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Real Estate Abbreviations, Terms and Phrases
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laches
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Delay or negligence in asserting one's rights.
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landlord
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The owner of any real estate, such as a house,
apartment building or land, that is leased or rented to another person,
called the tenant.
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latent defect
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Hidden structural defects and flaws.
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lease
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An oral or written agreement (a contract)
between two people concerning the use by one of the property of the other.
A person can lease real estate
(such as an apartment or business property) or personal
property (such as a car or a boat). A lease should cover basic
issues such as when the lease will begin and end, the rent or other costs,
how payments should be made, and any restrictions on the use of the property.
The property owner is often called the "lessor,"
and the person using the property is called the "lessee."
In Texas, any lease over one year in length, must be in writing.
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lease option
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A contract in which an owner leases his house
(usually for one to five years) to a tenant for a specific monthly rent,
and which gives the tenant the right to buy the house at the end of the
lease period for a price established in advance. This allows a potential
home buyer move into a house he may wish to eventually buy without having
to come up with a down payment or financing at that time.
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lease purchase
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A contract in which an owner leases his house
(usually for one to five years) to a tenant for an increased monthly rent,
and which gives the tenant the right to buy the house at the end of the
lease period for a price established in advance, with the incremental rent
increase being used to form a down payment. Buyers should be wary
of this type of contract since they may lose their extra rent/down payment
money should the owner suffer financial setbacks before the purchase has
been completed.
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leasehold estate
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A form of real estate in which a tenant is
allowed to construct permanent structures upon a parcel of leased land,
and derive some use or income from said structures during the period of
the lease. Leasehold estates usually involve long-term leases, ranging
from 20 to 99 years. Land owners are able to have their property
developed, with no out of pocket expenses. Instead of having to sell
their land too soon, they retain their family's rights to the land, while
receiving a steady income stream. The tenant saves the initial land
acquisation costs and may gain access to property that would be otherwise
unavailable. The downside is, as the lease nears the end or its term,
the tenant's investment becomes uncertain, and the landlord is in a position
to make demands for compensation, above the fair market price. Leaseholds
are much more common in commercial real estate, but can apply to some residential
properties as well. Hawaii has many leasehold condominium projects,
and even Houston has at least one mid-rise condominium building that lacks
ownership of the land it occupies.
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legal description
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A description of a specific parcel of real
estate which is acceptable to the courts in that state, and which will
allows an independent surveyor to locate and identify it. Usually it uses
one of the following methods;
,
metes
and bounds, or recorded plat
(lot and block number).
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less favorable treatment
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Any time a person is treated differently on
the basis of race, sex, religion, color, familial status, disability, or
national origin, either by action or inaction, in the selling or leasing
of real property, it is a violation of the Fair
Housing Laws. Also known as unequal treatment or different
treatment.
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lessee
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Tenant leasing property.
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lessor
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One who leases property to a tenant.
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leverage
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The use of borrowed funds to finance an investment
and to magnify the rate of return.
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Levy
Improvement District (LID)
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A type of Water Control and Improvement District,
used to build and maintain levies. Levies are used to contain flooding
creeks and rivers.
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licensee
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A person licensed by the Texas Real Estate
Commission to engage in real estate brokerage, either as a broker or as
a salesman.
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LID
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Acronym - Levy
Improvement District.
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lien
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A monetary claim against a property. These
should be settled before the sale is finalized.
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lien theory state
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Texas is a Lien Theory State, where legal
title of mortgaged property resides with the mortgagor (borrower), with
the mortgage as a lien against the property. Contrast with title
theory state.
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life estate
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An interest in property only for the duration
of someone's life.
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life tenant
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One who has a life estate in real property.
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limited equity housing
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An arrangement designed to encourage low-and
moderate-income families to purchase housing, in which the housing is offered
at an extremely favorable price with a low down payment. The catch is that
when the owner sells, she gets none of the profit if the market value of
the unit has gone up. Any profit returns to the organization that built
the home, which then resells the unit at an affordable price.
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lis pendens
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A notice indicating that legal action is pending
on a property.
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listing agreement
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The legal agreement between the listing agent/broker
and the vendor, setting out the services to be rendered, describing the
property for sale, and stating the terms of payment.
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loan-to-value
ratio (LTV)
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The ratio of the amount being loaned in respect
to the appraised value of the property, usually expressed as a percentage.
If a buyer was putting down $20,000, and borrowing a first lien of $180,000,
on a $200,000 property, then the loan would have a 90% LTV. Loan-to-value
ratios can effect interest rates, loan qualifying criteria, and lender
requirements for PMI
and escrow accounts.
- lock or lock In
- A commitment you obtain from a lender assuring you a particular
interest rate or feature or a definite time period. Provides protection
should interest rates rise between the time you apply for a loan,
acquire loan approval, and, subsequently, close the loan and receive
the funds you have borrowed.
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- loft
- (1) A style of residential construction. In Houston
the term "loft" is used quite liberally. It may
refer to an older building that has been converted into residential
condominiums, or it may mean a new mid-rise project with a "loft-style"
finish to the units. There are also new construction townhomes
that are promoted as being "lofts". A builder
creates new loft space by leaving exposed brick walls, bare polished
concrete floors and having unhidden heating ducts, trusses, etc.
- (2) An upstairs room or area that has an open wall,
overlooking a room or area below.
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- LTV
- See loan-to-value ratio.
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