CANTILEVER - A projecting beam or overhanging portion supported at one end only.

CAPITAL GAIN - The taxable profit derived from the sale of a capital asset.

CAPITAL IMPROVEMENT - Any structure which is erected as a permanent improvement to real property; any improvement which is made to extend the useful life of a property, or to add to the value of the property.

CAPITALIZATION - A mathematical process for converting net income into an indication of value, commonly used in the income approach to appraisal.

CAP RATE (CAPITALIZATION RATE) - The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

CERTIFICATE OF REASONABLE VALUE (CRV) - A certificate issued by the Veterans Administration setting forth a property's current market value estimate, based upon a VA approved appraisal.

CERTIFIED CHECK - A check which the bank guarantees to be good, and against which a stop payment is ineffective.

CERTIFIED PROPERTY MANAGER - A professional property manager who has qualified for membership in and is a member of the Institute of Real Estate Management, and is designated a CPM.

CHAIN OF TITLE - The recorded history of matters which affect the title to a specific parcel of real property, such as ownership, encumbrances and liens, usually beginning with the original recorded source of the title.

CHATTEL - Personal property which is tangible and moveable.

CLEAR TITLE - Title to property that is free from liens, defects or other encumbrances, except those which the buyer has agreed to accept, such as mortgage to be assumed, the ground lease of record, and the like; established title; title without clouds.

CLIENT TRUST ACCOUNT - An account set up by a broker to keep client's monies segregated from the broker's general funds.

CLOSING - The final stage of consummating a real estate transaction when the seller delivers title to the buyer, in exchange for the purchase price.

CLOSING COSTS - Expenses of the sale which must be paid in addition to the purchase price (in the case of the buyer's expenses), or be deducted from the proceeds of the sale (in the case of the seller's expenses).

CLOSING STATEMENT - A detailed cash accounting of a real estate transaction prepared by an escrow officer or other person designated to process the mechanics of the sale, showing all cash that was received, all charges and credits which were made, and all cash that was paid out in the transaction; also called a settlement statement.

CLOUD ON TITLE - Any document, claim, unreleased lien or encumbrance which many impair or injure the title to property or make the title doubtful because of its apparent or possible validity.

CLUSTER DEVELOPMENT - The grouping of housing units on less than normal size homesites, with the remaining land being devoted to common areas.

CODE OF ETHICS - A written system of standards of ethical conduct. The Code of Ethics of the National Association of Realtors, first written in 1913, establishes the high standards of conduct for members of the Realtor community.

COLLATERAL - Something of value given or pledged as security for a debt or obligation. The collateral for a real estate mortgage loan is the mortgaged property itself, which has been hypothecated.

COLOR OF TITLE - A condition which has the appearance of good title, but which in fact is not valid title, as where title is founded on some written document which on its face appears valid and effective, but which is actually invalid.

COMMERCIAL PROPERTY - A classification of real estate which includes income producing property such as office buildings, gasoline stations, restaurants, shopping centers, hotels and motels, parking lots and stores, and other similar uses.

COMMINGLING - To mingle or mix; for example, to deposit client funds in the broker's personal or general account. A licensee found guilty of commingling can have the license suspended or revoked by the Real Estate Commission.

COMMISSION - The compensation paid to a real estate broker(usually by the seller) for services rendered in connection with the sale or exchange of real property.

COMMITMENT - A pledge or promise to do a certain act, such as the promise of a lending institution to loan a certain amount of money at a fixed rate of interest to a qualified buyer, provided the loan is obtained on or before a certain date.

COMMON AREAS - Land or improvements designated for the use and benefit of all residents, property owners and tenants.

COMMON ELEMENTS - Parts of the property which are necessary or convenient to the existence, maintenance and safety of the condominium, or are normally in common use by all of the condominium residents.

COMMON LAW - That body of law which is based on usage, general acceptance, and custom, as manifested in decrees and judgments of the courts; judge-made law, as opposed to codified or statutory law.

COMMON WALL - A wall separating two living units.

COMMUNITY PROPERTY - A system of property ownership based on the theory that each spouse has an equal interest in property acquired by the efforts of either spouse during marriage.

COMPARABLES - Recently sold properties which are similar to a particular property being evaluated, and which are used to indicate a reasonable fair market value for the subject property.

COMPOUND INTEREST - Interest which is computed upon the principal sum plus accrued interest.

CONCESSIONS - Discounts given by landlords to prospective tenants to induce them to sign a lease.

CONDEMNATION - Either a judicial or administrative proceeding to exercise the power of eminent domain, i.e., the power of the government to take private property for public use.

CONDOMINIUM OWNERSHIP - An estate in real property consisting of an individual interest in an apartment or commercial unit, and an undivided common interest in the common areas such as the land, parking areas, elevators, stairways, and the like.

CONSIDERATION - An act or forbearance, or the promise thereof, which is offered by one party to induce another to enter into a contract; that which is given in exchange for something from another.

CONSTRUCTIVE EVICTION - Acts done by a landlord which so materially disturb or impair the tenant's enjoyment of the leased premises that a tenant is effectively forced to move out and terminate the lease without liability for any further rent.

CONSTRUCTIVE NOTICE - Notice of certain facts which are implied bylaw to a person because he could have discovered the fact by reasonable diligence or by inquiry into public records.

CONTINGENCY - A provision placed in contract which requires the completion of a certain act or the happening of a particular event before a contract is binding.

CONTRACT - A legal agreement between competent parties who agree to perform or refrain from performing certain acts for a consideration. In real estate, there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others.

CONVEYANCE - The transfer of title to real property by means of a written instrument such as a deed or an assignment of lease.

COOPERATING BROKER - A broker who joins with another broker in the sale of real property.

COOPERATIVE OWNERSHIP - Cooperative ownership of an apartment unit means that the apartment owner has purchased shares in a corporation which holds title to the entire apartment building.

CO-TENANCY - A form of concurrent property ownership in which two or more persons own an undivided interest in the same property.

COUNTER-OFFER - A new offer made as a reply to an offer received from another; this has the effect of rejecting the original offer, which cannot thereafter be accepted unless revived by the offeror's repeating it.

COURTESY TO BROKERS - The practice of sharing commissions with cooperating brokers.

COVENANT - A written agreement or promise of two or more parties by which either pledges to perform or not to perform specified acts on a property, or which specifies certain uses or non-uses of the property.

COVENANTS AND CONDITIONS - Covenants are promises contained in contracts, the breach of which would entitle a person to damages. Conditions, on the other hand, are contingencies, qualifications or occurrences upon which an estate or property right would be gained or lost.

COVENANTS RUNNING WITH THE LAND - Covenants which become part of the property and benefit or bind successive owners of the property.

CUL DE SAC - A street which is open at one end only, and which usually has a circular turnaround; a blind alley.

CUSTOMER TRUST FUND (CTF) - An impound account maintained for the purpose of setting up a reserve to pay certain periodic obligations such as real property taxes, insurance premiums, lease rent, and maintenance fees.