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Real Estate: Various VI


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What is a land contract?
Also know as an installment sale; The seller agrees to finance the property.
Two brothers owned a property and decided to list it with Agent Tejasi. Thirty minutes before the listing appointment, one of the brothers was called out of town on an emergency. So, a friend signed the listing contract for him. Tejasi had no idea that the person signing was not the owner. The status of the listing contract is?
The contract is void. The listing must be signed by the parties who have the authority to sell.
Define void contract.
The contract is missing an essential element or it is established for an illegal purpose. There isn't a listing contract.
Where is a habendum clause found?
In a deed. This is sometime called a granting clause. The seller is transferring the rights to the new owner "to have and to hold".
An agent received a thank you note from a lender for the referral of a buyer. The note included a $35 gift card to a local restaurant. The law that makes this kickback illegal is called?
RESPA: The Real Estate Settlement Procedure Act. It prohibits kickbacks from service providers.
What is an easement in gross?
Is personal in nature and does not pass with the land.The right of a company or person to use the land of another. i.e Utility company, billboards sites
Define Commercial easement in gross.
An inheritable right to use the land of another. This right may be mortgaged, sold or otherwise transferred.
Define Personal easement in gross.
Rights given to an individual to use the land of another that is not inheritable or transferable.
Define Real Property.
Land, improvements and legal rights, i.e. rights, interests, and benefits granted by law in the ownership of real estate, such as the right to own, sell, rent, mortgage.
Define Land.
The earth's surface from the center of the earth upwards. This does not include anything made by man.
Define improvements.
Anything man made attached to the land the can be considered permanent or part of the land, i.e. house, fence. This may change if there is a written agreement in the sale agreement.
Define Personal property.
May be called chattel or personalty, these are movable objects that are "not" permanently attached, such as furniture, automobiles, clothes. These items must be transferred with a separate "bill of sale" if buyer intends to purchase with house.
Define Fixture.
Personal property that has been converted to real property by being permanently attached to the land or building. A fixture can be created by agreement of parties, intention of the party attaching, method of attachment or adaptation to its surroundings.
When does a fixture revert to personal property?
When it is permanently detached from the land or the building.
Define easement by necessity.
must be court ordered under the law of ingress and egress therefore states that "an owner can not be landlocked"
Define easement by prescription.
This right is established when the petitioner has made use of a landowners land for a "prescriptive period" of 10-30 years in most states. The petitioner must have been using the land continuous, in plain view, open and notoriously without the owner's approval.
How are easements terminated?
Merger of the parcels of land, voluntary release :dominant tenement releases servient, prescription, lack of purpose and expiration of the time limit or abandonment: discontinued use coupled with the intent to never use again.
What are the 2 characteristics of land?
Physical and Economic
Define Land's physical characteristic.
Land is immobile, indestructible and nonhomogeneous or unique.
Define land's immobility.
geographic location is fixed, it can never change.
How is land indestructible?
Land can not be destroyed.
How is land unique or nonhomogeneous?
All land is different geographically and each parcel has its own location. No two parcels are identical.
What is a license?
Personal privilege to enter land for a specific reason and can be given orally or informally. A license is permission and can be canceled by the property owner at anytime. Licensee receives no title of ownership, can not transfer or pass on to heirs.
Define Encroachment.
A fixture or structure which invades a portion of a property belonging to another. To determine an encroachment a survey should be done.
Define Easement Appurtenant.
There must be 2 adjoining tracts of land owned by different owners. This easement is attached to the ownership of another's parcel of land and runs with the land. The land owner's property is called serviant estate or tenant, the party using the land is the dominant estate or tenement. The party maintaining the easement is the dominant tenant.
Define Riparian Rights.
Permits owner of land adjoining a non-navigable stream,
Define Estate in Land.
Refers to degree, quantity and nature of interest that a person has a real property for a lifetime (life estate) or forever (inheritable freehold)
Define Freehold Estate.
Estates of indeterminable length, existing for a lifetime or forever.
Define Fee Simple Estate.
Absolute ownership includes all the rights associated with ownership. Highest type of ownership interest recognized by law.
Define Life Estate.
Limited in duration, there are 3 parties the Grantor, Grantee, remainderman
List the government rights in land.
Property taxation, escheat, eminent domain
A developer purchased a parcel of land with the intent of building a high rise. The government rezoned the property for recreational use only. This is know as?
Downzoning
Under the law, when a previous owner is liable for hazardous waste this is know as ?
Retroactive liability
John purchased a lot with the intention of building a 2000 square foot house on it. He discovered that the zoning law allows 2000 square foot houses but the deed restriction allowed a minimum 2200 square feet?
The deed restriction is more restrictive and John's minimum house size must be 2200 square foot.
The loss of a right because of inaction is known as?
Doctrine of laches
The rights of a land owner with land next to a river or stream is known as?
Riparian rights
The adjustment of an assessment to correct unfairness in the system is know as?
Equalization
A church wanted to build in area of houses that was zoned residential. They petitioned the local zoning board for a special exemption on just one lot. This is known as?
Spot zoning
What does RCRA stand for
Resources Conservation and recovery act(RCRA-created to regulate disposal and cleanup of hazardous waste.
What is the Superfund amendment and Reauthorization act (SARA)?
Amended the Comprehensive Environmental Response and Liability Act (CERCLA) Created in 1986 this act established stronger cleanup standards, created the concept of innocent landowner immunity. This act also attempted to clarify the obligation of lenders.
D. Premises
novation
D. acceptance
C. due date
Define Valid contract.
A contract agreed to by all parties and meets all the standards of contract law. It is legally binding and enforceable.
Define voidable contract.
A contract which may appear legal but fails to meet some legal requirement. As a result, one or more parties have the right to rescind the agreement within a certain period of time. The contract is valid, but is also voidable or enforceable.
Define Enforceable contract.
A contract which meets the requirements of contract law and offers legal remedies if not fulfilled.
Define Unenforceable contact.
A contract which appears to be valid but offers no legal remedies if not fulfilled.
Define Offeror.
A party who presents an offer to another party.
Define Offeree.
A party who receives an offer from another party.
Define Offer.
An offeror making an offer prepares a written contract, signs it, and then sends it to the offeree. The offer may terminate upon either an acceptance of the offer, a counteroffer, the expiration of a time limit, the withdrawl of the offer before acceptance, the offeree's failure to accept in the manner specified in the offer, or the death and insanity of either party.
Define Counteroffer.
A "conditional" or "qualified" acceptance. Counter offers must be in writing and are terminated under the same conditions as an offer.
Define Acceptance.
In acceptance, an offeree agrees to a contract and its terms without any changes. An acceptance must be in writing and signed by the offeree.
What is communication?
After acceptance, the final step is to communicate the acceptance to the offeror together with a copy of the accepted offer.
What is earnest money?
A cash deposit paid by the buyer as a show of good faith to fulfill the terms of the contract. Earnest money is not required for a valid contract.
What happens when a contract is executed?
When a buyer and seller execute a contract, the buyer secures an equitable interest in the property. The seller, on the other hand, secures a claim on the earnest money during the executory stage of the contract.
What does executory contact mean?
When a contract is executory, it means the contract has not yet been completed. There are still obligations that must be fulfilled.
Define Executed contract.
An executed contract is complete. There are no more obligations to be fulfilled.
What is a Unliateral contract?
A contract in which only one party involved in a contract makes a promise.
What is a Bilateral contract?
A contract in which two (or more) parties are involved and each makes promises to the other party.
What is an expressed contract?
The parties state the terms of their contract verbally or in writing. With the exception of short-term leases in some states, real estate contracts are required to be in writing.
What is an implied contract?
A contract which arises due to the actions, relationship, or intentions of the parties.
Commerical
The types of properties that include office spaces, shopping centers, stores, theaters, hotels, parking facilities, etc.
Elevation Certificate
Insurance agents are required to obtain one of these on any property before issuing quotes for flood insurance.
Federal Deposit Insurance Corporation
This agency can fine and withdraw its insurance from lenders that do not carry flood insurance on required mortgages.
Flood Insurance
This type of homeowner's insurance policy covers "rising water" problems such as a burst water main, overloaded drains, and melting snow. It is usually an optional add-on policy that becomes effective 30 days after purchase, unless the property is in a specific area and is collateral for a federal loan, in which case it is a mandatory policy and effective immediately.
HO1
This is the basic form of a homeowner's hazard insurance policy, and the default policy when a property has been empty for any length of time. It covers fire, lightning, hail, and other perils.
HO2
This form of a homeowner's hazard insurance policy covers more than the basic form, but not as much as the special form. It is often available for second homes.
HO3
This special form homeowner's hazard insurance policy offers the most coverage for the most reasonable price, and is the preferred policy on primary residences. It covers both real and personal property.
HO6
This form of a hazard insurance policy is designed for condominiums and can be customized to comply with the condo association's bylaws.
HO4
This renter's insurance policy is similar to the homeowner's insurance policy carried on primary residences, but doesn't include coverage on real property owned by someone else.
Improvements
Additions to property that increase its value or enhance its appearance. It can include buildings, fixtures, and landscaping.
Landlord's policy
This insurance policy is the reverse of a renter's policy and covers only the real property.
Real Estate Counsellors
These people provide clients with competent, independent real estate advice without representing them as an agent.
Special Purpose
The types of properties that include churches, schools, cemeteries, and government-held lands.
Real Estate Market
The setting where real property is bought and sold and prices are established.
Submarket
A real estate market defined by property type and/or geographic location.
National Association of Realtors
A professional real estate organization that requires members to uphold a specific set of ethics and pay dues. In turn, the members can call themselves Realtors.
Rights of Ownership
A "bundle" of legal rights associated with owned property. These rights include possession, control of the property (within legal bounds), enjoyment of the property, exclusion, and disposition.
Exclusion
The right to legally ban other people from entering your property without your consent.
Prior Appropriation
A law used in states where water is scarce. This law limits homeowners' use of any domestic water found on or abutting their property.
Water Table
The name for the level at which subsurface water is located below ground.
Formal Legal Description
A description of any property in one of the following three methods: metes & bounds, rectangular survey, or plat plan.
Metes
A measure of distance and direction used in some formal legal descriptions.
Bounds
A name for the landmarks and monuments used in some formal legal descriptions.
Point of Beginning
The physical location at which a metes and bounds legal description starts. To obtain closure, the description must also end at this location.
Accession
The process of personal property or accretion of alluvial deposits becoming additions to real property. Ex: installing a new HVAC system, planting a tree, or sand washed up naturally on the edge of a steam. Also referred to as annexation.
Freehold Estates
Properties that are held for an indefinite time, or that exist for a lifetime or more.
Governmental Powers
A group of rights that supersede a property owner's rights. These rights include police power, eminent domain, taxation, and escheat (PETE).
Fee Simple Absolute
A type of freehold estate in which the holder of the property is entitled to all rights of property ownership, and which passes to the holder's heirs upon their death. There are no restrictions on its use or its transfer.
General Liens
Encumbrances that usually affect all of a debtor's non-exempt property, both real and personal. Examples include judgement liens, debts, federal taxes, etc.
Nonmoney Encumbrances
Encroachments, licenses, restrictions, and easements that affect only the physical condition and use of a property.
Bargain and Sale Deeds
These deeds contain no real warranty against unnamed encumbrances, and only imply that the grantor has the right to convey the property. *This type of deed is not used in Massachusetts.*
Alluvion
The accumulation of soil, rock, and other materials on the edge of a property that are deposited by the movement of water.
Involuntary Alienation
Occurs when a transfer of title is done without an owner's consent by operations of law (i.e. escheat, eminent domain, or adverse possession), court order, or natural forces.
Partition Suit
This process divides co-tenets interests in real property when the parties cannot all agree to voluntarily terminate the co-ownership.
Testator
Person who makes a will.
Legatee
The recipient of personal property delivered through a will.
Holographic Will
A will that is handwritten.
Board of Directors
A group of people responsible for the management of a corporation.
National Do Not Call Registry
A federal index of consumers that have requested telemarketers not be allowed to call them by telephone.
Price Fixing
An illegal practice that occurs when brokers conspire to set prices for the services they perform, rather than letting competition in the open market establish pricing naturally.