Real Estate Dictionary Terms - L
Laches
Unreasonable delay in asserting one's legal rights.
Land Contract
A contract used in the sale of real property when the seller wishes
to retain legal title until all or a certain part of the purchase
price is paid by the buyer. It is also referred to as an installment
sales contract or an agreement of sale.
Land Sales Contract
A contract for the sale of property, by which possession is delivered
to the buyer, but title remains with the seller until full payment
or the satisfaction of other stated conditions.
Landlocked
Property totally surrounded by other property with no means of ingress
or egress.
Landlord
The person who leases property; the owner of the property.
Lands, Tenements, And Hereditament
Inheritable lands or interest.
Late Charge
The penalty a borrower must pay when a payment is made a stated number
of days. On a first trust deed or mortgage, this is usually fifteen
days. A charge made by a lender against a borrower who fails to make
loan installments when due.
Late Support
The support that the soil of an adjoining owner gives to his or her
neighbor's land.
Lath
A building material of wood, metal gypsum, or insulating board fastened
to the frame of a building to act as a plaster base.
Lease
A written agreement between the property owner and a tenant that
stipulates the payment and conditions under which the tenant may
possess the real estate for a specified period of time. A contract
between owner and tenant, setting forth conditions upon which the
tenant may occupy and use the property and the term of the occupancy.
Lease Option
An alternative financing option that allows home buyers to lease
a home with an option to buy. Each month's rent payment may consist
of not only the rent, but an additional amount which can be applied
toward the down payment on an already specified price. A lease under
which the tenant has the right to purchase the property either during
the lease term or at its end.
Lease Purchase
The purchase of real property, the consummation of which is preceded
by a lease, usually long-term. Typically done for tax or financing
purposes.
Leasehold Estate
A way of holding title to a property wherein the mortgagor does not
actually own the property but rather has a recorded long-term lease
on it. The estate of a tenant under a lease. (See Estate for Years.)
Legacy
A gift of money by will. A disposition of money or personal property
by will.
Legal Description
A property description, recognized by law, that is sufficient to
locate and identify the property without oral testimony. A description
recognized by law; a description by which property can be definitely
located by reference to government surveys or approved recorded maps.
A description of a specific parcel of real estate complete enough
for an independent surveyor to locate and identify it.
Legally Competent Parties
People who are recognized by law as being able to contract with others;
those of legal age and sound mind.
Lender
A term which can refer to the institution making the loan or to the
individual representing the firm. For example, loan officers are
often referred to as "lenders."
Lender Guidelines
Most lenders use Fannie Mae and Freddie Mac underwriting guide lines.
Lessee
A tenant; the person who is entitled to possession of property under
a lease. See Lease.
Lessor
A landlord; the property owner who executes a lease. See lease.
Letter Of Intent
An expression of intent to invest, develop, or purchase without creating
any firm legal obligation to do so.
Leverage
The use of borrowed money to finance an investment.
Levy
To execute upon; to seize and sell property to obtain money to satisfy
a judgment. To assess; to seize or collect. To levy a tax is to assess
a property and set the rate of taxation. To Levy An Execution is
to officially seize the property of a person in order to satisfy
an obligation.
Liabilities
A person's financial obligations. Liabilities include long-term and
short-term debt, as well as any other amounts that are owed to others.
Debts or claims that creditors have against assests.
Liability Insurance
Insurance coverage that offers protection against claims alleging
that a property owner's negligence or inappropriate action resulted
in bodily injury or property damage to another party. It is usually
part of a homeowner’s insurance policy.
License
Personal, nonassignable authorization to enter and perform certain
acts on another's land. A privilege or right granted to a person
by a state to operate as a real estate broker or salesperson. The
revocable permission for a temporary use of land--a personal right
that cannot be sold. Under the law before 1968, which classified
persons who entered upon others' land, a licensee was someone who
entered upon land with the owner's express or implied permission
for a business purpose.
Lien
A legal claim against a property that must be paid off when the property
is sold. A mortgage or first trust deed is considered a lien. A lien
makes the debtor's property security for the payment of a dept or
the discharge of an obligation. A charge or claim against property
as security for payment of a debt or obligation. A right given by
law to certain creditors to have their debts paid out of the property
of a defaulting debtor, usually by means of a court sale.
Lien Theory
Some states interpret a mortgage as being purely a lien on real property.
The mortgagee thus has no right of possession but must foreclose
the lien and sell the property if the mortgagor defaults.
Life
Cycle costing In property management, comparing one type of equipment
to another based on both purchase cost and operating cost over its
expected useful lifetime.
Life Cap
For an adjustable-rate mortgage (ARM), a limit on the amount that
the enterest rate can increase or decrease over the life of the mortgage.
Life Estate
An estate in real property that continues for the life of a particular
person. The "life" involved may be that of the owner or
that of some other person. An estate in property whose duration is
limited to and measured by the life of a natural person or persons.
An interest in real or personal property that is limited in duration
to the lifetime of its owner or some other designated person or persons.
Life Tenant
A person in possession of a life estate.
Light Colors
Light colors make a room look larger.
Limited Partnership
A partnership composed of some partners whose contribution and liability
are limited. There must always be one or more general partners with
unlimited liability and one or more limited partners with limited
liability. A special partnership composed of limited and general
partners. The general partners have unlimited liability and total
management, whereas the limited partners have to voice in the management
and their only financial exposure is to the extent of their investment.
In some ways the limited partners' interest is similar to that of
stockholders in a corporation. See Partnership.
Line Of Credit
An agreement by a commercial bank or other financial institution
to extend credit up to a certain amount for a certain time to a specified
borrower.
Lintel
A horizontal board that supports the load over an opening such as
a door or window.
Liquid Asset
A cash asset or an asset that is easily converted into cash.
Liquidated Damages
An amount predetermined by the parties to a contract as the total
compensation to an injured party should the other party breach the
contract.
Liquidated Damages Clause
An agreement between the parties that in the event of a breach, the
amount of damages shall be liquidated (set or fixed). The amount
is set before the breach, usually at the time of making the contract,
on the assumption that the exact amount of damages is difficult to
determine because of the nature of the contract.
Liquidity
The ability to sell an asset and convert it into cash, at a price
close to its true value, in a short period of time.
Lis Pendens
A notice of pending litigation recorded to give constructive notice
of a suit that has been filed. A recorded notice that a lawsuit is
pending, the outcome of which may affect title to property. A recorded
legal document giving constructive notice that an action affecting
a particular property has been filed in either a state or a federal
court.
Listing
An employment contract between a broker and his principal (client).
A listing is automatically canceled upon the death of the agent (real
estate broker) or the principal(owner). Another real estate broker
must negotiate a new listing with the owner upon the death of the
real estate broker.
Listing Agreement
An employment contract authorizing a broker to sell, lease, or exchange
an owner's property. A contract between an owner (as principal) and
a real estate broker (as agent) by which the broker is employed as
agent to find a buyer for the owner's real estate on the owner's
terms, for which service the owner agrees to pay a commission.
Listing Broker
The broker in a multiple-listing situation from whose office a listing
agreement is initiated, as opposed to the cooperating broker, from
whose office negotiations leading up to a sale are initiated. The
listing broker and the cooperating broker may be the same person.
Litigation
A civil lawsuit; a judicial controversy.
Littoral Rights
A landowner's claim to use water in large navigable lakes and oceans
adjacent to his or her property. The ownership rights to land bordering
these bodies of water up to the highwater mark.
Loan
A sum of borrowed money (principal) that is generally repaid with
interest.
Loan Committee
The committee in a lending institution that reviews and approves
or disapproves the loan applications recommended by a loan officer.
Loan Correspondent
A loan agent usually used by distant lenders to help the lender make
real estate loans.
Loan Officer
Also referred to by a variety of other terms, such as lender, loan
representative, loan "rep," account executive, and others.
The loan officer serves several functions and has various responsibilities:
they solicit loans, they are the representative of the lending institution,
and they represent the borrower to the lending institution.
Loan Origination
How a lender refers to the process of obtaining new loans.
Loan Origination Fee
A fee charged to the borrower by the lender for making a mortgage
loan. The fee is usually computed as a percentage of the loan amount.
Loan Package
A group of documents prepared along with a loan application to give
the prospective lender complete details about the proposed loan.
Loan Servicing
After you obtain a loan, the company you make the payments to is "servicing" your
loan. They process payments, send statements, manage the escrow/impound
account, provide collection efforts on delinquent loans, ensure that
insurance and property taxes are made on the property, handle pay-offs
and assumptions, and provide a variety of other services.
Loan Trust Fund Acount
(See Impound Account.)
Loan Value
The lender's appraised value of the property.
Loan-To-Value (LTV)
The percentage relationship between the amount of the loan and the
appraised value or sales price (whichever is lower).
Loan-To-Value Ratio
The relationship between the amount of the mortgage loan and the
value of the real estate being pledged as collateral.
Lock-In
An agreement in which the lender guarantees a specified interest
rate for a certain amount of time at a certain cost.
Lock-In Period
The time period during which the lender has guaranteed an interest
rate to a borrower.
Lot-And-Block (Recorded Plat) System
A method of describing real property that identifies a parcel of
land by reference to lot and block numbers within a subdivision.
as specified on a recorded subdivision plat.
Louver
An opening with a series of horizontal slats set at an angle to permit
ventilation without admitting rain, sunlight, or vision.
LTV
These initials mean "loan to valueratio"
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