Terms You Need To Know

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A

A-Credit

A consumer with the best credit rating, deserving of the lowest prices that lenders offer. Most lenders require a Beacon score above 680 or 700 for you to qualify as an A client.

Accelerated Bi-Weekly Mortgage Payments

Mortgage payments which are made every 2 weeks for a total of 26 payments per year. Not to be confused with semi-monthly mortgage payments which have 24 payments a year and are made twice a month.

Acceptance

A property seller’s formal, written approval of a buyer’s offer.

Accrued interest

Interest that is earned but not paid, adding to the amount owed.

Actual Age

The time in years since a structure was erected. Not the same as effective age which refers to the condition of the home.

Addendum

Any change made to the original contract.

Additional Principal Payment

Payments made on top of the regular principal and interest payments of your mortgage. These payments can be pre-authorized through your lender on a monthly basis or provided as balloon payments. You must review your mortgage commitment to ensure that you qualify

Additional Property

Any real estate that a person may own and is not being financed.

Adjustments on Closing

There are two types of adjustments for which a buyer can be charged on closing

-Prepaid services — Where the sellers have prepaid property taxes or certain utilities, the buyers can be charged for the amount of prepayment on a pro-rata basis, depending on the date of occupancy. For example, if the sellers have paid the property taxes to the end of the year, and the sale closes on October 16th, the purchasers will be charged with an adjustment of 76 / 365’ths (the number of days remaining in the year) of the total paid for the year.

-Interest –This is the amount of interest required to be prepaid up to the Interest Adjustment Date (IAD). IAD is the point at which the mortgage interest starts accumulating “in arrears”. In Canada all mortgage interest is calculated and paid after the period to which it applies. This differs from the way in which rental and lease payments are calculated, which is “in advance”.

Adjoining Land

Property that shares a common boundary with the property being searched

Adjustable Rate Mortgage (ARM)

A mortgage loan where the interest rate and payments may be adjusted frequently. The term and or principal loan balance may also adjust to reflect the rate change.

Advanced

Given or provided. Usually referred to as the date of advance, which is the date that the mortgage funds are transferred

Agreement of Purchase and Sale

Contract created once an offer of purchase and sale has been accepted . The offer may be firm (no conditions attached), or conditional (certain conditions must be fulfilled before the deal can be closed, i.e. upon financing, upon inspection).

Alimony

Monthly payments received by an ex-spouse.

Amenities

Extra conveniences such as stores, malls, transit, parking, restaurants, theatres, service outlets, needed from day to day as well as common areas exclusive to owners.

Amortization

With a mortgage, the borrower agrees to pay back the amount borrowed over a period of time. This breaking of the loan into smaller parts to be paid back over set blocks of time is amortization.

Amortization Period

The time over which all regular payments would pay off the mortgage. This can be between 10 and 37 years but you could pay your mortgage off sooner if you have the money.(penalties may apply)

Amortization Schedule

A schedule setting out the breakdown of each monthly blended payment between principal and interest and the remaining principal balance after each payment

Amortization Term

The amount of time required to amortize (fully repay) the mortgage loan.

Amortized Loan

A loan that is completely paid off, interest and principal, by a series of consistent payments.

Amount Financed

The principal amount that has been borrowed. This could include fees for the loan.

Annual Mortgagor Statement

A report sent to the borrower every year stating the amount of principal owing on the home loan and the amount paid in taxes and interest during the previous year.

Annual Percentage Rate (APR)

A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated by taking the average compound interest rate over the term of the loan so that a borrower can compare loans. Used in mortgages, it is the interest rate of a mortgage when taking into account the mortgage insurance, interest and certain closing costs including any fees or points paid at closing.

Anticipatory Breach

Notification that one party to a contract plans to renege, releasing the other party from having to fulfill its end of the agreement.

Application

An statement of personal and financial information which is required to approve your loan.

Application Fee

Charged by the lender to process the document in which a prospective borrower details their financial situation to qualify for a loan.

Appraisal

The process of determining the value of property, usually for lending purposes. This value may or may not be the same as the purchase price of the home.

Appraisal Fee

Charged to deliver a professional opinion about how much a property’s value is.

Appraisal Report

A detailed evaluation for the value of a property based on an inspection and a review of values of comparable properties in the area.

Appraisal Value

An estimate of the market value of the property.

Appraiser

A person that is qualified through education, training, and experience to estimate the value of real and personal property.

Appreciation

A rise in the value of a currency or commodity relative to another currency or commodity.

Approval

An evaluation by a lender of a borrower’s ability to pay for a home as well as a confirmation of the amount the borrower may obtain.

Approved Lender

A financial institution that is authorized by Canada Mortgage and Housing Corporation (CHMC) to make loans under the National Housing Act. Only approved lending institutions can arrange mortgages that require mortgage loan insurance.

Arms Length

A transaction between unrelated entities where a willing seller (the seller is not forced or coerced to sell) transacts with a willing buyer (the buyer is not forced or coerced to buy).

Arrears

As a verb, the state of being behind in fulfilling obligations. As a noun, an unpaid, overdue debt or an unfulfilled obligation.

As Is Where Is

It is the buyers responsibility to examine the goods or property and buy at their own risk.

Asbestos

A fire resistant element that was once used for insulation.

Asking Price

The amount of money a seller requests for property or items

Assessed Value

A province or local government’s determination of a property’s worth for the purposes of taxes.

Assessment

The “assessed” value of a property is an estimate of the value of your property used by a municipal (local) government as a basis for calculating annual property taxes.

Assessment Rolls

Lists of taxable properties.

Assets

What you own or can call upon. Often used in determining net worth or in the process of securing financing.

Assign

If a tenant leaves before a lease expires and the lease, along with responsibilities, are assumed by the incoming tenant. Also see sublet.

Assignment

Arrangement whereby a tenant transfers tenancy to another person for the reminder of the tenancy’s term. In the case of a mortgage, the transfer of a mortgage from one person to another.

Assignment of Interest

Most Provinces allow a legal assignment of interest in a mortgage to have full legal effect without having to discharge and re-register the existing one. This is particularly useful in:
Switch situations, where the costs of transferring lenders would otherwise be very high.
Second mortgage situations where a postponement may be difficult to obtain.

Assignor

The person who transfers property to another person.

Assumability

The ability of a mortgage to be taken over by another borrower.

Assumable

An obligation or a loan that can be taken over by another borrower.

Assumable Mortgage

A mortgage which a qualified buyer can take over from the current owner of a property upon its sale. Assuming a mortgage can provide a buyer with a below market interest rate, (if rates are now higher), as well as saving on the legal costs of creating and registering a whole new mortgage. “Assumption” entails a simple amendment to the mortgage document registered on title. Also see switch

Assumed Charge

Existing charge taken over by the purchaser, who pays the vendor the purchase price of the property minus the outstanding balance of the charge

Assumption Agreement

A legal document signed by a home buyer that requires the buyer to assume responsibility for the obligations of a former owner’s mortgage. *If someone assumes your mortgage, make sure that you get a release from the mortgage company to ensure that you are no longer liable for the debt.*

Assumption Clause

In a mortgage contract there is a provision that allows a buyer to take responsibility for the loan from the seller.

Authorized User

A person to whom you give permission to use your credit.

Automatic Payment

Authorized periodic withdrawals made from a chequing or savings account to pay their bills as set up in advance.

B

Bad Debts: Money that can not be collected. Businesses are able to deduct bad debts under certain circumstances.
Balance: The amount of funds in your account.
Balance Due on Closing: Exact amount the purchaser pays to the vendor when the real estate deal closes
Balance Due on Completion: The amount of money the purchaser will be required to pay to the vendor to complete the purchase, after all adjustments have been made.
Balance of Payments: Composed of both the current account, which records the flow of goods and services (as well as investment income and transfers), and the capital account, which records the flow of capital assets. In theory one account should offset or “balance” the other. i.e. If office furniture is purchased with cash, the office furniture would show a credit(go up) and the cash account would show a debit(go down).
Balance Transfer: Moving an unpaid credit card debt from one issuer to another. In other cases moving funds from one financial institution to another.
Balance Transfer Fee: The fee charged to customers for transferring an outstanding balance from one credit card issuer to another.
Balloon Loan: A loan where the payments are not set up to pay off the loan in full by the end of the term. Periodically you are allowed a balloon payment that goes directly towards the principal portion of your loan.
Balloon Mortgage: A mortgage where the payments are not set up to pay off the mortgage in full by the end of the term. At the end of the term you are allowed a balloon payment that goes directly towards the principal portion of your mortgage.
Balloon Payment: A lump sum payment for the unpaid balance of the loan. An option usually provided by the lender once a year without penalty.
Bank: A financial institution that acts as a intermediary by receiving money deposits from clients and lenders. Banks lend money to borrowers.
Bankruptcy: A tactic that individuals use to relieve themselves of debts and/or liabilities when they are no longer able to repay those debts and liabilities.
Bankruptcy Trustee: A corporation or private individual appointed to undertake bankruptcy proceedings for another individual or corporation.
Bank Wire: A type of electronic payment system for the safe transfer of money between banks.
Basis Point: 1/100th of one percent. A unit of measure also referred to as Bps. For example, the difference between a loan at 4.0% and a loan at 4.5% is 50 basis points or 50 Bps.
Beacon score: A credit rating, also referred to as a credit score, used by banks and other lenders, indicating a person’s credit worthiness as poor, fair, good, or excellent, in comparison to others.
Blanket Mortgage: A mortgage creating a lien against more than one property; developers use blankets mortgages when subdividing large parcels of land into many separate lots; a blanket mortgage is spread over the entire parcel of land, rather than applied to each individual lot.
Blended Payments: Payments consisting of both a principal and an interest component, paid on a regular basis (i.e. biweekly, semi-monthly, monthly) during the term of the mortgage. The principal portion of payment increases, while the interest portion decreases over the term of the mortgage, but the total regular payment usually does not change.
Block: Area of land created during the remapping of property under POLARIS.
Block Number: A five-digit number assigned to a block; the first part of the PIN
Bona Fide Purchaser for Value: Purchaser of property who gives valuable consideration for the property and is acting in good faith.
Borrowing: Incurring an obligation to repay a debt in order to invest or consume more than one currently owns.
Breach: A violation of a law, contract, or obligation between two or more parties.
Bridge Financing: A loan made for a short term, to “bridge” (or cover) the time gap between completing the purchase of one property and finalizing arrangements to pay for it from the sale of another. The need for this type of financing often results from mismatched closing dates on the properties.
Broker: An individual in the business of assisting in the arranging of funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a finders fee for their services.
Brokerage: A license (often corporate) on behalf of which other licenses must provide real estate/mortgage services.
Brokerage Fee: A fee charged by a mortgage broker for arranging a loan.
Building Permit: A certificate issued by your municipality to the owner/contractor prior to any building being erected or repaired.
Buyer: Purchaser of the property.
Buyers Agent: A Realtor who acts contractually on behalf of the buyer.
Bylaw (municipal): Law that is passed by a municipality
Bylaws (condominium): Rules governing the internal operation of the condominium corporation

C

Canada Mortgage and Housing Corporation (CMHC): The National Housing Act (NHA) authorized Canada Mortgage and Housing Corporation (CMHC) to operate a Mortgage Insurance Fund which protects NHA Approved Lenders from losses resulting from a borrower defaulting on their mortgage.
Canadian Bankers Association (CBA): A professional industry association that provides support services to the banking industry.
Cap Rate: The highest rate that a borrower will pay within a defined time period. Examples are; the rate committed on a commitment letter or a mortgage pre-approval (also known as a “rate hold”).
Cash Flow: The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, management costs etc.)
Carrying Costs: The expenses involve with living in and maintaining a home and property. This includes mortgage payments, property taxes, heating, hydro, repairs, maintenance fees, etc.
Ceiling: The maximum allowable interest rate over the life of the loan of an adjustable rate mortgage. Usually used by banks and referred to as the ceiling rate.
Certificate of Action: Certificate of the court verifying that a statement of claim has been filed in a construction lien action.
Certificate of Appointment of Estate Trustee With a Will: When someone dies with a will, he has usually named an executor (known as an estate trustee) to administer the estate in accordance with the will; an executor’s authority is derived from the will itself; the valid will and conforms the executor as estate trustee; an executor will often be named to act not only as estate trustee, but also a trustee for the administration of any beneficiaries who are under a disability, including minors and mentally incapacitated persons; these trusts may require the executor and trustee to administer them over a long period of time.
Certificate of Appointment of Estate Trustee Without a Will: When someone dies without a will, it is necessary for someone, usually a relative, to apply to the court for a certificate of appointment of estate trustee without a will; until the appointment is made, no one has authority to do anything with the deceased’s assets; once an appointment is made, the estate trustee may deal with the estate, settling its debts and distributing remaining assets to relatives in accordance with a statutory formula that determines the shares family members get.
Certificate of Location or Survey: A document that specifies the exact location of the building on the property and describes the type and size of the building including additions, if any.
Certificate of Search or Abstract of Title: A document setting out instruments registered against the title to the property, i.e. deed, mortgage, etc.
Certify Title: Describe the state of the owner’s title, including any limitations
Chain of Title: List of all owners within the 40-year search period.
Charge taken back: Another name for vendor take back charge.
Chargee: The lender or the mortgagor
Chargee in Possession: Chargee who takes possession of the charges property after default by the charger
Chargor: Borrower and owner.
Chattels: Movable possessions not attached to the real property. An item of tangible personal property (tangible means it is a thing, like a car); intangible personal property refers to a right to something of value-for example, a cheque, which is a right to payment.
Closed Mortgage: A mortgage agreement that cannot be prepaid, renegotiated or refinanced before maturity, except according to its terms.(usually a penalty to opt out)
Closing Costs: Various expenses associated with purchasing a home. These costs can include, but are not limited to, legal/notary fees and disbursements, property land transfer taxes, adjustments for prepaid property taxes or condominium common expenses, appraisal fees, home inspection fees, insurance, P.S.T, G.S.T in the case of a new home, cost for title insurance, mortgage insurance if necessary and in some cases an application fee.
Closing Date: The date on which the sale of a property becomes final and the new owner usually takes possession of the property.
CMHC/Genworth/ AIG Insurance Premium: Mortgage insurance insures the lender against loss in case of default by the borrower. Mortgage insurance is provided to the lender by CMHC, Genworth Financial or AIG United and the premium is paid by the borrower.
Coerce: To compel or force someone to act or think in a certain way by the use of threats, pressure or intimidation.
Collateral: An asset, such as term deposit, Canada Savings Bond, or automobile, or equity in property that you offer as security for a loan.
Collateral Mortgage: A loan evidenced by a promissory note and backed by the collateral security of a mortgage on a property. The money borrowed is generally used for a purpose other than the purchase of a home, such as home renovations or a child’s tuition.
Commitment Letter: A written commitment from a lender to lend mortgage funds to a specific borrower/borrowers as long as certain conditions are met within a specified time period before closing. A key component of the commitment, particularly in a period of volatile interest rates, is the “rate hold”, where a lender may “cap” a rate for a defined period, such as 60 days or 90 days. Commitments on financing for new homes, which usually have longer closing dates, can be negotiated between the lender and the builder and be held for as long as 6 months to even as long as a year.
Common elements: Areas of the condominium development owned as tenants
Common Elements and General Index: Register that contains a description of the common elements and any easements and encumbrances that affect all the units.
Common Expenses: Monthly fees paid by unit owners to cover the condominium corporation’s obligations
Compound Period: The number of times per year in which the interest rate is compounded. In Canada, mortgages are generally compounded semi-annually, which is twice per year.
Compounding Frequency: Indicates the number of times compound interest is charged or calculated per year (for example, semi-annually or monthly).
Conditional Sale Contract: Also called a purchase money security agreement or a hire-purchase agreement; a slang term for this kind of contract is “buying on the never-never,” meaning that you never seem to stop paying in order to get title to (own) the chattel.
Condominium: A form of ownership in which the owner has title to a housing unit and also owns a share in the common elements (such as elevators, hallways, common area’s and perhaps the land).
Condominium Corporation: Corporation that comes into existence upon registration of the condominium plan.
Condominium Unit: Unit that is part of a condominium development.
Condominium Fee: A common payment among owners which is allocated to pay expenses associated with the developments upkeep.
Conditional Offer: An offer to purchase a property subject to conditions. These conditions may relate to financing, or the sale of an existing home. Usually a time limit in which the specified conditions must be satisfied is stipulated.
Connection Charges: Some local utility companies (hydro, gas, oil) charge a fee on closing to connect new buyers up to their service. More common, however, is the extra charge billed on the first billing.
Consent to variance: Committee of adjustment approval of a building or use of a property when it does not conform to a current bylaw and is not a legal non-conforming use.
Construction Lien: Lien against land that may be claimed be a person providing labour, services, or materials to a construction project.
Construction Loan: A short-term interim loan for financing the cost of construction. Majority of the time the lender advance funds to the builder at periodic intervals as the work progresses.
Consumer Proposal: A plan put forth by a debtor to her creditors, through a trustee in bankruptcy, wherein a reduction of dept, interest, and /or a longer period to pay debts is suggested.
Consumer Spending / Consumption: Goods and services purchased by households for the satisfaction of their needs. Consumer goods are often divided into non-durables, such as food, semi-durables, such as clothing, and durables, such as cars.
Conventional Mortgage: A mortgage that does not exceed 80% of the purchase price of the home. Mortgages that exceed this limit must be insured against default, and are referred to as high-ratio mortgages.
Conversion (of an Interest Rate): The process of changing an interest rate with one compounding frequency to an equivalent rate with a different compounding frequency.
Convertible Mortgage: This allows you to convert your mortgage into a new mortgage of longer term while your old mortgage is still in effect.
Cooling-Off Period: A 10-day period during which the purchaser can back out of the purchase.
Co-operative: A form of ownership in which the owner has a share in the co-operative which actually owns the property. The individual owner has the right to live in a housing unit but does not own the actual unit.
Corporation: A business entity which is owned by shareholders who decide in the general policies of the company through their elected Board of Directors. A corporation is a separate legal entity and therefore has the rights and liabilities of an individual. Shareholder do not share directly in the income of a corporation, but they may receive Dividends.
Counteroffer: Offer tendered by the original offeree as an alternative to the original offer; also known as a sign-back.
Covenant: A promise.
Credit Bureau: An agency that maintains individual credit files on consumers. There are three credit bureaus companies in Canada. The most prominent being Equifax and TransUnion.
Credit check: A process where an individual has their credit history reviewed before credit is extended to them.
Credit File: A detailed history of money you have borrowed, credit you have used and whether you make bill and other payments on time. A credit file may list employment history as well as present and previous residences.
Creditor: A person to whom a debt is owed. Contrast to Debtor.
Credit Rating: A numerical score calculated using the information in your credit file. The credit rating is often used to determine a borrower’s credit worthiness and is sometimes referred to as a credit score.
Credit Report: A record of an individual’s payment history recorded and available through a credit bureau. Individuals can order a copy of their own report by contacting their local bureaus.
Credit Score: A numerical score calculated using the information in your credit file. The credit rating is often used to determine a borrower’s credit worthiness and is sometimes referred to as a credit rating.

D

Damages: Financial compensation for losses arising out of a breach of contract.
Debt Coverage Ratio: The number of items net operating income must cover the annual mortgage payments (principal and interest). For example, if the lender requires the borrower to earn $1,100 in net income to allow him $1,000 is annual mortgage payments, the ratio is 1.1:1. The lender usually states the ratio as a number exceeding one (i.e., 1.1) and the maximum allowable loan payment can then be calculated by dividing N.O.I by the number supplied (i.e., $1,100 ÷ 1.0= $1,000.) See also Ratio.
Debt Financing: Incurring an obligation to repay a debt in order to invest or consume more than one currently owns.
Debt Service: The making of mortgage payments by the borrower, as arranged with the lender.
Debt-Service Ratio: The percentage of a borrower’s gross income that will be used for monthly payments of principal, interest, taxes, heating costs and condominium fees.
Debtor: One who owes a debt. Contrast to Creditor.
Declarant: Upon registration, the person who owns the land described in the description and who registers the declaration and description that creates the condominium plan.
Declaration: Document stating that the property is governed by the Condominium Act, 1998 and providing the consent of all mortgages of the property, setting out the percentage of common elements associated with each unit and the percentage of common expenses that each unit owner will be required to pay, providing the address of the condominium corporation, and designating exclusive use common elements.
Declaratory Judgment: A judgment where the court declares the right of the parties on some issue before it; also referred to as a declaration.
Deed (Certificate of Ownership): A document signed by the seller transferring ownership of the home to the purchaser. This document is then registered against the title to the property as evidence of the purchaser’s ownership of the property.
Deemed: Accepted as conclusive of a certain state of condition in the absence of evidence or facts usually required to prove that state or condition.
Default: Breach of one or more of the obligations contained in the charge; most commonly, the failure to remit principal and interest payments when due.
Default Judgment: A plaintiff obtains a default judgment when the defendant takes no action and files no defence when he is sued-in that case the defendant is deemed to have admitted the dept and the plaintiff may then present necessary documents to the court clerk, who will then, on behalf of the court, sign a judgment for the amount owing; no hearing is required, no oral submissions are made, and no judge is required to sign a default judgment.
Demand Loan: A loan where the balance must be repaid upon request.
Deposit: Money deposited in trust by the purchaser when making an offer. It is held in trust by the vendor’s agent, broker, lawyer or notary until the closing of the transaction.
Depreciation: A decline in the value of a currency relative to another currency.
Disbursements: Lawyer’s out-of-pocket expenses, or money actually spent on behalf of the client.
Discharge: Pay out and remove a mortgage connected to a property. To repay a debt in full.
Discharge of Charge: A document given by the charges to the chargor confirming that the loan has been pain in full and extinguishing the chargee’s interest in the property.
Discharge of Lien: Document registered on title that discharges a construction lien.
Disclosure Statement (in mortgage brokerage): A schedule showing the face value of the loan, all costs associated with issuing the loan to the borrower, and the effective annual rate as required by the B.C. Mortgage Brokers Act.
Disclosure Statement (in development): A document prepared by the developer of a subdivision to ensure that investors or purchasers have adequate information upon which to base a purchasing decision.
Distress: When a tenant has breached a commercial lease-for example, by failing to pay the rent when due-the landlord may “levy distress” (an alternative way of describing this is to say that the landlord may “distrain the tenant”) on the personal property of the tenant found on the premises-that is, the landlord may seize the tenant’s personal property in the leased premises without obtaining a court order; the landlord can then sell the seized property and use the money form the sale as compensation for the damage done by the tenant to the landlord’s interests; this remedy may be used as an alternative to eviction but cannot be used in addition to it; it is not available for residential tenancies.
Distress: The right of a commercial landlord to seize and dispose of a tenant’s property.
Dominant Tenement: Land that benefits from an easement.
Double Up: This feature is not offered by all lenders but it allows you to double your mortgage payments anytime without penalty.
Down Payment: The amount of cash paid towards the purchase transaction by the buyer of a home. It is taken as a personal commitment for the purchase of the property.
Due on Sale Clause: Provision in a charge permitting the chargee to accelerate full payment of the loan in the event that the chargor sells the property and the chargee does not approve the purchaser.

E

E-Reg: Electronic registration.
Easement: Right to use a portion of someone else’s land for a specific purpose, without requiring the owner’s permission.
Easement Implied by Law: Creation of an easement when the only way to gain access to a property is by crossing over another property.
Effective Annual Rate: An annual interest rate which is compounded once a year. This rate is used for disclosure purposes under the Mortgage Brokers Act.
Effective Interest Rate: The cost of credit on a yearly basis expressed as a percentage. This includes up-front costs paid to obtain the loan, and is therefore, usually a higher amount than the interest rate stipulated in the mortgage. (This is useful in comparing loan programs with different rates or points.)
Encroachment: Building or structure intruding upon someone else’s land.
Encumbrance: A claim against a property by another party which will affect the ability to transfer ownership of the property.
Equity: The interest of an owner in a property over the claims against the property. The difference between the market value of the property and any outstanding encumbrances.
Equity Take Out: When the owner takes a mortgage or larger mortgage on an existing property to obtain cash for other purposes such as investments, renovations or to put a child through college.
Equivalent Rate: Two interest rates are equivalent if, for the same amount borrowed, over the same period of time, the same amount is owned at the end of that period of time.
Error: The actual value of the dependant variable minus the predicted value of the dependant variable for any given observation.
Escrow Closing: Exchange and holding of funds, keys, and documents by the lawyers pending registration of the electronic documents
Estate: Interests in land that provides the right to exclusive possession.
Estate Trustee: The deceased’s legal representative for estate administration purposes; the estate trustee may be named in the will or approved by the court.
Estate Trustee During Litigation: A grant made under a court order appointing someone to act for the estate when there is a dispute about the validity of the will or about who should administer the estate; during litigation the estate trustee has control of estate assets but has no authority to make payouts until the court has dealt with the validity of the will or decided who should administer the estate, as the case may be.
Eviction: To remove or force a tenant out of a property using the proper legal processes.
Exclusive Possession: Sole possession of the land; denial of possession to all others.
Exclusive use Common Elements: Areas of the condominium development owned by all unit owners but used only by designated unit owners.
Execution: Signing of a document; also a short name for a writ of execution or a writ of seizure and sale.
Execution Creditor: A creditor who has obtained a judgment and is in the process of executing or enforcing a judgment for debt.
Execution Debtor: A debtor who is the subject of enforcement proceedings at the hands of an executor creditor.
Expected Value: See Arithmetic mean.
Express Grant: Creation of an easement by written document from the owner of the servient tenement to the owner of the dominant tenement.
Expropriation: Reacquisition of land, with compensation, by the Crown fro public purpose.

F

Face Value of a Loan: The loan amount which must be repaid at a stated rate of interest according to the contract terms.
Fault Grounds: Grounds for termination based on conduct or behaviour of the tenant or a guest of the tenant.
Fee Simple: The right to exclusive possession and the right to dispose of the land for an indefinite period of time; the true owner.
Final Payment: The last instalment that is made on a fully amortized loan. It is usually smaller than the preceding periodic payments.
Financial Statement: A numerical presentation of particular aspects of a business. Common financial statements include the Balance Sheet and the Income Statement.
Fire Insurance: Before a mortgage can be advanced, the purchaser must arrange fire insurance. A certificate from the insurance company will be required on closing.
Firm Offer: An offer to buy a property as was outlined in the offer to purchase with no conditions attached.
First Mortgage: Gives the lender a primary lien/charge against your house and property which has precedence over all other mortgages. Priority is determined by the date and time registered. A new first mortgage can only be registered as a “first” mortgage upon the discharge of the existing first one.
Fiscal Year: Any period of twelve consecutive months chosen by a business as its accounting period.
Five-Percent Down Program: This allows buyers to obtain up to 95% financing on properties up to a certain value. These loans must be insured against default by one of Canada’s default insurance companies.
Fixed-Rate Mortgage: A mortgage for which the rate of interest is fixed for a specific period of time (known as the term).
Fixed-Term Tenancy: Tenancy that has a specified beginning and end date and can be for any period of time, from months to years.
Fixtures: Chattels that have become attached or affixed to the real property; immovable possession attached to the real property.
Flip: Resale of property before the closing of the original purchase.
Floating Rate Mortgage: Another term for a variable rate mortgage.
Foreclosure: A legal procedure where the lender eventually obtains legal title to the property after the borrower has defaulted on payments.
Forfeit: Lose the right.
Freehold: Ownership of an interest in land (or land and a building) for an indefinite period of time.(usually means no condo fee’s or maintenance fee’s involved with the ownership of the property).
Fully Amortized Mortgage: Loan which is repaid completely by a series of payments over the full duration of the amortization period.

G

Genworth Financial Canada: One of Canada’s leading private default mortgage insurance companies.
Gross Debt Service (GDS) Ratio: The percentage of gross income required to cover the monthly payments associated with housing costs. Most lenders recommend that the GDS ratio be no more than 32% of your gross (before tax) monthly income.(there are a few special circumstance exceptions)
Gross Household Income: Gross household income is the total salary, wages, commissions and other income, before deductions, by all household members who are co-applicants for the mortgage.
Guarantor: A person with an established credit rating and sufficient earnings who guarantees to repay the loan for the borrower if the borrower defaults.

H

High Ratio Mortgage: If you don’t have 20% down from the lesser of the purchase price or appraised value of the property, your mortgage must be insured against payment default by a Mortgage Insurer, such as CMHC or Genworth.
Highrise: A multi-unit residential building that is six or more stories high.
Holdback: The amount of money required to be withheld by the lender during the construction or renovation of a house to ensure that construction is satisfactorily completed at every stage. This amount is released when the lender is satisfied that there are no outstanding work-orders against a property
Home Equity: The difference between the price for which a home could be sold (market value) and the total debts registered against it.
Home Equity Line of Credit: A personal line of credit secured against the borrower’s property. Generally, up to 80% of the purchase price or appraised value of the property is allowed to be borrowed with this product but could be less for lower beacon clients or at a higher rate of interest.
Home Inspection Report: A report commissioned by a property owner or purchaser, usually to verify the condition of a property prior to the “firming up” of a Real Estate transaction. Most reports indicate if their are any problems with the property and the costs involved to repair those problems.

I

Improvement: Changes made to real property, including construction, alteration, repair, installation, erection, and demolition.
In Escrow: Holding of funds or documents by a third party to be released only on certain specified conditions.
Income Statement: A financial statement which lists the revenues and expenses of a business organization for a stated period of time. Also called a profit and loss statement.
Income Tax: That part of taxable income which a person or corporation is required to forward to Revenue Canada periodically.
Inflation: A sustained rate of increase in prices.
Inspection: The examination of a house by a certified building inspector selected by the purchaser.
Institutional Lender: A lender other than an individual, including a bank, trust company, credit union, or insurance company.
Insurance Binder: Documented confirmation that a property has been insured.
Interest: Interest is the cost of borrowing and is the amount paid on the money borrowed. It is represented as a semi-annual percentage rate when referring to a mortgage.
Interest Accruing Loan: Debt which is paid off as one lump sum, including principal plus accumulated compound interest.
Interest Adjustment: The process of calculating compound interest payable in the amount borrowed between the day the monies are advanced and the day the amortization period starts.
Interest Adjustment Date (IAD): A date, usually one month before regular mortgage payments begin, when interest on monies advanced before that time is calculated and must be paid for by the borrower.
Interest-Only Mortgage: A mortgage on which only the monthly interest cost is paid each month. The full principal remains outstanding at all times. The payment is lower than an amortized mortgage since once is not paying any principal.
Interest Rate: The percentage rate that represents the cost of borrowing or the benefit of lending money.
Interest Rate Differential Amount (IRD): An IRD amount is a compensation charge that may apply if you pay off your mortgage principal prior to the maturity date or pay the mortgage principal down beyond the prepayment privilege amount. The IRD amount is calculated on the amount being prepaid using an interest rate equal to the difference between your existing mortgage interest rate and the interest rate that can now be charged when re-lending the funds for the remaining term of the mortgage.
Interests: Right to land that are not estates and do not confer a right to exclusive possession of the land.
Interim Financing: Short-term financing to help a buyer bridge the gap between the closing date on the purchase of a new home and the closing date on the sale of the current home. Also known as bridge financing.
Interim Occupancy Closing Date: Date on which the purchaser takes possession prior to final closing and transfer of title.

J

Joint Tenants: Two or more people owning property where on the death of one, the survivors inherit the deceased’s share.
Judgment Creditor: Party to whom a court awards the payment of money.
Judgment Debtor: Party against whom a court awards the payment of money.
Judgment Proof: Term used to described a debtor against whom a judgment may be obtained, where the judgment will be unenforceable because the debtor has no assets to pay the judgment or the debtor has hidden or encumbered assets so that they cannot be easily seized; a judgment in these circumstances is sometimes described as a “paper judgment”- that is, it is worth no more than the paper it is printed on because it cannot be enforced in any practical way.
Judicial Sale: Sale of charged property ordered and administered by a court.

K

L

Landlord: The person who rents or leases a premises they own to another party. Landlords of residential premises typically own an apartment building, condominium, townhouse or house.
Land Titles System: Land registration system in Ontario governed by the Land Titles Act.
Land Transfer Tax: A fee paid to the municipal and/or provincial government for the transferring of property from the seller to the buyer.
Latent Defect: Defect of which the vendor of a property was aware but which the purchaser did not know about and could not have discovered upon reasonable inspection of the property.
Law Society of Upper Canada (LSUC): Professional body governing the activities of lawyers in Ontario.
Lease: As a verb, to rent a premises (apartment, house, condo etc.) for a specific period of time. As a noun, a contract or agreement between a landlord and a tenant.
Lease (Capital Lease): A type of lease where ownership is transferred to the leassee from the leassor at the end of the term.
Lease (Operating Lease): Any lease that is not structured as a Capital Lease is an Operating Lease.
Leasehold Estate: Right to exclusive possession of property for a specified period of time in the return for the payment of rent.
Leasehold Mortgage: A mortgage loan for the purchase or improvements to a home where the building is on land which is leased (rented).
Legal Description: Description of land that is used in documents creating an interest land; describes that land with reference to recorded maps, surveys, or plans.
Legal Non-Conforming use: Status of a building or use of a property that does not conform to the current municipal bylaw but is acceptable because the building or use existed before the passing of the bylaw and has not subsequently been altered or discontinued.
Legally binding: A legal agreement enforceable by an authorized authority.
Legislation: An enacted law or group of laws.
Lending Value: The estimated value of a property for lending purposes. It is a long-term, conservative estimate of the value of the security as determined by the lender and , therefore, does not necessarily equal Market Value or Sales Price.
Liable: Legally responsible or obligated.
Liabilities: What you owe are your liabilities.
Lien: A claim to a right to sell or seize property, either real or personal, on the fulfillment of certain conditions.
Life Estate: Right to exclusive possession of the property for the length of a particular lifetime.
Liquidity: The degree of ease and certainty with which an asset can be converted into cash.
Litigation Guardian: An individual who conducts a lawsuit and instructs counsel on behalf of a party who is under a disability or who is not of full age and capacity.
Loan-To-Value (LTV) Ratio: The percentage of the value of the property for which a mortgage is required. This ratio is important in determining whether or not mortgage default insurance is required, and if so, what the cost of that insurance will be. (i.e. on a $100 000 property 80% LTV would be$80 000)
Lot: A 200-acre parcel of land created during the original division of land into concessions; also, a parcel of land created by a plan of subdivision.

M

Market Value: The highest price that a buyer would pay and the lowest price a seller would accept on a property.
Market Rate: The prevailing interest rate, at any given point in time, at which financing or refinancing can be expected.
Matrimonial Home: Defined under the Family Law Act to include every property in which a person has an interest and that is (if the parties are still married) or was (if the parties have separated) at the time of separation occupied by the spouses as their family residence.
Maturity Date: Date on which any outstanding balance of a charge is to be paid.
Maximum: A measure of dispersion given by the largest value in the distribution.
Metes and Bounds Description: Written description of the boundaries and dimensions of a parcel of land in relation to lot lines; enables a sketch of the parcel to provide a picture of the area of land.
Minimum: A measure of dispersion given by the smallest value in the distribution.
Monthly Tenancy: A periodic tenancy that renews automatically at the end of each month until terminated by the landlord or the tenant.
Mortgage: A mortgage is both a loan used to purchase or refinance a property. The property is security for the repayment of the loan.
Mortgagee: The lender.
Mortgage Commitment: The mortgagor’s agreement with the mortgagee when the mortgage is arranged.
Mortgage Insurance: If your down payment is less than 20% of the purchase price of the property, the lender is going to require mortgage insurance. The fee is calculated as a percentage of your mortgage. This is known as mortgage default insurance.
Mortgage Critical Illness Insurance: Critical Illness Insurance is available as an enhancement to Mortgage Life Insurance.
Mortgagee and Mortgagor: The lender is the mortgagee and the borrower is the mortgagor.
Mortgage Life Insurance: Recommended for all mortgagors. If you die, have a terminal illness, or suffer an accident, the insurance would pay the balance outstanding on the mortgage. This protect survivors from the loss of their homes.
Mortgage Payment: Regular instalments made towards paying back the principal and interest on a mortgage.
Mortgage Term: The number of months to years over which you pay a specified interest rate. Normally terms range from six months to 10 years.
Mortgage Broker: A registered agent who negotiates with lenders on behalf of a borrower to obtain the best overall mortgage for that borrower’s specific circumstances. Mortgage Brokers arrange financing for “A+” clients as well as financing “non-standard” situations which cannot be funded by a major national lender. This is possible because a Mortgage Broker has access to dozens of lenders who do not advertise nationally or operate retail locations.
Mortgage Loan: A loan used for the purchase of real property. The property being purchased is the security for the loan.
Mortgagor: The borrower.
Motion: An application to the court within the man proceeding to settle a legal issue that has arisen on the main proceeding-for example, a plaintiff might bring a motion to court asking that the defendant provide more detail in the statement of defence; a motion is brought by a notice of motion, which states what remedy is sought and the reasons for it; the facts in support of the motion are usually presented in an affidavit.
Multiple Listing Service (MLS): A service of a Real Estate Board which publishes and exchanges details of properties registered with them.
Municipal Levies: Levies can be charged by municipalities to recover the cost of services, if these services cannot be funded out of general revenues.
Municipality: Form of urban organization including cities, towns, and villages.

N

National Housing Act Loan (NHA): A mortgage loan which is backed/insured by Canada Mortgage Housing Corporation to certain maximums.
Net Income: The amount by which revenues exceed expenses in any given time period. Contrast to Net Loss.
Net Loss: The amount by which expenses exceed revenues in any given time period. Contrast to Net Income .
Net Proceeds: The face value of a loan less all brokerage fees, legal fess, appraisal costs and other charges .
New Charge: Arrangement by the purchaser for a new loan by way of charge for the purchase of property.
No-Fault Grounds: Grounds for termination unrelated to the conduct of behaviour of the tenant or a guest of the tenant.
Nominal Rate: The quoted interest rate for a mortgage loan.
Non-Blended Payment: Charge payment that does not blend or combine principal and interest into equal payments; the amount of principal repaid each month is a fixed amount and the amount of interest is calculated on the outstanding principal at the time.
Notice of Motion: A document that states what remedy is sought and the reasons for it.
Notice of Sale: Document used in a power of sale setting out the particulars of the default and the amounts owing under the charge.

O

Offer: Proposal from one person to another that, when accepted, becomes a contract.
Offer To Purchase: A formal, legal agreement which offers a price for a specified real property. The offer may be firm with no conditions attached or conditional where certain conditions must be fulfilled.
Offeree: Person to whom an offer is made.
Offeror: Person who makes the offer.
Official Plan: Statement of planning principles prepared for a municipality by the local planning board.
Open Mortgage: A mortgage which can be paid off at any time, without penalty.
Open Variable Mortgage: A variable rate mortgage in which the interest rate varies with money market conditions usually reflected by prime. You may pay off or renegotiate an Open Variable mortgage at anytime without interest penalties.
Operating Expenses: Those costs which have to be incurred to keep any business going, including the business of renting real property.
Outstanding Balance (OSB): Usually refers to the amount of principal which is outstanding at the end of the term but can also be looked at as the principal outstanding at any given point.
Owner’s Equity: Refers to how much of a property’s value is actually that of the owner’s-for example, if a house is worth $100,000 and is mortgaged for $50,00, the mortgagee is entitled to $50,000 is free and clear of the mortgage claim and is the owner’s equity in the house.

P

Parcel Register: A book in the Land Titles system that records all registered interest in land.
Partial Amortization: A loan repayment scheme in which the term is shorter than the amortization period. Whereas the loan payments will be calculated as if the loan will be paid back over the full amortization period, at the end of a specified term the outstanding balance is due and payable.
Partial Indemnity: Usual order for costs, based on a cost grid that establishes hourly rates for tariff items listed in the grid; provided less than full recovery of legal fees for the client.
Payment: A periodic instalment that is made to service a debt. For an interest-only loan, the payment consist of interest; for a constant payment loan, the payment consists of interest and principal.
Payment Frequency: The choice of making regular mortgage payments weekly, bi-weekly, monthly or semi-monthly.
Penalty: A fee usually charged by the lender if you would like to pay the mortgage in part or in full before it’s designated date.
Per Annum: Latin for “per year”.
Per Diem: per day; for each day; daily.
Percentage: A statistic used to facilitate data comparisons.
Personal Property: Consists of tangibles such as consumers goods, other goods, inventory and equipment, and intangibles including investments and securities.
Phase 1 Environment Assessment: Assessment of property conducted to determine the likelihood that one or more contaminants have affected all or part of the property.
Phase 2 Environment Assessment: Assessment of property conducted to determine the location and concentration of contaminants on the property; follows completion of a phase 1 assessment.
P.I. (Principle and Interest): Principal, and interest due on a mortgage.
P.I.T.: Principal, interest and taxes. These make up the regular payment on a mortgage if you choose to include property taxes in your regular mortgage payments
P.I.T.H: Principal, Interest, Taxes, Heating and Half of Condo Fees, if applicable. This is a basic component of the ratios used to help determine how large of a mortgage loan you can comfortably carry.
Plan of Subdivision: Registered plan illustrating the measurements and boundaries of all lots and streets created by the division of concession lots into many smaller lots.
Plan of Survey: Schematic sketch showing boundaries of property and location of all fences, structures, and rights of way.
Periodic Rate: The interest rate which is charged per compounding period (for example, per month or per day).
Possession: Control or occupancy of land regardless of ownership.
Porting: This allows you to move to another property without having to lose your existing interest rate. You can keep your existing mortgage balance, term and interest rate plus save money by avoiding early discharge penalties.
Portable Mortgage: A mortgage which allows you to transfer the existing amount and terms of your mortgage over to a new property without penalty.
Post-Dated Cheque: A cheque made out with a date after today’s current date. The cheque cannot be cashed until on or after the date on the cheque.
Power of Attorney: A legal document authorizing a person to act on behalf of another.
Power of Sale: A clause in a mortgage that permits the mortgagee to sell the property in the event that mortgage payments are not made in a timely manner.
Pre-Approved Mortgage: This product offers you the security of knowing how much mortgage financing is available, and protect your rate for up to 60 to 90 days depending on the lender. This is not the same as a commitment from the lender!
Prepayment: The act of fully or partially paying off the outstanding balance of a loan at any point during the term of the loan at a time earlier than set out in the contract.
Prepayment Charge: A fee that is charged by the lender when the borrower prepays all or part of a closed mortgage before the designated date(s) set out in the mortgage agreement.
Prepayment Option: The ability to pays off all or a portion of the principal balance.
Prepayment Penalty: A fee charged to the borrower by the lender when the borrower prepays all or part of a mortgage over and above the amount agreed upon. The usual penalty is the greater of the Interest Rate Differential (IRD) or 3 months interest.
Prepayment Privilege(s): The right to repay periodically more than the scheduled principal payment.
Present Value: The current equivalent of a future dollar amount.
Prime: The lowest rate a financial institution charges to the most credit worthy of customers.
Principal: The amount of money borrowed for a new mortgage.
Principal Residence: A housing unit that is owned by a taxpayer jointly with another person or otherwise. The tax payer, the tax payer’s spouse/former spouse, or a child of the tax payer must ordinarily live in the house.
Principal: Amount of money borrowed under a loan.
Privity of Contract: A rule that only parties to a contract can enforce contact rights.
Productivity: Measures the amount of goods and services that can be produced with one unit of labour.
Profit and Loss Statement: See Income Statement.
Promissory Note: An unconditional promise to pay on demand or by a fixed date a specified amount of money.
Property: Can refer to a section of land, or a home.
Property Identifier Number (PIN): Unique nine-digit number for each property created by combining the block and property number for that property.
Property Number: Four-digit number assigned to a property; the second part of the PIN.
Propriety Tax Account: An account that provides for the automatic payment of property taxes.
Public Guardian and Trustee: A government office whose staff are responsible for looking after the interests of the mentally incapable (formerly called mentally incompetent) where no guardian of the person or guardian of property has been appointed.
Public Utility: System that provides to the public water, sewage, fuel (including natural gas), energy (excluding electricity), heating, cooling, or telephone supplies or services.
Purchaser: Buyer of the property.
Purchaser in Good Faith: Sometimes given in Latin as bona fide purchaser, this phrase describes an individual who has bought something in circumstances where there is nothing to tell her that the seller is trying to unload the asset quickly, get cash, and get away with the cash before creditors manage to seize the asset or its proceeds; where a bad-faith sale has occurred, there are usually signs that tip off a reasonable and prudent buyer-for example, a price below fair market value, secrecy in the transaction, undue haste, insistence on payment in case, amount other things-so that a purchaser would be presumed to be on notice that the seller’s title is flawed or questionable and the purchaser is deemed to acquire ownership subject to that claims of creditors.

Q

Quick Close: Usually refers to a property being purchased in 45 days or less

R

Rate: The annual percentage amount charged in return for borrowing funds.
Rate Hold/Rate Commitment: The number of days the lender will guarantee the mortgage rate on a mortgage approval. This can vary from lender to lender commonly between 30 to 120 days.
Ratio: A ratio expresses one value in terms of another value; e.g., one out of every four houses is painted white. It can be stated as a fraction, one-quarter (¼) of the houses are white; or as a ratio, one out of four (1:4) houses is white.
Real Property: Land, including everything that is attached to it.
Realize on the Security: Seize and/or sell the charged property.
Realtor: A real estate professional who is a member of their local real estate board and the Canadian Real Estate Association
Receivable: Refers to money that is owing to a creditor (also called an account receivable); because it describes a right to future payment or income, a creditor can sell or assign its receivable as a way of paying others-a creditor who has done this gives the purchaser or assignee of the receivable the right to be paid the amount of the receivable by the debtor.
Recent: In appraisal, that time period just prior to the date of valuations over which demand and supply conditions have remained relatively stable.
Recession: A period of falling output in the economy.
Recovery: An initial period in the business cycle where the level of output is returning to its previous peak.
Refinancing: Renegotiating your existing mortgage agreement. May include paying out the mortgage in full or increasing the principal balance that is outstanding.
Register: As a noun, the term refers to the books in which certificates of indefeasible title are entered or kept and, as a verb, the term refers to registering documentation pursuant to the provisions of the Land Title Act.
Registered Encumbrance: A legal claim against real property. A debt for which the property was pledged as security.
Registration Fees: Fees that are paid to the provincial government for recording a title transfer, mortgage registration or other instrument such as an Assignment or Lien with the local authorities.
Relief from Forfeiture: A remedy granted to a debtor whose property has been seized by a creditor who has acted in an oppressive or capricious manner.
Renegotiate: To change the terms and conditions of a mortgage agreement prior to its maturity. Only can occur with the lender who presently holds the mortgage.
Renew: To extend a mortgage agreement with the same lender for another specified term. The length of the term and the conditions, such as the rate of interest, may be changed to match the current market conditions.
Registry System: Land registration system in Ontario governed by the Registry Act.
Renewal: At the end of a mortgage term, the mortgage may be renewed on new terms and conditions acceptable to both the lender and the borrower. If your not renewing, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing and the previous lender will be paid through the proceeds received from the new lender.
Rent: As a noun, payment made by a tenant at specified intervals in return for the right to occupy or use the property of another. As a verb, to obtain occupancy or use of another’s property in return for regular payments.
Rent Control: Regulations defining how a landlord can increase the rent and restricting the amount they can increase the rent by.
Rental: Refers to any rented property.
Rental accommodations: Refers to any residential rooms or buildings available for rent.
Rental Authority: The legal authority that oversees landlord tenant issues in a province or territory. In some areas the Rent Tribunal the rental authority, while in other areas the courts are the authority.
Rental Agreement: – A legally binding agreement to rent a premises, whether written or oral, between a landlord and tenant.
Rental Application: This is filled out by a prospective tenant and often includes authorization to conduct a credit check. A landlord will use the application to determine the suitably of renting a unit to the individual.
Rental Property: Refers to lands and/or units and/or buildings and/or rooms available for or being rented.
Representative: A licensee providing real estate services under the supervision of a managing broker.
Requisition: Request made to the vendor to clear up problems revealed by the title requisitions to the vender (seller).
Requisition Date: Deadline by which the purchaser (buyer) must submit any title requisitions to the vendor (seller).
Requisition Going on the Root of Title: Requisition based on a defect that calls into question the legal enforceability/validity of the title.
Requisition on Conveyance: Requisition that requires the vendor to produce an effective conveyance, assuming that the vendor has the ability to do so.
Requisition on Matters of Contract: Requisition for specific things that the purchaser is entitled to receive under the contract.
Requisition on Title: Query of directives made by the purchaser that asks the vendor to remedy problems with title.
Reserve Fund: Covers costs of major repairs to and replacement of common elements.
Restrictive Covenant: Promise by an owner of land to refrain from doing something on the property.
Retainer: A document that records the contractual relationship between lawyer and client, usually stating that the lawyer acts for the client and stipulating generally what the lawyer has been retained to do; also used to describe and amount of money that the client pays the lawyer to be available to her to perform legal work for a specified period-in purposes; he is deemed to be entitled to the money for making himself available to the client, although he may charge for any services actually performed during the period of the retainer.
Right of First Refusal: Describes a contract tern that gives a person the right to purchase a property, or exercise another right with respect to property, before the property of a right on it can be offered to others-if someone with a right of first refusal receives the offer and refuses to exercise his right to accept the offer, then he is deemed to have refused the offer and the property can now be offered to others.
Right of Survivorship: Automatic vesting of an interest in the surviving joint tenant or tenants when the joint tenant dies.
Right of Way: Right to use a portion of another’s land for access purposes.
Roll-Over Mortgage: A mortgage loan whose interest rate is established for a specific term. At the end of this term, the mortgage is said to “roll over” where the borrower and lender may agree to extend the loan. If satisfactory terms cannot be agreed upon, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.
Roommate: Someone who lives in a rental property with other tenant(s), sharing rent, the cost of utilities and other expenses according to mutually agreed upon terms before residence takes place.
Root of Title (root deed): First conveyance of the free simple estate (a deed or transfer) registered after the commencement date of a title search.

S

Sales Price: Value in exchange; the price obtained in an actual transaction.
Saving: The process of consuming less than what can be afforded in order to increase consumption in the future.
Search the Title: Conduct an investigation into the status and history of the title to land.
Second Mortgage: A mortgage loan granted when there is already a first mortgage registered against the property.
Secured Credit Transaction: A transaction where the debtor has put up some asset of value as collateral that the creditor may use as security for the unpaid debt-if the debtor defaults, the creditor can recover what is owing by seizing the collateral; the debt is said to be secured by the creditor’s right in the collateral with it.
Security: In the case of mortgages, real estate that is offered as collateral for the loan.
Seize: To take possession of by means of legal processes.
Seller: Vendor of the property.
Semi Monthly Mortgage Payments: Mortgage payments which are made on the 1st and 15th of the month equalling 24 payments per year. Not to be confused with bi-weekly mortgage payments which are equal to 26 payments per year.
Servicing Agent: A person or firm that takes the necessary steps and operations a lender performs to keep a loan in good standing, such as payment of taxes, collection of payments, insurance, property inspections. etc.
Servient Tenement: Land over which an easement runs.
Severance: Division of land into smaller parcels.
Sign-Back: Offer whereby the original offeree changes some of the terms in the original offer, initials the changes, then submits it to the original offeror.
Similar: In appraisal, two properties are similar if the actual differences between the properties will not have a material effect on their selling price.
Simple Interest: Interest which is computed on only the principal balance.
Simultaneous Conveyance: Two abutting parcels of land conveyed at the same time to two different people.
Skip A Payment: If you are short for the mortgage payment you may be eligible to skip a payment. If you have chose the double-up option you may be entitled to reverse the payments.
Specific Performance: Court order requiring a transaction to be completed; a type of remedy for breach of contract.
Spousal Consent: Consent of the spouse of the owner on title to the transfer or mortgage of a matrimonial home, required under the Family Law Act.
Standard Charge Terms Form: A document which clearly states the responsibilities of the mortgagor and the mortgagee.
Statement of Adjustments: Statement that outlines the various credits and debits against the purchase price and specifies the exact amount to be paid on closing.
Status Certificate: Certificate from the condominium corporation that includes, among other things, financial information, directors and officers, and the declaration.
Statutory Declaration: Sworn statement given by a person that attests to a given set of facts.
Stayed: A legal proceeding may be stopped from proceeding further, or stayed by a judge, until one of the parties does something they are obliged to do; for example, a plaintiff who is suing using an unregistered business name will have the proceeding stayed until he proves that he has registered the name as he is legally required to do.
Subdivision: This is a defined term in various statutes. Basically, a subdivision is the division of land into two or more parcels.
Subdivision Agreement: Agreement between a municipality and a builder setting out the terms under which the building is allowed to subdivide the land.
Subdivision Control: Government control over the division of land into smaller parcels.
Subject Property: The property to be appraised.
Sublet: To rent a property you lease to another person while still maintaining your responsibility to your landlord under your rental agreement. You are still responsible for the actions of your sublessee. This is not the same as assigning, where you transfer the responsibility of your agreement to the new tenant.
Sublessee: One who sublets from the current tenant.
Subsearch: A brief examination of title records to update an earlier search.
Superintendent of Bankruptcy: A government official in Ottawa who supervises and oversees the administration of the Bankruptcy and Insolvency Act.
Survey: The legal written and/or mapped description of a location and dimensions of the specified piece of land. The survey should also show the dimensions and placement on the lot of any structures, including additions such as sheds, fences and pools. An up-to-date survey is often required by a lender as part of a mortgage transaction. Lenders might allow title insurance in place of a survey.
Sweat Equity: Equity created by a purchaser performing extra work on a property in the process of being purchased.
Switch: The process of transferring an existing mortgage from one financial institution to another.
Syndicator: The promoter who sets up a syndicate investment package.

T

Tax Certificate: At the time of a sale, the lawyer for the buyer must confirm that local taxes have been paid and are up to date. If they are, a Tax Certificate is issued, from which any adjustments can be made and usually requiring the buyer to refund the seller for any prepaid taxes. If they are not up to date, the municipality requires the seller to pay them off from the proceeds of the sale. If there are insufficient proceeds, then it may fall upon the buyer to pay them.
Taxable Income (Loss): Income (loss) reported for tax purposes. It is not to be confused with net income (loss). Net income (loss) is arrived at by the deduction of Depreciation Expense, whereas taxable income (loss) is calculated after the deduction of Capital Cost Allowance.
Tenancy Agreement: Written, oral, or implied agreement between a landlord and a tenant that creates the tenancy.
Tenants in Common: Two or more people owning a property where on the death of one, the deceased person’s share passes to his or her heirs rather than the other owners; no right of survivorship.
Teraview: Software that is used to access the electronic land registration system in Ontario.
Term: The length of the current mortgage agreement. A mortgage may be amortized over a long period (such as 37 years) but there is always a specified term that is usually between six months to ten years or more. After the term expires, the balance of the principal owing on the mortgage can be repaid or a new mortgage agreement can be entered into at the then current interest rates.
Termination for Cause: Termination by the landlord on the grounds of fault.
Testator: One who makes a will to dispose of his estate on death.
Title: The legal ownership of something; often refers to a document that indicates ownership or an ownership interest-to say someone has title to a car usually mean that the car is registered with the province in the name of that person.
Total Debt Service (TDS) Ratio: The percentage of gross income needed to cover monthly payments for housing and all other debts including other financing obligations. The total should generally not exceed 40% of gross monthly income.
Title: Written evidence that proves the right of ownership of a specific piece of property.
Title Insurance: Protection for lenders or homeowners against financial loss resulting from legal defects in the title of the specified property.
Title Requisition: A request made to the vendor/seller to clear up a problem found during the search of title
Title Search: An examination of municipal records to determine the legal ownership of a property.
Transfer: A document that transfers ownership of land
Transfer Fee: An administration fee that is levied by the financial institution when the mortgage is transferred in, a discharge fee may also apply on the transfer out of a mortgage.
Trustee: Individual or business entity in whose name a trust is held.
Trustee in Bankruptcy: An individual, usually an accountant, who is licensed to act as a trustee under the Bankruptcy and Insolvency Act-such individuals advertise their services in the Yellow Pages; an individual or corporation that wishes to make a proposal or an assignment in bankruptcy begins by consulting a trustee; the trustee, once retained, is pain out of the debtor’s/bankrupt’s estate and becomes trustee over the estate for the benefit of the creditors to whom he is ultimately responsible for the administration and liquidation of the estate.

U

UFFI: Ureaformaldehyde Foam Insulation
Undertaking: A promise given in the course of legal proceedings by a party or his lawyer, generally as a condition to obtaining some concession from the opposite party.
Underwriting: The process of verifying data and approving a loan.
Underwriting Fees: A sum of money collected by some lenders to offset expenses incurred during the lending process.
Undue Influence: Any improper or wrongful constrain, manipulation, or persuasion whereby the will of a person is overpowered and he is induced to do or refrains from doing an act which he would not do or would do if left to act freely.
Unit: The premises rented under one tenancy agreement, usually an apartment within a complex of a group of units such as apartment buildings, condominiums, townhouse complexes, etc.
Unit Register: A register that shows ownership of each unit and any mortgages, liens, and leases relating to the unit
Unsecured Credit: A loan or extension of credit to a debtor where the debtor has not given the creditor a right to seize property belonging to the debtor to satisfy the debt when the debt remains unpaid.
Usurious Rate: A rate that is based on unlawfully or unnecessarily high interest.
Usury: Excessive interest and is illegal.
Utilities: Services such as heat, water and electricity that may or may not be included in the rent that is paid.

V

V: When the letter V is attached to the APR (Annual Percentage Rate), the interest rate is a variable rate and subject to changes.
Vacancy Allowance: An estimate of the amount of rent that may be foregone because of unoccupied units.
Vacant Possession: free or empty of all people and chattels
Vacated: Removed from title by registration of a court order that vacates or annuls the certification of action
Valid: In effect.
Valuation: An estimation of a property’s price value achieved through an appraisal.
Variable: Symbol which can take on any of a predetermined set of values.
Variable Interest Mortgage: A mortgage where the interest rate varies during the term of the mortgage. This fluxuation is usually tied to a factor such as the prime lending rate.
Variable Interest Rate: The rate of interest that fluctuates with changing market conditions during the term of the loan
Variable Rate Mortgage: A mortgage for which the rate of interest may change when other market conditions change such as prime. This is sometimes referred to as a floating rate mortgage.
Vendor: The seller in a real estate transaction.
Vendor Take Back: Where the seller of a property provides some or all of the mortgage financing in order to sell the property. The seller has the right to call in his loan at any time.
Vendor Take Back (VTB) Mortgage: A mortgage provided by the vendor/seller to the buyer.
Vendor Take Back Charge: A charge created when the vendor of a property agrees to lend the purchaser money toward the purchase price and the purchaser gives the vendor a charge on the property as security for the loan
Verification of Employment: The lender will contact an applicant’s employer in order to verify information provided in a mortgage application or a job letter. These questions may involve your income structure, length of employment, position, and so on.
Vest: To provide an immediate right to present or future ownership or possession
VISA: A company that provides credit through cards that are distributed through financial institutions around the world.
Void: Has no legal effect and is null.
Voidable: When one party to a contract is permitted to rescind the contract.

W

Waiver: An intentional and voluntary abandonment or surrender of some right, privilege or claim.
Walk-Away-Lease: Also known as a closed-end lease this is usually used when leasing vehicles. This allows the lessee to return a car at the end of its lease term, pay any end of lease costs, and the lease agreement is complete.
Walk-Through: The buyer’s final inspection of the property. Usually done on the day of closing or the day before closing.
Warranty: A document that certifies clear title to real estate. Also, a guarantee from a dealer or a manufacturer that their product will perform as specified.
Week-To-Week: Refers to a periodic tenancy that is not bound to a specific lease period, such as a year, but renews each week.
Will: A document stating how a person’s property will be dealt with upon death
With Prejudice: A phrase used in connection with attempts to settle; when it is used (usually at the start of a letter), it signifies that the writer intends to make an offer that he is prepared to disclose to the court during the trial; such disclosure indicates that the party does not fear that disclosure will prejudice his case; rather the idea is that it will enhance his case by showing him to be reasonable, and otherwise presenting him in a favourable light.
Without Prejudice: A phrase used in connection with attempts to settle; unlike “with prejudice” letters, this phrase means that statements will be make in the letter that are made solely in the context of an offer and the letter may not be disclosed to the court, even if it contains damaging statements or admissions; the making of an offer on a without-prejudice basis allows for a free and frank discussion of settlement, without the loss of the ability to present a case to the court, where the court is not prejudiced by admissions made in the course of settlement.
Witness: When one subscribes a name to a deed, a will or any other document for the purpose of attesting its authenticity.
Work Orders: Municipal/zoning by-laws require that residential property be maintained in a safe and habitable condition, and that a property’s use conform to specific requirements.
Workout: A mortgage where the monthly payment has been adjusted to prevent foreclosure.
Writ of Execution: A judicial order addressed to the sheriff requiring the enforcement of a judgment
Writ of Possession: A court order giving the mortgagor the right to take possession of the property
Writ of Seizure and Sale: Also called a writ of execution; allows the sheriff to seize and sell goods or land belonging to the judgment debtor and apply the proceeds to the judgment creditor’s claim.

X

X: The symbol used in legal documents that represents where a signature should appear.

Y

Year-End Statement: The report sent each year to the borrower. The report states the amounts paid in taxes and interest during the year, as well as the outstanding balance at years end.

Z

Zero Balance: Shown on a credit card statement when there is no outstanding balance owing.
Zero Down Mortgage: Was available in Canada as a true 100% mortgage financing product. No longer insurable by Canadian mortgage insurance companies.
Zoning: Classification of permitted land use that includes categories such as residential, commercial, industrial and agricultural
Zoning Bylaws: Bylaws enacted by a municipality to regulate the use of land