3. Concepts and Responsibilities of Home Ownership

Question 1

Capital Gains

Answer 1

Income earned from the sale of an asset.

Question 2

Coinsurance Clause

Answer 2

A provision in insurance policies covering real property that requires the policyholder to maintain coverage generally equal to at least 80% of the property’s actual replacement cost.

Question 3

Common Elements

Answer 3

Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all of the condominium residents. Each condominium owner has an undivided ownership interest in the general and limited common elements.

Question 4

Condominium

Answer 4

The absolute ownership of an apartment or a unit (generally in a multiunit building) based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners.

Question 5

Cooperative

Answer 5

A residential multiunit building whose title is held by a corporation that is owned by and operated for the benefit of persons living within the building, who are stockholders of the corporation, each possessing a proprietary lease.

Question 6

Deductible Clause

Answer 6

A clause in an insurance policy that limits the exposure to loss for an insured homeowner

Question 7

Endorsement

Answer 7

1. An additional document attached to an original insurance policy that amends the original; a rider.
2. Writing one’s name, with or without additional words, on a negotiable instrument.

Question 8

Equity

Answer 8

The current market value of a property minus any loans.

Question 9

Federal Emergency Management Agency (FEMA)

Answer 9

A government agency that sets program standards for flood insurance.

Question 10

Homeowners Insurance Policy

Answer 10

A standardized package insurance policy that covers a residential real estate owner against financial loss on a dwelling and its contents and includes liability coverage and loss of use.

Question 11

Investment

Answer 11

Money directed toward the purchase, improvement, and development of an asset in expectation of income or profits.

Question 12

Manufactured Home

Answer 12

A manufactured home is a single-family house constructed entirely in a controlled factory environment, built to the federal Manufactured Home Construction and Safety Standards (better known as the HUD Code)

Question 13

Mixed Use

Answer 13

Property that accommodates more than one use, such as commercial use and residential use.

Question 14

Modular

Answer 14

can generally be built at a fraction of the time and cost of conventional construction and often enable buyers to take part in designing their homes without having to start from scratch with an architect.

Question 15

Planned Unit Development

Answer 15

A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision.

Question 16

Time-Share

Answer 16

A form of ownership where permission is given to use certain property for certain intervals of time; may be fee simple title or merely a right to use (license).