Glossary - N

National Housing Act: The National Housing Act of 1954 amended as well as replaced all the earlier housing and mortgage policies prevailing in Canada. At the same time, the National Housing Act, 1954, also made the insurance of National Housing Act (NHA) loans granted by the authorized lenders possible. The NHA also facilitated the direct mortgage lending under an assortment of plans of the Canada Mortgage and Housing Corporation (CMHC).
Native lands: In the context of real estate in Canada, native land refers to the tracts of land held in reserve by the Crown for the utility and advantage of the native people of the country. Basically, the Indian Act affirms that these reserve terrains are retained by the Crown for the use and benefit of the indigenous peoples. In order to pass on the ownership of such real estate asset to other persons, the land ought to be submitted to the federal government of Canada. In turn, the government may transfer the titles of these properties by means of sale or bestow lease on the surrendered land.
Navigability: Navigability assumes an imperative aspect while ascertaining one's ownership and other related rights on a property along any shore or water body. It may be noted that the Acts passed by the different provinces do not delineate the issue of navigability, but leave it up to the court's prudence to define the term. Normally, a water body is considered to be navigable provided it can be passed through by small and/ or large vessels or crafts for leisure or business purposes. This standing is not changed by seasonal or cyclic instabilities or disruptions to navigation owing to any dam, canal, etc. and times when there is no navigation.
Negative amortization: The term negative amortization denotes a regular augmentation in mortgage money owing that happens when the monthly payment made by the borrower is not adequate to include the accrued interest and the outstanding amount continues to increase, at least during the initial years of the mortgage. In effect, negative amortization takes place with adjustable-rate mortgages that limit the raise in the monthly loan payment, but do not limit the interest rate on the mortgage loan. Therefore, the monthly payments made by the borrower do not cover the total interest amount owed by him or her to the lender.
Negative cash flow: The phrase negative cash flow denotes a situation where the outflow of cash is more than the cash inflow during a particular period. Negative cash flow does not necessarily mean a loss, but may be a result of a disparity in income and expenditure. However, if such disparity continues for long, it may be a hint of unsuccessful management, outflow of funds through scams or a genuine loss. In matters relating to real estate analysis, negative cash flow denotes an income property with the operating costs and debt service surpassing the total operating earnings.
Net income: The expression net revenue denotes total revenue in an accounting phase minus all expenditures incurred during the same period. Net income is also known as earnings, net earnings or net profit. In the context of real estate, the net income is applicable to study of real estate brokerages, but is not generally made use of in real estate venture analysis. As an alternative, in general real estate practitioners use the profit and loss statements to stabilize or reconstruct revenue and expenses to attain the fiscal performance of a distinctive structure for assessment and/ or comparison reasons. In addition, income and expenditures can be estimated to envisage cash flows before and after the deduction of taxes that can result in evaluation and/ or comparison.
Net lease: The term net lease refers to a lease agreement whereby a tenant, known as the lessee, not only pays the payment for hiring the property, but is also accountable for the related common expenses. In instance of property leases, the lessee possibly will pay for security, garbage cleaning and utilities. A capital lease is also known as a net lease, while an operating lease is not. In fact, the splitting up of net leases into net/ net, and net/net/net has led to enough bewilderment in the real estate market, especially considering the multitude of leasing deals developed by innovative commercial tenants and property owners. Usually most commercial real estate practitioners now evaluate rental preferences with regard to an original or base rent and a supplementary or additional rent. The base rent denotes the primary responsibilities of the tenant or lessee and is usually computed on a rate per square foot per year for roughly fixed costs of tenancy. On the other hand, the additional rent is delineated in the tenancy contract explaining the responsibilities of the landlord and tenant regarding what each of them are supposed to pay vis-à-vis the operating costs of the property. It may be noted here that a rental understanding whereby the property owner pays all the expenses and the tenant tenders a preset amount for the leased property is known as a gross lease.
Net operating income: The term net operating income refers to an amount by which operating proceeds surpasses operating expenditures in a particular accounting period. The net operating income, however, does not take into consideration the unusual gains and losses as well as the financial expenditures like the interest paid and financial revenue like the interest earned. In other words, net operating income denotes earnings from real estate investment minus all fixed and variable spending from gross operating income, but before subtracting the yearly debt service and tax liability.
Net present value: The term net preset value (NPV) denotes the current worth of an investment's potential net cash flows less the original investment. Computation of the net present value presents a process of grading real estate investment alternatives by means of affecting a discount rate to future cash flows. A positive NPV points to an excess more than the discount rate. On the other hand, a negative NPV is a sign of negative dollar amount, which is actually a penalty or loss, vis-à-vis the discount rate. The net present value is not meant as a relative appraisal, but somewhat as a procedure to examine individual properties depending on absolute dollars obtained in comparison to precise objectives of the investor. To some extent, it is possible to have a relative analysis provided the properties are extremely analogous, equity invested is similar and the same discount rate is affected. In fact, the net present value is often made use of in combination with the internal rate of return to determine profitability and is usually judged more consistent considering certain uncertainties that may come up with IRR involving manifold sign modifications in cash flows as well as negative and minimal cash flows in comparison to invested funds. Venture analysts often plan net present value of substitute investments or build up NPV profiles for precise investment alternatives depending on an assortment of discount rates.
Net worth: In general, the term net worth, also called net assets, refers to total assets minus liabilities for a company and, in the case of an individual; it denotes the value of a person's assets, including cash, but minus all legal responsibilities. It may be noted that the net worth crucial determinant of the worth of a firm taking the fact into account that it is basically composed of all the money that has been invested since its establishment in addition to the preserved income for the duration of its operation/ existence. The net worth may be brought to use to decide on the credit worthiness of a company as it provides a picture of the firm's investment history. In the case of an individual, net worth denotes amount by which the person's assets surpasses his or her liabilities and is also called the net value or wealth. In both cases, the term represents the total assets minus the total liabilities. In the context of real estate, the expression net worth denoted the entire present value of a real property minus its due liabilities.
New home construction loan: The term new home construction loan refers to a characteristic mortgage loan whereby the lender provides money advances to the borrower in a succession for the duration of the previously decided phases of construction. This mortgage loan is meant to cover the expenses of land development as well as construction of building and paid as required or as each stage is completed. The loan may also be made available by the lender according to a prearranged timetable or when some condition is fulfilled by the borrower. Often, the term new home construction loan is also referred to as building loan, development loan or construction mortgage.
New home sales: The expression new home sales denote the number of new single-family homes sold annually. In fact, the term is an economic pointer that records sales of newly built residences and as the new home sales sets off expenditure, they have a considerable influence on release. Usually, when there is an economic slump, new home sales also serve as an early sign of a depression.
It may be mentioned here that the actions of a new home sales profession is at a remarkable variance with those of the resale activities. In addition, as per special provincial real estate Acts, the builders or developers are able to engage their individual sales personnel even without soliciting the help of a real estate brokerage. The methods related to the employed sales personnel is likely to differ from one provincial jurisdiction to another. For instance, while some provinces allow the builders to employ sales personnel and still not be listed under the Act, in many other provinces, it is essential for the builders to register themselves under the Act. In both cases, usually every salesperson has to confine him or her to the business of solely selling properties that are owned by their company. Such sales personnel would be violating the law if they deal with any other sales or receive any other form of compensation associated with the sales of other properties. This stipulation is worth mentioning as many buyers of new homes own properties from before and they ought to be sold to enable the purchase of a new home.
New home warranty program: The term new home warranty program refers to a type of insurance plan that is usually managed by a government organization or an autonomous body and is meant for new homes that concerns assurances for precise shortcomings over a stipulated time frame.
Nominal interest rate: In lending business, the phrase nominal interest rate refers to the stated rate of interest that is required to be pain on a credit or money advance. In other words, it denotes the interest rate that the lender says the borrower will pay and it can either be a fixed or declining balance rate. However, it needs to be noted that the nominal interest rates virtually do not divulge anything regarding the cost of a loan. In the context of real estate, the term denotes the quoted rate of interest for a mortgage loan.
Non est factum: The term non est factum, which means 'it is not (my) deed' in Latin, refers to a petition that the defendant had signed a document without completely realizing its nature, by mistake or fradulently. An instance of this is a person signing a document regarding the transfer of ownership of his or her property under the belief that it is only a guarantee for a debt. It means that the defendant had signed the contract without comprehending its meaning, but by no means in a negligent manner. It is actually quite difficult to claim non est factum as it does not permit any negligence on the part of the signatory.
In effect, the term associates with the legal decree that an individual who was persuaded either naively or deceitfully by another person to sign a written document that is unfairly different from what he or she thought is not bound by that document. In this case, the law declared the document null and void on the ground that the mind of the signatory did not go along with the signature. As the signatory had no intention to sign the document, the law considers that the individual did not sign the document to which the signatory's name is attached. It is important to note that an individual cannot plead for non est factum if he or she misreads something that they had planned to sign.
In case an individual is of the belief that the contract or document states something, but does not read it and later finds out that the contract states something different, he or she does not have any defense as this tantamount to negligence on the part of the signatory. It has been discussed earlier that the court does not permit an individual to plead for non est factum in the event of any negligence on the part of the signatory. In the same way, a blind or illiterate person, who is aware of the common nature and impact of the agreement or document, will be bound by it except for the fact that the contract or agreement was misleadingly read to him or her or it was not read at all despite their request to do so. It is advisable that any individual contemplating to plead non est factum ought to seek expert legal advice as petitioning for non est factum successfully is an extremely hard task.
Non-monetary benefits: The term non-monetary benefits denotes any financial allowance, barring money, obtained by an individual or any other legal entity that is likely to be considered as a pecuniary gain from the point of view of taxation issues. It may be mentioned here that the majority of the debates on non-monetary benefits actually focus on the taxation benefits or gains obtained by individuals as property owners, shareholders and/ or employees. For instance, a non-monetary benefit may comprise of selling a vehicle owned by a company to a shareholder at a price that is less than its real value. In this case, the disparity between the fair market value of the vehicle and the real selling price may be considered as a benefit from the view point of taxation. Here the seller is said to receive the non-monetary benefit for the rationales of federal taxation.
Non-profit housing co-op: In Canada, a non-profit housing cooperative may be generally expressed as a cooperative where the primary intention of the share capital is not to provide housing to its members devoid of the objective of benefit for the members of the organization. During the time of disbanding or termination, following the reimbursement of all loans and legal responsibilities, the cooperative are usually shares out any left over property among one or numerous cooperatives or charitable institutions. The precise constitution as well as functioning of the non-profit housing cooperatives usually differs according to the provincial laws in every jurisdiction.
Non-realty interests: In real restate, the term non-realty interests refer to shares or investments in any real property, excepting the land and the improvements, which are taken into account while evaluating an asset. Very often, commercial real estate practitioners come across non-realty interests during the sale of a functioning business. It is possible that the enterprise may possess entitlements or claims related to trade marks, licenses as well as copyright or patented items. It is also possible that the business has been functioning under a franchisor agreement that ensue a variety of gains, for instance, an special region for the franchisee as well as the use of the franchisor's trade mark or brand name. The explicit agreements with clients that are also passed on to the new owner with the sale of the business are also likely to influence the price of the enterprise.
Non-recourse mortgage: The term non-recourse mortgage refers to a home loan in which the amount owned by the borrower can never be greater than the value of the house when the repayment of the advance takes place. In addition, in the instance of a non-recourse mortgage, the lender is only entitled to make use of the value of the residential property as collateral for reimbursement of the mortgage loan in the even the borrower turns out to be a defaulter.
Non-resident ownership: The term non-resident ownership refers to the possession of real estate property by individuals or entities who do not reside in that particular country. As per the provincial and federal laws, legal limitation may often influence the purchase and/ or disposition of land by non-resident owners, including individuals and other entities.
Notice: The term notice refers to a written or oral warning to an individual regarding the issuer's intention to do something or initiate a legal action. In other words, the term notice is a legal concept expressing a requirement that a party be conscious of legal process having an effect on their rights, obligations and/ or duties. In fact, there are a number of forms of notices - public or legal notice, actual notice, constructive notice (a notice supposed to have been received, for instance, mailing a notice instead of delivery) and implied notice. In addition to these, there is notice by publication whereby an individual or any other entity publishes a notice in the newspaper to initiate a legal case, bankruptcy or an estate probate with a view to draw public attention to the issue.
In the context of real estate, the form of notice that is used most frequently is a personal notice that signifies an express oral or written communication with the parties involved in a real property deal. In may be mentioned here that most often commercial real estate practitioners come across notices regarding stipulations being met in the agreement or contract, for instance, notices subject to funding and sale of the buyer's home as well as related notices getting rid of the stipulations.
Notice - agreements / contracts: The structure as well as the phrasing of the notices or information/ warning notes differs from one provincial jurisdiction to another. The most common written warnings/ information incorporate the elimination of stipulations/ clauses, waiver of provisions as well as additions concerning these conditions. It is possible that exceptional notices of agreements/ contracts are applicable regarding the entitlement of sale earning as well as the listing of the related real property.
Notice - real estate brokerage: It is essential for particular real estate brokerage notices to be finalized by the registrants as per the stipulations or provisions mentioned in the provincial real estate Acts and/ or be authorized by the suitable authoritarian agents. Real estate brokerages usually incorporate entries such as address alterations and change in the officers or directors in a conglomerate listed under the legislation.
Notice of pending litigation: In matters pertaining to real estate, the phrase notice of pending litigation refers to a legal document that is issued by the court of law and recorded in the provincial land registry office providing information or warning that a lawsuit is awaiting or in progress pertaining to a number of claims to land ownership. An individual asserting an endowment or holding in a piece of land, in a mortgage or obstruction listed against a piece of land is entitled to initiate a legal action to implement or execute his or her claim and record a notice of pending litigation. It may be noted here that the name as well as the subject matter of the notice forms are likely to differ from one provincial jurisdiction to another.
It is advisable that the individual initiating a court action in this connection should obtain a copy of the statement of claim from the court with a view to find out the details of the court case. Much like a caveat, a notice of pending litigation serves as a caution or warning. While the consequence of a notice of pending litigation will hinge on the form of the notice, there is little doubt that such a legal action will definitely influence the salability of the ownership of the real property till such a time when the dispute is settled or the notice is withdrawn. It is common knowledge that majority of the buyers will keep away from acquiring a property that is bogged down with such court cases.
Notice of tax sale: In matters pertaining to real estate issues, the term notice of tax sale refers to a legal information or warning recorded against the ownership of a land when the taxes on the real property due to the local municipality are unpaid for a particular period of time. However, it may be noted that the name and the variety of the subject matter will differ from one provincial jurisdiction to another.
It is important to note that the provincial laws empower the municipalities to sell the land/ real property for which taxes have remained unpaid for a specific period. In such an event, it is essential for the municipality to abide by the legal procedures to sell the land by means of public auction with a view to get back the amount due as taxes. It is interesting to note that in such cases normally the municipality itself has the privilege to bid at the public auction to acquire the concerned piece of land/ real property. However, the provincial legislations offer the owner of the land that is to be sold in a public auction for unpaid municipal taxes the facility to buy back the land before it is auctioned by clearing the due amount along with the fines involved. In such an instance, the defaulting land/ property owner is entitled to record the apposite notice of recovery at the local land registration office. On the other hand, the municipal authorities issue a tax certificate to the person who acquires the land at the tax sale or public auction. The certificate issued by the municipal authorities is evidence of the fact that the individual or other entity who has bought the land/ real property at the tax sale is the new registered owner of the realty in consideration.
Notice of termination: The expression notice of termination refers to a notice or written warning issued by either a property owner or the tenant that they desire to end the rental contract and check out of the premises in conformity with the terms and conditions mentioned in the lease agreement signed by them. The notice of termination may be given at any time - either at some point in the tenancy or at the end of the lease agreement depending on the stipulations spelled out in the pertinent provincial tenancy laws. The modus operandi, point in time of issuing the notices of termination as well as the causes for giving the notices during or at the conclusion of the rental period differ from one provincial jurisdiction to another.
Notice to vacate: The term notice to vacate, also called notice to quit, refers to a legal notice issued by a landlord to a tenant instructing the latter to leave the property. It is an officially authorized note that makes it mandatory for the tenants to take out their belongings from the owner's premises in a declared period of time or on a particular date and hand over the vacant possession of the property to the landlord, agent or the nominated heir. It is important to note that the title of this legal notice may differ from one provincial jurisdiction to another.
Nuisance: In law, the term nuisance refers to any use of land that gets in the way of the use and enjoyment of the adjacent lands and may invite legal action by the harmed party. In other words, a nuisance is usually associated with interference of the rights of an individual, most commonly the right to enjoy his or her land, and, as in the case of negligence, is among the civil wrongs known as a tort. For instance, a person may bring in some kind of pollutant that is harmful to a neighbor and/ or his or her property. In this instance, the nuisance, called a private nuisance, may lead the neighbor to initiate legal action seeking damages. Normally we consider a nuisance to be objectionable acts by neighbors, such as noise, but, in effect, it may also include instances of water or fumes escaping from an adjacent land as well as unsociable activities by a neighbor. When a nuisance affects a number of people in a locality it turns out to be a public nuisance that is considered to be a criminal offense.
Null and void: In law, the expression null and void denotes something that is invalid, not enforceable, having no legal power or result. In other words, any act, deed or deal that is void is considered to have no legal effect whatever and the law considers as if it never ever existed or took place. In the context of real estate, the term null and void is usually found in agreement or contracts related to the sale of realty assets that entails a stipulation and associated waiver.