Real Estate Terminology

Real Estate Terms (G-L)

General Agent

A general agent refers to the entity that has full authority over a property of the principal, such as a property manager.

General Lien

A general lien is a lien that attaches to all of the property of a person within the court's jurisdiction.

General Warranty Deed

A general warranty deed is a deed denoting an unlimited guarantee of title.

Ginnie Mae

Ginnie Mae is the nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.

Girder

A girder is the main beam in a structure that spans the distance from one side of the foundation to the other.

Good Faith Estimate

A Good Faith Estimate is an estimate of the fees a mortgage borrower will be required to pay at closing.  It is required by Federal law that the lender provides the Good Faith Estimate within three business days of the initial loan application.

Grace Period

In a mortgage, the grace period refers to a specified time frame in which payment may be made without the borrower being in default.

Graduated Lease

A graduated lease is a lease in which the rent changes from period to period over the lease term.  This type of lease is usually used by a new business tenant whose income will increase over time.

Graduated Payment Mortgage (GPM)

A graduated payment mortgage has payments that are lower in the early years but increase on a scheduled basis until they reach a level of amortization.

Grandfather Clause

A "grandfather clause" allows an activity to continue that was once considered acceptable or legal, but has since had the rules or laws changed.  An example of this is when a building once allowed pets, but subsequently changed the House Rules to not allow pets.  The existing tenants or owners are allowed to keep their pets, but new occupants to the building are not allowed to bring them in.  The existing pets and owners are "grandfathered".

Grant

A grant is a transfer of title to real property by deed.

Gross Lease

A gross lease is a lease in which the lessor pays all costs of operating and maintaining property, including the property taxes.

Ground Lease

A ground lease is a long-term lease of unimproved land and is usually for construction purposes.

Habendum Clause

The habendum clause is the statement in a deed that begins with the words "to have and to hold" and describes the estate granted.

Half Bath

A half bath, or powder room, has a sink and toilet, but does not have a bathtub or shower.

Headers

Headers are wooden reinforcements for the placement of doors and windows.

Hectare

A hectare is the metric system equivalent to 2.47 acres.

Holding Period

Holding period refers to the length of time a property is owned.

Holdover Tenant

A holdover tenant is a tenant that remains in possession of a property after a lease terminates.

Home Equity Loan

A home equity loan is a loan made against the equity in a home.

House Rules

House rules are building rules regulating the conduct and responsibilities of homeowners as they affect the building's common areas and services.

Housing Expense Ratio

The housing expense ratio is the relationship of a borrower's monthly payment obligation on housing (principal, interest, taxes, insurances and other applicable housing expenses) divided by gross monthly income, expressed as a percentage.  It is also referred to as top ratio.

HVAC

HVAC is an acronym that stands for heating, ventilation and air conditioning.

Hydronic System

A hydronic system is a process in an HVAC system where liquids are heated or cooled.

Hypothecate

Hypothecate is to pledge property as security for the payment of a debt without giving up possession.

Improvements

Improvements are changes or additions made to a property.  These typically increase the value of the property.

Indemnification

Indemnification is the reimbursement or compensation paid to someone for a loss already suffered.

Index

Index is a benchmark, usually a published interest rate, such as a one-year London Interbank Offered Rate (LIBOR) security yields, used to calculate the interest rate of an adjustable rate mortgage when rate is scheduled to change.  Generally, a margin stated in loan documents is added to the index to determine the new interest rate.

Index Lease

An index lease is a lease with a method of determining rent by an index, such as the LIBOR index.

Ingress

An ingress is the right to enter a parcel of land, usually used as "ingress and egress", or both entering and leaving.

Injunction

An injunction is a court instruction to discontinue a specified activity.

Insider Rights

Special rights offered to tenants occupying apartments in a building in the process of converting to a co-op or condo, giving them the exclusive right to buy their apartments for a limited period of time and normally at a discounted price.

Inspection

An examination of a property by a qualified inspector or engineer to understand the condition and to check for structural damage, termites, any required repairs or equipment replacement, etc.

Installment Land Contract

See Contract For Deed.

Installment Sale

An installment sale is a property sale in which the purchaser pays the purchase price over a period of years.  The seller recognizes gain for tax purposes by the proportion of the profit (determined by the profit divided by the nest sales price of the asset) received on each payment as it is received.

Insurable Interest

Insurable interest is the amount of property qualifying for insurance.

Insured Value

The insured value is the amount that a structure is insured and should include the cost of replacing the structure if completely destroyed.

Interest-Rate Spread

The interest-rate spread is the differential between the retail interest rate charged to a borrower and the wholesale rate accepted by the financial industry when acquiring home mortgage loans.  The spread is the profit to the bank.

Interest Rates

The interest rate is the cost of borrowing money from a lender.  Rates will vary and will change over time.

Interim Financing

Interim financing is a short-term or temporary loan such as a construction or bridge loan.

Interim Interest

Interim interest is interest owed by the borrower to the lender on the mortgage loan from the day of the closing top the date covered by the first payment.

Intestate

Intestate is the condition that occurs when someone dies without a valid will.

Involuntary Alienation

Involuntary alienation is the transfer of title to real property as a result of a lien foreclosure sale, adverse possession, filing a petition in bankruptcy, condemnation under power of eminent domain, or, upon the death of the titleholder, to the state if there aren't any heirs.

J-51

A New York City program giving tax breaks for the substantial rehabilitation of an existing property.  The program provides for an abatement of tax on a formula based on the level of improvement and an exclusion from additional tax due to the change in use of the property.

Joint Tenancy

Joint tenancy is a form of co-ownership that includes the right of survivorship.

Joist

A joist is a wooden framing member used in the construction of floors and ceilings.

Judgment Lien

A judgment lien is a general lien resulting from a court decree.

Jumbo Loan

A mortgage issued in an amount exceeding the threshold stipulated under Fannie Mae (FNMA) regulations for a conforming loan.

Land Lease

A land lease is a situation in which a building and other land improvement are rented for a term of years.  At the end of the lease term, the right of possession is extinguished and reverts back to the landowner.  At the time, the tenant loses any remaining equity interest in the property.

Landmark

Landmark status is the designation given to a building or neighborhood that is under government protection for purposes of preservation.

Landmarks Commission

The Landmarks Commission is a city governmental agency assigned responsibility for recommending properties and neighborhoods to be landmarked and ensuring that landmarks are properly preserved.

Lease

A lease is a written agreement to rent a property or part of a property from an owner.

Letter of Adequacy

A letter (usually issued by a managing agent) found in the offering plan of a building converting to cooperative or condominium ownership affirming that the income and expenses, as expressed in the proposed budget, are adequate to cover the costs of running the building.  This expert evaluation is required by the New York State Martin Act.

Liability

A liability is a debt or claim that is owed.

LIBOR Index

Stands for "London Interbank Offered Rate", and is the average yield of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market.  LIBOR is a common index used as a benchmark for adjusting mortgage interest rates in adjustable-rate mortgages.

Lien

A lien is an encumbrance on property which acts as security for the payment of a debt or the performance of an obligation.  A mortgage is a lien.  A lender will want most, if not all, liens on a property removed before making a mortgage loan.

Lien Foreclosure Sale

A lien foreclosure sale is the sale of property without consent of the owner, as ordered by a court or authorized by state law due to a debt resulting in a lien.

Life Estate

Life estate is a freehold estate created for the duration of the life or lives of certain named persons.  It is a non-inheritable estate.

Life Estate in Remainder

A life estate in remainder is a form of life estate in which certain persons are designated to receive the title upon termination of the life tenancy.

Like-Kind Exchange

The like-kind exchange is an exchange of similar property, as defined in the Internal Revenue Code that can be performed without recognition of taxable gain at the time of transfer.

Limited Liability Company

A form of organization that is similar to a partnership, in that recognition of income and expenses flow directly through to the owners for tax purposes (without a corporate tax), but that still permits insulation from liability similar to that of a corporation.

Liquidated Damages

Liquidated damages are the agreed amount to be paid as compensation for a breach of contract.

Liquidity

Liquidity refers to the ability of assets that are readily convertible to cash.

Lis Pendens

Lis pendens means a "lawsuit pending".  See Notice of Lis Pendens.

Listing

The term used by brokers to market an apartment for sale or rent.

Listing Broker

The listing broker represents the interests of the seller or landlord in the sale or rental of his or her property.

Loan Commitment

The loan commitment is the written obligation from a lending institution to provide a mortgage to a borrower.

Loan Origination Fee

The loan origination fee is the financing charge required by a lender.

Loan-to-Value Ratio (LTV)

The loan-to-value ratio is the mortgage amount divided by the lower of the purchase price or the appraised value of the property.  This ratio is expressed as a percentage.  A lender will use this ratio in determining the maximum mortgage loan that it will make on the property.

Lock-In / Rate Lock Agreement

A lock-in is an agreement by the lender guaranteeing the applicant a specified interest rate on the mortgage loan provided the loan closes within a set period of time.

Loft

A loft refers to an open living space that was converted from commercial space to residential space.  Lofts contain very high ceilings, large windows and open space.  In New York City, most lofts and converted commercial space are located in downtown Manhattan.

Lot

A lot is a measured section of land.