LEVERAGE - The use of borrowed funds to purchase investment property with the anticipation that the property acquired will increase in return so that the investor will realize a profit not only on his own investment, but also on the borrowed funds; the employment of a smaller investment to generate a larger rate of return through borrowing.
LICENSEE - A person who has a valid license. A real estate licensee can be a salesperson or a broker, active or inactive, an individual, a corporation, or a partnership.
LIEN - A charge or claim which one person (lienor) has upon the property of another (lienee) as security for a debt or obligation. Liens can be created by agreement of the parties(mortgage) or by operation of law (tax liens).
LIFE ESTATE - Any estate in real or personal property which is limited in duration to the life of its owner or the life of some other designated person. LIMITED COMMON ELEMENTS - That special class of common elements in a condominium reserved for the use of a certain apartment(s) to the exclusion of other apartments.
LIMITED PARTNERSHIP - A partnership formed by two or more persons having as members one or more general partners and one or more limited partners.
LINE OF CREDIT - A maximum amount of money a bank will lend one of its more reliable and credit worthy customers without need for any formal loan submission.
LIQUIDATED DAMAGES - An amount predetermined by the parties to an agreement as the total amount of compensation an injured party should receive in the event the other party breaches a specified part of the contract.
LIQUIDITY - The ability to sell an asset and convert it into cash at a price close to its true value.
LIS PENDENS - A legal document recorded at the County Recorder or Regitrar of Deeds, which gives constructiv notice that an action has been filed in either a state or federal court affecting a particular piece of property."Lis Pendens" is a Latin term which means "action pending" and is in the nature of a quasi-lien.
LISTING - A written employment agreement between a property owner and a broker authorizing the broker to find a buyer or a tenant for a certain real property.
LITTORAL LAND - Land bordering on the shore of a sea or ocean and thus affected by the tide currents.
LOAN COMMITMENT - A commitment by a lender of the amount he will loan to a qualified borrower on a particular piece of real estate for a specified amount of time under specific terms.
LOAN-TO-VALUE RATIO - The ratio that the amount of the loan bears to the appraised value of the property or the sales price, whichever is lower. LOCUS SIGILLI - Latin for "under seal", used in the abbreviated form, "L.S.," at the end of signature line in some formal legal documents; used instead of the actual seal.
LOSS PAYEE - The person designated on an insurance policy to be paid in case the insured property is damaged or destroyed.