Terminology
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ABATEMENT: A reduction, a decrease, or a diminution. The suspension or cessation, in whole or in part, of a continuing charge, such as rent.
ABSTRACT: A brief summary of the important points of a given instrument.
ABSTRACT CONTINUATION (Also known as abstract extension and also as supplemental abstract.): A partial abstract beginning at the terminal date of an existing abstract and showing instruments recorded between such terminal date and a subsequent date.
ABSTRACT OF TITLE: A summary of transactions affecting the title to a piece of land.
ABUT: To touch or border upon. A piece of land bordering on a street or an adjoining piece of property is said to abut such street or property.
ACCELERATION CLAUSE: A note, bond or other credit agreement clause advancing the date of maturity of a trust deed or mortgage upon the happening of a certain event.
ACCESS RIGHT: Landowner's right to have ingress and egress from landowner's property to a public street.
ACCOMMODATION: An obligation assumed without consideration.
ACCOMMODATION RECORDING: The recordation of an instrument without an assumption of responsibility for the correctness or validity of the instrument.
ACCRETION: An increase of land on a shore or river bank by the gradual deposit of sand or soil by action of the water. (Also, see "Avulsion.")
ACKNOWLEDGMENT: A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is his act and deed.
ACRE: An area of land containing 43,560 square feet or 4,840 square yards.
ACTION IN PERSONAM: A court action that seeks a judgment against a person as distinguished from a judgment against property.
ACTION IN REM: A court action that seeks a judgment against property to determine its status.
ACTUAL NOTICE: Notice a party receives in fact or in reality.
ADDENDUM: Something which is to be added. An addition or supplement to an agreement.
ADJOINING OWNERS: Owners of two or more parcels of real property the parcels being contiguous to each other.
ADJUDICATION: Judicial determination of a case or controversy.
ADMINISTRATOR: Person appointed by a probate court as representative of a decedent's estate when the decedent left no will.
ADMINISTRATOR CUM TESTAMENTO ANNEXO: The representative of a decedent's estate when no one is named as executor, or when the person named is unable or unwilling to act. (Also, see "Cum Testamento Annexo.")
ADMINISTRATRIX: A woman administrator.
ADVERSE POSSESSION: The unauthorized occupation of land belonging to another, by a person who does not have the consent of the owner. The occupier is said to hold possession adversely to the rights and interests of the owner. In most states, by operation of law, title to the land becomes vested in such occupier after a fixed number of years of actual, open, notorious, exclusive, peaceful and adverse occupancy.
AFFIANT: A person who has made an affidavit.
AFFIDAVIT: A written statement made under oath before a notary public or other judicial officer.
AFTER-ACQUIRED TITLE: Title acquired by a grantor who conveyed land before he owned it.
AGENCY: An individual or corporation authorized to act for another person or corporation. The scope of an agency depends upon the authority given to the agent.
AGENT: One who, having received authority from another, acts in the other person's behalf within the scope of the authority given.
AGREEMENT: A legally binding compact made between two or more persons.
AKA: Also known as.
ALIENATE: To transfer title to real property from one person to another.
ALIENATION: Transfer of title to land from one person to another. It is voluntary alienation if freely made; involuntary alienation when contrary to the owner's desire.
ALL-INCLUSIVE RATE: Rate which includes charges for title insurance, searching or abstract fees and examination fees.
ALLODIAL TENURE: The absolute ownership of real estate which is subject to inheritance by the owner's heirs or to disposition by the owner as he sees fit, as contrasted with the feudal system of ownership. Allodial tenure is characteristic of ownership in the United States.
AMORTIZED LOAN: A loan that is completely paid off, both as to principal and interest, by a series of regular payments that are equal or nearly equal.
ANCILLARY: In addition to.
ANCILLARY ADMINISTRATOR: Administrator appointed in a state other than the decedent's domicile.
ANNUM: Year.
ANTENUPTIAL AGREEMENT: Contract by a man and woman regarding their property, made in contemplation of their marriage. Also called prenuptial agreement.
APPRAISAL: Opinion as to value of property; a conclusion resulting from an analysis of facts affecting fair market value.
APPROVED ATTORNEY: An attorney whose opinion is acceptable to a title company as a basis for issuance of a title insurance policy by the insurer. The insurer, rather than the attorney, executes the policy.
APPURTENANCE: Anything incidental or belonging to land that is considered part of the real property.
APPURTENANT: Belonging to.
ARBITRATION: The process by which parties who cannot agree among themselves submit the dispute to the judgment of an impartial third party.
ASSESSED VALUATION: The estimated value of property for tax purposes, usually fixed by the tax assessor.
ASSESSMENT: (1) The act of fixing the amount of taxes or special improvement charges. (2) The amount of taxes or special improvement charges. Special improvement charges are usually for the costs of streets, sidewalks, sewers, etc.
ASSIGNEE: For example, the person who receives (is assigned) ownership of a contract or a mortgage by transfer from another.
ASSIGNMENT: (1) The act of transferring ownership of something from one person to another. (2) The instrument or paper by which one person transfers ownership of a right or an object to another.
ASSIGNOR: For example, the person who transfers ownership of a contract or mortgage to another.
ASSUMPTION AGREEMENT: Undertaking or adoption of a debt or obligation primarily resting on another person.
ASSUMPTION FEE: Lender's charge for changing over and processing new records for a buyer who is assuming an existing loan.
ASSUMPTION OF MORTGAGE (or DEED OF TRUST): Agreement by a buyer in which he assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property.
ATTACH: The act of a sheriff or other court officer in taking possession of a person or property under the authority and direction of a writ or order issued by a court.
ATTACHMENT: A legal remedy to aid collection of a debt, usually incidental to a lawsuit against the debtor wherein the court issues a writ of attachment under the authority and direction of which the sheriff seizes property of the debtor and holds same pending the outcome of the lawsuit, keeping the property available for sale to pay any money judgment entered in the lawsuit.
ATTESTATION CLAUSE: The clause in a deed or other instrument denoting that certain signatures are those of witnesses to the instrument.
ATTORN: To accept and acknowledge a new landlord.
ATTORNEY'S OPINION OR CERTIFICATE: The written statement of an attorney setting forth what she or he believes to be the condition of a real estate title.
ATTORNEY-IN-FACT: A person who is appointed to act as an agent for another.
AVIATION EASEMENT: An easement over private property which abuts and extends out from the end of airport runways, the easement restricting the graduated height of agricultural crops, bushes, trees and other objects in the take-off and landing path of aircraft.
AVULSION: A sudden and perceptable loss or addition to land by the action of water, or a sudden change in the bed or course of a stream. Black's Law
600 South 19th Avenue
Bozeman, MT 59718
BACK TITLE LETTER OR CERTIFICATE: (See "Starter.")
BALLOON PAYMENT: Installment note final payment that is greater than preceding payments and that pays the note in full.
BANKRUPTCY: A proceeding in U.S. District Court wherein assets of a debtor unable or unwilling to pay his debts are applied by an officer of the court in satisfaction of creditor claims.
BAR: (1) The attorneys at law, taken collectively in a municipality, county, state or the nation. (2) To defeat or to prevent.
BENEFICIARY: A person who is entitled to receive funds of property under the terms and provisions of a will or trust or insurance policy.
BENEVOLENT ASSOCIATION: Voluntary nonprofit organization organized for the benefit of its members.
BEQUEST: A gift of personal property in a will.
BILL OF SALE: The instrument by which title to personal property is transferred or conveyed.
BINDER: Memorandum of an agreement to issue insurance giving temporary coverage until such time as a formal policy is issued.
BLANKET MORTGAGE OR TRUST DEED: Mortgage or trust deed that covers more than one lot or parcel of real property: often covers an entire subdivision. As individual lots are sold, a partial release or reconveyance from the blanket mortgage is ordinarily obtained.
BONA FIDE PURCHASER: One who buys property in good faith, for fair value, and without notice of any adverse claim or right of third parties.
BOND: (1) A written promise to pay to the bearer or owner a stated sum of money at a specified time, with interest usually represented by interest coupons attached to the bond, which coupons may be clipped as they mature and presented for payment. Bonds are sometimes in the form of certificates of indebtedness. Bonds are often secured by real estate mortgages. (See "Promissory Note.") (2) A written commitment assuring the payment of a stipulated sum of money or the amount of damages in the event of an adverse happening. (3) A certificate of debt issued by a government or corporation guaranteeing payment to bearer of a specified sum of money, plus interest, on a specified future date.
BRANCH: As this term relates to First American Title Insurance Company offices, a direct or division office of First American Title Insurance Company, as opposed to an affiliate, agent, subsidiary or underwritten firm associated with the Company.
BROKER: One who acts as an agent for another in negotiating sales or purchases in return for a fee or commission.
BROKERAGE: A fee or commission paid to a broker.
BUILDING CODE: Laws specifying the type, kind, area and manner of construction of buildings, and prohibiting construction or repair of buildings in violation of such specifications. (Also, see "Zoning Ordinances.")
BUILDING LINE: Also called set-back line, a line inside the boundary lines of a piece of real estate beyond which no building may be constructed. Building lines may be established by municipal ordinances, restrictions, and subdivision plats.
BULK TRANSFER: Any transfer in bulk not in the ordinary course of the transferor's business of a major part of the materials, supplies, merchandise or other inventory of the business.
BUNDLE OF RIGHTS: Beneficial interests or rights an owner has in his property, including the rights of use and transfer, and the right to exclude others.
BY-LAWS: Rules adopted by the members of the board of directors of a corporation that govern the internal management of the corporation. Also called the corporate constitution.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
CASHIER'S CHECK: A bill of exchange drawn by the cashier of a bank, for the bank, upon any bank. After the check is delivered or issued to the payee or holder, the drawer bank cannot put a "stop order" against itself. By delivery of the check, the drawer bank has accepted the check, and thus becomes the primary obligor. (Also, see "Draft.")
CAVEAT: Literally, this means "let him beware." It is used generally to mean a warning.
CAVEAT EMPTOR: Let the buyer beware. Places a duty on a buyer to examine goods or property before purchasing when he buys at his own risk.
CAVEAT VENDITOR: Let the seller beware. Unless the seller by express language disclaims any responsibility, he shall be liable to the buyer if the goods delivered are different in kind, quality, use, and purpose from those described in the contract of sale.
CEDER: The insurance company issuing a policy which will then be reinsured. Most of the larger title insurers will not issue policies for more than $25,000,000 without obtaining reinsurance.
CERTIFICATE OF TITLE: Certified statement regarding ownership of land, based on examination of the record title.
CERTIFIED CHECK: A depositor's check recognized and accepted by a bank officer as a valid appropriation of the amount specified and as drawn against funds held by the bank.
CHAIN: As regards land measure, a chain equals 66 feet, 100 links, or 4 rods.
CHAIN OF TITLE: Beginning with a conveyance out of an original source of title such as a government, each succeeding deed, will or other medium which conveys and transfers the title to succeeding owners constitutes a link in the chain of title. The chain of title is the composite of all such links.
CHATTEL: Another name for personal property as distinguished from real estate. An article of movable property.
CHATTEL MORTGAGE: Obsolete name for mortgage of personal property.
CIVIL LAW: Law of the Roman Empire, based on the code of the Emperor Justinian. It is the basis of the law in many European countries today. In England, however, the common law applies.
CLAIM: A right to assert, or the assertion of, a demand for payment of money due, or the surrender or delivery of possession of property or the recognition of some right. A demand for something as one's rightful due.
CLASS ACTION: Representative lawsuit in which plaintiff files an action to recover money or to redress a wrong not only on his own behalf but also on behalf of all other persons similarly situated.
CLOSING: In some areas a closing is called a "settlement." The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed. The documents are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to. In some areas this procedure is known as the closing of escrow. (See also, "Settlement.")
CLOSING STATEMENT: A summation, in the form of a balance sheet, made at a closing, showing the amounts of debts and credits to which each party to a real estate transaction is entitled.
CLOUD ON TITLE: An irregularity, possible claim, or encumbrance which, if valid, would adversely affect or impair the title.
CO-INSURANCE: When the term "co-insurance" is used in connection with title insurance, as well as in other forms of insurance, it signifies that two or more insurance companies are insuring the same risk. Depending on the type of co-insurance utilized, the insurance may be identical for each company. That is, each company may have and be responsible for the same risks and liability. This is called "joint and several co-insurance," with each company's liability starting at the first dollar and continuing for the full amount of insurance as stated by the policy. This does not mean that the insured could be paid twice the amount of a loss, but does mean that all of the loss could be paid by one company rather than shared by both. The paying company would undoubtedly seek a partial recovery from its co-insurer. (Also, see "Reinsurance.")
CO-OPERATIVES: Co-operatives, usually referred to as "co-ops," are typically residential real estate projects which are owned by an entity, an interest in which is, in turn, owned by the "owner." The owner, as a concomitant to owning the interest in the entity, is also entitled to the use of a designated apartment in the building. This possessory interest is commonly evidenced by a proprietary lease.
CODE: A collection of laws.
CODICIL: An amendment, revision, supplementation, or cancellation of a will.
COLOR OF TITLE: That which gives the appearance of title, but is not title in fact.
COMMISSION: The amount due a real estate broker or mortgage loan broker for services performed in their respective capacities. The term also applies to regulatory tribunals such as real estate commissioners.
COMMITMENT: A pledge, promise, or firm agreement; also, a form of title evidence issued by a title company establishing a title insurer's contractual obligation to insure title to real property, subject to satisfaction of the requirements set forth therein..
COMMON AREA: When used in reference to condominiums or planned unit developments, the common area is that portion of land that is owned in common by all unit or lot owners and which each has an equal right to use. In a condominium the common area includes the buildings surrounding the units but not the unit of air space.
COMMON LAW: The system of laws originated and developed in England which was the source of customs, usages and arbitrary court decisions as distinguished from written laws enacted by legislative bodies.
COMPETENT: Legally qualified; capable of contracting.
CONDEMN: (1) The legal declaration of a government that something is unfit for further use or existence, or constitutes a peril to life, health, safety, or well-being of the public, and ordering its removal or destruction, such as declaring a building unfit for use and a menace to health and public safety and ordering its destruction, or to order the slaughter of diseased animals. (2) The selection of private property by a government or public service corporation for acquisition for public or quasi-public use.
CONDEMNATION: (1) The taking of private property for public or quasi-public use, with compensation to the owner, under the right of eminent domain. All governments and so-called public service corporations, such as railroads and electric companies, have the right to condemn and take private property. (2) The destruction by government of private property which imperils the life, health or safety of the public.
CONDITIONS: This term is related to restrictions and reservations. It refers to provisions in deeds and other real estate instruments which provisions make particular right contingent upon the occurrence of some future event.
CONDOMINIUM: An estate in real property consisting of an undivided interest in common in a portion of a parcel or real property together with a separate interest in space in a residential, industrial or commercial building. It may include a separate interest in another portion of real property. The estate may be either 1) an estate of inheritance or perpetual estate, 2) an estate for life, or 3) an estate for years including either a leasehold or subleasehold estate.
CONDOMINIUM UNIT: A residential unit in a condominium complex.
CONFIRMATION OF SALE: Court approval of the sale of property by an executor, administrator, guardian or conservator.
CONSIDERATION: Anything of value used to induce another person to enter into a contract. It may be money, services, or a promise, and consists of either a benefit to the promisor, or a loss or detriment to the promisee.
CONSTRUCTIVE: Inferred or implied.
CONSTRUCTIVE NOTICE: Notice given by public records.
CONTIGUOUS: In actual or close contact; adjoining or touching, e.g., parcels of land next to each other.
CONTINGENT: Dependent on an uncertain future event.
CONTRACT: Same as "Agreement", but usually more formal.
CONVEYANCE: The transfer of title to property from one person to another.
CORPORATION: A collection of individuals created by statutes as a legal person, vested with powers and capacity to contract, own, control, convey property, and transact business within the limits of the powers granted.
CORPOREAL: Of a material, tangible nature.
COTENANCY: Ownership of property by two or more persons.
COVENANT: (1) A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed. (2) Agreements or promises contained in deeds and other instruments for performance or nonperformance of certain acts, or use or nonuse of property in a certain manner.
CUM TESTAMENTO ANNEXO: With the will annexed. A term applied to administration granted where a testator makes an incomplete will, without naming any executors, or where he names incapable persons, or where the executors named refuse to act. If the executor has died, an administrator "de bonis non cum testamento annexo" (of the goods not [already] administered upon with the will annexed) is appointed. Often abbreviated d.b.n.c.t.a.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
DBA: Acronym for "doing business as."
DECEDENT: A deceased person.
DECREE: A judgment by a court.
DEDICATION: The setting aside of certain land by the owner and declaring it to be for some public use, accompanied by acceptance of such use by the public. Example: streets, sidewalks, parks.
DEED: A conveyance of realty; a writing signed by grantor, whereby title to realty is transferred from one to another. National Fire Insurance Company vs. Patterson, 170 Okl. 593, 41 p.2d 645, 647.
DEED BOOK: A book among the public records in which deeds are recorded.
DEED OF TRUST: An instrument used in many states in place of a mortgage. Property is transferred to a Trustee by the borrower (Trustor) in favor of the lender (Beneficiary) as security for a loan. The Deed of Trust is reconveyed upon payment in full.
DEED RESTRICTION: A restriction contained in a deed which limits the use or occupancy of the real estate or the type, size, purpose and location of improvements to be constructed on it.
DEFAULT: Failure to perform a promised task or to pay an obligation when due.
DEFAULT JUDGMENT: Judgment taken against a defendant who fails to appear in court.
DEFEASANCE: An instrument which defeats the force or operation of some other deed or estate. A collateral deed made at the same time with a feoffment or other conveyance, containing certain conditions, upon the performance of which the estate then created may be defeated or totally undone. Black's Law Dictionary,5th Edition.
DEFEASANCE CLAUSE: Clause in a mortgage that gives the mortgagor (borrower) the right to redeem his property on payment of his obligation to the mortgagee (lender).
DEFECT: A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.
DEFENDANT: The party who is being sued in a court of law.
DEFICIENCY JUDGMENT: When property at a mortgage foreclosure sale does not bring enough money to pay the mortgage debt plus costs of foreclosure, the court will enter a deficiency judgment against the mortgage debtor for the difference between the sale price and the mortgage debt plus costs.
DEMISE: (1) Death. (2) To transfer title to property or an interest in property by will or lease.
DESCRIPTION: The exact location of a piece of property stated in terms of lot, block, tract, part lot, metes and bounds, or U.S. Government survey (sectionalized). This is also referred to as a legal description of property.
DEVISE: A gift of real estate made by a will.
DEVISEE: One who is given real estate under a will.
DISPOSSESS: To deprive one of the possession and use of real estate.
DOMINANT ESTATE: The property for the benefit of which a right-of-way easement exists across another's adjoining piece of land is said to be the dominant estate. The land across which the easement runs is said to be the servient estate.
DOWER: A right which a wife has in her husband's property effective at the time of his death.
DRAFT: The common term for a bill of exchange. A written order from one person to another, directing that person to pay to a third person a set sum of money. A draft is distinguishable from a cashier's check in that a draft is payable on demand against money on deposit, while a cashier's check is a primary obligation of the bank that issues it.
DRAW: A partial advance of the proceeds of a construction loan mortgage, to which the borrower is entitled when construction reaches a certain specified stage.
DRESSER DRAWER TITLE: When an owner neglects to record his deeds and other real estate papers and places then instead in dresser drawers, or in a show box in a closet, or under the mattress, and there is nothing of record which shows any title in the supposed owner, his title is often referred to as a dresser drawer title.
DUE-ON-SALE CLAUSE: A provision in a trust deed or mortgage calling for automatic maturity at the lender's option in the event of sale or transfer of the real property to a third party; also called an alienation clause.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718