Real Estate Contract Forms and Addenda_CONTRACT FORMS ASG 3
Which of the following is TRUE regarding occupancy restrictions?
Both the Fair Housing Act and HUD allow for housing providers to comply with reasonable local, state, and federal occupancy restrictions. The answer is both the Fair Housing Act and HUD allow for housing providers to comply with reasonable local, state, and federal occupancy restrictions. In some cases, housing providers have been permitted to develop and implement reasonable occupancy restrictions on their own. Learning Objective 8.5
What does the statement on page 10 of the TREC Farm and Ranch Contract indicate regarding payment of brokersâ fees?
Brokers' fees or the sharing of fees between brokers are not fixed, controlled, recommended, suggested or maintained by the Texas Real Estate Commission. The answer is brokers' fees or the sharing of fees between brokers are not fixed, controlled, recommended, suggested or maintained by the Texas Real Estate Commission. Learning Objective 6.3
A buyer and seller enter into an agreement for buyer to purchase seller's lot, which is currently used for grazing, using the TREC Unimproved Property Contract. The buyer intends to develop the property for commercial use. Who pays for any rollback taxes in this case?
Buyer The answer is buyer. The party changing the usage is responsible for the rollback assessment. Learning Objective 6.4
An apartment complex that is occupied solely by persons age 62 or older gets an applicant from a 65-year-old tenant who has legal custody of her granddaughter. Management denies the application. Which of the following is TRUE regarding this action?
It does not violate the Fair Housing Act.
A blind tenant with a helper dog wishes to rent an apartment in a complex with a no pets policy and the landlord refuses based on its policy. Which of the following is TRUE under the Fair Housing Act?
It is a violation of the Act.
How long does the seller have to provide the condominium documents in the TREC Residential Condominium Contract?
It is negotiated by the parties The answer is it is negotiated by the parties. The parties may determine how long seller has to provide the condominium documents as defined in the contract. Learning Objective 6.2
Who is responsible for paying for the ownerâ s title policy under the TREC Unimproved Property Contract?
It is negotiated by the parties The answer is it is negotiated by the parties. The parties negotiate who pays for the ownerâ s title insurance and what title company to use. Learning Objective 6.4
Why is the Seller's Disclosure of Property Condition form not addressed in the TREC Unimproved Property Contract?
It is not required under section 5.008 of the property code. The answer is it is not required under section 5.008 of the property code. The law requires the seller to provide the form if the property is residential. This form is used for undeveloped property. Learning Objective 6.4
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 5. Seller delivers the condominium documents before the effective date. Assuming no option period, what is the latest date in which buyer may cancel the contract based on the documents and still get her earnest money refunded?
January 11 The answer is January 11. The contract provides that buyer may cancel the contract before the sixth day after buyer receives the documents by hand-delivering or mailing written notice of cancellation to seller by certified United States mail, return receipt requested. Learning Objective 6.2
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 5. Seller delivers the condominium documents three days after the effective date. Assuming no option period, what is the latest date on which buyer may cancel the contract and still get her earnest money refunded?
January 13 The answer is January 13. The contract provides that buyer may cancel the contract before the sixth day after buyer receives the documents by hand-delivering or mailing written notice of cancellation to seller by certified United States mail, return receipt requested. We know that the effective date is January 5 and that the certificate was delivered on January 8. The sixth day after delivery would be January 14. Since the contract allows cancellation before the sixth day after receipt of the certificate, which was January 14, January 13 is the correct answer. Learning Objective 6.2
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 15. Seller timely delivers the resale certificate three days after the effective date. Assuming no option period, what is the latest date on which buyer may cancel the contract based on the resale certificate and still get her earnest money refunded?
January 23 The answer is January 23. The contract provides that buyer may cancel the contract before the sixth day after buyer receives the resale certificate by hand-delivering or mailing written notice of cancellation to seller by certified United States mail, return receipt requested. We know that the effective date is January 15 and that the certificate was delivered on January 18. The sixth day after delivery would be January 24. Since the contract allows cancellation before the sixth day after receipt of the certificate, (which was January 18), January 23 is the correct answer. Learning Objective 6.2
Under the contract from Johnson to Swanson, if the closing date is May 27, what is the effective date?
May 12
Under the contract between Kramer and Sweeney, by what date was Sweeney required to pay the option fee if the first contract terminated on May 16 and Sweeney received notice on the same day?
May 18 The answer is May 18. Sweeney had to pay the option fee within three days of the original effective date (May 15). Learning Objective 9.3
Under the Seller Financing Addendum to the contract from Johnson to Swanson, Swanson timely delivers his credit report after the May 12 effective date. The credit report shows that Swanson has very poor credit. Johnson was hospitalized with a heart attack three days after he gets the report. By what date must Johnson terminate based on Swansonâ s credit report?
May 24 The answer is May 24. With a May 12 effective date, Swanson has until May 17 to deliver the report. Johnson then has seven days from that date to terminate based on the credit report. Learning Objective 9.2
Under the contract between Kramer and Sweeney, Deep Pocket Mortgage decides to increase the interest rate on the loan to 5.5%. What are Sweeney options under the Loan Assumption Addendum?
May terminate and the earnest money will be refunded to Sweeney The answer is may terminate and the earnest money will be refunded to Sweeney. Buyer may terminate this contract and the earnest money will be refunded to Buyer if the noteholder increases the interest rate to more than 5%. Learning Objective 9.3
Would an apartment complex that limits two-bedroom apartments to only two adults and two children be acceptable?
No, because the age of the two persons per bedroom is not a consideration
Would an apartment complex that limits one bedroom apartments to only one person be acceptable?
No, because the one person would be an adult, eliminating children. The answer is no, because the one person would be an adult, eliminating children. The primary intention of HUD is to make sure the occupancy standards are not so strict as to eliminate the protection of families with children. Learning Objective 8.5
How is paragraph 3 different in the Farm and Ranch Contract from the other five contracts?
Sales price can be adjusted after the effective date. The answer is sales price can be adjusted after the effective date. Paragraph 3 is only different in the Farm and Ranch Contract because the sales price can be adjusted by the survey. Learning Objective 6.1
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500-acre ranch using the TREC Farm and Ranch Contract. Seller was denied a special use valuation by the county that resulted in assessments. Who is responsible for payment of the assessments?
Seller The answer is seller. If seller's change in use of the property prior to closing or denial of a special use valuation on the property claimed by seller results in assessments for periods prior to closing, the assessments will be the obligation of seller. Obligations imposed by this paragraph will survive closing. Learning Objective 6.3
In the TREC Unimproved Property Contract, who is responsible for payment of assessments if seller's change in use of the property prior to closing results in assessments for periods prior to closing?
Seller The answer is seller. The contract provides that if seller's change in use of the property prior to closing or denial of a special use valuation on the property claimed by seller results in assessments for periods prior to closing, the assessments will be the obligation of seller. Obligations imposed by this paragraph will survive closing. Learning Objective 6.4
Buyer and seller enter into an agreement for buyer to purchase seller's lot using the TREC Unimproved Property Contract. The seller started developing the property for commercial use before closing. Who pays for any rollback taxes in this case?
Seller The answer is seller. The party changing the usage is responsible for the rollback assessment. Learning Objective 6.4
Which of the following disclosures related to the sale of a house is permitted but NOT required?
Sex offenders in the neighborhood
How long does the buyer have to terminate the contract after he receives the condominium documents in the TREC Residential Condominium Contract?
Six days after delivery of the documents The answer is six days after delivery of the documents. The contract provides that buyer may cancel the contract before the sixth day after buyer receives the documents by hand-delivering or mailing written notice of cancellation to seller by certified United States mail, return receipt requested. Learning Objective 6.2
What is the name of the doctrine that applies to prevent a small tract from being inadvertently omitted from a legal description of a metes-and-bounds description, thus creating a possible access problem?
Strips and gores doctrine The answer is strips and gores doctrine. This doctrine presumes the tract was intended to be included unless the deed specifically excludes the parcel. Learning Objective 6.3
Which of the following disclosures related to the sale of a house is permitted but not required?
Suicide on the property The answer is suicide on the property. Familial status is a prohibited disclosure. Faulty foundation and lead related death are required disclosures. Learning Objective 8.4
Under the Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum attached to the contract from Johnson to Swanson, who pays for the environmental assessment?
Swanson The answer is Swanson. Buyer, at buyer's expense, may obtain an environmental assessment report prepared by an environmental specialist. Learning Objective 9.2
Under the contract from Johnson to Swanson, who represents Swanson?
Swanson is not represented.
Under the contract between Kramer and Sweeney, Deep Pocket Mortgage does not consent to the assumption of Kramerâ s loan. What are Sweeneyâ s options?
Sweeney may terminate and get the earnest money. The answer is Sweeney may terminate and get the earnest money. If the noteholder fails to consent to the assumption of the loan, either seller or buyer may terminate this contract by notice to the other party and the earnest money will be refunded to the buyer. Learning Objective 9.3
In what way is paragraph 2 in the TREC Farm and Ranch Contract different from paragraph 2 of the One to Four Family Residential Contract?
The Farm and Ranch Contract calls for a tiers and range legal description rather than reference to a recorded plat. The answer is improvements and accessories are not addressed in the New Home Contracts. Improvements and accessories are addressed in the Construction Documents in the two New Home Contracts. Learning Objective 6.5
A new home builder is selling a spec house that she briefly lived in before listing it in the local MLS. A buyer is interested in making an offer on the house. Which TREC contract should the buyer's agent advise the buyer to use to submit the offer?
The One to Four Family Residential Contract (Resale) The answer is the One to Four Family Residential Contract (Resale). The new home contract does not address the seller's disclosure of property condition which is required to be provided under section 5.008 of the property code. Learning Objective 6.5
Under the HUD policy statement regarding occupancy standards, what is the age limit for persons occupying any one bedroom?
The age of the people is not a consideration
Which agreement for payment of brokerâ s fees is between the seller and the broker?
The listing agreement The answer is the listing agreement. The listing agreement is a written agreement between seller and broker that addresses broker compensation. Learning Objective 8.2
Under the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway attached to the contract between Kramer and Sweeney, who is responsible for removing a building located on a public beach if shoreline erosion causes private beach property to become a public beach?
The owner of the structure The answer is the owner of the structure. The cost of removing a structure from a public beach is solely the responsibility of the owner of the structure. Learning Objective 9.3
Who is responsible for paying rollback taxes under the TREC Unimproved Property Contract?
The party changing the property usage The answer is the party changing the property usage. The party changing the usage is responsible for the rollback assessment. Learning Objective 6.4
Which of the following disclosures related to the sale of a house is prohibited?
The racial breakdown of the neighboring high school The answer is the racial breakdown of the neighboring high school. Anything based on fair housing discrimination should not be disclosed. The remaining answers are optional disclosures. Learning Objective 8.4
Which of the following is NOT defined as a â Documentâ in the TREC Residential Condominium Contract?
The resale certificate The answer is the resale certificate. The Declaration, Bylaws and any Rules of the Association are called "Documents" in the contract. Learning Objective 6.2
Typically, where is the agreement for compensation between brokers if the property is listed in the MLS?
The subagency compensation blank in the MLS The answer is the subagency compensation blank in the MLS. When a listing broker enters a property in MLS and enters an amount under SAC or BAC that is an offer to selling agents to participate in the sale and receive compensation of a certain amount. Learning Objective 8.2
A disabled person wishes to rent an apartment and renovate it with grab bars and ramps. Which of the following is TRUE under the Fair Housing Act?
The tenant may renovate as long as he restores the apartment before he leaves. The answer is the tenant may renovate as long as he restores the apartment before he leaves. A landlord may not refuse to let a person with disabilities make reasonable modifications to dwellings at the personâ s expense, if the modifications are necessary for the person to use the housing. Learning Objective 8.3
How is paragraph 13 different in the New Home Contracts, the Unimproved Property Contract, and the Farm and Ranch Contract?
There is a possibility of the assessment of rollback taxes. The answer is there is a possibility of the assessment of rollback taxes. Rollback taxes can be assessed when the property zoning is changing. The amount of rollback taxes can be a significant amount. Learning Objective 6.1
Where is the specific rule addressing housing occupancy standards?
There is no rule The answer is there is no rule. Neither the Fair Housing Act nor HUD has a particular rule regarding occupancy. Learning Objective 8.5
Under the TREC Unimproved Property Contract, why should an adequate termination option be purchased?
To provide a sufficient amount of time to make absolutely certain that the property is suitable The answer is to provide a sufficient amount of time to make absolutely certain that the property is suitable. A buyer of an unimproved building lot must carefully research matters that will affect the suitability of the building lot for the buyer's intended use. This takes time and the time can be purchased by paying an option fee. Learning Objective 6.4
What is the statute of limitations on a DTPA cause of action?
Two Years The answer is two years. The suit must be commenced within two years after a false, misleading, or deceptive act or practice occurredâ "or within two years after the consumer discovered, or should have discovered, the deceptive act or practice. Learning Objective 8.1
What is HUDâ s policy regarding a reasonable occupancy standard?
Two persons per bedroom The answer is two persons per bedroom. In a statement of policy in 1998, HUD stated that two people per bedroom was a reasonable standard. Learning Objective 8.5
Under the contract from Fleming to Donaldson, if the effective date is February 12, when must the Donaldsons terminate the contract under paragraph 23?
Under the contract from Fleming to Donaldson, if the effective date is February 12, when must the Donaldsons terminate the contract under paragraph 23?
What can be a red flag for an illegal type of buyer rebate?
When the contract calls for money to be paid to a certain vendor for improvements to be made after closing The answer is when the contract calls for money to be paid to a certain vendor for improvements to be made after closing. One of the common forms of rebates happens when the contract calls for money to be paid to a certain vendor for improvements to be made after closing. Learning Objective 8.1
Under the Seller Financing Addendum to the contract from Johnson to Swanson, how long does Johnson have to terminate if Swanson timely delivers his credit report but Johnson determines that Swansonâ s credit is unacceptable?
Within 7 days after expiration of the time for delivery
The agreement between brokers referred to on the last page of the TREC sales contract is considered
an affirmation of the agreement between brokers. The answer is an affirmation of the agreement between brokers. It only affirms what the agreement is, but it is not an agreement between the brokers. Learning Objective 8.2
The buyer of a new home should
never assume everything is properly installed and working properly. The answer is never assume everything is properly installed and working properly. In particular, a new home in the builderâ s inventory should be treated in the same manner as a previously occupied resale home with regard to inspections and evaluations by competent professionals. Learning Objective 6.5
Most builders in Texas
provide their own contract. The answer is provide their own contract. Most builders will require the contract form that they provide, typically one created by the Texas Association of Builders. New homes may be sold using one of two TREC forms when the builder does not specify. Learning Objective 6.5
Under the lead-based paint addendum to the contract from Fleming to Donaldson, how long does Donaldson have to get a lead paint inspection?
10 days The answer is 10 days. Within 10 days after the effective date of this contract, buyer may have the property inspected by inspectors selected by buyer. Learning Objective 9.1
Under the contract from Fleming to Donaldson, how long does Donaldson have to obtain financing approval?
20 days The answer is 20 days. If buyer cannot obtain buyer approval, buyer may give written notice to seller within 20 days after the effective date of this contract and this contract will terminate and the earnest money will be refunded to buyer. Learning Objective 9.1
Under the contract from Johnson to Swanson, how long does Swanson have to deliver a credit report?
5 Days
What is a rollback tax?
A tax that can be assessed when the property zoning is changed The answer is a tax that can be assessed when the property zoning is changed. The other answers are not correct. Learning Objective 6.1
Which of the following is NOT a defense to the DTPA?
A written limitation of liability The answer is a written limitation of liability. The other answers are defenses to a DTPA lawsuit. Learning Objective 8.1
A builder wishes to rebate 1% of the purchase price to potential buyers. Which of the following is the BEST practice for a broker representing the buyer?
Advise the buyer to disclose all rebates to the lender The answer is advise the buyer to disclose all rebates to the lender. Any rebate to the buyer, either at or after closing, without the knowledge of the lender, is illegal. Learning Objective 8.1
A buyer and seller enter into an agreement for buyer to purchase seller's property using the TREC Unimproved Property Contract. The buyer intends to develop the property for commercial use. Which of the following has the biggest impact on buyerâ s decision to purchase?
All of these. Zoning ordinances, Restrictive covenants, Availability of utilities The answer is all of these. A buyer of an unimproved building lot must carefully research zoning ordinances, restrictive covenants, availability of utilities, access, and other matters that will affect the suitability of the building lot for the buyer's intended use. Learning Objective 6.4
Regarding the referenced transaction from Fleming to Donaldson, why is the lead-based paint addendum attached to the contract?
Because the house was built in 1975
How is paragraph 14 different in the Residential Condominium Contract?
Because the seller owns a single unit only, casualty loss addresses that situation. The answer is because the seller owns a single unit only, casualty loss addresses that situation. Paragraph 14 is different only in the condominium contract. The seller owns the unit only, so that must be define and addressed in terms of who is responsible for loss. Learning Objective 6.1
What is the maximum civil penalty for a violation of the DTPA?
$20,000 per violation The answer is $20,000 per violation. In addition to consumer compensation, the DTPA allows for civil penalties of up to $20,000 per violation, with an additional penalty of up to $250,000 for deceptive acts or practices that target the elderly. Learning Objective 8.1
What is the maximum civil penalty for a violation of the DTPA that targets the elderly?
$250,000 The answer is $250,000. In addition to consumer compensation, the DTPA allows for civil penalties of up to $20,000 per violation, with an additional penalty of up to $250,000 for deceptive acts or practices that target the elderly. Learning Objective 8.1
A broker, while representing a buyer, forges the buyerâ s signature on a sales contract. The buyer ends up suffering economic damages of $100,000 and sues the broker. The broker may be held liable for which of the following amounts?
$300,000 if it was intentional The answer is $300,000 if it was intentional. If the defendant is found to have committed the act intentionally, the economic damages may be trebled. Learning Objective 8.1
Broker and buyer enter into a buyer representation agreement where the buyer agrees to pay the broker 4% if the broker is not paid by the seller or the listing agent. The MLS listing indicates a 3% compensation offer to selling broker. How much will the buyer have to pay?
1% The answer is 1%. The buyer's representation agreement usually has a clause saying the buyer will pay a commission to the selling broker. Frequently, it says that the selling broker will try to collect the commission first from the seller or the seller's agents, and only if they are unable to collect it from the seller or their agents does the buyer owe any amount. Learning Objective 8.2
A buyer and seller enter into an agreement for buyer to purchase seller's 2,000-acre ranch using the TREC Farm and Ranch Contract. The parties agree that the sales price is calculated at $2,000 per acre and that the sales price will be adjusted based on the survey. The buyer gets a survey done which indicates that the ranch is 2,400 acres. The seller wants to adjust the sales price accordingly and buyer disagrees. What is buyerâ s option under the contract?
Buyer may terminate with written notice to the seller. The answer is buyer may terminate with written notice to the seller. Since the variance is more than 10% of the original sales price, the buyer may terminate as long as she gives notice within the time agreed to by the parties. Learning Objective 6.3
Which of the following is NOT an exemption under The Fair Housing Act?
Condominium sales to the elderly The answer is condominium sales to the elderly. The Fair Housing Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. Learning Objective 8.3
Buyer and seller enter into an agreement for builder to sell to buyer a new home using the TREC New Home Contract (Incomplete Construction). Buyer wants to upgrade the tile in the kitchen and completes a change order. Which set of documents includes change orders?
Construction documents The answer is construction documents. â Construction Documents means the plans and specifications, the finish out schedules, any change orders, and any allowances related to the plans and specifications, finish out schedules, and change orders. Learning Objective 6.5
Which of the following is TRUE regarding DTPA lawsuits?
Consumers may waive their rights to bring a suit under the DTPA. The answer is consumers may waive their rights to bring a suit under the DTPA. There are strict requirements for a waiver to be valid and enforceable. Learning Objective 8.1
Which of the following disclosures related to the sale of a house is required?
Death by electrocution because of faulty wiring
Which of the following is TRUE under the Fair Housing Act?
Disability includes those being regarded as having an impairment that substantially limits one or more major life activities. The answer is disability includes those being regarded as having an impairment that substantially limits one or more major life activities. The term includes those having a history of, or being regarded as having, an impairment that substantially limits one or more major life activities. Learning Objective 8.3
When a license holder suspects fraud, which of the following should the license holder NOT do to protect herself and the parties to the transaction?
Disclose everything to all parties The answer is disclose everything to all parties. The agent still has a fiduciary duty not to disclose confidential to the other party. Learning Objective 8.1
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 31. The roof of the complex is partially destroyed by a fire on February 3. Seller notified buyer on February 5 of the fire. What is the latest date buyer can terminate the contract because of the fire?
February 12 The answer is February 12. The contract provides that the buyer will have seven days from receipt of notice of such casualty loss within which to notify the seller in writing that the contract will be terminated unless buyer receives written confirmation from the association that the damaged condition will be restored to its previous condition within a reasonable time at no cost to buyer. Learning Objective 6.2
Who is responsible for paying for the residential service contract under the contract from Fleming to Donaldson?
Fleming
A buyer purchases a home for $350,000 and then resells it for $500,000 to a second buyer based on a fraudulent appraisal and then splits the $150,000 with the second buyer. The lender eventually forecloses after the second buyer fails to make any payments on the loan. This is an example of which of the following?
Flipping The answer is flipping. When a property is purchased and then quickly resells at a value that is artificially inflated by false appraisals, it is called flipping. Learning Objective 8.1
What is the term for purchasing a property and then quickly reselling it at a value that is artificially inflated by false appraisals?
Flipping The answer is flipping. When a property is purchased and then quickly resells at a value that is artificially inflated by false appraisals, it is called flipping. Learning Objective 8.1
Which of the following is not listed as a farm and ranch improvement in paragraph 2 the TREC Farm and Ranch Contract?
Garages The answer is garages. Garages are included as a residential improvement, not a farm and ranch improvement. Learning Objective 6.3
When may a defendant be held jointly and separately responsible for all damages recoverable by the claimant?
If the defendant's percentage of responsibility is greater than 50% The answer is this may be a fair housing violation. Any disclosure that indicates a preference based on familial status is prohibited by the Fair Housing Act. Learning Objective 8.4
What does the R-Value address in the TREC new home contracts?
Insulation The answer is insulation. R-Value is a measure of insulation. The higher the R-Value, the better resistance to the transfer of heat. Learning Objective 6.5
A seller wishes to list his house with a broker and wishes to conceal the fact that his spouse died of AIDS. What should the broker advise the seller?
The law permits the seller to withhold the information.
Broker and buyer enter into a buyer representation agreement where the buyer agrees to pay the broker 3% of the purchase price only if the broker is not paid by the seller or the sellerâ s agent. The broker finds a property that is listed in the MLS with an offer of compensation of 3.5%. How much will the buyer have to pay the broker under the agreement?
Nothing The answer is nothing. If the buyer's representation agreement says that the buyer's broker will receive 3% and the MLS printout says the listing broker is offering the selling broker 3.5%, the buyer would owe nothing. In this case, the agreement between brokers is through MLS. Learning Objective 8.2
Broker and seller enter into a listing agreement where the seller agrees to pay the listing broker 7% of the purchase price if the house is sold. The property is not listed in the MLS but eventually sells. How much will the seller have to pay the selling broker under the agreement?
Nothing The answer is nothing. If the property is not in MLS, even if the listing broker is a member of MLS, there is no offer of compensation. Learning Objective 8.2
How much is Fleming contributing to Donaldsonâ s closing costs under the contract from Fleming to Donaldson?
Nothing The answer is nothing. Other than paying for the residential service contract, Fleming is not contributing to closing costs. Learning Objective 9.1
Which paragraph from the One to Four Family Residential Contract changes in only one of the promulgated forms?
Paragraph 14 The answer is paragraph 14. This paragraph is different only in the Condominium Contract because it deals with damage to the condo unit before closing, rather than the entire property of which the condo is a part. Learning Objective 6.1
In what way are the Condominium Contract and the Farm and Ranch Contract different from the other four contract forms?
Paragraph 6 is different in both
The definition of property in paragraph 2 the TREC Farm and Ranch Contract addresses all of the following EXCEPT?
Parking The answer is parking. Parking is not included in the definition of property in paragraph 2 of the TREC Farm and Ranch Contract. Learning Objective 6.3
A buyer wants to make sure that the neighborhood is safe for their young daughters. He asks about whether there are any sex offenders on the street. The seller knows that the man that lives across the street is a registered sex offender but wishes to conceal this from potential buyers because he really needs to sell the property. What should the seller's agent do?
The agent is not required to disclose the information. The answer is the agent is not required to disclose the information. While the agent is not required to disclose the information, he should not outright lie to the buyer. He should tell the buyer to investigate the issue for himself. Learning Objective 8.4
A buyer asks the seller's agent about the racial makeup of the neighborhood. Which of the following is the best way to deal with the question?
The agent should not disclose any information based on race. The answer is the agent should not disclose any information based on race. A good business practice is to never disclose anything about the most stringent fair housing protected classes. Learning Objective 8.4
What law or rule requires disclosure of insulation R-Value?
The answer is federal regulations. Federal law requires that builders reveal to the buyer the R-value of the insulation installed in the new home. Learning Objective 6.5
Where is the written compensation agreement between a purchaser and a broker?
The buyer's representation agreement
When may an apartment complex manager discriminate based on familial status?
The community qualifies as housing for older persons
Under the contract between Kramer and Sweeney, what happens if the first contract between Kramer and Wright does not terminate by May 20?
The contract between Kramer and Sweeney terminates and the earnest money will be refunded to Sweeney. The answer is the contract between Kramer and Sweeney terminates and the earnest money will be refunded to Sweeney. The other answers are wrong. Learning Objective 9.3
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of February 1. Seller timely delivers the condominium documents five days after the effective date. Assuming the buyer gives timely notice, what happens when she terminates the contract?
The earnest money will be refunded to the buyer. The answer is the earnest money will be refunded to the buyer. The contract provides that if buyer cancels the contract pursuant to this paragraph, the contract will terminate and the earnest money will be refunded to buyer. Learning Objective 6.2
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of March 1. Seller timely delivers the resale certificate five days after the effective date. Assuming the buyer gives timely notice, what happens when she terminates the contract?
The earnest money will be refunded to the buyer. The answer is the earnest money will be refunded to the buyer. The contract provides that if buyer cancels the contract pursuant to this paragraph, the contract will terminate and the earnest money will be refunded to buyer. Learning Objective 6.2
Under the Seller Financing Addendum to the contract from Johnson to Swanson, what happens if Swanson fails to get Johnsonâ s consent before Swanson sells the property?
The entire amount is due and payable.
If as a result of a condemnation of a portion of the property by the local municipality, the use of the property went from residential to commercial, thus increasing the value of the property substantially, which of the following would be TRUE?
There would be no rollback taxes because property condemned is not subject to rollback taxes. The answer is there would be no rollback taxes because property condemned is not subject to rollback taxes. There are a number of exceptions to the application of the rollback tax: if the change of use occurs as a result of a sale for a right-of-way; a condemnation; a transfer of the property to the state or a political subdivision of the state to be used for a public purpose; and several others, including ownership by or dedication for a cemetery by a nonprofit cemetery organization. Learning Objective 6.1
Under the TREC Unimproved Property Contract, why must a buyer of an unimproved building lot carefully research restrictive covenants?
They may affect the suitability of the lot for the buyer's intended use. The answer is they may affect the suitability of the lot for the buyer's intended use. A buyer of an unimproved building lot must carefully research restrictive covenants and other matters that will affect the suitability of the building lot for the buyer's intended use. Learning Objective 6.4
Under the TREC Unimproved Property Contract, why must a buyer of an unimproved building lot carefully research zoning ordinances?
They may affect the suitability of the lot for the buyer's intended use. The answer is they may affect the suitability of the lot for the buyer's intended use. A buyer of an unimproved building lot must carefully research zoning ordinances and other matters that will affect the suitability of the building lot for the buyer's intended use. Learning Objective 6.4
Under the contract from Fleming to Donaldson, how should the Donaldsons ensure that they will be able to park their RV in the driveway?
They should add a statement to that effect in paragraph 6D.
A seller wants to tell potential buyers that the neighborhood is perfect for young couples without children. What should the broker advise the seller?
This may be a fair housing violation. The answer is this may be a fair housing violation. Any disclosure that indicates a preference based on familial status is prohibited by the Fair Housing Act. Learning Objective 8.4
Which of the following is TRUE under the Addendum for Back-up Contract attached to the contract between Kramer and Sweeney?
Time is of the essence.
Would a three-bedroom home leased to a single parent and five children be acceptable under the HUD standard?
Yes, because it allows two people per bedroom. The answer is yes, because it allows two people per bedroom. While two people per bedroom is a reasonable standard, the age of the two people is not a consideration. Learning Objective 8.5
Despite the additional cost, the buyer has decided the flooring material in his under-construction home should be clear Hawaii-sourced koa wood rather than the red oak specified by the construction documents. Both the buyer and the contractor should insist on
a detailed change order. The answer is a detailed change order. The construction defect notice is not relevant to this question. While the buyer might, as a matter of prudence, want to see the flooring material, the primary concern to both buyer and contractor is that all changes in the contract caused by the change in materials for the flooring are accounted for in a change order. Likewise, the completion date may change, but that is just one part of the change order. Learning Objective 6.5