Real Estate Principles, Real Estate Practice, Legal Aspects of Real Estate

Real Estate Settlement Procedures Act (RESPA)

A consumer protection statute, first passed in 1974. The purpose of RESPA are:1) To help consumers become better shoppers for settlement services and2) To eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.

security instrument

A contract whereby a debtor agrees to use property as security or collateral for the repayment of debt.

lease

A contract whereby, for a consideration, usually termed rent, one who is entitled to the possession of real property transfers such rights to another for life, for a term of years, or at will.

fee simple on condition

A defeasible fee (title), recognizable by words 'but if'.

Department of Housing and Urban Development (HUD)

A federal agency that administers funding for projects related to housing.

Americans with Disabilities Act (ADA)

A federal law protecting the rights of individuals with physical or mental impairments.

civil rights act of 1866

A federal law that prohibits all discrimination on the basis of race.

lien

A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation (ex: judgments, taxes, mortgages, deeds of trust, etc..).

life estate

A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate.

reversion

A future interest that is retained by the grantor after the conveyance of an estate of a lesser quantum that he/she has.

civil Rights Act of 1964

A law that prohibited discrimination on the basis of race, color, national origin, or gender in any housing program receiving federal money.

periodic tenancy

A lease that automatically renews for successive periods unless terminated by either party; also called estate from year to year.

estate for years

A leasehold estate for any specific period of time. An estate for years is not automatically renewed.

estate at will

A leasehold estate that may be terminated at the desire of either party.

tort liability

A legal obligation of one party to a victim as a result of a civil wrong or injury.

eviction

A legal proceeding by a lessor landlord to recover possession of real property.

involuntary lien

A lien imposed against property without consent of an owner (ex: taxes, special assessments, federal income tax liens, etc..).

National Association of Realtors (NAR)

A national organization of real estate brokers created to promote the real estate profession and foster professional behavior in its members.

administrator

A person appointed by a court to administer the estate of a one who has died intestate.

real estate broker

A person or an organization acting as the agent for others in negotiating the purchase and sale of real property or other commodities for a fee.

executor

A person or institution appointed by a testator to carry out the terms of their will.

real estate salesperson

A person performing any of the acts included in the definition of real estate broker but while associated with and supervised by a broker.

independent contractor

A person that provides services to another under terms specified in a contract or within a verbal agreement.

lessee

A person to whom property is rented under a lease.

grantor

A person who conveys title to real property by deed.

grantee

A person who receives title to real property by deed.

creditor

A person who regularly extends consumer credit that is subject to a finance charge, or is payable by a written agreement in more than four installments, not including the down payment, and to whom the obligation is initially payable, either on the face value of the note or contract, or by agreement where there is no note or contract.

eminent domain

A right of the government to acquire property for necessary public use by condemnation; the owner must be fairly compensated.

freehold estate

A right of title to land.

criminal law

A system of law concerned with the punishment of those who commit crimes.

metes and bounds

A term used in describing the boundary lines of land, seeing forth all the boundary lines together with their terminal points and angles.

side yard

A yard that extends along a side lot line from the front yard to the rear yard.

rear yard

A yard that extends along the full length of a real lot line.

fee simple estate

Absolute ownership of real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person's life and descending to the person's heirs or distributees.

covenants

Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property.

Unruh Civil Rights Act - California

All persons within the jurisdiction of this State are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin or disability are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever

personal property

All property that is not considered to be real property. That which is movable (not attached to land).

blind advertising

An ad that remains anonymous as to who is advertising.

fee simple determinable

An estate that will end automatically when the stated event or condition occurs. The interest will revert to the grantor or the heirs of the grantor.

estate in remainder

An estate which vests after the termination of the prior estate.

fee simple absolute

An inheritable estate in land providing the greatest interest of any form of title.

fixture

An item of personal property after being attached to real property.

tenancy in common

An ownership of realty by two or more persons, each of whom has an undivided interest, without the "right of survivorship".

encumbrance

Any charge, claim, right, burden (otherwise called a cloud on title), and/or interest in real property other than the owners, including but not limited to, any restriction upon the title to real property, affecting and/or limiting any interests or its use.

construction eviction

Any disturbance of the tenant's possession of the leased premises by the landlord whereby the premises are rendered unfit or unsuitable for the purpose for which they were leased.

material fact

Any fact that would influence the decision of a reasonably prudent person.

voluntary lien

Any lien placed on property with consent of, or as a result of, the voluntary act of the owner.

estate at sufferance

Continuing to occupy property after lawful authorization has expired; a form of leasehold estate.

condominium

Five or more units where in the owner has a fee simple interest in the air space, or four walls in which they live or occupy, plus common areas which are owned as a tenancy in common.

promissory note

Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its payment. The evidence of the debt.

trust funds

Funds held by a real estate broker, in trust, for clients and/or customers.

testate

Having made a valid will before one dies.

land

Included, but not limited to, the soil, earth, and ground, that which is the result of nature or man-made, as well as an indefinite extent upward into the air, and downward in a direct line from the surface to the center of the earth.

real estate

Land, and generally whatever is erected upon or affixed thereto. Improvements, such as buildings, structures, landscaping, fences, etc, are included.

contiguous

Lots that touch at any point (even corners).

deceit

Making a statement of fact that you know not to be true. Making a statement of fact in which no one has the grounds to believe it is true, or failing to disclose a "material fact".

ethics

Moral principles that govern a person's or group's behavior.

leasehold estate

Non-freehold estate; of limited duration, providing the right of possession and control but not title.

intestate

Not having made a will before one dies.

lessor

One who rents property to another under a lease.

estate in reversion

Property or estate ownership that reverts back to the grantor after a temporary ownership period.

trade fixtures

Removable personal property that a tenant attached to leased land for business purposes.

appurtenance

Something which is outside property itself but belongs to the land and adds to its greater enjoyment such as a right-of-way or a barn or a dwelling.

condemnation

Taking private property for public use, with fair compensation to the owner; exercising the right of eminent domain.

debt

That which is due from one person or another; obligation, liability.

real property

That which is immovable. Land, things affixed to land, and appurtenances. Real estate plus the Bundle of Rights.

Regulation Z

The Truth in Lending Act of 1968 is a United States federal law designated to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

power of attorney

The authority to act for another person in specified or all legal or financial matters.

variance

The authorization to improve or develop a particular property in a manner not authorized by zoning.

alienate

The capacity for a piece of property or a property right to be sold or otherwise transferred from one party to another.

estate

The degree, quantity, nature, and extent of interest that a person has in real and personal property (includes everything one owns).

setback

The distance a structure must be placed away from the street.

zoning

The division of an area into zones, as to restrict the number and types of buildings and their uses.

erosion

The eating away of a coastline or land by the action of water, ice, and/or wind, or wearing away of a surface by corrosion or traffic.

non-conforming use

The historical use whereby an individual would ask to use that property for that historical use, otherwise they will have to endure undue hardship.

licensee

The holder of a license, in particular a real estate license.

fraud

The intentional and successful employment of any cunning , deception, collusion, or artifice, used to circumvent, cheat or deceive another person whereby that person acts upon it to the loss of property and to legal injury.

good faith estimate

The lender's estimate of the borrower's settlement costs; RESPA requires the lender to furnish it to the borrower at the time of loan application.

frontage

The linear distance along which a building faces a lot or a roadway.

probate

The official proving of a will.

accession

The potential right of ownership to land which is produced, then added or united to the owner's land.

accretion

The process of gradual growth or increase over a period of time from naturally occurring events, resulting in additional layers of matter.

redlining

The refusal to lend money within a specific area for various reasons.

escheat

The reversion of the State of property in event the owner thereof abandons it or dies, without leaving a will and has no distributes to whom the property may pass by lawful descent.

right of lateral support

The right of a land owner to have the natural physical support of the adjoining piece of land.

police power

The right of any political body to enact laws and enforce them, for the order, safety, health, morals and general welfare of the public.

license suspension

The right of the BRE to deactivate a broker's or salesperson's license for wrongdoing.

water rights

The rights of a land owner and/or land occupier to use adjacent bodies of water in a reasonable fashion.

riparian rights

The rights of a land owner or land occupier to use flowing water (such as a river) that is adjacent to the land.

bundle of rights

The rights, or interests, that an individual has in a particular piece of property. The right to dispose, the right to encumber, the right to possess, the right to use, and the right to exclude others (the right of quiet enjoyment).

civil law

The system of law concerned with private relations between members of a community rather than criminal, military, or religious affairs.

law

The system of rules that a particular country or community recognizes as regulating the actions of its members and may enforce by the imposition of penalties.

blockbusting

The use of prejudice to instill fear, or panic (also known as panic selling), in order to motivate individuals in a particular area or neighborhood to sell or dispose of their property because of the entrance, or potential entry, of a protected class.

ownership in sevaralty

Title to real property held in the name of only one person.

comingling

To mingle or mix, for example, a client's funds in the broker's personal or general account.

hypothecate

To pledge a thing as security without the necessity of giving up possession of it.

joint tenancy

Undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship, i.e., the right to share equally with other surviving joint tenants in the interest of a deceased joint tenant.

steering

Using racial, ethnic, or religious criteria in suggesting, recommending, and/or influencing individuals regarding locations for the purchase or rental of a single family residence or rental dwelling.

license revocation

When the BRE cancels a salesperson or broker license.

Holden Act- Housing Financial Discrimination Act-

prohibits discrimination in lending (redlining).