Real Estate Express Part 1 Final Exam
How is a conventional life estate created?
A fee simple owner grants the life estate to a life tenant.
Purchasing power element of value
Consumers ability to pay
Trade Fixtures
Personal property used in a business and can be removed by the lessee when the lease terminates.
some rare case a court can award for extremely bad behavior from defaulting party (beyond actual losses) under suit for damages called
Punitive damages
What type of contract is one which initially appears to be valid, but is subject to recession by a party to the contract who is deemed to have acted under some kind of disability
Voidable
Laura occupies an apartment in a multi unit building. each month she pays the association an assessment for her share of the mortgage payment property tax and building fee. What does she own?
a co-op
carbon monoxide
a colorless, odorless, and poisonous gas from faulty heating equipment
Radon
a colorless, odorless, radioactive gas the occurs naturally in soil throughout the US
Plat
a map of one or more properties indicating each parcel's lot & block #, boundaries & dimension
Exercising the option creates a. sale contract
bilateral
example of void contract
contract does not include consideration
Purchase agreement also known as
contract of sale
In general what is a legitimate tenant complaint? If the landlord
does not make timely repairs
As part of the duties included in the listing agreement the broker agrees to use to achieve the purpose of listing agreement
due diligence
Parallels
east & west latitudinal lines
An estate is transferred with the stipulation that alcohol will never be consumed on the premises or seller will take back property. This kind of estate is?
fee simple defeasible
The distinguishing features of a condo estate are
fee simple ownership of the airspace in a unit and an undivided share of the entire property common areas
Nonconforming use
is one that clearly differs from current zoning either legal or illegal use
Valid contract
is one that is legally enforceable by virtue of meeting certain requirements of contract law.
a material fact
is one that is of significance to a reasonable arty which causes a potential buyer/renter to either lower the offer price or not enter into the transaction at all.
Material Fact
is one that is of significance to a reasonable party which causes potential buyer/renter to either lower the offer price or not enter into real estate transaction
right of option
is optionee (buyer) pays seller a valuable consideration in exchange for the right to purchase property for stated price and terms
Constructive Notice
it is knowledge one could have or should have obtained
How does CERCLA concern real estate agents
it may cause them to be held liable for improper disclosure of potential violations
True statement about contract revocation
it may not relieve the revoking party of contract obligations
A distinguishing feature of a defeasible fee simple estate is that
it may revert to a grantor if the prescribed use changes
a unique characteristic of a special assessment tax is that
it only applies to properties which will benefit from the public improvement
a town has a rapidly growing population, but there are no longer any vacant lots around the lake to build more homes. In this case it is likely that the price of existing homes on the lake will
increase
Reliction
increase due to receding water from shore
A home is located in a neighborhood where homeowners on the block have failed to maintain their properties. This is example of
incurable economic obsolescence
Allodial System
individuals are entitled to own property without proprietary control by king/government
A valid contract can be canceled if it is not possible to perform is called
infeasibility
An owner's agent is showing a buyer an apartment building. The buyer notices water stains on the ceiling, and informs the agent. The agent's best course of action is to
inform the seller of the inquiry and test the paint
If Mary wants to sell her interest as a tenant in common but cannot find a buyer including co-owners what can she do to convert her interest to cash?
initiate a partition suit
How are private usage restrictions such as declaration restrictions enforced?
injunction
Best way to determine if asbestos is in the building needs treatment
inspection by a certified inspector
other names for Land contract
installment contract, contract for deed, home note, trust deeds, deeds of trust & privately held mortgages
Abstract of title
instrument that records the history of the property
a contingency that is too broad, vague or excessive in duration may invalidate the entire contract on grounds of
insufficiency of mutual agreement
Condemnation suit proceedings
must accord with due process of law to ensure that it does not violate individual rights. Must justify in court the validity of intent public use resulting "public good" or public purpose.
Delivery and Acceptance
must have to be valid deed
Unlike a determinable estate, the grantor of a condition subsequent estate?
must repossess the property within a limited timeframe if restrictions are violated
For an option to buy to be valid and enforceable must include
name of option, actual non refundable consideration, price/terms, expire date, be in writing, legal description & meet general contract validity requirements (competent parties, option promise to perform & option signature)
The growth plan considers (master plan)
nature, location & extent of permitted uses, avail. sanitation facilities,, adequate utilities, patterns of thoroughfares, housing availability, conservation of natural resources, adequate recreation facilities, ability/willingness of community to absorb new taxes/bond issues & assessments
Easement by Implication
necessary prerequisite is severance of parcel created when grantor conveys portion of real estate they own
Reformation
necessary to correct or modify a contract when a contract does not accurately reflect the intentions of the parties because of some mechanical or clerical error in the document
3 factors that impact a contracts legality & interfere with contract fulfillment
negligence, misrepresentation & fraud
The length of the land contract term, interest rate and amount of monthly payments are
negotiable
The amount of a real estate brokerage Commission is determined by
negotiation with the client
What type of lease requires a tenant to pay for utilities internal repairs and proportionate share of taxes, insurance and operating expense plus rent?
net
If title is tenant in common for listing agreement
new owners could inherit a portion of the property from any of the original owners
Void contract legal effect
no legal effect (a contract for an illegal purpose)
If the party who has caused to disaffirm the contract elects instead to perform it - the contract is
no longer voidable
If a property is ETJ then municipality has
no right to control
Zoning board deals with issues and appeals of?
non conforming use, variance, special exception conditional use permit, zoning amendment
ADA - American w/ disabilities Act 1992 impacts
non-residential leases
Acknowledgement
not necessary to be valid deed, formal declaration made to or taken by a duly authorized official (notary)
A broker has her license suspended for violating state license law. In such a case, the licenses of her 3 sales people are
not valid
The demand for homes in a market is best expressed in terms of
number of households seeking housing
Many states have enacted URLTA which among other things
obligates the landlord to perform reasonable
tips for buyer of land contract
obtain appraisal, research title/obtain title insurance, retain services of a holding company to hold deed & original documents, have contract recorded immediately & consult a real estate attorney
1970 Uniform relocation assistance & real property acquisitions policies Act
obtain displacement services and compensation if the dwelling owner changes, or condemned or foreclose or damaged
What right(s) may leases convey to tenants
occupancy and exclusive use
a lease transfers what rights?
occupancy, enjoyment & control/use
abandonment
occurs when parties fail to perform contract obligations the contract can be cancelled
Assignment
of a lease is a transfer of the entire leasehold interest by the tenant to 3rd party
In a landlord / tenant relationship the damaged party may purse court action in the event
of lease default
Types of covenants
of season, against encumbrance, of further assurance, of quiet enjoyment, of warranty forever
to be an enforceable contract
offer made and accepted
revocation
offeree with draws offer before acceptance
option clause
offers a tenant the opportunity to choose a course of action at some time in the future under certain terms.
General Warranty Deed
offers max # of warranties and usually includes covenants
class A, B, C are classifications for what type of property
office space
How many owners can there be in a tenancy in severalty?
one
if 2 co-owners have an undivided equal interest
one owner may not lay claim to a half for their exclusive use
Jake attempts to contract with John on behalf of Jerry without Jerrys legal authorization. In such a case, Jake and John cannot create a valid contract because?
one party is not competent
Unilateral contract
one party promises to do something, provided the other party does something, the latter party is not obligated to perform.
Who can initiate an action or file a suit against a seller or a buyer
only a broker not an agent
in a listing a broker may not put much effort in marketing the property
open
"non-exclusive contract"
open listing
An agent obtains a listing which ensures compensation for procuring a customer, provided the agent is the procuring cause> The agent has entered into a/an
open listing
only the broker who brings the ready, willing and able buyer to seller or who finds the right property for a buyer will receive commission
open listing
this listing gives the seller or buyer the right to engage with any # of brokers as agents
open listing
one of the conditions an adverse possessor must meet in order to obtain legal title to a property is
opening possessing and claiming the property with out the owners consent
Planning commission oversees
operation of dept professional planning staff & makes recommendation to elected officials concerning land use policy
If contract is voidable can be cancelled by
operation of law or rescission
An agreement to keep open, for a set period, an offer to sell or lease real property.
option
merely creates a contractual right does not give the buyer any estate in property is?
option
used to give buyers time to resolve questions of financing, title, zoning etc before committing to buy is?
option
"Rent to own" works as an
option & purchase agreement rolled into the lease with no clear lines between different contracts
Valid but unenforceable contract example
oral long term lease & oral real estate sales contract
mode of expression
oral or written in a contract
Bob grants his sister Mary an estate for as long as she lives but her heirs cannot inherit the estate. What kind of estate?
ordinary life estate
Supply is affected by
overall plan of the community
All communities desire a certain degree of growth, but too much can
overwhelm services and infrastructure
Too much growth can
overwhelm services and infrastructure
The law presumes that is the real owner of the property.
owner of record
While physical maintenance of the property is a primary function of the property manager, the level of maintenance performed must be balance with?
owner's objectives and tenant demands
Freehold
ownership
Co-ownership
ownership existing when two or more persons have the same ownership rights in the same property
What best describes the concept. of "legal title" to real estate?
ownership of the bundle of rights to real estate
if parties agree to terminate contract they have performed
partial performance
court may nullify a contract where acceptance of terms by either party was
partial, accidental or vague
The "four unities" required to create a joint tenancy include what conditions?
parties must acquire respective interests at the same time
Among other provisions the Superfund Act (CERCLA)and superfund amendment and reauthorization act of 1986 provided that
parties responsible for improper disposal of hazardous waste could be changed for clean-up costs.
Novation
parties wish to create a new contract to replace cancelled contract (substitution)
Which actions is an expression of the public interest know as police power
passage of zoning ordinances to control land use
If seller revokes listing without grounds maybe required to
pay commission if broker found a buyer or reimburse broker for marketing expenses if no buyer was found
Tenants income should be high enough to
pay option fees, rent, security deposit & enough to enable them to meet the extra expenses.
a loan with negative amortization the
payments are not sufficient to retire the loan
In exchange for the right of option - Optionee
pays option valuable consideration
Before issuing a title insurance policy a title company does what
perform a title search
Termination of Listing Agreement
performance (found a buyer), expiration of agreement or termination (mutual agreed)
Requirements for a septic tank
permit required ( a percolation test showing soil can absorb water adequately
what type of property can be intangible
personal property
A general lien is a lien?
placed against any and all property owned by an individual
A governments is the authority to enact laws to guard the safety and health of its citizens, maintain order and promote public interest
police power
Planning personnel formulate their plan by analyzing
population/demographic trends, economic trends, existing land use, existing support facilities, & traffic patterns
Parcel or Tract
portion of land delineated by boundaries
What can happen if unregulated land use?
potential for eventual damage to property values and the environment.
Asbestos
powdery mineral once comply used as fireproofing insulation material around pipes, floor titles, in siding, roofing, wallboards, joint compound.
An agent informs a buyer that a clause in a contract is standard language. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for
practicing law without a license
option period of a contract consideration should be kept short to
prevent the agreement from looking like a land contract
injunction
prevents the owners from using a property in a way that is contrary to recorded restrictions & can also order of removal for a use that has already been implemented.
Title insurance is issued to protect either the buyer or the lender for time the closing date.
previous to
In addition to supply and demand the other critical component of an economic system
price
what is a quantification of the value an item traded
price
2 most common changes made to a listing agreement?
price and listing expire date
Demand is influenced by
price of real estate in area, population of household composition, income of consumers, availability of mortgage credit and consumer tastes & preferences.
What influences demand
price of real estate, population of household composition, income of consumers, avail of mortgage credit & consumer tastes/prefernces
Federal government interest in real estate
primary concerned with broad standards of real property usage, natural disasters, land description & discrimination
Zoning
primary tool cities and counties regulate land use and implement their master plans
The meaning and import of the agency relationship should be disclosed to the client
prior to completing a listing agreement
responsible for complying with the environmental laws
private owners
What represents the core activity of real estate brokerage?
procuring customers for clients and effecting transactions
The principal theme of federal fair housing laws is to
prohibit discrimination in housing transactions
A primary objective of residential zoning is?
promote the value and planned land use of a neighborhood
Community property consists of
property acquired by either party during marriage
needed for a listing amendment form?
property address, sellers name, MLS listing #, Listing office and Listed price
Special purpose real estate
property has a unique use to persons who own/use it like church, hospital, schools, government buildings
Which is considered community property in a community state?
property the spouses buy together after marriage
Real estate brokers and their sales team bear the brunt of the responsibility for
property transaction must be free & clear of any problem areas
What kind of lease does not stipulate rent as its rent is equal to the owners share of the periodic expense of entire cooperative?
proprietary lease
Indiana code 32-31-7 & IC 32-31-8
provide among other things a summary of tenant & landlord obligations (ex delivering the rental premises in a safe, clean & habitable condition)
In an agency relationship, the principal is required to
provide sufficient info for the agent to complete the agents tasks...
If seller wants a net listing licensee must
refuse the offer and encourage the seller to pay a flat fee or % of the sale price because it is viewed as unprofessional and illegal in many states
To prevent waiver of a time is of essence clause what should seller do
refuse to accept any late payments
In a leasehold estate the landlord does not have the right to do what
refuse to maintain the property
In an index lease the renter & owner will mutually agree upon a stable standard which will?
relate to the tenants trade, be clearly stated in the contract & impact tenant adjustments
Convenant of Seisin
relates to the past and guarantees grantor ownership
Extreme net lease
requires tenants to cover all expenses
Seller can also seek of the land contract where seller returns the payment made buy buyer in exchange for fail rental value while buyer had possession.
rescission
voidable contract is one which initially appears to be valid, but is subject to by a party to the contract who is deemed to have acted under some kind of disability
rescission
Contract terminations by breach of contract are
rescission, forfeiture, suit for damages, suit for specific performance
an owner-occupied condo is what type of property
residential
What makes up a significant portion of real estate market?
residential, commercial, agricultural leases
types of zones?
residential, commercial, industrial, agricultural, public, PUD
Units of demand by property classification?
residential=households, commercial/industrial=square feet, agricultural =acreage
Planning development
response to land use objectives, community attitude, and conclusion drawn from research
Legal Nonconforming Use
results when a zoning change leaves existing properties in violation of the new ordinance.
If a deed condition is violated ownership?
reverts to the grantor
If an owner of real property dies without leaving a will and with no legal heirs, what happen to the property?
reverts to the state or county by escheat
If Olivias property had diamonds that she would want a mining company to extract what type of lease would she off the mining co.
rights lease
Littoral Rights
rights of abutting properties of navigable water like lakes and seas. enjoy right to use but don not own water or land beneath
if court determines a party has sufficiently performed the contract even thou not to the full extent of every provision its called
sufficient performance
If tenant defaults landlord may file
suit for possession or suit for eviction
A change in the law after the date of the contract that makes the intended purchase illegal
supervening illegality
Price movements
supply and demand of products or services must always be considered together
Base industries lead to rise of
supporting 2nd industry market
property acquired under dower laws is owned by
surviving spouse for duration of a lifetime
License regulators, empowered by state law to oversee brokerage practices, may
take punitive actions against fraud or misrepresentation
A property owner is precluded by deed restriction from developing a thirty foot boat dock. The limitation prompts the owner to sell to another party. The new owner?
take title subject to the same restrictions
Diamond ring is example of?
tangible personal property
Documentary stamp tax
tax based on the actual price of property conveyed thus enabling taxing authorities to ascertain current market value for ad valorem tax purpose. State law usually required this payment on a conveyance of real property
How an interest in land is held
tenancy
Most common form of co ownership when the owners are not married?
tenancy in common
Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is
tenancy in common
Ownership of real estate by a single party is called?
tenancy in severalty
How to terminate a lease
term expire, notice, voluntary agreement, property destruction, condemnation, foreclosure & abandonment
If tenant abandonment the property landlord can
terminate the lease or sue for damages
If a tenant defaults URLTA landlord may
terminate, evict, provide proper notice if landlord can justify the cause for the action
When owner dies with a valid will property may transfer to others
testate
unconscionable contract
that is unduly favors the party with superior bargaining power
Tenancy
the actual act of holding that interest (estate)
A listing agreement can terminate when
the agreement expires
If grossly insufficient consideration may invalidate a contract on grounds
the agreement is a gift rather than contract or violation of the "good faith bargaining"
Price is best described as:
the amount of money a buyer and seller agree to exchange to complete a transaction
Ad volare taxes are based on
the assessed value of property
An owner completes a contract to sell her property. Before closing, the seller runs into financial trouble and assigns the contract to her principal creditor. The buyer cries foul, fearing the property will be lost. What happened
the assignor has completed a legal action
All real estate business is done under?
the authority of a Real Estate Broker
A significant difference between an appraisal and a brokers opinion of value is
the broker may not be a disinterested party.
Ownership of which is used to define an "interest" in real estate?
the bundle of rights
During the executory period of a sale contract, the buyer acquires an equitable title interest in the property. This means that
the buyer can potentially force the seller to transfer ownership
Title insurance is issued to protect
the buyer prior to closing
Interest in a condo differ from those in a co-op in that
the co-op owner owns stock in the cooperative association, whereas the condo owner simply owns real estate
Once a party's of a valid oral contract have executed & performed it what happens?
the contract has been fulfilled & parties can not use Statute of Frauds to rescind
For buyers protection in a land contract
the contract should require the seller to convey a marketable title @ completion of contract
How long a land contract is scheduled to run is called
the contracts amortization
How to determine a fair option fee
the current value of property, the anticipated value of property at end of option term, the value appreciation rate, the tenants credit rating, risk to landlord and length of the option term
The interest of a seller and buyer under a land contract are determined by
the doctrine of equitable conversion
One of the major consideration in planning where to allow growth is?
the effect of development on traffic patterns
The distinguishing feature of a defeasible fee simple estate is that
the estate may revert to a grantor or heirs if the prescribed use changes
Under a wrap around land contract the seller earns extra interest money when
the existing mortgage has a lower interest rate than land contract
true price of an item or service is
the final number parties agree to
The covenant of quiet enjoyment relates to?
the future
Who appoints the planning commission or board comprised of officials?
the governments legislative entity
covenant of seisin guarantees
the grantor owns the property and has a right to convey it
The more housing starts
the hotter the real estate market
A unique feature of a land trust is that
the identity of the beneficiary may not be identified.
option contract can alway be renegotiated & extended after
the initial terms is necessary
what makes the economy work
the interplay of supply and demand
A lenders title insurance policy generally protects
the lender against the possibility that the lenders lien can not be enforced
A buyers financing arrangements are often concluded at closing, because
the lender wants to ensure proper handling of the collateral for the loan
How does a licensee make a change to a listing agreement
the licensee crosses out the old info and writes in the change
RESPA requires specific closing procedures whenever
the loan is to be sold to the FNMA
The Real Estate Settlement Procedures Act prescribes closing procedures that must be followed whenever
the loan is to be sold to the FNMA
most listing agreements forms are provided by
the local multiple listing service or association of Realtors
If commercial real estate rental prices are falling in a market, it is likely that
the market is oversupplied
The value of a property is only as good as
the marketability of its title
The necessary condition of mutual consent maybe found lacking in a contract if
the offer which was accepted was vague
A buyer should submit a purchase and sales agreement because?
the offering price is not all the seller needs to consider
Procuring Cause
the one who brings about a sale (found a buyer)
an important legal characteristic of an option-to-buy agreement is that
the option must perform if the optionee takes the option, but the the optionee is under no obligation to do so.
to set up for option best possible chance at success
the optionee should have better credit worthiness than most tenants
upon death of the owner of a life estate passes to
the original owner or other named person
A standard owners title insurance policy generally protects
the owner against liability and losses from title defects
Private land use control is primarily exerted by
the owner of the controlled property via deed restrictions
several buyers are competing for the last available home in a desirable new subdivision. One buyer calls the owner developer directly on the phone and offers $10,000 over and above the listed price. The developer accepts the offer. at this point?
the parties have completed a verbal, executory contract
Since general contract law is used in land contracts than landlord/tenant law this benefits buyers because
the parties have greater freedom to negotiate the terms.
Why a project can't start until Plat is approved
the plat shows that the map complies with local zoning, building ordnance
another critical component of an economic system in addition to supply and demand is
the price mechanism
The concept of market value is best described as
the price that a willing, informed, and unpressured seller and buyer agree upon for a property assuming a cash price and the property's reasonable exposure to the market.
When a property is "under contract"
the principals have entered into a sale contract and must satisfy any contingencies prior to closing.
If an apartment contains a refrigerator that is not included in the lease,
the property manager does not have to maintain it
The property and title condition terms in an option contract warrants
the property will be maintained in a certain condition and the title will be marketable and insurable
lot & block system
the recorded plat method used to describe properties in residential, commercial & industrial subdivisions
Declaration restrictions attaches to?
the right of the property.
Surface rights?
the right to build a structure to improve land
An affirmative easement gives the benefitted party
the right to prevent the owner of a real property from using it in a defined way
non-freehold
the rights are conveyed by a lease, rights & interest in real property not involving ownership
police power components
the rights of the local, state & federal government to make laws for the good of all
Names included in a deed must appear?
the same throughout the document, legal description must be included along with a tax mailing address.
a sale contract contains an open-ended financing contingency: if the buyer cannot obtain financing , the deal is off. six months later the buyer still cannot secure financing. What happens
the seller may cancel the contract, since it can be ruled invalid
If a sale contract indicates that the day of closing is "the seller's day," this means that
the seller must pay prorated expenses inclusive of the day of closing
One feature of a wraparound mortgage loan is that
the seller offering the buyer a wraparound can profit from a difference in interest rates
important distinction between a contract for deed and a contract for sale is
the seller retains legal title in a contract for deed transaction until fully executed
If both parties orally agree to a contract contingency but do not put the contingency in a written contract - the courts will not enforce the contingency based on
the statute of Frauds
The ad valorem tax base of a municipal jurisdiction is equal to
the total of all assessed values of properties minus exemptions
The party who holds title to real estate placed in a living trust is
the trustee
When an estate is held in a trust, who holds legal title?
the trustee
A deed of trust transaction what occurs
the truster conveys title to a a trustee in exchange for loan funds form the beneficiary
What is cost role in dynamics of supply/demand & value?
the underlying influence dynamic of value and the cost of producing goods and services
The condo owners assessments for maintenance and operations are based on?
the units pro rata share of property value as defined in the declaration
In business brokerage, the notion of goodwill is best defined as
the value or price of the business over and above the value of its other assets.
A potential danger involved in a contract for deed is that
the vendee may not have a right of redemption
Failure to comply to ADA compliance
violators to be prosecuted for damages & civil penalties (responsible for costs to remedy)
what is a subdivision Plat Map?
visual drawing of where each lot, block, street, park and utilities are located.
A buyer agrees to all terms of a seller's offer except price. The buyer lowers the price by $1,000, signs the form, and mails it back to the seller. At this point, the seller's offer is
void
A unscrupulous investor completes a contract with a buyer to sell property the investor does not own. The sale contract for this transaction is?
void
a contract that proposes a illegal act is
void
contract involving a minor can be
void or voidable (generally be voidable because they can disaffirm the contract)
a contract with a minor is
voidable
void contract does not require an act of disaffirmation to render unenforceable but a does?
voidable
As part of a construction contract between a contractor and a buyer, the contractor promises to complete construction by November 20. This promise can be construed as
valuable consideration
Important effect of URLTA Act is
it prompted legislators at state level that empowered courts to nullify residential lease that violated the acts guidelines especially where lease gave unfair advantage to landlord
An important legal feature of a contract is?
it represents a "meeting of the minds"
Indiana SAFE act
it requires parties who extend financing for the purchase of real estate including sellers under land contract to be licensed
How does Planned Unit Development zoning differ from ordinary zoning?
it requires that multiple tracts of land be developed according to a single design for efficient use of space
Leins have the following legal feature
it terminates on payment of debt and recording of documents.
Chattels or personalty
items of personal property
All owners must sign if the entire property is being sold bu can sell their own interest w/out consent. What type of party?
joint tenants or tenants in common
In a memorandum
just the essential facts are recorded not the entire terms & conditions of the contract
Actual Notice
knowledge received or imparted through direct experience
If option fee is unreasonably high the lease option could be viewed as a
land contract because tenant has paid a substantial equity
Scarcity
land is a scarce commodity in a world of 3/4 water.
Master plan also called?
land use plan and comprehensive plan
unimpressed or undeveloped land
land with no building or residents on it, currently zoned one way but could change
If tenant refuses toggle up possession but refuses to pay rent
landlord serves a 10 day notice to quit
Geological hazards
landslides, flooding, subsidence & earthquakes
rights or interest in real property not ownership are conveyed by a lease which conveys a leasehold interest or estate to the tenant that grants the rights during lease term
leasehold interest or estate
What is the best way to identify a property
legal description
Homestead, dower, curtsey and elective share are examples of?
legal life estate
How does a legal life estate differ from a conventional life estate?
legal life estate is created by statue and conventional life estate is created by grant
A shop was originally built in a commercial zone. the zone has since been changed to a residential zone. Zoning authorities permit the use , most likely as
legal nonconforming use
Indiana appelled decision has made land contract
more like notes and mortgages which require foreclosure action & foreclosure sale. seller must elect to enforce contract or to declare contract at an end
What is used in the financing of real estate
mortgage contracts & promissory agreements
which is a voluntary lien?
mortgage lien
Easement in gross
most common type of easement
using ambitious terminology or language that resembles another of the contracts find to link or combine the contracts called
mudding the waters
Sometimes a contract does not accurately reflect the intention of parties because of some mechanical or clerical error in the document when this happens a legal action called is necessary to correct
reformation
A primary objective of residential zoning is to
regulate density
A real estate investment can take a long period of time to sell. For the investor, this means that real estate is
relatively illiquid
What does a rescission contract do?
releases all parties from any present and future liability
other names for mutual agreement in terminate contract
renounce & assent
Real estate sales agents are legally authorized to
represent buyers on their broker's behalf
Real estate agents are legally authorized to
represent their employing broker in procuring clients and customers.
One aim of the statue of frauds is to
require certain conveyances to be in writing
Typical deed restrictions concern
required min. area of residence, setback, prohibition against construction of sheds or secondary building, prohibit against conducting certain commercial activities.
Easement by condemnation
sold "for the greater good"
A landlord suddenly terminates a tenants lease in violation of lease terms. The tenant takes action to compel the landlord to comply with the violated terms. This is an example of a suit for
specific performance
The basic intent of zoning ordinances is to
specify usage for every parcel within the zoning authority jurisdiction
The basic intent of zoning ordinances is to
specify usage for every parcel within the zoning authority's jurisdiction
If a property has not been developed in a accordance with zoning codes what will owner need to do?
spend money to bring property into compliance
An example of conversion is?
spending a customer deposit on a surety bond for the agency
The purpose of a covenant clause in a deed of conveyance is to?
state the grantors assurance or warrant to the grantee that a certain condition or fact concerning the property is true
Doctrine of Laches
states that if a property owner is lax in protecting his or her rights, the property owner may lose those rights.
The only required clause in a deed of conveyance is one that
states the grantors intention, names the parties, describes the property and indicate a consideration
The enforcement of a voidable contract is limited by
statutes of limitations
A grocer temporarily installs special fruit and vegetable coolers in a leased grocery store in order to prevent spoilage. The coolers would be considered what?
trade fixtures that are personal property
Broker still entitled to commission if
transaction does not complete due to sellers default
A lease is an example of?
transfer of portion of bundle of rights
Conveyance
transfer uses a written instrument
Air, surface and subsurface right apply separately true or false?
true
Tenancy in common the tenants share indivisible interest? true or false
true
The real estate industry makes up 25% of nations economy
true
Indiana has no power of sale provision? true or false
true but requires that for any action to be taken in the contract must be in writing & notarized signature
The essence of the agency relationship between an agent and a principal can best be described as a relationship of
trust, confidence and good faith
In a power of sale land contract buyer stops making payments then
trustee has the power to foreclose under the "power of sale"
Laws of Descent
Involuntary alienation occurs when a title-holder dies without a valid will. The state's statutes of descent and distribution identify heirs and the respective shares of the estate they will receive. In the absence of heirs, title transfers to the state or county by escheat.
An owner transfers title to buyer in exchange for consideration. This is example of
voluntary alienation
alienation occurs
voluntary and involuntary
What best characterizes a conventional sale contract?
voluntary, bilateral and executory
Estoppel
Involuntary title transfer prevent a person from cling a right or interest that is inconsistent with person previous statement or acts
Rent clause
Is a lease provision that stipulates the time, place, manner & amount of rent payment
Actual notice
Is express or direct knowledge that a person has about a particular fact.
Functionality of real or personal property
Is it vital to the operation of the building? It may be a fixture if easily removed.
Definition of personal property
Is real property that is not attached to land
Revocation
Is the cancellation of contract by one party without consent of the other party
Property values
Is/are the key indicator of the health of the nation
What is the significance of base employment in a real estate market?
It drives total employment and population growth which lead to demand for real estate
What is the function of recording a deed?
It gives constructive notice of ownership.
Why is a fee simple estate called the highest form of ownership?
It includes complete bundle of rights and visually unlimited duration.
What distinguishes a lien from other types of encumbrance?
It involves a monetary claim against the value of a property
Economic commodity of Real Estate
It is bought, sold, traded and leased as a product within the real estate market
House led & House Fed
It is frequently written that American economy is
Disadvantage of land contract for a buyer
It lacks the formalities and buyer protection included in mortgage laws. Most include a forfeiture clause
A leased property is conveyed to a new owner. What happens to the lease?
It remains in effect
5 covenants under the General warranty deed
Covenant of Seisin, Covenant Against Encumbrances, Covenant of Further Assurance, Covenant of Quiet Enjoyment, Covenant of Warranty Forever.
The tenant not only has the right to exclusively possess the premises but that the landlord ensures there are no other tenants or claimants doing so at same time. Lease component?
Covenant of quiet enjoyment
What is the difference between a sublease and a lease assignment?
In a sublease the original tenant retains primary responsibility for performance of the original lease contract
Commercial zoning regulates
Intensity of usage by limiting the area of stores or offices per site area
Who must integrate environmental laws into their respective land use plans/regulations?
Regional, county and local planners
RBI
Related building illness
This primarily address the lease contract, deposit/advances, obligations of landlord/tenant & landlords rights of access/standards for eviction
URLTA Legislation
Many states have enacted the state legislation rights of residential renters
URLTA Uniform Residential Landlord & tenant act
URLTA Standards for improving oral, vague or unbalanced lease agreements
Unclear lease term, rent act & waiving of rights
Why is it important for a property manager to maintain good relations with tenants?
Unhappy tenants lead to expensive tenants turnover
URLTA
Uniform Residential Landlord and Tenant Act
A clause that specify how a property may be used & what rights are included
Use clause
What is the relationship between master planning and zoning ordinances.
Zoning ordinance are a primary means of keeping land use in line with the master plan
Subdivision allows homes in excess of 2,000 sq ft to be built. what is example of?
Zoning restriction
it is no longer necessary to search public records to ascertain the status of title when what has occurred
a Torrens certificate has been issued
a listing agreement is
a bilateral contract
Default
a breach of contract that gives the damaged party the right to take legal action, subject to any time limits created by statute of limitations or other legislation
Supervening illegality
a change in the law after the date of the contract that makes the intended purchase illegal
Formaldehyde
a chemical used in building materials, carpet and fabric. (as it ages it gives off a colorless pungent gas
The chain of title to a property refers to what?
a chronology of successive owners of record
a defect in the title commitment that was not identified in the sales contract is known as
a cloud
When a title company researches a title and determines the seller can perform as agreed, the title insurance company issues
a commitment to insure
One difference between a condition and covenant is that?
a condition can be created only when there is a transfer of ownership
contingency
a condition the must be met before the contract is enforceable
An intangible agreement that is made in "the meeting of the minds" of the individual parties is called?
a contract
Land contract
a contract in which the seller finances the sale of real estate in periodic installments
A lease contract is best described as
a conveyance of a possessory interest
direct purchase
a county or government may acquire property if there is a compelling public need or in effort to regulate privately owned property are inadequate
A and have limited sellers rights to forfeiture, the line between land contract & mortgages is being erased.
a court & legislators
Compensatory damages under suit for damages
a court award of the actual amount of damages suffered sue to a contract breach
Zoning Amendments
a current or potential property owner may petition the zoning board for an outright change in the zoning
The offer expires at exactly the time specified if the offer contains
a date and the phrase "time is of the essence"
a right the grantor does not have and therefore, is not able to convey is?
a deed exception
A lender may terminate foreclosure proceedings if the defaulting borrower executes?
a deed in lieu of foreclosure
A licensee could be subject to disciplinary action for receiving commission for a transaction if agreement did not have
a definite end date
A one-time tax levied on a property for purposes of recording a transaction is called
a documentary stamp tax
Agent Bob, who works for Broker Bill, obtains an owner listing to lease a building. Bill's other agent, Sue, locates a tenant for Bob's listing. In the absence of any arrangement to the contrary, Broker Bill in this instance is
a dual agent
Agent Jerry, who works for Broker Lucy, obtains an owner listing to lease a building. Lucy's other agent, Linda, a tenant representative, locates a tenant for Lucy's listing. If there is no arrangement to the contrary, Broker Lucy in this instance is
a dual agent
A condo owner actually owns
a fee simple interest in an air space and tenancy in common interest in share of common elements
Alteration in a lease become
a fixture
The best definition of a master plan is
a fusion of land use laws and local land use objectives and strategies.
Six investors purchase a shopping center. One investor manages the tenants and another handles the marketing and leasing. Two investors manage accounting and finance, and the remaining two run the management office. This is a possible example of
a general partnership
What type of deed offers max# of warranties and covenants?
a general warranty deed
What is subsidence?
a geological hazard, ground collapse into underground cavities. happens commonly in mine areas. caused by underground storage tanks that collapsed or removed w/out filling properly
Two real estate companies agree to conjoin their resources for the development and sale of an apartment complex, for which profits will be shared equally. This is an example of
a joint venture
Statute of Limitations
a law that restricts the period for an injured party can rescind or disaffirm a contract
When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?
a leased fee estate
what distinguishes a freehold estate from a leasehold estate?
a leasehold endures only for a specific period of time
Homestead, dower and curtesy, and elective share are examples of
a legal life estate
disaffirmation must occur within a for the to be valid
a legal timeframe act of rescission.
Listing Agreement
a legally-binding contract that creates an agency relationship authorizing a broker to serve as the agent for a principal in a real estate transaction.
if an attorney believes a title is a represented and can be conveyed by seller - attorney issues
a letter of opinion
deed of conveyance or deed
a living owner makes a private grant by means of deed of conveyance
what characterizes a real estate franchisee
a locally owned brokerage affiliate with a national franchisor for purposes of enhanced image and resources
Fraud with contract fulfillment
a misrepresentation of a material fact which is made with knowledge of it's falsity & with intent to deceive a party who relies on the misrepresentation
Compared to a stock portfolio, a real estate investment would be considered
a more management -intensive investment
Accord & satisfaction
a new agreement negotiated as a compromise of terms to the original contract
Implied agency arises when
a party creates an agency relationship outside of an express agreement.
Negative amortization of a loan occurs whenever
a payment does not pay the interest owed
What is a contract
a potentially enforceable agreement between 2 or more parties who agree to perform or not perform an act.
Covenant of Quiet Enjoyment
a promise that the property will not be claimed by someone with a better claim to title
Cloud
a question about the title
a chain of title is
a series of owners in a row who have owned the property in the past
An outside broker locates a seller for a buyer representative's client. In this instance, the outside broker is acting as
a subagent
To obtain a constructive eviction judgement
a tenant must vacate the premises
Marketable Title
a title to a property that is free from encumbrances, litigation and other defects and that can be really be sold or mortgaged
Subletting a lease
a transfer by a tenant a portion of the leasehold interest to another party done through execution of a sublease
What is a "buffer zone"?
a transitional zone between residential and commercial zones
What is a "rough in" in regards to radon
a vent pipe and junction box added by builder that additional piping and fan can be added.
What is an illustration of the legal concept of elective share?
a widow who was excluded from a will makes a claim to a portion of the couple's principal residence
2 reasons Indiana will allow forfeiture
abandoning or absconding buyer & buyer has paid minimal art on the contract at the time of default
The highest form of ownership interest one can acquire in real estate is the
absolute fee simple estate
3 responses to a offer
acceptance, rejection or counteroffer
Termination of an offer can be done by?
acceptance, rejection, revocation, lapse of time, counter offer & death or insanity of either party
Reasons to terminate an offer
acceptance, rejection, revocation, lapse of time, counter offer, death or insanity of either party
For a deed to convey title, it is necessary for the deed to be
accepted by the grantee
Office user concerns affecting demand
access by employees and supplies, efficiency of building and accommodating to the business, and image and cost
In Indiana deeds being recorded must include
acknowledgement
Indiana deeds being recorded must include
acknowledgement
Abandon Property
act of voluntarily surrendering or relinquishing possession and not paying taxes
Seller can enforce or an against a defaulting buyer
action for specific performance & action to recover unpaid purchase price. neither works if buyer has no money to complete transaction
To avoid situations lender Cavet Emptor, the buyer is charged with the responsibility of?
actual and constructive notice
A person claims ownership of a parcel of real estate to a prospective buyer, stating that she has lived on the property for five years and nobody has ever bothered her. The claimant also shows the buyer a copy of the deed. The legal basis of this claims refereed to as
actual notice
Essential items for purchase/sales agreement
ad here to certain legal criteria, entered by competent person, parties must consent, offer/acceptance, objective must be a legal one, consideration
Proper design of land use preserves the?
aesthetics, value of neighborhoods and promotes the success of commercial enterprise thru intelligently located zones
Indiana State law requires the recording of all documents that
affect the rights and interest in real estate
An item can be converted from real to personal property and vice versa by means of which processes?
affixing and severance
2 examples of compensation agreements that are not listing agreements
agreement broker has with their employees or independent contractors & agreement a broker signs with an unrepresented seller (FSBO) for sale by owner
A private party can not extinguish a declaration restrictions by
agreement or quitclaim deed
Real Estate as property is?
air, water, land and everything affixed to the land
To avoid problems (abuse by both parties) with contingency
be explicit/clear, have expiration date, expressly require diligence in effort to fulfill requirements
Real estate sales and or lease contracts are not considered personal service and continue to
be in effect obligated by heirs or successors
A contract that conveys an interest in real estate must
be in writing, contain legal description and be signed by one or more of the parties.
a contract that conveys an interest in real estate must also meet these criteria
be in writing, contain legal description of property, be signed by one or more of the parties.
For a listing agreement to be enforceable it must
be in writing. oral listings do not offer broker any legal protection
If a state allows for a cooling-period rescission in the contracting process, a party may
cancel a contract with the statutory period for any reason with no penalty
other names for termination of contracts
cancellation & discharge
If a landlord negligence or disruptive action has rendered the property unoccupiable tenant may locate & declare that the lease is
cancelled by default & tenant can sue for damages
A distinct feature of a joint tenancy is that joint tenants
cannot will their interest to a party outside the tenancy
Unlike tenants in common, joint tenants
cannot will their interest to a party outside the tenancy.
Essential provisions in most leases
capacity to contract, clear statement of terms, desription of premises, specification of rent/how paid, demising clause, in writing, delivery & signature
The judicial system exerts an influence on real estate ownership and use through decisions based on:
case law and common law
Earnest Money
cash deposit (any any form) that shows buyers intention to carry out the terms of the contract
As evidence that building inspectors found that a structure complies with building codes and ready for use the municipally or county issues?
certificate of occupancy
What did the Dodd-Frank Act 2012 do?
changed specific criteria to establish extensive requirements applicable to the mortgage lending industry
Release
contract, a release may be mutual or given by one of parties & requires consideration, often the relief from obligations in original contract
The principals may make changes as long as they sign or initial each change in regards to
contracts and forms
To be a marketable title seller must show title is free of?
doubts of identity of current owner, defect, claims that could affect value, undisclosed or unacceptable encumbrances
In the contracting process, a licensee must be careful to avoid
drafting a contract illegally
The distinguishing feature of leasehold estate is?
duration limited by lease terms
Things included in a buyers agreement
duration of the agreement, the commission that will be paid, various rights, duties & obligation of the parties
Chain of Warranties
each grantor in an unbroken chain of general warranty deeds may be responsible for all warranties of all previous owners.
Valuable consideration included in the contract must be
either tangible or intangible
the most important factor influencing demand for homes in a market is which of these
employment availability
Lease option to buy
enables a landlord to sell property @ a price on the high end of fair market value to a buyer who presently does not qualify for 3rd party financing
The Uniform Residential Landlord and Tenant Act fundamentally attempts to
encourage fairness and simplicity in lease forms and provisions
When buyer defaults upon a land contract the seller may elect to
enforce the contract or declare the contract at an end
The Statute of frauds concerns the of a contract, not its validity
enforceability
Option to buy is an contract
enforceable
what is an ALTA 98 policy
enhanced level owners title insurance policy - pay extra
Special Warranty Deed
I won and will defend against my acts only
3 factors determine competency
legal age, mental competency and legitimate authority
Bargain and sale deed
"I own and won't defend"
Livery of Seisen
"I own it and I have the right to sell it" entire bundle of rights is sold
Legal life estate also known as
"Martial rights"
Void Contracts are
"Null & Void" does not meet test for validity, so no contract at all. neither party can enforce
How much time does a seller have to accept a buyers offer?
"a reasonable" time or until expire date on offer
Caveat Emptor
"buyers beware" tenants must accept the leased property "as is" when they sign
In Aclarado real estate commission buy sell contract all feature a to indicate their choice between agreements to be sued for specific performance in event of default or simply let the seller retain earnest money (liquid damages)
"check box"
In a commercial lease is used in writing in the lease
"for no other purpose"
generally, a title insurance policy will protect the insured against
"hidden risks" losses arising from such title defects
Good consideration also called
"love & affection"
if a contract is created by mutual agreement or assent it can also be terminated under same
"meeting of the minds"
Indiana does not define how to determine if there is paid. which would preclude the seller from exercising the right of forfeiture
"minimal amount"
The landlord actual property expenses to the tenant instead of charging higher rent.
"passes through"
In competent party (another name) may not enter into enforceable contracts
"unsound mind"
2 types of title insurance policies
Standard and Extended
A homestead interest cannot be conveyed by one spouse? T or F
True
Special warranty Deed also called
grant deed
When does a testamentary trust take effect?
on death of grantor
Advolorem
real estate tax
requirements for a septic tank
water tight/ constructed of durable material like concrete, fiberglass, polyethylene or polypropylene, protected from corrosion, min. capacity below water line, 2 compartment tanks, effluent included from tanks w/aeration units for aerobic digestion shall discharge into a soil absorption system
Mirror image
when seller agrees to an offer exactly as it was made
supply and demand
when supply is low price will be high. Supply is how much product and services are available in market Demand is how much of it do buyers actually want.
Owner agents must disclose their agency relationship to tenants or buyers
whenever substantive contact is made
Acceleration Clause
which allows the seller to force buyer to refinance if the conditions of property becomes a risk to sellers financial investment
Most real estate buy-sell contracts restrict buyers right to assign because
while any seller must deliver exactly the same property, no 2 buyers are equally able to perform financially
The question of who owns title to a property is generally a function of?
who has best evidence
A suburb has a growing need for single-family housing, but the land available for new construction is running low. In this case, it is likely that the price of existing homes...
will increase
If a person having several heirs dies intestate, the property will
will pass to heirs by the laws of descent and distribution
when must a party to a voidable contract act?
within the statutory period
If a contract is void it terminates
without the need for disaffirmation
A land contract in which the buyer makes a payment to seller who then pays underlying lenders payment is called?
wrap around land contract
Required elements of a deed
written instrument, named parties, consideration, works of conveyance, legal description, signature of grantor & delivery/acceptance
Can a offer be withdrawn anytime prior to being accepted?
yes, until accepted
A certain legal description contains the phrase "....southeasterly along Happ Road to the stone landmark.." What kind of description is this?
êtes and bounds
What lease allows the landlord to share in the income generated from the use of property
% lease
types of leasehold estates
(1) Estate for Years, (2) Estate from Period to Period, (3) Estate at Will, (4) Estate at Sufferance.
Price mechanism
(Price) Amt. of money or asset that a buyer has agreed to pay and seller agreed to accept. It is quantification of the value of item traded.
how long is a lease option to buy
12-24 months
Deed of Trust
3rd party trustee holds the "naked title" to property, trustee can sell w/out court approval
An exception to Fair housing act of 1968 allows special dwellings to be set aside for Americans older than to the exclusion of younger people or people with children
55
total employment
=base, 2nd and supporting industries = creates demand for labor force
What environmental legislation particularly targeted cleanup of former industrial sites?
Brownfields legislation of 2002
The best evidence of a marketable title
A Torrens certificate
What is an advisory service provider?
A broker who renders real estate services for a fee
Express Contract
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.
Valuable Consideration & tangible value
A contract must contain a two-way exchange of _______ __________ as compensation for performance by the other party. The exchange of considerations must be two-way. The contract is not valid or enforceable if just one party provides _______ _________; can be money or something a party promises to do or not do.
Executed contract
A contract that has been completely performed by both parties.
executory contract
A contract that has not yet been fully performed.
what is a valid distinction between a corporation and proprietorship?
A corporation has perpetual existence; a proprietorship terminates upon the owners death
How to enter a property in the Torrens system?
A court action must first clear title by giving notice to all potential interest holders that they must express claim. Court then decrees the title accepted
What is the "Doctrine of Prior Appropriation"?
A doctrine that gives the state control of water use and the water supply
Deed of reconveyance
A document that a trustee uses to transfer the title back to the trustor (borrower) when the note is repaid.
A life estate is classified as?
A freehold estate
If the duration of an owners rights in an estate cannot be determined, the owner posses?
A freehold estate
A person wishes to convey any and all interest in a property to another with full assurance against encumbrance, liens or any other title defects on the property. This party would most likely use what type of deed?
A general warranty deed
Doctrine of Prior Appropriation
A governing principle of water rights law whereby the right to use water is controlled by the state rather than the landowner adjacent to the water.
What distinguishes a freehold estate from leasehold estate?
A leasehold endures only for a specific period of time
Deed
A legal instrument used by owner to transfer title to real estate voluntarily to another party
Time of the Essence
A phrase in a contract that requires the performance of a certain act within a stated period of time.or party guilty of breach of contract
offer
A promise or commitment to perform or refrain from performing some specified act in the future.
Covenant of Further Assurance
A promise that the grantor will perform further acts reasonably necessary to correct any defects in the title or in the deed instrument.
What is the effect of the Doctrine of Laches?
A property owner who is lax in protecting ownership rights may lose these rights
A person wishes to convey any and all interest in a property to another wit making any assurance as to encumbrances, liens or any other title defects on the property. This party would most likely use which type of deed?
A quitclaim deed
Parol Evidence Rule
A substantive rule of contracts under which a court will not receive into evidence the parties' prior negotiations, prior agreements, or contemporaneous oral agreements if that evidence contradicts or varies the terms of the parties' written contract.
Costs
A supplier incurs the expenses to generate and deliver to market. Capital/materials & supplies/labor/management and overhead
how does a constructive eviction occur?
A tenant declares a landlord in default and vacates the leased premises.
What provides protection against loss if there are defects or claims against the title to the insured property?
A title insurance policy
market
A transaction area where the price mechanism is constantly define and quantifying the value produced by relative elements of supply & demand
Dower can best be defined as
A wife's life estate interest in her husband's property
What is a covenants
A written warrant or promise set forth in a contract or other legal document by one of the parties to the contract
Ownership of is used to define an interest in real estate.
Bundle of rights
Office Building classification
A,B or C
What was designed to prevent forged or fraudulent documents from taking effect?
Acknowledgement
The best use for "repurposing" land is called?
Assemblage
9 things Indiana code requires for recording documents?
Acknowledgment, legibility of names, Name of person preparing instrument, Notarized Documents, Sales disclosure forms, Transfer of Deed of Taxation, Release of satisfaction of Liens, affirmation statement & grantee address
to be enforceable under Statute of Frauds?
All contracts must be in writing & leases over a year
On recording documents Indiana states
All documents to convey title, transfer title, or change title to have the endorsement of the auditors office prior to recording
The system of ownership that allows individuals to own property is called
Allodical system
an unauthorized revision to the contract by one party will make a contract voidable by other party is called
Alteration
Contract discharge by acts of parties are?
Alteration, release, assignment, novation & Accord/satisfaction
Easement by Prescription
An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law.
What clause should specify how the property may be used and what rights are included
An explanation clause
Misrepresentation is
An innocent or negligent misstatement of a material fact detrimentally relied upon by the other party
misrepresentation with contract fulfillment
An innocent or negligent misstatement of material fact, detrimentally relied up by another party
What is a contract?
An intangible agreement between parties to perform or refrain from performing some act.
fixture
An item of personal property that has been converted to real property by being permanently affixed to the realty.
Memorandum of Lease
An official record of lessees interest & claim on the property( this sometimes fills this requirement or public filing services)
Riparian Rights
An owner's rights in land that borders on or includes a stream, river, or lake. These rights include access to and use of the water to midpoint
Chattel Fixture
Another name for Trade Fixture
AMC?
Appraisal Management Company
Title record purposes
Avoid ownership dispute, public notice, buyer protection and Lien protection
Since the buyer does not get the property title until the final payment is made - what could a seller do that would impact eh buyers claim to the title?
Burden property with liens
Doctrine of Equitable Conversion
Buyer & seller interest under land contract are determined
The Environmental Protection Agency was created by
National Environmental Policy Act
Basic of Real estate demand
Base employment feeds total employment
An owner suddenly pulls a property off the market after hearing from the agent on the phone that the agent had received a full-price offer from a minority party. The agent then informs the offeror that the home has been removed from the market and is unavailable. Which party or parties, if any, have violated fair housing laws?
Both owner and agent
What type of contract is one which both parties promised to perform their respective parts of an agreement in exchange for performance by the other party?
Bilateral
Chattels or personalty are transferred by
Bill of sale
factors that impact an agreements legality
Negligence, misrepresentation and fraud
passed to establish a nation wide mortgage licensing system & registry for the residential mortgage industry
Congress
SBS
Sick Building Syndrome caused by poor air quality in building. from synthetic material and lack of ventilation
Enabling Act
Constitution grants States legal authority to delegate the authority to counties and municipalities thru legislation
Real estate planning
Constitution guarantees the right to own, but does not guarantee uncontrolled sale, use and development of real estate.
To be aware of concerns how these documents are created is
Contract fulfillment issue
severance
Conversion of real property to personal property by detaching from real estate
Trade fixture also called
Chattel fixture
It is illegal to discriminate in selling a house based on race, color, religion or national origin. This provided through
Civil rights act of 1968
Color of title?
Claim against the title like an Adverse Possession
means there is a claim against the title such as an adverse possession
Color of title
a lease is a significant & complex business proposition
Commercial
may be net, gross or percentage lease if tenant is a retail business
Commercial lease
the overall guideline for creating and enforcing zones, building codes and development requirements is from?
Completed Master plan
Which law created the Superfund?
Comprehensive Environmental Response compensation and liability act
Which of the following rights if any is NOT included in a fee simple absolute estate?
Conduct any and all activities w/out restriction
Affixing or attachment
Coverting personal property to real property by attaching to real estate
requires a tenant to pay for utilities, internal repairs & proportionate share of taxes, insurance & operating expenses plus rent
Net Lease
a one year lease on a house has expired, but the tenant continues sending monthly rent checks to the owner and the owner accepts them. What kind of leasehold estate exists?
Estate from period to period
What is the legal process used by the landlord to expel a tenant from a leased premises
Eviction
What is a major risk in the fulfilling of listing agreements?
Exceeding the limits of the authority granted by the agreement
A landlord promises to compensate a broker for procuring a tenant, provided the landlords brother decides not to rent the property within a month. This would be an example of a/an
Exclusive agency agreement
An agent is entitled to payment only if they actually find the property the buyer purchases
Exclusive agency buyer agency agreement
type of listing that gives the broker the right to market & sell a property for a specified time period while the owner has the right to find a buyer & sell property without paying broker commission
Exclusive Agency
Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice's home. What kind of agreement is this?
Exclusive agency
The most common contingency concerns
Financing
Economic of land
D.U.S.T.S Demand, utility or usefulness, scarcity, transferability and situs
Lien theory State also called?
Deed of Trust State
Documents that must be recorded are?
Deeds, mortgages, liens, easements, and sales contracts and anything that affects real estate title
Economic Characteristics of property
Demand & permanence of Investment
Residential zoning regulates
Density and values/aesthetics by limiting the number, size and type of residences allowed
What are Value determinants?
Desire, utility, scarcity and purchasing power
Community land use goals (3 phase process)
Develop a master plan, Administration of plan by municipal- or county or regional planning commission & implementation of plan through public control of zoning, building codes, permits and other measures.
Who establishes the covenant and restrictions for a subdivision?
Developer
What is an agents duty regarding inspections?
Disclose the result of any inspection, if known to the agent
There are two adjoining propterties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the flowing in relation to property B?
Dominant tenement
Not very common these days in residential because it increase the chances of a dispute over who actually procuring cause of sale for commission. type of listing is
Exclusive agency
a court grants land locked owner the right to use neighbors driveway. this an example of?
Easement by necessity
Necessity Easement
Easement needed because of a land- locked parcel
a farmer sold a farm several months later he was able to go back and harvest corn. The crop is called?
Emblement
what type of general law limits the uses to which an owner may put a property and create liability for clean-up where past uses have created air, water, or soil hazards?
Environmental
A right to get legal title in the future
Equitable title
Listing/representation contracts
Establish client relationships and provide for compensation
Leasehold estate where tenants occupies the premises w/out consent from landlord
Estate at Sufferance
Leasehold estate has no definite expire date "no renewal cycle", "forever or move out" lease
Estate at will (tenancy at will)
An actor rented a house from May 15th to Aug. 5th while she was working on location what kind of estate does she own
Estate for years
leasehold estate that has definite begin & end date
Estate for years
Periodic tenancy leasehold estate that automatically renews for an indefinite period of time - subject to timely rent
Estate from period to period
seller must pay commission only if home is sold by broker or an authorized agent of broker. type of listing is
Exclusive agency
"the exclusive right to represent"
Exclusive buyer agency agreement, the managing broker is entitled to compensation regardless of who locates the property; conversely, exclusive listing agreement where broker is entitled to compensation regardless of who locates the buyer
A listing agreement that results sellers usually see a quicker and more profitable sale of their property
Exclusive right to sell
The type of listing that gives the broker the greatest amount of assurance they will receive commission
Exclusive right to sell
A sales contract prior to closing is a executory or executed contract?
Executory
Buyer Bill has agreed to pay for a computer system after all hardware has been installed and operational. What type of contract does Bill hold?
Executory
ETJ
Extra Territorial Jurisdiction
Subdivision must meet FHA requirements plus the local to quality for?
FHA financing insurance
What is a common risk relating to agency relationship?
Failing to inform and disclose properly
ADA protect disabled American in residential sector with
Fair housing laws
Fair & equal treatment is the aim of the
Fair housing laws
Exception from ADA compliance
Faith based organizations
advertising is considered an essential cost of production?
False (labor, capital & management)
Under law, a lender must require a borrower to obtain the proper amount of flood insurance before closing a loan backed by improved real property located in standard flood hazard area if flood insurance is available
Federal
Who enacted laws to conserved protect the environment against hazards of growth and development (terms of air, water, soil quality)
Federal and State Legislature
Tenant Eviction procedures Act of 1976
Federal level unifies the eviction process for renters of multi-unit housing owned or subsidized by the government (ex. US Dept of Housing & Urban Development dwellings)
In what kind of estate does ownership revert to the grantor of the estate if usage fails to conform to stated condition in the grant?
Fee simple defeasible
If an estate includes the complete bundle of rights and unlimited duration of tenancy, it is a?
Fee simple estate
Most common concern in a contingency
Financing
Property that is between offices and warehouse?
Flex Space
To formulate growth strategy (master plan)
Forecasts growth trends then estimates how well the municipality can keep pace with the forecast
Resolution of Necessity
Formal resolution the public entity must 1st adopt to acquire a property
Fee simple, fee defeasible and life estate are what type of estate?
Freehold
pur autre vie
Freehold conventional life estate endures over the lifetime of a 3rd person after which property passes from tenant holder to the original grantor(reversion) or 3rd party (remainderman)
Legal Life Estate
Freehold estate created by state law and focus is defining and protecting the property rights of surviving family members upon death of husband or wife
Feetail estate
Freehold has been abolished in all states
Elective shares
Freehold legal life estate, state level statue a surviving spouse can make a min. claim to deceased spouses real or personal property
Industrial user concerns affecting demand
Functionality, avail. labor, compliance w/ Environmental regulations, zoning, health and safety of workers, access to suppliers and distribution channel
Bill informed landlord he will be moving in 30 days what action has Bill taken
Given notice
What kind of consideration can serve as nominal consideration in transferring a real property as a gift?
Good consideration
not valid consideration on a contract is
Good consideration because its questionable value
An owner sets a min. amount that they want to receive from sale and broker gets commission of any amount above the set min.
Net listing
Low initial payments which increase incrementally over time. Type of lease
Graduated Lease
Ideal for new business that have lower profits & anticipate profits for the future
Graduated lease
Erosion
Gradulal loss by flowing water or wind
With a Quitclaim Deed
Grantor warrants absolutely nothing/no covenants, not even claim to own property & most often used to clear up a Cloud
Residential leases are usually leases w/ exception that the tenant often pays utilities
Gross
requires landlord to pay the property operation expenses & tenant only pay rent
Gross lease
Concerns the land portion of a real property in exchange for rent. The owner grants the tenant a leasehold interest in land only
Ground lease or land lease
Covenant of Warranty Forever
Guarantees that the grantee will have title and possession of property free from acts or claims of 3rd party. Often considered part of Covenant of quiet enjoyment
General Warranty Deed
I own and will defend most common
Licensee Frank works for Broker Harry. Frank lists a home. Licensee Mary, who works for Broker Sam, sells Frank's listing. With whom does the seller have the agency agreement?
Harry
A property owner acquired a property by means of a dded that included a deed restriction against building any and of attached structure on the property. The owner wants to now build a small office/art studio in separate structure. What can owner do to overcome the restriction?
Have necessary parties execute a quitclaim deed
what state is the only state with statewide zoning regulations?
Hawaii
Why does a manager need to keep tenants happy?
High tenant turnover increases expenses and reduces profits.
James created his own will by writing it out on legal pad. What kind of will is this?
Holographic
A contract in which the seller finance she sale of real estate in periodic installments rather than financing through 3rd party
Home note
Adaptablility
How does item fit in the environment? Is legal test to is if item is a fixture
The overriding test of whether an item is a fixture or personal property is?
How it is described in a sale or lease contract
Method of annexation
How permanent is the method of attachment? Can the item be removed without causing damage to the surrounding property, or can any damage caused by the removal be easily repaired?
While the offering price stated in a contract is important to both buyer and seller what is equally important?
How the price will be handled
provision included in option
How to deliver notice of election, forfeiture terms, property/title condition warranties & how option consideration will be created
component of listing agreement
Identification of property, a promise of compensation, the specifics on the compensation & written document w/signatures of seller(s)
Indiana has reformed its law of land contracts where a buyer defaults after completing many payments
If a buyers equity in the property @ same time as default is "significant" as defined by law, the seller must institute formal foreclosure procedures & must compensate the buyer accumulated equity before repossessing
Forfeiture Clause in a Land Sale Contract
If a debtor misses a payment, the seller can cancel the contract, keep all the monies paid to date, and retake the property. These will be enforced, even though courts are hostile towards them. If seller chooses to enforce a forfeiture clause, the Seller is limited to that remedy and cannot also obtain damages or specific performance.
10 day notice to quit
If tenant refuses to give up possession & refuses to pay rent the landlord serves this
When property is held by joint tenants or tenants in common, all owner must sign the purchase and sales agreement
If the entire property is being sold
The primary criteria for distinguishing real from personal property
If the property is attached to the land or structure on the land
Physical Characteristics of Land
Immobility, Indestructibility, Uniqueness
physical characteristics of real property
Immobility, Indestructibility, Uniqueness
Land Characteristics
Immobility, Non-homogeneity, Indestructibility, Situs, Improvements, Fixed Investment, Scarcity
Is not technically a type of listing agreement
Net listing
The best way to obtain legal description?
In the deed where the grantor obtained title to property
In order to be in compliance with statute of frauds, a sales contract must be?
In writing
Board allows legal nonconforming use to continue for
Indefintely, until the structures are torn down, only while the same use continues or until property is sold
Is a commercial lease with rent based standard such as the consumer price or wholesale price index?
Index lease
Indiana views forfeiture as approbate if the vender has paid a minimal act on the contract a the time of default and seeks to retain possession while seller is paying taxes, insurance and other upkeep in order to preserve the premises. How does Indiana define "minimal amount"
Indiana does not define how to determine a minimal amount
Property that house production, manufacturing and distribution
Industrial
Constructive (Legal) Notice
Info one is legally responsible and could have found out by inquiring into public records
On an MLS listing form in what section would you find info regarding waterfront footage?
Site info
Atlas Films has rented a farm from Mr. Vem for a two-week film shoot. What type of agreement is used?
License
who has enacted certain protections for installment buyers because the recognized the unfairness of forfeiture clause.
Judges & legislators
If a licensee is found guilty of obtaining a real estate license under false pretenses the most likely penalty will be?
License revocation
You cannot knowing ly watch your neighbor construct a home that encroaches 10ft into your property line and then object only when construction nears completion because of
Lache
What kind of trust that can be used only with real property?
Land Trust
Real estate can be defined as
Land and everything permanently attached to it
Severable Rights
Land can be "laterally" severed into surface air and subsurface rights. Many states oil, gas and mineral rights are separate estates.
Legal concept of land
Land plus all man made structures permanently attached to the land including improvements like fence, street, buildings, sewers, sidewalks and piers
The solid waste disposal act regulates?
Landfills
Which is a legal principle that affects transfer of ownership to property by will
Law of Domicille
governs the making, interpretation & enforcement of leases
Laws of contracts
"Broker-lawyer accords"
Laws that define what type of contracts brokers and agents may pepare
A demising clause is found in a....
Lease
The contract that is necessary for the terms that will take place until option is exercised
Lease
Allows a tenant to buy the leased property from landlord under certain conditions
Lease option
Intend to buy the property but presently do not have funds to close
Lease purchase agreement
The tenants interest. in the leased property
Leasehold
is considered intangible personal property & is treated that way under the law is
Leasehold
what is a real estate activity that is directly linked to nations economy?
Leasing
The 2 types of notice in regard to title evidence are?
Legal and actual notice
Constructive notice is
Legal notice through recording a document
Legal Description is used to identify properties for?
Legal papers to identify properties on contracts, deeds and title insurance policies.
Describe Lien theory State?
Lender holds legal title, buyer gets equitable title
Lenders policy
Lender who hold mortgage on property will obtain protection worth the act of mortgage for the possibility the lenders lien can not be enforced.
Caveat emptor means
Let the buyer beware!
The dollar amount must be reasonable as to the damage caused in order to withstand reclaim by the defaulting party
Liquid damages
What info is submitted to MLS
Listing agent, office information, if property will be listed online/when address should be shown, property info,, school district, community info, driving direction, if sellers property disclose has been provided, potential financial terms, county where located, tax ID, street #/name/city/zipcode, selling office commission, listing & expire dates, occupant type (owner, presale, vacant etc), owners name/#, # to call for showing, land improvements, homeowner dues?
Not Assignable Contract
Listing agreement because its a personal agreement
Contract types
Listing contract, buyers agent contract, sakes contract, option contract, lease & property mgt contract
what best summarizes the critical skills in real estate brokerage
Listing, marketing, facilitating transactions and managing info.
What level of government is the affect of services on value is most apparent?
Local
a developer of subdivision must meet requirements and comply with zoning ordinances. what are the requirements?
Location, grading, alignment, surfacing, street width, highways, sewers, water mains, lot/block size, building/setback lines, public use dedications, utility easements, ground percolation, environmental impact report & zoned density
by local government is the most general and far reaching of influence on value
Long range planning
Types of Office Buildings
Low-rise, Mid-rise, High-rise, garden office, research/development
Master plan guidelines for accommodating demand
Make plans for expanding & contracting demands for services & infrastructure
Offshore waste dumping is regulated by
Marine protection research and sanctuaries act
If commercial real estate rental $ are falling in a market - it is likely?
Market is over supplied
The "price that a willing, informed, and unpressured seller and buyer agree upon for a property, assuming a case price and reasonable exposure of the property to the market" describes what concepts of value?
Market value
The equilibrium time lag
Markets strive for equilibrium but there is a lag of time reckoning imbalance and completion of market adjustment
to control and accommodate social and economic growth is the objective of?
Master plan
Growth pattern
Master plan defines what type of growth will occur and where
What plan sets specific guideline on how much growth the jurisdiction will allow?
Master plan growth
Using ambiguous terminology or language in the lease, option or purchase agreement that resembles another of the contracts tend to:
Muddy the waters if things go wrong
Comprehensive land use plans developed by?
Municipal, county and regional authorities
Where does a subdivision plat map go for approval and after approved?
Municipality for approval, after approval recorded in the county. where the land is located
Which Environmental Legislation created the requirements for Environmental impact survey on large development projects
Nation Environmental Policy Act
Unique appeal of Real Estate
No 2 are a like and no 2 have exactly same value
Recording System
No federal standards, each state prescribes procedures and requirements for recording in public title records.
If John intends to purchase Mary's property so he can operate prosititution business - will contract be valid? Why or Why not?
No, because it violates the validity requirement if lawful objective
Range
North/south area between consecutive meridians
Do you need to search public records to ascertain the status of title in a Torrens System?
Not necessary because it is all reflected on the title certificate
Recording
Not needed for deed to be valid but advisable to do.
type of lease termination by either party may terminate periodic leasehold or tenancy at will
Notice
Bargain and Sale Deed
Often have covenants against grantors acts, by which grantor warrants only what they have personally done nothing to harm title
Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?
Open
Non exclusive agency contract between buyer and broker
Open buyer agency agreement
a seller could sell the property themselves or a buyer could make a purchase themselves without paying commission
Open listing
The rights & liabilities of parties to a contract may be charge by the application of law
Operation of law
What is co-brokerage
Outside brokers acting as subagents assist a listing agent in procuring a customer.
Water rights include right to?
Own and use a body of water on the surface of the earth
What is OTP?
Owners title policy
Legal Classification of personal property
Ownership of anything that is not real estate and the rights associated
Which best describes ownership in severalty
Ownership of one property by one single person
Legal classification of Real property
Ownership of real estate and bundle of rights associated with with owning. All real estate in the Us is owned by someone, private or government entity.
Subsurface Rights
Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.
What is term for a contract that terminates when fully performed by parties?
Performance
Reasons for termination of contract
Performance, infeasibility, mutual agreement, cooling period(rescission), revocation, abandonment, lapse of time, invalidity of contract & operation of law
if title is by partnership for listing agreement
Person inserting from current owners might not know names of other partners.
2 types of easement in gross
Personal and commercial easement
Who is usually responsible fo site plans, subdivision plans, building permits and ruling
Planning commission
P.E.T.E
Police Power, Eminent Domain, Taxation, Escheat
PETE stands for
Police Power, Eminent Domain, Taxation, Escheat
Notorious possession
Possession without concealment
Which type of land contract is not covered under the provisions of Indian code?
Power of sale
Title (legal title)
Refers to the collection of rights that a person has in the ownership of real property
Goals of land use? (public and private control)
Preserve property values, promote highest & best use, balance individual property rights & public good (health, safety & welfare), control growth stay within infrastructure capabilities, incorporation of community consensus in regulatory & planning activities
What do property mangers do?
Preserves the value of the investment for owner while gearing income as an Agent for the owner
Quantifies value
Price is not value itself its the # that quantities value
How can you detect Formaldehyde & VOC's?
Professional testing
What professionals involved in real estate business are most concerned about managing real estate for clients?
Property managers
local government
Property taxes are governed by
intangible property
Property that cannot be seen or touched but exists only conceptually, such as corporate stocks.
tangible property
Property that has physical existence and can be distinguished by the senses of touch and sight.
conveys a leasehold interest to owner of a co-op rent is equal to owners shares of the periodic expense of entire co-op
Proprietary Lease
Statute of Frauds does what?
Protect consumers from fraud
For gross + Net lease
Prudent tenants & landlords look @ all expense obligations in relation to the level of rent to charge
Title Records
Public records of real property documenting the history of ownership, claims, ownership, conveyances, legal descriptions, and surveys.
Residential user concerns affecting demand
Quality of life, neighborhood quality, access and convenience to services and other facilities, dwelling amenities in relation to household size, cost and lifestyle
What type of deed is county treasures tax deed?
Quit claim deed
Suit to quiet the title also called?
Quitclaim
What can terminate a private deed restriction?
Quitclaim deed
What is the most significant investment the average consumer will make?
Real Estate
Farming in Real Estate
Real Estate professionals often specialize in one particular geographical area or property type
Is permanent fixture real or personal property?
Real property
Title to certain real property is being held in a trust as collateral for a loan. what kind of deed will trustee use to convey the title to the borrower when the loan terms are satisfied?
Reconveyance deed
Damaged parties can elect to use these legal remedies
Rescission, forfeiture, suit for damages, suit for specific performance
What are the supply units of property types?
Residential =dwelling units, Commercial or industrial =square feet and agricultural = acreage
What is the difference between a fee simple determinable estate and a fee simple condition subsequent estate
Reversion of ownership is automatic in the determinable estate
Bundle of rights include?
Right to possess, use, transfer, encumber and exclude
Benefits of interest associated with real property?
Right to sell, lease, encumber, use, enjoy, exclude, will, occupy, cultivate, exchange explore, license, dedicate and mortgage
The practice of leasing property rights other than the rights to exclusive occupancy & possession occurs most commonly
Rights lease
What is the most prevailing disadvantage of a land contract to the seller?
Risk of buyer default
What are the 3 kinds of maintenance a manger has to carry out for a managed property?
Routine, preventive and corrective
"carry over clause" is also called
Safety clause
The acronym SAFE stands for
Secure and Fair Enforcement mortgage licensing
mirror image
Seller agrees to an offer exactly as it was made signs with no changes
The are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation property B is said to be which in relation to property A?
Servient estate
The Resource Recovery Act Regulates?
Solid waste disposal
Title records of a property reveal several recorded liens: a one-year old judgment lien; a mechanic's lien dating from two years ago; a special assessment tax lien recorded last month; and a first mortgage lien recorded five years ago. In case of a foreclosure, which of these liens will be paid first?
Special assessment tax lien
The Legal description of a property is
Specific information surveyors use to locate property
Who regulates the handling of the security deposit
State law
Who enacts laws requiring all counties and municipalities to adopt a land use plan?
State legislation
What level of government enacts laws that control and restrict land use particularly from environmental perspective
State level legislation
Under laws of descent who gets property when its owner dies and no legal heirs are found?
State or county
All contracts to buy, sell exchange or lease interest in real property must be in writing to be enforceable because of
Statute of Frauds
What concerns enforceability not validity?
Statute of Frauds
What requires certain contracts to be writing to be enforceable?
Statute of Frauds
The enforcement of voidable contracts is limited by
Statute of Limitations
What is statute of frauds timeframe
Statute of limitations
What restricts the time period an injured party has the right to rescind or disaffirm the contract?
Statute of limitations
In a contract there is no override of interest
Straight
Riparian rights concern which?
Streams and rivers
Retail users concern affecting demand
Sufficient trade area population and income, trade completion, sales volume per square feet of rented area, consumer spending patterns and growth patterns in area.
Is an attempt to legally force defaulting party to comply with terms of contract
Suit for Specific Performance
This regulates addressed disposal of solid and toxic waste and measure for managing waste
Superfund Act
a contract to drain farmland that is subsequently designated as federally protected wetlands is now illegal. what happens to contract?
Supervening illegality because the contract is impossible to perform through no fault of either party & contract simply dies.
Economic Characteristics of real property
Supply & Demand, Scarcity, permanence of investment
legal concept of land
Surface of earth, everything beneath surface to center, all natural things permanently attached to earth, air above surface extends out to infinity
Demising Clause
Talks about the landlord leases the property & the tenant takes possession of the property
If prices are decreasing in a market, what does that indicate?
The demand is declining in relation to supply
Which is an important economic characteristics of real estate?
The demand must literally come to the supply
an important economic characteristic of real estate?
The demand must literally come to the supply
The period of time in which a tenant leases property owned by another in return for consideration
Tenancy
Which legislation holds current owners responsible for environmental violations committed by previous owners?
The Comprehensive Environmental Response compensation and Liability act (CERCIA,1980) and Superfund Amendment 1986
Are the agreements or promises of the contract
The Coventants or provisions in the lease
Planning commission manages?
The Master plan (comprehensive land use plan)
We orally agree that you will leave some personal property but we don not put it in the written contract. Court will not rule on issue because it wasn't written on contract. This is called
The Parol Evidence Rule
What guarantees the right of individual land owner ship?
The United States constitution
Alluvion
The actual soil, rock and other matter moved by flowing water result is Accretion
Farm area in Real Estate
The area the professional specialize in
A safety clause in a listing agreement contract means
The broker may claim Commission if the owner sells to a person the broker introduced to the property within a certain time after the listing expired
What is appropriate situation for forfeiture a land contract in Indiana
The buyer abandons and absconds the property
A buyer agrees to all terms of a sellers offer and sends notice of acceptance back to the seller. The seller now tells the buyer the deal is off because he has learned that the home was underpriced. What happens?
The buyer has a binding contract
In case where there is an extreme imbalance in the considerations exchange what could happen?
The contract could be invalidated as a violation of "good faith bargaining"
In a suit for damages by reason of default the damaged party may claim liquidated damages if?
The contract stated a specific act due to a damaged party
Which is the important result of National Environmental policy act of 1969?
The environmental protection Agency (EPA)was created
Which law or regulations prevent mortgage lenders from discriminating in extending credit to potential borrowers based on race, color, religion, national origin, sex, marital status, age and dependency on public assistance?
The equal credit opportunity act
What laws or rulings extended discrimination to include gender, handicapped status, and family status
The fair housing Amendments act of 1988
An owner of a lakefront property tells a fisherman that he cannot fish in a boat within fifty feet of the owner's shoreline. The fisherman protests that the owner cannot prevent him. why/why not?
The fisherman is correct because the water and the land underlying it are public property
The only clause that is actually required in a deed is?
The granting clause
a truth about Real estate investment
The greater the return, the greater the risk
accretion
The increase or addition of land by the deposit of soil by natural flow of water
In a condo who is responsible for maintaining the interval system of the individual unit?
The individual unit owner
Equitable title
The interest the buyer has in property between time of acceptance of contract and closing.
What makes the economy work
The interplay of supply and demand
An option to purchase expires. The landlord agrees to extend it in exchange for a higher price. The optionee claims he can exercise the option within the redemption period? What happens
The landlord is under no obligation since options do not have a redemption period
if John records the deed of conveyance he has imparted and bob has received what type of notice
legal notice
A principal discloses to the listing agent that she must sell a property within two months to avoid a financial problem. Nearly seven weeks later, a buyer's agent hears of the seller's difficulty from the listing agent and advises his buyer to submit an offer for 80% of the listing price. The buyer complies, and the seller accepts the offer. What happens?
The listing agent has violated fiduciary duties owed the client
Avulsion
The loss of land caused by a sudden or violent change in the course of a river, stream, or other body of water.
A homeowner has hired a contractor to build a room addition. The work has been completed and the contractor has been paid for all the work and material but tails to pay the lumber yard for a load of lumber. What potential problem may the home owner experience?
The lumber yard may place a mechanic's lien for the amount of lumber against the homeowners real property.
If there is a significant under supply of homes in the market construction will tend to increase example of?
The market tending toward Equilibrium
A buyer makes an offer with a 48hr expire time. 12hrs later, she changes her mind and informs seller that the offer is withdrawn? What is the status of the offer?
The offer is extinguished along with sellers right to accept it.
A offer can be terminated if
The offeror withdraws the offer after it has been accepted
A tenant has a option-to-purchase agreement with the landlord that expires on June30th. On July 1, the tenant frantically calls landlord to exercise the option, offering the apology that she was busy with a death in the family. What happens
The option is expired, and the tenant has no rightful claim to money paid for the option.
Master Plan
The overall guideline for creating and enforcing zone building codes and development requirement.
Market value of land
The price a buyer will be willing to pay
Who owns the property in a time-share estate?
The property is owned by tenants in common or by a freehold owner who leases on a time-share basis.
What distinguishes a pur autre vie life estate from an ordinary life estate?
The pur autre vie estate endures only for the lifetime of a person other than the grantee
is a model law enacted as a blueprint for state laws to regulate leasing & management practices of landlords with residential properties
URLTA
Curtesy rights
The right of a husband to a share of his wife's real estate upon her death.
dower rights
The right of a married woman to one-third of her husband's property in the event that he died before she did.
An owner completes a contract to sell her property. Before closing, the seller runs into financial trouble and assigns the contract to her mortgagor. What happens?
The sale contract remains valid
What circumstance would a buyer most likely sue for specific performance
The seller backed out of the original sales contract
Licensee Jones is in the process of closing on a sale. However, the property title has been found to have uncorrectable defects. What is the result regarding Jones compensation?
The seller is still liable for Jones compensation
Under the laws of descent, who gets a property when its owner dies without a will and no legal heirs can be found?
The state/county
What happens to the listing agreement when brokers firm goes out of business?
The states real estate licensing agency assign a temporary broker
the tenant exercises an option to buy a condo. The landlord agrees, but raises the agreed price by $3,000, claiming financial distress. The landlord does, however, offer the tenant two months of free rent before closing as an offset. What happens
The tenant can force the sale at the original terms
Describe a gross lease
The tenant pays a fixed rent and the landlord pays all operating expenses
what is true with respect to real property taxation by the federal government
There are no federal ad valorem taxes on real property
Why are volatile organic compounds (VOCs) considered an environmental hazard?
They emit toxic fumes
When an amendment is made to a listing agreement what happens to terms of original agreement?
They stay the same
An important effect of which law is that it prompted legislation at the state level that empowered the courts to nullify residential leases that violated this law's guidelines
URLTA
residential property does not include
motels
Indiana real estate commission are in of Indiana admin. code
Title 876
Torrens System
Title passes only when the conveyance has been duly registered on the title certificate itself.
Abstractor
Title searcher
Buyer sue hires Broker Tom to find a property for her to purchase and agree to pay Tom a Commission. Tom will be entitled to collect the Commission unless
Tom does not perform according to terms of the agreement
Things that geo influence on development
Topography, elevation & site visibility/view
4 principal forms of evidence the owner can use to support these assurances are?
Torren's certificate (best evidence), Title insurance policy, an attorneys opinion of the title abstract & title certificate
Alienation
Transfer of title to real estate either voluntary or involuntary
Are real Estate business is done under the authority of a real estate broker
True
Is surface water rights included in surface rights?
True
True or false - Local planners do not have unlimited authority to whatever
True
a listing agreement can only be modified if all parties agree? T or F
True
Who are the essential parties involved in an estate in trust?
Trustor, trustee and beneficiary
What laws or regulations require mortgage lenders to disclose financing costs and annual percentage rate to a borrower before funding a loan?
Truth-in-Lending laws
Disclosure of estimated closing costs is required of a lender in order to comply with
Truth-in-lending laws
What best describes the relationship between price & value?
Value is based on the interaction of under lying economic factors. Price is a quantification of value in a transaction
Title Evidence
Value of property is only as good as the Marketablilty of its title
groundwater rights
Water under the earth's surface below the saturation point and used by a property owner through the rule of capture.
Intent of parties (Legal test if item is a fixture)
What do buyer and sellers agree upon?
When does equitable conversion give the contract buyer a real property interest
When contract is signed
When does cost essentially equal price?
When the producer adds a required profit
If a licensee knows a negative material fact about a clients property that the lien has not disclosed the license must
disclose the info to others
used to Documentary stamps are
document the payment of a transfer tax
Real estate includes such things as?
fence, sidewalks, piers on a parcel of land
Property managers have a. relationship with the property owner.
fiduciary
Zoning ordinances must
be clear in import and apply to all parties equally, promote health safety & welfare of the community in a reasonable manner
The grantor of a deed must?
be clearly designated
To avoid problems a statement of a contingency should not
be excessive in duration
A Real Estate Broker
Which would not usually be a source of financing in real estate
If you receive a notarized general warranty deed from someone who does not own the property?
You received and own nothing but can sue for fraud
What implements the Master plan by regulating density, land use intensity, aesthetics and higher/best use?
Zoning ordinance
Liquid damages
contract remedy by which non defaulting party may retain some money or fees as the whole compensation for other's party breach.
transfer of real estate is also called
alienation
What is required for statute of frauds
all contracts must be in writing to be enforceable & all leases more than a year.
Title insurer pays
all costs associated with defense against title challenges and if unsuccessful must also pay for any reduction in value as a result.
What land system is used in the US
allodial system
Buyers and sellers rely on escrow accounts in order to
allow a third party fiduciary to handle the funds
most common remedy if a buyer defaults on a land contract
allow the seller to terminate the land contract upon buyer default
"rule of capture"
allows a property owner to pump a regulate art of water
Zoning variance
allows a use that differs from the applicable ordinance for a variety of justifiable reasons
Building codes
allows county and municipality to protect the public against hazards of unregulated construction. Establish standards for every aspect of the construction project
If change is material & intentional most likely fraudulent innocent party may rescind without penalty is called
alteration
Demand in market dynamics?
amount of property buyers or tenants wish to purchase, lease or trade.
What is the best definition of price in real estate?
amount the buyer and seller agree to exchange
What document is summited to the MLS when a listing agreement is signed
an MLS listing form
If a life tenant damages or misuses the property it is known as
an act of waste
The closing of a land contract typically does not require an appraisal this could be considered
an advantage to seller
Land contracts are
an alternative to 3rd party financing, advantage to both parties, and bilateral contract
codicil
an amendment to a will
The difference between a balloon loan and an amortized loan is
an amortized loan is paid off over the loan period
opinion of title
an attorney can provide stating that the title meets all ownership needs and has no question in its history
In what kind of easement is there a dominant tenement and a servant tenement?
an easement appurtenant
Neighbor Fred built a retaining wall that was 2 feet outside his property line. What has Fred created?
an encroachment
A road easement is a example of?
an encumbrance
An interest in real estate that does not include the right to posses is considered?
an encumbrance
Lache
an equitable doctrine that prevents claiming rights or benefits because you delayed too long making claim
Lache
an equitable doctrine that prevents claiming rights or benefits because you delayed too long making the claim
what kind of interest does a linear usually have in a liened property
an equitable interest except in a mortgage liner in a title theory state
Illiquidity
an inability to convert assets into cash quickly
A new widget company moves into town & hires 2,000 employees. given that this company sells its products world wide, what would you expect?
an increase in demand for all types of real estate
abstract of title
an instrument that records the history of the property
A court might grant an easement by prescription if?
an intruder has been using an owners property for a certain period with or without the owners knowledge
What is the difference between an offer and contract?
an offer is a promise by one party based on performance of the other party and becomes an actual contract after it is accepted and the other party has been notified of acceptance
A good example of a unilateral contract is
an option to purchase
In addition to title loss coverage under a lender or owner police, a title insurer must also pay for any and all cost associated with?
any defense against title challenges
What types of land contract is not recognized by Indiana Law when not in writing?
any when not in writing
When they talk about the entire listing agreement contract they mean
anything not written in the agreement is not part of the agreement
Sufficient Consideration
anything of value; it does not have to be money; it can be a benefit conferred or a promise. In a bilateral contract, the promises are often the consideration. Every executory contract requires consideration.
The rights, duties and liabilities of the landlord and manager are
apportioned under the terms of the management contract
Conversion is the act of
appropriating client or customer deposits for use in the agency's business.
Planning commission responsible for?
approving site/subdivision plans, building permits and ruling on zoning issues
Building codes address?
architectural/engineering standards, construction material, standards, building support systems and utility system
Who are Property mangers?
are brokers who, under the law, perform duties and services on behalf of the owner
Most common use of police power?
are county and municipal zoning
Real Estate Contract
are legal agreements that underlie the transfer & financing of real property
Real estate contracts
are legal agreements that underlie the transfer & financing of real property
Real estate contracts
are legal agreements that underline the transfer & financing of real estate.
Mortgage contracts & promissory agreements
are part of the financing real estate
Restrictive Covenants
are promises by those who purchase property in subdivision to limit use of their property to comply with the requirements.
Sales/lease contracts & option agreements
are used to transfer real estate. interest from one party to another
Threats to air quality
asbestos, carbon monoxide, formaldehyde, lead, mold & radon
An agent's performance of due diligence concerning a listing can best be described as
ascertaining the facts about the client and the property at the onset of the listing period.
How can a realtor check who owns property to sign on the listing agreement?
ask seller for deed or other documents, check w/title company where property is located or call county tax office to check records
In real estate a seller may their role in contract to a 3rd party who would be obligated to perform by selling the property at price & term specified
assign
A lease involves the original tenant giving over entire leasehold interest in property to new tenant while remaining responsible for rent in case of default
assignments
The warrant of a seizen in a deed
assures grantor owns estate to be conveyed and has the right to
Warrant of further assistance
assures the grantee will not be distrurbed by 3rd party title dispute
Warrant forever or warranty of title
assures the grantee will receive good title - grantor will assist in defending any claims to the contrary
Certificate of title?
attorney issues which indicates all problems are cleared title co. can issue insurance
Special exception grant
authorizes a use that is not consistent with zoning ordinance in a literal sense - is clearly beneficial or essential to public welfare & does not martially impair other use in the zone.
Scarcity element of value
availability in relation to demand
factors that influence supply in market dynamics?
availability of skilled labor, construction loans/financing, land and materials. also influenced by investment returns, community master plan, government police powers and regulation.
in obtaining offers from a buyer, an agent must be careful to
avoid disclosing what price the owner will accept
URLTA attempts to
balance landlords right to access w/tenants right of quiet enjoyment & to establish equitable procedures for dealing with lease defaults
Authorities conduct comprehensive land use planning in order to
balance public interest with individual property rights
Contract terminations by operation of law are
bankruptcy, foreclosure, supervening illegality, passage of time, late, death or incapacity
Tenants obligation imposed by URLTA
bargain in good faith, maintain the condition of leased premises, abide by legitimate rules/regulations of the building, refrain from abusing or causing destruction to property, limit use to those approved & avoid unduly disturbing other tenants
Landlord obligation imposed by URLTA
bargain in good faith, provide required maintenance, make repairs, comply w/local building codes, provide access/safety services, & provide procedures for delivery of official notice
The foremost factor contributing to commercial and residential demand in a market is
base employment
The foremost factor contributing to commercial and residential demand in a market?
base employment
Exculputory Clause
basically waives the rights to hold the landlord liable for property damage & personal injury. Many states have outlawed this clause
Agents should for their protection about hazards
be aware of potential hazards, disclose known material facts, distribute the HUD booklet & know where to seek professionals for help.
Identification for a listing agreement
best way is legal description, street address is often used but should be supported by legal address (attach to agreement)
exclusive listing is bilateral or unilateral contract?
bilateral
Exercise of the option create a/an where both parties are bound to perform
bilateral sales contract
Exercise of the option creates a/an where both parties are bond to perform
bilateral sales contract
Valid contract legal effect
binding & enforceable on all parties
An agent informs owners in an area that a decline in property values over the past five years is due to an influx of minority families. He suffuse that the trend will continue, and advises them to sell before it is too late. The agent is probably guilty of?
blockbusting
Zoning Board of Adjustment (zoning appeals board)
board rules on interpretations of zoning ordinances by property owners (they are the court of appeals for owners and developers who want to use land in a manner that doesn't go with the existing ordinances.
One similarity between a general partnership and a limited partnership is that
both may broker real estate if properly licensed
To record a lease who needs to sign the lease
both parties
Bilateral contract
both parties promise to perform their respective parts of the agreement
This is the primary thrust of federal involvement in real estate law?
broad regulation of usage
puffing
broker goes too far in describing a property the write up on property provides info that is subjective opinion
Which is not regulate by state government? RE Licensing, Deed recording, business permits or estate taxes?
business permits
Public records protect the by revealing whether a property has a marketable title.
buyer
wrap around land contract
buyer makes payment to seller who then pays the underlying mortgage lender. if payment is higher than mortgage payment seller keeps the difference
Straight land contract
buyer pays existing lender directly & makes another payment to seller or buyer can send one payment to seller who disburse payment to existing loan. no override of interest
What is likely to increase risk of buyer default
buyer poor credit history
Purchase agreement?
buyer promises to buy, seller promises to convey title by deed or assignment lease (for a leasehold property) , and stipulated price and terms
The concept known as substitution states that
buyers will not pay more for a certain house than they would for another, similar house.
Title affected by minor cloud bay be corrected
by quitclaim deed from previous owners to the grantor
Example of rapid growth?
can outpace the support capability of basic municipal serves.
Doctrine of Estoppel
can prevent an owner from reclaiming a property transferred under false pretenses
tips for seller of land contract
check buyers credit report, require title insurance, require buyers to obtain homeowners insurance (bother seller & buyer name on policy), hire a disbursement co. to handle contract, seller can ask the buyer to pay property tax directly to seller or disbursement co., include a "acceleration Clause", include clause prevent buyer from assignment, consult a real estate attorney
Unclear of names of all the sellers are that need to sign listing agreement
check where the title is held
in the event of a buyer's default, a provision for liquidated damages in a sale contract enables a seller to
claim the deposit as relief for the buyers failure to perform
To demonstrate marketable title to a buyer seller must show that the title is free of
claims that could affect the value
to demonstrate marketable title to a buyer a seller must show that the title is free of
claims that could affect the value
Aleatory contract
classification of a contract that effects are triggered by the occurrence of a chance event
Flex Space
classified as industrial as anything between offices and warehouse usually combine of both.25% office 75% warehouse 1-2 story
In which contract provision would the length of the lease be outlined
clear statement of terms
2 items that will cause a suit to quiet the title are?
color of title and break in chains
Radon
colorless, orderless, radioattive gas that occurs naturally in soil.
option fee
compensate the landlord for keeping property off the market during option & improve cash flow
assingment
competant parties to a contract may assign their contractual rights & obligations to someone else.
What must a contract meet to be valid?
competent parties mutual agreement, lawful objective, consideration and in writing
Valid contract must meet all criteria
competent parties, mutual consent, valuable consideration, legal purpose/lawful objective & voluntary act of good faith.
Suit for Specific Performance
competes the defaulting party to perform the contract obligation that was breached
In eliciting an offer from a buyer, an owner's agent must be careful to
complete any offer the buyer might decide to make
Licensing process requirement in the SAFE act
completing 20 hr education, passing the associated exam, obtaining a unique identifier for a national database of mortgage loan originators
What reason is a zoning variance allowed?
compliance will cause unreasonable hardship, use will not change the essential character of the area, use does not conflict with the general intent of the ordinance
To receive a building permit the project must?
comply with all relevant ordinances and codes
While a property is under a contract for deed, the seller, or vendor, mortgages her equity in the property, and has a separate judgment lien placed on the property. Faced with financial loss, the vendor assigns the contract to another party, then leaves town. What can the vendee do in this case?
comply with the contract and take legal title when its terms are fulfilled.
Once a resolution of necessity is adopted from a formal hearing where owner voice an opinion then the government agency may commence a in court
condemnation suit
What is a fact about home warranties that an agent should be sure a client knows
conditions that pre-existed the coverage date of the warranty will not be covered
What must a title company do before issuing a title insurance policy?
conducts a title search to uncover defects in the title, or unrecorded breaks in the chain of title
Illegal nonconforming use
conflicts with ordinances that were in place before the use commenced
In an instance where the landlords negligence or disruptive action has rendered the property unoccupiable a tenant may vacate the premise and declare the lease is cancelled by default. this action is called
constructive eviction
A person has occupied a property for seven years, and no one has ever attempted to evict her or co-occupy the parcel. In this case, the person might base a claim of legal ownership on
constructive notice of possession
A contract that conveys an interest in real estate must
contain a legal description of the property
A contract that conveys an interest in Real estate must
contain legal description of the property
Title records ( public records)
contains a history of every parcel of real estate in the county including names of previous owners, liens, easements & other encumbrances that is recorded
In absence of justifiable grounds, may not relieve the revoking party of
contract obligations
A loan assumption is generally accomplished by a
contract of Novation
when transfer uses a written instrument it is called
conveyance
A statutory amount of time after entering into a contract or to rescind the contract without cause
cooling period
Which factor has a heavy influence on the status of the market in a specific area?
cost of financing
which factors has a heavy influence on the status of the market
cost of financing
two important concerns of office property users are
cost of occupancy and building efficiency
The level of government that actual levies real estate taxes?
county and local
The major source of real estate law are legislation at federal, state and local level and?
court decisions
Where would one find info based on constructive notice?
court house records
A deed restriction or declaration of restriction may be enforced by means of a
court injunction
Why are land contracts usually not subject to mortgage laws
courts generally do not view land contracts as functionally equivalent to mortgages
If no rent amount is stated in lease contract
courts will assume it to be a fair amount based on market value at the time the contract began
Deed restrictions also called?
covenants, conditions, restrictions (CCR's)
A special tax district might be created to
create a two-mile extension of county sewer facilities
Creating a contract in good faith means?
created as a free and voluntary act
Easement by Grant
created with the express written agreement of the property owner in conveying land by deed
Responsible parties who may not be held liable by CERCLA
current owner of site where hazards were disposed prior to ownership
Rescission (legal remedy)
damaged party from a breach of contract may rescind the contract. This cancels the contract returns parties to their pre contract condition including refunding any money already transferred
Forfeiture (legal remedy)
damaged party from a breach of contract remedy. It requires the breaching party to give up something, according to the terms of the contract
Suit for damages
damaged party from breach legal remedies 2 types Liquid damages & compensatory damages
other elements of a deed not required
date, exceptions/restrictions, warranties/covenants, acknowledgement & recording
What situation might impact a listing agreement
death of broker
Circumstance that can affect the listing agreement
death of broker, brokerage goes out of business, broker loses license & agent transfer to a different firm
Personal service contracts like real estate listing contracts are discharged if
death of one of the parties
An agency relationship may be involuntarily terminated for what reason?
death or incapacity of the agent
2 documents that create a condo are?
declaration and master dee
What document shows legal alienation of a property?
deed
Most common reason for suit for specific performance
defaulting sales or lease contracts where buyer or seller wants the court to compel the defaulting party to go through with the transaction even when defaulter would prefer to pay a damage award
Deed conditions create estate
defeasible fee
what is "color of title"
defective title or title received by defective means
While all parties have the power to revoke they may not have the
defensible right
proper notice is
defined by state law
Contracts may be classified according to
degree of explicitness
Counties and municipalities have the legal right to control land use due to
delegation of authority by state level enabling acts
A basic responsibility of a landlord is to
deliver a habitable property.
Economic factors that drive value
demand, utility, scarcity, transferability & situs
Federal government related agencies that affect how real estate markets operate don not include
department of consumer affairs
A broker responsible for handling a trust account is violating the law by?
depositing an earnest money check in a personal account
Habendum Clause
describes the type of estate being conveyed
four principals determinants of value underlying the price for a product are
desire, utility, scarcity, and purchasing power
a property transferred by a will is called
devise
Adhesion contract
dictated by the party who has the greater bargaining advantage
Actual notice is
direct knowledge
The Americans with disabilities Act requires property managers to
ensure that disabled employees have the same level of access to facilities that all employees have
The purpose of a recovery fund is to
ensure that judgments against licensees will be collectible.
Industrial zoning regulates
environmental consequences
URLTA aims to
equalize/standardize rights of landlord/tenant, protect tenants from unethical practices & prevent unfair/complex leases/their enforceability
if option contract is recorded the optionee creates in the property
equitable interest
the optionee enjoys in the property because the option creates the right to obtain legal title
equitable interest
Because the option creates the right to obtain legal title, the optionee has
equitable interest in the property
In a contract or a contract for deed, seller keeps legal title until final closing buyer receives?
equitable title
which is a role of the federal government in land use regulations
establish broad standards usage
What is the state government role in land use regulations?
establishment real estate license laws
Abstract
evidence of title - History
Since the value of a property is one as good as its marketability of its title, the is a significant issue.
evidence supporting the status of the title
In fulfilling a listing agreement one of the major risk areas is
exceeding the authority of the agreement
The purpose of the closing event is to
exchange legal title for the sale price.
3 types of buyer agency agreements
exclusive buyer agency, exclusive agency buyer agency & open buyer agency agreements
The listing type that assures a broker that they will receive compensation no matter who procures the buyer is what type of agreement?
exclusive right to sell
most widely used listing agreement
exclusive right to sell
a completed & expired lease contract is executed or executory contract?
executed
How is the Master plan (comprehensive land use plan) enforced?
exercising its power to establish zones, controlling building permits and create building codes.
In the course of planning for land use, the planning personnel analyze
existing land use
a loyal government could stimulate the real estate market by
expanding the sewer system
removal of asbestos can be
expensive and very dangerous
degree of explicitness
express or implied in a contract
Revocation
extinguishes the offer & offer's right to accept
Even after giving buyer and seller the required information about property condition disclosures, the licensee may still be subject to legal action for
failing to disclose known adverse facts
Most common form of default by landlord
failure to provide services & maintain property conditions
The most common form of landlord default
failure to provide services and maintain the property
An agent owes customers several duties. These may be best described as
fairness, care and honesty
the idea land is scarce
falls under economic characteristics of real property
Physical influence deriving from the property itself would include?
feature of the site
If you receive a quitclaim deed from someone who owns property fee simple you will own
fee simple
Of 2 kinds of simple estate, the kind that is a perpetual estate with no usage restriction?
fee simple absolute
If buyers return possession of premises after defaulting on a land contract. Seller needs to
file a quiet title action to remove buyers interest as a cloud on the title of legal owner
Private use restriction can be enforced by
filing for a court injunction.
One of the property mangers fundamental responsibilities is
financial reporting to the principal
Alterations to a rental property come a/an of the property and therefore becomes the possession of the landlord
fixture
"payment terms addendum
for financing sellers agree to finance part or all of the sale for the buyer they need terms, rate & payments outlined in a separate addendum.
Indiana courts typically require rather than as a means of protecting a buyer with substantial equity in a property
foreclosure & forfeiture
a buyer who defaults on sales contract may the earnest money deposit because of forfeiture
forfeit
The clause that provides that the option is entitled to the consideration if the option terms expire all under what terms
forfeiture
parties must create the contract in good faith as a
free & voluntary act
A warehouse building lacks sufficient ceiling height for the operation of modern forklifts. This is an example of
functional obsolescence
Subzones
further stipulate the types of residence allowed (single family, multi complex, condo ect.)
How does a lease option to buy help a tenant
gains access to property, re establish credit, prepays part of down payment, all while testing out house & neighborhood before purchasing
How to lessen exposure of radon in new construction
gas permeable layer under slab, plastic sheeting, sealing/caulking, vent pipe, electrical junction box for fan.
Property mangers are usually considered to be?
general agents empowered to perform a wide range of duties for the landlord.
A court renders a judgment which authors a lien to be placed against the defendants house, care and personal belongings this is an example of a
general judgment lien
what type of deed warrants the title against any defects arising during and before grantor ownership of property
general warranty
what type of deeds, which provides the grantee with the best assurance of title
general warranty
the type of deed that offers the grantee the fullest protection against claims to the title is the
general warranty deed
which is true of a nuncupative will
generally, it is not valid for the transfer of real property
What is the most important issue for a broker acting as property manger to accomplish?
get the max income while preserving the value of the investment
Equitable conversion
gives the buyer real property interest, seller holds legal title in a trust and buyer holds equitable title until completely paid then gets legal title
A business owner insists on a price for his enterprise that exceeds the value of the tangible assets, claiming that it is a well-known family business with a loyal clientele. The excess value is known as
goodwill
Who can acquire property through eminent domain?
government entities
Under the illogical system private ownership is subject to
government interference called PETE
full service lease
gross lease
In which type of lease does the owner of an improved property wish to sell an interest in the improvement while reading ownership of the underlying land
ground lease
State laws based on URLTA exceptions are
ground lease involving farmland or mobile home lots, transient occupancies (like hotel), tenancy involving the owners staff, occupancy of college dorms, hospitals, mental institutions etc., proprietary leases in co-ops & occupancy in a residence that is under a contract for deed
A safety clause in a listing agreement
guarantees that the broker will be paid under certain circumstances even if the listing agreement expires before the property is sold.
Covenant of Seisin
guarantees that the grantor owns the property and has the right to transfer ownership
Covenant against encumbrances
guarantees that there are no monetary claims against the property except as mentioned in the deed.
What type of lease doesn't normally last beyond the lease term
lease option
An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. In this case, the agent
has an exposure to a charge of negligent misrepresentation
A construction boom in a market is a indication that prices?
have been increasing
a construction boom in a market is an indication that prices
have been increasing
Leased purchase agreements are NOT suitable for tenants who?
have funds to purchase the premises
Value of real estate
heavily influenced by changes in surrounding areas. also influence by economic obsolescence
A lessor requiring a security deposit as a condition of a lease
helps the landlord restore the premises in case of damages and/or prepare it for the next lease
most susceptible to mold
highly sealed structure with inadequate ventilation
As part of the duties included in the listing agreement the seller does not agree to
hold the broker responsible for any claims resulting from the information given to or withheld from broker
Major forms of legal life estate
homestead, Dowery or curtesy and elective share
which would be considered tangible real property
house
Amortization
how long the land contract is scheduled to run
Things to consider for a lease
how rent is collected/assessed, nature of the leased premises or rights & how property will be used
An owner obtains a loan and gives the mortgagee a mortgage on the property as collateral. The mortgagor/owner retains title to the property, and the mortgagee records a lien. This is an example of
hypothecation
a homeowner borrowers money from a lender and gives the lender a mortgage on the property as collateral for the loan. The homeowner retains title to the property. This is example of
hypothecation
Metes and Bounds
identifies the boundaries of a parcel of real estate using reference points, distance & angles
Indiana code does not require that deeds being recorded include
identity of liens
Constructive Eviction
if landlord fails to perform duties and tenant refuses to pay rent and abandons premise due to the breach of contract
Binder or commitment to insure
if search fails to discover any uninsurable defects it recapitulates property description, interest to be insured, Maes of insured and exceptions
As a component of real estate value, the principle of substitution suggest that
if two similar properties are for sale, a buyer will purchase the cheaper of the two
with a quitclaim deed, a false statement
if you receive a quitclaim deed from someone who owns the property in fee simple, you have no warranty to backup your claim of ownership
A homeowner in a residential zone converts her residence to rental offices. Is it illegal nonconforming use or legal conforming use?
illegal nonconforming use
investors usually invest for the long term since real estate suffer from
illiquidity
Air Rights
imaginary vertical lines extended to infinity
the physical characteristics of real property includes
immobility
How to identify potential geographic hazards?
impact surveys on large developments projects
A contract is an unstated or unintentional agreement that may be deemed to exist when the actions of any of he parties suggests existence of an agreement.
implied
The role of local tax districts is to
impose property taxes for specific municipal services.
Building permits are issued to someone that wants to?
improve, repair, or refurbish property
Patent Defect
in a title is one that is obvious and can be seen by a knowledgeable person
Compensation Clause
in all listing agreements addresses the specifics on commission like how much, how it will be paid and requirements to get commission
The main difference of leased option & leased purchase agreement?
in contracts with a lease option clause the sale of the premises is 2nd to the rental agreement
An option does not
in itself convey an interest in real property
latent defect
in title is one that is not obvious and could not be identified by knowledgable person. ex. forged deed
What makes option to buy valid & enforceable
include name of option, actual non-refundable consideration, price/terms of sale, expire date, in writing, legal description, & meet general valid contract requirements
a standard coverage title insurance policy protects against?
incompetent grantors
What type of lease is suitable for tenants who need to use the premises until they can purchase them
lease purchase agreement
The primary role of the Federal Housing Authority in the mortgage lending market is to
insure loans made by approved lenders
Why are insurance policies called "aleatory" contracts?
insurer performs the promised action only if a specified chance event occurs.
A homeowners occupancy in exchange for rent is example of
intangible value
Zoning Ordinance
intent is to specify land usage for every parcel w/in the jurisdiction.
market economy
interaction between supply, demand and price
Encumbrances and police powers are
interests that do not include possession
person without a will is said to be
intestate
A contingency that is too broad,vague or excessive in duration may
invalidate the entire contract on grounds of insufficiency of mutual agreement
Adverse Possession
involuntary alienation use of another's property without consent of the owner or where the owner took no action to evict the adverse possessor
Abandoment
involuntary alienation where property has been abandoned for a statutory period may also escheat to state or county
a patent defect
is a defect in title that is obvious and can be seen by a knowledgeable person
Breach of contract
is a failure to perform according to terms of the agreement. It terminates the party rights but not obligations
Listing agreement
is a legally binding contract that creates an agency relationship authorizing a broker to serve as agent for principal in real estate transaction
A growth strategy?
is a policy position that limits building permits and development progress to desired growth
price
is a reflection of the total of all value factors at anytime - changes in underlying factors of value will trigger changes in price
option
is a unilateral agreement that creates the right to option for legal title
Public acquisitions and ownership
is a voluntary transaction between government entity and private owner
Agents role
is affiliated licensee who will be taking the listing and filling out the forms
Contract
is an agreement between 2 or more parties who in a "meeting of the minds" have pledged to perform or refrain from performing some act
Implied contract
is an unstated or unintentional agreement that may be deemed to exist when the action of any parties suggest the existence of an agreement
Industrial or complex
is land used for industrial purpose like warehouse, factories or distribution
Highest and best use of a property is that use which
is physically and financially feasible, legal, and the most productive.
The guardian for a mentally incompetent party enters into an oral contract with another part to buy a trade fixture. This contract?
is possibly valid and enforceable
Market equilibrium
is supply = demand and price, cost and value are identical
Rescission
is the act of nullifying a contract
Supply in market place dynamics
is the amount of properties available for sale or lease at any given time in any price range
Base Parallel or Base Line
is the designated line for identifying townships
title search
is the detailed examination of the public records concerning a specific piece of real estate within a specific time frame.
Purpose of Declaration restrictions
is to preserve the value and quality of the neighborhood, commercial center or industrial park.
Net listing creates a conflict of interest form broker because
it essentially violates the brokers fiduciary responsibility of putting clients interest above their own.
a distinctive feature of a promissory note is that
it is a negotiable instrument
An important characteristic of a promissory note is that
it is assignable
A contract may be defensibly terminated without damages if
it is impossible to perform
When a tenant in common dies, what happens to the tenant's interest in the estate?
it passes by probate to the deceased tenant's heirs
Quitclaim?
lawyer files in court
A vague lease term can
lead to a dispute about the duration of a tenants possession rights
Lease vs lease option
lease a legal contract & instrument of conveyance which transfer to tenant a leasehold fee for certain duration - Lease option @ end of lease tenant has option to buy
3 distinct & separate contracts in a lease option
lease agreement, option contract & purchase agreement
a person who possesses the complete bundle of rights to a property owns?
legal title
State of real estate professionals such as brokers and appraisers constrains entry into deception and sets standards.
licensing
which is false about liens
liens never convey ownership
Deed restrictions are created as a form of _______________________________ over land use.
limits
What is used to establish client relationships & provide compensation
listing & representation contracts
HUD Indiana rights, laws & protection
little had changed until 2002 law amended tenant/landlord relationship seeking better housing conditions for tenants
Owner of properties abutting a navigable non moving body of water enjoy but do not own water or land beneath
littoral right to use
Zoning and building codes fall under
local government
What level of government controls land use through authority known as police power?
local level (county or city government)
owners hire brokers and promises to pay a commission in exchange for brokers promise to
locate a "ready, willing & able" buyer or tenant for owner
The purpose of a formal legal description of a property is to
locate and identify the property reliably
Planning departments are responsible for
long term implementation of the Master plan, creating rules/restriction that support plans/policies & enforcing/administering land use regulation on everyday basis
If there is a significant undersupply of homes in a market, construction will tend to increase. This is an example of
marke tending toward equilibrium
market principle
market demand moves to meet supply and supply moves to meet demand.
types of parties to the purchase/sales agreement
married couple, joint tenants or tenants in common, by businesses & an estate or trust
A factor that does not challenge a contracts validity
material fact
URLTA requires leases to be clear about
max deposit amt, the tenants right to earn interest in deposit, commingling deposit or advance with other monies, deadline for returning deposits & procedures & criteria for return of deposit to tenant
Real estate contracts that are not personal service contracts
may be assigned
To be valid a listing agreement
may be oral or written
When the terms of the mortgage loan are satisfied, the mortgagee
may be required to execute a release of mortgage documents
If defaulting buyer of a land contract will not voluntarily relinquish possession a seller
may file an action for ejectment only after notice of intent of termination was ignored
An agent is operating as a disclosed dual agent on a transaction. In this case, the agent
may not represent one party's interests to the detriment of the other.
the term "realtor"
may only be used by members belonging to the National Association of REALTORS®.
situs
meaning site and the unique attractiveness of property location is a major determinant of other economy characteristics
"Sever"
means to cut off
All contracts to buy, sell, exchange or lease interest in real property other than 1 yr lease must?
meet the statute of fraud
construction of septic tank
min. water depth in any compartment 30", max water depth for calculating septic tank capacity shall not exceed 6 1/2 feet, the intake waffle or sanitary shall extend @ least 8" below liquid level, @ least tip of the inlet sewer, @ least one opining 18" in min. per compartment, access opening shall be located over each, inlet, outlet or sanitary tie/baffle
land
minerals below earth, water on or below and air above.
Contract Classified according to?
mode of expression, degree of explicitness, degree of commitment & state of fullfillment
An agent does not like a particular minority buyer, and is very short with the person, refusing to engage in lengthy conversation or show him any properties. A second minority party visits the office the next day. The agent is very forthcoming, and shows the person five prospective properties. This agent could be liable for
providing unequal services
An agent spends two hours with a minority buyer, then shows the buyer five available properties all over town. Later, a similarly qualified minority couple enter the office. The agent spends twenty minutes with the couple, gives them the MLS book to review, and encourages them to drive by the listings on their way home. If they like anything, they should come back the next day to discuss terms. This agent could be liable for
providing unequal services
appeal for a zoning amendment is a difficult process that often involves?
pubic hearings
The parts of the Americans with Disabilities Act that most concern real estate agents are those that deal with
public accommodations and employment
Eminet Domain for
public good and public use
Government has a right to own real property for?
public use and welfare
5 most common types of contracts a broker uses w/ buyers and sellers
purchase & sales agreement, land contract (installment sales contract or contract for deed), option to buy, lease/rental & rescission
a lease option should consist of what 3 distinct and separate contracts
purchase agreement, option and lease
assemblage
putting together 2 or more pieces of land to make one larger
another name for counteroffer
qualified acceptance
price is not value itself - its the number that
quantifies value
Under land contract the buyer is entitled to to the exclusion of anyone else who may reside on the property
quiet enjoyment and use of property
serious gaps in the chain of title must be resolved via court action in a lawsuit to
quiet title
Which type of deed is used to clear up a cloud in the chain of title?
quitclaim
Could every geographical and Environmental influences on property climate would include?
rainfall, snow fall, temperatures
If a property's vacancy rate is significantly lower than market rates, it may be a sign that the manager needs to
raise rental rates
When a person's conduct validates a contract that has been discharge by time (like accepting a purchase offer after a listing has expired) the contract again becomes valid by
ratification
Another name for Quitclaim deed
re-conveyance deed
When a note secured by a trust deed is paid off, the public trustee releases a
re-conveyance deed (quit claim)
true statement about real estate as an economic products
real estate is governed in the market by the price mechanism
A real estate tax lien, a federal income tax lien, a judgement lien and mortgage lien recorded against a property. Which is paid first?
real estate tax lien
our legal system recognizes 2 major classification of property
real property and personal property
Severance
real property can be converted to personal property by
Law of Situs
real property devised or inherited is distributed according to laws of the state where property is located
The primary distinction between the legal concepts of real estate and real property is that
real property includes ownership of a bundle of rights
restrictive covenants must be
reasonable and they must benefit all property owners
Reddendum clause, or reserving clause
recites restrictions and limitations to the estate being conveyed, e.g., deed restrictions, liens, easements, encroachments, etc.
Prudent avoidance
recommended course of action EMF emission (Electromagnetic fields)
Public title records contain a history of a property, including
recorded liens
What risk management strategies is the one that aims at minimizing both the severity and the likelihood of loss is
reduction
bounds
refers to a fixed reference point, movement & landmark
Metes
refers to the distance & direction
If a landlord defaults URLTA tenant may
sue for damages, terminate agreement or negotiate a rent abatement
Common reason for mold
roof leaks, improper vent appliance, runoff from gutters, flood damage
2005 Supreme Court ruling - eminent domain vs individual rights
ruling affirmed the rights of state and local government to use the power of eminent domain for urban re-development and revitalization. winning argument "public purpose"
What is used to transfer real estate interest from one party to another?
sale & lease contracts, option agreements
Assignable contract
sales contract because they involve purchase of real property
Indiana code requires that deeds being recorded must include the following
sales disclosure forms and affirmation statement
The tax levy for is one of the biggest items in most property tax bills
schools
The SAFE Act
secure & fair enforcement mortgage licensing act of 2008
Lease components - important basic lease clauses
security deposit, repairs/maintenance, subletting/assignment, rules/regulations, improvements/alterations, options, damage/destruction, explanation of use, collection/disputes, covenant of quiet enjoyment & lease renewals
two covenants that relate to the past
seisin & against encumbrances
a condo owner can
sell or mortgage condo unit without hinderance from individual owners of neighboring units
If earnest money is something other than money what has to happen
seller must agree in writing and understand deposit being held by broker is in a form other than money
First thing a seller does in a land contract termination upon buyers default
seller must give buyer notice of intent to terminate, request buyer to leave premises.
If tenant in a lease option breaches lease agreement what does landlord do?
send tenant notice of terminated contract
Exceptions to fair housing law
senior citizen housing, religious groups/ private organizations & disabled Americans
The option must require the optionee to pay a specific consideration this is
separate from the purchase price
Chain of title
series of owners in a row that owned the property in the past
Amount of growth from master plan
sets specific guidelines on how much growth the jurisdiction will allow
FHA (Federal Housing Administration)
sets standards similar to local ordinances to ensure adequate level of construction quality, aesthetics and infrastructure services.
undivided and indivisible
signify that the owners interest is in a fractional part of the entire estate not in a physical portion of the real property itself
Tenancy in severalty also called
sole ownership, ownership in severalty and estate in severalty
power of sale land contract
some title company draft & insure land contracts that contain a seller, buyer & a trustee
Describe a tenants at sufferance
someone who stays beyond her lease without consent
A bargain and sales deed is a
special warranty deed
What type of deed is used by grantor who cannot or do not want to make any warranties other than time they held title do property?
special warranty deed
What are 2 forms of owners title insurance?
standard and extended
what is an ALTA 92 policy
standard level owners title insurance policy
parties to a valid oral contract have executed and performed it even though not enforceable, party can not use
statute of fraud to rescind the offer
If a buyer defaults in a land contract seller can use
statutory & common law remedies
a party with a voidable contract must act within the
statutory period
a minority family would like to buy a home in a certain price range. The agent shows the family all available properties in a neighborhood of families with similar backgrounds. The agent did not mention a number of homes in the family's price range in other neighborhoods. This agent could be liable for
steering
A prospective homebuyer offers to buy a house if the seller agrees to pay financing points at closing. The seller get the offer, sign it, and gives it to his agent to deliver. At this point the status of the offer is?
still an offer
The lease must identify the property by
street address or any description that makes property identifiable to the parties
Examples of public land control
subdivision regulations, building codes, eminent domain, environmental restrictions and development requirements
How can potential buyer prevent the sale of property to another party while seeking funding to purchase
submit option to buy
An important difference between a judicial foreclosure and a non-judicial foreclosure is?
there is no right to redeem the property in a non-judicial foreclosure
a notable weakness of the sales comparison approach to value is that
there may be no recent sale price data in the market
Courts sometime refuse to enforce Adhesion contracts on the grounds of?
there was no "meeting of the minds" or no true offer & acceptance because they had no choice but to accept.
Masterplan defining what type of growth will occur
they are generally to control & accommodate social & economic growth
2 individuals can own a house as tenants by the entireties if?
they are married
Exception in SAFE licensing requirements
they do not apply if an individual is selling their own home, a commercial building or to an immediate relative
Something true regarding the legal nature of option contracts?
they give the optionee an equitable interest in the property
What is a distinctive feature of metes and bounds description?
they identify an enclosed area, beginning and ending at the same point
which of the following is true of easements in general
they involve the property that contains the easement and a non-owing party
a due-on-sale clause in a sale contract puts parties on notice that
third-party loans surviving closing may be accelerated by the lender
"middle of the road"
this approach is the use of preprinted contract templates drafted by lawyer that brokers can fill in
A property built 23 yrs ago had a roof overhang that extended 1 1/2 feet onto neighbors property. what could happen?
this could cause an easement by prescription
Owner of a tenancy for life can not deed his interest to himself on the form of a gee simple because
this would involve only one party
Offer & acceptance
through the process of mutual consent required to be valid
How does radon enter a home?
thru foundations, floor cracks, wall seams, windows etc
A Torrens certificate is not merely a record but is also a?
title
a first time home buyer must purchase as a condition of obtaining a mortgage
title insurance coverage protecting the lender
The Torrens system differs from other title recording systems in that
title is conveyed only when conveyance is registered on the title certificate
In the Torrens System of recording
title passes when the conveyance is registered on the title certificate
What action identifies if any liens are on a property?
title search
A lender lends money to a homeowner and takes legal title to the property as collateral during the payoff period. They are in a
title-theory state
For a deed to be recorded in Indiana requires the signature?
to be notarized
Seller agrees in a listing agreement to
to consider all good faith offers, make avail for showings, take responsibility for all info the seller provides broker & hold broker harmless for any claims resulting from info given or w/held from Broker
What is the principal purpose underlying legal description of real property?
to create a consistent, unchanging standard for location the property
Testate
to die with a valid will
What is the purpose of SAFE act
to establish nation wide mortgage licensing system and registry for the residential mortgage industry
Covenant of warranty forever relates
to future
covenant of further assurance relates
to future
License (part of bundle of rights) means
to give permission to use the property
The purpose of a homestead tax exemption is
to offer an amount of tax relief on an owner's principal residence.
The purpose of a homestead tax exemption is
to offer tax abatement on a principal residence
covenant against encumbrances relates
to past
covenant of seisen relate
to past
Which is included in the bundle of rights inherent in ownership?
to possess
Why are explosion of urban growth regulations necessary?
to preserve the interest, safety and welfare of the community
economic system
to produce, distribute a supply of goods and services to satisfy the demand of the people.
Federal & State legislation about tenant/landlord relationship goal is
to protect residential tenants who do not hold as much bargaining power in the lease arrangement as landlords.
What part of a non-navigable waterway does the owner of an abutting property own?
to the middle of the waterway
a contingency that is may invalidate the entire contract on the grounds of insufficienal of mutual agreement
too broad, vague or excessive in duration
two important concerns of retail property users are
trade area population and spending patterns
There are types of title insurance policies
two
Adhension
type of contract gives the weaker party only the options of accepting or rejecting contract?
Recission
type of contract where parties agree they are rescinding the contract & releasing one another involved in the sale from any present or future liability
Covenant of Further Assurance
type of covenant forces a correction deed from grantor if necessary
The growth patterns considers in a master plan
type of enterprise/development allowed, residential/ commercial density, where to allow residential/public sectors, effects of new traffic patterns, effects of environmental quality, natural resources & code specifications for construction
Major consideration for growth patterns?
type of enterprise/development allowed, residential/commercial density, effects of Industrial/commercial land use on residential/public sectors, effect of new development on traffic patterns/throughfares, effect on Environment/environmental quality, effect on natural resources
Aquifers
underground geological formation
Victoria decides not to lease the condo from Sanchez. (They have an oral agreement.) She tells him she has changed her mind the day before she had agreed to move in. He has spent time and money getting the property ready for Victoria and is thinking of suing. Which type of contract applies to the situation?
unenforceable
An option is bilateral or unilateral contract?
unilateral
an option is a agreement creates the right to obtain legal title
unilateral
an option is what kind of contract
unilateral
A transaction broker should disclose his or her agency relationship to the transaction principals when?
upon first substantive contact
In which provision would a landlord describe what activities can take place
use clause
Broker agrees in a listing agreement to
use due diligence to achieve purpose of listing
What is the cleanest way to make a change to a listing agreement
use state approved form designed for listing agreement modification
Planned Unit Development (PUD) restricts
use to developement of whole tracts that are designed to use space efficiently and maximize open space
buffer zone
use to separate residential areas from commercial/industrial zones
Volatile organic compound (VOC's)
used in construction materials like adhesives emit toxic fumes.
Deed in Trust
used to convey property to the trustee of a land trust
A lender who charges a rate of interest in excess of legal limits is guilty of
usury
Unenforceable Contract legal effect
valid between the parties, but neither may force performance. (ex. courts will not enforce oral agreement - statute of frauds)
Voidable contract legal effect
valid, but may be rejected by one party (ex. contract w/a minor or under duress)
4 ways a court may construe the legal status of a contract
valid, valid but unenforceable, void, voidable