A B [C] D E F G H I J K L M N O P Q R S T U V W X Y & Z
Capital gain – Profit earned from the sale of an asset.
Capitalization – A mathematical process for estimating the value of a property using a proper rate of return on the investment and the annual net operating income expected to be produced by the property.
The formula is expressed as: Income ÷ Rate = Value.
Capitalization rate – The rate of return a property will produce on the owner’s investment.
Capping – The process of laying two to four feet of soil over the top of a site and then planting grass or some other vegetation on it to enhance the landfill’s aesthetic value and to prevent erosion.
Carbon monoxide – A colorless, odorless gas that occurs as a by-product of burning such fuels as wood, oil, and natural gas owing to incomplete combustion. Also known as CO.
Cash flow – The net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. When expenses exceed income, a negative cash flow results.
Cash rent – In an agricultural lease, the amount of money given as rent to the landowner at the outset of the lease, as opposed to sharecropping.
Caveat emptor – A Latin phrase meaning “Let the buyer beware.”
Certificate of occupancy – A permit issued by the appropriate local governing body to establish that the property is suitable for habitation by meeting certain safety and health standards. Also known as an occupancy permit.
Certificate of reasonable value (CRV) – A form indicating the appraised value of a property being financed with a VA loan.
Certificate of sale – The document generally given to the purchaser at a tax foreclosure sale. A certificate of sale does not convey title; normally it is an instrument certifying that the holder received title to the property after the redemption period passed and that the holder paid the property taxes for that interim period.
Certificate of title – A statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records.
Chain of title – The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.
Change – The appraisal principle that holds that no physical or economic condition remains constant.
Chattel – Items of personal property that include such tangibles as chairs, tables, clothing, money, bonds, and bank accounts. Trade fixtures belong in this category. See also personal property.
Civil Rights Act of 1866 – An act that prohibits racial discrimination in the sale and rental of housing.
Client – The principal.
Closing – An event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer.
Closing statement – A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.
Cloud on title – Any document, claim, unreleased lien, or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title.
Clustering – The grouping of homesites within a subdivision on smaller lots than normal, with the remaining land used as common areas.
Code of ethics – A written system of standards for ethical conduct.
Codicil – A supplement or an addition to a will, executed with the same formalities as a will, that normally does not revoke the entire will.
Coinsurance clause – A clause in insurance policies covering real property that requires the policy holder to maintain fire insurance coverage generally equal to at least 80 percent of the property’s actual replacement cost.
Commingling – The illegal act by a real estate broker of placing client or customer funds with personal funds. By law brokers are required to maintain a separate trust or escrow account for other parties’ funds held temporarily by the broker.
Commission – Payment to a broker for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property.
Common elements – Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all of the condominium residents. Each condominium owner has an undivided ownership interest in the common elements.
Common law – The body of law based on custom, usage, and court decisions.
Community association management – Provides a team of property managers, accounting staff, office staff, and property consultants to manage property.
Community property – A system of property owner ship based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage. A hold over of Spanish law found predominantly in western states; the system was unknown under English common law.
Community Reinvestment Act of 1977 (CRA) – Under the Act, financial institutions are expected to meet the deposit and credit needs of their communities; participate and invest in local community development and rehabilitation projects; and participate in loan programs for housing, small businesses, and small forms.
Comparables – Properties used in an appraisal report that are substantially equivalent to the subject property.
Competition – The appraisal principle that states that excess profits generate competition.
Competitive market analysis (CMA) – A comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of location, style, and amenities.
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) – A federal law administered by the Environmental Protection Agency that establishes a process for identifying parties responsible for creating hazardous waste sites, forcing liable parties to clean up toxic sites, bringing legal action against responsible parties, and funding the abatement of toxic sites. See Superfund.
Comprehensive plan – A comprehensive plan to guide the long-term physical development of a particular area. See master plan.
Computerized loan origination (CLO) – An electronic network for handling loan applications through remote computer terminals linked to various lenders’ computers.
Condemnation – A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner.
Conditional-use permit – Written governmental per mission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area.
Condominium – The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners.
Confession of judgment clause – Permits judgment to be entered against a debtor without the creditor’s having to institute legal proceedings.
Conformity – The appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value.
Consideration
- That received by the grantor in exchange for his or her deed.
- Something of value that induces a person to enter into a contract.
Construction alterations – Alterations, such as redesigning the space, to the interior of a building to meet a tenant’s particular space needs.
Construction loan – A short-term loan made during the construction phase of a building project. See also interim financing.
Constructive eviction – Actions of a landlord that so materially disturb or impair a tenant’s enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent.
Constructive notice – Notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property.
Contingency – A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes binding.
Contract – A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
Contribution – The appraisal principle that states that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value.
Controlled business arrangement (CBA) – An arrangement where a package of services (such as a real estate firm, title insurance company, mortgage broker and home inspection company) is offered to consumers.
Conventional loan – A loan that requires no insurance or guarantee.
Conveyance – A term used to refer to any document that transfers title to real property. The term is also used in describing the act of transferring.
Cooperating broker – Brokers that have the same fiduciary obligation to the seller as does the listing broker, helping produce a ready, willing, and able buyer for the property. See also listing broker.
Cooperative – A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possessing a proprietary lease.
Co-ownership – Title ownership held by two or more persons.
Corporation – An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.
Correction lines – Provisions in the rectangular survey (government survey) system made to compensate for the curvature of the earth’s surface. Every fourth township line (at 24-mile intervals) is used as a correction line on which the intervals between the north and south range lines are remeasured and corrected to a full six miles.
Corrective maintenance – Repairs that keep the building’s equipment, utilities, and amenities functioning.
Cost approach – The process of estimating the value of a property by adding to the estimated land value the appraiser’s estimate of the reproduction or replacement cost of the building, less depreciation.
Cost recovery – An Internal Revenue Service term for depreciation.
Counteroffer – A new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted there after unless revived by the offeror.
Covenant – A written agreement between two or more parties in which a party or parties pledge to perform or not perform specified acts with regard to property; usually found in such real estate documents as deeds, mortgages, leases, and contracts for deed.
Covenant of quiet enjoyment – The covenant implied by law by which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenant’s possession or use of the property.
Credit – On a closing statement, an amount entered in a person’s favor–either an amount the party has paid or an amount for which the party must be reimbursed.
Curtsy – A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. Most states have abolished curtsy.
Curvilinear – A street system that integrates major arteries of travel with smaller secondary and cul-de-sac streets carrying minor traffic.
Customer – The third party for whom some level of service is provided.
