Capital gains - Profit earned from a sale of real estate.

Capitalization - A method used to estimate value of a property based on the rate of return on investment.

Cashflow - The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income-producing property (mortgage payment, maintenance, utilities, etc.).

Caveat emptor - Buyer beware. The buyer must inspect the property and satisfy himself that it is adequate for his needs. The seller is under no obligation to disclose defects but may not actively conceal a known defect or lie if asked.

Cc&r's - Covenants, conditions, and restrictions. The basic rules establishing the rights and obligations of owners 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.

Certificate of eligibility - The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business, and mobile homes. Certificates of eligibility may be obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility).

Certificate of occupancy - A certificate issued by a local governmental body stating that the building is in a condition to be occupied.

Certificate of satisfaction - A document signed by the Noteholder and recorded in the land records evidencing release of a DEED OF TRUST, MORTGAGE or other lien on the property.

Certificate of title - A written opinion by an attorney setting forth the status of title to the property as shown on the public records. The certificate does not certify as to matters not of record and affords no protection unless the author was negligent. Compare, TITLE INSURANCE.

Chain of title - The series of transactions from GRANTOR to GRANTEE as evidenced in the land records.

Chattel - Personal property.

Class action - A claim brought up on behalf of a group of people.

Closing - The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands. Also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report and notary fees.

Cloud on title - An evidence of encumbrances.

Coinsurance - When more than one insurance company shares the risk of a particular transaction or series of transactions. Lenders may require co-insurance on large commercial projects.

Collateral - Property pledged to secure a loan.

Condemnation - A judicial proceeding through which a governmental body takes a private property for a public use.

Condemnation - Taking of private property for a public use through exercise of the power of EMINENT DOMAIN. The Constitution protects against taking without fair compensation.

Condition - - "What you see is what you get". Seller does not make any guarantees or warrantees as to the physical condition of the property.

Condominium - A system of individual FEE SIMPLE ownership of portions (units) in a multi-unit structure, combined with joint ownership of common areas. Each individual may sell or encumber his own unit. Compare, COOPERATIVE.

Conservator - Also called a Committee or Guardian, a person designated by the Court to protect and preserve the property of someone who is not able to manage their own affairs. Examples include the mentally incompetent, minors and incarcerated persons.

Construction loan - A short-term interim loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he progresses. These are generally done by lenders with offices local to the site of the construction. This enables the lender or their agent to monitor the progress of the construction.

Contract - A legally enforceable agreement between two parties.

Contract for deed - Also known as a Land Contract or Land Installment Contract. A method of financing where title remains in the Seller's name until the Buyer has paid the full purchase price. A Contract for Deed will normally trigger the DUE ON SALE CLAUSE in a DEED OF TRUST or MORTGAGE but Veterans Administration regulations specifically allow Contracts for Deed without invoking the DUE ON SALE CLAUSE.

Conventional loan - A mortgage not insured by FHA or guaranteed by the VA.

Cooperative - A system of individual ownership of stock in a corporation that. in turn, owns the structure. Each owner has an exclusive right to use his individual unit and must pay his portion of the debt encumbering the entire building. Compare, CONDOMINIUM.

Cost approach - A method used by an appraiser to estimate replacement costs of improvements less depreciation.

Cotenancy - Ownership in the same land by more than one person. See, TENANTS IN COMMON, JOINT TENANTS, TENANTS BY THE ENTIRETY.

Covenant - A written agreement or restriction on the use of land or promising certain acts. Homeowner Associations often enforce restrictive covenants governing architectural controls and maintenance responsibilities. However, land could be subject to restrictive covenants even if there is no homeowner's association.

Credit report - A report documenting the credit history and current status of a borrower's credit standing.