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TOPICAL REAL ESTATE DICTIONARY Top 20 Terms Agents Buying Closing Contract Credit Inspection Law Financing Selling Taxes/Insurance Law arbitration A method of resolving a dispute in which a third party renders a decision. boundary The dividing line between two adjacent properties. breach of contract The failure to perform provisions of a contract without a legal excuse. building code A comprehensive set of laws that controls the construction or remodeling of a home or other structure. cancellation clause A clause that details the conditions under which each party may terminate the agreement. cloud on title An invalid encumbrance on real property. community property Property accumulated through the joint efforts of husband and wife. It is a classification of property peculiar to certain states. conveyance The transfer of title of property. deed of trust A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan. fee simple This type of ownership, also called fee simple absolute, is the maximum interest a person can have in a piece of real estate. It entitles the owner to use the property in any manner they see fit, in accordance with state and local laws. foreclosure Legal process by which a lender ends the borrower's interest in a property after a loan is defaulted. The lender may sell the property and keep the proceeds for mortgage and legal costs, using excess proceeds to satisfy other liens or return to the borrower. joint tenancy Ownership by two or more people that gives equal shares of a piece of property. Rights pass to the surviving owner or owners. liquidated damages A sum of money specified in the purchase contract to be paid by one party to the other in the event of a breach of contract. property line The official dividing line between properties. real property Land and any permanent fixtures on it, including buildings, trees, and other fixtures. tenancy by the entirety Ownership by a husband and wife in which they together hold title to the whole property with right of survivorship. title The legal document conferring ownership of a piece of real estate. title company A firm that ensures that the property title is clear and provides title insurance. title search The process of reviewing all recorded transactions in the public record to determine whether any title defects exist that could interfere with the clear transfer of ownership of the property. zoning Regulations that control the use of land within a jurisdiction.