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Call option
A provision in the mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason.
Canada Mortgage and Housing Corporation (CMHC)
A federal crown corporation mandated to promote the construction of new houses, the repair and modernization of existing houses, and the improvement of housing and living conditions, including the establishment of mortgage default insurance for lenders.
Canadian National Association of Real Estate Appraisers
A national, member-based association that offers real estate appraiser designations in Canada.
Canadian Residential Appraiser
A designation granted by the Appraisal Institute of Canada.
Canadian Uniform Standards of Professional Appraisal Practice
A generally accepted and recognized standard of appraisal practice for real property valuation adopted in Canada and by certain Canadian appraisal associations and organizations.
Candidate
An individual who is in the process of meeting the specific education and work experience requirements for designation as a real estate appraiser. Candidates are allowed a specified period of time to earn an appraisal designation, as set by the respective association.
Cap
A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease.
Capacity
The power provided under law to a person to enter into binding contracts.
Capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.
Case Law
The body of legal decisions where the court has interpreted legislation when applying it to a specific set of facts. Court decisions can be made at various levels within the judicial system (e.g. Provincial Court, Court of Queen’s Bench, and Court of Appeal provincially and the Supreme Court of Canada federally). The decisions of a higher court may alter decisions made by lower courts, and the prior decisions of courts will influence future court decisions. Therefore, case law is based on judicial precedent rather than statutory law. See also Statute Law.
Cash Back
A mortgage feature whereby the lender refunds a sum of money either as a percentage of the mortgage principal or as a lump sum.
Cash-Out refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.
Caveat
Latin for “let him beware,” a caveat is a written legal notice registered against the title of a property warning that a claim or an interest has been made against the property by a third party. The registration of a caveat is only notice of a claim and does not relate to the validity of the claim being made.
Caveat Emptor
A doctrine of the common law that translates to “let the buyer beware.”
Certificate of Compliance
A confirmation from the municipality that the location of building(s), structures and development on a property comply with all the regulations of the Land Use Bylaw. The response may be either in the form of a stamped property survey if the existing development meets regulations or by way of a written letter if the development on the property does not meet regulations. A certificate of compliance is usually required by mortgage lenders and standard real estate purchase contracts.
Certificate of Title
A document that records the information about the land, such as the legal land description, municipal jurisdiction, ownership and registered interests. The Land Titles Office no longer issues a paper Certificate of Title, but a paper copy may be available from any Registry Agent in Alberta. An electronic copy is available on the Spatial Information System (SPIN) operated by Alberta Registries, Service Alberta. See also SPIN.
Certified Appraisal Reviewer
A designation granted by the Canadian National Association of Real Estate Appraisers.
Certified Mortgage Appraisal Reviewer
A designation granted by the Canadian National Association of Real Estate Appraisers.
Chain of title
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
Change frequency
The frequency (in months) of payment and interest rate changes in an adjustable-rate mortgage (ARM).
Charge
The name given to a mortgage when registered under the Land Titles Act.
Charging Clause
A provision in a mortgage document that charges the borrower’s interest in the real property as security for payment of the debt obligation.
Chattel Mortgage
An agreement that charges the borrower’s personal property identified in the agreement as security for a loan. A lender may take security on personal property in order to enhance the extent of their security for a loan. This may be the case when borrower’s real property is insufficient for a lender to proceed with the loan.
Chattels
The movable items not securely affixed to the land or buildings, as furnishings and appliances that are not considered part of the real property. They may be referred to as personal property.
Claimant
A person who applies or has applied for payment of benefits or financial compensation.
Clear title
A title that is free of liens or legal questions as to ownership of the property.
Client
The party in a real estate transaction that is represented by a real estate professional. As per the Real Estate Act Rules, a client is a person who has entered into a service agreement with an industry member whether or not that service agreement is in writing.
Closed Mortgage
The restriction or denial of repayment rights until maturity of the mortgage.
Closing
Finalizing a real estate transaction, which includes signing of the title documents, calculations of adjustments and disbursements of funds.
Closing Costs
The total costs for the respective parties associated with a real estate or mortgage transaction. Closing costs are typically due on the closing date, which is the date at which the real estate or mortgage transaction is finalized.
Closing Date
The date when the financial adjustments are made for each party in a real estate or mortgage transaction. In real estate, it is the date when the title to the property transfers to the new owner, after which, the new owner assumes financial responsibility for the property.
Closing statement
Also referred to as the statement of adjustments. The final statement of costs incurred to close on a loan or to purchase a home.
Collateral
A borrower’s pledge of specific property to a lender to secure the repayment of the loan by the borrower.
Collection
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.
Combination loan
With this type of loan, you receive a first mortgage for 80 percent of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important to you, consider combination loans--known as 80/10/10 loans or 80/20's.
Combined loan-to-value (CLTV)
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value.
Commercial Building
A building intended for business use.
Commercial Condominium
A condominium that consists of units within an office tower, low-rise/single-level business centre or single-purpose facility, such as medical, dental or professional offices.
Commercial Lease
A type of contract granting temporary use or occupation of a commercial property for a specified period in exchange for a specified amount of rent.
Commercial Property
The real property used to conduct retail or service businesses with the prime objective of making a profit.
Commission
The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is a percentage of the price of the property or loan.
Commitment Letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a "loan commitment."
Common Areas
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation). They are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.
Common Area Maintenance Expenses
The costs charged in a commercial lease for the maintenance, repair, and replacement of the common areas, amenities and building systems of the property. These costs are typically assigned based on the amount of space leased.
Common Law
The accumulated legislation that is enacted by the courts. The courts create laws based on decisions (i.e. precedents) that were made previously by the same or different courts.
Common Property
The physical space that is not considered to be part of a unit within a condominium and that is jointly owned under the condominium corporation.
Common Property Expenses
The expenses associated with the maintenance, repair, and replacement of the common property of the condominium corporation.
Common Property Unit
In a barely blended condominium, a unit that includes areas for use by unit owners that is owned by the condominium corporation who is responsible for its care and maintenance.
Community property
In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.
Comparables
An abbreviation for "comparable properties"; used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; they have reasonably the same size, location, and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.
Comparative Market Analysis (CMA)
A method of property valuation used by real estate professionals for estimating the value of residential properties.
Compensation
Payment for performance of service.
Competence
The acquisition of knowledge, skills, and abilities at a level of expertise sufficient to be able to perform in an appropriate employment setting.
Competing Interests
When the interests of clients represented by the same brokerage compete with each other in regards to a real estate transaction or potential transaction.
Complainant
A person who files a formal written complaint to the Real Estate Council of Alberta.
Complaint
A formal written statement made by a person concerning an industry professional’s alleged failure to follow the standards of business practice as set out by the Real Estate Council of Alberta.
Compliance Stamp
The official mark on a Real Property Report from a municipality confirming that a property’s location and improvements comply with the requirements of the Land Use Bylaw in that respective municipality.
Compound interest
This refers to any interest earned on an account holder's principal balance, as well as any prior interest.
Condition
An aspect of a contract that serves as an impediment to an enforceable contract, until such time as it has been satisfied or waived. Conditions are typically placed in a contract by a party to that contract in order to protect its interest(s) and include a specific period of time after which the condition(s) will expire. Each condition may have the same or a different expiry. Real estate purchase contracts may include conditions added for the benefit of the seller, buyer, or lender.
Conditional Offer
A conditional offer sets out the terms of the sale such as the purchase price, the date of closing, the names of the parties, and the amount of any required deposit, but it also includes conditions that must be met within a specified period of time in order for the contract to be binding on the parties. These conditions could include a satisfactory home inspection or financing acceptable to the buyer.
Conditional Sale
Is a real estate transaction where the seller has accepted the buyer’s Conditional Offer.
Condominium
A form of property ownership that includes both the individual ownership of a unit and the shared ownership of common property with other unit owners.
Condominium Additional Plan Sheet
A document on which instruments for or against a Condominium Plan and condominium corporation are officially registered with Alberta Land Titles. It may also be referred to as the Condominium Sheet or Condo Sheet by real estate professionals.
Condominium Administrator
An individual appointed by the court to manage the affairs of a condominium. The court determines what powers and duties of the Board of Directors and/or condominium corporation are to be delegated to the administrator, the length of the appointment, any terms and conditions the may accompany the appointment and the compensation for the administrator’s services.
Condominium Bylaws
Rules that govern the affairs and behaviour of a condominium corporation and individual unit owners. They work in conjunction with the Condominium Property Act and Regulation and empower the condominium corporation to control, manage and administer the units and common property. Bylaws may only be created, amended or repealed through the passing of special resolutions by the condominium corporation.
Condominium conversion
Changing the ownership of an existing building (usually a rental project) to the condominium form of the property.
Condominium Corporation
A legal entity that consists of all unit owners within a condominium.
Condominium Document Condition
A condition in a purchase contract that gives the buyer the opportunity to review certain condominium documents associated with a unit and condominium he or she is interested in.
Condominium Document Reviewer
An individual who specializes in interpreting the information contained within the various documents associated with a condominium.
Condominium Documents
The package of documents that relate to the structure, finances and management of a condominium. The wide range of documents provides important information to industry professionals and to the sellers, buyers, borrowers and lenders with whom they work. Various documents related to the condominium may be obtained from the seller, member(s) of the Board or the property manager, as the case may be. In addition, some documents may be found on SPIN.
Condominium Fees
The monthly fee set by the Board of Directors and paid by a unit owner to the condominium corporation.
Condominium Insurance
The corporation is responsible for acquiring and renewing insurance for the common property. Insurance coverage typically includes the common perils to property (e.g. fire), general liability and liability for the Board of Directors of the condominium corporation. The insurer issues a Certificate of Insurance to the corporation for proof of coverage and this document forms part of the condominium documents provided to unit owners, buyers, and lenders.
Condominium Manager
An individual or company licensed by RECA that carries out some or all of the duties of a Board of Director and condominium corporation.
Condominium Management Services
Condominium management services are those in which and individual or brokerage is exercising the power, or performing the duties of, a condominium corporation on behalf of that corporation. These duties commonly include:
- collecting, holding or disbursing funds levied by the condo corporation or due to the corporation under the Condominium Property Act (e.g., condo fees)
- enforcing the bylaws or rules of the condo corporation
- negotiating and entering into contracts on behalf of the condo corporation
- supervising employees or contractors hired by the condo corporation
Condominium Plan
A 2-dimensional or 3-dimensional plan of subdivision that outlines the size, location, and boundaries of the land and any building located on the property. The Plan also divides the property into units and common areas. There are 3 types of Condominium Plans: Conventional Condominium Plans, Bare Land Condominium Plans and Barely Blended Condominium Plans.
Condominium Property Act
Alberta legislation that sets out the rules for creating, operating and managing condominiums.
Condominium Property Regulation
Alberta legislation that prescribes the processes and requirements for the creation, operation and management of condominiums.
Condominium Unit
The separate parts of the overall condominium plan that are designated for private ownership and exclusive use of the owner. The unit boundaries and the unit factor for each unit are defined by the Condominium Plan.
Confidential Information
Any information concerning a client, such as his or her financial information, personal situation, or the details of a real estate, mortgage brokerage or real estate appraisal transaction.
Conflict of Interest
A situation that undermines the impartiality of a person. According to the Real Estate Act Rules, a conflict of interest arises when there is a real or apparent incompatibility between an industry member’s interests and the interests of a client or potential client.
Conservation Easement
A voluntary agreement between a landowner and a government agency or conservation charity that limits the amount and type of development which can occur on the landowner’s property in order to preserve the ecological and/or natural portions of his or her land.
Construction Loan
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
Consumer Protection Act
Alberta legislation that protects consumers from unfair business practices before, during or after a consumer transaction.
Consumer Reporting Agency (or bureau)
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources.
Contingent Fee
A form of compensation for services provided that is dependent on the result of the service.
Contract
A binding agreement, enforceable by the courts, made between 2 or more persons, competent at law to enter into such agreement, for consideration or value, to do or refrain from doing some lawful and genuinely intended act. A contract can contain any number of promises or terms to be performed by either party. The underlying intention of any contract is that it shall be binding on the parties.
Conventional Condominium Plan
A type of Condominium Plan in which units are defined spaces within a building. The boundaries for units for this type of Condominium Plan are determined by floors, walls and ceilings. All areas not included in the units are considered to be part of the common property.
Conventional Mortgage
A mortgage where the loan amount does not exceed 80% of the appraised value or purchase price of the property.
Conversion Condominium
A condominium that involves the creation of units and common areas in an existing building through the registration of a Condominium Plan with Land Titles. Conversion condominiums typically involve buildings which previously offered rental accommodation or leased space, such as apartment buildings, offices, warehouses or storage facilities. Upon registration of a Condominium Plan, the former rented/leased spaces are converted into separately titled units.
Convertibility Clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.
Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.
Conveyance
The transfer of an interest in property from one person to another through written documentation to affect such a transfer.
Conveyancing
The formal process of transferring the legal title of land and recording interests in the land, using the prescribed Land Titles forms submitted in the prescribed manner.
Cooperative Housing
A corporation of shareholders with a common interest or purpose. In a housing cooperative, individuals own shares in the corporation but do not own the units. The individual’s proportionate interest (shares) dictates the size of the unit he or she can occupy. The occupancy right to the space is provided under a tenancy agreement with the corporation.
Corporate Relocation
Arrangements under which an employer moves an employee to another area as part of the employer's normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity.
Cost Approach
An appraisal method for determining the value of a property that is based on the current cost of replacing or reproducing the subject property.
Cost of Credit
The difference between the value received by a borrower and the value given by the borrower to the credit grantor in connection with a credit agreement.
Covenant
A written agreement or promise usually under seal between 2 or more parties for the performance of an action. In mortgage brokerage, it refers to the clauses in a mortgage agreement that establishes the rights and obligations agreed to by the borrower and the lender.
Crawl Space
A type of foundation that is typically shorter in height than a basement. Crawl spaces are not tall enough to provide habitable space for use by building occupants but they can accommodate some components of the building infrastructure.
Credit Agreement
A legally binding contract between a borrower and lender which includes terms of repayment, the fees, other costs, as well as rules and requirements of the loan.
Credit Bureau
An agency that collects, records, stores and distributes credit and personal date files to authorized lenders (creditors) for a fee.
Credit Report
A record detailing an applicant’s past borrowing and repayment history.
Credit Score
A numerical expression based on a statistical analysis of a person’s credit files which represents the creditworthiness of that person.
Current Real Property Report
A legal document produced by a land surveyor that clearly illustrates the boundaries of a property and the location of improvements to the land relative to the boundaries. It also illustrates other issues impacting the property, such as rights-of-way, easements, encroachments, etc. In addition, it may contain a surveyor’s opinion or concerns regarding these items. A current real property report (RPR) illustrates the up to date improvements on the land and their relationship to the property boundaries whereas an existing RPR may not illustrate the current state of a property if any improvements were made to the land since the date of the RPR.
Customer
The party to a real estate transaction that is not being represented by a real estate professional. As per the Rules, a customer is a person who has contacted, but not engaged or employed an industry member to provide services.
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