Investment Glossary:

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T

Tax and Insurance Escrow:  Account required by a mortgage lender to fund annual property tax assessments and hazard insurance premiums, funded through monthly contributions by the mortgagor

Tax Lien:  A debt attached to the property for failing to pay taxes

Tax Stop Clause:  A provision in a lease whereby real estate tax increases imposed on the Lessor are passed along to the lessee as additional rent; also referred to as an Escalator clause.

Teaser Rate:  Contract interest rate charged on an adjustable rate mortgage for the initial adjustment interval that is significantly lower than the fully indexed rate at the time

Tenancy in Common (TIC):  In the law, the type of ownership created when real or personal property is granted to two or more persons, each of whom has an undivided interest in the property and an equal right to use the property without expressed words creating a joint tenancy.  There is no right of survivorship.

Terms:  Conditions and/or arrangements specified within a contract

Time Is of The Essence:  A phrase that, when inserted in a contract, requires that all references to specific dates and times of day noted in the contract be interpreted exactly, in its absence extreme delays might be acceptable

Title:  Evidence of ownership, evidence of lawful possession

Title Defect:  An unresolved claim against the ownership of property, prevents seller from providing buyer clear title to the property

Title Insurance:  An insurance policy that protects the holder from loss sustained by defects in the title

Title Search:  An examination of the public records to determine the ownership and encumbrances affecting real property

Title Theory State:  The system in which the lender has legal title to the mortgaged property and the borrower has equitable title. Texas is not a title theory state. Contrast with lien theory state.

Triple Net Lease:  Lease in which the tenant is to pay all operating expenses of the property so that the landlord receives net rent, frequently used to mean tenant pays taxes, insurance, and maintenance in addition to normal operating expenses

Trust:  An arrangement whereby property is transferred to a trusted third party trustee by a grantor/trustor, trustee holds the property for the benefit of the beneficiary

Trust Deed:  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, same as Deed of Trust

Trustee:  One who holds property in trust for another to secure performance of an obligation, the neutral party in a trust deed transaction.