Real Estate Terms to know...

Blaire apparently hasn't learned her lesson. She paid a $5,000 penalty when MREC found her guilty of misrepresentation, a $10,000 penalty when she was found guilty of placing a for sale sign in someone's yard without permission, and now she's committed three more violations by placing a series of discriminatory ads. What's the maximum penalty MREC can levy for these new violations?

$75,000

OLD CAR

- Obedience - Loyalty - Disclosure - Confidentiality - Accountability - Reasonable Care

OLD CAR (fiduciary duties)

- Obedience - Loyalty - Disclosure - Confidentiality - Accountability - Reasonable Care

In Maryland, how many hours of approved real estate courses must an individual complete before taking the real estate broker's exam?

135

Because Lisa's agent didn't inform her that she needed to pull a permit to build a deck off the back of her home, she spent $11,000 having it installed, $7,000 having it removed when the homeowners association discovered she didn't pull a permit, and another $5,000 in legal fees fighting her agent in court over it. How much money is she entitled to seek from the Guaranty Fund?

18,000

In order to qualify as one of the *blank* real estate professional members of the MD Real Estate Commission, you must have 10 years of real estate experience as a licensee.

5

Charlie and his girlfriend, Frankie, are buying a house together. Having found the perfect home, they made an offer without first having seen the seller's property disclosure/disclaimer statement. The statement arrived two days after they entered into the contract with the seller. How many days do Charlie and his girlfriend have to rescind their offer if they find something in the disclosure that makes them uncertain about the property?

5 days

The Protection of Homeowners in Foreclosure Act (PHIFA) outlines parameters for foreclosure consulting services offered to homeowners who are at least ______ delinquent on their mortgage payments

60 Days

Charlotte, an associate broker, has finally saved up enough of her commission earnings to buy an oceanfront condo in Ocean City. Assuming that she's made all of the necessary disclosures and included all the necessary paperwork with her offer, what do we know she sent to the seller's agent?

A disclosure that she's a real estate licensee

Monument

A permanent landmark used to describe very large pieces of property. Stone walls, trees, river banks & boulders.

Consumer

A person who purchases goods and services for personal use

In addition to sanctions imposed by the Maryland Real Estate Commission, serious violations of real estate license laws can result in what?

A small fine

Land Survey

A survey that shows where one's property lines and easements are.

Lot and block system

A system for the legal description of land that refers to parcels' lot and block numbers, which appear on recorded maps and plats of subdivided land; may also be used for assessment maps.

Leasehold Estate

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

Fee on condition

A type of defeasible estate recognized by the words "but if." The estate continues unless a specific event occurs, in which case it terminates.

Fee Simple Defeasible

A type of ownership of real property that grants the owner all the incidents of a fee simple absolute except that it may be taken away if a specified condition occurs or does not occur

Ratification

Acceptance after the fact, either through signing paperwork or through the parties' actions. If the parties choose, implied agency can be ratified through signing an agency agreement after the implied agency relationship has been created.

Control

Allows the owner to control the use of the property, including how others may use the property.

Which of these parties would be eligible to be one of MREC's consumer members?

Amelia, a retired community college professor who used to teach about home improvement.

Express Agency

An agency relationship created by oral or written agreement between principal and the agent.

Freehold Estate

An estate in real property which continues for an indefinite period of time.

Riparian Rights

An owner's rights in land that borders on or includes a stream, river, or lake. These rights include access to and use of the water.

Fee Simple Determinable

An ownership in which the estate is held " so long as" or "during the period" a condition or limitation is maintained.

For sale signs on ground rent properties that show the price of the property must also state which of the following?

Annual ground rent plus the full cost of capitalization

Cheyenne has been working with a buyer, though they don't have a signed agency agreement. When he finds a house he likes, Cheyenne helps him fill out the offer paperwork and submits it to the seller's agent. In what capacity is Cheyenne contributing to this transaction?

As a sub-agent for the seller

Adesha made an offer on a three-bedroom townhouse in Hanover on April 5. The sellers accepted her offer on April 6, and all signatures were finalized by April 7. Adesha still hasn't received the property disclosure/disclaimer statement. Until when can Adesha rescind the contract without penalty?

At any time before she receives the disclosure/disclaimer statement

Which of these incentives would be legal according to Maryland license law?

Ben runs a "Spring into Summer" ad offering sellers a reduced commission rate for the next three months.

Ruthe lost her job last year, and she's fallen three months behind on the mortgage payments for her Baltimore home. She seeks the services of Chuck, a foreclosure consultant. Chuck charges Ruthe $1,000 up front, then disappears and fails to return Ruthe's calls. PHIFA permits Ruthe to *blank*.

Bring a private legal action against Chuck to recover up to $3,000, as well as reasonable attorney's fees

Exclusive Agency

Broker exclusive agent but owner can sell

COALD (Traditional Agency Duties)

Care Obedience Accountability Loyalty Disclosure

Chandler is a licensed salesperson in a state that doesn't have a reciprocal agreement with Maryland. What must he do in order to qualify for licensure in Maryland?

Chandler needs to complete the same licensure requirements as other Maryland salesperson candidates and submit an irrevocable consent form.

Four years ago, licensee Gustav assisted a buyer in her purchase of a foreclosed three-bedroom townhome in Hanover. The buyer recently called Gustav, telling him that she filed a complaint with MREC, claiming that Gustav knew the plumbing was faulty, but didn't disclose this to her. As a result, she's racked up more than $35,000 in plumbing bills since her home purchase. Panicked, Gustav begins searching for the transaction file until his broker tells him he can stop. Why?

Complaints must be filed within three years of the transaction date, and this sale took place four years ago.

Daniel has several properties listed around town. He receives a call from a prospective buyer who is very interested in one of the properties and wants to schedule a showing. What should Daniel do?

Disclose his agency relationship with the seller to the prospective buyer.

DEEP-C

Disposition, Enjoyment, Exclusion, Possession, Control

FAR

FAR is computed by dividing a building's usable floor area on all floors by the total square footage of the lot on which the building is located. A lower FAR (less than one) is common in suburban settings, where density is lower. Urban settings would have a higher FAR, where density is higher.

Enjoyment

Gives the owner the ability to use the property in any legal manner.

Exclusion

Gives the owner the right to decide who may or may not access the property.

Disposition

Gives the owner the right to sell or convey the property.

Reliction

Gradual recession of water which uncovers new land.

Erosion

Gradual wearing away; deterioration; depletion due to a natural force.

Real Estate

Includes the land itself, as well as any attached items such as buildings, pools, and monuments.

Real Property

Includes the real estate as well as the rights that included in property ownership. AKA the "bundle of rights".

Land Parcel

Includes the surface of the land, earth below the surface, any attached natural items, and the airspace above the land.

How does a Maryland broker's license renewal differ from a salesperson's license renewal?

Instead of having 4.5 hours of electives, brokers must take three hours of broker supervision coursework and only 1.5 hours of electives.

Which of the following situations is a violation of Maryland fair housing laws?

Jack refuses to rent a unit in the six-unit apartment building he owns and in which he lives to a transgender woman named Jane.

Percolating Water Rights

Laws that govern the use and ownership of underground water.

Linda is the sponsoring broker at Gardner Homes. Which of the following best describes what happens with her license?

Linda displays her license at Gardner Homes.

MREC received Shanice's complaint against licensee Nick two years and eight months after he helped her buy her one-bedroom condo in Silver Spring. Nick and his broker responded to the copy of the complaint MREC sent them. Three weeks later, Nick and his broker received notice via certified mail that Shanice's claim warranted a hearing, which would take place in a week. What's wrong with this scenario?

MREC must give 10 days' notice before a hearing.

What is the name of the organization that has the authority to impose penalties of up to $25,000 for real estate license law violations?

Maryland Real Estate Commission

Which of these unlicensed assistants may NOT be compensated for their activities in Maryland?

Michael, who shows properties when salesperson Janine is out of town.

Amelia's portfolio is on fire! She's got four upcoming listings and each of them will list for at least $500,000. Before she can count her commissions, though, she's got some paperwork to get through. Since she wants to stay on the right side of the Maryland Property Condition Disclosure Law, which of these sellers does Amelia need to remind about completing the Residential Property Disclosure/Disclaimer Statement?

Mikey, an investor who's selling a property that he converted into a three-unit apartment building

Which one of the following choices is not protected by federal or Maryland fair housing law, but may be protected by local ordinances in Maryland?

National origin and sexual orientation

RGSS - Rectangular government survey system

Originally used to survey federally owned blocks of land.

Client

Person represented by the RE agent

Kent's seller client's home just went under contract on Tuesday. Just as he's hanging the "under contract" sign in the yard, he gets an email alert from a different buyer's agent with a new offer attached. What should Kent do with the offer?

Present it to his client.

Estoppel

Prevents one party from suing another, because the party's actions or statements implied that he or she agreed with the other party; e.g., if Kara creates an implied agency relationship with a client and performs agency tasks for the client, estoppel prevents her from later claiming she wasn't in an agency relationship.

The Sunshine Law

Prohibits public officials from holding closed meetings

Dual Agency

Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states

Alluvion

Solid material deposited by a body of water.

Customer

Someone who is working with an agent but who isn't represented by that agent.

Legal Description of land

Specifies the boundaries and location of a piece of property.

Ruthe is fed up with her agent's lazy and irresponsible behavior. On top of his usual incompetence, her checking account was just hacked because he misplaced her $10,000 EMD check. She's lost $5,000 and has to pay $50 in bank fees, too. With which entity should she file a complaint?

The Guaranty Fund

Net Listing

The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states.

Whose responsibility is it to ensure that a prospective buyer receives a copy of the Maryland Residential Property Disclosure and Disclaimer Statement prior to the buyer making a written offer to the seller?

The buyer's broker and the seller's broker

Principal

The client

Metes

The direction and distance of a line forming the boundary of a property.

Fee Simple

The greatest possible interest a person can have in real estate.

Estate

The interest or right that a person has in real property.

Bridget represents Colin, who's buying Hugh's house. Darcy represents Hugh. Hugh completed and signed the Residential Property Disclosure/Disclaimer Statement, and Colin reviewed and signed it. Hugh and Colin also signed the Section 10-702 notice form, and their agents made sure a copy of the form and the disclosure statement were included in the finalized contract. What's missing from this scenario?

The licensees also need to sign the notice form.

Avulsion

The loss of land caused by a sudden or violent change in the course of a river, stream, or other body of water.

Bounds

The physical features that define the boundaries of the land.

Accretion

The process by which water carries rock, sand and soil and causes land build-up.

Cost Approach

The process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation.

Sales Comparison Approach

The process of estimating the value of a property by examining and comparing actual sales of comparable properties.

Income Approach

The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life.

Possession

The property is owned by the title holder.

Water Rights

The right of a landowner to water adjoining or passing through property (based on common law).

Littoral Rights

The right of a property owner whose land borders on a body of water, such as a lake, ocean or sea, to reasonable use and enjoyment of the shore and water the property borders on.

Surface Rights

The right to both land and water rights.

Right of Profit

The right to harvest timber, for instance, and sell it.

Subsurface/Mineral Rights

The right to the minerals and substances that lie far below the earth's surface.

Air Rights

The right to use the open space above a property, usually allowing the surface to be used for another purpose.

What is the goal of the Maryland Real Estate Commission in declaring an area a real estate conservation area?

To curb threats to the racial stability of an area.

If a license expires due to nonrenewal, it must be reinstated within what time period?

Within one year

LaTonya represents the seller of a property that's got an interested buyer. She's emailing the buyer, who's unrepresented, some documentation based on some questions he had and has included the Understanding Whom Real Estate Agents Represent form so she can disclose her agency relationship with the seller. Is this permissible?

Yes, LaTonya may disclose her agency relationship through whatever medium is used when first contacting the unrepresented party.

Jim's had one heck of a time getting his latest listing sold. His seller client nitpicked every single item that the buyers asked her to repair after the home inspection. She was about to let the deal fall through over it until Jim offered to rebate 0.5% of his commission back to the seller. Does Maryland license law permit Jim to do this?

Yes, as long as he documents the commission reduction in writing and discloses it to all parties.

John is 18 and wants to be a real estate broker in Maryland. If he completes the 135 hours of required real estate licensing coursework, is there anything that might prevent him from taking the broker's license exam?

Yes, he must have at least three years of active experience as a Maryland salesperson before he qualifies to take the broker's exam.

Shawn and his life partner, Dennis, recently put an in an offer on a home. The seller tells his agent to reject the offer, because he won't sell to "gays." Are Shawn and Dennis protected under fair housing laws?

Yes, under state fair housing laws

What happens to you if you're involved in a case and can't pay the judgment amount, and the consumer is awarded money from the Guaranty Fund?

Your license will be suspended and can't be reinstated until you pay back the fund plus interest.

In order to qualify as one of the four appointed consumer members of the Maryland Real Estate Commission, how many years of experience must you have as a real estate licensee?

Zero

Sub-agency

a situation in which a licensee brings an unrepresented buyer to a transaction. In states where sub-agency is permitted, that licensee represents and owes fiduciary duties to the seller. Today's buyers are typically represented by a licensee, thus eliminating sub-agency of this type in most transactions.

Universal Agent

has broad authority to act for the principal, such as someone who has power of attorney.

General Agent

is responsible for handling all dealings in a given area for a client, such as a property manager. This type of agent may bind a client to a contract.

Special agent (aka limited agent)

limited authority to act on a client's behalf, such as a real estate agent or an escrow officer. This type of agent can't bind a client to a contract.

Fiduciary

someone in a position of trust who owes loyalty to another.

Agent

someone who acts on behalf of someone else

Single agency

the agent represents only one party to a transaction.

Single-license dual agency

when a single licensee represents both the buyer and the seller in the same transaction

Designated/appointed agency (aka dual-license dual agency)

when two separate licensees from a single firm each represent one party (buyer or seller) in the same transaction.