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 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 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.
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.
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.
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.
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.
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.
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.
Class of property is a subjective division of buildings based on desirability among tenants and investors, considering factors like age, location, quality, and maintenance.
A clear title, also known as a marketable title, is one that is free of liens, encumbrances, or other legal questions about the ownership of the property. A clear title ensures that the seller actually owns the property and has the right to sell it, allowing the new owner to enjoy full ownership rights.
In the context of real estate, a client is an individual or entity that engages a broker, lawyer, accountant, appraiser, or other professional to represent their interests in a transaction.
A closed-end mortgage is a type of mortgage loan whose principal amount cannot be increased during the payout period. This contrasts with an open-end mortgage, where the loan amount can be revised or increased.
Closing is the final step in executing a real estate transaction where ownership is officially transferred from the seller to the buyer.
A collapsible corporation refers to a specific type of corporation that is dissolved typically within three years, with the IRS treating any gain from the sale or liquidation as ordinary income rather than capital gain for the stockholders.
A Commission Split refers to the arrangement of sharing commissions earned between a sales agent and sponsoring broker, or between the selling broker and listing broker. This arrangement ensures that all parties involved in the transaction are compensated according to their contribution.
Common areas are portions of a property that are accessible and used by all owners or tenants. They play a crucial role in the overall functionality and value of residential, commercial, and mixed-use properties.
Common Property refers to property owned equally by all members of a group, which can include areas within a cooperative apartment building or municipal parks.
The Comparative Sales Approach, also known as the Sales Comparison Approach, is a real estate appraisal method that estimates the value of a property by comparing it to similar properties that have recently sold in the same area.
Compensatory damages are awarded in legal cases to compensate for actual losses or damages suffered by the injured party, aiming to make them whole again. These damages cover measurable losses, such as medical expenses, lost wages, and repair costs, and do not include punitive or non-economic damages.
A Conditional Sales Contract is a legal agreement for the sale of property in which the seller retains the title until the buyer fulfills certain predefined conditions, typically the full payment.
Conditions, Covenants, and Restrictions (CCRs) are rules and guidelines that govern the use and appearance of properties within a community or municipality. They are designed to maintain a cohesive and appealing environment among property owners and to protect property values.
A condominium, often shortened to condo, refers to a private residential unit within a complex or building of multiple units. While individual condo units are separately owned, common areas are jointly owned by all condo owners.
A condominium is a type of residential property where individuals own individual units but share ownership of common areas and facilities.
The process of converting rental apartments or other types of multi-unit buildings into individually owned units usually under a condominium structure.
A Condominium Owner's Association (COA) is an organization of all unit owners within a condominium, established to oversee and manage the common elements and enforce the community bylaws.
Confiscation involves the seizure of private property for public use, primarily by the government, although it can occur under other authorities. It is not the same as eminent domain as it often occurs without compensation to the owner.
A conservation easement is a legal agreement, voluntarily entered into between a landowner and a government agency or land trust, that limits the use of land to protect its conservation value.
A conservator is an individual or entity appointed by a court to manage the estate and financial affairs of a person who is unable to do so themselves due to physical or mental limitations. This role is often conferred to ensure that the individual's property is adequately cared for and managed.
In real estate terminology, 'contiguous' refers to properties that share a common boundary. These properties are directly adjacent to each other, and their borders touch at some point. This can be particularly relevant in zoning, development, and legal contexts.
Contract Rent refers to the amount of rent that has been explicitly agreed upon in a lease or rental agreement between a tenant and a landlord. It remains fixed over the term stated in the contract unless otherwise adjusted according to specified conditions.
A Controller’s Deed is a legal document that serves as evidence of property ownership, issued by a governmental unit after the property is sold at a public auction, often as a result of unpaid property taxes.
A conventional home refers to a dwelling constructed on-site from the ground up as opposed to mobile homes or modular housing, which are typically prefabricated elsewhere.
A Conventional loan is a type of mortgage that is not guaranteed or insured by any government agency. They typically require higher credit scores and a higher down payment than government-backed loans.
Conversion in real estate refers to various forms of changing the use, ownership, or financing structure of a property. This can include transforming rental apartments into condominiums, involuntary taking of property, changing the ownership structure of financial institutions, or altering the terms of a mortgage.
To convey means to transfer ownership or interest in a property from one party to another, typically through the execution of a deed or other legal document.
Conveyance refers to the transfer of the title of real estate from one party to another through a legally binding instrument. It typically involves documentation that deeds property from a seller to a buyer during a recognized transaction.
A corner lot is a land parcel that is bounded on at least two sides by the intersection of two roads. Corner lots are valued both for their accessibility and visibility in commercial real estate and may present unique benefits and challenges for residential development.
Corporeal refers to tangible, visible physical property. It encompasses both real and personal property that can be seen and touched, such as buildings, fences, and pavement, as opposed to intangible assets like easements.
A correction deed is a legal document used to amend or correct an error or omission in a previously recorded deed, ensuring the property's title is accurately represented and legally sound.
The Cost of Living Index is an indicator that measures the relative expense of living in a specific area by comparing the prices of goods and services to a baseline, often representing an earlier year or different location.
Cost segregation is a tax strategy that helps businesses and property investors accelerate depreciation deductions. By identifying personal property assets and separating them from real estate, businesses can apply shorter depreciation periods to these assets, thereby realizing greater tax depreciation deductions in the early years.
Cotenancy refers to any arrangement of multiple ownership in real estate, including Tenancy in Common and Joint Tenancy, where two or more parties hold title to a property together.
A 'Covenant Running With The Land' is a legal stipulation imposed on property that binds current and future owners to adhere to specified restrictions or obligations. These covenants are usually included in property deeds and remain in effect even as the land changes ownership.
Covenants and Conditions (Restrictions), often referred to as CC&Rs, are contractual limits tied to the property that impose certain rules or obligations on property owners.
A crawl space is a narrow, unfinished area between the ground and the first floor of a building, typically not tall enough for standing, used to access electrical wiring, plumbing, and HVAC systems.
A creditor is an entity or person to whom money is owed by a debtor. In a strict legal sense, a creditor is one who extends credit to another for money or other property. More generally, a creditor is someone who has a legal right to demand and recover from another entity a sum of money on any account.
Cropland is property devoted to growing annual agricultural products. It is distinct from pasture and grazing land or range land. Cropland is eligible for agricultural use exemptions under specific conditions.
A Certificate of Reasonable Value (CRV) is a document issued by the Department of Veterans Affairs (VA) that establishes the maximum loan amount that the VA will allow for a property. It is a critical component in the VA home loan process, providing assurance of the property's value.
Curable Depreciation refers to a type of property deterioration that can be corrected at a cost that is less than the value it will add to the property.
Current yield is a measure of the annual income (interest or dividends) of an investment compared to its current price. It's a useful metric for investors looking to understand the income-generating potential of their investments over a short-term period.
Damages refer to the monetary compensation recoverable by a person who has been injured due to the act or default of another. This can include physical harm, property damage, or violation of rights.
A written statement by a trustee acknowledging that the property is held for the benefit of another party.
Declining Balance Depreciation is a method of depreciation, often used for income tax purposes, whereby a rate is applied to the remaining balance to derive the depreciation deduction. Compare with Accelerated Depreciation. See Modified Accelerated Cost Recovery System.
Dedication refers to the act of setting aside and transferring ownership of private land by its owner to a public agency for public use, which must be formally accepted by the governmental unit.
A deed in lieu of foreclosure is a legal process where a borrower voluntarily transfers ownership of the property to the lender to avoid foreclosure proceedings.
A Deed of Reconveyance is a legal document issued by a mortgage holder indicating that the borrower has met the obligations of the mortgage and that the property title is transferred back to the borrower. It effectively nullifies the lender's claim to the property.
A Deed of Release is a document where one who has limited rights to a piece of real estate, such as a mortgagee or lienholder, abandons those rights back to the owner of the property. It often takes the form of a Quitclaim Deed.
A deed restriction is a clause in a deed that may be inserted by a seller to limit the use of land, often to maintain property values or adhere to specific community standards.
Defeasance is a clause in a mortgage that gives the borrower the right to redeem the property after a default, typically by paying the full indebtedness and any additional fees incurred.
Deferred charges refer to nontangible costs that are anticipated to provide value over multiple years. These costs are amortized over the period they are expected to provide value, for accounting or tax purposes.
Deferred maintenance refers to the practice of postponing necessary repairs and maintenance activities on real estate properties. This neglect typically results from budget constraints or prioritization of financial resources toward other projects, and it consequently leads to physical depreciation.
In mortgage finance, a deficiency refers to the shortfall of funds recovered through the sale of a property that had secured a foreclosed loan compared to the total debt owed. This typically includes the unpaid loan balance, accrued interest, foreclosure expenses, and any damages incurred by the lender.
Deleveraging is the process of reducing the level of one's financial leverage. This term often refers to corporations but has broadened to include any entities that suffer from too much debt, including individuals, governments, and economic sectors such as real estate. The primary aim is to reduce financial risk.
Delinquent refers to the state of having an unpaid amount after the due date and any grace period has passed. This term is often used before default is declared.
Demolition is the process of tearing down and removing an existing structure, typically to clear a site for new development or construction. This can involve a variety of methods, depending on the size, location, and type of construction of the building to be demolished.
Depreciable basis refers to the portion of an asset’s cost that can be depreciated over its useful life for tax purposes. It is an essential concept in the calculation of depreciation expenses, influencing both financial reporting and tax liabilities.
Depreciation (Accounting) refers to the method of allocating the cost of a tangible asset over its useful life. It is an accounting technique used to account for the gradual wear and tear, aging, or decrease in the utility of an asset.
Descent refers to the acquisition of property by an heir when the deceased leaves no will.
A formal depiction of the dimensions and location of a property; generally included in deeds, leases, sales contracts, and mortgage contracts for real property. Different methods such as government rectangular survey, lot and block, and metes and bounds are used for legal descriptions and plats.
A developer is an individual or company that improves raw land into improved property by utilizing labor, capital, and entrepreneurial efforts.
Development refers to the process of adding improvements to a parcel of land, which can include drainage, utilities, subdividing, access, and buildings. It encompasses all activities from the preparation of detailed plans to securing government permits and the actual construction.
A gift of real estate property bequeathed through a will or last testament, often compared with the term 'bequeath,' which generally refers to the gifting of personal property.
Direct damages refer to the compensation paid by a government entity for the value of land and improvements taken through eminent domain proceedings. It contrasts with indirect damages and severance damages.
Discharge in Bankruptcy refers to the release of a bankrupt party from the obligation to repay debts that were, or might have been, proved in a bankruptcy proceeding.
A discount in the context of real estate represents the difference between the face amount of an obligation and the amount advanced or received for the loan. It often indicates the sale of a loan or mortgage at less than its face value.
A licensed broker who provides brokerage services for a lower commission than that typically charged in the market, often offering less extensive services or unbundled service options.
Displacement in real estate refers to the involuntary movement of population due to the conversion of their homes to other uses. This can occur due to various factors, including legal actions like condemnation, urban renewal projects, redevelopment initiatives, and natural disasters.
The termination of an agreement or contract, regardless of the initiating circumstances, is known as dissolution. This could occur due to various reasons such as the completion of contract terms (performance), a court order, or mutual agreement among the parties involved.
A distress sale involves selling assets, typically real estate, at a significantly reduced price to generate quick cash due to financial exigencies or other compelling circumstances.
A dominant tenement refers to a parcel of land that benefits from an easement on an adjacent or nearby property, known as the servient tenement, allowing specific uses such as access or utilities.
In real estate, a donee is the recipient of a gift. This term is commonly used to describe someone who receives property or other assets without providing any compensation in return.
In real estate, a donor is an individual or entity that gives real property or assets without receiving equal value in return. This term often refers to gifts or philanthropic contributions where the donor voluntarily transfers ownership to another party, such as a charity or a public institution.
A down payment is the initial upfront portion of the total amount due on a property purchase. It is typically paid in cash, representing a percentage of the property's value.
A provision in a mortgage that pledges multiple properties as collateral, potentially including newly acquired properties owned by the borrower. A default on one mortgage constitutes a default on the one with the dragnet.
DRY CLOSING refers to a real estate closing without the actual immediate exchange of property and funds, where parties meet and provide assurances that the transaction will occur according to the previously negotiated sales contract.
Due Care refers to the standard of conduct that is expected from a reasonable and prudent person in a given situation. It imposes a duty to act as a reasonably careful person would under similar circumstances.
Due Process refers to the legal necessity for following established procedures when the government intends to limit or seize an individual’s property rights. This ensures fair treatment by providing appropriate notifications and opportunities for affected parties to present their viewpoints.
Dutch Colonial homes are a distinctive style characterized by their gambrel roofs, flared eaves, and an overall early-American aesthetic. Typically moderate in size, they are built over 2 to 2½ stories.
A dwelling is any structure or place where people reside, such as apartments, hotels, mobile homes, nursing homes, and single-family houses.
Earnest money is a deposit made by a purchaser of real estate to evidence good faith.
A negative easement is the right to prevent the owner of a property from using it for specific purposes. This is in contrast to an affirmative easement, which allows the holder to make use of the property for a specified purpose.
In real estate condemnation, an economic unit refers to whether some or all of the property taken has a different highest and best use than the larger parcel.
The effective rental rate calculates the true cost of renting a property by taking into account rental concessions over the lease's duration. This provides a more accurate measure for both tenants and landlords compared to the asking rent.
An efficiency unit or apartment is a small dwelling unit, often consisting of a single room, within a multifamily structure. In most cases, kitchen and bath facilities are not complete.
Egress refers to the right or means of a property owner to exit their land parcel and access a public road or other routes of escape. This is a critical aspect of property rights and accessibility.
An Electronic Signature (e-signature) is a digital method for identity verification through the Internet, usually used in connection with contracts and other types of agreements. This method often involves security measures such as a Personal Identification Number (PIN) to indicate the approval of the individual agreeing to the transaction.
An elevation drawing is an orthographic (nonperspective) representation of a property from different views such as the front, rear, or side. This type of drawing helps illustrate how a planned or existing structure is situated in its topographical context.
