# 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

Cancellation Clause	A provision in a contract (e.g., lease) that confers the ability of one in the lease to terminate the party's obligations. The grounds and ability to cancel are usually specified in the lease.
Cantilever	A projecting beam or overhanging portion supported at one end only.
Capitalization Rate (Cap Rate)	The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital. For example, a 10% CAP rate means an investor would receive $10 every year, in perpetuity, if they paid $100 for the building. It is supposed to measure the degree of risk of the investment which would include quality of income stream, probability of continuing, and the overall market.
Capital Expenses	This type of expense is most often defined by reference to generally accepted accounting principles (GAAP), but GAAP does not provide definitive guidance on all possible expenditures. Accountants will often disagree on whether or not to include certain items.
Capital Gain	The taxable profit derived from the sale of a capital asset.
Capital Improvement	Any structure which is erected as a permanent improvement to real property; any improvement which is made to extend the useful life of a property, or to add to the value of the property. Examples include upgrading the elevators, replacement of the roof, and renovations of the lobby.
Capitalization	A method of determining value of real property by considering net operating income divided by a predetermined annual rate of return. See "Capitalization Rate".
Carrying Charges	Costs incidental to property ownership, other than interest (i.e. taxes, insurance costs and maintenance expenses), that must be absorbed by the landlord during the initial lease-up of a building and thereafter during periods of vacancy.
Certificate of Occupancy (CO)	A document presented by a local government agency or building department certifying that a building and/or the leased premises (tenant's space), has been satisfactorily inspected and is/are in a condition suitable for occupancy.
Certificate of Reasonable Value (CRV)	A certificate issued by the Veterans Administration setting forth a property's current market value estimate, based upon a VA approved appraisal.
Certified Check	A check which the bank guarantees to be good, and against which a stop payment is ineffective.
Certified Property Manager	A professional property manager who has qualified for membership in and is a member of the Institute of Real Estate Management, and is designated a CPM.
Chain of Title	The recorded history of matters which affect the title to a specific parcel of real property, such as ownership, encumbrances and liens, usually beginning with the original recorded source of the title.
Chapter 11	That portion of the Federal Bankruptcy code that deals with business reorganizations. Chapter 7 is that part of the Federal Bankruptcy code that deals with business liquidations.
Chapter 7	That portion of the Federal Bankruptcy code that deals with business liquidations. Chapter 11 is that part of the Federal Bankruptcy code that deals with business reorganizations.
Chattel	Personal property which is tangible and moveable. Household goods, including personal property such as lamps, desks, and chairs.
Circulation Factor	Interior space required for internal office circulation not accounted for in the Net Square Footage. Based upon our experience, we use a Circulation Factor of 1.35 x the Net Square Footage for office and fixed drywall areas and a Circulation Factor of 1.45 x the Net Square Footage for open area workstations. See also "Net Square Footage and "Usable Square Footage.
Class A, B, or C	This refers to the quality of the building. Usually, it is based on price or rental rates with the presumption that price reflects the image and appeal a property has. This classifying term is challenging, as each of us perceives quality differently.
Clear Title	Title to property that is free from liens, defects or other encumbrances, except those which the buyer has agreed to accept, such as mortgage to be assumed, the ground lease of record, and the like; established title; title without clouds.
Clear-Span Facility	A building, most often a warehouse or parking garage, with vertical columns on the outside edges of the structure and a clear span between columns.
Client Trust Account	An account set up by a broker to keep client's monies segregated from the broker's general funds.
Closing	The final stage of consummating a real estate transaction when the seller delivers title to the buyer, in exchange for the purchase price.
Closing Costs	Expenses of the sale which must be paid in addition to the purchase price (in the case of the buyer's expenses), or be deducted from the proceeds of the sale (in the case of the seller's expenses).
Closing Statement	A detailed cash accounting of a real estate transaction prepared by an escrow officer or other person designated to process the mechanics of the sale, showing all cash that was received, all charges and credits which were made, and all cash that was paid out in the transaction; also called a settlement statement.
Cloud on Title	Any document, claim, unreleased lien or encumbrance which many impairs or injure the title to property or make the title doubtful because of its apparent or possible validity.
Cluster Development	The grouping of housing units on less than normal size homesites, with the remaining land being devoted to common areas.
Code of Ethics	A written system of standards of ethical conduct. The Code of Ethics of the National Association of Realtors, first written in 1913, establishes the high standards of conduct for members of the Realtor community.
Collateral	Something of value given or pledged as security for a debt or obligation. The collateral for a real estate mortgage loan is the mortgaged property itself, which has been hypothecated.
Color of Title	A condition which has the appearance of good title, but which in fact is not valid title, as where title is founded on some written document which on its face appears valid and effective, but which is actually invalid.
Commencement Date	A date which Landlord and Tenant agree the lease actually started. This may be different than the occupancy or lease date. Often, a lease document has a commencement date exhibit that both parties sign. The commencement date often triggers the start of rent and acceptance of the property condition.
Commercial Property	A classification of real estate which includes income producing property such as office buildings, gasoline stations, restaurants, shopping centers, hotels and motels, parking lots and stores, and other similar uses.
Commingling	To mingle or mix; for example, to deposit client funds in the broker's personal or general account. A licensee found guilty of commingling can have the license suspended or revoked by the Real Estate Commission.
Commission	The compensation paid to a real estate broker (usually by the seller) for services rendered in connection with the sale or exchange of real property.
Commitment	A pledge or promise to do a certain act, such as the promise of a lending institution to loan a certain amount of money at a fixed rate of interest to a qualified buyer, provided the loan is obtained on or before a certain date.
Common Area	There are two components of the term "common area". If referred to in association with the Rentable/Usable or Load Factor calculation, the common areas are those areas within a building that are available for common use by all tenants or groups of tenants and their invitees (i.e. lobbies, corridors, restrooms, etc.). On the other hand, the cost of maintaining parking facilities, malls, sidewalks, landscaped areas, public toilets, truck and service facilities, and the like are included in the term "common area" when calculating the tenant's pro-rata share of building operating expenses.
Common Area Maintenance (CAM)	This is the amount of additional rent charged to the tenant, in addition to the base rent, to maintain the common areas of the property shared by the tenants and from which all tenants benefit. Examples include: snow removal, outdoor lighting, parking lot sweeping, insurance, property taxes, etc. Most often, this does not include any capital improvements that are made to the property.
Common Elements	Parts of the property which are necessary or convenient to the existence, maintenance and safety of the condominium, or are normally in common use by all of the condominium residents.
Common Law	That body of law which is based on usage, general acceptance, and custom, as manifested in decrees and judgments of the courts; judge-made law, as opposed to codified or statutory law.
Common Wall	A wall separating two living units.
Community Property	A system of property ownership based on the theory that each spouse has an equal interest in property acquired by the efforts of either spouse during marriage.
Comparables	Lease rates and terms of properties similar in size, construction quality, age, use, and typically located within the same sub-market and used as comparison properties to determine the fair market lease rate for another property with similar characteristics.
Compound Interest	Interest which is computed upon the principal sum plus accrued interest.
Concessions	Cash or cash equivalents expended by the landlord in the form of rental abatement, additional tenant finish allowance, moving expenses, cabling expenses or other monies expended to influence or persuade the tenant to sign a lease.
Condemnation	The process of taking private property, without the consent of the owner, by a governmental agency for public use through the power of eminent domain. See also "Eminent Domain".
Condominium Ownership	An estate in real property consisting of an individual interest in an apartment or commercial unit, and an undivided common interest in the common areas such as the land, parking areas, elevators, stairways, and the like.
Consideration	An act or forbearance, or the promise thereof, which is offered by one party to induce another to enter into a contract; that which is given in exchange for something from another.
Construction Management	The actual construction process is overseen by a qualified construction manager who ensures that the various stages of the construction process are completed in a timely and seamless fashion, from getting the construction permit to completion of the construction to the final walk-through of the completed leased premises with the tenant.
Constructive Eviction	Acts done by a landlord who so materially disturb or impair the tenant's enjoyment of the leased premises that a tenant is effectively forced to move out and terminate the lease without liability for any further rent.
Constructive Notice	Notice of certain facts which are implied bylaw to a person because he could have discovered the fact by reasonable diligence or by inquiry into public records.
Constructive Receipt	Control of the cash proceeds without actual physical possession by Exchanger or their agent.
Consumer Price Index ("CPI")	Measures inflation in relation to the change in the price of a fixed market basket of goods and services purchased by a specified population during a "base" period of time. It is not a true "cost of living" factor and bears little direct relation to actual costs of building operation or the value of real estate. The CPI is commonly used to increase the base rental periodically as a means of protecting the landlord's rental stream against inflation or to provide a cushion for operating expense increases for a landlord unwilling to undertake the record keeping necessary for operating expense escalations.
Contiguous	Touching at some point or along a boundary.
Contiguous Space	(1) Multiple suites/spaces within the same building and on the same floor which can be combined and rented to a single tenant. (2) A block of space located on multiple adjoining floors in a building (i.e., a tenant leases floors 6 through 12 in a building).
Contingency	A provision placed in contract which requires the completion of a certain act or the happening of a particular event before a contract is binding.
Contract	A legal agreement between competent parties who agree to perform or refrain from performing certain acts for a consideration. In real estate, there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others.
Contract Documents	The complete set of design plans and specifications for the construction of a building or of a building’s interior improvements. Working Drawings specify for the contractor the precise manner in which a project is to be constructed. See also "Specifications" and "Working Drawings".
Conveyance	The transfer of title to real property by means of a written instrument such as a deed or an assignment of lease.
Cooperating Broker	A broker who joins with another broker in the sale of real property.
Cooperative Ownership	Cooperative ownership of an apartment unit means that the apartment owner has purchased shares in a corporation which holds title to the entire apartment building.
Core Factor	Represents the percentage of Net Rentable Square Feet devoted to the building’s common areas (lobbies, rest rooms, corridors, etc.). This factor can be computed for an entire building or a single floor of a building. Also known as a Loss Factor or Rentable/Usable (R/U) Factor, it is calculated by dividing the rentable square footage by the usable square footage."
Cost Approach	A method of appraising real property whereby the replacement cost of a structure is calculated using current costs of construction.
Co-Tenancy	A form of concurrent property ownership in which two or more persons own an undivided interest in the same property.
Counter-Offer	A new offer made as a reply to an offer received from another; this has the effect of rejecting the original offer, which cannot thereafter be accepted unless revived by the offeror's repeating it.
Courtesy to Brokers	The practice of sharing commissions with cooperating brokers.
Covenant	A written agreement or promise of two or more parties by which either pledges to perform or not to perform specified acts on a property, or which specifies certain uses or non-uses of the property.
Covenant of Quiet Enjoyment	The old "quiet enjoyment" paragraph, now more commonly referred to as "Warranty of Possession", had nothing to do with noise in and around the leased premises. It provides a warranty by Landlord that it has the legal ability to convey the possession of the premises to Tenant; the Landlord does not warrant that he owns the land. This is the essence of the landlord's agreement and the tenant's obligation to pay rent. This means that if the landlord breaches this warranty, it constitutes an actual or constructive eviction.
Covenants and Conditions	Covenants are promises contained in contracts, the breach of which would entitle a person to damages. Conditions, on the other hand, are contingencies, qualifications or occurrences upon which an estate or property right would be gained or lost.
Covenants Running with the Land	Covenants which become part of the property and benefit or bind successive owners of the property.
Cul De Sac	A street which is open at one end only, and which usually has a circular turnaround; a blind alley.
Cumulative Discount Rate	The interest rate used in finding present values that when applied to the rental rate takes into account all landlord lease concessions and then expressed as a percentage of base rent.
Customer Trust Fund (CTF)	An impound account maintained for the purpose of setting up a reserve to pay certain periodic obligations such as real property taxes, insurance premiums, lease rent, and maintenance fees.

# 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