Real Estate Glossary

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NATIONAL ASSOCIATION OF REALTORS - Formerly known as the National Association of Real Estate Boards (NAREB), it is the largest and most prestigious real estate organization in the world.

NEGATIVE CASH FLOW - The investment situation where cash expenditures to maintain an investment (taxes, mortgage payments, maintenance, etc.) exceed the cash income received from the investment.

NEGOTIABLE INSTRUMENT - Any written instrument which may be transferred by endorsement or delivery so as to vest legal title in the transferee.

NEGOTIATION - The transaction of business aimed at reaching a meeting of minds among the parties; bargaining.

NET INCOME - The sum arrived at after deducting from gross income the expenses of a business or investment, including taxes and insurance, and allowances for vacancy and bad debts; what the property will earn in a given year's operation.

NET LEASE - A lease, usually commercial, whereby the lessee pays not only the rent for occupancy, but also pays maintenance and operating expenses such as tax, insurance, utilities and repairs. Thus the rent paid is "net" to the lessor.

NET WORTH - The value remaining after deducting liabilities from assets.

NOMINAL CONSIDERATION - A consideration bearing no relation to the real value of the contract. A deed often recites a nominal consideration, such as "ten dollars and other valuable consideration."

NON-COMPETITION CLAUSE - A provision in a contract or lease prohibiting a person from operating or controlling a nearby business which would compete with one of the parties to the contract.

NONCONFORMING USE - A permitted use which was lawfully established and maintained but which no longer conforms to the current use regulations because of a change in the zoning.

NONDISTURBANCE CLAUSE - A clause inserted in a mortgage whereby the mortgagee agrees not to terminate the tenancies of lessees who pay their rent if the mortgagee forecloses on the mortgagor-lessor's building.

NORMAL WEAR AND TEAR - That physical deterioration which occurs in the normal course of the use for which a property is intended, without negligence, carelessness, accident or abuse of the premises (or equipment or chattels) by the occupant, members of household, or their invitees or guests.

NOTE - A document signed by the borrower of a loan, stating the loan amount, the interest rate, the time and method of repayment and the obligation to repay. The note is the evidence of the debt. When secured by a mortgage, it is called a mortgage note.

NOTICE - (1) Legal notice is notice which is required to be made by law, or notice which is imparted by operation of law as a result of the possession of property or the recording of documents. (2) Notice which is required by contract, for example, when the parties agree to terminate a contract by the written notice of either party 30 days prior to termination.

NOTICE OF COMPLETION - Document filed to give public notice that a construction job has been completed and that mechanics' liens must be filed within ,say, 45 days to be valid.

NOTICE OF DEFAULT - A notice to a defaulting party that there has been a default, usually providing a grace period in which to cure the default.

NOTICE OF NONRESPONSIBILITY - A legal notice designed to relieve a property owner from responsibility for the cost of improvements ordered by another person.

NOTICE TO QUIT - A written notice given by a landlord to his tenant, stating that the landlord intends to regain possession of the leased premises and that the tenant is required to quit and remove himself from the premises either at the end of the lease term or immediately if there is a breach of lease or if the tenancy is at will or by sufferance; sometimes refers to the notice given by the tenant to the landlord that he intends to give up possession on a stated day.

NOVATION - The substitution of a new obligation for an old one; substitution of new parties to an existing obligation, as where the parties to an agreement accept a new debtor in place of an old one.

NUISANCE - Conduct or activity which results in an actual physical interference with another person's reasonable use or enjoyment of his property for any lawful purpose.

NULL & VOID - Having no legal force or effect; of no worth; unenforceable; not binding.

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