Abatement: Stopping or reducing of amount or value/ as when assessments for ad valorem taxation are abated after the initial assessment has been made.

Absentee landlord: An owner of an interest in income-producing property who does not reside on the premises and who may rely on a property manager to oversee the investment.

Absolute fee simple title: A title that is unqualified. Fee simple is the best title that can be obtained.

Absorption analysis: A study of the number of units of residential or nonresidential property that can be sold or leased over a given period of time in a defined location.

Abstraction: Method of finding land value in which all improvement costs (less depreciation) are deducted from sales price. (Also called extraction)

Access: A way to enter and leave a tract of land, sometimes by easement over land owned by another.

Accessibility: The relative ease of entrance to a property by various means, a factor that contributes to the probable most profitable use of a site.

Accessory buildings: Structures on a property such as sheds and garages that is secondary to the main building.

Accretion: Land buildup resulting from the deposit by natural action of sand or soil washed up from a river, lake, or sea.

Accrual basis: In accounting, a system of allocating revenue and expense items on the basis of when the revenue is earned or the expense incurred, not on the basis of when the cash is received or paid out.

Accrued depreciation: (1) For accounting purposes, total depreciation taken on an asset from the time of its acquisition. (2) For appraisal purposes, the difference between reproduction or replacement cost and the appraised value as of the date of appraisal.

Accrued expenses: Expenses incurred that are not yet payable. In a closing statement, the accrued expenses of the seller typically are credited to the purchaser (taxes, wages, interest, etc.).

Acquisition appraisal: A market value appraisal of property condemned or otherwise acquired for public use, to establish the compensation to be paid to the owner.

Acre: A measure of land, 208.71 by 208.71 feet in area, being 43,560 square feet, 160 square rods, or 4,840 square yards.

Actual age: The number of years elapsed since the original structure was built. (Sometimes referred to as historical or chronological age)

Adjustable-rate mortgage (ARM): A financing technique in which the lender can raise or lower the interest rate according to a set index, such as the rate on six-month Treasury bills or the aver-age cost of funds of FDIC-insured institutions.

Adjustment: Decrease or increase in the sales price of a comparable property to account for a feature that the property has or does not have in comparison with the subject property.

Ad valorem: According to value (Latin); generally used to refer to real estate taxes that is based on assessed property value.

Adverse land use: A land use that has a detrimental effect on the market value of nearby properties.

Aesthetic value: Relating to beauty, rather than to functional considerations.

Age-life method of depreciation: A method of computing accrued depreciation in which the cost of a building is depreciated at a fixed annual percentage rate; also called the straight-line method.

Aggregate: In statistics, the sum of all individuals, called variates.

Air rights: The right to use the open space above the physical surface of the land, generally allowing the surface to be used for some other purpose.

Allocation method: The allocation of the appraised total value of the property between land and building. The allocation may be accomplished either on a ratio basis or by subtracting a figure representing building value from the total appraised value of the property.

Allowance for vacancy and collection losses: The percentage of potential gross income that will be lost due to vacant units, collection losses, or both.

Amenities: The qualities and state of being pleas-ant and agreeable; in appraising, those qualities that are attached to a property and from which the owner derives benefits other than monetary; satisfaction of possession and use arising from architectural excellence, scenic beauty, and social environment.

Amortized mortgage: A mortgage loan in which the principal and interest are payable in periodic installments during the term of the loan so that at the completion of all payments there is a zero balance.

Annuity: A fixed, regular return on an investment.

Annuity method: A method of capitalization that treats income from real property as a fixed, regular return on an investment. For the annuity method to be applied the lessee must be reliable and the lease must be long term.

Anticipation, principle of: The principle that the purchase price of property is affected by the expectation of its future appeal and value.

Appraisal: An estimate of quantity, quality, or value; the process through which conclusions of property value are obtained; also refers to the report setting forth the process of estimating value.

Appraisal methods: The approaches used in the appraisal of real property. (See cost approach, income capitalization approach, sales comparison approach.)

Appreciation: Permanent or temporary increase in monetary value over time due to economic or related causes.

Approaches to value: Any of the following three methods used to estimate the value of real estate: cost approach, income capitalization approach, and sales comparison approach.

Appurtenance: Anything used with land for its benefit, either affixed to land or used with it, that will pass with the conveyance of the land.

Arm’s-length transaction: A transaction in which both buyer and seller act willingly and under no pressure, with knowledge of the present conditions and future potential of the property, and in which the property has been offered on the open market for a reasonable length of time and there are no unusual circumstances.

Array: An arrangement of statistical data according to numerical size.

Assemblage: The combining of two or more adjoining lots into one larger tract to increase their total value.

Assessed value: The value placed on land and buildings by a government unit (assessor) for use in levying annual real estate taxes.

Assessment: The imposition of a tax, charge, or levy, usually according to established rates. (See also special assessment.)

Band of investment: A method of developing a discount rate based on (1) the rate of mortgage interest available, (2) the rate of return required on equity, and (3) the debt and equity share in the property. A variation of this method is used to compute an overall capitalization rate.

Bargain and sale deed: A deed that contains no warranties against liens or other encumbrances but implies that the grantor has the right to convey title.

Base line: A reference survey line of the government or rectangular survey, being an imaginary line extending east and west and crossing a principal meridian at a definite point.

Base rent: The minimum rent payable under a percentage lease.

Bench mark: A permanent reference mark used by surveyors in measuring differences in elevation. (PRM)

Benchmark: The standard or base from which specific estimates are made.

Beneficiary: The person who is to receive the benefits from a trust fund.

Book value: The value of a property as an asset on the books of account; usually, reproduction or replacement cost, plus additions to capital and less reserves for depreciation.

Break-even point: That point at which total income equals total expenses.

Break-even ratio: The ratio of operating expenses plus the property's annual debt service to potential gross income.

Building capitalization rate: The sum of the discount and capital recapture rates for a building.

Building codes: Rules of local, municipal, or state governments specifying minimum building and construction standards for the protection of public safety and health.

Building residual technique: A method of capitalization using net income remaining to building after interest on land value has been deducted.

Bundle of rights: A term often applied to the rights of ownership of real estate, including the rights of using, renting, selling, or giving away the real estate or not taking any of these actions.

CAMA: (Computer Assisted Mass Appraisal) Use of computerized databases and techniques m valuing commercial and residential properties for tax assessment purposes.

Capital: Money and/or property comprising the wealth owned or used by a person or business enterprise to acquire other money or goods.

Capitalization: The process employed in estimating the value of a property by the use of an appropriate capitalization rate and the annual net operating income expected to be produced by the property. The formula is expressed as

                                     Income  = Value

                                       Rate

Capitalization rate: The percentage rate applied to the income a property is expected to produce to derive an estimate of the property's value; includes both an acceptable rate of return on the amount invested (yield) and return of the actual amount invested (recapture).

Capital recapture: The return of an investment; the right of the investor to get back the amount invested at the end of the term of ownership or over the productive life of the improvements.

Capitalized value method of depreciation: A method of computing depreciation by deter-mining loss in rental value attributable to a depreciated item and applying a gross rent multiplier to that figure.

Cash basis: A system of recognizing revenue and expense items only at the time cash is received or paid out.

Cash equivalency technique: Method of adjusting a sales price downward to reflect the increase in value due to assumption or procurement by buyer of a loan at an interest rate lower than the prevailing market rate.

Cash flow: The net spendable income from an investment determined by deducting all operating and fixed expenses from gross income. It expenses exceed income a negative cash flow is the result.

Chain: A surveyor's unit of measurement equal to four rods or 66 feet, consisting of 100 links of 7.92 inches each; ten square chains of land are equal to one acre.

Change, principle of: The principle that no physical or economic condition ever remains constant.

Chattels: Tangible personal property items.

Client: One who hires another person as a representative or agent for a fee.

Closing statement: The computation of financial adjustments required to close a real estate transaction, computed as of the day of closing the sale; used to determine the net amount of money the buyer must pay to the seller to complete the transaction, as well as amounts to be paid to other parties, such as the broker or escrow holder. (See also settlement.)

Community property: A form of property owner-ship in which husband and wife have an equal interest in property acquired by either spouse during the time of their marriage. Community property does not include property that each spouse owned prior to marriage or property received by gift or inheritance or as the proceeds of separate property.

Comparables: Properties that are substantially equivalent to the subject property.

Competition, principle of: The principle that a successful business attracts other such businesses/ which may dilute profits.

Compound interest: Interest paid on both the original investment and accrued interest.

Condemnation: Taking private property for public use through court action, under the right of eminent domain, with compensation to the owner.

Conditional use permit: Approval of a property use inconsistent with present zoning because it is in the public interest. For example, a church or hospital may be allowed in a residential district.

Conditions, covenants, and restrictions (CC&Rs): Private limitations on property use placed in the deed received by a property owner, typically by reference to a Declaration of Restrictions.

Condominium: The absolute ownership of an apartment or a commercial unit, generally in a multiunit building, by a legal description of the airspace that the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners.

Common elements: All portions of the land, property, and space that make up a condominium property that include land, all improvements and structures, and all easements, rights, and appurtenances and exclude all space com-posing individual units. Each unit owner owns a definite percentage of undivided interest in the common elements.

       Parcel: The entire tract of real estate included in a condominium development; also referred to as a development parcel.

       Unit: One ownership space in a condominium building or a part of a property intended for independent use and having lawful access to a public way. Ownership of one unit also includes a definite undivided interest in the common elements.

Conformity, principle of: The principle that buildings should be similar in design, construction, and age to other buildings in the neighborhood to enhance appeal and value.

Contiguous: Adjacent; in actual contact; touching.

Contract: An agreement entered into by two or more legally competent parties who, for a consideration, undertake to do or to refrain from doing some legal act or acts.

Contribution, principle of: The principle that any improvement to a property, whether to vacant land or a building, is worth only what it adds to the property's market value, regardless of the improvement's actual cost.

Conventional loan: A mortgage loan, made with real estate as security that is neither insured by the FHA nor guaranteed by the VA.

Conveyance: A written instrument, such as a deed or lease, by which title or an interest in real estate is transferred.

Cooperative:  A multiunit residential building with title in a trust or corporation that is owned by and operated for the benefit of persons living within it, who are the beneficial owners of the trust or the stockholders of the corporation, each possessing a proprietary lease granting occupancy of a specific unit in the building.

Corporation: An association of shareholders, created under law, having a legal identity separate from the individuals who own it.

Correction lines: A system of compensating for inaccuracies in the rectangular survey system due to the curvature of the earth. Every fourth township line (24-mile intervals) is used as correction lines on which the intervals between me north and south range lines are remeasured and corrected to a full six miles.

Cost approach: The process of estimating the value of a property by adding the appraiser's estimate of the reproduction or replacement cost of property improvements, less depreciation, to the estimated land value.

Cost index: Figure representing construction cost at a particular time in relation to construction cost at an earlier time, prepared by a cost reporting or indexing service.

Covenant: An agreement written into deeds and other instruments promising performance or nonperformance of certain acts or stipulating certain uses or nonuses of property.

Cubic-foot method: A method of estimating reproduction cost by multiplying the number of cubic feet of space a building encloses by the construction cost per cubic foot.

Curable depreciation: A depreciated item that can be restored or replaced economically (See also functional obsolescence—curable and physical deterioration—curable.)

Datum: A horizontal plane from which heights and depths are measured.

Debt investors: Investors who take a relatively conservative approach, typically taking a passive role in investment management while demanding a security interest in property financed.

Declaration of restrictions: Document filed by a subdivision developer and referenced in individual deeds to subdivision lots that lists all restrictions that apply to subdivision properties.

Decreasing returns, laws of: The situation in which property improvements no longer bring a corresponding increase in property income or value.

Deed: A written instrument that conveys title to or an interest in real estate when properly executed and delivered.

Deed restrictions: Provisions in a deed limiting the future uses of the property Deed restrictions may take many forms: they may limit the density of buildings, dictate the types of structures that can be erected, and prevent buildings from being used for specific purposes or used at all. Deed restrictions may impose a myriad of limitations and conditions affecting the property rights appraised.

Default: Failure to perform a duty or meet a contractual obligation.

Demised premises: Property conveyed for a certain number of years, most often by a lease.

Demography: The statistical study of human populations, especially in reference to size, density, and distribution. Demographic information is of particular importance to people involved in market analyses and highest and best use analyses in determining potential land uses of sites.

Depreciated cost: For appraisal purposes the reproduction or replacement cost of a building, less accrued depreciation to the time of appraisal.

Depreciation:  For appraisal purposes, loss in value due to any cause, including physical deterioration, functional obsolescence, and external obsolescence.

Depth factor: An adjustment factor applied to the value per front foot of lots that vary from the standard depth.

Direct capitalization: Selection of a capitalization rate from a range of overall rates computed by analyzing sales of comparable properties and applying the formula

I  =  R   to each

V

Direct costs: Costs of erecting a new building involved with either site preparation or building construction, including fixtures.

Easement: A right to use the land of another for a specific purpose, such as a right-of-way or for utilities; a nonpossessory interest in land. An easement appurtenant passes with the land when conveyed.

Economic base: The level of business activity in a community—particularly activity that brings income into the community from surrounding areas.

Economic life: The period of time during which a structure may reasonably be expected to perform the function for which it was designed or intended. economic obsolescence.

Effective age: The age of a building based on the actual wear and tear and maintenance, or lack of it, that the building has received.

Effective demand: The desire to buy coupled with the ability to pay.

Effective gross income: Estimated potential gross income of a rental property from all sources, less anticipated vacancy and collection losses.

Egress: A way to leave a tract of land; the opposite of ingress.

Eminent domain: The right of a federal, state, or local government or public corporation, utility, or service corporation to acquire private property for public use through a court action called condemnation, in which the court determines whether the use is a necessary one and what the compensation to the owner should be.

Encroachment: A building, wall, or fence that extends beyond the land of the owner and illegally intrudes on land of an adjoining owner or a street or an alley.

Encumbrance: Any lien (such as a mortgage, tax lien, or judgment lien), easement, restriction on the use of land, outstanding dower right, or other interest that may diminish the value of property to its owner.

Entrepreneurial profit: The amount of profit attributable to the development function.

Equalization: The raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts.

Equity: The interest or value that an owner has in real estate over and above any mortgage or other lien or charge against it.

Equity capitalization rate: A rate that reflects the relationship between a single year's before-tax cash flow and the equity investment in the property. The before-tax cash flow is the net operating income less the annual debt service payment, and the equity is the property value less any out-standing loan balance. The equity capitalization rate, when divided into the before-tax cash flow, gives an indication of the value of the equity.

Also called cash on cash rate, cash flow rate, or equity dividend rate.

Equity investors: Investors making use of what is termed venture capital to take an unsecured and thus relatively risky part in an investment.

Escalator clause: A clause in a contract, lease, or mortgage providing for increases in wages, rent, or interest, based on fluctuations in certain economic indexes, costs, or taxes.

Escheat: The reversion of property of a decedent who died intestate (without a will) and without heirs to the state or county as provided by state law.

Escrow: The closing of a transaction through a disinterested third person called an escrow agent or escrow holder, who holds funds and/or documents for delivery on the performance of certain conditions.

Estate: The degree, quantity, nature, and extent of ownership interest that a person has in real property.

Estate in land: The degree, quantity, nature, and extent of interest a person has in real estate.

Estate in remainder: The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate; for instance, when an owner conveys a life estate to one party and the remainder to another. (For a case in which the owner retains the residual estate, see estate in reversion.)

Estate in reversion: An estate that comes back to the original holder, as when an owner conveys a life estate to someone else, with the estate to return to the original owner on termination of the life estate.

Excess rent: The amount by which scheduled rent exceeds market rent.

Expense: The cost of goods and services required to produce income.

Expense-stop clause: Lease provision to pass increases in building maintenance expenses on to tenants on a pro rata basis.

External obsolescence: Loss of value from forces outside the building or property, such as changes in optimum land use, legislative enactments that restrict or impair property rights, and changes in supply-demand relationships.

Externalities: The principle that outside influences may have a positive or negative effect on property value.

Feasibility study: An analysis of a proposed subject or property with emphasis on the attainable income, probable expenses, and most advantageous use and design. The purpose of such a study is to ascertain the probable success or failure of the project under consideration.

FAR (Floor-Area Ratio): The arithmetic relationship of the total square feet of a building to the square footage of the land area. The floor-area ratio is often limited by the zoning code and may have an important influence on the land value.

             Formula: floor area ratio = building area

                                                         land area

Federal Reserve Bank System: Central bank of the United States established to regulate the flow of money and the cost of borrowing.

Fee simple: The greatest possible estate or right of ownership of real property, continuing without time limitation. (Sometimes called fee or fee simple absolute)

Fee simple defeasible: Any limitation on property use that could result in loss of the right of ownership.

Fee simple qualified: Ownership of property that is limited in some way.

FHA: The Federal Housing Administration. Insures loans made by approved lenders in accordance with its regulations.

Final value estimate: The appraiser's estimate of the defined value of the subject property, arrived at by reconciling (correlating) the estimates of values derived from the sales comparison/ cost, and income approaches. Financial Institutions Reform, Recovery and Enforcement

First mortgage: A mortgage that has priority as a lien over all other mortgages.

Fixed expenses: Those costs that are more or less permanent and do not vary in relation to the property's occupancy or income, such as real estate taxes and insurance for fire, theft, and hazards.

Fixture: Anything affixed to land, including personal property attached permanently to a building or to land so that it becomes part of the real estate.

Foreclosure: A court action initiated by a mortgagee or lien or for the purpose of having the court order that the debtor's real estate be sold to pay the mortgage or other lien (mechanic's lien or judgment).

Form appraisal report: Any of the relatively brief standard forms prepared by agencies such as the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association and others for routine property appraisals.

Freehold: An estate in land in which ownership is for an indeterminate length of time.

Frequency distribution: The arrangement of data into groups according to the frequency with which they appear in the data set.

Front foot: A standard of measurement, being a strip of land one foot wide fronting on the street or waterfront and extending the depth of the lot.

Value may be quoted per front foot.

Functional obsolescence: Defects in a building or structure that detract from its value or marketability usually the result of layout, design, or other features that are less desirable than features designed for the same functions in newer property.

Functional obsolescence—curable: Physical or design features that are no longer considered desirable by property buyers but could be replaced or redesigned at relatively low cost.

Functional obsolescence—incurable: Currently undesirable physical or design features that are not easily remedied or economically justified.

GIS: (Geographic Information Systems) Various types of software that make use of a computerized database to produce maps based on satellite imaging derived reference points on the earth's surface.

Going concern value: The value existing in an established business property compared with the value of selling the real estate and other assets of a concern whose business is not yet established. The term takes into account the goodwill and earning capacity of a business.

Grant deed: A type of deed in which the grantor warrants that he or she has not previously conveyed the estate being granted to another, has not encumbered the property except as noted in the deed, and will convey to the grantee any title to the property the grantor may later acquire.

Grantee: A person who receives a conveyance of real property from a grantor.

Grantor: The person transferring title to or an interest in real property to a grantee.

Gross building area: All enclosed floor areas, as measured along a building's outside perimeter.

Gross income multiplier: A figure used as a multiplier of the gross income of a property to pro-duce an estimate of the property's value.

Gross leasable area: Total space designed for occupancy and exclusive use of tenants, measured from outside wall surfaces to the center of shared interior walls.

Gross lease: A lease of property under the terms of which the lessee pays a fixed rent and the lessor pays all property charges regularly incurred through ownership (repairs, taxes, insurance, and operating expenses).

Gross living area: Total finished, habitable, above-grade space, measured along the buildings out-side perimeter.

Ground lease: A lease of land only on which the lessee usually owns the building or is required to build as specified by the lease. Such leases are usually long-term net leases; the lessee's rights and obligations continue until the lease expires or is terminated for default.

Ground rent: Rent paid for the right to use and occupy land according to the terms of a ground lease.

Growing equity mortgage (GEM): A type of loan that rapidly increases the equity in a property by increasing the monthly payments a certain percentage each year and applying those increases to the principal.

Highest and best use: The legally and physically possible use of land that is likely to produce the highest land (or property) value. It considers the balance between site and improvements as well as the intensity and length of uses.

Historical cost: Actual cost of a property at the time it was constructed.

Historical rent:  Scheduled (or contract) rent paid in past years.

Holdover tenancy: A tenancy, in which the lessee retains possession of the leased premises after the lease has expired and the landlord, by continuing to accept rent from the tenant, thereby agrees to the tenant's continued occupancy.

Homeowners association: Organization of property owners in a residential condominium or subdivision development, usually authorized by a declaration of restrictions to establish property design and maintenance criteria, collect assessments, and manages common areas.

Hoskold sinking fund table: A table that supplies a factor by which a property's annual net income may be multiplied to find the present worth of the property over a given period at a given rate of interest.

HUD (Department of Housing and Urban Development): improved land. Real property made suitable for building by the addition of utilities and publicly owned structures, such as a curb, sidewalk, street-lighting system, and/or sewer.

Improvements: Structures of whatever nature, usually privately rather than publicly owned, erected on a site to enable its utilization, e.g., buildings, fences, driveways, and retaining walls.

Income capitalization approach: The process of estimating the value of an income-producing property by capitalization of the annual net operating income expected to be produced by the property during its remaining economic life.

Increasing returns, law of: The situation in which property improvements increase property income or value.

Incurable depreciation: A depreciated item that would be impossible or too expensive to restore or replace.

Index method: An appraisal technique used to estimate reproduction or replacement cost. The appraiser multiplies the original cost of construction by a price index for the geographic area to allow for price changes.

Indirect costs: Costs of erecting a new building not involved with either site preparation or building construction; for example, building permit, land survey, overhead expenses such as insurance and payroll taxes, and builder's profit.

Industrial district or park: A controlled development zoned for industrial use and designed to accommodate specific types of industry, providing public utilities, streets, railroad sidings, and water and sewage facilities.

Ingress: The way to enter a tract of land. Often used interchangeably with access.

Installment contract: A contract for the sale of real estate by which the purchase price is paid in installments over an extended period of time by the purchaser, who is in possession, with the title retained by the seller until a certain number of payments are made. The purchaser's payments may be forfeited on default.

Insurable value: The highest reasonable value that can be placed on property for insurance purposes.

Interest: A percentage of the principal amount of a loan charged by a lender for its use, usually expressed as an annual rate.

Interest rate: Return on an investment; an interest rate is composed of four component rates—safe rate, risk rate, nonliquidity rate, and management rate.

       Management rate: Compensation to the owner for the work involved in managing an investment and reinvesting the funds received from the property.

       Nonliquidity rate: A penalty charged for the time needed to convert real estate into cash.

      Risk rate: An addition to the safe rate to compensate for the hazards that accompany                                                       investments in real estate.

      Safe rate: The interest rate paid by investments maximum security, highest liquidity,    and minimum risk.

Interim use: A temporary property use awaiting transition to its highest and best use.

Intestate: Dying without a will or without having made a valid will. Title to property owned by someone who dies intestate will pass to his or her heirs as provided in the law of descent of the state in which the property is located.

Investment value: The worth of investment property to a specific investor.

Inwood annuity table: A table that supplies a factor to be multiplied by the desired yearly income (based on the interest rate and length of time of the investment) to find the present worth of the investment.

Joint tenancy: Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. On the death of a joint tenant, the decedent's interest passes to the surviving joint tenant(s) by the right of survivor-ship.

Joint venture: The joining of two or more people to conduct a specific business enterprise. A joint venture is similar to a partnership in that it must be created by agreement between the parties to share in the losses and profits of the venture. It is unlike a partnership in that the venture is for one specific project only, rather than for a continuing business relationship.

Land: The earth's surface in its natural condition, extending down to the center of the globe, its surface and all things affixed to it, and the airspace above the surface.

Land capitalization rate: The rate of return, including interest, on land only.

Landlocked parcel: A parcel of land without any access to a public road or way.

Landlord: One who owns property and leases it to a tenant.

Land residual technique: A method of capitalization using the net income remaining to the land after return on and recapture of the building value have been deducted.

Land trust: A trust originated by the owner of real property in which real estate is the only asset. Because the interest of a beneficiary is considered personal property and not real estate, a judgment against the beneficiary will not create a lien against the real estate. Thus land trusts are popular when there are multiple owners who seek protection against the effects of divorce, judgments, or bankruptcies of each other.

Latent defect: Physical deficiencies or construction defects not readily ascertainable from a reasonable inspection of the property, such as a defective septic tank or underground sewage sys-tem, or improper plumbing or electrical wiring.

Lease: A written or oral contract for the possession and use of real property for a stipulated period of time, in consideration for the payment of rent.

Leases for more than one year generally must be in writing.

Leased fee: The lessor's interest and rights in the real estate being leased.

Leasehold estate: The lessee's right to possess and use real estate during the term of a lease. This is generally considered a personal property interest.

Legal description: A statement identifying land by a system prescribed by law. (See also lot and block system, metes and bounds description, and rectangular survey system.)

Lessee: The person to whom property is leased by another; also called a tenant.

Lessee’s interest: An interest having value only if the agreed-on rent is less than the market rent.

Lessor: The person who leases property to another; also called a landlord.

Lessor’s interest: The value of lease rental payments plus the remaining property value at the end of the lease period.