Common Real Estate Terms


Accelerated Payments
A mortgage payment option whereby the monthly mortgage payment is either split in half or in quarters and is paid every two weeks (bi-weekly) or every week (weekly)

Addendum
A document that is attached to, and made part of, an original contract as a result of making changes to elements that have already been agreed to. 

Adjustable Rate Mortgage
A mortgage where the interest rate and payments are increased or decreased at predetermined intervals based on a lender's rate market review.  The interest rate charged on the mortgage may be linked to the lender’s prime rate or a pre-selected index rate.  Also see Index Rate.

Adjustments
The financial calculations made regarding the costs for the respective parties associated with a mortgage or real estate transaction at the time of closing (e.g. property taxes). Also see Closing and Closing Costs.

Agency
A consensual relationship created by contract or by law where one party, the principal, grants authority for another party, the agent, to act on behalf of and under the control of the principal to deal with a third party and where the agent accepts responsibility for representing the principal.

Agent
An industry professional who is expressly or implicitly authorized to act or represent another party.

Alberta New Home Warranty Program (also New Home Buyer Protection Act)
The New Home Buyer Protection Act applies to new homes constructed with a building permit applied for after February 1, 2014. The legislation covers single family homes, duplexes, multi-family homes, condominiums, manufactured homes (including ready to move homes), and recreational properties. The legislation does not cover dorms, work camps, hotels and rental apartments. under the warranty periods. The minimum required warranty coverage terms are:

  • 1 year labour and materials
  • 2 years for defects in labour and material related to delivery and distribution systems
  • 10 years for major structural
  • 5 years on building envelope, with a requirement for the warranty provider to offer the option to purchase additonal years of coverage

Alberta Real Estate Association
A provincial professional association with 10 real estate boards operating in Alberta and more than 10,000 Alberta REALTORS® as its members.

Amendment
A document that records a correction, addition, deletion or other changes to any previously agreed-to terms in the original contract. 

Amortization
The gradual retirement of a debt by means of installment payments which often includes principal and interest. Also see Principal and Interest.

Amortization Period
The length of time required to repay a mortgage by equal installments of periodic constant payments based on a set interest rate. The payments are typically a combination of principal and interest in blended amounts. 

Amortization Schedule
A table illustrating the amount of principal and interest that comprise each of the periodic installments and the outstanding principal balance of the loan after each level payment is made.

Apartment Condominium
A style of residential condominium involving units that are part of a building and attached to each other on one or more sides. This condominium style has a shared entrance, usually through the building lobby.

Appraisal
A formal, impartial estimate or opinion of value, usually written, of a specific and adequately described property, as of a specific date and supported by the presentation and analysis of relevant data pertinent to a property.

Appraisal Process
A systematic analysis of the factors that bear upon the value of real estate.  It consists of an orderly process by which the problem is defined, the work necessary to solve the problem is planned, and the data involved are acquired, classified, analyzed, and interpreted into an estimate of value.

Appraiser
An individual authorized by RECA to perform real estate appraisal services for a fee. A real estate appraiser is an accredited professional whose main service typically involves estimating the value of real property at a specified date in a manner that is independent, impartial and objective.

Asking Price
The amount of money that a seller is asking or intends to ask for his or her property.

Assessed Value
The value placed on real property by a municipality as a basis for determining property taxes.

Assessment
The process of determining the property value for taxation purposes. Assessment is used to determine the property owner’s proportionate share of municipal taxes on an annual basis.

Assigned Parking Stall
A parking stall that is part of the common property and is therefore owned collectively by the condominium corporation. When a parking stall is assigned, the Board of Directors is effectively granting a unit owner sole benefit of that parking stall. However, responsibility for care and maintenance of the parking stall typically remains with the Board of Directors. The Board of Directors can choose to reallocate the assignment whenever they wish. These parking stalls are not individually illustrated on Condominium Plans.  Also see Condominium Plan.

Assigned Storage Area
A storage area that is part of the common property and is therefore owned collectively by the condominium corporation. When a storage area is assigned, the Board of Directors is effectively granting a unit owner sole benefit of that storage area. However, responsibility for care and maintenance of the storage area typically remains with the Board of Directors. The Board of Directors can choose to reallocate the assignment whenever they wish.  These storage areas are not individually illustrated on Condominium Plans. Also see Condominium Plan.

Associate
An individual who is licensed as a real estate associate or mortgage associate as defined in the Real Estate Act and as administered through the Real Estate Council of Alberta. An associate must be registered with a licensed brokerage in order to trade in real estate or deal in mortgages. An associate holds the basic licensing level in the real estate or mortgage brokerage industry.

Associate Broker
An individual who is licensed as an associate broker as defined in the Real Estate Act and as administered through the Real Estate Council of Alberta. An associate broker holds the qualifications of a real estate broker, but is not authorized to operate a brokerage. An associate broker is registered with a real estate brokerage and authorized to trade in real estate on its behalf.

Attached Goods
An improvement or personal property item attached to the real property or building. Whether an item becomes a fixture depends largely on the circumstances, with emphasis placed on the method of how the item is affixed to the property.

Backup Offer
A backup offer is when a buyer submits an Offer to Purchase on a property that is conditionally sold. If the seller accepts the backup offer, it would be next in line if the conditions are not satisfied on the conditional offer that is already in place.

Balance
The amount of unpaid mortgage remaining after a payment has been made.

Balanced Market
A real estate market condition where demand from buyers is in equilibrium with the supply of properties.

Bare Land Condominium Plan
A type of Condominium Plan in which units are individual parcels of land. The boundaries for units within a Bare Land Condominium Plan are defined by the width and depth of each parcel of land and identified using survey monuments (e.g. steel pins, wooden stakes) placed on or under the ground.

Broker
The individual authorized by the Real Estate Council of Alberta to hold the classification of broker as defined in the Alberta Real Estate Act. The broker is responsible for the operation of the brokerage and the supervision of all its employees. The broker must be registered with the brokerage that he or she manages in order to trade in real estate or deal in mortgages.  There can only be one broker for each brokerage. Also see Brokerage.

Brokerage
The company, partnership or sole proprietorship licensed by the Real Estate Council of Alberta as a real estate brokerage authorized to trade in real estate or mortgage brokerage authorized to deal in mortgages.  A brokerage must have a broker responsible for its operation. Also see Broker.

Building Codes
Provincial standards for the design, construction and alteration of buildings to ensure the safety of future occupants and visitors to the premises.  Alberta Building Coderegulates the construction and safety of structures for both old and new buildings. Standards set by the Codes include electrical wiring, fire alarm systems, fire extinguishers, emergency routes, occupancy limits, lighting and ventilation. These codes exist in addition to the requirements of the Municipal Land Use Bylaw.

Buyer
An individual who is in the process of purchasing real estate and enters into a purchase contract to that effect.

Buyers’ Market
A real estate market condition where property supply is strong and buyer demand is weak.

Bylaws
A set of directives that govern the affairs and behaviour of a condominium corporation and individual unit owners. They work in conjunction with the Condominium Property Act and Regulation and empower the condominium corporation to control, manage and administer the units and common property. Bylaws may only be created, amended or repealed through the passing of special resolutions by the condominium corporation.

Canada Mortgage and Housing Corporation
A federal crown corporation mandated to promote the construction of new houses, the repair and modernization of existing houses, and the improvement of housing and living conditions, including the establishment of mortgage default insurance for lenders.

Caveat
A legal notice registered against the title of a property warning that a claim or an interest has been made against the property by a third party. Caveat in Latin means ‘let him beware’ and must be in writing. The registration of a caveat is only notice of a claim and does not relate to the validity of the claim being made.

Caveat Emptor
A doctrine of the common law that translates into ‘let the buyer beware’.

Certificate of Compliance
A confirmation from the municipality that the location of building(s), structures and development on a property comply with all the regulations of the Land Use Bylaw.  The response may be either in the form of a stamped property survey if the existing development meets regulations or by way of a written letter if the development on the property does not meet regulations. A certificate of compliance is usually required by mortgage lenders and standard real estate purchase contracts.

Certificate of Title
A document that records the information about the land, such as the legal land description, municipal jurisdiction, ownership and registered interests. The Land Titles Office no longer issues a paper Certificate of Title, but a paper copy may be available from any Registry Agent in Alberta. An electronic copy is available on the Spatial Information System (SPIN) operated by Alberta

Client
The party in a real estate transaction that is represented by a real estate professional. As per the Rules, a client is a person who has entered into a service agreement with an industry member whether or not that service agreement is in writing.

Closing
Finalizing a real estate transaction, which includes signing of the title documents, calculations of adjustments and disbursements of funds.

Closing Costs
The total costs for the respective parties associated with a real estate or mortgage transaction. Closing costs are typically due on the closing date, which is the date at which the real estate or mortgage transaction is finalized. Also see Closing Date.

Closing Date
The date when the financial adjustments are made for each party in a real estate or mortgage transaction. In real estate, it is the date when the title to the property transfers to the new owner, after which, the new owner assumes financial responsibility for the property.

Commission
The remuneration paid for services as an agreed fee or percentage of sale price or property lease.

Common Property
The physical space that is not considered to be part of a unit within a condominium and that is owned by a condominium corporation.

Common Property Expenses
The expenses associated with the maintenance, repair and replacement of the common property of the condominium corporation.  Also see Common Property.

Common Property Unit
In a barely blended condominium, a unit that includes areas for use by unit owners that is owned by the condominium corporation who is responsible for its care and maintenance.

Comparable Property
A property that has recently sold and is similar to the subject property.

Comparative Market Analysis
A method of property valuation used by real estate professionals for estimating the value of residential properties.

Compliance Stamp
The official mark on a Real Property Report from a municipality confirming that a property’s location and improvements comply with the requirements of the Land Use Bylaw in that respective municipality.

Condition
An aspect of a contract that serves as an impediment to an enforceable contract, until such time as it has been satisfied or waived. Conditions are typically placed in a contract by a party to that contract in order to protect its interest(s) and include a specific period of time after which the condition(s) will expire. Each condition may have the same or a different expiry. Real estate purchase contracts may include conditions added for the benefit of the seller, buyer or lender. Also see Conditional Offer and Conditional Sale.

Conditional Offer
A conditional offer sets out the terms of the sale such as the purchase price, the date of closing, the names of the parties, and the amount of any required deposit, but it also includes conditions that must be met within a specified period of time in order for the contract to be binding on the parties. These conditions could include a satisfactory home inspection or financing acceptable to the buyer.

Conditional Sale
Is a real estate transaction where the seller has accepted the buyer’s Conditional Offer. Also see Conditional Offer.

Condo Fees
The monthly fee set by the Board of Directors and paid by a unit owner to the condominium corporation.

Condominium
A form of property ownership that includes both the individual ownership of a unit and the shared ownership of common property with other unit owners.

Condominium Additional Plan Sheet
A document on which instruments for or against a Condominium Plan and condominium corporation are officially registered with Alberta Land Titles. It may also be referred to as the Condominium Sheet or Condo Sheet by real estate professionals.

Condominium Bylaws
Rules that govern the affairs and behaviour of a condominium corporation and individual unit owners. They work in conjunction with the Condominium Property Act and Regulation and empower the condominium corporation to control, manage and administer the units and common property. Bylaws may only be created, amended or repealed through the passing of special resolutions by the condominium corporation.

Condominium Corporation
A legal entity that consists of all unit owners within a condominium. Also see Condominium.

Condominium Document Condition
A condition in a purchase contract that gives the buyer the opportunity to review certain condominium documents associated with a unit and condominium he or she is interested in.

Condominium Document Specialist
An individual who specializes in interpreting the information contained within the various documents associated with a condominium. Also see Condominium Documents.

Condominium Documents
The package of documents that relate to the structure, finances and management of a condominium. The wide range of documents provides important information to industry professionals and to the sellers, buyers, borrowers and lenders with whom they work. Various documents related to the condominium may be obtained from the seller, member(s) of the Board or the property manager, as the case may be. In addition, some documents may be found on SPIN.

Condominium Fees
The monthly fee set by the Board of Directors and paid by a unit owner to the condominium corporation.

Condominium Insurance
The corporation is responsible for acquiring and renewing insurance for the common property. Insurance coverage typically includes the common perils to property (e.g. fire), general liability and liability for the Board of Directors of the condominium corporation. The insurer issues a Certificate of Insurance to the corporation for proof of coverage and this document forms part of the condominium documents provided to unit owners, buyers and lenders.  Also see Board of Directors.

Condominium Plan
A 2-dimensional or 3-dimensional plan of subdivision that outlines the size, location and boundaries of the land and any building located on the property. The Plan also divides the property into units and common areas. There are 3 types of Condominium Plans: Conventional Condominium Plans, Bare Land Condominium Plans and Barely Blended Condominium Plans.

Condominium Property Act
Alberta legislation that sets out the rules for creating, operating and managing condominiums.

Condominium Unit
The separate parts of the overall condominium plan that are designated for private ownership and exclusive use of the owner. The unit boundaries and the unit factor for each unit are defined by the Condominium Plan.

Conservation Easement
A voluntary agreement between a landowner and a government agency or conservation charity that limits the amount and type of development which can occur on the landowner’s property in order to preserve the ecological and/or natural portions of his or her land.

Conventional Condominium Plan
A type of Condominium Plan in which units are defined spaces within a building. The boundaries for units for this type of Condominium Plan are determined by floors, walls and ceilings. All areas not included in the units are considered to be part of the common property.

Conventional Mortgage
A mortgage where the loan amount does not exceed 80% of the appraised value or purchase price of the property.

Conveyance
The transfer of an interest in property from one person to another through written documentation to affect such a transfer.

Conveyancing
The formal process of transferring the legal title of land and recording interests in the land, using the prescribed Land Titles forms submitted in the prescribed manner.

Covenant
A written agreement or promise usually under seal between 2 or more parties for the performance of an action. In mortgage brokerage, it refers to the clauses in a mortgage agreement that establishes the rights and obligations agreed to by the borrower and the lender

Current Real Property Report
A legal document produced by a land surveyor that clearly illustrates the boundaries of a property and the location of improvements to the land relative to the boundaries. It also illustrates other issues impacting the property, such as rights-of-way, easements, encroachments, etc. In addition, it may contain a surveyor’s opinion or concerns regarding these items. A current real property report (RPR) illustrates the up to date improvements on the land and their relationship to the property boundaries whereas an existing RPR may not illustrate the current state of a property if

Debt
The financial amount that is owed as a result of borrowing funds.

Debt Ratio
A comparison of the total monthly payments of a borrower’s debt to his or her income. It is used to determine whether the borrower can afford the debt obligation.

Designated Agency
A concept where, through a written service agreement, the brokerage, the real estate professional and the client amend the agency responsibilities owed to the client as prescribed by the common law.  In essence, the agency responsibilities are transferred from the brokerage to the individual real estate professionals registered with the brokerage which results in the rebuttal of the common law presumption of attributed knowledge. 

Designated Agent
Refers to the individual real estate professional who carries out the designated agency responsibilities which have been transferred from the brokerage and which are owed to a client of the brokerage.

Discharge of Mortgage
The repayment of a mortgage and the legal document which confirms that the borrower is under no further liability to the lender in respect of the loan. In order to be effective, the discharge of the mortgage needs to be registered with the Land Titles Office.

Disclosure
The act of revealing knowledge and making information known. An industry professional is responsible to disclose openly and honestly all matters which are relevant or could result in a conflict of interest.

Disclosure and Particulars Statement
A letter that acts as a catchall for information the Condominium Property Act stipulates must be provided by a condominium corporation upon receiving a written request. In general, the Disclosure and Particulars Statement may include the following information:

  • A statement setting out the amount of the monthly contributions for the unit of interest
  • The particulars of any legal action commenced or served against the condominium corporation
  • The particulars of any unsatisfied court judgement or order for which the condominium corporation is liable
  • The particulars of any written demand in access of $5,000 made on the condominium corporation that, if not met, may result in legal action against the condominium corporation
  • The particulars of any post-tensioned cables located in or on the property of the condominium
  • A statement setting out any structural deficiencies known to the condominium corporation for any buildings located on the property of the condominium

Dower Act
Alberta statute that protects the surviving spouse’s interest in the homestead upon the death of the other spouse. The Dower Act grants certain property rights to the untitled spouse (spouse who is not on title) regarding this land/property. Also see Dower Rights.

Dower Rights
The property rights granted by the Dower Act to an untitled spouse (the spouse not on title) regarding the homestead. This applies when one spouse is the sole registered owner (one spouse on title). Dower rights include the right of a spouse to inherit a life interest (life estate) in the homestead. They also give the untitled spouse the ability to prevent the disposal of the property by the titled spouse, including the sale, lease or mortgaging of the property. Also see Dower Act.

Down Payment
The part of the purchase price of real property the buyer pays in cash and does not finance with a mortgage.

Dwelling Unit
A unit in a residential condominium.

Easement
A right acquired by one party to use the land of another. Once registered on title, an easement is a binding interest in the land that runs with the land regardless of any change in ownership.

Encroachment
A structure that is placed, erected, or built on an adjoining property. It also applies to soffits and eaves that overhang the adjoining land.

Encroachment Agreement
An agreement between the property owner and an adjacent property owner to condone a building or structure built on the adjacent property, be it private property or municipal property. The agreement sets out the terms and conditions for the intruding structure to remain and grants an easement to allow that owner to enter onto the adjoining property to maintain or repair the structure. The agreement is registered on the title of all properties it affects. Also see Encroachment and Easement.

Encumbrance
The registered interests on the title of land that affect or encumber the title.      

Estoppel
A person (the principal) acts in such a way as to lead a third party to  believe that another party (the agent) has the authority to act on behalf of another. Note: this term should not be confused with an Estoppel Certificate.

Estoppel Certificate
A signed statement from the condominium corporation that confirms the financial information it provides regarding a unit is correct as of the date on the statement and can be relied on by a third party. Upon issuing the Estoppel Certificate, the condominium corporation is barred from changing any of the statements it has certified as correct.

Exclusive Representation Relationship
A real estate relationship between a brokerage and a client that gives the brokerage the sole right to represent the client in a trade or potential trade in real estate.

Exclusive Use Area
Common property owned by the condominium corporation that is permanently leased to individual unit owners by the Board of Directors. When an area of the condominium has been deemed to be for the exclusive use of a unit owner, only that owner is permitted the enjoyment that area provides.

Existing Real Property Report
A legal document produced by a land surveyor that clearly illustrates the boundaries of a property and the location of improvements to the land relative to the boundaries. It also illustrates other issues impacting the property, such as rights-of-way, easements, encroachments, etc. In addition, it may contain a surveyor’s opinion or concerns regarding these items. A current real property report (RPR) illustrates the up to date improvements on the land and their relationship to the property boundaries whereas an existing RPR may not illustrate the current state of a property if any improvements were made to the land since the date of the RPR.

Fee Schedule
A table attached to a condominium corporation's Annual Budget which shows each condominium unit’s monthly contribution amount for the upcoming year.

Fee Simple
The highest estate form of land/property ownership with the most rights with the fewest limitations. Although generally considered absolute ownership, it is still subject to the restrictions imposed by government.

Fiduciary
A person who is entrusted to represent another person and has the legal obligation to act for the benefit of, and solely in the best interests of that person being represented.

Fiduciary Duty
A legal duty requiring a real estate professional to act at all times in the client’s best interests.

Fiduciary Relationship
The relationship between a principal (e.g. client) and an agent whereby the agent is entrusted with acting for the benefit of the principal.

Fixed Rate Mortgage
A mortgage for which the interest rate has been fixed for a certain period of time (generally the length of the mortgage term).

Fixtures
An improvement or personal property item attached to the real property or building. Whether an item becomes a fixture depends largely on the circumstances, with emphasis placed on the method of how the item is affixed to the property. 

Foreclosure
The legal process by which a lender takes possession and ownership of a property due to the borrower’s failure to comply with the terms and conditions of the mortgage agreement.

Foundation
A building system consisting of a base that a building rests upon.

Guaranteed Sale Agreement
A written agreement under which an industry member or another person on behalf of, or to the benefit of, an industry member undertakes to pay to the seller of real estate within a fixed or determinable period of time a fixed or determinable amount of money in respect of that seller’s real estate.

High Ratio Mortgage
A mortgage loan that exceeds 80% of the appraised property value or sale price whichever is less.

Highest and Best Use
The use of real property that will support the highest value and will produce the greatest net return over a period of time.

Historical Title Search
A review of all past property ownership and registered encumbrances relating to a specific parcel of land to determine the condition of title.

Home Inspection
A visual examination of readily accessible interior and exterior aspects of a property in order to provide an opinion on the property’s condition as of the date of the inspection. The purpose of a property inspection is to look for signs that there may be problems with the property and to suggest any areas that should be looked at further by an expert. Home inspections are performed by property (home) inspectors.

Homeowners Association
An association with mandatory membership based on residence in a specific area or community.

Homeowners Association Fee
A compulsory fee paid by property owners in the specific area under a Home Ownership Agreement. Fees are either paid on an annual or monthly basis. A registered caveat on each property title requires the owner to make these payments to the Association. Also see Homeowners Association.

Instrument
A written, legal document used to register an encumbrance on a property title (e.g. agreement, restriction, mortgage). Each instrument has a unique registration number.

Interest Rate
The amount charged by a lender to a borrower for the use of borrowed funds and is calculated as a percentage of the principal.

Joint Tenancy
A form of land/property ownership that involves two or more owners, with each owner having the right of survivorship. Therefore, each owner’s interest in the land/property will automatically pass to the surviving owner(s) and cannot be willed to another party.

Judicial Sale
The sale of real property that is conducted under the authority and supervision of the Court of Queen’s Bench.

Land Survey
The legal written and/or mapped description of the location and dimensions of land. Also see Real Property Report.

Land Surveyor
A licensed professional involved in the gathering, storing, processing and delivering of geographic information involved in the determination of property boundaries or assembly and analysis of land related information.

Land Surveyors Act
The legislation that establishes the definition of a land surveyor and the practice of land surveying in Alberta. It also prohibits anyone, other than an Alberta land surveyor, from engaging in the practice of land surveying. This legislation establishes the Alberta Land Surveyors Association as the regulatory organization empowered to administer on behalf of the province, the granting of, and annual renewal of, certificates of registration related to land surveying.

Land Titles Act
Alberta legislation that outlines the land titles system of administration including land title transactions and interests in land.

Land Titles Assurance Fund
An assurance to the public that owners do not suffer damage or loss from errors in title. Registered properties are protected by indefeasibility of title, which means that they are not liable to be annulled, voided or undone. The Fund is supported by fees collected by the Land Titles Offices.

Land Titles Office
The official location for processing land title documents. Alberta has 2 Land Titles Offices – 1 in Calgary and 1 in Edmonton. Otherwise, Registry Agents across the province work under licence to manage land title matters.

Land Use Bylaw
General rules applicable to all land use classifications in a municipality (e.g. Residential, Commercial, Industrial and Special district classifications).

Land Use Districts
The Municipal Land Use Bylaw divides a municipality into districts. There are generally 4 broad district classifications: Residential, Commercial, Industrial and Special Districts. Each district has sub-categories for the different types of use within that land use classification.

Landlord
A person or company who leases rights of real estate use to a tenant.

Latent Defect
A physical deficiency or construction fault in a property that is not visible or discoverable through a reasonable inspection.

Law of Property Act
Alberta’s provincial statute that provides the legal framework in regard to real property rights which are the subject of instruments such as mortgages, contracts, and conveyances.

Leased Parking Stall
A parking stall that is part of the common property and therefore owned collectively by the condominium corporation. The use of this parking stall is essentially permanently leased to an individual owner. Responsibility and care for this parking stall is often delegated to the unit owner. On Condominium Plans registered after September 1, 2000, these parking stalls are illustrated using dashed lines. On Condominium Plans registered before September 1, 2000, these parking stalls are typically not differentiated from the rest of the common property

Lender
An individual or institution responsible for underwriting, funding and administering a mortgage loan and to whom real estate is pledged as security for the loan. This may include institutional lenders, non-institutional lenders, government lenders and private lenders.

Listing
A property for which the seller has entered into a written service agreement with a real estate brokerage to market his or her property for sale.

Listing Price
The amount of money that a property that is under contract with a brokerage may be advertised to the public and marketed through various listing databases by the brokerage.

Marijuana Grow Operation
Any property that has been leased or bought by persons in the illegal drug trade which has been turned into an indoor growing environment for marijuana plants.

Market Bubble
A temporary situation in the economy characterized by prices for a product becoming grossly inflated beyond its realistic value due primarily to excessive consumer confidence.

Market Price
The amount actually paid for a property in a particular real estate transaction.

Material Latent Defect
A physical deficiency that is not visible and renders a property dangerous or potentially dangerous, unfit for habitation or unfit for the purpose for which it is acquired. It may also include defects that would involve great expense to remedy, notices from local authorities that prejudicially affect the property or a lack of appropriate permits.

Measurement Standard
An accepted method of quantifying the area of a property. Each sector of real estate practice tends to have a generally accepted method for measuring the applicable properties.

Mixed-Use Condominium
A condominium which consists of units with multiple uses (e.g. retail, commercial, residential)         

Mortgage
A legal agreement specifying the pledging of real property to a lender as security for a debt.

Mortgage Insurance
A credit risk management tool protecting the lender from losses due to default on the mortgage by the borrower. It is typically required when the loan to value ratio for the property is 80% or greater.

Mortgage Insurer
A provider of mortgage loan (default) insurance to lenders. Also see Mortgage Insurance.

Mortgage Pre-Approval
An approval for a mortgage based on a borrower’s qualifications made in advance of a real estate purchase. A written pre-approval protects the borrower by specifying the mortgage term, interest rate and maximum amount of the loan. If mortgage rates rise, the borrower receives the pre-approved rate. If rates drop, the borrower receives the lower rate. However, the borrower must take possession of a property before the pre-approval expires. They typically are 60 or 90 days, but may be as long as 120 days for new construction. Once a property has been purchased, the pre-approval is subject to the borrower submitting any final supporting documentation, providing his or her financial position has not changed. It is also subject to the property meeting the lender’s underwriting requirements.

Mortgage Pre-Qualification
The tentative approval for a mortgage based on the borrower’s qualifications made in advance of a real estate purchase. It is for a specified period of time and subject to the borrower submitting his or her supporting documentation to the lender, providing his or her financial position has not changed. Once a property has been purchased, the property must also meet the lender’s underwriting requirements..

Mortgage Statement
A statement received from the lender that includes details of the mortgage such as property address, outstanding principal balance, monthly payment, interest rate and mortgage term.

Mortgage Term
The period of time for which the lender loans funds to the borrower, as specified in the mortgage agreement. At the end of the mortgage term, the principal and unpaid interest becomes due and payable by the borrower to the lender. At that time the borrower may renew or refinance the mortgage. Also see Mortgage Refinance and Mortgage Renewal.

Multiple Offers
A situation when multiple buyers submit an Offer to Purchase on the same property, at the same time.

Municipal Compliance Stamp
Municipal Compliance Stamps are found on Real Property Reports and serve as confirmation that property improvements comply with municipal bylaws and regulations. Some municipalities refer to the stamp as a Certificate of Compliance. See also Real Property Reports.

Municipal Land Use Bylaws
General rules applicable to all land use classifications in a municipality (e.g. Residential, Commercial, Industrial and Special district classifications).

Negotiation
A form of dispute resolution that attempts to seek a satisfactory solution for all parties to a dispute that is based on the interest of each party as opposed to their specific position on the matter. Negotiations only involve those parties to the dispute

New Condominium
A condominium that involves the creation of units and common areas that never existed before in brand new structures or on raw land through the registration of a Condominium Plan with Land Titles. The units within a new condominium have never previously been offered for sale. Generally, the completion of a new condominium is scheduled for a single date after which all the construction work is to be completed.

New Home Buyer Protection Act (also Alberta New Home Warranty Program)
The New Home Buyer Protection Act applies to new homes constructed with a building permit applied for after February 1, 2014. The legislation covers single family homes, duplexes, multi-family homes, condominiums, manufactured homes (including ready to move homes), and recreational properties. The legislation does not cover dorms, work camps, hotels and rental apartments. under the warranty periods. The minimum required warranty coverage terms are:

  • 1 year labour and materials
  • 2 years for defects in labour and material related to delivery and distribution systems
  • 10 years for major structural
  • 5 years on building envelope, with a requirement for the warranty provider to offer the option to purchase additonal years of coverage

Non-Conforming Use
The use of a property that met municipal requirements at one time, e.g. secondary suite, but does not meet the current Land Use Bylaw requirements. The non-conforming status may be lost if the building is renovated, damaged or destroyed. If the non-conforming use has ceased, any future use must conform to the current Land Use Bylaw requirements.

Notice of Assessment
An individual summary sent to each taxpayer by Canada Revenue Agency after processing his or her tax return. It may also indicate any corrections to the return, such as taxes owing or refunds to be paid.

Offer to Purchase
An Offer to Purchase (also known as Real Estate Purchase Contract) is the contract a property buyer will write for submission to a property seller. It contains the date of the offer, the description of the property being offered on, the amount of the deposit, the purchase price being offered, down payment and financing details, as well as the buyer's name and address, and the name and address of the seller, subject-to clauses, conditions, closing dates, and any special requirements you want to impose on sellers (for example, you want the kitchen appliances).

Owner Occupied
A property used as a self-contained domestic property occupied by the owner and used as the primary place of residence.

Payout Penalty
The future, currently unpaid, interest some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the original term is completed.

Permit
A document that gives an individual authorization to build a new structure or demolish, relocate, repair, alter or make additions to an existing building.

Post-Tension Cable
A group of steel bands (i.e. tendons) that are coated in grease or another corrosion-inhibiting substance and encased in plastic or metal sheathing. The cable is stretched using hydraulic jacks and secured in place using anchorages before being embedded in concrete.

Pre-Approval
An approval for a mortgage based on a borrower’s qualifications made in advance of a real estate purchase. A written pre-approval protects the borrower by specifying the mortgage term, interest rate and maximum amount of the loan. If mortgage rates rise, the borrower receives the pre-approved rate. If rates drop, the borrower receives the lower rate. However, the borrower must take possession of a property before the pre-approval expires. They typically are 60 or 90 days, but may be as long as 120 days for new construction. Once a property has been purchased, the pre-approval is subject to the borrower submitting any final supporting documentation, providing his or her financial position has not changed. It is also subject to the property meeting the lender’s underwriting requirements.

Pre-Payment Penalty
A fee charged by a lender when the borrower prepays all or a part of the mortgage in excess of the regular payments allowed as stipulated in the mortgage agreement.

Pre-Qualification
The tentative approval for a mortgage based on the borrower’s qualifications made in advance of a real estate purchase. It is for a specified period of time and subject to the borrower submitting his or her supporting documentation to the lender, providing his or her financial position has not changed. Once a property has been purchased, the property must also meet the lender’s underwriting requirements.

Principal (Financial)
A sum of money owed as a debt upon which interest is calculated.

Principal (Mortgage)
The amount of funds originally borrowed from the lender or the portion of a mortgage still owing upon which interest is calculated.

Principal and Interest
A periodic mortgage payment calculation based on a combination of principal repayment and interest.

Principal, Interest and Tax
A periodic mortgage payment calculation based on a combination of principal repayment, interest and a portion of the property taxes.

Property Assessment
The process of determining the property value for taxation purposes. Assessment is used to determine the property owner’s proportionate share of municipal taxes on an annual basis.

Property Inspection
A visual examination of readily accessible interior and exterior aspects of a property in order to provide an opinion on the property’s condition as of the date of the inspection. The purpose of a property inspection is to look for signs that there may be problems with the property and to suggest any areas that should be looked at further by an expert. Property inspections are performed by property inspectors. Also see Property Inspector.

Property Inspection Report
Written communication describing property issues discovered from observations made, and research conducted by, a qualified property inspector.  The report should include the following information:

  • Convey the current condition of all inspected items
  • Emphasize any inspected items that are unsafe or require major repairs and/or replacement
  • Estimate when repairs and/or replacements of inspected items will need to occur
  • Describe preventative measures that can be taken to remedy current issues or extend the life of the inspected items

Property Inspector
An individual who performs a property inspection.

Property Insurance
A legal agreement which provides financial protection against most risks to property due to damage or destruction caused by specified perils such as fire, theft, vandalism.

Property Taxes
The annual amount charged each property owner by the municipality where the property is located. The amount is based on the assessed value of the property in relation to the municipal tax rate for that classification of property, as determined annually by the municipality. Property taxes fund the operations and services of the municipality. In addition, portions of the property tax may also relate to the provision of education and the payment for a local improvement levy.

Purchase Contract
A legally binding agreement entered into by a buyer of real estate and a seller of real estate that details the buyer’s intention to purchase a specific property from the seller of that property provided that certain terms and conditions, as described in the agreement, will be met.

Purchaser
The buyer of real estate.

Qualifying
The process of determining a prospective borrower’s eligibility for mortgage financing related to a potential real estate purchase.

Quarter Section
A geographic reference for a parcel of land measuring 64.7 hectares or 160 acres and usually identified as NE, SW, NW or SW.

Real Estate Appraiser
An individual authorized by RECA to perform real estate appraisal services for a fee. A real estate appraiser is an accredited professional whose main service typically involves estimating the value of real property at a specified date in a manner that is independent, impartial and objective.

Real Estate Council of Alberta
The governing body for the real estate, mortgage brokerage and real estate appraisal professions as authorized under the Real Estate Act of Alberta. The purposes of the Council include: to set and enforce standards of conduct for the industry and business of industry professionals; investigate, detect and suppress mortgage fraud; provide services that enhance and improve the industry and business of industry professionals; and to administer the Real Estate Act. Also see Real Estate Act.

Real Estate Purchase Contract
A Real Estate Purchase Contract (also known as an Offer to Purchase) is the contract a property buyer will write for submission to a property seller. It contains the date of the offer, the description of the property being offered on, the amount of the deposit, the purchase price being offered, down payment and financing details, as well as the buyer's name and address, and the name and address of the seller, subject-to clauses, conditions, closing dates, and any special requirements you want to impose on sellers (for example, you want the kitchen appliances).

Real Estate Professional
The term used by RECA that refers to an individual who is authorized by RECA to trade in real estate and/or manage properties. These individual must be engaged by or associated with a real estate brokerage.

Real Property
Refers to the land any permanent improvements to the land and the property rights that go with the ownership of the land.

Real Property Report
A legal document produced by a land surveyor that clearly illustrates the boundaries of a property and the location of improvements to the land relative to the boundaries. It also illustrates other issues impacting the property, such as rights-of-way, easements, encroachments, etc. In addition, it may contain a surveyor’s opinion or concerns regarding these items. A current real property report (RPR) illustrates the up to date improvements on the land and their relationship to the property boundaries whereas an existing RPR may not illustrate the current state of a property if any improvements were made to the land since the date of the RPR. 

REALTOR®
A registered trademark of the Canadian Real Estate Association (CREA). Real estate professionals are not required to be members of their local board, however only real estate professionals who are members of their local real estate board are authorized to use the REALTOR® term.

Registered Size
The floor space of a unit within a condominium as outlined in the Schedule of Unit Factors and Unit Areas on a Condominium Plan. In addition to the above ground space contained in the unit, the registered size may include a variety of areas, such as a basement, garage, parking stall or storage area

Reserve Fund
Cash and cash equivalents used to pay for major capital repairs and replacements of the condominium corporation’s common property that do not occur on an annual basis.

Reserve Fund Study
An analysis of the common property of a condominium corporation that includes the following:

  • An inventory of all common property that may need repair or replacement within 25 years
  • The present condition of the common property and an estimate of when each component may need to be repaired or replaced
  • The estimated costs of repairing and replacing each component of the common property
  • The life expectancy of each repaired or replaced component of the common property
  • The current amount of the reserve fund and basis for its determination
  • The recommended amount of money that should be added to the reserve fund, if any, in order to ensure necessary repairs and replacements occur and the basis for its determination

Residential Property
A type of property that a municipality has designated for use as single-family detached homes, townhouses, apartments, condominiums, and cooperatives that is or was used as a residence.

Residential Tenancy Agreement
An agreement that outlines the terms and obligations between a landlord of a residential premise and a tenant and sets out any conditions that have been agreed to by the parties to the agreement.

Restrictive Covenant
A written agreement registered on title that places a restriction or limitation on the use of the land or on the architectural detail of a property.

Seller
The owner of real estate who is in the process of disposing of his or her property through a sale to a buyer. The property may be for sale through a real estate industry professional or for sale by the owner.

Sellers’ Market
A real estate market condition where buyer demand is strong and property supply is weak.

Semi-Attached Condominium
A style of residential condominium consisting of 2 units placed side-by-side that share a common wall

Showing
A scheduled appointment for a real estate professional to view a property that is for sale to a prospective buyer.

Single-Family Condominium
A style of residential condominium that has stand-alone, separate units.

Sole Ownership
A form of ownership of land/property where only one individual (or company) is registered. Although generally considered absolute ownership, it is still subject to the restrictions imposed by government. The rights of the sole owner may also be impacted by the rights of an untitled spouse. Also see Dower Act.

Special Assessment
A financial obligation in addition to a unit owner’s monthly contributions. The portion of the special assessment owed by each unit owner is calculated based on unit factors. Special assessments may be paid as a lump sum or in periodic installments, depending on the payment schedule established by the condominium corporation, by a specific date

Survey Plans
An illustrative plan used to layout most municipal land and some acreage subdivisions. The land is surveyed, subdivided and registered at Land Titles in accordance with the Municipal Government Act. The legal description of these lands changes to a legal land description that includes the plan, block and lot number.

Tenant
A person or organization that contracts with a landlord to occupy a specific space for a defined period of time according to the terms of a lease.

Tenants in Common
A form of ownership of land/property that involves two or more land owners with no right of survivorship by any owner. Therefore, each owner may will his or her share of the land/property to another party.

Term
A contractual detail that represents points of agreement between the contracting parties (e.g. inclusions, exclusions, date contract takes effect, length of the contract).

Title
A document that records the information about the land, such as the legal land description, municipal jurisdiction, ownership and registered interests. The Land Titles Office no longer issues a paper Certificate of Title, but a paper copy may be available from any Registry Agent in Alberta. An electronic copy is available on the Spatial Information System (SPIN) operated by Alberta Registries, Service Alberta.

Title Insurance
A contractual arrangement that indemnifies the insured against loss or damage resulting from title defects, some non-title issues relating to the ownership of real property, or the enforcement of liens that exist against it. Different title insurance policies exist for lenders and property owners. Title insurance is more common in residential real estate, although commercial policies are also available.

Title Number
A unique number assigned to a Certificate of Title at the time a property is registered by Alberta Land Titles.

Title Search
A review if all registered encumbrances relating to a specific parcel of land to determine the present condition of title.

Titled Parking Stall
A parking stall that has its own Certificate of Title and therefore is a unit onto itself. Titled parking stalls are held in fee simple ownership by the individual who is registered on the title. These parking stalls are depicted on the Condominium Plan using solid, bolded lines.

Titled Storage Area
A storage area that has its own Certificate of Title and therefore is a unit onto itself. Titled storage areas are held in fee simple ownership by the individual who is registered on the title. These storage areas are depicted on the Condominium Plan using solid, bolded lines.

Torrens System
A system for recording land title transactions and interests in land, as prescribed in the Land Titles Act. It includes three supporting principles: the current title accurately reflects the facts about the property (i.e. Mirror Principle); the current title has all the information about the property (i.e. Current Principle); and the provincial government guarantees the accuracy of the title (i.e. Insurance Principle). This system improved on previous land title systems by facilitating land transactions and providing security of title, thus eliminating time-consuming and costly searches for an accurate chain of title for each transaction.

Townhouse Condominium
A style of residential condominium consisting of multi-story units attached on 1-3 sides. Each unit typically has its own private entrance.

Unattached Goods
The movable items not securely affixed to the land or buildings, such as furnishings and appliances that are not considered part of the real estate.

Unaudited Financial Statement
A financial statement that has not been reviewed by an auditor and does not possess any third-party assurances regarding the accuracy of the data it contains.

Unit
A physical space within a structure or parcel of land that is individually owned within a condominium.

Unit Factor
The portion of financial responsibility assigned to each unit owner for their share of the common property. The total sum of all unit factors for a condominium in Alberta must equal 10,000.

Written Service Agreement
A contract in writing that establishes the relationship between the parties as to the services and obligations to be performed by an industry professional. Written service agreements are required in residential real estate when a real estate professional is working with a consumer as a client.

Zoning
General rules applicable to all land use classifications in a municipality (e.g. Residential, Commercial, Industrial and Special district classifications).

Disclaimer: These terms and definitions are provided for educational purposes only. Although they are believed to be accurate, the Marnie Campbell Realty Team is not responsible for any deficiencies, defects, errors, omissions, completeness, suitability, accuracy, currency, or applicability of contents contained herein.

There is a lot to know about purchasing a home and our team is happy to help answer all your questions.  Contact Marnie Campbell Realty Team for more information about real estate in Calgary, Airdrie, Okotoks, Cochane and Chestermere. Call or text direct 403-479-8619 

 The information provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The Terms of Use Agreement shall not impose a financial obligation on the Registrant or create any representation agreement between the Registrant and the Participant.

All information provided is deemed reliable but is not guaranteed accurate, and should be independently verified.

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