REAL ESTATE GLOSSARY

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Laches:	Delay or negligence in asserting one's rights.

Landlord:	The owner of any real estate, such as a house, apartment building or land, that is leased or rented to another person, called the tenant.

Late Charge:	Penalty paid by a borrower when a payment is made after the due date.

Latent defect:	Hidden structural defects and flaws.

Lease:	An oral or written agreement (a contract) between two people concerning the use by one of the property of the other. A person can lease real estate (such as an apartment or business property) or personal property (such as a car or a boat). A lease should cover basic issues such as when the lease will begin and end, the rent or other costs, how payments should be made, and any restrictions on the use of the property. The property owner is often called the "lessor," and the person using the property is called the "lessee."

Lease Option:	A contract in which an owner leases his house (usually for one to five years) to a tenant for a specific monthly rent, and which gives the tenant the right to buy the house at the end of the lease period for a price established in advance. This allows a potential home buyer move into a house he may wish to eventually buy without having to come up with a down payment or financing at that time.

Lease Purchase:	A contract in which an owner leases his house (usually for one to five years) to a tenant for an increased monthly rent, and which gives the tenant the right to buy the house at the end of the lease period for a price established in advance, with the incremental rent increase being used to form a down payment. Buyers should be wary of this type of contract since they may lose their extra rent/down payment money should the owner suffer financial setbacks before the purchase has been completed.

Leasehold Estate:	A form of real estate in which a tenant is allowed to construct permanent structures upon a parcel of leased land, and derive some use or income from said structures during the period of the lease. Leasehold estates usually involve long-term leases, ranging from 20 to 99 years. Land owners are able to have their property developed, with no out of pocket expenses. Instead of having to sell their land too soon, they retain their family's rights to the land, while receiving a steady income stream. The tenant saves the initial land acquisition costs and may gain access to property that would be otherwise unavailable. The downside is, as the lease nears the end or its term, the tenant's investment becomes uncertain, and the landlord is in a position to make demands for compensation, above the fair market price. Leaseholds are much more common in commercial real estate, but can apply to some residential properties as well.

Legal Description:	A description of a specific parcel of real estate which is acceptable to the courts in that state, and which will allows an independent surveyor to locate and identify it. Usually it uses one of the following methods; government survey, metes and bounds, or recorded plat (lot and block number).

Lender:	The bank, mortgage company, or mortgage broker offering the loan.

Less Favorable Treatment:	Any time a person is treated differently on the basis of race, sex, religion, color, familial status, disability, or national origin, either by action or inaction, in the selling or leasing of real property, it is a violation of the Fair Housing Laws. Also known as unequal treatment or different treatment.

Lessee:	Tenant leasing property.

Lessor:	One who leases property to a tenant.

Leverage:	The use of borrowed funds to finance an investment and to magnify the rate of return.

Levy Improvement District:	Also known as LID. A type of Water Control and Improvement District, used to build and maintain levies. Levies are used to contain flooding creeks and rivers.

LIBOR:	See London Interbank Offered Rate

Licensee:	A person licensed by the Texas Real Estate Commission to engage in real estate brokerage, either as a broker or as a salesman.

LID:	See Levy Improvement District.

Lien:	A legal claim by one person on the property of another as a security for payment of a debt. These should be settled before the sale is finalized.

Life Estate:	An interest in property only for the duration of someone's life.


Life Tenant:	One who has a life estate in real property.

Limited Equity Housing:	An arrangement designed to encourage low-and moderate-income families to purchase housing, in which the housing is offered at an extremely favorable price with a low down payment. The catch is that when the owner sells, she gets none of the profit if the market value of the unit has gone up. Any profit returns to the organization that built the home, which then resells the unit at an affordable price.

Lis Pendens:	A notice indicating that legal action is pending on a property.


Listing:	A written agreement between a property owner and a real estate broker authorizing the broker to find a buyer.

Listing Agreement:	The legal agreement between the listing agent/broker and the vendor, setting out the services to be rendered, describing the property for sale, and stating the terms of payment.

Loan Application:	An initial statement of personal and financial information required to apply for a loan.

Loan Application Fee:	Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.

Loan-to-Value Ratio:	Also known as LTV. The ratio of the amount being loaned in respect to the appraised value of the property, usually expressed as a percentage. If a buyer was putting down $20,000, and borrowing a first lien of $180,000, on a $200,000 property, then the loan would have a 90% LTV. Loan-to-value ratios can effect interest rates, loan qualifying criteria, and lender requirements for PMI and escrow accounts.

Lock or Lock In:	A commitment you obtain from a lender assuring you a particular interest rate or feature for a set period of time. Provides protection should interest rates rise between the time you apply for a loan, acquire loan approval, and, subsequently, close the loan and receive the funds you have borrowed.

Loft:	(1) A style of residential construction. It may refer to an older building that has been converted into residential condominiums, or it may mean a new mid-rise project with a "loft-style" finish to the units. There are also new construction townhomes that are promoted as being "lofts". A builder creates new loft space by leaving exposed brick walls, bare polished concrete floors and having unhidden heating ducts, trusses, etc. (2) An upstairs room or area that has an open wall, overlooking a room or area below.

London Interbank Offered Rate:	Also known as LIBOR. The interest rate charged among banks in the foreign market for short-term loans to one another. A common index for ARM loans.

LTV:	See loan-to-value ratio.

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