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GLOSSARY of American & Mexican Real Estate Terms

L

Land – Terreno

A portion of the earth’s solid surface distinguishable by boundaries or ownership.

Land Contract

The seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.

Landlocked

Completely shut in by adjoining parcels of land with no access to public roads.

Landlord/Lessor – Arrendador

The owner of property (as land, houses, or apartments) that is leased or rented to another.

Latent Defect

A defect which cannot be discovered by ordinary inspection.

Lease – Arrendamient

An agreement by which a landlord gives the right to a tenant to use, and to have exclusive possession, but not ownership of realty, for a specified period of time, in consideration for the payment of rent.

Lease Purchase Agreement

An arrangement whereby part of the rent payment is applied to the purchase price, and when the prearranged total amount has been paid, title is transferred.

Leasehold

The interest that the tenant has created by a lease.

Legal Description

A written description of a parcel of land which locates it precisely and will hold up in court (does not include address).

Lender – Prestanista

The person or institution that lets out (money) for temporary use on condition of repayment with interest.

Lien Theory State

The mortgage merely creates a lien right on the mortgagee with the mortgagor retaining the title.

Less than Freehold Estate

Estates in possession generally referred to as leaseholds. Considered to exist for a definite period of time, or successive periods, of time until terminated by notice; also know as non-freehold estates.

Lessee

Tenant.

Lessor

Landlord.

Letter of Termination of Construction – Carta de Terminacion de Obra

The document from the Tax Department stating there is no further work or additions to be added to the property and that construction has ceased.

Leverage

Using borrowed capital to finance the purchase of Sedona real estate or other assets (No money down).

License

A personal privilege to go upon the land of another; not considered an interest in land. Permission only to use.

Lien – Gravamen

A legally recognized right to enforce a claim or charge on the property of another for payment of some debt, duty or obligation.

Limited Partnership

An entity with a general partner, and one or more passive investors, called limited partners.

Liquidated Damages

An agreed-to sum, which will be paid if the contract is breached.

Liquidity

The ease with which an asset may be converted into cash.

Lis Pendens

A notice filed for he purpose of serving constructive notice that title, or some matter involving particular real property, is in litigation.

Listing Contract – Contracto de Prestacion de Servicios Profesionales

An employment agreement between an owner and broker defining the duties and rights of both parties (Unilateral contract).

Loan – Emprestito, Prestamo

Money lent at interest.

Loan-to-Value Ratio

The relationship between the amount borrowed and the appraised value of the property (Purchase price 100,000-Loan 80,000-LTV 20,000).

Lot and Block

A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method (Must have a plat map to find the property).

Loyalty

The duty owed by an agent, to avoid conflicts of interest or any activity which is detrimental to a principal.