Client Trust Account to Coinsurance Clause
Client Trust Account
A client trust account is one that is used to impound client funds and avoid illegal commingling. Real estate attorneys and brokers must use such accounts to hold earnest money and security deposits. It is a grievous breach of fiduciary duties, professional ethics and the law to intentionally misuse client trust funds.
Closely Held Corporation
Also called a closed or family corporation, this is a corporation whose shares are owned by only a few investors, or even just one investor.
Closing
Also called a settlement, the closing is the consummation of a transaction – specifically, a mortgage or real estate transaction. With real estate transactions, it generally includes the delivery of the property’s deed, the signing of all required documents and the disbursement of funds necessary to complete the transaction. The two most common types of closing are face-to-face with all parties or escrow closing; and they are usually held at the offices of the lender, title company, escrow company, broker or one of the representing attorneys.
Closing Agent
Also called a settlement agent, the person responsible for facilitating a closing. The closing agent is usually either the seller’s attorney or a representative of the title company. With escrow closings, the escrow agent is typically the closing agent.
Closing Condition
With mortgage and real estate transactions, the closing conditions are requirements that must be satisfied before an approved mortgage loan can be officially closed. These conditions are usually itemized in the loan approval notice. The closing or escrow agent cannot release the funds and finalize the transaction until all closing conditions have been satisfied.
Closing Cost
The closing costs refer to the charges and fees – over and above the down payment – that must be paid in order to complete the transaction. This normally includes the origination fee, appraisal costs, attorney’s fees, discount points, title company charges, credit report costs and prepaid escrow payments.
Closing Instruction
See the Escrow Instruction entry.
Closing Protection Letter (CPL)
Also called an insured closing letter (ICL), the closing protection letter is a title insurance company or closing agent guarantee protecting the lender from losses due to errors, malfeasance, fraud or negligence committed by the closing agent. Many mortgage lenders now routinely require closing protection letters before they agree to close loans originated by mortgage brokers.
Closing Statement
The closing statement is a final accounting of transaction funds received and paid. The attorneys representing the seller and buyer will prepare this statement, which the closing agent will incorporate into the final settlement statement.
Cloud on Title
A cloud on the property’s title is an encumbrance, irregularity, zoning violation, building code violation or claim on a title that impairs the title to that property. A cloud on title means that there may be serious questions about the true ownership of the property or whether the seller has full rights to sell or transfer the subject property.
CLTV
See the Combined Loan-to-Value entry.
Cluster Development
A cluster development is a type of real estate development program that attempts to create higher density on select parcels. This is done either because there is a lack of available land or because it allows other parcels to remain open, common areas.
CMA
See the Competitive Market Analysis entry.
CMBS
See the Commercial Mortgage-Backed Securities entry.
CMO
See the Collateralized Mortgage Obligation entry
CMT
See the Constant Maturity Treasury Instrument entry.
Coach House
A coach house is a residential unit-in a multi-unit property-that is separate from the main building containing the other units. Most coach houses are former stables or garages.
Coastal Zone Management Act
The Coastal Zone Management Act of 1972 is a federal legislation that established the EPA’s control over activities affecting the environmental health and status of the nation’s coastlines.
Co-Borrower
A co-borrower is any additional borrower on a loan, in addition to the primary borrower. All borrowers on a loan typically participate equally in all legal obligations and requirements, as enumerated on the promissory note and other mortgage documents. Compare with the Co-Signer entry.
Codicil
A codicil is a legal amendment or addition to a will.
Cofferdam
A cofferdam is a dry area used for construction or work within a body of water. Most cofferdams create a temporary enclosure in a body of water and then displace the water with pumps. The resulting dry area allows room for the building of bridges, dams, piers and other structures, as well as to build or repair ships (when dry docks are not available or practical). Cofferdams have also facilitated the excavation of artifacts and areas in shallow waters.
COFI
See the Cost of Funds Index entry.
Cogeneration Plant
Also called a combined heat and power (CHP) plant, the cogeneration plant generates power (electricity) and uses the excess heat to also provide steam or hot water. This is an efficient method for providing heat, because it uses the waste heat from the power-generation process. It is often used with district heating systems. See also the District Heating entry.
Coign
The coign is a building’s cornerstone, which typically has a different color or design from the other elements of the building. It is often inscribed with a date or dedication.
Coinsurance Clause
The coinsurance clause is a common element of property insurance policies, by which the property owner shares some of the risk. Depending on the type of coverage, the policy might only reimburse for a percentage of the full replacement cost or the depreciated actual cash value.
