Real Estate Definitions

Law Office of

Tina Nielsen Amodeo, L.L.C.

DEFINITIONS

the document used to transfer ownership or “title” of real estate.

A debt secured by real property. You give a mortgage to the bank or lender and in return they give you money. When you repay the debt, they cancel the mortgage.

A written agreement signed at or before closing that permits one of the following to occur:

1. The seller to remain on the property after closing for a designated period of time and for a designated amount of money paid to the buyer, usually calculated as a per diem figure based upon the cost of mortgage payment, taxes and assessments to the buyer;

2. The buyer to take possession of the property before and until closing for a designated amount of money, usually calculated as a per diem figure based upon the cost of mortgage payment, taxes and assessments to the seller;

Comment:

In number 1 above, an amount will usually be held in escrow at closing from the seller’s proceeds until such time as the designated period of time for the extended occupancy is over and the seller vacates the property. At the time the seller vacates the property, the amount of per diem charges is added up and deducted from the amount of money held in escrow. The balance of the escrow gets returned to the seller. A second walk-through should be scheduled for the day when the seller vacates the property. Difficulties may arise when the second walk-through occurs and there is damage to the property caused by the seller after closing. This is why a Use and Occupancy Agreement should be carefully drafted to take into consideration the possibility that damages can occur and set definite amounts for charges for any damages. Difficulties may also arise when the seller cannot vacate the property on the designated date. Therefore, the drafter of the agreement should be careful to include a penalty provision with definite charges to the seller for not vacating the property by the designated date.

The closing or settlement is the meeting that takes place where the refinance or sale and purchase of the property is completed. It is also where the buyer signs any mortgage documents that are necessary in order for him to obtain the money to pay the seller. It is the time and place where every part of the transaction is consummated from the pro-ration of taxes to the handing over of the keys. The closing could take place at an attorney’s office, at a real estate agency, at the lender’s office or at the buyer’s title agency. All parties to the transaction will be present including the seller, buyer, real estate agents, title agent and attorneys. It is the time and place where the seller gives the Deed to the buyer and the buyer gives the balance of the purchase price to the seller.

Joint tenancy with right of survivorship

Interest, possession, right and title to property that is held by two or more individuals where the interest, possession, right and title are the same, are created at the same time and held undivided. If property is held by two joint tenants, when one tenant passes away, the surviving tenant(s) take(s) up the interest of the tenant who passed away together with the interest he already holds. Since each joint tenant owns an undivided interest in the entire property, the passing of one tenant passes the undivided interest to the remaining tenants. For example, A gives B and C a Deed naming B and C as joint tenants with rights of survivorship. B passes away. C owns the property outright. Please note that in order to convey title solely after B has passed away, C will most likely be required to prove that B passed away by showing a death certificate or other documents indicated that B has passed away. When C sells the property, the Deed will have to recite how she and A originally obtained ownership of the property and recite the fact that title vested completed in C by virtue of the passing of A.

Interest, possession, right and title to property that is held by two or more individuals where the interest, possession, right and title are divided between the individuals in time and quantity but where possession is shared. For example, A gives B and C a Deed naming B and C as grantees as tenants in common, B to hold 50% interest, right and title to the property, and C to hold 50% interest, right and title to the property. If B or C pass away, B’s heirs will or devisees will hold 50% of the property and C will still own the other half. If C later passes away, B’s heirs and C’s heirs or devisees will separately hold 50% of the property. In order to sell property held by tenancy in common, where one or all of the owners has passed away, it is necessary to have the executor or administrator of the estate of the deceased owner, to convey the 50% ownership of the deceased owner. Proper proof and recitation of the administration of the estate will be required.

Interest, possession, right and title to property that is held by husband and wife. Similar to the joint tenancy, when a husband and wife hold property, if one passes away, the other, as surviving tenant by the entirety, takes title to the entire property. It is presumed in the State of New Jersey that property held by husband and wife is held as tenants by the entirety. Therefore, if A and B have a Deed to property and they are married, if A or B pass away, it is only necessary for the surviving tenant to sign on a Deed conveying the property out to a new owner. Of course, the Deed to the new owner will have to recite how A and B originally obtained ownership of the property and recite the fact that by operation of law the property vested in the Grantor as surviving tenant by the entirety and recite the date of the passing of the deceased spouse.

The trail of conveyances of real property from the original title holder to the present owner recited consecutively. A Deed will recite the chain of title from the current owner to the previous owner in order to establish the chain of title for the record.

The notice filed in the public records notifying all persons who may have an interest in a particular parcel of real property are that a lawsuit is pending that could affect their rights as to that property.

The real estate agent who lists the property for sale for the seller.

An agent who works for both the seller and buyer but who is beholden to neither.

One to whom a debt is owed.

One to whom a debt is owed who has obtained a judgment that is of record and that allows him or her to enforce the collection of the debt.

One who owes money to someone else known as the creditor.

The bank, lender or other entity or person who is given a mortgage as security for money loaned to the person giving the mortgage. For example, the bank lends you money to buy a house; you give the bank a mortgage. The bank is the mortgagee.

The person who gives a mortgage as security for money loaned to him or her. For example, when you give a mortgage to a bank and they loan you money to buy a house, you are a mortgagor.

The document you sign that states that you promise to pay a debt. The note is usually signed at the same time you give a mortgage to the person who is lending you money. The mortgage is recorded and held as security that you will abide by your promise to pay back the loan according to the terms of the note.