Urs Villiger

real Estate sales representative


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Glossary of Real Estate Terms


A measure of land equaling 160 square rods, or 4,840 square yards, 43,560 square feet, or .4 hectares.


The relationship between principal and agent which arises out of a contract, written or oral, wherein an agent is employed and authorized by a principal to represent him in business transactions with a third party.


One who is authorized by a principal to represent him in business transactions with a third party.  In the real estate profession it refers to a broker.

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.


The gradual retirement of a debt by means of partial payments of the principal at regular intervals.


The act or process of estimating value.

Assumption of Mortgage

The taking of title to property by a grantee, wherein he assumes liability for an existing mortgage against a property and becomes personally liable for the payment of such mortgage debt.

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.

Breach of Contract

Failure to fulfill an obligation under a contract.  Breach confers a right of action on the offended party.


See Real Estate Broker.


Any undertaking for the purpose of profit, including any interest in any such undertaking.


The limit on how much an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.


The name given to a mortgage document when title is registered under the Land Titles Act.


See “Date of Completion.”

Cloud on Title

Any encumbrance or claim that affects title to real property.


Assets pledged as security in a loan.  For example, real estate serves as collateral in a mortgage.


Remuneration paid to an agent on sale or lease of property, usually as a percentage of the amount involved.


See “Mortgage Commitment.”

Compound Interest

Interest on both the original principal and on interest accrued.

Condition Precedent

A condition in a contract 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 referring to a future event upon the happening of which the contract becomes no longer binding on the parties.


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).


Something of value given by a promise to a promisor to make the promise binding.


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.

Conventional Mortgage

A first mortgage outside the conditions of the National Housing Act granted by an institutional lender such as a bank, mortgage, loan, or trust company wherein the amount of the loan does not exceed 75% of the approved lending value of the property.


The transfer of an interest in property from one person to another.


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.


A person to whom a debt is owned by another person termed the debtor.


Compensation or indemnity for loss owing of breach of contract, or a tort (civil wrong).

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).


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 the land.


Failure to fulfill an obligation.


Payment of money or other valuable consideration as pledge for fulfillment of contract.


A loss in value due to any cause.


A legal identification of land or premises.


To repay a mortgage in full


A two-family dwelling or house.




A right enjoyed by one landowner over the land of another.


The unauthorized extension of the boundaries of land.


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.


The difference between the selling price and any charges against the property and appraised/market value.

Equity of Redemption

The right of the mortgagor to reclaim clear title to the property upon full repayment of the debt.


An interest in land.


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.


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.


Chattels included in the sale.

Fee Simple

An estate in which the owner has unrestricted power to dispose of the property as desired, including leaving by will or inheritance.  It is the greatest interest a person can have in real estate.


Permanent improvements to property that may not be removed at the expiration of the term of lease or tenure.


Remedial court action taken by a mortgagee, when default occurs on a mortgage, to cause forfeiture of the equity of redemption of the mortgagor.


A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in land.


The party to whom an interest in real property is conveyed.


The party who conveys an interest in real property by deed.

GDS Ratio

Gross Debt Service Ratio.  Allowable ratio of gross monthly payment to gross monthly income of mortgage applicant, usually about 30%.

High Ratio Mortgage

A mortgage loan that exceeds the normal limit of a conventional first mortgage, in regard to the ratio of the loan amount to the property’s lending value; the higher loan is made possible by a mortgage insurance plan.

Home Warranty Plan

Protection against failure of mechanical systems within the property.  Usually includes plumbing, heating systems and installed appliances.


A document or deed, usually in duplicate, expressing certain objects between the parties.


A judicial process or order requiring the person to whom it is directed to do-or refrain from doing a particular thing.


A form of written legal document.

Instrument Rate

The percentage which is charged for the use of borrowed money.


Incapable of being recalled or revoked; unchangeable, unalterable.

Joint Tenancy

Ownership of land by two or more persons whereby, on the death of one, the survivor or survivors take the whole estate.


The person from whom another holds tenancy.


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 (rental).

Legal Description

A written description by which property can be located, definitely.


Tenant under a lease


The person who grants use of property under lease to a tenant.


A right, given to a creditor, creating an interest in the real property until the debt is discharged.

Lis Pendens

A legal document giving notice that an action or proceeding is pending in the courts which affects the title to the designated property.


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.

Loan-To-Value Ratio

The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.

Market Value

(Formal Definition)  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 purchaser, 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 party acting under necessity, compulsion or peculiar and special circumstances.

Maturity Date

The day the mortgage loan must be paid in full or the agreement renewed.

Metes and Bounds

A system of land description whereby all boundary lines are set forth by use of terminal points and angles-mete referring to a limit or limiting mark, 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.

Mill (No longer used)

One-tenth of one cent, a measure used to indicate the property tax rate, e.g. a tax rate of one mill per dollar is the same as 0.10 per cent of the assessed value.


A conveyance of property to a creditor as security for the payment of a debt; the lender or creditor.


The one whom property is conveyed as security for the payment of a debt; the lender or creditor.


The one who makes the mortgage; the borrower or debtor.

Mortgage Commitment

A formal indication, by a lending institution that it will grant a mortgage loan on property, in a certain specified terms.

Multiple Listing

An arrangement among brokers, usually real estate board members, whereby each broker presents his listings to the other members who may negotiate the transaction.

Notice DOR

Notice filed in court by mortgagor under foreclosure proceedings that he desires an opportunity to redeem.

Offer and Acceptance

The basic requisite of any contract is a proposal by one party, called the offer, to another party, called the offer, to accept the basic terms of the Agreement.  If the offer indicates his assent to the proposal, there is an acceptance and the contract will bind both parties to its terms.

Open Listing

A listing given to any number of brokers without liability to compensate any except the one who first acquires a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer; the sale of the property automatically terminates the listing.


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.

Personal Property

All property, except land and the improvements thereon.

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.


The employer of an agent or broker, who give 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.

Quit Claim Deed

A general release of all claims or rights to a parcel of land.

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 Broker

A person who represents a principal in a real estate trade.  (See more formal definition in the Real Estate and Business Brokers Act).

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 favorable lease.  The real estate, plus the rights that go with it.


A registered word which may only be used by an active member of a real estate board affiliated with the Canadian Real Estate Association.


The compensation paid for the temporary use, and/or occupation of real estate.

Restrictive Convenant

A limitation placed upon the use of property, contained in the deed.


The interest one has in a piece of property.


The right to pass over another’s land, more or less frequently, according to the nature of the easement.


An employee of a broker authorized to trade in Real Estate.

Sealed and Delivered

A term indicating that a conveyor has received adequate consideration as evidence by his voluntary delivery.  The word “sealed” adds more strength, since under old conveyancing law an official seal was used as a substitute for consideration.

Set Back

The distance from the curb or other established line within which no buildings may be erected.

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.


An agent authorized by the listing agent to assist in transacting the affairs or the principal (with express or implied consent of principal)


The accurate mathematical measurement of land and buildings thereon, made with the aid of instruments.


An association of individuals formed for the purpose of owning, operating and managing large parcels of real property for the mutual benefit of all, and organized as corporation, limited partnership or joint venture.


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.


One who occupies land or tenement under a landlord.


In a mortgage “term” is the actual length of time for which the money is loaned.

Term Mortgage

A non-amortizing mortgage under which the principal is paid in its entirety upon the maturity date.


The means of evidence by which the owner of land has lawful ownership thereof.


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.


Estimated worth or price.  The act of ascertaining how much specific real property is worth.

Zoning By-law

A by-law passed by a municipality and approved by the Ontario Municipal Board, 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 Restricted Area by-law.

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