Completed Contract Method to Conditional Estate

 

Completed Contract Method

In the construction industry, accountants use the completed contract method to recognize revenues for long-term construction contracts. Because the date of completion cannot be predicted with 100% accuracy, this method recognizes revenue and related costs only when the project is finished.

Completion Bond

The completion bond is an insurance or guarantee provided by a contractor to ensure the client that the construction improvements will be completed. If the contractor fails to fulfill this guarantee, the bond can be activated to reimburse the client for losses.

Component Depreciation

The component depreciation approach is a method of calculating a property’s depreciation by breaking down the cost of a building or improved property into its structural components. This approach then calculates depreciation based on the useful life of the components – rather than of the whole building or project.

Composite Wood

See the Engineered Lumber entry.

Compound Interest

In the mortgage loan industry, the term compound interest refers to the cumulative interest on both the interest charged against the principal balance and the interest charged on any unpaid interest. For example, mortgage loans with negative amortization can suffer from compound interest, as the unpaid interest charges are added to the principal balance and are assessed additional interest. In other words, you’re paying interest on the unpaid interest.

Comprehensive Environmental Response, Compensation & Liability Act (CERCLA)

The Comprehensive Environmental Response, Compensation & Liability Act (CERCLA) is a 1980 federal legislation mandating the EPA’s effort to begin clean-up of abandoned hazardous sites. This legislation established the Superfund and the recovery of costs for those clean-up.

Comprehensive Zoning

The term comprehensive zoning refers to a general zoning plan that covers a large area. See the Master Plan entry.

Compression Cooling System

The comprehensive cooling system is a method of cooling commonly used in refrigerators and freezers. In this system, a compressor is used to force low-pressure gas (such as Freon) through a high-pressure line and coils called a condenser. This action heats up the gas. When outside air is blown over these condenser coils, the gas loses its heat to the air. The gas then condenses into a liquid, which flows into a reservoir.

An expansion valve then regulates the liquid’s flow from the reservoir into an evaporator, which changes the liquid back to a gas at lower (colder) temperature. Air is then blown across the evaporator coils, which rapidly cools the air. A compressed air system is not as efficient for room cooling as an absorption system.

Computerized Loan Origination (CLO) System

The computerized loan origination (CLO) system is an electronic network that was originally introduced before the widespread advent of the Internet. The system allowed users in remote real estate and mortgage offices to make loan applications. This has now been replaced by online automated underwriting systems.

Concession

In real estate, concessions are inducements or allowances offered by one party to persuade a second party to accept an agreement or contract. For example, a builder or seller may offer concessions such as new carpeting or upgraded tiles, while a landlord may offer concessions to prospective tenants like a free month’s rent or credits for decorations.

Concierge

The concierge is a hotel, apartment building or condominium building clerk, who is usually situated in the building’s lobby. At its most basic, concierges are basically security persons who also accept packages and messages for the building’s residents. Full-service concierges also provide additional services, such as providing dining recommendation, offering tourist information and procuring tickets to events.

Concrete

The ubiquitous concrete is a mixture of cement and water with elements such as sand, gravel, pebbles, crushed stone, shale or brick pieces. Once dried, it becomes a very strong and useful construction material. There are basically four types of concrete: poured, precast, pre-stressed and reinforced.

Concurrence Estate

A concurrence estate is a type of estate in land that has more than one owner. See the Estate entry.

Concurrency

In urban and land planning, the term concurrency is a designation by local or county authorities that the level of services or infrastructure can be maintained for the area’s population. Urban sprawl, however, have severely strained the ability of quickly growing municipalities to deal with the population demands. Many municipalities and counties have begun to address this problem with impact fees.

Concurrent Loan

A program or transaction that involves two or more loans, such as an 80/20, 80/10 or 90/10 program. For example, Anne has enough money to make a 10% down payment, so she needs a 90% LTV mortgage loan. However, Anne wants to avoid paying mortgage insurance (which is required whenever the first mortgage loan is over 80% LTV). So she opts with a concurrent loan, with a first mortgage loan for 80% LTV combined with a second mortgage loan at 10% LTV, to give her the 90% financing she needs. This is also called a piggy-back loan.

Condemnation

Through the power of eminent domain, the government has the right to take private property, with fair compensation, against the will of the owner. With a condemnation, the government exercises this right of eminent domain to take the property from the owner. Property owners may also exercise the right to inverse condemnation on and force the government to take their property. Condemnation powers may also be used on dangerous or poorly maintained properties that the government fairly deems to be a public hazard.

Condenser

The condenser is a device found in many cooling systems that converts gas or steam back into liquid or water. This liquid then proceeds to an evaporator, which turns the liquid into cold water vapor.

Conditional Approval

With mortgage loans, a conditional approval is typically a tentative mortgage loan approval, with pre-closing conditions. These approval conditions must be satisfied before the loan is fully approved and scheduled for closing. The conditional approval differs from the preliminary or pre-approval in that conditional approvals have already undergone substantial underwriting analysis; pre-approvals only review the applicant’s credit, income and employment.

Conditional Estate

See the Fee Simple Defeasible entry.