Terms Beginning With - C
Property Development & Investment Glossary, Terms & Definitions
Call provision
A clause in a mortgage deed that allows the lender to accelerate the debt if a particular event occurs prior to the initial maturity date.
Cancellation clause
A clause in a contract that gives the party the right to cancel the contract if a certain event occurs.
Capital expenditure
An upgrade to a property that will persist longer than a repair. Rather than being expensed, this item is added to the property's base.
Capital gains
The revenue or profits obtained from the sale of real estate are taxed at a lower rate than earned income.
Capitalization
The process of converting a revenue stream into a property value.
Capitalization rate
Divide net operating income by the expected value or resale price to get the current rate of return.
Capital loss
A loss incurred as a result of the selling of a capital asset.
Carrying costs
Those expenses incurred as a result of owning a property.
Cash basis
When cash is received, revenue is recognised, and when cash is paid out, expenses are recognised.
Cash on cash return
An investment's rate of return. Divide the cash flow by the down payment to arrive at this figure.
Cash flow
The discrepancy between the income generated by the property and the expenses incurred. The owner's net spendable income is represented by this cash flow.
Caveat emptor {Latin) "Let the buyer beware."
The buyer must inspect the property before closing and does so at his own responsibility.
Central business district (CBD)
The primary business area in the heart of a city's downtown.
Certificate of insurance
An insurance company's document confirming the property insurance coverage.
Certificate of occupancy
A document provided by a local authority allowing a property to be occupied.
Certificate of payment
A certificate provided by an architect to a contractor for the sum determined by the architect to be properly due.
Certificate of title
An attorney's opinion on the legal status of a property's title.
Chain
A land measurement of 66 feet in length used in surveying. There are 100 links in each chain.
Chain of title
From the time the initial patent was awarded until now, a history of ownership of a piece of property is kept.
Change order
When the owner or architect authorises a change in the specifications, price, or time specified in the building contract in writing, an order is issued.
Chattel
Personal belongings that can be relocated.
Chattel mortgage
A personal property-backed mortgage.
Circulation allowance
The amount of space required to have adequate access to, from, and around work areas.
Clear span
The quantity of floor space that is not obstructed by columns.
Clear title
A title that is unencumbered or unburdened by any flaws.
Client
A person who hires another person to execute a service for them.
Closed-end fund
An offering by a partnership that closes after the sale of a certain number of units unless the partnership is amended.
Closing
The completion of a real estate deal in which the buyer receives ownership rights in exchange for a monetary payment to the seller.
Closing costs
Expenses incurred as a result of the closing.
Closing date
The date when a transaction is completed.
Closing statement
A document that lists all of the lender's and purchaser's costs and accounts for all of the proceeds from a real estate sale.
Cloud on title
A claim or encumbrance on a property that causes the title to be tainted.
Coinsurance
A condition in an insurance policy that specifies the minimum percentage of value that must be insured in order to recover the entire loss amount.
Collateral
A borrower's promise of marketable real or personal property as security for a loan.
Commercial property
Offices, motels, hotels, and retail stores are examples of real estate intended for commercial usage.
Comingle
Mixing funds, such as combining personal and company funds in a same checking account.
Commission
The commission paid to a real estate or mortgage broker for services done, which is based primarily on a percentage of the cost.
Commitment
The act of committing to fulfil a commitment.
Commitment fee
A fee given to a lender in exchange for a loan.
Common area
Hallways, lobbies, restrooms, and stairwells are examples of space that is not used or occupied by tenants.
Common area maintenance charge (CAM)
A clause in a shopping centre lease that requires the tenant to contribute to the common area operating costs.
Community shopping center
A medium-sized shopping centre with 50 smaller retail establishments and a small department store or supermarket as the anchor tenant. 150,000 square feet is the average size.
Co-mortgagor
A person who signs a mortgage as a co-signer.
Comparables
Properties that are similar in terms of economics.
Comparative market approach
A method of estimating a property's value based on recent selling prices of similar properties.
Comparison year
Any year that is compared to the base year for the purpose of determining a rise or fall in operational costs during the period of a lease with an escalator clause.
Completion bond
A formal agreement that guarantees the completion of a property's construction.
Compound interest
Interest is paid on both the original principle and the accumulated interest that has not been paid.
Concessions
Discounts are offered in a lease or sales contract to entice a party to sign the contract.
Concurrence estates
Estates are parcels of land that have many owners.
Condemnation
A government action in which property is taken for public use and the owner is compensated.
Conditions
Certain terms in a contract on which the agreement's fulfilment is contingent.
Condominium
Individuals have fee-simple title to a specific unit in a multi-tenant building in this form of ownership. Each unit owner has their own mortgage and pays a portion of the property's common area upkeep and operation costs.
Condominium association
A condominium property's non-profit governing organisation. When you buy a condo, you instantly become a member of the association.
Condominium conversion
Similar properties in terms of economics.
Consideration
The exchange of money or services for property.
Constant payment loan
A loan in which all instalments are made at the same time throughout the payback period.
Construction allowance
A owner's contribution to the construction cost and/or alterations required to make a facility ready for a tenant's occupancy. This allowance may be a set amount or it may fluctuate depending on the kind of transaction.
Construction cost
The whole project cost, with usual overhead and profit, that must be paid.
Construction cost estimate
Prior to the commencement of construction, a number is presented that estimates the overall cost of the project.
Construction draw
Advances on a building loan on a regular basis.
Construction loan
A loan for the purpose of constructing a home, usually with a duration of less than three years. They're usually based on prime rates and are just paid interest with a balloon payment payable at the loan's maturity.
Constructive eviction
Any interference by the landlord with the tenant's possession of the leased premises, rendering them unfit for habitation. In this instance, the renter is not responsible for any subsequent rent payments.
Constructive notice
When a fact is a subject of public record, the legal assumption is that everyone knows about it.
Consumer price index (CPI)
The U.S. Department of Labour's Bureau of Labour Statistics publishes a monthly index that shows the cost of a variety of consumer products and services.
Contingency fund
A money set aside to cover unexpected expenses.
Contingent liability
A third-party responsibility is one that is undertaken by a third party. If the original obligor defaults, the obligation will fall to the third party.
Contiguous
Properties that are close by and in close proximity.
Contract
A contract between two or more parties that establishes or alters a legal relationship, usually by an offer and acceptance.
Contract for deed
A contract in which the seller agrees to hand over title to the buyer after all payments have been fulfilled.
Contractor
A person who enters into a contract to deliver products or services.
Contractor's affidavit
A written declaration issued under oath before a notary public by a contractor that states the facts about the contract, subcontracts, material suppliers, and labour. This affidavit details the sums paid and unpaid, as well as the outstanding payments.
Contract price
The amount for which a property is purchased.
Conventional mortgage loan
A loan from a source other than the federal government.
Conveyance
A document that transfers ownership of a piece of property.
Coop
A deal between two people to divide the commission on a real estate transaction.
Cooperative ownership
A kind of corporate control in which each individual holds equity in the company. Each shareholder is then given a proprietary lease to live in one of the units.
Core space
The square footage utilised for the public hallways, elevators, toilets, stairways, electrical and telephone rooms, and the cleaning closet of a building.
Corporation
The secretary of state registers a legal entity that limits the individual responsibility of the persons who make up the entity.
Cost approach
An assessment approach that determines the worth of a property by adding the cost of reconstruction to the cost of land.
Cost basis
The original price of an item, generally the purchase price, is utilised to calculate a capital gain.
Counteroffer
An offer made in reaction to an offer, rather than an acceptance.
Covenant
A promise entered into a deed or other document by which a party commits to do or not do specified things.
Covenant not to compete
A contract that prohibits one party from competing against another.
Creative financing
Any type of financing that isn't a traditional level-paid amortising loan.
Credit
The ability to raise capital.
Creditor
A person who owes money to another.
Curable depreciation
A property's deterioration that can be remedied.
Curb appeal
On first impression, a property's aesthetic image and look are transmitted.
Current yield
Divide your current income by the cost of your investment.