Real Estate & Tax Lien Glossary
50 essential terms for curative title investors. Each definition includes Texas-specific guidance, real-world examples, and related concepts.
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A
Abstract of Title
A condensed history of the title to a property consisting of a chronological summary of all recorded documents and proceedings affecting the title. Abstracts form the basis for title examination and opinions.
Ad Valorem Tax
A tax based on the assessed value of property, from the Latin meaning 'according to value.' Property taxes are the most common form of ad valorem taxation, calculated as a percentage of the property's appraised value.
Affidavit of Heirship
A sworn legal document used to establish ownership of property when someone dies without a will (intestate). It identifies the deceased's heirs and their relationship, allowing property to transfer without formal probate.
Assessed Value
The value assigned to a property by tax authorities for purposes of calculating property taxes. Assessed value may differ from market value based on assessment ratios, exemptions, and caps on value increases.
C
Chain of Title
The chronological sequence of historical transfers of title to a property, from the original grant to the current owner. A complete chain establishes ownership through an unbroken series of conveyances.
Clouded Title
A title with unresolved claims, liens, or defects that cast doubt on the true ownership of property. Clouded titles prevent sales, refinancing, and title insurance until the issues are resolved.
Curative Title
The process of clearing defects and resolving issues that cloud property title, transforming unmarketable title into marketable title. Curative work includes clearing liens, resolving heir claims, and filing quiet title actions.
D
Deed Restriction
A limitation on property use recorded in the deed or a separate declaration. Deed restrictions control what owners can and cannot do with their property, such as architectural standards, permitted uses, and prohibited activities.
Deficiency Judgment
A court judgment against a borrower for the difference between the debt owed and the foreclosure sale price when the sale proceeds don't fully satisfy the loan. The lender can pursue the borrower personally for this remaining balance.
Delinquent Taxes
Property taxes that remain unpaid after their due date. Delinquent taxes accrue penalties and interest, create liens against the property, and can eventually lead to tax sale if not paid.
Due Diligence
The investigation and research conducted before acquiring property to verify condition, ownership, value, and any issues that might affect the purchase. Thorough due diligence protects buyers from costly surprises after closing.
E
Easement
A legal right to use another person's land for a specific purpose. Common easements include utility access, shared driveways, and drainage rights. Easements 'run with the land' and transfer to new owners.
Encumbrance
Any claim, lien, or liability attached to real property that may affect its value or transferability. Encumbrances include mortgages, easements, liens, deed restrictions, and any other interest held by someone other than the owner.
F
Foreclosure
The legal process by which a lender takes possession of mortgaged property when the borrower defaults on loan payments. Foreclosure terminates the borrower's ownership rights and allows the lender to sell the property to recover the debt.
Fractional Interest
A partial ownership share in real property, less than complete ownership. Fractional interests commonly arise from inheritance when property passes to multiple heirs, each receiving a percentage based on their relationship to the deceased.
H
Heir Property
Real estate passed down through generations without clear title documentation, typically because owners died without wills and no probate was filed. Multiple heirs often share fractional ownership interests.
Homestead Exemption
A property tax reduction for owner-occupied primary residences. The exemption reduces the taxable value of the home, lowering the annual property tax bill for qualifying homeowners.
L
Lien
A legal claim against property as security for a debt or obligation. Liens give creditors the right to have the property sold to satisfy the debt if the owner doesn't pay. Common liens include mortgages, tax liens, and judgment liens.
Lis Pendens
A recorded notice indicating that a lawsuit affecting title to real property is pending. It serves as a public warning that the property's ownership is in dispute and any purchase during litigation is subject to the lawsuit's outcome.
M
Marketable Title
Title that is free from reasonable doubt as to who the owner is and free from material liens or encumbrances. Marketable title can be sold or mortgaged without significant risk of legal challenges.
Mechanic's Lien
A legal claim against property by contractors, subcontractors, or suppliers who provided labor or materials for improvements but weren't paid. Mechanic's liens secure payment for work that enhanced property value.
Mineral Rights
The ownership interest in subsurface minerals such as oil, gas, coal, and metals. Mineral rights can be severed from surface rights, allowing one party to own the surface while another owns the minerals below.
P
Partition Sale
A court-ordered sale of property when co-owners cannot agree on its use or disposition. Any co-owner can petition for partition, forcing a sale and division of proceeds according to ownership percentages.
Probate
The legal process of administering a deceased person's estate, including validating their will, paying debts, and distributing assets to heirs. Probate provides court supervision and creates clear records of property transfer.
Q
Quiet Title Action
A lawsuit filed to establish clear ownership of real property and remove any clouds on the title. The court judgment eliminates competing claims and establishes the plaintiff as the rightful owner.
Quitclaim Deed
A deed that transfers whatever interest the grantor may have in property without any warranties about the quality of title. The grantor makes no promises about ownership—they simply 'quit' any claim they might have.
R
Redemption Period
The legally mandated timeframe during which a former property owner can reclaim their property after a tax sale by paying all delinquent taxes, penalties, interest, and costs. The length varies by state and property type.
Right of Redemption
The legal right of a property owner to reclaim their property after a tax sale or foreclosure by paying all amounts due within a specified time period. During the redemption period, the purchaser's title remains subject to this right.
S
Sheriff's Deed
A deed issued to the purchaser of property sold at a sheriff's sale, typically resulting from foreclosure or execution on a judgment. Sheriff's deeds convey whatever interest was subject to the execution without warranties.
Special Warranty Deed
A deed where the grantor warrants title only against defects arising during their ownership period. Unlike a general warranty deed, it does not protect against claims from before the grantor acquired the property.
Struck-Off Property
A property that failed to sell at a tax auction because no bidder met the minimum bid. The property is 'struck off' to the taxing authority, which then holds title and may sell it later through a resale process.
T
Tax Deed
A legal document conveying ownership of property sold at a tax sale due to unpaid property taxes. The tax deed transfers title from the delinquent owner to the purchaser, subject to any applicable redemption period.
Tax Lien Certificate
A certificate issued by a government authority representing unpaid property taxes. The certificate holder earns interest on the delinquent taxes and may eventually foreclose on the property if taxes remain unpaid.
Tax Rate
The percentage or dollar amount per unit of value used to calculate property taxes. The tax rate multiplied by the assessed value equals the annual property tax bill. Rates are set by local taxing jurisdictions.
Tax Sale
A public auction where properties with delinquent taxes are sold to recover unpaid taxes. Tax sales are conducted by government authorities and allow investors to purchase properties or tax liens at significant discounts.
Title Insurance
An insurance policy protecting property owners and lenders against financial loss from defects in title. Unlike other insurance that covers future events, title insurance protects against past events that affect current ownership.
Title Search
An examination of public records to trace the chain of ownership and identify any liens, encumbrances, or defects affecting a property's title. Title searches are essential for real estate transactions and title insurance.
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