LAND CONTRACT: Is an installment contract for the sale of land whereby the seller has legal title until paid in full. The buyer has equitable title during the contract term.
LANDLORD’S LIEN: Several types of landlord’s liens are created by contract or by statute. Some examples are: (1) a contractual landlord’s lien; (2) statutory landlord’s lien; and (3) landlord’s remedy of distress or right of distraint, which is not a true lien but has a similar effect. It is the seizure and holding of property as security for payment of a debt or satisfaction of a claim.
LANDLORD’S WARRANT: A warrant enabling a landlord to levy upon a tenant’s personal property (e.g. furniture, etc.) and to sell this property at a public sale to collect delinquent rent.
LAND, TENEMENTS AND HEREDITAMENTS: Originally used to describe freehold estates only. The terms have come to mean the most technical and all-inclusive description of real estate.
LEASE: An agreement whereby the owner of real property (landlord) gives the right of possession to another (tenant) for a specified period of time (term) and for a specified consideration (rent).
LEASE COMMENCEMENT DATE: The date on which beneficial occupancy commences and the legal terms of the lease go into effect.
LEASEHOLD IMPROVEMENTS: Improvements made to leased premises by a tenant. The term is used in condemnation proceedings to determine the portion of the award to which the lessee is entitled. (See also Tenant Improvements and Workletter.)
LEGAL DESCRIPTION: A method of geographically identifying a parcel of land that is acceptable in a court of law.
LEGAL OWNER: The term is used to distinguish the legal owner from the equitable owner and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than to act as a lien.
LEGAL TITLE: Usually title without ownership rights, such as the title placed in a trustee under a deed of trust, or the title in a vendor under a land contract.
LETTER OF CREDIT: An engagement, pledge, or commitment by a bank or person, made at the request of a customer, stating that the issuer will honor drafts or other demands for payment upon full compliance with the conditions specified in the letter of credit.
LETTER OF ATTORNMENT: A letter from a grantor to a tenant stating that a property has been sold and directing rent to be paid to the grantee (the new owner). (See also Attorn.)
LETTER OF INTENT: A formal method through which a prospective developer, buyer, or tenant expresses his/her interest in property. Depending on the language, a legal obligation may be created.
LIEN: An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all encumbrances are not liens.
LIENHOLDER: A mortgagee or other creditor who has a lien against the property of another.
LIEN WAIVER (WAIVER OF LIENS): Generally, a waiver of mechanic’s lien rights signed by a general contractor and his subcontractors.
LIKE-KIND PROPERTY: A tax term used in certain real property exchanges. Property must be exchanged for like-kind property and the tax consequences postponed pursuant to Section 1031 of the Internal Revenue Code. The term does not refer to the physical similarity of the properties but the purpose and intent of the taxpayer.
LIMITED PARTNERSHIP: A partnership created under state law which consists of one or more general partners who conduct the business and are responsible for any losses, and one or more special or limited partners who contribute capital and are liable only up to the amount contributed.
LISTING AGREEMENT: Is an agreement between a real estate broker and the property owner which, authorizes the broker to assist in the sale or lease of that property in return for a fee, commission or other form of compensation. (See also Exclusive Listing.)
LONG TERM LEASE: A lease whose term exceeds ten years, or in some regions five years, from initial signing until the date of expiration or renewal option.
LOT: A parcel of land. A part of a series of parcels, which make up a subdivision; the boundaries of which are created by and shown on a plat.
LUMP-SUM CONTRACT: A construction contract requiring the contractor to complete a building for a specified amount, usually established by competitive bidding. The contractor absorbs any loss or retains any profit.