Glossary

All | # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
There are 98 names in this directory beginning with the letter L.
Laches, Doctrine of
A legal principle holding that the law will refuse to protect those who fail to assert their legal rights within the time period prescribed by the statute of limitations, or (if there is no applicable statute of limita_tions) within a reasonable time.
Land
In the legal sense, it is the solid part of the surface of the earth, everything affixed to it by nature or by man, and anything on it or in it, such as minerals and water; real property.
Land Contract
see Contract for Deed.
Land Lease
see Ground Lease.
Landlocked
Condition of a lot that has no access to public thoroughfare except through an adjacent lot.
Landlocked Property
A parcel of land with_out access to a road or highway.
Landlord
A landowner who has leased his or her property to another. Also called a lessor.
Landmark
A monument, natural or artificial, set up on the boundary between two adjacent properties, to show where the boundary is.
Latent Defects
Defects that are not visible or apparent (as opposed to patent defects).
Lawful Objective
An objective or purpose of a contract that does not violate the law or a judicial determination of public policy.
Lease
A transfer of a leasehold estate from the fee owner (the landlord or lessor) to a tenant (or lessee); a contract in which one party pays the other rent in exchange for the possession (and profits) of real estate. Sometimes called a rental agreement.
Lease Option
A lease combined with an option agreement that gives the lessee (tenant) the right to purchase the property under specified conditions.
Lease Purchase
A lease combined with a purchase agreement that obligates the lessee (tenant) to purchase the property under specified conditions.
Lease, Escalator
A lease in which the tenant pays a fixed rent based on the landlord's esti_mate of annual operating expenses, with any excess expenses charged to the tenant at the end of the year.
Lease, Fixed
A lease in which the rent is set at a fixed amount, and the landlord pays most or all of the property's operating expenses. Also called a gross lease, flat lease, or straight lease.
Lease, Graduated
A lease in which it is agreed that the rental payments will increase at certain intervals by a specified amount or according to a specified formula. Also called a step-up lease.
Lease, Index
A type of graduated lease in which the periodic rent increases are tied to increases in the consumer price index, or some other eco_nomic indicator.
Lease, Land
A lease of the land only, usually for a long term, to a tenant who intends to con_struct a building on the property. Also called a ground lease.
Lease, Net
A lease requiring the tenant to pay the property's operating expenses (such as taxes, insurance, maintenance, and repairs), in addi_tion to the rent paid to the landlord.
Lease, Percentage
A lease in which the rent is based on a percentage of the tenant's monthly or annual gross sales.
Lease, Sandwich
A leasehold interest lying be_tween the property owner's interest and the in_terest of the tenant in possession; for example, when a tenant subleases the property to a sub_tenant, the original tenant's interest is sand_wiched between the interest of the landlord and that of the subtenant.
Leased Fee Estate
The estate held by the les_sor.
Leasehold
The interest or estate on which a lessee (tenant) of real estate has a lease.
Leasehold Estate
Created by a lease, the owner gives the tenant an exclusive right of posses_sion.
Legacy
A gift of personal property by will. Also called a bequest.
Legal Description
A precise description of a parcel of real property; the three main types of legal descriptions are metes and bounds, rectangular survey, and recorded plat.
Lender, Institutional
A bank, savings and loan, or similar financial institution that invests other people's funds in loans; as opposed to an indi_vidual or private lender, which invests its own funds.
Lessee
One who leases property from another; a tenant.
Lessor
One who leases property to another; a landlord.
Let
To rent a property to a tenant.
Letter of Intent
Written expression of desire to enter into a contract without actually doing so.
Leverage
The effective use of borrowed money to finance an investment such as real estate.
Levy
To impose a tax.
Liability
1. A debt or obligation. 2. Legal re_sponsibility.
Liability, Joint and Several
A form of liabil_ity in which two or more persons are respon_sible for a debt both individually and as a group.
Liability, Limited
A situation in which a busi_ness investor is not personally liable for all of the debts of the business, as in the case of a limited partner or a corporate stockholder.
Liable
Legally responsible
License
1. Official permission to do a particu_lar thing that the law does not allow everyone to do. 2. Revocable, nonassignable permission to use another person's land for a particular purpose. Compare: Easement.
Lien
A claim on a property of another as security for money owed. Examples of types of liens would include judgments, mechanic's liens, mortgages and unpaid taxes.
Lien Notice
A written notice from a contrac_tor or subcontractor informing a property owner that a lien could be enforced against the prop_erty if bills for construction labor or materials are not paid.
Lien Priority
The order in which liens are paid off out of the proceeds of a foreclosure sale.
Lien Theory
The theory holding that a mort_gage does not involve a transfer of title to the lender, but merely creates a lien against the prop_erty in the lender's favor. Compare: Title Theory.
Lien, Attachment
Lien, Construction
A lien on property in fa_vor of someone who provided labor or materi_als to improve it. Also called a mechanic's lien or materialman's lien.
Lien, Equitable
A lien arising as a matter of fairness, rather than by agreement or by opera_tion of law.
Lien, General
A lien against all the property of a debtor, rather than a particular piece of his or her property. Compare: Lien, Specific.
Lien, Involuntary
A lien that arises by opera_tion of law, without the consent of the property owner. Also called a statutory lien.
Lien, Judgment
A general lien against a judg_ment debtor's property, which enables the judg_ment creditor to force the sale of the property and collect the judgment from the proceeds if the judgment debtor does not pay.
Lien, Mechanic's
A lien on property in favor of someone who provided labor or materials to improve it. Also called a construction lien or statutory lien.
Lien, Property Tax
A specific lien on property to secure payment of general real estate taxes.
Lien, Specific
A lien that attaches only to aparticular piece of property (as opposed to a gen_eral lien, which attaches to all of the debtor's property).
Lien, Tax
A lien on property to secure the pay_ment of taxes.
Lien, Voluntary
Alien placed against property with the consent of the owner; a mortgage.
Lienholder, Junior
A secured creditor whose lien is lower in priority than another's lien.
Life Estate
A freehold estate that lasts only as long as a specified person lives. That person is referred to as the measuring life. Also called an estate for life.
Life Tenant
One who is allowed to use property for life or the lifetime of another designated person.
Lifetime Cap
The highest amount over the initial interest rate that an adjustable mortgage can be raised. Lifetime caps are typically in the range of 5.0% - 7.0%. If the initial interest rate is 5.25% and the lifetime cap is 6.0%, the highest interest rate a borrower could pay during the course of the loan would be 11.25% (5.25% + 6.0%).
Like-Kind Property
Property having the same nature.
Limited Broker
A property owner who is li_censed to participate as a seller in five or more real estate transactions per year without being represented by another broker, but is not allowed to represent others in real estate transactions.
Limited Liability Company (LLC)
A form of business organization that combines certain characteristics of corporations and partnerships; the managing members are not personally li_able for the company's obligations.
Limited Partnership
One in which there is at least one partner who is passive and limits liability to the amount invested and at least one partner whose liability extends beyond monetary investment.
Lineal
Relating to a line; having only length, without depth. A lineal mile is 5,280 feet in dis_tance.
Liquidated Damages
An amount agreed upon in a contract that one party will pay the other in the event of a breach of contract.
Liquidity
Ease of converting assets to cash.
Lis Pendens
Latin for "suit pending", recorded notice of the filing of a lawsuit, the outcome of which may affect title to real property.
Listing
Written agreement between a principal and an agent authorizing the agent to perform services for the principal involving the principal's property.
Listing, Exclusive
Either an exclusive agency listing or an exclusive right to sell listing.
Listing, Exclusive Agency
A listing agreement that entitles the broker to a commission if any_one other than the seller finds a buyer for the property during the listing term.
Listing, Exclusive Right to Sell
A listing agree_ment that entitles the broker to a commission if anyoneincluding the sellerfinds a buyer for the property during the listing term.
Listing, Net
A listing agreement in which the seller sets a net amount he or she is willing to accept for the property; if the actual selling price exceeds that amount, the broker is entitled to keep the excess as his or her commission.
Listing, Open
A nonexclusive listing, given by a seller to as many brokers as he or she chooses. If the property is sold, a broker is only entitled to a commission if he or she was the procuring cause of the sale.
Littoral Land
Land that borders on a station_ary body of water (such as a lake, as opposed to a river or stream). Compare: Riparian Land.
Littoral Rights
The water rights of an owner of littoral land, in regard to use of the water in the lake.
LLC
Limited liability company.
Loan Application (1003)
A loan application that is required for conforming loans. It has become the standard application for most residential loans, even non-conforming loans.
Loan Broker
A licensed real estate agent who negotiates loans between borrowers and lend_ers.
Loan Correspondent
An intermediary who ar_ranges loans of an investor's money to borrow_ers, and then services the loans.
Loan Fee
A loan origination fee or assumption fee. See: Origination Fee; Assumption Fee.
Loan Package
The organized group of documents that contains all of the information required to obtain an underwriting decision of loan approval or loan denial. Depending on the type of loan and the particular lender, a package may contain some or all of the following as well as other documents: loan application, statement of use of funds, statement of net worth, P & L statements, tax returns, pay stubs, statements from various types of banking and investment accounts, property appraisal, letters of explanati
Loan-to-Value (LTV)
The ratio of the size of the loan to the value of the property. If the loan is $80,000 and the value of the property is $100,000 the LTV is 80% ($80,000 / $100,000).
Loan, Amortized
A loan that requires regular installment payments of both principal and in_terest (as opposed to interest-only payments). It is fully amortized if the installment payments will pay off the full amount of the principal and all of the interest by the end of the repayment period. It is partially amortized if the install_ment payments will cover only part of the prin_cipal, so that a balloon payment of the remaining principal balance is required at the end of the repayment period.
Loan, Conforming
A loan made in accordance with the standardized underwriting criteria of the major secondary market agencies, Fannie Mae and Freddie Mac, and which therefore can be sold to those agencies.
Loan, Construction
A loan to finance the cost of constructing a building, usually providing that the loan funds will be advanced in install_ments as the work progresses. Also called an interim loan.
Loan, Conventional
An institutional loan that is not insured or guaranteed by a government agency.
Loan, FHA
A loan made by an institutional lender and insured by the Federal Housing Ad_ministration, so that the FHA will reimburse the lender for losses that result if the borrower de_faults.
Loan, Fixed-Rate
A loan on which the interest rate will remain the same throughout the entire loan term. Compare: Mortgage, Adjustable-Rate.
Loan, Guaranteed
A loan in which a third party has agreed to reimburse the lender for losses that result if the borrower defaults.
Loan, Interest-Only
A loan that requires the borrower to pay only the interest during the loan term, so that the entire amount borrowed (the principal) is due at the end of the term.
Loan, Participation
A loan from which the lender receives some yield in addition to the in_terest, such as a percentage of the income gen_erated by the property, or a share in the borrower's equity in the property.
Loan, Seasoned
A loan with an established record of timely payment by the borrower.
Loan, Take-Out
Long-term financing used to replace a construction loan (an interim loan) when construction has been completed. Also called a permanent loan.
Loan, VA-Guaranteed
A home loan made by an institutional lender to an eligible veteran, where the Veterans Administration will reim_burse the lender for losses if the veteran bor_rower defaults.
Lock-in Clause
A clause in a promissory note or contract for deed that prohibits prepayment before a specified date, or prohibits it altogether.
Lot
A parcel of land; especially, a parcel in a subdivision.
Lot and Block Description
The type of legal description used for platted property; it states the property's lot number and block number and the name of the subdivision, referring to the plat map recorded in the county where the property is located. Sometimes called a maps and plats or lot, block, and subdivision description.
Lot Line
A line bounding a lot as described in a property survey.
Love and Affection
The consideration often listed on a deed when real estate is conveyed between family members with no money ex_changed. The law recognizes love and affection as good consideration (as distinguished from valuable consideration, which is money, goods, or services).
LTV
Loan-to-value ratio.