Glossary of Real Estate terms - L

Land Title Fees

The fees paid to the Land Title Office for the processing and recording of a Transfer or Mortgage document.

Latent Defect

Hidden structural defects and flaws.

Lease

A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.

Leasehold Estates

A form of real estate in which a tenant is allowed to construct permanent structures upon a parcel of leased land, and derive some use or income from said structures during the period of the lease.  Leasehold estates usually involve long-term leases, ranging from 20 to 99 years.  Land owners are able to have their property developed, with no out of pocket expenses.  Instead of having to sell their land too soon, they retain their family's rights to the land, while receiving a steady income stream.  The tenant saves the initial land acquisation costs and may gain access to property that would be otherwise unavailable.  The downside is, as the lease nears the end or its term, the tenant's investment becomes uncertain, and the landlord is in a position to make demands for compensation, above the fair market price.  Leaseholds are much more common in commercial real estate, but can apply to some residential properties as well.  Vancouver has many leasehold subdivisions and condominium projects, with the land owned by the Municipality, UBC and various First Nations groups.

Legal Description

A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Lien

Any legal claim against a property, filed to ensure payment of a debt, that must be paid off when the property is sold.

Lender

A term which can refer to the institution making the loan or to the individual representing the firm.

Liability Insurance

Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party. It is usually part of a homeowner's insurance policy.

Line of Credit

An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

Loan

A sum of borrowed money (principal) that is generally repaid with interest.

Loan-to-value (LTV)

The ratio of the amount being loaned in respect to the appraised value of the property, usually expressed as a percentage.  If a buyer was putting down $150,000, and borrowing a first mortgage of $600,000, on a $750,000 property, then the loan would have a 80% LTV.