Business / Real Estate Glossary

No-Loss Rule: If a real estate transaction qualifiies as an exchange, no loss can be recognized.

Nominal Damages: Monetary damages of a token amount awarded for a wrongful act where no loss occurred.

Nominal Interest Rate: The stated interest rate in a note or contract, which may differ from the true or effective interest rate, especially if the lender discounts the loan and advances less than the full amount.

Non-Agent: An intermediary between a buyer and seller, or landlord and tenant, who assists both parties with a transaction without representing either. Also known as a facilitator, transaction broker, . . . View Full Definition

Non-Conforming Loan: A mortgage loan that does not meet Fannie Mae and Freddie Mac underwriting guidelines. Non-conforming loans are available as both fixed and adjustable rate mortgages.

Nonconforming Use: A use of property, legally permitted to continue as such, in spite of the orignial zoning ordinance which prohibited such use for the area.

Noncumulative Zoning: Zoning that allows only the stated use and not more restrictive uses.

Nondisturbance Clause: An agreement where the mortgagee agrees to honor a tenants lease in the event that the mortgage is foreclosed.

Nongeographic Farming: Farming/prospecting a particular segment of the market such as an ethinic group or nationality, as opposed to a geographic area.

Nonhomogeneity: A lack of uniformity, dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogeneous.

Noninstitutional Lenders: Credit unions, pension funds, private individuals and real estate investment trusts.

Nonjudicial Foreclosure: The process of selling real property under a power of sale in a mortgage or deed of trust that is in default. One disadvantage is that the lender cannot obtain a deficiency judgment. Also, s . . . View Full Definition

Notary Public: A person who acknowledges oaths, such as the signing of a grant deed or deed of trust, must be duly appointed by the proper authorities.

Note (Original Note): A document signed by the borrower of a loan and stating the loan amount, the interest rate, the time and method of repayment and the obligation to repay. The note serves as evidence of the d . . . View Full Definition

Notice Of Cessation: A notice that gives subcontractors 30 days and gives prime contractors 60 days to file liens from the date of cessation of work.

Notice Of Completion: A document recorded to give constructive notice that a building job has been completed.

Notice Of Default: A notice to a defaulting party announcing that a default has occurred. The defaulting party is usually provided a grace period during which to cure the default. Notices of default are freque . . . View Full Definition

Notice Of Deliquency: In junior financing, where the borrower gives the senior lender permission to notify the junior lender in the event of a default.

Notice Of Nonresponsibility: A legal notice designed to relieve a property owner of responsibility for the cost of improvements ordered by another person (such as a tenant). The owner usually gives notice that he or she . . . View Full Definition

Novation: Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Nuisance: That which annoys and disturbs one in possession of his or her property, rendering its ordinary use physically uncomfortable.

Nuncupative Will: An oral will declared by the testator in his or her final illness, made before witnesses and then created in legal written form.

Obedience: The fiduciary relationship obligates the agent to act in good faith at all times, obeying the principals instructions in accordance with the contract. However, that obedience is not absolute . . . View Full Definition

Obligatory Advance: Any advance which, under the terms of the credit line deed of trust or other agreement, the secured party has legally obligated itself to make in the absence of a default, breach, or other s . . . View Full Definition

Obligor: A promisor, one who incurs a lawful obligation to another (the obligee). The maker of a promissory note is an obligor. In a performance bond, the contractor is the obligor. One who guarantee . . . View Full Definition

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