LA Condo & Real Estate Glossary: Terms Every Buyer Should Know

Buying or selling a condo comes with its own vocabulary — a mix of real-estate, lending, HOA, and California-specific terms. Here are the ones you are most likely to run into in Los Angeles, in plain English.

Building & HOA terms

HOA (Homeowners Association)

The organization that governs a condo building — it maintains common areas, enforces the rules, and collects the dues that fund operations and reserves.

CC&Rs

Covenants, Conditions & Restrictions — the recorded rulebook for the building, covering what you can and can’t do (renovations, rentals, pets, and more).

Reserves & reserve study

The association’s savings for major future repairs (roof, elevators, plumbing) and the professional report that projects those costs. A well-funded reserve is one of the clearest signs of a healthy building.

Special assessment

A one-time charge to every owner when a big expense exceeds reserves — sometimes tens of thousands of dollars.

Davis-Stirling Act

The California law that governs condos and HOAs, including disclosures, reserve studies, meetings, and owners’ rights.

Master insurance policy

The HOA’s building-wide insurance. You still carry your own “HO-6” policy for the interior and personal property.

Owner-occupancy ratio

The share of units lived in by owners rather than renters. Lenders watch this closely — a low ratio can make a building harder to finance.

Financing terms

Warrantable vs. non-warrantable

A “warrantable” condo building meets Fannie Mae, Freddie Mac, or VA standards and qualifies for standard loans. “Non-warrantable” buildings are still financeable, just through different products.

Pre-approval

A lender’s written estimate of what you can borrow, based on verified income and credit. It sets your budget and makes your offer credible.

PITI

Principal, Interest, Taxes, and Insurance — your core monthly payment. For condos, add HOA dues on top when budgeting.

DTI (debt-to-income)

The share of your monthly income that goes to debts. Lenders count HOA dues here, so higher dues can affect how much you qualify for.

LTV (loan-to-value)

The loan amount as a percentage of the home’s value. A lower LTV (bigger down payment) usually means better terms.

FHA / VA condo approval

For those loan types, the building itself must appear on the FHA or VA approved-condo list, separate from your own qualification.

Escrow & closing terms

Escrow

A neutral third party that holds funds and documents and only releases them when both sides meet the contract terms.

Earnest money (EMD)

Your good-faith deposit, held in escrow and applied to your purchase at closing.

Contingency

A condition that must be satisfied for the deal to proceed — commonly inspection, appraisal, loan, and HOA-document review. Until removed, it’s typically your exit ramp.

Preliminary title report (“prelim”)

A report showing who owns the property and any liens or restrictions attached to it.

Title insurance

Coverage that protects against defects in the title (undisclosed liens, ownership disputes).

Proration

Splitting ongoing costs — property taxes, HOA dues — fairly between buyer and seller as of the closing date.

Recording

Filing the deed with the county to make the transfer official. Closing happens when the deed records.

Taxes & ownership terms

Documentary transfer tax

A tax on the transfer of real property. Los Angeles has a City base rate plus, on higher-value sales, the added Measure ULA tax (see our closing-costs guide).

Measure ULA (“mansion tax”)

An added City of LA transfer tax on higher-value property sales, generally paid by the seller. Most condos fall below the threshold, so it usually doesn’t apply — but the thresholds adjust each year.

Fee simple

Full ownership of your unit, plus an undivided interest in the building’s common areas. The standard form of condo ownership.

Common area vs. exclusive-use common area

Shared spaces owned by all (lobby, roof) versus shared-owned spaces reserved for one unit’s use (a specific parking space or balcony).

HOA demand / estoppel

The statement escrow orders from the HOA showing dues, any assessments, and amounts owed, so balances are settled correctly at closing.

Add a term

Run into something that isn’t here? Ask a Condos of LA advisor — we’ll explain it in plain English and, if it’s a common one, add it to this glossary.

This guide is general information about buying, selling, and owning condominiums in Los Angeles and is not legal, tax, or financial advice. Rules, rates, and tax thresholds change — confirm current figures with your lender, escrow officer, CPA, or attorney, and with a Condos of LA advisor, before making decisions.