Glossary
A
Abstract of Title - A written history of the transactions or conditions
bearing on the title to a designated parcel of land. It cov ers the period fromthe original source of title to the present and summarizes all documents of
public record.
Acceleration Clause - A clause requiring the Purchaser to pay the entire
principal balance due if certain conditions of the con tract are violated. A few
examples of these conditions are failure to make regular installment payments, non-payment of property taxes, and non-payment of hazard insurance premiums.
This clause most often appears in land contracts under the heading "Enforce ment
on Default" or "Acceleration Clause."
Accrued Interest - Interest that has been earned but not paid.
Add-Back Escrow - In a land contract that utilizes an Add-Back escrow, the
Purchaser includes an extra amount with each month's payment in order to cover
future tax and/or insurance bills pay able by the Purchaser. The Seller then
pays property taxes and/or insurance premiums and adds back the amounts paid to
the cur rent principal balance owed. Add-Back escrows in contracts are usually
worded as follows:
"The Purchaser is to pay monthly, in addition to the monthly pay ment
hereinbefore stipulated, the sum of $ __, which is an es timate of the monthly
cost of the taxes, special assessments, and insurance premiums for the land,
which shall be credited by the Seller on the unpaid principal balance owed on
the contract. If Purchaser is not in default under the terms of this contract,
Seller shall pay for Purchaser's account the taxes, special assessments, and
insurance premiums mentioned above when due and before any penalty attaches, and
submit receipts therefore to Purchaser upon demand. The amounts so paid shall be
added to the principal balance of this contract.
Addendum - An addition to a written document. Addenda is the plural.
Agent - One who undertakes to transact business or to manage an affair for
another, with the authority of the latter.
Amendment- An alteration to a contract.
Amortization - The length of time it will take to pay off a debt at the
mutually agreed upon interest rate and payment amount. An example of an
amortization schedule for a $23,000 balance with payments of $250 at 11%
interest is shown below.
| Pymt.# |
Payment |
Interest |
Principal |
Total
Balance |
| 0 |
- |
- |
- |
$23,000.00 |
| 1 |
$250.00 |
$210.83 |
$39.17 |
$22,960.83 |
| 2 |
$250.00 |
$210.47 |
$39.53 |
$22,921.30 |
| 3 |
$250.00 |
$210.11 |
$39.89 |
$22,881.41 |
| 4 |
$250.00 |
$209.75 |
$40.25 |
$22,841.16 |
Appurtenance - Something outside the property itself but considered part of
the property that adds to its greater enjoyment, such as the right to cross
another's land.
Assessments - The amount of tax or special payment due to municipality
or association.
Assignee - The person or corporation to whom an agreement contract is
assigned; one to whom real property or an interest real property is transferred
or set over.
Assignment - A transfer from one party to another.
Assignor- A party who assigns or transfers an agreement or contract to
another.
B
Balance Due - The amount currently owed on a debt; the principal balance due.
Balloon - The final payment on a mortgage, trust deed or a contract when
that payment is greater than the preceding installment payments and pays the
loan in full.
Bankruptcy - The financial inability to pay one's debts when due The debtor
seeks relief through court action that may work out erase debts.
Breach of Contract - A violation of the terms of a legal agreement.
Buyer - One who purchases property; also referred to as "Vendee or
"Purchaser."
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