REAL ESTATE TERMS - L
 

Landlord's warrant: A warrant from a landlord to levy upon a tenant's personal property (e.g., furniture, etc.) and to sell this property at a public sale to compel payment of the rent or the observance of some other stipulation in the lease

Lead manager: The investment banking firm that handles the principal responsibilities for coordinating the new issuance of securities

Lease: An agreement whereby the owner of real property gives the right of possession to another for a specified period of time and for a specified consideration

Legal description: A geographical description identifying a parcel by government survey, metes and bounds, or lot numbers of a recorded plat including a description of any portion that is subject to an easement or reservation.

Legal owner: The legal owner has title to the property, although the title may actually carry no rights to the property other than as a lien.

Letter of credit: A commitment by a bank or other person that the issuer will honor drafts or other demands for payment upon full compliance with the conditions specified in the letter of credit. Letters of credit are often used in place of cash deposited with the landlord in satisfying the security deposit provisions of a lease.

Letter of intent: A preliminary agreement stating the proposed terms for a final contract. Also known as the LOI.

Leverage: The use of credit to finance a portion of the costs of purchasing or developing a real estate investment. Positive leverage occurs when the interest rate is lower than the capitalization rate or projected internal rate of return. Negative leverage occurs when the current return on equity is diminished by the employment of debt.

Lien: A claim or encumbrance against property used to secure a debt, a charge or the performance of some act

Lien waiver: Waiver of a mechanic's lien rights that is often required before the general contractor can receive a draw under the payment provisions of a construction contract. It may also be required before the owner can receive a draw on a construction loan.

Lifecycle: The various developmental stages of a property: pre-development, development, leasing, operating and redevelopment (or rehab)

Like-kind property: A term used in an exchange of property held for productive use in a trade or business or for investment. Unless cash is received, the tax consequences of the exchange are postponed pursuant to Section 1031 of the Internal Revenue Code.

Limited partnership: A type of partnership comprised of one or more general partners who manage the business and are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but who take no part in running the business and incur no liability above the amount contributed

Liquidity: The ease with which assets can be converted to cash without loss in value

Listing agreement: An agreement between the owner of a property and a real estate broker giving the broker authorization to attempt to sell or lease the property at a certain price and terms in return for a commission, set fee or other form of compensation

Loan-to-value ratio (LTV): The ratio of the value of the loan principal divided by the property's appraised value

Lock-box structure: A structure whereby the rental or debt-service payments are sent directly from the tenant or mortgagor to the trustee

Lockout: The period during which a loan may not be prepaid.

Long-term lease: In most markets, this refers to a lease whose term is at least three years from initial signing to the date of expiration or renewal.

Loss severity: The percentage of principal lost when a loan is foreclosed

Lot: Generally one of several contiguous parcels of land making up a fractional part or subdivision of a block, the boundaries of which are shown on recorded maps and plats

Low-rise: A building with fewer than four stories above ground level

Lump-sum contract: A type of construction contract requiring the general contractor to complete a building or project for a fixed cost normally established by competitive bidding. The contractor absorbs any loss or retains any profit.