Business / Real Estate Glossary

Lien Theory: Some states interpret a mortgage as being purely a lien on real property. The mortgagee thus has no right of possession but must foreclose the lien and sell the property if the mortgagor defaults.

Lien Waiver: Documents signed by subcontractors and suppliers, indicating they have received payment in full.

Life Cycle Costing: In property management, comparing one type of equipment to another based on both purchase cost and operating cost over its expected useful lifetime.

Life Estate: Any estate in real or personal property that is limited in duration to the life of its owner or the life of some other designated person. Although classified as a freehold estate because it . . . View Full Definition

Life Tenant: A person in possession of a life estate.

Lifting Clause: A provision in a junior mortgage that allows the underlying senior loan to be replaced or refinanced so long as the amount of the new senior loan does not exceed the amount of the first lien . . . View Full Definition

Like Kind: A term relating to the nature of a property rather than its quality or quantity. Only like kind properties qualify for a real estate exchange and the resulting tax benefit.

Limited Liability Company (LLC): LLCs are a relatively recent form of business organization. An LLC combines the most attractive features of limited partnerships and corporations. The members of an LLC enjoy the limited lia . . . View Full Definition

Limited Partnership: Consists of one or more general partners as well as limited partners. The business is administered by the general partners and funded, for the most part, by limited or silent partners. Each . . . View Full Definition

Line Of Credit: An amount of money stipulated by a commercial bank to an active customer on an annual basis. The balance normally must be brought to zero on an agreed upon regular date.

Liquefaction: A phenomenon which occurs during an earthquake whereby the ground/soil turns into a highly unstable, jelly-like substance.

Liquidated Damages: An amount predetermined and agreed by the parties to an agreement as the total amount of compensation an injured party should receive if the other party breaches a specified part of the contract.

Liquidity: Refers to the time it takes to convert an asset to cash that is a reflection of its market value.

Lis Pendens: A recorded legal document that gives constructive notice that an action affecting a particular piece of property has been filed in a state or federal court. Lis pendens is Latin for action p . . . View Full Definition

Listing Agreement: A written employment agreement between a property owner and a real estate broker authorizing the broker to find a buyer or a tenant for certain real property. Listing can take the form of op . . . View Full Definition

Listing Broker: The broker in a multiple-listing situation from whose office a listing agreement is initiated, as opposed to the cooperating broker, from whose office negotiations leading up to a sale are i . . . View Full Definition

Listing Presentation Manual: Used by real estate brokerages to make presentations to listing prospects. A visual aid used in combination with a verbal presentation made by a real estate agent.

Littoral Rights: The rights of a landowner whose land borders a pond, lake or ocean shore-line where the body of water is non-flowing. Littoral rights extend to the mean high watermark of ocean or tidal waters.

Living Trust: An arrangement in which a property owner (trustor) transfers assets to a trustee who assumes specified duties in managing the asset. After payment of operating expenses and trustees fees, th . . . View Full Definition

Loan Application: A lenders initial sourse of information on a borrower/applicant and the collateral involved, stipulates the amount of money requested and repayment terms.

Loan Broker Listing: A mortgage loan brokers contract with a buyer to obtain a loan.

Loan Commitment: A lenders agreement to lend a specified amount of money which must be exercised within a set time limit.

Loan Constant: The annual payment required per dollar of a mortgage loan, including principal and interest.

Loan Correspondent: A person or entity that acts for a lender in arranging loans or the sale of loans.

Loan Documents: Documents prepared by a lender in conjunction with granting the loan to the borrower, may include a promissory note, deed of trust, and required loan disclosure documents.

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