QUADRANGLE – Used in the GOVERNMENT RECTANGULAR SURVEY METHOD of LAND description, a square-shaped LAND area, twenty-four miles on each side containing sixteen TOWNSHIPS.
QUALIFICATION PERIOD – The period during which the INSURED must be TOTALLY DISABLED before becoming eligible for RESIDUAL DISABILITY BENEFITS.
QUALIFIED IMPAIRMENT INSURANCE – A form of SUBSTANDARD or special class INSURANCE which restricts BENEFITS for the INSURED person’s particular CONDITION.
QUALIFIED PLAN – A plan which the INTERNAL REVENUE SERVICE approves as meeting the requirements of Section 401(a) of the 1954 Internal Revenue Code. Such plans receive TAX advantages.
QUALIFIED TERMINABLE INTEREST PROPERTY – Created by the Economic Recovery Tax Act, a category of PROPERTY whereby a deceased spouse’s WILL entitles the surviving spouse to all INCOME from the PROPERTY for life with that INCOME payable at least annually and which precludes anyone , including the spouse, from appointing the PROPERTY to anyone else during the spouse’s life.
QUALIFIED THRIFT LENDER – A lender who specializes in HOME MORTGAGE finance under the rules established by FIRREA. QUALIFYING LENDERS are eligible for advances from the district FEDERAL HOME LOAN BANK.
QUANTITY SURVEY METHOD – A method of estimating construction costs in which the total IMPROVEMENT cost is based first on the cost of acquiring all of the components and then applying the cost of the labor to have the components assembled.
QUEEN ANNE HOUSE – A nineteenth-century-style house that is a multi-story, unique looking and irregular in shape with a variety of surface textures, colors, and materials. The term QUEEN ANNE has come to be applied to any VICTORIAN HOUSE that cannot be otherwise classified.
QUIET ENJOYMENT – The right of an owner to the use and possession of PROPERTY without interference.
QUIET TITLE ACTION – Also known as SUIT TO QUIET TITLE – A suit in court to remove a DEFECT, CLOUD ON THE TITLE or suspicion regarding legal rights of an owner to a certain PARCEL of REAL PROPERTY.
QUIT CLAIM DEED – A DEED which merely releases whatever ownership INTEREST the GRANTOR may have without any WARRANTY or implication that the GRANTOR has an interest.
QUOTE – A price estimate given to the potential consumer as he/she decides to which company a formal application will be submitted which may legally bind the company to honor this quote in some jurisdictions and/or lines of business.
RADON – A naturally occurring (not man-made) gas that may contaminate water or air in buildings to which studies from mines have correlated a relationship to lung cancer in humans. Homes that are too well insulated may trap radon gas, increasing its concentration.
RAFTERS – The series of sloping beams that extends from the exterior wall to the center RIDGE BOARD and provides the main support for the roof. The RAFTERS of a flat roof are often called ROOF JOISTS.
RANCH HOUSE – Originally a low, rambling, one-story house typical of the western United States now used to describe almost any one-story house.
RANGE LINES – Numbered east or west of a PRINCIPAL MERIDIAN in the GOVERNMENT RECTANGULAR SURVEY, lines that are parallel to a PRINCIPAL MERIDIAN marking off the LAND into six mile strips known as RANGES.
RANGES – Also known as RANGE STRIPS – Six-mile wide strips of LAND which runs north and south parallel to the PRINCIPAL MERIDIAN. Each range strip is identified by its distance east or west of the PRINCIPAL MERIDIAN.
RANGE STRIPS – Also known as RANGES – Six-mile wide strips of LAND which runs north and south parallel to the PRINCIPAL MERIDIAN. Each range strip is identified by its distance east or west of the PRINCIPAL MERIDIAN.
RATE – The pricing factor upon which the INSURANCE buyer’s PREMIUM is based.
RATED POLICY – Also known as EXTRA-RISK POLICY – An INSURANCE POLICY issued at a higher-than-standard PREMIUM rate to cover the extra RISK where, for example, an insured has a hazardous occupation or impaired health.
RATEMAKING – The statistical process by which INSURERS determine RISKS and pricing for the basic classes of INSURANCE.
RATE OF RETURN – The percentage relationship between the earnings and the cost of an INVESTMENT.
RATE OF RETURN OF INVESTMENT – Also known as RECAPTURE RATE – In APPRAISAL, a term used to describe the rate of recovery of an INVESTMENT in a WASTING ASSET. Added to the DISCOUNT RATE to derive a CAPITALIZATION RATE, it may be based on the STRAIGHT-LINE, SINKING FUND or ANNUITY method.
RATING TERRITORY – A geographical grouping in which like HAZARDS tend to equalize and permit the establishment of an EQUITABLE RATE for the territory.
RAW LAND – Acreage with no added improvements, such as drainage, landscaping, streets, UTILITIES and structure.
READY, WILLING AND ABLE BUYER – The person who is ready to purchase the LISTED PROPERTY on the seller’s terms, financially able to do so and willing to take positive steps toward the completion of the transaction.
REAL ESTATE – 1) The LAND and all things permanently attached to the LAND by man. 2) In business informally referred to as THE DIRT AND THE BRICKS AND STICKS, the activities concerned with ownership and use transfers of the PHYSICAL PROPERTY.
REAL ESTATE BROKERAGE MANAGERS COUNCIL – An affiliate of the NATIONAL ASSOCIATION OF REALTORS and part of the REALTORS NATIONAL MARKETING INSTITUTE (RNMI).
REAL ESTATE COMMISSION – State agency that enforces REAL ESTATE license laws.
REAL ESTATE EDUCATORS ASSOCIATION – A professional organization primarily composed of persons who teach REAL ESTATE in junior colleges and proprietary license preparation schools.
REAL ESTATE INFORMATION SYSTEMS (REIS) – A large data bank that includes historical RENTAL RATES on more than 100,000 PROPERTIES.
REAL ESTATE INVESTMENT TRUST (REIT) – An INVESTMENT SYNDICATE with at least one hundred members which is strictly regulated by federal law and has certain TAX advantages.
REAL ESTATE MARKET – The potential buyers and sellers of REAL PROPERTY at the current time and the current transaction activity for REAL PROPERTY which includes markets for various PROPERTY types, such as office, housing, CONDOMINIUM or LAND markets.
REAL ESTATE MORTGAGE INVESTMENT CONDUIT (REMIC) – A PARTNERSHIP, TRUST, CORPORATION or separate pool of ASSETS, the purpose of a REMIC is to hold a fixed pool of MORTGAGES and issue interests in itself to MORTGAGE INVESTORS.
REAL ESTATE OWNED (REO) – PROPERTY acquired by a lender through FORECLOSURE and held in INVENTORY.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) – A federal law ensuring that the buyer and seller in a residential REAL PROPERTY transaction are each aware of their SETTLEMENT costs and requires the use of the UNIFORM SETTLEMENT STATEMENT which details the financial particulars of the transaction.
REALIZED GAIN – In a TAX-FREE EXCHANGE, a GAIN that has occurred financially but is not necessarily taxed.
REAL PROPERTY – Also known as REALTY – Informally referred to as THE DIRT, THE BRICKS AND STICKS AND THE RIGHTS OF THE BUNDLE, the REAL ESTATE and all interests, benefits and rights inherent in ownership.
REALTIST – A member of the NATIONAL ASSOCIATION OF REAL ESTATE BROKERS, a group comprised mainly of minority BROKERS.
REALTOR – A member of the NATIONAL ASSOCIATION OF REALTORS as well as the appropriate state and local BOARDS OF REALTORS.
REALTOR-ASSOCIATE – A licensed SALESPERSON (not BROKER) that is a member of the NATIONAL ASSOCIATION OF REALTORS.
REALTORS NATIONAL MARKETING INSTITUTE (RNMI) – An affiliate of the NATIONAL ASSOCIATION OF REALTORS mainly concerned with educational programs and literature for members.
REALTY – Also known as REAL PROPERTY – Informally referred to as THE DIRT, THE BRICKS AND STICKS AND THE RIGHTS OF THE BUNDLE, the REAL ESTATE and all interests, benefits and rights inherent in ownership.
REAPPRAISAL LEASE – Also known as REEVALUATION LEASE – A LEASE where the rental level is periodically reviewed by independent APPRAISERS. Often the LESSOR and LESSEE will each select an APPRAISER; if they do not agree on a VALUE, they will choose a third APPRAISER.
REASONABLE AND CUSTOMARY CHARGE – A charge for health care services which is consistent with the going rate or charge in a certain geographical area for identical or similar services.
REASSESSMENT – The process of revising or updating the VALUE estimate of PROPERTY for AD VALOREM TAX purposes.
REBATE – 1) A refund resulting from a purchase or TAX; 2) often illegal if done without knowledge of all parties, a kickback of a charge,
REBATING – Prohibited by law, the practice of giving any valuable consideration, usually all or part of the COMMISSION, to the prospect or INSURED as an inducement to buy or renew.
RECAPTURE – Taxable based on the HOLDING PERIOD of the ASSET, the difference between the ACCELERATED DEPRECIATION taken on a CAPITAL ASSET and what would have been the STRAIGHT-LINE DEPRECIATION.
RECAPTURE CLAUSE – A clause in a CONTRACT permitting the party who grants an interest or right to take it back under certain conditions.
RECAPTURE RATE – Also known as RATE OF RETURN OF INVESTMENT – In APPRAISAL, a term used to describe the rate of recovery of an INVESTMENT in a WASTING ASSET. Added to the DISCOUNT RATE to derive a CAPITALIZATION RATE, it may be based on the STRAIGHT-LINE, SINKING FUND or ANNUITY method.
RECASTING – The process of adjusting a LOAN arrangement, especially under the threat of DEFAULT.
RECESSION – 1) Officially declared after two consecutive quarters of reduced gross domestic product, a general economic slowdown; 2) the legal remedy of terminating or canceling a CONTRACT and restoring the parties to their original positions.
RECIPROCITY – Mutual agreement by states to accept as valid the REAL ESTATE license one has earned in another state.
RECOGNIZED GAIN – In a TAX-FREE EXCHANGE, the portion of GAIN that is taxable.
A realized GAIN will generally be recognized to the extent of boot received.
RECONCILIATION – Also known as CORRELATION – In APPRAISAL, the process of adjusting comparables to estimate the VALUE of the subject being APPRAISED.
RECONFIGURATION – Changing the physical shape of a PROPERTY.
RECONVEYANCE – Occurs when a MORTGAGE DEBT is retired. The lender conveys the PROPERTY back to the EQUITY owner, free of the DEBT.
RECONVEYANCE DEED – Also known as DEED OF RECONVEYANCE – The DEED from a TRUSTEE to a TRUSTOR, which returns to the TRUSTOR the limited power to sell the PROPERTY.
RECORDED PLAT METHOD – Also known as LOT AND BLOCK METHOD – A legal description based on reference to the lot and block numbers of a recorded SUBDIVISION map.
RECORDING – The act of entering a document in the PUBLIC RECORDS, thus giving CONSTRUCTIVE NOTICE.
RECOURSE – The ability of a lender to claim money from a borrower in DEFAULT in addition to the PROPERTY pledged as COLLATERAL.
RECOVERY FUND – Generally administered by the REAL ESTATE COMMISSION, it requires LICENSEES to contribute then reimburses aggrieved persons who are unable to collect from BROKERS for wrongdoings.
RECTANGULAR SURVEY METHOD – Also known as GOVERNMENT SURVEY
METHOD – A system established by the federal government for surveying and legally describing LAND by reference to a PRINCIPAL MERIDIAN and BASE LINE or BASEAND-MERIDIAN SYSTEM.
RECURRING CLAIM PROVISION – A provision in some HEALTH INSURANCE POLICIES which specifies a length of time during which the recurrence of a CONDITION is considered to be a continuation of a previous period of DISABILITY or hospital confinement.
RECURRING CLAUSE – A clause in some HEALTH INSURANCE POLICIES which provides the specifics of a RECURRING CLAIM PROVISION.
REDEMPTION PERIOD – The period during which a former owner can reclaim FORECLOSED PROPERTY.
REDEVELOP – The process of DEMOLITION of the existing IMPROVEMENTS and construction of new IMPROVEMENTS on a SITE. The new IMPROVEMENTS are often of a different type from the old.
RED HERRING – A proposed PROSPECTUS that has not been approved by the SECURITIES AND EXCHANGE COMMISSION (SEC) or state securities commission.
RE-DISCOUNT RATE – Also called DISCOUNT RATE – The rate of interest charged to member BANKS when they borrow from the Federal Reserve System.
REDLINING – Outlawed by the COMMUNITY REINVESTMENT ACT, an illegal practice of a lender refusing to make home LOANS in certain areas. The term is derived from circling, with red pencil on a map, areas where the institution will not lend. If the area is completely cut off from MORTGAGE financing, PROPERTY VALUES will plummet and neighborhood conditions will deteriorate rapidly.
REDUCED PAID-UP INSURANCE – A form of INSURANCE available as a NONFORFEITURE OPTION. It provides for continuation of the original INSURANCE PLAN, but for a reduced amount.
REDUCTION CERTIFICATE – Used when MORTGAGED PROPERTY is sold and the buyer assumes the DEBT, a document in which the MORTGAGEE (lender) acknowledges the sum due on the MORTGAGE LOAN.
RE-EVALUATION CLAUSE – See also REAPPRAISAL LEASE, RE-EVALUATION LEASE – The clause in a lease that allows for periodic review of the rental level by independent
APPRAISERS.
RE-EVALUATION LEASE – Also known as REAPPRAISAL LEASE – A LEASE where the rental level is periodically reviewed by independent APPRAISERS. Often the LESSOR and LESSEE will each select an APPRAISER; if they do not agree on a VALUE, they will choose a third APPRAISER.
REFERRAL – The act of suggesting the use of a certain BROKER.
REFINANCE – To replace an old LOAN(s) with a new LOAN(s).
REGENCY HOUSE – An English style two- or three-story symmetrical house with a HIP ROOF. A small octagonal window over the front door is traditional.
REGIONAL SHOPPING CENTER – A type of SHOPPING CENTER containing 300,000 to
900,000 square feet of shopping space and at least one major department store.
REGISTRAR – The person who is to maintain accurate official records, such as for MORTGAGES, DEEDS and other recorded documents.
REGRESSION – The APPRAISAL principle which maintains that whenever PROPERTIES of different VALUES, AMENITIES, sizes, etc., are present in one area, the VALUE of the better PROPERTIES will be adversely affected and regress to the general VALUE of the area.
REGULATION – Supervision of business practices by a governmental entity.
REGULATION D – A REGULATION of the SECURITIES AND EXCHANGE COMMISSION that sets forth conditions necessary for a PRIVATE OFFERING EXEMPTION.
REGULATION Z – A federal REGULATION requiring CREDITORS to provide FULL DISCLOSURE of the TERMS of a LOAN.
REGULATORY TAKING – Effects of government REGULATION deemed so severe as to destroy most of the VALUE of a PROPERTY. In effect, the government has “taken” the PROPERTY without JUST COMPENSATION.
REHABILITATE – To RESTORE a STRUCTURE to a condition of good repair.
REHABILITATION – (1) RESTORATION of a TOTALLY DISABLED PERSON to a meaningful occupation; (2) a provision in some LONG-TERM DISABILITY POLICIES that provides for continuation of BENEFITS or other financial assistance while a TOTALLY DISABLED INSURED is retraining or attempting to resume productive employment.
REHABILITATION TAX CREDIT – Not of use to high-income investors, a provision of the Tax Reform Act of 1986 which allows, under certain conditions or imposed requirements, a twenty percent TAX CREDIT for REHABILITATING certified HISTORIC STRUCTURES
and a ten percent credit for other buildings that were placed in service after 1936
REIMBURSEMENT – The payment of the expenses actually incurred as a result of an ACCIDENT or sickness, but not to exceed any amount specified in the POLICY.
REINSTATEMENT – The resumption of COVERAGE under a POLICY which has LAPSED.
REINSURANCE – The acceptance by one or more INSURERS, called RE-INSURERS, of a portion of the RISK UNDERWRITTEN by another INSURER who has CONTRACTED for the entire COVERAGE.
REINSURANCE FACILITY – An alternative mechanism to service those INSUREDS that cannot obtain INSURANCE in the VOLUNTARY MARKET. PREMIUMS and LOSSES for the business that is CEDED to the FACILITY are POOLED and all INSURERS share according to their proportion of the VOLUNTARY MARKET.
REINSURERS – INSURERS which agree to accept a portion of the RISK UNDERWRITTEN by another INSURER who has CONTRACTED for the entire COVERAGE.
REINVESTMENT RATE – The INTEREST RATE an investor is assumed to be able to earn on intermediate cash flow in the projection of a terminal VALUE.
RELEASE – Also known as FINAL RELEASE – Typically issued in exchange for a settlement payment, a legal CONTRACT between two or more parties acknowledging the termination of a claimant’s right to sue against the released party.
RELEASE CLAUSE – In a MORTGAGE, a clause that gives the owner the privilege of paying off a portion of the MORTGAGE indebtedness, thus freeing a portion of the PROPERTY from the MORTGAGE.
RELEASE OF LIEN – To free REAL ESTATE from a MORTGAGE.
RELICTION – An increase in LAND by the permanent withdrawal of a river, lake, sea or other body of water.
RELOCATION CLAUSE – A LEASE stipulation that allows the LANDLORD to move the TENANT within the building.
RELOCATION NETWORK – Generally not members of a FRANCHISE that share information with one another concerning potential customers, a geographically diversified group of independent REAL ESTATE BROKERAGE companies.
RELOCATION SERVICE – A company that contracts with other firms to arrange the relocation of employees from one city to another. The service generally handles the sale of the employee’s home and purchase of a new home and may also include furniture-moving service.
REMAINDER – An ESTATE that takes effect after the termination of a prior ESTATE, such as a LIFE ESTATE.
REMAINDER ESTATE – The interest in REAL PROPERTY received by the REMAINDERMAN under a LIFE ESTATE IN REMAINDER. The interest in INCHOATE (contingent) while the LIFE TENANT is alive and does not VEST in the REMAINDERMAN until the death of the LIFE TENANT.
REMAINDERMAN – The person entitled to the remainder of a LIFE ESTATE after the LIFE TENANT has died.
REMEDIATION – The cleanup of an environmentally contaminated SITE.
REMODEL – To change the appearance and functional utility of a building which may include painting, repairing and replacing of FIXTURES and equipment.
RENEGOTIATE – To legally revise the TERMS of a CONTRACT.
RENEWABLE TERM INSURANCE – TERM INSURANCE which can be RENEWED at the end of the TERM at the option of the POLICYHOLDER and without EVIDENCE OF INSURABILITY for a limited number of successive TERMS. The RATES increase at each RENEWAL as the age of the INSURED increases.
RENEWAL – Continuance of COVERAGE under a POLICY beyond its original TERM by the INSURER’S acceptance of the PREMIUM for a new POLICY TERM.
RENEWAL OPTION – The right, but not the obligation, of a TENANT to continue a LEASE at specified TERM and RENT.
RENOVATE – General term applied to the process of upgrading an existing IMPROVEMENT. Usually there is an attempt to keep the same general appearance of the building with new materials or to return the building to its original appearance.
RENT – A charge for the use of space.
RENTABLE AREA – Also known as NET LEASABLE AREA (NLA) or NET RENTABLE
AREA – 1) Floor space that may be rented to TENANTS in a building or project; 2) the area upon which RENTAL payments are based. Generally excludes COMMON AREAS and space devoted to the cooling, heating and other equipment of a building.
RENTAL AGREEMENT – Also known as LEASE and RENTAL CONTRACT – Any written or oral CONTRACT under which an owner of REAL PROPERTY agrees to transfer to a TENANT the rights of possession and QUIET ENJOYMENT, in exchange for the right to receive CONSIDERATION or RENT from the PROPERTY and the right to REPOSSESS the PROPERTY at the termination of the LEASE (REVERSION).
RENTAL CONTRACT – Also known as LEASE and RENTAL AGREEMENT – Any written or oral CONTRACT under which an owner of REAL PROPERTY agrees to transfer to a TENANT the rights of possession and QUIET ENJOYMENT, in exchange for the right to receive CONSIDERATION or RENT from the PROPERTY and the right to REPOSSESS the PROPERTY at the termination of the LEASE (REVERSION).
RENTAL RATE – The periodic charge per UNIT for the use of a PROPERTY. The period may be a month, quarter or year. The UNIT may be a square foot, DWELLING UNIT or other UNIT of measurement.
RENT BID MODELS – A conceptual tool used to explain how LAND is allocated in competitive markets, based on the assumption that space is controlled by the activity, which offers the highest BID for the SITE.
RENT CONCESSION – Also known as CONCESSIONS – Benefits granted by a seller/LESSOR to induce a SALE/LEASE.
RENT CONTROL – Laws that govern the RATE that may be charged for space.
RENTER – Also known as LESSEE and TENANT – The person who receives a LEASE.
RENTER’S POLICY – A package type of INSURANCE that includes COVERAGE similar to a HOMEOWNERS POLICY to cover the PERSONAL PROPERTY of a RENTER or
TENANT in a building.
RENT-FREE PERIOD – Offered by a LANDLORD as a RENTAL CONCESSION to attract TENANTS, a portion of the TERM of a LEASE when no RENT is required.
RENT MULTIPLIER – Also known as GROSS RENT MULTIPLIER (GRM) – In the INCOME APPROACH TO VALUE, the relationship or ratio between the sales price of a PROPERTY and its gross rental INCOME, usually GROSS monthly INCOME when referring to RESIDENTIAL PROPERTIES and gross annual INCOME when referring to COMMERCIAL PROPERTIES.
RENT ROLL – A list of TENANTS, generally with the LEASE, RENT and expiration date for each TENANT.
RENT-UP PERIOD – The time it takes for newly constructed PROPERTIES to be fully occupied.
REORIENTATION – Changing the market appeal of a PROPERTY.
REPAIRS – 1) In INCOME PROPERTY, repairs are an OPERATING EXPENSE for accounting and TAX purposes; 2) as distinguished from CAPITAL IMPROVEMENTS, work performed to return PROPERTY to a former condition without extending its useful life.
REPAYMENT CLAUSE – Also known as OR-MORE CLAUSE – The clause which permits partial or complete repayment of the PRINCIPAL BALANCE ahead of the scheduled time without any PENALTY.
REPLACEMENT – The substitution of HEALTH INSURANCE COVERAGE from one POLICY CONTRACT to another.
REPLACEMENT COST – Also known as ACTUAL CASH VALUE – The estimated cost to construct, at current prices, the duplication of only the function and not the form of the subject improvements.
REPLACEMENT RATIO – The percentage of INCOME before retirement that is required to be replaced to maintain the same standard of living after retirement.
REPLACEMENT RENT – Also known as ECONOMIC RENT and MARKET RENT. The amount of RENT that would be paid for the REAL PROPERTY in an open competitive market at any given time – in contrast to CONTRACT RENT.
REPLACEMENT RESERVE – An amount set aside from NET OPERATING INCOME to pay for the eventual wearing out of short-lived ASSETS.
REPLEVIN – A legal action brought by an owner to recover PERSONAL PROPERTY which has been taken illegally.
REPRESENTATION – Statements made by an applicant in the application which he represents as being substantially true to the best of his knowledge and belief, but which are not warranted as exact in every detail.
REPRODUCTION COST – Also known as REPRODUCTION COST NEW – The estimated cost to construct, at current prices, the duplication of both the form and the function of the subject improvements.
REPRODUCTION COST NEW – Also known as REPRODUCTION COST – The estimated cost to construct, at current prices, the duplication of both the form and the function of the subject improvements.
RESALE PRICE – In projection of REAL ESTATE INVESTMENT performance, the assumed selling price a PROPERTY could fetch at the end of the PROJECTION PERIOD.
RESALE PROCEEDS – The amount a former owner receives upon a sale after paying TRANSACTION COSTS, remaining DEBT and, sometimes, INCOME TAXES.
RESCIND – To withdraw an offer or CONTRACT. REGULATION Z allows a three-day period in which to RESCIND certain CREDIT transactions.
RESCISSION – Termination of an INSURANCE CONTRACT by the INSURER when the CONTRACT was induced by DURESS, MISREPRESENTATION, FRAUD, or MISTAKE.
The action of RESCISSION must take place within the contestable period or TIME LIMIT ON CERTAIN DEFENSES but takes effect as of the date of issue of the POLICY, thus VOIDING the CONTRACT from its inception.
RESERVATION OF RIGHTS – An arrangement whereby an INSURER defends a case without COMMITMENT to provide COVERAGE in the event that the facts disclosed during the trial reveal that the OCCURRENCE is not covered.
RESERVE – (1) An amount allocated for a special purpose, usually a LIABILITY and not an extra fund; (2) an amount representing LIABILITIES kept by an INSURER to provide for future commitments under POLICIES outstanding.
RESERVE FUND – An account maintained to provide funds for anticipated expenditures required to maintain a building. A reserve may be required by a lender in the form of an
ESCROW to pay upcoming TAXES and INSURANCE costs. A REPLACEMENT
RESERVE may be maintained to provide for replacement cost or short-lived components such as heating equipment, carpets or roofing. Deposit of money into such a fund does not achieve a tax deduction.
RESERVE PRICE – An established amount below which the seller is not obligated to accept a winning BID In an AUCTION or other bidding procedure.
RESERVES FOR REPLACEMENT – Funds set aside from the effective GROSS INCOME to replace future short-lived items, such as air-conditioning units, washing machines, stoves, paving, roofing, etc.
RESIDENCE – The place where one lives, particularly the DWELLING in which one lives.
RESIDENTIAL – Pertaining to HOUSING.
RESIDENTIAL BROKER – One who LISTS and sells houses or CONDOMINIUMS.
RESIDENTIAL MEMBER (RM) – A designation conferred by the AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS.
RESIDENTIAL PROPERTY – 1) In income TAXATION terminology, RENTAL UNITS used for DWELLING purposes, not of a transient (hotel, motel) nature; 2) in REAL ESTATE BROKERAGE terminology, OWNER-OCCUPIED housing. To qualify as RESIDENTIAL, at least eight percent of a building’s INCOME should be derived from DWELLING UNITS.
RESIDENTIAL SALES COUNCIL – Affiliate of the REALTORS NATIONAL MARKETING INSTITUTE of the NATIONAL ASSOCIATION OF REALTORS that provides educational and promotional materials for members, most of whom are involved in RESIDENTIAL REAL ESTATE sales or BROKERAGE.
RESIDENTIAL SERVICE CONTRACT – Available in most areas upon the purchase of an existing home, an INSURANCE CONTRACT or home WARRANTY, generally for one year, covering the mechanical, plumbing and electrical systems of a home. Either the buyer or seller can pay for the CONTRACT.
RESIDENT MANAGER – One who supervises the care of an APARTMENT complex while living in one of the UNITS in the complex.
RESIDUAL – VALUE or INCOME remaining after deducting an amount necessary to meet fixed obligations.
RESIDUAL DISABILITY – Paid on a PRO-RATA basis, depending on the percentage of earnings LOSS.; a period of PARTIAL DISABILITY that immediately follows a period of TOTAL DISABILITY.
RESIDUAL DISABILITY BENEFITS – A provision in an INSURANCE POLICY that provides BENEFITS in proportion to a reduction of earnings as a result of DISABILITY, as opposed to the inability to work full-time.
RESIDUAL MARKET – A system through which INSURANCE is made available to buyers that represent unusually high RISKS and who are unable to obtain INSURANCE through ordinary methods in the VOLUNTARY MARKET.
RESIDUAL TECHNIQUES – A method of estimating the VALUE of a building or LAND, given values of one and RATE OF RETURN.
RESOLUTION TRUST CORPORATION (RTC) – Supervised by the FEDERAL DEPOSIT INSURANCE CORPORATION, a federal agency created by FIRRA to manage and resolve INSOLVENT SAVINGS AND LOAN ASSOCIATIONS placed into its conservatorship or receivership.
RESPONDENT SUPERIOR – In agency law, the doctrine that a PRINCIPAL is LIABLE for the acts of an AGENT.
RESTORE – To return a building to its original quality and appearance. While modern materials are used, the emphasis is on faithful reproduction of original style.
RESTRAINT OF ALIENATION – A limiting condition on the right to transfer PROPERTY. Courts will void the CONDITION if the CONDITION is against public policy or is unreasonable.
RESTRICTED APPRAISAL REPORT – An APPRAISAL REPORT that contains minimal detail and is intended to be received or relied upon by the CLIENT only, not any other party.
RESTRICTION – A limitation placed upon the use of PROPERTY contained in the DEEDS or other written instrument in the CHAIN OF TITLE or in local ORDINANCES pertaining to LAND use.
RESTRICTIVE COVENANT – A COVENANT or DEED RESTRICTION that limits the PROPERTY rights to the owner.
RETAIL GRAVITATION – The drawing power of a SHOPPING CENTER; generally, the larger the center, the greater its ability to draw from distant areas.
RETAINAGE – In a construction CONTRACT, money earned by a CONTRACTOR but not paid to the CONTRACTOR until the completion of construction or some other agreed-upon date.
RETAINING WALL – Any wall erected to hold back or support a bank of earth.
RETALIATORY EVICTION – The requirement that a TENANT VACATE a UNIT in
response to complaint from the TENANT concerning the condition of the building. Landlordtenant laws in many states forbid such EVICTIONS if proper channels are taken to lodge the complaint.
RETENTION – The net amount of RISK retained by an INSURANCE COMPANY for its own account or that of specified others and not REINSURED.
RETIRE (A DEBT) – To pay off the PRINCIPAL on a LOAN, thereby fulfilling the obligation under the LOAN CONTRACT.
RETROCESSION – The process by which a REINSURER obtains REINSURANCE from another company.
RETROSPECTIVE DATE – The first date for which CLAIMS will be paid under a CLAIMSMADE POLICY of LIABILITY INSURANCE.
RETROSPECTIVE RATING – Rating procedure which allows adjustment of an INSURED’S final RATE on the basis of the INSURED’S own LOSS experience.
RETURN ON EQUITY – The annual CASH FLOW that an EQUITY investor receives. See also EQUITY DIVIDED and EQUITY YIELD RATE
REVENUE STAMPS – Stamps that are affixed to DEEDS (and, in some states, other documents affecting REAL ESTATE) and that indicate the payment of the state’s DEED transfer (or other transfer) TAX. Federal Revenue Stamps have not been used since 1986, but many states have substituted their own.
REVERSE ANNUITY MORTGAGE (RAM) – A MORTGAGE under which someone who owns a home FREE AND CLEAR receives monthly payments from a lender for a period of time, usually less than ten years. At the end of the MORTGAGE TERM, the owner agrees to REFINANCE the LOAN or sell the property to pay off the LOAN.
REVERSE EXCHANGE – An exchange of REAL ESTATE whereby one party receives new PROPERTY before surrendering the PROPERTY to be exchanged.
REVERSE LEVERAGE – A situation in which financial BENEFITS from ownership accrue at a lower rate than the MORTGAGE INTEREST RATE.
REVERSION – The right of a LESSOR to possess leased PROPERTY upon the termination of a LEASE.
REVERSIONARY FACTOR – The mathematical factor that indicates the present worth of one dollar to be received in the future.
REVERSIONARY INTEREST – The right to the future ownership or possession of REAL PROPERTY currently owned or occupied by another. REVERSIONARY INTERESTS exist with LIFE ESTATES in reversion (in the GRANTOR) and LEASEHOLD ESTATES (in the LESSOR).
REVERSIONARY VALUE – The VALUE of PROPERTY at the expiration of a certain time period.
REVIEW APPRAISER – One who specializes in APPRAISAL REVIEWS.
REVOCABLE TRUST – A TRUST that can be terminated or revoked by its creator.
REVOCATION – An act of recalling a power of authority conferred such as a POWER OF ATTORNEY, an AGENCY, a license, etc.
REZONING – An action to change the designation of a subject PARCEL or group of parcels on the ZONING MAP the effect of which is to change the permitted uses for the affected PARCELS.
RIDER – 1) An AMENDMENT or attachment to a CONTRACT; 2) a document that modifies the POLICY. It may increase or decrease BENEFITS, waive a CONDITION or COVERAGE, or in any other way amend the original CONTRACT.
RIDGE – The horizontal line at the junction of the top edges of two sloping roof surfaces.
RIDGE BOARD – The heavy horizontal board set on edge at the RIDGE of the roof to which the RAFTERS are attached.
RIGHT OF FIRST REFUSAL – The opportunity of a party to match the TERMS of a proposed CONTRACT before the CONTRACT is EXECUTED.
RIGHT OF REINSTATEMENT – Without giving up either TITLE or possession, the right of a DEFAULTED TRUSTOR to REINSTATE the LOAN by paying all past-due charges and bringing the LOAN current before the FORECLOSURE sale.
RIGHT OF SURVIVORSHIP – The distinguishing feature of both JOINT TENANCY and TENANCY BY THE ENTIRETY, that at the death of one co-owner of PROPERTY, that person’s interest in the PROPERTY automatically passes to the surviving JOINT TENANT or TENANTS.
RIGHT-OF-WAY – Usually held by a POLITICAL UNIT, the right to use or control the REAL PROPERTY of another person.
RIPARIAN – In water law, a reference to water abutting the bank of a river or a stream.
RIPARIAN RIGHTS – Recognized in most eastern states but rarely in western states where they recognize USUFRUCTORY rights, rights pertaining to the use of water on, under, or adjacent to one’s LAND. May be qualified to avoid NUISANCE and pollution.
RISK – 1) Uncertainty or variability; 2) the possibility that returns from an investment will be greater or less than forecast; 3) the INSURED or to PROPERTY covered by a POLICY.
RISK CLASSIFICATION – The process by which a company decides how its PREMIUM rates for LIFE INSURANCE should differ according to the RISK characteristics of individuals INSURED (e.g., age, occupation, sex, state of health) and then applies the resulting rules to individual applications. See also UNDERWRITING.
RISK CONTROL – Any conscious action, or decision not to act, intended to reduce the frequency, severity or unpredictability of accidental LOSSES.
RISK-FREE RATE – The INTEREST RATE on the safest INVESTMENTS, such as federal government obligations.
RISK POOLING ARRANGEMENT – Also known as POOLING ARRANGEMENT – An agreement to divide any LOSSES that might occur equally among two or more people, typically with each paying the average LOSS.
RISK RETENTION GROUP – An alternative form of INSURANCE in which members of a similar profession or business band together to self INSURE their RISKS.
ROBBERY – The taking of PROPERTY from a person by force or threat of violence.
ROD – A unit of measurement sixteen and a half feet or five and a half yards long.
ROLLOVER – Transfer of IRA or other qualified PENSION funds from one financial institution (TRUSTEE) to another.
ROLLOVER LOAN – Commonly used in Canada, a type of MORTGAGE LOAN in which the AMORTIZATION of PRINCIPAL is based on a long term but the INTEREST RATE is established for a much shorter term. The loan may be extended, or rolled over, at the end of the shorter term at the current market INTEREST RATE.
ROOF JOISTS – The RAFTERS of a flat roof.
ROOFTOP LEASE – A LEASE under which the top or side of a building is LEASED for purposes such as restaurants, heliports and advertising.
ROTH IRA – An special type of INDIVIDUAL RETIREMENT ACCOUNT to which an individual can make contributions with after-tax dollars from which funds can be withdrawn taxfree at retirement.
ROW HOUSE – Single family DWELLING UNITS attached to one another by common walls, generally with a common FACADE.
ROYALTY – Money paid to a PROPERTY owner for extraction of some valuable resource from the LAND.
RULE OF 72’S – An approximation of the time it takes for money to double when earning COMPOUND INTEREST. To derive the number of years to double the PRINCIPAL, divide the percentage rate into seventy-two.
RULE OF 78’S – A method for computing unearned INTEREST used on INSTALLMENT LOANS with add-on INTEREST. The number seventy-eight is based on the sum of digits from one to twelve.
RUN-OFF COMPANY – An INSURANCE COMPANY that is being wound up or otherwise not UNDERWRITING business in a particular line, thus letting its present INSURANCE POLICIES run to their expiration dates.
RUNS WITH THE LAND – A phrase associated with EASEMENTS which transfer with the REAL PROPERTY from one owner to another.
RURAL – Generally characterized by farms, ranches, small towns and unpopulated regions, pertaining to the area outside the larger and moderate-sized cities and surrounding population concentrations..
RURBAN AREAS – On the fringe of urban development; in the process of being developed for urban uses.
