Ag Law Exam 2 Questions

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What is an open listing?

(broker will be paid a commission by the seller when a ready, willing, and able buyer is found to pay the asked price; the seller is free to use other brokers or sell the property themselves

How do you write legal descriptions using the metes and bound systems?

- Begin with a starting point - Series of "calls" consisting of a "course" - Course- degrees N45*E - Have to use if you cant use rectangle but wont work if ends do not meet

**What factors should be considered in selecting a separately taxed entity?**

You want to grow the company aggressively, and thus prefer to re-inject income to its operations, rather than pay it as distributions. You want to use the company income to secure pre-tax fringe benefits (insurance). trade off: losses can not be used to offset personal income as a deduction don't ever pay yourself just keep putting it into the business.

What is a Tort?

a personal or civil wrong inflicted on one person by another for which the law allows redress Generally, then, we have to have: - An act (or failure to act, aka an omission) - Injury - A legal entitlement to some sort of compensation

License

a revocable right to make limited use of another's property (that's why it is always referred to in cases as a "mere license.") ex. what you wear on your wrist at the tumbleweed

What does "nuisance" mean?

a substantial, unreasonable interference with another party's use or "enjoyment" of their property. (must be material, unreasonable, interfering how they use their property)

What is required to have the "intent" needed for an intentional tort like trespass?

a) Their goal in acting is to bring about the consequences OR b) They know (or really should have known) with substantial certainty the consequences will result

With respect to brokerage agreements for buying and selling real estate: Which ones involve a broker?

all, except for sale by owner Open Listing and exclusive

What is an Entity?

any legally-recognized organization formed to carry on business or charitable activity

In gross easement

attached to a personal, recreational, or economic benefit might benefit a person but not the land its self

Appurtenant Easement

attached to the land they benefit the land its self in value.

What duties do we owe to licensees and invitees of business guests (people there for YOUR economic reasons)?

must inspect dangers, make them safe, adequate warning (invite friends and they pay you for alcohol)

What duties do we owe to licensees and invitees of trespassing kids, if landowner knew or should have known they were around?

must take precautions to prevent unreasonable risk of harm to kids attractive nuisance (artificial: kids like that will hurt them and don't know that it will hurt them), pool- fence, pump jack- fence, pond

What is For sale by owner (FSBO)?

no agent is involved

What are the requirements for a validly accepted deed?

once the grantee has accepted the deed, thats it, they can't cancel the acceptance

What is an Exclusive agency listing?

only one broker is authorized to sell the property, and get the commission. However, the seller can still sell the property, and if so, no commission is paid

What is an Exclusive right to sell?

only the broker is authorized to sell the property, and is entitled to commission no matter who sells the property

What duties do we owe to licensees and invitees of undiscovered trespassers?

pretty much nothing

What are the requirements for a validly delivered deed?

the grantor has to intend to make a present transfer of an interest in the property

Profit

the right to enter someone else's land and take something with you when you go ex. Hunting, fishing, mining, oil gas lease

Why may sales be pending?

theres a contract but it is still pending, but contract might not close, so stays pending.

When are quitclaim deeds most commonly used?

to clean up title issues meaning you could be transferring absolutely nothing has ZERO warranties, promises, or covenants.

What are the elements of trespass to chattels?

1) Intent. (Trespass to chattels is an intentional tort) 2) Some act of physical invasion 3) The invasion must be some form of entry to personal property - same intent rules apply with trespass to chattels as trespass to land, just have to intend to do the act

What are the elements of trespass to conversion?

1) Intent. (Trespass to chattels is an intentional tort) 2) Some act of physical invasion 3) The invasion must be some form of entry to personal property that is so serious, it merits the payment of the full value of the item to the owner

Ned gives Homer a written easement saying Homer can cross Ned's land to get to his. What kind of easement(s) are described here? A: Affirmative. B: Negative. C: Appurtenant. D: In gross

A) Affirmative easement C) Appurtenant easement

Who needs a transition plan?

EVERYONE! Especially Vulnerable: - Young families - Farms on verge of "viable size" - Families and farms with limited asset liquidity - "Complex" families

What does "I.M." mean?

Indian Meridian

How do we modify the basic negligence standard for people with disabilities?

It is held to the standard of a child of like age, education, intelligence, and experience

Why do you see signs on houses for sale that say "Sale pending" or "contract pending?"

It's saying "yeah, theres a contract, but that contract might not close, so you might still have a chance

Under what circumstances can you use deadly force to defend property?

NEVER. can only use reasonable force

**What factors should be considered in selecting a pass-through taxed entity?**

No double taxation! With start-up ventures that may experience losses, those losses can be deducted against personal income. Simpler tax treatment (hopefully). Tradeoffs: Owners are taxed on income of entity REGARDLESS of whether it is distributed to them. Less flexibility as to who can own shares

What is the order in which creditors get paid (i.e. secured vs. unsecured, secured vs. secured, etc)?

Secured creditor (perfected) vs. secured creditor (unperfected). - The first creditor that either filed or perfected first wins. • Secured first • Unsecured second

What is a multiple listing?

a pooling of exclusive agency listing's or exclusive right to sell listing that comes with agreements for how the commission will be divided between the listing broker and the one actually selling the property

Why don't credit card companies want you to go bankrupt?

because they are at the back of the line for repayment.

What are the ways you can "pierce the corporate veil?"

being able to penetrate the legal protection of the entity and impose liability on a member of the entity Potential causes: - Intermingling assets - Underfunding the entity (draining a cooperation) - Failing to follow corporate formalities (have to have annual meetings/elections) - Failing to pay taxes or entity filing/renewal fees. (filing fee $50)

What does MLS stand for?

multiple listing service

What is our analysis to see if a claim for nuisance should be granted for "Unreasonable interference"?

the severity of the injury must outweigh the utility of the defendant's conduct

What are the three primary reasons for business failure after a generational transfer?

1) Inadequate estate planning 2) Insufficient capitalization 3) Failure to prepare the next generation properly

Make my day law

Basically, a defender can use deadly force if: - someone was trying to (or had already) forcefully enter their dwelling or vehicle OR was trying to remove someone from the dwelling or vehicle.

What does "C.M." mean?

Cimmaron Meridian

Why is there non-possessory interests in land?

To get access to roads, transmission lines no ones hanging out there but they have the right to use someone elses property Someone pays you to not use your land= easements

What does it take to obtain a "variance" from zoning rules?

- If you can demonstrate some sort of extraordinary hardship created by the zoning ordinance, you may be able to get a specialized waiver of the zoning controls Ex. If there is a creek that wont allow you to get out of the other zone Rural Zoning: counties can be zoned. Zone a town but then a farmer has to get a permit to farm. Takings: if it denies ALL economic use of the land you. (negative taking- taken it from me but I cant do anything with it, or a damn) ALMOST ALL (Must have a balance: social goals, reduction in value to owner, owners expectations with the land)

What are the requirements for a validly executed deed?

- Must be in writing. - Must identify grantee. - Must be signed by grantor. - Must identify the land. - Must have words of "present transfer." NOW

What does it take to have a valid "nonconforming use" that can continue even if the zoning for the property has changed?

- a use that exists when a zoning ordinance is enacted that doesn't fit the zone that applies to it -generally have to be either allowed to continue or be gradually phased out ex. if your land was to be outside of town and you were using it before the town developed to your land

Townships

- are identified by counting the township lines and range lines from a baseline and principal meridian - Small to large (Township 2 South, Range 3 West) - Can ONLY use halves and quarters

Defense of property-

- can only use reasonable force - NEVER can use deadly force to protect property alone/ - can't use indirect force (traps, spring guns, dogs, etc.) if you couldn't use the same amount of direct force if you were there.

What is profit created by?

- have to be affirmative (can't be negative). - generally can't be transferred unless they are commercial in nature. - cannot be created by implication

What is the trick to tell trespass to chattels from conversion?

- little damage/ temporary interference: trespass - lots of damage/long term or permanent interference: conversion

What is a quitclaim deed?

- look for "quitclaim" - sorta the "as is" of deeds- transfers whatever, if anything, the grantor has to give in the subject property.

What is a warranty deed?

- look for "warrant," - indicates a warranty against defects in title Warranties: - grantor owns the property - grantor has the power to convey the property

Conservation Easement

- someone wants to maintain property in its current state, preserve land. - can not be altered with - its very negative - tax benefits

Zoning

- the result of a "comprehensive planning process" that attempts to create a coordinated plan for how land in a given area will be used, and to coordinate land use with each other. - to keep stuff that is similar next to each other - heavily tied with the police power: power of govt. to protect the general welfare (promote health and safety) 1. Residential: where people live 2. Commercial: commonly retail (Walmart, food) 3. Industrial: manufacturing, processing 4. Infrastructure: public buildings, utilities 5. Resource: sometimes includes a type of Ag. operation 6. Agriculture: may appear in some jurisdictions - some zones allow stacking, which means that you can make use of any lower class zoning than the one you are in

What is easement created by?

- to give someone an express grant (deed) - by reservation ex. you may sell the land to someone but still have an agreement to where you can drive across it deed or reservation must be in writing if its going to last more than 1 year, or its just a license. - by implied grant or reservation by necessity, Requires 2 things: 1) the dominant and servient estate had to be owned by the same party(ies) 2) there was a strict necessity when the dominant and servient estates were severed - by operation of law -by adverse of posession

What provision should be included in a land sale contract, ESPECIALLY "Ferrell's Top Four?"

1) A clear description of the parties. Who is the owner? 2)The purchase price and how it is to be paid. How it is supposed to be paid? 3) A complete and accurate legal description 4) Signature of the parties. Both have to sign contract

What are the purposes of bankruptcy?

1) Allow for the efficient and fair payment of as many debts as practical without crushing the debtor. 2) Provide the debtor with a fresh start by rearranging some debts and completely discharging others that are addressed by the bankruptcy proceedings (but they HAVE to be handled through the bankruptcy proceedings or no dice).

What are the elements of fraud?

1) An affirmative misrepresentation (have to say something) 2) Fault (knowing statement of falsehood) 3) Intention to induce reliance (keep you from doing something or do) Has to be material 4) Justifiable reliance (only if you didn't know the truth) 5) Damages (lost something caused you harm)

What is the fundamental rule of negligence and the standard of care we apply to people in a negligence analysis?

1) Defendant had a DUTY to meet some STANDARD OF CARE with respect to the plaintiff. (driving on the right side of the road, business owner) 2) The defendant had a BREACH of that duty. (failed to meet duty or did do) 3) The breach was the ACTUAL AND PROXIMATE CAUSE of the plaintiff's injury. (fair for us to hold this person accountable) 4) DAMAGE to the plaintiff RULE: Everyone is held to the standard of an ordinary, prudent, reasonable person.

What are the five steps to a successful transition?

1) Determine where you are now 2) Communicate with stakeholders 3) Develop a business succession plan 4) Develop a plan for your estate / gifts 5) Deploy your plans / evaluate / revise

What are the three types of farm stakeholders?

1) Manager(s) 2) Financial investors 3) Emotional investors

Which chapter of the Bankruptcy Code applies only to farmers?

12

What percentage of US farm and agribusiness owners have no form of estate plan in place?

64%

Which of the following would be a "fixture" that you might want to buy along with the real estate where they were found? Select ALL the right answers. A) An overhead feed bin that was transported to the property and welded to a foundation B) A grain bin that was transported to the property and attached to a foundation C) A portable cattle feeder located in one of the property's pastures D) A mobile grain auger used to load the grain bins on the property

A and B

What is easement terminated by

All sorts of ways: - set it for an expressed term of years - execute a release in writing - the necessity for it ends - the servient land is destroyed - merger (someone acquires both the dominant and servient estates) - the property is condemned

How do we modify the basic negligence standard for people with kids?

Kids are held to the standard of care of a child of like age, education, intelligence, and experience. This is way different from adults Two Big issues: 1) Kids under a certain age will be considered too young to be capable of negligence. 2) Kids engaged in adult activities will be held to an adult standard of conduct.

If you intend to plow a big pile of lime into your fields soil and a rainstorm comes in and washes some onto another field, where is raises the PH too much and damages their crop. Is this trespassing?

Yes

PURCHASE PRICE, EARNEST MONEY AND SOURCE OF FUNDS. This is a CASH TRANSACTION unless a Finance Supplement is attached. The Purchase price is "$250,000" payable by Buyer as follows: Buyer has paid "$10,000" as Earnest Money on execution of the Contract, and Buyer shall pay the balance of the purchase price and Buyer's Closing costs at Closing. Upon execution of the Contract, the Earnest Money shall be deposited in the trust account of "Sellers McSellerson" or if left blank, the Listing Broker's trust account, as part payment of the purchase price and/or closing costs. If the following paragraph above is part of your contract and your the buyer, for how much of the closing contract should you write a check for? Assume no Financing Supplement is attached. A) $10,000. B) $240,000. C) $250,000. D) No immediate payment is needed upon closing.

B) $240,000

If 2 bros are wrestling near the boarder line of a property and one throws the other across into the other property, who is trespassing?

Both bros

How are "LLC's" taxed?

Can generally get to pick how you pay "C Corporation," or "S Corporation."

If you see "I.M." and "C.M." what does that imply about the property being described?

Cimarron- Panhandle (east) Indian is the middle- (74 counties)

By appointing Broker as exclusive broker, Seller agrees to work through Broker for the sale, option or exchange of the property and to refer to Broker all inquiries received in any form from other real estate Brokers, agents, associated broker associates, sales associates, or provisional sales associates, sales persons prospective buyers or tenants, or any other source during the time this Listing Agreement is in effect. In addition, any compensation, which is conditioned upon the Sale of Property, shall be earned by Broker as set forth herein without any discount or allowance for any efforts made by Seller or by any representative of Seller in connection with the sale of the property. If your selling a piece of real estate, and your contract has this paragraph, which type of listing agreement is it? A) For sale by owner. B) Open listing. C) Exclusive agency listing. D) Exclusive right to sell

D) Exclusive right to sell

How are "partnerships" taxed?

Flow-through straight to the individual. YOU and PARTNERS

How are sole proprietorships taxed?

Flow-through straight to the to the individual. YOU

What property is "exempt" from collection in a judgement on debts or in bankruptcy?

Generally, all property except exempt property is part of the bankruptcy estate and subject to allocation among the creditors. - IF YOU PUT COLLATERAL ON ANY OF IT, IT IS NOT EXEMPT PROPERTY.

Who gets the commission in the sale of a brokerage agreement?

If the seller is the broker then they get the commission, or if multiple brokers make the sale then they split the commission

What is the limitation on your personal liability if you invest in an LLC or corporation?

LLC: Members' liability is limited to their investment Corporation: Shareholders' liability is limited to their investment

What are the restrictions on corporate/LLC ownership of agricultural assets or businesses?

LLCs face the same restrictions on engaging in agriculture, unless they meet all these requirements: - The same classes of people are required as for a corporation - They can only have 30 members (w/ the exception of lineal descendants) - No more than 35% of the corporations gross annual receipts can come from non-farm sources (excluding oil and gas)

You're selling some agriculture land with a crop of growing wheat upon it. The contract closing date is May 15. If your contract reads like this, are you entitled to harvest the wheat crop (which would mature in mid-to-late June? CROPS, unless otherwise agreed in writing, Seller has the right to harvest all growing crops until delivery of possession of the property.

No, because June is after May

Wilbur start a pig farm in 1975. When he started his operation, he was 5 miles from the city limits of nearby town, But now the town has grown around them, and there are 'executive homes' developments all around his farm. He has now zoned his property for residential use only, and his farm is not compliant with the zoning restrictions. Can the city force Wilbur to shut down the farm immediately?

No, because Wilbur must either be allowed to continue his nonconforming use or be given time to gradually phase it out

Ned tells Homer that Homer (or whoever own's Homers property after Homer) can cut across Ned's land to get to his property. What did Ned just create?

Nothing, because Statue of Frauds its an interest in land, which is a statue of frauds

Homer gives Mr. Burns a "mineral estate" in any and all uranium deposits that are under Homers property, and also gives Mr. Burns an easement to enter Homers property to mine the uranium. Thus, Homer owns a surface estate, but Mr. Burns can use some of the surface to access his mineral estate. Between Homer's surface estate and Mr. Burns mineral estate, which one describes a "servient estate" and which one describes a "dominant estate"?

Servient: Homers Dominant: Mr. Burns

How do you write legal descriptions using the rectangular coordinate / fractional description system?

Starts with a system of baselines (east and west) and principal meridians (north and south) that form a grid Lines laid out every 6 miles' parallel to baseline (township) parallel to meridian (range) The boxes (36 square miles) are called "townships", which are lines parallel to a baseline each line running parallel to a principal meridian defines a range Origin where your baseline and meridians intersect then you go every 6 miles Section is 1x1 1mile=5280ft, ½=160acres description- NW ¼ (only 1 direction=NSEW), 1/4= 1320(2 directions) Mainly ¼ because of land runs

T or F: A license can be created orally.

True

How are "corporations" taxed?

Two options: 1) Subchapter C: Taxed at the corporate level, so earnings passed to shareholders are taxed twice. 2) Subchapter S: Election as "S Corporation" allows pass-through taxation, but carries a number of restrictions.

Homer says, "I transfer Lot 2 to you Ned, but I reserve the right for the Stonecutters hunting club to cut across your land to get to the road". What kind of easement is this?

Void; easement cannot be reserved to a third party

What does the median imply about the property being described?

Where each range is located on the earth

What are the DO's and DON'T's of holding a family transition meeting?

Who: ALL stakeholders What: a talk about the farm When: NOT a holiday Where: o A comfortable place o NOT anyone's home o Free of distractions Why: so we can discuss ideas for future of the farm and ranch

Ned says to Homer "you can cut across my land to get to the road." What kind of easement is this?

easement by express grant

Homer says, "I transfer Lot 2 to you Ned but I reserve the right to cut across your land to get to the road". What kind of easement is this?

easement by reservation

Dominant estate

estate receiving the benefit of the easement the property that is more valuable, receiving something

Servient estate

estate that is burdened by the easement has to give up something ex. If you have land next to someone elses and they have to use your land to get across to theirs

What is license created by?

express: you expressly grant the license. implied: when you tried to get an easement, but didn't get it in writing - is transferable and can be terminated

What is our analysis to see if a claim for nuisance should be granted for "Substantial interference"?

inconvenient, unsafe, offensive, annoying to the average person in the community.

Negative Easement

right to limit another's use of their land ex. Someone pays you to not do something on your property... you are limited to what you can do

Affirmative Easement

right to make actual use of anothers land ex. can drive across someone elses land

Easement

right to make limited use, but not possess, the right of another

What is the meaning of "marketable title" as an implied promise in a land sale contract?

seller promises to: -Title acquired by adverse possession is never marketable UNLESS you have a judicial determination of title. -There are no encumbrances on the property - no liens, mortgages. Any encumbrances render the title unmarketable, unless they are assumed by the purchaser. (Note that these are usually taken care of by the seller contemporaneously at the time of the sale) -A violation of the zoning ordinance at the time of the sale makes title unmarketable (but remember the availability of nonconforming uses and variances).

How do we modify the basic negligence standard for people with specialties?

standard of: doctors, lawyers, engineers and tractor mechanics are held to higher standards

What duties do we owe to licensees and invitees of social guests and people that are their for their own economic reasons?

warn of known dangers (don't have to inspect)

What duties do we owe to licensees and invitees of discovered trespassers?

warn of known, serious dangers

What are the eligibility requirements for that chapter of the Bankruptcy Code?

• The individual or husband and wife must be engaged in a farming operation. • The total debts (secured and unsecured) of the operation must not exceed $4,153,150. • At least 50% of the total debts that are fixed in amount (exclusive of debt for the debtor's home) must be related to the farming operation. • More than 50% of the gross income of the individual or the husband and wife for the preceding tax year must have come from the farming operation. • The farmer must have some form of "regular annual income."


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