C
- capital cost allowance (cca)
The amount that an owner of an income producing asset is allowed to deduct as an expense for Income Tax purposes as a result of ownership of that depreciable asset. Only one-half of the ordinary CCA may be claimed in the first year of the holding period; no CCA may be claimed in the year of sale.
- capital risk
The risk of losing all or part of an Investment. (Capital at risk is the estimate).
- capitalization
Changing a stream of income to a capital market value (current market value) using a required rate of return.
- capitalization rate
The return an investor requires for investing in a property to receive the annual net operating income flows. It can be estimated from similar properties by dividing their estimated net operating incomes by the prices at which the properties sell.
- cash basis
Accounting procedure which recognizes revenue at the time it is actually received in cash form. Contrast to Accrual Basis.
- cash reconciliation statement
A calculation of the cash available at any point in time. The old cash balance plus all receipts less all disbursements will compute the current cash at hand.
- cash-equivalent price (of an offer)
See Market Value (of an offer).
- caveat
A notice registered against the title to land warning those looking at the title that a claim has been made.
- cca
Abbreviation of Capital Cost Allowance.
- ceiling price
The maximum price that a purchaser is willing to pay for a property. Compare to Floor Price.
- certificate of pending litigation
A notice of a pending court action registered against the title to property for the purpose of warning all persons that the title to the property is in litigation and preventing dealings with respect to the property.
- chattel mortgage
A document evidencing a debt owed by the borrower (mortgagor) to the lender (mortgagee). The mortgage is secured by the lender against personal property owned by the borrower as collateral to ensure the repayment of the debt. These mortgages are governed by the Personal Property Security Act.
- chattels
Articles of personal property (i.e., a car, stereo, television, etc.) as opposed to real property.
- civil law
A system whereby the law of a nation is set out in a comprehensive set of writings. An example of these writings or codes would be a Criminal Code for a country.
- closed mortgage
A mortgage which cannot be fully paid out before expiry of its term.
- closing statement
A statement prepared for a purchaser or vendor, showing the amounts to be received and paid out. The difference between these amounts represents either the balance payable (by the purchaser) or the cash proceeds from sale (to the vendor) upon completion of the transaction. See also Purchaser's Statement of Adjustment and Vendor's Statement of Adjustment.
- co-ownership syndicate
A real estate syndicate organization in which two or more investors are owners of an undivided interest in real property.
- common law
A system of law made up of principles and rules of action based upon the ancient customs and usages of the people of a nation which have been recognized, affirmed or enforced by the courts.
- comparative method
An appraisal method which bases the value of the subject property on the price of similar properties which have sold recently. Also named the Market Method.
- completion date
Date on which the purchaser's solicitor undertakes to the vendor (or his solicitor) that he will pay the balance owing to the vendor upon the Transfer of Title being accepted for registration.
- compound interest
Interest which, during the life of the loan, is charged or calculated at regular intervals and if not immediately paid (as in an interest only loan) will, in subsequent periods, earn interest itself (as in an interest accruing loan).
- compounding frequency
Indicates the number of times compound interest is charged or calculated per year (for example, semi-annually or monthly).
- condition
A fundamental term of a contract, a breach of which allows the injured party to terminate the contract and/or sue for damages or Specific Performance.
- condition precedent
Legal term for a "subject to" clause. In contract law, a condition precedent calls for the happening of some event or the performance of some act before the contract shall be binding upon the parties.
- conditional sales agreement
A contract for the sale of goods by which the seller reserves ownership (but not possession) of the goods until the price has been paid (usually by instalments). Such contracts are regulated by the Personal Property Security Act.
- consideration
The legal term for the reason which induces a party to enter into a contract. Consideration may be in the form of a right, interest, profit or benefit accruing to one party. It may also be in the form of an agreement not to do something, or loss suffered by the other.
- consistency principle
The accounting rule which states that once a firm has selected a method of recording financial transactions from a number of alternative options, all of which are acceptable under generally accepted accounting principles, it will apply those principles over subsequent accounting periods.
- constant payment loan
A loan which is repaid by equal and consecutive instalments that include principal and interest.
- consumption
The act of spending money on goods which decrease in value after the time of purchase (for example, the purchase of bread or a refrigerator). Contrast to Investment.
- contract
An agreement between two or more persons which creates an obligation to do or not to do a particular thing.
- contract of purchase and sale
A contract of purchase or sale of land which contains the obligations of the vendor and purchaser with respect to the purchase and sale.
- conversion (of an interest rate)
The process of changing an interest rate with one compounding frequency to an equivalent rate with a different compounding frequency.
- conveyance
The process of transferring an interest in land from one person to another by way of a transfer document. Conveyancing usually refers to the transfer of title to land but also includes dealings such as assignments, leases, and mortgages.
- corporate veil
In law, this refers to the distinct status of a corporation as a separate entity from its shareholders and corporate officers. Because a corporation is a separate entity, a person dealing with the corporation may not know the identities of the shareholders or officers. For example, the names of the owners of an incorporated business are not shown on its financial statements.
- corporation
A business entity which is owned by shareholders who decide on the general policies of the company through their elected Board of Directors. A corporation is a separate legal entity and therefore has the rights and liabilities of an individual.
- cost method
A method of appraisal which determines the value of a property by adding the market value of the site to the cost of replacing the existing building.
- cost of goods sold
The cost to the business of manufacturing or purchasing the items actually sold.
- cost principle
A generally accepted accounting principle which states that the historical cost of an asset must be reflected in a company's Financial Statements.
- counter-offer
A statement by the recipient of the offer which has the legal effect of rejecting the offer and of proposing a new offer to the offeror (who then becomes the recipient of the "new" offer).
- court order enforcement act
An Act which, amongst other things, provides for the rights and remedies of individuals attempting to collect on judgments awarded by the Court.
- covenant
For the purposes of this course a covenant is a promise contained within an agreement. The person making the covenant is called the covenantor and the person in whose favour it is made is called the covenantee.
- credit analysis
An investigation of a loan applicant's ability to repay.
- creditor
A person to whom a debt is owed. Contrast to Debtor.
- curable depreciation
Wear and tear or outmoded design which can be corrected at a cost that is economically feasible (e.g., worn carpeting). Contrast to Incurable Depreciation.
- current assets
Those assets which will be converted into cash, sold, or consumed within one year or the normal operating cycle of a business, whichever is longer. Current Assets may include Cash, Marketable Securities, Accounts Receivable, Inventories, and Prepaid Expenses. Compare to Noncurrent Assets.
- current cost
The amount of money it would be necessary to spend today to reconstruct existing improvements. See also Historic Cost.
- current liabilities
Those Liabilities which are expected to be paid within one year. Current Liabilities may include Accounts Payable, Property Taxes Payable, Wages Payable, and Income Taxes Payable.
