CLT Lease, the lessee is identified as the “homeowner.”
Lessor
The party who conveys a leasehold interest to a lessee. In the 2011 Model CLT Lease, the lessor is identified as the “CLT.”
Lessee
The party to whom a leasehold interest is conveyed by a lessor. In the 2011 Model CLT Lease, the lessee is identified as the “homeowner.”
Lessor
The party who conveys a leasehold interest to a lessee. In the 2011 Model CLT Lease, the lessor is identified as the “CLT.”
Letter of (attorney’s) acknowledgment
A letter attached to the CLT ground lease, signed by an attorney and stating that the attorney has explained to the lessee the ground lease and other documents relating to the lessee’s purchase of a home from the CLT.
Letter of agreement or letter of stipulation
A letter attached to the CLT ground lease, signed by the lessee and stating the lessee’s understanding of and agreement with the goals, terms, and conditions of the ground lease.
Lien
A creditor’s right to have a specific debt paid out of the proceeds of sale of specific property owned by a debtor, or otherwise through the action of a court. The term is also used to identify the property interest that a creditor has in the specific property securing such debt repayment.
The liability of real estate as security for payment of a debt. Such liability may be created by contract, such as a mortgage, or by operation of law, such as a mechanics lien.
Lien theory states
States in which a mortgage is treated as being a lien on the mortgaged propertythe mortgagee having no right of possession unless the mortgagor defaults and the lien is foreclosed. Distinguished from title theory states, below.
Limited equity coop
The type of housing cooperative in which the resale value of ownership shares is limited by the corporation’s bylaws.
Lis Pendens
A pending lawsuit. A lis pendens notice is legal notice to the world that a lawsuit is pending.
Loan Estimate
A three-page Loan Estimate must be provided to the consumers no later than three business days after they submit a loan application for most mortgages. The Loan Estimate provides information about key features, costs and risks of the mortgage loan for which the consumer is applying.
Loan Policy
A policy of title insurance issued to the mortgage lender insuring against loss by defects in, liens against, or unmarketability of title.
Loan-to-value ratio
The ratio (expressed as a percentage) of the amount of a loan to the value of the collateral that secures it. If a home valued at $100,000 is mortgaged to secure an $80,000 loan, the loan-to-value ration is 80%.
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Market Value
An average between the highest price that a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept.
Marketable Title
A title that a court of equity considers to be so free of material defects and liens that it will force the title’s acceptance by questioning purchaser. Also known as a merchantable title.
Match/Leverage
financial value of non-Triangle Community Foundation contributions to project budget, including land or easement value.
Mechanic’s lien
A lien created to secure the amount owed to one who has performed work or supplied materials in the construction or repair of the debtor’s property.
A lien on real estate, created by operation of law, which secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvements on the real estate.
Membership organization
A nonprofit corporation in which members (beyond just the members of the board) have a degree of control over the composition of the governing board, and may be assigned other powers as well. In the case of the “classic CLT,” both lessees and non-lessees can become members and participate in electing the CLT’s board of directors. Other powers usually assigned to members of a classic CLT include establishment of member dues and ratification of any plans for the sale of land or dissolution of the corporation and any changes in articles of incorporation, bylaws, and resale formulas.
Memorandum of lease or notice of lease or short form lease
A document that is filed in the land records of a jurisdiction to record the fact that a particular property is encumbered by a lease. The memorandum notes certain major features of the lease but does not contain the amount of detail contained in the lease itself.
Memorandum of Understanding (MoU)
Generally referred to as an MoU, this is a document of agreement between two or more parties, without the binding power of a contract. When WLT initiates on a formal relationship with a new partner organisation, a joint MOU will be drawn up to outline the basis of the relationship and the expectations. WLT also has an MoU with most of its corporate supporters.
Merger (of leasehold and fee estates)
The action by which, upon the expiration or termination of a lease, the leasehold interest and the leased fee are legally combined to create a single fee simple interest.
Metes and Bounds
Describing boundaries by using courses, directions, distances and monuments.
Mineral rights
The right to mine or otherwise remove minerals from beneath the surface of a given parcel of land; may be held separately from other ownership rights to that parcel; Normally retained by the ground lessor in the case of a CLT ground lease.
Mitigation
Steps taken to reduce or reverse the impact of earlier environmental changes or damage, usually caused by human activities. For example, if logging removed a bird nesting area, mitigation activities might include planting young trees.
monetary default
Failure to meet a monetary obligation; e.g., failure to make mortgage payments or lease fee payments. Distinguished from non-monetary default, below.
Mortgage
A pledge (in the case of a mortgage lien) or conditional transfer (in the case of a deed of trust) of real estate as security for a loan.
A temporary conditional pledge of property to a creditor as security for the payment of a debt that may be cancelled by payment.
Mortgage-based formula
A type of resale formula that determines the resale price by
calculating the total amount of mortgage debt that could be amortized (at interests rates current at the time of resale) with monthly payments that would be affordable for a given
household income.
Mortgage deed
See deed of trust.
Mortgage insurance
Insurance that will cover a certain percentage of a mortgagee’s loss due to a default by the mortgagor. Such insurance may be provided by either a private company or a public source such as FHA.
Mortgagee
Holder of a mortgage or (deed of trust) as security (whether as the original lender or as a subsequent holder of the mortgage.
Mortgagor
A property-owner who mortgages (pledges or conditionally transfers) her property as security for a loan.
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Non-monetary default
Failure to comply with non-monetary obligations established by a mortgage, lease, or other agreement, e.g., violation of the occupancy requirements established by a CLT ground lease.
Not-for-profit (or “nonprofit”) corporation
A corporation that is controlled not by holders of ownership shares but by members. Though members may benefit in certain ways from the activities of a not-for-profit corporation, profits generated by those activities cannot be distributed to members as they can be distributed to shareholders in a for-profit corporation. The members may be numerous, as in the case of a classic CLT, or may be limited to the members of the board of directors or even to a single separate entity.
Notice
A formal notification that is required if due process is to be followed in certain circumstances. For instance, members of a board of directors must receive notice of board meetings if decisions made in those meetings are to be legally bindin
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Officers
Positions within a corporation to which specific duties are assignedthe most common nonprofit corporate officers being President, Vice President, Secretary, and Treasurer.
Open Space
An undeveloped piece of land adding ecological, scenic or recreational value to an urban area. Open space can be public or private. Examples include forests, marshes and wildlife sanctuaries.
Option (purchase option)
A right to purchase a specified property on specified terms, within a specified period of time or upon the occurrence of specified circumstances.
In title industry terms, referred to as title opinion. The conclusion and judgment of a skilled person as to the status of a title, based upon a title examination.
Option Agreement
A contract made to keep an offer open to purchase a Conservation Easement, land in fee simple title, etc. for a specified period, so that the offeror cannot revoke the offer during that period.
Orthophotograph
aerial photograph corrected to scale.
Outright Donation
A landowner gives all (or part) of their interest in a property to a land trust; the trust makes no payment for the land or easement. The donor typically gains tax benefits for making a charitable contribution.
Outright Purchace
On occasion a land trust may pay full price for fee simple ownership of a property. This is expensive for the trust, but may be necessary to conserve an environmentally important piece of land. The seller receives no tax benefits.
Owner’s Policy
This policy is purchased for a one-time fee and protects a homeowner’s investment in a property for as long as they or their heirs have an interest in the property. Only an owner’s policy protects the buyer should a covered title problem arise with the title that was not found during the title search. Possible hidden title problems can include errors or omissions in deeds, mistakes in examining records, forgery and undisclosed heirs.
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Permitted mortgage (as the term is used in the Model CLT Ground Lease)
A leasehold mortgage, securing a loan to the homeowner/lessee, that is explicitly permitted by the CLT/lessor.
Personal property or personalty, movable property that is not a part of or affixed to the land; distinguished from real property or realty.
Portfolio
a collection of investments held by a single investor. For a mortgage lender, the mortgages retained “in portfolio” are those mortgages not sold on the secondary mortgage market. A CLT’s portfolio is generally understood to consist of its real estate holdings.
Portfolio income
as used in this manual, income generated through a CLT’s ongoing stewardship activities related to its real estate holdings; includes rental income, ground lease fees, and transfer fees.
Power of attorney
written authorization to take legally binding actions on behalf of another.
A legal instrument authorizing one to act as another’s agent or attorney.
Preemptive option
an option to purchase specified property at any time it is placed on the market by its owner, thus a right to preempt a sale to any other party. premises, the surface of a parcel of land together with the improvements on that parcel of land.
Preliminary Title Report
A report prepared prior to issuing a title insurance policy that shows the ownership of a specific parcel of land. It includes information about liens and encumbrances that will not be covered under a title insurance policy.
Preminum
The amount payable for an insurance policy.
Preservation vs. Conservation Preservation
leaves land intact with minimal human intervention. Conservationprotects certain natural attributes of land (e.g. soil, water quality, habitat) while allowing for sustainable human use (e.g. farming, forestry, recreation) where appropriate.
Personal property or personalty
Movable property that is not a part of or affixed to the land; distinguished from real property or realty.
Probate
A legal procedure in which the validity and probity of a document, such as a will, is proven.
Promissory Note
A written promise to pay or repay a specified sum of money at a stated time, or on demand, to a named person. In addition to the payment of principal, a promissory note usually provides for the payment of interest.
Portfolio
a collection of investments held by a single investor. For a mortgage lender, the mortgages retained “in portfolio” are those mortgages not sold on the secondary mortgage market. A CLT’s portfolio is generally understood to consist of its real estate holdings.
Portfolio income
As used in this manual, income generated through a CLT’s ongoing stewardship activities related to its real estate holdings; includes rental income, ground lease fees, and transfer fees.
Power of attorney
Written authorization to take legally binding actions on behalf of another.
Preemptive option
An option to purchase specified property at any time it is placed on the market by its owner, thus a right to preempt a sale to any other party.
Premises
The surface of a parcel of land together with the improvements on that parcel of land.
Preservation
Often used interchangeably with conservation. Preservation suggests that natural resources will be left undisturbed, while conservation usually indicates some resource management. (compare conservation)
Private mortgage insurance (PMI)
Mortgage insurance provided by a private company, distinguished from similar insurance provided by public sources such as FHA.
Private mortgage insurance (PMI), mortgage insurance provided by a private company, distinguished from similar insurance provided by public sources such as FHA.
Project Related Staff Expenses
non-overhead staff time expense directly related to the subject project.
Property Tax
A tax, paid by a landowner, based on the government’s estimate of the land’s value.
Public Benefits
conservation uses of land that provide benefits to the public (e.g. food, clean water, clean air, recreation, etc.).
Public Records
The transcriptions in a recorder’s office of instruments that have been recorded, including the indexes pertaining to them.
Purchase contract
A contract between a designated buyer and seller, spelling out the terms on which a specified property is to be purchased by one from the other. Purchase contracts for CLT homes may be three-party contracts, in which the CLT participates as the designated buyer’s ground lessor.
Purchase option price
The price at which one has a right to purchase a specified property under the terms of an option agreement. In the Model CLT Ground Lease, the purchase option price is the lesser of the formula price or appraised value at the time of sale. (See Model Lease, Article 10.)
Purchase option price
The price at which one has a right to purchase a specified property under the terms of an option agreement. In the Model CLT Ground Lease, the purchase option price is the lesser of the formula price or appraised value at the time of sale.
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Quit Claim Deed
A deed that does not imply the grantor holds title, but which surrenders and gives to the grantee any possible interest or rights that the grantor may have in the property.
Quiet Title Suit
A lawsuit brought by an owner of real estate for the purpose of cancelling, wiping out, and putting a quietus upon supposedly immaterial, inconsequential, and unenforceable claims and interests that cloud the owner’s title.
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Real estate
Land and all things permanently attached to it whether naturally or artificially.
Real property or Realty, real estate as property.
Realtor
A copyrighted trade name that can be legally used only by those belonging to the National Association of Realtors.
Recording (of deeds, mortgages, etc.)
The process of creating a permanent public record of ownership interests in real estate by filing copies of the documents that establish such interests in the “land records” maintained by an agency of local government.
Record Title
The aspects of a title that appear in the public records as distinguished from unrecorded title aspects and interests.
Refinance Rate
When referring to title insurance, the refinance rate is the reduced rate for a loan policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years.
Reissue Rate
When referring to title insurance, the reissue rate is the reduced rate for an Owner’s Policy of title insurance issued on a property that was previously insured within some period of years. In some states, the term is also used for a refinance rate.
Remainder Interest
(also reserved life estate) A landowner may transfer a property to a land trust, but keep the right to live on the land until his or her death. This means that the landowner still has the primary claim to the land and the trust holds the remainder. Full ownership is not transferred to the trust until after the donor’s death.
Resale
In the context of this manual, any sale of the improvements on CLT land after the initial sale to the initial ground lessee.
Resale formula
A formula determining the maximum price for which a specified property can be resold under the terms of a specific agreement.
Resale price
In the case of a CLT, the maximum price for which improvements on CLT land may be sold by the ground lessee. See purchase option price, above.
Resale restriction
Any restrictions on the resale of a property under the terms of a specific agreement. CLT ground leases normally restrict resale with regard to both the price for which the improvements can be sold and the qualifications of those who are permitted to purchase the improvements.
Reserve fund
A fund established and managed for the purpose of meeting anticipated future expenses. An increasing number of CLT homeownership programs allocate a portion of the ground lease fee to a repair/replacement reserve fund that will help to pay for necessary future replacements and repairs (e.g., replacement of roofs, heating systems,
etc.).
Restraints on alienation
restrictions on a property-owner’s right to alienate (transfer title to) a property. Such restrictions are prohibited in certain circumstances under common law and in some states by statutes codifying old English common law of property.
Rider
An attachment to a written agreement, signed by the parties to the agreement, modifying the terms of the agreement for some period of time (not necessarily for the full term of the agreement) or only in relationship to an identified third-party, such as for the benefit of a particular lender.
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.
Riparian Habitat
Habitat that is next to, or affected by, water sources such as rivers, creeks, lakes and springs. These areas often shelter plants and animals that couldn’t survive in nearby areas. (see Wetlands)
Riparian Rights
The many rights of a person in, to, and over the banks, bed, shallows, shore, and water of a stream or body of water upon which his land borders.
Right of first refusal
The right to purchase a property for a price offered by a third party and accepted by the owner. If an owner grants a right of first refusal and subsequently receives an acceptable offer from a third party, the owner must give notice to the holder of the right and give the holder an opportunity to purchase the property for the offered price
before the property can be sold to the third party.
Risk Rate
When referring to title insurance, the risk rate is a rate that does not include the cost of researching the title or the cost of conducting the closing.
Rule against perpetuities
The common law rule prohibiting the establishment of perpetual socalled “unvested” ownership rights relating to a particular property, such as a perpetual option to purchase a property. (This is a highly technical rule that in most states is not in any conflict with the terms of the Model Ground Lease.)
Rural Development
An agency of the U.S. Department of Agriculture administering various federal programs designed to benefit rural communities and residents of rural areas.
Rural Housing Services
An agency administering affordable housing programs within the Rural Development agency.
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Safe harbor guidelines
Published by the IRS in 1996 (as Revenue Procedure 96-32) describing the circumstances under which an organization can be assured that its housing projects qualify as charitable on the basis of the specific income levels of the populations
housed in these projectstherefore the guidelines on the basis of which many housing organizations qualify for 501(c)(3) status.
Search
A careful exploration and inspection of the public records in an effort to find all recorded instruments relating to a particular chain of title.
Second Mortgage
A mortgage ranking in priority immediately below a first mortgage.
Section 8
a federally-funded program that provides rental housing subsidies for low-income households. These subsidies are provided by HUD as either “tenant-based assistance” or as “project-based assistance.” In either case they pay the difference between fair market rent and the amount considered affordable for the tenant, determined as a percentage of the household’s income.
Secondary mortgage market
a market for the purchase and sale of existing mortgages. See Fannie Mae and Freddie Mac, above.
Separation of title
the process by which the title to buildings and/or other improvements comes to be held by a party other than the owner of a fee interest in the land.
Settlement
In some areas called a “closing.” The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.
Settlement price
the price of a home as stated in a “HUD-1 Settlement Statement.” Distinguished from base price as used in this manual, the settlement price is the price paid for a home including any subsidy that is allocated to the homebuyer (rather than to the CLT).
Severability
The right of an owner of buildings or other improvements to remove them from the leased premises on which they are situated. A ground lease may or may not permit such removal of improvements. Most CLT ground leases do not.
Shared equity homeownership programs, a term that has come to be used to describe a range of resale-restricted affordable homeownership programs, including CLTs, deed- restricted programs, and limited equity coops.
Shared equity homeownership programs
a term that has come to be used to describe a range of resale-restricted affordable homeownership programs, including CLTs, deedrestricted programs, and limited equity coops.
Simple appraisal-based formulas
a type of appraisal-based formula that allocates to the seller a specified percentage of the appreciated combined market value of both the improvements and the land.
Simultaneous Issue Rate
When referring to title insurance, the simultaneous issue rate is the reduced rate for a loan policy or owner’s policy issued on the same property or loan at the same time as another policy. The term usually refers to a loan policy issued at the same time as an owner’s policy when a property is purchased.
Special Warranty Deed
A deed that warrants the title only with respect to acts of the seller and the interests of anyone claiming by, through, or under him.
Standard permitted mortgage
As defined in the Model CLT Ground Lease, a leasehold mortgage that meets certain requirements stated in the ground lease (or an exhibit attached to the ground lease), and that the CLT is required to permit.
Standards and Practices
Land Trust Alliance guidelines for the responsible operation of a land trust.
Steward
A person who manages property on behalf of someone else; an administrator. Stewardship is the act of managing resources; the long-term responsibility for the care and management of land.
Stewardship
Those steps necessary to preserve a conservation easement in perpetuity, including the creation of baseline documentation reports, regular monitoring, landowner relations including successor generation landowners, addressing amendments and enforcing easements.
Specific form of stewardship that applies to the landowner/easement holder’s management of the land/easement after it is acquired. These activities includemonitoring, landowner relations, enforcement, landowner notification and approvals and proper management of stewardship funds.
Stewardship Endowment
fund established to support the long-term costs of providing the stewardship services (above) for a conservation easement or ownership of a property.
Subdivision
An area of land 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.
Sublease
an arrangement whereby a lessee leases all or a portion of the leased premises to a third party for some portion of the lessee’s remaining term. CLTs normally permit a sublease
only with the lessor’s approval.
Subsidy
gift, grant or deferred loan used to reduce the cost of housing for the occupants.
Subsidy recapture
In the case of subsidized homeownership, the practice of requiring the homeowner to repay the subsidy when the home is resold.
Subsidy retention
in the case of subsidized homeownership, the practice of “locking” the subsidy in place so that the home will remain affordable for subsequent homebuyers of modest means.
Survey
(1) To determine the location, boundaries, area, or the elevations of land and structures upon the earth’s surface by means of courses in relation to the North Star, and the measuring of angles and distances by using the techniques of geometry and trigonometry. (2) The map or plat drawn by a surveyor that represents the property surveyed and shows the results of a survey.
Sustainable
Being sustainable means using natural resources in a way in which they can continue to survive and be used in the future, rather than becoming depleted. Sustainable methods also less damaging to the environment.
Sustainable Development
A philosophy of resource use and management intended to meet society’s present needs without compromising the resource for future generations.
Sweat equity
equity that is credited to homeowners when they construct or improve their own homes with their own hands
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Tax-exempt status
status of an organization that has been recognized as exempt from the obligation to pay certain taxes.
Tax Lien
The lien that is imposed upon real estate by operation of law that secures the payment of real estate taxes.
Tenancy by Entireties
An estate or interest in real estate predicated upon the legal fiction that a husband and wife are one person. A conveyance or devise to them (unless contrary intent is expressed) vests title in them as one person. Upon the death of either husband or wife, full title passes to the survivor.
Tenant
(1) Usually one who holds possession of real estate under a lease. (2) In a broader sense, one who holds or possesses lands and tenements by any kind of title.
Tenants in Common
Two or more persons in whom title to a single piece of real estate is vested in such a manner that they have a common or equal right to possession and enjoyment of the property, but each holds a separate individual interest or estate in the property. Each owner may sell or encumber his respective interest or dispose of it by will, and if he dies without leaving a will, his heirs inherit his undivided interest.
Termination
The act of concluding a leaseand thereby extinguishing the rights of the lessee under the leasebefore the expiration of the full term of the lease. A lease may be terminated as a result of a default by one party or the other.
Third Party
A term usually applied to persons who are not principal parties to a contract or other instrument, but who have some right, interest or duty that such contract or instrument affects. For example, where a sale contract between buyer and seller of real estate provides that the money and documents involved in the transaction will be deposited with a title company pending the closing of the deal, the title company becomes a third party to the transaction.
Title
The legal document that proves ownership interest in a piece of land. A title is transferred from one person to another by the use of a deed. Ownership rights to real estate, or evidence of such ownership.
(1) A combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy, and dispose of real estate or an inheritable right or interest therein. (2) The rights of ownership recognized and protected by the law.
Title Comment
An offer to issue a title insurance policy. The title commitment will describe the various conditions, exclusions and exceptions that will apply to that particular policy.
Title Comment
An offer to issue a title insurance policy. The title commitment will describe the various conditions, exclusions and exceptions that will apply to that particular policy.
Title company
a company that sells title insurance based on its examination of land records and its determination that the party conveying ownership of a property has title to that property and can legally convey it. Title companies can play a significant role in coordinating real estate transactions.
Title Covenants
Covenants ordinarily inserted in conveyances and in transfers of title to real estate for the purpose of giving protection to the purchaser against possible insufficiency of the title received. A group of such covenants known as “common law covenants” includes: (a) covenants against encumbrances; (b) covenant for further assurance (in other words, to do whatever is necessary to rectify title deficiencies); (c) covenant of good right and authority to convey; (d) covenant of quiet enjoyment; (e) covenant of seisin; (f) covenant of warranty.
Title Defect
(1) Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership. (2) Any material irregularity in the execution or effect of an instrument in the chain of title.
Title Examination
To peruse and study the instruments in a chain of title and to determine their effect and condition in order to reach a conclusion as to the status of the title.
Title insurance
A policy insuring an owner of real estate or a mortgagee against loss resulting from a defect in the title to the real estate conveyed to the policy-holder.
Title Insurance
Is insurance that protects purchasers of real estate and mortgages against loss from defective titles, liens and encumbrances.
Title Plant
(1) In many areas, synonymous with abstract plant. (2) A geogra…
Title theory states
States in which a mortgage is interpreted as conveying title to the mortgaged property to the mortgagee until the mortgage debt has been fully paid. Distinguished from lien theory states (see above). The instrument used for title theory transactions may be called a mortgage deed or deed of trust.
Trail Easement
A voluntary legal agreement that allows a qualified holder (e.g., a land trust) of the easement to run and maintain a trail or trail segment across a property owned by another party.
Transfer fee
in the case of a CLT, a fee paid by the buyer of a home (when it is resold by a previous homeowner) which is added to the purchase option price received by the seller. Increasingly common among CLTs, these fees are an important source of long-term support for CLT stewardship functions.
Trust
a fiduciary arrangement whereby property is conveyed to an individual or institution that, as a “trustee,” manages the property for the benefit of one or more designated beneficiaries. Although a community land trust does hold and manage real estate for the benefit of the local community, it is not organized, legally, as a trust; it is organized as a not-for-profit corporation.
Trustee
The individual who actually owns the property in trust. The trustee is responsible for managing the assets held in trust, and distributing income according to the terms of the trust. The trustee owes a fiduciary duty to the beneficiaries and must carry out their instructions.
Trust Agreement
This outlines the terms of how the trust is to be managed and administered. It spells out the responsibilities of the beneficiaries and the trustee.
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Urban Growth Boundary
Most land-use plans include an Urban Growth Boundary (UGB). A UGB is an imaginary line that separates areas where development is allowed and areas where development is restricted. UGBs encourage development in existing urban areas and preservation of land outside the boundary.
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Waiver
the act of relinquishing, choosing not to exercise a particular right, claim or privilege.
Watershed
The entire area of land that collects and drains water (from snow and rain) into a single river or similar body of water.
Wetlands
Lands that are normally saturated with water, such as swamps, marshes and bogs. These areas often host plants and animals specially adapted to life in very wet conditions. (see riparian habitat)
