Property Management Glossary of Terms Pt. 2
Every industry has its own terminology, the lingo, and it’s easy to forget that those who are outside of the industry may not be as familiar with the property management phrases and acronyms like we are. Below is Part 2 of our property management glossary of terms you should be familiar with for your convenience and education. These are some of the most commonly used terms in property and real estate management.
G
Guarantor
Also known as a co-signer, someone who is assuming financial responsibility for your lease in the event that you cannot or do not pay a balance.
H
Homeowners Association (HOA)
A non-profit association that manages the common areas of a residential subdivision.
I
Interest
A percentage of the principal charged by the lender from a borrower for the use of a particular asset. In real estate, the interest usually refers to mortgage interest rates that depend on the Federal Reserve Discount interest rate, credit report and score, and lender’s business decisions.
Investment Property
A property not occupied by the owner, generally rented to a tenant to produce income.
L
Landlord-Tenant Law
A part of the Common Law that outlines the rights and duties of both landlords and tenants, including the duty to preserve the premises on the tenant’s part and duty do deliver possession on the landlord’s side.
Lease
The written or oral contract between a landlord and tenant that transfers the right to exclusive possession and use of the landlord’s property to the tenant for a specified period of time (also known as the Lease Term), for a stated consideration (rent payments).
Lessee
A tenant who rents the property from the landlord.
Lessor
A landlord who grants the lease to the tenant.
M
Management Agreement
The contract between an association and property management company setting forth the rights and obligations of the parties. These agreements may be “full service” or “financial service” contracts.
Market Rate
The current rate of the real estate market.
Mortgage
A legal document that obliges the borrower to pay the loan back as instructed.
N
Non-Liquid Asset
An asset that cannot easily be converted into cash.
O
Operating Budget
A financial plan predicting the property’s income that is balanced by various expenses over a period of one year.
P
Prorate
A per diem calculation of rent or other charges.
Property Management Agreement
The agreement between the landlord and the management company that discusses the details of how the property will be managed. This agreement also includes other details that pertain to criteria and payments to the management company.
Property Manager
Someone who manages real estate for another person or corporation for compensation; responsible for accounting, maintenance, and rent collection, among other property management duties.
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