Party Wall Agreement
An agreement registered on the title of each property that sets out the rights and obligations of each party regarding the common dividing wall.
A physical deficiency in a property that is visible through the exercise of reasonable vigilance in the course of a property inspection.
The future, currently unpaid, interest some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the original term is completed.
A document that gives an individual authorization to build a new structure or demolish, relocate, repair, alter or make additions to an existing building.
From a legal perspective represents an individual, sole proprietorship, partnership, unincorporated or incorporated entity or organization with legal rights and existence.
The legally binding promise made by the borrower to repay the mortgage amount including the interest. Failure to do so provides the lender the right to sue the borrower personally to obtain repayment of the principal amount in addition to foreclosing on or selling the property.
Factual or subjective information about an individual that can be used to identify that individual.
Personal Information Protection Act
Alberta legislation governing the collection, use and disclosure of personal information by private sector organizations in a manner recognizing both the right of the individual to have his or her personal information protected, and the need of organizations to collect, use, or disclose personal information for reasonable purposes.
Personal Information Protection and Electronic Documents Act
Federal legislation governing the collection, use and disclosure of personal information collected through commercial activity applicable to all private enterprises across Canada and all organizations under federal jurisdiction. Alberta, British Columbia and Quebec are not covered by PIPEDA as they are covered by similar provincial statutes however federal organizations in these provinces are governed by PIPEDA.
Personal Trades in Real Estate
Refers to a real estate professional buying, selling, leasing or renting property for personal or commercial purposes on his or her own behalf. If a real estate professional has a direct or indirect interest in a real estate transaction, they are required to make certain disclosures to the other parties in the transaction.
A form of new condominium in which the construction is finished in multiple stages and therefore has several completion dates.
Phased Development Disclosure Statement
A document provided by a developer that contains the following details regarding a phased development:
- A statement indicating that the building or land is to be developed in phases
- The maximum and minimum number of units in the entire project
- A description of the units and common property in the initial phase and subsequent phases
- The basis for allocating unit factors within the condominium corporation
- The extent to which the developer will contribute to the common expenses during the development of each phase and the entire project
- The effect on the owners’ monthly contributions for administrative expenses and the condominium corporation’s budget if future phases are not completed
- Details of the proposed appearance of each phase and its compatibility with other phases
PI (see Principal and Interest)
PIPA (see Personal Information Protection Act)
PIPEDA (see Personal Information Protection and Electronic Documents Act)
PIT (see Principal, Interest and Tax)
A person or organization who brings legal action against another person or organization in a court of law.
The ability of the borrower to transfer an existing mortgage, including the rate and terms, from one property to another property. However, the lender may require the borrower to re-qualify for the same mortgage because the financial circumstances of the borrower may have changed and the property securing the mortgage has changed.
Postponement of Mortgage
Process by which a lender agrees to maintain a position of subsequent priority in the event of rearrangement and registration of a prior mortgage. Also see Mortgage.
A group of steel bands (i.e. tendons) that are coated in grease or another corrosion-inhibiting substance and encased in plastic or metal sheathing. The cable is stretched using hydraulic jacks and secured in place using anchorages before being embedded in concrete.
Power of Attorney
A written, signed, dated and witnessed document that enables an individual to appoint another person to act on his or her behalf with respect to his or her financial and legal affairs including debts. Also see Special Power of Attorney.
An approval for a mortgage based on a borrower’s qualifications made in advance of a real estate purchase. A written pre-approval protects the borrower by specifying the mortgage term, interest rate and maximum amount of the loan. If mortgage rates rise, the borrower receives the pre-approved rate. If rates drop, the borrower receives the lower rate. However, the borrower must take possession of a property before the pre-approval expires. They typically are 60 or 90 days, but may be as long as 120 days for new construction. Once a property has been purchased, the pre-approval is subject to the borrower submitting any final supporting documentation, providing his or her financial position has not changed. It is also subject to the property meeting the lender’s underwriting requirements.
A fee charged by a lender when the borrower prepays all or a part of the mortgage in excess of the regular payments allowed as stipulated in the mortgage agreement.
The tentative approval for a mortgage based on the borrower’s qualifications made in advance of a real estate purchase. It is for a specified period of time and subject to the borrower submitting his or her supporting documentation to the lender, providing his or her financial position has not changed. Once a property has been purchased, the property must also meet the lender’s underwriting requirements.
Primary Mortgage Market
A mortgage market in which original loans are made by lenders.
The residential property which the borrower occupies as his or her main residence on a continual basis.
The interest rate charged by lenders to its most creditworthy borrowers.
The individual (i.e. client) who authorizes the agent (e.g. real estate or mortgage brokerage professional) to act on his or her behalf in an agency relationship. Also see Agency.
A sum of money owed as a debt upon which interest is calculated.
The amount of funds originally borrowed from the lender or the portion of a mortgage still owing upon which interest is calculated. Also see Mortgage.
Principal and Interest
A periodic mortgage payment calculation based on a combination of principal repayment and interest. Also see Mortgage.
Principal, Interest and Tax
A periodic mortgage payment calculation based on a combination of principal repayment, interest and a portion of the property taxes. Also see Mortgage.
Principles of Value
Accepted principles that guide the work of appraisers and form the basis of their value-related decisions.
The order in which financial obligations registered on the title of a property would be addressed upon disposition of the property (e.g. sale of the property, foreclosure, settlement of an estate). With a few exceptions (e.g. property taxes, condominium fees), the order is determined by the date of registration of the financial encumbrance on the title of the property.
Refers to an individual’s ability to retain control over his or her personal information.
Any individual, group of individuals as in a syndicated mortgage or Mortgage Investment Corporation other than a financial institution that advances funds in return for a mortgage with agreed to repayment terms and conditions. Private lenders do not include chartered banks, treasury branches, credit unions, loan corporations, trust companies, and insurance companies, any persons engaged in the business of making loans secured with mortgages or any persons that manage registered pension plans.
A mortgage contract in which the lender is not a registered financial institution but rather a private corporation and/or an individual.
Privity of Contract
A legal principle under the common law that as a general rule, prevents any person from seeking enforcement of a contract or suing on its terms unless they are a party to the contract.
A lender product sheet describes the particulars of a specific mortgage product, including term, amortization, repayment privileges, loan to value maximum, debt servicing maximum ratios, mortgage size restrictions, underwriting criteria, applicant income, equity sources, acceptable credit history (e.g. minimum credit score, bankruptcy history) and any other details relevant to the specific lender product or program. A lender product generally targets a particular borrower type or meets a specific borrowing need in the marketplace. Product sheets are provided by lenders to mortgage brokerage industry members for their information. If a product sheet is used for a specific mortgage, it should be retained by the industry member as part of the transaction record. Also see Lender Rate Sheet.
A formal written direction specifying that a party with relevant documents produce those documents for the purpose of a Professional Conduct Review carried out by RECA or litigation through the courts. Also see Professional Conduct Review.
Professional Condominium Management
The Board of Directors delegates some or all of the duties associated with the condominium to a condominium manager.
Professional Conduct Review
The formal process RECA undertakes to gather evidence to help determine if an industry professional’s conduct is deserving of sanction. Professional Conduct Reviews are carried out based on the legislative requirements of the Real Estate Act, theprinciples of natural justice and administrative law and RECA’s investigative policies and procedures.
Professional Conduct Review Officer
The person who is responsible for carrying out the duties of RECA’s formal investigative process according to the legislative requirements of the Real EstateAct, the principles of natural justice and administrative law and RECA’s Professional Conduct Review Program.
A form of mutual respect among individuals working in the same profession. Professional courtesy as it relates to the real estate industry would include a real estate professional observing or experiencing a minor breach of the Real Estate Act or Rules or noting an error in property information and notifying the colleague who committed the breach, of the issue.
Professional Liability Insurance
A form of business liability insurance intended to cover damages resulting from errors, omissions and negligence by professionals that occurred in the course of providing their business services.
The rights inherent in the ownership of a commodity.
The process of determining the property value for taxation purposes. Assessment is used to determine the property owner’s proportionate share of municipal taxes on an annual basis.
An individual who places a value on real estate for the purpose of taxation.
A shortcoming or failing of a property.
A visual examination of readily accessible interior and exterior aspects of a property in order to provide an opinion on the property’s condition as of the date of the inspection. The purpose of a property inspection is to look for signs that there may be problems with the property and to suggest any areas that should be looked at further by an expert. Property inspections are performed by property inspectors. Also see Property Inspector.
Property Inspection Contract
A legally binding agreement entered into by a consumer and a property inspector that specifies the details for a property inspection to be performed on a particular property.
Property Inspection Report
Written communication describing property issues discovered from observations made, and research conducted by, a qualified property inspector. The report should include the following information:
Convey the current condition of all inspected items
Emphasize any inspected items that are unsafe or require major repairs and/or replacement
Estimate when repairs and/or replacements of inspected items will need to occur
Describe preventative measures that can be taken to remedy current issues or extend the life of the inspected items
An individual who performs a property inspection.
A legal agreement which provides financial protection against most risks to property due to damage or destruction caused by specified perils such as fire, theft, vandalism.
The management of the administrative, operations and maintenance of real property according to the ownership objectives. According to the Real Estate Act, property management activities are included in the definition of trading in real estate. As such, an individual requires an authorization from RECA to carry out property management activities. Property management activities include any of the following:
- leasing or offering to lease real estate or negotiating or approving, or offering to negotiate or approve, a lease or rental of real estate.
- holding money received in connection with an activity referred to in subclause (i).
- collecting, or offering or attempting to collect, on behalf of the owner or other person in charge of real estate, money payable as rent for the use of the real estate.
- advertising, negotiating or carrying out any other activity, directly or indirectly, for the purpose of furthering an activity referred to in any subclause (i), (ii) or (iii).
An individual or business that performs administrative, operational and/or maintenance duties on behalf of the owner of a property for compensation. Depending on the duties performed, a real estate authorization from the Real Estate Council of Alberta may or may not be required.
The annual amount charged each property owner by the municipality where the property is located. The amount is based on the assessed value of the property in relation to the municipal tax rate for that classification of property, as determined annually by the municipality. Property taxes fund the operations and services of the municipality. In addition, portions of the property tax may also relate to the provision of education and the payment for a local improvement levy.
Provincial Court of Alberta
The point of first entry into Alberta’s justice system which hears proceedings, applications and trials relating to civil law, criminal law, family law, youth law, and traffic law subject to any statutory limitations.
A legally binding agreement entered into by a buyer of real estate and a seller of real estate that details the buyer’s intention to purchase a specific property from the seller of that property provided that certain terms and conditions, as described in the agreement, will be met.
The buyer of real estate. Also see Buyer.