Real Estate Alphabet Soup: F is for Foreclosure
In my last post, “Real Estate Alphabet Soup: E is for Easement and Eminent Domain” I continued my primer on the “alphabet soup” of real estate. This post continues to stir the “alphabet soup” with the letter “F.”
F is for “foreclosure.” A foreclosure is the termination of a right to property. A foreclosure action is an equitable action to compel the owner of the property to make payment on a mortgage or other debt, such as a deed of trust, secured by a lien on the property. The foreclosure is precipitated by the debtor/property owner’s non-payment of the debt which if not paid upon demand by the lender, can lead to the lender enforcing its rights under the lien and selling the property to which the lien is attached in order to satisfy the debt. As a consequence of a lender exercising its right to foreclose, through judicial foreclosure proceedings, once the statutory requirements are satisfied, which include notice to the owner/debtor, the mortgagor or debtor’s equity of redemption or right to redeem the property may be lost.
F is also for “fixture”, a type of personal property or chattel which is physically attached or affixed to real property in a manner such that its removal would damage the real property, so that it is considered to become a part of the real property. For instance, a lighting fixture would not be considered a fixture if it can be easily removed; however, if the lighting fixture is a built-in lighting fixture that is not easily removable without damaging the surrounding property, then it would be considered a permanent fixture and part of the property which may be conveyed with the real property. Other built-in features, such as bookcases window seats, or mechanical fixtures like a furnace are also considered to be fixtures and part of the real property.
Another type of “fixture” is a trade fixture, which is a property item affixed to a business premises which is necessary for conducting the business on the property. Lease agreements usually expressly permit or require the removal of trade fixtures at the end of the lease term, with the requirement for the tenant or lessee to pay for any damage to the real property caused by the removal of the trade fixture.
In my next post, I will move on to the letter “G”, the next letter in this real estate “alphabet soup.”
This blog was written by Anne-Herbert Rollins at Miles & Stockbridge.
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