Real Estate and Mortgae Attorneys in Jacksonville, Florida - Commonly Used Terms

TERM		DEFINITION
Abstract (of Title)		Acceleration Clause The clause in a note and mortgage which gives the lender the right to demand full payment upon the happening of a certain event, as for example, missed payments, failure to insure, failure to pay taxes, or transfer of ownership without the lender’s consent where such consent is required. This clause allows the lender to sue for the entire balance at one time, as opposed to bringing a separate suit every month.
Accretion		The gradual addition to the shore resulting in additional property for the owner.
Ad valorem		The literal meaning is “according to value”. It is a method of taxing using the value of the thing taxed to determine the amount of the tax. Property taxes are ad valorem taxes.
Adverse Possession		A claim made against the real estate of another based on open and notorious possession and payment of taxes on the real estate for a certain number of years or based on color of title (i.e. a document that purportedly conveyed the property to the claimant.)
Amortization		From the root word “amortize’, which means to destroy or kill. Amortization of a loan refers to the payment of the debt in equal installments consisting of principal and interest. At the end of the loan term, the loan has been paid off.
Annual Percentage Rate (APR)		The yearly interest expressed as a percentage of a loan which would typically include such things as prep aid interest, points, and origination fees. The Federal Truth-in-Lending Act requires that the annual percentage rate be disclosed to the buyer at or before closing. It is intended to inform the buyer that there are costs associated with the loan in addition to the interest to be paid. The APR Will be higher than the note interest rate.
Balloon Note (or Balloon Mortgage)		A loan providing for specified payments at stated regular intervals and a final payment of more than twice any other periodic payments. The periodic payments are insufficient to amortize the amount of the loan so that a larger principal sum known as a balloon payment is due at maturity.
Blanket Mortgage		A mortgage encumbering more than one property of the borrower.
Caveat Emptor		A Latin phrase meaning “Let the buyer beware.” This old legal maxim referred to the fact that the buyer took the risk regarding the condition of the item purchased unless protected by a specific warranty. With regard to real property law, caveat emptor is not often applicable to residential real estate since consumer protection laws and case law often require the seller to disclose certain facts to the buyer.
Clear Title		One which is not encumbered or burdened with title defects.
Closing		In real estate transactions, a closing is the final procedure in which documents are signed and the sale or loan is completed. Another term for closing is a settlement.
Closing Costs		Costs associated with selling, buying, and mortgaging real estate. Some are imposed by government, such as documentary stamps, some are imposed by lenders, such as credit report and appraisal fees, and some are voluntary, such as termite and home inspection fees.
Condemnation		The taking of private property for a public purpose, with compensation to the owner under the right of eminent domain. Governments, utility companies and railroads have the right to condemn and take private property. The party whose property is taken is entitled to have their own attorney and the taking authority will pay those reasonable attorneys fees and reasonable expert witness fees.
Condominium		A residential or commercial structure of two or more units whereby the interior space is individually owned but the balance of the property (the land, parking lot, recreational buildings, etc.) is owned in common with the other owners of individual units.
Construction Lien		Formerly called mechanic’s lien, this is a claim created by Florida law for the purpose of securing priority of payment for work performed or materials furnished to a property. In Honda, those who supply materials or services or perform work on property have a period of 90 days after so doing to file their lien. Lienors may have to file a Notice to Owner prior thereto in order to perfect their lien.
Contract		A written agreement between competent people to do a legal act A buyer makes an offer - if a seller accepts it, then it becomes a contract. No document becomes a contract until it is signed and initialed by all parties, so nothing is left to chance. When parties are still negotiating, there is no contract - it is a series of offers and counter-offers, which have not yet reached the dignity of a contract.
Conventional Loan		A mortgage that is not a V.A. or F.H.A. loan
Deed		A document transferring title to real estate from seller to buyer. There are many different types of deeds, and the correct one to use should be discussed with your attorney. See Quit- Claim Deed. See Warranty Deed.
Deed of Trust		An instrument used in some states in place of a mortgage. The borrower transfers the title to the property to a trustee who holds it in trust in favor of the lender. Deeds of trust are not used in Florida.
Deficiency Judgment:		A money judgment entered against a borrower for the amount which the borrower is liable on the note and mortgage if a foreclosure sale does not produce enough money to pay the debt.
Easement		The right to use the land of another for a specific purpose. It is created by or reserved in a written instrument It is for the benefit it of specific property (such as the right of one party to cross the land of another) or is “in gross”, such as an easement given to a public utility.
Egress		Usually part of the term ‘ingress and egress”, often used interchangeably with the word “access”. It means the right to come and go across the land of another usually granted by a written document known as an easement. See Easement.
Encroachment		An intrusion into another’s property, usually by a structure, wall, or fence.
Escrow Account		See Impound Account.
Foreclosure		The legal process by which a lender has the secured property (collateral) sold at public auction to pay a delinquent debt. Mortgages, construction liens, homeowner association, and condominium association liens can be foreclosed.
General Lien		A lien or charge against all property of the debtor rather than against only specific property of the debtor. A final judgment is a general lien while ad valorem taxes and mortgages constitute specific liens
Graduated Payment Mortgage		A mortgage which requires increasingly higher payments over the loan term but with the interest rate remaining constant. The payments are lower than necessary to amortize the loan in the beginning and higher later. Graduated payment mortgages are intended for people whose income is smaller now but which will almost certainly increase, as for example, for a young doctor.
Grantee		The person or entity receiving an interest in real estate by written instrument, generally a deed.
Grantor		The person or entity conveying an interest in real estate, generally by a deed.
Homestead		The primary residence of the seller. In selling homestead property, both spouses should sign the contract to sell and both must sign the deed, even if the homestead property is only in the name of one spouse.
Impound Account (Escrow Account)		A lender’s escrow account. Money held by the lender for the payment of taxes, insurance, and where applicable, flood insurance and private mortgage insurance. The borrower pays a portion with each monthly payment. The lender pays the bills from the accumulated funds. Generally, impound accounts do not earn interest for the borrower.
Joint Tenancy with Right of Survivorship		A form of real property ownership where two or more parties own equal interests, and upon the death of one of them, the interest passes to the surviving joint tenants rather than to the heirs of the deceased. In florida, the deed must specifically state joint tenancy with right of survivorship, otherwise the parties are tenants in common. See Tenancy in Common.
Judgment		A written decision of a court of law. When a certified copy of a money judgment is recorded, it becomes a lien against the real property of the defendant.
Latent Defect		A hidden defect, one that is not readily discoverable by mere observation. In the famous Florida Supreme Court case of Johnson v. Darns, it was held that sellers and their real estate agents must disclose material latent defects concerning the property to prospective purchasers.
Lessee		Tenant
Lessor		Landlord
Lis Pendens		A legal notice recorded to show pending litigation relating to real property and giving notice that anyone acquiring an interest in the property after the date of the recording of the notice may be bound by the outcome of the litigation.
Marketable Title		Title to real property which is free from reasonable objections. One which can readily be sold or mortgaged to a reasonably prudent purchaser or mortgagee. It is a title without defects.
Maturity		The termination period of a note or other obligation.
Metes and Bounds		A description of land by boundary lines with other terminal points and angles. Metes refers to distance and bounds refers to direction.
Mortgage		A lien on real property securing the owner’s debt to a lender. A mortgage also typically contains terms such as requirements for insurance, escrow, and assumption.
Mortgagee		The party lending the money and holding the mortgage which secures the debt.
Mortgagor		The borrower who pledges real property as security for the debt.
Plat		A map showing a parcel of land subdivided into lots and streets. A plat map is recorded with the county and is a public record.
Power of Attorney		An instrument authorizing another to act as one’s agent. Powers of Attorney may be general or specific and may be for a limited period of time or until revoked. Any power of attorney used to convey or mortgage real estate must be signed in the presence of two different witnesses and a notary public and must be recorded in the public records. All powers of attorney cease to be effective upon the death of the grantor of the power of attorney.
Private Mortgage Insurance		Insurance required by lenders when the borrower does not pay at least 20% down payment for a conventional loan. The private mortgage insurance does not benefit the borrower rather it benefits the lender. FHA loans have similar mortgage insurance.
Quit-Claim Deed		A deed without any warranties by the seller.
Recording		Filing documents affecting real estate in the public records of the county. Such filing gives notice to future purchasers, lenders arid other interested parties. Recordings controlled by statute and usually requires witnessing and notarization of an instrument.
Riparian Rights		The rights of owners of lands bordering a river or stream.
Sale and Leaseback		The sale of an asset (usually real property) to a buyer who immediately leases it back to the seller.
Tenancy in Common		An undivided ownership in real property by two or more persons. The interest of the owners does not have to be equal. When one of the owners dies, there is no survivorship to the other owners, but rather the interest of the deceased owner passes to their heirs at law or beneficiaries under their will. See Joint Tenancy with Right of Survivorship.
Title Defect		Any legal right held by others to claim property or an interest in property. A cloud on title that makes it unmarketable. See Marketable Title.
Title Insurance Policy		A contract of insurance whereby the insurance company agrees to reimburse the insured against loss arising from claims against the insured property. Generally the buyer and the buyer’s lender want title insurance at the closing. Examples of claims are unpaid mortgages, association dues, back taxes, judgments, construction liens, and federal tax liens.
Useful Life		In appraising real property, useful life means the remaining true economic value of a building or a portion of it such as the roof.
Usury		An unlawful (too high) rate of interest.
Warranty Deed		A deed containing seller’s warranties, such as a warranty that the seller owns the property, that it’s free and clear of encumbrances, that the seller has the right to sell it and that the seller will defend the buyers title in court if it is challenged.
Wrap-Around Mortgage		A junior (second) mortgage with a face value of both the amount it secures and the balance due under the underlying first mortgage. The mortgagee under the wrap-around mortgage collects a payment based on the face value of the wrap-around mortgage and then pays the first mortgage. A deed and wrap-around mortgage will trigger a due-on-sale clause if the first mortgage contains such a clause.