Take-out Commitment - A written agreement from a Lender to provide permanent financing following construction of a planned project. The takeout commitment usually contains specific conditions for occupancy and income, such as a certificate of occupancy and/or a certain percentage of unit sales or leases in place and paying rent. Most construction lenders require takeout financing prior to beginning construction.
Targeted Affordable Housing - Properties with rent and occupancy restrictions which meet or exceed the following requirements: 1) at least 20 percent of all units have restricted rents affordable to households earning no more than 50 percent of area median income as adjusted for family size; or 2) at least 40 percent of all units have restricted rents affordable to households earning no more than 60 percent of area median income as adjusted for family size.
Tax and Insurance (Reserve) Escrow - An account required by a mortgage lender and established at the time of closing to fund annual property tax assessments and hazard insurance premiums for the mortgaged property. Funded through monthly contributions and maintained by the Lender.
Tenant Improvement (Reserve) Escrow - An account required by a mortgage lender and established at the time of closing for the purpose of reserving funds estimated to be necessary to improve retail and office space. Funded through monthly contributions and maintained by the Lender.
Tenant Mix - A phrase used to describe the quality of a property's income stream. In multi-tenanted properties, institutional investors typically prefer a mixture of national credit tenants, regional credit tenants and local non-credit tenants.
Third Party Reports - Reports required by a mortgage lender prior to funding a loan that include MAI Appraisal, Phase I Environmental and Physical Condition reports.
Title - (1) A combination of all the elements that constitute a legal right to own, possess, use, control, enjoy and dispose of real estate or a right or interest therein. (2) The rights of ownership recognized and protected by the law.
Title Insurance - Insured statement of the condition of title or ownership of real property. For a one-time-only premium, the named insured and their heirs are protected against title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from it. In the event of a claim, the title company provides legal defense from the policyholder and pays any covered losses incurred as a result of such claim.
Title Search - A review of all recorded documents affecting a specific parcel of land to determine the present condition of title. An experienced title officer or attorney reviews and analyzes all material relating to the search, then determines the sufficiency and status of title for insurance of a title insurance policy.
Tranche - A class of securities. CMBS offerings are generally divided into rated and unrated classes, or tranches, according to seniority and risk. Higher-rated tranches allow for internal credit enhancements; lower-rated classes offer higher yields.
Triple-Net Lease - A commercial lease in which the tenant is required to pay all operating expenses of the property and the landlord receives a net rent amount each month.
Trust Deed - A conveyance of real estate to a third party to be held for the benefit of another. Commonly used in some states in place of mortgages that conditionally convey title to the lender.
Trust Account - Account maintained by a broker or escrow company to handle all money collected for clients.
Trustee - Someone given legal responsibility to hold property in the best interest of another.
Trustees Deed Upon Sale - A written document which is prepared and signed by the trustee when the secured property is sold at a trustee's sale. This document transfers ownership to the successful bidder at the sale; must be recorded with the county recorder in the county in which the property is located.
Trustees Sale - The public auction of the real property, described in the deed of trust, to satisfy the unpaid obligation.
Trustees Sale Guarantee - A Title report given to the present trustee when a trustee's sale proceeding has been initiated. This report provides the names of the current owner, all liens and encumbrances recorded and other information pertinent to the foreclosure process. The information is insured to be correct by the title company.
Trustees Sale Proceeding - (Foreclosure): the term used to describe the non-judicial procedure followed by the trustee in enforcing a creditor's rights when a debt secured on real property is in default.
Trustor - The borrower (or property owner) at the time the deed of trust was created. Trustor is often used to refer to the current owner.