Building codes are a set of regulations that govern the design, construction, and maintenance of buildings. These codes aim to ensure the safety, health, and general welfare of the building occupants and the public.
CAD is an acronym that can stand for 'Cash Available for Distribution,' 'Central Appraisal District,' or 'Computer-Aided Design,' all of which are pertinent in different realms of real estate and related industries.
A Cadastral Map is a legal map utilized for recording and determining the ownership of properties. It provides detailed information about the boundaries and ownership of each parcel of land.
The Community Associations Institute (CAI) is an international organization designed to provide education, resources, and advocacy for community association leaders, such as homeowners associations, condominium owners, and housing cooperatives.
A California bungalow is a single-story, compact house that became popular in the early twentieth century. Characterized by its low profile, simplicity, and affordability, it often includes a front porch, wide eaves, and built-in cabinetry.
The California Ranch, also known as the Ranch-style house, is a post–World War II–era architectural style that features a 1-story, ground-hugging design with a low, pitched roof. This distinctive style became popular in the post-war period for its simplicity, spaciousness, and informal living spaces.
A call option is a financial contract that gives the option buyer the right, but not the obligation, to purchase a specific quantity of an asset at a predetermined price within a specified time period.
Call provisions are clauses in a loan agreement that grant the lender the right to accelerate the debt and demand full repayment upon occurrence of a specific event or agreed-upon date.
Common Area Maintenance (CAM) charges are fees paid by tenants to cover the maintenance of common areas in a commercial property.
A Cancellation Clause is a provision within a contract that grants the right to terminate the agreed-upon obligations upon the occurrence of specified conditions or events.
CAP in adjustable rate mortgages (ARMs) refers to a limit placed on adjustments to protect the borrower from large increases in the interest rate or the payment level. There are different types of caps, including annual caps, lifetime caps (life-of-loan caps), and payment caps. This measure helps borrowers by providing predictability and stability in their mortgage payments.
Capacity of Parties refers to the legal competence of all parties involved in a contract to understand and engage in the agreement. Ensuring that all parties have the full legal capacity is crucial for the contract's enforceability.
Cape Cod Colonial is an early-American-style 1½-story compact house, often symmetrical with a central entrance and steep gable roof covered with shingles.
Capital Expenditure, commonly referred to as CAPEX, are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.
Capital refers to the financial assets or their financial value, as well as tangible factors of production used to create value. It is a significant part of the assets owned by an entity and is used to fund long-term operations and investments.
A capital asset as defined in Section 1221 of the Internal Revenue Code (IRC) that receives favorable tax treatment upon sale contains various exclusions such as inventory, property held for resale, property used in a trade or business, certain copyrights, and specific U.S. government obligations.
Capital calls are additional money requested from equity owners to bridge deficits in construction or operating costs. These calls often happen due to initial underfunding or unforeseen expenses.
Capital Expenditure (CapEx) refers to the funds used by an organization to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. These expenditures are critical for the long-term growth and operational efficiency of an organization and are generally depreciated over their useful life.
A capital gain is the profit that results from a sale of a capital asset, such as real estate, stocks, or bonds, where the sale price exceeds the purchase price.
Capital improvements, also referred to as capital expenditures, are significant upgrades, enhancements, or additions to an existing property that increase its overall value, extend its useful life, or adapt it to new uses.
A capital loss occurs when an investor sells a capital asset at a price lower than its purchase price. The capital loss is the difference between the selling price and the purchase price of the asset.
The capital market is a venue where various long-term securities such as equities, mortgages, and bonds are traded. It contrasts with the money market, which deals with short-term securities.
Capital Recapture is the return of an investor's original investment in a property or business, often through income generated by that asset. It's also known as Capital Recovery.
Capital Recovery refers to the process by which an investor recoups the initial investment in a real estate or business venture. This is typically achieved through revenue generation, cash flows, or sale of the asset. Understanding capital recovery is crucial for assessing the viability and profitability of investments.
A capital reserve is a fund created to finance major, long-term investments, property or infrastructure enhancements within a real estate property. These are set aside from profits and retained earnings specifically for future large scale repairs, renovations, or unexpected large expenses.
Capital structure refers to the composition of capital invested in a property, reflecting the interests of those who contributed both debt and equity capital.
In finance and real estate, capitalization is the process of deriving a present value for future income through a capitalization rate. In accounting, it involves setting up an asset on financial records to be depreciated over its useful life rather than expensed immediately.
Capitalization rate, commonly referred to as Cap Rate, is a real estate valuation measure used to compare different real estate investments. It is calculated by dividing the net operating income (NOI) by the current market value of the property.
A capitalization rate (Cap Rate) represents the rate of return expected to be generated on a real estate investment property. It helps in deriving the property's current market value or the potential return on investment.
Capitalizing in real estate is the process of estimating the present value of an income stream, setting up the cost of an asset on financial records, or supplying a business with capital.
Capitalized value refers to the present value of a future income stream, discounted at a specific rate called the capitalization rate. It is a crucial concept in real estate valuation for properties producing regular income.
A Captive Real Estate Investment Trust (Captive REIT) is a business and tax strategy employed by large retailers and banks with substantial real estate holdings or property loans. The REIT is sold by the company to investors to hold the real estate assets that were previously on the company's books. The company then pays rent to the REIT, which it deducts as a business expense.
Capture rate is a key metric in real estate that measures the sales or leasing rate of a particular development compared to all developments in the market area. This rate helps developers and investors gauge the market performance of a specific project within a competitive landscape.
A carriage house is a secondary structure used primarily for parking vehicles or providing additional living space, often located on the same property as a principal residence. Originally designed to house horse-drawn carriages and the carriage driver, it now serves versatile roles in modern real estate.
Carry-back financing, also known as seller financing, occurs when the seller of a property provides a loan to the buyer to complete the property purchase. This arrangement can be beneficial in situations where traditional mortgage financing is difficult to secure.
Carrying charges refer to the ongoing expenses necessary for holding a property, such as taxes, interest on loans, insurance, and maintenance costs. These charges are pertinent to both idle properties and properties under construction.
Carryover basis is the tax terminology used in tax-deferred exchanges to describe the transfer of the adjusted tax basis from a relinquished property to the newly acquired property. This concept is significant in deferring capital gains tax until the final sale of the property.
A provision in an agreement that removes or excludes a particular portion of the property or obligations. Carve-outs can pertain to items in sales agreements, mortgages, or leases, potentially subjecting them to new terms or entirely exempting them from certain existing terms.
The Case-Shiller/S&P Home Price Index is a measure developed by economists Carl Case and Robert Shiller for Standard & Poor's Corporation. It tracks the price changes of single-family homes in the U.S. by analyzing repeat sales of properties across various metropolitan areas.
Cash Available for Distribution (CAD) is a key metric for assessing the financial performance of Real Estate Investment Trusts (REITs). It is derived from Funds From Operations (FFO), after deducting costs of recurring capital expenditures.
Cash equivalent in real estate refers to converting the price of a property sold with either favorable or unfavorable financing into the price the property would have sold for if the seller had accepted all cash in the transaction.
Cash flow refers to the periodic amounts available to an equity investor after deducting all periodic cash payments from rental income, providing insight into the liquidity and operational viability of a real estate investment.
Cash Flow Analysis assesses the inflows and outflows of cash in a business or investment over a specific period, aiding in financial strategy and decision-making.
A Cash Flow Mortgage is a unique debt instrument where almost all income from property rental is used to pay the lender, typically with no interest rate specified.
The Cash Method is a straightforward accounting technique in which revenue and expenses are recorded when they are actually received or disbursed. It is most commonly used by small businesses and individual taxpayers for its simplicity and ease of use.
The term 'Cash Out' refers to the process of completely liquidating an asset, enabling the owner to receive its total monetary value in cash.
A cash purchase in real estate refers to acquiring property without the use of financing or loans, where the buyer pays the full purchase price in cash.
Cash throw-off, often referred to as cash flow, is a crucial metric in real estate investment that indicates the amount of cash generated by a property after all operating expenses and debt service have been paid. It is a measure of the income-producing ability of a property.
Cash-on-cash return (CoC return) is a rate of return commonly used in real estate transactions that calculates the cash income earned on the cash invested in a property.
A measure of annual cash return on the amount of cash invested in a property, often used to evaluate the performance of income-generating real estate.
A Cash-Out Refinance allows homeowners to replace their existing mortgage with a new, larger loan, providing them with the difference in cash.
Casualty insurance provides protection against the financial impacts arising from accidents, injuries, and legal liabilities, safeguarding both personal and business interests from unexpected losses.
'Caveat Emptor,' a Latin phrase meaning 'let the buyer beware,' is a fundamental principle in real estate transactions. It emphasizes the responsibility of buyers to thoroughly inspect and review the property themselves, utilizing due diligence, except for latent defects, which are hidden or concealed defects not immediately detectable during an inspection.
Caveat Subscriptor is a legal doctrine stating 'let the seller beware,' which holds sellers liable for goods found to be defective post-sale unless sold 'as is.'
Caveats are warnings, often written to a potential buyer, to exercise caution and due diligence; usually offered as a means for the seller or broker to minimize liability for potential deceptive trade practices.
The CCIM (Certified Commercial Investment Member) designation is a prestigious credential awarded by the CCIM Institute, a recognized affiliate of the National Association of REALTORS®. This certification highlights a member's expertise in commercial and investment real estate, setting a high professional standard in the industry.
The CCIM Institute is a leading global provider of education and certification for commercial real estate professionals, affiliated with the National Association of REALTORS®. It offers rigorous training leading to the Certified Commercial Investment Member (CCIM) designation and disseminates industry knowledge through the Commercial Investment Real Estate magazine.
A 'Cease and Desist' order is a legal mandate issued by a court or administrative agency to stop an individual or business from continuing an identified illegal activity. Within real estate, these orders are crucial for preventing antitrust violations and illegal discriminatory practices.
A census tract is a geographic region defined for the purpose of taking a census, which is typically delineated by the U.S. Census Bureau to capture detailed demographic data about residential areas.
The Central Appraisal District (CAD) is a government organization responsible for appraising the value of properties within its jurisdiction for tax assessment purposes. By providing a consistent valuation process, it avoids duplication and inconsistencies among various taxing entities.
A Central Business District (CBD) is the commercial and business center of a city, often characterized by a high concentration of office buildings, retail stores, and cultural institutions.
The Central Business District (CBD) is typically the commercial and business center of a city, characterized by high concentrations of office buildings, retail stores, hotels, entertainment venues, and governmental buildings. This area serves as the focal point for business and commerce, attracting significant daytime population.
Central Trade & Transfer (CTT) is an exchange platform where illiquid real estate investments can be sold, including both auctions and off-auctions activities.
CERCLA, also known as Superfund, is a United States federal law designed to clean up sites contaminated with hazardous substances and pollutants. This act provides a federal 'Superfund' to clean up uncontrolled or abandoned hazardous-waste sites and accidents, spills, and other emergency releases of pollutants and contaminants into the environment.
A Certificate of Deposit (CD) is a financial product commonly offered by banks and credit unions that provides an interest rate premium in exchange for the customer's commitment to leave a lump-sum deposit untouched for a predetermined period.
A Certificate of Deposit (CD) is a type of savings account that carries a specified minimum deposit and term, typically offering a higher yield compared to regular savings accounts.
A Certificate of Eligibility (COE) is issued by the Department of Veterans Affairs (VA) to indicate that the recipient is eligible for a home loan guaranteed by the agency.
A Certificate of Insurance (COI) is a document that verifies the existence of insurance coverage, including details about the type and extent of coverage provided. It serves as proof of insurance for the insured party, typically issued by the insurance company or broker.
A Certificate of No Defense, also known as an Estoppel Certificate, is a legal document used in real estate transactions to certify that the represented facts are accurate and there are no existing claims or disputes. This document plays a crucial role in ensuring transparent and risk-free real estate deals by confirming the status and obligations attached to a property.
A Certificate of Occupancy (C/O) is a legal document issued by a local government agency or building department certifying that a building complies with applicable building codes and is safe for occupancy.
A Certificate of Occupancy (C/O) is an official document issued by a local government authority that allows a newly constructed or renovated property to be legally occupied. It confirms that the building complies with all applicable building codes, zoning laws, and other local regulations ensuring the safety and health of occupants.
A Certificate of Reasonable Value (CRV) is a document issued by the Department of Veterans Affairs (VA) which sets a ceiling on the maximum VA mortgage loan amount based on an approved appraisal.
A Certificate of Satisfaction is a legal document that indicates the fulfillment of the terms and obligations under a lien, mortgage, or loan agreement. It is often required to clear any encumbrances against a property, signifying that the associated debt or obligation has been satisfied in full.
A Certificate of Title is an authoritative opinion rendered by an attorney regarding the status of a property's title based on public records. It ensures the property's title is clear of public record claims.
Certification in real estate refers to an appraiser's formal attestation of freedom from bias in an appraisal report and the official acknowledgment of one's expertise, often mandated by state regulations.
A Certified Commercial Investment Member (CCIM) is a real estate professional who has obtained a prestigious designation awarded by the CCIM Institute, a commercial real estate affiliate of the National Association of Realtors (NAR). This designation signifies a deep understanding of commercial real estate investment and the practical application of industry principles.
A Certified General Appraiser is a professional authorized to appraise any property type under state certification laws, ensuring compliance with the Appraisal Foundation's standards.
A Certified Historic Structure is a building officially recognized for its historical significance by a ratified government authority, enabling it to qualify for specific preservation and restoration incentives.
A Certified Home Inspector is a professional who is credentialed and qualified to perform home inspections in accordance with state-specific requirements. These inspectors evaluate residential properties for safety, structural integrity, and compliance with relevant codes and standards.
The Certified Property Manager (CPM) designation is a professional accreditation awarded by the Institute of Real Estate Management (IREM), recognizing expertise in real estate management.
The Certified Real Estate Brokerage Manager (CRB) is a prestigious designation awarded by the Council of Real Estate Brokerage Managers, an affiliate of the National Association of Realtors (NAR). This certification is designed to recognize professionals who have distinguished themselves as leaders and experts in broker management.
A Certified Residential Appraiser is a professional qualified to appraise residences and up to four units of housing with no limit on the value. This certification requires completion of specific education, experience, and adherence to professional appraisal standards.
The Certified Residential Specialist (CRS) designation is a credential awarded to experienced and highly successful residential real estate agents by the Council of Residential Specialists (CRS). It highlights the agent's dedication to furthering their education and experience in residential sales.
A chain is a linear unit of land measurement historically used in surveying. It is 66 feet in length and consists of 100 links.
A Chain of Title refers to the sequential historical record of documentations pertaining to the ownership and encumbrances of a specific property, tracked back to the earliest available records or original grant.
A change order is an amendment to the construction plans after they have been finalized. This process can often lead to increased costs and timeline extensions.
Chapter 13 Bankruptcy involves a court-approved debt repayment plan that allows a homeowner to keep their property while making installments to creditors over a 3- to 5-year period.
Chapter 7 bankruptcy involves the liquidation of a debtor's non-exempt assets to pay off creditors in exchange for the discharge of most debts.
A charge-off in real estate refers to the portion of principal and interest recognized as a loss when a loan is deemed uncollectible. Lenders resort to charge-offs when they perceive that further collection efforts on a delinquent account will not be fruitful.
Chattel refers to personal property that is tangible and movable, distinguishing it from real estate, which is immovable. It includes items such as furniture, automobiles, and jewelry.
A chattel mortgage involves the pledge of personal, movable property as security for a debt. This arrangement allows borrowers to use specific personal assets to secure financing.
Chronological age refers to the actual age of a property based on the number of years since its construction, regardless of its physical condition or renovations.
A Circuit Breaker is a local program designed to offer rebates or reductions in a homeowner’s property tax based on specific criteria such as age, income status, or other qualifying factors. These programs aim to provide tax relief especially to vulnerable groups like the elderly or low-income residents.
A landmark federal legislation that prohibits discrimination based on race, color, national origin, sex, or religion in various spheres including employment, education, and access to public facilities and accommodations.
The Civil Rights Act of 1968 is a critical federal law designed to eliminate housing discrimination and ensure equitable access to housing opportunities for all individuals, regardless of race, color, religion, sex, or national origin. The best-known segment of this law is Title VIII, known as the Federal Fair Housing Act.
A 'Claim' is a request for reimbursement for a loss covered by an insurance policy or a demand for something believed to be owed.
Clapboards are long, narrow boards with one edge thicker than the other, overlapped horizontally to cover the walls of frame houses; a type of siding commonly used in construction.
CLARITAS is a demographic information provider offering comprehensive reports and maps to analyze markets, select site locations, and effectively target customers. It addresses questions such as customer and prospect locations, ideal business locations, competition positioning, and market potential.
Class of property is a subjective division of buildings based on desirability among tenants and investors, considering factors like age, location, quality, and maintenance.
Clawback provisions in laws or contracts limit or reverse a payment or distribution for specified reasons, ensuring financial fairness and compliance.
