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