gap

A defect in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land.

gap loan

One that fills the difference between the "floor loan" and the full amount of the "permanent loan". See "floor loan" and "permanent loan." Example: A "developer" arranges a permanent "mortgage" that will fund $1,000,000 when the apartments she is building are 80% occupied. From completion of construction until 80% occupancy is reached, the mortgage is only $700,000. The developer arranges a "gap loan" of $300,000 for the "rent-up period."

Garn-St. Germaine Bill

Or the Depository Institutions Deregulation and Monetary Control Act of 1980 authorized the deregulation of banks and savings institutions. Allowed savings and loan associations to offer checking-type accounts; to issue credit cards. Established loan loss reserve requirements. A follow-on bill, The Depository Institutions Act of 1982 (also sponsored by Senators Garn and St. Germaine), allowed savings and loan associations to have up to 50% of assets in real estate development; 30% of assets in consumer loans and corporate debt; own real estate development companies; and offer money market deposit accounts.

general agent

One authorized by a principal to perform any and all acts associated with the continued operation of a particular job or a certain business of the principal. The essential feature of a general agency is the continuity of service, such as that provided by a property manager of a large condominium project. Most real estate brokers are treated as special agents. (See agent, special agent)

general contractor

The prime contractor hired by the property owner for the construction of an entire building or project, rather than just a portion of the work. The general contractor hires subcontractors, (e.g., plumbing, electrical, etc.), coordinates all work, and is responsible for payment to subcontractors.

general index

A county recorder's office index used by title company examiners when searching the chain of title of a property. The examiner uses the index to research all the grantors and grantees in the chain of title. The index lists all the things that apply to a person by name, including liens, judgments and power of attorneys. (See chain of title)

general lien

The right of a creditor to have all of a debtor's property-both real and personal-sold to satisfy a debt. (See lien)

general partner

In a "partnership", a partner whose "liability" is not limited. All partners in an ordinary partnership are general partners. A "limited partnership" must have at least one general partner. Example: The "general partner" in a limited partnership is the "syndicator" who arranges the purchase, seeks investors, and assumes all liabilities of the partnership.

general partnership

In a general partnership, all the partners participate in the operation and management of the business and share full liability for business losses and obligations. (See partnership)

general plan

Every city and county is required to develop a general plan of comprehensive zoning. (See comprehensive zoning)

general real estate tax

General real estate taxes are levied to fund the operation of the governmental agency that imposes the taxes.

general warranty deed

A deed in which the grantor fully warrants good clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed.

gentrification

The displacement of lower-income residents by higher-income residents in a neighborhood. Generally occurs when an older neighborhood is rehabilitated or revitalized. Example: In the past, many large older homes in Inman Park, Atlanta, had been converted to boarding houses. Recently, middle-income families have been buying these houses and converting them back into "single-family homes." The lower-income residents are often forced to move to surrounding areas and are replaced by the renovators. As this process is repeated, "gentrification" of the neighborhood occurs.

geographic farming

Farming/prospecting an area defined by specific "geographic" boundaries. (See farming, nongeographic farming)

gift deed

A deed in which the consideration is "love and affection." Because the deed is not supported by valuable consideration, the donee (recipient of the gift) may not be able to enforce against the donor certain promises or agreements contained in the deed.

going-in capitalization rate

The capitalization rate computed by dividing the projected first year's net operating income by the value of the property.

good and marketable title

"Title" to a piece of real estate that can be shown, usually by "title search" or "abstract of title" to be vested in the "owner of record" and free of claims or "liens" that would impair its marketability.

good funds

Cash, cashier's checks and personal checks that have cleared the bank.

good-faith estimate

A preliminary accounting of expected closing costs. The Real Estate Settlement Procedures Act (RESPA) requires the lender to promptly give loan applicants a good-faith estimate of closing costs. (See Real Estate Settlement Procedures Act (RESPA))

goodwill

An intangible, salable asset arising from the reputation of a business; the expectation of continued public patronage; including other intangible assets like trade name and going concern value. When a business is sold, the sales price often reflects its goodwill value.

government check

The 24-mile-square parcels composed of 16 townships in the rectangular (government) survey system of legal description.

government lot

Fractional sections in the rectangular (government) survey systems that are less than one quarter-section in area. Areas smaller than full quarter-sections were numbered and designated as government lots by surveyors. These lots can be created by the curvature of the earth; by land bordering or surrounding large bodies of water; or by artificial state borders. An overage or a shortage was corrected.

Government National Mortgage Association (GNMA)

A federal agency created in 1968 when the Federal National Mortgage association (FNMA) was partitioned into two separate corporations. "Ginnie Mae," as it is popularly called, is a corporation without capital stock and is a division of HUD. The GNMA operates the special assistance aspects of federally aided housing programs and has the management and liquidating functions of the old FNMA. The FNMA is authorized to issue and sell securities backed by a portion of its mortgage portfolio, with the GNMA guaranteeing payment on such securities.

grace period

A provision of a contract that allows a party additional time to complete an action before default occurs.

graduated lease

A lease that provides for graduated changes, at stated intervals, in the amount of rent. Example: a 5-year "graduated lease" calls for annual rent increases of 5% to the $100. The yearly payments would be: $100 in Year 1; $105 in Year 2; $110.25 in Year 3, etc.

graduated-payment mortgage (GPM)

A loan in which the monthly principal and interest payments increase by a certain percentage each year for a certain number of years and then level off for the remaining loan term.

grandfather clause

When a law is changed or a new law is passed, those whose specific activity was legal under the previous law are often allowed to continue, by virtue of this provision. [Example: All real estate "brokers" are allowed to continue to practice as brokers after licensure requirements increase. The new law affects only new "licensees"; old licensees are "grandfathered."]

grant

A technical term used in deeds of "conveyance" of property to indicate a transfer.

grant deed

A type of deed in which the grantor warrants that he has not previously conveyed the estate being granted to another, that he has not encumbered the property except as noted in the deed and that he will convey to the grantee any title to the property he may later acquire.

granting clause

Words in a deed of conveyance that state the grantor's intention to convey the property at the present time. This clause is generally worded as "convey and warrant," "grant," "grant, bargain and sell" or the like.

grantor

The person transferring title to, or an interest in, real property. A grantor must be competent to convey title. A corporate grantor must have legal existence and be authorized to hold and convey title to real property. The grantor must be clearly identified in the deed.

gross absorption

A measure of the total square feet of office, industrial, or retail space leased in a market area over a period of time with no consideration for space vacated in the same area during the same period. (See absorption, net absorption)

gross area of entire office building - BOMA

The gross area of the entire building is the sum of the areas at each floor level, including cellars, basements, mezzanines, penthouses, corridors, lobbies, stores, offices, garages within the building, included within the principal outside faces of exterior walls, not including architectural setbacks or projections. Included are all stories or areas which have floor surfaces with clear standing headroom (6 feet 6 inches minimum) regardless of their use. Where a ground level area, or part thereof within the principal outside faces of the exterior walls is left unenclosed, the gross area of the unenclosed portions is to be considered as a part of the overall square footage of the building. All unroofed areas and unenclosed roofed-over spaces, except as defined above, are to be excluded from the calculation.

gross asset value

The fee simple or leased fee market value of an investment, without regard to the debt balance or ownership percentages.

gross building area

The total floor area in an office building measured in square feet. The area extends to the outer surface of exterior walls and windows, and includes all interior areas but excludes parking and roof space.

gross debt service ratio

The percentage of gross income which is the maximum amount a mortgagor is allowed to pay annually in principal, interest, and property taxes. For example, a mortgagor may pay $270 out of $1000 gross income as P.I.T. payments. This ratio is usually expressed as a percentage i.e., P.I.T. payments can be 27% of gross income. Compare to Loan-to-Value Ratio. See also Ratio.

gross income

The amount earned through employment or investment before taking taxes or other deductions into consideration. This amount may or may not be the same as gross income for purposes of mortgage lending.

gross income multiplier

A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property's value.

gross investment in real estate (historical cost)

The total amount of equity and debt invested in real estate investments, including the Gross Purchase Price, all acquisition fees and costs, plus subsequent Capital Improvements, less proceeds from sales and Partial Sales.

gross leasable area

The space actually occupied by retail tenants, and the basis for charging base rent. Sometimes also used for industrial space. Also called "leasable area."

gross leasable area (retail)

The portion of Total Floor Area designed for tenants' occupancy and exclusive use, including storage areas, department stores, and outparcels buildings owned by and leased from the center. It is the area that produces rental income. [ULI]

gross leasable area of mall tenants

The Gross Leasable Area, less the square footage of department stores owned by and leased from the center. [ULI]

gross lease

A lease that provides that the landlord shall pay all expenses of the leased property, such as taxes, insurance, maintenance, utilities, etc. This term is usually used to mean the same thing as full service gross.

gross lease (industrial)

A lease in which the tenant's rent includes real estate taxes, fire and extended coverage insurance, as well as maintenance of the roof structure and outside walls.

gross operating income

The result when other income is added to rental income. (See other income, rental income)

gross potential annual rent

Total base rent paid by an investment property’s tenants, assuming 100% occupancy. Sometimes called “gross potential rent.” Part of the operating statement used in the income capitalization approach to value.

gross potential revenue

Similar to gross potential rent, except it also includes income from other sources such as parking income or laundry income (in the case of an apartment building, for example).

gross purchase price

The total cost of an investment including all amounts paid to the seller excluding any adjustment at closing.

gross real estate investment value

The market value of real estate investments held in a portfolio without regard to debt. Equal to the total of Real Estate Investments as shown on a Statement of Assets and Liabilities on a market value basis.

gross realized rent

Gross potential rent less vacancy allowance and bad debt allowance.

gross realized revenue

Gross potential revenue less an allowance for vacancy and bad debt. Note that different rates may be used for the different income sources (i.e., 5% vacancy rate for units, 2% vacancy rate for parking spaces).

gross rent

A rental rate that includes normal building services (e.g. utilities, janitorial, repairs, payroll, etc.) as provided by the landlord within the base year rental.

gross rent multiplier (GRM)

An economic unit of comparison used in valuing multifamily property by the sales comparison approach. This unit of comparison, sometimes referred to as the “GRM,” is derived by dividing a property’s sale price by its annual gross potential rent. See also effective gross income multiplier.

gross rentable area - BOMA

Gross rentable area shall be computed by measuring inside finish of permanent outer building walls, or from the glass line where at least 50% of the outer building wall is glass. Gross rentable area shall include all area within outside walls less stairs, elevator shafts, vertical ducts and balconies.

gross scheduled income

The maximum amount of rent if the property were 100 percent occupied.

ground lease

A lease of land alone, sometimes secured by improvements placed on the land. Also called a land lease, the ground lease is a means used to separate the ownership of the land from the ownership of the buildings and improvements constructed on the land.

ground rent

Rent paid to the owner for use of land, normally on which a building is constructed. Generally, the arrangement is that of a long-term lease with the lessor retaining title to the land.

ground rents

A perpetual lease where the landowner retained title and the lessee received the right of possession and use. Used predominantly in Maryland and Pennsylvania prior to 1885.

groundwater

Water under the earth's surface, regardless of the geological structure in which the water is standing or flowing. It does not include water in underground streams that have identifiable banks and beds.

growing-equity mortgage (GEM)

A loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the principal balance outstanding and thus shorten the overall term of the loan.

growth rates

The assumed rates of increase in income and expenses applied in a discounted cash flow analysis of a property.

guarantor

One who becomes contingently or secondarily liable for another's debt or performance.

guaranty

(Noun) An assurance provided by one party that another party will perform under a contract. Contrast with "guarantee" (verb). [Example: Fred Garrison is an experienced developer. His daughter, Ruth, decides to branch out and start her own company. The construction lender requires a "guaranty" from Fred Garrison before granting Ruth Garrison a loan for her first project.]

guardian

A person, appointed by court or by will, given the lawful custody and care of the person or property of another (called a ward). The ward might be a minor, an insane person or even a spendthrift. The guardian may, upon court approval and without necessity of obtaining a real estate license, sell the ward's property, if it is in the best interest of the ward.