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Laches – An established legal doctrine under which, apart from any question of statutory limitation, courts discourage laziness and delay in the enforcements of rights and due to the delay or negligence in asserting one’s legal rights, will refuse to try suits not brought within a set reasonable time period.

Land – The material of the earth, whatever it may be such as soil, rock or other substance and which includes the free or unoccupied space for an indefinite distance downward as well as upward.

Land and improvement loan – A loan obtained by a builder-developer to purchase land and additionally to cover thesubdividing expenses.

Land contract – An installment contract used in a sale of real property whereby legal title to the property remains vested in the seller (vendor) until the buyer(vendee), who holds has equitable title and the right to possession, has paid over a preset period of time all or an established part of the purchase price and whereby a defaulted buyer would forfeit all payments made. Also known as a Conditional sales contract, an Installment sales contract and a Real property sales contract. See Security interest.

Land economics – A branch of economics that deals with the utilization of land resources in order to meet the objectives set by society.

Land grant – 1. The original granting of land from the public sector to the private sector commonly used in the early history of the U.S. 2. A gift of government land to a university, public utility or railroad or for a purpose that would be in the best interest and benefit of the general public.

Land improvements – The physical alterations to or construction of a relatively permanent nature attached to or appurtenant to land and of such a character as to increase its utility and or value.

Land lease – A lease covering only the ground. See Ground lease.

Land planning – The designing of land use areas, road networks and layout for utilities to achieve efficient real estate resource utilization.

Land residual technique – An income approach method of appraisal used in estimating the value of the land as separate from the building which is often used with feasibility studies and highest and best use purposes. See Building residual technique and See Property residual technique.

Land trust certificate – An instrument used in financing larger real estate transactions which serves as the investment vehicle where an investor receives a trust certificate as evidence of his or her share in the trust.

Land use planning – An activity, generally conducted by a local government and used to guide decisions on zoning that proposes and recommendations public and private land uses that are consistent with community policies.

Land use regulation – The ordinances, codes and permit requirements of a local government that include building codes, curb-cut permit systems, historic preservation laws, housing codes, subdivision regulations, tree-cutting laws and zoning that are intended to make the private use of land and natural resources conform to policy standards. See Zoning.

Landlocked – A condition where a lot that has no access to a public thoroughfare except through an adjacent lot. See Egress. See Easement.

Landlord – A party who is also sometimes called a lessor that rents property to another under a lease.

Landmark – A monument or erection placed on the boundary line of two adjoining parcels to establish the boundary mark.

Landscape architect – A professional who designs subdivisions, building sites, and other projects that require grading, drainage, utility installation and site improvements and who also does plant placement selection and layout.

Landscaping – The utilization of a plant material to improve the appearance of lots and buildings.

Late charge – A charge assessed by a party against another party for failing to make agreed to payments when due. See Penalty.

Late date order – The commitment issued by a title insurance company to write an owner’s title insurance policy covering the seller’s title as of the date of the contract and includes that when the sale closes, the purchaser orders the title company to record the deed and bring their examination down to cover this later date so as to show the purchaser as the new property owner.

Latent defects – The physical weaknesses or construction defects not noticeable even after a reasonable inspection of the property that show up at a later date.

Lateral support – The support that the soil on a parcel of property must receive from the adjoining owner’s property. See Subjacent support.

Lath – A building material typically of wood or metal which gets fastened to the frame of a building in order to act as the base for the plaster.

Law – An established rule or standard of conduct or action established and enforceable by the government and by which a society governs itself.

Lawful object – An object of a contract that is permitted by law and possible of performance.

Layout – The design or floor plans used to arrange rooms in a home, apartment, office or other building.

Lead – 1. A mineral used for many centuries which is very pliable and which interferes with the flow of water and is now considered a hazardous substance which requires disclosure. 2. A party of interest to a real estate licensee.

Lead-based paint – A hazardous product that is no longer manufactured which is potentially poisonous and the possibility of its presence must be disclosed to buyers and tenants residing in property built before 1978.

Lease – 1. A contract between an owner (lessor) of real property and a tenant (lessee) giving the right of possession to another, for a specified period of time (term) and for a specified consideration (rent). 2. Sometimes used as a method of financing as an alternative to purchasing property outright.

Lease option – See Lease with an option to purchase.

Lease with an option to purchase – A lease in which the lessee, tenant, has the right to purchase real property under certain conditions such as at a specific price or within a specific time frame either during or at the end of the lease term.

Leased fee – The interest, that can be valued, in a property that is being leased to others that the owner has such as the right to receive ground rent over a period of time and also the right to repossess the property at the termination of the lease.

Leasehold – See Leasehold estate.

Leasehold estate – A less-than-freehold estate or personal property interest that a tenant has in property which is obtained through the lease.

Leasehold improvements – The fixtures that are generally acquired or installed by a non-residential tenant and which can normally be removed at the expiration of the lease provided no damage will be done to the property and the removal does not conflict with the lease terms.

Leasehold policy – An insurance form commonly used for insuring commercial property that is taken out by the lessee in order to protect his or her interest in the property due to the value of the added fixtures and equipment.

Leasehold value – The value of a tenant’s interest in a lease which can be significant when the rent is below market and the lease has a considerable remaining term.

Lease-purchase agreement – An arrangement whereby a portion of the rent may be applied toward an established purchase price or down payment where the tenant can using borrowed funds purchases the property and become the owner outright rather than simply a lessee.

Legacy – The distribution of money or personal property by one’s will.

Legal – That which is required or permitted by law or conforming to the law.

Legal age – The official standard of maturity at which time a person is held legally responsible for his or her acts and would be capable of entering into contracts for the sale or lease of real property. See Minor.

Legal capacity – The ability, power or fitness of a party to enter into a contractual agreement as determined by law.

Legal description – A description of land recognized by law by which property can be positively located and so thoroughly identified by reference to government surveys or approved recorded maps such as Lot, Block, and Tract; U.S. Government Survey; and Metes and Bounds.

Legal description – A means of identifying the exact boundaries of land by metes and bounds, by a plat or by township and range survey system.

Legal notice – The information that must be given by law.

Legal Person – A legal entity which has the powers and duties of a natural person which is most often a corporation.

Legal residence – A person’s permanent home.

Legal title – A title which lacks the full bundle of rights commonly associated with ownership and which might be being held by a trustee under a trust deed.

Legality of purpose – One of four essential elements of every contract is that it involves a lawful object and if not the contract would be void. See Lawful object.

Legatee – A party who receives personal property by will.

Lender – A general term pointing to any person or entity such as mortgagees and beneficiaries under trust deeds who advanced funds which are to be repaid.

Lessee – The party commonly referred to as the tenant who has the right to the possession and use of real estate for a limited time under a lease agreement.

Lessor – An owner or landlord who entered into a lease agreement and granted a tenant possession and use and quiet enjoyment.

Less-than-freehold estate – An estate commonly called a leasehold or leasehold estate that exists for a definite period of time and runs for successive periods of time or until terminated.

Letter of commitment – See Commitment letter.

Level-payment loan – A mortgage on real estate that is paid off by making a series of nearly-equal payments at regular intervals where a part of the payment goes to interest and the remainder goes to reduce the amount of the unpaid principal on the loan. See Amortized loan or Installment note.

Leverage – 1. A real estate financing principle that uses investment debt financing to maximize the return per dollar of equity invested. 2. A financial method applied with the anticipation that the acquired property will increase in return so that the investor will realize a profit not only on his or her own investment but also on the borrowed funds and with the return to the borrowed funds being predominant.

Levy – 1. The legal seizure of property to satisfy a judgment. 2. The imposition of a tax.

Liability – 1. An obligation or duty that must be performed. 2. A claim of creditors for a debt due.

Liability insurance – A type of insurance that protects a property owner from claims arising from injuries or damage to other people or their property. See Casualty insurance.

Liable – Being responsible or obligated. See Exculpatory clause and Nonrecourse.

LIBOR – London Inter Bank Offered Rate. A rate that international banks dealing in Eurodollars charge each other for large loans and which some domestic banks use as an index for Adjustable Rate Mortgages.

License – 1. A permit or authorization to do what without a license would be unlawful to do. 2. A personal privilege to perform some act or series of acts upon the land of another without possessing any estate therein.

License laws – The state laws that govern the activities of real estate brokers and salespersons.

License year – The period of time specified in a state’s licensing act for which a license is valid which is generally different than the calendar year.

Licensee – A person to whom a license has been granted.

Licensing examination – A written test given to prospective real estate brokers or salespersons periodically to determine his or her ability to represent the public knowledgeably in real estate transactions.

Lien – A voluntary or involuntary encumbrance against property for money which usually makes specific property security for the payment of a debt or discharge of an obligation such as judgments, taxes, mortgages, deeds of trust, etc. All liens are encumbrances but all encumbrances are not liens.

Lien theory states – A legal theory followed by certain states that places a lien on mortgaged property as security for the debt and in which the title to the property remains held by the borrower.

Life cycle costing – A method used to compare one type of equipment with another based on the purchase cost that includes its operating cost over its expected useful lifetime to determine the true cost of a piece of equipment.

Life estate – An possessory freehold estate or interest in real property being held for the duration of the life of a named person who could be the person holding estate or of the life of another.

Life of loan cap rate – In an Adjustable Rate Mortgage, ARM this is the highest rate that the note cannot go over during the life of the loan.

Life tenant – A person who is in possession of a life estate.

Like kind property – An identification of four of the five types of IRC defined property used in a Section 1031 exchanges having the same nature which are: investment property, income property, property used in trade or business and dealer property. See Section 1031 exchange, Investment property, Income property, Trade or business property and Dealer property.

Limited appraisal – See Self-contained appraisal report, a Summary appraisal report.

Limited liability – A restriction of a party’s personal liability for potential business losses to be only up to the amount invested.

Limited partnership – A partnership consisting of one or more general partners plus limited partners in which the general partners manage and control the business affairs of the partnership and where the limited partners are essentially investors who have funded the partnership and are silent and take no part in its management and lawfully have no liability for its debts in excess of their invested capital.

Limited-access highway – A highway designed for the constant flow of traffic and where the entrance and exit opportunities have been predetermined and set at identifiable intervals.

Line of credit – See Home equity loan.

Linear Foot – A measurement of one foot or 12 inches in length as contrasted to a square foot or a cubic foot.

Lintel – A horizontal board that supports the load over a door, window or other opening.

Liquidate – 1. To dissolve a business. 2. To retire debts.

Liquidated damages – A sum agreed upon by all parties to be the full and the final amout of damages received if a certain event occurs.

Liquidated damages clause – A clause in a contract by which the parties agree in advance to establish the damages in case of a breach of the contract.

Liquidity – 1. The ease with which a person is able to pay his or her maturing obligations. 2. The holdings such as common stocks and U.S. savings bonds which have the ability to be able to be easily converted to cash or its equivalent.

Lis pendens – A notice that literally means a lawsuit pending that is usually recorded but sometimes filed so as to give constructive notice to warn all persons that the title or right to the possession of the real property is in litigation.

Listing – A contract by which a party employs an licensed real estate broker to assist them in a real estate transaction which usually is the sale of property.

Listing agent – The real estate broker who has obtained a signed listing contract from an owner/seller.

Listing agreement – See Listing contract.

Listing broker – The licensed real estate broker who has entered into a listing contract with an owner to assist in the selling of his or her property for which the owner agrees to pay certain identified compensation.

Listing contract – 1. An employment contract between an owner and a licensed real estate broker entered into for the purpose of the broker providing services to find ready, willing and able persons to buy, rent or lease a particular property under the terms specified in the contract for an identified period of time and where the owner agrees to pay certain identified compensation. In addition, it usually authorizes the broker to be the agent of the owner/principal and to perform services for the principal in a fiduciary capacity involving the principal’s identified property. 2. The employment of a licensed real estate broker by a prospective purchaser or lessee to locate property to purchase or lease can also broadly be considered a type of listing.

Litigation – A lawsuit or legal contest in a court of law for the purpose of enforcing a right.

Littoral – The land bordering nonflowing water such as a lake, ocean or sea as opposed to land bordering flowing water such as a stream or river.

Littoral rights – 1. A landowner’s claim to use the water in large navigable lakes and oceans adjacent to his or her property. 2. The ownership rights to use the land bordering lakes and oceans up to the high-water mark.

Livery of seisin – The appropriate ceremony from common law for transferring the possession of lands from a grantor to a grantee. Also known as Seizin or Investiture.

Load center – A main or branch electrical distribution center for a structure equipped with circuit breakers rather than a main switch and a fuse box.

Load-bearing wall – An integral and relatively permanent part of a house which helps support the floors or roof.

Loan administration –The handling of loan payments, delinquencies, impounds, payoffs and releases from loan origination through maturity which is done by some mortgage bankers who not only originate loans but also service them. Also known as Loan servicing.

Loan application – The source of information on which a lender bases a decision about making a loan which defines the loan contract, shows the desired loan amount, the repayment terms, the name of the borrower, place of employment, salary, bank accounts, credit references and describes the real estate that is to be mortgaged.

Loan closing – See Closing.

Loan commitment – A lender’s contractual commitment to make a loan based on an appraisal and underwriting.

Loan correspondent – A representative who negotiates or services loans for a lender.

Loan fee – A service charge made by a lender for granting a loan that is in addition to the required interest.

Loan maturity – The life of the loan or the amount of time the loan will remain in existence until the debt is paid off.

Loan origination fee – A fee charged by the lender to the borrower for the administrative costs of processing and creating a mortgage loan which is usually computed as a percentage of the loan amount and is often expressed as points.

Loan term – The length of time that the mortgage loan will be in effect.

Loan terms – The conditions on which the mortgage is made including the rate and the length of the repayment period.

Loan value – A value which determines the highest amount a lending institution will lend on a property.

Loan-to-value ratio – The relationship amount of mortgage debt that a lender can or may loan to a borrower compared to the market or appraisal value of a property being pledged as collateral expressed as a percentage. The greater the loan-to-value ratio, the greater the financial leverage available to the purchaser i.e. an 80% loan to value ratio on a $100,000 property means a mortgage of up to $80,000 is possible.

Local Housing Authority, LHA – The local body whose major concern is public housing.

Localization of income – The income production from a fixed location like real estate because of having a fixed and unique location.

Location – The position of land and improvements in relation to other land and improvements and to local or general economic activity.

Location quotient – An analytical technique that compares the percentage of a certain activity in a city with the percentage of the same activity in the nation.

Location, Location, Location – A popular statement that is traditionally referred to as the three most important things in real estate indicating the great importance of location with respect to the value of real estate.

Lock-in clause – A period of time written into a loan contract prior to which the borrower may not repay any of the principal.

Log cabin – An early-American-style house using unfinished logs as the exterior walls.

Long-range planning – A forecast for a period of years in the future which is used as the basis for short-range planning.

Long-term capital gain – A gain or profit on the sale of property that has been owned for more than one year and where the maximum tax rate is lower than the maximum rate taxed on ordinary income.

Loss – A situation that occurs when the cost of an investment or product is larger than the income produced from its operations or the sale of the investment or its products.

Lot – A specific parcel of land.

Lot and block – A method of identifying real property on a recorded subdivision plat that identifies a parcel of land by reference to its lot and block numbers within the subdivision. Sometimes called a Recorded plat.

Lot line – A boundary line of a lot as that is identified in a property survey.

Lot split – The division of an existing small parcel into two separate parcels.

Louver – An opening filled with a series of solid fixed or movable horizontal slats set at an angle to permit ventilation without admitting rain, sunlight or vision.

Love and affection – The form of consideration typically used in a gift deed.

Low-ball offer – An offer from a prospective buyer that is much lower than the listing price and which might indicate that the buyer believes that the owner might not receive many good offers and that the buyer is interested in the property only if it can be purchased at a bargain price.

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Categories: Real Estate Words Glossary