Glossary of Terms
When buying or selling a home, you will encounter many terms that may be unfamiliar. To assist, we have provided this glossary of Real Estate terms.
A B C D E F G H I J K L M N O P Q R S T U V W Z
Glossary of Terms - L
L/V: Short form for "Loan-to-value ratio".
LAND BANKING: The practice of acquiring land now for future use.
LAND CONTRACT: See " Contract for Deed ".
LAND LEASE: A rental agreement for the use of land but not the improvements thereon.
LAND SALE LEASEBACK: An arrangement where a person sells property to another but immediately rents it from the purchaser.
LAND SURVEYOR: A qualified professional who is trained to establish, measure and draw out the boundaries of properties and the improvements (buildings and other features) located thereon based on land records and site examinations.
LAND USE PLANNING (REGULATION): An effort by a municipality to establish guidelines for the use and development of land within its boundaries.
LAND USE SUCCESSION: The gradual change in the use of land in a neighborhood over a period of years.
LAND/BUILDING RATIO: A comparison of the value of the land with the value of the improvements to that land.
LANDLOCKED: A term describing a property that does not border on any public road.
LANDLORD: Also known as "lessor". The owner of a property who allows other persons to occupy a property in exchange for periodic payments of rent.
LANDMARK: Any object which is fixed to the ground and may serve as a guidepost for a survey or boundary. Also known as "monument".
LANDSCAPE ARCHITECT: A professional designer of ground works who takes into consideration the need for drainage, utilities installations, buildings, grading while creating a pleasing appearance.
LATE CHARGE: A fee or penalty to be paid to a lender for a payment which is delivered after it is due.
LATENT DEFECTS: Problems with a property or building which are not visible to the casual observer but which may surface later. A vendor must disclose to a purchaser any serious latent defects of which he has knowledge.
LEASE: A written agreement to rent a property or part of a property from the owner. Sets out premises rented ("demised premises"), amount to be paid, payment period, and other rights and obligations of the landlord and tenant.
LEASE WITH OPTION TO PURCHASE: A rental contract which allows the tenant to purchase the property during the period of the lease. Payments under the lease may be credited (in whole or in part) against the purchase price.
LEASE-PURCHASE MORTGAGE LOAN: A Fannie Mae loan which allows qualified persons to lease a property from a nonprofit organization with an option to purchase the home. Payments are made against the loan principal and interest but with a portion going into a savings account toward the purchase price.
LEASED FEE: Description of the ownership interest in a property of a landlord who has rented the property to a tenant.
LEASEHOLD ESTATE: An interest in a property for a period of time as specified under a rental contract.
LEASEHOLD IMPROVEMENTS: Additions to a rented premises made by the tenant, often in the nature of a fixture, which may be removed by the tenant at the end of the lease term if no damage ensues to the premises and if the lease permits.
LEASEHOLD MORTGAGE: A loan secured against a tenant's interest in a property.
LEGAL AGE: Set by statute, the age at which a person ceases to be a minor and is able to contract on his own behalf.
LEGAL DESCRIPTION: A description of a piece of real estate that is drafted according to legal requirements and which clearly and adequately establishes the identity of the property so described. Found in most instruments for registration on title to land.
LEGAL NAME: Usually a person's full name as given at birth, may be changed by filing the proper forms and paying the appropriate fee.
LEGAL NOTICE: Informing one or more persons of a fact, action or intention in a period of time and in a fashion required by a statute, contract or court order.
LEGAL RESIDENCE: The place where one resides (may refer to a street address or, for income tax purposes, a country of residence).
LEGAL TITLE: The bundle of rights of ownership that a person acquires in purchasing a piece of property, which may be defended against competing interests.
LEGATEE: The beneficiary under a will.
LENDER: Any individual or company which provides money to third parties in return for periodic payments of interest and principal over time.
LENDER OPTION COMMITMENTS: A contract between a lender and potential borrower which allows a lender to provide certain loans at certain times on terms set out in the contract but also allows the lender to choose not to provide such loans.
LENDER'S TITLE INSURANCE: A policy of Title Insurance which covers the interest of a lender on a mortgage registered on title to a property.
LESS THAN FREEHOLD ESTATE: An interest in land which is limited to a certain period of time.
LESSEE: A tenant under a lease.
LESSOR: A landlord under a lease (the owner of the property being rented).
LET: 1. (Verb) To lease or rent part or all of a property to a third party. 2. (Noun) A served ball that strikes the net but still falls in to the service court in tennis.
LETTER OF COMMITMENT: See " commitment Letter ".
LETTER OF CREDIT: An agreement between a bank and a borrower which allows the borrower to use money on the bank's credit.
LETTER OF INTENT: A written indication to the owner of property that the writer will be making an offer to purchase the property.
LEVEL-PAYMENT MORTGAGE: A land loan which requires regular, even payments.
LEVY: To charge or assess a tax or charge.
LIABILITIES: The debts or obligations of a person.
LIABILITY INSURANCE: A contract made with an insurance company to cover costs arising out a person's responsibility for injuries to others.
LIABLE: To be legally obligated or responsible for something or to someone.
LIBER: Latin for "book", the volume in which land records are held.
LIEN: A legal claim against property for moneys owed.
LIEN HOLDER: The person who has the claim against the property.
LIEN WAIVER: The surrender or passing up on one's right to a claim.
LIFE CAP: The maximum interest rate chargeable under an adjustable or variable rate mortgage over its life.
LIFE ESTATE: A limited right in a property, to use or occupy the property for the life of the person holding the estate after which title reverts to the grantor or a named third party.
LIFE TENANT: A person who enjoys rights of occupation of property for life.
LIFETIME PAYMENT CAP: The maximum increase or decrease in the amount of each periodic payment allowable over the life of an adjustable or variable rate mortgage.
LIGATION BOND: A written promise made by a borrower for a sum of money in excess of the principal amount of the loan. The lender may sue the borrower on this promise.
LIKE-KIND PROPERTY: Similar property.
LIMITED LIABILITY: Responsibility or obligation which is restricted to the limits set out.
LINE OF CREDIT: A very flexible form of loan in which the lender agrees to make a certain amount of money available to the borrower at a certain rate of interest. The borrower may use as much of the amount available as she wishes and may pay out all or any part of the amount owing at any time or re-borrow such funds at her leisure.
LINEAL MEASUREMENT: The distance from one point to another measured in a straight line, along the ground.
LINK: A lineal measurement equaling 7.92 inches.
LIS PENDENS: Latin meaning "suit pending", a recorded notice of a legal claim which may affect ownership of a parcel of land.
LIST: To place a property up for sale in the public forum, to add it to the list of properties for sale.
LISTING BROKER (AGENT): The real estate professional who acts for the vendor in marketing a property for sale. As opposed to Selling Broker (Agent) -- the agent representing the purchaser.
LISTING: The agreement that allows a real estate professional to market a property or the actual notice of the property's availability and features.
LITIGATION: Legal action in pursuit or furtherance of a claim.
LOAN: See also " mortgage ". A transfer of money or other property from one party to another upon the expectation that the money or other property will be returned (often with additional payments as well).
LOAN APPLICATION: The form completed by a potential borrower which provides information the prospective lender requires to assess the borrower's suitability for a loan.
LOAN APPLICATION FEE: The charge paid by the borrower for the honour of requesting a loan and of having the lender consider the request.
LOAN COMMITMENT: See " commitment letter ".
LOCATION: The most important factor in the value of a property.
LOCK OR LOCK IN: Obtain a commitment from a lender to guarantee a certain interest rate or other loan feature for a set period of time.
LOCK PERIOD: The time span over which the lender guarantees a feature of a loan.
LOG CABIN: A dwelling made of unfinished logs, rough in texture, old-fashioned, rustic.
LOSS MITIGATION: The duty of any person claiming damages against another person, actions designed to alleviate the injury suffered or to reduce the cost of that injury to that injured party.
LOT: A measured section of land, often a particular parcel of land on a registered plan.
LOT LINE: The legal perimeter of a parcel of property, often shown on a survey of the property.
LOW-BALL OFFER: A slang term for an offer to purchase a property with an offered purchase price much lower than that asked for. An attempt to take advantage of pressures on the vendor to sell by asking him to accept much less than the property may be worth.