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Accrued
items of expense:
Incurred
expenses that are not yet payable. In a
closing statement, accrued expenses of the
seller are credited to the purchaser (taxes,
wages, interest, etc.).
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Acknowledgment:
A
declaration before a notary public or other
officer by a party executing a legal document
that the execution is his free and voluntary
act and deed.
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Acre:
A
measure of land. One acre is equal to 43,560
square feet or 160 square rods or 4,840 square
yards.
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Ad
valorem:
According
to value (Latin). This term generally used
to refer to real estate taxes.
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Affidavit:
A
voluntary statement in writing, sworn to before
a notary public or other officer.
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Agent:
One
who acts or has the power to act for another.
A licensed real estate broker authorized to
act under a listing or management agreement
executed by a property owner (the principal);
this creates a fiduciary relationship under
the law of agency. A building manager is the
agent of the property owner.
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Air-handling
light fixture:
A
light fixture into which air is introduced
by means of an air diffuser for quiet, draft-free
distribution.
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Amortization:
The
process of paying off a debt together with
interest, usually with equal payments at regular
intervals over a period of time.
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Amortized
mortgage:
A
mortgage loan in which the principal, as well
as the interest, is payable in monthly or
periodic installments during the term of the
loan.
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Annual
loan constant:
The
principal and interest of a loan expressed
as the constant annual payment required to
retire a debt at a certain rate of interest
over a certain period of time.
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Appraisal:
An
estimate of quantity, quality or value. The
process through which conclusions of property
value obtained; also refers to the report
setting forth the estimate and conclusion
of value.
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Approaches
to value:
Employed
by an appraiser to estimate the value of real
estate: cost approach, income approach and
market data approach.
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Architect:
A
person who normally functions as a creator,
coordinator, author of the drawing and specifications
and the general administrator of construction.
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Architectural
drawing:
Includes
all architectural contracts and drawings such
as plot plans, floor plans, elevations, sections,
details, schedules, etc., and any architectural
drawing that forms a part of the contract
documents. Exceptions include mechanical,
electrical, and structural drawings, as well
as specialized data that are normally handled
by consultants to the architect or owner.
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Assessed
value:
The
value placed on land and buildings by a township
or a county assessor for use in levying annual
real estate taxes.
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Assignment:
The
transfer in writing of an interest in a lease,
mortgage or other instrument. The assignor,
or lessee, transfers the entire remainder
of the term created by the lease, and the
assignee becomes liable to the original lessor
for rent. Assignor may or may not retain secondary
liability for performance under the lease,
depending upon the terms of the lease pertaining
to assignment.
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Bag
filter:
A
unit within a mechanical system that bellows
in a bag form when air flows through, cleaning
the air by collecting particles of foreign
matter. This system of filtering is rated
the most efficient- in a range of 92 to 95
percent.
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Banked
elevators:
A
group of elevators adjacent to each other
with a specific demised enclosure
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Bank
partition:
A
type of space divider usually made of steel
and glass and extending only approximately
five to six feet up from the floor rather
than to the ceiling.
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Base
lease:
A
contract stating the minimum established requirements
that are applicable to all tenants.
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Base
year:
The
year of a lease term that is used as the standard
when implementing as escalator clause. Operating
costs are judged higher or lower during the
next year when compared to the base year.
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Bay:
An
unfinished area or space between a row of
columns and the bearing wall. Usually the
smallest area into which a building floor
can be partitioned.
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Bids:
A
competitive system in which each bidder submits
a sealed proposal to execute construction
work for a specified sum. The list of bidders
(bid list) is controlled by the client and
architect.
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Binder:
A
preliminary agreement evidencing a meeting
of the minds and effective until the principal
agreement can be executed.
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Block
Layout:
The
preliminary sketch showing different tenants'
spaces on various floors. This helps the building
management to understand the feasibility of
the building.
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Board
of underwriters:
An
organization that fixes rates for fire insurance
and other types of coverage. The organization
also maintains a laboratory that tests safety
factors of materials, substances, electrical
equipment, machinery and other apparatus.
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Boot:
(See
Fixture boot.)
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Borrowed
light:
A
partition containing glass or plastic panels
between an interior dark space and a space
illuminated by daylight or high-intensity
artificial light.
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Buck:
(See
Door frame.)
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Building
codes:
Ordinances
that specify minimum construction standards.
These ordinances are enforced for the protection
of public safety and health.
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Building
core:
The
central or arterial part of a multistory building
that integrates functions and service needs
for established occupants. Such areas are
normally composed of toilet facilities, elevator
banks, janitors' closets, utilities, mechanical
facilities. smoke shafts and stairwells.
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Building
module:
A
unit of length and width by which the plan
of a building can be standardized and which
facilitates the design and layout of office
space, The module places constraints on the
size and shape of many of the elements of
the physical systems. In contrast, buildings
of a non-modular design present many problems
for initial design and subsequent alterations.
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Building
permit:
The
approval that must be obtained under state
of local regulations. Drawings and specifications
must be filed with the legal authorities in
control of building operations.
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Building
shell:
The
skeleton of a building to which the finished
exterior and interior are applied. It includes
the building foundation.
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Building
skin:
All
the materials that cover a building's shell
(see Building shell).
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Building
standard:
The
specific construction standards that have
been established by the owner and architect
to achieve a uniform element of design throughout
the building and to establish a cost basis
for fitting up charges and/or allowance. Such
items may be changed only with the approval
of the building owner or the managing representative.
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Build-to-suit:
An
agreement between a landlord and a new tenant
whereby the landlord assumes the obligation
of fitting up the demised space to the tenant's
specification within the constraints of building
standards. The tenant takes possession when
the space is completed.
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Cancellation
clause:
A
provision in a lease that confers upon one
or both of the parties to the lease the right
to terminate the lease upon the occurrence
of the condition or contingency set forth
in the said clause.
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Capitalization:
The
process of ascertaining the value of a property
by the use of a proper investment rate of
return and the net income expected to be produced
by the property. The formula of net annual
income divided by proper capitalization rate
is expressed: Income/Rate = Value.
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Cash
flow:
The
net operation income of a property minus its
debt service.
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Cash-on-cash
return:
A
percentage figure arrived at by dividing the
cash flow from a property by the total investment
in the property and multiplying by 100. Also
called Cash yield.
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Cash
yield:
(See
Cash-on-cash return.)
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Certificate
of insurance:
A
certificate issued by an insurance company
or its agent. It verifies that a certain insurance
policy is in effect for stated amounts and
coverage and names those insured.
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Certificate
of payment:
A
certificate issued by the architect to the
contractor for such amount as the architect
decides is properly due. The amount of the
certificate is therefore left, subject to
the contract's provisions, entirely to the
architect's discretion. However, in reaching
a decision, the architect is acting not as
the owner's agent but in a judicial capacity.
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Chain
of title:
The
succession of conveyances from some accepted
starting point, usually beginning with the
original recorded source, whereby the present
holder of real property derives the title.
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Change
order:
An
order issued any time there is a change in
the specifications, price or time set forth
in the building contract as authorized by
the owner, architect or engineer.
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Channeling:
Cutting,
chipping or routing a prescribed sectional
area in a linear pattern on any surface, usually
in concrete or plaster.
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Chattels:
Personal
property items.
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Circulation
allowance:
The
space needed to have sufficient access to,
from and around workspaces.
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Clear
span:
The
amount of floor area clear of interference
form columns.
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Commitment:
A
pledge, promise, or affirmation of agreement.
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Common
areas:
Areas
used by two or more tenants and/or third parties
and not under control of any one tenant.
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Comparison
year:
During
the term of a lease with an escalator clause,
any year that is compared with a base year
for the purpose of establishing a rise or
fall in operating costs (see Base year).
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Condemnation:
The
taking of private property for public use,
with adequate compensation to the owner, under
the right of eminent domain.
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Condition
or conditions:
A provision in a deed or a will. It guarantees
that upon the occurrence or nonoccurrence
of a certain event, the title of the purchaser
of devisee will be limited, enlarged or terminated.
A condition in a deed is a restriction that
is coupled with a reverter clause.
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Consideration:
Anything
of value given by one party to induce another
to enter into a contract. It may be money,
personal services of even "love and affection'.
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Construction
allowance:
A
landlord's contribution to the cost of construction
and/or alteration necessary to prepare a space
for a tenant's occupancy. This may be an established
amount, or it may vary from one kind of transaction
to another.
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Construction
cost:
Total
expense, plus normal overhead and profit,
that must be paid for the job in question.
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Construction
cost estimate:
A
figure submitted in advance of construction,
not binding unless submitted as a bid. It
is used to help arrive at a decision concerning
the feasibility of a proposed project.
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Constructive
eviction:
Any
disturbance by the landlord of the tenant's
possession of leased premised, whereby they
are rendered unsuitable for occupancy (the
purpose for which they were leased). In such
a case, the tenant is not liable for further
payment of rent.
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Constructive
notice:
Notice
given to the world by the recording of documents
with a public official. All persons are charged
with knowledge of such documents and their
contents, whether or not they have actually
examined them.
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Contingency
fund:
A
fund established by a developer to cover unforeseen
construction costs.
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Contract
documents:
Documents
consisting of the agreement and the conditions
of the contract (general, supplementary and
other conditions). They include the drawings,
the specifications, all addenda issued prior
to execution of the contract and all modifications
thereto. A modification is (1) a written amendment
to the contract signed by both parties; (2)
a written interpretation issued by the architect
in the form of a drawing or otherwise; (3)
a change order; or (4) a written order issued
by the architect for a minor change in the
work.
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Contractor:
An
individual and/or firm used in performing
work on construction projects. There are different
classes of contractors, which are normally
listed under the heading of subcontractors.
The function of the subcontractor is to perform
a particular task only under the direction
and coordination of the general contractor,
who takes on the responsibility of managing
the project in accordance with the construction
documents. The general contractor is normally
selected through bidding procedures and is
totally responsible for completion of the
project in a skillful manner that is acceptable
to both architect and owner. However, the
general contractor may be pre-selected to
handle all work within a particular project.
This is usually the case for multistory office
buildings where the general contractor is
the same for all tenant space construction.
The contractor also could be contracted on
a time-and-material basis, which may or may
not have an upset maximum.
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Contractor's
affidavit:
A
written statement, made under oath before
a notary public by a contractor, stating facts
regarding the contract, subcontracts, material
suppliers and labor and setting forth the
amounts paid and unpaid and the balance of
payments due.
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Convection
system:
A
system in which heat is transferred through
the circulatory motion of air that occurs
when the temperature varies due to the difference
in air density and the action of gravity.
A hot-water or steam radiator is one such
system.
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Convector:
A
heating unit in which air, heated by contact
with a heating device in a casing, circulated
by convection. This term is often used by
the layperson in identifying what is really
an induction unit or system, which it resembles.
It is usually taken for granted that all systems
are the same, and thus it is often used as
a generic term when identifying either system.
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Conventional
mortgage:
A
mortgage loan that is not insured or guaranteed
by any government agency (FHA or VA).
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Conveyance:
A
written instrument by which title or an interest
in real estate is transferred; a deed.
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Core:
(See
Building core.)
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Coring:
A
mechanical system of removing a cylindrical
section of concrete from the existing floor
to gain access to the duct system.
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Cost
approach:
The
process of estimating the value of a property
by adding to the estimated land value the
appraiser's estimate of the replacement cost
of the building, less depreciation.
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Cove
base:
(See
Wall base.)
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Covenant:
An
agreement, written into deeds and other instruments,
promising performance or nonperformance of
certain acts or stipulation certain uses or
non-uses of the property.
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Damages:
The
estimated reparation in money for an injury
sustained.
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Damper:
A
valve or plate that is operated mechanically
or manually to regulate air flow to or from
any prescribed point.
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Debt
service:
The
total annual debt payment calculated by multiplying
the loan constant by the outstanding loan
balance.
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Dedication:
The
voluntary giving of private property by the
owner of a development for some public use
(streets, schools, etc.,).
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Deed:
A
written instrument that, when executed and
delivered, conveys title to an interest in
real estate.
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Deed
of trust:
Also
known as a trust deed, an instrument used
to create a mortgage lien by which the mortgagor
conveys a title to a trustee who holds it
for the benefit of the noteholder (the lender).
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Deed
restrictions:
Clauses
in a deed limiting the future uses of the
property. Deed restrictions may take many
forms. They may limit the density of buildings,
dictate the types of structures that can be
erected and/or prevent buildings from being
used for specific purposes or used at all.
Deed restrictions may impose a myriad of limitations
and conditions.
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Default:
Failure
to meet an obligation when due or to perform
any provision f a lease, mortgage or other
agreement.
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Demised
premises:
Premises,
or parts of real estate, in which an interest
or estate has been transferred temporarily,
such as an interest in real property conveyed
in a lease.
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Demising
clause:
The
clause in a lease whereby the landlord (Lessor)
leases and the tenant (Lessee) takes the property.
Demise is synonymous with "lease"
or 'let".
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Demolition
clause:
The
clause within a lease denoting the fact that
if or when the ground lease has expired, the
building will be demolished per such clause.
The lessor must notify the tenants within
an established time of such condition.
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Depreciation:
Loss
of value due to all causes. Depreciation usually
includes: (1) physical deterioration (ordinary
wear and tear); (2) functional depreciation
(Obsolescence); and (3) economic obsolescence
(causes outside the property).
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Design
cost or budget cost:
Cost
based on an agreed-upon concept where specific
units have been established.
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Design
development:
The
process by which, upon approval of the schematic
design, the architect proceeds with development
of the plans and elevations of the building.
Drawings establishing all major elements and
outline specifications are prepared. A revised
statement of probable construction cost is
usually made at this time.
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Developmental
planning:
Establishing
a plan for the current spaces needs of an
office that also takes into account anticipated
future needs.
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Diffuser:
A
device for reducing the velocity of air flow
from a mechanical duct system supplying air.
Its shape is usually circular or square and
it is set in the ceiling at predetermined
locations to diffuse air within that space.
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Door
frame:
Made
of either wood or hollow metal. A frame includes
the following components: (a) head - the horizontal
top portion of the door frame; (b) jamb -
either the left or right vertical portion
of the frame; (c) sill - the bottom of the
door at floor level; (d) stop - a continuos
projection around the frame to resist the
door from traveling beyond a closing point;
(e) buck - the subframe of wood or pressed
metal to which the door case is fixed.
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Doors:
The
most common types are solid-core wood (S.C.),
hollow-core wood (H.C.), or hollow metal (H.M.).
All of the doors can be furnished for paint
finish; wood doors, when it is requested,
may be furnished with any particular wood
veneer available, at an additional cost. (One
particular type of door that may come up periodically
on proposed construction jobs is the class
B door. This door of wood or metal, but usually
metal, has a two-hour fire rating and is primarily
located at stairwells or other enclosures
requiring fire protection for at least two
hours.)
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Dry
and wet bulb thermometer:
A
special thermometer that measures relative
humidity.
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Duct:
A
pipe, tube, channel or any other necessary
for conveying gases, liquids or solid units
from one point to another. The term is mostly
identified with air-conditioning systems where
the transfer of air is necessary. This is
accomplished through sheet-metal ducts. The
term is also applicable to under-floor duct
systems for conveyance of telephone lines
and other electrical conductors.
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Easement:
A right to use the land of another for a specific
purpose, such as a right-of-way or for utilities
(see Incorporeal interest). An easement, appurtenant
passes with the land when it is sold.
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Economic
obsolescence:
Impairment
of desirability or useful life or loss in
the use and value of property arising from
economic forces outside the building or property,
such a changes in optimum land use, legislative
enactment that restrict or impair property
rights and changes in supply-demand relationships.
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Effective
gross income:
The
scheduled gross income of a property minus
the vacancy rate.
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Egress:The
right to leave a tract of land. Often used
in connection with access.
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Electrified
floor:
A
floor in a commercial or office building containing
ducts that house telephone and power lines,
which emerge from the floor at frequent intervals
for easy installation of telephones and power
equipment.
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Eminent
domain:
The
right of a government or municipal quasi-public
body to acquire private property for public
use. It is acquired through a court action
called condemnation in which the court determines
the use is a public use and decides the price
or compensation to be paid to the owner.
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Encroachment:
A
building or some portion of it, or a wall
or fence that extends beyond the land of the
owner and illegally intrudes upon land of
an adjoining owner, a street, or an alley.
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Encumbrance:
Any
lien, such as a mortgage, tax, or judgement
lien. It can also be an easement, a restriction
on the use of the land or an outstanding dower
right that may diminish the value of the property.
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Entrepreneurial
building:
A
building where the landlord is not a major
tenant and that is built primarily for its
investment-return potential.
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Equalization:
The
raising or lowering of assessed values for
tax purposes in a particular county or taxing
district to make them equal to assessments
in other counties or districts.
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Equity:
The
interest or value an owner has in real estate
over and above the mortgage against it.
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Escalation
clause:
A
clause in a contract providing for increases
or decreases in rent payments in accordance
with fluctuations of certain costs or expenses
of the landlord.
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Escalation
payments:
Payments
under an escalation clause.
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Escrow:
A
written agreement between two or more parties
providing that certain instruments or property
be placed with a third party to be delivered
to a designated person upon the fulfillment
or performance of some act or condition.
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Eviction:
The
forced removal, by legal means, of a tenant
from the leased premise (see Constructive
eviction).
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Exclusive
agency listing:
A
listing contract under which the owner appoints
a real estate broker as the one exclusive
agent for a designated period of time to sell
the property on the owner's stated terms,
and under which the owner agrees to pay the
broker a commission. However, the owner reserves
the right to sell without a commission to
a prospect not introduced or claimed by the
broker (see Exclusive right to sell).
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Exclusive
listing:
A
contract to sell property as an agent, whereby
the agent is given the exclusive right to
sell the property or is made the exclusive
agent for its sale.
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Exclusive
right to sell:
A
listing contract in which the owner appoints
a real estate broker as the exclusive agent
for a designated term. The broker must sell
the property on the owner's stated terms,
and the owner agrees to pay the broker a commission
when the sale is consummated.
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Expense
ratio:
The
percentage of gross income that is consumed
by the operating expenses of a property.
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Expense
stop:
A
ceiling or limit on the dollar amount one
party, typically the landlord, will pay in
an expense category. This ceiling is determined
by adding a percentage or dollar amount to
the base year costs.
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Exploratory
costs:
The
cost figures collected on the basis of a discussion
of possible needs and reviewed with an interested
individual (see Preliminary cost estimates).
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Fee
simple:
The
largest possible estate or absolute right
of ownership or real property. It can be held
without time limitation and is freely transferable
and inheritable.
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Fiduciary:
A
person to whom power or property is entrusted
for the benefit of another.
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Field
of observation:
(On-site
observation.) Observation deemed necessary
by the architect to ensure successful completion
of the project.
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Fin-tube
radiation system:
A
heating convection system that transmits heat
through a series of sheet-metal plates spaced
at close intervals on a center pipe. The energy
of heat transmission is usually through hot
water or steam.
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First
right of refusal:
A
lease concession that gives a tenant the first
right, within a limited period, to a designated
additional space that another prospective
tenant has expressed a desire to lease.
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Fit
up:
(Fitting
up). The construction necessary within the
enclosing walls, i.e., the space the tenant
is leasing, to divide and improve that tenant's
space into a functional layout, including
partitions, doors, telephone and electrical
outlets, finished surfaces, paint, tile, carpet,
etc., and up to the point of furnishing with
personal property.
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Fixture:
Personal
property or improvements so attached to the
land as to become part of the real property.
The right of the tenant to remove fixtures
may be given by stipulation in the lease or
by separate written agreement between the
parties.
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Fixture
boot:
A
sheet-metal housing, over air-handling light
fixtures, that will receive ducts for conveying
conditioned air through such light fixtures
to particular areas at certain required quantities.
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Flat
base:
(See
Wall base.)
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Footcandle:
A
measurement of light level. It is equivalent
to the light intensity made by one candle
at a distance of one foot.
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Footcandles
maintained:
The
level of light that will be maintained after
the initial drop-off of footcandles following
installation. Usually it will be after the
first 100 hours of burning.
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Footprint:
The
shape and configuration of a building.
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Foreclosure:
A
court action initiated by the mortgagee or
a lienor for the purpose of having the court
order the debtor's real estate sold to pay
the mortgage or other lien (mechanic's lien
or judgement).
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Functional
obsolescence:
Defects
in a building or structure that detract from
its value or marketability. (See Obsolescence.)
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Garden-type
building:
A
modern, low-rise building typically found
in suburban areas, that is built to blend
in with its surroundings. Often of stucco
exterior.
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General
lien:
A
lien on all property, both real and personal,
of a debtor.
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Glazier:
A
mechanic responsible for handling and installing
glass.
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Graduated
lease:
A
lease that provides for specific increases
or decreases in rent at definite times during
the term of the lease.
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Grantee:
A
person to whom an interest in land is conveyed
by deed, grant, or other written instrument.
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Grantor:
A
person who transfers his or her interest in
land to another by a written instrument.
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Gross
lease:
A
lease of property whereby the lessor is to
pay all property charges regularly incurred
through ownership. (See Net lease.)
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Gross
rent multiplier:
A
figure that produces an estimate of the property's
value when used as a multiplier of the gross
income of a property.
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Ground
lease:
A
lease (usually of long duration) of land to
a tenant who covenants to erect a building
on the premises. The building is security
for rentals. If the tenant defaults, the landlord
may foreclose on the lease. (See Subordinated
ground lease).
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Hard
construction costs:
The
costs of constructing a building shell plus
most of the covering materials.
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Hardware:
General
term that includes the following: (a) hinges,
butt or pivot; (b) lever handles, knobs or
pulls; (c) latchset, lockset, magnetic and
friction catches; and (d) door closers, door
holds, door bumpers.
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Highest
and best use:
The
possible use of land that will produce the
greatest net income and thereby develop the
highest land value.
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High
rise:
An
inexact term, usually denoting a building
of steel frame construction regardless of
the building height.
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Hold
harmless:
(See
Save harmless.)
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Holding
area:
A
space or room usually in the freight-docking
area where deliveries to a tenant (or the
building management) may be held until delivered;
sometimes also called a receiving area.
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Holding
over:
The
act of a tenant retaining possession of the
premises longer than the term expressed in
the lease.
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HVAC:
An
abbreviation for heating, ventilating, and
air conditioning.
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Improvements
on land:
Usually
publicly owned structures such as buildings,
fences, driveways, and retaining walls erected
so that a site can be used.
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Improvements
to land:
Usually
publicly owned structures such as curbs, sidewalks,
streetlights, and sewers constructed to enable
the development of privately owned land.
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Income
approach:
The
process of estimating the value of an income-producing
property by capitalization of the annual net
income expected to be produced by the property
during its remaining useful life.
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Incorporeal
interest:
Nonpossessory
rights in real estate. For example, it could
be an easement or right-of-way.
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Inducements:
Negotiable
points in a lease resolved in the tenant's
favor in an effort to induce them to sign
the lease. Also called concessions, typically
inducements include free rent and an increased
tenant improvement allowance.
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Induction
system:
A
mechanical system normally located on the
periphery of a building at the base of the
window walls. Forced air is thermostatically
controlled to temper its flow by heating or
cooling the interior air/ This process is
controlled by the current climatic conditions
at the exterior and the demands of spaces
within the building (see Convection system
and Convector).
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Industrial
district or park:
A
controlled parklike development designed to
accommodate specific types of industry. It
provides public utilities, streets, railroad
sidings, water, sewage facilities, etc.
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Installment
contract:
A
contract for the sale of real estate wherein
the purchase price is paid in installments
over an extended period of time by the purchaser,
who is in possession. Title is retained by
the seller until the final payment.
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Insured:
The
indemnified person(s) or company(ies) who
receive the proceeds of insurance in the event
of insurable loss or damage.
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Interest
rate:
The
percentage of the principal sum charged by
a lender for its use, usually for a yearly
period.
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Interior
partitions:
All
types of interior non-load-bearing partitions
that enclose or subdivide tenant space. May
be of steel, wood, glass, masonry, or combinations
of these materials. Such partitions may be
either movable or non-movable, prefabricated
or built on the job.
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Jamb:
(See
Door frame.)
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Joint
tenants:
Two
or more landowners who have been specifically
named in one conveyance as joint tenants.
Upon the death of a joint tenant, the surviving
joint tenant or tenants receive the deceased
tenant's interest by the right of survivorship,
which is the important element of joint tenancy.
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Judgement
clause:
A
provision in notes, leases and contracts by
which the debtor, lessee, etc., authorizes
any attorney to go into court and confess
judgement against him for a default in payment.
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Judgement
lien:
A charge, or lien, upon the lands of a debtor.
The court decree, which must be properly entered,
declared that the debtor is indebted and fixes
the amount of the indebtedness.
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Land
contract:
A
contract for the purchase of real estate on
an installment basis. Upon payment of the
last installment, the deed is delivered to
the purchaser (see Installment contract).
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Latent
defect:
(Hidden
defect). A physical deficiency or construction
defect not readily ascertainable from a reasonable
inspection of the property, such as a defective
septic tank or underground sewerage system,
improper plumbing or electrical liner.
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Lease:
A
contract whereby, for a consideration (usually
termed rent), one who is entitled to the possession
of real property transfers such rights to
another for life, for a term of years, month
to month or at will.
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Leasehold:
The
interest or estate that a lessee of real estate
holds under the provisions of a lease.
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Lessee:
The
tenant in a lease.
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Lessor:
The
landlord in a lease.
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Letter
of Intent:
(see
Offer to lease.)
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Levy:
To
impose or assess a tax on a person or property.
The amount of taxes to be imposed in a given
district.
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License:
Permission
given by the landlord for a person to enter
the premises of a tenant for a particular
purpose. A license is of temporary character,
purely a personal right, and cannot be sold.
It is revocable.
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Lien:
A
right given by law to a creditor to have a
debt or charges satisfied out of the property
of the debtor. It applies to a particular
piece or pieces of real or personal property.
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Limited
partnership:
A
partnership arrangement that limits the partner's
liability to the amount invested and also
limits the profit he or she can make. A limited
partner is not permitted to have a voice in
the management.
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Listing
contract:
An
agreement between a landowner (as principal)
and a licensed real estate broker (as agent)
by which the broker is employed as agent to
sell the real estate on the landowner's terms
within a given time, for which service the
landowner agrees to pay a commission (see
Open listing, Exclusive agency listing and
Exclusive right to sell).
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Live
load:
A
load that may be removed or replaced on a
structure but is not necessarily a dynamic
load. It includes the impact effect, such
as people walking on a surface.
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Low
rise:
A
building not of steel frame construction and,
hence, necessarily only one to a few stories
high.
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Market
data approach:
The
process of estimation the value of property
through the examination and comparison of
actual sales of comparable properties.
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Market
value:
The
highest price that a buyer ready, willing
and able but not compelled to buy, would pay,
and the lowest a seller ready, willing and
able but not compelled to sell, would accept.
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Mechanic's
lien:
A
lien established by law in favor of those
who provide labor or material for the improvement
of real estate.
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Metal
pan:
An
architectural term for a preformed sheet-metal
unit that is set in place to receive a plastic
material (concrete, terrazzo, etc.). It is
frequently used for ceiling or stair construction.
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Millwork:
Finished
carpentry work, wood processing done in the
mill or factory, as distinguished from handwork
on the job.
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Miscellaneous
area:
Area,
other than workspaces, that requires equipment
accommodating special construction furnishing
or interior design treatments.
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Modular
system:
(See
Building module.)
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Module:
(See
Building module.)
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Month-to-month
tenancy:
A
tenancy from month to month is generally created
when the parties specify no definite lease
term and the rent is payable monthly. Such
as a lease may be written or oral, and can
be terminated by either party at the end of
any month. Otherwise, it is renewed automatically
from month to month on the same terms.
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Mortgage:
A
conditional transfer or pledge of real property
as security for the payment of a debt.
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Mortgagee:
A
lender.
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Mortgage
lien:
A
claim on real estate given to the mortgagee
when the mortgagor executes a mortgage or
trust deed to secure his or her note.
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Mortgagor:
A
borrower who conveys real property as security
for a loan.
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Mullions:
Metal
strips placed at regular intervals along a
window line. They are designed to receive
a wall partition in a manner ensuring a smooth,
soundproof connection.
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Multipersonnel
areas:
Areas
within a tenant's space (open or enclosed)
providing workspaces for more than one occupant.
They require interior and access circulation
allowances.
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Net
lease:
Lease
under which the tenant pays the agreed-upon
rent plus utilities and taxes.
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Net-net
lease:
Lease
under which the tenant pays the agreed-upon
rent plus utilities, taxes, insurance and
maintenance.
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Net-net-net
lease:
Lease
under which the tenant pays the agreed-upon
rent plus all costs of maintenance and repair.
Also called triple net lease.
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Net
operating income (NOI):
The
effective gross income from a property minus
operating expenses.
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Noninstutional
buildings:
(See
Entrepreneurial building.)
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Notary
public:
An
officer appointed by the governor with authority
to take the acknowledgement of persons executing
documents and to sign the certificate and
affix a seal.
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Notice:
Information
about or warning of something. Notice may
be by personal observation or by written or
oral message from another person.
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Obsolescence:
Lessening
of value due to being out of date (obsolete)
as a result of changes in design and use;
an element of depreciation.
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Offer
to lease:
An
agreement that binds the lessor to continuing
negotiations in good faith once a qualified
tenant has been found, until all negotiation
points have been covered. In effect, it takes
the space off the market during the negotiating
period. Also called letter of intent.
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Open
listing:
A
listing contract under which the broker's
commission is contingent upon the broker producing
a buyer before the property is sold by the
owner or another broker.
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Option:
A
contractual agreement giving one party a privilege
of demanding, within a specified time, the
carrying out of a transaction upon stipulated
terms.
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Pass-through:
Expenses
or a portion of expenses associated with tenancy
that are "passed through" from the
landlord to the tenant who then pays them.
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Percentage
lease:
Lease
under which the tenant pays a fixed minimum
monthly rent plus a percentage of his or her
gross monthly income in excess of that minimum.
Used primarily in retail leases.
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Perimeter
drapery pocket:
A
linear area along the interior of the exterior
window wall that is recessed at some dimension
above the ceiling to accommodate drapery tracts.
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Perimeter
space:
A
prescribed space at the outer periphery of
a building.
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Personal
property:
Items
(chattels) that do not fit the definitions
of realty; movable objects.
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Plenum:
(See
Ceiling plenum.)
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Plumbing
walls:
Walls
provided along areas, as in kitchens and washrooms,
where there are no provisions for pipe shafts.
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Possession:
Right
of an owner to occupy property; when the property
is occupied by a tenant, the owner has constructive
possession by right of title.
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Power
cells:
(See
Under-floor ducts.)
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Preliminary
costs:
Expenditures
that are made before the main project is begun,
such as feasibility studies, subsoil exploration,
financing commitments, etc.
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Prepaid
items of expense:
In
the preparation of a closing statement, pro-rations
of prepaid items of expense that are credited
to the seller.
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Prime
tenant:
A
tenant who occupies a great portion of the
space available within a given building that
may, in addition, be owned by that tenant.
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Principal:
(1)
A sum lent or employed as a fund or investment,
as distinguished from its income or profits;
(2) the original amount (as a loan) of the
total due and payable at a certain date;
(3) a party to a transaction, as distinguished
from an agent.
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Procuring
cause:
"A
broker will be regarded as the 'procuring
cause' of a sale, so as to be entitled to
commission, if his efforts are the foundation
on which the negotiations resulting in a sale
are begun" Coles versus Pattison 189
Okl. 160, 114 P. 2d 457,458.
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Pro
forma:
A
set of figures projecting costs and income
on a proposed new property. Used as a basis
for capitalization.
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Programming:
A
system in which specific requirements of the
client are determined in written form and,
when approved by the client, become the basis
for all future planning. The client will feel
the effects of successful programming as long
as he or she lives with the facility executed.
The client will have a flexible enclosure
able to house immediate and long-range needs
without disrupting his or her operation during
growth periods.
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Public
corridor:
The
space that leads to different tenant's spaces
from a service core.
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Punch
list:
A
list prepared by the architect, designer and
owner and formally submitted to the contractor
to note any deficiencies when they check all
completed construction, which assures verification
that such work has been accomplished in a
good, workmanlike manner in respect to the
contract documents.
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Purchase-money
mortgage:
A
note secured by a mortgage or trust deed given
by a buyer (as mortgagor) to a seller (as
mortgagee) as part of the purchase price of
the real estate.
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Quiet
enjoyment:
A
covenant, usually inserted into leases and
conveyances on the part of the grantor, promising
that the tenant or grantee shall enjoy possession
of the premises in peace and without disturbances.
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Quiet-title
suit:
A
suit to remove a defect, cloud, or questionable
claim against the title to the property.
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Real
estate broker:
Any
person, co-partnership, association or corporation
who, for a compensation or valuable consideration,
sells or offers for sale, buys or offers to
buy, or negotiates the purchase, sale, or
exchange of real estate, or who leases or
offers to lease or rents or offers for rent
any real estate or the improvements thereon
for others. Such a broker must secure a state
license. For a license to be issued to a firm,
it is usually required that all active partners
and officers must be licensed real estate
brokers.
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Real
estate salesperson:
Any
person who, for a compensation or valuable
consideration, is employed either directly
or indirectly by a real estate broker to sell
or offer to sell, or buy or offer to buy or
negotiate the purchase, sale or exchange of
real estate or to lease, rent or offer for
rent any real estate or to negotiate leases
thereof or the improvements thereon.
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REALTOR(r):
A
registered trademark term reserved for the
sole use of active members of local boards
of REALTORS(r) affiliated with the National
Association of REALTORS(r).
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Recapture:
A
clause in a lease agreement providing for
lessor's retaking or recovering possession
of the premises, usually by cancellation of
the lease under certain conditions.
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Receiving
area:
(See
Holding area.)
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Recording:
The
act of entering a record of documents affecting
or conveying interest in real estate in a
county recorder's office. Until recorded,
a deed or mortgage generally is not effective
against subsequent purchasers or mortgages
or other third parties (see Constructive notice).
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Redemption
period:
A
period established by state laws during which
the property owner has the right to redeem
his or her real estate from foreclosure or
tax sale by paying the sale price, interest
and costs. (Many states do not have mortgage-redemption
laws.)
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Rentable
area:
The
importance of this subject dictates the following
detailed definition. In the United States
and Canada there are three methods of measuring
rentable area in office buildings. All three
measure the total square footage.
1.
International Association of Building Owners
and Managers (BOMA Standard)
From
the inside of the outside wall (or in new
buildings from the glass line) to the outside
of the inside wall (or hall wall) and center
to center on the division walls. Columns are
included.
2.
General Services Administration
Same
as above except all columns, division walls,
service closets, etc. are included. Net usable
space only. In making leases to the federal
government, this method must be used.
3.
So-called New York Method
Space
is measured right across the floor from glass
line to glass line, subtracting only elevator
shafts and stairwells, In the case of multiple
occupancy on one floor, the common space -
usable and non-usable- is apportioned among
the tenants according to the size of their
respective areas.
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Replacement
cost:
The
new cost of replacing the subject property
with property having the same utility and
amenities.
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Restriction:
A
limitation placed upon the use of property.
It is contained in the deed or other written
instrument in the chain of title.
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Reversionary
interest:
A
right to the future enjoyment of property
that is presently in the possession of or
is occupied by another.
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Revisions:
Changes
in the work that require the architect to
provide substitute drawings or revise the
original working drawings. Each revision on
the drawings should be identified graphically
to illustrate the point of changes, and the
date should be circled to indicate when the
revision was made.
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Right-of-way:
The
right or privilege to pass across the lands
of another; an easement.
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Sales
contract:
A
contract containing the complete terms of
the agreement between seller and buyer for
the sale of a particular parcel or parcels
of real estate.
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Save
harmless:
To
indemnify another; to secure another against
lost or damage or claims of a third party.
Often referred too as hold harmless.
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Scheduled
gross income:
The
rental rate of a property multiplied by the
total rentable space.
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Schematic
design:
(1)
A design concerning the building programs
resulting from inspection of the site and
conferences with the client. The client's
needs and requirements are carefully analyzed.
Zoning regulations and codes affecting the
work are studied. Sketches and statements
of probable construction costs are prepared
for the owner's approval.
(2) A suggested plan, designs, or program
of action.
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Settlement:
The
process at the closing of a sale of real estate,
negotiated by a real estate broker, whereby
the broker usually accounts to the principal
for the earnest money deposit and deducts
commission and advances by use of a form of
settlement statement.
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Shell:
(See
Building shell).
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Shop
Drawings:
Drawings
made by the various trades reflecting construction
of items on the contract documents - a necessary
step between the architect's drawings and
actual construction. Shop drawings speak not
merely the language of the trade but the language
of the shop in which is to be done.
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Signal-zone
closet:
A
closet that holds communication equipment;
e.g., telephone or intercom systems.
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Sill:
(See
Door frame).
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Skin:
(See
Buildng skin).
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Slab:
The
reinforced concrete floor between beam, supporting
columns or walls. Also, any large tin area
of concrete such as a wall, roof or balcony
is a slab.
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Soft
construction costs:
Costs
of constructing and leasing a building other
than the costs of building the actual physical
structure.
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Space
analysis:
An
analysis of an existing office situation to
locate problem areas and to provide a basis
for judgment in evaluation major changes.
Also, it can be in the form of planning tools
that will be used by the client in developing
a planning decision. This includes space standards,
adjacency requirements
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Space
planning:
Architecturally
designing any space with all the amenities
and mechanical gadgets to make it more functional
for the occupants. Besides amenities, gadgets
and good communication systems, it includes
better sound and light control within the
space.
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Space
standards:
The
standard-size spaces for particular functions
- a necessary tool in planning for any growing
organization. The absence of standards leads
to a situation where space is allocated to
offices in a haphazard, nonfunctional way.
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Special
assessment:
A
charge against real estate made by a unit
of government to cover the proportionate cost
of an improvement such as a street or sewer.
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Special
facilities:
Workspace
for one or more occupants designed to accommodate
the special equipment required for their work.
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Special-warranty
deed:
A
form of deed whereby the grantor covenants
against lawful claims of all persons claiming
by, through or under the grantor only.
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Specifications:
A
detailed and exacting statement of what is
to be done. Their careful preparation is the
best insurance for trouble-fee execution of
the work and satisfactory completion of the
project.
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Specific
lien:
A
lien that affects or is attached to only a
certain specific parcel of land or piece of
property.
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Speculative
building:
An
entrepreneurial building where construction
is undertaken without a prior lease commitment
from a prime tenant or tenants.
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Staging
area:
A
place to store and work with materials and
equipment prior to their movement into space
where they will finally be used.
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Statute
of frauds:
A
state law that requires certain classes of
contracts, engagements and/or transfers of
interest in real estate to be made in writing
in order to be enforceable in a court of law.
Details of this law vary from one state to
another. (The original Statute of Frauds was
passed in England in 1677).
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Straight
wall base:
(See
Wall base.)
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Sublease:
A
lease executed by the lessee of an estate
to a third person that conveys the same estate
for a shorter term, or a portion of the estate
for the same or shorter term, is a sublease.
When the entire estate is sublet for the entire
remainder of the term, it is called an assignment.
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Subordinated
ground lease:
A
ground lease is which the lessor (owner) places
his right in relation to the structure behind
that of others, such as the holder of the
construction loan or permanent mortgage (see
Ground lease).
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Subordination:
An
agreement by which a lienholder, a lessee
or one having an interest or claim in or against
personal or real property places the interest
behind that of another.
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Substitution
clause:
That
portion of the work letter that specifies
what materials may be substituted for the
standard constructive materials ordinarily
supplied by the landlord.
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Survey:
The
process of measuring land to determine its
size, location and physical description; also,
the map or plat showing the results of a survey.
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Syndication:
A
combining of persons or firms to accomplish
a joint venture that is of mutual interest.
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Task
lighting:
Overhead
lighting systems that provide each workspace
with individual overhead lighting controls.
Designed to conserve energy by lighting only
work areas that are occupied at any given
time.
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Tax
rate (real estate):
Generally
quoted as so many dollars per $100 of assessed
value, the general real estate tax is made
up of the taxes levied on real estate by various
government agencies and municipalities, such
as the city, the county, school districts,
park districts, etc.
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Tenancy
at sufferance:
A
tenancy that exists when, after expiration
of a lease, the tenant remains in possession
without the consent of the landlord or the
person entitled to possession. No notice is
required to terminate this tenancy.
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Tenancy
at will:
One
wherein the landlord agrees that the tenant
may stay in possession after expiration of
the lease and pay rent for the time the space
is occupied, until either landlord or tenant
desires to terminate the tenancy.
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Tenant
presentation agreement:
A
contract under which a client agrees to work
through no salesperson except the one designated
in the agreement.
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Thermopoane:
A
brand name (now used generally) for a window-glass
construction that has insulating qualities.
Two layers of glass are separated by an air
space. Also called double-glazing insulating
glass.
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Thermostat:
A
device actuated by temperatures that regulates
and controls dampers, valves, switches or
other mechanisms.
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Title:
Evidence
of the right a person has to the ownership
and possession of land.
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Title
defect:
Any
legal right held by others to claim property
or to make demands upon the owner.
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Title
insurance policy:
A
policy insuring an owner or mortgager against
loss by reason of defects in the title to
a parcel of real estate, other than those
encumbrances, defects and matters that are
specifically excluded by the policy.
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Topography:
Surface
features of land, such as elevation, ridges,
slope and contour.
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Trade(s):
A
classification of worker skills; carpenters,
electricians, sheet metal workers, etc.
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Trade
fixtures:
Articles
installed by a tenant under terms of a lease
and removable by the tenant before the lease
expires. These remain personal property; they
are not true fixtures.
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Traffic-flow
study:
A
careful study made by the space planner of
the interactions among different departments,
operations and/or person-to-person contacts
in the given space to avoid confusion and
create better function and communication.
(A typical example: stenos and their offices.)
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Transfer
lobby:
A
floor area in a building where passengers
must transfer from an elevator that has brought
them from a lower level to a different elevator
that serves higher levels of the building.
An inconvenience.
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Transfer
tax:
A
levy on a deed transfer signified by affixing
stamps to a deed.
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Triple
net lease:
(See
Net-net-net lease.)
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Trust
deed:
An
instrument used to create a mortgage lien
by which the mortgagor conveys title to a
trustee who holds it for the benefit of the
note-holder (the lender).
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Trustee's
deed:
A
deed executed by a trustee that conveys land
held in a trust.
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Twindows:
Windows
built of double panes of glass with space
between the panes. Designed to conserve energy
by improving building insulation.
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Under-floor
ducts:
The
under-floor distribution system provided in
the structural slab to meet electrical and
telephone needs on the floor. The system should
be designed not only to provide for logical
rearrangements or reasonable increase in service
equipment.
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Unit
office space:
Fully
enclosed or semi-enclosed space, providing
work space for a single occupant and involving
a circulation provision required to access
the space.
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Usable
area:
Any
area in a given floor that could be used by
the tenant. This area includes a point from
the perimeter glass line to demising walls;
it also includes column areas within such
a space.
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Usury:
The
charging of interest at a rate in excess of
the maximum legal rate.
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Value:
The
power of a thing to command other goods in
exchange; the present worth of future rights
to income and benefits arising from ownership.
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Voidable:
A
valid act that may be avoided or declared
void.
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Volume
per square foot:
The
method of estimating probable total construction
cost by multiplying the adjusted gross building
volume in a square feet by a predetermined
cost per unit of volume.
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Waiver
of lien:
The
intentional or voluntary relinquishment of
the right to a mechanic's lien. It is routinely
signed by contractors when they are paid for
their work.
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Wall
base:
A
defined material applied to the base of walls
for general protection and finish. Although
it can be provided in various materials, the
primary material is vinyl or rubber. The base
is available in various heights and colors.
It is also available as a straight or flat
base, for carpeted areas, or a cove base,
which is normally used for tile floors as
a maintenance and finish advantage.
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Warranty
deed:
A
deed that contains a covenant or assurance
by the grantor of real property for him or
herself and heirs to the effect that he or
she is the owner and will defend and protect
the grantee against claims.
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Waste:
An
unreasonable or improper use , abuse,, mismanagement
or omission of duty regarding the care or
title to real estate by one rightfully in
possession.
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Water
closet (W.C.):
A
toilet.
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Wet
columns:
Columns
where provisions are made to have a plumbing
fixture for drinking fountain, sink, etc.;
the pipes are taken through the small enclosure
(chase) against the column.
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Working
drawings:
Detailed
floor-space plans that diagram all improvements
to be made. They are designed as instructions
to the various contractors invloved.
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Work
letter:
That
part of the lease stated in detail pertaining
to all work that is to be done for a tenant
by a landlord.
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Wrap-around
mortgage:
A
technique in which the lender assumes payment
of the existing mortgage and gives a new,
increased mortgage to the borrower at a higher
interest rate. The new mortgage "wraps
around" the existing one. With the trend
in today's mortgage market toward rising interest
rates and appreciated property values, wraparound
mortgaging has gained increased acceptance.
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Zoning
ordinance:
Exercise
of policy power by a municipality in regulating
and controlling the character and use of property.
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