When I am asked what I do or what type of law I practice, my ten second “elevator speech” is to say that I primarily focus on every aspect of real estate law “from A to Z, from acquisition to zoning and everything in between,” among other areas. The general practice of real estate law, which is very broad, diverse and “covers a lot of ground,” if you’ll pardon the pun, really is an “alphabet soup” of sorts. So in a basic A, B, C’s manner, I thought I’d discuss some of the highlights of this “alphabet soup” of real estate. Starting, of course, with the letter A.
Among many real estate terms, “A” is for “acquisition”. I think that is a good starting point for this primer. Because almost everything about real estate starts with actually acquiring or obtaining interest in real estate, whether that be a fee simple ownership interest or a leasehold interest. One can acquire real estate by several means. Real estate can be acquired by purchasing a vacant parcel of land or an improved property. One can also acquire a leasehold interest in property by a lease, of either the entire property or perhaps just a portion of the property, such as leasing an apartment, an office suite, or a space in a shopping center. And some fortunate individuals may acquire real estate through gift or inheritance.
As part of the acquisition of real estate there are other “A”s you should keep in mind. A is also for “appraisal,” which is an important part of any real estate purchase or sale. A real estate appraisal determines the current fair market value of the property. A licensed real estate appraiser can determine the value, based upon various factors and methods, such as comparable sales of other similar properties, income potential, or replacement cost value.
A is also for “assessment” or “assessed” value, which is the value of a property as determined by the State Department of Assessments and Taxation. The assessed value is the value used by the state and local governments to determine the real estate taxes owed on the property.
And finally, A is for “abstract of title” which is a history of the title to the property, including the current and prior owners, liens and other encumbrances on the property. The land records of the various counties contain a wealth of information and history of the land and the “chain of title” of the owners, past and present.
In my next post, I will move on to the letter “B”, the next letter in this real estate “alphabet soup.”
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