Dictionary of Law
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leverage :: legal definition


Leverage - 1) n. the use of borrowed money to purchase real estate or business assets, usually involving money equaling a high percentage of the value of the purchased property. 2) v. to borrow most of the funds necessary as a loan against real estate to buy other real estate or business assets. The dangers of high leverage are over-appraisal of the property to satisfy a lender, a decline in the value of the property (which may have been purchased during a period of high inflation), high carrying costs (interest, insurance, taxes, maintenance) which exceed income, vacancies and/or inability to finance improvements to increase profits. Too often the result is the collapse of "paper" real estate empires which have been created by risky leveraging.


Related Law Terms

abstract of judgment :: n. a written summary of a judgment which states ho ... aying the debt. See also: levy lien
abstract of title :: n. the written report on a title search which show ... e also: chain of title title report
accounts receivable :: n. the amounts of money due or owed to a business ... sidering the chances of collection.
ad valorem :: adj. Latin for "based on value," which applies to ... per parcel. See also: property tax
after-acquired property :: n. 1) personal or real property acquired by a debt ... lso: bankruptcy secured transaction
appraise :: v. to professionally evaluate the value of propert ... surance claims. See also: appraiser
appraiser :: n. a professional who makes appraisals of the valu ... isal Institute). See also: appraise
appurtenant :: adj. pertaining to something that attaches. In rea ... t. See also: easement real property
assess :: v. to set a value on property, usually for the pur ... e place upon sale of real property.
asset :: n. generally any item of property that has monetar ... ill and rights to market a product.
assume :: v. to take over the liability for a debt on a prom ... he assumption. See also: assumption
attachment :: n. the seizing of money or property prior to getti ... bond. See also: writ of attachment
attorney-in-fact :: n. someone specifically named by another through a ... cument. See also: power of attorney
bankruptcy :: n. a federal system of statutes and courts which p ... y proceedings trustee in bankruptcy
capital gains :: n. the difference between the sales price and the ... so: basis delayed exchange exchange
chain of title :: n. the succession of title ownership to real prope ... title conveyance foreclosure title
claim :: 1) v. to make a demand for money, for property, or ... the government, it is lawsuit time.
collateral :: 1) n. property pledged to secure a loan or debt, u ... ral to the Colorado divorce action.
color of title :: n. the appearance of having title to personal or r ... rty based on this "color of title."
commingling :: n. the act of mixing the funds belonging to one pa ... rust accounts for funds of another.
condemnation :: n. the legal process by which a governmental body ... eminent domain inverse condemnation
condition subsequent :: n. 1) in a contract, a happening which terminates ... Dad Fauntleroy. See also: condition
contingent interest :: n. an interest in real property which, according t ... ontingent remainder future interest
convey :: v. to transfer title (official ownership) to real ... ion conveyance deed grantee grantor
conveyance :: n. a generic term for any written document which t ... r Recorder of Deeds. See also: deed
covenant :: 1) n. a promise in a written contract or a deed of ... o compete deed restrictive covenant
deed :: 1) n. the written document which transfers title ( ... veyance deed of trust warranty deed
demise :: 1) v. an old-fashioned expression meaning to lease ... r life. 3) n. death. 4) n. failure.
depreciation :: n. the actual or theoretical gradual loss of value ... e early years of use (accelerated).
devise :: 1) v. an old-fashioned word for giving real proper ... so: bequest gift legacy remise will
devisee :: n. a person who receives a gift of real property b ... will. See also: beneficiary legatee
dominant estate :: n. in real estate law, the property retained when ... See also: easement servient estate
easement :: n. the right to use the real property of another f ... rstandings at the time of creation.
equity :: n. 1) a venerable group of rights and procedures t ... ry enjoin equitable injunction writ
escrow :: 1) n. a form of account held by an "escrow agent" ... w the deal." See also: escrow agent
escrow instructions :: n. the written instructions by buyer and seller of ... ir agents. See also: closing escrow
estate :: n. 1) all that one owns in real estate and other a ... ife estate probate real estate will
exchange :: 1) v. to trade or barter property, goods and/or se ... ins tax. See also: delayed exchange
execution :: n. 1) the act of getting an officer of the court t ... so: death penalty writ of execution
fair market value :: n. the amount for which property would sell on the ... so: appraise appraiser market value
fiduciary :: 1) n. from the Latin fiducia, meaning "trust," a p ... lation fiduciary relationship trust
foreclosure :: n. the system by which a party who has loaned mone ... ced sale mortgage notice of default
fraud :: n. the intentional use of deceit, a trick or some ... audulent conveyance intrinsic fraud
free and clear :: adj. referring to the ownership of real property u ... the title has no claim against it.
grandfather clause :: n. 1) a clause in a statute or zoning ordinance (p ... Such laws are now unconstitutional.
grant deed :: n. the document which transfers title to real prop ... rant grantee grantor quitclaim deed
impound :: v. 1) to collect funds, in addition to installment ... cases. See also: forfeit forfeiture
in kind :: adj. referring to payment, distribution or substit ... . See also: distribution trust will
insurance :: n. a contract (insurance policy) in which the insu ... t clause Workers' Compensation Acts
interest :: n. 1) any and all, partial or total right to prope ... nal property real property standing
inverse condemnation :: n. the taking of property by a government agency w ... e also: condemnation eminent domain
invitee :: n. a person who comes onto another's property, pre ... ail employees. See also: negligence
joint tenancy :: n. a crucial relationship in the ownership of real ... ty property tenancy in common title
jurisdiction :: n. the authority given by law to a court to try ca ... Superior Court Supreme Court venue
laches :: n. the legal doctrine that a legal right or claim ... , breach of contract, fraud, etc.).
land :: n. real property, real estate (and all that grows ... See also: real estate real property
lease :: 1) n. a written agreement in which the owner of pr ... triple net lease unlawful detainer
legatee :: n. a person or organization receiving a gift of an ... eficiary devise devisee legacy will
levy :: 1) v. to seize (take) property upon a writ of exec ... heriff's sale tax writ of execution
lien :: n. any official claim or charge against property o ... ord's lien mechanic's lien mortgage
life estate :: n. the right to use or occupy real property for on ... hter, Sadie, will own the property.
lis pendens :: (lease pen-dense) n. Latin for "a suit pending," a ... ob can be penalized by court order.
marital deduction :: n. an estate tax deduction allowed a surviving spo ... community property estate tax trust
market value :: n. the price which a seller of property would rece ... ich are often called "comparables."
marketable title :: n. the title to real property which has no encumbr ... e. See also: contract real property
mechanic's lien :: n. the right of a craftsman, laborer, supplier, ar ... ll sue for the debt. See also: lien
merger :: n. 1) in corporate law, the joining together of tw ... and taking one, and wife the other.
mortgage :: n. a document in which the owner pledges his/her/i ... losure notice of default trust deed
nominal party :: n. a defendant or a plaintiff included in a lawsui ... ed. See also: necessary party party
notice :: n. 1) information, usually in writing in all legal ... Thirty-day notice three-day notice
option :: n. a right to purchase property or require another ... ng or upon expiration of the lease.
parcel :: n. a defined piece of real estate, usually resulti ... See also: real estate real property
personalty :: n. movable assets (things, including animals) whic ... lso: personal effects real property
possessory interest :: n. in real estate, the intent and right of a perso ... o: possess possession real property
possibility of a reverter :: n. the potential that the title to a real property ... further issue. See also: reversion
power of attorney :: n. a written document signed by a person giving an ... y, as in a real estate transaction.
premises :: n. 1) in real estate, land and the improvements on ... t). See also: real estate structure
pro rata :: (proh rat-ah or proh ray-tah) adj. from Latin for ... e year in which he/she holds title.
promissory note :: n. a written promise by a person (variously called ... lso: interest obligee obligor usury
property :: n. anything that is owned by a person or entity. P ... rty real property separate property
property tax :: n. an annual governmental tax on real property or ... are made. See also: ad valorem tax
quasi community property :: n. in community property states, property acquired ... : community property palimony quasi
real estate :: n. land, improvements and buildings thereon, inclu ... the future. See also: real property
real estate investment trust :: n. nicknamed REIT, a real estate investment organi ... its upon sale-if there is a profit.
real property :: n. 1) all land, structures, firmly attached and in ... onal property real estate reversion
reconveyance :: n. in those states which use deeds of trust as a m ... conveyance. See also: deed of trust
remainder :: n. in real property law, the interest in real prop ... ed reversion title vested remainder
rental value :: n. the amount which would be paid for rental of si ... alimony to be paid. See also: rent
reversion :: n. in real property, the return to the grantor or ... lled "reverter." See also: reverter
servient estate :: n. real property which has an easement or other us ... See also: dominant estate easement
straw man :: n. 1) a person to whom title to property or a busi ... a trail will mislead hunting dogs).
tax :: n. a governmental assessment (charge) upon propert ... unified estate and gift tax use tax
title :: n. 1) ownership of real property or personal prope ... ink slip real property title search
title report :: n. the written analysis of the status of title to ... lso: abstract title title insurance
trade fixture :: n. a piece of equipment on or attached to the real ... uch damage. See also: fixture trade
undivided interest :: n. title to real property held by two or more pers ... y by the entirety tenancy in common
unlawful detainer :: n. 1) keeping possession of real property without ... Thirty-day notice three-day notice
use :: n. the right to enjoy the benefits of real propert ... ay it is only of academic interest.

Popular Law Searches

legal definition ministerial act :: n. an act, particularly of a governmental employee ... exercising any individual judgment.
chancery legal definition :: n. a court that can order acts performed. Today ch ... ts in most states. See also: equity
testamentary disposition legal definition :: n. how the terms of a will divide the testator's ( ... named beneficiaries. See also: will
contract of sufferance :: n. a "hold-over" tenancy after a lease has expired ... y tenancy at will unlawful detainer
forthwith legal definition :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
forthwith definition legal :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
what is to wit in a legal contract :: prep. that is to say. Example: "the passengers in ... tty Bumgartner and Sherry Younger."
mirror wills legal definition :: n. the wills of a husband and wife which are ident ... d each names the other as executor.
clean hands doctrine latin :: n. a rule of law that a person coming to court wit ... ices. See also: affirmative defense
sine qua non only relates to contract law :: (see-nay kwah nahn) prep. Latin for "without which ... qua non of the injury to Playmate.

Other Law Terms - L

labor and materials :: (time and materials) n. what some builders or repa ... track of actual labor hours worked.
laches :: n. the legal doctrine that a legal right or claim ... , breach of contract, fraud, etc.).
land :: n. real property, real estate (and all that grows ... See also: real estate real property
landlady :: n. female of landlord or owner of real property fr ... rents or leases. See also: landlord
landlocked :: adj. referring to a parcel of real property which ... which it was created (carved out).
landlord :: n. a person who owns real property and rents or le ... so: lease lessee lessor rent tenant
landlord and tenant :: n. the name for the area of law concerning renting ... ord lease lessee lessor rent tenant
landlord's lien :: n. the right of a landlord to sell abandoned perso ... to the ex-tenant and a public sale.
lapse :: 1) v. to fail to occur, particularly a gift made i ... eficiary devisee legatee trust will
larceny :: n. the crime of taking the goods of another person ... : grand larceny petty larceny theft
last antecedent rule :: n. a doctrine of interpretation (construction) of ... o trucks and not boats or tractors.
last clear chance :: n. a rule of law in determining responsibility for ... contributory negligence negligence
last will and testament :: n. a fancy and redundant way of saying "will." Law ... writing another one. See also: will
latent defect :: n. a hidden flaw, weakness or imperfection in an a ... warranty product liability warranty
lateral support :: n. the right of a land- owner to assurance that hi ... support problems are less dramatic.
law :: n. 1) any system of regulations to govern the cond ... um maritime law natural law statute
law and motion calendar :: n. a court calendar in which only motions and spec ... special legal arguments are heard.
law book :: n. any of numerous volumes dealing with law, inclu ... : common law law Shepardize statute
law of admiralty :: n. statutes, customs and treaties dealing with act ... w. See also: Jones Act maritime law
law of the case :: n. once a judge has decided a legal question durin ... he ruling is the "law of the case."