A Glossary of Real Estate Terms for Landlords and Tenants


October 31, 2018

Are you a seasoned real estate investor, first-time property owner, or tenant? Either way, it’s helpful to know the common real estate terms. When starting a lease agreement, some familiarity with legal terms benefits both landlord and tenant. Often landlords are concerned about damage or maintenance needs of their property. For a tenant, the living conditions and lack of landlord intrusions are of the utmost importance.

Blueground focuses on the needs of the tenants, and of the property owners. All maintenance requirements, service requests, and property management responsibilities are handled. Additionally, our design team turns the interiors of the property into a comfortable, welcoming home. Working with us makes the renting process seamless for all parties.

A listing of real estate terms

Appraiser

A professional with the required expertise to access the FMV of an asset (i.e., real estate property).

Assessed valuation

The value of a property that’s been assigned to determine applicable taxes due.  

Building code

A set of rules to enforce the proper and safe design, construction and structure of a building.  

Equity

The fair market value of the property, less any outstanding debt or encumbrances.

Fair market value (FMV)

The price at which a willing buyer would pay a willing seller for his or her property.

Housing co-op

An alternative to purchasing a home or renting an apartment. When someone buys into a co-op, they become a shareholder with exclusive use of a single housing unit on the property. One advantage of buying into a co-op is the cost-effectiveness. Residents living in a co-op building collectively pay any outstanding bills.    

Landlord (Lessor)

A person who rents an apartment, land, or building to a tenant.

Lease

A contract stating the owner of real estate property gives the right of possession to a tenant for a specified length of time, for a periodic payment.

Lease agreement  

A formal legal document entered into and signed by the landlord and tenant of a rental property. Contained within the agreement are lease terms and legal rights of the landlord and tenant.

Lease guarantor 

Someone who acts as a third party to help provide security for the landlord in terms of the rental agreement.

Mixed-use

Refers to space within a building that provides more than one use. For example, an apartment or loft with retail space, or an apartment building with office space.

Normal wear and tear

The term refers to natural damage inside a leased rental property due to aging. It’s considered to be normal depreciation of the property.

Operating expenses

The actual costs incurred to operate the property. Including, but not limited to, maintenance, repairs, utilities, insurance, and taxes.

Property

In a lease agreement, the property refers to the rental for lease. Specific information about the property, such as the street address, city, state, zip code and total square footage will be within the agreement.

Property management company

A company that manages the day-to-day activities for real estate properties. Some of these activities include; advertising properties, screening prospective tenants, drafting rental leases, collecting rent payments, and maintaining the properties.

Quiet enjoyment

Refers to the right a tenant has to enjoy the rental property without intrusions or unannounced visits from the landlord.  

Real estate broker

The main professional duty of a real estate broker is to serve as the intermediary for sellers and buyers of real estate property.

Real property

The land on which the real estate building sits, along with anything else affixed to the land (i.e. fences, light fixtures, heating and cooling fixtures, plumbing, electricity, etc.)

Renewal option

A clause within the lease agreement that gives a tenant the option to extend the lease term. A specific period and rent amount are also disclosed.

Rent

A fee or form of compensation paid by the tenant to the landlord to occupy a residence.

Right of entry

In most instances, this is a limited right for the landlord to enter the property leased to their tenant. A landlord can only enter in the event of an emergency, with a prospective tenant, or make repairs. The latter two instances require approval from the tenant.

Subletting

The tenant can sublet the rental property if they cannot complete the remaining term of the lease. Or, the tenant may choose to rent part of the space to another person.

Security deposit

Money paid by a tenant to the landlord to reserve or secure the property before move-in. A security deposit is refundable to the extent of damages caused by the tenant during their period of occupation.

Tenant (Lessee)

One who enters into a lease agreement for the purpose of renting real estate from a landlord.

Termination

The tenant must return the property back to its original condition upon expiry of the lease.

Term of lease

States the duration of the lease in months or years.

Turn-key property

A brand new, or fully renovated home that’s completely furnished and equipped with every household necessity. Turn-key properties are available for immediate move-in, just like the properties listed by Blueground.

Use of premises

Specifies whether there are any restrictions on the use of rental property.

Vacancy factor

The amount of time, usually expressed as a fraction of days over one year, that a rental property remains vacant.  

Walk score

This score measures the walkability of a given neighborhood. A high walk score means a resident of that neighborhood lives within walking distance to many stores, restaurants, parks, bars, and public transit.   

Warranty of habitability

An implied law that states a landlord’s rental property must be deemed fit for human occupancy. For instance, the property should be structurally safe, sanitary, supply clean drinking water, electricity, heat, and a lock on the front door. The landlord is obligated to provide a home with adequate living standards.

Understanding this list of real estate terms can make you a more knowledgeable and informed landlord or tenant.


United States