Escrow Terms

To help you understand common terms involved in the escrow process, we have prepared a glossary of terms for you. You may click on the letter to jump to the terms beginning with that letter.

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Abstract: An abridgment; a brief summary.

Abstract of Judgment: A consideration or summary of the essential provisions of a Court Judgment.

Abstract of Title: A list of, and full or abstract copies of, all documents affecting Title based on an examination of public records.

Abutting Owner: Owner whose land touches another parcel, i.e., a road, highway, or other parcel of land.

Acceleration Clause: A clause in an Installment Note permitting the Payee to declare the entire unpaid balance immediately due and payable upon the failure to pay an installment when due. Such a clause is subject, however, to a statutory right of reinstatement in California if the Note is secured by a Deed of Trust or Mortgage not being foreclosed by Judicial Process.

Acknowledgement: An act of authenticating instruments conveying property or otherwise conferring rights; a declaration by the Party executing an instrument that it is the Party’s act and Deed; a form used by Notaries Public and other authorized officials to verify the act of Acknowledgement.

Adjudication: Judicial determination of a case or controversy.

Administrator: A person appointed by a Probate Court as the representative of a Decedent’s Estate where the Decedent left no Will.

Administrator c.t.a.: Administrator with the Will annexed; the representative of a Decedent’s Estate where no one is named as Executor, or where the named person is unable or unwilling to act.

Ad Valorem: According to value.

Adverse Possession: Claims of Ownership of property based upon open and hostile possession and occupancy. Issuance of Title Insurance requires Judicial determination.

Affiant: A person who makes an Affidavit.

Affidavit: A written declaration under oath.

Agent: A person who acts for another by proper authorization.

Alienation: The voluntary parting with an interest in the Ownership of Real Property.

Alienation Clause: A clause in a Note and Trust Deed permitting the payee to declare the entire unpaid balance immediately due and payable upon subsequent transfer of the property. Also referred to as a “Due On Sale” clause.

All-Inclusive Deed of Trust: This is a junior Deed of Trust on the property that includes the amount actually due the Beneficiary therein but also includes the amount actually due the Beneficiary therein but also includes the unpaid principal balances of Deeds of Trust that are to remain of record and are senior to this Deed of Trust. The Beneficiary agrees that by accepting payment on the amount of the “All-Inclusive” Deed of Trust that he will make the payments, when due, on the senior Deeds of Trust.

This type of Deed of Trust is often used by a Seller of the property rather than using a Contract of Sale to avoid complex problems of foreclosing on a Contract of Sale.

The “All-Inclusive” Deed of Trust is also often called a “Wrap-Around” Deed of Trust, a “Hold Harmless” Deed of Trust, or an “Over-riding” Deed of Trust.

Amortization: Provision for the payment of a debt or obligation by payment of principal and interest at stated periods for a stated time until debt is extinguished.

Appraisal: An opinion as to the fair market value of property.

Appurtenant: Belonging to.

Assessed Value: Value placed on property as a basis for Taxation.

Assessments: Special taxes imposed to pay for public improvements beneficial to a limited area.

Assignment: A transfer of all of an interest in Personal Property.

Assignee: The Party to whom the Assignment is given.

Assignor: The Party who makes an Assignment.

Assumption: An agreement to undertake a debt or obligation contracted by another.

Attachment: A seizure of property by Judicial Process during the Pendency of an Action.

Attorney-In-Fact: An Agent authorized to act for another under a “Power-of-Attorney”.


Beneficiary: As used in a Trust Deed, the Beneficiary is the Lender.

Bill of Sale: A written instrument evidencing the transfer of Title to Personal Property.

Bona Fide Purchaser: One who buys property, in good faith, for a fair value, and without notice of adverse claims or rights of third Parties.


Chain of Title: A chronological list of recorded instruments affecting the Title to land.

Chattel: Personal Property.

Collateral: Any property pledged as security for a debt, e.g., the real estate pledged as security for the payment of an indebtedness secured by a Mortgage or Deed of Trust.

Collateral Assignment: The Assignment of a debt and the security therefore, such as a Note and Deed of Trust to secure the performance of an obligation by the Assignor. The Assignee holds Title for security purposes.

Community Property: Property acquired by husband or wife or both during marriage other than by gift, or as an heir, legatee, or devisee.

Condemnation: The exercise of the power of Eminent Domain, i.e., the taking of property for a public use upon payment of just compensation; also refers to Condemnation of unsafe structures under the Police Power.

Condominium: A statutory estate in land consisting of Ownership of a divided interest, i.e., an individually owned airspace unit, in a multi-family or other structure; together with an undivided interest in the common areas.

Confirmation of Sale: Court approval of the sale of property by an Executor, Administrator, Guardian, or Conservator.

Conservator: A person appointed by the Probate Court to take care of the person and/or property of an adult person who is not competent to act for himself or herself.

Consideration: The inducement for entering into a contract; it consists of either a benefit to the Promisor, or a loss or detriment to the Promisee.

Constructive Notice: Notice given by the public records of a claim of Ownership or interest in property. Generally, the law presumes that one has the same knowledge of instruments properly recorded as if one were actually acquainted with them.

Contiguous: Being in actual contact; adjoining or touching.

Contingent: Dependent upon an uncertain event.

Conventional Loan: A loan secured by a Mortgage or Deed of Trust which is not insured or guaranteed by a Governmental Agency.

Conveyance: A written instrument transferring the Title to land or an interest therein from one Party to another.

Corporation: An artificial being, created by law; and possessing certain rights, privileges, and duties of natural persons.

Covenants: Agreements contained in Deeds and other instruments for the performance or non-performance of certain acts, or the use or non-use of property in a certain manner.


Decedent: A deceased person.

Decree of Distribution: An order of the Probate Court distributing property to persons entitled thereto.

Dedication: A gift or grant of land by the Owner for a public use. A dedication to be effective must be accepted by or on behalf of the public.

Deed: Written instrument by which the Ownership of land is transferred from one Party to another.

Deed of Trust: A written instrument by which Title to an interest in land is transferred by the Trustor to a Trustee as security for a loan or other obligation due a Beneficiary. Also, called Trust Deed.

Default: Failure to perform a duty or to discharge an obligation.

Defendant: A Party against whom a Legal Action is brought.

Deficiency Judgment: A Personal Judgment in a Judicial Foreclosure Action for the amount remaining due after a sale of the security.

Deposit Receipt: A written contract used when accepting “Earnest Money” to bind an offer for property by a prospective Purchaser.

Devise: A disposition of real property by will.

Devisee: One who receives real property by will.

Divest: To deprive of a right or Title.

Document: An original or official paper relied upon as the basis, proof, or support of anything.

Documentary Transfer Tax: A tax on transfers of Title to Real Property when consideration is $100.00 or more.

Dominant Tenement: The land benefited by an Appurtenant Easement.

Donee: A person to whom a gift is made.

Donor: A person who makes a gift.


Earnest Money: A good faith deposit given to bind a contract between Buyer and Seller.

Easement: A limited right or interest in land of another that entitles the holder of the right to some use, privilege, or benefit out of or over the land (e.g., to install pole lines, pipelines, roads, driveways).

Eminent Domain: The power to take private property for a public purpose upon payment of just compensation.

Encroachment: The extension of an improvement onto the property of another.

Encumbrance: A lien or charge on land.

Endorsement: A writing on a negotiable instrument by which property mentioned therein is assigned and transferred. Also, a notation on an instrument to change, clarify, or enlarge its contents. In insurance – a provision or rider added to the Insurance Policy to alter the terms of the Insurance Contract.

Equitable Title: Title of the Purchaser under a Contract of Sale or the right to acquire the Legal Title.

Equity: Property value in excess of Mortgage and other liens.

Escheat: Forfeiture of Title to property to the State – either Real or Personal. A transaction in which an impartial third Party acts as Agent for both Seller and Buyer, or for both Borrower and Lender, in carrying out Instructions, delivering papers and documents, and disbursing funds.

Estate: The degree, nature, and extent of the interest a person has in Real Property.

Estoppel: A doctrine which bars one from asserting rights which are inconsistent with a previous position or representation.

Et Al: And others.

Et Ux: And wife.

Et Vir: And husband.

Exception: A deduction, subtraction, or exclusion.

Executor: A male person or a legal entity who is designated in a Will as the representative of a Decedent’s Estate.

Executrix: A female person or legal entity who is designated in a Will as the representative of a Decedent’s Estate.

Exemption: An immunity from some burden or obligation.

Extension Agreement: Agreement granting further time for performance.


Facsimile: An exact and precise copy.

Fee: An Estate of Inheritance.

Fictitious Deed of Trust: A recorded Deed of Trust containing general provisions but naming no Parties and describing no property. It is used for reference only in a short form Deed of Trust.

Fiduciary: One who holds something of value in trust for another.

Financing Statement: A Personal Property Security Instrument which replaced a Chattel Mortgage upon adoption of the Uniform Commercial Code.

Fixture: A thing which was originally Personal Property but which has become attached to and is considered as part of the Real Property.

Foreclosure: A proceeding to enforce a lien by a sale of the property in order to satisfy the debt.

Forfeiture: A loss of some right, title, estate, or interest in consequence of Default under an obligation.

Franchise: A right or privilege conferred by Law or Contract.


Garnishment: A Statutory Proceeding whereby property, money, or credits of a Debtor in possession of another are seized and applied to payment of the debt.

General Plan Restrictions: Restrictions on the use of property imposed for the benefit of more than one parcel of property, usually a tract containing many lots.

Grant: A transfer of Real Property.

Grantee: The person to whom a grant is made.

Grantor: The person who makes a grant.

Ground Lease: A lease of the land only.

Guardian: A person appointed by the Probate Court to care for the person and/or estate of a minor or incompetent person.


Heirs: The persons designated by law to succeed to the Estate of a Decedent who leaves no Will.

Homestead: A residential parcel upon which the Owner has recorded a “Declaration of Homestead” pursuant to California Law, which, to an extent, protects it against forces sale.

Hypothecate: To give a thing as security without parting with possession.


Implied: Presumed or inferred, rather than expressed.

Impound Account: Funds collected by a Lender from a Borrower to guarantee payment of such items as Taxes and Hazard Insurance Premiums when due.

Improved Real Estate: Land upon which building have been erected.

Incompetent: Incapable of managing one’s affairs.

Indemnity Agreement: An agreement to compensate another Party for a potential loss. A “Hold-Harmless” agreement.

Indorsement: Same as Endorsement.

Inheritance Tax: A Tax imposed upon the privilege of succeeding to the Title of Real and Personal Property of a Decedent.

Installment Note: A Promissory Note providing for payment of the principal in two or more certain amounts at different stated times.

Instrument: A writing, such as a Deed, made and executed as the expression of some act, contract, or proceeding.

Insurable Interest: An interest in property of such a nature that the occurrence of the event insure4d against would cause financial loss to the insured. Such interests may be that of an Owner, a Mortgagee, a Lessee, a Trustee, etc.

Interim Loan: A short tem loan under circumstances anticipating a subsequent long term loan.

Interlocutory Decree: A Decree that does not finally dispose of a Cause of Action but requires that some further steps be taken.

Inure: To accrue to the benefit of a person.

Involuntary Lien: A lien created by operation of Law.

Irrevocable: Not to be revoked or withdrawn.


Joint Tenancy: Title held by two or more persons in equal shares with right of survivorship.

Joint Venture: A form of business organization composed of two or more natural or artificial persons to conduct a single enterprise for profit.

Judgment Lien: A Statutory Lien created by recording an “Abstract of a Judgment”.

Junior Lien: A subordinate lien.

Jurat: A certificate evidencing the fact that an Affidavit was properly made before an Authorized Officer.

Jurisdiction: The right of a Court to make a decision concerning the subject matter in a given case. The power to hear and determine a matter.


Lease: A Contract for the possession of land in consideration of payment of rent.

Legacy: A gift of Personal Property by will, usually money.

Legal Description: A description or Real Property sufficient to locate it by reference to Government Surveys or recorded maps.

Legatee: One to whom Personal Property is given by will.

Lessee: The tenant under a lease.

Lessor: The landlord under a lease.

Levy: A seizure of property by Judicial Process.

Lien: A charge upon property for the payment of a debt or performance of an obligation. A form of encumbrance. Taxes, Special Assessments, and Judgments, as well as Mortgages, are liens. In addition, there are Mechanic’s and Materialmen’s Liens for furnishing labor or materials.

Life Estate: An Estate measured by the life of a natural person.

Limited Partnership: A Partnership composed of one or more general partners and one or more limited partners, whose contribution and liability are limited.

Lis Pendens: A recorded notice of the filing of an Action.

Loss Payable Clause: An Endorsement to an Insurance Policy (Hazard) specifying parties (Lenders) entitled to participate in proceeds in the event of a loss.


Marketable Title: A Title free from reasonable doubt in Law and in fact.

Market Value: The price that property would reasonably be expected to bring if it were offered for sale with a reasonable sales effort over a reasonable period of time.

Mechanic’s Lien: A Statutory Lien in favor of laborers and materialmen who have contributed to a work of improvement.

Merger of Title: The absorption of one Estate in another.

Mesne: Intermediate; intervening.

Metes and Bounds: Measurements and boundaries.

Minor: A person under 18 years of age.

Monuments: Objects or marks used to fix or establish a boundary.

Moratorium: Temporary suspension.

Mortgage: A two Party security document pledging land as security for the payment of a debt or performance of an obligation.

Mortgagee: The Party who obtains the benefit of a Mortgage (the Lenders).

Mortgagor: The Party who executes a Mortgage (the Borrower).


Nominee: A person designated to take the place of another.

Notary Public: An official appointed by the Secretary of State to administer oaths, to authenticate Contracts, to acknowledge Deeds, etc. A California Notary may act as such in any part of the State.

Note: A written acknowledgment of a debt by a Borrower including a promise of payment in accordance with specified terms; an evidence of debt; the credit instrument. Also referred to as Promissory Note.

Notice of Cessation: A notice that work has ceased; a notice recorded within the time periods which is specified by statute, limiting the time for filing Mechanic’s Liens on an incomplete project.

Notice of Completion: A notice recorded within the time period specified by statute, after completion of a work improvement, signaling commencement of the time period within which claims for Mechanic’s Liens must be recorded.

Notice of Default: Recorded notice that a Default has occurred under the terms of a Deed of Trust.

Notice of Nonresponsibility: Notice recorded by an Owner of Real Property that he will not be responsible for payment of Mechanic’s Liens for work contracted by another.


Obligor: One who places himself under a legal obligation.

Offset Statement: A Statement furnished to Escrow from a tenant regarding status of rental and his rights of possession; also, by an Owner of land subject to an encumbrance, as to the balance due.

Open End Mortgage: A Mortgage (or Deed of Trust) which secures additional advances made by a Lender in addition to the original principal amount of the loan.

Option: A Right to require an act to be done in the future.

Ownership: The right to the use and enjoyment of property, or an interest therein generally to the exclusion of others.


Parol: Oral; verbal.

Partnership: An association of two or more persons as Co-Owners to carry on a business for profit.

Patent: A conveyance of the title to government lands by the government.

Personal Property: Movable property; all property which is not Real Property. Property consisting of Chattels as contrasted to real estate; e.g., furniture, car, clothing.

Plaintiff: The Party who brings a Court Action.

Power-Of-Attorney: A written authorization to an Agent to perform specified acts on behalf of his principal. May be a “General Power” or a “Limited Power”.

Presumption: That which may be assumed without proof.

Prima Facie: Assumed correct until overcome by further proof.

Principal: One who employs an Agent to act on his behalf; or the chief or foremost Party in a particular transaction; or the amount of a loan exclusive of interest; or the assets constituting a Trust Estate.

Priority: That which is earlier or previous in point of time or right, such as first Deed of Trust is ahead of or has priority over a second Deed of Trust.

Prorate: To divide, distribute or assess proportionately.

Purchase Money Mortgage (Deed of Trust): A Mortgage (Deed of Trust) securing payment of all or portion of the Purchase Price of Real Property.


Quiet Title: An Action to establish Title to Real Property or to remove a cloud on Title.

Quitclaim Deed: A Deed which conveys whatever present Right, Title or Interest the grantor may have.


Real Property: Land and buildings as opposed to Personal Property or Chattels.

Reconveyance: A document extinguishing the Lien of a Deed of Trust.

Recordation: Filing for record in the Office of the County Recorder.

Redemption: Buying back one’s property after a Judicial Sale. See Right of Redemption.

Reformation Action: A Legal Action to correct a mistake in a Deed or other document.

Reinstatement: The curing of all defaults by a Borrower, i.e., the restoration of a loan to current status through payment of arrearages.

Release Clause: A clause in a Deed of Trust providing for release of specified portions of the property upon compliance with certain conditions.

Rescission: The act of canceling or annulling the effect of a document.

Reservation: The right or an interest retained by a Grantor in a conveyance.

Restrictions: Limitations on the use and enjoyment of property.

Rider: A supplement to, an addition to, an Endorsement to a document.

Right of Redemption: A legally enforceable right provided by Law under certain conditions permitting the Owner to reclaim Foreclosed Property by making full payment of the Mortgage debt or the Foreclosure Sales Price, as applicable. The Right of Redemption exists for a specified period of time, known as the Redemption Period. Junior lien claimants may also have such right.

Right of Way: The right to cross over a parcel of land.


Satisfaction: Performance of the terms of an obligation.

Seal: An impression upon a document which lends authenticity to its execution, i.e. a Corporate Seal or Notary Seal.

Security: Collateral; property pledged to secure repayment of a debt.

Security Agreement: Document now used in place of a Chattel Mortgage as evidence of a Lien on Personal Property., A financing Statement may be recorded to give Constructive Notice of the Security Agreement.

Security Deposit: A deposit made to assure performance of an obligation.

Separate Property: Property acquired before marriage, and property acquired during marriage by gift, devise, descent, or bequest.

Servient Tenement: An Estate burdened by an Easement.

Special Assessments: See Assessments.

Specific Performance: A Legal Action to compel performance of an agreement.

Statement of Information: A brief written statement of facts relied upon by Title Insurers to assist in the identification of persons executing the Statement.

Sublease: A lease of less than all of the interest held by an original Lessee to a Sublessee.

Subordination Agreement: An agreement under which a lien is made inferior to another lien.

Subrogate: To substitute one person in the place of another with reference to an obligation.

Succession: The receiving of property by inheritance.

Surety: A Party that binds itself with another, called the principal, for the performance of an obligation.

Survey: A map or plat containing a statement of courses, distances and quantity of land and showing lines of possession.

Syndication: A pooling arrangement or association of persons investing in Real Property by buying an interest in an enterprise.


Tax Deed: A Deed issued to the Purchaser at a Tax Sale.

Tenancy in Common: Ownership of property by two or more persons in equal or unequal undivided interests without right of survivorship.

Tender: An unconditional offer of payment of a debt or to fully satisfy an obligation.

Title: Evidence of a person’s right or the extent of his interest in property.

Township: Subdivision of the public lands of the United States; each township usually contains 36 sections; a section usually contains 640 acres.

Trust: A fiduciary relationship in which a Trustee holds Title to property for the benefit of others.

Trust Deed: See Deed of Trust.

Trustee: The person to whom property is conveyed in Trust.

Trustor: The person who conveys property in Trust.


Unlawful Detainer: A Legal Action to recover possession of Real Property.

Usury: The charge of a greater rate of interest for the loan of money than is permitted by law.


Vendee: Purchaser.

Vendor: Seller.

Verification: An Affidavit attached to a pleading or other document which states that the matters set forth are true.

Versus: Against (abbreviated vs. or v.).

Vest: To give immediate, fixed right in property, with either present or future enjoyment of possession; also denotes the manner in which Title is held.

Void: Having no legal effect; null.


Waiver: A relinquishment or abandonment of a right.

Will: A disposition of property effective upon the maker’s death; often referred to as “Last Will and Testament”.

Writ: A process of the Court under which property may be seized and sold.


Zoning: Governmental regulations relating to the use of property.

Contact Us

Embassy Escrow, Inc.

7369 Day Creek Blvd.,

STE. 102,

Rancho Cucamonga, CA 91739

Phone. (909) 922-8393

Fax. (909) 304-0014