Escrow's core job ends at recording, but a real estate transaction leaves a long tail of terms that matter afterward — which is why this is the largest category in the glossary. It spans routine post-closing servicing, like impound accounts for property tax and insurance, and specialized situations that only apply to some transactions: 1031 exchanges and their strict 45-day and 180-day windows, reconveyance when a loan is paid off, and the tax documents — like the 1099-S — that follow a sale into the next filing season. It also covers what happens when an owner dies or divorces after closing, through documents like an affidavit of death or affidavit of surviving spouse. If a question comes up months or years after your escrow closed, the answer is probably in this category.
- 1031 Exchange
- A tax-deferred exchange under Section 1031 of the Internal Revenue Code allowing an investor to sell an investment property and reinvest the proceeds into a like-kind replacement property while deferring capital gains taxes.
- 1099-S
- An IRS form filed by escrow reporting the proceeds from the sale of real property to the IRS and the seller. Required on most real estate transactions unless a specific exemption applies.
- 180-Day Exchange Period
- The maximum time allowed to complete a 1031 exchange by closing on the replacement property. Begins on the day the relinquished property closes and cannot be extended except in certain presidentially declared disasters.
- 45-Day Identification Period
- The period in a 1031 exchange during which the exchanger must identify potential replacement properties in writing. Begins on the day the relinquished property closes and cannot be extended.
- Abstract of Judgment
- A recorded document that creates a lien against all real property owned by the judgment debtor in the county where recorded. Must be paid off before or at closing if the seller has any judgments recorded against them.
- Affidavit of Death
- A notarized document recorded with the county recorder to remove a deceased joint tenant or trustor from title. Must be accompanied by a certified copy of the death certificate.
- Affidavit of Surviving Spouse
- A notarized document used to transfer community property or community property with right of survivorship to the surviving spouse after the death of their partner without going through probate.
- Beneficiary Demand
- A payoff statement provided by the lender (beneficiary of the deed of trust) showing the exact amount required to pay off the loan including principal, interest, and any fees or penalties.
- Boot
- Any non-like-kind property received in a 1031 exchange including cash, debt relief, or personal property. Boot is taxable in the year of the exchange and reduces the tax deferral benefit.
- Boundary Dispute
- A disagreement between neighboring property owners about the location of the boundary line between their properties. May require a survey, negotiation, or legal action to resolve.
- Carbon Monoxide Detector
- A California law requirement that residential properties with an attached garage or fossil fuel burning appliance have working carbon monoxide detectors. Sellers must certify compliance prior to closing.
- CC&R Violation
- A breach of the covenants, conditions, and restrictions recorded against a property. HOAs and neighbors may have the right to enforce CC&Rs through legal action.
- Change of Ownership Statement
- A form sent by the county assessor to the new owner after a property transfer requesting information about the transaction to assist in determining the new assessed value.
- Conservatorship Order
- A court order appointing a conservator to manage the financial affairs and/or personal care of a person who is unable to manage their own affairs. Escrow requires a certified copy of the conservatorship order and court authorization to sell real property.
- Corporate Resolution
- A formal document adopted by a corporation's board of directors authorizing specific actions such as the sale or purchase of real property. Required by escrow and title when a corporation is a party to the transaction.
- Death Certificate
- An official government document certifying a person's death. Required by escrow and title to process title transfers involving deceased owners including survivorship transfers and estate sales.
- Deed of Reconveyance
- A document recorded by the lender or trustee after a loan is paid in full that releases the deed of trust lien from the property. Evidence that the property is free and clear of that particular loan.
- Demand Request
- A written request from escrow to a lender or lienholder asking for a payoff statement showing the exact amount needed to pay off a loan or lien as of a specific date.
- Easement by Implication
- An easement created by operation of law rather than by express written agreement when the circumstances of a property transfer imply that an easement was intended. Addressed in the 2024 California Supreme Court ruling in Romero v. Shih.
- Final Closing Statement
- The completed accounting of all funds in the escrow transaction issued after recording and disbursement. Shows all actual charges, credits, and the final amount received or paid by each party.
- FIRPTA
- The Foreign Investment in Real Property Tax Act — a federal law requiring withholding of federal income tax when a foreign person sells U.S. real property. Escrow must withhold 15% of the gross sales price unless an exemption applies.
- Form 593
- California Franchise Tax Board form used to report and remit state income tax withholding on the sale of California real property. Escrow is responsible for withholding and remitting unless a valid exemption applies.
- Grant Deed Recording
- The official recording of the grant deed with the county recorder that transfers legal ownership from seller to buyer. The recorded deed becomes part of the public record and establishes the new owner's title.
- HOA Transfer Fee
- A fee charged by a homeowners association when a property is sold to cover the cost of transferring the account from the seller to the buyer and providing required disclosure documents.
- Homeowners Association (HOA)
- An organization in a planned community, condominium, or subdivision that enforces CC&Rs and manages common areas. HOA membership is mandatory for properties within the association and dues are collected monthly or annually.
- Homestead Exemption
- A California property tax exemption that reduces the assessed value of an owner-occupied primary residence for tax purposes. Homeowners must apply through their county assessor's office.
- Indemnification Agreement
- An agreement in which one party agrees to protect another party from specified losses or claims. Used in escrow when a party requests an exception to standard requirements such as closing without a required document.
- Letters Testamentary
- A court document issued to the executor of an estate authorizing them to act on behalf of the estate including selling estate property. Required by escrow and title when a property is being sold by an estate.
- Lis Pendens
- A recorded notice that a lawsuit has been filed affecting title to real property. A lis pendens clouds title and must be resolved before the property can be sold or refinanced.
- LLC Operating Agreement
- The governing document of a limited liability company that establishes ownership, management structure, and member rights. Escrow and title review the operating agreement to confirm authority to sell or purchase real property.
- Mello-Roos
- A special tax assessment levied on properties in a Community Facilities District to fund public infrastructure and services. Mello-Roos taxes are in addition to regular property taxes and must be disclosed to buyers.
- Partnership Agreement
- The governing document of a partnership that establishes the rights and obligations of the partners. Escrow and title review the partnership agreement to confirm authority to sell or purchase real property.
- Post-Close Escrow
- Escrow work that continues after recording and disbursement including filing tax forms, releasing holdbacks, resolving outstanding title issues, and ensuring all post-closing obligations are fulfilled.
- Pre-Escrow Seller Net Sheet
- An estimate of the seller's net proceeds prepared by the listing agent or escrow officer before escrow is formally opened. Helps the seller understand their expected proceeds before accepting an offer.
- Probate
- The court-supervised process of administering a deceased person's estate including validating their will, paying debts, and distributing assets. Property held in a living trust avoids probate.
- Property Tax Proration
- The division of property taxes between buyer and seller based on the closing date. California property taxes are paid in arrears so prorations must account for taxes already due but not yet paid.
- Qualified Intermediary (QI)
- A neutral third party required in a 1031 exchange who holds the sale proceeds and facilitates the exchange. The seller cannot receive or control the funds during the exchange period.
- Quiet Title Action
- A court proceeding to establish clear title to real property by resolving competing claims or interests. Used to clear title defects that cannot be resolved through standard escrow procedures.
- Reconveyance
- The process by which a lender releases their deed of trust lien after the loan is paid in full by recording a deed of reconveyance. Confirms the property is free and clear of that lien.
- Retrofit Compliance
- California-required property upgrades that sellers must complete or disclose prior to closing. Common retrofit requirements include water heater strapping, smoke detectors, carbon monoxide detectors, and low-flow water fixtures.
- Smoke Detector Compliance
- A California law requirement that residential properties have working smoke detectors in specified locations. Sellers must provide a written statement of compliance to the buyer prior to closing.
- Subordination Agreement
- An agreement in which a lienholder agrees to make their lien junior to another lien. Commonly used when refinancing to allow a new first trust deed to maintain priority over an existing second lien.
- Supplemental Tax Bill
- An additional property tax bill issued by the county assessor after a change of ownership reflecting the difference between the old assessed value and the new assessed value from the date of transfer through the end of the tax year.
- Survey
- A professional measurement and mapping of a property's boundaries and physical features conducted by a licensed land surveyor. May be required by the lender or title company or to resolve boundary disputes.
- Title Search
- A review of public records to trace the history of ownership and identify any liens, encumbrances, or defects affecting title to a property. Performed by the title company as part of the title insurance process.
- Water Heater Strapping
- A California law requirement that water heaters be strapped or braced to resist earthquake movement. Sellers must certify compliance on the TDS and escrow may require written certification.
- Withholding Exemption
- A qualifying condition that eliminates the requirement to withhold taxes on a real estate sale. Common exemptions include the principal residence exemption for Form 593 and the primary residence exclusion for FIRPTA.