Owing to the massive costs involved in purchasing a property, before taking a deep dive or a final call for investment, several aspects, like amenities and connectivity, are taken into careful consideration.
Legal jargon can be, at times, challenging to comprehend. The legal terminologies are extensive and complex. Here is a list of a few legal terms related to property that are good to know and will make your job easier while investing in a property or selling it or even while availing property damage claims. To grasp important terminologies associated with property law, refer to this glossary.
Property Rights:
Property rights refer to the legal ownership of resources and their use. It applies to tangible or intangible resources and can be owned by individuals, businesses, and governments. Individuals can exercise property rights to gain, delegate, rent, or sell property.
Property Law:
Property law is vital for businesses and individuals to claim their right to ownership and protect their property interests. It covers a broad range of legal issues like transactions related to real estate, tenant-landlord relationships, and disputes associated with property. Property law determines who holds the right to use the property, gain profits from it, and is responsible for managing and maintaining it.
Property Title:
A property title represents the legal rights associated with the ownership and use of a property. It is used to establish a property owner’s “bundle of rights,” including the right of possession, right of enjoyment, right of control, right of disposition, and right of exclusion.
Abstract of Title:
Abstract of title refers to a property’s title history. It gives an overview of liens and legal actions associated with the property. Abstract of title is vital to buyers of property and investors as it provides a summary of the title’s status and validates a clear title.
Mortgage:
A Mortgage is a legal document outlining an agreement between the property owner and a lender. It grants the lender the right to confiscate property if the owner fails to repay the borrowed money and the interest.
Deed:
Deed refers to a written legal document that signifies the property ownership transfer from one party to another. For a deed to be legally valid, it should be inclusive of the names of the parties involved, a description of the property involved in the transaction, signature of the grantor, i.e., the individual transferring the property. Once the deed is executed, it becomes the grantee’s (person to whom property is being transferred) proof of property ownership.
Deed of Gift:
Deed of gift is a legal document that is used while transferring property as a gift. For instance, if a parent wants to gift property to their child or while donating to a non-profit charity or organization. The gift deed establishes that the property was given without any exchange for compensation or with any conditions attached. The person giving the gift is the donor, and the person or group receiving it is referred to as the recipient or donee.
Deed of Lease:
Deed of lease: A deed of lease outlines the terms and conditions included in the lease agreement. It protects the interest of the landlord and tenant by ensuring that they are well aware of their rights and responsibilities. It outlines the framework associated with the property, including the schedule and amount of fees to be paid, guidelines to follow while termination\ng the lease, responsibilities of utility, and more.
Deed of Release:
A deed of release is a legal document used by parties to terminate the existing agreement of property ownership. It ensures that parties associated with the property are free from any obligation or liability.
Deed of Partition:
Deed of partition is a legal document defining property division among people. It is used extensively in wills to divide property among multiple heirs.
Deed of Trust:
A deed of trust is a legal document specifying the transfer of a property title to a third party until the borrower repays the debt to the lender (bank or Escrow Company).
Quitclaim Deed:
Quitclaim deed is a legal document stating that the seller has surrendered their possible rights. It is used to clean up the title of a property after an owner’s demise. For instance, if a parent’s property needs to be transferred to an individual, the other heirs quitclaim their share of the land or house.
Warranty Deed:
A warranty deed is a legal document stating that the seller holds a clear title to the property and is entitled to sell it to the buyer.
Sheriff’s Deed/Sheriff’s Sale:
Sheriff’s sale is a deed indexed under the sheriff instead of the property owner, indicating its forced sale by court order for payment of debts.
Lien:
A lien is a legal claim to take possession of another’s property until the debt they owe is repaid, or an obligation they have to meet is completely fulfilled. The types of lien include bank lien, tax lien, judgment lien, mechanic’s lien, and more.
Acknowledgment:
Acknowledgement is a legal statement at the end of a deed signifying the document’s validity. It implies that the interested party or individual was present in the courtroom when the deed was recorded to authenticate his signature.
Adverse Possession:
Adverse possession, also referred to as squatter’s rights, is a legal process where a non-owner occupying a property for a certain period gains its title and ownership.
Conveyance:
Conveyance is the transfer of property ownership from one person to another through a deed, contract of sale, or lease agreement. It establishes absolute ownership of the property and protects both buyer and seller rights.
Covenants:
Covenants are lawful promises or agreements between parties specifying the use, ownership, or maintenance of property through deeds, contracts, or association agreements. It is important for property owners and buyers to comprehend the covenants applicable to their property and strictly adhere to them to avoid legal disputes.
Indiscriminate Survey:
Indiscriminate survey is a method of survey used in the U.S. State-Land states to describe plots of property by relying on natural land features, such as trees, streams, and adjoining properties.
Caveat Emptor:
Caveat emptor is a Latin phrase meaning “let the buyer beware” used as a disclaimer in real property transaction legal contracts to avoid disputes arising post-purchase. It places the onus on the buyer for due diligence before purchasing a property from the seller.
Easement:
An easement is an agreement granting access to another party’s property by paying an exchange fee. For instance, a utility easement between a property owner and a utility company allows the company to run power lines, water piping, or other types of utilities through the owner’s property.
Joint Tenancy:
Joint tenancy is a legal arrangement made when a property is owned by two or more people. In joint tenancy, each individual or party has equal rights and obligations toward the property. Joint tenancy paves the way for the right of survivorship, which indicates that if one of the owners of the property dies, it can be directly passed on to the surviving party/ individual without the intervention of the court.
Abatement:
Abatement outlines the reduced property tax a person has to pay on any given property.
Dominium:
Dominium indicates absolute property ownership and its right to possession and use. It also suggests that the owner is entitled to retain or transfer the property at their pleasure.
Conclusion:
Be it for a business firm or an individual, property investment is usually for life. They put in meticulous efforts to select the property. Owing to the massive costs involved in purchasing a property, before taking a deep dive or a final call for investment, several aspects, like amenities and connectivity, are taken into careful consideration. Additionally, looking at a legal angle is imperative for buyers and investors, as a disputed property might prevent them from raising a loan. In this regard, a fair understanding of property law’s legal terms is essential. Besides real estate and brokerage firms, B2B companies marketing to law firms specifically dealing with real estate or property will also benefit from the glossary. It will help them understand the complex jargon and pitch their services effectively to law firms for marketing success.
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