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Call - Under a metes and bounds property description, a reference to a course, distance, or monument used in describing a boundary.

Cancellation - The discharge of a contractual obligation by marking the document "canceled," surrendering possession of it, or by destroying it.

Capital - Accumulated wealth; a portion of wealth set aside for the production of additional wealth; specifically, the funds belonging to the partners or shareholders of a business, invested with the expressed intention of their remaining permanently in the business.

Capital Assets - Assets that are permanent or have a long life expectancy (e.g. land, buildings, heavy equipment).

Capital Expenditures - Expenditures made for the acquisition of capital assets (assets that are permanent or have a long life expectancy) or for capital improvements (permanent or long-term improvements). See also Capital Assets and Capital Improvements.

Capital Gain/Loss - For income tax purposes, the profit/loss realized upon the sale of a capital asset; the difference between the "amount realized" (sale price less closing expenses) and the "adjusted basis" of real property.

Capital Improvement - Any structure erected on real property or any permanent or long term improvement made to real property that adds to its value and useful life.

Capitalization - A process used by appraisers in connection with the income approach method of appraisal to convert a property's actual or projected net income into an estimate of property value. This is accomplished by dividing net operating income by a "capitalization rate." See Capitalization Rate and Income Approach.

Capitalization Rate - A rate, expressed as a percentage, used in the process of "capitalization" of income in connection with the income approach method of appraisal; a ratio of income to value; a rate which will enable an investor to recapture his/her capital investment and realize a reasonable return (yield or profit) on such investment. See Capitalization ; Income Approach.

Cash Flow (before Taxes) - The net income produced from an income-producing property after deducting operating expenses and debt service from gross income received. See also Cash Flow (after Taxes).

Cash Flow (after Taxes) - The net income produced from an income-producing property after deducting depreciation and income taxes from the "before tax cash flow". See also Cash Flow (before Taxes).

Caveat Emptor - A literal translation of this term is " let the buyer beware." Under this old legal doctrine, a buyer of real estate has the duty to inspect the property she/he is purchasing and will be held to have accepted any defects or conditions that are discoverable by a reasonably diligent inspection. Under a strict application of this doctrine, the buyer is considered to take the property "as is." This doctrine has been substantially eroded by modern court decisions so that sellers of real estate today generally have an affirmative duty to disclose most property defects, especially latent (hidden) defects, about which she/he has knowledge. (See also Implied Warranty of Fitness dealing with the sale of new dwellings.) The doctrine has little, if any, application to actions of real estate agents who have extensive duties to both buyers and sellers under various state real estate license laws.

Certificate of Reasonable Value (CRV) - A form on which is reported the appraised value of a property that is to be security for a VA mortgage loan.

Certificate of Title - An attorney's report or opinion of title based upon her/his examination of applicable public records. In it, the attorney reports that record title to certain real property has been examined and that marketable fee simple title does or does not exist. The certificate also contains standard and special exceptions relating to matters affecting title.

Chain - Unit of land measurement; 66 feet.

Chain of Title - A history of conveyances and encumbrances affecting the title to particular real property.

Chattels - Items of movable personal property, such as animals, household furnishings, money, jewels, motor vehicles, and all other items that can be transferred from one place to another.

Civil Rights Act of 1866 - An act of Congress that generally prohibits racial discrimination and that has been interpreted to allow a citizen to sue for racial discrimination in the sale or rental of housing.

Clear Title - Title to property that is free and clear of all encumbrances or defects.

Closing - The consummation or completion of a transaction involving the sale or exchange of real estate; may be accomplished either at a closing meeting attended by the various parties (or their agents) or by way of an escrow closing. At closing, title to the property is formally transferred to the purchaser and all financial matter's relevant to the transaction are settled.

Closing Statement - A detailed accounting of all receipts and disbursements in connection with a real estate sale which is provided to the seller and purchaser at the time of closing.

Cloud on Title - An outstanding claim or encumbrance, which, if valid, would affect or impair the owners title.

Coastal Area Management Act - North Carolina legislation, passed in 1974, that regulates real estate development within coastal areas of environmental concern.

Coinsurance - A clause placed in rnost property insurance policies requiring the insured to share the loss with the insurer if the property is underinsured.

Collateral - Something of value which is pledged or provided as security (to guarantee performance) for a contractual obligation. The real estate which is mortgaged to secure the repayment of a debt evidenced by a promissory note.

Color of Title - An apparent title founded upon a written instrument, a deed, will, or judicial decree that purports to convey and apparently passes title to land but fails to do so, either because of a defect in its execution or a want of title in the person executing the instrument.

Commingling - The illegal practice by a real estate broker of maintaining personal or business funds in the same account with trust funds held for others.

Commission - Compensation earned by a broker for the performance of specific duties in connection with the sale or leasing of a property. The amount of payment is usually measured by a percentage of another sum and is usually paid by the seller (if a sale is involved) or owner (if a lease is involved).

Commissioner's Deed - In certain court actions, or special proceedings, a commissioner is appointed to sell real or personal property and is empowered to give a commissioners' deed to the purchaser. Specific statutory procedures must be carefully followed by the commissioner.

Commitment - A pledge, a promise, or a firm agreement. See Loan Commitment.

Common Areas (Elements) - Those portions of a property owned or rented by multiple parties (such as a condominium complex, apartment complex, or shopping mall) that are designated or reserved for shared use by all the owners or tenants.

Common Law - A body of law that grew up from custom and cases decided in the courts, as distinguished from codified statutory law.

Comparable - A recently sold property that has similar characteristics to a property being appraised (the "subject" property) and that is used for comparative purposes when estimating the value of the subject property.

Compound Interest - Interest paid on the original principal of an indebtedness and also on the accrued and unpaid interest that has accumulated.

Concurrent Ownership - The ownership of the same parcel of property by two or more persons. Concurrent ownership is also generally referred to as cotenancy" or "co-ownership.' The three principal types of concurrent ownership are: Joint Tenancy, Tenancy in Common, and Tenancy by the Entirety .

Condemnation - The taking of private property for a public purpose with compensation to the owner, by the state, other body politic, or public service corporation authorized to exercise the power of eminent domain; also, a declaration that a structure is unfit for use. See also Eminent Domain.

Conditional Use Permit - In zoning law, a permit that is issued authorizing a certain use to be made of property only after certain stated prerequisites have been met.

Condominium - A legal arrangement under which a person owns one unit of a multiunit development, such as an apartment building, plus an undivided interest in common areas used by all unit owners, such as hallways and grounds. (For clarity see also Townhouse.)

Conner Act - The North Carolina recording act that requires all conveyances of real property, contracts to convey, and leases of land for more than three years to be recorded at the office of the Register of Deeds in order to be effective as against certain third parties. See Recording.

Consideration - Something of value, usually money, that is the inducement of a contract. Any right, interest, property, benefit accruing to one party, any forbearance, detriment, loss or responsibility given, suffered or undertaken, may constitute a consideration that will sustain a contract.

Construction Lien - See Mechanic's Lien.

Construction Mortgage - A mortgage or deed of trust securing a loan made for interim financing during the construction period.

Constructive Eviction - A situation which arises when a landlord, either by her/his affirmative act or by her/his failure to perform some required act, prevents a tenant from enjoying the use of a leased premises in the manner contracted for in a lease. In such situation, the tenant is said to be "constructively evicted" from the premises even though she/he has not actually been denied possession of the premises. See also Eviction.

Constructive Notice - Notice given by the public records. Persons with a duty to search, are bound by whatever information they would find by a reasonable search of the public land records whether or not they in fact make the search.

Contingency Provision - A provision in an offer or contract that makes validity of the offer or contract dependent or contingent upon the occurrence of some act.

Contingent Offer - An offer containing a contingency provision.

Contract - A legally enforceable agreement between two or more competent parties, based on legal consideration, to do or to abstain from doing some act.

Contract for Deed - See Installment Land Contract.

Conventional Mortgage - A mortgage loan that is not insured or guaranteed under any government program.

Conveyance - A general term for any document that transfers title to real property. The word is also a verb describing the act of transferring title to real property.

Cooperative - A multiunit development in which a purchaser obtains a stock certificate representing part ownership of the building and a lease to a specific apartment or unit within the development.

Correction Deed - A type of deed often used to remedy defects in title to property. For example, a title examiner might discover that a deed in the chain of title has been improperly acknowledged. A correction deed, properly executed and acknowledged by the same grantors who executed the defective deed, might be required to clear the title defect.

Correlation - The process of deriving a final estimate of value from the adjusted values of various comparable properties under the market data approach to appraisal.

Cost Approach - An appraisal method or procedure used to estimate the value, usually the market value, of an improved property by summation of the land value and the value of improvements, each of which has been estimated independently. The estimated value of the land, considered as though vacant, is added to the estimated replacement or reproduction cost of the improvements, less estimated depreciation, to derive an estimate of the property's market value.

Cotenant - Any one of two or more parties who share an undivided ownership interest in real property.

Counteroffer - An offer made in reply to an original offer which contains new or different terms or conditions not included in the original offer. The offer made in reply (counteroffer), once communicated, has the effect of rejecting the original offer and the latter cannot be subsequently accepted unless renewed by the original offeror.

Covenant - An agreement between two or more persons entered into by deed whereby one of the parties promises the performance of certain acts, or that a given state does or shall, or does not/or shall not, exist. Simply put, a covenant is a promise.

Covenant of Title - A promise (covenant )placed in a deed whereby the grantor agrees to indemnify the grantee against certain defects in title or a total failure of title.

Credit - A sum entered in favor of either the seller or purchaser on a closing statement. A credit indicates an amount that a party is to receive or be reimbursed for at closing, as well as the amount of any loan or deposit which is to serve as part of the purchase price.

Creditor - The party to whom a debt is owed.

Curtesy - A life estate that was given at the common law to a husband in the lands his deceased wife was seized of during their marriage. The current statute, N.C. Gen. Stat. §29-30, provides a statutory substitute for curtesy whereby a husband is entitled to a life estate in one-third of the realty owned by his wife upon her death, upon the husband's election not to take as her devisee or as her heir. Top of Page ©2000 athomecharlotte.com. All Rights Reserved.