Glossary of Terms
Scope of Work
Relocation Policy Consulting: CRI will provide advice to Company to assist Company in determining its options in the relocation of any of its employees. This service will include: i) review of Company’s policies and procedures for a determination of the extent of availability of relocation benefits to Company’s employees; ii) advice for implementation of such policies generally or with regard to specific employees as requested by Company; and iii) other related matters to which Company and CRI may mutually agree.
Marketing Assistance Program: CRI will assist Company with the marketing of Homes that Company may desire to be disposed of or sold. This service will include: i) review of the pertinent files concerning each Home to determine feasibility and timing for its sale or disposition; ii) obtaining an Estimate of Most Probable Sales Price of each Home based upon two Broker Market Analyses; iii) advice regarding marketing strategies for selling the Home and periodic review of marketing strategies and pricing of the Home; and iv) other related matters to which Company and CRI may mutually agree.
Home Finding Assistance: CRI will assist individual employees designated for such assistance by Company with regard to location of housing in the destination area. This service will include: i) introduction of employee to real estate brokers and other local resources for locating housing in the area; ii) identification of housing goals such as size of Home, neighborhoods, school systems, and other related aspects; and iii) other related matters upon which Company and CRI may mutually agree.
Mortgage Assistance: CRI will provide individual employees designated by Company with assistance in obtaining financing for homes to be purchased in the area to which the employee is relocated. This service will include i) identifying local resources, such as banks, mortgage lenders and other financial institutions which may provide employee with mortgage services and ii) other related matters upon which Company and CRI may mutually agree.
Transportation of Household Goods, Autos & Storage: CRI will assist individual employees designated by Company with the transportation of their household goods and autos and storage as needed/authorized to their new location. This service may include: i) moving the household goods and autos to the new location through proven contractors known to CRI; ii) moving automobiles to the new location through proven contractors known to CRI; and iii) such other related services upon which Company and CRI may mutually agree.
Lump-Sum Payments & Expense Management: If requested by Company, CRI shall provide financial assistance for employees designated by Company. Financial assistance consists of CRI making lump-sum payments on Company’s behalf and auditing each employee’s expense reimbursement request to ensure it complies with Company’s relocation and/or candidate services policy and government reporting regulations. CRI will process and pay all relocation related payments as authorized by Company. CRI will consult with Company’s Human Resources Representative (on a case-by-case basis) concerning any exceptions not covered by the relocation plan to determine what expenses will be covered or rejected. CRI will relay the message to the employee, citing the reason(s) the expense was reimbursed or not reimbursed. CRI will track all expenses, calculate tax gross-up and provide all necessary tax reports to Company.
Temporary Housing Assistance: CRI will assist individual employees designated by Company with arranging temporary housing that may be required for a reasonable duration (i) after employees' arrival at their new locations and before such Employees are able to move into their new homes or (ii) while employees are relocated to a new location for temporary assignments related to their employment. This service will include: i) locating hotel, apartment, or such other corporate housing as may be available in or near the employees' new locations and ii) counseling or such other related services upon which Company and CRI may mutually agree.
Travel Services: CRI will assist Company in the assessment and coordination of travel needs for each transferee and their family. This service will include i) sending authorization for travel services to proven travel agent after consulting with transferee on individual or family needs and ii) tracking all travel expenses including processing and payment of such expenses iii) reporting travel expenses to Company on periodic reports and reporting expenses to Company payroll.
Candidate Services: CRI will assist individual prospective candidates designated by Company with questions they may have regarding relocation. CRI will consult with the candidates on the relocation policy and benefits being offered by the Company and arrange for an orientation service at the destination location in order that the candidate can make an informed decision on accepting a new job and relocating to a new area. In addition, expense management services will be made available to the candidate through the use of CRI’s online portals.
Assignment Cost Estimates: To ensure that each and every anticipated cost is considered for, CRI is able to create a customized cost estimate of relocation expenses per assignee for short-term, long-term and permanent international transfers. CRI can work with their global tax providers to generate estimated tax costs for the home and host locations.
Letter of Assignment: A Letter of Assignment (LOA) helps manage the expectation of both the employee and Company. The LOA addresses the terms and conditions of the assignment and is tailored to the specific individual assignee. CRI can prepare the LOA using a standard letter template with client specific verbiage dependent on each assignment type.
Accompanying Family Assistance: In many countries it will not be possible for accompanying family members to work. In such circumstances, CRI is able to provide guidance and alternative suggestions. In those countries where accompanying family members can work, help with career choices can be arranged.
Host Country Allowances: Through its partnerships with various data providers, CRI is able to arrange for the provision of country specific data and calculations of appropriate host country allowances such as housing and utilities allowance, transportation allowance, etc. based on assignee’s base salary, relocating family size and host country destination.
Tax Administration: Through its partnership with the Company’s tax provider, CRI is able to arrange for country specific tax briefings through the regulations that are fundamental to prudent tax management.
Certificate of Coverage: Whereas a totalization agreement exists between the United States and host country, CRI can apply for a certificate of coverage on behalf of the assignee.
Candidate Assessments: CRI is able, through its professional service partners, to arrange for a variety of programs, which range from simple, self-administered written tests to in depth psychological assessments.
Destination Services: Destination services can include, but are not limited to the following:
- Pre-departure counseling with the destination service provider
- Completion and review of International Profile
- General information on how to be optimally prepared for the assignment
- Provision of temporary corporate apartment services, if requested
- Provision of travel services if requested
- Logistical support and liaison between assignee and host city management
- On the ground assistance with:
- Applying for local documentation
- Procurement of social security card or equivalent
- Obtaining a driver’s license
- Opening bank accounts, credit cards, etc.
- Information on area neighborhoods
- Leasing options and listing of suitable properties
- Lease negotiation and review of tenancy agreement
- Scheduling & accompanying on school appointments
- Rental or purchase of furniture and appliances
- Utilities hook-up assistance
- Introduction to shopping, restaurants, schools, medical and leisure facilities
Home Sale Program Glossary
Acceptance Date: the date upon which CRI signs a contract of sale signed by and received from the Employee indicating acceptance of the Appraised Value Offer, the Amended Value Offer, or the Buyer Value Option.
Amend Date: the date upon which CRI closes on the Home with the Employee under the Buyer Value Option Program. On the Amend Date all ownership rights, privileges, and obligations are passed to CRI.
Amended Value Offer: the offer extended to an Employee by CRI which amends the Appraised Value Offer to reflect the pertinent terms of a third-party offer.
Appraised Value Offer: the offer extended to an Employee by CRI based on relocation appraisals and the valuation procedures outlined in the Customer policy for the Guaranteed Purchase Offer Program.
Broker Market Analysis: a written market analysis of the real estate values and market conditions in the area of the subject Home based upon recent comparable sales with supporting data prepared by a licensed real estate agent.
Buyer Value Option: the offer extended to an Employee by CRI when an Appraised Value Offer is not available or authorized by the Customer whereby the Employee locates a bona fide buyer for the Home and CRI then purchases the Home based on a market offer, re-lists the Home with the real estate agent, and closes the sale with the buyer.
Date of Possession: the Acceptance Date or Vacate Date, whichever is later.
Equity: the amount by which the Appraised Value Offer, Amended Value Offer or Buyer Value Option presented by CRI to the Employee on the Home exceeds (i) all outstanding balances under all deeds of trust, mortgages, other liens, taxes and assessments on the Home, (ii) all costs required to cure defects in title, (iii) all amounts necessary as provided herein to make repairs requested by prospective lenders to the Home, (iv) prorated items such as interest, property taxes, bonds, assessments, condominium or homeowner dues which are prorated through the Acceptance Date or Vacate Date, whichever is the later and (v) amounts for work or replacement required as agreed by Employee.
Estimate Of Most Probable Sales Price: the price at which a Home would most probably sell for cash or cash equivalent, “as is,” if exposed to the market for sale for a reasonable marketing time not to exceed 120 days, provided that all parties are well informed, acting in their own best interests and with financing on the terms and conditions generally available in the community where the Home is located.
Home: a completed single family residence, condominium or townhouse owned by an Employee who has good and marketable title to the home as his or her principal residence as of the date the Employee is notified of transfer, excluding cooperatives, multiple family dwelling units, mobile homes, any property containing acreage greater than the norm or zoning limits for the particular locale and neighborhood, any property owned by a trust, any property that contains hazardous or toxic materials or gases that cannot be eliminated or reduced to an acceptable level, any property that contains visible mold or recent water penetration conducive to mold formation, and property infested with termites, any property that requires significant repairs that the Customer will not approve, and any property whose appraised value is established by means other than an appraisal or an appraisal that has been obtained not using the ERC approved format. This term shall include all fixtures normally sold with a Home in accordance with local custom of that area.
Home Sale Program Costs includes the following:
- Acquisition Costs, that include all costs incurred by CRI related to the acquisition of the Employee’s Home, including, but not limited to, appraisal fees, inspections fees, radon or other testing costs, title insurance fees, certificate of occupancy, bank (financial institution) information fees and all other miscellaneous acquisition costs.
- Recurring Carrying Costs, which include all recurring costs incurred by CRI to carry or manage the Home after its acquisition and until the closing of its resale, including but not limited to: mortgage interest, property taxes, assessments, utilities, insurance, maintenance, condominium or homeowner association dues or assessments, property management fees and all other miscellaneous recurring carrying costs.
- Non-Recurring Carrying Costs, which include all non-recurring costs incurred by CRI to carry or manage the Home after its acquisition and until the closing of its resale, including but not limited to: repairs, capital improvements, mortgage assumption fees, costs for CRI to inspect the property (when necessary), and all other miscellaneous non-recurring carrying costs.
- Disposition Selling Costs, which include all costs incurred by CRI in connection with the resale of the Home to a third party, including but not limited to: broker’s commissions, title costs, cost to cure claims of title defects, attorney fees, escrow fees, document preparation fees, pre-payment penalties, mortgage release fees, state or local transfer and recording fees, closing and other legal fees, F. H. A. or V. A. points, monetary concessions and incentives approved by Customer, gains or losses on sale, survey charges, and all other resale costs.
Proceeds of Sale: the amount of money due and payable to the seller or due from the seller (when proceeds of sale are negative) on a real estate transaction after the closing of the sale with the purchaser. Proceeds of Sale are represented on the last line of the HUD-1 settlement statement. The Proceeds of Sale reflect the resale price less the mortgage payoff(s), prorations, broker commission, title expenses, attorney fees, recording fees, transfer taxes, and other miscellaneous closing costs.
Qualified Independent Appraiser: an individual member of an appraisal Customer selected from the list of appraisers furnished by CRI.
Request for Services: a written/online authorization from the Customer indicating the services the Customer wants CRI to provide.
Resale Closing: the consummation of the sale to a third party of a Home acquired by CRI on behalf of the Customer.
Special Home: improved real estate containing one or more of the characteristics of the excluded properties outlined in the definition of a “Home” as defined in section 1.1 above, but which the Customer nevertheless asks CRI to purchase, or that involves special considerations or requires material deviations from the
procedures set forth in the applicable Service Agreement Description. CRI will handle Special Homes only after there are mutual considerations and agreements between CRI and Customer upon expectations and associated fees. References to a “Home” in this Agreement shall include a Special Home.
Vacate Date: the date upon which the Employee moves out of the Home.
Billing Glossary
Equity or Equity Advance: The amount by which the Appraised Value Offer, Amended Value Offer or Buyer Value Option presented by CRI to the Employee on the origin property less adjustments for mortgages/liens attached to the property, prorated items such as interest, property taxes, homeowners association dues through the date of acceptance or vacate date whichever is later. In addition, other items may be adjusted for repairs and/or buyer’s concessions that an employee has agreed to pay as it relates to the sale of the property. A holdback is deducted when an Advance is provided and then returned to the employee once the home vacated.
Mortgage Payoff: The amount of which is required to pay off a mortgage loan that will include the principal and interest through the payoff date. The mortgage payoff amount is provided to CRI by the mortgage lender. Generally, a mortgage payoff is after the acquisition or purchase of the property by CRI and prior to the resale closing with an outside buyer.
Appraisals, Inspections, Title: Costs incurred by CRI related to the acquisition of the Employee’s property, including, but not limited to, appraisal fees, inspections fees, radon or other testing costs, title and legal documents. These are direct cost invoiced to CRI by suppliers and in turn invoiced to Company for reimbursement to CRI.
Negative Proceeds: Costs (i.e. mortgage, prorated items, commission and closing cost) invoiced as a result of a negative situation with the outside sales contract as a result of the costs being greater than the selling price. Negative proceeds are generally invoiced as an estimate using a calculation of 8% of the sales price plus any buyer’s concessions within the contract of sale. This occurs when there is not enough equity to cover the costs associated with the “sale” of the property. Example: you had a $250,000 property where the transferee had a $245,000 mortgage balance. We would pay him $5,000 in equity. When we go to close on the outside sale, there would be negative proceeds because the commission and closing costs would be $250,000 X 8% = $20,000. If there was only $5000 in equity, then we would need $15,000 in negative proceeds to cover the $20,000 in closing costs. We would bill Company for the $5,000 equity and then bill again for the $15,000 in negative proceeds which equals the commission and closing costs amount.
Relocation Expenses: Costs associated with the relocation program outside of the Home Sale and Household Goods costs. Relocation expenses are detailed to include miscellaneous allowances, home finding, temporary living, final move, incentives, and other miscellaneous items reimbursed to or paid on behalf of the employee.
Loss on Sale: Payment of the difference between the “Employee Investment” (original purchase price less seller paid concessions) and the sale price up to a maximum of one year’s base salary. This payment is normally made when the sale price is less than the Employee Investment and in accordance/approved by Company policy.
Household Goods: Costs associated with the pack, load, transportation, delivery, unpack and debris pick-up of an employee’s personal effects from origin to destination. Cost of packing materials, third party services and insurance is also included. Most costs are based upon the weight of the shipment and the distance of the move.
Storage-In-Transit: Cost associated with the delivery in/out of the employee’s personal effects to/from a storage facility as well as any handling fees and fuel surcharge during the delivery to/from storage. Insurance is also included as well as the daily rate for storage based upon the weight of the shipment.
Management Fees: Charges invoiced by CRI for services authorized by Company for CRI to perform in accordance with CRI/Company Service Agreement.
Credit Memo: A credit memo is prepared and provided to Company for the return of resale proceeds which are received by CRI for properties that closed. Credits for the proceeds received by CRI are summarized on each credit memo.
Home Sale FAA: Reconciliation of the Home Sale Transaction detailing all acquisition (appraisals, inspections and title, plus miscellaneous for any courier or wire fees), carrying costs (pro-rations for interest, taxes homeowner’s association dues, vacant dwelling insurance; maintenance; utilities; repairs; cleaning; lawn care, etc. and selling costs (Real Estate Commission, Seller’s Closing Cost (i.e. title charges, recording fees, attorney’s fees, surveys, transfer tax/stamps, etc.).