 ABSTRACT OF TITLE – A condensed history of the title, consisting of the various links in

the chain of title, together with a statement of all liens, charges or encumbrances affecting a
particular property.

 ACCELERATION CLAUSE – A clause in a contract stating that upon the happening of a

certain event, like failure to pay any installment due shall make all the balance become
immediately due and payable.

 ACCEPTANCE - When the seller or agent's principal agrees to the terms of the contract of
sale and approves the negotiation on the part of the agent and acknowledges receipt of the
deposit in subscribing to the agreement of sale.

 ACCRETION - An addition to land from natural causes as, for example, from gradual action
of the ocean or the river waters.

 ACKNOWLEDGEMENT - A formal declaration before a duly authorized officer by a

person who has executed an instrument that such execution is his act and deed.

 ACQUIRED ASSET - Usually refer to real estate properties that were previously mortgaged
to the bank, by which because the owner failed to pay the mortgage, the ownership of the
property transfered to the bank through a judicial foreclosure proceeding. Acquired Asset is
called Foreclosed Properties.

 ACQUISITION - The act or process by which a person procures property.

 AD VALOREM - According to valuation.

 ADMINISTRATOR - A person appointed by the probate court to administer the estate of a

deceased person.

 ADVERSE CLAIM – A claim of a person on property owned by another (Good only for 30
days no second adverse claim is allowed).

 ADVERSE POSSESSION – Right of an occupant of land to acquire title against the real
estate owner, where possession has been actual, continuous, hostile, visible, distinct and in the
concept of owner for the statutory period. (Note: Statutory period is 30 years: adverse possession
does not apply on lands titled under the Torrens System)

 AFFIDAVIT - A statement or declaration reduced in writing sworn to or affirmed before

some officer who has authority to administer an oath or affirmation.

 AFFIRM - To confirm, to ratify, to verify.

 AGENT – One who acts for and has the authority to represent another who is known as the
principal

 AGREEMENT OF SALE - A written agreement or contract between seller and purchaser

which they reach a meeting of the minds on the terms and conditions of the sale.
 AIR RIGHT - The right of the property owner to use, control, or occupy the air space over
his property, subject to the requirements of air navigation and government regulation.

 ALIENATION – The transferring of property to another; the transfer of property and

possession of lands, or other things, from one person to another.

 AMORTIZATION - staggered payment of the thing purchased. Also known as

INSTALLMENT. It refers at the process of paying off a debt (often from a loan or mortgage)
over time through regular payments. A portion of each payment is for interest while the
remaining amount is applied towards the principal balance. An amortization could be in Equal
Payments which has fix amounts throughout the loan period. It could also be a Balooning
Payment wherein the monthly due increases through time. Given a number of pay-periods and
interest rate, the amortization amount is calculated using Amortization Factor Table.

 AMORTIZATION – The liquidation of a financial obligation on installment basis. (A

periodic payment which includes interest and principal necessary to liquidate a financial
obligation)

 APPOINTMENT - Appointment is one way of how an agency relationship is created. It

means that the principal gives express authorization to the agent. Under both common and
statutory law, this requires writing when the sale of real estate is involved.

 APPRAISER– A Real Estate Appraiser is a duly registered and licensed natural person who,
for a fee, compensation or other valuable consideration, performs or renders, or offers to perform
services in estimating and arriving at an opinion of or acts as an expert on real estate values, such
services of which shall be finally rendered by the preparation of the report in acceptable written
form. Also known as valuer, refers to a person who conducts valuation/appraisal; specifically,
one who possesses the necessary qualifications, ability and experience to execute or direct the
valuation/appraisal of real or personal property.

 APPRECIATION – A rise in value or price due to such factors as inflation or market

conditions.

 APPURTENANCE – Something annexed to another thing which may be transferred incident

to it. That which belongs to a thing as a barn, dwelling, garage, or orchard, is incident to the land
to which it is attached.

 ASSESSOR - refers to a government official who conducts appraisal and assessment of real
properties for taxation purposes.

 ASSIGNMENT – The transfer of property or right and obligations over it in favor of another.
(The one who assigns or transfers a property is called ASSIGNOR while those to whom property
is assigned are called ASSIGNS or ASSIGNEES)

 AUTOMATIC REDEMPTION CLAUSE – A stipulation in a mortgage of several properties

providing that when a buyer of one or more lots pays in full the purchase price, a portion of the
payments shall be applied to the mortgage obligation and the mortgagee shall correspondingly
release said lot or lots from the mortgage.
 BALLOON PAYMENT – Where the final installment payment on a note is greater than the
preceding installment payments and the payer pays the note in full, such a final installment is
termed a balloon payment. (Payment in lump sum although not yet due)

 BASE AND MERIDIAN – Imaginary lines used by surveyors to find and describe the
location and boundaries of a real property

 BINDER – A agreement to cover a down payment for the purchase of real as evidence of
good faith of the part of the purchaser

 BLANKET MORTGAGE – A mortgage that has two or more properties pledged as security
for a debt

 BREACH – The breaking of a law, or failure to perform a duty or obligation specified in a

contract or agreement, or revelation of secret, either by omission or commission

 BROKER – A Real Estate Broker is a duly registered and licensed natural person who, for a
fee, commission or other valuable consideration acts as an agent of a party in a real estate
transaction to offer, advertise, solicit , list, promote, mediate, negotiate, or effect the meeting of
the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar
transactions on real estate or any interest therein.

 BUNDLE OF RIGHTS – The rights of ownership whereby the owner has the right to enjoy,
dispose, exclude others and to recover

 CAPITAL ASSET - Capital asset means property held by the taxpayer (whether or not
connected with his trade or business), but does not include – (a) Stock in trade of the taxpayer or
other property of a kind which would properly be included in the inventory of the taxpayer if on
hand at the close of the taxable year; or (b) Property held by the taxpayer primarily for sale to
customers in the ordinary course of his trade or business; or (c) Property used in the trade or
business of a character which is subject to the allowance for depreciation provided in subsection
(F) of Sec. 34 of the Code; or (d) Real property used in trade or business of the taxpayer.

 CAPITAL GAINS TAX - Capital Gains Tax is a tax imposed on the gains presumed to have
been realized by the seller from the sale, exchange, or other disposition of capital assets located
in the Philippines, including pacto de retro sales and other forms of conditional sale.

 CAPITAL PROPERTY – Property you own that could give you a capital gain if you sold it.
Can include investments, a property other than your home and money from a trust account. A
property that is acquired for investment purposes, or use in a business, that will give rise to a
capital gain, and not an income gain, if it is sold at a profit. Land, buildings, machinery,
equipment, shares in a farm corporation and an interest in a farm partnership will usually be
capital property to the farmer.

 CAVEAT EMPTOR – Means “let the buyer beware” (The buyer is duty-bound to examine
the property he is purchasing and he assumes conditions which are readily ascertainable on the
face of the title)
 CENRO -- Community Environment and Natural Resources Officer of the DENR

 CLIENT – A client is a person who empowers another to act as his or her representative or
agent. Client-Agent relationship is equal to fiduciary relationship.

 CLOSED MORTGAGE – A mortgage which can be paid off on its maturity

 CLOUD ON THE TITLE – Any conditions revealed by a title search which affect the title to
property; usually relatively unimportant items but which cannot be removed without a quit claim
deed or court action

 COMMISSION – An agent’s compensation for performing the duties of his agency; in real
estate practice, a percentage of the selling price of property, percentage of rentals, etc.

 CONDEMNATION – The taking of public property for public use with fair compensation to
the owner. An exercise of the Right of Eminent Domain.

 CONJUGAL PROPERTY – property owned in common by the husband and wife

 CONSULTANT – A Real Estate Consultant is a duly registered and licensed natural person
who, for a fee, compensation or other valuable consideration, offers or renders professional
advice and judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition
of lands or improvements thereon; and (ii) the conception, planning, management and
development of real estate projects.

 CONTRACT OF SALE – An agreement between a buyer and a seller whereby there is

transmission of ownership on the object of the contract

 CONTRACT TO SELL - An agreement whereby the seller promises to sell a thing in

consideration of the buyer’s compliance to the terms and conditions of the contract and that only
after the buyer’s compliance will the seller be obligated to transfer or convey the ownership of
the thing subject of the contract.

 CONVEYANCE – The means by which title to real estate is transferred

 CORNER INFLUENCE – The added desirability or utility of a property due to its frontage to
two streets, which for residential use provides better ventilation and as to commercial or
industrial use, it provides better access, display and transportation convenience.

 COUNTER OFFER – It is a qualified or conditional acceptance

 CUL DE SAC – A passageway with one outlet; a blind alley.

 CUSTOMER – A customer generally refers to person without representation involved in the

transaction involved in the transaction. All agents and brokers have a duty to treat customers
fairly.

 DACION EN PAGO – Payment in kind. Payment of the debt or obligation with a property
 DEED – A written instrument which, when properly executed and delivered, conveys title.

 DEFAULT – The failure to fulfill a duty or promise or to discharge an obligation; an

omission or failure to perform any act.

 DEFEASANCE CLAUSE – The clause in a mortgage that gives the mortgagor the right to
redeem his property upon the payment of his obligations to the mortgagee

 DEFICIENCY JUDGMENT – It is a judgment for the mortgagor to pay the balance of the
obligation if the proceeds of the foreclosure sale is not sufficient to cover the principal
obligation.

 DEPRECIATION – Loss in value brought about by deterioration through ordinary wear and
tear and action of the elements, functional or economic obsolescence.

 EARNEST MONEY – A sum of money tendered by a buyer to the seller which if accepted
by the seller shall form part of the purchase price and as proof of the perfection of the contract. It
is a sign of good faith on the part of the buyer. Actually, it is a partial payment of the purchase
and it must be deducted therefrom. (see also BINDER)

 EASEMENT – he right, advantage or privilege which an individual has in land of another,

such as a right of way

 ECA – Environmentally Critical Area is an area that is environmentally sensitive.

 ECC – Environmental Compliance Certificate is the document issued by the DENR Secretary
or the Regional Executive Director certifying that based on the representation of the proponent
and the preparers, as reviewed and validate by the EIARC, the proposed project or undertaking
will not cause a significant negative environmental impacts; that the proponent has complied
with all the requirements of the EIS System, and that the proponent is committed to implement
its approved EMP in the EIS or mitigation measures in IEE.

 ECONOMIC LIFE – The period over which a property will yield a return on the investment,
over and above the economic or ground rent to land

 ECONOMIC RENT – The potential rent which a property can command, considering rental
of similar or comparable properties in the neighborhood.

 ECP – Environmentally Critical Project is a project that has a high potential for significant
negative environmental impact.

 EIS –Environmental Impact Statement refers to the documents or studies on the

environmental impacts of a project including the discussions on direct and indirect consequences
upon human welfare and ecological and environmental integrity.

 EMB - Environmental Management and Protected Areas Sector of the DENR

 EMINENT DOMAIN – The right of the government to acquire property for necessary public
or quasi-public use

 EMP – Environmental Management Plan is a section of the EIS that details the prevention,
mitigation, contingency and monitoring measures to enhance positive impacts and minimize
negative impacts of a proposed project or undertaking.

 ENCROACHMENT – A building, part of building, or obstruction which intrudes upon or

invades a highway or sidewalk or trespasses upon property of another.

 ENCUMBRANCE – Anything which affects or limits the fee simple title to property, such as
mortgages, easements, or restrictions of any kind. Liens are money encumbrances which make
the property security for the payment of a debt or obligations, such as mortgages and taxes.

 ESCHEAT -- it is the reservation or automatic conveyance of real property to the State upon
the owner’s death due to the absence of will heirs or other legal claimants, to the title, or when
the owner fails to pay the real estate taxes.

 ESTOPPEL -- Estoppel is one way of how an agency relationship is created. It means that if
the principal makes third persons to believe that someone is his agent and that third party deals
with the agent, then the principal cannot deny the agency relationship even though it did not exist
in fact.

 EQUITY OF REDEMPTION – Right of the original owner to reclaim property sold through
judicial foreclosure proceedings by payment of debt, interests, and cost.

 EQUITY –The interest or value which an owner has in real estate over and above the
mortgage against it.

 ESCALATION CLAUSE – A provision in a contract providing for periodic proportional

upward or downward adjustment of price or consideration

 ESCHEAT – Reversion of property to the state owing to lack of any heirs capable of
inheriting; or due to other causes provided by law

 ESCROW – An agreement entrusted to a third person to be held by him until the

performance or fulfillment of some act or condition ETHICS – That branch of moral science,
idealism, justness, and fairness, which treats of the duties that a member of a profession or craft
owes to the public, to his clients or patron, and to his professional brethren or members.

 FAIR MARKET VALUE – The price which a willing seller will sell and a willing buyer will
buy, neither being under abnormal pressure.

 FEE SIMPLE – Largest estate of ownership in real property in which the owner holds all
rights not reserved by society. Absolute ownership.
 FIDUCIARY – A person in a position of trust and confidence, as between a principal and a
broker; the broker as fiduciary owes certain loyalty which cannot be breached under rules of
agency.

 FORECLOSURE – A procedure where by property pledged as security for a debt is sold to

pay the debt in the event of default in payments or terms. It is a process instituted by a mortgagee
by which the mortgaged property is sold at public auction to satisfy the principal obligation
which the debtor failed to fulfill. The property that has been transfered to the bank through a
foreclosure proceeding is called a Foreclosed Property, which is also known as Bank Acquired
Asset.

 FORFEITURE – The loss of money or anything of value, due to failure to perform, such as
under an agreement to purchase

 HIGHEST AND BEST USE PRINCIPLE – The use for a property which will bring the
optimum or highest returns or advantage as of a certain time

 HOLDOVER CLAUSE- A provision in a listing agreement which entitles the broker to

commission even when the sale was closed after the period of the authority provided that the
buyer was registered by him with the seller and with whom he has negotiated during the period
of his authority. It may also be applied in lease contracts wherein this provision determines what
happens when the tenant remains beyond the expiration of the lease; example: after the
expiration of lease, the landlord serves an eviction notice to the tenant, but the tenant was given
an option to remain upon payment of a P3000 per day additional rent, according to the holdover
clause. More about Holdover Clause..

 N-HOUSE FINANCING- also known as VENDOR FINANCING, is a real estate buying at

installment basis wherein the mortgage agreement is between the property developer and the
buyer. When the buyer fails to fulfill the obligation to pay, the ownership of the property reverts
back to the developer. In-house financing usually have higher interest rates compared to bank
loan. What is bad in in-house financing is that the seller only issues a Contract-to-Sell. In Bank
Financing, the seller issues an Absolute Deed of Sale to the name of the buyer, and then
automatically mortgage the property to the bank.

 KEY LOT – A lot adjoining a corner, at right angle to it and fronting an intersecting street.
(Commonly referred to as a “Tumbok” Lot)

 LATCHES – Delay or negligence in asserting one’s legal right

 LIEN – A hold or claim which one person has upon a property of another as security for a
debt or charge, judgments, mortgages

 LIS PENDENS – An annotation in the title which serves as notice that the property is subject
to a pending litigation. Lis pendens is Latin for "suit pending."This may refer to any pending
lawsuit or to a specific situation with a public notice of litigation that has been recorded in the
same location where the title of real property has been recorded.
 LISTING – The broker’s “stock in trade” or the property being handled by the broker: it can
be referred to also as the contract between the owner and broker: or the authority of the broker to
negotiate the transaction of a property for a commission.

 MASTER DEED – A document executed by a property owner which creates or converts his
properly into a condominium pursuant to Rep. Act. 4726

 MECHANICS LIEN – A lien created by law which exists in favor of persons who have
performed or furnished materials in the erection or repair of a building

 METES AND BOUNDS – Measurements and boundaries. A term used in describing the
boundary lines of land, setting forth all the boundary lines, together with their terminal points
and angles.

 MULTIPLE LISTING – an arrangement among a group of real estate brokers to share its
listings with a pre-arrange agreement especially on commission sharing

 OBSOLESCENCE – Impairment of desirability and usefulness brought by physical,

economic, functional deterioration, or other causes. Loss in value due to reduced desirability and
usefulness of a structure because its design and construction becomes obsolete; loss because of
becoming old-fashioned and not in keeping with modern needs with consequent loss of income.

 OPEN MORTGAGE – A mortgage which can be paid off at any time even before its
maturity.

 OPEN-END MORTGAGE – A mortgage containing a clause which permits the mortgagor to

borrow additional money after the loan has been reduced, without re-writing the mortgage

 OPTION – The right to purchase or lease a property at a certain price for a certain designated
period, for which right a consideration is paid

 OPTION MONEY – The amount paid to a property owner in consideration of giving a

prospective buyer or lessee the exclusive right to buy or lease his property within a specified
period at the agreed price and term. (Within the option period, the owner cannot sell or lease
except to the person who paid the option money).

 ORDINARY ASSET - Ordinary asset refers to all properties specifically excluded from the
definition of capital assets under Sec. 39 (A)(1) of the NIRC.

 OVER-IMPROVEMENT – The improvement which does not produce an adequate return for
the amount invested on a building or property. An improvement which is not suitable to the site
on which it is placed due to excessive size or cost.

 PACTO DE RETRO SALE – A contract of sale with the stipulation that the vendor shall
have the right to buy back the property within the agreed period

 PACTUM COMMISSORIUM – A stipulation which authorizes the mortgagee to appropriate

the property as his own upon failure of the debtor to fulfill the principal obligation
 PACTUM DE NON ALIENDO – A stipulation which prohibits the mortgagor from
alienating the property within the period of the mortgage

 PARAPHERNAL LEASE – Property exclusively owned by the wife

 PENRO -- Provincial Environment and Natural Resources Officer of the DENR

 PERCENTAGE LEASE – A lease of a property in which the rental is based upon the volume
of sales made upon the leased property

 POLICE POWER – The right of the state to enact laws and enforce them for the order,
safety, health, morals and general welfare of the public

 PRINCIPAL – A principal is commonly known as the person who engages the agent for
representation.

 PROBATE – The proof or act of proving at a court that a last will and testament is actually
that of the deceased person

 PROCURING CAUSE – The act of a broker leading to the meeting of minds between the
parties to a transaction or the consummation of a transaction.

 PUT OPTION – This is a contract that authorizes a Broker to offer a property for sale at a
premium profiteering price, which is normally a high price above the normal fair market value.
When a real estate owner wants to sell his property that is currently under a Professional Real
Estate Management Service (PREMS), he will just order a Put Option to the Broker.

 QUITCLAIM – A deed of release or renunciation of a legal right. A deed to relinquish any

interest in property which the grantor may have had an protest or adverse claim.

 RATIFICATION -- Ratification is one way of how an agency relationship is created. It

means that if a person having no authority whatsoever purports to act as an agent and the
purported principal later adopts the acts of that agent, an agency relationship has retroactively
been created.

 REAL ESTATE - refers to the land and all those items which are attached to the land. It is
the physical, tangible entity which can be seen and touched, together with all the addition on,
above or below the ground.

 REAL ESTATE DEVELOPMENT PROJECT - means the development of land for

residential, commercial, industrial, agricultural, institutional and recreational purposes, or any
combination of such including, but not limited to, tourist, resorts, reclamation projects, building
or housing projects, whether for individual or condominium ownership, memorial parks and
others of similar nature.

 REAL PROPERY - includes all the rights and benefits related to the ownership of real estate.
 REAL ESTATE SERVICE PRACTITIONERS - shall refer to and shall consist of Real
Estate Salesperson, Real Estate Broker, Real Estate Appraiser, and Real Estate Consultant. :

 RED - Regional Executive Director of DENR

 REIT - Real Estate Investment Trust

 RESA - Real Estate Service Act (R.A. No. 9646)

 SALESPERSON – a Real Estate Salesperson is a duly accredited natural person who

performs service for, and in behalf of, a real estate broker who is registered and licensed by the
Professional Regulatory Board of Real Estate Service for or in expectation of a share in the
commission, professional fee, compensation or other valuable consideration.

 TACITA RECONDUCTA – It means that if at the end of the period of lease, the lessee
continues to enjoy the thing leased with the acquiescence of the lessor, it is understood that there
is an implied new lease.

 TIE LINE -- is an imaginary line connecting from the known geographic position (tie point)
to the corner of the titled property. This term is used in Map Reading.

 TIE POINT -- is a reference point with known geographic position established by the Bureau
of Lands. This term is used in Map Reading.

 UNDER IMPROVEMENTS – That improvement which does not sufficiently improve the
land to product he highest and best value of return of which the land is capable.

 UNEARNED INCREMENT – A value added to land for which the owner is in no way
responsible, like the increase of population

 VALUE IN EXCHANGE – Objective Value. Property’s value to an impartial buyer who

represent the market.

 VALUE IN USE – Subjective Value. The property’s value to its occupants or users.

 WARRANTY DEED – A deed used to convey real property which contains warranties of
title and quiet possessions. In a warranty deed, the grantor is to defend the premises against the
lawful claims of the third person.

 WRIT OF EXECUTION – A writ authorizes and directs the proper officer of the court,
usually the sheriff to carry into effect a judgment or decree of the court.

 ZONING ORDINANCE – The exercise of police power by the municipality or city and
regulating and controlling the character and use of property