Agent - One who acts or who has power to act for another. A licensed real estate broker authorized to act under a listing or management agreement executed by a property owner (the Principal); this creates a fiduciary relationship under the law of agency.

Amortization - The process of paying off a debt together with interest, usually with equal payments at regular intervals over a period of time.

Appraisal - An estimate of quantity, quality or value. The process through which conclusions of property value are obtained; also refers to the report setting forth the estimate and conclusion of value.

Architectural drawing - Includes all architectural contracts and drawings such as plot plans, floor plans, elevations, sections, details, schedules, etc., and any architectural drawing that forms a part of the contract documents. Exceptions include mechanical, electrical and structural drawings, as well as specialized data that are normally handled by specialists in those fields.

Assessed value - The value placed on land and buildings by a township or a county assessor for use in levying annual real estate taxes.

Assignment - The transfer of leasehold interest in a property to a second party.

As-is - The existing condition of real estate, prior to any improvements contemplated under a lease.

BOCA - Building Officials Conference of America which writes the guidelines for basic, community building codes.

BOMA - Building Owners and Managers Association which established methods of computing square footage in commercial buildings.

Base lease - A contract stating the minimum established requirements that are applicable to all tenants.

Base rent - The minimum monthly rent, usually computed on a per- square-foot-per-year basis, due under the lease (see percentage rent).

Base year - A specific year of a lease against which certain rent escalations and additional expense reimbursements to landlord may be calculated.

Binder - A preliminary agreement evidencing a meeting of the minds and effective until the principal agreement can be executed.

Build-out - Refers to the interior construction of a tenant's space whether new construction or the reconfiguration of existing space.

Build-to-suit - A customized design and build approach to a tenant's space usually resulting in a single occupant building which is then leased or sold to the tenant.

Building standard - A list of materials and finishes used in the the build-out, repair or restoration of a tenant's suite.

Building core - The central or arterial part of a multistory building that integrates functions and service needs for established occupants. Such areas are normally composed of toilet facilities, elevator banks, janitors' closets, utilities, mechanical facilities, smoke shafts and stairwells.

Building permit - The approval that must be obtained under state or local regulations. Drawings an specifications must be filed with the legal authorities in control of building operations.

Building shell - The skeleton of a building to which the finished exterior and interior are applied. It includes the building foundation.

Cancellation clause - A provision in a lease that confers upon one or both of the parties to the lease the right to terminate the lease upon the occurrence of the condition or contingency set forth in the said clause.

Capitalization - The process of ascertaining the value of a property by the use of a proper investment rate of return and the net income expected to be produced by the property. The formula of net annual income divided by proper capitalization rate is express: Income/Rate=Value.

Certificate of insurance - A certificate issued by an insurance company or its agent. It verifies that a certain insurance policy is in effect for stated amounts and coverage and names those insured.

Certificate of occupancy - Presented by city building department to landlord or tenant after completion of tenant improvements and satisfactory inspections by city building department inspectors.

Change order - An order issued any time there is a change in the specification, price or time set forth in the building contract as authorized by the owner, architect or engineer.

Circulation allowance - The space needed to have sufficient access to, from and around workspaces.

Class A - Building classification defined by BOMA as the most prestigious buildings competing for premier office users with above average rental rates for the area along with high-quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence

Class B - Building classification; defined by BOMA as buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and the systems are adequate, but the building does not compete with Class A at the same price.

Class C - Building classification by BOMA as buildings competing for tenants requiring functional space at rents below the average for the area.

Commission - The fee paid to a real estate broker as procuring cause and/or for his or her services rendered in a real estate transaction. May be paid by either party in a transaction; it is usually governed by a prior written agreement.

Common areas - Areas used by two or more tenants and/or third parties and not under the control of any one tenant.

Common area maintenance (CAM) - An additional, annual charge often assessed to tenants for maintenance of the property's "common area", such as its entryways, hallways or bathrooms.

Construction allowance - The amount a Landlord contributes to the cost of construction and/or alteration necessary to prepare a space for a tenant's occupancy.

Constructive eviction - Any disturbance by the landlord of the tenant's possession of leased premises, whereby they are rendered unsuitable for.  In such a case, the tenant is not liable for further payment of rent.

CPI - (Consumer Price Index) A measure of inflation as determined by the US federal government by using a "basket of goods". Used in leases as an impartial benchmark for the calculation of escalations.

Contract documents - The complete set of drawings, specifications, bidding instructions, construction agreement, etc. used in the construction industry

Cost approach - The process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the replacement cost of the building, less depreciation.

Default - Failure to meet an obligation when due or to perform any provision of a lease, mortgage or other agreement.

Demarcation point - The location where a telecommunications provider's network ends and a private network begins

Demised premises - Premises, or parts of real estate, in which an interest or estate has been transferred temporarily, such as an interest in real property conveyed in a lease.

Demising wall - The wall which separates a tenant's suite from another tenant's suite, or building common areas.

Design development - The process by which, upon approval of the schematic design, the architect proceeds with development of he plans and elevation of the building. Drawings establishing all major elements and outline specifications are prepared. A revised statement of probable construction cost is usually made at this time.

Economic obsolescence - Impairment of desirability or useful life or loss in the use and value of property arising from economic forces outside the building or property, such as changes in optimum land use, legislative enactments that restrict or impair property rights and changes in supply-demand relationships.

Effective gross income - The scheduled gross income of a property minus the vacancy rate.

Egress - The right to leave a tract of land. Often used in connection with access.

Eminent domain - The right of a government entity to take (condemn) property with just compensation for the public good.

Encroachment - A building or some portion of it, or a wall or fence, that extends beyond the land of the owner and illegally intrudes upon land of an adjoining owner, a street or an alley.

Encumbrance - Any lien, such as a mortgage, tax or judgment lien. It can also be an easement a restriction on the use of the land or an outstanding dower right that may diminish the value of the property.

Equity - The interest or value an owner has in real estate over and above the mortgage against it.

Escalation clause - A clause in a contract providing for increases or decreases in rent payments in accordance with fluctuations of certain costs or expenses of the landlord.

Escrow - A written agreement between two or more parties providing that certain instruments or property be placed with a third party to be delivered to a designated person upon the fulfillment or performance of some act or condition.

Estoppel certificate - A statement concerning the status of an agreement, (usually a lease) and the performance of obligations under the agreement. A third party such as a lender, relies on the statement (which is usually unilaterally executed by the tenant) for such things as making a loan on property.

Exclusive agency listing - A listing contract under which the owner appoints a real estate broker as the one exclusive agent for a designated period of time to sell the property on the owner's stated terms, and under which the owner agrees to pay the broker a commission. However, the owner reserves the right to sell without a commission to a prospect not introduced or claimed by the broker (see Exclusive right to sell).

Executive suite -  Executive suites are shared offices with services provided by a management firm.

Exclusive right to sell -   A listing contract in which the owner appoints a real-estate broker as the exclusive agent for a designated term. The broker must sell the property on the owner's stated terms, and the owner agrees to pay the broker a commission when the sale is consummated.

Expense ratio -  The percentage of gross income that is consumed by the operating expenses of a property.

Expense stop -  A ceiling or limit on the dollar amount one party, typically the landlord, will pay in an expense category. This ceiling is determined by adding a percentage or dollar amount to the base year costs.

Fair market value (FMV) -  The price which the market would bring, over a reasonable period of time, for a property for sale or for lease.

Fixture  - Personal property or improvements so attached to the land as to become part of the real property. The right of the tenant to remove fixtures may be given by stipulation in the lease or by separate written agreement between the parties.

Flex space -  A building providing use flexibility between office, and other uses such as manufacturing, laboratory, warehouse, etc. Usually provides high bays and relocation flexibility for overhead doors and other entrances.

Footprint -   The shape and configuration of a building.

Force majeure -  An event outside the reasonable control of the parties to a contract such as an "Act of God", war, riots or strikes which would prevents the parties from complying with the provisions of an agreement.

Functional obsolescence -  Defects in a building or structure that detract from its value or marketability.

General lien  - A lien on all property, both real and personal, of a debtor.

Go-dark -  The condition that results from a tenant's closing its business, even though the lease is still in effect. Lease language may provide a means for a landlord to void a lease and take back the leased premises if the tenant ceases to operate its business at that location.

Graduated lease -  A lease that provides for specific increases or decreases in rent at definite times during the term of the lease.

Grantee  - A person to whom an interest in land is conveyed by deed, grant or other written instrument.

Grantor  - A person who transfers his or her interest in land to another by a written instrument.

Gross lease -  Commonly specifies one rental amount inclusive of rent, taxes, utilities, maintenance, etc. associated with the rental of a property.

Gross rent multiplier  - A figure that produces an estimate of the property's value when used as a multiplier of the gross income of a property.

Gross square feet -  Usually refers to gross area of a building by measuring from the outside of its exterior walls and including all vertical penetrations, such as elevator shafts. Also includes basement space.

Ground lease -  A long-term lease of land, entered into by a tenant to construct a building (at its expense) from which to conduct its business.

Hard construction costs -  The costs of constructing a building shell plus most of the covering materials.

Highest and best use -  That possible use of land that will produce the greatest net income and thereby develop the highest land value.

Hold over -  The condition that results when a tenancy exists beyond the end of the term of a lease.

Income approach -  The process of estimating the value of an income-producing property by capitalization of the annual net income expected to be produced by the property during its remaining useful life.

Interior partitions -  All types of interior nonload-bearing partitions that enclose or subdivide tenant space. May be of steel, wood, glass, masonry or combinations of these materials. Such partitions may be either movable or non-movable, prefabricated or built on the job.

Joint tenants -  Two or more landowners who have been specifically named in one conveyance as joint tenants. Upon the death of a joint tenant, the surviving joint tenant or tenants receive the deceased tenant's interest by the right of survivorship, which is the important element of joint tenancy.

Lease commencement date -  The date upon which the lease commences and the obligations of the parties begins.

Leasehold improvements -  Construction or improvements for the purpose of preparing the premises for the conduct of tenant's business. Improvements permanently attach to the premises unless they are trade fixtures, and they remain with the premises after the end of term of the lease.

Lessee -  The tenant.

Lessor  - The landlord.

Lien -  A right given