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Cancellation clause - A clause in a lease or other contract, setting forth the conditions under which each party may cancel or terminate the agreement. The conditions may be as simples as giving notice or complex and require payment by the party desiring to cancel.

Cap - (1) A maximum amount of charge. Example: an adjustable rate mortgage with a 5% rate cap could not adjust the interest rate by more than 5% (2) a fitting used to seal, such as by a plumber to seal (cap) a pipe end. (3) a cornice, lintel, or top of a structural member such as a column.

Capitalization Rate - The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.

Cemetery - Large parcels of land used for burying deceased persons. May be public or private, the private usually being of a specific religious denomination.

Certificate - A writing, either from a court or other public body, giving assurances of existing conditions or facts, and giving rights or creating obligations.

Certificate of Occupancy - A certificate issued by a local building department to a builder or renovator, stating that the building is in proper condition to be occupied.

Certificate of Title - In areas where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney, stating that title is vested as stated in the abstract.

Certified Check - A personal check drawn by an individual which is certified (guaranteed) to be good. The bank holds the funds to pay the certified check and will not pay any other checks drawn on the account if such payment would impede payment of the certified check. The bank also will not honor a stop payment of a certified check.

Certified copy - A true copy, attested to be true by the officer holding the original.

Change of Name - When there is a name change of a party appearing on a document (deed, etc.), it may be reflected in several ways, such as: (1) mary smith, a married woman, w.a.t.a. (who acquired title as) mary jones, an unmarried woman. (2) mary smith, aka (also known as) mary jones. (3) mary smith, formerly mary jones. (4) mary smith, alias mary jones. Each may be applicable in different circumstances (how and why the name was changed).

Chattel - Personal property.

Claim - An assertion of some right or demand.

Close of Escrow - The date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.

Closing - (1) In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. (2) a selling term meaning the point at which the client or customer is asked to agree to the sale or purchase and sign the contract. (3) the final call in a metes and bounds legal description which "closes" the boundaries of the property.

Closing Costs - Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc.

Closing Service Letter - Also known as Closing Protection Letter. A letter of authorization from a Title Company, for an individual or agency conducting a settlement on behalf of the Title Company and Lender which includes the execution of all documents and disbursements of funds.

Closing Statement - The statement which lists the financial settlement between buyer and seller, and also the costs each must pay. A separate statement for buyer and seller is sometimes prepared.

Cloud - (See Cloud on Title).

Cloud on Title - An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. For example: a sells lot 1, tract 1, to b. The deed is mistakenly drawn to read lot 2, tract 1. A cloud is created on lot 2 by the recording of the erroneous deed. The cloud may be removed by quitclaim deed, or, if necessary, by court action.

Code - A comprehensive set of laws drawn up to cover completely a given subject. Covers diverse subjects, such as the criminal code, and the building code.

Code of Ethics - (See Ethics).

Coinsurance - Ordinary coinsurance is defined as a transaction under which each of two or more insurers assumes a designated portion of the liability for the total risk and is liable for only such portion of any loss beginning at the first dollar of loss. (See Reinsurance.)

Collateral - By or at the side, additional or auxiliary. Mistakenly used to mean collateral security.

Collateral Security - Most commonly used to mean some security in addition to the personal obligation of the borrower.

Commission - An amount, usually as a percentage, paid to an agent (real estate broker) as compensation for his services. The amount to a real estate broker is generally a percentage of the sale price or total rental.

Commitment - A binding contract with a title company to issue a specific title policy, showing only those exceptions contained in the commitment and any intervening matters after the date of the commitment and prior to the effective date of the policy. The commitment contains all information included in the preliminary title report, plus a list of the title company's requirements to insure the transaction. It also includes the standard exceptions from coverage that will appear in the policy.

Commitment Fee - A fee paid for a loan commitment. (See Commitment).

Common Area - The area owned in common by the owners of condominiums or planned unit development homes in a subdivision.

Common Law - The body of laws, originated and developed in england, which was adopted by most states and still prevails if not superseded by statutes. Also referred to as case law.

Common Wall - (See Party Wall).

Community Driveway - A driveway which is jointly owned, used and maintained by two or more persons. Usually, a portion of each owner's property is burdened by the driveway.

Community Property - Property owned in common by a husband and wife, which was not acquired as separate property. A classification of property peculiar to certain states.

Community Reinvestment Act - Federal legislation of 1977 (and subsequent amendments) for the purpose of encouraging banks and thrifts (savings and loans) to make more loans in their local areas. The act created the national consumer cooperative bank to make loans to local banks and thrifts for community investment (loans) and also to guarantee certain loans made in the local community.

Comparable Sales - Sales that have similar characteristics as the subject property, used for analysis in the appraisal. Commonly called "comps".

Concrete - A cement mixture containing sand and gravel which is combined by mixing with water, poured to a desired shape, and hardens as it dries.

Condemnation - The taking of private property by the government for public use - as for a street or a storm drain - upon making just compensation to the owner. This right or power of government to take property for a necessary public use is called eminent domain.

Condominium - A structure of two or more units, the interior space of which are individually owned; the balance of the property (both land and building) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces (exclusive of paint or other finishes) of the exterior walls, floors, and ceiling the balance of the property is called the common area.

Condominium Conversion - The changing of rental property (two or more units) to condominium ownership. Physical changes, as well as paperwork, may be necessary to conform to building and safety codes.

Condominium Map (Plan) - A recorded map showing the condominium units and common area. The map includes both horizontal and vertical measurements of the units. It is important that the map agree with the declaration of restrictions (recorded at the same time).

Condominium Owner's Association - (See Home Owner's Association).

Conservator - A person appointed by the court to care for the person and/or property of an incompetent adult or an adult unable to care for their person or property because of health.

Consolidation - (1) The coming together, either through merger or partial ownership, of two or more companies. (2) the solidification of loose material or liquid, usually under pressure.

Constructive Notice - Notice imparted by the public records of the county when documents entitled to recording are recorded.

Contiguous - Near or close to, whether actually touching or not. Generally refers to actual touching or bordering on.

Contingency - Commonly, the dependence upon a stated event which ust occur before a contract is binding. For example: the sale of a house, contingent upon the buyer obtaining financing.

Contract - An agreement between two or more persons or entities which creates or modifies a legal relationship. Generally based upon offer and acceptance.

Conveyance - An instrument in writing, such as a deed or trust deed, used to transfer (convey) title to property from one person to another.

Corner Lot - A lot contiguous to two intersecting streets, and, for purposes of value, having access to both streets.

Corporation - A general term encompassing any group of people "incorporating" by following certain statutory procedures. Most common type of corporation is a private one formed to carry on a business. An entity authorized by law and established by a group of people, the stockholders, which is endowed with certain rights, privileges and duties similar to an individual.

Cotenancy - A general term covering both joint tenancy and tenancy in common.

Co-trustee - One who shares the duties of trustee with one or more other trustees.

County - A political division within a state, usually encompassing one or more cities or towns. There are exceptions such as new york city which contains more than one county. Louisiana uses the word parrish instead of county; new york uses both borough and county, as in kings county (the borough of brooklyn).

Covenant - (1) A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as the covenant of warranty in a warranty deed. (2) Agreements or promises contained in deeds and other instruments for performance or nonperformance of certain acts, or use or nonuse of property in a certain manner.

Covenants, Conditions and Restrictions - Commonly called CC & R's the term usually refers to a written recorded declaration which sets forth certain covenants, conditions, restrictions, rules or regulations established by a subdivider or other landowner to create uniformity of buildings and use within tracts of land or groups of lots. The restrictions also can be established by deed. CC & R's are sometimes referred to as private zoning.

Credit - (1) The financial worthiness of a borrower. The history of whether this borrower has met financial obligations on time in the past. (2) an accounting term designating money received or receivable, as opposed to debit which is money paid or payable.

Credit report - A report on the past ability of a loan applicant to pay installment payments. Several national and local companies make such reports.

Curb cuts - The part of a curb which lowers to street level to form the apron of a driveway.

Custodian - (1) One who is entrusted with the care and keepin gof real or personal property. (See also Custody). (2) a janitor.

Custody - The care and keeping of property (real or personal). For example: an escrow agent has custody of documents and funds until closing.

Customer - A buyer of good or services.

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