Quick! Do you know the difference between a rack rate and a rack rent? What is a rentier? Besides their unpleasant demeanor and poor hygiene, why should you beware of alligators?
The Third Edition of The Encyclopedia of Real Estate Terms by Damien Abbott answers these questions and many more and serves as a complete guide to the meaning, use, and significance of over 10,000 words or phrases used in real estate. The beautifully crafted, hardcover book has more than 1,500 Smyth-sewn pages, along with two handy, sewn-in page markers.
Abbott applies his extensive knowledge from working in the real estate profession in more than twenty countries over five continents. Since graduating from the University of London he has been involved in real estate development, investment, appraisal, management, and financing. Although he now spends most of his time writing and traveling, Abbott's far-reaching experience includes appraisal work; condominium development; acquiring and financing office investments and shopping centers; industrial development; property sales; and collateralized mortgage financing. He is an affiliate member of the Appraisal Institute, a Fellow of the Royal Institution of Chartered Surveyors, and a member of the International Real Estate Federation FIABCI, the Urban Land Institute, and the Australian Property Institute.
The author describes this text as “a comprehensive reference book on real estate-a dictionary, a thesaurus, and an encyclopedia, rolled into one”. Indeed, the book references real estate concepts and terms from North America, the United Kingdom, Australia, New Zealand, and France. The first edition of The Encyclopedia of Real Estate Terms was published in 1987, the second edition was published in 2000, and the third edition was published in July 2008. This latest edition was published about the same time the thirteenth edition of The Appraisal of Real Estate was released, so the Encyclopedia still cites the twelfth edition. Nevertheless, the current edition of the Encyclopedia has been modernized to be more international than previous versions and better reflects the rapid globalization of real estate in the twenty-first century.
The three primary aims of this edition of The Encyclopedia of Real Estate Terms are
1. to provide a clear and precise explanation of the meaning of a particular word or phrase,
2. to help the user find an answer to many of the questions that occur in real estate today, and
3. to point out where a problem might occur and where further advice and counsel may be found.
For ease of use, summary user guides are printed on the inside covers and there is a more-detailed user guide section at the front of the text. The body of this volume is an international treasure trove of real estate terms and definitions. In addition, there are extensive, multipage discussions of key concepts. One of the appendixes details major laws and enactments, and there are extensive case law references and citations within the definitions of the terms. There are more than 15,000 citations and over 7,400 bibliographic references, along with a separate bibliography of more than 1,500 titles. Furthermore, the country of origin notation for the terms provides a useful contextual reference for the user.
My few criticisms of this book include the erroneous reference to the Appraisal Institute as The American Institute of Appraisers in the acknowledgments section; the slightly confusing double mention of the term nut on page 805; and the section of the definition of radburn on page 971 as "an area surrounded by through roads into which a number of cul-de-sacs thrust their way like sperm into an ovum," which is a bit too explicit. A term not listed in the Encyclopedia, but one that would be useful for property assessment practitioners is common level ratio. Lastly, the pages of acid-free paper are thin and will require some care by the user to keep from tearing.
With those faint objections aside, the richness and quality in the descriptions of the terms are really what this book is all about. Real estate professionals (not necessarily geeky ones) can easily become engrossed in the meaning and derivation of frequently used expressions. For example, and befitting the current business environment, the word bankruptcy is shown to be derived from the Old French banque (bench) and rupt (broken), thus being the broken bench of a failed trader. Boycott originates from the dastardly English estate manager Charles Cunningham Boycott and his unconscionable actions during the 1879-1880 Irish famine. My personal favorite is the definition for speculator, which at one point quotes The Notebooks of Leonardo da Vinci, "Oh! Speculators on things, boast not of knowing the things that nature ordinarily brings about; but rejoice if you know the end of those things which you yourself devise ... beware of the teaching of these speculators, because their reasoning is not confirmed by experience" It is somewhat reassuring to learn that, even in our fast-paced modern world, attitudes toward some actors have not changed since the sixteenth century.
There are numerous and extensive discussions of key real estate terms with exhaustive legal and financial references. The topics cover all aspects of real estate, including appraisal, finance, insurance, economics, investment, law, taxation, planning, and management.
The Encyclopedia of Real Estate Terms offers plenty of the practical, but a great deal of fun is provided by some of the arcane. On the practical side, the Encyclopedia explains how skyscraper was generally defined as a building at least thirty floors high, but in the twenty-first century, a building needs to exceed forty to fifty stories for such a classification. Often seen in expanding communities, a rurban property is one that is situated just beyond the suburbs and is in the process of transition from rural to urban. Another term that has often been seen in the last few years (and sure to be more visible in the near future) is cratered property, defined as an investment that is a financial disaster.
An arcane term presented in the text is common of pannage, which is an ancient right by which swine were permitted to forage for food in a common wood or forest during certain times of the year. Even more esoteric is gazump, which is a slang word in British English meaning to swindle. A ha-ha is not a laugh, but a sunken fence typically found in the English countryside. Mortgage terms of art include anaconda mortgage or the similar Mother Hubbard clause, which provides that in the event of default the mortgagee may foreclose on any loans that are owed by the mortgagor to the same mortgagee. A poor man's mortgage is a connotation for an installment land contract.
In addition to the practical and arcane references, The Encyclopedia of Real Estate Terms also delineates regional distinctions. For example, there is a distinction made in United Kingdom parlance for a quantity surveyor, who is a professional advisor separate from an architect or an engineer and provides services on the measurement and valuation of building and engineering works. In the United States and in some European countries, such a person is typically known as an estimator. Along the same lines, the British definition of the first floor is the level at least one full floor height above the ground floor, whereas Americans typically view the first floor as the ground level. The vivid Australian term land shark refers to a person seeking to make excessive profit from land speculation.
The description of a day, which is a period of twenty-four hours to most, raises the notion that various cultures view its beginning and end differently. In a global environment, this seemingly trivial point can have massive consequences for when business is conducted and when a negotiable instrument or loan is due for payment.
lthough I didn't count, the most entries seem to be under the letter P, while there are only two pages under the letter K. Interestingly, there is only a single item under X, "a mark or signature" Terms that have been retired, such as complete appraisal and limited appraisal, are defined and are correctly noted to have been replaced in appraisal reporting with scope of work, in accordance with the Uniform Standards of Professional Appraisal Practice.
The $165.00 hardcover price is hefty, but The Encyclopedia of Real Estate Terms, third edition, is an excellent resource for appraisers and real estate professionals, especially those practicing in the area of forensic appraisal (litigation support) and those with an international clientele.
In case you didn't know, a rack rate is the published room rate in a hotel, whereas a rack rent is the highest annual rent at which a property can be let. A rentier is a person whose income is derived solely from the ownership of capital, rather than from one's own labor. Finally, always beware of alligators. An alligator is an investment that generates a substantial negative cash flow or loss, or requires continual expenditure. It sounds as though the four-legged variety may inflict less damage.Reviewed by Anthony C. Barna, MAI, SRA, Kelly-Rielly-Nell-Barna Associates, Inc., Pittsburgh, Pennsylvania