GLOSSARY

Select a letter below or scroll down to find an entry

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z

MENU		GLOSSARY
	A	Abstract A written history of the title to a parcel of real estate as recorded in a Land Registry Office. ) Acre A measure of land equalling 10 square chains, 160 square rods, or 4,840 square yards, 43,560 square feet, or .4047 hectares. (www.househuntingintoronto.com) Adverse possession When an individual, not the owner, takes actual possession of the property, hostile to, and without the consent of the owner. Agency The relationship between principal and agent, wherein an agent is employed and authorized by the principal to represent the principal in business transactions with a third party. Agreement for sale An agreement for the purchase of real property wherein the purchase price is paid in installments and the title is not conveyed to the buyer until the purchase price is paid in full. Agreement of purchase and sale A contract by which one party agrees to sell and another agrees to purchase. Agreement to lease A contract by which one party agrees to rent real estate to another party for a rental fee or other compensation.(www.househuntingintoronto.com) Amortization  Paying off a debt, such as a mortgage, by installments. The conventional amortization period for a mortgage is anywhere between 15 and 25 years. The shorter the amortization period, the less interest you have to pay. Appraisal  An estimate of a property's value. Appurtenance Something which is outside the real property itself, but belongs to the land and is joined thereto. It adds to greater enjoyment of the land. A right-of-way is an appurtenance. Asking (list) price  The price placed on the property for sale by the seller. Assessed value A valuation placed upon property as a basis for municipal taxation. Assessor An official who has the responsibility of determining assessed value for tax purposes. Assumption of mortgage The taking of property by a grantee, wherein he/she assumes liability for an existing mortgage against a property and becomes personally liable for the payment of such mortgage debt. Authority The legal power or right given by a principal and accepted by the agent to act on the principal's behalf in business transactions with a third party.
	B	Balance due on completion The amount of money the buyer will be required to pay to the seller to complete the purchase, after all adjustments have been made. Blended payments  Payments consisting of principal and interest components, paid during the amortization period of a mortgage.(www.househuntingintoronto.com) Breach of contract Failure of fulfill an obligation under a contract. Breach confers a right of action on the offended party. Broker  A person licensed by the provincial or territorial government to trade in real estate. Real estate brokers may form companies or offices which appoint sales representatives to provide services to the seller or buyer, or they may provide the same services themselves. In parts of Canada, brokers are referred to as agents. Building Codes Regulations established by local governments providing for structural requirements for building. Building Line A line fixed at a certain distance from the front and/or sides of a lot, beyond which no building can project.(www.househuntingintoronto.com) Building Permit A document issued by the municipal authority certifying the blueprints for construction and allowing work to commence. Bundle of rights A concept in which rights of possession, use, enjoyment, and disposition comprise the rights of ownership. Business Any undertaking for the purpose of profit, including any interest in any such undertaking. Buyer's Agent  (also known as "Buyer's Broker" or "Purchaser's Agent") A person or firm representing the buyer. A Buyer's Agent's primary allegiance is to the buyer. The buyer is the Buyer Agent's client. Buyer Brokerage Agreement  A written agreement between the buyer and the buyer's agent, outlining the agency relationship between the two parties and the manner in which the buyer's agent will be compensated. In some provinces, a buyer agency relationship arises automatically, without a written agreement establishing the relationship.
	C	Caveat emptor Let the buyer beware. The buyer must examine the goods or property he/she is buying and he/she, therefore, buys at his/her own risk.(www.househuntingintoronto.com) Charge The name given to a mortgage document when title is registered under the Land Titles Act. Chattel Personal property which is tangible and moveable. Client  The person being represented by an agent. The agent owes the client the duties of utmost care, integrity, confidentiality and loyalty. Closing  The day the legal title to the property changes hands. Cloud on title Any encumbrance or claim that affects title to real property. CMHC  Canada Mortgage and Housing Corporation. A Crown corporation providing information services and mortgage loan insurance. Commission  An amount agreed to by the seller and the real estate broker/agent and stated in the listing agreement. It is payable to the broker/agent on closing and shared, if applicable, among those salespeople involved in the sale. Common law That part of the law formulated, developed, and administered by the common law courts, based originally on common customs and mostly unwritten. Compensation Payment or reward for performance of service. Compound interest Interest on both the original principal and on interest accrued. Condition precedent A condition in an agreement which calls for the happening of some event, or performance of some act, before the agreement becomes binding on the parties. Condition subsequent A condition in a contract referring to a future event upon the happening of which the contract becomes no longer binding on the parties. Condominium The fee ownership of a specified amount of space (the unit) in a multiple dwelling or other multi-occupancy building with tenancy-in-common ownership of portions used jointly with other owners (the common elements). Consideration Something of value given by a promise to a promisor to make the promise binding. Construction Lien (Mechanic’s Lien). A claim filed in the land registry office by an individual, or company for labour material, or both, supplied for the improvement of the property. Contract A contract is a legally binding agreement between two or more capable persons for consideration or value, to do or not to do some lawful and genuinely intended act. If for the sale of real estate, it must be in writing.(www.househuntingintoronto.com) Conveyance The transfer of an interest in property from one to another. Covenant An agreement contained in a deed and creating an obligation. It may be positive, stipulating the performance of some act. It may be negative or restrictive, forbidding the commission of some act. CREA  The Canadian Real Estate Association. A national association representing the real estate industry on federal public policy matters, providing member services and education. CREA promotes adherence to a strict Code of Ethics and Standards of Business Practice. Creditor A person to whom a debt is owed by another person termed the debtor. Customer  A person who receives valuable information and assistance from a real estate broker or salesperson, but is not represented by that individual.
	D	Damages Compensation or indemnity for loss owing for breach of contract, or a tort (civil wrong).(www.househuntingintoronto.com) Date of Completion The date specified in the agreement of purchase and sale, when the buyer is to deliver the balance of money due and the seller to deliver a duly executed deed and vacant possession of the property (unless otherwise agreed). Debt-Service Ratio  The measurement of debt payments to gross household income which may include, in addition to the main wage earner's salary, salaries of other wage earners, commissions, bonuses, overtime, etc. Deed An instrument in writing, duly executed and delivered, that conveys title or an interest in real property. Deed restriction An imposed restriction in a deed for the purpose of limiting the use of land. Default Failure to fulfill an obligation. Deposit Payment of money or other valuable consideration as pledge for fulfillment of contract. Depreciation A loss in value due to any cause. Description A legal identification of land or premises.(www.househuntingintoronto.com) Developer One who engages in the subdivision or improvement of land. Dominant tenement The estate (i.e. property) which derives benefit from an easement over a servient tenement, as in a right-of-way. Dual Agent  A real estate broker or salesperson who acts as agent for both the seller and the buyer in the same transaction. Both buyer and seller are the agent's clients. Duplex A two-family dwelling or house. Dwelling Residence
	E	Easement A right enjoyed by one landowner over the land of another. Economics The study of how society chooses resources which have alternative uses, to produce various commodities over time and distribute them for consumption, now and in the future, among various people and groups in society. Encroachment The unauthorized extension of the boundaries of land. Encumbrance Outstanding claim or lien recorded against property or any legal right to the use of the property by another person who is not the owner. Equity  The difference between the value of the property and the amount owing (if any) on the mortgage. Equity of redemption The right of the mortgagor to reclaim clear title to the property upon full repayment of the debt. Escheat The reversion of property to the state in the event the owner thereof dies leaving no will and having no legally qualified heir to whom the property may pass by lawful descent. Estate An interest in land. Estoppel A bar to alleging or denying a fact because of one’s own previous actions or words to the contrary. Ethics Rules of behaviour made and accepted by business to provide fair and moral practice. Exclusive listing The giving of the sole right to offer the described property for sale according to the terms of the agency agreement. Express authority Authority delegated by the principal which clearly sets forth in exact, plain, direct, and well-defined limits those acts and duties which the agent is empowered to perform on behalf of the principal: e.g. an exclusive listing. Expropriation Taking of private property by the state for public use, with fair compensation to the owner, through the exercise of the right of eminent domain. Extras Chattels included in the sale.
	F	Fee simple The highest estate or absolute right in real property. Financial Institutions  Banks, credit unions, insurance or trust companies. Fixtures Permanent improvements to property that may not be removed at the expiration of the term of lease or tenure. Foreclosure Remedial court action taken by a mortgagee, when default occurs on a mortgage, to cause forfeiture of the equity of redemption of the mortgagor.
	G	GDS ratio see: Gross Debt Service ratio GE Capital Mortgage Insurance Company  GE Capital Mortgage Insurance Company is the only private sector source of mortgage insurance to lenders in Canada. Grant A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in land. Grantee The party to whom an interest in real property is conveyed. Grantor The party who conveys an interest in real property by deed. Gross Debt Service  The amount of money needed to pay principal, interest, taxes and sometimes, energy costs. If the dwelling unit is a condominium, all or a portion of common fees are included, depending on what expenses are covered. Gross Debt Service Ratio  Gross debt service divided by household income. A rule of thumb is that GDS should not exceed 30%. It is also referred to as PIT (Principal, Interest and Taxes) over income. Sometimes energy costs are added to the formula, producing PITE, which moves the rule of thumb GDS to 32%.
	H	House Hunting A continuous attempt to find a desired building that will serve as living quarters.
	I	Indemnify To secure against hurt, loss, or damage; to make compensation to for incurred hurt, loss or damage. Indenture A document or deed, usually in duplicate, expressing certain objects between the parties. Infant A person who is a minor; under the age of 18 and thus incapable of the independent judgement necessary to undertake a legal obligation. Injunction A judicial process or order requiring the person to whom it is directed to do, or refrain from doing, a particular thing. Instrument A form of written legal document. Interest rate The percentage which is charged for the use of borrowed money. Intestate A person who dies without a will, or leaves one which is defective in form, in which case his/her estate descends by operation of law to his/her heirs or next-of-kin. Irrevocable Incapable of being recalled or revoked; unchangeable, unalterable.
	J	Joint tenancy Ownership of land by two or more persons whereby, on the death of one, the survivor or survivors take the whole estate. Judgment The decision of the court.
	L	Landlord The person from whom another holds tenancy. Lease Contract between landlord (lessor) and tenant (lessee) for the occupation or use of the landlord’s property by the tenant for a specified time and for a specified consideration (rent). Legal description a definite, written description by which property can be located. Lessee Tenant under a lease. Lessor The person who grants use of property under lease to a tenant. Lien A right, given to a creditor, creating an interest in the real property until the debt is discharged. Lis pendens (Certificate of pending litigation) A legal document giving notice that an action or proceeding is pending in the courts which affects the title to a designated property. Listing An oral or written agreement between a property owner and a broker authorizing the broker to offer the owner’s real property for sale or lease. Listing Agreement The legal agreement between the listing broker and the seller, setting out the services to be rendered, describing the property for sale and stating the terms of payment. A commission is generally payable to the broker upon closing.
	M	Marketable title A title which a court of equity considers to be so free from defect that it will enforce its acceptance by a buyer. Market value The highest price in terms of money, which the property will bring to a willing seller if exposed for sale on the open market allowing a reasonable time to find a willing buyer, buying with the knowledge of all the uses to which it is adapted and for which it is legally capable of being used, and with neither buyer or seller acting under necessity, compulsion or peculiar and special circumstances. Mechanic’s lien (Construction Lien) A claim filed in the land registry office by an individual, or company, for labour or material, or both, supplied for the improvement of the property. Metes and bounds A system of land description whereby all boundary lines are set forth by use of terminal points and angles - metes referring to limits or limiting marks, and bounds referring to boundary lines. Metropolitan area That area which includes not only the entire chief urban core of a city (the central city), but also the outlying suburbs which are appended thereto. Minor A person who is under the age of legal competence, which is 18 years in Ontario. MLS®, Multiple Listing Service®  Trademarks owned by The Canadian Real Estate Association. They are used in conjunction with a real estate database service, operated by local real estate boards, under which properties may be listed, purchased or sold. MLS®Online™  Carries MLS® property advertisements and consumer-related information supplied by individual real estate boards and associations across Canada. More or less Term often found in a property description intended to cover slight, unimportant or unsubstantial inaccuracies of which both parties are willing to assume the risk. Mortgage  A contract providing security for the repayment of a loan, registered against the property, with stated rights and remedies in the event of default. Lenders consider both the property (security) and the financial worth of the borrower (covenant) in deciding on a mortgage loan. (www.househuntingintoronto.com) Mortgage Broker  A person or company having contacts with financial institutions or individuals wishing to invest in mortgages. The mortgagor pays the broker a fee for arranging the mortgage. Appraisal and legal services may or may not be included in the fee. Mortgage Insurer  In Canada, high-ratio mortgages (those representing greater than 75% of the property value) must be insured against default by either CMHC or private insurers. The borrower must arrange and pay for the insurance, which protects the lender against default. Mortgagee  The person or financial institution lending the money, secured by a mortgage. Mortgagor  The property owner borrowing the money, secured by a mortgage. Mortgage Commitment A formal indication, by a lending institution that it will grant a mortgage loan on a property, for a certain specified amount and on certain specified terms. Multiple listing An arrangement among brokers who are real estate board members, whereby each broker shares information regarding his listings with the other members, who may negotiate the transaction.
	N	Notice ror Notice filed in court by mortgagor under foreclosure proceedings requesting an opportunity to redeem.
	O	Offer and acceptance The basic requisite of any contract is a proposal by one party, called the offeror, to another party, called the offeree, to accept the basic terms of the agreement. If the offeree indicates assent to the proposal, there is an acceptance and the contract will bind both parties to its terms. Offer of Purchase and Sale  The document through which the prospective buyer sets out the price and conditions under which he or she will buy the property. Option A right given by the owner of property to another (for valuable consideration) to buy certain property within a limited time at an agreed price.
	P	Personal property All property, except land and the improvements thereon. Power of attorney Delegated written authority to a person to legally act on behalf of another. Power of sale The right of a mortgagee to force sale of the property without judicial proceedings should default occur. Prepayment clause A clause inserted in a mortgage, which gives the mortgagor the privilege of paying the mortgage debt in advance of the maturity date, on stipulated terms. Principal The client of an agent or broker, who gives the agent or broker the authority to do some act for him. Principal amount In mortgage law, this term refers to the debt itself, as distinguished from interest. Prospect A potential buyer or customer.
	Q	Quit claim deed A general release of all claims or rights to a parcel or land.
	R	Real estate Real estate includes real property, leasehold and business whether with or without premises, fixtures, stock-in-trade, goods or chattels in connection with the operation of the business. (Real Estate and Business Brokers Act.) Real Estate Board  A non-profit organization representing local real estate brokers/agents, salespeople, which provides services to its members and maintains and operates a MLS® system in the community. Real estate broker A person who represents a principal in a real estate trade. Real property The combination of the tangible and intangible attributes of land and improvements. Value-wise, it is the sum of the value of the real estate, considered as land and structure and, for example, the tangible value arising by reason of a favourable lease, the real estate, plus the rights that go with it. REALTOR  Trademark identifying real estate professionals in Canada who are members of The Canadian Real Estate Association, and as such, subscribe to a high standard of professional service and to a strict Code of Ethics. Rent The compensation paid for the temporary use, and/or occupation of real estate. Restricted area bylaw See: Zoning bylaw. Restrictive covenant A limitation placed upon the use of property, contained in the deed. Right The interest one has in a piece of property. Right of survivorship The distinguishing feature of joint tenancies which provides that, where land is held in undivided portions by co-owners, upon the death of any joint owner, his interest in the land will pass to the surviving co-owner, rather than to this estate. Right-of-way The right to pass over another’s land, more or less frequently, according to the nature of the easement. Riparian rights The rights of the owners of lands on the banks of watercourses, to take advantageous use of the water on, under or adjacent to his land, including the right to acquire accretions, wharf slips, and fish therefrom. Running with the land A covenant is said to run with the land when it extends beyond the original parties to the agreement and binds all subsequent takers to either liability to perform it or the right to take advantage of it.
	S	Salesperson An employee of a broker authorized to trade in real estate (as defined within the Real Estate and Business Brokers Act). Caution: No to be referred to as a sales associate or other comparable term not reflective of employment status. Sealed and delivered A term indicating that a conveyor has received adequate consideration as evidenced by voluntary delivery. The word sealed adds more strength since under old conveyancing law an official seal was used as a substitute for consideration. Seller's Agent  The Seller's Agent represents the seller -- either as a Listing Agent under the listing agreement with the seller or by cooperating as a Sub-Agent, typically through the MLS® system. In dealing with prospective buyers -- customers-- the Seller's Agent can provide a variety of information and services to assist the buyer in his/her decision-making. The Seller's Agent does not represent the buyer. Servient tenement Land over which an easement exists in favour of the dominant tenement. Set back The distance from an established line within which no buildings may be erected. Special assessment An assessment which is not customarily levied and which is made against only those specific parcels of property directly benefitting therefrom. Specific performance A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract. It is available only where the remedy of damages cannot afford adequate relief to the plaintiff. Statement of adjustments A statement prepared by the solicitor for the seller setting out, in balance sheet form, the credits to the seller (e.g. purchase price, prepaid taxes, prepaid insurance, etc.), and the credits to the buyer (e.g. deposits, arrears in taxes prior to the date of closing), and the balance due on closing, so that both the buyer and the seller will have a record, at the date of closing, of the financial breakdown of the transaction. Statute A law established by an act of the legislature. Statute of frauds A law which provides that certain contracts must be in writing in order to be enforceable at law. It includes real estate contracts. Subagent An agent authorized by the listing agent to assist in transacting the affairs of t he principal (with express or implied consent of principal). Survey The accurate mathematical measurement of land and buildings thereon, made with the aid of instruments. Syndicate An association of individuals formed for the purpose of owning, operating and managing large parcel of real property for the mutual benefit of all, and organized as a corporation, limited partnership or joint venture.(www.househuntingintoronto.com)
	T	Tax rate The rate of tax applied to the assessed value of a property calculated by dividing the budget of the municipality by the tax base. Tenancy-in-common Ownership of land by two or more persons; unlike joint tenancy in that interest of deceased does not pass to the survivor, but is treated as an asset of the deceased’s estate. Tenant One who occupies land or tenement under a landlord. Tenure A system of land holdings for a temporary time period. Term  The actual life of a mortgage contract-- from six months to ten years -- at the end of which the mortgage becomes due and payable unless the lender renews the mortgage for another term (See Amortization). Time is of the essence Requires punctual performance of the time requirements of a contract and is indicated by so stating as in an Agreement of Purchase and Sale. Title The means of evidence by which the owner of land has lawful ownership thereof. Trade A disposition or acquisition of or transaction in real estate by sale, purchase, agreement of sale, exchange, option, lease, rental or otherwise and any offer or attempt to list real estate for the purpose of such disposition or transaction, and any act, advertisement, conduct or negotiation, directly or indirectly in furtherance or any disposition, acquisition, transaction, offer or attempt, the verb "trade" has corresponding meaning. Transfer To convey from one person to another. Trust account An account separate and apart from one’s personal monies, as required by law in the case of a broker or lawyer.
	V	Valuation Estimated worth or price. The act of estimating the worth of real property. Variable-rate Mortgage  A mortgage in which payments are fixed, but the interest rate moves in response to trends. If interest rates go up, a larger portion of your payment goes to the interest; if rates go down, more goes to cover the principal. Vendor A seller of real property. Void Of no legal effect; a nullity. Voidable Where one party to a contract is entitled to rescind the contract at his or her option.
	Z	Zoning by-law A bylaw passed by a municipality prohibiting the use of land in certain areas for any purpose other than as set out in the by-law. In the Planning Act, it is called a Restricted Area Bylaw.
		Sources: Canadian Real Estate Association (CREA) & Ontario Real Estate Association (OREA)

CONTACT INFORMATION
		Rick McGuigan Toronto real estate sales representative Coldwell Banker Case Realty Phone: 416-696-5100 Pager: 416-461-0925
HOME  -  WELCOME  -  BUYING  -  SELLING  -  LEASING  -  FINANCING  -  MOVING  -  RELOCATING  -  TORONTO LOFTS  -  QUICK TOURS  -   FEATURED LISTINGS  -  MLS LISTINGS  -  FREE HOME SEARCH  -  FIRST TIME HOME BUYERS  -  HOME BUYERS SEMINAR  - HOME SELLERS SEMINAR  -   FREE CMA SERVICE  -  TORONTO INFO  -  USEFUL LINKS  -  HOME IMPROVEMENT  -  RESOURCES  -  FAQ  -  GLOSSARY  -  NEWSLETTER INTERNATIONAL REAL ESTATE DIRECTORY  -  CONTACT  -  SITE INDEX  -  WEB AWARDS