This glossary covers legal terms relevant to real estate investment.
Ownership & Title
Title
Legal right to own, use, and dispose of property.
Title Deed
Official document proving property ownership.
Clear Title
Title free from liens, encumbrances, or legal questions.
Chain of Title
Historical record of property ownership transfers.
Encumbrances
Encumbrance
Any claim or liability attached to property that may affect its value or transferability.
Lien
Legal claim against property as security for a debt.
Mortgage
Loan secured by property, creating a lien until repaid.
Easement
Right to use another's property for a specific purpose.
Contracts
Contract
Legally binding agreement between parties.
SPA (Sale and Purchase Agreement)
Contract for property sale with all terms and conditions.
MOU (Memorandum of Understanding)
Preliminary agreement before formal contract.
Breach
Failure to fulfill contractual obligations.
Legal Entities
SPV (Special Purpose Vehicle)
Legal entity created for a specific purpose, often holding a single asset.
Limited Liability
Legal protection limiting investor liability to their investment amount.
Shareholder Agreement
Contract defining rights and obligations of company shareholders.
Legal Processes
Due Diligence
Investigation and verification before transaction.
Closing
Final step when ownership transfers and funds exchange.
Escrow
Third party holding funds/documents until conditions are met.
Power of Attorney
Legal authorization for someone to act on another's behalf.
Dispute Resolution
Arbitration
Private dispute resolution with binding decision.
Mediation
Facilitated negotiation to reach voluntary settlement.
Litigation
Resolving disputes through court proceedings.
Understanding legal terminology helps investors protect their interests and navigate transactions confidently.
