Real estate part 2

Caveat emptor means

"let the buyer beware." In real estate, it means that it is the buyer's responsibility to perform due diligence on the property, and it is not the seller's responsibility to disclose all or protect the buyer.

Residential real estate transactions involving properties built before 1978 must provide

A lead-based paint disclosure

What is the Forest Conservation and Management Program?

A program designed to encourage the preservation or development of land for productive woodland purposes

The MD property condition disclosure Law requires

All sellers on single-family. Residential real properties to provide buyers with a written property condition disclosure or disclaimer statement

Material fact

Any fact that would influence the buyer decision to purchase the property, purchase at a certain price or with certain conditions

Which of the following statements is true if the parties did not agree to sign a Release of Deposit Agreement and one of the parties defaults?

Both parties can pursue all legal and equitable remedies.

Which of the following statements about a broker's liability according to the Broker Liability section of the Residential Contract of Sale is true?

Brokers are not liable for the performance of the contract by the parties to it.

Sales contract

Buyer's documented offer to the seller to purchase the property identified in the agreement

Common signs of foundation issues

Cracks in basement walls, moisture in the basement, misaligned doors and Windsor, cracks in sheetrock, and separation around the garage doors

Common chimney and fireplace issues

Creosote buildup, drafts near fireplace, cracked or sloping hearth or firebox, and loose and crumbling bricks

Common window problems

Damaged or broken glass and screens, windows that stick or wont stay open, damaged hardware, and leaking or damaged seals

Which section of the Residential Contract of Sale stipulates that the seller is conveying the property to the buyer with a good and merchantable title?

Deed and Title section

Common roof issues

Discolored or curling shingles, water buildup or ice damming in gutters, damage to flashing, water damage along the fascia, and cracks, holes, or rotting on the soffit

Purchaser receives the property condition disclosure or disclaimer statement on or before entering in the sales

Do not have the right to rescind, cancelled, sale

There are four types of leasehold estates

Estate for years, Periodic estate, Tenancy at sufferance, Tenancy at will

Ways a lease can be terminated in MD?

Expiration, eviction, and mutual agreement

In the Estate section of the Residential Contract of Sale, a property can be conveyed in either _______________ or subject to annual ground rent.

Fee simple

Purchaser who doesn't receive the property disclosure or disclaimer statement before or upon entering in a sales

Has unconditional right to rescind, cancel, sale within 5 days

Common heating and cooling issuees

Hot and cold rooms and a furnace or a/c unit wont urn on or a pilot light wont stay lit

Deposit section of the Residential Contract of Sales specifies

How and by him the earnest money deposit is handled and disbursed

From an agent's perspective, what is one benefit of a buyer representation agreement?

It defines how and how much the agent will be paid.

From a buyer's perspective, what is the primary benefit of signing a buyer agency agreement?

It ensures a higher level of service.

Who is responsible for providing prospective buyer with a copy of the disclosure in a timely maner

Listing agent

Once licensees have entered into a representation agreement with the client for a lease property, their duties include:

Listing and marketing the property for the property owner, Assisting tenant clients in locating a suitable place to lease, Assisting the client in reviewing and preparing the lease agreement, Representing the client's interest in all negotiations and transactions regarding the lease of the property

What location of the property affect affordability and enjoyment of use

Located in protected zones such as wetland or historical districts, is under abatement, or is uninsurable

Stigmatized properties

Locations where a death, crime, or haunting occurred.

How long to keep real estate forms on file with the broker in MD

Min of five years

Purpose of the Consent for Dual Agency form

Obtain the client's consent or not for a broker/licensees are required to represent them as a dual agent/intra-company agent should such a situation arise

Under which types of agency agreement may a buyer and agent operate?

Open, exclusive right to represent, and exclusive agency

Lead can be found in

Paint, plumbing, dust, soil, and drinking water

Interior environmental hazards include

Radon, asbestos and mold

MD broker's Act

Requires all licensees to disclose material facts that they know or should know to every prospective buyer

MD real estate commission's code of ethics

Requires that real estate licensees make reasonable efforts to discover all material facts about each property they list

Encroachments

Structures or objects illegally built on another's land

Common electrical issues

Switches warm to touch, lights burn out quickly or dim when other items are in use, burnt or discolored outlets, faulty appliances and old or damaged circuit breakers

Common wood-eating pests

Termites, carpenter ants, and power post beetles

One of the required elements of a valid option contract is

The amount of consideration the optionee is paying the optionor

Payment Terms section of the Residential Contract of Sales indicates

The amount of earnest money the buyer is putting down

Standard provisions in lease agreements:

The capacity to contract, A demising clause, A description of the premises, A clear statement of the "term" or length of the lease, Specification of rent and how it is to be paid (consideration), The requirement for long-term leases to be in writing, The requirement for contracts to be signed by all parties, The inclusion of use provisions, The expression of leases in annual terms

Home/ environmental inspection section of the Residential Contract of Sale

The parties identify items to be included or excluded from the sale of the property

"Time is of the essence" means

The parties will not unduly delay the process

Purchase Price section of the Residential Contract of Sales contains

The price the buyer is offering for the property

a benefit of a redeemable ground lease?

The tenant can buy out the lease from the landlord.

Tenancy at will

This leasehold estate may be terminated at will by either party. An estate at will is not inheritable; this means that at the death of either party to the lease, the leasehold automatically terminates

Capacity to contract

This means that the person signing the lease must be a competent, sane adult. A lease to a person who is incompetent in the eyes of the law can be voided by that person

Tenancy at sufferance

This type of estate is one in which a tenant continues to occupy property after lawful authority has expired.

What's the purpose of a buyer presentation?

To build rapport with the buyer

Alternate Financing section of the Residential Contract of Sales explains

Under what conditions alternate financing may be used

Asbestos

Used in many materials before 1970s. Becomes dangerous when it begins to deteriorate and becomes friable. Only licensed professionals should handle asbestos

Common plumbing issues

Water damage on ceilings or walls, leaking or blocked drains, clogged or leaking toilets, reduced water pressure, and soggy ground around the home

Financing Application and Commitment section of the Residential Contract of Sales specifies

When the application for financing must be submitted

Financing section of the Residential Contract of Sales indicates

Whether the buyer has a financing contingency

Understanding Whom Real Estate Agents Represent form

You are required to present and explain this disclosure form at the first face-to-face meeting with the customer.

Consent for Dual Agency form

You are required to present this form and obtain the buyer's signed consent as part of completing the buyer representation agreement and present it again for signed consent if a dual agency situation arises.

Listing agreement

a binding contract entered into by the seller of a property and seller's listing agrent

Estate for years

a lease that ends on a specific date, survives the death of either party and is inheritable

Periodic estate

a lease that ends on say, dec 31, but will be automatically renewed for another negotiated period

full-service lease

a lease where the base rent, the nets, utilities and janitorial are included in one price per square foot lease rate

Ground lease

a residential lease or sublease for a specific term-max 99 years, that is renewable forever, subject to the payment of ground rent. lease in which the tenant leases property upon which the tenant intends to build

Actual eviction

a term often used for when a landlord acts without a court's involvement, violating statutory law by physically removing the tenant and their belongings from the premises or prevents tenants from accessing the premises.

exclusive agency

allow sellers to work with an agent, while still trying to locate the buyer themselves

exclusive right to sell

allows the listing agent to list the property and receive a commission, no matter who brings the buyer to the table

open listing

allows the seller to contract with multiple agents, but only pay a commission to the agent who locates a buyer

nonfreehold estate

an estate that conveys possession and control. also known as a leasehold estate

freehold estate

an estate that conveys possession, control and title (ownership)

To remedy a breach of contract situation,

an optionee can sue for specific performance or monetary damages.

failure to demand rent

can result in unpaid rent and loss of property if lasting longer than 20 straight years

Natural break-even point

comes into play with percentage leases. Landlord wont charge a percentage of sales until the tenant's sales reach the break-even point

signs of underground oil tank

crimped off pipe in the ground, vents sticking out of the ground, and research showing an underground tank registered.

3 primary types of commercial leases?

gross lease, net lease, and percentage lease

failure to pay rent

if lasting longer than 3 months, petition may be filed for unpaid rent

in a ground lease situation, what does the ground tenant own?

improvements (including buildings)

To be valid, an option contract must be

in writing and signed by the optionor and state the amount of consideration, the length of the option period, and the sales price of the property.

common areas of asbestos

insulation and wall paint, ceiling tiles and vinyl floor, insulation around hot water and steam pipes

Eviction

is a legal action by the courts to remove the tenant and the tenant's belongings from the premises.

Option contract

is an offer to purchase a specific piece of real estate, but without the obligation to buy it. Optionee (buyer) can enforce an option contract b/c its a unilateral contract.

Nonfreehold estate

is the term used for an estate that conveys possession and control, but not title.

lessor

landlord

Gross lease

landlord pays all expenses related to the property (taxes, insurance, and maintenance)

Right of first refusal

landlord selling a leased property give the property's residential tenants the option to purchase the property before sold to someone else

loft lease

lease of a space that is generally wide open and has limited services

proprietary lease

lease used by owners of cooperative apartments who purchase shares of the corporation that owns the building

Constructive eviction

may occur intentionally or inadvertently. when the tenant is prevented from the quiet enjoyment of the premises. If the premises have become unlivable due to a breach of warranty of habitability, a tenant may vacate and not be held responsible for lease payments

what conditions are prime for mold growth?

moisture and lack of air circulation

commercial leases contain

monthly rent and deposit amount, purpose for which the space is being rented, lease and agreement start and end dates, names and signatures of all parties, conditions under which the lease can be terminated

Rent receipts

must be provided for rend paid in cash and upon tenant request

records of rent payments

must include the dates and amounts of rent paid

Leases are contracts, and as such, the same laws governing contracts in Maryland apply to creating a valid lease. These include

offer, acceptance, legal capacity, legal purpose, consideration, mutual assent

Radon found in

soil and well water. Homeowners can test for radon in the home

oil or gas lease

special lease agreement with an oil or gas company in which the land owner receives a cash payment for executing the lease.

lessee

tenant

Percentage lease

tenant pays a base rent plus a percentage of their gross sales.

Net lease

tenant pays some or all expenses separately (taxes, insurance, and maintenance)

lease

the contract that allows a tenant to live on the property and establishes the rights and obligations of the tenant

A demising clause

the date the tenant will take possession of the property

commercial lease agreement

the owner receives financial compensation and in exchange, the tenant is given the right to operate his or her business on the property

leasehold estate

the right that allows a tenant to live on the property

control

the right to determine how the property is used and who may enter the property

possession

the right to use the property: to live or work there

Modified gross lease

typically used for multi-tenant industrial buildings and single office properties b/c they include all the nets in the base rent but not utilities or janitorial