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Abstract of title

In real estate, an Abstract of Title is the condensed history of title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.

Acknowledgment

A declaration or avowal of one’s own act, to give it legal validity; as, the acknowledgment of a deed before a proper officer. Also, the certificate of the officer attesting such declaration.

Acre

An acre is a measure of land area in Imperial units or U.S. customary units. It is equal to 43 560 square feet, or 4840 square yards. The precise meaning of this depends on the exact definition adopted for a foot: the international acre is 4046.8564 m², but the U.S. survey acre is 4046.8726 m². In the UK, an acre is defined in the Units of Measurement regulations 1995 (http://www.hmso.gov.uk/si/si1995/Uksi_19951804_en_2.htm) as 4046.8564224 m².

A square mile has 640 acres, and a square parcel of land ¼ mile wide has 40 acres. A square parcel of land ½ mile on a side (¼ square mile) is 160 acres, the size of a homestead in the US. An area of land that is one furlong (220 yards) long and one chain (22 yards) wide has an area of one acre.

In the metric system, an acre is approximately 0.4047 hectare; to a good enough approximation for many purposes, it can be taken as 0.4 hectare. Conversely, a hectare is about 2.5 acres.

The acre was selected as approximately the amount of land tillable by one man behind an ox in one day. This explains its definition of in terms of the non-square one-chain by one-furlong parcel of land; a long narrow strip of land is more efficient to plough than a square plot, since the plough does not have to be turned so often. Statutory values were enacted in England by acts of Edward I, Edward III, Henry VIII, and George IV; the British “Weights and Measures Act” of 1878 defined it as containing 4840 square yards.

An acre foot is a measure of volume used in the U.S. used to measure large volumes of water, an acre foot being the volume necessary to cover one acre to a depth of one foot, or 325,852.73 gallons. The volume of a reservoir may be measured in acre feet.

Ad valorem tax

A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments.

Adjustable rate mortgage

An adjustable rate mortgage or variable rate mortgage is a loan secured on a mortgage whose interest rate and so monthly repayment vary over time. Other forms of mortgage loan include interest only mortgage, fixed rate mortgage, discounted rate mortgage and balloon payment mortgage. Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and thus are widely used where unpredictable interest rates make fixed rate loans difficult to obtain. The borrower benefits if the interest rate falls and loses out if interest rates rise

Variable rate mortgages are the most common form of loan for house purchase in the United Kingdom but are unpopular in some other countries. Variable rate mortgages are very common in Australia and New Zealand. An adjustable rate mortgages may offer the ability to repay principal (or capital) early without penalty, leading to significant reductions in the total cost of the loan, and also potentially shortening the original term of the loan.

Adjustable rate mortgages are sometimes sold to unsophisticated consumers who are unlikely to be able to repay the loan should interest rates rise, which they often do. In the United States, extreme cases are characterized by the Consumer Federation of America as predatory loans.

Due to changes in government policy among many OECD countries, the Federal Reserve Bank (or its equivalent) is now charged with maintaining an inflation rate at a low (at or below 2 percent) level. This policy has made a significant impact on the volatility of adjustable rate mortgages, as the supply of money is more tightly controlled by the Federal Reserve, reducing the frequency and size of fluctuations in the base rate.

Adverse possession

In real estate, adverse possession is a means of acquiring title to another’s land without compensation.

Adverse possession requires the actual, visible, hostile, notorious, exclusive, and continuous possession of the property under a claim of title. In simple terms, this means that those attempting to claim the land are occupying the land exclusively and openly as if it were their own. Generally they must do this continuously without challenge by the lawful owner for a fixed statutory period in order to acquire title.

This is sometime called squatters’ rights. If the squatter leaves the land for a period, or if the rightful owner effectively removes the squatter’s access even temporarily during that time period, the “clock” usually begins running again.

A similar concept allows creation of an easement, in which others may acquire the right to trespass on land for the purposes of access to other land. This must also be done openly but need not be exclusive. It is common practice in cities such as New York, where builders often leave sidewalk space or plazas in front of their buildings to meet zoning requirements, to close public areas they own periodically in order to prevent the creation of a permanent easement and compromise their property rights.

Allodial/Allodium

Allodial land, or allodium, is literally land which has no lord. The holder of allodial land would owe no obligations, as owner of the land, to anyone else.

Some sytems of law, for example English law, do not permit any land to be allodial, all land ultimately being held from the Crown, whereas others, such as Scottish law do permit this.

Allodial property rights were claimed by the people of colonial America after the Declaration of Independence and recognized by the States after the Revolutionary War. Once this occurred there was no real distinction between land held in fee simple and allodial land, and the two terms are used interchangeably in legal systems which have abolished the notion of a Lord. In these situations, Allodial land ownership may be contrasted to feudal land ownership.

Amortization

Amortization is distribution of a single lump-sum cash flow into many smaller cash flow installments for easier repayment. Unlike other repayment models, each repayment installment consists of both principal and interest. Amortization are chiefly used in loan repayments and sinking funds. The payments are usually of equal amounts. In the case of a loan, at the beginning of the loan, a greater amount of the payment is applied to interest compared to the latter portion of the loan.

In accounting, Amortization also means the spreading of expenses over future time periods of an intangible balance sheet item such as a leasing (mortgage) or deferred charges.

In real estate, it is also used to refer to a loan with such repayment scheme.

Apartment

An apartment (or flat) is a self-contained housing unit that occupies only part of a building. Apartments may be owned (by an owner-occupier) or rented (by “tenants”).

Some apartment-dwellers own their apartments, either as co-ops, in which the residents own shares of a corporation that owns the building, or development; or in condominiums, whose residents own their apartments and share ownership of the public spaces. Most apartments are in buildings designed for the purpose, but large older houses are sometimes divided into apartments.

In some parts of the world, the word apartment is used generally to refer to a new purpose-built self-contained residential unit in a building, whereas the word flat means a converted self-contained unit in an older building. In Britain and the Commonwealth, a flat is often taken to be a working class publicly-provided residential unit, whereas an identical private unit when targeted at a middle class resident would be called an apartment.

Apartment building

An apartment building, block of flats or tenement is a multi-unit dwelling made up of several (generally four or more) apartments (US) or flats (UK). Where the building is a high-rise construction, it is termed a tower block.

A two-unit dwelling is known as a duplex (US) or maisonette (UK); a three-unit dwelling is known as a triplex.

Appraisal

In the field of real estate transactions, appraisal refers to the act of determining the value of a property. An appraiser usually performs this function before a loan can be issued by a bank, to verify that there is sufficient collateral should the borrower default.

There are various methods of determining the value, including:

• comparison - Comparing the property to other similar ones
• rebuild - Determining what it would cost to rebuild the structure
• income - For commercial properties, determining the income the property generates

Professional appraisers exist in other fields, such as antiques, art or most other valuables that may need to be bought, sold or insured.

Appreciation

Appreciation is a term used in accounting relating to the increase in value of an asset. In this sense it is the reverse of depreciation, which measures the fall in value of assets over their normal life-time.

In times of high inflation appreciation will be common to all balance sheet assets. Generally, the term is reserved for property or, more specifically, land and buildings. In any viable modern economy, such property tends to increase in value over the years - if only because of the scarcity of usable land forces its price in a competitive situation.

Needless to say there are considerable difficulties in assessing the increase in value of any particular asset. This is principally because of the variety of interpretations that can be attached to the word value itself and due to the various instruments and methods used in the valuation process.

Assignment

In American law, an assignment is a transfer of rights or property from one person or entity to another. The person or entity transferring the rights or property is referred to as the assignor, and the other party is the assignee.