Real Estate Law

One rectangular piece of property was divided by a stream, separating the property into two equal triangular lots. The frontage of the entire parcel measured 400' and the depth of one of the triangles measured 720'. What was the total acreage of both triangular lots?

6.6 To find the total square footage, multiply 400 by 720. This gives you a total square footage of 288,000. Then, take 288,000 square feet and divide by 43,560 to arrive at a total acreage for both lots of 6.6.

Which of the following activities is NOT covered under the Fair Housing Law?

Activities of an owner-occupant of a duplex. Owner-occupants of up to 4-plex are exempted from most of the fair housing law.

All of the following items are required for the validity of a contract EXCEPT:

Contingency clause. A contingency clause, such as a buyer only buying if able to obtain a loan, is not a required element of a contract.

Lots were being sold in a subdivision that required all building lots contain a minimum of .5 acres. This would be an example of:

Deed restrictions. Deed restrictions are private land use controls, such as minimum acreage, minimum square footage, certain type of roofs, etc. (A) Down zoning is going from a more intensive use to a less intensive use, such as from multi-family to single family. (C) Directive zoning encourages land to be used for the highest and best use. (D) Discriminatory pricing is not a valid term.

A buyer signed a contract to buy a piece of vacant ground for $350,000. The buyer planned on building a commercial building on the vacant ground. After signing the contract, the buyer found the zoning did not allow commercial properties to be built on that ground. The buyer had not told the seller the buyer's plans of building a commercial building on the property. This contract would be:

Enforceable. The contract is enforceable as no misrepresentations were made to the buyer. (A) A void contract has no legal effect at all, such as a person who has been declared mentally incompetent by a court signing a contract.

An investor built a three story apartment complex with no elevators. Under the 1988 Fair Housing Amendments Act, which of the floors must be accessible to the handicapped?

Ground floor only. Under the 1988 Fair Housing Amendments Act, if there is an elevator in the complex, then all floors must be accessible to the handicapped. If there is no elevator, then ground floor units only must be accessible. Therefore, (A) can be the only right answer.

Regarding Fair Housing Laws, which is true?

It applies only to discrimination involved in the acts of selling or renting property. Fair Housing Laws do apply to transactions involved in the selling or renting of property. (A) Fair Housing Laws prohibit discrimination on the basis of race, color, religion, national origin, sex, handicap or familial status.

Each of the following contracts would be bi-lateral EXCEPT a:

Lease option. An option contract is a uni-lateral (one-way) contract, not a bi-lateral (two-way) contract.

Which of the following statements BEST distinguishes general from limited partnerships?

Limited partnerships also must have general partners

A person invested $5,000 in a limited partnership. One of his concerns was the amount of his liability. Since he is one of the limited partners, can he be held liable for more than his initial investment?

No, because he is only liable for his initial investment

A licensee, under a managing broker, directly collects a commission from a seller on an option. Is this legal?

No, because the commission should have been paid to the managing broker.,

What is the name of the map that shows the individual lots in a subdivision?

Plat Map. A plat map shows how the individual lots are platted (drawn) out.

ABC Incorporated was organized with five stockholders. How would ABC Incorporated take title to the property?

Severalty

When a buyer receives an equitable title to a property, this entitles the buyer to:

Sue for specific performance. A signed contract gives the buyer an equitable title (the right to receive the deed at a later date, usually closing). Therefore, if the seller backs out of the contract, the buyer can sue for specific performance - court action to force completion.

A buyer signed an offer to purchase on a property listed for sale. The offer to purchase contract did not state any time period for which the offer was valid. In this case, which of the following statements is true regarding the offer to purchase contract?

The buyer can revoke the contract at any time before acceptance. A buyer can always revoke an offer anytime before it is accepted by the seller.

A legal description is as follows: "Beginning at the intersection of Route #7 and Boone County Road proceed South 2 miles to the old oak tree, thence 1 mile West to the well by the old farm house, thence North 2 miles to an iron post at the corner of the Johnson farm, thence East 1 mile back to the point of beginning." Which of the following would NOT be true?

This property is equal to 1/2 of a township. 1/2 of a township is 18 square miles. This describes only 2 square miles. It does contain 1,280 acres (1 sq. mile = 640 acres)

An owner of a 12 unit apartment building lived in one of the apartments. The owner refused to rent to a person because of their national origin. Does the person have a valid complaint?

Yes, because it was a 12 unit apartment. Only a 1-4 plex might be exempt under the 1968 Fair Housing Laws, not a 12- plex. If one is exempt, the person can discriminate based on national origin. However, even if exempt, one can NEVER discriminate based on race.

A buyer and seller negotiated a sale by sending contracts through the mail. Would this result in a valid contract?

Yes, under the Statute of Frauds as long as it is in writing, it is valid. Written contracts are enforceable under the Statute of Frauds even if the two parties have not made actual contact.

Managing Broker Dole was showing a buyer different apartments for rent in a specific area of a city. The buyer asked Dole to find an apartment that did not allow children as the buyer desired peace and quiet and felt that children would destroy their privacy. Managing Broker Dole should:

inform the buyer that only bona fide retirement communities can legally restrict children. Only certain retirement communities may prohibit children. As a general rule, discriminatory advertising (A) is illegal. Steering is an agent directing persons to an area based on where the agent thought they belonged (B) (usually based on ethnic concerns). (D) is wrong as retirement communities are not required to be open to children.

Which of the following statements BEST describes the difference between a void and a voidable contract?

A void contract can not be enforced legally; a voidable contract could remain in force until one of the parties involved decided to void it. Neither side can enforce a void contract (such as a contract to commit a crime) but a voidable contract is enforceable until one of the parties decides to void it.

One rectangular piece of property was divided by a stream, separating the property into two equal triangular lots. The frontage of the entire parcel measured 500' and the depth of one of the triangles measured 920'. What was the total acreage of both triangular lots?

10.5 500` times 920' equals 460,000 total square feet. 460,000 square feet divided by 43,560 equals 10.5 acres.

A corn field was bisected by a road dividing it into 2 equal lots measuring 530 feet by 430 feet each. What was the total acreage of these 2 lots?

10.5 530 times 430 equals 227,900 square feet per lot. 227,900 times two lots equals 455,800 total square feet. 455,800 divided by 43,560 equals 10.5 acres.

The intent behind the Statute of Frauds is to:

Put real estate transactions in writing. The Statute of Frauds requires real estate sales contracts, deeds, and leases over one year to be in writing to be enforceable.

A person owned a 4-plex and lived in one of the units. Which of the following would be allowed?

Refusing to rent to a student from a different national origin. An owner-occupant of up to a 4-plex is an exemption under Fair Housing laws and would be allowed to discriminate based on national origin.

A handicapped person rented an apartment from a property manager. The handicapped person made several modifications to the apartment to enable the handicapped person easier living conditions. Under the 1988 amendments to the Federal Fair Housing Law, which of the following items would the handicapped person NOT have to restore to its original condition when the lease expires?

Returning the doorway in the apartment to its original width. Returning the doorway to its original width is the one item HUD has said does NOT have to be done as this would not be detrimental to the next user.

Which of the following statements BEST illustrates the difference between a bilateral and unilateral contract?

The performance obligation of the parties. With a bilateral contract, one has a promise for a promise, where both parties have performance obligations. With a unilateral contract, one has a promise for an action, where only one party has a performance obligation.

Which of the following statements BEST identifies an option?

The possibility of buying at a set price at a later date - An option gives the buyer the right to buy at a set price within a certain time period.

Which of the following statements is true regarding an option to purchase real estate?

It has all the elements of a sales contract. An option, like any other contract, must contain all necessary contract terms.

$1,000 is paid for a 30 day option to buy. Which of the following BEST describes the listing agent's commission?

It is earned only if the option is exercised. Until the option is exercised (i.e. the buyer agrees to buy it), the buyer is not ready, willing and able. Once exercised, the agent has procured a ready, willing and able buyer so the commission is earned.

A buyer wrote an offer contingent on the buyer's spouse approving the property within 24 hours. Would this result in a valid contract?

It is permissible as long as it is agreed to by both parties. A contingency is something written into the contract that allows a party to "opt out" of the contract should something happen or fail to happen. A spouse`s approval is a valid contingency.

A buyer made an offer on a property with earnest money being part of the contract. The buyer wanted to make sure the earnest money would be returned if the buyer could not qualify for a loan. The buyer would need to put which of the following clauses in the contract to make sure this would happen?

Mortgage contingency clause. A mortgage contingency clause states that a buyer will only buy if the buyer is able to obtain financing. If the buyer cannot, typically the earnest money will be returned to the buyer.

Q agreed in writing to give a neighbor the piece of land between the rose bush and the neighbor's property line. The transfer was to take place within 6 months. After the 6 month period had passed, Q refused to transfer the property. Would the neighbor have any recourse?

No, as there was no consideration given, the agreement was not enforceable. In order for a contract to be enforced, both sides must give some consideration (something of value). The seller was giving something and was under no legal obligation to do so since the buyer gave no consideration in return. The issue of writing (A) & (B) is not relevant nor is the time (D).

A seller and buyer agreed in writing to buy and sell a piece of real estate. The seller and buyer also agreed orally that the seller would leave the refrigerator for the buyer. After closing, the buyer discovered that the seller had not left the refrigerator. The buyer then sued the seller in court for the refrigerator. Would the buyer likely prevail in this lawsuit?

No, because the agreement was not in writing. Oral agreements generally cannot be enforced in court.

A managing broker listed a new home for sale that was nearly complete. The garage on the house was still under construction. A buyer approached the managing broker and said they would buy the house only when and if the garage was completely finished. Was this a contractual obligation for the buyer?

No, this was just an offer from the buyer to negotiate a possible contract. In order to have a contractual obligation, there must be a meeting of the minds on behalf of both buyer and seller on the exact terms of the contract. Here, the buyer has just made an offer with the garage being completed as part of that offer. The seller would have to agree to those terms to have a valid contract. Therefore, is the best answer.