Real Estate Terminologies

A condensed history of the title, consisting of the various links in the chain of the title, together with the statement of all liens and encumbrances affecting the title.

to touch or border on, as a property abutting on a highway or sharing a common boundary with another property.

that part of a wall or pier on or against which an objects abut or pressers.

a condition on the loan contract or mortgage note which permits the lender (bank) to require immediate payment of the entire balance if the contract is breached or conditions for repayment occur, such as sale or demolition.

acquisition rights of a property owner through additions or improvements attaching to the property either naturally or by the labor or material of another.

the addition to land through processes of nature, such as deposits of soil carried by streams.

an unpreventable destructive occurrence of the natural world.

in assessment and taxation of real property, this refers to the present or predominant utilization of the property.

a court action brought to establish title and to remove the cloud on the title.

the method of estimating physical deterioration incurable as a percentage applied to current reproduction cost of the improvements.

the right of the landowner to use and control the air space over his land subject to the requirements of aerial navigation and other laws and regulations.

a relatively narrow way, publicly or privately owned which serves as a secondary means of access and affords lights and air abutting properties.

fine materials such as sand, mud or other sediments carried by water and deposited on land. The soil deposited by accretion.

transferring of property to another; the transfer of property and possessions of lands, or other things, from one person to another.

the process of retiring debt or recovering capital investment through scheduled, systematic repayments of principal, a program of periodic contributions to a sinking fund or debt retirement fund; that portion of a fixed mortgage payment applied on reduction of the principal amount owed.

a form of mortgage wherein the mortgagee takes possession of the mortgaged property, pays the real estate taxes and receives the fruits with an obligation to apply them in payment of the principal and interest.

the process of estimated value of a real property and any interest therein as of a given time for a specified purpose, for a fee.

that which has been added to another thing. That which has been added or appended to a property and which becomes an inherent part of the property and usually passes with it when it is sold, leased or devised.

the statute of frauds, a legal provision which requires agreements for the sake of real estate to be in writing in order to be enforceable.

the percentage applied to the market value to determine the taxable or assessed value of the property.

is the list of all taxable or exempt real property within the LGU concerned.

the transfer of property or rights and obligation over in favor of another. The one who assigns or transfers a property is called assignor while those to whom property is assigned are called
assignees.

a stipulation in a mortgage of several properties providing that
when a buyer of one or more lots pays in full the purchase price, a portion of the payment shall be applied to the mortgagor’s obligation and the mortgagee shall correspondingly release said lot or lots from the mortgage.

the sudden removal of land from one parcel to another when a body of water such a river, abruptly changes as channel.

where the final installment payment on a note is greater than the preceding installment payments and payor pays the note in full, such a final installment is termed balloon payment, payment in lump sum although not yet due.

Imaginary lines used by surveyors to find and describe the location and boundaries of a real property.

a contract whereby both parties signed the document.

is a type of loan used to fund the purchase of more than one piece of real property Blanket loans are popular with builders and developers who buy large tracts of land, then subdivide them to create many individual parcels to be gradually sold one at a time. Rather than securing a new mortgage each time a portion of the development is sold, the barrower uses the blanket loan to buy them all. Once a parcel is sold, a portion of the mortgage is released, with the rest of the mortgage remaining intact.

decay, withering away, as of a neighborhood. Decay caused by failure to maintain the quality of real estate and that of public services.

the financial analysis, the intersection of the total cost line and the total revenue line represent the break even point. In real estate, it is that point where effective gross income from a property must coven normal operating expenses and debt service.

ownership of a parcel of of real estate may embrace a great many rights, such as the right of its occupancy and use, the right to sell it in who in part; the right to bequeath, the right to transfer, by contract, for specified period of time the benefits to be derived by occupancy and the use of the real estate.

a situation wherein sellers outnumber the buyers. – a condition obtaining in an area at a certain time when there are few buyers, in which case price tends to go down. Supply is more than demand.

For firms, a capital asset is an asset that has a useful life longer than one year and is not intended for sale during the normal course of business. For individuals, capital asset typically refers to anything the individual owns for personal or investment purposes.

exclusive real estate properties of the husband.

means, “let the buyer beware”. A buyer is charged with knowledge of facts, which are readily ascertainable on the face of the title.

a pledge of personal property as security for a debt.

a mortgage which can be paid off only upon its maturity unless the mortgagee is willing to accept early payment.

refers to any irregularity in the chain of title of property (usually real property)that would give a reasonable person pause before accepting a conveyance.

a deed of sale subject to conditions like who will pay for the capital gains tax, documentary tax, cost of evicting the tenant, squatters, etc.. This is an arrangement where as buyer takes possession, but its title and right of possession remains with the seller until the buyer pays the full purchase price (usually in installments stretched over months or years)

just like the Deed of Sale wherein there is conveyance or transfer of title from seller to buyer.

the actual amount of rent as specified in the contract of lease.

a financing scheme under the unified home lending program
to enable residents in depressed areas to acquire their lot by organizing themselves into a cooperative.

the actual amount spent to build or put a property into being.

a method of appraising property based on depreciation cost of improvements plus the market value of the lot.

a street open at one end only, having enlarged turnaround area at the close end.

conveyance of real estate property to a creditor in payment of debt or obligation. Compared to sale, here the assignor has pre-existing obligation by the seller in favor of the buyer. Sale creates an obligation.

a document proving the legal transfer of the property's ownership. the Deed of Sale should be taken to the RD for the transfer of title to be recorded.

sale on installment basis but the title is transferred already to the
buyer with simultaneous mortgage of property to the seller.

sale or installment where there is a transfer of title to the buyer, the buyer paying the difference of the selling price and mortgage existing and assuming the latter.

is a clause in the mortgage that gives the mortgagor the right to redeem his property upon payment of his obligation to the mortgagee. This clause releases the property from encumbrance when the mortgage obligation is fully paid.

less the value of property due to the physical deterioration (wear & tear).

a transfer of property at death in the absence of a will; transfer by inheritance.

the location or direction toward which the residential sections are destined or determined to grow.

amount accompanying an offer to purchase to show good faith or genuine desire of the buyer.
This is not refundable.

a non-possession interest held by one person in land of another person whereby the first person is accorded partial use of such land. An easement restricts but does not abridge the rights of the fee owner to the use and enjoyment of the easement holder’s rights.

the remaining period which a property can be profitably used or the period where a property is expected to generate more income than expenses.

is the revenue derived from the use of the land and of the forces inherent in the land. The actual amount of rent as specified in the contract of lease.

a loss in the value of a property due to external influences.

the right of the government of a public utility to acquire private property for necessary public use by condemnation with proper and just compensation to the owner. The property may be taken either for government use or by delegation to third parties, who will devote it to public or civic use or, in some cases, to economic development. The most common uses of property taken by eminent domain are for government buildings and other facilities public utilities highways, and railroads. However, it may also be taken for reasons of public safety.

where a property owner violates the property rights of his neighbor by building something on the neighbor's land or by allowing something to hang over onto the neighbor's property. Encroachment can be a problem along property lines when a property owner is not aware of his property boundaries or intentionally chooses to violate his neighbor's boundaries.

is the right of the defendant mortgagor to extinguish and retain ownership of the property by paying the amount fixed in the decision of the court within ninety (90) days to one hundred twenty (120) days after entry of judgment or even after the sale but prior to its confirmation.

a stipulation in a promissory note authorizing periodic increase of interest rate, or a provision in long term lease authorizing periodic increase of rental.

the reversion of real estate property to the state in the event the owner dies without leaving a will and has no legal heir.

an agreement where the consideration of the contract is entrusted to a third party, who is authorized to release the payment after fulfillment of conditions.

the degree, nature and extent of interest that a person has in real property. Example: the highest form of an estate is FEE SIMPLE , under which the owner can use the property at will and dispose of it without restriction.

listing wherein the agent is the only one authorized by the seller
apart from the owner.

only one agent is authorized and the agent is entitled to a commission even if it’s the seller himself sells the property.

the price that a willing seller will sell and a willing buyer to buy neither being under abnormal pressure. It is the highest price in terms of money a property will likely sell in an open and competitive market, under all conditions requisite to a fair sale, with the seller and buyer acting prudently and knowledgeably without any undue stimulus.

absolute ownership; the bundle of rights which are inherent in ownership without any limitations or restrictions other than those provided by law, annotated in the title or stipulated in the contract.

a loss in the value of a property because of the buyer’s desires or the presence of fixtures which are not desirables.

refers to a subdivision plan where the resulting blocks are rectangular in shape.

an economic principle that adjacent lots may have different values due to difference in plottage, elevation, or orientation to morning and afternoon sun.

the legal use of property that is most likely to produce the greatest net return to the land and or building over a given period of time.

a provision in a listing contract whereby the broker is still entitled to the commission even if the sale happened to materialize after the expiry date of the contract a long as the broker registered the buyer within the period of authority.

holds that an application or more factors of production will tend to increase net income up to a certain point beyond which an addition will tend to decrease net income.

a method in appraising property based on the property’s anticipated future income. It is done by dividing the annual anticipated net income to capitalization rate.

the displacements of present residents by people of lower economic status or different social and cultural backgrounds.

is a study that reflects relationship between acquisition price and anticipated benefits of an investment.

one that is created by court or resulting from a court decision as when a Deed of Sale is declared by the court to be a mortgagee. This is an Equitable Mortgage.

is a lot adjoining a corner lot and fronting an intersecting street.

delay or negligence in asserting one’s legal right.

under the land reform law, refers to the acquisition by the government of lots of varying ownership for better planning and development unrestricted by individual boundaries.

a hold or claim which one person has upon the property of another as security for debt or charge,
judgment, mortgage, taxes.

normally typed at the back of the title to give notice that the property is subject to a pending court litigation involving the true ownership or possession of the property.

the authority given by the principal to the broker for the latter to negotiate the sale, purchase, lease, exchange, or mortgage of property within a stipulated period and stated price and terms.

contract between the seller and the broker.

is a contract between lending window and the loan originator
specifying the terms and conditions governing their working relationship.

the value of property which is a certain percentage of its market value which the bank is willing to lend only the property as security.

is a document executed by a property owner which creates or converts his property into a condominium pursuant to Republic Act No. 4726 otherwise known as the Condominium Act. This document contains all statements defining the limitation of ownership of a condo unit which binds all unit
owners.

an approach to value wherein the value of a property is determined by comparing the price of comparable properties (Principle of Substitution) which were the subject to recent
sales or being offered for sale with adjustment due to its location, size, use neighborhood and facilities. The value of the property subject of appraisal is inferred from the sales, listing, offering and advertisements of nearby comparable properties this is an application of the principle of substitution.

is the process of valuing a group of properties as of a given date using standard methods and allowing for statistical testing.

A title free and clear of objectionable liens and encumbrances.

is a study of the supply and demand conditions for a specific type of property.

Measurements and boundaries. A term used in describing the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles.

a fixed object and point establishment by surveyors to establish land locations.

on his own.

a cooperative arrangement among brokers who are members of the realty associations where properties for sale/lease or wanted are circularized to all members, and commission is shared between the listing member and selling member with a nominal percentage going to the association as service fee. An arrangement between listing and selling brokers to help each other in selling listed properties. Normally, all listed properties whether for sale or wanted to buy are circulated among members.

a real estate is considered “spark plug” which triggers activities in allied industries causing income opportunities from different private sectors.

an authority to sell real estate property where the broker’s commission is on a mark-up basis.

one of the causes of depreciation. It is the impairment of desirability of usefulness brought about by new inventions, current changes in design and improved processes for production or from external influencing factors, which make a property less desirable and valuable for continued use.

mortgage which can paid before the until maturity.

a non-exclusive real estate contract. An agreement where the property is simultaneously marketed by multiple real estate agents.

a type or mortgage which permits borrowing additional funds against the same collateral.

contract between the buyer and the seller.

in taxation, refers to the stock in trade of the real estate dealer/developer. When sold, it is subject to withholding tax.

the improvement which does not produce an adequate return for the amount invested on a building or property; an improvement which is not suitable on which it is placed due to excessive size or cost.

the payment of the repurchase price does not merely render the document null and void but there is the obligation on the part of the vendee to sell back the property.

A stipulation which authorizes the mortgagee to appropriate the property as his own upon failure of the debtor to fulfill the principal obligation.

a stipulation in a mortgage contract which prohibits the mortgagor from alienating the mortgaged property during the term of the mortgage.

exclusive real estate properties of the wife.

an authority to sell real estate property where commission of the broker is based on percentage.


Example: 5% of the selling price.

for the period determined by the law barring action for recovery.

Value is determined by the rate at which the market can absorb the present and projected supply of improved properties. The slower the rate, the lower the value.

Market value derives from expectations of buyers and sellers. Prices rise and fall with expectations.

the concept that there is an ideal balance of factors for the development of real estate such that it will produce the greatest value.

a appraisal principle that holds that property tends to reach maximum value when the neighborhood is reasonably homogeneous in social and economic activity.

an appraisal principle which holds that the value of the property tends to be enhanced by association with superior properties.

An appraisal principle that holds that the maximum value of a
property tends to be set by an equally desirable and valuable substitute property

the act of the broker, which is instrumental in affecting the meeting of the minds between the seller and the buyer in the sale of real estate property.

comes form the Latin word “popius” or belonging to one’s own; it is a bundle of rights. Under the Civil Code, property is thing which may be the object of appropriation.

A deed of release or renunciation of a legal right. A deed to relinquish any interest in property which the grantor may have had a protest or adverse claim.

refers to the land and all those items which are attached to the land. It is the physical, tangibles entity, together with all additions or improvements on, above and below the ground. (R.A No. 9646).

a pledge of real property as a security for a debt.

Buying back one’s property after a judicial sale.

Another person’s thing. Property owned by another person.

are things belonging to others.

are things owned by no one and subject to the use of all. things (as light, air, the sea, running water) incapable of entire exclusive appropriation.

An action to correct a mistake in deed or other document.

All lands (including mines and natural resources) belong to the State.

The right to future possession or enjoyment by the person, or his heirs, creating the preceding estate.

is the remaining functional life of a property.

cost in acquiring and equally desirable substitute property.

cost in reproducing a new replica.

is a provision in a master deed of a condominium corporation which requires a unit owner to give notice and priority to other unit owners in the event he is selling his unit.

The period to redeem a property sold in an extrajudicial foreclosure sale is not extendible. Redemption period up to 3 months after the foreclosure.

where there is no agreement stipulated in the contract, the period is maximum of 4 years, if it is stipulated in the contract, the maximum period is 10 years.

If two or more people own property jointly with rights of survivorship and one of the owners should die, the deceased owner's share of the property automatically passes to the
surviving owners.

a privilege operating as an easement upon land, whereby the owner does grant, or by agreement, given to another the right to pass over his land; to construct a roadway over, or use a roadway, a specific part of his land, telephone, telegraph, or electric power lines, or the right to place underground water mains, gas mains or sewer mains.

a foundation or wall of stones or rocks loosely placed together without order, especially used in deep water to prevent scour on the sides of the bulkheads and similar construction, and at he bend of a river to prevent erosion during seasons of fast flowing water.

is an owner whose land abuts the bank of a river. The right of the land owner to water, on, under, or adjacent to his land.

contract whereby a party, for a consideration , binds himself to transfer ownership to another. In sale, there is no pre-existing obligation by the seller in favor of the buyer. Sale creates an obligation.

is the amount of sale from dismantled asset.

is the amount of sale if item is sold as junk.

refers to an extraordinary element of value over and above the market value. It is increment of value to a particular owner.

a phrase normally being put or stamped at the back of the title that the title was acquired by extrajudicial settlement by the heirs of the estate of the former registered owner and that any heir, creditor or other persons unlawfully excluded in the extrajudicial settlement can file a claim against the property within (2) two years from the date of annotation.

This exists when there are few sellers of properties in a particular area as against many buyers.

parcel of land that is subject to an easement that benefits another parcel of real estate, called a dominant estate.

A deed given by the court order in connection with the sale property to satisfy a judgment.

a legal provision which requires agreement for the sale of real estate to be in writing to be enforceable.

obliges owners of real estate properties to utilize them in a manner that will benefit not only their interest but also the general welfare.

the value of replaceable property is inferred from the value of a substitute property and based on the assumption that no prudent buyer will pay more than what it will cost him to
acquire a equally desirable property.

a plan showing how a property will be subdivided indicating the layout and sizes of the subdivision lots, roads, playgrounds, open spaces, and other amenities.

The lessee leases portion of the property leased. In this case, the personality of the original lease is not terminated. The lessee remains to be party to contract and continues to be directly responsible to the lessor. If the contract is silent as to the right to sublease, the lessee may sublease, the lessees may sublease the property even without the consent of the lessor.

is a writ issued by a government agency, most often a court, to compel testimony by a witness or production of evidence under a penalty for failure

The process by which a parcel of land including boundaries. The primary purpose is to determine the relative position of points and lines on the surface of the earth.

is the right included in the bundle of rights by the owner on anything above and under the property.

RA No. 3765 - An act to require the disclosure of finance charges in connection with extensions of credit.

a legal principle that there is deemed to be an implied new lease when the lessee continues to occupy the premises for a least 15 days after the expiration of the lease with the acquiescence of the lessor and without any notice to vacate.

is the inherent power of the state acting through the legislature, to impose and collect revenue for the purpose of supporting the government and its recognized objectives.

the imaginary line connecting point 1 of a lot with a reference point such as BLLM.

is a survey plan indicating the elevation and contour of the property.

is the increase in the value of real estate property without any effort on the part of the owner.

an improvement which is not suitable to the site on which is placed because of deficient size or cost.

is the right to use or enjoy a thing possessed, directly and without altering it.

The monetary worth of an asset, business entity, good sold, service rendered, or liability or obligation acquired. It is normally, an estimate or an opinion. . It is normally, an estimate or an opinion.

is the process of estimating the value of an identified interest in a specific parcel of real estate as of a given date.

a tax payable to Bureau of Internal Revenue on the sale transfer or other disposition of real estate classified as ordinary asset

annotation on the title that property is being held in
reserve for whatever judgment maybe rendered against the registered owner.

authorizing and directing the proper officer of the court, usually the sheriff to carry into effect a judgment or degree of the court.

the public regulation of the character and intensity of the use of real estate through employment
of police power.

Written regulations and laws that define how property in specific geographic zones can beused. Zoning ordinances specify whether zones can be used for residential or commercial purposes, and may also regulate lot size, placement, bulk (or density) and the height of structures.