GLOSSARY OF REAL ESTATE TERMS

TAX-DEFERRED EXCHANGE (1031 EXCHANGE)
A transaction, provided for under Section 1031 of the Internal Revenue Code, whereby the owner of business or investment property (real or personal) can defer recognition of capital gains taxes associated with the sale of such property by reinvesting the equity from the sale into other “like-kind” property of equal or greater value.

TAX LIEN
A non-consensual lien, arising pursuant to state statute, against a parcel of real property; which lien is imposed by the taxing authority (the county treasurer) for unpaid property taxes, and which lien gives the taxing authority a security interest in the property. If not paid within the time provided by statute, the property will be sold at tax sale and a treasurer’s deed will issue to the purchaser. See lien.

TAX SALE
The sale of a parcel of real property by the county treasurer for the county in which the property is situate to satisfy a debt resulting from the nonpayment of general or special property taxes. Compare foreclosure.

TENANCY IN COMMON
A form of co-ownership of property whereby each owner holds an undivided interest in some percentage (not necessarily equal) of the property. Tenancy in common does not include a right of survivorship. Upon the death of a tenant in common, his or her interest in the property descends to heirs or passes by will. Compare joint tenancy.

TITLE INSURANCE POLICY
A form of insurance issued by a title insurance provider that is applicable to a parcel or parcels of real property and insures (1) the property owner as to vesting, clear title, access and marketability, and/or (2) a lender with a lien secured against the property as to the sufficiency and priority of the lien. Coverage provided by a title insurance owner’s or loan policy is limited by exclusions (set forth on the policy jacket) and exceptions. Coverage under any policy may be expanded by endorsement.

TITLE INSURANCE COMMITMENT (COMMITMENT OR BINDER)
A report issued by a title insurance company, or its agent, showing the current condition of title to a parcel of real property and setting forth the requirements, including payment of the premium, that must be satisfied in order to issue a title insurance policy. Compare O&E. See title insurance policy.

TREASURER’S DEED
The form of deed issued by a county treasurer following a tax sale. Compare confirmation deed. See tax sale.