Abandonment - Voluntary relinquishment of rights of ownership or another form of interest (an easement)
by failure to use the property over an extended period of time.
Absentee landlord - A lessor of real property (usually the owner) who does not reside on any portion of the
Abstract of title - A summary of the conveyances, transfers, and any other data relied on as evidence of
title, together with any other elements of record that may impair the title. Still in use in some states, but
giving way to the use of title insurance.
Accelerated depreciation - Depreciation occurring at a rate faster than equal amounts per year. This form
of depreciation is usually used for special assets for income tax purposes.
Acceleration clause - A clause in a mortgage or trust deed giving the lender the right to call all monies
owed to be immediately due and payable upon the happening of a certain stated event, such as sale of the
Access right - A right to enter and exit one's property. Accretion Gradual deposit of soil from a waterway
onto the adjoining land. The additional land generally becomes the property of the owner of the shore or
bank, except where local statutes specify otherwise.
Accrued depreciation - The amount of depreciation accumulated over a period of time in the accounting
Acknowledgment - A formal declaration of execution of a document before an authorized official (usually a
notary public) by a person who has executed (signed) a document.
Acre - A measure of land equal to 160 square rods (43,560 square feet). An acre is approximately 209 X
Addendum - Something added. A list or other items added to a document, letter, contract, escrow instructions, etc.
Adjustable Rate Mortgage (ARM) - Mortgage with an interest rate that can change as often as specified in
the loan agreement.
Adjusted Cost Basis - The value of an asset on the accounting books of a taxpayer; the original cost plus
improvements less depreciation.
Adjusted sales price - For income tax purposes, the selling price of a property less its acquisition cost and
all the costs to sell it.
Adjustment period - A period of time from one rate change to another, usually one, three, or five years, in
which the interest rate on an ARM is allowed to change. Thus, a mortgage with an adjustable period
of one year is referred to as a one-year ARM.
Adverse land use - A use of land that causes the surrounding property to lose value, such as a truck terminal adjacent to a residential area.
Adverse possession - A method of acquiring title by open and notorious possession under an evident claim
or right. Specific requirements for time of possession usually vary with each state.
Affidavit - A written statement or declaration sworn to or affirmed before some official who has the
authority to administer affirmation. An oath.
Agency agreement (listing) - A listing agreement between the holder of real property and a broker wherein
the broker's commission is protected against a sale by other agents but not by the principal (seller). Often
referred to as a nonexclusive-agency listing.
Agent - A person authorized to represent or act for another in business matters.
Agreement of sale - A written contract between the buyer and the seller, where both parties are in full
agreement on the terms and conditions of the sale.
Alienation - The transfer of property from one person to another.
Alienation clause - A clause within a loan instrument calling for a debt to be paid in its entirety upon
the transfer of ownership of the secured property. Similar to a due-on-sale clause.
All-inclusive trust deed (AITD) - Same as wrap- around mortgage, except with a deed of trust as the
security instrument instead of a mortgage.
Amortization - The liquidation of a financial obligation through equal payments in regular installments.
Annuity - (1) Cash payment over a given period. (2) A fixed amount given or left by will paid periodically.
Appraisal - An estimate and opinion of value; an objective conclusion resulting from an analysis of pertinent data.
Appreciation - Increase in value of property from improvements or the elimination of negative factors.
Appurtenance - Something belonging to the land and conveyed with it, such as buildings, fixtures, and
ASHI - American Society of Home Inspectors. Assemblage Process of acquiring contiguous
properties into one overall parcel for a specific use or to increase the value of the whole.
Assessed value - Value placed on property by the tax assessor.
Assessment - (1) The valuation of property for the purpose of levying a tax. (2) The amount of the tax
Assessor - One appointed to assess property for taxation.
Assigned mortgage - A note that is transferred to another. For example, a note owed to you is an asset
that someone is paying you interest on and that you can assign to another.
Assignee - One who receives an assignment.
Assignment - A transfer or making over to another the whole of any property, real or personal, or of any
estate or right therein. To assign is to transfer.
Assignor - One who owns property assigned.
Assumed mortgage - The agreement of a buyer to assume the liability of an existing mortgage. Normally,
the lender has to approve the new borrower before the existing borrower is released from the liability.
Attachment - Seizure of property by court order, usually in a pending lawsuit to make property available
in case of judgment.