Glossary: A

Glossary

A

Abstract of Title -A written history of the transactions or conditions bearing on the title to a designated parcel of land. It covers the period from the original source of title to the present and summarizes all documents of public record.

Acceleration Clause - A clause requiring the Purchaser to pay the entire principal balance due if certain conditions of the contract are violated. A few examples of these conditions are: failure to make regular installment payments, non-payment of property taxes, and non-payment of hazard insurance premiums. This clause most often appears in land contracts under the heading "Enforcement on Default" or "Acceleration Clause".

Accrued Interest - Interest that has been earned but not paid.

Add-Back Escrow - In a land contract that utilizes an Add-Back escrow, the Purchaser includes an extra amount with each month's payment in order to cover future tax and/or insurance bills payable by the Purchaser. The Seller then pays property taxes and/or insurance premiums and adds back the amounts paid to the current principal balance owed. Add-Back escrows In contracts are usually worded as follows:

"The Purchaser is to pay monthly, in addition to the monthly payment herein before stipulated, the sum of $-, which is an estimate of the monthly cost of the taxes, special assessments, and insurance premiums for the land, which shall be credited by the Seller on the unpaid principal balance owed on the contract. If Purchaser is not in default under the terms of this contract, Seller shall pay for Purchaser's account the taxes, special assessments, and insurance premiums mentioned above when due and before any penalty attaches, and submit receipts therefore to Purchaser upon demand. The amounts so paid shall be added to the principal balance of this contract.”

Addendum - An addition to a written document. Addenda is the plural.

Agent - One who undertakes to transact business or to manage an affair for another, with the authority of the latter.

Amendment - An alteration to a contract.

Amortization -The length of time that it will take to payoff a debt at the mutually agreed upon interest rate and payment amount. An example of an amortization schedule for a $23,000 balance with payments of $250 at 11%interest is shown below:

	Total
Payment #	Payment	Interest	Principal	Balance
0	-	-	-	$23,000.00
1	$250	$210.83	$39.17	$22,960.83
2	250	210.47	39.53	22,921.30
3	250	210.11	39.89	22,881.41
4	250	209.75	40.25	22,841.16

Appurtenance - Something that is outside the property itself but is considered a part of the property and adds to its greater enjoyment, such as the right to cross another's land.

Assessments - The amount of tax or special payment due to a municipality or association.

Assignee -The person or corporation to whom an agreement or contract is assigned; one to whom real property or an interest in real property is transferred or set over.

Assignment -A transfer from one party to another.

Assignor - A party who assigns or transfers an agreement or contract to another.