Property Legal Terms (C)

call option

Similar to the acceleration clause.

cancellation clause

Clause in an agreement that sets out the conditions under which, and the terms on which, the contract can be cancelled or terminated

cancellation clause

Clause in an agreement that sets out the conditions under which, and the terms on which, the contract can be cancelled or terminated

cap

Adjustable Rate Mortgages have fluctuating interest rates, but those fluctuations are usually limited to a certain amount. Those limitations may apply to how much the loan may adjust over a six month period, an annual period, and over the life of the loan, and are referred to as "caps." Some ARMs, although they may have a life cap, allow the interest rate to fluctuate freely, but require a certain minimum payment which can change once a year. There is a limit on how much that payment can change each year, and that limit is also referred to as a cap.

capitalization

The estimate of a property's value on the basis of its earning capacity

cash back

A payment made by a property owner to a prospective tenant to secure a letting in times of oversupply on terms which would otherwise be unacceptable. In essence it can be regarded as the opposite of a premium and, as such, is a form of reverse or negative premium

cashier's check (cheque)

A check where a bank draws a check upon itself instead of its depositor's account. The depositor, who instructs the bank to do so and provides the money for it, does not have the right to stop payment. Buyers often insist on this mode of payment while closing sales. Also called a Banker'sDraft, Bank Check or Demand Draft in some countries

cash-out refinance

When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a "cash out refinance”.

causeway

Raised road usually across low lying lands

caveat emptor

Latin for buyers beware. Legal term meaning the quality risk in transaction vests with the buyer, unless specifically stated otherwise or unless fraud or deception can be proved. Most countries, however, now have strict laws protecting buyers from shoddy workmanship, finish and quality

certificate of occupancy

Certificate issued by a local authority stating that a building is fit for occupation.

certificate of deposit

A time deposit held in a bank which pays a certain amount of interest to the depositor.

certificate of deposit index

One of the indexes used for determining interest rate changes on some adjustable rate mortgages. It is an average of what banks are paying on certificates of deposit.

certificate of occupancy

Certificate issued by a local authority stating that a building is fit for occupation

certificate of practical completion

Under a building contract a certificate issued by the architect, surveyor or supervising officer stating that the works have been substantially completed and the building is ready for occupation. This certificate will : a) release an agreed percentage of any retention money; b) begin the defects liability period; and c) transfer responsibility for insurance from the contractor to the employer

certificate of purchase

Certificate issued to a buyer, usually following a court-ordered sale, stating that he has purchased a certain property. The buyer will be entitled to transfer the title to the property to his own name if the original owner does not redeem the property within a specified date.

certificate of use

The document from the competent official certifying that land has already been put to use.

certified check

a personal check which a bank guarantees to pay. The bank usually ensures that the issuer has enough funds in his account to honour the check and does not clear other checks if they deplete the funds in the issuer's account to the point where there's not enough money to cover the amount of the certified check. Banks also do not honor stop payments on certified checks.

certified copy

A document that is certified by a competent authority to be a true copy of its original

chain of title

An analysis of the transfers of title to a piece of property over the years.

channel

A passageway for the passage of wiring, sewage, water or gas. A channel may be open or covered, on the ground or underground. Also means a long, open-ended depression through which water flows.

chanote (also called Title Deed)

Is a certificate of ownership of real property in which the person, whose name appears as the owner, has a real property right to transfer, sell, dispose of and mortgage the Land upon registration with the relevant local land department, including the lease.

charge

Acts as an encumbrance on title and involves no transfer of title to, or of possession of the property as a security for the loan. The property is designated as that which can be taken in execution of the debt on default.

civil action

Legal action for remedy against some wrong that is not criminal in nature

civil law

All laws other than dealing with crimes

claim

Demand for some action or right

class action

Legal action brought by a group of people who have similar claims against a common party

clear title

A title that is free of liens or legal questions as to ownership of the property.

closing

This has different meanings in different states. In some states a real estate transaction is not consider "closed" until the documents record at the local recorders office. In others, the "closing" is a meeting where all of the documents are signed and money changes hands.

closing costs

Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" are items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.

closing statement

See Settlement Statement.

cloud on title

Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by deed, release, or court action.

co-borrower

An additional individual who is both obligated on the loan and is on title to the property.

collateral

In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.

collection

When a borrower falls behind, the lender contacts them in an effort to bring the loan current. The loan goes to "collection." As part of the collection effort, the lender must mail and record certain documents in case they are eventually required to foreclose on the property.

commercial property

Property that is used for business purpose only

commingling

The mixing of different kinds of funds. For example, if a company mixes funds it has collected as fixed deposits (which should be accounted for separately) with money collected as advance from buyers, it is known as commingling

commission

Most salespeople earn commissions for the work that they do and there are many sales professionals involved in each transaction, including Realtors, loan officers, title representatives, attorneys, escrow representative, and representatives for pest companies, home warranty companies, home inspection companies, insurance agents, and more. The commissions are paid out of the charges paid by the seller or buyer in the purchase transaction. Realtors generally earn the largest commissions, followed by lenders, then the others.