habendum clause

That part of a deed beginning with the words "to have and to hold," following the grantor is conveying.


Fit for human habitation. (See implied warranty)


As defined in the fair housing act, a physical or mental impairment that substantially limits one or more major life activities (walking, seeing, learning, working) or a record of having such an impairment or being regarded as having such impairment. Handicap does not include current, illegal use of or addiction to a controlled substance. (See disability)

handicapped requirements

Code required features designed to accommodate handicapped persons, including entry ramps, restrooms, restroom fixtures, hardware, special doors, etc.

hard money loan

A loan made in cash.

hazardous contamination

See hazardous materials.

hazardous materials

Materials are considered hazardous if they pose a risk to health, safety, and/or property. A tenant will customarily require a landlord to warrant that the building and property are free of all hazardous materials or other contamination. Depending on the type and condition of industrial property involved, leasing agents and tenants are sometimes advised to request a Phase 1 environmental assessment from the landlord and review it before completing a lease transaction. Buyers and lenders will customarily require a Phase I environmental assessment from the seller before completing a purchase or financing transaction. Property sellers may have certain obligations by law to disclose the presence of hazardous materials on their property.

hazardous waste

Toxic waste materials jeopardizing the value of real estate. (See asbestos, Environmental Protection Agency, underground storage tanks, urea-formaldehyde)

hazardous waste disclosure

California Health and Safety Code (å¤ 25359.7(a)) requires owners of nonresidential properties to disclose to prospective buyers or lessees the existence of hazardous substances on or beneath a property. Both residential and nonresidential tenants are required to notify landlords if hazardous substances have been released on a property.

head lease

A Head Lease is a Lease to an entity that will subsequently grant leases to sub-lessees who will be tenants in possession. It sets out the promises the Landlord has made to his Superior Landlord. The promises contained in this Head Lease will bind the Tenant if he has prior knowledge of those promises.


A metric land measurement equal to about 2.471 acres or about 107,637 square feet. [Example: Abel sold 6 hectares of land in Puerto Rico for $20,000.]


A person who inherits under a will or a person who succeeds to property by the state laws of descent if the decedent dies intestate. (See intestate)

heirs and assigns

A term often found in "deeds" and "wills" to grant a fee simple estate. [Example: Abel wills property to "Baker, heirs and assigns." Upon inheriting the property, Baker can sell it or will it to "heirs."]


Property capable of being inherited.


The quality or state of being heterogeneous; different in kind; unlike; incongruous.


Generally, a building that exceeds 6 stories in height and is equipped with elevators. Example: A "high-rise" building is constructed to include retail space on the first floor, 8 floors of office space, 10 floors of condominium units, and a club/restaurant on the 20th floor.

high-rise office building

Higher than twenty-five stories above ground level.

highest and best use

That use, from among reasonably probable and adequately supported alternative uses, which is legally permissible, physically possible, financially feasible, and maximally productive.

highrise developments

Sometimes called mixed-use developments (MUDs), combine office space, stores, theaters and apartment units in a single vertical community. MUDs usually are self-contained and offer laundry facilities, restaurants, food stores, valet shops, beauty parlors, barbershops, swimming pools and other attractive and convenient features.

historic cost

The actual amount of money spent at the time the asset was purchased or the improvements were built. See also Current Cost.

historic structure

A building that is officially recognized for its historic significance and has special status under the 1976 Tax Reform Act, which encourages "rehabilitation" and discourages "demolition" or substantial alteration of the structure. In 1981 a special tax law allowed a 25% "tax credit" for rehabilitation for "certified historic structures", reduced to 20% in 1986. Example: Because the old office building was designated a certified "historic structure", its owner decided to restore the building to take advantage of allowable tax deductions.

hold harmless clause

A contract provision whereby one party agrees to indemnify and protect the other party from any injuries or lawsuits arising out of the particular transaction. Such clauses are usually found in leases in which the lessee agrees to "indemnify, defend and hold harmless" the lessor from claims and suits of third persons for damage resulting from the lessee's negligence on the leased premises.


Money not paid until certain events have occurred, such as a "floor loan" of a "loan commitment" or "retainage" on a construction contract. Example: The developer has a 10% "holdback' from subcontractors until the building "inspection" is complete.

holder in due course

The holder of a negotiable instrument (check or note) purchased for value when the instrument appears complete and regular on its face; is taken before its due date and without notice of previous dishonor; and the holder has no notice of any defects in title of the transferor.

holding period

The term of ownership and operation used in a discounted cash flow analysis for an investment property. A holding period of 10 years is frequently used for purposes of analysis.


The condition that arises when a tenant continues to occupy property after the lease term has expired. Many leases anticipate this possibility by stipulating an increased rent during a holdover period.

holdover tenant

A "tenant" who remains in possession of leased property after the expiration of the lease "term." (See tenancy at sufferance)

holographic will

A will that is written, dated and signed in the testator's handwriting, but not witnessed. Some states consider a holographic will to be valid even though it was not witnessed, presumably on the theory that the handwriting can be analyzed to verify authenticity and demonstrate competency.

home equity loan

A loan (sometimes called a line of credit) under which a property owner uses his or her residence as collateral and can then draw funds up to a prearranged amount against the property.

Home Mortgage Disclosure Act (HMDA)

Enacted by Congress in 1975 and implemented by the Federal Reserve Board's Regulation C, a federal law that requires lenders with federally related loans to disclose to the Federal Reserve the number of loan applications and loans made in different parts of their service areas; designed to eliminate the discriminatory practice of redlining. (See Federal Reserve, redlining)

home warranty insurance policy

An insurance policy that insures against plumbing, electrical, heating, and major appliance problems for the term of the policy.

homeowner instructions

Instructions given to a property owner by a listing broker that advise the owner of cleaning and repairs that will improve the appearance and increase the value of a listed property.

homeowner's association

A nonprofit association of homeowners organized pursuant to a declaration of restrictions or protective covenants for a subdivision, PUD or condominium.

homeowner's insurance policy

A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability and other common risks. (See basic form homeowner's policy and broad form homeowner's policy)


A statutory exemption of real property used as a home from the claims of certain creditors and judgments up to a specified amount; requires a declaration of homestead be completed and filed with the county recorder's office.

homestead exemption

The amount of homestead protection from unsecured creditors.


Composed of parts all of the same kind or of the same kind or nature; essentially alike.

housing accommodation

Housing accommodations are any improved or unimproved real property, or portion thereof, used as the home, residence, or sleeping place of one or more human beings. It does not include accommodations operated by non-profit religious, fraternal, or charitable associations or corporations, provided that such accommodations are used in the furtherance of the primary purposes for which the association or corporation was formed.

housing affordability index

A measure of the percentage of the United States population who can afford to purchase a home; based on average income and average home price.

Housing Financial Discrimination Act of 1977 (Holden Act)

The Act prohibits financial institutions (banks, savings & loans, or other financial institutions, including mortgage loan brokers, mortgage bankers and public agencies) from engaging in discriminatory loan practices.

Howey test

One of two tests which determines whether an investment unit is a security. The other test is called the risk capital test.


A federal cabinet department officially known as the U.S. Department of Housing and Urban Development, HUD is active in national housing programs. Among its many programs are urban renewal, public housing, model cities, rehabilitation loans, FHA-subsidy programs and water and sewer grants. The Office of Interstate Land Sales Registration is under HUD's jurisdiction, as are the Federal Housing Administration (FHA) and the Government National Mortgage Association (GNMA).

HUD-1 settlement statement

At closing, in conformance with Real Estate Settlement Procedures Act (RESPA) regulations, a HUD-1 settlement statement is prepared showing the exact closing costs to buyer and seller. (See RESPA)


The acronym for heating ventilating and air conditioning. Refers to the equipment used to heat and cool a building.

hybrid financing

Mixing forms of conventional financing to create a new approach. (See convertible loan, participation mortgage)


To pledge real or personal property as security for a loan or other obligation without surrendering possession of the property. The borrower retains the rights of control and possession, and the lender secures an underlying equitable right in the pledged property.