glossary-of-legal-real-estate-terms-505472872-968x387

A Glossary of Legal Real Estate Terms

Navigating the housing and real estate market can seem like a confusing task if you don’t understand the terminology being used. To help make housing a little easier to understand, here’s some common legal lingo you may hear in real estate and home buying.

  • Amortization: the period of time required to reduce a debt to zero when payments are made regularly, this would refer to the amount of time you hold a mortgage loan. 
  • Appraisal: the process that determines the market value of a property.
  • Assumption: a legal document signed by a homebuyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder.
  • Building permit: a certificate that must be obtained from the City by the property owner or contractor before a building can be erected or repaired.
  • Closing costs: costs that are in addition to the purchase price of a home, such as legal fees, transfer fees and disbursements. These are payable at closing date.
  • Conditional offer: an offer to purchase that is subject to specified conditions. There is usually a stipulated time limit within which the specified conditions must be met.
  • Covenant: a clause in a legal document which, in the case of a mortgage, gives the parties to the mortgage a right or an obligation.
  • Deed: legal document, which is signed by both the vendor and the purchaser transferring ownership. This document is registered as evidence of ownership.
  • Default: failure to make mortgage payments, defaulting on the loan, may give cause to the mortgage holder to take legal action to possess (foreclose) the mortgaged property.
  • Encumbrance: a registered claim for debt against a property, such as a mortgage.
  • Foreclosure: legal procedure in which the lender gets ownership of the property if the borrower defaults on the mortgage loan.
  • Lien: a claim against a property for money owing.
  • Offer to Purchase: written contract setting out the terms under which the buyer agrees to buy. If accepted by the seller, it forms a legally binding contract subject to the terms and conditions stated in the document.
  • Survey: document that illustrates the property boundaries and measurements, specifies the location of buildings on the property, and indicates any easements or encroachments.
  • Zoning bylaws: City or regional laws that specify or restrict land use.

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