Florida Real Estate Glossary

A tax-deferred exchange under Internal Revenue Code Section 1031 that lets an investor reinvest proceeds from one investment property into another like-kind property.

A mortgage provision that lets the lender demand the entire unpaid balance at once when the borrower defaults or another triggering event occurs.

A unit of land area equal to 43,560 square feet. A section of land contains 640 acres.

A property tax based on the assessed value of real estate, set as of January 1 and paid in arrears in Florida.

A mortgage whose interest rate changes over time based on an index plus a fixed margin, subject to rate caps.

A way to gain legal title by openly possessing another owner's land without permission for the period the law requires, which is 7 years in Florida.

The gradual repayment of a loan through regular payments that cover both interest and principal until the balance reaches zero.

Transferring contractual rights to a third party, while the original party often remains secondarily liable.

A bilateral contract is a promise for a promise; a unilateral contract is a promise in exchange for an act.

A single mortgage that covers more than one parcel of land, often with a partial release clause so parcels can be freed as they sell.

Real estate advertising that omits the licensed name of the brokerage firm, which Florida law prohibits.

The illegal practice of inducing owners to sell by suggesting that members of a protected class are moving into the area.

A failure to perform a contractual obligation without legal excuse, which gives the other party remedies.

A licensee who may operate a real estate business independently, hold escrow funds, and supervise sales associates.

A person who holds a broker license but chooses to work under the supervision of another broker.

Government standards that regulate how structures must be built for safety, separate from zoning, which regulates use.

The set of legal rights that come with real property ownership: possession, control, enjoyment, exclusion, and disposition.

The rate of return on an income property, equal to net operating income divided by value.

The money left after subtracting operating expenses and mortgage debt service from a property's income.

The recorded history of ownership of a property, tracing each transfer from owner to owner over time.

A streamlined disciplinary tool for specified minor violations, carrying a set penalty the licensee can pay rather than contest.

The federal form that gives a borrower the final loan terms and closing costs, which must be received at least 3 business days before closing.

Mixing escrow funds with a broker's personal or business funds, which is a Florida license law violation.

The parts of a condominium owned collectively by all unit owners, such as the lobby, pool, and parking.

A local government's long-range land use plan that zoning must be consistent with under Florida's Community Planning Act.

A form of ownership in which a buyer holds fee simple title to an individual unit plus an undivided share of the common elements.

Something of legal value that each party exchanges, which is required for a valid contract.

Short-term financing disbursed in stages as a building project reaches milestones, with the balance due at completion.

The legal presumption that the public is aware of a fact, such as ownership, because a document is recorded in the public record.

A condition in a contract that must be satisfied for the deal to move forward, such as financing, inspection, or appraisal.

The 14 hours of approved coursework a Florida licensee must complete for each two-year renewal after the first.

A mortgage that is not insured or guaranteed by a government agency. PMI is required when the loan-to-value ratio is above 80 percent.

Using entrusted escrow funds for the broker's own benefit, a serious Florida license law violation that can carry criminal penalties.

A form of ownership in which a resident owns shares in a corporation that owns the building and holds a proprietary lease for the unit.

An appraisal method that adds land value to the depreciated cost to replace the improvements. It fits new or special-purpose buildings.

The Florida state agency that houses the Division of Real Estate, investigates complaints, and administers licensing.

The written instrument that transfers title to real property from the grantor to the grantee.

A private limitation on how a property may be used, written into a deed or recorded subdivision rules and enforced by owners or an association.

A court judgment against a borrower for the loan balance still owed after a foreclosure sale brings less than the debt.

In appraisal, a loss in value from physical deterioration, functional obsolescence, or external obsolescence.

Prepaid interest a borrower pays at closing to lower the loan's interest rate, where one point equals one percent of the loan amount.

The state body whose administrative law judges hear disputed-fact cases against licensees and issue a recommended order to FREC.

A Florida tax on deeds and on notes or mortgages, charged at 0.70 per 100 on deeds and 0.35 per 100 on the obligation.

Representing both the buyer and the seller as a single agent in the same transaction, which is prohibited in Florida.

A mortgage clause that lets the lender call the full balance due if the borrower transfers the property without paying off the loan.

A good-faith deposit a buyer puts down to show serious intent, held in escrow and applied at closing.

A right to use another person's land for a specific purpose, such as access or utilities, without owning it.

The four things a property needs to have value: demand, utility, scarcity, and transferability, remembered as DUST.

The government's power to take private property for public use, which requires just compensation.

Any claim, lien, or restriction on a property that affects its title or use, such as a mortgage, easement, lien, or deed restriction.

The owner's value in a property, equal to its current market value minus the debt owed against it.

The borrower's right to stop a foreclosure by paying the full amount owed before the foreclosure sale is finalized.

The government power by which property passes to the state when an owner dies with no will and no heirs.

A separate trust account where a broker holds funds belonging to others, kept apart from the brokerage's own money.

An executed contract is fully performed by both parties; an executory contract still has obligations left to complete.

The federal law that prohibits housing discrimination based on race, color, religion, national origin, sex, familial status, and disability.

A Fair Housing protected class covering households with children under 18 and pregnant people.

The highest and most complete form of property ownership, with rights that last indefinitely and pass to heirs.

A fee simple estate held subject to a condition, so ownership can be lost or revert if the condition is violated.

A mortgage insured by the Federal Housing Administration that allows low down payments and requires mortgage insurance premiums.

The full duties of trust a single agent owes a principal, often memorized with the mnemonic OLD CAR.

Personal property that has become permanently attached to real property and is treated as part of the real estate, conveying with it.

The legal process by which a lender forces the sale of mortgaged property after the borrower defaults. Florida uses judicial foreclosure through the courts.

The seven-member commission inside DBPR that adopts real estate rules, issues and revokes licenses, and disciplines licensees.

The deed that gives a buyer the greatest protection, warranting the full chain of title against all defects.

Also called the rectangular survey system, a method that describes land using townships and sections measured from principal meridians and base lines.

A quick valuation tool equal to sale price divided by gross rent, using gross income rather than net.

The legally permissible, physically possible, financially feasible, and maximally productive use of a property, used as the basis for appraised value.

Florida constitutional protection that shields a primary residence from forced sale by most creditors and limits how it can be devised.

A Florida property tax reduction of up to 50,000 on a primary residence, applied in two 25,000 layers.

An appraisal method that estimates value by dividing a property's net operating income by the capitalization rate.

A one-time Florida tax of 2 mills (0.002) on the amount of a new mortgage secured by Florida real property.

The 1985 Florida Supreme Court decision requiring sellers of residential property to disclose known material defects not readily observable to the buyer.

Co-ownership with the right of survivorship that requires the four unities of time, title, interest, and possession.

The federal requirement that sellers and landlords of pre-1978 housing disclose known lead hazards, provide an EPA pamphlet, and allow a 10-day inspection.

The use of borrowed money to control a larger investment, which can magnify both returns and risk.

A monetary claim against property that secures payment of a debt. It can be voluntary, like a mortgage, or involuntary, like a tax or judgment lien.

The rule, followed in Florida, that a borrower keeps title to mortgaged property while the lender holds only a lien.

Ownership of property measured by the duration of a person's life, after which it passes to a remainderman or reverts to the grantor.

An amount the parties agree in advance that one will keep or pay if the other defaults, such as retained earnest money.

A recorded notice that a lawsuit affecting title to a property is pending, warning third parties that the outcome could affect the property.

The water rights of an owner whose land borders a standing body of water such as an ocean, sea, or lake.

The ratio of the loan amount to the property value, used to size a loan and to decide whether PMI applies.

A legal description method that identifies a parcel by its lot and block numbers on a recorded subdivision plat.

The most probable price a property should bring in a competitive and open market under fair conditions with informed, willing parties.

A fact that affects the value or desirability of property and that a licensee must disclose if it is not readily observable.

A legal description method that defines a parcel by starting at a point of beginning and tracing directions and distances around its perimeter back to the start.

The property tax rate expressed in mills, where one mill equals 1 dollar of tax per 1,000 dollars of taxable value.

The security instrument that pledges real property as collateral for a debt, creating a lien in favor of the lender.

A cooperative system in which member brokers share their listings and offers of cooperation with one another.

A Florida agreement with certain other states that lets a qualified nonresident licensee obtain a Florida license by passing only the 40-question Florida law exam.

A property's income after operating expenses but before mortgage debt service, used in the income approach to value.

A Florida brokerage status in which a licensee deals with a buyer or seller as a customer and owes only three limited duties.

A land use that was lawful before a zoning change and is allowed to continue, though generally not to expand; also called grandfathered.

Replacing an original party or contract with a new one, which releases the original party from liability.

The matching offer and acceptance that create the mutual assent, or meeting of the minds, required for a contract.

A unilateral contract in which the optionor must sell at a set price if the optionee exercises, while the optionee is not obligated to buy.

A mortgage that finances real property together with personal property, such as appliances and furniture, under one loan.

A recorded map of a subdivision showing the lots, blocks, streets, and easements, referenced by the lot and block description method.

Insurance a conventional borrower pays when the loan-to-value ratio is above 80 percent, protecting the lender against default.

The fixed starting point of a metes and bounds description, where the boundary must also close.

The government's authority to regulate property to protect public health, safety, and welfare, without paying compensation.

The borrower's written promise to repay a debt, which is the instrument that actually creates the obligation.

The division of a recurring expense such as property tax, insurance, or HOA dues between buyer and seller at closing based on the closing date.

A mortgage the buyer gives as part of the purchase price, commonly when the seller finances part of the sale.

A deed that transfers whatever interest the grantor holds, if any, with no warranties of title.

A Florida fund that reimburses a member of the public who holds an unpaid court judgment against a licensee for certain violations.

A registered trademark of the National Association of Realtors, referring only to a licensee who is a member, not to every licensee.

Entering a deed or other instrument into the county public records, which gives constructive notice and establishes priority.

The illegal practice of a lender denying or limiting loans in certain areas based on the neighborhood's racial or ethnic makeup.

Canceling a contract and returning the parties to the positions they held before it was made.

A federal law that governs disclosures in residential mortgage settlements and prohibits kickbacks and unearned fees.

A loan that lets an eligible older homeowner convert home equity into payments with no monthly repayment while living in the home.

The feature of joint tenancy and tenancy by the entireties by which a deceased co-owner's share passes automatically to the surviving co-owners.

The water rights of an owner whose land borders a flowing watercourse such as a river or stream.

A licensee who performs real estate services under the supervision of a broker and cannot operate independently.

An appraisal method that estimates value by comparing the subject to recent sales of similar properties and adjusting the comparables toward the subject.

The document a lender records when a mortgage is fully paid, releasing the lien from the property.

A Florida constitutional cap that limits annual increases in the assessed value of homestead property to 3 percent or the change in the CPI, whichever is less.

The market where existing mortgage loans are bought and sold, giving lenders fresh capital to make new loans.

A one-square-mile unit of the government survey system containing 640 acres, with 36 sections to a township.

A licensee who represents one party, the buyer or the seller, with full fiduciary duties under Florida law.

A charge levied only on the properties that benefit from a specific public improvement, based on benefit rather than value.

A use allowed in a zoning district only with specific approval after meeting stated conditions; also called a conditional use.

A deed in which the grantor warrants the title only against defects that arose during the grantor's own period of ownership.

A court remedy that forces a defaulting party to complete the agreed sale, available because real property is unique.

The rule that contracts for the sale of real property must be in writing and signed to be enforceable.

The illegal practice of directing buyers toward or away from neighborhoods based on a protected class.

A lien the county sells for delinquent property taxes; if it stays unpaid, the holder may eventually force a tax deed sale.

A form of co-ownership available only to married couples in Florida that includes survivorship and protection from individual creditors.

The default form of co-ownership in which each owner holds a separate, possibly unequal interest that passes to heirs, with no survivorship.

A contract clause that makes the stated deadlines strictly enforceable, so missing a date is a breach.

Insurance that protects against title defects existing before the policy date, with separate owner and lender policies.

A six-mile-square block of the government survey system that contains 36 sections.

Florida's default brokerage relationship, in which a licensee gives limited representation to a buyer or seller without full fiduciary duties.

A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, allowing no down payment and a funding fee instead of monthly mortgage insurance.

An agreement that has the four essential elements: competent parties, mutual assent, a legal purpose, and consideration.

Permission to deviate from a specific zoning requirement because strict compliance would cause an unnecessary hardship.

A void contract was never legally valid; a voidable contract is valid until the protected party chooses to void it.

A new, larger loan that wraps around an existing loan that stays in place, with the borrower paying the new lender who continues paying the old one.