Real estate U Chapter 4

Caveat

A Latin term that means "let him beware.". Caveat is usually interpreted as a sort of warning or cautionary expression.

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.

Uniform Commercial Code

A collection of laws that governs various types of business transactions.

Express Contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

Executed Contract

A contract that has been completely performed by both parties.

Land Lease

A land lease--also called a ground lease--is a lease agreement that permits the tenant to use a piece of land owned by the landlord in exchange for rent.

Percentage Lease

A lease of property in which the rental is based upon the percentage of the volume of sales made upon the leased premises, usually provides for minimal rental.

Gross Lease

A lease of property whereby the lessor is to meet all property charges regularly incurred through ownership

Net Lease

A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs.

Estate at will

A lease that can be terminated by either party at will, without notice usually 30 days

Index Lease

A lease tied to an index such as the Consumer Price Index.

Graduated Lease

A lease where the rent will increase periodically in amounts specified in the lease, as contained in the escalation clause.

Implied Contract

A legal substitute for a contract. An implied contract is 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.

As is"

A phrase used in sale contracts by sellers as an attempt to limit liability for the condition of the premises. If known latent defects or condition of a property is known to the seller, seller has the obligation to disclose.

Contingency

A provision in a contract that requires the occurrence of a specific event before the contract can be completed.

Liquidated Damages

A provision in certain legal contracts that allows for the payment of a specified sum should one of the parties be in breach of contract.

Rescission

A remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made.

Option

A right given for a consideration to purchase or lease a property upon specified terms within a specified time; if the right is not exercised the option holder is not subject to liability for damages; if exercised, the grantor of option must perform

Tenancy at sufferance

A tenancy that occurs when a tenant that is supposed to vacate does not, but continues to pay rent, and the landlord accepts it.

Leasehold Estate -

A tenant's right to occupy real estate during the term of a lease, generally considered to be a personal property interest.

Periodic Lease

Also known as a tenancy from year to year, month to month, or week to week, is an estate that exists for some period of time determined by the term of the payment of rent. Automatically renews

Rider

Also known as an addendum, in general, is a writing annexed to an agreement.

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.

Constructive Eviction

Any disturbance of the tenant's possession of the leased premises by the landlord whereby the premises and rendered unfit or unsuitable for the purpose for which they were leased.

Constructive Eviction -

Any disturbance of the tenant's possession of the leased premises by the landlord whereby the premises and rendered unfit or unsuitable for the purpose for which they were leased.

Contract Remedies Compensatory damages:

Compensatory damages equal the amount of money actually lost due to the breach of contract.

Leasehold Estate for years

Definite period of time (years, months, etc) Specific beginning / end date. New contract required at end. Example: Typical rental property tenant

Signing the Sales Contract

Generally, the purchaser signs the contract of sale first because the purchaser is the party making the offer. The purchaser is stating the purchase price he/she wants to offer and the terms.

Discharge of Contract Impossibility of performance

If there is a change in the law which makes full performance of the contract illegal, the contract may be discharged due to impossibility of performance.In another example, if a property is destroyed by fire, the listing contract between the owner and broker may be discharged due to 'impossibility of performance'

Lawyer's Fund for Client Protection

Setup to protect consumers from dishonest attorneys.

Holdover Tenant

Tenant who remains in possession of leased property after the expiration of the lease term.

Voidable

That which is capable of being adjudged void, but is not void unless action is taken to make it so.

Eviction

The legal process of removing a tenant from rental property

Actual Eviction

The legal process that results in the tenant's being physically removed from the leased premises.

Assignment -

The method or manner by which a right or contract is transferred from one person to another.

Quiet Enjoyment

The right of an owner or lessee legally in possession of property, to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.

Right of first refusal

The right of first refusal may be added to a sales contract or a lease.It allows the holder to purchase (or lease) a property if the seller decides to sell or another purchaser (or lessee) comes along.The holder of the right of first refusal can match the offer from the third party or forfeit their claim to purchase or lease the property.

Discharge of Contract operation of law

This includes the statue of limitations.

Void -

To have no force or effect; that which is unenforceable.

A uni-lateral contract

is an "open contract" where one party promises to pay another party if the other party performs a specific action.An open listing contract is an example of a uni-lateral contract.

Caveat Emptor

let the buyer beware

Executory Contract

contract not fully performed on both sides

Discharge of Contracts 1)

1) Agreement of the parties

Mortgage Contingency Clause

A clause in a contract that states a mortgage must be obtained in order for the contract to be binding.

Lease

A contract whereby, for a consideration, usually termed rent, one who is entitled to the possession of real property transfers such rights to another for life, for a term of years, or at will

Triple Net Lease

A lease in which the tenant or lessee is responsible for paying a portion of or all of the common expenses related to real estate ownership, in addition to base rent.

Eviction

A legal proceeding by a lessor landlord to recover possession of real property.

Forbearance

A special agreement between the lender and the borrower to delay a foreclosure.

Security Deposit

A sum of money usually equal to one month's rent, held by the landlord to cover any damage to the apartment caused by a tenant.

Power of Attorney

A written instrument duly signed and executed by a person which authorizes an agent to act on his/her behalf to the extent indicated in the instrument

Covenant for leases

Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property.

Periodic Lease

Also known as a tenancy from year to year, month to month, or week to week, is an estate that exists for some period of time determined by the term of the payment of rent.

Ground Lease

An agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner.

Proration

Dividing property taxes, hazard insurance and other expenses or income between the buyer and seller, as of date of settlement.

Offer and Acceptance

Elements required for the formation of a legally binding contract. The expression of an offer to contract on certain terms by one person (the "offeror") to another person (the "offeree"), and an indication by the offeree of its acceptance of those terms.

Contract Requirements

In New York State, an individual must be at least 18 years of age to enter into a contract.- Minors (less than 18 years old) CANNOT enter into a contract. The contract is voidable if signed by a minor.- In New York State, an individual must be mentally and emotionally capable to enter into a contract.

Contract remedies Liquidated damages:

Liquidated damages are damages agreed to be paid in the contract.

The following people generally hold the deposit/down payment:

Listing agent (seller's broker)- Seller's attorney

Contract remedies: specific performance

This is an order from the court requiring specific performance means that the contract is to be completed as the parties originally agreed.

Discharge of Contracts Novation:

This is the act of either:1) replacing an obligation to perform with a new obligation; or2) adding an obligation to perform; or3) replacing a party to an agreement with a new party.

Discharge of Contracts Full performance

When the duties of the contract are performed by both parties, full performance is achieved. This is the most common and desirable way to discharge a contract.

Actual Eviction

Where one is either by force or by process of law, actually put out of possession.

Down payment

a portion of the total cost of an item that must be paid at the time of purchase

Contract Remedies Reformation:

doctrine that permits the court to rewrite a contract that expresses the true intentions of the parties. Is is most often used when parties to a contract sign without realize that the contract contains a clerical error.

A bi-lateral contract

includes two parties.Most contracts in real estate are bi-lateral.A few common examples include listing contracts, sales contracts, buyer representation agreements and independent contractor agreements.

Earnest money deposit

money pledged by a buyer to show good faith when making an offer to buy a home