The fixture test asking whether an item is specially suited or custom-fitted to this particular property.

An item that began as personal property but became part of the real estate by being attached or adapted to it, such as a built-in cabinet. It normally transfers with the property.

Intention of the installer

The fixture test of the objectively apparent purpose of the installation, shown by how and why it was installed, not by an owner's undisclosed wish.

The fixture test asking how firmly an item is installed and whether removing it would damage the item or the building.

Movable property that has not become part of the real estate, such as an ordinary sofa. Also called chattel.

Land, everything permanently attached to it, and the ownership rights that go with it.

Relationship of the parties

The fixture test recognizing that sellers and buyers, or landlords and tenants, may start from different presumptions about what stays.

The process by which something attached to the real estate is detached and becomes personal property again.

A business item a tenant installs, such as a removable salon station. Under the general rule, the tenant may remove it within the permitted time and must repair removal damage.

A right or item that goes with the land, such as an access easement, and generally passes with the benefited parcel.

The economic characteristic describing the market's preference for a particular location, which can change while the land stays in place. Also called situs.

The parcel that benefits from an appurtenant easement.

An easement that benefits one parcel (the dominant estate) and burdens another (the servient estate). The benefit generally passes with the dominant land.

The physical characteristic that a parcel of land cannot be moved to another location. Moving a building does not move the land under it.

Human-made additions or changes to land, such as buildings, roads and utility systems. Their cost is not necessarily what they add to market value.

The physical characteristic that land endures, unlike a building that can wear out or burn. Land can still be damaged or lose value.

Permanence of investment

The economic characteristic that capital put into real estate improvements is a long-lasting commitment that is hard to recover by moving the improvement.

The economic characteristic of limited supply relative to demand. Scarcity alone does not mean a high price; buyers must want the property.

The parcel burdened by an appurtenant easement.

Another name for area preference: the market's preference for a particular location.

The physical characteristic that no two parcels are exactly alike, if only because each occupies a different location. Also called nonhomogeneity.

A summary of a money judgment that, when recorded in a county, creates the judgment lien. Entry of judgment alone does not.

Based on value. Ad valorem property taxes are computed from a property's taxable value and the tax rate.

A security instrument that, like a mortgage, creates a voluntary lien securing a loan.

The legal process of enforcing a lien by selling or taking the property. Default alone does not transfer title.

A lien that reaches the debtor's property generally, within its legal scope. It does not make exempt property available to creditors.

A lien that arises through law, such as a property tax lien, a mechanic's lien or a judgment lien.

A lien arising from a court judgment that can reach the debtor's property within its legally defined scope; the usual example of a general lien.

A claim against property that secures payment of an obligation, such as unpaid association assessments. It does not by itself transfer ownership.

A lien on improved property for qualifying unpaid construction work or materials, once properly perfected.

The order in which competing liens are paid from available proceeds, usually first in time but subject to statutory priority and agreements.

Special assessment (local improvement)

A charge local government levies on particular parcels for a local improvement that benefits them, such as a street project. It is separate from general ad valorem property tax and is not assessed value.

A lien that burdens only identified property, such as a mortgage or a property tax lien on a parcel.

Subordination agreement

An agreement by which a lienholder moves its lien behind another claim without releasing the debt.

A claim against property for unpaid property taxes, which can ultimately lead to tax foreclosure through required procedures.

A lien created by agreement, such as a mortgage or deed of trust securing a loan.

Ownership of a unit, with exclusive possession of it, plus an undivided interest in the common elements, usually administered by an association.

A freehold estate that can end on violation of a stated condition or ceasing of a stated use.

The status of a tenant who entered lawfully but stays after the right to possession ends without the landlord's consent.

A leasehold that continues with both parties' permission, without a definite term or recurring rental period.

A leasehold with a definite beginning and end, of any length; the name does not require a full year.

The broadest estate: potentially perpetual, transferable during life and able to pass at death, though still subject to taxes, zoning and valid restrictions.

An ownership interest with no definite lease term, such as a fee simple or a life estate.

A tenant's nonfreehold estate: the right to possess and use property under a lease, as opposed to ownership.

An estate that lasts for the life of a measuring person and ends at that person's death, even if the life estate has been transferred.

The holder of a life estate, who may possess and use the property and collect rent but must avoid waste.

A leasehold that continues for successive periods, such as month to month, until properly terminated.

The grantor's right to end a defeasible fee when the condition occurs; in California it must be exercised, because the estate does not end on its own.

A future interest under which possession passes to a designated third party when a prior estate ends.

A future interest under which possession returns to the grantor when an estate ends.

Authorized representative

A person with lawful authority to sign for a party. A representative's signature can satisfy the statute of frauds for the party represented.

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Adaptability: The fixture test asking whether an item is specially suited or custom-fitted to this particular property. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Fixture: An item that began as personal property but became part of the real estate by being attached or adapted to it, such as a built-in cabinet. It normally transfers with the property. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Intention of the installer: The fixture test of the objectively apparent purpose of the installation, shown by how and why it was installed, not by an owner's undisclosed wish. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Method of attachment: The fixture test asking how firmly an item is installed and whether removing it would damage the item or the building. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Personal property: Movable property that has not become part of the real estate, such as an ordinary sofa. Also called chattel. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Real property: Land, everything permanently attached to it, and the ownership rights that go with it. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Relationship of the parties: The fixture test recognizing that sellers and buyers, or landlords and tenants, may start from different presumptions about what stays. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Severance: The process by which something attached to the real estate is detached and becomes personal property again. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Trade fixture: A business item a tenant installs, such as a removable salon station. Under the general rule, the tenant may remove it within the permitted time and must repair removal damage. — Property ownership and land use controls and regulations · Taught in Real and personal property, fixtures, and trade fixtures
Appurtenance: A right or item that goes with the land, such as an access easement, and generally passes with the benefited parcel. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Area preference: The economic characteristic describing the market's preference for a particular location, which can change while the land stays in place. Also called situs. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Dominant tenement: The parcel that benefits from an appurtenant easement. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Easement appurtenant: An easement that benefits one parcel (the dominant estate) and burdens another (the servient estate). The benefit generally passes with the dominant land. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Immobility: The physical characteristic that a parcel of land cannot be moved to another location. Moving a building does not move the land under it. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Improvements: Human-made additions or changes to land, such as buildings, roads and utility systems. Their cost is not necessarily what they add to market value. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Indestructibility: The physical characteristic that land endures, unlike a building that can wear out or burn. Land can still be damaged or lose value. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Permanence of investment: The economic characteristic that capital put into real estate improvements is a long-lasting commitment that is hard to recover by moving the improvement. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Scarcity: The economic characteristic of limited supply relative to demand. Scarcity alone does not mean a high price; buyers must want the property. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances, Elements of value and the forces that influence value
Servient tenement: The parcel burdened by an appurtenant easement. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Situs: Another name for area preference: the market's preference for a particular location. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Uniqueness: The physical characteristic that no two parcels are exactly alike, if only because each occupies a different location. Also called nonhomogeneity. — Property ownership and land use controls and regulations · Taught in Physical and economic characteristics of land and appurtenances
Abstract of judgment: A summary of a money judgment that, when recorded in a county, creates the judgment lien. Entry of judgment alone does not. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Ad valorem: Based on value. Ad valorem property taxes are computed from a property's taxable value and the tax rate. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Deed of trust: A security instrument that, like a mortgage, creates a voluntary lien securing a loan. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority, Promissory notes, deeds of trust, and mortgages
Foreclosure: The legal process of enforcing a lien by selling or taking the property. Default alone does not transfer title. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority, Default, foreclosure, reinstatement, and anti-deficiency rules in California
General lien: A lien that reaches the debtor's property generally, within its legal scope. It does not make exempt property available to creditors. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Involuntary lien: A lien that arises through law, such as a property tax lien, a mechanic's lien or a judgment lien. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Judgment lien: A lien arising from a court judgment that can reach the debtor's property within its legally defined scope; the usual example of a general lien. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Lien: A claim against property that secures payment of an obligation, such as unpaid association assessments. It does not by itself transfer ownership. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Mechanic's lien: A lien on improved property for qualifying unpaid construction work or materials, once properly perfected. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Priority: The order in which competing liens are paid from available proceeds, usually first in time but subject to statutory priority and agreements. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Special assessment (local improvement): A charge local government levies on particular parcels for a local improvement that benefits them, such as a street project. It is separate from general ad valorem property tax and is not assessed value. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Specific lien: A lien that burdens only identified property, such as a mortgage or a property tax lien on a parcel. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Subordination agreement: An agreement by which a lienholder moves its lien behind another claim without releasing the debt. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Tax lien: A claim against property for unpaid property taxes, which can ultimately lead to tax foreclosure through required procedures. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Voluntary lien: A lien created by agreement, such as a mortgage or deed of trust securing a loan. — Property ownership and land use controls and regulations · Taught in Liens: mechanics' liens, judgments, tax liens, assessments, and priority
Condominium: Ownership of a unit, with exclusive possession of it, plus an undivided interest in the common elements, usually administered by an association. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land, Private controls: CC&Rs and common interest developments
Defeasible fee: A freehold estate that can end on violation of a stated condition or ceasing of a stated use. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Estate at sufferance: The status of a tenant who entered lawfully but stays after the right to possession ends without the landlord's consent. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Estate at will: A leasehold that continues with both parties' permission, without a definite term or recurring rental period. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Estate for years: A leasehold with a definite beginning and end, of any length; the name does not require a full year. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Fee simple absolute: The broadest estate: potentially perpetual, transferable during life and able to pass at death, though still subject to taxes, zoning and valid restrictions. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Freehold estate: An ownership interest with no definite lease term, such as a fee simple or a life estate. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Leasehold: A tenant's nonfreehold estate: the right to possess and use property under a lease, as opposed to ownership. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land, Leases and other real estate agreements
Life estate: An estate that lasts for the life of a measuring person and ends at that person's death, even if the life estate has been transferred. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Life tenant: The holder of a life estate, who may possess and use the property and collect rent but must avoid waste. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Periodic tenancy: A leasehold that continues for successive periods, such as month to month, until properly terminated. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land, Leases and other real estate agreements
Power of termination: The grantor's right to end a defeasible fee when the condition occurs; in California it must be exercised, because the estate does not end on its own. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Remainder: A future interest under which possession passes to a designated third party when a prior estate ends. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Reversion: A future interest under which possession returns to the grantor when an estate ends. — Property ownership and land use controls and regulations · Taught in Freehold and leasehold estates in land
Authorized representative: A person with lawful authority to sign for a party. A representative's signature can satisfy the statute of frauds for the party represented. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Corporation: A legal entity that can own real estate in its own name. Shareholders own stock, not a fractional deeded interest in each corporate asset. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
General partnership: A partnership that can own property for its business. Its general partners are personally liable for partnership obligations. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Joint venture: A venture of two or more parties commonly focused on one particular project. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Limited liability company: A business entity that can hold real estate in its own name. Its members hold membership interests, not deeded interests in its property, and generally have limited liability. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Limited partnership: A partnership that distinguishes general partners, who manage and are personally liable, from limited partners. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Operating agreement: The document governing an LLC, including whether members or managers manage it. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Real estate investment trust: A qualifying real estate investment vehicle through which investors buy shares. The shares are not deeds to particular properties. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Real estate syndicate: A pooling of investors' money, usually with a sponsor's expertise, to acquire or develop property. It describes an arrangement, not one legal form. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Sole proprietorship: A business with one individual owner and no separate entity liability shield, which can be an individual broker's own brokerage. — Property ownership and land use controls and regulations · Taught in Ownership by business entities and syndicates
Acre: A unit of land area equal to 43,560 square feet. It measures area and does not prescribe a shape. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps, Real estate arithmetic: area, percentages, and commissions
Aliquot part: A fractional subdivision of a section, such as the NE 1/4 of the SW 1/4, read from right to left. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Base line: An east-west reference line in the rectangular survey system; township designations locate land north or south of it. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Bearing: The direction of a boundary call; N 30 degrees E means thirty degrees east of north. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Legal description: A description that identifies the exact land in a transaction, more reliably than a street address or tax parcel number. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Metes and bounds: A legal description method that traces boundary distances, directions and reference points from a point of beginning back to that point. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Monument: A natural or artificial object, such as a tree, stream or survey pin, used as a reference point in a boundary description. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Point of beginning: The starting point of a metes-and-bounds boundary, to which the description must return to close. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Principal meridian: A north-south reference line in the rectangular survey system; range designations locate land east or west of it. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Range: In the rectangular survey system, a designation that locates land east or west of a principal meridian. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Recorded map description: A description naming the lot, block when applicable, and the specific recorded map with its recording reference. A bare lot number is not enough. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Rectangular government survey system: A legal description method that locates land using principal meridians, base lines, townships, ranges and sections. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Section: In the rectangular survey system, a standard area of one square mile, or 640 acres. A township contains 36 sections. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Township: In the rectangular survey system, a standard square six miles on each side containing 36 sections. — Property ownership and land use controls and regulations · Taught in Legal descriptions: metes and bounds, government survey, and recorded maps
Building code: Rules that set construction safety standards, separate from zoning's regulation of use. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Condemnation: The legal process by which government exercises eminent domain to take private property. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Eminent domain: Government's power to acquire private property for public use, provided it pays just compensation. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Escheat: The passing of property to the state when an owner dies without a valid will and with no legal heirs. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Intestate succession: The passing of a deceased owner's property to heirs under the law of descent and distribution when there is no valid will. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Just compensation: The payment owed to an owner when government takes property by eminent domain. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Police power: Government's power to regulate property use to protect public health, safety, morals and general welfare, through zoning, building codes and similar rules. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Taxation: The government's power to raise public revenue, including from real property. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Zoning: Public land-use control, exercised under the police power, that divides land into districts and regulates permitted uses and development such as height and density. — Property ownership and land use controls and regulations · Taught in Government rights in land: police power, eminent domain, taxation, escheat
Conditional public report: A report that permits transactions subject to statutory safeguards while specified requirements remain outstanding. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Final public report: A report supporting the covered offering once the required review is complete; delivery of the contracted title or interest waits for it. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Notice of intention: The application the subdivider files with the Department of Real Estate, with a questionnaire, to obtain a public report. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Parcel map: The map used for divisions creating four or fewer parcels, subject to statutory exceptions. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Preliminary public report: A report that permits advertising and nonbinding reservations but not binding sales. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Public report: The Department of Real Estate report on a covered subdivision offering, which the owner, subdivider or agent must give a prospective purchaser, with a receipt, before a binding sale or lease agreement. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Subdivided Lands Act: California law, commonly called the Subdivided Lands Law, protecting purchasers through Department of Real Estate oversight and disclosure of covered subdivision offerings. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Subdivider: The owner or developer who divides or proposes to divide land and applies for the public report. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Subdivision Map Act: California law governing the division and design of land through city or county review, using tentative and final maps or parcel maps. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Tentative map: A map reviewed first by the local agency for divisions creating five or more parcels, followed by a final map. — Property ownership and land use controls and regulations · Taught in The Subdivided Lands Act and the Subdivision Map Act
Asbestos: Mineral fibers historically used in products such as pipe insulation, floor tiles and textured coatings. The concern is inhaling fibers released when material is damaged or disturbed. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
CERCLA: The federal Comprehensive Environmental Response, Compensation, and Liability Act, or Superfund, which addresses hazardous substance releases and can impose strict, retroactive cleanup liability on responsible parties, including owners and operators. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Environmental due diligence: Appropriate environmental inquiry before acquisition, which can support certain landowner protections but is not blanket immunity. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Environmental hazards booklet: California's consumer booklet educating about hazards, mitigation and information sources. It does not replace property-specific investigation or disclosure. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Formaldehyde: A chemical emitted by some manufactured building products. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Friable: Describes asbestos-containing material that can be crumbled under hand pressure when dry, which makes fiber release more likely. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Lead hazard pamphlet: The approved federal pamphlet about lead hazards that must be given to buyers and tenants of target housing before they become obligated. It is general information, not a property report. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Lead risk assessment: A professional evaluation of lead hazards in a property. A purchaser gets a default 10-day opportunity to obtain one or an inspection before becoming obligated. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Lead-based paint: Paint containing lead, common in housing built before 1978, which can seriously harm young children and poses particular risks during pregnancy. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Mold: Fungal growth supported by moisture and suitable material. Response requires correcting the moisture source and appropriately cleaning or removing affected material. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Phase I environmental site assessment: A review of historical uses, records, site conditions and interviews to identify potential environmental concerns. It ordinarily does not include soil or groundwater sampling. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Phase II assessment: Targeted sampling and testing performed when a Phase I or other information warrants further environmental investigation. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Radon: A radioactive gas from natural uranium decay in soil and rock that can enter through ground-contact openings and accumulate indoors. It cannot be seen or smelled, so each home must be tested. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Target housing: Housing covered by the federal lead disclosure rule: most residential housing built before 1978, other than exempt housing. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Thirdhand smoke: Toxic chemical residue left on surfaces and in dust by tobacco smoke, defined in California law as an environmental hazard. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Underground storage tank: A tank, such as for fuel, buried below the surface. Releases can contaminate soil and groundwater, and taking a tank out of service does not remove past contamination. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Wetlands: Areas saturated with water that may be federally regulated waters under the Clean Water Act. Wet ground alone does not establish federal jurisdiction. — Property ownership and land use controls and regulations · Taught in Environmental hazards and regulations
Bylaws: The internal rules a body adopts to run itself. A condominium's or community association's bylaws address its board, operations and charges and rank below the declaration and articles of incorporation. A state real estate commission may also adopt bylaws for its own operations. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
CC&Rs: Covenants, conditions and restrictions: a recorded declaration of private rules governing a development, such as use, setbacks, appearance and architectural approval. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Common area: Property in a development apart from the separate interests, shared by the owners. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Common interest development: A California development combining separate interests with shared property arrangements, such as a condominium, planned development, community apartment project or stock cooperative. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Community apartment project: A development in which the separate interest is an exclusive right to occupy a unit. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Declaration: The recorded document identifying the development, association and restrictions intended as enforceable equitable servitudes. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Equitable servitude: A restriction on land use enforceable against successive owners. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Exclusive use common area: Common area that designated owners have the right to use exclusively, such as a balcony outside a unit's boundaries; it stays common area. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Homeowners association: An organization that commonly administers a development's private restrictions and maintains common property, often with mandatory membership and assessments. Abbreviated HOA. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Operating rules: Rules for the association's ongoing operations; they rank last and cannot defeat the declaration. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Planned development: A common interest development whose separate interest is a separately owned lot, parcel, area or space. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Separate interest: The part of a common interest development owned or occupied individually; its owner is a member of the association. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Stock cooperative: A development in which the separate interest is an exclusive occupancy right tied to ownership of corporate shares. — Property ownership and land use controls and regulations · Taught in Private controls: CC&Rs and common interest developments
Agency: A relationship in which an agent acts on behalf of a principal, subject to the principal's authority and direction. In real estate, the represented principal is the client. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents
Agent: A person authorized to act on behalf of a principal within the scope of authority the principal grants. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents
Dual agency: Representation of both the buyer and the seller in the same transaction by one licensee or brokerage. States treat it differently: some permit it with the informed written consent of both parties, some use an intermediary or transaction-broker arrangement instead, and some prohibit it. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents, Agency relationships in California: seller's, buyer's, and dual agents, Fiduciary duties an agent owes the principal, Representing a seller or a buyer: offers, price, and confidential information, The California agency relationship disclosure: who, what, and when, Duties to non-client third parties: honesty and material facts, Buyer broker agreements
Fiduciary: Describes the relationship of trust in which an agent owes a client duties of loyalty, confidentiality, accounting, reasonable care, disclosure and obedience. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents, Agency relationships in California: seller's, buyer's, and dual agents, Fiduciary duties an agent owes the principal, Dual agency in California: consent and confidentiality, Disclosure of acting as a principal or having another interest, Buyer broker agreements
General agent: An agent authorized to handle a continuing range of activities in a business or property operation, such as a property manager running rentals within an agreed scope. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents
Honest and fair dealing: The duty an agent owes everyone in a transaction, including people the agent does not represent, to treat them truthfully and without deception. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents, Agency relationships in California: seller's, buyer's, and dual agents, Duties to non-client third parties: honesty and material facts
Principal: The person who authorizes an agent to act on the principal's behalf. Also called the client. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents
Special agent: An agent authorized for a particular transaction or limited assignment, such as a broker hired to market one home without power to sign the sale contract. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents
Third parties: People in a transaction other than the agent and the agent's client. An agent owes them honest and fair dealing, not advocacy. — Laws of agency and fiduciary duties · Taught in Agency defined: principal, agent, third party, general and special agents
Agency confirmation: A disclosure and written confirmation, in the purchase contract or a separate writing, of whom the agent actually represents. It is additional to the agency disclosure. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, Representing a seller or a buyer: offers, price, and confidential information, The California agency relationship disclosure: who, what, and when, Dual agency in California: consent and confidentiality, Buyer broker agreements
Agency disclosure: The form that explains the possible agency relationships and their duties. It is given before the listing or buyer representation agreement and offer, with a signed acknowledgment. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, Dual agency in California: consent and confidentiality
Business day: For TRID timing, either a day the creditor's offices are open for substantially all business functions (initial Loan Estimate deadline) or every day except Sundays and federal legal public holidays (waiting periods and rescission). — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents
Buyer's agent: An agent who represents the buyer's interests, and who must also treat the seller honestly and fairly. A buyer can be a client of a buyer's agent while being a customer of the seller's agent. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, The California agency relationship disclosure: who, what, and when
Confidential information: A client's financial position, motivations, bargaining position or other personal information affecting price, which a dual agent may not reveal without that client's express permission. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, Representing a seller or a buyer: offers, price, and confidential information, The California agency relationship disclosure: who, what, and when, Dual agency in California: consent and confidentiality
Loyalty: The fiduciary duty to put the client's interests above the agent's own, such as a larger fee. It never permits deceiving a customer. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, Fiduciary duties an agent owes the principal
Material fact: A fact that could affect a reasonable person's transaction decision or the property's value or desirability, such as known recurring foundation problems or leaks. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, Duties to non-client third parties: honesty and material facts, Misrepresentation, fraud, and negligence liability of agents, Material facts, inspections, and reports
Seller's agent: An agent who represents the seller. The agent owes the seller reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and accounting, and must deal honestly and fairly with an unrepresented buyer. — Laws of agency and fiduciary duties · Taught in Agency relationships in California: seller's, buyer's, and dual agents, The California agency relationship disclosure: who, what, and when
Branch manager: A licensee to whom a broker delegates supervision under a written contract, with notice to the DRE. Delegation does not end the broker's responsibility. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker
Broker-salesperson agreement: The dated, signed written agreement required by 10 CCR section 2726 covering supervision, duties and compensation. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker, Broker supervision of salespersons and written broker-salesperson agreements
Fictitious business name: A business name a salesperson may use only under the responsible broker's control and supervision. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker, Truth in advertising: license identification, team names, and misleading ads
Notice of retention: Notice the responsible broker gives the Commissioner within five days of retaining a salesperson, signed by both. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker
Reasonable supervision: Under 10 CCR section 2725, systems for transactions, documents, trust funds, advertising, discrimination-law training and regular reports, which the broker must monitor. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker, Broker supervision of salespersons and written broker-salesperson agreements
Responsible broker: The broker under whom a salesperson performs licensed activities and who remains responsible for supervising them. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker, Broker supervision of salespersons and written broker-salesperson agreements
Salesperson: A licensee who performs licensed activities under a responsible broker. — Laws of agency and fiduciary duties · Taught in The salesperson's relationship to the responsible broker, Licensing: activities requiring a license, exemptions, and qualifications
Apparent authority: Authority a third party reasonably believes an agent has because of manifestations attributable to the principal. An agent's own unsupported claim does not create it. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Estoppel: A doctrine that can prevent a person from denying agency when that person's conduct caused another's reasonable, detrimental reliance on the appearance of agency. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Express agency: An agency created by an explicit agreement between principal and agent. It describes formation, not the scope of authority. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Implied agency: An agency inferred from the parties' conduct rather than an explicit agreement. Conduct cannot replace a legally required writing. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Implied authority: Authority covering acts reasonably necessary to carry out the authorized task, even if unstated. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Mutual assent: Agreement by the parties to the same terms, shown objectively through words or conduct such as offer and acceptance rather than by secret intentions. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Ostensible agency: Agency by estoppel: authority a principal leads a third party reasonably to believe exists. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel
Ratification: Adopting, with knowledge of the material facts, something one could otherwise reject, such as a voidable contract or an agent's unauthorized act. An illegal, void bargain cannot be ratified. — Laws of agency and fiduciary duties · Taught in How an agency is created: express, implied, ratification, and estoppel, Void, voidable, and unenforceable contracts and the statute of frauds
Buyer representation agreement: A service contract in which a buyer engages a broker for representation, stating scope, services, compensation, exclusivity and duration. It creates express agency and is separate from the purchase contract. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts
Commission: The broker's compensation for brokerage services, earned as the brokerage agreement provides, often as a percentage of the price. Rates are negotiable. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Commissions and fees: negotiability, written agreements, and fee sharing, Listing agreements: types, terms, and a definite termination date
Exclusive agency: An exclusive engagement of one brokerage that preserves the client's right to sell or acquire property independently, without any broker's help, without owing that brokerage's fee. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Listing agreements: types, terms, and a definite termination date
Exclusive right to sell: A listing giving one brokerage the exclusive listing and its commission on any covered sale during the term, whoever finds the buyer, including the owner. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Listing agreements: types, terms, and a definite termination date
Listing agreement: An agreement in which an owner employs a broker to market property, setting exclusivity, commission terms and duration. It creates express agency and is separate from the purchase contract. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Listing agreements: types, terms, and a definite termination date
Net listing: A compensation method in which the broker keeps the sale proceeds above the owner's desired net amount. It does not decide exclusivity. Many states restrict or prohibit it because it sets the broker's interest against the seller's. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Listing agreements: types, terms, and a definite termination date
Open listing: A nonexclusive listing that lets the owner engage several brokers and sell independently. Only the broker who is the procuring cause of the sale earns the commission. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Listing agreements: types, terms, and a definite termination date
Procuring cause: The broker whose uninterrupted chain of efforts brings about the completed sale, not merely the first to advertise or mention the buyer. — Laws of agency and fiduciary duties · Taught in Agency agreements: listing and buyer representation contracts, Listing agreements: types, terms, and a definite termination date
Accounting: The fiduciary duty to safeguard money and property entrusted by a client and keep accurate records of them. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal, Termination of agency
Confidentiality: The fiduciary duty to protect a client's confidential information, such as a bargaining limit, unless disclosure is authorized or required. It generally survives the end of the agency. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal
Conflict of interest: A situation in which the broker's interest may diverge from the client's, as when extra net-listing proceeds go to the broker rather than the owner. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal, Disclosure of acting as a principal or having another interest
Disclosure: The fiduciary duty to communicate information material to the client's decisions, including presenting offers, while leaving the decisions to the client. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal, The broker's duty to conduct a visual inspection of residential property
Hidden defect: A significant property defect that is not readily observable, also called a latent defect. A licensee who knows of one generally must disclose it, and a buyer's planned inspection does not excuse the disclosure. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal
Obedience: The fiduciary duty to follow the client's lawful instructions within the agency. It does not extend to unlawful instructions such as lying. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal
Reasonable care: The fiduciary duty to perform the client's work with professional competence and diligence, such as checking information and tracking deadlines. It does not guarantee investment success. — Laws of agency and fiduciary duties · Taught in Fiduciary duties an agent owes the principal
Counteroffer: A reply that changes a material term of an offer. It is not an acceptance and rejects the original offer. — Laws of agency and fiduciary duties · Taught in Representing a seller or a buyer: offers, price, and confidential information, Elements of a valid contract and contractual capacity, Offers, counteroffers, acceptance, and revocation
Financing contingency: A contingency that lets a buyer terminate if the specified loan cannot be obtained after the required efforts and notice. It does not require a lender to approve the loan. — Laws of agency and fiduciary duties · Taught in Representing a seller or a buyer: offers, price, and confidential information, Performance, breach, remedies, and discharge of contracts, Purchase contracts: contingencies, deposits, and liquidated damages
Listing price: The price at which a property is advertised for sale. It generally invites offers and does not bind the seller to accept a matching bid. — Laws of agency and fiduciary duties · Taught in Representing a seller or a buyer: offers, price, and confidential information
Offer: A definite proposal to contract on stated terms. A listing price generally invites offers rather than being an offer itself. — Laws of agency and fiduciary duties · Taught in Representing a seller or a buyer: offers, price, and confidential information, Elements of a valid contract and contractual capacity, Offers, counteroffers, acceptance, and revocation
Offering price: The amount stated in the buyer's offer. — Laws of agency and fiduciary duties · Taught in Representing a seller or a buyer: offers, price, and confidential information
Acknowledgment of receipt: The signed acknowledgment the delivering agent obtains. If a party refuses, the agent signs and dates a declaration of the facts of the refusal. — Laws of agency and fiduciary duties · Taught in The California agency relationship disclosure: who, what, and when
Agency relationship disclosure: The form explaining seller agency, buyer agency, dual agency and their duties. Civil Code section 2079.16 specifies it; the seller's agent gives it before the listing agreement. — Laws of agency and fiduciary duties · Taught in The California agency relationship disclosure: who, what, and when, Buyer broker agreements
Next business day: If the buyer's agent did not prepare the offer, the form must be presented no later than the next business day after receiving the offer from the buyer. — Laws of agency and fiduciary duties · Taught in The California agency relationship disclosure: who, what, and when
Consent to dual agency: Agreement to shared representation. It does not authorize disclosing either party's confidential information. — Laws of agency and fiduciary duties · Taught in Dual agency in California: consent and confidentiality
Dual agent: A broker, directly or through salespersons, representing both seller and buyer with both parties' knowledge and consent. — Laws of agency and fiduciary duties · Taught in Dual agency in California: consent and confidentiality
Express permission: A party's explicit authorization, required before a dual agent discloses that party's confidential information to the other side. — Laws of agency and fiduciary duties · Taught in Dual agency in California: consent and confidentiality
Material property defect: A known fact materially affecting value or desirability that must be disclosed despite dual-agency confidentiality. — Laws of agency and fiduciary duties · Taught in Dual agency in California: consent and confidentiality
Unrepresented buyer: A buyer without an agent; this alone does not make the seller's agent a dual agent. — Laws of agency and fiduciary duties · Taught in Dual agency in California: consent and confidentiality
Fraud: Deliberate deception, such as a knowingly false statement of material fact or a promise made with no intent to perform, that induces another's reliance. Fraud inducing assent can make a contract voidable. — Laws of agency and fiduciary duties · Taught in Disclosure of acting as a principal or having another interest, Misrepresentation, fraud, and negligence liability of agents, The Real Estate Recovery Account
Informed consent: A client's agreement after the conflict and its extent are explained, needed when a listing agent wishes to buy the listed property. — Laws of agency and fiduciary duties · Taught in Disclosure of acting as a principal or having another interest
Licensee as principal: A licensee buying or selling for the licensee's own account, who should disclose licensed status and the personal role early and in writing. — Laws of agency and fiduciary duties · Taught in Disclosure of acting as a principal or having another interest
Ownership-interest disclosure: A licensee's duty to disclose a direct or indirect ownership interest in a property, including through related persons or entities, before buying or selling it in a transaction. Each state sets who must be told and when. — Laws of agency and fiduciary duties · Taught in Disclosure of acting as a principal or having another interest
Secret profit: Undisclosed gain an agent makes in a transaction, which a licensee must avoid along with competing side arrangements. — Laws of agency and fiduciary duties · Taught in Disclosure of acting as a principal or having another interest
Breach: A party's failure to perform a contractual duty without a legal excuse. A refusal to perform is a possible breach, not proof that the contract was void. — Laws of agency and fiduciary duties · Taught in Termination of agency
Expiration: The end of an offer or agreement when its stated deadline or term passes, such as an offer's acceptance deadline or a representation agreement's end date. — Laws of agency and fiduciary duties · Taught in Termination of agency, Offers, counteroffers, acceptance, and revocation
Mutual agreement: Termination of an agency by consent of both principal and agent. — Laws of agency and fiduciary duties · Taught in Termination of agency
Operation of law: Termination that happens by legal effect rather than the parties' choice, such as the death or incapacity of an individual principal or agent, destruction of the subject property, or a change making performance unlawful. — Laws of agency and fiduciary duties · Taught in Termination of agency
Performance: Termination of an agency by accomplishing its agreed purpose, such as completing a transaction through closing. — Laws of agency and fiduciary duties · Taught in Termination of agency, Performance, breach, remedies, and discharge of contracts
Renunciation: The agent's act of withdrawing from an agency. Like revocation, it can end authority but may still breach the agency contract. — Laws of agency and fiduciary duties · Taught in Termination of agency
Revocation: The withdrawal of something previously given, such as an offeror's withdrawal of an offer before acceptance or a principal's withdrawal of an agent's authority. — Laws of agency and fiduciary duties · Taught in Termination of agency, Offers, counteroffers, acceptance, and revocation
Advance fee: A fee collected by a broker before services are completed; under section 10146 it is trust money and goes into a trust account. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing, Advance fees and advance fee agreements
Flat fee: A fixed dollar amount of brokerage compensation, as opposed to a percentage of the price. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing
Party to be charged: The person against whom enforcement of an agreement is sought, whose signature, or an authorized representative's, the required writing must bear. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing, Void, voidable, and unenforceable contracts and the statute of frauds
Price fixing: Competitors agreeing on commissions, minimum fees or other price terms. Similar prices set independently are not price fixing. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing
Referral fee: A fee paid out of a commission to a party who referred the business, deducted in the order the agreement specifies. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing
Sherman Act: The federal law, 15 U.S.C. section 1, prohibiting agreements that unlawfully restrain interstate or foreign trade. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing
Trust money: Money a licensee holds for others, such as earnest money, rents, and security deposits. State law requires it to be delivered or deposited promptly, usually into the broker's trust or escrow account, kept separate from the broker's own funds, and fully accounted for. — Laws of agency and fiduciary duties · Taught in Commissions and fees: negotiability, written agreements, and fee sharing
Concealment: Hiding a known material defect, such as covering signs of an active leak, which can create liability like a false statement. — Laws of agency and fiduciary duties · Taught in Duties to non-client third parties: honesty and material facts, Misrepresentation, fraud, and negligence liability of agents
Confidential bargaining information: A party's private negotiating limit or motivation, which need not be volunteered and, in a dual agency, requires express permission to disclose. — Laws of agency and fiduciary duties · Taught in Duties to non-client third parties: honesty and material facts
Death disclosure rule: Under Civil Code section 1710.2, a death more than three years before the offer need not be volunteered, and HIV status or AIDS-related death is not a material fact; an intentional lie to a direct inquiry is still not protected. — Laws of agency and fiduciary duties · Taught in Duties to non-client third parties: honesty and material facts
Misrepresentation: A false or misleading communication of fact, whether by a false statement or by withholding information that must be disclosed. — Laws of agency and fiduciary duties · Taught in Duties to non-client third parties: honesty and material facts
Reasonable skill and care: The standard of competence an agent owes to both parties, client or not. — Laws of agency and fiduciary duties · Taught in Duties to non-client third parties: honesty and material facts
Cooperating broker: A broker from another brokerage who works with the listing broker on a transaction. Cooperation alone does not make the broker a subagent. — Laws of agency and fiduciary duties · Taught in The broker's duty to conduct a visual inspection of residential property
One-to-four-unit residential property: Residential real property improved with one to four dwelling units, or a manufactured home; the property class covered by section 2079. — Laws of agency and fiduciary duties · Taught in The broker's duty to conduct a visual inspection of residential property
Visual inspection duty: Under Civil Code section 2079, a broker or salesperson owes a prospective buyer a reasonably competent and diligent visual inspection of covered residential property, and must disclose material facts it would reveal. — Laws of agency and fiduciary duties · Taught in The broker's duty to conduct a visual inspection of residential property
Intentional misrepresentation: A knowingly false or reckless statement of material fact intended to induce reliance, on which the other party justifiably relies to its harm. — Laws of agency and fiduciary duties · Taught in Misrepresentation, fraud, and negligence liability of agents
Justifiable reliance: A reasonable decision to rely on a statement, an element of misrepresentation claims. — Laws of agency and fiduciary duties · Taught in Misrepresentation, fraud, and negligence liability of agents
License discipline: Action by a state licensing agency against a license for causes such as fraud, misrepresentation, negligence, incompetence or inadequate supervision. Sanctions include revocation, suspension, a fine or a reprimand, generally after notice and an opportunity to be heard. — Laws of agency and fiduciary duties · Taught in Misrepresentation, fraud, and negligence liability of agents
Negligence: A claim that generally involves a duty, breach, causation and damages. Safety procedures reduce risk but do not eliminate liability. — Laws of agency and fiduciary duties · Taught in Misrepresentation, fraud, and negligence liability of agents
Negligent misrepresentation: False factual information given carelessly, without intent to deceive, such as a misread floor-area figure. — Laws of agency and fiduciary duties · Taught in Misrepresentation, fraud, and negligence liability of agents
Appraisal: An opinion of value for a defined property interest as of an effective date, supported by analysis. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value, The appraisal process and appraisal standards
Cost: The amount spent to acquire or produce something. An improvement's cost does not establish what it adds to value. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value, Market value, price, and cost; other types of value
Demand: Desire for a property backed by purchasing power. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
DUST: A memory aid for the four characteristics of value: demand, utility, scarcity and transferability. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Economic forces: Forces influencing value such as employment, income, credit availability, interest rates and construction costs. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Effective demand: Desire for property backed by the purchasing power to buy it. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value, Real estate economics, land use trends, and market cycles
Governmental forces: Forces influencing value such as zoning, taxes, building regulations and public services. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Market value: An opinion of the most probable price a property should bring in a competitive, open market under normal sale conditions as of a specified date. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value, Market value, price, and cost; other types of value
Physical or environmental forces: Forces influencing value such as location, terrain, climate, access, natural hazards and surrounding development. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Price: The amount asked, offered or actually paid. A completed sale produces a transaction price. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value, Market value, price, and cost; other types of value
Social forces: Forces influencing value such as population changes, household size and lifestyle preferences. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Transferability: The ability to convey ownership rights; a title problem can impair it. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Utility: A property's capacity to satisfy a need, such as a useful floor plan. — Property valuation and financial analysis · Taught in Elements of value and the forces that influence value
Conformity: Value tends to be supported when a property is compatible with neighborhood uses and market expectations, not necessarily identical in design. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Financially feasible: The highest-and-best-use test of whether expected benefits justify the costs. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Highest and best use: The reasonably probable use that is legally permissible, physically possible, financially feasible and maximally productive. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity, The appraisal process and appraisal standards
Land as though vacant: Analysis of the use of land if it had no improvements, done separately from analysis of the property as improved. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Legally permissible: The highest-and-best-use test excluding uses that zoning or other legal restrictions prohibit, however profitable. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Maximally productive: The highest-and-best-use test selecting the use producing the highest value among feasible alternatives. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Overimprovement: An improvement more expensive than the market supports, so buyers will not pay back its added cost. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Physically possible: The highest-and-best-use test of whether lot size, terrain, access and utilities allow the use. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Progression: The upward influence on a lesser property's value from superior surrounding properties. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Regression: The downward influence on a superior property's value from inferior surrounding properties. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity
Substitution: A buyer generally will not pay more for a property than the cost of an equally desirable substitute available without undue delay. — Property valuation and financial analysis · Taught in Principles of value: highest and best use, substitution, and conformity, The sales comparison approach
Asking price: The price a seller requests for a property. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Assessed value: The value assigned to property for tax purposes, which can differ from market value and sale price. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Closed sale price: The amount recorded in a completed transaction. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Insurable value: The value of the insured interest or improvements under the policy's valuation basis; land is generally excluded from building coverage. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Investment value: Value to a particular investor based on that investor's own financing and return requirements, which can differ from market value. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Liquidation value: Value assuming a constrained sale, with a limited sale period and a motivated seller, which may mean selling assets separately. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Replacement cost: The current cost to build a building with equivalent utility using modern materials, standards and design. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value, The cost approach
Reproduction cost: The current cost to build an exact duplicate of a building with the same design and materials, including outdated features. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value, The cost approach
Salvage value: The expected worth of recoverable components or materials when removed. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Value in use: The value of a property's usefulness for a particular use. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Written appraisal: Under federal law for a federally related transaction, an independent, impartial opinion of defined value by a licensed or certified appraiser for an adequately described property on a specific date, supported by relevant market information. — Property valuation and financial analysis · Taught in Market value, price, and cost; other types of value
Cost approach: A valuation approach that adds land value to the current cost new of the improvements minus accrued depreciation. It is most useful for new or special-purpose buildings. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards, The cost approach
Effective date: The date as of which an appraisal's value opinion applies, which need not be the report date. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
Federally related transaction: A transaction with a qualifying federal regulatory connection that requires an appraiser's services under FIRREA. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
Income approach: A valuation approach that estimates value from a property's expected earning power, used especially for income-producing property such as apartment buildings. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards, The income approach and capitalization
Intended use: The purpose for which an opinion will be used, to identify before accepting an assignment because a CMA or BPO cannot substitute where an appraisal is required. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
Reconciliation: Weighing the indications from the valuation approaches by their reliability and relevance to reach a conclusion, rather than averaging them. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards, The sales comparison approach
Report date: The date the appraisal report is issued. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
Sales comparison approach: An approach using recent comparable sales and the principle of substitution, adjusting each comparable to the subject and never the subject to the comparable. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards, The sales comparison approach
Scope of work: The type and extent of research and analysis needed for an appraisal to produce credible results. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
USPAP: The Uniform Standards of Professional Appraisal Practice, developed by the Appraisal Foundation's Appraisal Standards Board. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
Workfile: The appraiser's records supporting the assignment and opinion. — Property valuation and financial analysis · Taught in The appraisal process and appraisal standards
Adjusted indication: A comparable's sale price after adjustments, read as evidence of the subject's value. It does not change what the comparable actually sold for. — Property valuation and financial analysis · Taught in The sales comparison approach
Adjustment: A dollar or percentage change made to a comparable's sale price for a difference from the subject: subtract for a superior feature, add for an inferior one. — Property valuation and financial analysis · Taught in The sales comparison approach
Comparable: A recently sold or listed property similar to the subject, used as evidence of the subject's value. Often called a comp. — Property valuation and financial analysis · Taught in The sales comparison approach, Gross rent and gross income multipliers
Net adjustment: The sum of a comparable's positive and negative adjustments. Large adjustments in opposite directions can cancel to a small net figure. — Property valuation and financial analysis · Taught in The sales comparison approach
Paired sales analysis: Comparing otherwise similar sales that differ in one feature to estimate that feature's market contribution. — Property valuation and financial analysis · Taught in The sales comparison approach
Seller concessions: Costs or benefits a seller provides to the buyer, such as paying the buyer's closing costs, which can inflate a sale price and must be verified before relying on it. — Property valuation and financial analysis · Taught in The sales comparison approach
Subject property: The property being valued or priced. Comparables are adjusted toward it; the subject itself is held still. — Property valuation and financial analysis · Taught in The sales comparison approach
Time adjustment: An adjustment for market price changes between the sale date and the effective date. — Property valuation and financial analysis · Taught in The sales comparison approach
Curable: Describes a defect whose correction would add at least as much value as it costs. Being technically repairable is not enough. — Property valuation and financial analysis · Taught in The cost approach, Accrued depreciation: physical deterioration and functional and external obsolescence
Depreciation: Loss in value from any cause in appraisal, or a tax cost-recovery deduction for a building or improvement. A tax deduction is not a cash outflow or proof of declining market value. — Property valuation and financial analysis · Taught in The cost approach, Financial analysis of income property: cash flow, returns, and leverage
Economic life: The period over which improvements contribute value to the property. — Property valuation and financial analysis · Taught in The cost approach
Effective age: A building's age as indicated by its condition and utility, which may be more or less than its actual age since construction. — Property valuation and financial analysis · Taught in The cost approach, Accrued depreciation: physical deterioration and functional and external obsolescence
Entrepreneurial incentive: The amount a developer expects to earn for coordinating a project, included as a component of complete improvement cost new. — Property valuation and financial analysis · Taught in The cost approach
External obsolescence: Loss in value from causes outside the property, such as neighboring industrial noise or reduced local demand. Also called economic obsolescence; generally incurable by the owner. — Property valuation and financial analysis · Taught in The cost approach, Accrued depreciation: physical deterioration and functional and external obsolescence
Functional obsolescence: Loss in value from a problem within the property itself, such as an awkward layout or an expensive feature buyers do not value. — Property valuation and financial analysis · Taught in The cost approach, Accrued depreciation: physical deterioration and functional and external obsolescence
Incurable: Describes a defect whose correction would cost more than the value it adds, or that the owner cannot correct, such as external obsolescence. — Property valuation and financial analysis · Taught in The cost approach, Accrued depreciation: physical deterioration and functional and external obsolescence
Physical deterioration: Loss in value from wear, decay or damage to the improvements, such as a leaking roof or worn flooring. — Property valuation and financial analysis · Taught in The cost approach, Accrued depreciation: physical deterioration and functional and external obsolescence
Accrued depreciation: The total loss in value of the improvements from all causes, compared with their cost new. — Property valuation and financial analysis · Taught in Accrued depreciation: physical deterioration and functional and external obsolescence
Age-life method: A depreciation estimate that divides effective age by total economic life and multiplies the result by improvement cost new. — Property valuation and financial analysis · Taught in Accrued depreciation: physical deterioration and functional and external obsolescence
Breakdown method: Estimating physical, functional and external losses separately and adding them, avoiding double counting. — Property valuation and financial analysis · Taught in Accrued depreciation: physical deterioration and functional and external obsolescence
Cost new: The current cost to construct the improvements as new, measured as reproduction or replacement cost, not the owner's historical spending. — Property valuation and financial analysis · Taught in Accrued depreciation: physical deterioration and functional and external obsolescence
Remaining economic life: The part of a building's economic life still ahead of it. Effective age plus remaining economic life equals total economic life. — Property valuation and financial analysis · Taught in Accrued depreciation: physical deterioration and functional and external obsolescence
Tax depreciation: An income-tax cost-recovery deduction for buildings and improvements, but not land. It does not reduce NOI or cash flow. — Property valuation and financial analysis · Taught in Accrued depreciation: physical deterioration and functional and external obsolescence
Anticipation: Present value reflects the future benefits a property is expected to provide, such as rent, enjoyment or resale proceeds. — Property valuation and financial analysis · Taught in The income approach and capitalization
Capitalization rate: The rate used to convert annual net operating income into value: value equals NOI divided by the rate. A higher rate gives a lower value. Also called a cap rate; it is not a mortgage interest rate. — Property valuation and financial analysis · Taught in The income approach and capitalization, Financial analysis of income property: cash flow, returns, and leverage
Debt service: Mortgage principal and interest payments. They are not operating expenses, so financing does not change NOI. — Property valuation and financial analysis · Taught in The income approach and capitalization, Financial analysis of income property: cash flow, returns, and leverage
Direct capitalization: Estimating value by dividing one year's net operating income by a capitalization rate expressed as a decimal. — Property valuation and financial analysis · Taught in The income approach and capitalization, Gross rent and gross income multipliers, Commercial, industrial, and income properties and business opportunities
Effective gross income: Potential gross income minus vacancy and collection losses, plus other income. — Property valuation and financial analysis · Taught in The income approach and capitalization, Gross rent and gross income multipliers, Financial analysis of income property: cash flow, returns, and leverage
Gross income multiplier: A comparable's sale price divided by its gross income, usually annual and including other income. Abbreviated GIM; it must use the same income definition as the subject. — Property valuation and financial analysis · Taught in The income approach and capitalization, Gross rent and gross income multipliers
Net operating income: Effective gross income minus operating expenses, before debt service. Abbreviated NOI; it is the income capitalized into value. — Property valuation and financial analysis · Taught in The income approach and capitalization, Gross rent and gross income multipliers, Financial analysis of income property: cash flow, returns, and leverage, Commercial, industrial, and income properties and business opportunities
Operating expenses: Recurring costs of running a property, such as property taxes, insurance, management and routine maintenance. Mortgage payments, income taxes and accounting depreciation are excluded. — Property valuation and financial analysis · Taught in The income approach and capitalization, Gross rent and gross income multipliers, Financial analysis of income property: cash flow, returns, and leverage
Other income: Income a property earns besides rent, such as parking or laundry revenue. — Property valuation and financial analysis · Taught in The income approach and capitalization
Potential gross income: A property's income at full occupancy, before vacancy and collection losses. — Property valuation and financial analysis · Taught in The income approach and capitalization, Gross rent and gross income multipliers
Replacement reserves: Money set aside for periodically replacing building components; treatment in an income calculation follows the problem's stated rule. — Property valuation and financial analysis · Taught in The income approach and capitalization
Vacancy and collection losses: Income lost to unoccupied units and to rent tenants owe but do not pay, subtracted from potential gross income. — Property valuation and financial analysis · Taught in The income approach and capitalization
Gross rent multiplier: A comparable's sale price divided by its gross rent for a stated period, usually monthly. Abbreviated GRM; multiplying the subject's rent for the same period by it estimates value. — Property valuation and financial analysis · Taught in Gross rent and gross income multipliers
Appreciation: An increase in property value, often expressed as a percentage of the starting value. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage
Before-tax cash flow: Net operating income minus debt service, assuming no other cash adjustments. Tax depreciation is not subtracted. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage
Capital improvement: A substantial addition or upgrade to a property, such as a new rental wing, which is separated from routine operating expenses. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage
Cash-on-cash return: Annual before-tax cash flow divided by the initial cash invested. Unrealized appreciation is not added to it. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage
Debt-service coverage ratio: NOI divided by annual debt service; 1.00 means NOI just covers the debt service. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage
Equity: Current property value minus the outstanding debt secured by it. It is not the same as net sale proceeds, and a higher LTV means less equity. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage, General financing concepts: interest, amortization, points, and loan-to-value
Leverage: The use of borrowed money. It reduces the equity needed to control a property and magnifies gains and losses relative to that equity. — Property valuation and financial analysis · Taught in Financial analysis of income property: cash flow, returns, and leverage
Area: The surface inside a boundary, measured in square units such as square feet or acres. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Commission rate: The agreed percentage applied to the stated price base to compute commission. Commission divided by price gives the rate. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Commission split: Division of a commission among parties. Apply each split to the correct share: on a $20,000 commission, a 50% brokerage share is $10,000 and a salesperson's 60% of that is $6,000. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Down payment: The buyer's cash paid toward the purchase price at closing. Earnest money is commonly credited toward it but is not the whole down payment. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Percentage base: The whole against which a percentage is taken; in percentage change it is the original amount. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Perimeter: The distance around a boundary, measured in linear units such as feet. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Perpendicular height: The height measured at a right angle to the base, used in triangle and trapezoid area. A sloping side is not necessarily this height. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Square mile: A unit of area equal to 5,280 feet squared, or 27,878,400 square feet, which is 640 acres. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Triangle: A three-sided shape whose area is base times perpendicular height divided by two. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Unit conversion: Restating a measure in different units, such as dividing square feet by 43,560 to find acres. — Property valuation and financial analysis · Taught in Real estate arithmetic: area, percentages, and commissions
Adaptive reuse: Changing a building's use, such as converting offices to apartments. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Density: The intensity of development, often measured in dwelling units per acre. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Infill: Development of vacant or underused sites within already developed areas. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Market cycle: A simplified pattern of recovery, expansion, oversupply and recession, not a fixed timetable. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Net absorption: The change in occupied space over a period; compare it with completions to interpret vacancy. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Oversupply: A condition in which projects keep arriving after demand slows, raising vacancy and concessions. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Real estate demand: Willingness and ability to buy or rent, influenced by employment, income, household formation, population and credit. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Real estate supply: Available space, determined by existing buildings, construction costs, sites, financing and development constraints; it adjusts slowly because construction takes time. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Suburban growth: Development extending outward from the urban core. — Property valuation and financial analysis · Taught in Real estate economics, land use trends, and market cycles
Amortization: Repayment of loan principal over time through payments that cover the period's interest and reduce the balance. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Annual percentage rate: The cost of credit expressed as a yearly rate, abbreviated APR. It includes interest and certain charges, so it can exceed the note rate, but it does not capture every closing expense. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value, Financing and credit laws: truth in lending, RESPA, and fair lending
Balloon payment: A large final loan payment. Its presence alone does not establish predatory lending. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value, Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive, Promissory notes and real estate securities
Break-even: The number of months needed to recover an extra upfront cost through monthly savings: the cost divided by the monthly savings. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Discount points: Upfront charges based on the loan amount; one point equals 1% of the loan. A point does not guarantee a one-percentage-point rate reduction. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Impound account interest: California Civil Code section 2954.8 requires covered lenders to pay at least 2% simple annual interest on advance tax and insurance funds held on one-to-four-family residential loans. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Interest: The charge for using borrowed money. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Interest-only loan: A loan whose payments cover only interest during the interest-only period, so principal does not decline. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Loan principal: The unpaid balance of a loan. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Loan to value: The loan amount divided by the lender's value basis, times 100; abbreviated LTV. On a purchase the basis is generally the lower of price and appraised value. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Negative amortization: An increase in principal when unpaid interest is added to the loan balance. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value, Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Note rate: The contractual interest rate stated in the promissory note, which can be lower than the APR. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Origination charge: A creditor's own charge for making the loan, a zero-tolerance item that cannot rise merely because the creditor underestimated it. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Simple interest: Interest computed as principal times annual rate times years. — Financing · Taught in General financing concepts: interest, amortization, points, and loan-to-value
Acceleration: A clause letting the lender demand the entire remaining debt after a specified trigger, commonly default. — Financing · Taught in Promissory notes, deeds of trust, and mortgages, Default, foreclosure, reinstatement, and anti-deficiency rules in California, Promissory notes and real estate securities
Beneficiary: In a trust, a person who holds the beneficial interest in property whose legal title the trustee holds. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Due-on-sale clause: A loan provision letting the lender demand full payment when the property is transferred, which can limit assumptions and other existing-loan transfers. — Financing · Taught in Promissory notes, deeds of trust, and mortgages, Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Mortgage: A pledge of identified real property as security for a loan. It is a voluntary, specific lien. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Mortgage discharge: The recorded release of a mortgage after satisfaction, which Civil Code section 2941 requires within 30 days. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Mortgagee: The lender who receives a mortgage as security for a loan. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Mortgagor: The borrower who gives a mortgage on property to secure a loan. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Power of sale: A provision authorizing the sale of collateral after default through the foreclosure procedure the law permits. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Promissory note: The document stating the borrower's debt and promise to repay. A mortgage or deed of trust separately secures it with the property. — Financing · Taught in Promissory notes, deeds of trust, and mortgages, Promissory notes and real estate securities
Reconveyance: The trustee's release of a deed of trust's security interest after the debt is paid; a mortgage is instead discharged. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Trustee: The person or entity that holds legal title to trust property and administers it for the beneficiaries. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Trustor: The borrower under a deed of trust, who conveys the security interest to a trustee for the lender's benefit. — Financing · Taught in Promissory notes, deeds of trust, and mortgages
Anti-deficiency protection: Code of Civil Procedure section 580b protection against deficiency liability for specified purchase-money obligations. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Default: A party's failure to perform as the contract requires, which can trigger the other party's contractual remedies. Check duties, deadlines, conditions and notice before calling a failed closing a default. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California, Purchase contracts: contingencies, deposits, and liquidated damages
Deficiency: The shortfall when foreclosure proceeds do not cover the secured debt. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Foreclosure prevention alternative: An approved written modification, forbearance or repayment plan that bars a notice of sale or trustee's sale while the borrower complies. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Judicial foreclosure: Foreclosure that proceeds through a court. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Nonjudicial foreclosure: Foreclosure by trustee's sale under a power of sale, the way California forecloses most deeds of trust. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Notice of default: The recorded notice starting the foreclosure timeline; the sale may occur no earlier than three months and 20 days after it is recorded. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Notice of sale: The recorded notice of the trustee's sale; three months does not mean 90 days. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Purchase-money obligation: Debt used to buy the property, including seller financing and a lender's purchase loan on a dwelling for no more than four families occupied partly by the purchaser. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Redemption: Paying off a claim against a property to recover or preserve ownership, such as satisfying a secured debt or paying off an awarded tax certificate. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Reinstatement: Curing a default to restore the loan to good standing, rather than paying off the whole debt. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Trustee's sale: The sale of foreclosed property by the trustee under a power of sale. — Financing · Taught in Default, foreclosure, reinstatement, and anti-deficiency rules in California
Adjustable-rate mortgage: A loan whose rate resets under its terms, commonly an index plus a margin, subject to applicable caps. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Fixed-rate loan: A loan whose stated interest rate stays the same for its term. Taxes and insurance can still change the total monthly payment. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Index: A published rate to which an adjustable-rate loan's margin is added to set the new interest rate. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Installment land contract: A seller-financed sale in which the buyer pays over time, usually with possession and equitable title, while the seller keeps legal title until the agreed performance is completed. Also called a contract for deed. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Junior loan: A loan secured by a lien subordinate to another lien, regardless of its size, rate or lender. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Lifetime cap: A limit on how high or low the rate may go over the loan's life. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Margin: The fixed percentage an adjustable-rate loan adds to its index to determine the interest rate. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Payment cap: A limit on payment changes, not necessarily on interest accrual; it can cause negative amortization. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Periodic rate cap: A limit on how much an adjustable rate may change at one adjustment. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Seller carryback: Seller financing in which the seller accepts the buyer's secured note for part or all of the unpaid price, often alongside an institutional first loan. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Wraparound: A financing arrangement whose new obligation includes an existing loan; the buyer pays the wrap lender, who remains responsible for paying the underlying loan. — Financing · Taught in Types of loans: fixed, adjustable, junior, seller-carried, and all-inclusive
Fannie Mae: A secondary-market company that, like Freddie Mac, purchases eligible mortgages and supports securitization. Their standards define conforming loans. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Federal Reserve: The central bank, whose goals include maximum employment, stable prices, and moderate long-term interest rates. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
FHA: The Federal Housing Administration, which insures qualifying mortgages made by approved lenders rather than lending directly. Borrowers pay mortgage insurance premiums. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Freddie Mac: A secondary-market institution that purchases mortgages and supports mortgage securitization. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Ginnie Mae: A federal entity that guarantees payments on eligible mortgage-backed securities. It does not originate home loans. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Liquidity: The ability to turn loans into funds; secondary market liquidity supports lending capacity but does not ensure approval. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Mortgage banker: A firm that originates and funds loans and may sell them to investors. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Mortgage broker: A party who arranges financing by matching borrowers with lenders and submitting applications, without funding the loans. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Mortgage-backed securities: Investments backed by pools of mortgage loans, traded in the secondary mortgage market. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Primary mortgage market: The market in which borrowers obtain new loans from originating lenders. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Secondary mortgage market: The market in which existing loans and mortgage-backed securities are bought and sold, replenishing originators' funds for new lending. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Servicing: Collecting loan payments and administering the account. Loan ownership and servicing can be separated, and a loan sale does not change the note's terms. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
VA: The Department of Veterans Affairs, which generally guarantees part of a qualifying lender's loan to eligible veterans, service members and certain surviving spouses. — Financing · Taught in Sources of financing: primary and secondary mortgage markets
Affiliated business arrangement: A settlement provider in which the referring party has an ownership interest. It requires disclosure, a charge estimate, no required use, and benefits generally limited to an ownership return. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Amount financed: The credit provided to or for the consumer after applicable adjustments, such as subtracting prepaid finance charges. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Closing Disclosure: The final mortgage disclosure of loan terms and costs, which the consumer must receive at least three business days before consummation. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Consummation: The time the consumer becomes contractually obligated on the credit transaction under state law, which anchors the disclosure waiting periods. It is not necessarily funding or recording. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
ECOA: The federal Equal Credit Opportunity Act, which prohibits creditor discrimination on prohibited bases in any aspect of a credit transaction while permitting objective creditworthiness evaluation. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Finance charge: The dollar cost of credit, including interest and certain other credit charges. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Holden Act: California's law against housing-finance discrimination, including redlining, while permitting consideration of fair market value. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending, California fair housing law and the Commissioner's discrimination rules
Kickback: A thing of value given or accepted under an agreement or understanding, written or not, to refer settlement business. Disclosure does not make it lawful. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Loan Estimate: The early mortgage disclosure of estimated loan terms, payments, closing costs and cash to close, delivered or mailed within three business days after application and at least seven business days before consummation. It is not loan approval. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Prepayment penalty: A charge for paying a loan off early. Adding one after the Closing Disclosure is received starts a new three-business-day wait. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending, Loan brokerage under the Real Estate Law and its disclosure statement
Rescission right: A consumer's right under Truth in Lending to cancel certain credit secured by a principal dwelling until midnight of the third business day after the latest of consummation, notice and material disclosures. Purchase financing is exempt. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
RESPA: The federal Real Estate Settlement Procedures Act, which regulates settlement-service referrals and charges, prohibiting kickbacks and unearned splits on federally related mortgage loans. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Truth in Lending: The federal law promoting meaningful disclosure of consumer credit costs, implemented by Regulation Z. Disclosure does not guarantee affordability or the lowest rate. — Financing · Taught in Financing and credit laws: truth in lending, RESPA, and fair lending
Borrower disclosure statement: The written statement under section 10240 delivered within three business days of receiving a completed written loan application or before the borrower becomes obligated on the note, whichever is earlier. — Financing · Taught in Loan brokerage under the Real Estate Law and its disclosure statement
Broker-controlled funds: Funds the broker, designated relatives or qualifying entities will use to fund the loan, which must be disclosed. — Financing · Taught in Loan brokerage under the Real Estate Law and its disclosure statement
Combined-role disclosure: Under 10 CCR section 2903, written disclosure of both roles within 24 hours when a broker both acts as agent in a sale, lease or exchange and arranges related financing. — Financing · Taught in Loan brokerage under the Real Estate Law and its disclosure statement
Dwelling-secured loan: A loan secured by a dwelling; section 10240.1 limits most of the article's provisions to such loans. — Financing · Taught in Loan brokerage under the Real Estate Law and its disclosure statement
Lender or purchaser statement: Under section 10232.4, the disclosure given to a prospective lender or purchaser as early as practicable before commitment and before the broker receives funds. — Financing · Taught in Loan brokerage under the Real Estate Law and its disclosure statement
Loan brokerage: Negotiating a loan secured by a lien on real property, which triggers California disclosure duties. — Financing · Taught in Loan brokerage under the Real Estate Law and its disclosure statement
Administrative or clerical work: Work excluded from origination, subject to the independent contractor exception. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
Annual continuing education: At least eight hours yearly for renewal, including three in federal law, two in ethics and two in nontraditional mortgage lending. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
MLO financial responsibility: A qualification standard for the endorsement along with character, fitness, education and testing. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
MLO license endorsement: The authorization added to a California real estate license, required before acting as an originator under that route; a salesperson cannot rely on the broker's. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
Mortgage loan originator: An individual who takes a residential mortgage loan application or offers or negotiates its terms for compensation or gain. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
NMLS: The Nationwide Multistate Licensing System and Registry, which supports licensing, registration and records but does not substitute for the required authorization. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
Qualified test: The MLO test requiring at least 75 percent correct; retesting ordinarily waits 30 days, and three consecutive failures require six months. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
SAFE Act: The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which California implements through an MLO license endorsement route. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
Unique identifier: The NMLS number an independent contractor processor or underwriter must hold along with the endorsement. — Financing · Taught in Types of loan originators: the MLO license endorsement and the SAFE Act
ALTA policy: An American Land Title Association policy; extended coverage broadens protection to certain off-record risks such as unrecorded interests or survey matters. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
CLTA policy: A California Land Title Association policy; standard coverage principally addresses public-record title risks plus certain defects such as forgery. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Exceptions: In title insurance, particular matters listed as not insured, such as a recorded easement. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Lender's policy: A title insurance policy that protects the lender's security interest; it does not replace owner coverage. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Owner's policy: A title insurance policy that protects the insured owner's interest. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Preliminary title report: A California report describing the estate and proposed insured and listing expected exceptions; an offer to insure on stated terms, not an abstract or guarantee of clear title. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Title insurance: Insurance against covered title losses, usually from events before the policy date, paid for with a one-time premium. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Vesting: How title is held, reviewed in the preliminary report along with the legal description, liens and easements. — Transfer of property · Taught in Title insurance: preliminary reports and CLTA and ALTA policies
Acknowledgment: A formal declaration before an authorized officer that authenticates a deed's signing for recording purposes. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Chain of title: The sequence of ownership transfers leading to the current owner. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Constructive notice: Knowledge the law attributes to a person, commonly from proper recording in the chain of title, whether or not the person looked. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Deed: The document that conveys ownership of real estate, as opposed to a bill of sale, which transfers personal property. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Delivery: Transfer of a deed with intent that it take effect now, completed by the grantee's acceptance. Signing and keeping a deed is not delivery. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Grant deed: In California, a deed carrying two implied covenants unless limited: no prior conveyance of the same estate, and no encumbrances made by the grantor. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Grantee: The party who receives a real property interest by deed. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Grantor: The party who conveys a real property interest by deed. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Implied covenants: The limited promises in a California grant deed; they are not a guarantee against every defect in the property's history. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Quitclaim deed: A deed that releases whatever interest the grantor has, if any, without title warranties. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Race-notice rule: California's rule protecting a later purchaser who pays value, has no notice of the earlier interest and records first. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Recording: Placing a document in the public records, which gives public notice and helps protect against competing claims. — Transfer of property · Taught in Deeds: grant and quitclaim deeds, validity, delivery, and recording
Closing statement: A record accounting for the purchase price, financing, adjustments, and expenses for the buyer and seller. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Credit: A settlement entry recognizing funds or an adjustment in a party's favor, such as loan proceeds or earnest money credited to the buyer. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Day-count convention: The rule for counting days in a proration, such as a 360-day year of 30-day months or a 365-day year, along with who owns the closing day. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Debit: A settlement entry charging a party, such as the price charged to the buyer or the seller's share of unpaid taxes. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Escrow: The holding of funds, such as earnest money, by a neutral party until release conditions and procedures are satisfied. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Escrow holder: The person or firm named in the contract to hold the contract deposit until its authorized disposition. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Escrow instructions: Written directions specifying deposits, conditions, payments and closing requirements; the holder follows them and does not change the bargain. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Escrow Law exemption: An exemption from California's Escrow Law for certain banks, insurers, title searchers, attorneys with a bona fide client relationship, and brokers acting incidentally to their own transactions. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Funding: The lender's authorization and disbursement of loan proceeds, a milestone separate from signing. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Impound account: A lender's continuing tax-and-insurance account, different from the transaction escrow that closes the sale. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Proration: Allocating income or expenses, such as taxes or dues, between seller and buyer by their ownership periods. Unpaid taxes give a seller debit and buyer credit. — Transfer of property · Taught in Escrow in California: instructions, the escrow holder, closing, and prorations
Broker trust account: A properly titled account in which a broker holds trust funds. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Chronological record: The record of trust receipts and disbursements kept in order, including qualifying uncashed checks and daily balances. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Commingling: Mixing a client's entrusted funds with the agent's personal or business funds, even if the money is not spent. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling, DRE jurisdiction and grounds for discipline
Conversion: Using a client's entrusted funds or property for an unauthorized purpose, such as paying the agent's own expenses. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling, DRE jurisdiction and grounds for discipline, The Real Estate Recovery Account
Disputed broker portion: A broker's share of a payment that is in dispute, which stays in trust until the dispute is finally settled. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Held offer check: A check the broker may hold uncashed until acceptance if it is not negotiable by the broker or the offeror gives written instructions, and the offeree is told when the offer is presented. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Neutral escrow: An independent escrow holder to which trust funds may be delivered. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Trust funds: Money belonging to others that a broker receives in a transaction, such as a deposit or rents; custody does not make it brokerage income. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Withdrawal authority: Written authority for a licensed salesperson to withdraw funds; the broker stays responsible. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust funds: handling deposits, trust accounts, and commingling
Bank reconciliation: Comparing the books with the bank statement; outstanding checks and deposits in transit may explain differences, and an unexplained difference requires investigation. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Chronological columnar record: Under 10 CCR section 2831, the account record of date received, source, amount, deposit date, check number, disbursement date, other depository and daily balance. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Disbursement consent: Under 10 CCR section 2832.1, written consent from every principal owning funds in the account before a disbursement that would reduce the balance below the broker's aggregate trust fund liability. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Separate beneficiary record: The record of each beneficiary's or transaction's individual balance and the broker's liability to each. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages, Record keeping requirements and retention
Trust fund liability: The amount the broker owes to each beneficiary or transaction. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Trust fund reconciliation: Under 10 CCR section 2831.2, at least monthly comparison of the separate records with the overall record, except in months without account activity, and documentation of each liability. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Trust fund shortage: A shortfall when funds available are less than total liability to beneficiaries; it must be corrected, not hidden by altering another ledger. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Uncashed check: A check held under a principal's instructions that must still be recorded as trust funds received. — Practice of real estate and disclosures (includes specialty areas) · Taught in Trust fund records, reconciliation, and shortages
Blockbusting: Seeking profit by inducing owners to sell or rent through representations that members of a protected group are entering the neighborhood. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act, California fair housing law and the Commissioner's discrimination rules
Civil Rights Act of 1866: A federal law (42 U.S.C. 1982) that protects citizens' equal rights in real and personal property against racial discrimination; Fair Housing Act owner exemptions do not remove it. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act
Disability: Under fair housing law, a substantially limiting impairment, a record of one, or being regarded as having one. Current illegal controlled-substance use is excluded. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act
Fair Housing Act: The federal law that prohibits housing discrimination based on race, color, religion, sex, national origin, familial status and disability. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act
Familial status: A protected class that generally covers children under 18 living with a parent, legal custodian or authorized designee, plus pregnancy and people securing legal custody. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act, California fair housing law and the Commissioner's discrimination rules
Housing for older persons: Housing exempt from familial-status restrictions, but not from other protected categories: qualifying government programs, housing solely occupied by persons 62 or older, or qualifying 55-and-over housing. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act
Multiple listing service: A system through which brokers share listings. It must not discriminate in membership or participation terms. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act, Listing agreements: types, terms, and a definite termination date
Reasonable accommodation: A change to a rule, policy or service needed for a person with a disability, such as an assistance-animal exception to a no-pets policy. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act, California fair housing law and the Commissioner's discrimination rules
Reasonable modification: A physical change to premises needed for a person with a disability, such as grab bars, generally at that person's expense under the Fair Housing Act. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act
Redlining: Restricting lending or related services in a neighborhood because of its residents' protected characteristics. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act
Retaliation: Threats, coercion or interference against people who assert fair housing rights or help others assert them, which the law prohibits. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act, California fair housing law and the Commissioner's discrimination rules
Steering: Directing someone's housing choices based on a protected characteristic, such as showing homes only in certain neighborhoods. — Practice of real estate and disclosures (includes specialty areas) · Taught in The federal Fair Housing Act, California fair housing law and the Commissioner's discrimination rules, Servicing diverse populations: implicit bias, access, and language
Discriminatory covenant: A recorded restriction that does not become enforceable through recordation. — Practice of real estate and disclosures (includes specialty areas) · Taught in California fair housing law and the Commissioner's discrimination rules
Fair Employment and Housing Act: California's law prohibiting housing discrimination and harassment based on many characteristics, including source of income, gender identity and sexual orientation. — Practice of real estate and disclosures (includes specialty areas) · Taught in California fair housing law and the Commissioner's discrimination rules
Source of income: A protected characteristic that includes lawful, verifiable public assistance and housing subsidies such as Section 8 vouchers paid directly to landlords. — Practice of real estate and disclosures (includes specialty areas) · Taught in California fair housing law and the Commissioner's discrimination rules
Unruh Civil Rights Act: California's law protecting equal treatment by business establishments, including protections involving perceived characteristics and association. — Practice of real estate and disclosures (includes specialty areas) · Taught in California fair housing law and the Commissioner's discrimination rules
Digitally altered image: An image changed in a way that alters the representation of the property, such as adding furniture or removing a utility pole; it requires a conspicuous statement and a link to the original. — Practice of real estate and disclosures (includes specialty areas) · Taught in Truth in advertising: license identification, team names, and misleading ads
Licensed-activity designation: The statement required by section 10140.6(a) on matter published in a newspaper or periodical or by mail, disclosing that the licensee is performing acts requiring a license. — Practice of real estate and disclosures (includes specialty areas) · Taught in Truth in advertising: license identification, team names, and misleading ads
Nationwide Multistate Licensing System: The registry that assigns the unique identifier a mortgage loan originator must disclose. — Practice of real estate and disclosures (includes specialty areas) · Taught in Truth in advertising: license identification, team names, and misleading ads
Qualifying team name: A name used by two or more licensees that includes a member's surname with associates, group or team and cannot imply an entity independent of the responsible broker. — Practice of real estate and disclosures (includes specialty areas) · Taught in Truth in advertising: license identification, team names, and misleading ads
Solicitation materials: Business cards, stationery, flyers, advertisements and other materials intended as a first point of contact with consumers, which must carry the licensee's name, license number and responsible broker's identity. — Practice of real estate and disclosures (includes specialty areas) · Taught in Truth in advertising: license identification, team names, and misleading ads
Electronic image storage: Under 10 CCR section 2729, storage that is nonerasable write once, read many, with indexing and a custodian who can explain preparation and storage. — Practice of real estate and disclosures (includes specialty areas) · Taught in Record keeping requirements and retention
Electronic signature retention: Under section 2729.5, electronically signed documents must be kept including their electronic signatures. — Practice of real estate and disclosures (includes specialty areas) · Taught in Record keeping requirements and retention
Record retention: Under section 10148, brokers retain copies of listings, deposit receipts, canceled checks, trust records and other transaction documents for three years. — Practice of real estate and disclosures (includes specialty areas) · Taught in Record keeping requirements and retention, Technology: electronic signatures, records, and online marketing
Trust fund records: Records of funds received and disbursed, including uncashed checks held under a principal's instructions. — Practice of real estate and disclosures (includes specialty areas) · Taught in Record keeping requirements and retention
Write once, read many: A storage format that prevents changes to stored records. — Practice of real estate and disclosures (includes specialty areas) · Taught in Record keeping requirements and retention
Broker associate: A licensee who holds broker qualifications but works in the capacity of a salesperson or sales associate under another broker, rather than operating a brokerage. — Practice of real estate and disclosures (includes specialty areas) · Taught in Broker supervision of salespersons and written broker-salesperson agreements
Clerical support: Permitted assistant work: answering and routing calls, scheduling appointments, organizing records, typing as directed, and routine bookkeeping. — Practice of real estate and disclosures (includes specialty areas) · Taught in Permitted activities of unlicensed sales assistants
Fidelity bond: Coverage at least equal to the maximum funds an unlicensed employee can access. — Practice of real estate and disclosures (includes specialty areas) · Taught in Permitted activities of unlicensed sales assistants
Licensed activity: Work such as choosing terms, explaining legal effect, recommending an offer, soliciting listings and negotiating, which must be done by a licensee. — Practice of real estate and disclosures (includes specialty areas) · Taught in Permitted activities of unlicensed sales assistants
Residential apartment management exception: Section 10131.01 lets an employee of a retained management firm, under required supervision, show rental units, handle applications and fees, give scheduled terms and accept signed leases. — Practice of real estate and disclosures (includes specialty areas) · Taught in Permitted activities of unlicensed sales assistants
Trust account signing authority: Under section 10145, an unlicensed employee of an individual broker may sign withdrawals if authorized in writing and the broker maintains qualifying fidelity bond or insurance. — Practice of real estate and disclosures (includes specialty areas) · Taught in Permitted activities of unlicensed sales assistants
Unlicensed sales assistant: A person who helps a brokerage with clerical and support work without acting as broker or salesperson. — Practice of real estate and disclosures (includes specialty areas) · Taught in Permitted activities of unlicensed sales assistants
Citation: A written finding of a specified, less serious violation, which can impose a fine and a correction order in place of other discipline. It is not just a warning. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline, Disciplinary actions, citations, and restricted licenses
Department of Real Estate: The California agency, under the Real Estate Commissioner, that regulates real estate licensees. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
Desist and refrain order: An order under section 10086 requiring the recipient to stop the specified activity immediately upon receipt. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
False promise: A promise likely to induce someone to act, made without intent or ability to perform; a ground for discipline. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
License revocation: The withdrawal of a license as a disciplinary sanction, more severe than a reprimand or suspension. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
License suspension: Temporary removal of license privileges. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
Real Estate Commissioner: The official appointed by the Governor who investigates complaints and enforces the Real Estate Law. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
Restricted license: A license permitting activity subject to conditions; the Commissioner may require monitoring costs and restitution as a condition of issuance. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline, Disciplinary actions, citations, and restricted licenses, License term, renewal, and continuing education
Statement of issues: The document that accompanies a suspension order under section 10177.1 for a fraudulently procured license; a hearing may be requested within 30 days of service. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
Substantial misrepresentation: Misconduct supporting discipline under section 10176, along with false promises, undisclosed dual agency, commingling and secret compensation. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
Verified written complaint: A sworn complaint concerning conduct within section 10176 that the Commissioner must investigate; an investigation is not a finding of guilt. — Practice of real estate and disclosures (includes specialty areas) · Taught in DRE jurisdiction and grounds for discipline
Administrative fine: A monetary sanction imposed in discipline. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Citation review conference: A conference held within 60 days after the cited party's notice requesting a hearing; the result leaves the citation unchanged, amends it or dismisses it. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Disciplinary action: DRE enforcement affecting a license, such as suspension, revocation or a restricted license, imposed after administrative hearing procedures. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Formal hearing request: Written notice of intent due within 30 days after receipt of the citation, or of the post-conference notice, to avoid the citation becoming final. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Injunction: A court order directing a party to stop doing something, such as continuing a violation of a restriction. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Monitoring costs: Costs the Commissioner may require under section 10186 before issuing a restricted license; unpaid costs block renewal and removal of restrictions. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Receiver: A person a court may appoint to protect threatened funds or property. — Practice of real estate and disclosures (includes specialty areas) · Taught in Disciplinary actions, citations, and restricted licenses
Broker affiliation notice: Notice of the beginning and termination of a salesperson's affiliation with a broker. — Practice of real estate and disclosures (includes specialty areas) · Taught in Licensing: activities requiring a license, exemptions, and qualifications
Licensing exemption: A defined exemption, such as for a regular corporate officer, holder of a power of attorney, attorney, court-appointed receiver or trustee under a deed of trust; it cannot be used to evade licensing. — Practice of real estate and disclosures (includes specialty areas) · Taught in Licensing: activities requiring a license, exemptions, and qualifications
MLO endorsement: A required mortgage loan originator endorsement, distinct from the real estate license. — Practice of real estate and disclosures (includes specialty areas) · Taught in Licensing: activities requiring a license, exemptions, and qualifications
Power of attorney: A document granting another person authority to act for the principal, limited to the powers its text specifies; it is not necessarily universal. — Practice of real estate and disclosures (includes specialty areas) · Taught in Licensing: activities requiring a license, exemptions, and qualifications
Consumer protection hours: At least 18 of the 45 hours must be designated for consumer protection. — Practice of real estate and disclosures (includes specialty areas) · Taught in License term, renewal, and continuing education
Continuing education: Coursework a real estate licensee must complete to renew an active license, abbreviated CE. Each state sets the required hours and topics, which usually include law updates and ethics or agency. — Practice of real estate and disclosures (includes specialty areas) · Taught in License term, renewal, and continuing education
Nine-hour update survey: For a licensee who has already renewed, a survey of specified subject areas within the 45 hours; it does not replace the total. — Practice of real estate and disclosures (includes specialty areas) · Taught in License term, renewal, and continuing education
Actual and direct loss: The unpaid judgment amount representing real, direct loss in the transaction, which payment is limited to. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Recovery Account
Automatic license suspension: Section 10475 suspends the licensee's license upon payment when clear and convincing evidence conditions are met; reinstatement requires full repayment plus interest. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Recovery Account
Consumer Recovery Account: A separate account in the Real Estate Fund giving limited relief for qualifying unpaid losses caused by licensed real estate activity; it is not general insurance against a disappointing purchase. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Recovery Account
Final judgment: A court's conclusive decision on a claim, ordinarily required before a recovery account claim. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Recovery Account
Judgment debtor: The licensee against whom the judgment was entered, who must receive the notice and application and may object. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Recovery Account
Verified application: The application delivered to the DRE within one year after the judgment becomes final, documenting the claim and collection efforts. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Recovery Account
Appraisal influence: Section 2785 bars improperly influencing a mortgage-loan appraisal, such as demanding a desired value, tying business to the result, or asking to remove adverse conditions. — Practice of real estate and disclosures (includes specialty areas) · Taught in General ethics and the Commissioner's standards of conduct
Appraiser independence: An independent, supported opinion free of pressure; asking for error correction or consideration of appropriate information is permitted. — Practice of real estate and disclosures (includes specialty areas) · Taught in General ethics and the Commissioner's standards of conduct
Certified factual statement: Under section 10178, the statement a responsible broker promptly files with the Commissioner after discharging a salesperson for a disciplinary violation. — Practice of real estate and disclosures (includes specialty areas) · Taught in General ethics and the Commissioner's standards of conduct
Licensee ethics rule: The Commissioner's Article 11, titled Licensee Ethics, which contains section 2785 and is not a general code of ethics. — Practice of real estate and disclosures (includes specialty areas) · Taught in General ethics and the Commissioner's standards of conduct
Negligence or incompetence: Carelessness or lack of ability in licensed work, a disciplinary ground even without intentional deception. — Practice of real estate and disclosures (includes specialty areas) · Taught in General ethics and the Commissioner's standards of conduct
REALTOR: A member of the National Association of REALTORS, not simply any real estate licensee. A licensed sales associate may hold a license without being a REALTOR. — Practice of real estate and disclosures (includes specialty areas) · Taught in General ethics and the Commissioner's standards of conduct
Consumer disclosure: Information the law requires to be provided to a consumer in writing. Electronic delivery requires the consumer's consent and does not change its required content or timing. — Practice of real estate and disclosures (includes specialty areas) · Taught in Technology: electronic signatures, records, and online marketing
Data breach notification: A business that owns or licenses data must notify affected residents, generally within 30 calendar days; a maintainer must notify the owner immediately. — Practice of real estate and disclosures (includes specialty areas) · Taught in Technology: electronic signatures, records, and online marketing
E-SIGN Act: A federal law, 15 U.S.C. section 7001, providing that a covered transaction cannot be denied legal effect solely because its record or signature is electronic. — Practice of real estate and disclosures (includes specialty areas) · Taught in Technology: electronic signatures, records, and online marketing
Electronic signature: A signature in electronic form adopted with intent to authenticate a record. It does not supply missing assent, terms or signing authority. — Practice of real estate and disclosures (includes specialty areas) · Taught in Technology: electronic signatures, records, and online marketing
Reasonable security: California requires covered businesses holding residents' personal information to maintain security appropriate to it. — Practice of real estate and disclosures (includes specialty areas) · Taught in Technology: electronic signatures, records, and online marketing
Withdrawal of consent: A consumer's withdrawal of electronic consent, which operates prospectively and does not undo records already delivered. — Practice of real estate and disclosures (includes specialty areas) · Taught in Technology: electronic signatures, records, and online marketing
Initial inspection: An inspection a tenant may request before move-out, giving the opportunity to correct deficiencies before deductions. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Just cause: The statutory reason required to end a covered tenancy, generally after 12 months of continuous occupancy; rent default is an at-fault just cause. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Property management agreement: The contract between an owner and a manager that defines the manager's authority, duties, compensation, reporting, term and termination. The lease separately governs the landlord-tenant relationship. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Property manager: A person who operates property for an owner, combining financial analysis, market knowledge, communication, recordkeeping and maintenance judgment. The manager owes the owner loyalty, reasonable care, disclosure of material information and an accounting. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Resident apartment manager: A manager within a licensing exception; under section 10131.01 qualifying unlicensed employees may perform limited, supervised functions but not negotiate lease terms. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Security deposit: Money a tenant pays to secure lease obligations. It is not rent income and must be recorded separately, with deductions limited to lawful ones. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Unlawful detainer: The lawful court process to recover possession, instead of lockouts or utility shutoffs; a notice is not an eviction judgment. — Practice of real estate and disclosures (includes specialty areas) · Taught in Property management and California residential landlord-tenant law
Americans with Disabilities Act: The federal law, abbreviated ADA, requiring equal access, reasonable policy modifications and auxiliary aids at public accommodations such as a brokerage office open to clients. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Business opportunity: Under California law, includes the sale or lease of the business and goodwill of an existing business enterprise or opportunity. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Commercial property: Retail, office and industrial uses; California's definition excludes single-family residential property, covered dwelling units and vacant land. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Goodwill: Benefits such as reputation and repeat patronage that support earnings beyond identifiable assets. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Income property: A revenue-producing investment, not a single statutory property class. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Industrial property: Property used for manufacturing, storage and distribution, where loading access and transportation links matter. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Net lease: A lease that shifts specified property expenses to the tenant in addition to rent. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities, Leases and other real estate agreements
Public accommodation: A business open to the public, such as a brokerage or leasing office, covered by the ADA. An ordinary private dwelling interior is not one. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Readily achievable: Easily accomplishable without much difficulty or expense, the ADA standard for removing existing barriers. If removal is not readily achievable, alternative methods must be considered. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities, Servicing diverse populations: implicit bias, access, and language
Section 1031 exchange: Under 26 U.S.C. § 1031, nonrecognition of gain or loss for a qualifying exchange of real property held for investment or productive business use for like-kind real property held for those purposes. Property held primarily for sale is excluded, and the result is generally tax deferral. — Practice of real estate and disclosures (includes specialty areas) · Taught in Commercial, industrial, and income properties and business opportunities
Assessment: A word with two real estate meanings. In a condominium or community, a charge on owners for common expenses, owed even by an owner who does not use an amenity. In property tax, the official determination of a property's value and whether it is taxable. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Manufactured home: A factory-built dwelling that may be owned separately from the land or, when permanently affixed, treated as real property under state law. Ownership of the home must be distinguished from ownership or rental of its site. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Multisite plan: A plan with rights at more than one property; a specific interest ties rights to a particular property plus others, a nonspecific interest gives access to multiple sites. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Reservation system: A system allocating accommodations among competing purchasers. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Time-share estate: A California time-share coupling occupancy with a freehold estate or an estate for years with a future interest; a separate real property interest. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Time-share plan: A plan providing recurring rights for less than a full year per year, over more than one year. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Time-share use: A time-share that does not include either qualifying estate. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Vacation Ownership and Time-share Act: California's law covering plans with California accommodations or offered to Californians, with exemptions such as plans of ten or fewer interests or three years or less. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
Voluntary exchange program: A separate arrangement for swapping use; membership does not prove ownership or availability. — Practice of real estate and disclosures (includes specialty areas) · Taught in Specialty areas: manufactured homes, timeshares, and other specialties
As-is sale: A sale in which the buyer accepts the property in its present condition, without seller repairs. It does not remove the seller's required disclosures, such as a state's property condition disclosure form. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Transfer Disclosure Statement
Local option disclosure: A local Option Real Estate Transfer Disclosure Statement that may provide substantially the same information and warnings. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Transfer Disclosure Statement
Real Estate Transfer Disclosure Statement: California's TDS, the seller's completed written statement of property condition for covered single-family property; it is not a warranty or substitute for inspections. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Transfer Disclosure Statement
TDS delivery: Delivery as soon as practicable before transfer of title in an ordinary sale, or before contract execution for a real property sales contract, lease with option or ground lease with improvements. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Transfer Disclosure Statement
Termination period: The buyer's right after late disclosure or a material amendment to terminate by written notice within three days of personal delivery or five days of delivery by mail or qualifying electronic delivery. — Practice of real estate and disclosures (includes specialty areas) · Taught in The Real Estate Transfer Disclosure Statement
Consultant's report: A report that must be accompanied by a completed and signed NHD. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Dam failure inundation area: Potential flooding shown on a dam failure inundation map, distinct from FEMA flood areas. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Earthquake fault zone: A designated zone along a fault, disclosed separately from seismic hazard zones. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Fire hazard severity zone: A high or very high zone in a state responsibility area, or very high zone in a local responsibility area. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Letter of Map Revision: A FEMA letter that, attached, allows a changed flood designation to be reported. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Local Option Real Estate Transfer Disclosure Statement: A local form that may supply substantially the same information as the NHD. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Natural Hazard Disclosure Statement: California's NHD, identifying designated hazards that may affect a buyer's decision; it is not a warranty or part of the purchase contract. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Seismic hazard zone: A zone with separate entries for landslide and liquefaction. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Special flood hazard area: An area with a 1% annual chance of flooding, generally shown as zones beginning with A or V. Abbreviated SFHA; covered loans there generally require flood insurance. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
Wildland fire area: An area that may contain substantial forest fire risks and hazards; wildland disclosure addresses the state's lack of duty to protect buildings. — Practice of real estate and disclosures (includes specialty areas) · Taught in Natural hazard disclosure statements and related hazard disclosures
As Is: A contract term under which the buyer accepts the property in its present condition. It does not by itself cancel inspection or termination rights the contract grants, and it generally does not protect a seller or licensee who conceals or misrepresents a known defect. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Common interest development documents: Documents revealing assessments, restrictions and financial issues; Civil Code section 4528 lets sellers provide current documents they possess at no cost. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Death disclosure: Under Civil Code section 1710.2, a death more than three years before the offer need not be disclosed, nor HIV status; this never protects an intentional lie to a direct inquiry. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Sex offender database notice: The Civil Code section 2079.10a notice directing buyers to the Department of Justice website. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Specialist report: A home inspection, pest or foundation report; read its scope, exclusions and recommendations because none promises discovery of every defect. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Visual inspection: The reasonably competent and diligent inspection Civil Code section 2079 requires of covered residential property with one to four units and manufactured homes. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Water heater bracing: Health and Safety Code section 19211 requires covered water heaters to be braced, anchored or strapped and a written seller compliance certification. — Practice of real estate and disclosures (includes specialty areas) · Taught in Material facts, inspections, and reports
Auxiliary aids: Services or devices that provide effective communication with people with disabilities, such as interpreters or accessible formats. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Explicit bias: A consciously held prejudice. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Fair housing roleplay: The continuing education activity requiring licensees to act as both consumer and professional. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Implicit bias: An automatic association that can affect judgment without conscious awareness. Anti-bias training aims to change real decisions. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Interpretation: Conveying spoken communication in another language. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Language assistance: Competent help for a consumer's preferred language that protects accuracy, confidentiality and independent decisions. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Protected characteristic: A trait on which housing decisions may not lawfully be based. The federal Fair Housing Act protects race, color, religion, sex, national origin, familial status and disability. States can add more: New York also protects, for example, creed, marital status, lawful source of income and citizenship or immigration status. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Systemic bias: Bias embedded in recurring policies and practices. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Translation: Conveying written material in another language. — Practice of real estate and disclosures (includes specialty areas) · Taught in Servicing diverse populations: implicit bias, access, and language
Acceptance: Unequivocal agreement to the offer's exact terms, given in the manner and time the offer requires. Silence or a private decision generally is not acceptance. — Contracts · Taught in Elements of a valid contract and contractual capacity, Offers, counteroffers, acceptance, and revocation
Capacity: Legal ability to enter a contract. An adult who understands the transaction generally has it; a poor bargain alone does not show incapacity. — Contracts · Taught in Elements of a valid contract and contractual capacity
Consideration: A bargained-for exchange of legal value, such as a seller's promise to convey for a buyer's promise to pay. Immediate cash and equal value are not required. — Contracts · Taught in Elements of a valid contract and contractual capacity
Contract: An agreement creating enforceable obligations, which requires competent parties, mutual consent, a lawful object and consideration. — Contracts · Taught in Elements of a valid contract and contractual capacity
Duress: Wrongful pressure that forces a party's assent, which can make a contract voidable by that party. — Contracts · Taught in Elements of a valid contract and contractual capacity
Lawful object: A legally permissible purpose for the agreement; signing a writing or exchanging money cannot make an illegal objective enforceable. — Contracts · Taught in Elements of a valid contract and contractual capacity
Minor: A person below the age of legal adulthood, whose contract is generally voidable by the minor rather than automatically void. — Contracts · Taught in Elements of a valid contract and contractual capacity
Mutual consent: Agreement by the parties to the same bargain, shown by an offer and an acceptance matching its material terms; fraud, duress or material mistake can undermine it. — Contracts · Taught in Elements of a valid contract and contractual capacity
Unenforceable: Describes an agreement that may otherwise satisfy formation requirements but that a court will not enforce because of a legal barrier, such as a missing required writing. — Contracts · Taught in Elements of a valid contract and contractual capacity, Void, voidable, and unenforceable contracts and the statute of frauds
Void: Describes an agreement that has no legal effect as a contract from the outset, such as one whose purpose is illegal. — Contracts · Taught in Elements of a valid contract and contractual capacity, Void, voidable, and unenforceable contracts and the statute of frauds
Voidable: Describes a contract that is binding unless a protected party, such as a minor or a victim of fraud or duress, chooses to avoid it. The other party has no equal right to escape. — Contracts · Taught in Elements of a valid contract and contractual capacity, Void, voidable, and unenforceable contracts and the statute of frauds
Memorandum: A written record of an agreement's terms that can satisfy the statute of frauds if it is signed by the person to be charged or an authorized signer. — Contracts · Taught in Void, voidable, and unenforceable contracts and the statute of frauds
Rescission: Unwinding a contract and generally restoring the benefits each party received, either by mutual agreement or on a legal ground such as fraud. — Contracts · Taught in Void, voidable, and unenforceable contracts and the statute of frauds, Performance, breach, remedies, and discharge of contracts
Statute of frauds: A law, found in every state, requiring certain contracts, including contracts for the sale of real property and most leases longer than one year, to be in a signed writing to be enforceable. — Contracts · Taught in Void, voidable, and unenforceable contracts and the statute of frauds
Accord and satisfaction: An accord is agreement on substitute performance; satisfaction is its completion. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Anticipatory repudiation: A clear, unequivocal refusal to perform made before performance is due. A request to negotiate a change is not repudiation. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Assignment of rights: A transfer of contractual rights that does not itself release the assignor from duties. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Compensatory damages: Money awarded to make up for proven loss caused by a breach, not to punish the breaching party. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Discharge: The ending of contract duties, by performance, rescission, novation, impossibility or operation of law. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Liquidated damages: An amount or measure of damages the parties agree to in advance for a specified breach. It is enforceable only if it compensates rather than operating as a penalty. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts, Purchase contracts: contingencies, deposits, and liquidated damages
Material breach: A breach that substantially defeats the bargain and can excuse the other party's remaining performance. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Minor breach: A breach that does not substantially defeat the bargain. It may justify damages but does not excuse all remaining performance. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Mitigation: The injured party's duty to take reasonable steps to limit loss after a breach. Loss that could reasonably have been avoided generally is not recoverable. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Novation: Replacing an existing obligation with a new one by agreement of all necessary parties, which extinguishes the old obligation and releases the original party. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts, Leases and other real estate agreements
Residential liquidated damages rule: Under Civil Code section 1675, for a dwelling of up to four units the buyer intends to occupy, an amount actually paid of 3 percent or less of the price is valid unless the buyer proves it unreasonable; above 3 percent the seller must prove it reasonable. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts, Purchase contracts: contingencies, deposits, and liquidated damages
Specific performance: A discretionary equitable remedy in which a court orders a party to perform as promised, such as conveying land. Land's uniqueness can support it, but it is not guaranteed. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Tender: An offer of required performance by someone ready, willing and able to perform; it is not completed performance. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Time is of the essence: Contract language making timely performance material, so the deadlines it covers require strict compliance. It applies only to the duties it actually covers. — Contracts · Taught in Performance, breach, remedies, and discharge of contracts
Definite termination date: California requires a specified date of final and complete termination in an exclusive listing; compensation claims under one lacking it are a disciplinary ground under section 10176(f). — Contracts · Taught in Listing agreements: types, terms, and a definite termination date
Protection clause: A provision preserving the broker's fee for specified acquisitions or sales after the agreement expires, such as listed properties the broker showed, if its conditions are met. — Contracts · Taught in Listing agreements: types, terms, and a definite termination date
Buyer-broker representation agreement: A written contract authorizing the buyer's agent to perform licensed services for the buyer; it hires the broker and is not an offer to purchase. — Contracts · Taught in Buyer broker agreements
Inquiry: A question about possible different terms, such as a later closing, that keeps the offer under consideration and need not reject it. — Contracts · Taught in Offers, counteroffers, acceptance, and revocation
Offeree: The party who receives an offer and has the power to accept it. — Contracts · Taught in Offers, counteroffers, acceptance, and revocation
Offeror: The party who makes an offer. A counteroffer makes the original offeree the new offeror. — Contracts · Taught in Offers, counteroffers, acceptance, and revocation
Rejection: The offeree's refusal of an offer, which ends it. A rejected offer cannot later be accepted unless it is renewed. — Contracts · Taught in Offers, counteroffers, acceptance, and revocation
Appraisal contingency: A contingency that protects a buyer if the property appraises below an agreed value. — Contracts · Taught in Purchase contracts: contingencies, deposits, and liquidated damages
Contingency: A contract term making a party's obligation depend on a condition, such as an inspection or financing. Adding one to a response is a counteroffer. — Contracts · Taught in Purchase contracts: contingencies, deposits, and liquidated damages
Earnest money: A buyer's deposit made under a purchase contract. It is distinct from the mutual promises that supply consideration and is not required for a contract to exist. — Contracts · Taught in Purchase contracts: contingencies, deposits, and liquidated damages
Inspection contingency: A contingency allowing termination for specified inspection results with timely notice. A mere right to inspect does not create a cancellation right. — Contracts · Taught in Purchase contracts: contingencies, deposits, and liquidated damages
Assignment: The transfer of a tenant's entire remaining leasehold interest. It does not by itself release the original tenant. — Contracts · Taught in Leases and other real estate agreements
Gross lease: A lease under which the landlord generally pays the property's operating expenses and the tenant pays agreed rent. — Contracts · Taught in Leases and other real estate agreements
Lease: An agreement giving a tenant (lessee) the right to possess and use property while the landlord (lessor) keeps ownership. — Contracts · Taught in Leases and other real estate agreements
Lessee: The tenant under a lease. — Contracts · Taught in Leases and other real estate agreements
Lessor: The landlord under a lease, who keeps ownership and a reversion. — Contracts · Taught in Leases and other real estate agreements
License: Permission to use another's land, generally personal and revocable, such as permission to park for a weekend. — Contracts · Taught in Leases and other real estate agreements
Percentage lease: A lease that ties some rent to the tenant's business sales, often a percentage added to base rent. — Contracts · Taught in Leases and other real estate agreements
Purchase option: A right to buy specified property on agreed terms during a stated period, supported by consideration, so the owner cannot revoke the opportunity before it ends. Also called an option to purchase. — Contracts · Taught in Leases and other real estate agreements
Sublease: A transfer of less than the tenant's entire leasehold interest, leaving the original tenant an interest as sublessor. — Contracts · Taught in Leases and other real estate agreements
Fractional interest: A division of an investment among investors, which does not eliminate securities requirements. — Contracts · Taught in Promissory notes and real estate securities
Installment note: A note calling for periodic payments. — Contracts · Taught in Promissory notes and real estate securities
Lender or purchaser disclosure: Under section 10232.4, the completed statement provided as early as practicable before commitment and generally before receipt of funds; keep the signed copy three years. — Contracts · Taught in Promissory notes and real estate securities
Maker: The borrower who signs the promissory note. — Contracts · Taught in Promissory notes and real estate securities
Payee: The party to whom payment under the note is promised. — Contracts · Taught in Promissory notes and real estate securities
Secured note: A note backed by a mortgage or deed of trust; buying it buys a creditor's investment, not ownership of the borrower's home. — Contracts · Taught in Promissory notes and real estate securities
Suitability: Under section 10232.45, reasonable efforts to assess an investor's understanding, ability to bear risk and objectives, with records kept at least four years. — Contracts · Taught in Promissory notes and real estate securities
Exercise: The optionee's act of using an option in the manner and time its terms require. Proper exercise creates a purchase obligation but does not itself deliver a deed. — Contracts · Taught in Options, lease-options, and rights of first refusal
Lease option: A lease combined with an option to purchase. The tenant may choose not to buy, and rent counts toward the price only if the agreement provides rent credits. — Contracts · Taught in Options, lease-options, and rights of first refusal
Lease purchase: An arrangement combining a lease with a commitment to buy, rather than just a choice to buy. — Contracts · Taught in Options, lease-options, and rights of first refusal
Option: A right to buy on stated terms within a specified period, without an obligation to buy before exercise. Consideration supports the optionor's promise to keep it open. — Contracts · Taught in Options, lease-options, and rights of first refusal
Option fee: Money a buyer pays for an option, such as the right to buy a property later or to terminate a purchase contract within a set period. The seller generally keeps it if the buyer uses the option to walk away or lets it lapse, and it is often credited toward the price if the purchase closes, while earnest money is refunded or forfeited under the contract's own terms. — Contracts · Taught in Options, lease-options, and rights of first refusal
Optionee: The holder of an option, usually the prospective buyer, who may choose to buy but has no obligation to do so before exercise. — Contracts · Taught in Options, lease-options, and rights of first refusal
Optionor: The party, usually the owner, who grants an option and is bound to keep the purchase opportunity open. — Contracts · Taught in Options, lease-options, and rights of first refusal
Rent credit: A portion of rent that the agreement credits toward the purchase price if an option is exercised. It exists only if agreed. — Contracts · Taught in Options, lease-options, and rights of first refusal
Right of first refusal: A right to buy on matching terms if the owner decides to sell. Unlike a purchase option, it gives no power to initiate a purchase. — Contracts · Taught in Options, lease-options, and rights of first refusal
Unilateral contract: A contract that invites acceptance through performing the requested act, not a return promise. — Contracts · Taught in Options, lease-options, and rights of first refusal
Advance fee materials: All advance fee advertising, promotion, solicitation and negotiation materials, including the agreement form, to be submitted to the Real Estate Commissioner at least 10 calendar days before use. — Contracts · Taught in Advance fees and advance fee agreements
Limited service contract: A qualifying written contract offering stand-alone services task by task, with compensation as each task is completed, so its fees are not advance fees. — Contracts · Taught in Advance fees and advance fee agreements
Treble damages: Damages of three times the injured party's actual damages, available to purchasers and tenants for knowing violations of the lead disclosure statute. — Contracts · Taught in Advance fees and advance fee agreements
Verified accounting: An accounting due to the principal each calendar quarter-end and on complete performance, and to the Commissioner on demand. — Contracts · Taught in Advance fees and advance fee agreements

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