REAL ESTATE TERMS

A

An agent is an individual who has completed the Real Estate Agent's Program and the Provincial Qualifying Examination for Agents. An Agent is licensed by the Real Estate Council of Alberta (RECA) and employed or by association with a licensed brokerage in Alberta.Thus, an agent may be a representative of a client acting on their behalf or authorized to trade in Real Estate.

AGENT

ALBERTA REAL ESTATE ASSOCIATION (AREA)

An association of Real Estate industry members who belong to Real Estate Boards and to the Canadian Real Estate Association (CERA).

AMORTIZATION

The number of years it will take to repay a mortgage loan in full.

ASSESTS OF A CORPORATION

The Real Property Report and the Personal Property Report acquired for the use, maintenance and enjoyment of the common property and includes funds such as Surplus Funds, the Replacement Reserve Funds, maintenance equipment, etc. These assets are not distributable to the owners except on termination of the corporation.

ASSOCIATE BROKER

A person who holds the qualifications of a broker (successful completion of the Real Estate Brokers Program and the Provincial Qualifying Examination for Brokers). An association broker is licensed by the Real Estate Council of Alberta (RECA) and employed by or associated with a licensed brokerage in Alberta. A broker is registered with and authorized to operate a brokerage and trade in real estate on behalf of that brokerage.

B

BARE LAND CONDOMINIUM

These are typically townhouses with a Condominium Association that are built on individual lots.

BOARD OF DIRECTORS

Those people elected by the groups of registered unit owners or other qualified people such as representatives of lenders, tenants or non-owners. There are generally three to seven individuals who are elected from different units at General Meetings to supervise and manage the project on behalf of all the unit owners. The board has a duty to comply with the Condominium Property Act and the bylaws of the Condominium Building.

BROKERAGE

A brokerage is a licensed body by the Real Estate Council of Alberta under the Real Estate Act. A brokerage is authorized by its license to trade in Real Estate or deal in mortgages only in the name under which it is licensed. A brokerage is authorized to employ or contract with individual licensed brokers, associate brokers and agents to conduct business on behalf of the brokerage.

BYLAWS

The rules and regulations supplemental to the Condominium Property Act which govern operational aspects of the corporation, owners and the board.

C

A notice or a warning under the Condominium Property Act or the Alberta Land Titles Act. Under the Condominium Property Act, a corporation may register a caveat against age title of a defaulting owner's unit to give notice of unpaid condominium fees or, in a rental situation, failure to provide a common property security deposit.

The portion of the condominium which is not compromised of units. Condominiums created since January 1,1979 generally limit the boundaries of the unit to the interior finish of the unit (i.e., paint to paint or basically the air space), making virtually all of the physical structure common property. The common property is shared and jointly owned by the unit owners. Exteriors of the unit, balconies, roads, walkways, privacy areas, storage sheds, parking areas, recreational facilities are considered part of common property

In a Condominium an owner owns a unit and shares ownership in the common property with the other unit owners. The term Condominium is also used informally to refer to the individual unit and to the structure or total property owned by unit owners.

CANADIAN REAL ESTATE ASSOCIATION (CREA)

An umbrella organization whose members include Real Estate industry members from the ten provincial associations, the Yukon Territory and 116 Real Estate boards across Canada.

CAPITAL REPLACEMENT RESERVE FUND

The purpose of the reserve fund is to provide money for the repair or replacement of property owned by the corporation and the common property when this repair or replacement does not occur annually

CAVEAT

CERTIFICATE OF TITLE

Describes necessary details of the owners of the property and bears notations of the rights any other parties may have to that piece of the property.

CLOSED MORTGAGE

A mortgage that cannot be repaid or renegotiated unless the lender agrees and the borrower is willing to pay an interest penalty.

CLOSING DATE

The date the purchase of the property becomes final and the new owner obtains the Title and takes possession.

COMMON PROPERTY

CONDOMINIUM

CONDOMINIUM CONTRIBUTION

When unit owners are expected to pay a portion of the management and maintenance of the common property and any other common. expenses.

CONDOMINIUM CORPORATION

When a Condominium plan becomes registered, the owners of the different units within the Condominium become subjected to the Condominium's rules and regulations. The owners are similar to shareholders because they have merit to help make decisions within the Condominium, but hold no more power than other owners when making these decisions.

D

DEED

A legal document that conveys (transfers) ownership of a property to a buyer.

DEPOSIT

The amount of money paid by the purchaser at the time of making an offer to purchase. Until the sale closes the money will be held in trust by either the seller's Lawyer or Real Estate Agent .

E

EASEMENT

Grants a third party the right to enter into another person's property for a specified purpose.

ENCUMBRANCE

A legal claim registered against a property. It may not prevent the sale of the property, but may affect its value.

ESTOPPEL CERTIFICATE

A form of documents issued under the corporate seal of the corporation to any person acquiring an interest in a unit. This certificate contains specific information concerning the status of contributions by a unit owner toward common expenses.

EXCLUSIVE USE COMMON PROPERTY

Consists of those proportions of the Common Property that are restricted to one or more units (e.g. balconies, individual parking spaces, lockers, fenced backyards). Titles for these areas may be developed which create legal ownership of the portion of the Common Property that is used by the unit owner.

F

FEE SIMPLE (ESTATE)

Ownership where the owner owns the land now and for all time in the future, and the owner's rights are subject only to restrictions by the government.

FIXED RATE MORTGAGE

A mortgage for which the rate of interest is fixed for a period of time.

H

HIGH-RATIO MORTGAGE

A mortgage for more than 75% of the property's appraised value or purchase price, whichever is lower.

I

INTEREST RATE

The rate of return paid by the borrower (purchaser) to the lender for permitting the borrower to use the funds for the specified term. It is expressed as an annual rate.

J

JOINT TENANCY

A joint ownership where, if a owner dies, their ownership is automatically transferred to the other owner(s)

L

LIEN

A right of Encumbrance affecting any property, as security for a debt or charge (usually for labour, services, or material supplied to it.)

LIFE ESTATE

An exclusive use of property for the term of one's life.

M

MANAGEMENT AGREEMENT

The agreement entered into by the Condominium Corporation and a property manager. In this contract, the manager is given a specific amount of authority when dealing with the different owners of the Condominium. The manager generally assists with the administrative duties of the property and the assets of the corporation.

MORTGAGE

A loan used to purchase the home. The property is used as security for the loan.

MORTGAGEE

The lender ( the bank or financial institution). The person/insitution who is lending the money to the purchaser.

MORTGAGE PAYMENT

The amount of money that the purchaser pays to the lender on a established, regular basis to repay the principal and pay interest on the mortgage loan.

MORTGAGOR

The borrower. The person that is borrowing money from a financial insitution to buy a property.

O

OPEN MORTGAGE

A mortgage that can be prepaid or renegotiated at any time and in any amount without interest penalty.

P

PRE-ARRANGED MORTGAGE

Preliminary approval by the ender of the borrower's application for a mortgage to a certain maximum amount and rate.

PRINCIPAL

The amount of money borrowed for a mortgage.

R

REAL PROPERTY

Real property is a combination of tangible and intangible rights. The tangible element is the real estate itself, the physical, touchable land improvements. The intangible element is the real property rights that arise by reason of ownership of the physical property.

REAL PROPERTY REPORT

The legal outline of the property and location of all buildings on the land.

RESTRICTIVE COVENANT

A registered limitation against the Land Title. In Alberta such a restriction would normally by found in a form of a caveat registered against the title at the Land Title Offices and involves the physical land and improvements made to it, including structures thereon.

S

SECTION

A section of land measures one mile by one mile and normally contains 640 acres

SPECIAL RESOLUTION

A term used when a Corporation is required to change a bylaw and/or other specific business elements. It must be passes at a properly convened corporation meeting by not less than %75 entitled to vote and representing not less than %75 of the total unit factors. It can also be signed by the sam people referred to above, as an alternate means of obtaining the necessary consent.

STATEMENT OF ADJUSTMENTS

A document detailing the exact amount owed by the purchaser to the vendor upon closing. It includes the balance of the purchase price, reimbursement of any prepaid utilities or services and lawyer fees and costs.

SURVEY

A document providing details of a property's boundaries, measurements, and structures.It also describes any easements, rights-of-way, or encroachments made by either your property or adjoining properties.

T

TENANCY IN COMMON

The owners each own a part of the common land. If one owner dies, the interest goes to their heirs rather than the other owner(s).

TERMS

The length of time that a mortgage agreement covers. When the term expires, the mortgage is usually repaid in full borrower renegotiated for another term.

TITLE

The legal evidence of ownership to a property.

TITLE SEARCH

Insurance which may be purchased against title defects, either in lieu of or in addition to a real property report.

TORRENS SYSTEM

Alberta's land registry system. It is used in real estate to conduct land title searches.

TOTAL DEBT SERVICE RATIO

The total of annual mortgage payments and all other debts, expressed as a percentage of gross annual income.

U

UNIT

That part of the project which is individually owned. The boundaries for a unit are defined in the registered condominium plan.

UNIT FACTOR

A unit owner's share of re common property. Each unit factor is expressed as a fraction in which the denominator is 10,000n. In most cases in Alberta, the unit factor is based on the size of a given unit in relation to the size of all other units. The unit factor for a specific unit is reflected on its certificate of title and on the condominium plan.