A

A/C         An abbreviation for air conditioner or air conditioning.

Acre         A measurement of land equal to 43,560 square feet. Example: A lot aprox. 150 x 290.

Adjustment Date         The day from which all calculations of interest, tax adjustments, utility bill adjustments (if applicable) are made to the credit of either the buyer or the seller. This is usually (but not always) the same as the possession date.

Amortization         The period set to pay down a loan. The normal amortization period for a mortgage in Canada is twenty five years, but can be as short as five years or as long as twenty five years.

Appraisal         An estimate of a property’s value performed by a professional appraiser.

Agency         The relationship between principal and real estate agent which arises out of a contract, written or oral wherein an agent is employed and authorized by the principal to represent him/her in business transactions with a third party.

Assumption         Taking over a loan and becoming personally liable for the repayment

Assessment – An appraisal for the purposes of taxes.

Assurance Fund         A fund set up by the B.C. Government to compensate any person deprived of land where there has been fraud, a mistake or error by the registrar of titles.

Agreement for sale         An agreement between the vendor and purchaser for the purchase of real property.

B

Backfill         The replacement of excavated earth into a trench around or against a basement /crawl space foundation wall.

Bay window         Any window space projecting outward from the walls of a building.

Balance due on completion         The amount the purchaser needs to pay the vendor after all adjustments have been made.

Bearing wall         A wall that supports any vertical load in addition to its own weight.

Blended Mortgage Payments         Payments consisting of principal and interest component of a mortgage.

Breach of Contract         Violation of any of the terms or conditions of a contract without legal excuse; default, non-performance, such as failure to make payment when due.

Bridge Financing         A short-term loan for borrowers, sometimes used when a borrower buys a second home before the first one has been sold.

Buyer Agent         An agent representing the buyer in a home purchase.

C

Caveat       A notice registered against the title of land that there is an outstanding claim.

Chattel         Articles of personal property such as household goods, furnishings, and fixtures that are not permanently affixed to the house.

Closing Costs         All the charges that are attached to the closing . These one-time fees include charges for title search and insurance, attorney’s fee, lender and/or broker fees.

Common Area         An area in a strata that is owned by all residents. i.e.:the swimming pool, roof or lobby. (see limited common area).

“Condition Precedent”         A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal. also known as “Subject-to” Clause Consideration – The legal term used for what reason which induces a party to enter into a contract. It can take the form of financial payment or the a promise to do or not do something.

Conveyance         The term used to describe the process of transferring the seller’s title to the buyer and indicates all the necessary steps to complete the transfer.

Cornice         Overhang of a pitched roof , usually consisting of a fascia board, and soffit.

Covenant – A promise contained within an agreement. (a restrictive covent ant is a restriction placed on land i.e. restricted building heights). (A local millionaire actually bought the rights from all his neighbors to not block his view).

Collateral         Something of value given or pledged as security for a debt or obligation. The collateral for a real estate mortgage loan is the mortgaged property itself.

Cripple         Short vertical “2 by 4’s or 6’s” frame lumber installed above a window or door.

D

Deposit

A sum of money that is required to be paid with an offer to purchase as a symbol of the purchaser’s commitment.

E

Easement         A registered limited right of use of another’s land by a landowner for that benefit of his land. i.e.: the use of a common driveway.

Encumbrances         Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title.

Encroachment       Is the term used for something that illegally invades property such as a fence or wall.

Equity         The difference between the value of a property and the amount of financing on that property.

F

Fascia         Horizontal boards attached to rafter/truss ends at the eaves and along gables.

Fixture         Personal property that becomes real property when attached in a permanent manner to real estate.

Foreclosure         A legal procedure whereby property used as security for debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document.

G

Gable       The end, upper, triangular area of a home, beneath the roof.

Guarantor         One who becomes contingently liable for another’s debt.

H

H V A C       An abbreviation for Heat, Ventilation, and Air Conditioning

High-ratio Mortgage         A mortgage loan that exceeds the normal limit of 75% LTV (loan to value) of a conventional mortgage.

Holdback         A portion of each payment that remains unpaid until such time as the job is completed and/or any liens placed against your property by the contractor’s debtors are discharged.

I

Interest adjustment date       The date on which the mortgage really begins, usually the first of the month. The interest owed for the number of days between the closing date and the last day of the month is paid on the closing date by cheque or by deduction from the mortgage advance and covers.

J

Joint Tenancy       Property held by two or more persons with an undivided interest. If one owner dies, the property passes automatically to the other / others.

Jurisprudence       The science of juridical law; the knowledge of the laws, customs, and rights of men in a state or community, necessary for the due administration of justice.

L

Latent Defect         A defect that is hidden or concealed and would not be visible during reasonable inspection.

Leasehold         A less-than-freehold estate which a tenant possesses in real property.

Lien         A charge registered against a property.

Lintel         A horizontal piece over a door or window that carries the weight of the structure above it.

Life Estate         An interest in land during a persons life and ends upon their death.

Limited common area         An area in a strata that is owned by all residents but has limited use i.e. parking stall or balcony.

Listing Agreement         The contract between the vendor and the licencee to sell the property.

M

Mansard         Is a type of roof that has four sides that slope up from the edge to the square peak. (Also known as a hip roof.)They were first conceived by the architect François Mansart in the1850’s. The roof incorporates an additional floor usually with dormers. (French buildings were taxed on their height not the number of floors).

Market Value         The value of a property based on what the market will bear. Determined by a comparison of the subject property to others in a similar area that have sold recently.

Mortgage         A document evidencing a debt towards by the borrower. When it is registered in the land title office, It transfers ownership of the land from the mortgagor to the mortgage until the debt is paid.

Open Mortgage – contains a provision allowing partial or full prepayments.

Closed Mortgage – cannot be paid out before its term has expired.

Convertible Mortgage – A fixed-rate mortgage similar to a closed mortgage, but which can be converted to a longer, Closed mortgage at any time without penalty.

Blanket Mortgage – A mortgage that covers more than one property owned by the same borrower.

High Ratio Mortgage – A mortgage in which the loan-to-value ratio is above 75%.

Variable Rate Mortgage – A mortgage where the rate of interest changes during the term depending on the market rate at that time.

Mortgage Broker         A person or company that arranges mortgages. The mortgagor pays the broker a fee for arranging the mortgage. Appraisal and legal services may or may not be included in the fee.

Mortgagor         The borrower of the funds…from a mortgage.

Multiple Listing Service         A service that combines listings of all available homes in an area into one directory.

N

Non-Conforming Use       A permitted use which was lawfully established and maintained but which no longer conforms to the current use regulations because of a change in the zoning.

Novation         A creditors’ acceptance of a third party assuming someone’s debt and thereby releasing that debt.

P

Prime Rate         The interest rate that banks charge to their preferred customers.

Principal         The mortgage amount initially borrowed or the portion still owing on the mortgage. Interest is calculated on the principal amount.

R

Restrictive Covenant       A Covenant restricting the use of land of the covenantor for the benefit of the covenantee.

Real Estate Investment Trust (REIT)         A REIT is a company dedicated to owning, and sometimes operating, income-producing real estate, such as apartments, shopping centers.

S

Statement of Adjustments       A closing statement to add all debits and credits up. Adjustments are made for items such as interest, taxes owed, agent commission etc.

“Subject-to” Clause         A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal. also known as “Condition Precedent”.

T

Tax Rate         The rate per $1000 of land value that property tax is calculated.

Tenancy in Common         The ownership of property by two or more persons, where on the death of one, his share does not automatically go to the other(s) but is credited to his estate.

Term         The actual life of a mortgage contract. It also indicates when the principal balance becomes due and payable to the lender.

Tort         A private wrong or injury other than breach of contract, i.e.: trespass.

Torrens system         A land registry system, based on a ship registry system. It removed the need for historical research into land title. Named after Robert Richard Torrens.

U

Usury         Charging a rate of interest in excess of that permitted by law. (60%) in B.C.)

V

Void         Having no legal force or binding effect; not enforceable.

W

Watt         A measure of the electrical requirement of an appliance calculated by multiplying the voltage times the amperage.         i.e.: 20 amps x 110 volts = 2200 watt