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Level 29

Real Estate: Various V

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title search
examination of all public records that might affect a title B78
American Land Title Association policy extended title license insurance policy to cover risks that may be discovered only through inspection of the property B78
Connor Act
state law that provides that many real estate documents are not valid as to third parties unless they are recorded; pure race state first one to record the deed prevails B82
extra-territorial jurisdictions; allows a municipality to regulate development in areas adjacent to, but not within, the corporate limits (1 to up to 3 miles) B89
overlay district
a type of zoning that is superimposed over another type of zoning ex. a residential flood plain B91
historic preservation zoning
to preserve historic buildings and sites that are irreplaceable
subdivision process
initial planning stage analyze property for highest and best use; final planning stage final plans are approved, budgets prepared; start-up stage carries the subdividing process to a conclusion B95
certificate of occupancy given by the building inspectors once completed structure has been inspected and found satisfactory B96
flood hazard areas
areas bordering on rivers and streams which are subject to federal regulations concerning improvements and construction in those areas; required to have flood insurance if federally related mortgage is used B96
aka government survey; a type of property description in which each township contains 36 equal sections of land which are 1 mile long and 1 mile wide; not used in NC Y17
references to a recorded plat
a type of property description uses a subdivision lot number and page number of a map book in the courthouse to describe real estate Y17
reference to a prior recorded deed
a type of property description that makes reference to a deed that has already been recorded for the property (prior deed should have metes & bounds desc) Y17
informal reference
a type of property description that only uses a street address or house number to describe the property; acceptable use for a lease but not to convey ownership; should be combined with a reference to recorded plat Y17
excise tax definition
aka revenue stamps/deed stamps; a deed transfer tax paid by the seller; is required to be noted on a deed by state law B610
caveot emptor
let the buyer beware sellers do not have to disclose any facts about the property being sold. NC is a caveot emptor state B605
the full broker responsible for notifying the NC Real Estate Commission of changes, maintaining the trust account; maintaining all transactions properly and supervising all provisional brokers; required for each brokerage firm and branch office B605
fixed lease
aka flat lease; rent is set at a fixed amount for the life of the lease Y19
graduated lease
rent automatically increases at pre-set intervals Y19
precentage lease
tenant pays a minimum monthly base rent plus percentage of gross sells over a certain amount (often used in commercial leases for shopping centers) Y19
index lease
aka variable lease rent automatically increases or decreases according to some index such as the cost-of-living index Y19
full service lease
rent includes all expenses of the occupancy because landlord provides everything such as utilities, cleaning, etc Y19
actual eviction
aka summary ejectment; landlord evicts tenant for breaching the lease Y19
NC residential rental agreement act
1. landlord must provide fit premises, comply with business codes, keep common areas safe, provide smoke detectors 2. tenant must keep leased premises fit and safe and not damage or remove property 3. tenant cannot be evicted by landlord for up to 12 months in retaliation for asserting legal rights Y20
self help eviction
taking an action to force a tenant out of the property (change the locks, turn off utilities, impound tenant's personal property, etc); is illegal in NC Y20
NC tenant security deposit act
1. must be placed in trust account in an insured NC bank or landlord must be bonded (if landlord is a licensee, deposit must be in trust acct); 2. can only be used for non-payment of rent, damages, unpaid bills; cost of rerenting or court costs; 3. tenant must be given itemized statement within 30 days Y20
maximum security deposit amounts
week-to-week 2 weeks rent
pet fees
can be non-refundable and must be "reasonable". service animals (ex. seeing-eye dogs) cannot be charged pet fees Y21
NC vacation rental act
applies to short-term recreational rents for less than 90 days when the primary residence is somewhere else; provides for expedited evictions and addresses mandatory evacuations; if property is sold, new owner must honor rentals scheduled for next 180 days Y21
brokerage (agency) contract
it creates the agency relationship and establishes the scope of the agent's authority to work on client's behalf; every agreement except certain buyer agency agreements must be in writing from the time of the formation; must be for a definite period and terminate without notice Y22
buyer agency agreement
can be oral if there is no time limit on the agreement; must be in writing with a time limit if it is an exclusive agreement or no later than presentation of the first offer Y22
universal agency
agent is authorized to handle all of the principal's business under a power of attorney; real estate firm will rarely be one Y23
general agency
agent is authorized to perform a broad range of acts in connection with the principal's business; many property managers are general agents Y23
special agency
agent is authorized by a principal to do one or more specific acts according to detailed instructions; does not have the authority to bind the client; typical real estate contracts are this Y23
seller agency
the firm and employees represent only sellers in real estate transactions Y23
buyer agency
the firm and employees represent only buyers in real estate transactions Y23
single agency
when firm and employees represent only the buyer or only the seller in a particular transaction Y23
designated agency
a type of dual agency in which the BIC appoints one licensee to represent only the seller in a particular transaction and appoints another licensee to represent only the buyer; cannot share confidential information; each principal gets better representation Y24
working with real estate agents brochure
a brochure to be presented to consumer at first substantial contact explaining agency options (buyer/seller); ask consumer to sign and agent must keep on file for at least 3 years; if FSC is over phone, mail to consumer within 3 days Y25
first substantial contact
the time when the licensee's discussion with a buyer begins to focus on the buyer's specific property needs and desires or on his/her financial ability; anything that can be used against the buyer during negotiations; auctioneers are exempt Y25
agent's duties to the principal:
agent's duties to 3rd party
Honesty and fairness must be honest with all parties in the transaction
willful misrepresentation
agent has actual knowledge of a material fact and intentionally lies about it B126
willful omission
agent has actual knowledge of a material fact and intentionally keeps his/her mouth shut regarding it B128
negligent misrepresentation
agent unintentionally misinforms regarding a material fact because they have no actual knowledge or have incorrect information B127
negligent omission
agent has no actual knowledge of a material fact but should reasonably have known of such a fact B128
principal's duties to agent
good faith principal must cooperate with the firm
material facts in NC
presence of leaking polybutylene pipes even if repaired or replaced; use of synthetic stucco siding even if replaced; use of property as a meth lab; structural defects, pending zone changes, inoperative appliances, issues with: wiring, plumbing, drainage, percolation Y27
non-material facts in NC
stigmatized properties death or crime that occurred on property; haunted house; sexual predator in the neighborhood; mere presence of mold Y27
a wrongful act, injury or violation of legal right to a person or property of another; references when an agent does this while acting for the principal B623
classes of contracts (9)
express; implied; unilateral; bilateral; executed; executory; valid; void; voidable Y29
essential elements of a contract (5)
mutual assent offer and acceptance, meeting of the minds, mutual agreement
mail box rule
the postmark date is considered to be the date that the contract is actually communicated if the addressee is the other party in the transaction Y30
offer termination conditions (7)
revocation or withdrawal by the offeror
statutes of fraud (definition)
states that certain contracts must be in writing in NC to be valid and enforceable Y31
statutes of fraud (required contracts)
any contract for the sale or conveyance of real property
Uniform Electronic Transaction Act (UETA). contracts can be created electronically and an electronic signature is binding; no court case has tried to test the enforceability of this act Y32
legal remedies for contract breach (3)
money damages, specific performance, rescission Y33-34
money damages (3)
compensatory damages money to make injured party whole
types of listing contracts (3)
exclusive right to sell one firm is guaranteed to receive a commission, regardless of who brings in a buyer
heated living space
adequate heated by permanently installed heating system, finished to generally acceptable standards, directly accessible from other living areas; stairs count on both levels and you can walk on it Y37
termination of listing contracts
death or insanity of owner; dissolution of the brokerage firm; death or insanity of individual broker working alone; destruction of the property; breach of the contract; property is sold and transaction is closed Y37
offer to purchase
an offer by a prospective buyer of real estate Y38
sales contract
aka purchase contract; an offer to purchase that has been accepted by the offeree Y38
due diligence period
allows the buyer to fully investigate the property, negotiate any repairs, apply for necessary funding, order an appraisal and survey, etc. buyer may pay seller a non-refundable due diligence period fee Y39
installment land contract
a property is sold with seller financing; seller retains legal title and the deed to the property until all of the purchase price is paid; buyer doesn't receive deed until the property is paid for; if buyer defaults, buyer loses property, seller has cloud on title Y41
option to purchase
a contract that gives one person the right to buy or lease a specific property at a specific price for a specified period of time from the owner Y41
property management limitations (4)
1. cannot make capital improvements to the property
What are included in the "bundle of legal rights"?
Right of Control of the property, enjoyment, exclusion, possession, transfer and disposition. ( i.e. lease, sell, leave to someone in a will, gift)
Where is the right of survivorship found?
Joint tenancy and tenancy by the entirety.
What are emblements/ fructus industriales?
Annual crops that are classified as personal property of the person who grew them.
What are trees, grasses, and perennials classified as in real estate?
Since they do not require annual planting they are classified as real property/ Fructus naturales.
What does nonhomogeneity describe ?
A Physical characteristic of real estate and refers to uniqueness of the property. Every parcel of land is physically different from another parcel of land.
What is a transaction broker?
A facilitator, intermediary, or non-agent, because neither party in the transaction is a client. The parties are customers.
What does fiduciary mean?
a person placed in a position of TRUST and CONFIDENCE.
A real estate licensee who has listed a property is called ?
General agent of the BROKER and special agent of the SELLER.
What is a general agent expected to do in a transaction?
To be involved in an on-going business relationship.
What is a special agent responsible for?
He or she is limited to a specific transaction.
What is a universal agent responsible for?
He or she is acting on behalf of a person, as if he/she was the person.
What is a guardian agent responsible for?
A licensee who has listed a property
What is a real estate licensee who has listed a property?
General agent of the broker and special agent to the seller.
Negligent misrepresentation occurs when?
A broker should have known that a statement about a material fact was false.
What does negligent misrepresentation mean?
A party made a decision based on information he/she/they thought was true, but it was not. The licensee "should have known and did not know".
What does the Sherman Antitrust Act allow or disallow?
It does not allow tying agreements.
Buyers met an agent at an open house. In order to buy the listed property, the buyers needed to sell their house. The agent wrote an offer to purchase with the following terms. "Purchasers shall list purchasers property at 567 Main Street, Your Town, Your State with XYZ Realty within 24 hours of the acceptance of this offer, or this offer shall become null and void and the earnest money shall be refunded to the purchaser." Is this legal?
No, it is a violation of the Sherman Antitrust Act.
In most states which of the following situations would MOST LIKELY be grounds for suspension or revocation of a real estate license?
Failure to specify a definite termination date in a listing contract
Most states do not allow a listing contract to "automatically renew"
True, There must be definite beginning and ending dates in a listing.
A person died testate. After an extensive search, no additional heirs were found. The person's real property would transfer by ?
By devise.
What does testate mean?
A person died with a will. Real property is devised or transferred by the will.
What does intestate mean?
A person died without a will, the laws of descent and distribution will be followed.
What does Demise mean?
Someone has died, therefore to give up the right of possession in a lease.
What does Escheat mean?
The property reverts to the state when it is classified as abandoned. This may happen when someone dies intestate and no heirs can be found.
Which of the following would be future interests in a fee simple defeasible estate?
Reconveyance/ Redemption
What does fee simple defeasible estate mean?
The title may revert upon the occurrence or nonoccurrence of a special event.
What are the 2 types of fee simple defeasible estate?
Special limitation with the possibility of reverter and condition subsequent with the right of re-entry.
Agnes, Zelma and Jayne are sisters and own a property as joint tenants. Jayne sold her share to Maggie. Upon closing, Maggie is a ?
Tenant in common with Agnes and Zelma. When Jayne sells her property to Maggie, the unity of time and title is breached. Agnes and Zelma are still joint tenants, but Maggie would be a tenant in common with them.
What does joint tenancy require?
Unities of time, title, interest and possession.
If state law permits, the unities of time, title, interest, possession and person would be created when?
Mr. and Mrs. Jones buy real estate.
What is tenancy by the entireties?
The unities of time, title, interest, possession and person; when two people are married to each other
In 1969 Carmel purchased a condo for $15,000. Today she sold the property for $85,000 and agreed to finance the loan for the buyer. This transaction is known as a/an?
Land contract.