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105 Cards in this Set

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Abandonment
The giving up of a responsibility as shown through some overt action. Non-use of property is not abandonment; failure to keep property up or to pay taxes is. May result in non-compensatory loss of property rights. Ex. Dying intestate with no heirs
Abstract of Title
A collection of documents showing interests, which have been recorded against title to a property. Does not guarantee marketability of title.
Abstractor
One who prepares an abstract of a title
Acceleration Clause
Clause in a contract, which will, under specified circumstances, cause a speeding up of the due date. Commonly used by a mortgagee as a remedy for the Due on Sale Clause to require payment in full before termination date of the contract, forcing the property into foreclosure.
Acceptance
Agreement to receive what has been offered. Acceptance of an offer results in contract and terminates the offer. If offer not accepted, offer is terminated without contract.
Accession
Man-made additions to real property
Accretion
Natural additions to real property - typically results from the addition of soil because of the natural flow of a body of water (alluvial soil)
Acknowledgement
Positive declaration as to of the truth of a stated fact. In the recording process, relates to statements of signatory on document, relating to age of party, lack of duress, and assurance the part is who they say they are.
Acre
Area of land totaling 43,560 sq feet
Active License
One which has been issued for use
Actual Damages
Court order providing restitution of costs incurred by a party to a contract because of default by the other party.
Actual Eviction
Court action (summary proceeding) which a landlord can take against a tenant for breach of lease. A Notice to Quit must first be given to the tenant - 7 day NtQ for money due, 30 day NtQ for any other breach. If NtQ fails, a Writ of Restitution from the court requires the tenant to restore right of possession to the landlord within 10 days.
Actual Notice
Information which is known.
Addendum
An addition, which becomes part of a contract at the time it is created.
Adjustable Rate Mortgage (ARM)
type of variable rate mortgage in which interest rate changes are identified in the contract base on an economic indicator or index.
Administrator
Party named by the court to act on behalf of a party who has died without leaving a will.
Ad Valorem Tax
Tax assessed against real property based on the value of the property - assessed value or state equalized value. In MI, assessed value is 50% of market value. Actual tax based upon millage rate.
Advance
Term used to refer to time which payments are made in relation to the period over which the item or service is received. Advance payments are made at the beginning of the process/period.
Adverse Possession
A statutory means by which title to real property claiming open, continuous, hostile, notorious use agains the wishes of the owner for a statutory period (15 years in MI) - need proof!
Agency
Relationship, which results from consent and is based in trust. The principal authorizes and places trust in the agent to act on the principal's behalf and in the principal's best interest - Agency results from contract, often an employment agreement. Listing Agreements, Independent Contractor Agreements, Powers of Attorney, Trust Agreements, Escrow Agreements all contracts which create agency. Agent owes fiduciary duties to principal - Care, Obedience, Loyalty, Accounting, Due Diligence, Confidentiality
Alienation Clause
Another name for a Due On Sale Clause. Combining an alienation clause and an acceleration clause in a contract results in the elimination of the normal right of a contracting party to assign the rights of the contract.
Alluvion
Soil carried by natural movement of water which is deposited on the shore and increases land mass
Amendment
Change in contractual terms and conditions AFTER a contract has been created.
Amenities
Additions available to or appurtenant to real property which provide pleasure, comfort, or convenience. Central air, fireplace, finished basement, etc.
Amortized
Characterized by elimination of a debt through regular periodic payments to principal and interest over a specified amount of time. Payment over the full term results in a fully amortized loan; payments over less than full amortization period result in partially amortized loan requiring a balloon payment at end of term.
Annual Percentage Rate (APR)
Term created under Truth in Lending Act to refer to any yield earned by a lender in connection with a loan. Includes interest rate, discount points, origination fees, and any other money which will be paid to the lender by the borrower.
Anti-Trust Law
A body of law relating to the regulation of activities which tend to restrain free trade - boycotting, price fixing, etc. MI penalties include criminal action - fine to $100,000 and imprisonment up to 3 years.
Possibly also civil action.
Appraisal
Report prepared by a specialist in property valuation providing an estimated opinion of value - based on available market information.
Appraisal License
License required by a party appraising real property to others for compensation. Issued by Bureau of Occupational and Professional Regulation.
Appraised Value
Value established by appraisal.
Appreciation
Increase in value of property for any reason. Commonly results from effects of economic principle of Supply and Demand, updating of improvements, conditions external to the property, etc.
Appurtenance
Attachment. Can refer to physical attachments to the land like fences and other structures, to conceptual attachments such as the rights, which attach to the interest in ownership, or to attachments to documents such as amendments or addenda. Appurtenances, as they relate to real property run with the land unless otherwise agreed in writing.
Area
A two dimensional measurement defining a flat surface. Determined by using the mathematical formula: L x W = A. Typical real estate references include: square footage, generally used to indicate size of a structure or a room; square miles, generally used to define sections and townships; in the U. S. Rectangular Survey System.
Arrears
Behind. Term used to refer to time at which payments are made in relation to the period over which the payment is due. Payments in arrears are made at the end of the period. Taxes paid in arrears are paid at the end of the tax year, for example, to catch payment up to the due date. Interest, by law, is always paid in arrears. It is for this reason that the first payment on a loan is always due a period of time (typically at least 30 days) after the money is received.
Articles 1-6
Portions of the Michigan Occupational Code which deal with all licensed occupations that fall under regulation by the Department of Consumer & Industry Services, Bureau of Occupational and Professional Regulation (BOPR). These 6 articles set up the regulatory structure; define the duties of the Department and Boards; identify violations and penalties; establish a complaint procedure for violations.
Article 25
Portion of the Michigan Occupational Code, which specifically deals with the occupation of real estate. Identifies types and purposes of licenses; defines relation-ships between licensees within the occupation; establishes requirements for licensing; identifies disclosures and recommendations required by licensees; establishes certain contractual requirements relating to dealing with the public.
"As is" Clause
Clause often included in a real estate purchase agreement to provide protection to the seller from lawsuits by a purchaser for defects of property. The clause will give protection if the seller has not committed fraud in the transaction. See also: Caveat Emptor.
Assessed Value
Value placed on real property by a taxing authority. In Michigan, the legal requirement for assessed value is 50% of market value. This value is established by the assessor on an annual basis as of dates established by law. A system of checks and balances insures that all property assessments are based on the 50% requirement. Local assessors report to the county assessors who report to the state assessor. At each level, adjustments can be made using an equalization factor to adjust the assessed value up or down as required. When this factor is applied by the state assessors’ office, the resulting adjusted value is referred to as the State Equalized Value (SEV), which becomes the basis for ad valorem tax bills on real property. Since 1994, tax bills also show a taxable value which, except in the first year of the ownership will probably be lower than the assessed value or SEV since there is now a limit on the amount tax a given tax year.
Assessor's Parcel Number
Tax Identification Number
Assignment
Giving up of an interest. Generally relates to contractual rights, which, by law, can be assigned to another unless the parties agree otherwise in writing. Assignment always leaves the assigning party in a position of liability for the rights given should the assignee fail to live up to the agreement
Assignor
Party who gives up rights held by contract.
Assignee
Party who gives up rights held by contract.
Associate Broker
1).Type of license issued to real estate practitioner who has completed 3 years of real estate sales experience or the equivalent, 90 hours of statutory classes, has attained the age of 18, and passed the broker’s license examination. This license can be issued only under a broker license. It may be held by a designated decision-maker for a real estate company (principal associate broker) if the broker is a non-living entity such as a partnership, LLC or corporation. In this case, at least one party must hold an associate broker license in order for a broker license to be issued. This structure is often used to shift responsibility from the individual to a non-living entity, thereby limiting individual liability for the actions of those employed by the company. More than one principal associate broker license may be held as required by law with different companies at the same time. More than one individual in the company can also hold an associate broker license. 2) A party who has not been designated as a decision-maker for the company can be issued an associate broker license as a non-principal. Since the party has met the requirements, s/he can become a principal of the company or have a broker license issued without meeting further requirements. As a non-principal, a licensee can hold only one associate broker license under one company at a time.
Association
A method of tying together a group of people with a common purpose. Common in subdivisions and condominiums where a group of unit owners also share ownership in common areas. Typically, an association is formed to oversee and provide private regulation of the common areas and to collect dues or fees, which are charged to all owners to pay for maintenance of the common areas.
Association Dues
Periodic charges to members of an association to fund the obligations of the association. In real property-related situations such as condominiums and sub-divisions, these charges become liens against the individually-owned property, and failure to pay may result in Association action to collect. The authority of the Association is defined in Subdivision Restrictions or a Master deed and By-laws. See also: Association; Condominium; Lien.
Assumed Name
A name taken by an individual, which is different from the party’s given name: an alias or a d/b/a (doing business as). An assumed name must be registered with the County Clerk’s Office in the County in which the individual resides or in which s/he will be using the name. Once an individual takes a registered assumed name and, for real estate purposes, licenses are issued under this name, this becomes the individual’s name for purposes of the particular business for which it was taken. An individual broker who takes an assumed name, for example, must advertise using this name..
Assumption
The receipt or acceptance of an interest. Generally relates to contractual rights, which can always be assumed by another person unless the parties agree otherwise in writing. Liability for following through on the assumed responsibilities falls to the assuming party, but the party from whom the rights and responsibilities were assumed remains in a position of liability, as well.
Attachment
Any additional paper becoming part of a contract either when it is created or during the executory period prior to closing.
Attorney at Law
One who has completed law school, passed the bar exam and is licensed for the practice of law. An attorney-at-law can do real estate activities under a law license if the act is part of the practice of law. To actually list or sell property for others for compensation, however, requires a real estate license rather than a law license.
Avulsion
Sudden washing away of land through natural forces such as flooding.
Balloon Payment
Large (larger than the regular monthly payments) final payment on a loan. Characteristic of Bridge (Swing) loans and Partially Amortized loans.
Bargain and Sale Deed
Type of deed which conveys an absolute interest in real property but which does not make any guarantees about the quality or quantity of the interest. Often used as the instrument of conveyance by a sheriff in a foreclosure sale.
Baseline
part of the rectangular survey system
Benchmark
Physically identifiable indicator used by a surveyor to establish altitudes and measurements in relation to sea level.
Beneficiary
One who benefits. Under Title Theory, refers to the lender, who receives the proceeds of the sale if the Trustee uses the Power of Sale Clause. Regarding insurance, the party to whom money will be paid in the event of loss.
Bequest
The gift of personal property given by will.
Bilateral Contract
Contract in which both parties make promises, which are binding on the promising party, i.e., party A promises and Party B promises. Breach of contract results if either or both parties fail to perform. Examples include a Purchase Agreement, Lease Agreement.
Bill of sale
Instrument used to transfer interests in personal property, as distinguished from a deed, the instrument used to transfer interests in real property.
Blanket Mortgage
Document identifying more than one parcel of real property as collateral for a loan. Typically used by builders or developers to allow several individual lots to be pledged as collateral to borrow money for construction on these lots. An entire tract, which has been subdivided, provides collateral value for the loan, as identified by individual legal descriptions of the lots. To protect a potential purchaser from a lien against property purchased, the mortgage document includes a Partial Release Clause allowing for removal of each legal description from the mortgage as payment is made on its sale.
Blend Rate
Method of establishing an interest rate when two different rates are involved. Commonly used in connection with an Escalation Clause on an assumption of an existing mortgage or in a Wraparound Mortgage. The dollar amount charged at each rate is given a percentage value in relation to the entire loan, thus, giving it a comparative weight. By using this ratio, a new rate is established. For example, if $25,000 is outstanding on the loan at 8% and $50,000 is to be loaned in addition at 10%, the blend rate will be determined by counting one part at 8% and two parts at !0%. Adding these up, 8 + 10 + 10, gives a total of 28, which is then divided, by the number of parts (3). 28 divided by 3 = 9.33% - the blend rate.
Blind Ad
Advertisement that fails to notify the public that the advertiser is a business rather than an individual. In real estate ads, use of the name of an individual broker without using the word broker to clarify that the person is also a company is a blind ad. A salespersons’ s use of his/her name without the use of the broker’s name to advertise listed property is also a blind ad. Such ads are illegal, and use of them is punishable under licensing law as a form of false advertising.
Blockbusting
Illegal activity defined under fair housing law in which a licensee, for financial gain, through implied or express means, leads a property owner to believe that the presence of a minority in a neighborhood will adversely affect market value. Under Michigan Fair Housing law a violation for blockbusting also occurs if the party identifies the decline in quality of schools, increase of crime in a neighborhood as a reason for the decrease of value of a property. Also known as Panic Peddling. See also: Minority; Discrimination; Steering; Redlining.
Board
As regards real estate, the Board of Real Estate Brokers and Salespersons established under the Michigan Occupational Code as part of the regulatory structure of the real estate occupation. The Board is made up of 9 total members, 6 of whom hold licenses in the occupation and 3 who are members of the general public. The Board exists within the Michigan Department of Consumer and Industry Services (DCIS) as part of the Bureau of Occupational and Professional Regulation (BOPR). Members are nominated by the Governor and, upon approval by the Senate, serve a maximum of two 4 year terms. It is the Board, which ultimately decides penalties in licensing disputes. Other functions of the Board include the promulgation of rules, and, in conjunction with the Department, oversight and approval of license examinations. Any action of the Department as to issuance or renewal of licenses or other approvals are at the discretion of the Board
Borrower
Party to a loan who receives the money.
Bond
Form of insurance to provide against loss of money held by one individual on behalf of another. Required of subdividers prior to receipt of any monies from potential purchasers. Landlords, under the Security Deposit Act, must post bond for any security deposits held on behalf of tenants before the landlord can use any of this money. A real estate licensee need not post bond as a requirement for licensing. However, the Board as a penalty in the event of violations involving other people’s money may make such a requirement.
BOPR
Bureau of Occupational and Professional Regulation
Bottomland
Land under water in rivers, lakes and streams. See: Riparian Right; Littoral Right.
Branch Office
A location used by a company other than its main office.
Branch Office License
As it relates to real estate, a branch office license must be issued in order for a branch office to operate, and the Department must be notified of any change in branch office location. A branch office, as an extension of the broker, can not exist except under a broker license. A manager of a branch office can be any licensed person, including one holding a salesperson’s license. The requirement changes if a branch office is located more than 25 miles from the city limits of the main office. In this case, the manager must hold an associate broker license. Advertising by a branch office must include the name of the broker as it appears on the broker license. All branch offices, there-fore, will have identical advertising as regards the name of the company. See also: Franchise.
Breach
Literally a break. In contracts, the breaking of a promise made; a default.
Bridge Loan
a form of interim (short term) financing used to make available money to close on a new purchase prior to sale of the currently owned property. Also called Swing Loan. See also: Interim Financing; Term Loan.
Broker
1) Third party who is paid to bring a transaction together. Typical in mortgage, securities and real estate transactions. A broker holds no interest in the property, which is the subject of the transaction. If a party who acts as a broker is also the owner of property, which is sold, the party is a dealer rather than a broker. See also: Dealer; Mortgage Broker’s Lender’s and Servicer’s Licensing Act.
Broker License
Real estate license, which names the company and places responsibility for all actions taking place under the license. A broker license can be issued to an individual, in which case, the individual is also the decision-maker for the company. An individual broker can be licensed in his/her given name or can take an assumed name and operate under a d/b/a (doing business as). If the given name is used, any advertising by the individual broker must also include the word broker to clearly indicate that it is a company and not an individual advertising. To avoid placing total responsibility for all activities within a brokerage upon an individual personally, a non-living entity is often formed to hold the broker license, typically a corporation, a limited liability company (LLC) or a partnership. In this case, the decision-making responsibility will fall upon a person who is licensed with an associate broker license. No broker license can be issued to a non-living entity unless there is an individual holding an associate broker license. It is, in this case, the associate broker who must meet the licensing requirements for the company.

Broker licensing requirements include: 3 years of real estate experience or the equivalent, 90 hours of statutory classes, age of at least 18, passing the broker’s license examination, and having a place of business in the State of Michigan. Licensing does not require that the applicant be a citizen of the United States or a resident of Michigan.
Budget Mortgage
Security instrument requiring that the regular monthly payments include 1/12 of the annual payment for taxes and/or insurance due on the collateral property. Sometimes referred to as PITI because, in addition to the lender's return of principal and interest, taxes and insurance are collected. Since these items do not belong to the lender, they are placed in an escrow or impound account and can be paid out only upon receipt of the bill from the rightful owner of the money (the government for taxes or an insurance company).
Building Codes
Local laws regulating improvements and fixtures attached to real property, establishing requirements for structure, plumbing, heating and electrical systems. Building codes require a permit be pulled when work is done on any of the systems or when improvements area added on the land. An inspection is required to insure health, safety and welfare. Inspection information, included on a Field Card, provides a public record of the improvements done on each parcel as well as to providing a basis for property tax adjustments. In some cities, City Inspections are required at the time of a real property transfer to insure the property is "up to code," and, before the structure can be occupied, the municipality must provide a Certificate of Occupancy. See also: Zoning Ordinances.
Builder's License
License issued to a residential builder in Michigan. A party operating under an active builder’s license can sell never occupied new construction built under a builder’s license. Sale of used structures, however, does not fall under this license. Regulated under the Occupational Code.
Building Restrictions
Requirements set by private or public entities to insure adequacy of structural, heating, plumbing and electrical systems in improvements on the property. See also: Building Codes; Subdivision Restrictions.
Bundle of Rights
Also called title. The interest held in real property by individuals. Includes all of the rights of ownership such as air rights, subsurface rights, mineral rights, riparian rights, the right to sell, to split, to improve, to possess, to will, to use as collateral, the right of way, etc. Transfer of these rights is evidenced by a deed. The entire interest is defined by its estate (quality of ownership) and its tenancy (quantity of ownership). See also: Title; Interest; Deed; Freehold Estate; Freehold Tenancy.
Bureau of Occupational And Professional Regulation (BOPR)
Body within the Michigan Department of Consumer and Industry Services, which regulates licensed occupations. Regulation includes many different licenses, real estate being only one of them. Also regulated are appraisers, builders, morticians, beauticians, etc.
Business Opportunity
Refers to the sale of an existing, on-going business such as a beauty shop on leased premises. The sale includes not a real property interest but various types of interests in personal property such as trade fixtures and inventory and the lease contract. The market value in such a sale is based on the value of an already operating business. Such sales are regulated under real estate licensing law.
Buyer's Broker
Broker who represents a buyer rather than a seller in a transaction and who may be compensated either by the represented buyer or by the seller. it is the representation, not the compensation that creates the agency relationship requiring fiduciary duties. May also refer to a broker who represents a tenant in a lease transaction - called “tenant rep.”
Buydown
Reference to a lender’s willingness to allow a reduction in interest rate if the borrower pays points up front to compensate for the loss of income to the lender over the term of the loan. Until recently, only FHA and VA types of loans were available for buydowns. Today, however, it is common in conventional lending as well.
Buyer
Party to a purchase agreement who is purchasing.
By-laws
The rules, established by the developer that can be amended later by the Association or its Board of Directors and under which the Association of a Condominium Complex operates. Bylaws address issues such as the election of the Board of Directors and the responsibilities of the Board, the method of determining the prorated share of ownership costs and operating expenses of the complex.
Capital Gain
Profit resulting from the sale of property, either real or personal, which, as a form of income, is subject to Capital Gains Tax. The tax is levied not on the entire sale price, but the net profit. Gross profits, for purposes of capital gains tax are reduced by the original purchase price, allowable depreciation and cost of improvements made to the property during the time of ownership. There is an exclusion, up to $250,000 per person, from paying the tax on the sale of a principal residence as long as the owner has occupied the property for two of the last 5 years. Before claiming such an exemption, check with your accountant.
Capital Improvement
An improvement to real property which extends its useful life or adds value to it. Generally, capital improvements are the more expensive repairs, occurring infrequently, e.g., new roof, furnace, siding, etc. In a condominium form of ownership a reserve account often provides available money for capital improvements. If the reserve held is inadequate to meet the expense, an assessment is charged to all owners with an interest in the common areas to which the capital improvement applies. In property management relationships, while the management company oversees the day to day maintenance, the owner will not, typically, provide the management company with the same freedom to deal with capital improvements. Payments for large improvements are capital expenditures.
Capitalization Rate
Also called Rate of Return. Refers to the percentage of return an investor earns on an investment. Serves as the basis of the income approach to value. Based on net rather than gross income, the capitalization rate reflects return of actual (net) profit. Using the premise that net income is a percent of value, the capitalization rate can be determined, as long as value and net profit are known, by dividing the net profit by the value. The value can be determined if the capitalization rate and net income are known by dividing net income by capitalization rate; and income can be determined by multiplying a known value times a known capitalization rate.
Caveat Emptor
From the Latin, “Let the buyer beware!”, a legal concept which puts the burden to know the condition and, therefore, the value, of what is purchased on a purchaser. While many recent consumer protection laws tend to lessen the impact of “buyer beware,” it is still necessary for a purchaser of real property to have inspections of title, value and condition done in order to eliminate the potential liability resulting from the “as is” clause included in most real estate purchase agreements today. if an “as is” clause is accepted by a purchaser, the purchaser may find judicial relief only if fraud by the seller can be proved. To increase their protection, many sellers today are also including recommendations to purchasers to have inspections done. If this notice is not heeded, the purchaser proceeds at his/her peril.
Cease and Desist Order
Loosely translated, “stop and stop,” the meaning of such an order from a government body or a court is clear: stop whatever act you were doing which was in violation of the law.
Censure
Punitive measure taken against a violator, which involves making the violator’s illegal action a matter of public record. A real estate violation in Michigan becomes a matter of public record for 5 years. Typically, censure results from a guilty finding as the result of an Administrative Hearing or a Conciliation Conference held by the Department or as the result of an admission of guilt as shown by payment of a fine when a citation is issued. See also: Complaint Procedure.
Certificate of Eligibility
CERTIFICATE OF ELIGIBILITY - Issued to a Veteran by the Veteran’s Administration (VA) indicating the amount of the veteran’s entitlement for benefits offered through VA. Current maximum entitlement available to a veteran for a housing guarantee is $36,000 which represents 20% of the purchase price of a principal residence if a veteran uses the VA’s -0- down mortgage plan. The total amount is available only if the veteran qualifies financially for the loan. It is possible that the total entitlement used can be less than the amount available. In this case, a veteran has a remaining partial entitlement which can be used at a later time to guarantee a loan on the purchase of a second property.
Chain of Title
Relating to the recording of documents regarding interests in property. A search of the records should provide a clear connection between the giver and receiver showing that each receiver became the next giver or that any encumbrances placed against the interest were subsequently removed by the interest holder. If these links cannot be determined, the flaw is referred to as a gap in the chain of title or a cloud on title. Until the gap is repaired, marketable title can not be transferred. Commonly, such clouds can be removed if a quit claim deed or a release, discharge or satisfaction of the interest is recorded in which the party who holds the missing link willingly gives up any future claim to it. If the party is unwilling to sign a quit claim deed, court action in the form of a suit to quiet title may be necessary. Such an action will forever resolve the question of who holds the interest.

Examples of such gaps or clouds include: a mortgage which was paid off but which never released from the record or a deed that was never entered into the chain of title. Many of these clouds are easily discovered by a title search and are easily remedied. In other cases, however, it may not be noted on record. The forgery of a person’s signature will probably not show in a title search, nor will a missing heir who may later turn up and make a claim.
Chattel
Term used to refer to personal property dating from the time when estates were measured by ownership of personal property, specifically, cattle. Today, chattel, the old form of the word cattle has become synonymous with personal property. It may refer to the easily recognized mobile personal property, to emblements or to trade fixtures (sometimes called chattel fixtures). In any case, the key characteristic of chattel is that it can be moved, either be-cause it is not attached or it is removed. (Removing a light fixture makes it personal property, i.e., chattel.)
Chattel Fixture
Also known as a trade fixture. An item, generally used in a trade or occu-pation, which is attached to the real property of another, but lacks the intent of permanence, and which is considered personal property. A chattel fixture typically occurs in rental property. It is considered the personal property of the tenant and can be removed upon the termination of a lease. The return of the property to its original condition upon removal of the fixture is required of the tenant.
Chattel Mortgage
Mortgage in which the collateral provided to secure the loan is per-sonal property only, e.g., security instrument with a car loan
Citation
A “ticket” issued by a representative of the Department to a licensee who has been accused or “cited” for a violation. Each real estate citation carries a fine of $100 which, if paid, is an admission of guilt. If the cited party chooses not to admit guilt, a Notice of Hearing will be delivered to the last known address of the accused party for further investigation. See also: Censure; Complaint Procedure, Administrative Hearing.
Civil Action
Court action initiated by one individual against another individual. Penalties in such actions include actual damages or an order for specific performance. Jail penalties are never assessed. See also: Criminal Action.
Civil Rights Act of 1866
Federal law making racial discrimination illegal. Action under this law must be taken in Federal Court. Penalties include unlimited punitive damages. Affected by the Jones V. Mayer Decision which, although exceptions may be included under other fair housing laws, racial discrimination by a licensee or a private party is never an exception allowed in a real estate transaction. See also: Jones V. Mayer; Elliott-Larsen Civil Rights Act; Federal Fair Housing Act of 1968.
Cleaning Deposit
Money held by a landlord in case the tenant does not leave the apartment clean. Cleaning costs, legally, cannot be withheld from a security deposit. A cleaning deposit can be included in a lease, but it must be separately agreed to as part of the contract. A cleaning deposit remains the property of the tenant and is refunded if the apartment is left clean. If not, the landlord can claim the portion of the deposit needed to clean after the tenant vacates. Not the same as a cleaning fee, an actual charge to the tenant that will not be refunded.
Cleaning Fee
A non-refundable charge made in a lease to cover the cost of cleaning when the tenant vacates.
Client
One who enters into a contract with another to obtain representation.
Closed Mortgage
Mortgage in which prepaying a loan balance results in a charge of a prepayment penalty, typically 1% of the remaining balance.
Closing
Finalization of a contract. Also called Settlement.
Closing Costs
Charges incurred to meet contractual terms and conditions so a contract can close. May include Title Insurance Policy, Survey, Appraisal, Credit Report, etc.
Code of Ethics
Standards of conduct. Regarding real estate, generally the Code of Ethics adopted for the profession by the National Association of REALTORS® (NAR). Violations of a code of ethics does not, in and of itself, mean a violation of the law. However, laws, in general, grow out of ethical standards, and, if the ethical standard has also been written into law, an ethical violation is also a legal violation.