Earnest Money
A buyer's partial payment to the seller as a show of good faith in completing the transaction.

earthquake safety disclosure
By California law, real estate agents or owners are required to prepare a "Residential Earthquake Hazards Report" disclosing the earthquake safety preparedness of all houses sold in the state.

EASEMENT
A property interest which one person has in land owned by another entitling the holder of the interest to limited use or enjoyment of the other's land.

EASEMENT IN GROSS
The limited right of one person to use another's land (servient estate), which right is not created for the benefit of any land owned by the owner of the easement; that is, there is no dominant estate, as the easement attaches personally to the owner, not to the land.

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economic rent
Currently referred to as market rent, it is the rental income that real estate can command in an open, competitive market at any given time, as contrasted with contract rent, or the income actually received under a lease agreement.

effective interest rate
The actual rate or yield of a loan, regardless of the amount stated on the debt instrument.

EMBLEMENTS
Growing crops (called "fructus industriales"),such as rice and taro, which are produced annually through labor and industry.

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EMINENT DOMAIN
The right of government, both state and federal, to take private property for a necessary public use, with just compensation paid to the owner.

ENCROACHMENT
An unauthorized invasion or intrusion of a fixture or other real property wholly or partly upon another's property, thus reducing the size and value of the invaded property.

ENCUMBRANCE
Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title.

ENTIRETY, TENANCY BY
A form of joint ownership of property between husband and wife with the right of survivorship.

entity rule
Three entities can hold property: individuals, partnerships and corporations. In the case of a property exchange, the way an exchanger holds property going into an exchange is the way they must hold the property coming out of the exchange.

ENVIRONMENTAL IMPACT STATEMENT
A report which includes a detailed description of a proposed development project with emphasis on the existing environment setting, viewed from both a local and regional perspective, and a discussion of the probable impact of the project on the environment during all phases.

Equal Credit Opportunity Act (ECOA)
Federal legislation passed in 1974 to ensure that the various financial institutions and other firms engaged in the extension of credit exercise their responsibility to make credit available with fairness and impartiality, and without discrimination on the basis of race, color, religion, national origin, sex or marital status, age, receipt of income from public assistance programs (food stamps, social security), and to ensure good-faith exercise of any right under the Consumer Credit Protection Act (creditor must state reasons for denial of credit). The act applies to all who regularly extend or arrange for the extension of credit. A real estate licensee is considered a creditor if the licensee routinely assists sellers in determining whether a proposed buyer in a land contract or purchase-money mortgage is creditworthy.

equal dignities rule
A rule of agency law that stipulates that when a contract is required by law to be in writing, the authority of an agent to enter into such a contract on behalf of the principal must also be in writing.

equalization factor
A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value.

equitable lien
A lien arising out of common law—in contrast to a statutory lien, which is imposed on property by statute.

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equitable right of redemption
The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and charges.

equitable title
The interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another's name.

EQUITY
That interest or value remaining in property after payment of all liens or other charges on the property. A owner's equity is normally the monetary interest over and above the mortgage indebtedness.

equity loans
A loan based on a percentage of the equity a borrower holds in a collateral property.

equity trust
An investment trust dealing with ownership rather than financing.

ERRORS AND OMISSIONS INSURANCE
A form of insurance which covers liabilities for errors, mistakes and negligence in the usual listing and selling activities of a real estate office or escrow company.

ESCHEAT
The reversion of property to the state when a decedent dies intestate and there are no heirs capable of inheriting, or when the property is abandoned.

ESCROW
The process by which money and/or documents are held by a disinterested third person (a "stakeholder") until the satisfaction of the terms and conditions of the escrow instructions (as prepared by the parties to the escrow).

ESTOPPEL
A legal doctrine by which a person is prevented from asserting rights or facts which are inconsistent with a previous position or representation he had made by his act, conduct or silence.

ETHICS
A system of moral principles, rules and standards of conduct.

EVICTION
The legal process of removing a tenant from possession of the premises for some breach of the lease contract.

essentials of a valid lease
A lease is a form of contract. To be valid, a lease must meet essentially the same requirements as any other contract:

Offer and acceptance—The parties must reach a mutual agreement on all the terms of the contract.

Consideration—The lease must be supported by valid consideration. Rent is the normal consideration given for the right to occupy the leased premises. However, the payment of rent is not essential as long as consideration was granted in creating the lease itself, sometimes, for instance, this consideration is labor performed on the property. Because a lease is a contract, it is not subject to subsequent changes in the rent or other terms unless these changes are in writing and executed in the same manner as the original lease.

Capacity to contract—The parties must have the legal capacity to contract.

Legal objectives—The objectives of the lease must be legal.

estate in land
The degree, quantity, nature and extent of interest a person has in real property.

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estate (tenancy) at sufferance
The tenancy of a lessee who lawfully comes into possession of a landlord's real estate but who continues to occupy the premises improperly after his or her lease rights have expired. (See tenant)

estate (tenancy) at will
An estate (or tenancy ) in which a person holds or occupies real estate with the permission of the owner, for a term of unspecified or uncertain duration; i.e., there is no fixed term to the tenancy.

estate (tenancy) for years
An interest for a certain, exact period of time in property leased for a specified consideration.

estate (tenancy) from period to period
An interest in leased property that continues from period to period--week to week, month to month or year to year.

estate taxes
Federal estate taxes and state inheritance taxes (as well as the debts of decedents) are general, statutory, involuntary liens that encumber a deceased person's real and personal property. These are normally paid or cleared in probate court proceedings. (See inheritance taxes, lien)

estimated buyer's costs
An estimate of the buyer's total cash requirements to purchase real property. A realistic estimate of all costs and payments based on the buyer's offer.

estimated seller's proceeds
An estimate of the net amount an owner will receive from the sale of his or her property. An "Estimated Seller's Proceeds" form is filled out by the listing broker and calculates the proceeds based on the listing price and seller's costs.

estoppel
Method of enforcing an agency relationship in which someone stated incorrectly that another person is his or her agent, and a third person relied on that representation.

estoppel certificate
A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.

ethics
The system of moral principles and rules that become standards for conduct.

eviction
The legal process of removing a tenant from the premises as a result of a breach of a lease. The distrubance of a tenant's enjoyment of any material part of a leased premises by an act of the landlord, or by a claim of superior title by a third party.

evidence of title
Proof of ownership of property; commonly a certificate of title, an abstract of title with lawyer's opinion, title insurance or a Torrens registration certificate.

EXCHANGE
A transaction in which all or part of the consideration for the purchase of real property is the transfer of property of a like kind.

EXCLUSIVE AGENCY
A written listing agreement giving one agent the right to sell property for a specified time, but reserving to the owner the right to sell the property himself without payment of any commission.

exclusive-authorization-and-right-to-sell listing
A written listing agreement appointing a broker as the exclusive agent for the sale of property for a specified period of time. The listing broker is entitled to a commission if the property is sold by the owner, by the broker or by anyone else. The phrase "right-to-sell" really means the right to find a buyer; it does not mean that the agent has a power of attorney from the owner to sell the property.

exclusive-buyer-agency-agreement
This is a completely exclusive agency agreement. The buyer is legally bound to compensate the agent whenever the buyer purchases a property of the type described in the contract. The broker is entitled to payment regardless of whether he or she locates the property. Even if the buyer finds the property independently, the agent is entitled to payment.

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EXCLUSIVE LISTING
A written listing of real property in which the seller agrees to appoint only one broker to sell the property for a specified period of time. The two types of exclusive listings are the exclusive agency and the exclusive right to sell.

Exclusive Right of Sale Listing
A written agreement between an agent and a property owner stating that the owner will pay a commission to the agent if the property is sold during a specific time period--whether or not the agent is responsible for the sale.

EXECUTIVE
The act of making a document legally valid, such as formalizing a contract by signing, or acknowledging and delivering a deed.

EXECUTOR
A male person appointed by a testator to carry out the directions and requests in the last will and testament, and to dispose of property according to the provisions of the will.

executrix
A female person appointed by a testator to carry out the directions and requests in his or her last will and testament, and to dispose of his or her property according to the provisions of the will. State probate laws generally refer to this person as a "personal representative of the decedent."

EXECUTORY CONTRACT
A contract in which one or both of the parties has not yet performed.

express agreement/ contract
An oral or written contract in which the parties state the contract's terms and express their intentions in words.

exculpatory clause
A clause in an agreement that relieves a party from all obligation for his or her acts or failure to act.

EXTENDER CLAUSE
A "carry over" clause (referred to as a safety clause) contained in a listing which provides that a broker is still entitled to a commission for a set of period of time after the listing has expired if the property is sold to a former prospect of the broker.

EXTENSION
An agreement to continue the period of performance beyond the specified period.

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