BOB HOGUE SALES ASSOCIATE EXAM REVIEW

florida statute chapter 475 part 3

commercial real estate sales commision lien act gives broker lien rights for earned commission. applies to commercial property, NOT residential. Lien is only against the onwers new proceeds from the sale and does not attach to the commercial real property.

monetary limits of claims

$50,000-$150,000

calculating percentage of profit

% profit = money paid/ money made

2 exemptions of prelicensing

4 year or higher real estate degree, licensed attorney

multifamily housing

5 or more units multifamily dwellings of 4 or fewer units if the owner does not reside in any of the units

a florida real estate licensee who moves out of state and becomes a non florida resident must notify the commission within

60 days

passing score of license exam

75

tenancy in common

2 or more persons wish to share the ownership of a single property, they may choose to do so as tenants in common most frequently used form of co-ownership except for husband and wife relationship same or different times with an equal or unequal shares of ownership undivided interest

time to file a claim

2 years

discount rate

2nd most commonly used method of controlling the supply of money is changing the discount rate. discount rate is the interest rate charged member banks for borrowing money from the Fed. if the rate is increased, member banks have to pay a higher interest rate for the money borrowed from their district bank

a student failing the end of course exam must wait

30 days before retaking

brokers must implement one of the settlement procedures within

30 days of receiving conflicting demands or of having a good faith doubt

time periods regarding tenant deposits

30 days. the landlord must notify the tenant in writing of which method is used to hold the tenants deposit in non interest bearing florida bank, interest bearing florida bank, or posted bond 15 days. landlord who does not intend to make a claim on the security deposit has 15 days to return 30 days. landlord who is making a claim on the deposit has 30 days to notify the tenant of the claim 15 days. after receiving written notification of landlords claim on deposit, the tenant has 15 days to object in writing to the claim

4 unique duties of a single agent

COLD confidentiality obedience loyality disclosure (full)

elements of a valid and enforceable real estate sale contract (COLIC)

Competent parties Offer and acceptance Legal purpose In writing and signed (statute of frauds applies to real estate contracts) Consideration (valuable or good)

A BAR SALE (real estate services)

Advertise real estate services Buy Appraise (non-federally related transactions) Rent or provide rental info or lists Sell Auction Lease Exchange

citations

DBPR investigator-auditors have the authority to issue during the investigation or audit fines range from $100-$500; could require edu course attendance licensees have 30 days to accept or reject the alleged violations

cease to be in force (ceases to be in effect)

DBPR must be notified within 10 days when: 1. a broker or registered school changes business addresses 2. a sales associate or a real estate instructor changes employer

characteristics of value (DUST)

DUST Demand Utility Scarcity Transferability

private restrictions (DELL)

Deed restrictions Easements Leases Liens

chapter 61J2

FREC (florida real estate commission) rules

probable cause

FREC probable cause panel is composed of 2 individuals proceedings not open to the public panel serves as grand jury if panel finds probable cause does not exist they may dismiss the case with a letter of guidance

final order

FRECs final decision as to innocence or guilt and the determination of the appropriate penalty copy of final order is mailed to each party must notify the recipient of the appeal process licensee has the right to practice real estate during the complaint process and up until the final order becomes effective

7 protected classes

FRSH CRN familial status, race, sex, handicap status, color, religion, national origin NOT AGE

conditions for alienation by adverse possession (HOTCAN)

HOTCAN Hostile possession of the property Open possession Taxes Claim on title Adverse possession Notorious and flagrant possession of property

4 unities of joint tenancy (PITT)

PITT 1. Possession-joint tenants have the same rights as undivided possession 2. Interest- joint tenants have equal ownership interest 3. Title- joint tenants acquire title on the same instrument (deed) 4. Time- joint tenants acquire their interests in the property at the same time

government restrictions (PET)

Police power Eminent domain Taxation

SIN

Stamps on deed $.70 per $100 Intangible on new mortgages $.002 per $1 of debt Note, stamps on new and assumed notes $.35 per $100

consumer credit protection act (truth in lending act)

TILA intended to inform borrowers of the true cost of obtaining a loan federal reserve regulation Z-most requirements under TILA are implemented by loan costs disclosed under the act- annual percentage rate- cost of credit as a yearly rate finance charge- dollar amount the credit will cost amount financed- amount of credit provided by the lender total of payments- amount the borrower will have paid after all payments as scheduled

florida law requires appraisers, real estate brokers, and sales associates to abide by

USPAP when conducting appraisals of real property.

money to maintain escrow account

a broker is allowed to place in a sales escrow account up to $1000 of personal or brokerage funds brokers can keep up to 5,000 of their own monies in a property management escrow account

residential property

a broker may place a lien on real property for nonpayment of commission only if the broker is expressly authorized to do so in a contractual agreement

transaction broker

a broker who provides limited representation to a buyer, seller or both in a real estate transaction does not represent either party in a fiduciary capacity or as a single agent all licensees are operating as transaction broker unless another brokerage relationship is established (no need for written disclosure)

single agent relationship

a broker who represents, as a fiduciary, either the buyer or the seller but NOT BOTH. sales associates and broker associates owe the same fiduciary obligations to the brokers principals as does their broker

liens

a claim to have a debt or other obligations satisfied out of property belonging to another holder (lienor) and owner (lienee) recorded with the clerk of the circuit court encumbrance to a title, but not all encumbrances on property are liens

survey

a drawing of a parcel of land showing its boundary lines

contract for deed (land contract)

a financing device that is used when a buyer does not have sufficient cash to make a down payment that is acceptable to the seller the grantee is granted equitable title and takes possession of the property

an individual typically begins a real estate career in Florida as

a licensed sales associate. starts with license as voluntary inactive sales associate

revoke without prejudice

a licensee may be revoked or canceled if it was issued through a mistake or inadvertence of the commission. such revocation or cancellation shall not prejudice any subsequent application for licensure filed by the person against whom such action was taken

settlement stipulation

a licensee-respondent and the licensees attorney will meet with the DRE attorney before a hearing to discuss a possible settlement and enter a stipulation stipulation- agreement as to the facts of the case and the penalty reached between the attorneys for the DRE and the licensee or licensees attorney must be approved by FREC

broker associate

a person who holds a brokers license but chooses to register and work in real estate under the direction of another broker.

licensee as buyer or seller

a real estate licensee who was the buyer or seller (lessor or lessee) in a real estate transaction may make a claim against the fund, provided the licensee did not act in the capacity of a real estate agent

background check of criminal history

a withhold of adjudication must be disclosed on the application

americans with disabilities act of 1990

access to public transportation, public accommodations, and commercial facilities new construction and renovation. examples of alterations include widening doorways, making cuts in street curbs, lowering telephones, installing ramps, and providing ADA compliant toilets and grab bars in restrooms

escrow account

account for the deposit of money a disinterested 3rd party holds in trust. hence trust funds

additional survey measures and terminology

acre- 43,560 square feet (approx. 208.71 feet x 208.71 feet) benchmark-permanent reference mark (PRM) affixed to an iron post or brass marker that is embedded in the sidewalk or street, used to establish elevations and altitudes above sea level on surveyed parcels mile- 5,280 feet in length

fiduciary relataionships

acts in a position of trust and confidence for another

guardians deed

acts on behalf of a minor and is also a fiduciary

2 types of notice to legal title that have equal priority

actual notice and constructive notice

loan servicing

additional source of income for lenders service sees typically range from 3/8 to 3/4 of 1% of the unpaid balance of loans serviced

waiver hearing

administrative complaint fails to timely respond to election of rights

3 type of administrative penalties

administrative, civil, and criminal FREC does not have the authority to order restitution

prohibited activities

advertise that housing is available only to people of a certain race, color, religion, national origin, handicap or familial status making false statements concerning the availability of housing

blind advertisements

advertisements that fail to disclose the license name of the brokerage firm are blind advertisements

fiduciary duties

after leaving a former employer, a sales associate who diverts a buyer or seller of the former employer from completion of a transaction may sustain liability for breach of fiduciary to the former employer and possibly to the party that hired the former employer because of the fiduciary relationships between sales associate and employer, the obligations of the sales associate do not end with termination of employment

housing for older persons

age 62+ at least 80% of the units occupied by persons 55 years old or older, and housing policies are published and followed that demonstrate an intent to be housing for persons 55 and older

exclusive listing

agent- one broker commission-to listing broker if not sold by owner

exclusive right of sale

agent-one broker commission- to listing broker no matter who sells

open listing

agent-one of more brokers commission- only to broker who sells property

option contract

agreement to keep open for a specified period of time an offer to sell or lease real property property owner (optionor) grants buyer (optionee) exclusive right to buy/lease the owners property for specified price and terms within certain period of time must be in writing

acquiring legal title

alienation-the act of transfering ownership, title, or an interest in real property from one person to another alienation may be voluntary/involuntary

income tax (IRS) lien

all property owned by the taxpayer at the time of the filing as well as on all future property acquired by the taxpayer until the lien is satisfied

personal property

also called chattel personality indicates personal property all personal property included in the sale should be identified in the contract for sale, or the seller is entitled to remove the property real property can become personal property through act of severance personal property can become real property by attachment

deposit

also called good faith deposits or binder deposits sum of money or its equivalent, delivered to a real estate licensee as earnest money or a payment, or partial payment in connection with a real estate transaction

construction lien

also called mechanics, materialmans, or laborers lien based on principle of law called unjust enrichment lien on property that has been improved by their supplies and or labor lien must be filed with clerk of circuit court no later than 90 days after the last supplies are delivered or the last labor is performed allows a construction lien filed after work is completed to become retroactive to the first delivery of material or first day of work effective for 1 year

leases

an agreement between the landlord (lessor) and a renter (lessee) that grants lessee the right of possession and use of the property (not ownership) lease of more than 1 year be in writing signed by the lessor w 2 witnesses leases for 1 year or less are enforceable a property owner may not delegate the authority to draft a lease to a nonattorney

general partnership

an association of 2 or more persons for the purpose of jointly conducting business

estate and tenancies

an estate refers to the degree, quantity, nature, and extent of interest (ownership rights) a person can have in real property estate and tenancy are used interchangbly freehold estates and leasehold estates (nonfreehold estates)

fixtures

an item that was once personal property but has been permanently attached to or made part of the real estate and is now legally considered real property

freehold estates

an ownership interest for an indefinite period

owner developer

an unlicensed entity that sells, exchanges, or leases its own property

life estate

another type of freehold estate period of the lifetime of an individual can be created by the person who holds title to real property called conventional life estates when the life estate ends, the property reverts to the original grantor (previous owner) or goes to a 3rd party, called a remainderman estate in reversion (reversion estate) if life estate goes to a remainderman, the remainderman owns a remainder estate while the life estate exists life estates can be created by law called legal life estates

separate property

any property held in one spouses name only, property the husband and wife owned separately prior to the marriage, and property acquired during the marriage by inheritance

real estate services

any real estate activity involving compensation for performing the service for another

tiggering terms

bait and switch- federal offense amount of percentage of any down payment number of payments period (term) of repayment amount of any finance charge

ways an offer is terminated (WILDCARD)

Withdrawal by offeror Insanity Lapse of time Death Counteroffer Acceptance Rejection Destruction of the property

void contract

lacks one or more of the required elements of a valid contract and has no legal effect

ripartarian rights

land abutting a flowing waterway

littoral rghts

land abutting tidal bodies of water ex gulf of mexico

3 phases of development and construction

land acquisition, subdividing and development, recording the subdivision plat map

real estate

land and all human-made improvements

surface rights

land and water rights

vacating premises

landlord has 15 days to return the security deposit landlord has 30 days to notify the tenant of intentions to impose a claim on the deposit

termination of rental agreements by the landlord

landlord must give the tenant written notice demanding either payment of rent within 3 business days of possession of the premises. notice may be mailed, personally delivered, or attached to door of the dwelling tenant has 3 business days to either pay the rent or surrender the premises if the tenant vacates the premises, the landlord then is required to give the tenant written notice by certified mail of any claim on the tenants security deposit or advance rent held by the landlord

fee simple estate

largest bundle of legal rights fee, fee simple, fee simple absolute used to describe the estate highest type of real property interest recognized by law most title to property is held in fee

tenancy at will

lease agreement that has a beginning date but no fixed termination date, such as week to week or month to month agreement tenancy without specific term- may be written or oral agreements

lis pendens

legal document giving constructive notice of a pending legal action that involves real estate

constructive notice

legal notice, accomplished by recording a document in public records

IRMA

legal test for fixtures Intent of the parties Relationship or agreement of the parties Method or degree of attachment Adaption of the item

caveat emptor

let the buyer beware

property tax and special assessment lien

levy real property taxes and special tax assessments are ahead of private liens in priority and second only to real property tax liens

null and void

license no longer exists when a license has been involuntary inactive for more than 2 years, the license becomes null and void without any further action by the DBPR or FREC a license that has been revoked after a disciplinary proceeding becomes null and void. revocation of a license is a permanent penalty failure to complete post license education requirement within the expiration of the initial license will cause license to become null and void

a property manager who is paid by commission or on a transactional basis must be

licensed as an active real estate broker

mandatory suspension

licensee has repaid the amount paid from the fund in full (plus interest)

judicial review (appeal)

licensee/respondent may challenge the final order within 30 days by filing an appeal with the district court licensee can request stay of enforcement to obtain a stay of the final order, the district court of appeals must issue a writ of supersedeas if the reviewing court finds that a material error in the procedure by FREC has affected the fairness of the hearing or the correctness of the action taken the case will be sent back to FREC for corrective action the respondents rights and privileges as a licensee will be restored if the final order is reversed

licensee requirements-option contracts

licensees may draw option contracts, there is no case law indicating otherwise

change of address

licensees must notify the DBPR within 10 days

commerical real estate sales commission lien act

lien is only against the owners net proceeds (personal property) and does not apply to the commercial real property

financing

life blood of real estate. business of providing funds that make real estate transactions possible.

type of value associated with rapid sale

liquidation value

real estate licensees are allowed to assist buyers and sellers with the drawing of 4 types of contracts:

listing agreement-brokers employment with the seller buyer brokerage agreement-employment sale and purchase contract-between buyer and seller option contract **real estate brokerage offices typically use standardized listing agreements**

characteristics of FHA mortgage loans

loan insurance- nonconventional insured by FHA up to certain limits, protect lenders in the event that borrowers default lending source-FHA approved lenders discount points downpayment- low as 3.5% loan limits insurance premium- upfront mortgage insurance premium (UFMIP) annual mortgage premiums qualifying ratios

biweekly mortgage

loan is amortized the same way as other loans with monthly payments, except the borrower makes a payment every 2 weeks

government survey system

logic that you can identify a parcel by reference to two intersecting points by dividing the land into squares process was to create a large grid with every square of the grid uniquely identified

landlords obligation to maintain premises

maintain the rented dwelling unit in a condition that meets all building, housing, and health codes in a community provide exterminating services provide garbage receptacles and pickup provide working equipment for heat plus running hot water

joint tenancy

major difference between joint tenancy and tenancy in common is joint tenancy is characterized by right of survivorship specific wording in the deed "as joint tenants with the right of survivorship and not as tenants in common" a joint tenant who wants to sell his/her property may do so however, a person who buys that share cannot be a joint tenant with the other original owners but instead will be a tenant in common

value

monetary value worth of something between many market participants assessed value, insurance value, investment value, liquidation value, going-concern value, salvage value

purchase money mortgage

mortgage given as part of the buyers consideration for the purchase of real property is delivered when the deef is transferred as a simultaneous part of the transaction title passes to the buyer, and the seller retains a vendors lien right as security for the debt

market value

most probable price a property should bring in a competitive open market under all conditions requisite to a fair sale under certain guidelines published by fannie mae and freddie mac

overall capitalization rate

net operating income / value (sale price) = overall capitalization rate formula for direct capitalization 1. capitalization rate x value (sale price) = net operating income 2. net operating income / value (sale price) = capitalization rate 3. net operating income / capitalization rate = value (sale price) investors prefer to specify a capitalization rate because investors are free to choose acceptable rate of return they desire investment value- value of property to a particular investor based on the investors desired rate of return, risk tolerance, etc. definite relationship exists between present value, net income, and capitalization rate

alluvion

new deposits of land as a result from accretion; deposits commonly occurring at the mouth of large rivers

telephone solicitation florida law

no solicitation calls registry calls restricted from 8am-9pm $10,000 fine per violation FSBO exception

mediation

non binding, informal, nonadversarial process intended to reach a negotiated settlement

broker relationship disclose act does not apply to

non residential transactions rental or leasing of real property auctions appraisals dispositions, except for a property with 4 or fewer residential units

principal meridian runs

north and south

general lien

not restricted to one property but may affect all properties off a debtor attaches to all of the lienee (debtors) real property include judgement lies, income tax liens, and estate tax liens

executory contract

not yet fully performed

consideration

obligation each party is making to the other a promise undertaken by one party must be supported by a promise undertaken by the other party benefit or sacrifice may not be equal valuable consideration-can be measured in terms of money good consideration- not measured in terms of money

5 purposes of surveying property

obtain current and accurate boundary information required to write a legal description establish the exact quantity of area within a described tract, whether described in square miles, acres, or square feet reestablish boundaries that may have become lost or obliterated obtain data required to divide a large tract into smaller units for development and sale identify and describe encroachments

conflicting demands

occur when the buyer and the seller make demands regarding the disbursing of escrowed property that are inconsistent and cannot be resolved broker must notify FREC within 15 business days demands were received

assignment

occurs when a lessee( tenant) assigns to another person all the leased property for the remainder of the lease

tenancy at sufferance

occurs when a tenant stays in possession of the property beyond the ending date of legal tenancy without the consent of the landlord tenant has naked possession and is not entitled to notice to terminate holding over

price fixing

occurs when competing brokers conspire to establish a standard commission rate rather than letting the rate be set by the open market

market allocation

occurs when the brokers agree to split up the competitive market areas among themselves and not compete in each others areas

real estate investment trusts (REITs)

offer investors the opportunity to invest in income-producing real estate properties

withdrawal by offeror

offeror may withdraw (revoke) the offer at any time until notice of the offeree's acceptance is received by the offeror or the offeror's designated agent

metes and bounds

oldest method of land description begins at an exact reference point called point of beginning (POB)

unilateral contract

one party obligated

federal reserve system economic tools to influence money supply

open market operations- money supply decreases and interest rates increase discount rate- more loans are made and money supply increases reserve requirement- money supply increases and interest rates decrease

kickbacks and regulations

or rebate, is an unearned fee paid to a licensee associated with a real estate transaction for non-real estate services the parties to the transaction must be fully informed of the kickback the kickback must not be prohibited by other law. the real estate settlement and procedures act (RESPA) it is unlawful to share a commission with an unlicensed person other than the seller or the buyer in the transaction it is unlawful for a licensee to pay an unlicensed person for performing real estate services **($50 referral fee)**

informal/parol contract

oral

foreign corporation

organized under the laws of another state but doing business in florida

grantor

owner giving title

voluntary lien

owner places against the property to secure payment of a long term debt (mortgages)

grantee

owner receiving title

2 types of title insurance

owners policy lenders policy (mortgagee policy), transferable, assignable to new mortgagee

concurrent ownership

ownership by 2 or more persons at the same time

annual mortgage insurance premium (MIP)

paid monthly, annual premium divided by 12 as part of the monthly mortgage payment

tenancy by the entities

basically a joint tenancy between husband and wife if parties are truly husband and wife, the estate is implied one spouse cannot do anything that affects the ownership of a tenancy by the entities such as mortgage, will, or sell any portion of the spousal interest in a tenancy by the entireties without the other spouses consent

equitable title

beneficial interest in real estate implying that an individual will receive legal title at a future date

arbitration

binding judgement

administrative law

body of law created by governing administrative agencies in form of regulations, rules, orders, and decisions

lien theory

borrower retains title to the property. the lender is protected with a lien on the real property ex: my car

upfront mortgage insurance premium

borrowers are charged a one time mortgage insurance fee at closing

bilateral contract

both parties obligated

brokers compensation

broker earns the commission

key concept regarding escrow accounts

broker may open an escrow account in a florida bank, savings association, or credit union broker must be a signatory on the escrow account broker must review, sign and dat the monthly reconciliation statements broker must review the company's escrow accounting procedures if the broker does not maintain an escrow account, the funds may be held by a title company or in an attorneys trust account brokers must retain records of real estate transactions for 5 years, regardless of whether escrow funds were pledged (2 years after litigation if beyond the 5 yr period)

interest bearing escrow account

broker must get written permission from all parties before placing the funds into this type of act

misappropriation of escrow funds

brokers cant intermingle or commingle (mix) escrow deposits with other types of funds

giving opinions to title

brokers must handle statements regarding title to property with extreme caution in the event a licensee knows that the title to a property in not marketable or that liens exist, the licensee is required to inform prospective buyers

BPO

brokers price opinion. a written opinion of the value of real property

trade names

business name other than the legal name of a person doing business individual broker or brokerage entity may use a trade name and applicable designation after that name is registered with DBPR sales associates and broker associates may not use a trade (ficticious) name for income tax purposes only

sole proprietorships

business owned by an individual

partially amortized mortgage (balloon mortgage)

buyer makes regular payments smaller than what is required to completely pay off the loan by its date of termination

in addition to HOA disclosure summary, the contract for sale and purchase must state: (4)

buyer should not sign (execute) the contract without first receiving the homeowners disclosure summary if the disclosure summary is not provided for the buyer before executing the contract for sale and purchase, the contract is voidable to void the contract, the buyer must give the sellers agent written notice of he buyers intention to cancel the contract within 3 calendar days after receipt of the disclosure summary or before closing whichever comes first the right to void the contract cannot be waived by the buyer (right terminates at closing)

property tax disclosure

buyers should not rely on the sellers current property taxes as the amount of property taxes the buyers may be obliged to pay in the year subsequent to purchase. a change in ownership or property improvements triggers reassessments of the property that could result in higher property taxes

implied contract

by acts and conduct

steering

channel homeseekers to or away from particular neighborhoods because they are members of a protected class

commercial real estate leasing commission lien act

chapter 475 part IV, gives a broker lien rights for earned commission associated with a brokerage agreement to lease commercial real estate

CMA

comparative market analysis. sellers often ask real estate brokers and sales associates what buyers are likely to pay for their property's

7 steps involved with filing a complaint

complaint is filed investigation of the complaint probable cause determination formal complaint is issued if probable cause is found informal hearing/formal hearing is conducted final order is imposed judicial review (appeal) of final order

chain of title

complete successive record of a propertys ownership

executed contract

completed all terms and conditions

tenants obligations

comply with applicable building, housing and health codes keeping clean and sanitary use reasonable care in the operation of all plumbing, electrical, heating, and AC equipment behave, and do not disturb peace of other tenants

moral turpitude

conduct contrary to honesty, good morals, justice, or accepted custom

condominiums

consists of condominium units and common elements what makes the structures condominiums is how the developer organized the association deed to the unit may be held by one or more persons in any type of estate or tenancy

quarter sections

contain 160 acres

bargain and sale deed

contains no express warranty against encumbrances contains covenant of seisin grantor does not defend the title against any future claims or attacks on the title

easement by prescription

continually using another persons real property for the statutory period when such use is adverse to the owners interest

title insurance

contract that protects the policyholder from losses arising from defects in the title

tax deed

convey title to property sold for nonpayment of taxes extreme caution should be taken when purchasing property at a tax sale

cooperatives

coperative association, or co op is a multiunit building that is owned by a corporation corporation holds title to the land and improvements owners purchase shares of stock ownership of the stock entitles the purchaser to a proprietary lease and the right to occupy the unit common expenses and transfer of ownership of a cooperative unit is accomplished by sale of the stock

business arrangements and entities that may not register as a brokerage

corporation sole, joint venture, business trust, cooperative association, unincorporated association, trade names

relationship of agreement of the parties

courts seek to determine the exact nature of the relationship of the parties

FREC quasi legislative powers

create and pass rules/regulations and regulate professional practices

involuntary lien

created by law to protect interests of persons who have valid monetary claims against the owner of real property

dedication

gift of land by an owner. involves streets, sidewalks, park areas, and other improvements. streets and public areas obligates the local government to maintain them.

eminent domain

gives government power to take land from an owner through legal process called condemnation taking for just compensation

ginnie mae (government national mortgage association)

government corporation under HUD guarantor on the pools of FHA and VA mortgage loans

escheat to the state

government to take the property when the owner who does die intestate and who has no known heirs

the DBPR is under the executive branch of the

governor

erosion

gradual loss of land due to natural forces

reliction

gradual receding of water, uncovering additional land

FREC quasi judicial powers

grant or deny applications for licensure suspend or revoke licenses and impose administrative fees make determinations of violations

5 types of leases

gross lease, net lease, percentage lease, variable lease, ground lease

unincorporated association

groups of people associated for some non commercial common purpose

nonfreehold estates

have a known duration and do not involve ownership interest nonfreehold or less-than-freehold estates grant the right to use and possess real property

personal assistants

hired by licensees to perform administrative tasks associated with real estate transactions whether a personal assistant must be a real estate licensee is determined by the tasks the assistant performs unlicensed personal assistants may not be paid commission or compensation on a transactional basis unlicensed assistant is NOT ALLOWED to show property a licensed personal assistant must be registered under the employing broker

for a broker to be paid a commission, the broker must (3)

hold current, active, real estate license at the time the listing or buyer broker agreement is entered into and real estate services are conducted be employed by the seller or buyer through a listing agreement or a buyer broker agreement be the procuring cause (payment could also result from a referral

homestead

homeowners (including single persons) in florida maay homestead their permanent (principal) residence florida constitution grants certain protection and benefits to homestead protection of the family- if a married person dies and the family homestead was titled in the deceased persons name only (in severalty) by operation of law the surviving spouse receives a legal life estate and the children receive a remainderman estate. purpose of homestead law is to protect the family and prevent the family from being displaced from the homestead protection of the homestead- protected from forced sale to satisfy judgement liens for debts owing to personal loans, credit card debt, etc tax exemption- up to 50,000 and deducted from the assessed value size of household- 1/2 acre within the city personal property- 1,000 of value

home equity conversion mortgage (hecm) or reverse mortgage

homeowners age 62+ who have paid off their mortgage or have a small balance remaining are eligible only available through FHA approved lender allows homeowners to borrow against the equity in their own homes homeowners can receive payments in a lumpsum, monthly basis, or occasional basis as a line of credit does not require payment as long as the borrower lives in the home lenders recover the principal and interest when the home is sold

tier/township

horizontal (east-west) township lines parallel to the base line every 6 miles. the grid pattern created by the intersection of two range lines and two township lines forms a 6 mile square called a township. townships contain 36 square miles ( 6 miles x 6 miles = 36 miles)

qualifying ratios (2)

housing expense ratios (HER)- monthly housing expenses principal, interest, property taxes and hazard insurance plus mortgage insurance premium (PITI+MIP) divided by monthly gross income= housing expense ratio total obligations ratio (TOR)- total monthly obligations (PITI divided by MIP+ LTO) divided by monthly gross income= housing expense ratio FHA loans do not have due on sale clause in the mortgage

components of adjustable-rate mortgage

index- economic indicator that is used to adjust the interest rate in the loan margin- or spread, is the percentage added to the index calculated rate index- adding the index to the lender margin index+margin=calculated rate index payment cap-limits the amount the monthly payments can increase during any adjustment negative amortization-occurs when the mortgage payments are not large enough to cover the interest expense teaser rate- lender will offer borrowers an initial below-market interest rate

key provisions of rule pertaining to title company and attorney escrow accounts

indicate the name, address, and telephone number of title company or attorney on the sale contract buyers broker must make a written request within 10 business days to the title company or attorney to provide written verification of the deposit (unless the deposit is held by a title company or an attorney nominated in writing by a seller or sellers agent) within 10 business days after the written request, buyers broker must provide sellers broker with either a copy of the verification or written notice that no verification was received.

the product that real estate licensees market is

information knowledge of property transfer, knowledge of market conditions, knowledge of how to market real estate or business

mortgage

instrument that pledges the property a security (collateral) for a debt hypothecation-pledging of a property as security for repayment of a loan without surrendering possession of the property mortgage instrument must be in writing to be enforceable

fraud

intentional deceit

leasehold estates

interest in real property that a tenant possesses measured in calendar time

undivided interest

interest in the entire property, rather than ownership of a particular part of the property

time share ownership

interval ownership- deeded interest, for fee simple ownership right to use

criminal penalties

issued by criminal courts DBPR must refer criminal matters to the state attorney generals office

multiple licenses

issued to a broker who qualifies for more than 1 business entity

applicant who has been disbarred or guilty of offenses is not qualified for a real estate license unless

passage of time, good conduct and reputation, or other sufficient reasons cause the commission to believe granting the license will not endanger the interests and welfare of the general public.

termination of contracts

performance, mutual rescission, impossibility of performance, lapse of time, breach

cooperative association

permitted to conduct commercial business and to convey, sell, or buy its own property but it cannot be registered as a real estate broker

descent

person dies intestate (without leaving a will)

agent

person entrusted with another's business authorized to represent and act for the principal

complaints filed with HUD under fair housing act

person has 1 year from the day the discriminatory act occured to file complaint with HUD HUD is able to mediate the complaint and have the parties sign a conciliation agreement

principal

person who delegates authority (client)

florida resident

person who has resided in FL continuously for a period of 4 calendar months or more within the preceding year regardless of whether the person resided in a recreational vehicle, hotel, rental unit, or other temporary/permanent location

title to real property

person who holds vested ownership rights in property has title. the rights referred to may be a limited or full bundle of rights title to real property is a legal concept signifying ownership of the collection of rights called an estate the new owner receives the estate specified in a deed or other legal instrument of conveyance equitable title

sales associate

person who performs real estate services for compensation but who does so under the direction, control, or management of a broker/owner developer

florida statute chapter 475 part 1

pertains to real estate brokerage, sales associates, schools

depreciation in a structure can be attributed to three major causes

physical deterioration, functional obsolescence, external obsolescense

impossibility of performance

physical improvements, the death of the buyer or seller

material fact

piece of information that is relevant to a person making a decision that affects the value of the real property

deed restrictions

placed in a deed that affect the use of a parcel of real property restrictive covenants placed by an owner who has created a restriction on future owners of the parcel of real estate

intent of the parties

placing an article on or in real property is of primary insurance

examples of functional obsolescence

poor design, changing tastes

common elements of condominiums

portions of the condominium property that are not included in the units but are legally attached to each unit and are transferred with the unit when it is sold deed to a unit conveys the unit to the purchaser together with its proportionate ownership interest

formula of effective gross income and what expenses are deducted

potential gross income (PGI)-vacancy and collection losses+ other income = effective gross income when vacancy and collection losses are are deducted from annual potential gross income and any income from other sources (laundry, vending machines, parking) is added the result is effective gross income

if you hold a 4 year real estate degree, you are exempt from

prelicense course 1, 2, and post license. NOT CONTINUING EDUCATION

if you are a florida licensed attorney you are exempt from

prelicensing course 1

variables that influence demand

price of real estate population of numbers and household composition income of customers avalibility of mortgage credit consumer taste or preferences

junior liens

priority of most liens is the date and time that the lien was recorded in public records 4 kinds 1. mortgage liens 2. judgement liens 3. vendors liens 4. income tax (IRS) liens

subdividing

process of converting parcels of land into smaller units or lots.

accretion

process of land buildup from water borne-rock, sand, and soil

ostensible partnerships are

prohibited

time sharing

property first organized as condominium. each unit is divided into time intervals of ownership usually 52 weeks. size location, amenities, and time of year all affect the purchase price

sole ownership

property is held by one person it is called estate in severalty severed ownership

formula: unpaid property taxes

property taxes for year/ 365 days = daily tax rate daily tax rate x number of days seller owns property in year = proration amount (credit buyer, debit seller) taxes paid in arrears

equity

property value - debt = equity example: property worth 500,000 has outstanding debt of 375,000. the investors equity is 125,000. 500,000 value - 375,000 debt = 125,000

anti trust laws

protect competition. local real estate boards and multiple listing services may not fix commission rates or splits between cooperating brokers

homeowners association disclosure

provide buyers with a disclosure summary regarding the association, existence of restrictive covenants, and any assessments that the association imposes

general warranty deed

provides greatest protection to the buyer contains all covenants and warranties to give the grantee every possible future guarentee for title protection most common used deed in florida contains covenant of seisin, covenant against encumbrances, covenant against further assistance, covenant of quiet enjoyment, covenant of warranty forever

quitclaim deed

provides the grantee with the least protection of statutory deeds no covenants or warraranties convey what interest IF ANY the grantor may have when the deed is delivered useful for clearing existing or potential clouds on the title remise, release, quitclaim allows grantor to sign a deed transferring any and all interests without claiming ownership

vendors lien

purchase money mortgage a valid vendors lien is enforceable by foreclosure

voluntary relinquishment for permanent revocation

puts the real estate licensee out of the real estate business

sales commission formula

sale price x commission rate= total commission total commission x percentage to listing brokerage = listing commission listing commission x listing sales associate percentage = listing sales associate commission total commission x percentage of selling brokerage = selling commission selling commission x buyers sales associate percentage = buyers sales associate commission

time line to deposit escrow funds (example)

sales associate receives deposit from a prospective buyer on a tuesday (no legal holidays involved) sales associate has until the end of the next business day (wed) to deliver the deposit to the broker broker has until the end of the 3rd business day (friday) to deposit the funds. the 3 day business period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker.

abstract of title

search of the recorded documents concerning a parcel of real property reveals mortgages, liens, judgements, or unpaid taxes

the chief administrator is the DBPR is also the

secretary of the DBPR, appointed by the governor, subjected to confirmation from the state senate

list the types of depositories broker may establish escrow accounts

signatory on escrow account title company and attorney escrow account interest bearing escrow account money to maintain escrow account

similarities and differences between business brokerages and real estate brokerage

similarities 1. sale of real property or assignment of a long term lease 2. real estate license required differences 1. assets include personal property and goodwill 2. going-concern value may differ from real estate value 3. wider geographic market

fair housing act covers 2 housing catagories

single family and multifamily

title opinion

some buyers will accept option of title executed by an attorney who has studied abstract of title lists any defects or clouds ie liens, easements, encumbrances will include whether the seller has marketable (merchantable) title

closing statements

some entities on the closing statement are shared between the buyer and the seller

air rights

space above a tract, height established by law possible for the seller to retain 1 or 2 of the components if the buyer and seller agree

remedies for breach of contract

specific performance- court orders the other party to perform according to the terms of the contract liquidated damages- amount of damages (usually earnest money deposit) stipulated in the contract. if the buyer reaches the contract, typically the seller claims the earnest money deposit as liquidated damages rescission- contract is canceled and the parties are restored to their original positions compensatory damages- involves a lawsuit to recover the actual amount of the monetary loss to either party (also called unliquidated damages)

3 categories of residential construction

speculative, custom homes, tract homes

sales associates must deliver escrow deposits to their broker by

the end of the next business day

special warranty deed

the grantor guarentees that nothing has been done to encumber or cloud the title during the grantors ownership

subordination agreement

the holder of a prior lien (lien with an earlier recording date) agrees to allow a junior lienholder's interest to move ahead of the prior lien

notice and settlement procedures

when a broker assumes responsibility of an escrow in a real estate transaction, the deposit belongs to and is under the control of the depositor until the party accepts the offer and acquires some interest or equity in the deposited funds

lot and block numbers

the lot and block method can be used only where plat maps, or simply plats, have been recorded in public records

sale of real property subject to a lease

when a leased property is sold, the lease is binding on the new owner

the state government impacts the real estate business

when ownership to real property is transferred or pledged as collateral for a mortgage

sellers market

when supply does down, prices go up ( more buyers competiing for fewer homes) the supply and demand equilibrium is upset by excess demand ( more buyers than supply) creates a sellers market

lien priority

when there are 2 or more liens on a property, the priority of the lien determines the order in which the liens will be satisfied (paid off) if the property must be sold

counteroffer

willingness to contract, but on terms or conditions different from those contained in the original offer

some closing agents require that the buyers funds be sent to closing agent by

wire transfer

statute of limitations

written contracts-5 years oral contracts-4 years

broker relationship disclosure act and residential transactions

written disclosures are required only when dealing in residential real estate sale transactions residential sale improved residential property of 4 or fewer units, the sale of unimproved residential property intended for use as 4 or fewer units, or the sale of agricultural property of 10 or fewer units

assignment of mortgage purpose

the mortgage and promissory note are the property of the mortgagee (lender) the mortgagee may choose to sell the negotiable instruments rather than continue to receive the monthly payments from the mortgagor a legal instrument stating that the mortgagee assigns (transfers) the mortgage and promissory note to the purchaser assignment of mortgage is signed by the assignor (mortgagee) assignee becomes the new owner of debt and security instrument individual/company purchasing the mortgage will receive an estoppel certification (letter) verifying the amount of the unpaid balance, the rate of interest, and the date to which the interest has been paid before the assignment

real estate brokerage partnerships

the partnership must register with the DBPR under the partnership name at least one partner must be licensed as an active broker partners who deal with the public and perform services of real estate must be licensed as active brokers sales associates and brokers associates may not be general partners in the real estate brokerage partnership 14 calendar days for a broker to be replaced

property manager

the property owners local representative

no brokerage relationship

the seller (or the buyer) can choose not to be represented by a real estate broker 3 duties 1. account for all funds entrusted to the licensee 2. deal honestly and fairly 3. disclose all known facts that materially affect the value of the residential real property that are not readily observable to the buyer

right of survivorship

the share of a co owner who has died goes to the surviving co owners and not to the deceased tenants heirs

conditions that create a buyers market

the supply and demand equilibrium is upset by excess supply and demand (more houses for sale than potential buyers) develops a buyers market vacancy rate- percentage of rental units that are not occupied

time share act

timesharing act, chapter 721

title theory

title to the mortgaged property is conveyed to the lender through a mortgage deed or to a trustee through a deed of trust if borrower defaults, the lender may take possession of the property. the borrower retains equitable title to the property. once the debt is paid in full, the lender conveys legal title to the borrower

notice to legal title

to be recorded, a deed must first be acknowledged by the grantor and the acknowledgement must be witnessed and certified by a notary notary public declaring that signing the document is a voluntary act requirement for recording-signatures of 2 witnesses florida law does not require documents be recorded

cost

to create, expenditure to create an improvement including materials, labor, land

legal description

to describe a parcel of land with sufficient detail that it will be accepted by a court of law a legal description is legally sufficient if it allows a surveyor to define the exact boundaries of the property should be inserted into sale contracts with extreme care

preparation of contracts

to draft the wording of legal documents or legal instruments for others is considered practicing law

home equity loan

to finance consumer purchases secured by a borrowers primary residence usually a 2nd mortgage the dollar amount of a home equity loan is based on the amount of equity. the borrower may take a lump sum amount or access a line of credit

real estate recovery fund

to reimburse an individual or business entity judged by a florida court to have suffered monetary (compensatory) damages as a result of an act committed by a broker or sales associate who: was a holder of a current valid active real estate license under chapter 475 was not the seller, buyer, landlord, or tenant in the transaction was acting solely in the capacity of a real estate licensee in the transaction claim for recovery will not be considered unless a civil suit resulted in a final judgement against an individual licensee claimant must cause a writ of execution claimant must execute an affidavit showing the final judgement is not an appeal

cash flow

total amount of spendable income generated from an investment. it is the total amount of money remaining after all expenditures have been paid. can be positive or negative determined by 3 factors: income received, operating expenses, and method of debt repayment negative leverage occurs when borrowed funds cost more than they are producing

requirements for real estate office signs

trade name (if one is used) brokers name the words "licensed real estate broker" or "lic. real estate broker"

brokerage options relationships

transaction broker, single agent, no brokerage relationship

transfer by voluntary alienation

transfer of title is accomplished with the owners control and consent deed- written instrument used to convey an interest in real property will-legal instrument used to convey title to real and personal property after a persons death to die testate-the decedent prepared a will before death testator (male) or tresatrix (female) gift of real property is a devise, recipient of gift is devisee gift of personal property is a bequest, recipient is beneficiary

florida residential landlord and tenant act

under deposits and advance rents: 1. hold the money in a seperate non interest bearing florida bank account for the benefit of the tenant. the landlord many not comingle 2. landlord must pay the tenant for 75% of the annualized average interest rate payable on the account of 5% per year 3. post a security bond with the clerk of circuit court in the county in which the rental property is located in the total amount of security deposits and advance rents or $50,000 whichever is less landlords must give tenants written notice of the advance rent or security deposit either in the lease agreement or within 30 days after receipt of advance rent or security deposit must state that the landlord has posted surety bond provided by law

USPAP

uniform standards of professional appraisal practice

3 types of agents

universal agent general agent special agent

civil penalties

unlicensed person performs real estate services or a licensee commits fraud

misrepresentation

untrue statement of fact and an incorrect of false misrepresentation of facts

common law

unwritten law or case law. law based on usage, general acceptance, and custom

blockbusting

use the entry, or rumor of an entry of a protected class into a neighborhood to persuade owners to sell

sublease

used to give another person only part of an existing lease occurs in 2 ways 1. the lessee (tenant) assigns only a portion of the leased property 2. lessee (tenant) assigns all property for a period that is less than the remaining term of the lease

range

vertical (north and south) range lines parallel to the principal meridian every 6 miles

2nd degree misdemeanor

violation of chapter 475 $500 fine, 60 days in jail

special exemptions under the act

religious organizations may restrict dwellings units they own or operate private clubs may restrict rental or occupancy of it units to its members

active license

required to engage in real estate brokerage services. active status is achieved by finding an employer and registering with DBPR under your employing broker or owner/developer

satisfaction of mortgage (release of mortgage)

requires that a mortgagee cancel the mortgage and send the recorded satisfaction to the mortgagor within 60 days

statute of frauds

requires that contracts conveying an interest in real property and contracts that are not to be performed within one year of the date created must be in writing and signed. enforceable contract-legally binding contract that the courts will recognize

single family houses

residential property that is not privately owned privately owned residential property if a real estate licensee is employed to sell or rent the property residential property owned by a person who owns 4+ residential units residential property when the owner, during the immediate past 2 year period sells 2 or more houses in which the owner was not a resident

5 sales specialties of real estate

residential, commercial, industrial, agricultural, business

litigation

resolving the matter in court of law 2 court procedures- interpleader and declaratory judgement

mutual rescission or....

reunciation

landlord access to premises

right to inspect make necessary and agreed on repairs, decorations, alterations, or improvements supply agreed on services exhibit or show the premises 12 hours of reasonable notice

easements

right to use the land of another for a specific and limited purpose

price

the amount paid in a particular transaction, the contract price

all commissions and all listings are the property of

the broker

sales associates and broker associates may only have

1 registered employer at any given time

the initial effective date of a real estate licensee is

the date the applicant passed the license exam

3 exceptions to notice and settlement procedures

1. HUD-owned property are exempted from the notice and settlement procedures and chapter 475 FS 2. condomininium unit buyer 3. if a buyer of real property in good faith fails to satisfy the terms specified in the financing clause

3 duties required in all brokerage relationships

1. account for all funds entrusted to the licensee 2. deal honestly and fairly 3. disclose all known facts that materially affect the value of the residential real property that are not readily observable to the buyer

a valid contract is one that complies with the provisions of contract law and contains 4 essential elements

1. contractual capacity of the parties (competent parties) 2. offer and acceptance (mutual assent) 3. legality of object (legal purpose) 4. consideration

9 duties a real estate licensee owes to a buyer/seller

1. deal fairly and honestly 2. loyalty 3. confidentiality 4. obedience 5. full disclosure 6. account for funds 7. skill, care, and diligence in the transaction 8. present all offers and counteroffers in a timely manner 9. disclose all known facts that materially affect the value of the real property and are not readily observable to the buyer

7 duties of a transaction broker under chapter 475

1. deal honestly and fairly 2. account for all funds 3. use skill, care, and diligence in the transaction 4. disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer 5. present all offers in a timely manner 6. exercise limited confidentiality, unless waived in writing by a party 7. perform any additional duties that are mutually agreed to with a party

calculating rent owed for a variable lease

1. divide the new index by the original index 2. multiply the number from step one by the original rent

exemptions of hair housing act

1. if a real estate licensee was not involved 2. there was no discriminatory advertising the seller owns 3 or fewer single family dwellings or rents the property seller was not living in the single family house and was not the most recent resident when the property was sold or rented rentals in multifamily dwellings with 4 or fewer family units as long as the owner lives in 1 of the units

election of rights

1. not dispute the allegations of fact and request informal hearing (FREC) 2. dispute the allegations of fact and request a formal hearing 3. not dispute the allegations of facts and waive the right to be heard

types of liens

1. property tax lien 2. special assessment lien 3. federal estate tax lien

steps in property tax protest procedure

1. seek an adjustment by contacting the county property appraiser or a representative of that office 2. if the property owner's request for adjustment is rejected, the owner may file an appeal with the value adjustment board. a property owner is allowed 25 days after the notice of proposed property taxes (TRIM notice) is mailed to file an assessment appeal 3. litigation in the courts. the taxpayer may pay the taxes under protest and file a suit (certiorari hearing; meaning review of matter by the courts)

exceptions to disclosure requirements

1. when the licensee knows that a single agent or transaction broker represents a prospective seller/buyer 2. at a bona fide open house that does not involve eliciting confidential info; the execution of contractual offer or an agreement, negotiations concerning price, terms, or conditions of a potential sale 3. during unanticipated casual encounter between licensee and prospective buyer/seller that do not involve eliciting info; the execution of a contractual offer or an agreement for representation or negotiations concerning price, terms, or conditions of a potential sale 4. when responding to general factual questions from a prospective seller/buyer concerning properties that have been advertised for sale 5. situations in which a licensee's communications with a prospective buyer/seller are limited to providing either written or oral communications that is genereal, factual info about the qualifications, background, and services of the licensee or the licensee's brokerage firm 6. when an owner is selling new residential units built by the owner and the circumstances or setting should reasonably inform the potential buyer that the owners employee or single agent is acting on behalf of the owner, whether because of the location of the sales office or because of office signage, signage or place cards or ID badges worn by the owners employee or single agent

time share disclosures

10 calendar days of contract signing or receipt of pubic offering whichever is later sales personnel selling time share plans of any type must be licensed salespersons must be salaried employees who are not paid commission and who do not receive compensation on a transactional basis unlawful for real estate licensee to collect an advance fee for the listing of a timeshare unit

licensees must notify FREC with a change of mailing address within

10 days

investigation

10 days after probable cause has been found to exist or subject of investigation waives the privilege of confidentiality

change of employer

10 days to notify the DBPR

suspension

10 years must continue all renewal requirements during period of suspension

appraiser qualification board

establishes minimum criteria for state certified appraisers and endorses uniform examinations for certification establishes guidelines for supervision of registered trainees

customer

member of the public who is or may be a buyer or seller of real property and may or may not be represented by a real estate licensee in an authorized broker relationship. the seller (or the buyer) who chooses limited representation is a customer under the transaction broker relationship

time share resale listing agreement disclosures

THERE IS NO GUARANTEE THAT YOUR TIME SHARE PERIOD CAN BE SOLD AT ANY PARTICULAR PRICE OR WITHIN ANY PARTICULAR PERIOD OF TIME

compensation

anything of value or valuable consideration, directly or indirectly paid, promised, or expected to be paid or received

unenforceable contract

appears to have all essential elements, but it cannot be enforced in court

committees deed

appointed by the court

easement appurtment

appurtment=next to involves 2 or more parcels of property and continues from owner to owner

discount points

are an added loan fee often charged by lenders to increase the yield on a lower than market interest loan and to make the loan more competitive with higher interest loans

corporations

artificial person or legal entity created by law and consists of one or more persons. formed by filing articles of incorporation with the florida department of state both foreign and domestic stockholders elect board of directors must register with DBPR under corporations name at least one of the officers or directors must be licensed as an active broker (pertaining to the principal broker or qualifying broker) active/inactive florida brokers, and unlicensed people may serve as officers and directors of a real estate brokerage all officers and directors who are not licensed must register with DBPR *inactive brokers and unlicensed individuals may perform managerial functions sales/broker associates may not be an officer or director in a real estate brokerage corporation (will be issued citation) sales associates/broker associates may be shareholders 14 calendar days for a broker to be replaced

specific liens

as specific do not affect all the debtors property, applying only to a certain specified property include property tax and special assessment lien, mortgage lien, vendors lien, construction lien

state documentary stamp tax on deeds

assessed at the rate of .70 for each $100 of the full purchase price or any fraction of $100 purchase price / $100 = number of taxable increments rounded up to a whole number number of increments x .70 = cost of documentary stamps on deeds on normal sales or exchanges, the documentary tax is shown as a debit to the seller on the closing statement

designated sales associates

assets of $1 million or more

CAM (community association manager)

association consists of 10+ units, or has budget higher than $100,000

general agent

authorized by the principal to perform acts associated with the continued operations of a particular job or a certain business of the principal

universal agent

authorized by the principal to perform all acts that the principal can personally perform and that may be lawfully delegated to another

special agent

authorzed by the principal to handle only a specific business transaction or only to perform a specific act broker agrees to represent the buyer OR the seller

net listing

created when a seller agrees to sell a property for a stated acceptable minimum amount called the sellers net broker retains the proceeds in excess of the sellers net as commission

prorated expenses

credit- reimbursed, or debit-charged to either buyer or seller are prorated because the item applies to both closing day is allocated to either the buyer or the seller as determined in the sale contract have all prorated items determined as of midnight of the day before closing date. sellers responsibility ends at midnight the day before the closing occurs and that the buyer is responsible for costs incurred from the closing date going forward prorations are entered on the settlement statement as double entities (1 party credited, 1 party debited)

condominium documents

declaration of condominium-describes the unit boundaries, common elements, membership and voting rights in the association, covenants, and restrictions articles of incorporation of the association bylaws of the association FAQs estimated operating budget

statutory deed

deed whose format is defined by state law

types of administrative penalties

denial of license application or failure to renew a license letter of reprimand is a letter that is placed in the licensees file describing a minor incidence of misconduct that resulted in no disciplinary action (letter of guidance) notice of noncompliance is a warning for a minor violation that allows a licensee 15 days to correct the minor infraction without consequence (nonresponse could result in disciplinary action) citation concerns a violation of no substantial threat to the public and involving a fine that ranges from $100-$500 probation allows the licensee to continue to practice real estate under the guidance of FREC for a period of time while completing conditions specified by FREC such as to complete edu courses, attend FREC meetings and satisfy all the terms of the penalty fine may be up to 5,000 for each violation of chapter 455 and chapter 475 suspension of a license (up to 10 yrs) revocation of license is permanent

redlining

deny loans or insurance coverage by a lender or an insurer that present different terms or conditions for homes in a certain neighborhoods

demand

desire and ability to purchase or rent goods and services

EDO (escrow disbursement order)

determination who is entitled to the disputed funds

condominiums disclosures and cancelation period

developer is required to file the condominium documents with the division of florida condominiums, timeshares, and mobile homes developers of 20+ residential units must also prepare a prospectus and file it buyer of condo may cancel the contract within 15 calendar days 3 business days after the date of execution of the contract and receipt by the buyer of the condo docs if the buyer decides to cancel, the broker may return the escrowed binder deposit to the purchaser without first securing the sellers permission. buyer must notify broker in writing

cooperatives disclosures and cancellation period

developer is required to include a disclosure stating that the buyer of a residential cooperative unit may cancel the contract within 15 calendar days contract for resale must include clause stating the buyer acknowledges receipt of the articles of incorporation of the association, bylaws Q and A answer sheet at least 3 days before signing contract buyer may cancel the contract within 3 business days

interstate land sales full disclosure act (ILSA)

developers must register subdivisions of 100 or more lots with bureau developers of 25 or more lots must provide buyers with a property report prior to signing the sale contract. property reports contains important info about the property

actual notice

direct knowledge acquired in the course of a transaction

when in doubt, always

disclose

easement in gross

does not benefit another specific parcel of land, the easement benefits the company that owns it

listings

duplication of records from a previous employer constitutes breach of trust. the removal of records from a previous employers office constitutes theft

summary suspension

during investigative process, the DBPR or the DRE may uncover something so serious that it cant allow the licensee to continue to endanger public welfare authority to issue summary (emergency) suspension order

documentary stamp on promissory notes

each new or assumed loan amount / $100 = number of taxable increments (rounded up to nearest whole number) number of increments x $.35 = cost of documentary stamps on notes

sections

each township is further divided into 36 sections. each section is one square mile or 640 acres numbered in an S pattern starting in the top right in writing a legal description of a section it is customary to show the section number, then the township number and direction, and last the range number and direction

land

earth and everything attached to it by nature

base line runs

east and west

corporation sole

ecclesiastical or church organization

net operating income and expenses that are deducted

effective gross income-operating expenses= net operating income all costs of mortgage expense, depreciation, income taxes, capital improvements, personal expenses, and business related expenses (such as payroll and advertising) that do not contribute to the actual operation of a property are business expenses, not operating expenses income remaining after subtracting all relevant operating expenses from effective gross income fixed, variable, and reserve

listing contracts

employment agreement between a property owner and a real estate broker authorizing the broker to find a buyer (or tenant) for a certain property may be written, oral, or implied longer than 1 year must be in writing chapter 475 f.s. requires that a copy of the listing contract be given to the owner within 24 hours of execution.

equal credit opportunity act (ECOA)

enforced by CFPB, protects discrimination on the basis of marital status, age, or receipt of income from public assistance programs

limited liability partnerships (LLPs)

enjoy protection from personal liability in much the same way as limited partners in a limited partnership

florida statute 20

executive branch of floridas government

informal hearing

expedited way of resolving the disciplinary case provided the licensee does not dispute the alleged facts stated in the complaint the licensee-respondent is given the opportunity to explain the details of the case with supporting evidence/witnesses if any party raises an issue of disputed fact during the informal hearing, the hearing is terminated and a formal hearing will be scheduled before an administrative law judge

1st degree misdemeanor

failure to provide accurate rental info $1000 fine, 1 year in jail

3rd degree felony

falsifying a license application and unlicensed practice of a profession $5000 fine, 5 years in jail

estate tax lien

federal estate tax lien are imposed against a decedents taxable assets automatically upon death florida has no inheritance tax, it does have an estate tax designed to collect up the maximum allowable federal estate tax credit for state death taxes paid

real estate settlement procedues act (RESPA)

federal law administered by CFPB designed to ensure that borrowers are informed regarding the amount and type of charges they will pay at closing respa prohibits a seller from requiring the homebuyer to use a particular title insurance company as a condition of sale

filing the complaint

filed in writing and is legally sufficient

notice of noncompliance

first time minor violation if a licensee fails to take action to correct the minor violation within 15 days after being notified the licensee maybe issued a citation or licensee may be subjected to a disciplinary proceeding

the federal government impacts the real estate business through

fiscal and monetary policies

filing a complaint legally sufficient violation of any 3:

florida statute any existing, legally enacted DBPR rule any existing, legally enacted FREC rule

business trust

form of business entity that may be created to engage in transactions involving its own real property

limited liability corporations (LLCs)

form of business organization that offers the best features of a corporation and a partnership

claim resulting from an EDO

if a broker who complied with an escrow disbursement order is later required by a court of law to pay damages as a result of legal actions taken by the buyer or seller in the transaction, FREC is authorized to order reimbursement to the broker for the amount of the judgement against the broker up to $50,000

easement by necessity

if a landowner subdivides land, conveying part of it in a way that causes a parcel to be landlocked, the court may authorize creation of an easement by necessity to allow property owners to enter an exit their landlocked property

due on sale clause

if all or any part of the property or any interest in the property is sold or transferred without the lender's prior written consent, the lender may require immediate payment in full. allows the mortgagee to call due the outstanding loan balance plus accrued interest prevents another party from assuming the mortgage

formal hearing

if licensee-respondent requests a formal hearing of disputes the allegations, the DBPR requests that the case be prosecuted under chapter 120 FS. conducted by division of administrative hearings (DOAH) administrative law judge prepares and submits to FREC a recommended order that includes judges findings and recommended penalty

formal complaint

if probable cause is found to exist formal administrative complaint-outline of all allegations of facts and charges against the licensee

brokerage relationship limitations

if the broker firm has a transaction broker relationship with the seller, the brokerage firm can also work with the buyer in the same transaction, as a transaction broker or in a non representation capacity if the brokerage firm is representing the seller as a single agent, the brokerage firm can work with the buyer, in the same transaction in a non representation capacity

commingle

illegal practice of mixing a buyers, sellers, tenants, or landlords funds with brokers own money or of mixing escrow money with a brokers personal funds or brokerage funds

disadvantage of investing in real estate

illiquidity. not considered a liquid investment

exemptions from property taxes

immune properties are city, county, state, and federal government properties exempt properties include property belonging to churches and non profit organizations. exempt properties are subject to taxation, but the owner is released from the obligation

express contract

in words

formal contract

in writing

requirements for a valid deed

in writing (statute of frauds) names of grantor and grantee grantor must be of legal capacity (competent) consideration must be described granting clause (words of conveyance) habendum clause (ownership interest being conveyed) legal description signed by grantor and 2 witnesses voluntary delivery and acceptance

domestic corporation

incorporated in florida and doing business in florida

subsurface rights

mineral rights

false advertising

misdemeanor 2nd degree. false or misleading info in means of radio, tv, or written matter for the purpose of inducing someone to buy, lease, rent, or acquire an interest in title to real property is illegal

judgement lien

involuntary lien attaching to real property when a judgement is obtained against the owner

culpable negligence

involves negligent conduct that while not intentional involves the disregard of the consequences likely to result from ones actions

sale and purchase contracts

involves vendor (seller) and vendee (buyer) bilateral contract- both parties involved consideration in a sale contract is the promises the buyer and the seller make to eachother earnest money is not required to make the contract valid seller must convey clear and merchantable title broker does not have authority or power to sign a contract for buyer or seller

voidable contract

is a contract, but because of the manner or method in which it was brought about, one of the parties is permitted to avoid any contractual duties

personal representatives deed

is an individual either appointed by will or by order of a court to settle the estate of a deceased person

procuring cause

the broker must have started the chain of events that resulted in a sale procuring disputes between licensees are usually settled through an arbitration hearing disputes between a broker and a buyer/seller be litigated in court

mortgage lien

makes a loan using real estate as security are voluntary liens beause they are made with the owners consent. the date the mortgage is filed and recorded with the clerk of the circuit court establishes the priority of the lien against other claims on the property

method or degree of attachment

manner in which an article is attached to real property generally indicates whether it is a fixture or personal property

sale and purchase contracts disclosures

material defects disclosure- johnson vs davis radon gas disclosure lead based paint disclosure-pre 1978 housing, requires contractors who disturb paint in these properties be certified and follow specific work practices. to become certified, a renovator must successfully complete an 8 hour training course property tax disclosure building code violation disclosure community development disclosure timeshare resale listing agreement disclosure

administrative fine

maximum fine of $5000 per violation

fair housing poster

means equal housing opportunity house with = symbol inside

4 settlement procedures (MALE)

mediation arbitration litigation EDO (escrow disbursement order)

offer and acceptance

meeting of the minds contract is formed on the acceptance of the offer and communication of the acceptance

revocation

most severe

MLS

multiple listing service, clearinghouse

promissory note (simply note)

must accompany all mortgages in florida a legal instrument that serves as evidence of a debt a note is a promise to repay that makes the borrower personally liable for the obligation a note is usually not recorded

limited partnerships

must be one or more general partners, and one or more limited partners limitd partners are not liable to be creditors of the partnership unless the limited partners names appear in the partnership name

recordkeeping and retention of disclosure documents

must keep for 5 years

real estate brokerage general partnerships

must register with DBPR under the partnership name at least one partner must be licensed as an active broker

real estate brokerage limited partnerships

must register with the DBPR under limited partnership name general partners who deal with the public and perform services of real estate must be licensed as active brokers at least 1 general partner must be licensed as an active broker all other general partners must register with the DBPR sales/broker associates may not be general partners in the real estate brokerage limited partnership; however, they may be limited partners (like stockholders in corporations) limited partners are not required to register with the DBPR

parts of a deed

names of the grantor and grantee-names, addresses, and date of the deed consideration- anything of value being given in exchange for title words of conveyance-granting clause, conveys the property are grants, bargains, and sells interest of estate being conveyed- habendum clause to have and to hold voluntary delivery and acceptance-title passes at the time of delivery and acceptance; when the grantor delivers a valid deed that is accepted by the grantee singature of the grantor and 2 witnesses-do not need to be notarized, but if the grantee wants to give constructive notice of ownership, the deed must be notarized before it can be recorded in public records

telephone solicitation federal law

national do not call registry calls restricted from 8am-9pm $16,000 fine per violation no FSBO exception-must check registry (federal law supersedes state law)

examples of grounds for licensee application denial

neglecting to answer all questions of application neglecting to forward the proper fees with the application request neglecting to correct errors or omissions on applications returned failing to successfully complete the required end of course exam

VA mortgage loan characteristics

qualifications for program- only veterans, unremarried surviving spouses of veterans eligibility requirements-period of active duty of continuous service lending source and eligible property- one to four unit properties loan guarentee and entitlement- 2015 maximum entitlement is 104,250. veterans entitlement is the maximum amount the government guarentees the lender will be paid in the event the borrower defaults reusing entitlement loan limits-VA does not set loan limits, depends on the value of the real estate, loan may not exceed the amount stated in the certificate of reasonable value (CRV) loan origination fee VA funding fee-may be added to the maximum loan amount and financed, if a veteran has a service connected disability, the funding fee is waived down payment-VA loans of 417,000 or less do not require down payment qualifying ratio-veteran borrowers total monthly obligations may not exceed 41% closing costs-veteran is not allowed to pay for termite report

real property

real estate + bundle of rights

broker property management

real estate brokers must abide by chapter 475 brokers may keep up to $5,000 of the brokers personal funds or business funds in a property management escrow account sales associates who collect rent from tenants do so for their employing broker it is illegal for a sales associate or a broker associate to independently perform property management services for a property owner

transfer of real property

real estate contracts are not required to be witnessed ot notarized

federally related transactions

real estate transaction involving the sale, lease, purchase, investment, or exchange in real property, or the refinancing of real property; or the use of real property as security for a loan; and the the appraisal is being performed for a federal financial regulatory agency

bundle of rights (DEEPC)

real property ownership rights, DEEPC Disposition, dispose Enjoyment, quiet enjoyment Exclusion, trespassing Possession Control

restrictive covenants

recorded by the developer, along with the subdivision plat to maintain specific standards in the subdivision, such as requiring certain architectural or design specifications not disciminate against race, color, religion, sex, national origin, families w children, handicap, or public policy impose limitations on the use of land in an entire subdivision

situs

refers to prospective buyer's preferance for certain area location, location, location

statutory law

refers to statutes

florida fair housing act

refuse to rent or sell housing falsely deny that housing is available for inspection, rental or sale refuse to make a mortgage loan impose different conditions or terms on a loan threaten, coerce, or intimidate any individual exercising a fair housing right refuse reasonable charges to a dwelling to accommodate a disability

group license

registered to sales associates who are registered under 1 owner/developer

transition from single agent to transaction broker

the agent must first obtain the principals WRITTEN consent to the change in the relationship requires buyer/sellers signature the consent to transition to transaction broker notice includes wording regarding the principals permission to allow the single agent to transition to transaction broker

superior liens

take priority over all other liens 1. real estate liens 2. special assessment liens 3. federal estate tax lien

joint venture

temporary form of business arrangement if 2 parties from a joint venture to provide real estate services for compensation, both parties must be licensed real estate brokers

estate for years

tenancy with a starting and ending date created by written lease agreement

gross lease

tenant (lessee) pays a fixed (base) rent and the landlord (lessor) pays all expenses associated with the property including taxes, utilities, insurance, and repairs

net lease

tenant (lessee) pays fixed rent plus property costs net-net-net or triple net

ground lease (land lease)

tenant leases the land only and erects a building on the land

eviction requirements

tenant must be notified in writing that the landlord is demanding possession of the premises landlord must file a complaint for eviction in court of county where dwelling is located tenant is allowed 5 business days to file a reply in defense against the complaint if the tenant merely continues to occupy the premises without answering the complaint, the landlord must obtain a final judgement from the court clerk of court issues a writ to the sheriff at the time the sheriff executes (signs) writ of possession, the landlord or the landlords agent may remove any personal property found on the premises

termination of rental agreements by the tenant

tenant must first give written notice to the landlord citing the noncompliance and stating the intent to cancel the agreement if the noncompliance is not corrected thereafter, the landlord has 7 days to correct the noncompliance and resolve the problem if noncompliance is not corrected within 7 days after the delivery of the tenants compliant to the landlord, the tenant is entitled to terminate the agreement rent may be reduced by a court if the dwelling is rendered uninhabitable, owing to the landlords failure, the tenant may not be liable for the rent during the period the premises remain untenable, if the court agrees with the tenants assertions

percentage lease

tenant pays rent based on gross sales received by doing business on the leased property

variable lease

tenant pays specified rent increases at set future dates tied to a consumer price index (CPI)

adaption of the item

test that seeks to determine whether an item was designed for, or necessary to, the normal use of the specific property

sales associates and broker associates must complete their post license education before

the 1st renewal of their initial licenses

brokers must deposit funds by the end of

the 3rd business day

adverse possession

true owner of the record fails to maintain possession and the property is seized by another owner sleeps on his rights and does not use the legal means available to remove the hostile trespasser

state intangible tax on new mortgage

two mills ($.002) per dollar of debt new loan amount x $.002 = cost of intangible tax

civil rights act of 1964

type of real estate: public accommodations and public facilities protected class: race, color, religion, and national origin. ended racial segregation

fair housing act

type of real estate: sale or rental of a single family and multi family residential property, including advertising sales and rentals, financing, and brokerage systems protected class: race, color, religion, sex, national origin, familial status, and handicap status

civil rights act of 1866

type: all real estate (residential and commercial) protected class: race only

conversion

unauthorized control or use of another persons personal property

encroachment

unauthorized use of anothers property fence or garage located beyond a legitimate boundry implied easement

the money you earn is

your brokers

voluntary inactive license status

licensee who has been qualified for a real estate license but who voluntarily chooses not to engage in the real estate business

sales associate applicant must be (age)

18

license application expires after

2 years

license application expires:

2 years after the date the DBPR receives the application

armed forces renewal exemption

6 months after discharge from active duty

temporary license

DBPR may issue a temporary real estate license to the spouse of an active duty member of the armed forces who is assigned to duty in florida. the spouse must hold a valid real estate license in another state or foreign jurisdiction. a temporary license expires 6 months after the date of issue and is not renewable

military veteran and spouse waiver

DBPR has the authority to waive the initial application, license, and unlicensed activity fees for military vets and their spouses who apply for a real estate license within 60 months after honorable discharge

it is a violation of license law to share a commission with or to pay a fee or other compensation to an unlicensed person for the referral of real estate business clients, prospects, or customers, however

a florida broker may pay a referral fee to a broker licensed in another state so long as the foreign broker does not violate florida law.

broker

a person who for another, and for compensation or other consideration (or anticipation of compensation or other consideration) performs real estate services

absentee owner

a property owner who does not reside on the property and who often relies on a professional property manager to manage the investment

continuing education

active and inactive licensees must complete 14 hours of cont. edu. every 2 year period after. 3 hours of core law are required in 2 year 14 hour renewal cycle.

new sales associates must change their license to

active status before operating as a sales associate. submitting DBPR from RE:11

becoming a broker requires

additional education, experience, and passing the broker license exam

who does the DBPR employ

all DRE personnel to support FREC activities

broker applicant must have held an active real estate license for

at least 2 years during the 5 year period preceding application to become a broker.

individual who wishes to actively engage in real estate industry must

be registered and licensed with DBPR

applicants who possess a Florida sales associate license must fulfill their sales associates post licensing edu

before the expiration of the initial sales associate license or before applying for a brokers license (whichever comes first)

chapter 475 of florida statute exempts the following individuals from holding a real estate license

cemetery lots rent lots in mobile home park attorneys at law CPAs (certified public accountants) power of attorney (attorney in-fact) owners of time shares appraisers court appointed individuals hotel/motel clerks SEC (securities and exchange commission) apartment property owners

subdivision plat map

developers submit for new development for review by the gov

post licensing education

effect of placing all initial licensees in a conditional (probationary) status because failure to complete post licensing edu requirement will cause license to become null and void.

FREC powers and duties (3 areas)

executive powers, quasi legislative, quasi judicial. limited to administrative matters, nothing criminal makes decisions and sets policies carried out by DRE

many brokers and sales associates prefer to select one specific portion of a city and become an expert in that particular portion, called

farm area

FREC and what composes it

florida real estate commission. consists of 7 members. 4 active brokers-licensed for at least 5 years 1 active sales associate or broker- licensed for at least 2 years 2 consumer (unlicensed or lay) members-never been licensed governor appoints commission members to 4 year staggered terms paid 50$ per day

involuntary inactive license status

if a licensee fails to renew an active or voluntary inactive license before the expiration date when a licensee has been involuntary inactive for: 1. 12 months of less, they must satisfy the eduction requirement by completing 14 hrs of FREC approved continuing edu 2. more than 12 months, but less than 24 months, they are required to complete 28 hours of a commission-prescribed education course

development

improving raw land

to be successful, licenses must know how to

market real estate and businesses

NAR

national association of realtors. largest trade organization in the world. promotes ethics and education in the industry. NAR realtors must complete 3 hours of training every 4 years

broker license suspension or revocation

no disciplinary action is taken under against the sales associates and broker associates registered under that broker. they can no longer work for that broker, and DBPR places licenses under involuntary inactive status. sales associates and broker associates can seek new employment, and licenses will go back to active as soon as their new broker registers with DBPR

florida statute chapter 475 part 2

pertains to real estate appraisers and sets forth requirements for licensed and certified appraisers according to federal statute. FREAB (florida real estate appraisal board) regulates state certified, licensed and registered trainee appraisers

florida statute 120

procedural process for all governmental entities authorized under the florida constitution.

background check and expungement

process by which the record of criminal conviction is destroyed or sealed after expiration of time.

appraisal

process of developing and communicating an opinion about a property's value

registration

process of submitting information to the DBPR that is entered into the dept records

property management

professional service conducted by a person or company hired to maintain and manage property on behalf of the property owners

chapter 455

professions regulated by DBPR (dept business and professional regulation). discipline a real estate licensee who failed to notify DBPR within 30 days of conviction, finding of guilt, plea, or adjudication of a crime

the local government impacts the real estate business through

property taxation and regulatory activities

sales associates and broker associates licensed in florida must be

registered under their employing broker.

FREC executive powers

regulate and enforce license law, establish fees

division of florida condominiums, timeshares, and mobile homes

regulates condominiums, cooperatives, timeshares, and mobile home parks. also provides arbitration program to handle recall and election disputes for HOAs

FREAB (florida real estate appraisal board)

regulates state certified and licensed appraisers. federally related transaction

counseling

service of analyzing existing or potential projects and providing advice to individuals and firms regarding the purchase and use of real estate investments

real estate professionals have found that advertising money is more efficiently spent and produces better outcomes if efforts are focused on a target market

target marketing involves expertise in locating prospects

new licensees must not begin working until

the DBPR indicates the license has been changed to active status under the proper broker/brokerage entity

real estate brokerage

the business of bringing together buyers and sellers, owners and renters, and of completing real estate transactions

florida statute chapter 475 part 4

the commercial real estate leasing commission lien act, gives broker lien rights for earned commission associated with brokerage agreement to lease commercial real estate

the broker experience cannot be earned by working for an owner/developer unless

the owner developer is a licensed broker who holds a current, valid, active real estate license

a competent licensed real estate professional must know the economic and legal intricacies associated with transfers of

title, property taxes, financing, and local zoning ordinances

rental agents

typically find a tenant for property and collect a fee

exempt from real estate licensure are salaried employees who

who work in an onsite rental leasing office in a leasing capacity who does not receive commission managers of condos or coop apartments who rent individual units for periods no longer than one year and who are not paid a commission owner-developer who do not receive commission of a gov agency who perform real estate services for the state or local gov and do not receive commission business entities who negotiate the sale/purchase of radio, television, or cable enterprises (does not involve real property)