CAL-VET PROGRAM
A program administered by the State Department of Veterans Affairs for the direct financing of farm and home purchases by eligible California veterans of the armed forces.

CC&Rs
Covenants, conditions and restrictions. The basic rules establishing the rights and obligations of owners (and their successors in interest) of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners.

CCIM
Certified Commercial Investment Member.

CPM ©
Certified Property Manager, a designation of the Institute of Real Estate Management.

CAPITAL ASSETS
Assets of a permanent nature used in the production of an income, such as land, buildings, machinery and equipment, etc. Under income tax law, it is usually distinguishable from "inventory" which comprises assets held for sale to customers in ordinary course of the taxpayer's trade or business.

CAPITAL GAIN
At resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). Used for income tax computations. Gains are called short or long term based upon length of holding period after acquisition. Usually taxed at lower rates than ordinary income.

CAPITALIZATION
In appraising, determining value of property by considering net income and percentage of reasonable return on the investment. The value of an income property is determined by dividing annual net income by the Capitalization Rate.

CAPITALIZATION RATE
The rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income. It may also be described as the yield rate that is necessary to attract the money of the average investor to a particular kind of investment. In the case of land improvements which depreciate, to this yield rate is added a factor to take into consideration the annual amortization factor necessary to recapture the initial investment in improvements. This amortization factor can be determined in various ways
(1) straight-line depreciation method, (2) Inwood Tables and (3) Hoskold Tables. (To explore this subject in greater depth, the student should refer to current real estate appraisal texts.)

CAP RATE
See LIFE OF LOAN CAP.

CASEMENT WINDOWS
Frames of wood or metal which swing outward.

CASH FLOW
The net income generated by a property before depreciation and other noncash expenses.

CAVEAT EMPTOR
Let the buyer beware. The buyer must examine the goods or property and buy at his or her own risk, absent misrepresentation.

CERTIFICATE OF ELIGIBILITY
Issued by Department of Veterans Affairs - evidence of individual's eligibility to obtain VA loan.

CERTIFICATE OF REASONABLE VALUE (CRV)
The Federal VA appraisal commitment of property value.

CERTIFICATE OF TAXES DUE
A written statement or guaranty of the condition of the taxes on a certain property made by the County Treasurer of the county wherein the property is located. Any loss resulting to any person from an error in a tax certificate shall be paid by the county which such treasurer represents.

CERTIFICATE OF TITLE
A written opinion by an attorney that ownership of the particular parcel of land is as stated in the certificate.

CHAIN
A unit of measurement used by surveyors. A chain consists of 100 links equal to 66 feet.

CHAIN OF TITLE
A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner.

CHANGE, PRINCIPLE OF
Holds that it is the future, not the past, which is of prime importance in estimating value. Change is largely a result of cause and effect.

CHARACTERISTICS
Distinguishing features of a (residential) property.

CHATTEL MORTGAGE
A claim on personal property (instead of real property) used to secure or guarantee a promissory note. (See definition of Security Agreement and Security Interest.)

CHATTEL REAL
An estate related to real estate, such as a lease on real property.

CHATTELS
Goods or every species of property movable or immovable which are not real property. Personal property.

CHOSE IN ACTION
A personal right to something not presently in the owner's possession, but recoverable by a legal action for possession.

CIRCUIT BREAKER
(l) An electrical device which automatically interrupts an electric circuit when an overload occurs; may be used instead of a fuse to protect each circuit and can be reset. (2) In property taxation, a method for granting property tax relief to the elderly and disadvantaged qualified taxpayers by rebate, tax credits or cash payments. Usually limited to homeowners and renters.

CLOSING
(l) Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of funds. (2) Condition in description of real property by courses and distances at the boundary lines where the lines meet to include all the tract of land.

CLOSING COSTS
The miscellaneous expenses buyers and sellers normally incur in the transfer of ownership of real property over and above the cost of the property.

CLOSING STATEMENT
An accounting of funds made to the buyer and seller separately. Required by law to be made at the completion of every real estate transaction.

CLOUD ON TITLE
A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or a quiet title legal action.

CODE OF ETHICS
A set of rules and principles expressing a standard of accepted conduct for a professional group and governing the relationship of members to each other and to the organization.

COLLATERAL
Marketable real or personal property which a borrower pledges as security for a loan. In mortgage transactions, specific land is the collateral. (See definition of Security Interest.)

COLLATERAL SECURITY
A separate obligation attached to contract to guarantee its performance; the transfer of property or of other contracts, or valuables, to insure the performance of a principal agreement.

COLLUSION
An agreement between two or more persons to defraud another of rights by the forms of law, or to obtain an object forbidden by law.

COLOR OF TITLE
That which appears to be good title but which is not title in fact.

COMMERCIAL ACRE
A term applied to the remainder of an acre of newly subdivided land after the area devoted to streets, sidewalks and curbs, etc., has been deducted from the acre.

COMMERCIAL LOAN
A personal loan from a commercial bank, usually unsecured and short term, for other than mortgage purposes.

COMMERCIAL PAPER
Negotiable instruments such as promissory notes, letters of credit and bills of lading. Instruments developed under the law of merchant.

COMMISSION
An agent's compensation for performing the duties of the agency; in real estate practice, a percentage of the selling price of property, percentage of rentals, etc. A fee for services.

COMMITMENT
A pledge or a promise or firm agreement to do something in the future, such as a loan company giving a written commitment with specific terms of mortgage loan it will make.

COMMON AREA
An entire common interest subdivision except the separate interests therein.

COMMON INTEREST SUBDIVISION
Subdivided lands which include a separate interest in real property combined with an interest in common with other owners. The interest in common may be through membership in an association. Examples are condominiums and stock cooperatives.

COMMON LAW
The body of law that grew from customs and practices developed and used in England "since the memory of man runneth not to the contrary".

COMMON STOCK
That class of corporate stock to which there is ordinarily attached no preference with respect to the receipt of dividends or the distribution of assets on corporate dissolution.

COMMUNITY PROPERTY
Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse has equal rights of management, alienation and testamentary disposition of community property.

COMPACTION
Whenever extra soil is added to a lot to fill in low places or to raise the level of the lot, the added soil is often too loose and soft to sustain the weight of the buildings. Therefore, it is necessary to compact the added soil so that it will carry the weight of buildings without the danger of their tilting, settling or cracking.

COMPARABLE SALES
Sales which have similar characteristics as the subject property and are used for analysis in the appraisal process. Commonly called "comparables", they are recent selling prices of properties similarly situated in a similar market.

COMPARISON APPROACH
A real estate comparison method which compares a given property with similar or comparable surrounding properties; also called market comparison.

COMPETENT
Legally qualified.

COMPETITION, PRINCIPLE OF
Holds that profits tend to breed competition and excess profits tend to breed ruinous completion.

COMPOUND INTEREST
Interest paid on original principal and also on the accrued and unpaid interest which has accumulated as the debt matures.

CONCLUSION
The final estimate of value, realized from facts, data, experience and judgment, set out in an appraisal. Appraiser's certified conclusion.

CONDEMNATION
The act of taking private property for public use by a political subdivision upon payment to owner of just compensation. Declaration that a structure is unfit for use.

CONDITION
In contracts, a future and uncertain event which must happen to create an obligation or which extinguishes an existent obligation. In conveyances of real property conditions in the conveyance may cause an interest to be vested or defeated.

CONDITION PRECEDENT
A qualification of a contract or transfer of property, providing that unless and until a given event occurs, the full effect of a contract or transfer will not take place.

CONDITION SUBSEQUENT
A condition attached to an already-vested estate or to a contract whereby the estate is defeated or the contract extinguished through the failure or non-performance of the condition.

CONDITIONAL COMMITMENT
A commitment of a definite loan amount for some future unknown purchaser of satisfactory credit standing.

CONDITIONAL ESTATE
Usually called, in California, Fee Simple Defeasible. An estate that is granted subject to a condition subsequent. The estate is terminable on happening of the condition.

CONDITIONAL SALE CONTRACT
A contract for the sale of property stating that delivery is to be made to the buyer; title to remain vested in the seller until the conditions of the contract have been fulfilled. (See definition of Security Interest.)

CONDOMINIUM
An estate in real property wherein there is an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map or condominium plan. The areas within the boundaries may be filled with air, earth, or water or any combination and need not be attached to land except by easements for access and support.

CONDOMINIUM DECLARATION
The document which establishes a condominium and describes the property rights of the unit owners.

CONFESSION OF JUDGMENT
An entry of judgment upon the debtor'.s voluntary admission or confession.

CONFIRMATION OF SALE
A court approval of the sale of property by an executor, administrator, guardian or conservator.

CONFISCATION
The seizing of property without compensation.

CONFORMITY, PRINCIPLE OF
Holds that the maximum of value is realized when a reasonable degree of homogeneity of improvements is present. Use conformity is desirable, creating and maintaining higher values.

CONSERVATION
The process of utilizing resources in such a manner which minimizes their depletion.

CONSIDERATION
Anything given or promised by a party to induce another to enter into a contract, e.g., personal services or even love and affection. It may be a benefit conferred upon one party or a detriment suffered by the other.

CONSTANT
The percentage which, when applied directly to the face value of a debt, develops the annual amount of money necessary to pay a specified net rate of interest on the reducing balance and to liquidate the debt in a specified time period. For example, a 6% loan with a 20 year amortization has a constant of approximately 8 1/2%. Thus, a $10,000 loan amortized over 20 years requires an annual payment of approximately $850.00.

CONSTRUCTION LOAN
A loan made to finance the actual construction or improvement on land. Funds are usually dispersed in increments as the construction progresses.

CONSTRUCTIVE EVICTION
Breach of a covenant of warranty or quiet enjoyment, e.g., the inability of a lessee to obtain possession because of a paramount defect in title or a condition making occupancy hazardous.

CONSTRUCTIVE FRAUD
A breach of duty, as by a person in a fiduciary capacity, without an actual fraudulent intent, which gains an advantage to the person at fault by misleading another to the other's prejudice. Any act of omission declared by law to be fraudulent, without respect to actual fraud.

CONSTRUCTIVE NOTICE
Notice of the condition of title to real property given by the official records of a government entity which does not require actual knowledge of the information.

CONTIGUOUS
In close proximity.

CONTOUR
The surface configuration of land. Shown on maps as a line through points of equal elevation.

CONTRACT
An agreement to do or not to do a certain thing. It must have four essential elements: parties capable of contracting, consent of the parties, a lawful object, and consideration. A contract for sale of real property must also be in writing and signed by the party or parties to be charged with performance.

CONTRIBUTION, PRINCIPLE OF
A component part of a property is valued in proportion to its contribution to the value of the whole. Holds that maximum values are achieved when the improvements on a site produce the highest (net) return, commensurate with the investment.

CONVENTIONAL MORTGAGE
A mortgage securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed. The type customarily made by a bank or savings and loan association.

CONVERSION
(1) Change from one legal form or use to another, as converting an apartment building to condominium use. (2) The unlawful appropriation of another's property, as in the conversion of trust funds.

CONVEYANCE
An instrument in writing used to transfer (convey) title to property from one person to another, such as a deed or a trust deed.

COOPERATIVE (apartment)
An apartment building, owned by a corporation and in which tenancy in an apartment unit is obtained by purchase of shares of the stock of the corporation and where the owner of such shares is entitled to occupy a specific apartment in the building. In California, this type of ownership is called a "stock cooperative".

CORNER INFLUENCE TABLE
A statistical table that may be used to estimate the added value of a corner lot.

CORPORATION
An entity established and treated by law as an individual or unit with rights and liabilities, or both, distinct and apart from those of the persons composing it. A corporation is a creature of law having certain powers and duties of a natural person. Being created by law it may continue for any length of time the law prescribes.

CORPOREAL RIGHTS
Possessory rights in real property.

CORRECTION LINES
A system for compensating inaccuracies in the Government Rectangular Survey System due to the curvature of the earth. Every fourth township line, 24 mile intervals, is used as a correction line on which the intervals between the north and south range lines are remeasured and corrected to a full 6 miles.

CORRELATION
A step in the appraisal process involving the interpretation of data derived from the three approaches to value (cost, market and income) leading to a single determination of value. Also frequently referred to as "reconciliation".

CO-SIGNER
A second party who signs a promissory note together with the primary borrower.

COST APPROACH
One of three methods in the appraisal process. An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.

CO-TENANCY
Ownership of an interest in a particular parcel of land by more than one person; e.g. tenancy in common, joint tenancy.

COVENANT
An agreement or promise to do or not to do a particular act such as a promise to build a house of a particular architectural style or to use or not use property in a certain way.

CRAWL HOLE
Exterior or interior opening permitting access underneath building, as required by building codes.

CRE
Counselor of Real Estate, Member of American Society of Real Estate Counselors.

CREDIT
A bookkeeping entry on the right side of an account, recording the reduction or elimination of an asset or an expense, or the creation of or addition to a liability or item of equity or revenue.

CURABLE DEPRECIATION
Items of physical deterioration and functional obsolescence which are customarily repaired or replaced by a prudent property owner.

CURRENT INDEX
With regard to an adjustable rate mortgage, the current value of a recognized index as calculated and published nationally or regionally. The current index value changes periodically and is used in calculating the new note rate as of each rate adjustment date.

CURTAIL SCHEDULE
A listing of the amounts by which the principal sum of an obligation is to be reduced by partial payments and of the dates when each payment will become payable.