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GLOSSARY of American & Mexican Real Estate Terms

C

CC & R’S Covenants, Conditions, and Restrictions – Estipulaciones, Condiciones y Restricciones

Which are the rules of general application governing the relations between land owners in a specific subdivision, development, condominium development or cooperative housing facility. May be registered on title.

Capital Gains Tax – Impuestos Sobre la Renta

The tax profit realized from the sale of property.

Capitalization

Used in the income approach to value. To capitalize income means to convert future income into present (current) value.

Capitalization Rate

The rate of interest considered to be a reasonable return on investment – given the risk.

Cash-out Refinance

When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a “cash out refinance.”.

Caveat Emptor

Means “Let the Buyer beware”.

Certification – Certificacion

The formal assertion in writing of some fact.

Certificate of No Lien – Libre de Gravamen

The document from the Public Registry office certifying there are no liens against the property.

Certificate of No Tax Liability – Certificado de no Adeudo

The document from the Public Registry office certifying there is no tax liability against the property.

Chain of Title

A history of the ownership affecting title to a parcel of land.

Charges – Cargas

The price demanded for something.

City Planning

The effort on the part of the city to coordinate, direct and control the type of development taking place, so as to ensure maximum benefits to the populace.

Closing – Firma de Escritura de Compraventa

The act of making a transaction complete.

Closing Costs – Costos del Cierre de la Operacion

Monies expended by a party in completing a transaction, over and above the purchase price, including: legal fees, taxes, mortgage application charges, interest adjustments, registration fees, appraisal fees, etc.

Cloud on Title

Any claim affecting title to property.

Collateral

Property which has been pledged as security for a loan.

Color of Title

Adverse possession.

Commingling

Illegally mixing deposits or monies, collected from a client, with one’s personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days).

Commitment – Compromiso

An agreement or pledge to do something in the future.

Common Area Assessments

In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas.

Common Elements

Property jointly owned on a pro-rata basis with other unit owners in a condominium regime.

Common Land – Ejido

System of communal ownership of agricultural land.

Community Property

Any property acquired in certain by purchase, or as compensation by either spouse during the period of marriage, is considered to be owned in an undivided half interest by each.

Comparable

Comparable property recently sold which is used in the market data approach.

Comparative Analysis

A method of appraising property in which the selling prices of similar properties are used as the basis for estimating the value of the subject property.

Compensation – Compensacion

To offset an error, defect, or undesired effect.

Competent Parties

Those who are legally capable of entering into contracts.

Condemnation

The process of exercising eminent domain through court action.

Condition – Condicion

Clauses in the agreement that must be fulfilled before the Agreement becomes firm and binding. If the condition is not fulfilled, the Agreement will usually become null and void and any deposit paid returned to the Purchaser.

Condominium Regime- Condominio Regme

A Condominium regime is a Mexican legal Notary Public document that is not legally obtainable until construction is complete.

Consideration

Anything of value offered to induce someone to enter into a contractual agreement. For example, sale price, earnest money, a promise for a promise.

Constructive Eviction

Occurs when the tenant’s use of the premises is substantially disturbed or interfered with by the landlord’s actions or failure to act where there is a duty to act. The tenant is effectively forced to move out and terminate the lease without further liability for further rent.

Constructive Notice

The knowledge that the law presumes a person has about a particular fact irrespective of whether the person knows about the fact or not (Recording).

Consumer – Consumidor

An individual or corporation that acquires or enjoys property, products or services as the end-user.

Consumer Protection Agency – Procuraduria Federal del Consumidor (PROFECO)

An Agency which functions are to promote and protect consumer rights and to procure equity and legal certainty between consumers and commercial suppliers.

Contingency

A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

Contract – Contrato A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.

Contract for a Deed A means by which the seller passes possession but retains title to the property until the total or a substantial portion of the purchase price is paid. Installment contract. The two parties here are the vendor (owner) and the vendee (buyer).

Convertible ARM

An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.

Conveyance

The transfer of title to land from one party to another.

Cooperative

A form of property ownership in which a corporation is established to hold title in property and to lease the property to shareholders in the corporation. Own stock.

Corporation – Sociedad Anonima

An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.

Cost Approach

A method of estimating value based on the economic principle of substitution; the value of a building cannot be greater than the cost of purchasing a similar site and constructing a building of equal utility.

Counteroffer

An implied rejection of the original offer by proposing new offer or by making conditional acceptance.

Covenant – Estipulacion

A legal assurance or promise in a deed or other document, or implied by law.

Curable Depreciation

Depreciation is considered curable if the cost of the repair is less than what the repair adds to the value of property.