Glossary

An Earnings Statement is a standard financial document that summarizes a company's revenue and expenses for a specific period of time.

Burden imposed on a real property, the servient estate, in favor of another immovable, the dominant estate, belonging to a different owner.

Economic life is the time period during which a construction contributes to the value of the property. Economic life can match the physical life of a construction or be less, but never more.

Economic obsolescence is caused by external forces such as changes in neighbourhood land uses and governmental ordinances that affect full utilization of the property.

Difference between what a factor of production (capital, land, labor) is earning, and what it could earn in the next best-paid employment.

Age of an analogue building showing a utility, a state and an equivalent lifespan. The effective age may be longer or shorter than the chronological age depending on the degree of maintenance, of modernization and according the prevailing status of the market offer and demand.

Total potential income from property before any expenses are deducted but considering a deduction of a reserve for vacancies and bad debt.

Emphyteusis is the right which, for a certain time, grants a person the full benefit and enjoyment of an immovable owned by another provided he does not endanger its existence and undertakes to make constructions, works or plantations thereon that durably increase its value. Emphyteusis is established by contract or by will. The term of the emphyteusis shall be stipulated in the constituting act and be not less than 10 nor more than 100 years. If it is longer, it is reduced to 100 years.

(See: Emphyteutic Lessee)

The Emphyteutic Lessee is a quasi-owner of the real estate which he is leasing.

An improvement that intrudes illegally on another's property.

General term for any claim or lien on a parcel of real property. These include: mortgages, deeds of trust, recorded abstracts of judgment, unpaid real property taxes, tax liens, easements and water or timber rights. While the owner has title, any encumbrance is usually on record and must be paid for at some point.

Shareholders’ equity is the capital that incurs the risk of the business. This type of financial resource forms the cornerstone of the entire financial system. Its importance is such that shareholders providing it are granted decision-making powers and control over the business in various different ways. Shareholders’ equity is equal to the sum of capital increases by shareholders and annual net income for past years not distributed in the form of dividends plus the original share capital.

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. A trust account held in the borrower's name to pay obligations such as property taxes and insurance premiums.

The heritage of a deceased person.

When a company is sold or transferred, the shares of the owner-manager are valued, and this value is determined and set at a specific time. Following this, a new definition of the owner-manger’s shares and a redistribution of equity among the new owners of the company occurs. Several methods are used to institute a freeze and each method has its particularities. The “classic” method entails a transfer of the owner-manager’s shares to a management company that becomes the owner of the company. The management company issues new, non-participating shares to the owner-manager in exchange for his old shares. The value of the new, non-participating shares will be equivalent to the value determined for the old shares at the time of the freeze. Usually, the new, non-participating shares are controlling shares. The management company will also issue new participating shares to the designated beneficiaries of the estate. The new participating shares are the shares that will benefit from the increase in the company’s value in the future. In setting the value of his shares at the time of the freeze, the shareholder sets the amount of the capital gain that he will realize on his new, non-participating shares. The tax on this capital gain will be payable upon disposition of the shares.

Latin abbreviation for "et uxor" meaning "and wife".

Dispossession by process of law. The act of depriving a person of the possession of something in pursuance of the judgment of a court.

The exchange rate is a rate at which nations' currencies are exchanged, that is, the price of one currency in terms of another. A large number of countries now use the American dollar as the standard against which to measure the value of their own currency. As the great majority of Canada's international trade and financial transactions are with the US, the value of the Canadian dollar in relation to the US dollar is of prime importance to Canada.

Physical evidence that has been tendered or filed with the court.

Expropriation is a compulsory seizure or surrender of real estate for public interest purposes in return for an indemnity to the property's owner.

R.S.Q., chapter E-24