Legal Terms

TAX DEED — The deed given to a purchaser at a public sale of land held for nonpayment of taxes. It conveys to the purchaser only such title as the defaulting taxpayer had.

TENANCY IN COMMON — Co-ownership of property by two or more persons who hold undivided interest, without right of survivorship; interests need not be equal.

TENANT — The party who has legal possession and use of real property belonging to another.

TIME IS OF THE ESSENCE — A condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time.

TITLE — Indicates “fee’’ position of lawful ownership and right to property. “Bundle of Rights” possessed by an owner. Combination of all elements constituting proof of ownership.

TITLE INSURANCE — Insurance to protect a real property owner or lender up to a specified amount against certain types of loss, e.g., defective or unmarketable title.

TORT — Any wrongful act (not involving a breach of contract) for which a civil section will lie for the person wronged.

TRANSFER FEE — A charge made by a lending institution holding or collecting on a real estate mortgage to change its records to reflect a different ownership.

TRUST ACCOUNT — An account separate and apart and physically segregated from broker’s own funds, in which broker is required by law to deposit all funds collected for clients.

TRUST DEED — Just as with a mortgage this is a legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan. However, it differs from the mortgage in a number of important respects. For example, instead of there being two parties to the transaction there are three. There is the borrower who signs the trust deed and who is called the trustor. There is the third, neutral party, to whom trustor deeds the property as security for the payment of the debt, who is called the trustee. And, finally, there is the lender who is called the beneficiary, the one who benefits from the pledge agreement in that in the event of a default the trustee can sell the property and transfer the money obtained at the sale to lender as payment of the debt.

TRUSTEE — One who holds property in trust for another to secure the performance of an obligation. Third party under a deed of trust.

TRUSTOR — One who borrows money from a trust deed lender, then deeds the real property securing the loan to a trustee to be held as security until trustor has performed the obligation to the lender under terms of a deed of trust.

TRUTH IN LENDING — The name given to the federal statutes and regulations (Regulation Z) which are designed primarily to insure that prospective borrowers and purchasers on credit receive credit cost information before entering into a transaction.

UNDERWRITING — Insuring something against loss; guaranteeing financially.

UNIFORM COMMERCIAL CODE — Establishes a unified and comprehensive method for regulation of security transactions in personal property, superseding the existing statutes on chattel mortgages, conditional sales, trust receipts, assignment of accounts receivable and others in this field.

VALUATION — Estimated worth or price. Estimation. The act of valuing by appraisal.

VENDEE — A purchaser; buyer.

VENDOR — A seller.

VESTED — Bestowed upon someone; secured by someone, such as title to property.

VOIDABLE — That which is capable of being adjudged void, but is not void unless action is taken to make it so.

WARRANTY DEED — A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the lawful claims of third persons. It is commonly used in many states but in others the grant deed has supplanted it due to the modern practice of securing title insurance policies which have reduced the importance of express and implied warranty in deeds.

WRAP AROUND MORTGAGE — A financing device whereby a lender assumes payments on existing trust deeds of a borrower and takes from the borrower a junior trust deed with a face value in an amount equal to the amount outstanding on the old trust deeds and the additional amount of money borrowed.

ZONE — The area set off by the proper authorities for specific use; an area subject to certain restrictions or restraints.

ZONING — Act of city or county authorities specifying type of use to which property may be put in specific areas.