Real Estate U CH 4-7
conventional high balance conforming
$417,500-$625000
doctrine of laches
(use it or lose it) if easement isn't being used, you can go to court to remove it. failure to do something at proper time will bar a party from bringing legal proceesding
SEQR
- State Environmental Quality Review of 1970 - Required for most state and municipal projects and all state and local discretionary approvals
lender's rights
- right to foreclose on the property if borrower defaults (over 90 days late on mortgage payments) - Right to take possession of real estate if borrower defaults - right to assign the mortgage to another lender
essentials of a valid contract
-competent parties -mutual consent - consideration - lawful objective - in writing
data required for contract
-prior deed -prior title insurance -survey -CO -persona data -down payment (goes into escrow)
contract validity
-properly written -stated terms -signed
lease requirements
-security deposit (proof of intent) -possession + habitability (can get reduction if not) -improvement-who is responsible for maintenance -assignment -sublet -apt. sharing -termination
4 types of leasehold estates
1. Estate for Years 2. Periodic Lease 3. Estate at Will 4. Estate at Sufferance
closing steps
1. seller broker sends deal sheet 2. seller attorney drafts contract 3. contract to buyers attorney (2-7 days) 4. buyer signs 5. seller signs 6. sellers attorney gives notice to buyers
release clause
A clause found in a blanket mortgage which gives the owner of the property the privilege of paying off a portion of the mortgage indebtedness, and thus freeing a portion of the property from the mortgage.
attorney review clause
A clause found in real estate contracts that may allow buyers to walk away from an agreed upon sale for any reason.
Mortgage Contingency Clause
A clause in a contract that states a mortgage must be obtained in order for the contract to be binding.
express contract
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.
Lease
A contract whereby, for a consideration, usually termed rent, one who is entitled to the possession of real property transfers such right to another for life, for a term of years or at will.
Certificate of Occupancy (CO)
A document issued by a governmental authority that a building is ready and fit for occupancy.
Real Estate Settlement Procedures Act (RESPA)
A federal law requiring mortgage lenders to give potential borrowers a government publication describing the closing process and providing clear, advance disclosure of all closing costs to home buyers - helped consumers become better shoppers for settlement services.
interest
A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount) APR- annual percentage rate (can "lock in" for 90 days)
group home
A home where a small number of unrelated people in need of care, support, or supervision can live together, such as those who are elderly or mentally ill.
estate at will
A lease that can be terminated by either party at will, with 30 days notice
implied contract
A legal substitute for a contract. an agreement created by actions of the parties involved, but it is not written or spoken. This is a contract assumed to have been drawn.
conventional mortgage
A loan secured by real property through the use of a mortgage note (fixed or adjustable)
3/1 ARM
A loan with three years of the same rate then rate adjustments every year thereafter. lowest fixed rate
master plan
A long-term planning document. It establishes the framework and key elements of a site reflecting a clear vision created and adopted in an open process. It synthesizes civic goals and the public's aspirations for a project, gives them form and organization, and defines a realistic plan for implementation, including subsequent approvals by public agencies.
Blanket Mortgage
A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause.
Article 9A
A section of the New York Real Property Law addressing the purchase or lease of vacant subdivided lands sold through an installment contract within or without New York.
statute of frauds
A state statute under which certain types of contracts must be in writing to be enforceable.
bilateral contract
A type of contract that arises when a promise is given in exchange for a return promise.
rider
AKA addendum
Constructive Eviction
Actions of a landlord that so materially disturb or impair a tenant's enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent.
sublease
An arrangement in which the lessee (tenant) in a lease assigns the lease to a third party, thereby making the old lessee the sublessor, and the new lessee the sublessee, or subtenant.
periodic estate
An interest in leased property that continues from period to period—week to week, month to month, or year to year. for x period of time determined by term of payment
predatory lending
Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.
Environment Impact Statement
Large projects developers are required to outline possible effects of the project on the environment
Estate for Years
Lease for a definite period of time
Sub-prime loans
Loans with more risks and higher interest rates offered by some lenders to borrowers with questionable credit histories. hidden fees balloon payments refinancing
margin
Percentage charged by lender above index rate (usually 2.75%)
Estate at Sufferance
Tenant remains on the property, without the landlord's permission, after the lease has expired
Mortgage Insurance Premium (MIP)
The FHA insurance in which lender makes period payments to the borrower using borrowers equity in home as satisfaction of mortgage
PITI (principal, interest, taxes, and insurance)
The basic costs of owning a home—mortgage principal and interest, real estate taxes, and hazard insurance. lenders place property tax + insurance in escrow + pay when they're due
subdivision regulations
The control of the division of a tract of land into individual lots by requiring development according to specific design standards and procedures adopted by local ordinances.
gross lease
The landlord pays all the expenses of the property. The tenant pays only fixed rent. (usually for office space)
lifetime cap
The maximum interest rate adjustment permitted over the life of the loan.
lease purchase
The purchase of real property, the consummation of which is preceded by a lease, usually long term, that is typically done for tax or financing purposes.
Demography
The scientific study of population characteristics.
net lease
The tenants pay rent plus some of the expenses of the property. often used for larger commercial properties
building permit
Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zoning ordinances.
Zoning Board of Appeals
a local administrative appeal agency and an interpreter of the zoning ordinance.
accessory apartment use
a second residential unit that may be contained within an existing single family home, garage or carriage house separate access, bedroom, bathroom, kitchen
promissory note
a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.
moratorium
a suspension of activity; an authorized delay usually 6 months
severability
ability to separate a contract into its legal and illegal portions
Interstate Land Sales Full Disclosure Act
act passed to facilitate regulation of interstate land sales, to protect consumers from fraud + abuse in the sale or lease of land -selling in one property to someone in another state
covenant
agreements written into deeds and other instruments promising performance/non of certain acts or stipulating use of property
back end ratio
all of buyers debt / income conventional 33-38%, FHA 43-50%
alienation clause (due on sale)
allows lender to require a balance of a loan to be paid in full if collateral is sold
graduated lease
allows specific rent increases in the future. variable lease that permits increase or decrease depending on appraised value, index, or time usually in long term leases
site plan
an architectural plan, landscape architecture document, and a detailed engineering drawing of proposed improvements to a given lot
public open space
anything not developed with a building
discount point
can be paid at closing to reduce interest rate ex. 2% on $250,000-> cost to discount 2%
as-of-right zoning
complies with all applicable zoning regulations + does not require any discretionary action by city planning commission or Board of Standards + Appeals most development + enlargements are as-of rights -part of bundle of rights
executory contract
contract not fully performed on both sides
Essentials of a sales contract
date indentification of parties legal description personal property provision consideration terms of payment type of deed closing info broker clause
what is included in mortgage
date+name prepayment penalty acceleration clause defeasance clause right to foreclose must maintain marketable title alienation clause signature aknowledgement
incentive zoning
encourages private developers to provide amenities for public use in exchange for opportunity to build larger or taller structures on a site.
Loan point
equals 1% of borrower's loan.
VA Loan
guaranteed by government designed to offer long-term financing no down payment
10/1 ARM
highest fixed rate, then adjusts every year after
FHA loan
insures by federal government, up to $625k, lower interest and down payment have to pay mortgage premium
Leasehold Estate
interest or estate which a lessee of real estate has therein by virtue of another lessee's lease
buydown
interest pre-payment at closing to temporarily reduce interest rate, usually for 1-3 years
fixed mortgage
interest rate fixed for life of loan longer the term, higher the interest rate
mortgage
involves lender + borrower security instrument lender holds lien borrower holds title legal agreement by which a bank lends money in exchange for taking a title of debtors property
town council
legislative body creates master of comprehensive plan where you request to build something, makes laws, + capital budget
home equity line of credit
line of credit extended to homeowner that uses home as collateral
Jumbo loan
loan over $625,500 not purchased, usually kept or sold on secondary market
conventional conforming
loan up to $417,000
adjustable rate mortgage
loan with the interest rate periodically adjusted based on an index which reflects the cost to the lender of borrowing on credit markers based on amortization rate determined by cap + margin
PMI (Private Mortgage Insurance)
may be required on conventional loan when down payment is less than 20% protects lender in case of default lender terminates when borrower reaches 78%
assignment of lease
method or manner by which a right or contract is transferred from one person to another (sublease)
earnest money deposit
money pledged by a buyer to show good faith when making an offer to buy a home
front end ratio (housing)
monthly expenses (PITI) / income aim for 25-28%for conventional 31-40% on FHA
wrap-around mortgage
mortgage in which seller extends to the buyer a junior mortgage which wraps around existing mortgage
Pledged Account Mortgage (PAM)
mortgage with dedicated savings account which earns interest that I used to gradually reduce mortgage payments
abutting
neighboring land with a common boundary
Types of Commercial Leases
net lease gross lease percentage lease graduated lease
breach of contract
occurs when one party fails to live up to the terms of a contract
negative amortization loan
occurs when the loan payment is less than the interest charges over a period, so outstanding balance of loan increases
ground lease
one party owns land and other owns improvements. leased for 50-99 years. improvements become lessor's property
unilateral contract
one person enters into an agreement and other person required to perform (renovation but no contract)
mortgage contingencies
purchase money mortgages assumed mortgage FHA financing fanny mae regulations
loan to value
ratio of loan amount to property sale (sale/appraised, whichever is lower) loan/value of home used to determine if required down payment amounts when initially writing mortgage loans
executed contract
signed by both parties
warranty clause
the part of a deed in which the seller warrants the title conveyed to the buyer not included in mortgage docs
eminent domain
the right of government to take private property for public use by condemnation
percentage lease
the tenant pays a base rent each month, and the landlord also receives a percentage of the tenant's revenue each month. usually malls + larger businesses
absolute net lease
the tenant pays taxes, maintenance, insurance + building expenses
triple net lease
the tenant pays the real estate taxes, maintenance, and insurance
residential accessory use
the use of land that is subordinate to, and customarily found in connection with the principal use allowed on a lot by zoning law a garage is incidental to the principal use of a lot as a single family residence and usually found on single family parcel, so it isn't mentioned in zoning
cap
typically 2% even if ec indicator is x, we cap at x increase l