Glossary B

BAD CREDIT
A term used by financial institutions to categorize instances of poor financial management.

BALLOON (payment) mortgage
Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.

BANKRUPTCY
A provision of Federal Law whereby a debtor surrenders his assets to the Bankruptcy Court and is relieved of the future obligation to repay his unsecured debts. A Trustee in Bankruptcy administers the assets, selling them to pay as much of the debt as possible. If your seller is in bankruptcy, the Trustee in Bankruptcy owns the property and is the party to sign the contract and make decisions. After bankruptcy, the debtor is discharged and his unsecured creditors may not pursue further collection efforts against him. Secured creditors, those holding deeds of trust or judgment liens, continue to be secured by the property but they may not take other action to collect from the debtor.

BENCHMARK
A permanent reference mark for surveyors.

BENEFICIARY
A person named to receive a benefit from a TRUST. A contingent beneficiary has conditions attached to his rights, usually someone else must die first.

BID
An offer.

BINDER
A title insurance binder is the written commitment of a title insurance company to insure title to the property subject to the conditions and exclusions shown on the binder.

BLANKET MORTGAGE
A mortgage covering at least two pieces of real estate as security for the same mortgage. This sort of loan is more common for commercial property or “special case” loans.

BOARD RATE
The board rate is also known as “prime rate”. It wraps up interest payments and fees and expresses all these costs in one rate. It is designed to reflect the total annual cost to a borrower of a loan. All lenders must disclose this benchmark rate in their advertising of home loans and personal loans.

BOND
An amount of money, often posted with the Court, to guarantee against loss as a result of a possible claim. For example, if there is a LIEN against the property, the owner may post a bond and the lien is removed from the property and the parties argue over the money rather than the property.

BREACH OF CONTRACT
Failure to perform provisions of a contract.

BRIDGING LOAN
An interest servicing short term loan (up to 6 months) to help bridge over the period between the completion of purchase of a new property and the receipt of proceeds from the sale of an existing property.

BROKER
An individual in the business of assisting in arranging funding or negotiating contracts for a client buy who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.

BUILDING COMMENCEMENT
Construction of a building project is deemed to have commenced when a permit to commence building works in respect of that building is issued by the Commissioner of Building Control. In the case of a public sector project for which this permit is not required, the construction of the building project is deemed to have commenced when the first tender is invited. Where the contractor is selected by pre-qualification or close tender, the date on which the contract is awarded is used.

BUILDING PLAN APPROVAL
(Private Sector Only) The approval granted by the Commissioner of Building Control in respect of building plans and specifications submitted in accordance with the prescribed building regulations in force.

BUILDING RESTRICTION LINE
A required setback a certain distance from the road within which no building may take place. This restriction may appear in the original plat of subdivision, restrictive covenants or by building codes and zoning ordinances.

BUILDING UNDER CONSTRUCTION
Also known as BUC, it is property that is normally sold by the plans while the physical building is under construction. For such properties, the Temporary Occupation Permit (TOP) and/or Certificate of Statutory Completion (CSC) has not been issued.

BUNGALOW
A landed house standing on its own boundary with no common wall. Usually 2-storey, newer developments can be 3 storeys, older development can be single storey. The minimum land plot size must be at least 400 sq m (4,306 sq ft).

BUSINESS PARK
This refers to areas for non-pollutive industries and businesses that engage in high-technology, research and development, high value-added and knowledge-intensive activities. Science parks where the primary activity is research and development are included in the Business Park category from 3rd Quarter 2002.

BUY-DOWN
When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. These are sometimes used to qualify borrowers for a loan amount that they would not otherwise qualify for but will be able to pay in subsequent years as their income increases.

BUYER’S MARKET
Market where there are more properties available for sale than interested buyers.

BY-LAWS
Rules and regulations governing an association or corporation.
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