LEGAL DEFINITIONS

(A-L)

AFFIDAVIT OF TITLE: A sworn statement of fact that clearly states the status of potential legal issues about the property or the seller.

 

ARTICLES OF INCORPORATION: A set of formal documents filed with a government body to legally document the creation of a corporation.
 

ASSIGNMENT: A transfer of rights in real property or personal property to another that gives the recipient—the transferee—the rights that the owner or holder of the property—the transferor—had prior to the transfer.

 

ATTACHMENT A: This list explains some of a seller’s various responsibilities.

ATTORNEY MODIFICATION PERIOD: The attorney modification period allows both the seller and buyer to either void the sale, or request virtually any modification or changes to the Listing Contract with the exception of the sales price.

BANKRUPTCY: A generalized term for a federal court procedure that helps consumers and businesses get rid of their debts and repay their creditors.

BENEFICIARIES: People or entities who you would like to receive any part of your estate or trust, including, but not limited to family members (children, grandchildren, in-laws, etc.), friends, and charities.

 

BILL OF SALE: A certificate that shows personal property was transferred from the current owner to the new owner.

BUSINESS NAME: The title under which an organization carries on its business.

 

BUSINESS TERMINATION: The final determination of an action.

 

CAPITAL CONTRIBUTION: The amount of money or assets given to a business or partnership by one of the owners or partners.

CERTIFIED PROPERTY INSPECTOR: A certified property inspector assesses the condition of a property's roof, foundation, heating and cooling systems, plumbing, electrical work, water and sewage, and some fire and safety issues.

CHILDREN: All individuals ages 0-17.

CLASS OF STOCK: Typically stocks have two classes COMMON or PREFERRED. Common shares have no preference over any other shares with respect to the payment of dividends or the distribution of assets or liquidation. Preferred shares are entitled to priority and payment of dividends or the distribution of assets or the liquidation of assets.

CLOSING: The date the ownership of a property is legally transferred to a buyer.

CLOSING DOCUMENTS: Documents signed during the Closing.

CLOSING STATEMENT or SETTLEMENT SHEET: An itemization of the fees, commissions, insurance, etc. that must be handled during the Closing.

COOK COUNTY TRANSFER TAX DECLARATION STAMP. Cook County tax stamps issued that declare and allow the seller to transfer title of the seller’s property to a new owner (the buyer).

 

CORPORATE OFFICERS: The executives of a corporation charged with certain operational responsibilities. Typically appointed by the board of directors, the corporate officers usually include the Chief Executive Officer (CEO), Chief Financial Officer (CFO), President, and in some corporations the Chief Operating Officer.

 

DISSOLUTION: The closing down or dismissal of an assembly, partnership, or official body.

 

DISTRIBUTIONS: The act of dividing up the assets of an estate or trust, or paying out profits or assets of a corporation or business according to the ownership percentages.

 

ESTATE: an estate is someone's net worth in the eyes of the law.

EXECUTOR: The person who manages your will.

FISCAL YEAR: A 12-month period over which a company budgets its spending.

 

FOUNDER: The entrepreneur who started the business.

HAZARD INSURANCE POLICY: Insurance that protects a property owner against damage from disasters like fires, hurricanes, earthquakes, etc.

 

INCAPACITY: Physical or mental inability to do something or to manage one’s affairs.

 

INDEMNIFICATION: To compensate for loss or damage; to provide security for financial reimbursement to an individual in case of a specified loss incurred by the person.

LEAD PAINT DISCLOSURE REPORT FORM: A form given to buyers from realtors that tells the buyer about any known evidence of lead-based paint on the property.

 

LIMITED LIABILITY: A corporate structure whereby the members of the company cannot be held personally liable for the company’s debts or liabilities.

 

LIQUIDATION: The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts.

LISTING CONTRACT: A contract between a real estate broker and the owner of a property. This contract allows the broker the authority to act as the property owner's agent in the sale of the property.