HABENDUM CLAUSE The part of the deed defining the extent of the estate granted. Coming from the Latin phrase 'habendum et tenendum", which means 'to have and to hold", the habendum clause states the owner's exact interest in the property, whether it be fee simple or some lesser interest.

HABITABLE Suitable for occupancy. Local building codes ensure that structures are habitable through requirements for building permits and certificates of occupancy. Anyone wishing to construct a new building or make a major addition to an old one must obtain a building permit which binds the builder to minimum standards of construction. Before a new structure can be occupied, the owner must obtain a certificate of occupancy to certify that the building has passed a final inspection by local officials. Though building codes differ from locality to locality, most areas have regulations regarding fireproofing structures, electrical wiring, and plumbing.

HALF-SECTION An area of land comprised of 320 acres. There are 72 half-sections in a township.

HAMLET A small village.

HANDYMAN'S SPECIAL A parcel of real estate, normally residential, that is in need of major work and repair in order to bring the property up to market standards. Normally, such property is on the market at a price significantly below current prices, reflecting the loss in value due to wear and tear.

HARBOR LINE An arbitrary line set by the appropriate authorities on navigable rivers, beyond which permanent structures may not be build.

HARD SELL Action by a salesperson that results in an aggressive sales presentation. Hard sell tactics are sometimes used with certain types of real estate such as time sharing and second home sites. In both instances, a substantial amount of time and money is often spent in attempting to bring about a sale.

HARRIS, CHAUNCEY D. An urban economist who, along with Edward L. Ullman, is credited with developing the multiple nuclei growth theory of urban development. The theory is used to explain how development of different types of land use occurs. HAZARD INSURANCE An insurance policy on property to protect the insured against loss due to physical damage to the property.

HEAVY HITTER A real estate developer or investor who has substantial financial resources and or financial backing.

HEDGING The sale or purchase of mortgage future contracts by a mortgage banker or lender for the purpose of protecting cash transactions made at a future date.

HEIGHT ZONING A zoning technique used to establish height restrictions so as to protect the sunlight and flow of air to adjoining properties.

HEIR A person who is entitled to the real property of a deceased person who died intestate (left no will).

HEREDITAMENT Any property capable of being inherited, be it real, personal, corporeal, incorporeal, or mixed.

HETEROGENEOUS Different or diverse. Heterogeneity is one of the physical characteristics of real estate. Because no two parcels of land are the same, investors should carefully evaluate the characteristics of a particular site for suitability for proposed uses since a use that works on one parcel of land may fail for another. In addition, heterogeneity makes specific performance a viable remedy for breaches of contract involving real estate. If a person contracts for a particular parcel of land, receiving its value in money or receiving another similar parcel does not substitute for the original land.

HIDDEN AMENITIES Features of a property which, even though they may not be easily recognizable, add to the value of the property. Examples would include extra wall insulation, high quality paint, and better grade materials.

HIGHEST AND BEST USE The legal use of a parcel of land which, when capitalized, will generate the greatest net present value of income. Existing uses of land are not always the highest and best use.

HIGHEST AND BEST USE STUDY A study of two or more possible uses of a particular parcel of land to determine which use will be the most profitable.

HIGH RISE A commonly used expression referring to a building, usually an apartment or condominium complex, that is high enough to require an elevator.

HIGH WATER LINE OR MARK The line or mark on a shore to which the water rises at high tide under normal weather conditions.

HIGHWAY A free and public road or street which anyone has the right to use.

HISTORICAL COST Actual cost of a project when it was first constructed.

HISTORIC DISTRICT A zoning classification which refers to a geographic area that has been identified as having historical significance. Quite often a local government will limit both the type and the extent of land use changes that can occur in an area deemed a historical district.

HOFFMAN RULE A rule of thumb used by some appraisers in estimating the value of land. The rule states that the front half of a 100-foot-deep lot is worth two-thirds of that lot's value, with the back half is worth the remaining one-third.

HOFFMAN-NEILL RULE A rule of thumb used by appraisers and developers many years ago based on a set of depth factors published by Henry H. Neill. These factors were an extension of similar factors developed by Judge Murray Hoffman which originally came to be known as the Hoffman Rule. Such set factors are not widely used today and reliance on this rule is highly questionable.

HOLDBACK That portion of a contractor's draw under a construction loan that is withheld by the lender until all work is completed to the satisfaction of the lender. Quite often the amount withheld is equal to the contractor's profit, which means that enough of the loan is dispersed so that the subcontractors can be paid.

HOLDER IN GOOD FAITH One who takes property without any knowledge of defective title.

HOLD HARMLESS CLAUSE An exculpatory clause freeing one from personal liability.

HOLDING COMPANY A company that is not actively involved in business operations but which owns enough stock in other companies so as to have control over their operation.

HOLDING PERIOD The period of property ownership, from the date of purchase to the date of sale.

HOLDOVER TENANT The retention by a tenant of possession after the lease on a property has expired. Holding over creates a tenancy at sufferance.

HOLOGRAPHIC WILL An entirely handwritten will which is not properly witnessed. Such a will is valid only in some jurisdictions and then only if it is free from suspicion of fraud or other defects.

HOME The place in which a person lives.

HOME EQUITY LOAN A loan secured by a second mortgage on a person's home and characterized by an open line of credit based on the homeowner's equity. As a result of the Tax Reform Act of 1986, consumer interest on credit cards, automobile loans, and similar purchases is not deductible when itemizing deductions for federal income tax purposes. However, the interest paid on a home equity loan is fully deductible as long as certain guidelines are met, namely that the amount borrowed must be used for home improvements, medical expenses, or education. Thus, home equity loans have become very popular in recent years. Adding to the popularity is the ease within which such a loan can be made. Most lenders will establish a line of credit to the homeowner up to a total loan-to-value ratio of 75 or 80 percent.

HOME IMPROVEMENT LOAN A loan made to a homeowner in which the home is used as collateral for the loan. In recent years one result of increased housing costs and higher market prices has been the relatively fast equity build-up for owners of real estate. To an owner this equity can become a source of capital that can be drawn out of the home for home improvements or personal or business reasons. Numerous commercial banks and finance companies make short- term (three to five years) junior mortgages based on a percentage of the homeowner's equity. Since they are junior mortgages, such loans normally carry an interest rate three or four percentage points above that charged on senior instruments or first mortgages.

HOME INSPECTION SERVICE A professional service available to homebuyers normally undertaken prior to the transfer of title to the property. Quite often, particularly in the case of older homes, a buyer will make an offer contingent upon an inspection of the property being done by a qualified person and if the property does not pass the minimum inspection requirements, the offer is voidable. Home inspection services charge from one hundred to several hundred dollars, with the fee normally paid by the buyer.

HOME INSPECTOR A person who inspects real estate for the purpose of determining whether or not the property meets minimum structural and code standards. Such persons normally have engineering and or building backgrounds and are employed on a fee basis.

HOMEOWNER'S ASSOCIATION The organization in a condominium made up of all the unit owners and which is responsible for maintaining the common areas of the condominium. Thehomeowner's association also decides on matters affecting the common areas, such as whether an individual unit owner may put up window boxes or plow a garden. Most homeowner's associations have a fight of first refusal, or right to purchase a unit at market value before the owner seeks other purchasers; however, this right may not be used to discriminate against prospective buyers on the basis of race, color, creed, national origin, sex, handicap, or families with children.

HOMEOWNERSHIP Owning the home in which one lives. One of the successes of the American economic system has been its ability to provide a decent home to a broad number of households. Approximately 60% to 65% of all occupied housing in the United States is owner occupied. Homeownership offers several advantages to an individual. It provides a sense of security and belonging to a community. There is a certain pride and satisfaction in controlling one's own territory without being restricted by rules established by a landlord or having one's privacy intruded upon by strangers. In a privately owned home, there is generally more living space, more rooms, more storage space, and more privately controlled outdoor space for the dollar spent. This is particularly important for large families with young children. Homeownership often gives a person more social status and a better credit rating. In addition, there are certain financial benefits; monthly payments for a mortgage include a build-up of equity and tax deductible interest. There are other tax advantages as well. Property taxes are deductible, and capital gains on the sale may be deferred if a person reinvests in another house of same or greater price. Except for certain types of variable rate mortgages, the mortgage debt service remains constant, providing protection against inflation while the asset generally appreciates in value. However, homeownership is not for everyone. It may lead to constraints on one's ability to relocate.

HOMEOWNER'S INSURANCE A package insurance policy available to anyone who owns a one-family house, condominium, cooperative, mobile home, or who resides in an apartment. It is quite common for a homeowner to purchase and maintain insurance coverage for his or her residence. For a relatively small and certain amount of money the homeowner buys protection against a potentially large and unpredictable loss. Numerous types of policies are available. The homeowner can buy a standard fire insurance policy which insures only against fire and lightning, whereas for an additional premium, the coverage is broadened to include damage from wind, hail, smoke, explosion, riot, vehicles, and falling aircraft. Or one can purchase protection against burglary, injuries suffered by parties while on the property, and damages the policyholder causes to the property of others. Besides being able to purchase any number of separate policies, one can also purchase a package policy called a homeowner's policy that includes all of the above mentioned risks. A homeowner's policy can be purchased by anyone who owns and occupies either a one- or two-family residence. The advantages to purchasing such a policy are numerous: (1) only one policy is purchased, (2) only one premium has to be paid, (3) the coverage is for a wide variety of perils, and (4) the cost is considerably less than if the same perils were covered through individual policies. What properties are covered? First, the house or the dwelling is covered. In addition to the living quarters, this includes such structures as garages or other additions. Other structures referred to as appurtenant structures are covered such as a tool shed or a detached garage. However, buildings located on the property that are either rented to others or used for commercial purposes are not covered. Personal property including all household contents and personal belongings is covered. This would include losses both at home or away from home. Pets are not protected, nor are automobiles, which have their own special insurance. Another added feature of a homeowner's policy is the coverage of additional living expenses. which is intended to cover the increase in living expenses incurred while a house cannot be occupied because of damages caused by an insured peril. What perils are insured against? The number of perils insured against under a homeowner's policy depends upon what form is purchased. Three forms are available: (1) the Basic Form (HO-]), (2) the Broad Form (HO-2), or (3) the Comprehensive Form (HO-5). The Broad Form, which is the most common, insures against eighteen different perils. 'Me Basic Form insures only against the first eleven, whereas the Comprehensive Form covers the eighteen perils, plus additional coverage. While the HO-5 is often referred to as an all-risk policy, it still has certain exceptions listed in the policy. Is there a policy for renters? For those who rent, the Tenant's Form (HO-4) of the homeowner's policy is available. It insures contents and personal property against the same perils included in the Broad Form. However, since a renter does not own either the dwelling or other private structures on the property, the dwelling is not insured. Such a policy does, however, provide coverage for additional living expense.

HOMEOWNER'S ONCE-IN-A-LIFETIME TAX EXCLUSION A forgiveness of $125,000 in capital gains taxes for taxpayers 55 years or older who sell their principal residence. To qualify, a taxpayer must be at least 55 years old on or before the date of the sale. The house must have been the principal residence in at least three of the five years preceding the sale. If married, only one spouse must be 55 years old, but both must join in making the election. If filing separately, each spouse is only allowed half the exclusion or $62,500. There are other more technical provisions which may require consultation with an attorney or tax accountant for an understanding of how the law applies in the situation of any particular individual.

HOMEOWNER'S (HOMESTEAD) TAX EXEMPTION The amount of the assessed value of property not subject to property tax due to the fact that the taxpayer resides on the property and declares it as his or her homestead. Those states that provide for a homestead exemption normally require the homeowner to file for the exemption within a statutory period of time within the tax year.

HOMEOWNER'S WARRANTY (HOW) PROGRAM A ten-year warranty program administered by a subsidiary of the National Association of Home Builders and available from some builders of new homes. The program has strict building standards, and it requires the builder to give a one-year warranty against defects in workmanship, a two-year warranty against defects in electrical and mechanical systems, and a full ten-year warranty against major structural and sanitary defects. The warranty is transferable to new owners and provides for arbitration in case of owner/builder disputes.

HOME RULE The power of local self-government given either by the state constitution or legislation to a municipal corporation. Home rule powers allow local governments to pass zoning ordinances and other land-use regulations.

HOMESTEAD EXEMPTION A statutory or constitutional right which gives a person who is defined as the head of a household protection from creditors for property known as the homestead. The homestead is ordinarily defined as the primary dwelling and surrounding land, and usually there must be a family which owns and occupies the dwelling. This exemption does not normally apply to rented premises. Many states define this exemption. Ordinarily, any recorded debts which existed before the declaration of the exemption are not affected. In some states homestead exists automatically by operation of law, while in other states the head of the household must file a declaration of homestead with the appropriate public official in the jurisdiction. Debts incurred to finance and to repair the homestead may or may not be affected by the exemption. The exemption may be waived and each state has its own requirements for what constitutes a waiver. Upon the death of the head of the household, the surviving spouse may be entitled to the exemption. In some states the homestead is also important in calculating property taxes. A certain statutory amount may be subtracted from the assessment of the homestead before the tax rate is applied.

HOMOGENEOUS Similar in type. Real estate is the opposite of homogeneous, since no two parcels of land are exactly alike.

HORIZONTAL PROPERTY ACT The name, in some states, for legislation authorizing the creation of the condominium form of ownership. Before 1960, no such legislation existed, while today every state has some form of condominium legislation.

HOSKOLD FACTOR A factor used to value an annuity that is based on reinvesting capital recapture at a safe rate of interest, named after H. E. Hoskold.

HOSKOLD, H. E. An English mining engineer who originated the use of the 'Hoskold" method of valuing coal mines, timberland, and other types of real estate with depleting assets.

HOTEL A building offering its facilities as lodging to the public rather than to a limited private group.

HOT LISTING A listing on property that, in the opinion of the real estate broker acquiring the listing, is located in a market with much more demand than supply. In theory, hot listings do not remain on the market for a very long period of time.

HOUSEHOLD The total number of people who occupy a particular dwelling including people who may not be related to the householder.

HOUSE-POOR HOMEOWNER A homeowner who has bought more house than he or she can comfortably afford and, thus, spends a more than normal percentage of his or her income on the mortgage payment. First home buyers who have financed a high percent of the purchase price are sometimes referred to as being "house poor."

HOUSING AFFORDABILITY INDEX A monthly index published by the National Association of Realtors showing the financial ability of the median income family to purchase the median-priced home with an 80 percent loan. An index greater than 100 means that the median income family could qualify for more than the median-priced home with an 80 percent loan. A less than 100 index means that the same median income cannot qualify to buy the median-priced home, which is normally the case during times of inflation and higher than normal interest rates.

HOUSING AND URBAN DEVELOPMENT (HUD) An agency of the federal government which oversees many federal housing programs, including enforcement of fair housing laws.

HOUSING ASSISTANCE COUNCIL (HAC) The Housing Assistance Council is funded by the Department of Housing and Urban Development (HUD) and provides assistance, training, and loans for the development of low-income housing in rural areas. The mailing address is 1025 Vermont Avenue, N.W., Washington, D.C. 20005; (202) 842-8600.

HOUSING CODE Local government codes which specify minimum standards that a dwelling unit must meet.

HOUSING FINANCE AGENCY A state financing program that provides direct loans at a preferred interest rate to citizens of that state who, for various reasons, have been unable to obtain financing from private institutions. Applicants must be residents of the state for a specified period of time and under most programs may not own other real property. In recent years, cities and counties have also established mortgage funds in order to meet the needs of the housing market in their political jurisdictions.

HOUSING FOR THE ELDERLY A real estate project specifically built for elderly persons and normally, in addition to living accommodations, provides recreational facilities and nursing services.

HOUSING STARTS The number of housing units (including apartments) placed under construction during a specific period of time. Since the construction industry is such a vital component of the overall economy, the number of housing starts is an important barometer for how well the economy is doing.

HUNDRED PERCENT LOCATION The location which generates the highest per square foot revenues for a particular type of use in a geographic area. This particular location generally commands the highest rentals or cost per square foot.

HYBRID MORTGAGE A type of mortgage in which the lender is allowed to receive income generated from the property.

HYPOTHECATE The process of pledging something as security but retaining possession of it. The borrower who gives a mortgage to a lender but keeps possession of the mortgaged property has hypothecated the property.