Property Reference: C

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Capital gain

In finance, a capital gain is profit that is realized from the sale of an asset that was previously purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, and property. (If the sale of the asset had yielded a loss rather than a profit, this loss would be called a capital loss.)

Capital gains are often exempt from income tax, in which case it may be important to distinguish capital gains (or losses) realised on the sale of fixed assets (long-life assets that form part of the structure of a business, such as real property) from trading profits or losses realised on the sale of trading stock (short-life assets that are quickly sold on).

In many jurisdictions, including the United States and the United Kingdom, capital gains are subject to a capital gains tax.

Chain of title

A chain of title is the sequence of historical transfers of title to a property. The “chain” runs from the present owner back to the original owner of the property. In situations where documentation of ownership is important, it is often necessary to reconstruct the chain of title. To facilitate this, a record of title documents may be maintained by a registry office or civil law notary.

Real estate is one field where the chain of title has considerable significance. Various registration systems, such as the Torrens system, have developed to track the ownership of individual pieces of real property. In many real estate transactions, insurance companies issue title insurance based upon the chain of title to the property when it is transferred. Title insurance companies sometimes maintain private title plants that track real estate titles in addition to the official records. In other cases, the chain of title is established by a abstract of title, certified by an attorney.

Community land trusts

Land trust communities trace their conceptual history to India’s gramdans where villages held property in the community interest, and to European and North American land banks, which are quasi-public agencies that invest in land often to help build family farms or to encourage economic development. Residential land trusts emerged in the United States after calls among civil rights leaders in the 1950s and 1960s in the American South for economic reforms to reverse rampant poverty. An Institute for Community Economics was organized in the 1960s to help residential trusts:

* Gain control over local land use and reduce absentee ownership
* Provide affordable housing for lower income residents in the community
* Promote resident ownership and control of housing
* Keep housing affordable for future residents
* Capture the value of public investment for long-term community benefit
* Build a strong base for community action

Residential community land trusts are now widespread in the United States, but seldom gain much notice beyond occasional local news accounts. The Institute for Community Economics in 2004 reported nearly 120 community land trusts of varied sizes in 30 states, the District of Columbia and in five Canadian provinces. While a few earlier trusts faltered, the number of land trusts in North America overall nearly tripled between the 1987 and 2004.

Community trusts don’t typically advertise their goals, but rely on community members and word of mouth to attract new residents. In residential land trusts, the community association usually owns land, while their occupants’ own buildings. Trusts usually retain rights to buy buildings from residents who move out of the community. The goal of residential trusts is often to protect housing prices from real estate speculation and gentrification but to allow residents to accrue equity, including sweat equity.

Condominium

A condominium describes a form of housing tenure.

It is the legal term used in the USA and Canada for a type of joint ownership of real property in which portions of the property are commonly owned and other portions are individually owned. In Australia, the legal term for this is known as strata title. Often, it consists of units in a multi-unit dwelling (i.e., an apartment or a development) where the unit is individually owned and the common areas like hallways and recreational facilities are jointly owned by all the other unit owners in the building. It is possible, however, for condominiums to consist of single family dwellings. An association consisting of all the members manage the common areas usually through a board of directors elected by the members. The same concept is also used in other countries with different names, such as “unit title”, “commonhold” or tenant-owner’s association. Another variation of this concept is the “time share”. Condominiums may be found in both civil law and common law legal systems as it is purely a creation of statute.

An alternative form of ownership popular in the United States in common law jurisdictions is the “cooperative” corporation, also known as “company share”, in which the building has an associated legal company and ownership of shares gives the right to a lease for residence of a unit. Another form is leasehold or ground rent in which a single landlord retains ownership of the land on which the building is constructed in which the lease renews in perpetuity or over a very long term such as in a civil law emphyteutic lease. Another form of civil law joint property ownership is undivided co-ownership where the owners own a percentage of the entire property but have exclusive possession of a specific part of the property and joint possession of other parts of the property; distinguished from joint tenancy with right of survivorship or a tenancy in common of common law.

Conservation land trusts

Conservation trusts often rely on endowments and large donations to acquire sensitive natural areas or notable landmarks, and purchase land to hold it in perpetual protection as open or green space.

A Land Trust Alliance formed in 1981 provides technical support to the growing network of land trusts. On the eve of the 21st Century, an Alliance census reported 6,225,225 acres (25,193 km²) of land was held by 1,263 conservation land trusts, up from 1.9 million acres (7,700 km²) among 887 trusts 10 years earlier.

Since 1891, when the first US land trust was organized, conservation trusts have been established in each of the 50 states, often as a way of protecting open spaces in the path of urban sprawl. Local and regional trusts in California, New York and Montana held the most area among those of states nationwide.

Contract of sale

A contract of sale is a legal act that involves an exchange of goods, services or property to be exchanged from seller (or vendor) to buyer (or purchaser) for an agreed upon value in money (or money equivalent) paid or the promise to pay same. It is a specific type of legal contract.

An obvious ancient practice of exchange in many common law jurisdictions it is now governed by statutory law that is designed to make transactions among merchants and consumers straightforward and easy to understand.

Governed by the Uniform Commercial Code in most American and Canadian jurisdictions, however in Quebec it is governed by the Civil Code of Quebec as a nominate contract in the book on the law of obligations.

Copyhold

At its origin in mediaeval England, Copyhold tenure was tenure of land according to the custom of the manor, the “title deeds” being a copy of the record of the manor court.

Copyholds were gradually enfranchised (turned into ordinary holdings of land—either freehold or 999-year leasehold) during the 19th century. Legislation in the 1920s finally extinguished the last of them.

For further information see Manorial Law (1996) by Andrew Barsby.

Council house

The council house is a form of public housing found in the United Kingdom. Council houses were built and operated by the local Council for the benefit of the local population.

Council housing was generally typified by houses with generously sized rooms (compared to the private sector), particularly those built in the 1970s after the Parker Morris standards were introduced. However they also tended to be unimaginatively designed, and rigid council rules often forbade tenants “personalising” their houses. Council tenants also faced problems of mobility, finding it hard to move from one property to another as their families grew or decreased, or to seek work. Despite the building there was a constant demand for housing, and ‘waiting lists’ were maintained with preference being given to those in most housing need.

Council housing declined in the Thatcher era, with rules restricting councils’ investment in housing, preventing them subsidising their housing from local taxes, and giving tenants the “right to buy” their council houses on very financially attractive terms. At one stage tenants could buy their home with a discount of up to 70% of the market price. The “right to buy” was popular with many former Labour voters.

Many councils have now transferred their housing stock to not-for-profit housing associations, who are now also the providers of most new public sector housing.

Cottage

A cottage is a small house of any period. It is the equivalent of a modern villa in Europe.