Effective Gross Income(EGI) - Term used for an income-producing property, derived from the potential gross income, less a vacancy factor and a collection loss amount.
Effective gross rent (EGR) - The net rent generated, after adjusting for tenant improvements and other capital costs, lease commissions and other sales expenses
Equity Participation - The right of a Lender to a share in the gross profits, net profits or net proceeds in the event of a sale or refinance of a property on which the Lender has made a loan. Also known as an equity kicker.
Eminent Domain - The right of a government to take privately owned property for public purposes under condemnation proceedings upon payment of its reasonable value. See Condemnation.
Encroachment - The presence of an improvement such as a building, a wall, a fence or other fixture which overlaps onto the property of an adjoining owner.
Encumbrance - A right or claim upon real property (land) held by one other than the property owner. Encumbrances are divided into two classes, as follows:
a) Liens (mortgages, deeds of trust, mechanics' liens, local taxes, assessments, judgments, attachments, etc.).
b) Encumbrances other than liens which are limitations on the ownership of the land (such as conditions, restrictions, reservations, easements, etc.).
Endorsement - Addition to or modification of a title insurance policy which expands or changes coverage of the policy, fulfilling specific requirements of the insured.
Equity - (1) A legal doctrine based on fairness, rather than strict interpretation of the letter of the law. (2) The market value of real property, less the amount of existing liens. (3) Any ownership investment (stocks, real estate, etc.) as opposed to investing as a lender (bonds, mortgages, etc.).
Escrow Account - Account held by lender containing funds collected as part of mortgage payments for annual expenses such as taxes and insurance, so that the homeowner does not have to collect a large sum when these fall due.
Estoppel Certificate - A document by which a tenant certifies to a Lender that all rental amounts due and owing are current, and that the Landlord is in compliance with all terms and conditions of the Lease. Also, a document by which the mortgagor (borrower) certifies that themortgage debt is a lien for the amount stated. The debtor is thereafter prevented from claiming that the balance due differs from the amount stated.
Expense Ratio - A comparison of the operating expenses to potential gross income. This ratio can be compared over time and with that of other properties to determine the relative operating efficiency of the property considered.