[incomplete] Principles of Real Estate I. ch1-12(first half of book)

1. Research and Education

"A person interested in real estate research can concentrate on such matters as improved construction materials and management methods, or on finding answers to economic questions such as "What is the demand for homes going to be next year in this community (state, country)?" Opportunities abound in real estate education. Nearly all states require the completion of specifies real estate courses before a real estate license can be issued. All states require continuing education for license renewal. As a result, people with experience in the industry and an ability to effectively teach the subject are much sought after as instructors. Real estate teacher organizations, such as the Texas Real Estate Teachers Association (TRETA) with its CREI (Certified Real Estate Instructor) designation and the Real Estate Educators Association (REEA) with its DREI (Distinguished Real Estate Instructor) designation, are now also making a significant impact on improving the quality of real estate education."

1. Government Service

"Approximately one-third of the land in the US is government owned. This includes vacant and forested lands, office buildings, museums, parks, zoos, schools, hospitals, subways, airports, and courthouses. All of these are real estate and all require government employees who can negotiate purchases and sales, appraise, finance, manage, plan, and develop. Cities, counties, and state governments all have extensive real estate holdings. At the federal level, Forest Service, Park Service, Department of Agriculture, Army Corps of Engineers, Bureau of Land Management, and General Services Administration are all major landholders. In addition to outright real estate ownership, government agencies such as the Federal Home Loan Bank employ thousands of real estate specialists to keep their real estate lending programs operating."

1. Property Management:

"For an investment property, the property manager's job is to supervise every aspect of a property's operation so as to produce the highest possible financial return over the longest period of time. The manager's tasks include renting, tenant relations, building repair and maintenance, accounting, advertising, and supervision of personnel and tradespeople. Agents are usually paid a salary and, if the property is a rental, a bonus for keeping the building fully occupied. To be successful, a property manager should be at ease with tenants, a public relations expert, handy with tools, a good bookkeeper, and knowledgeable about laws applicable to rental units."

1. Apartment Locators:

"In recent years, the service of helping tenants find rental units and helping landlords find tenants has become increasingly popular. This is normally a free service to the public. Locators are paid commissions by management companies and owners of apartment projects for finding qualified tenants. A locating agent must have an in-depth knowledge of the apartment complexes in the community and their requirements for tenants. The locating business has expanded in the last few years to include the leasing of condominiums, townhouses, and single-family homes. An offshoot of apartment locators are roommate locators. These are especially popular in cities with substantial numbers of single persons. Roommate locators are central in places where people who are looking for other people willing to share lining space can meet. The locator service maintains files on people with space to share (such as the second bedroom in a two-bedroom apartment) and those looking for space. The files will contain information on location, rent, male or female, smoking or nonsmoking, etc. Most roommate and tenant locator services have been started by individual entrepreneurs and are not affiliated with real estate offices. In Texas, a real estate license is required to operate as an apartment locator or a roommate locator."

1. Securities and Syndications

"Limited partnerships and other forms of real estate syndications that combine the investment capital of a number of investors to buy large properties number in the thousands. The investment opportunities and professional management offered by syndications are eagerly sought after by people with money to invest in real estate. As a result there are job opportunities in creating, promoting, and managing real estate syndications."

1. Land Development

"Most new houses in the US are built by developers who, in turn, sell them to homeowners and investors. Some houses are built by small-scale developers who produce only a few a year. Others are part of 400-house subdivisions and 40-story condominiums that are developed and constructed by large corporations that have their own planning, appraising, financing, construction, title, and marketing personnel. There is a equal opportunity for success in development whether you build four houses a year or work for a firm that builds 400 a year."

1. Full-Time Investors

"One of the advantages of the free-enterprise system is that you can choose to become a full-time investor solely for yourself. A substantial number of people have quit their jobs to work full time with their investment properties and have done quite well at it. A popular and successful route for many has been to purchase inexpensively and with a low down payment, a small apartment building that has not been well maintained but is in a good neighborhood. The property is then thoroughly reconditioned and rents are raised. This process increases the value of the property. The increase is paralyzed into a larger building -often through a tax-deferred exchange -and the process is repeated, Alternatively, the investor can increase the mortgage loan on the building and take the cash he receives as a "salary" for himself or use it as a down payment on another not-too-well maintained apartment building in a good neighborhood. Other individual investors have done well financially by searching newspaper advertisements and regularly visiting real estate brokerage offices looking for underpriced properties that can be sold at a markup. A variation of this is to write to out-of-town property owners in a given neighborhood to see if any wish to sell at a bargain price. Another approach is to become a small-scale developer and contractor. (No license is needed if you work on your own property._ Though personal efforts, you create value in your projects and then hold them as investments. One should be cautioned, however, that there are very few legitimate "get rich quick" schemes in the real estate business."

1. Consulting

"Real Estate Consulting involves giving others advice about real estate for a fee. A consultant must have a very broad knowledge of real estate including financing, appraising, brokerage, management, development, construction, investing, leasing, zoning, taxes, title, economics, and law. To remain in business as a consultant, one must develop a good track record of successful suggestions and advice. Because it is difficult to be a consultant without performing brokerage function, most consultants have a real estate license."

2. Real estate

"Real estate or real property is land and the improvements made to land as well as the rights to use them." -anything affixed to land with the intent of being permanent is considered to be part of the land, therefore real estate -houses, schools, factories, barns, fences, roads, pipelines, landscaping

1. Mortgage Financing

"Specialists in mortgage financing have a dual role: (1) to find economically sound properties for lenders and (2) to locate money for borrowers. A mortgage specialist can work independently receiving a fee from thh borrower for locating a lender, or as a salaried employee of a lending institution. The commission paid to a mortgage specialist on a multimillion-dollar loan can be quite substantial. Texas requires mortgage brokers to be licensed."

1. Real Estate Appraiser

"The job of the real estate appraiser is to gather and evaluate all available facts affecting a property's value. Appraisal is a real estate career opportunity that demands a special set of skills: practical experience, technical education, and good judgement. If you have an analytical mind and like to collect and interpret data, you might consider becoming a real estate appraiser. The job combines office work and field work, and the income of an expert appraiser can match that as a salaried appraiser for local tax authorities or lending institutions. The appraisal process is becoming more complex, however. Most lenders and taxing authorities require that their appraisers have some advanced credential designation to ensure an adequate level of competence."

1. Title Insurance

"The title insurance business offers an abundance and wide range of job opportunities. A person who is very good at performing simple accounting procedures and preparing closing statements and has an outgoing personality could be an excellent escrow officer. One who is more inclined to the technical side, research, or document review could be a title examiner. There are also opportunities available in administration and management. These positions require a variety of skills and can be very rewarding. It's interesting to note that most people that go into the title insurance business very seldom leave it. There are different challenges every day."

1. Urban planning

"Urban planners work with local governments and civic groups for the purpose of anticipating future growth and land use changes. The urban planner makes recommendations for new streets, highways, sewer and water lines, schools, parks, and libraries. The current emphasis on environmental protection and controlled growth has made urban planning one of real estate's most rapidly expanding specialties. An urban planning job is usually a salaried position and does not emphasize sales ability."

1. Farm Brokerage:

"With rapid disappearance of the family farm, the farm broker's role is changing. Today, a farm broker must be equally capable of handling the 160-acre spread of Farmer Jones and the 10,000-acre operation owned by an agri-business corporation. College training in agriculture is an advantage and on-the-job training is a must. Knowledge of soil types, seeds, fertilizers, production methods, new machinery, government subsidies, and tax laws is vital to success. Farm brokerage offers as many opportunities to earn commissions and fees from leasing and property management as from listing and selling property."

1. Residential Brokerage:

"requires a broad knowledge of the community and its neighborhoods, finance, real estate law, economics, and the money market. Working hours will often include nights and weekends because these times are usually most convenient to buyers and sellers. A residential agent must also possess an automobile that is suitable for taking clients to see property. A person who is adept at interpersonal relations, who can identify clients' buying motives, and who can find the property fit, will be successful in this business. In only a few offices are new residential sales agents given a minimum guaranteed salary or a draw against future commissions. Therefore, a newcomer should have enough capital to survive until the first commission is earned -and that can take 4-6 months. Additionally, the agent must be capable of developing and handling a personal budget that will withstand the feast and famine cycles that can occur in real estate."

1. Industrial Brokerage:

"specialize in finding suitable land and buildings for industrial concerns. This includes leasing and developing industrial property as well as listing and selling it. An industrial broker must be familiar with industry requirements such as proximity to raw materials, water and power, labor supplies, and transportation. He must also know about local building, zoning, environmental, and tax laws as they pertain to possible sites, and about the schools, housing, and cultural and recreational facilities that would be used by future employees of the plant. Commissions are irregular, but are usually substantial. Working hours are regular business hours, and sales efforts are primarily aimed at locating facts and figures and presenting them to clients in an orderly fashion. Industrial clients are usually sophisticated business people. Gaining entry to an industrial brokerage and acquiring a client list can be slow."

1. Commercial Brokerage:

"specialize in income-producing properties such as apartment and office buildings, retail stores, and warehouses. In this specialty, the sales agent is primarily selling monetary benefits. These benefits are the income, appreciation, mortgage reduction, and tac shelter that a property can reasonably be expected to produce. To be successful in commercial brokerage, one must be very competent in math, know how to finance transactions, and be aware of current tax laws. One must also have a sense of what makes a good investment, what makes an investment salable, and what the growth possibilities are in the neighborhood where a property is located. Commission income is likely to be less frequent but in larger amounts compared to residential brokerage. The time required to break into the business is longer, but once in the business, agent turnover is low. The working hours are much closer to regular business hours than those in residential."

3. easement by prescription

(another non written documentation): accessed easement by long term ownership, legally recognized easement (:persons using a private road for a long enough period of time) -is a right created by use of another's property as easement for a period of time.

3. easement by implications

(not on a written document): purchasing half the back of the parcel, the only way to the back is through the front. The law may protect the buyer's right to travel over the front to get to his land. -is the right to cross over another's property to get to your land. -may be unwritten; example of land-locked property which had to be accessed by crossing over another's property

3. Qualified Fee Estate

-A fee estate subject to certain limitations imposed by the person creating the estate. Qualified fee estates(uncommon) fall into 3 categories: -fee simple [Determinable] estate(conditional limitation): limited to certain events: ( Mr Smith donates a parcel of land to a church "so long as" the land is used for religious purposes ) estate termination is automatic if used contrary to the limitation stated in the deed, otherwise full ownership rights. -fee simple subject to [Condition subsequent]:similar to determinable, but gives grantor the right to terminate rather than automatic termination -fee simple upon [Condition precedent]: the title will not take effect until condition is performed (a land developer might use a condition precedent to encourage lot purchasers to build promptly. This would enhance value of her unsold lots.) -from the standpoint of the property owner, a qualification is an encumbrance to her title.

3. Life Estate

-Conveys an estate for the duration of someone's life. -The duration of the estate can be tied to the land of the life tenant (the person holding the life estate) or to a third party. -Someone must be named to acquire the estate upon its termination. (granting your financially needy aunt a house to live in for the rest of her life; life tenant. You must decide who gets the house upon her death.) -If you want the house back, you would want a reversionary interest for yourself. -or if you predecease her, to your heirs. -if you want your children, friend, relative, or charity; they are the remainderman -When your aunt is alive, the remainderman is said to hold a remainder interest in the house. When she dies, that interest changes to a fee simple estate. -A life estate does not have to be based on the life span of the life tenant. it can be based on the life span of a third party, [life estate pur autre vie] (for the life on another). -(suppose your rich uncle is naming your aunt to receive a substantial portion of his wealth upon his death. If this could adequately take care of her financial needs, you could grant your aunt a life estate until your uncle dies) -Sometimes a life estate is used to avoid the time and expense of probating a will and to reduce estate taxes. (an aging father could deed his real estate to his children but retain a life estate for himself)

2. ownership of waterways

-Water (ordinary flow, underflow, tides of every flowing river, natural stream, lake, every bay or arm of the Gulf of MX , storm water, flood water, rain water of every river natural stream canyon, ravine, depression, and watershed) is the property of the State of Texas -water imported from outside the state boundaries for use in the state transported through the beds and banks of any applicable stream within the state, or by using any facilities owned or operated by the state, is the property of the State. -Permits are given to regulate the specifically appropriated amount of water used, and also beneficially appropriate the amount used for the purposes specified in the appropriation. -If water appropriated is not used, the right can be lost, limited, or prohibited in future years. -If used for 3 years, then "first in time is first in line", if others come along. -file by march 1st every year

3. Homesteads

-designed to protect the family's home from certain debts and and judgements against them that might result in the forced sale and loss of the home, -provide the other with a home for life, upon death of one spouse, -restricts one spouse from acting without another when conveying the homestead or using it as collateral for a loan

2. Prior Liens against fixtures... Chattel mortgage?

-the buyer may find that an important fixture may have prior claims by a supplier or vendor that give the purchaser an inferior priority in the event of nonpayment or subsequent default by the seller. -for instance, if a homeowner purchased a central air conditioning unit, the air conditioning contractor or vendor would probably record and properly file a chattel mortgage (which is recorded before the item becomes a fixture) in the real property records to reflect their interest in the AC system until it is fully paid for. -The AC system once affixed to the real estate is a part of that real estate. However, Texas statute gives that AC contractor, as a supplier and materialman, the right to put a lien on the property and remove that AC in the event that the contractor is not paid. Therefore, a subsequent purchaser may discover the AC unit can be removed after they take possession of the premises.

3. Easement termination

1. when purpose no longer exists 2. if dominant and servient estate combine with intent of extinguishing the easement 3. is released by the dominant estate to the servient estate 4. by lack of use

1. Texas Broker License

900 classroom hours or 60 semester hours To be eligible to apply for a real estate Broker License: -Four (4) years active experience &3600 points of qualifying practical experience plus -270 classroom hours of core real estate courses including a 30-hour Real Estate Brokerage course plus An additional 630 classroomhours in related courses

2. Separate bill of sale

A document that transfers title to personalty or personal property (in addition to the deed). -a right or interest in things of a temporary or movable nature; anything not classified as real property.

2. Monument

A man-made monument could be an iron pipe, stone, tree, or other fixed point used in making a survey. -Used when using metes and bounds as land description by setting a monument at one corner of the parcel, and then describing the parcel in terms of distance and direction from that point. -from that monument, a surveyor runs the parcel's outside lines by compass and distance so as to take in the land area being described. -to guard against the possibility that the monument might later be destroyed or removed, it is referenced by means of a connection line to a nearby permanent reference mark (benchmark - a fixed marker, permanent reference markers for location and elevation) established by a government service agency.

2. Parcel

A parcel can be described as follows: NW ¼ of the SW ¼ To calculate the area of that parcel: ¼ x ¼ x 640 = ______ acres The earth is round, not square. Therefore, not all sections contain 640 sq ft.

4. Joint venture

A partnership of 2 or more persons or firms in order to carry out a single business project. A joint venture is treated as a partnership for tax purposes. -However, whereas a general partner can bind her partnership to a contract, a joint venturer cannot bind the other joint venturers to a contract for anything outside the scope of that single business project. -ex. purchase of land by two or more persons with the intent of grading it and selling it as lots; the association of a land owner and builder to build building on it to sell to investors. -if more than one project is undertaken, the relationship may become a general partnership rather than a joint venture -ex: develop a subdivision or planned community. A partner can bind the others only within the scope of the one specific business project. All contribute talent or money and have strong interest to succeed.

2. Appurtenances

A right, a privilege, or improvement that belongs to and passes with land but is not necessarily a part of the land. -examples: easements and rights-of-way, condominium parking stalls, shares of stock in a mutual water company that services the land.

2. TCEQ - Texas Commission on Environmental Quality

An agency of the state, TCEQ, gives permits for the amount of water that can be used from streams, rivers, lakes, etc.; they enforce the laws and duties under the Texas Water Code. Their policies are approved by the Water Development Board Texas Water Code. This agency is responsible for carrying out legislative, executive, and judicial functions provided under the Texas Water Code delegated to it by the Constitution and other laws of the state of Texas. The commission is composed of 3 members appointed by the Governor with the advice and consent of the Senate. Each must be from a different section of the state. Any person affected by a ruling, order, decision, or other act of the department may file a petition to review, set aside, modify, or suspend the act of the department....

3. Periodic Estate

An estate from year-to-year or a periodic tenancy, a periodic estate has an original lease period with a fixed length; when it runs out, unless the tenant or his landlord acts to terminate it, renewal is automatic for another like period of time. - a-month-to month is an example of this arrangement -to avoid last minute confusion, rental agreements usually require that advance notice be given if either the landlord or the tenant wishes to terminate the tenancy.

4. Associations

An organization that can own property and transact business in its own name. The homeowners associations found in condominiums and planned unit developments are one example of a particular type of association. -a not-for-profit organization that can own property and transact business in its own name In TX, if not properly incorporated, an association can create proportional liability for all its members.

4. Joint Tenancy

Another form of multi-person ownership. Joint tenancy is the right of survivorship. Upon death of a tenant, his interest does not descend to his heirs or pass by his will. The entire ownership remains with the surviving joint tenant(s). In other words, there is just one less owner. -In joint tenancy each spouse is liable for his portion of ownership -can be terminated by one tenant's conveyance of his or her interest. -Corporations cannot be joint tenants - not human and exist forever, never dies.

2. Improvements

Any form of land development. -are they permanently attached? -buildings, roads, fences, pipelines, houses, schools, barns, landscaping, etc.

1. License Requirements

Any person who, for compensation or the promise of compensation -lists or offers to list -sells or offers to sell -buys or offers to buy -negotiates or offers to negotiate

3. Property taxes

At state and local government levels, the real property tax provides money for such things as schools, fire and police protection, parks, and libraries. -The right of taxation enables the government to seize ownership of real estate upon which taxes are delinquent and to sell the property to recover the unpaid taxes

3. prohibition of waste:

Because a life estate arrangement is temporary, the life tenant must not commit waste by destroying or harming the property. A life tenant must care for the property(keep property in a reasonable repair), pay property taxes, assessments, and interest on debt secured by the property. During the tenancy, the life tenant is entitled to the use and/or income generated by the property, and may sell, lease, rent, or mortgage his or her interest. However, that it is impossible for the life tenant to sell, lease, or mortgage any greater interest than the life tenant holds.

4. Limited partnership

Because of unlimited financial liability and management responsibility, an alternative partnership form, the limited partnership, has developed. the Business Organizations Code requires that a limited partnership form be formed by a written document. -49/50 + Washington, D.C., have adopted the Uniform Limited Partnership Act which legalizes LP's and requires that it all be in writing. -composed of general and limited partners. -the general partners organize and operate the partnership, contribute some capital, and agree to accept the full financial liability of the partnership. -The limited partners provide the bulk of the investment capital, have little say in the day-to-day management of the partnership, share in the profits and losses, and contract with their general partners to limit the financial liability of each limited partner to the amount the or she invests. -a well written partnership agreement will allow for the continuity of the partnership in the event of the death of either a general or a limited partner. -advantages of a limited liability, minimum management responsibility, and direct pass-through of profits and losses for taxation purposes have made this form of ownership popular. -however, being free of management responsibility is advantageous to the investors only if the general partners are capable and honest. -if they are not, the only control open is to the limited partners to vote to replace the general partners. -Disadvantage: an interest is hard to sell.

1. Texas License Requirements

Before applying for a real estate Salesperson License requiring 180 classroom hours, individuals must furnish evidence of successfully completing the following: -Principles of Real Estate course (60 classroom hours) -Law of Agency course (30 classroom hours) -Law of Contracts course (30 classroom hours) -Promulgated Contract Forms course (30 classroom hours) -Real Estate Finance course (30 classroom hours)

4. Community Property, Separate Property,

Community Property rights do not come into effect until there is a marriage and similarly end with dissolution of marriage. The law in Texas presumes all property acquired after marriage is community property. -Non community property is Separate property. Separate property is acquired prior to marriage, even if subsequently marries. -Rents and revenues from separate property are usually considered community property, unless otherwise agreed. -Separate property could be: Acquired by gift Acquired by separate funds By written agreement -note....real estate agents and title companies are going to want the signatures of both .....just in case....rather than having one spouse sign a listing agreement or contract. In divorce situations upon sale of a property, the title company will want to have the documentation from the divorce decree regarding that property owned during marriage.

3. Easement in Gross

Doesn't benefit land. There's only a servient estate and no dominant estate. (Ex. utility easements like power lines or railroads) -is given to person owning land. -ex: power company; a right given to a person or business that goes with the land when sold; a benefit to the owner, therefore, not dominant or servient

1. Education Standard Advisory Committee (ESAC):

ESAC is a new statutory committee appointed by TREC to regularly review and revise curriculum standards, course content requirements, and instructor certification requirements for core and Continuing Education(CE) courses. The committee consists of 12 members. A nonvoting staff member may [also] be appointed

2. Section

Each 36-square-mile township is divided into 36-one-square-mile-units called sections. -sections are numbered 1-36 starting on the top right corner of the township -with this numbering system, any 2 sections with consecutive numbers share a common boundary. each 36 mile township is divided into 36 sections, each 1 square mile.

2. Acre

Each square-mile section contains 640 acres, and each acre contains 43,560 square feet. -Any parcel of land smaller than a full 640-acre section is identified by its position in the section. This is done by dividing the section into quarters and halves. -1 sq. mi. = 640 acres -1 acre = 43,560 square feet

2. Township

Every 6-miles north and south of a base line, township lines are drawn. They intersect with the range lines and produce six-by-six mile mapped squares called townships(not to be confused with township as applied to political subdivisions)

2. Fructus naturales:

Fructus Naturales are considered part of the land. -Trees, cultivated perennial plants, natural vegetation, uncultivated vegetation of any sort; regarded as fixtures

4. Real estate investments

Idea of creating a trust carries out the investment objectives of

3. Home Equity Liens in TX

In 1997, a constitutional amendment was passed to allow home equity loans in TX. -restrictive proposal, allowing only one loan at a time, with no personal liability, without a prepayment penalty, that cannot be called (accelerated) because of the homes' decrease in the market value. -a person can have 1 without personal liability and no prepayment penalty (penalty a lender may charge if loan is paid off early). There are many restrictions. There is also a 3-day right to rescind after applying for a home equity loan (one can change their mind).

3. Subsurface rights

In TX, oil and mineral rights are subsurface estates. -This is the dominant estate in Texas! -Owner of mineral rights can reasonably enter upon the property to extract the minerals to which he holds a fee or leasehold estate. -Minerals are real property until they are removed from the ground and become personality.

2. Metes and bounds example

In mapping shorthand, this parcel would be described by first identifying the monument, then the county and state within which it lies, and "thence S80o0'0"E, 180.0'; thence S15o0'0"W, 160.0'; thence S85o0'0"W, 151.0'; thence N4o11'18"E, 199.5' back to the p.o.b." -This is read from this point, we travel clockwise along the parcel's perimeter, reaching the next corner by going in the direction 80 degrees east of south for a distance of 180 feet. We then travel in a direction 15 degrees west of south for 160 feet, thence 85 degrees west of south for 151 feet, and then 4 degrees, 11 minutes, and 18 seconds east of north for 199.5 feet back to the point of beginning. -It is customary to describe a parcel as if traveling clockwise, but not required.

2. Intention

Intention is inferred from the nature of the article, the relationship and situation of the parties involved, the policy of the law, the mode of annexation, and the purpose or use for which the annexation is made. Preeminence is given the question of intention of the parties. It is always a good idea to confirm the party's intent, in writing, in the contract for sale.

2. Personal property / Personalty

Items that are not part of the land. -chattel; sold by using a Bill of Sale; not fixtures -chairs, furniture, beds, desks, automobiles, farm machinery -fructus industriales or emblements (most courts of law regard them as personal property even though they are attached to the soil.)

4. Poor Mans Will

Joint tenancy has loosely been labeled a poor mans will, because of the survivorship feature. "single owning unit" -However it should not replace a properly drawn will because it affects only that property held in joint tenancy. A will can be changed if the persons named therein are no longer in one's favor. But once a joint tenancy is formed, the title is permanently conveyed and no further opportunity for change exists unless the joint tenancy is terminated -A joint tenant cannot name someone in his will to receive the joint tenant interest because his interest ends upon his death. -ownership in joint tenancy may result in additional estate taxes. -it can be used to defeat dower or curtesy rights.

2. Land

Land starts at the center of the earth, passes through the earth's surface, and continues on into space. Land is not just the surface of the earth. This is important because, given a parcel of land, it is possible for one person to own rights to use its surface (surface rights), another to own the rights to drill or dig below its surface (subsurface rights), and still another to own the rights to use the air space above it (air rights). -Improvements -Fixtures -Tests of Fixture: annexation, adaptation, intention -Trade Fixtures -Plants, Trees, & Crops

4. Operations of a limited liability company

Must include Limited, LC, or Ltd. abbreviation. It must maintain the registered office and registered agent(similar to corp), and all real or personal property owned or purchased by the LLC shall be held and owned, and the conveyance shall be made, in the name of the LLC. LLC companies are not Corps, partnerships, nor limited partnerships. -They borrow attributes from both the general partnerships and the corporation, but mix them differently than they are mixed in the Limited partnership. -they are a totally new theory of ownership enacted by the state legislatures and, a lot of law yet to be made in this area. -advantage: classification as a partnership for federal income tax purposes -will not be taxed as a corporation

1. Education Standard Advisory Committee

New statutory committee appointed by TREC to regularly review & revise curriculum standards, course content requirements, & instructor certification requirements for core and Mandatory Continuing Education (MCE) courses. 12 members 7 from practice of real estate 4 from real estate instructors 1 public member

4. Tenancy by entirety

Not recognized in Texas due to fact that Texas is a community property state. also called tenancy by entireties, is a form of joint tenancy specifically for married persons. To the 4 unities, a fifth is added: Unity of person=based on the legal premise that a husband and wife are an indivisible legal unit. Two key characteristics (1) the surviving spouse becomes the sole owner of the property upon the death of the other, and (2) neither spouse has a disposable interest in the property during the lifetime of the other. -right of survivor ship Bothe signatures are necessary to convey title to the property. -A tenancy by entirety can be terminated only by joint action of husband and wife. -Use "John Smith and Jane Smith, husband and wife as tenants by entirety with the rights of survivorship." on deeds and other conveyances to avoid later questions as to whether their intention might have been to create joint tenancy or tenants in common.

1. Research and Education (summarized):

Opportunities abound in real estate education. Teacher organizations are TRETA which offers a CREI designation and REEA which offers the DREI designation. Research minded individuals would love to study the economics, trends, management methods, building materials, i.e., a vast array to topics. The Education Standard Advisory Committee (ESAC) is a statutory committee appointed by the Texas Real Estate Commission to review curriculum standards, course content for core and MCE courses.

2. Reference to Other Documents Other Than Maps

Other publicly recorded documents, such as deeds, mortgages that contain a good legal description.

1. Not required to be licensed:

Owners who deal only with their OWN property

1. License Requirements:

Property owners who deal only with their own properties do not need a real estate license. One who works for another in selling, buying, leasing, negotiating to do those activities all for a fee would need a license.

2. Realty

Realty refers to land and buildings and other improvements from a physical standpoint -land + improvements (structures, etc.)

1. Career Opportunities

Residential Brokerage Commercial Brokerage Industrial Brokerage Farm Brokerage Property Management Apartment Locators Real Estate Appraising Government Service Land Development Urban Planning Mortgage Financing Securities & Syndications Consulting Title Insurance Full-Time Investor Research & Education

2. ECONOMIC CHARACTERISTICS OF LAND (SMFS)

Scarcity - "in demand", a shortage (more so in some areas than others) Modification - improvement to surrounding parcels affecting a subject property (airport, flooded property enhanced by upstream dam) Fixity - long term pay-off; permanence of investment Situs - area preference; location in its economic value; single most important factor in real estate.....a freeway can change a preference, etc.

2. Open Beaches Act

State has rights to egress and ingress (enter and leave)

1. TREC info

TREC Mailing Address: Texas Real Estate Commission P. O. Box 12188 Austin, TX 78711-2188 Street Address: Texas Real Estate Commission Stephen F. Austin Building 1700 N. Congress Ave., Suite 400 Austin, TX 78701 Phone: (512) 936-3000 Email: [email protected]

2. Water Development Board

TWDB is composed of 6 members who are appointed by the Governor with the advice and consent of the Senate. The board establishes and approves all general policies of the state regarding agricultural water funding and water-related research, including administration of the Texas Water Bank (facilitates the transfer, sale, or lease of water rights though out the state) and the Texas Water Trust (water rights held for environmental flow maintenance purposes)....

1. Chapters overview:

The chapters are designed to gradually build the student's knowledge of real estate. Chapter 2= begins with land descriptions, fixtures, and the physical and economic characteristics of land. Chapter 3= leads to rights and interests one can have in land. Chapter 4= talks about the types of ownership that one can have to land and how that interest can be held by an individual, two or more persons, or a company. Chapter 5= deals with issues of real estate ownership. Chapter 6= defines the differences in condos, cooperatives, PUDs and timeshares. Chapters 7 and 8= apply contract law to offers and acceptance with emphasis on what features actually makes contracts legally binding. Chapter 9= covers licensing laws and professional affiliations & covers the Texas license requirements and a visit to the Texas Real Estate Commission will provide information regarding requirements and forms for downloading. Much of the application process can be done on-line. Chapter 10= discusses the business relationship of a broker and the agent. Chapter 11= explains the relationship of the broker and agent with the principal (buyer or seller) or third parties. Chapter 12= defines the important laws that licensees must be well aware of and abide by. The rest of this textbook will be covered in Principles II.

2. Annexation

The first test of a fixture. Annexation refers to how the object is attached to the land. Ordinarily, when an object that was once personal personal property is attaches to land by virtue of its being embedded in the land or affixed to the land by means of cement, nails, bolts, concrete already placed on the driveway, lumber, wiring, pipes, doors, toilets, sinks, water heaters, furnaces, and other construction materials change from personal property to real estate when they become part of a building. -it becomes affixed and is conveyed with the land(cement on truck is personalty until it is poured onto driveway)

3. Fee simple

The largest, most complete bundle of rights one can hold in land; land ownership -Under the alloidal system, the rights of taxation, eminent domain, police power, and escheat are retained by the government. -Fee simple is the remainder bundle of rights and is available for private ownership -can be held by individuals and their heirs forever or until their government can no longer protect those rights. -The largest estate one can hold: fee simple -Other lesser estates in land, such as life estates and leaseholds, are created from the fee estate.

4. Texas Partnership Statutes

The nature of Tx community property laws has generally dictated that a partnership has 3 distint interests, which are set out by the Texas partnership statutes.: 1.a partners rights to specific partnership property (desks, computers, machinery, etc) which is NOT community property. 2. a partners interest in the partnership(usually determined by a dollar amount) which MAY be community property 3. a partners right to management in the partnership, which is NOT community property

3. Eminent domain

The right of government to take ownership of privately held real estate regardless of the owner's wishes. -The legal proceeding involved in eminent domain is condemnation -The property owner must be paid the market value of the property taken from him -The actual condemnation is usually preceded by negotiations between the property owner and the agent of the public body wanting to acquire ownership. -Must arrive at a mutually acceptable price, or a formal proceeding in eminent domain is filed against the property owner in a court of law. -Land for schools, freeways, streets, parks, urban renewal, public housing, public parking, utility companies and railroads (utility, pipelines, and tracks) and other social and public purposes is obtained this way

3. Police power

The right of the government to enact laws and enforce them for the order, safety, health morals, and general welfare of the public. -examples are zoning laws; planning laws; building, health, and fire codes; and rent control. A key difference between police power and eminent domain is that although police power restricts how real estate may be used, there is no legally recognized "taking" of property. -there is no payment to the owner who suffers loss of value through the exercise of police power -police impact has the most impact on land value

2. Adaptation:

The second test of a fixture. How would you classify custom-made drapes made for an unusual window? How is this article adapted to the building? If the drapes were custom cut for the windows in the building, they are automatically included in the purchase or rental of the building. -standard drapes suitable for use in other buildings are personalty and not automatically included with the building. -specifically adapted to the building -custom

2. Land Descriptions

There are 6 commonly used methods of describing the location of land. (1) informal references (2) metes and bounds (3) rectangular survey system (4) recorded plat (5) assessor parcel number (6) reference to documents other than maps. -Methods (1)-(4) are generally considered to be legal descriptions: they sufficiently identify the land so that it cannot be confused with another tract. -Methods (5) and (6) are informal references: they are not sufficient for legally identifying the land.

1. Real Estate Appraising (summarized):

This is the job of determining the value of a particular property. Practical experience, technical education, and a good data processing mind are required. It requires field work and office work and can be lucrative. One can work independently, on salary with an appraisal company or lending institution.

4. Four unities

To create joint tenancy, four unities must be present. They are the unities of time, title, interest, and possession. (PITT) -Time=each must acquire ownership at the same moment. Once formed, it is not possible to add new joint tenants later unless an entirely new joint tenancy is formed among the co-existing owners and new co-owner. (If person A sells his interest to person D, then person B, C, and D must sign new joint tenancy document. If not done, person B automatically becomes a tenant in common with B and C, who between themselves remain joint tenants. D will then own an undivided1/3 interest in common with B and C, who will join an undivided 2/3 interest as joint tenants. -Title=joint tenants acquire their interests from the same source; the same deed or will. Texas requires that the joint tenancy be expressly agreed to in writing by the parties involved. Automatic joint tenancy presumption has been abolished by statute. -Interest= joint tenants own one interest together, each joint tenant has exactly the same right in interest(the foundation upon which survivorship feature rests). If the joint tenants list different individual interests, they lack unity of interest and will be treated as tenants in common. Unity of interest also means if one joint tenant holds a fee simple interest in the property, the others cannot hold anything but a fee simple interest. -Possession= joint tenants must enjoy the same undivided possession of the whole property. No individual owns a particular portion of it.

2. Plants, Trees, and Crops

Trees, cultivated perennial plants, and uncultivated vegetation of any sort are considered part of the land (fructus naturales). Annual cultivated crops are called fructus industriales or emblements, and most courts of law regard them as personal property even though they are attached to the soil.

4. Right of survivorship

Upon death of one joint tenant, the interest is extinguished. The other(s) are left as owners immediately. If it was just two, it becomes sole ownership once one dies. -community property may not be held in joint tenancy

2. Estate tax value=

Value that federal and state taxation authorities establish for a deceased person's property; it is used to calculate the amount of estate taxes that must be paid.

2. Value

We tend to think of market value. A single property can have other values, too. Worth is affected by the purpose for which the valuation was performed.

3. Escheat

When a person dies and leaves no heirs and no instructions as to how to dispose of real and personal property, or when property is abandoned, the ownership of that property reverts to the state.

3. Encumbrances

When a right is removed from the fee simple bundle, it creates an impediment to the free and clear ownership and use of that property. Such impediment to a clear title is called an encumbrance. -any claim, right, lien, estate, or liability that limits the fee simple title to property. -examples; easements, encroachments, deed restrictions, liens, leases, and air and subsurface rights. -qualified fee estates are encumbered estates, as are life estates

4. No right of survivorship

When a tenancy in common exists and one of the co-owner dies, the undivided interest passes to the heirs or devisees, who then become tenants in common with the remaining co owners. There is no right of survivorship; that is the remaining co owners do not acquire the deceased's interest unless named in the last will and testament to do so. -When a creditor has a claim on a co owners interest and forces its sale to satisfy the debt, the new buyer becomes a tenant in common -any income generated by the property belongs to the tenants in proportion to the size of their interests. Similarly, each tenant is required to pay taxes, repairs, upkeep, interest, debt repayment the same way. If a tenant doesn't contribute, the other co owners can pay on his behalf and sue. It is possible to request a court ordered partition. If the property cannot be physically divided, it is sold and tenants are given their proceeds

2. Trade fixtures

When a tenant makes permanent additions to the property they are renting, the additions belong to the landlord when the lease or rental agreement expires usually. However, this can work a particular hardship on tenants operating a trade or business. -for example, a supermarket moves to a rented building, then buys and bolts to the floor various trade fixtures such as display shelves, meat and dairy coolers, frozen food counters, and checkout stands. Then the supermarket moves out, can they be removed and kept by the tenant? -Modern courts hold that tenant-owned trade fixtures do not become property of the landlord. -For the tenant to keep the trade fixtures, they must be removed in a timely manner before the expiration of the lease and without seriously damaging the building -usually belong to tenant even though built in (exception to test of a fixture)

2. Fixture

When an object that was once personal property is attached to land (or a building thereon) so as to become real estate -as a rule, the fixture is the property of the landowner, and when the land is conveyed to a new owner, it is automatically included with the land.

4. Sole ownership or estate in severalty

When title to property is held by one person -although several could imply several persons have ownership, it is NOT the case. -remember by "severed" (separate, sole, ownership) -Sole ownership is available to single and married person, however in the case of married persons, most states require one spouse to waive community property, dower, or curtesy right in writing. -Businesses usually hold title to property in severalty. It is from the estate in severalty that other tenancies are carved. -as sole owner you can make all the decisions regarding a property without co owners agreement. -You can decide what property or properties to buy, when to buy, and how much to offer. You can decide whether to pay in cash or to seek loan using the property as collateral. -You control how the property will be used, how much rent to charge, how it will be managed, terms. -high entry cost to sole ownership. This form of real estate ownership is not possible for someone with only a few hundred dollars to invest

4. Tenants in common

When two or more persons share the ownership of a single property. As tenants in common, each person owns an undivided interest in the whole property. Each person has a right to possession of the property. -none can claim others nor claim a portion -no right of survivorship -each owner can sell, lease, mortgage, give away, or devise his individual interest. -If you invest in property with your friends, you cannot, in the future, exclude them from your property percentage. You could only sell or dispose of your interest without the permission of your friends. If you sell, they purchaser is the new tenant in common -In TX, in a deed, two or more persons named owner are presumed tenants in common unless specified otherwise. If married, may be automatically considered to be taking ownership as community property. -Unity of possession is the only unity essential to a tenancy in common.

2. Littoral Rights:

Where land borders on a lake or sea -rights allow landowners to use and enjoy the water touching their land provided they do not alter the water's position by artificial means. -owners of lakes or sea have rights to use the water, but not to change the water's position by artificial means

2. Tests of a fixture: Annexation, Adaptation, Intention

Whether or not an object becomes real estate depends on whether the object was affixed or installed with the apparent intent of permanently improving the land. In Texas, the determination of what constitutes a fixture has 3 tests.

4. Limited Liability companies

a company consisting of members or managers that is governed by its bylaws, -Formation - must be registered with the State giving certain information

3. Liens

a hold or claim to someone's title (encumbrance)

3. LICENSE.....

a personal privilege to use land, not a right or an estate in land. It can not be assigned to someone else and it can be cancelled by the person assigning it; and it's not an encumbrance to land. Example: Parking lot attendant gives car owner a license to park in a space for a period of time.

3. easements

a right or privilege one has to the use of the land of another for special purpose consistent with the general use of the land. The land owner is not dispossessed from his land, but rather coexists side by side with the holder of the easement. -examples are those given to telephone and electric companies to erect poles and to run lines over private property, easements given to people to drive or walk across someone else's land, and easements given to gas and water companies to run pipelines to serve their customers. -the usual procedure in creating an easement is for the landowner to use a written document to specifically grant an easement to someone else or to reserve an easement to himself in the deed when he sells the property.

3. Leasehold estates:

although this is possession of the land, there is no ownership. The estate is of definite duration. Under a leasehold estate, the user is called the tenant or lessee, and the person from whom he leases is the landlord or the lessor. As long as the lease is valid, paid, and abiding by it, the owner(although owns the property) cannot occupy it until the lease has expired. -During the lease period, the freehold estate owner is said to hold a reversionary interest(the right to cover possession at the end of the lease period). -meanwhile, the lease is an encumbrance against the property. There are 4 categories of leasehold estates (1)estate for years (2)periodic estate (3)estate at will, and (4)tenancy at sufferance

1. Title Insurance (summarized):

an escrow officer needs good accounting skills and an outgoing personality would be an excellent asset.

1. Full-Time Investors (summarized):

an individual can devote their sole job to buying, selling and managing real estate. Sometimes by starting small the investor can grow into eventually into dealing with larger properties, i.e., apartment complexes. Individuals can do very well by buying a property, fixing it up, renting it out, selling it, buying a more and repeating the process.

3. TEXAS HOMESTEAD RIGHTS

are constitutional rights; can not be waived; are automatic; (no papers to sign); are protected from forced sale, -protection is automatic -except non-payment of: mortgage or property taxes, or for labor/materials done on the property, or IRS, or refinance liens, or owelty, or home equity loans, or reverse mortgages. (Owelty: in a divorce one spouse deeds over to the other his/her portion of the ownership.) -rights are constitutional and can be changed only by constitutional amendment, ratified by the voters of the State of TX.

2. Beach

area defined by mean low tide to natural vegetation line

3. Judgment Lien

arise from lawsuits where money damages were awarded; abstract of judgment may be obtained to extend the lien on other properties in other counties; creditor can get a writ of execution to get sheriff to seize and sell to recover payment

3. CHATTELS

articles of personal property Chattel personal - cars, food, furniture, etc. Chattel real - interests in real estate that remain personal property Ex: contract for the purchase of real estate; a lease -governed by personal property laws

2. Rectangular Survey System

authorized by Congress in May 1785 in order to systematically divide the land north and west of the Ohio River into 6-mile radius squares, now called congressional townships. -It was also designed to provide a faster and simpler method than metes and bounds for describing land in newly annexed territories and states. -rather than using physical monuments, the rectangular system, also known as the government survey or US public lands survey, is based on the system of mapping lines first imagined by ancient geographers and navigators. -These are the longitude(meridians) and latitude(parallel, base lines, or correction line) lines that encircle the earth. -there are 36 principal meridians and their intersecting base lines in the US public lands survey system. page 22. Meridians, base line, range, township, section, acre

3. Temporary renting of a homestead

can be done when no other property has been purchased; with a second home the first must be sufficiently abandoned before homestead rights vest in the newly acquired home.

2. Insurance value

concerned with the cost of replacing damaged property. It differs from market value in two major respects: (1) the value of the land is not included, as it is presumed only the structures are destructible, and (2) the amount of coverage is based on the replacement cost of the structures.

3. Deed restrictions or deed covenants

covenants; private agreements that govern the use of land; planned by the developer and handed over to the association to enforce liens -Where scenic views are important, deed restrictions may limit the height of buildings and trees to 15 feet. -A buyer would still obtain fee simple ownership, but voluntarily gives up some rights to do as he pleases(fee simple title subject to deed restrictions) -The right to enforce restrictions is usually given by the developer to the subdivision's homeowner association. -Violations can result in civil court action brought by other property owners who are bound by the same deed restriction.

4. Corporations

created by several people; the corporation can buy, sell, own and operate in the name of the corporation; corporation has a designated person to sign when buying or selling; majority of shareholders must vote to buy or sell; the investor is shielded from liability, but negative is double taxation (corporation pays taxes on profits and shareholder pays taxes on dividends (the remaining profits; ownership is very liquid; small investor can participate; Board of Directors hires management, shareholders have little management control. -owned by stockholders, who possess shares of stock as evidence of their ownership.

4. Unincorporated nonprofit associations

defined under TX law as "an unincorporated organization, other that one created by a trust, consisting of 3 or more persons joined by mutual consent for a common, nonprofit purpose" -may hold title to real estate in its own name and can transfer encumbered real estate.

3. Easement Appurtenant

directly benefits the use and enjoyment of a specific piece of land the actual easement that passes with the property in the examples of the dominant/ servient estates; it is physically and legally connected to the dominant estate -Dominant Estate - the estate 'needing' access(front lot) -Servient Estate - the estate providing access(back lot)

2. check

each 24-by-24 mile area created by the guide meridians and correction lines

1. License Requirements

either directly or indirectly for the purpose of bringing about a sale, purchase, or option to purchase, exchange, auction, lease, or rental of real estate, or any interest in real estate is required to hold a valid real estate license.

3. STATUTORY ESTATES

estates created by state law; dower, curtesy, community property, homesteads. In Texas, there is homestead protection and community property, but no dower or curtesy

3. Party Wall Easement

exist when a single wall straddles the lot line that separates two parcels of land. -a fence or wall that sits on a property line and owned by owners of the adjacent properties -common where stores and office buildings are built right up to the lot line -each lot owner owns that portion of the wall on his land

4. Partnership

exists when two or more persons, as partners, unite their property, labor, and skills as a business to share the profits created by it(engaged in business for a profit). The agreement can be oral or written. The partners can hold the partnership property in their own names (as tenants in common or as joint tenants) or in the name of the partnership(title in severalty). -for convenience, especially in a large partnership, the partners can designate 2 or 3 of their group to make contracts and sign documents on behalf of the entire partnership. There are 4 types of partnerships: General, limited, limited liability, and joint ventures.

3. FREEHOLD ESTATES

fee estates, life estates, and estates created by statute are free hold estates or actual ownership of the land freehold: tried under real property laws, 1. estate that is created of unpredictable duration 2. cases are tried under real property laws (non freehold or less-than-freehold are leasehold) -governed by real property laws

3. Curtesy

gives a husband rights in his wife's real property

3. Dower

gives a wife rights in her husbands real property

3. Community Property

gives each spouse a one-half interest in marital property -property acquired after marriage

Limited Liability Partnerships - L.L.P

good for law firms; limits the liability of the general partners to those who have direct supervisory control over the misconduct of other general partners; L.L.P.'s must be registered with the Secretary of State and carry some malpractice insurance. -for example, a law firm or brokerage firm organized as a general partnership, all the general partners have a right to bind the partnership, and all general partners have 100% liability for partnership obligations. -In a limited liability partnership, limited the liability of the partners such that if one partner commits malfeasance or malpractice(ex. a partner in the tax section of a law firm), it would not create a 100% liability for a partner in the real estate section of the law firm. -only the partners who have direct supervisory control over the misconduct will have liability for it. -To create such partnership, the firm must register with the Secretary of State and carry a specifies amount of malpractice insurance.

1. Government Service (summarized):

government owned land ranges from raw land to office buildings, museums, libraries, fire and police stations, hospitals, public housing, etc. All require real estate tasks and all levels of government have employees with real estate knowledge.

2. Metes and bounds

identifies a parcel by specifying its shape and boundaries. Starts with a permanent reference mark(benchmark), leads to a monument(point of beginning or point of commencement) that becomes a permanent point of reference. -usage of a stream, road, oak tree or fence to mark a side of a parcel has drawbacks (1) there might not be a convenient corner or boundary marker where one was needed (2) over time, oak trees die, streams and rivers change course, fences are removed, unused roads become over grown with vegetation, etc. -method drawback are resolved by setting a man-made monument at one corner of the parcel, and then describing the parcel in terms of distance and direction from that point. -from that monument, the survey begins there, customarily heads clockwise and follows the distance and directions description(o,',"). From the monument, a surveyor runs the parcel's outside lines by compass and distance so as to take in the land area being described, and returns to point of beginning(or point of commencement). -distances are measured in feet, usually to the nearest tenth or one-hundredth of a foot. -Iron posts may be permanently inserted at each turn. -direction is shown in degrees, minutes and seconds. -There are 360(o) degrees in a circle, 60 minutes(') in each degree, and 60(") seconds in each minute. -example 29o14'52"(29 degrees, 14minutes, and 52 seconds)

3. Grant

is a written document.

1. Farm Brokerage (summarized):

knowledge in agriculture would be a big advantage and on-the-job-training is a must. There are fewer farms. Opportunities may lie in leasing and managing, as well as sales.

1. Industrial Brokerage (summarized):

locating, leasing and developing suitable land and buildings for various industries would be the thrust of this niche. Knowledge of various industrial needs, local zoning and environmental laws, as well as tax laws would be required. Commissions would be very irregular, but are very substantial. Working hours are regular and entry into this field may be slow because of the time it would take to build a client base and knowledge.

4. Financial liability

means each partner is personally responsible for all the debts of the partnership. Thus, each general partner can lose not only what they have invested in the partnership, but more, up to the full extent of their personal financial worth. -If one partner makes a commitment on behalf of the partnership, all partners are responsible for making good on that commitment. -If the partnership is sued, each partner is fully responsible -although a recent legislative change requires the creditor to proceed against partnership assets before pursuing the individual partners.

2. fructus industriales or emblements

most courts of law regard them as personal property even though they are attached to the soil. -crops

3. Mechanic's lien

one who furnishes labor and materials to improve a property may legally place a lien on the property and force sale of the property to recover payment; must be recorded to be valid.

4. General partnership

outgrowth of common law. Since 2003, Texas enacted the Business Organizational Code, which provides (1)title to partnership property can be held in the partnerships name, (2) each partner has equal right to possession of partnership property -only for partnership purposes, (3) upon the death of one partner, their rights in the partnership property vest in the surviving partners. The decedent's estate must be reimbursed for the value of interest in the partnership (4) a partner's right to specific partnership property is not subject to dower or curtesy, and (5) partnership property can be attached by creditors only for debts of the partnership, not for debts of a partner -the profits and losses of the partnership are taxable directly to each individual partner in proportion to his or her interest in the partnership. Although the partnership files a tax return, it is only for informational purposes. The partnership itself does not pay taxes.

2. Riparian right

ownership of land that borders on a river or stream carries with it the right to use that water in common with other landowners whose land borders on the same watercourse -owners of bordering a river or stream have rights to use the water in a reasonable manner -The landowners do not have absolute ownership of the water that flows through or past their land

2. Compass Directions (used in metes and bounds)

page 21. Arc=(L) or (A), (R)adius, (triangle) is angle necessary to make the arc(angle between the broken lines)

3. Mortgage lien

pledge of property by owner to secure payment of debt; voluntary lien; specific lien (on just one property) -not imposed by law, this is a voluntary lien created by the property owner. -creditor can foreclose and sell the pledged property

4. Subchapter S Corporations

popular method of organization for real estate brokers and developers. In 1958 the Internal Revenue Code established this type of organization to offer liability protection. It was limited to too few people initially, but the big negative was that only 20% of the gross receipts could come from passive income (ex; rental income). In 1997 the number of shareholder was increased to 75 and now the top personal tax rate is below the top rate on corporations, now called C Corporations.

2. Range

range called columns shows how land is referenced to a principal meridian and base line. Every 6 miles east and west of each principal meridian, parallel survey lines(longitude) are drawn. The resulting 6-mile wide columns are called ranges and are numbered consecutively east and west of the principal meridian(longitude).

3. Estate

refers to one's legal interest or rights in land

4. Illiquidity

refers to the possibility that it may be very difficult to sell one's partnership interest on short notice in order to raise cash.(hard to sell one's interest in a hurry)

2. Real property

refers to the right to own land and improvements

3. Title

refers to the the right to or ownership of something. Also, the evidence of ownership, such as a deed or bill of sale.

2. Water Rights:

rights vary across the country. Some note the "30-inch" rule: this concept divides the country from north to south between the eastern areas that receive more than 30 inches of annual rainfall and western areas that receive less than 30 inches of annual rainfall(roughly paralleling Interstate Highway 35, from Tx to Minnesota). Eastern areas water laws are largely the law of surface waters and are modeled after the English riparian system. Western areas regularly experience varying degrees of water shortages and drought conditions, resulting in water law rules being based on the concept that the State is the owner of the water(in fee or in trust for the public) and allowing a person to establish a state-permitted right to use the water by putting it to beneficial use. -Riparian rights, Littoral rights

2. Recorded Plat (also called Lot, Block, Tract)

simplest and most commonly used. A plat is a map identifying a property by location and boundaries. References survey books by book and page. It references the metes and bounds of the subdivision.

3. Estate for Years -

specific start and stop time; can last for 1 day or many years; does not have automatic renewal in and of itself. If subleased, the lessee becomes the sublessor and the new tenant is the sublessee(Usually, the lessor is the freehold estate owner. However, the lessor could be a lessee. A fee owner leases property to a lessee, who in turn, leases the right to another person. by doing this, the first lessee becomes the sublessor and is said to hold a sublease. The person who then leases is a sublessee. No more right can be acquired than what the lessee has under lease. The sublessee has only the remaining portion of the time on the sublease) -does not automatically renew itself

3. Specific and General Liens

specific=one one particular property; property tax lien, mortgage liens, and mechanics liens are specific liens because its a lien against a specific property and no other general=on all properties of a person in a general or given jurisdiction; federal tax liens, judgement liens(all debtors property in the country or county)

2. Ownership

subsurface, surface, air -ownership of land normally includes the right to drill for and remove water found below the surface

3. Property tax lien

superior to all other liens; at beginning of each year a lien is placed on a property and remains until paid; if not paid, government can force sale; involuntary liens; specific lien (it is placed on a particular property)

3. Estate at will

tenancy at will. A landlord-tenant-relationship with all the normal rights and duties of a lessor-lessee relationship, except that the estate may be terminated by either the lessor or the lessee at anytime. However, most states recognize the inconvenience a literal interpretation of "anytime" can cause and require that reasonable advance notice be given.

3. Remainderman

the person entitle to the property when it reverts back

2. Loan value

the value set on a property for the purpose of making a loan

1. Property Management (summarized):

there's been a growing demand here due to more condominiums and businesses needing hired management for their own properties. The task would involve renting, tenant relations during rental periods, repairs, maintenance, accounting, advertising and supervision of staff, as well as keeping up-to-date on related laws.

1. Commercial Brokerage (summarized):

these brokers deal with income-producing properties, therefore selling monetary benefits. Knowledge required would be good math skills, understand how to finance transactions, tax laws, and neighborhood economics. Commission is larger, but often is less frequent than residential sales.

1. Urban planning (summarized):

these planners work with local governments and civic groups to plan for growth and land use changes. This is a rapidly expanding specialty, usually salaried and does not require sales skills.

1. Securities and Syndications (summarized):

this entails creating, promoting and managing syndications for a large group of investors.

1. Apartment Locators (summarized):

this free public service finds rental units and assists landlords in filling their vacancies. Paid commissions come from the management companies. Knowledge of many apartment complexes is imperative and possibly even lead to roommate locators.

1. Consulting (summarized):

this involves giving advice for a fee and requires very broad knowledge of real estate in every aspect of real estate. One must develop a good track record.

1. Residential Brokerage (summarized):

this may involve irregular hours, having a car suitable for business clients, skill with problem solving and people's needs and emotions, as well as knowledge in communities, finance, real estate law, economics, and the ability to work on straight commission.

1. Land Development (summarized):

this may involve someone building a few homes yearly or a corporation that develops subdivisions or multi-story office buildings and requires a large staff to handle all aspects of various projects.

1. Mortgage Financing (summarized):

this requires a real estate license because the job entails finding good properties for lenders and money for buyers. One can work independently or for a lending institution.

2. VERTICAL LAND DESCRIPTIONS

to establish air and subsurface rights. Datum - point, line or surface from which a distance, vertical height or depth can be measured Air Lot - a space over a parcel of land (condo) Contour Maps - topographic maps indicate elevation

3. Encroachment

unauthorized intrusions (fence, tree) injuring someone's title -The unauthorized intrusion of a building or other improvement onto another person's land. -the owner of the property has the right to force removal of improvement -failure to do so may injure title and make land more difficult to sell

2. Assessor Parcel Number

used for tax purposes. The appraisal district assigns a parcel number to each property in the county. Each property is reference by a Map Book and page number. In Texas each county is divided into Map Books.

2. Assessed value=

value given a property by the county tax assessor for purposes of property taxation. It utilizes a mass appraisal technique to determine value and is recognized by Uniform Standards of Professional Appraisal Practice (USPAP) as an acceptable method of appraisal for tax assessors.

3. Homestead Limitations:

value of property has no bearing on homestead Married - Rural Homestead: 200 acres, 1 or more parcels with improvements; if more than 200 is owned, the homesteaded 200 acres can be carved out and must include the home. -Urban homestead: a lot or lots with no more than 10 acres together all contiguous, with improvements, home and/or business;. -Rural homestead for a married couple is up to 200 acres and for a single person up to 100 acres.

3. Voluntary & Involuntary liens

voluntary=created by property owner (mortgage lien) involuntary=created by operation of the law (property tax, judgment liens)

3. Tenancy at sufferance

when a tenant stays beyond legal tenancy without landlord consent. In this situation, the tenant is called the holdover tenant(although not a tenant anymore in landlord-tenant sense). The landlord is entitled to evict in a timely manner. -Differs from a trespasser only in that his original entry was rightful -If tenant pays and landlord accepts, during holdover period, the tenancy at sufferance changes to periodic estate.

2. Water table or groundwater level, groundwater rights

when speaking of underground water, the term water table refers to the upper limit of percolating water beneath the earth's surface, also called same as 'groundwater level'. -this may be just a few feet below the surface or hundreds of feet down -The Texas Supreme Court has adopted the English common law rule of capture, which allows the owner of the surface pump unlimited quantities of water from under the land. Therefore, -groundwater is considered the property of the owner of the surface estate and is treated like mineral ownership. -Texas has not adopted the appropriative system with respect to groundwater rights -groundwater is regulated by groundwater districts in many areas, which have authority over the drilling, completion, and pumping of groundwater wells -checking with Texas Water Development Board should be a part of every buyer's due diligence if there is a plan for using groundwater in any significant quantities

2. Percolating water:

where water is not confined to a defined underground waterway -water in the soil not yet 'captured' in an underground river or lake

2. PHYSICAL CHARACTERISTICS OF LAND (IIN)

○Immobility - cannot be moved ○Indestructibility - durable ○Non-homogeneity - no 2 parcels are alike, one cannot be substituted for another Non-fungible - cannot be substituted Fungible - can be substituted