A scale comparing relative values with each other or a predetermined reference.

A measure of interest rate changes. Usually used to determine changes in an ARM’s (Adjustable Rate Mortgage) interest rate over the term of the loan.

Real or personal property that exists in concept rather than having physical form; usually intangible property is represented by physical muniments that document ownership.
Examples of incorporeal property include rights, relationships (e.g., community property), patents, easements, estates, royalties, and appurtenances.
Same as Incorporeal property.

1. The sum paid or accrued in return for the use of money; the rate of such payment or accrual expressed as a percentage of the total amount of the loan.
2. A right, share of, participation in, or claim to something.

Monetary or other payment received by a party as recompense or reparation for the taking of property under the powers of eminent domain or condemnation. From the takings clause of the Fifth Amendment to the United States Constitution, just compensation is often determined by the fair market value of a property. Other methods of determining fair compensation for property that has been taken through government proceedings include negotiation between the owner and the government or by court action.

1. Title to real property that is free from liens, encumbrances, or defects aside from those which the buyer has agreed to accept (mortgage to be assumed, ground lease of record, etc.)
2. Title to real property that is established, marketable, and without clouds.

The activities, operations, or purposes that are employed in a particualr geographic area; the specific manner in which a parcel or tract of land is utilized. Land use is usually regulated by municipal governments through zoning ordinances, although some land uses are regulated by state or federal governments.

Definition: Funds that an institution with fiduciary or financial responsibility is required by law to maintain in reserve (e.g., a bank, insurance company, stockbroker, etc.).

Terms, Definitions, and Concepts: Finance and Investment, Legal (Law)

1. Revocable, non-transferable permission to use the property of another for a specific purpose.
2. a. Legal authorization to perform or engage in certain specific acts (e.g., real estate license, driver's license, business license, etc.)
b. A document or permit that provides evidence of such authorization or permission.

A freehold estate in real property in which the interest in the property is held until the death of the owner or some other person specified by the grantor of the estate. Unlike other freehold estates, life estates cannot be inherited by the heirs of the grantee. Transfer of property ownership following the end of a life estate occurs according to the provisions stipulated by the grantor. There are three types of life estates: legal life estates, conventional life estates, and estates pur autre vie (technically a type of conventional life estate).

Definition:
1. One form of a shell lease, a lit shell or lit box is a commercial or residential building with a minimally finished interior, usually with drop ceilings, lighting, plumbing, interior walls (painted or unpainted), electrical outlets or conduits, elevators, rest rooms, and a concrete floor. A lit shell may or may not have heating, ventilation, and air conditioning (HVAC). A lit shell is considered ready to lease and ready for tenant improvements (TI's). In many cases, the landlord (the lessor) will offer financial incentives in the form of a tenant improvement allowance (TIA), which pays for or at least partially defrays the cost of any improvements necessary for the tenant (the lessee) to occupy the building itself. Tenant improvement allowances do not usually include furniture, fixtures, and equipment (FFE) or trade fixtures necessary for the tenant to conduct business. Usually lit shell improvements (also known as vanilla shell improvements (VSI)), or those improvements necessary to upgrade the building from a cold shell or base shell state, are not completed until the lease agreement between the tenant and landlord has been negotiated and executed. This ensures that the landlord does not pay for improvements that are unnecessary or that the tenant does not want.

2. The lease agreement or contract for a lit shell building. A proper lit shell lease should describe in detail the tenant improvements (TI's) that are to be completed, and any other information necessary for construction of the building to be completed (commonly known as build-out) prior to tenant occupancy.

Also known as a Lit box.
More or less the same as Vanilla shell, Vanilla box, Plain vanilla shell, Plain vanilla box, Plain white box, Plain white shell, Tropical shell, Warm lit shell, Warm lit box, Warm shell, Warm box, Warm vanilla shell, Warm vanilla box, Warm white box, Warm white shell, White box, White shell, or White box shell.


Discussion: Like many real estate terms and phrases, practical use and meanings of those terms associated with shell leases (e.g., vanilla shell, base shell, cold shell, warm shell, etc.) differ by location and situation, sometimes even within the same region or municipal area. As they say, the devil is in the details. The lease or sales contract should clearly and exactly specify the degree to which construction of any sort of "shell" or "box" building has been or will be completed prior to tenant occupancy. As either a tenant or landlord, you should not assume that the other party's definitions of shell lease terminology are the same as yours. Get it in writing, and make sure you understand and agree with all the terms and conditions of the shell lease agreement before you sign. If necessary, have a real estate attorney review the contract prior to its execution.

Shell leasing and its various forms (warm, cold, base, etc.) are used primarily in commercial real estate, but are gaining popularity in upscale condominiums and townhouses and other high-end residential real estate transactions. The idea is to attract either tenants or buyers, or both, by offering customizable living units. Financial incentives in the form of tenant (or buyer) improvement allowances afford new residents the opportunity to select nearly all aspects of interior decor, including relatively large projects such as plumbing and fixtures, wiring, and interior walls.


Terms, Definitions, and Concepts: Real Estate, Construction and Building, Appraisal, Auction, Finance and Investment, Management

The ratio of the amount finances (loan amount) to the appraised value of the property or the sales price, whichever is lower. Commonly abbreviated as LTV.

The care and work put into a building to keep it in operation and productive use; the general repair and upkeep of a building. If maintenance is deferred, the building will suffer a loss in value.

Land which is of little value because of some deficiency, such as poor access, lack of adequate rainfall, or steep terrain.

The highest monetary price a property would bring, if offered for sale in an arm's-length transaction for a reasonable period of time in a competitive market. Also known as fair market value.

1. Title to real property that is free from liens, encumbrances, or defects aside from those which the buyer has agreed to accept (mortgage to be assumed, ground lease of record, etc.)
2. Title to real property that is established, merchantable, and without clouds.
3. Title that is without liens or encumbrances and can be sold or transferred to another.

A statutory lien created in favor of materialmen, contractors, laborers and mechanics to secure payment for materials supplied and services rendered in the improvement, repair or maintenance of real estate.

Something that is commercially valuable and desirable, and that can usually generate a profit or return on an investment (yield).

Species of trees that are commercially valuable as timber. Examples include Douglas-fir (Pseudotsuga menziesii), redwood (Sequoia sempervirens), and eastern cottonwood (Populus deltoides).

Live trees of merchantable species and sufficient size that they can be profitably harvested and sold. Merchantable timber is then milled and made into lumber and other wood products.

1. Title to real property that is free from liens, encumbrances, or defects aside from those which the buyer has agreed to accept (mortgage to be assumed, ground lease of record, etc.)
2. Title to real property that is established, marketable, and without clouds.
3. Title that is without liens or encumbrances and can be sold or transferred to another.

Of or having to do with money or currency; financial.

Coins or paper bills issued by a government to be used as a measure of value and a medium of exchange.

1. The income or revenue (monetary or non-monetary) earned by an individual or business after the deduction of expenses such as taxes, insurance, losses, etc. Contrast with gross income.
2. The revenue a business or property will earn in a given year's operation, according to the following simplified formula: Net income = Gross income - Expenses

A lease agreement, usually long-term commercial or industrial, in which the tenant (lessee) agrees to pay all or a portion of the property expenses in addition to periodic rent. It is called a net lease because the rent paid is "net" to the lessor.
Abbreviated as "N lease".