Glossary of Terms
This clause in a note and trust deed permits the payee or
beneficiary to declare the entire unpaid balance immediately
due and payable when a given condition occurs. Such a condition
can be the sale of the land. This clause is sometimes called
an "alienation clause".
Literally, "according to value". This term is usually
used in reference to real property taxes, which are assessed
according to value, ie, ad valorum.
All Inclusive Trust Deed (AITD/Wrap-Around)
A junior Deed of Trust securing a promissory note, the face
amount of which is the sum of the liability secured by prior
Trust Deeds plus the cash or equity advanced by the AITD lender.
Provision for the payment of a debt as to both principal and
interest in equal installments, over a period of time.
An opinion as to the fair market value of land and the improvements
The value placed on land and improvements as a basis for taxation.
In California this is usually accomplished by the county assessor's
office, and the assessed values for real estate taxes are
usually one quarter of market value.
Special and local levies upon property in the immediate vicinity
of an improvement. Assessments can be imposed by such entities
as flood control districts, street lighting districts, and
air pollution control districts, which serve an area.
One to whom a transfer of interest is made. For example, the
assignee of the Deed of Trust or contract.
One who makes an assignment. For example, the assignor of
a Deed of Trust or contract.
The transfer, in writing, of a person's interest to another
person or entity in an asset, such as an assignment of a stock,
a Deed of Trust, and note or a lease.
An agreement by one party to pay an obligation previously
owed by another. For example, the assumption of an existing
Trust Deed by a new owner may occur when property is sold.
Attorney in Fact
One who holds a power of attorney from another allowing him
to act on behalf of the grantor of the power.
In a Trust Deed, the lender is designated as the beneficiary.
He obtains the benefit of the security.
A report from the lender, usually in wiriting, setting forth
the terms and conditions of a loan already of record, such
as amounts still owed, interest rate, monthly payments, etc.
Bill of Sale
A document that attests to the transfer of ownership of personal
One who obtains a loan and owes money to a lender.
One who purchases or acquires property.
A service performed by a neutral third party in receiving
and disbursing loan payments as instructed by the parties
The exercise of the power of eminent domain by which property
is taken for a public use upon payment of just compensation.
Condemnation can also refer to the condemning of unsafe structures.
A multifamily or other structure in which units are individually
owned and in which owners of individual units also own an
individed interest in common areas.
Dependent upon conditions or events specified but not yet
accomplished. Property may be sold contingent upon the seller
or buyer meeting a predetermined condition.
A written document that transfers title to an asset from one
person to another. A deed and an assignment are both conveyances,
as is a bill of sale.
One who sets value of property for taxation purposes.
A written document which conveys ownership of land from one
person to another.
Deed of Trust
A document executed by the owner of land by which the land
is given as security for the payment of a note or other performance
obligation. In California and some other states, the Deed
of Trust is usually used in place of a mortgage.
Failure to perform a duty or to pay an obligation.
A personal judgment in a judicial foreclosure action for the
remaining amount due after a sale of the security.
A statement from a lender showing the amount due on a loan.
An amount of money given as part of the purchase price of
property to bind the agreement between buyer and seller.
A right or interest in the land of another, such as a right
to cross over another person's property to reach yours.
The right or power of a governmental body to take property
for a public purpose upon payment of just compensation.
A lien affecting the land and improvements, such as a mortgage
or Trust Deed.
Market value of property, less any encumberance or other liens
According to section 17003 of the State of California Financial
Code: "...any transaction wherein one person, for the
purposes of effecting the sale, transfer, encumbering, or
leasing of real or personal property to another person, delivers
any written instrument, money, evidence of title to real or
personal property, or other thing of value to a third party
to be held by such third person until the happening of a specified
event or the performance of a prescribed condition, when it
is then to be delivered by such third person to the grantee,
grantor, promisee, promisor, obligee, obligor, bailee, bailor,
or any agent or employee of any of the latter."
An interest in real property which is excluded from the conveyance
and remains in the grantor or which had been excluded in a
Insurance against loss or damage by fire to specific property.
A proceeding to enforce a lien by the sale of the property
in order to satisfy the debt.
The buyer on a deed.
The seller on a deed.
An account held in trust by the lender in which the borrower
is required to place monthly deposits for taxes, insurance
and other purposes.
Land Sale Contract
An agreement to sell and purchase wherein legal title is withheld
from the purchaser until such time as the required payments
to the seller have been completed.
Lease Option (Lease with the option to purchase)
A lease containing an option giving the lessee the right to
purchase the property. The price and terms of the purchase
must be set forth for the option to be valid. The option may
run for the length of the lease or only for a portion of the
One who lends money to borrowers.
The tenant under a lease.
The landlord under a lease.
Description of real property, as used in legal documents in
contrast to a street address by which the property is commonly
known. Legal descriptions usually refer to recorded maps,
surveys, or other public documents.
A security interest in real or personal property which places
the holder in a position prior to the rights of the general
creditors of the owner. Examples include Trust Deeds, mortgages,
special assessments, recorded judgments, mechanic liens, taxes,
A notice recorded in the official records of a county to indicate
that a lawsuit is pending affecting the lands described in
The price that real property would reasonably be expected
to bring were it to be offered for sale with a reasonable
sales effort over a reasonable period of time.
Metes and Bounds
A term used in describing the boundary lines of land setting
forth all the boundary lines together with their terminal
points and angles.
A written document executed by the owner of land by which
the land is given as security for the payment of a debt or
performance obligation (rarely used in California).
Written evidence of a debt by a borrower that included a promise
of payment in accordance with specified terms. A valuable
document which must not be lost even when paid in full. In
real property transactions, a note is usually secured by a
Deed of Trust.
Notice of Completion
A notice which should be recorded to indicate completion of
a work of improvement to real property. A valid notice of
completion limits the time for filing valid mechanic's liens.
Notice of Default
Recorded notice that a default has occurred under a Deed of
Trust and/or Note.
A statement furnished to an escrow from an owner of land subject
to an encumberance (note) as to the balance due. Not to be
confused with a beneficiary's statement. This can also be
provided by a tenant regarding his rights of possession
Open End Deed of Trust
A Deed of Trust which secures additional notes for funds that
a lender may advance to a trustor, subsequent to the execution
of the original loan.
One who receives payments.
One who makes payments.
All property which is not land or improvements permanently
affixed to land. Example: stocks, bonds, furniture, automobiles,
clothing, promissory notes, etc. Items of tangible personal
property are often referred to as chattels.
A charge made by a lender. One point equals one percent of
Power of Attorney
A written authorization to an agent to perform specified acts
on behalf of his principal. This may be granted as either
a general or a limited power.
Preliminary Title Report
A report from a title company of the present condition of
title made prior to the issuance of a title policy.
An agreement to pay a penalty for the payment of a note before
it actually becomes due.
The allocation of property taxes, interest, insurance premiums,
rental income, etc. between buyer and seller proportionate
to time of use.
A deed which conveys whatever right, title or interest the
grantor may have in property at the time of conveyance. There
is no guarantee implied in a quitclaim deed.
Land or improvements permanently affixed to land.
The document that is evidence that the Deed of Trust affecting
real property has been paid in full and that the lender and
the trustee no longer have any interest in the property.
Filing for recording, an executed document, in the office
of the county recorder, a very necessary process in dealing
with real property.
Request for Notice of Default
A recorded request for notification of a recorded notice of
default on a Deed of Trust.
Rights reserved by the grantor in conveying property, or a
right which had previously been reserved.
This is often referred to as covenants, conditions and restrictions
(CC&R) in regards to a piece of property, setting limitations
on its use.
Right of Way
The right of another to cross over, under or through a parcel
One who sells property to another.
Usually referred to as the condition of title that exists
at the time of acquisition by the buyer, such as subject to
a Deed of Trust.
An agreement by which a prior lien is made inferior to an
otherwise junior lien.
One who collects taxes on property.
Evidence of a person's right to or the extent of his interest
Insurance against loss or damage resulting from defects in
title to a particular parcel of real property.
see Deed of Trust
Trustee (in a Deed of Trust)
The entity to which property is conveyed in trust, not to
be confused with the beneficiary. The Trustee is the entity
which issues a Full Reconveyance upon satisfaction of the
debt secured by the Deed of Trust.
Trustor (in a Deed of Trust)
The borrower under a Deed of Trust.
One who is purchasing property under a land sale contract.
One who is selling property under a land sale contract.
The manner in which the owner of real property holds title.
For example, John Jones, a single man.
Local government regulations relating to the use of property.