Real Estate Glossary J - O

Lease: A contract giving the right to use the leased property for a period of time.

Lease Term: The fixed term of the lease.

Leasehold Improvements: Improvements made to the leased premises by or for a tenant.

Legal Description: A description of a specific parcel of real estate which is acceptable to the courts in that state, and which allows an independent surveyor to locate and identify it. i.e. government survey, metes and bounds or recorded plat, (lot and block number.)

Lessee: The person or company useing leased property under the lease.

Lessor: Depending on the type of the lease, either the owner of the leased property or the owner of the security interest in the leased property.

Letter of Credit: A specific arrangement between a lessee and one of its banks. The bank agrees in the event of a defined event, the lessor can look to the bank to make payment instead of the lessee. This is similar to a security deposit in that it is one way for a lessor to insure that it will be paid under the lease.

Letter Of Intent (LOI): A preliminary agreement stating the proposed terms for a final contract. They can be binding or non-binding.

Lien: A monetary claim against a property.

Listing Agreement: A Legal agreement between the listing broker and seller outlining: services to be rendered, identifying the property, and stating the terms of payment.

Load Factor: The common area calculation used to convert usable square foot measurements (usually, the physical space actually occupied by the tenant) to rentable square foot calculations. Usually includes a pro rata share of restrooms, lobby and common hallways.

Market Rent: The rental income that a property would command on the open market with a landlord and a tenant ready and willing to consummate a lease in the ordinary course of business; indicated by the rents that landlords are willing to accept and tenants are willing to pay in recent lease transactions for comparable space.

Mechanic's Lien: A legal claim placed on real estate by someone who is owed money for labor, services or supplies contributed to the property for the purpose of improving it.

Metes And Bounds: A system of land description using distance (metes) and angles/compass directions (bounds) beginning and ending at the same point.

Mixed-Use: Space within a building or project providing for more than one use (i.e. residential/retail.)

Month-to-Month Tenancy: A rental agreement that provides for a one month tenancy that is automatically renewed each month unless either tenant or landlord gives the other the proper amount of notice (usually 30 days) to terminate the agreement.

Mortgage: A contract providing security for repayment of a loan, registered against property with stated rights and remedies in the event of default.

NACORE: International Association of Corporate Real Estate Executives.

Net Lease: Type of lease whereby the Tenant pays for part or all of the operating expenses which may include utilities, janitorial, property insurance, property management, sewer, water & garbage.

Net Net Net Lease (NNN): Type of lease where Tenant generally pays for all operating expenses.

Non-Compete Clause: A clause specifying that the business of the tenant is exclusive in the property and that no other tenant operating the same or similar type of business can occupy space in the building.

Operating Expenses: Actual costs associated with operating a property. (Including maintenance, repairs, management, utilities, taxes, and insurance.)