Financial Planning 100 Point Learning Contract
Real Estate Vocabulary - Related to Legal Issues (in Real Estate)
Abstract (Of Title)
An abstract of a title is a summary of the public records about the title (proof of ownership) to a piece of property. An attorney or title insurance company looks an abstract of title to see if there are any problems that must be cleared before a buyer can buy the property.

Building Line or Setback
The building line or setback marks the area within the property where you are allowed to build.

Certificate of Title
A certificate of title is made by a title company or a by an attorney. It says the seller actually has title to the property which he is offering for sale.

Condemnation

  • Meaning 1 – The government (city, state, or federal) forces you to sell your property to them for a government purpose, like building or widening a road. The government’s right to do this is called Eminent Domain.
  • Meaning 2 – The government declares that a building is unsafe.

Deed
A deed is a formal written document that transfers the title to real estate property from one owner to another. It is signed and witnessed according to the laws of the State where the property is located. The buyer gets the deed on the closing day.

Easement Rights
Easement rights give someone the right to go on or across property for a stated purpose. For example, an electric company will have the right to go on to private property to access their power lines.

Encroachment
An encroachment is part of a building or other obstruction that goes past its property line, or past its building line. The government can force you to tear a building down if it has an encroachment.

Encumbrance
An encumbrance is a legal right or interest in land that makes the property harder to sell, and hurts its value. Here are some examples:

  • zoning ordinances,
  • easement rights,
  • mortgages and liens,
  • a pending legal action,
  • unpaid taxes, or
  • restrictive covenants.

General Warranty Deed
A general warranty deed is a deed with a guarantee. If there are unknown claims on the property, they will be the responsibility of the one who gave this guaranteed deed.

Grantee
In the deed, the buyer is called the grantee.

Grantor
In the deed, the seller is called the grantor.

Marketable Title
A marketable (sellable) title has no problems that would keep it from being transferred.

Quitclaim Deed
If you sign a quitclaim deed for a property, you give away whatever rights of ownership you may have in that property.
If you buy a property from someone who uses a quitclaim deed to clear the title, there is no guarantee because they are only saying they’re giving up whatever rights they may have, not what rights they do have.

Restrictive Covenants
Restrictive covenants are rules made by previous owners of the land that current owners must obey by law. They limit such things as:

  • density of buildings per acre,
  • size, style or price range of buildings,
  • types of businesses allowed

Special Lien
A special lien is lien that binds a specified piece of property. A general lien applies to all of a person’s assets.

Special Warranty Deed
In a special warranty deed, the seller guarantees that he has not done anything during the time he owned the property that would interfere with the new owner’s title to the property. It does not guarantee that there are no problems that happened before he owned the property.


Title
Title is the right of ownership and control of a particular property. Title also means the documents that legally establish ownership of a particular property.

Title Insurance
Title Insurance protects lenders or buyer if there is a legal problem with the title.

Title Search or Examination
A title search or title examination checks the title records at the local courthouse. It makes sure the buyer is buying the property from the legal owner and there are no liens, claims or restrictive covenants that would make the property worth less money.

Trustee
A trustee is a person who has legal responsibility to care for someone else’s property. If a minor or someone who is very sick owns property, a trustee manages the property for them.