Glossary

227 terms from Appendix B and 22 Colorado companion definitions. Compact memory aids, not replacements for the chapters or the cited authorities. Drill them as flashcards.

Filter terms

A

Abstract of title: A summary of instruments and proceedings affecting title in the examined record chain. See Chapter 7.
Acceleration: Making the remaining debt due after a contractual triggering event, subject to law. See Chapter 15.
Acceptance: Assent to an offer in the required manner without a material change that creates a counteroffer. See Chapter 10.
Accession: Acquisition of additional property rights through attachment, growth, or other legally recognized addition. See Chapter 2.
Accretion: Gradual buildup of land through deposits by water. See Chapter 2.
Accrued expense: An incurred but unpaid expense, potentially requiring a closing adjustment. See Chapter 17.
Acknowledgment: Formal acknowledgment of execution before an authorized officer, commonly relevant to recording. See Chapter 7.
Actual notice: Direct knowledge of information, contrasted with notice attributed by law. See Chapter 7.
Ad valorem: Based on value, as in a property tax calculated using taxable assessed value. See Chapter 20.
Adjustable-rate mortgage: A loan whose interest rate can change under an index, margin, and other contractual terms. See Chapter 15.
Adjusted basis: Tax basis after required increases and decreases, distinct from mortgage debt. See Chapter 20.
Adverse possession: Acquisition of ownership by possession satisfying all statutory requirements. See Chapter 7.
Agency: An authorized relationship in which an agent acts on behalf of a principal. See Chapter 8.
Alienation: Transfer of a property interest, voluntarily or involuntarily. See Chapter 7.
Amortization: Repayment of loan principal through scheduled payments over time. See Chapter 15.
Anticipation: Valuation principle linking present value to expected future benefits. See Chapter 14.
Antitrust: Laws protecting competition, including prohibitions on specified competitor agreements. See Chapter 19.
Appraisal: An opinion of value developed for a defined assignment. See Chapter 14.
Appreciation: An increase in value; not a guaranteed feature of ownership. See Chapter 20.
Appurtenant: Attached to or benefiting another interest, as an easement benefiting a dominant parcel. See Chapter 5.
APR: Annual percentage rate, a legally defined annualized expression of covered credit cost. See Chapter 16.
As-is: Contract language concerning property condition; not blanket permission to conceal required facts. See Chapter 11.
Assessment: A valuation or charge under a tax or improvement system; context determines meaning. See Chapter 20.
Assignment: Transfer of contractual rights; not necessarily release of the original party's obligations. See Chapter 10.
Assumption: Taking responsibility for an existing loan under the governing arrangement. See Chapter 15.
Avulsion: Sudden change in land or a watercourse, distinguished from gradual accretion or erosion. See Chapter 2.

B

Balloon payment: A substantial remaining balance due at loan maturity. See Chapter 15.
Beneficiary: In deed-of-trust terminology, commonly the lender; in trusts generally, a person entitled to benefits. See Chapter 4, Chapter 15.
Bilateral contract: An agreement formed through an exchange of promises. See Chapter 10.
Bill of sale: An instrument commonly used to transfer personal property. See Chapter 7.
Blanket loan: A loan secured by more than one parcel. See Chapter 15.
Blind advertisement: An advertisement omitting required brokerage or licensee identification. See Chapter 19.
Blockbusting: Inducing transactions for profit through representations concerning protected groups entering a neighborhood. See Chapter 13.
Boot: Non-like-kind value received in an exchange, potentially producing recognized gain. See Chapter 20.
Breach: Failure to perform an enforceable obligation without a valid excuse. See Chapter 10.
Bridge loan: Temporary financing addressing an interim funding need. See Chapter 15.
Bundle of rights: A teaching model describing ownership rights such as possession, use, exclusion, and disposition. See Chapter 2.

C

Capital expenditure: Spending for a major improvement or replacement, distinguished from routine operating expense. See Chapter 14, Chapter 18.
Capitalization rate: A rate converting specified annual NOI into value in direct capitalization. See Chapter 14.
Cash-on-cash return: Annual defined cash flow divided by cash invested. See Chapter 20.
CC&Rs: Covenants, conditions, and restrictions affecting property use and obligations. See Chapter 6.
CERCLA: Federal environmental law commonly called Superfund, with specified cleanup-liability provisions. See Chapter 12.
Chain of title: The sequence of ownership-related transfers and instruments affecting an interest. See Chapter 7.
Client: A represented principal in a brokerage relationship. See Chapter 8.
Closing Disclosure: The integrated five-page disclosure for covered mortgage transactions. See Chapter 16.
Cloud on title: An apparent defect or claim that can impair title. See Chapter 7.
CMA: Comparative market analysis, a brokerage analysis of market positioning and comparable evidence. See Chapter 14.
Commingling: Improper mixing of trust funds with personal or business funds. See Chapter 19.
Community property: A marital-property system recognized in certain jurisdictions, subject to detailed local rules. See Chapter 4.
Comparable: A sufficiently relevant property used as evidence in market analysis or valuation. See Chapter 14.
Condemnation: The legal process used to exercise eminent domain. See Chapter 6.
Conditional-use permit: Approval of a use contemplated by an ordinance subject to conditions. See Chapter 6.
Condominium: Separate unit ownership combined with an interest in common elements. See Chapter 4.
Consideration: Bargained-for legal value supporting an agreement. See Chapter 10.
Constructive eviction: Qualifying serious interference that may support a tenant's departure and remedies when required elements are met. See Chapter 18.
Constructive notice: Notice attributed by law, including through qualifying public records. See Chapter 7.
Consummation: Becoming contractually obligated on a credit transaction under applicable law. See Chapter 16.
Contingency: A contractual condition affecting obligations or available remedies. See Chapter 11.
Contribution: The value a component adds to the whole, not necessarily its cost. See Chapter 14.
Conventional loan: A loan not federally insured or guaranteed through programs such as FHA or VA. See Chapter 15.
Conversion: Unauthorized use or appropriation of another person's funds or property. See Chapter 19.
Cooperative: An ownership arrangement commonly involving shares and associated occupancy rights. See Chapter 4.
Counteroffer: A materially changed response proposing different terms instead of conforming acceptance. See Chapter 10.
Customer: A person receiving services without necessarily being represented. See Chapter 8.

D–E

Debit: A charge to a party on a settlement statement. See Chapter 17.
Debt-service coverage: NOI divided by annual debt service under the stated convention. See Chapter 20.
Deed: An instrument used to convey an interest in real estate. See Chapter 7.
Deed in lieu: A negotiated conveyance to a lender instead of foreclosure. See Chapter 7.
Deed of trust: A security instrument commonly involving a trustor, trustee, and beneficiary. See Chapter 15.
Defeasance: A provision concerning release of security after satisfaction of the obligation. See Chapter 15.
Defeasible fee: A fee estate subject to termination under a legally effective limitation or condition. See Chapter 4.
Deficiency: Unpaid debt remaining after application of collateral proceeds, subject to recovery restrictions. See Chapter 7.
Depreciation: In appraisal, loss in improvement value; in tax, allocation of qualifying basis under prescribed rules. See Chapter 14, Chapter 20.
Designated agency: A state-recognized arrangement assigning different affiliated agents to different clients. See Chapter 8.
Devise: A transfer of property by will under the applicable terminology. See Chapter 7.
Discount point: One percent of the loan amount as a financing charge unit. See Chapter 16.
Dominant estate: The parcel benefiting from an appurtenant easement. See Chapter 5.
Dual agency: Representation of opposing parties in the same transaction where legally permitted. See Chapter 8.
Due-on-sale: A loan provision concerning repayment upon specified transfers, subject to legal restrictions and exceptions. See Chapter 15.
Easement: A right to use another's land for a defined purpose without owning that land outright. See Chapter 5.
Easement in gross: An easement benefiting a person or entity rather than a dominant parcel. See Chapter 5.
ECOA: The Equal Credit Opportunity Act, governing specified credit discrimination. See Chapter 16.
Effective age: An appraisal estimate reflecting condition and utility rather than chronological age alone. See Chapter 21.
Effective gross income: Potential income less vacancy and collection loss plus applicable other income. See Chapter 14.
Emblements: Certain cultivated crops with harvesting rights under applicable tenancy and termination rules. See Chapter 2.
Eminent domain: Government power to acquire private property for public use with required legal protections and compensation. See Chapter 6.
Encroachment: A physical intrusion onto another parcel or beyond a legal boundary. See Chapter 5.
Encumbrance: A claim, burden, restriction, or interest affecting property. See Chapter 5.
Equity: The owner's economic interest after relevant debt or claims are considered. See Chapter 15.
Erosion: Gradual wearing away of land. See Chapter 2.
Escheat: Property passing to the state when succession law provides no entitled private successor. See Chapter 6.
Escrow: Holding funds or documents subject to authorized conditions. See Chapter 17.
Estate for years: A tenancy for a defined term, even when shorter than one year. See Chapter 18.
Estoppel: A principle preventing a person from denying a position when legally sufficient reliance makes denial improper. See Chapter 8.
Exclusive agency: An exclusive listing commonly preserving an owner-sale compensation exception. See Chapter 9.
Exclusive right to sell: A listing ordinarily protecting the broker's compensation on a sale during its term regardless of who procures it, subject to terms. See Chapter 9.
Executed contract: For performance classification, a fully performed contract; in signing contexts, the word can mean signed. See Chapter 10.
Executory contract: A contract with performance still outstanding. See Chapter 10.
External obsolescence: Value loss caused by influences outside the property. See Chapter 14.

F–L

Fair Housing Act: Federal law prohibiting specified housing discrimination. See Chapter 13.
FCRA: The Fair Credit Reporting Act, governing consumer reports and specified uses and notices. See Chapter 16.
Fee simple absolute: The broadest conventional inheritable freehold estate without a special defeasance condition. See Chapter 4.
FHA: Federal Housing Administration in lending; distinguish this abbreviation from Fair Housing Act in civil-rights contexts. See Chapter 13, Chapter 15.
Fiduciary: A person owing legally recognized duties of trust and loyalty within a defined relationship. See Chapter 8.
FIRPTA: Federal rules concerning tax and withholding on specified foreign dispositions of U.S. real property interests. See Chapter 20.
Fixture: An item formerly personal property treated as part of the real estate under the applicable analysis. See Chapter 2.
Foreclosure: Enforcement of a security interest through authorized sale or legal process. See Chapter 7.
Freehold: An ownership estate of indefinite duration, including fee and life estates. See Chapter 4.
Functional obsolescence: Value loss from a property's design, layout, or utility deficiency. See Chapter 14.
General agent: An agent authorized for an ongoing range of activities within a defined scope. See Chapter 8.
General lien: A lien potentially affecting multiple assets or interests of a debtor under applicable law. See Chapter 5.
General warranty deed: A deed containing broader title warranties than a special warranty deed, subject to its language and law. See Chapter 7.
Grantee: The recipient of a conveyed property interest. See Chapter 7.
Grantor: The party conveying a property interest. See Chapter 7.
GRM: Gross rent multiplier, using a clearly identified rent period. See Chapter 14.
Gross lease: A lease commonly placing many operating expenses on the landlord, subject to its terms. See Chapter 18.
Ground lease: A lease of land with terms governing its use and often improvements. See Chapter 18.
Highest and best use: Legally permissible, physically possible, financially feasible, maximally productive use. See Chapter 14.
Hypothecation: Pledging property as collateral without surrendering possession merely by the pledge. See Chapter 15.
Index: A reference measure used with a margin or formula to adjust a rate or payment. See Chapter 15, Chapter 18.
Installment land contract: A financed sale in which the seller commonly retains legal title pending specified performance. See Chapter 11.
Joint tenancy: A co-ownership form conventionally including survivorship, subject to state creation and severance rules. See Chapter 4.
Leasehold: A tenant's possessory interest under a lease or recognized tenancy. See Chapter 4.
Lessee: The tenant receiving a leasehold interest. See Chapter 18.
Lessor: The party granting a leasehold interest. See Chapter 18.
Leverage: Use of borrowed funds, magnifying potential gains and losses. See Chapter 20.
License: In property use, permission distinct from an estate; in professional regulation, authorization to practice. See Chapter 5, Chapter 19.
Lien: A security claim or charge against property for an obligation. See Chapter 5.
Life estate: An estate measured by a specified person's life. See Chapter 4.
Liquidated damages: An agreed damages amount subject to enforceability rules. See Chapter 10.
Lis pendens: Notice of pending litigation affecting a claimed property interest under applicable law. See Chapter 5.
Littoral rights: Rights associated with property bordering specified standing waters, subject to local law. See Chapter 2.
Loan Estimate: The integrated three-page estimate for covered mortgage transactions. See Chapter 16.
LTV: Loan-to-value ratio, using the lender's applicable value base. See Chapter 15.

M–R

Margin: The contractual addition to an ARM index in a fully indexed rate. See Chapter 15.
Market value: An opinion of value under a defined market-value premise, not necessarily asking price or cost. See Chapter 14.
Marketable title: Title meeting the applicable standard for freedom from reasonable doubt or unacceptable defects. See Chapter 7.
Material fact: Information significant to a transaction decision under the applicable legal standard. See Chapter 12.
Mechanics' lien: A statutory lien connected with qualifying labor or materials improving property. See Chapter 5.
Metes and bounds: A boundary description using courses, distances, monuments, and related references. See Chapter 3.
Mill: One dollar of tax per $1,000 of taxable value. See Chapter 20.
Mortgagee: The party receiving a mortgage, ordinarily the lender. See Chapter 15.
Mortgagor: The party giving a mortgage, ordinarily the borrower. See Chapter 15.
Negative amortization: Growth in principal when unpaid interest is added to the loan balance. See Chapter 15.
Net lease: A lease shifting specified property expenses to the tenant. See Chapter 18.
Net listing: Compensation based on amounts above an owner's specified net, prohibited or restricted in various states. See Chapter 9.
NOI: Net operating income before debt service, income taxes, and accounting depreciation under the conventional framework. See Chapter 14.
Nonconforming use: A use not conforming to current zoning; lawful continuation depends on its status and governing rules. See Chapter 6.
Novation: Consented substitution of an obligation or party with release of what is replaced. See Chapter 10.
Open listing: A nonexclusive listing under which compensation depends on the applicable agreement and performance. See Chapter 9.
Option: A right, not an obligation, to enter the specified transaction under agreed conditions. See Chapter 11.
Optionee: The holder of the option right. See Chapter 11.
Optionor: The party granting the option. See Chapter 11.
Package loan: Financing secured by real property and specified personal property. See Chapter 15.
Partition: Division or judicial disposition of co-owned interests under applicable rules. See Chapter 4.
Percentage lease: A lease tying some rent to defined business sales or revenue. See Chapter 18.
Periodic tenancy: A tenancy continuing through recurring periods until properly ended. See Chapter 18.
Personal property: Movable or other property not classified as real property under the applicable rules. See Chapter 2.
PITI: Principal, interest, taxes, and insurance components of a housing payment. See Appendix A.
PMI: Private mortgage insurance protecting a lender against specified losses on covered loans. See Chapter 15.
Point of beginning: The starting and closing point of a metes-and-bounds boundary description. See Chapter 3.
Police power: Government authority regulating matters such as health, safety, and welfare, subject to legal limits. See Chapter 6.
Prescription: Acquisition of a use right through qualifying adverse use for the required period. See Chapter 5.
Principal: In agency, the represented client; in finance, the loan balance apart from interest. See Chapter 8, Chapter 15.
Probate: A court-supervised estate process where applicable. See Chapter 7.
Procuring cause: The causally effective chain producing a transaction under governing compensation rules. See Chapter 9.
Proration: Allocation of a recurring amount between parties or periods. See Chapter 17.
Puffing: Promotional opinion rather than a specific verified factual statement, depending on context. See Chapter 8.
Pur autre vie: A life estate measured by another person's life. See Chapter 4.
Quiet title: A court action to resolve competing title claims. See Chapter 7.
Quitclaim deed: A deed transferring the grantor's interest, if any, without ordinary title warranties. See Chapter 7.
Ratification: Legally effective approval of an earlier act. See Chapter 8.
Reasonable accommodation: A necessary reasonable change to a policy, rule, practice, or service concerning disability access. See Chapter 13.
Reasonable modification: A necessary reasonable physical alteration concerning disability access. See Chapter 13.
Recording: Placing an instrument in the authorized public record system. See Chapter 7.
Redemption: Recovery of property or relief from enforcement by satisfying applicable obligations within an allowed period. See Chapter 7.
Redlining: Discriminatory restriction of housing-related services by geographic area tied to protected characteristics. See Chapter 13.
Regression: A downward value influence on a superior property from inferior surroundings. See Chapter 14.
REIT: A real estate investment trust; its interests may be securities with distinct risks and rules. See Chapter 20.
Reliction: Gradual exposure of land as water permanently recedes, subject to local rules. See Chapter 2.
Remainder: A future interest in another person following a prior estate. See Chapter 4.
Rent roll: A record of units, tenants, rents, and relevant lease information. See Chapter 18.
Replacement cost: Current cost of equivalent utility using modern materials and methods. See Chapter 14.
Reproduction cost: Current cost of duplicating the original design and materials. See Chapter 14.
Rescission: Undoing a transaction under a recognized legal or contractual right. See Chapter 10, Chapter 16.
RESPA: Federal law addressing covered settlement and mortgage-servicing practices. See Chapter 16.
Reversion: An interest returning to the grantor or lessor after a lesser estate ends. See Chapter 4.
Riparian rights: Rights associated with land bordering a watercourse under the applicable water-law system. See Chapter 2.

S–Z

Section: A standard one-square-mile unit in the rectangular survey system, subject to actual survey variations. See Chapter 3.
Servient estate: Land burdened by an easement. See Chapter 5.
Severalty: Sole ownership by one legal person or entity. See Chapter 4.
Severance: Removing an attached item from realty, potentially converting it to personal property. See Chapter 2.
Short sale: A sale involving lender-approved acceptance of less than the secured payoff, with liability issues separately resolved. See Chapter 7.
Situs: The economic desirability of location. See Chapter 2.
Special agent: An agent authorized for a particular transaction or limited activity. See Chapter 8.
Special assessment: A charge associated with a specified public improvement or benefit under law. See Chapter 20.
Special warranty deed: A deed with warranties generally limited to the grantor's ownership period. See Chapter 7.
Specific performance: A discretionary court remedy ordering promised contractual performance. See Chapter 10.
Statute of frauds: Writing requirements for specified agreements. See Chapter 10.
Statute of limitations: A time limit for bringing a legal claim. See Chapter 10.
Steering: Channeling housing choices based on a protected characteristic. See Chapter 13.
Subagent: An agent acting through another agent for the same principal where that relationship is legally established. See Chapter 8.
Subject-to purchase: Acquisition subject to an existing lien without necessarily assuming personal liability on the note. See Chapter 15.
Sublease: Transfer of less than the tenant's full remaining leasehold interest under the conventional distinction. See Chapter 18.
Subordination: Agreement changing the relative priority of interests. See Chapter 5, Chapter 15.
Substitution: Valuation principle involving the cost or price of acceptable alternatives. See Chapter 14.
Tenancy at sufferance: A holdover situation after lawful possession has ended, subject to law and later conduct. See Chapter 18.
Tenancy at will: A tenancy dependent on continuing consent under applicable rules. See Chapter 4.
Tenancy by the entirety: A marital co-ownership form recognized in certain jurisdictions. See Chapter 4.
Tenancy in common: Co-ownership of undivided shares without ordinary automatic survivorship. See Chapter 4.
TILA: Truth in Lending Act, addressing covered credit disclosure and consumer protections. See Chapter 16.
Time is of the essence: A clause emphasizing timely contractual performance. See Chapter 10.
Title: The legal ownership interest or rights in property, distinct from the deed documenting transfer. See Chapter 7.
Title insurance: Protection against specified covered title risks, subject to policy terms and exceptions. See Chapter 7.
Township: A standard six-mile-by-six-mile rectangular-survey unit containing thirty-six sections. See Chapter 3.
Trade fixture: A tenant-installed item used for business with removal rights governed by law and agreement. See Chapter 2.
Transaction broker: A nonagency or limited-service role whose name and duties depend on state law. See Chapter 8.
TRID: The TILA-RESPA integrated-disclosure framework for covered mortgage transactions. See Chapter 16.
Trustee: A party holding property, powers, or duties under a trust or deed-of-trust arrangement. See Chapter 4, Chapter 15.
Trustor: In conventional deed-of-trust terminology, the borrower granting the security interest. See Chapter 15.
Unilateral contract: A contract based on an offer seeking acceptance through requested performance. See Chapter 10.
Variance: Authorized relief from a zoning requirement upon satisfaction of legal criteria. See Chapter 6.
Void: Having no legal contractual effect. See Chapter 10.
Voidable: Subject to avoidance by a party with a legally recognized right to do so. See Chapter 10.
Waste: Conduct or neglect improperly harming another's interest in property, such as the future interest after a life estate. See Chapter 4.
Wraparound loan: Financing incorporating an existing debt within a new arrangement, requiring careful legal and payment analysis. See Chapter 15.
Zoning: Public regulation of land use and development under authorized governmental powers. See Chapter 6.

Colorado companion glossary

Review definitions that condense the Colorado chapters rather than replace their conditions.

Annual Commission Update: A Colorado continuing-education course category; the ordinary cycle requires three different four-hour updates, not repeated credit for one year’s course.
Associate broker: A Colorado broker practicing under an employing broker; not a separate salesperson license category.
CBS1: The Commission’s residential Contract to Buy and Sell Real Estate form designation. Use the applicable revision and the actual completed terms.
CBSF1: The specialized residential foreclosure purchase contract form. Its availability does not mean it is suitable for every distressed-property transaction.
Colorado Real Estate Commission: The state body exercising statutory broker-regulatory authority; distinct from a trade association.
Customer in a Colorado brokerage transaction: A party not represented or served in a brokerage relationship by the broker, while still owed applicable duties such as required disclosure and honesty.
Designated brokerage: A framework identifying the individual broker or brokers serving a party; an office colleague’s relationship is not automatically imputed to everyone in the firm.
Documentary fee: Colorado’s statutory fee on certain recorded conveyances, distinct from recording charges, local transfer taxes, and seller income taxes.
Employing broker: A broker shown in Commission records as employing or engaging another broker and subject to applicable supervisory qualifications and duties.
Equity purchaser: A term defined for covered foreclosure-protection transactions; do not apply it automatically to every buyer of distressed property.
Good funds: Funds meeting applicable legal and settlement requirements for disbursement; not merely an unverified promise that money will arrive.
Independent broker: A broker qualified for independent practice; independent status alone is not the same as employing-broker authority.
Inspection objection: A contract notice identifying inspection-related dissatisfaction through the agreement’s objection route; distinct from the separate termination route.
Inspection resolution deadline: The completed contract deadline governing resolution of a timely inspection objection and the specified consequence when resolution fails.
Mutual Execution of Contract (MEC): The contract’s defined mutual-execution reference; distinguish it from offer expiration, communication of acceptance, earnest-money delivery, closing, and possession.
Nonresident withholding: A conditional Colorado settlement withholding requirement based on sales price and net proceeds; not a two-percent tax on gain and not federal FIRPTA.
Prior appropriation: A priority-based water-right framework associated with beneficial use; not a rule that land ownership automatically authorizes unlimited withdrawal.
Public trustee: A public official involved in Colorado deed-of-trust foreclosure and related statutory functions; not simply a private trustee named in a national hypothetical.
Special warranty deed: A deed with warranty limited to the grantor’s period or acts under the instrument; the default deed selection in the residential form discussed in Chapter 25 unless another permitted selection is made.
Three-way reconciliation: A comparison of adjusted bank balance, trust-account book balance, and the total of individual beneficiary or property ledgers.
Transaction-broker in Colorado: A broker assisting a transaction without serving as either party’s agent, while owing statutory duties and satisfying the current written-agreement requirement.
Well ownership update: Documentation of a well’s new owner; the purchase form’s 60-day fallback filing and the statute’s 63-day owner-contact update concern different triggers.