Real estate broker. Any person, co-partnership, association or corporation who, for a compensation or valuable consideration, sells or offers for sale, buys or offers to buy, or negotiates the purchase, sale, or exchange of real estate, or who leases or offers to lease or rents or offers for rent any real estate or the improvements thereon for others. Such a broker must secure a state license. For a license to be issued to a firm, it is usually required that all active partners and officers must be licensed real estate brokers.
Real estate salesperson. Any person who, for a compensation or valuable consideration, is employed either directly or indirectly by a real estate broker to sell or offer to sell, or buy or offer to buy or negotiate the purchase, sale or exchange of real estate or to lease, rent or offer for rent any real estate or to negotiate leases thereof or the improvements thereon.
Recapture. A clause in a lease agreement providing for lessor’s retaking or recovering possession of the premises, usually by cancellation of the lease under certain conditions.
Recording. The act of entering a record of documents affecting or conveying interest in real estate in a county recorder’s office. Until recorded, a deed or mortgage generally is not effective against subsequent purchasers or mortgages or other third parties (see Constructive notice).
Redemption period. A period established by state laws during which the property owner has the right to redeem his or her real estate from a foreclosure or tax sale by paying the sale price, interest and costs. (Many states do not have mortgage-redemption laws).
Rentable area. The generally accepted means of measuring space within an office building is the Building Owners and Managers association (BOMA) standard. From the inside of the outside wall (or in new buildings from the glass line) to the outside of the inside wall (or hall wall) and center to center on the division walls. Columns are included.
Replacement cost. The current cost of replacing the subject property with property having exactly the same utility and amenities.
Rules and Regulations. Building standards that are binding on the tenants are usually set forth in a part of the lease covering such things as use of common areas, door lettering, signs, noise, odors, moving or installation of equipment, special locks, etc.
Scheduled gross income. The rental rate of a property multiplied by the total rentable space.
Schematic design. (1) A design concerning the building program resulting from inspection of the site and conferences with the client. The client’s needs and requirements are carefully analyzed. Zoning regulations and codes affecting the work are studied. Sketches and statements of probable construction costs are prepared for the owner’s approval. (2) A suggested plan, design or program of action.
Space analysis. An analysis of an existing office situation to locate problem areas and to provide a basis for judgment in evaluating major changes. Also, it can be in the form of planning tools that will be used by the client in developing a planning decision. This includes space standards, adjacency requirements and space requirements.
Space planning. Architecturally designing any space with all the amenities and mechanical gadgets to make it more functional for the occupants. Besides amenities, gadgets and good communication systems, it includes better sound and light control within the space.
Space standards. The standard-size spaces for particular functions–a necessary tool in planning for any growing organization. The absence of standards leads to a situation where space is allocated to offices in a haphazard, nonfunctional manner.
Statute of frauds. A state law that requires certain classes of contracts, engagements and/or transfers of interest in real estate to be made in writing in order to be enforceable in a court of law. Details of this law vary from one state to another. (The original Statute of Frauds was passed in England in 1677).
Sublease. A lease executed by the lessee of an estate to a third person that conveys the same estate for a shorter term, or a portion of the estate for the same or a shorter term, is a sublease. When the entire estate is sublet for the entire remainder of the term, it is call an assignment.
Subordinated ground lease. A ground lease in which the lessor (owner) places his right in relation to the structure behind that of others, such as the holder of the construction loan or permanent mortgage (see Ground lease).
Subordination. An agreement by which a lien-holder, a lessee or one having an interest or claim in or against personal or real property places the interest behind that of another.
Trade fixtures. Articles installed by a tenant under terms of a lease and removable by the tenant before the lease expires. These remain personal property; they are not true fixtures.
Triple net lease (NNN). A lease in which the tenant is responsible for all operating, maintenance, taxes, insurance and utilities for their rentable square footage in a building.
Turn-key. Refers to an office that is prepared for the tenant to turn the key and get to work. It can refer to tenant improvements in which all of the improvements are made by the landlord and allows the tenant to move their furniture and equipment in without having to do any improvements themselves. It also refers to executive suites where an office includes furniture, phones and internet access.
Useful Life. The length of time, as specified in the tax code, over which an asset may be depreciated. The Useful Life for tax purposes is not necessarily the same as the actual physical life expectancy of a particular asset.
Vacancy and Credit Allowance. A deduction from the Gross Scheduled Income for losses due to unoccupied space and uncollected rent. The result is the Gross Operating Income, also called Effective Gross Income.