AZ Real Estate (Focus Cards)

Question 1

Large scale residential plan (includes PUDs) with large number of recreation amenities (parks, golf, lakes, bike paths, jogging trails)?

Answer 1

Master Planned Community -

Large scale residential plan (includes PUDs) with large number of recreation amenities (parks, golf, lakes, bike paths, jogging trails)

Chap 2

Question 2

Restrictions imposed by developer for benefit of owners.

1. Cannot Violate Law or Public policy, follows Fair Housing Laws.
2. HOA and Owners enforce restrictions. Can seek Injuctive Relief in court.
3. Zoning vs Restrictions - most restrictive applies.
4. For Sale, For Rent, Solar Energy devices cannot be prohibited.

chap 2

Answer 2

Deed Restrictions - Restrictions imposed by developer for benefit of owners.

1. Cannot Violate Law or Public policy, follows Fair Housing Laws.
2. HOA and Owners enforce restrictions. Can seek Injuctive Relief in court.
3. Zoning vs Restrictions - most restrictive applies.
4. For Sale, For Rent, Solar Energy devices cannot be prohibited.

chap 2

Question 3

A right across one property for benefit of the adjacent property.

1. Permanent Easement.
2. Dominant Parcel Benefits
3. Servient Parcel has easement across it.

Chap 2

Answer 3

Easement Appurtenant -

A right across one property for benefit of the adjacent property.

1. Permanent Easement.
2. Dominant Parcel Benefits
3. Servient Parcel has easement across it.

Chap 2

Question 4

Method of taking title to or acquiring an interest in the property of another. Person must demonstrate in court possessed by:

Notorious, Open, Continous, Hostile use.

Chap 2

Answer 4

Adverse Possession -

Method of taking title or acquiring an interest in the property of another. Person must demonstrate in court that possesssion was by:

Notorious, Open, Continous, Hostile use.

Chap 2

Question 5

Liens that are placed against “specific property” are called?

1. Real Estate Taxes - (Ad Valorem Tax)
2. Government Assessments
3. Mechanic’s Liens
4. HOA Liens

Answer 5

Specific Liens - Liens that are placed against “specific property”

1. Real Estate Taxes - (Ad Valorem Tax)
2. Government Assessments
3. Mechanic’s Liens
4. HOA Liens

Chap 2

Question 6

Liens that are placed “against an individual” and “all real/ personal property” he or she owns are called?

1. Judgment Liens: Court Ordered
2. Income Tax Liens: By Government for nonpayment.

Answer 6

General Liens -

Liens that are placed “against an individual” and “all real/personal property” he or she owns.

1. Judgment Liens: Court Ordered
2. Income Tax Liens: By Government for nonpayment.

Chap 2

Question 7

Liens *placed* *by the owner* and considered “specific liens” are called?

1. Mortgages
2. Trust Deeds
3. Land Contracts

Chap 2

Answer 7

Voluntary Liens - Liens *placed* *by the owner* and considered “specific liens.”

1. Mortgages
2. Trust Deeds
3. Land Contracts

Chap 2

Question 8

When are “foreclosure cost” paid, in what priority order?

Answer 8

Lien Priority -

1. Property Taxes #1
2. Foreclosure Costs
3. Special Assessments
4. Mechanics Liens
5. HOA Liens

Chap 2

Question 9

What are the 6 essentials for a contract?

Answer 9

6 Essentials for a Contract -

1. Competent Parties - Incompotent parties may void contract.
2. Valid Consideration - Money or valuables (labor/love).
3. Offer and Acceptance - All agree
4. Legal Object - Lawful
5. In Writing - per Statute of Frauds
6. Property Description - APN, Assessors Parcel #, Address

Chap 3

Question 10

As per Statute of Frauds, what agreements must be in writing?

Answer 10

Statute of Frauds - Contracts that must be in writing:

1. Employment Agreement - Hires Broker
2. Agreement for Transfer/Sale - (Deeds, Purchase Contracts, Mortgages, Trust Deeds and Options)
3. Lease - More than Year
4. Any Agreement - Not to perform in 1 year.

Chap 3

Question 11

A contract created from the actions or conduct of the parties is called?

Answer 11

Implied Contract -

A contract created from the actions or conduct of the parties.

Chap 3

Question 12

Contract created when all terms have been specifically stated: “verbally or in writing.”

Answer 12

Expressed Contract -

Contract created when all terms have been specifically stated: “verbally or in writing.”

Chap 3

Question 13

Right to buy or lease property within a specific period for specified price and terms. It is only binding on the owner.

Answer 13

Option -

Right to buy or lease property within a specific period** for **specified price and terms. It is only binding on the owner (optioner)

Chap 3

Question 14

Right which allows holder to match any offer owner receives, if property is offered for lease or sale.

Answer 14

Right of First Refusal -

Right which allows holder to match any offer owner receives, if propety is offered for lease or sale.

If I decide to sell I will give you first opportunity.

Chap 3

Question 15

When there is no contract at all, or it is not enforceable by law, is what kind of contract?

Answer 15

Void/Invalid Contract -

When there is no contract at all, or it is not enforceable by law.

Chap 3

Question 16

Contract appears to be valid, but one of the elements is missing such as competent party (under 18), or maybe signed under duress, is called?

Answer 16

Voidable Contract -

Contract appears to be valid, but one of the elements is missing such as competent party (under 18), or maybe signed under duress.

Note: Incompetent party must void.

Chap 3

Question 17

Listing not shared with “other agents in company” or MLS?

Answer 17

Pocket Listing -

Listing not shared with “other agents in company” or MLS?

Chap 3

Question 18

Listing where broker is paid if he or another broker finds buyer, but “seller reserves right to sell property” without paying a commission.”

Answer 18

Exclusive Agency Listing -

Listing where broker is paid if he or another broker finds buyer, but “seller reserves right to sell property” without paying a commission.”

Chap 3

Question 19

Listing where no cooperation/compensation is offered to “other companies.”

1. All Offers must still be presented
2. Buyer’s Agent may need separate compensation agreement.

Answer 19

“Exclusive” (office) Listing -

Listing where no cooperation/compensation is offered to “other companies.”

1. All Offers must still be presented
2. Buyer’s Agent may need separate compensation agreement.

Chap 3

Question 20

Lien for unpaid commissions, only for commercial leases may be placed on lessor’s property is called?

Answer 20

Commission Liens -

Lien for unpaid commissions, only for commercial leases may be placed on lessor’s property. Only ones allowed in AZ.

Chap 3

Question 21

Prohibits anti-competitive practices such as:

1. Brokerage no fixed commissions or prices
2. Telling Consumers commission are non-negotiable
3. Geographic non-compete areas
4. Boycotting other company listings

Answer 21

Sherman Anti-Trust Act -

Prohibits anti-competitive practices such as:

1. Brokerage no fixed commissions or prices
2. Telling Consumers commission are non-negotiable
3. Geographic non-compete areas
4. Boycotting other company listings

Chap 3

Question 22

Promise given by seller of business not to compete in agreed area for a specific time.

Answer 22

Covenant Not to Compete -

Promise given by seller of business not to compete in agreed area for a specific time.

Chap 3

Question 23

Who employs the agent?

Answer 23

Principal -

Employs the agent (broker), principal also called the client.

Chap 4

Question 24

What fiduciary duties does the agent owed to customer?

Answer 24

Fiduciary Duties to Customer -

1. Fairness
2. Honesty
3. Good Faith
4. Compentency
5. Disclosure of Material facts

Chap 4

Question 25

What are the **CARLOD fiduciary duties** owed **to client**?

Answer 25

**Fiduciary Duties** - owed **to client (CARLOD: Confidentiality, Acctg, Reasonable Skill/Care, Loyalty, Obedience, Disclosure)** 1. **_Confidentiality_** - Agent keeps ***actual price seller will accept***, and ***buyer will pay confidential***. In effect after expiration of agency indefinitely. 2. **_Accounting_** - Account to parties all moneys 3. **_Reasonable Skill/Care_** - 1. **Contract Preparation** 2. **Marketing** Efforts 3. **Advising** on **Price/Market** Conditions 4. Meeting **Deadlines** 5. Disclosure of **Material Facts/Defects** 1. **_Loyalty_** - Client's Interest First 2. **_Obedience_** - Unless prohibited by Law 3. **_Disclosure_** - 1. **Conflicts of Interest** 2. Other **Offers** 3. **Material Defects** 4. **Agency Relationship** Status 5. _Info Material to_ **Client's Interest** Chap 4

Question 26

Which **Fuduciary Duties** do these fall under? 1. **Contract Preparation** 2. **Marketing** Efforts 3. **Advising** on **Prices/Market** conditions 4. Meeting **Deadlines** 5. **Disclosure of Material Facts** and Defects

Answer 26

**Reasonable Skill and Care -** 1. **Contract Preparation** 2. **Marketing** Efforts 3. **Advising** on **Prices/Market** conditions 4. Meeting **Deadlines** 5. **Disclosure of Material Facts** and Defects Chap 4

Question 27

Which **Fiduciary Duties** do these fall under? 1. **Conflicts of Interest** 2. Other **Offers** 3. **Material Defects** 4. **Agency Relationship** Status 5. **Info Material to Client's Interest**

Answer 27

**Disclousure (Fiduciary Duty)** 1. **Conflicts of Interest** 2. Other **Offers** 3. **Material Defects** 4. **Agency Relationship** Status 5. **Info Material to Client's Interest** Chap 4

Question 28

What **Fiduciary Duties** are **owed to customer?**

Answer 28

**Fiduciary Duties** **Owed to "Customer** - 1. **Fairness** 2. **Honesty** 3. **Good Faith** 4. Compentency 5. Disclosure of Material facts Chap 4

Question 29

What are clients _duties to Agent (Broker)_?

Answer 29

**Clients duties to _Agent (Broker)_ - CIP** 1. **Compensation** 2. **Indemnification (Hold Harmless)** 3. **Performance** Chap 4

Question 30

**Does payment of a fee create** an Agency?

Answer 30

**No** - Payment of a fee **"does not" create an Agency.** Chap 4

Question 31

What type of **Agency** is created **by actions alone**?

Answer 31

**Implied Agency -** **Created by actions** of the parties. Chap 4

Question 32

Agency created by *_specific authorization_* either **oral or written by the principal.**

Answer 32

**Expressed Agency -** Agency created by *_specific authorization_* either **oral or written by the principal.** Chap 4

Question 33

**In New Home Sales** who does the **agent represent**?

Answer 33

**New Homes Sale Agency** - **Agent represents Seller-Builder** not buyer. Chap 4

Question 34

When a **dual agency exists** in brokerage. Agent must obtain permission using what form?

Answer 34

**Consent to "Limited Representation" -** **Written permission of both parties** must be obtained **if a *_dual agency exist_*** in brokerage. This is the form used. Chap 4

Question 35

In a **FISBO when representing the buyer** and then taking the list. **What form must be used?** 1. Maintains "Single Agency" with buyer 2. Discloses that agent does not represent seller. but seller agrees to pay compesantion.

Answer 35

**"_Unrepresented Seller" Compensation Agreement_ -** Formed **used by Buyer's Agent** in a FISBO (For Sale by Owner) **when also taking the listing.** 1. **Maintains "Single Agency" with buyer** 2. Discloses that agent does not represent seller. but **seller agrees to pay compesantion.** Chap 4

Question 36

What relationship is created by authorization of Principal?

Answer 36

**Agencies -** Relationship created by **Authorization of Prinipal.** Chap 4

Question 37

What type of **Agency** is **used to sell a home or do something specific**, give **limited authority**?

Answer 37

**Specific (Special) Agency** - Used to **sell a home** or **do something specific** and **gives limited authority.****Broker is Special Agent.** Chap 4

Question 38

What type of Agency is used for **"property management agreements"** and give authorization for **various business and personal matters?**

Answer 38

**General Agency** - Used for **"property management agreements"** and give authorization for **various business and personal matters.** Chap 4

Question 39

What type of **"agency"** that gives authority to represent principal in **all matters? Think planets.**

Answer 39

**Universal Agency -** **Agency** gives authority to **represent principal in _all matters (planets)_** Chap 4

Question 40

Legal concept that **information communicated to agent** has been **communicated to principal.**

Answer 40

**Inputed (Communicated) Notice -** Legal concept that **information communicated to agent** has been **communicated to principal**. Chap 4

Question 41

**(Respondeat Superior)** - _Principle_ is **responsible for agents actions.**

Answer 41

**Vicarios Liability (Respondeat Superior)** - _Principle_ is **responsible for agents actions.** Chap 4

Question 42

Insures against claims when **3rd party is injured.** Protects Broker and Agents

Answer 42

**General Liability Insurance -** Insures against **claims** when **3rd party is injured.** Protects Broker and Agents. Chap 4

Question 43

**Insurance** that protects against **major claims (rain).**

Answer 43

**Umbrella Insurance -** **Insurance** that protects against **major claims (rain).** Chap 4

Question 44

Agent is what type of **agent to broker**?

Answer 44

**Agent is General Agent** - He handles mutiple listings and sales for broker. Chap 4

Question 45

Ways to do what with Agency? 1. **Per**formance 2. **Mut**ual Agreement 3. **Ex**piration of Term 4. **Rev**ocation by Principal/Agent 5. **Destruct**ion of Property 6. **Bank**ruptcy of Principal 7. **Death**/Incapicity of Principal/Broker Hint: Potential Money Elimated, Reason Destroys Bank Deposit.

Answer 45

**Ways to Terminate Ageny (7)** 1. **Per**formance 2. **Mut**ual Agreement 3. **Ex**piration of Term 4. **Rev**ocation by Principal/Agent 5. **Destruct**ion of Property 6. **Bank**ruptcy of Principal 7. **Death**/Incapicity of Principal/Broker Hint: Potential Money Elimated, Reason Destroys Bank Deposit. Chap 4

Question 46

Death does not terminate what?

Answer 46

**Purchase Agreements and Leases -** **Death** does not terminate. Chap 4

Question 47

When agent **uses trust funds for his/her use** is called?

Answer 47

**Conversion of Funds -** When **agent uses trust funds** for his/her use. Chap 5

Question 48

In an assignment of lease or purchase contract, who has primary liablity?

Answer 48

**Assignee Primary Liability** - **Assignee has primary liabilty** in assignment, and **Assignor has secondary liablity** in assignment. Chap 5

Question 49

What clause makes the sale contigent upon a certain event? Failure to fullfill voids the contract.

Answer 49

**Contingency Clause** - Claue that makes the **sale contigent upon a certain event.** Failure to fullfill voids the contract. Chap 5

Question 50

**Clause** that makes sale contingent upon **buyer obtaining financing**. Specifies: 1. **Loan amount,** 2. **Interest rate,** 3. **Terms** 4. **Commitment Date**

Answer 50

**Mortgage Contingency Clause** - Clause that makes sale contingent upon **buyer obtaining financing**. Specifies: 1. **Loan amount,** 2. **Interest rate,** 3. **Terms** 4. **Commitment Date** Chap 5

Question 51

What other contingencies are common in purchase contracts?

Answer 51

**Common Contingencies in Contract** - 1. **Home** Inspection 2. **Roof** 3. **Mechanical** Equipment 4. **Termite** Inspection Chap 5

Question 52

At the time deed and other documents are recorded, what occurs?

Answer 52

**Close of Escrow -** At the time Deed and other documents are recorded, Chap 5

Question 53

A **record of insurance losses** on a property or related to a specific consumer is?

Answer 53

**Claims History (Clue Report/Loss History Report) -** A **record of insurance losses** on a property or related to a specific consumer. Chap 5

Question 54

A **court order** to enforce the terms of a contract. When a **person sues of damages** is called?

Answer 54

**Specific Performance -** A **court order** to enforce the terms of a contract. When a **person sues of damages**. Chap 5

Question 55

**Obvious defects - Buyer is responsible**. Let the buyer beware in latin?

Answer 55

**Caveat Emptor -** **Obvious defects - Buyer is responsible**. Let the buyer beware in latin. Chap 5

Question 56

Legal remedy of canceling contract and **restoring the parties to their original positions** is called?

Answer 56

**Recission -** Legal remedy of canceling contract and **restoring the parties to their original positions.** Chap 5

Question 57

**A dispute resolution process** conducted **by third-party mediator** who helps to resolve differences.

Answer 57

**Mediation -** **A dispute resolution process** conducted **by third-party mediator** who helps to resolve differences. Chap 5

Question 58

**To increase the "rate of return"** through using **borrowed money** is called?

Answer 58

**Leverage -** To **increase the "rate of return"** through using **borrowed money.** Chap 6

Question 59

Who looks for **high yield, low risk**, and **good security**?

Answer 59

**Lender -** Looks for **high yield, low risk,** and **good security.** Chap 5

Question 60

What **"hypothecates" the property as collateral** for the debt?

Answer 60

**Mortgage or Trust Deed -** **"Hypothecates" the property as collateral** for the debt. States legal description of property and recorded to establish priority. Chap 6

Question 61

**Level payments** of **principal and interest** is called?

Answer 61

**Amortized -** **Level payments** of **principal and interest.** Chap 6

Question 62

**Payments of PITI** is what type of loan?

Answer 62

**Budget loan -** Loan with **Payments of PITI.** Chap 6

Question 63

**Loan with Interest Only** during term, and principal due at maturity?

Answer 63

**Straight/Interim/Short Term (Construction) -** **Loan with Interest Only** during term, and principal due at maturity. Chap 6

Question 64

Loan with **Principal only payments**. Interest shortage is added to unpaid principal balance.

Answer 64

**Negative Amortization -** Loan with **Principal only payments**. Interest shortage is added to unpaid principal balance. Chap 6

Question 65

Loans made with **no government guarantee or insurance. Solely based on security and borrower's ability to repay (20% down)?**

Answer 65

**Conventional Loans -** Loans made with **no government guarantee or insurance. Solely based on security and borrower's ability to repay (20% down)**. Chap 6

Question 66

**Loan where seller becomes the lender**, and buyer the borrower. Used when buyer has **insuficient down payment.**

Answer 66

**Purchase Money Loan -** **Loan where seller becomes the lender**, and buyer the borrower. Used when buyer has **insuficient down payment.** Chap 6

Question 67

**Seller remains liable for existing loan** and agrees to **create new loan for buyer (at greater amount - includes first loan amount)** at higher interest rate. **Buyer takes no liability for existing loan.**

Answer 67

**Wraparound Loan -** **Seller remains liable for existing loan** and agrees to **create new loan for buyer (at greater amount - includes first loan amount)** at higher interest rate. **Buyer takes no liability for existing loan.** Chap 6

Question 68

In this type of loan, rate adjustments are based on 1. **_MTA_** - Monthly Treasury Average 2. **_LIBOR_** - London Interbank Offered Rate

Answer 68

**Adjustable Rate Mortgage -** 1. **MTA** - Monthly Treasury Average 2. **LIBOR** - London Interbank Offered Rate Chap 6

Question 69

**Funds are advanced in installments** as building progresses and with **interest payments only**. The principal is due at maturity of the debt.

Answer 69

**Construction (Interim/Straight/Short Term) Loan -** **Funds are advanced in installments** as building progresses and **with interest payments only.** The principal is due at maturity of the debt. Chap 6

Question 70

**Long-term financing** replacing and **paying off construction** loan. "**Permanent "buyer loan."**

Answer 70

**Take-Out Loan -** **Long-term financing** replacing and paying off construction loan. **Permanent loan for buyer.** Chap 6

Question 71

**Short term loan on property "for sale"** to allow owner to **borrow funds for new home**. Also used to bridge gap between time contruction loan expires and take-out loan is placed.

Answer 71

**Gap/Swing/Bridge Loan** - **Short term loan on property "for sale"** to allow owner to **borrow funds for new home.** Also used to bridge gap between time contruction loan expires and take-out loan is placed. Chap 6

Question 72

Lender **makes payments to borower**

Answer 72

**Reverse Annuity Loan (RAM) -** Lender **makes payments to borower.** Chap 6

Question 73

Loan in which the **borrower is "not held" liable** for debt.

Answer 73

**Non-Recourse Loan -** Loan in which the **borrower is "not held" liable** for debt. Chap 6

Question 74

Clause that allows lender to declare loan balance **immediately due and payable upon default**

Answer 74

**Acceleration Clause -** Allows lender to declare loan balance **immediately due and payable upon default** Chap 6

Question 75

Lenders **Yield Maintenance Clause?**

Answer 75

**Prepayment Clause -** Lenders **Yield Maintenance Clause.** Chap 6

Question 76

Clause that states note/mortgage are **null and void,** when **borrower pays off debt.**

Answer 76

**Defeasance Clause -** Clause that states **note/mortgage are null and void,** when **borrower pays off debt.** Chap 6

Question 77

Clause when **"individual parcels release"** from blanket mortgage?

Answer 77

**Release/Partial Release Clause** - Clause when **"individual parcels release"** from blanket mortgage. Chap 6

Question 78

Clause where lender agrees "**not to terminate leases**" in the event of a foreclosure.

Answer 78

**Nondisturbance Clause** - Clause where lender agrees **"not to terminate leases"** in the event of a foreclosure. Chap 6

Question 79

Clause that indicates which **person is held personally liable** if the **default occurs**. (Corps and LLC's)

Answer 79

**Personal Guarantee Clause -** Clause that indicates which **person is held personally liable** if the **default occurs**. **(Corps and LLC's)** Chap 6

Question 80

**Charging more** **than** the **rate set by law.**

Answer 80

**Usury -** **Charging more than** the **rate set by law**. Chap 4

Question 81

**Rate specified** on note or contract.

Answer 81

**Contract/Note/Face Rate -** **Rate specified** on note or contract. Chap 6

Question 82

**When no rate appears.** Rate applied to **judgments or court stipulated rate.**

Answer 82

**Legal Rate -** **When no rate appears.** Rate applied to **judgments or court stipulated rate.** Chap 6

Question 83

What is a **FHA appraisal** called?

Answer 83

**Conditional Commitment -** **FHA Appraisal**. Borrower pays MIP to protect lender. Chap 6

Question 84

Clause that gives buyer a way out, **if appraisal is not "equal or greater" than purchase price**. Buyer must see appraisal.

Answer 84

**Escape/FHA Amendatory Clause -** Clause that gives buyer a way out, **if appraisal is not "equal or greater" than purchase price**. Buyer must see appraisal. Chap 7

Question 85

Do FHA or VA loans have prepayment penalties?

Answer 85

No - **FHA or VA loans "do not" have prepayment penalties**. Chap 7

Question 86

The **certificate issued** by the VA to veterans stating **eligibilty and "guaranteed amount" (entitlement).** When eligibility is paid-off eligibility is restored.

Answer 86

**Certificate of Eligibility -** The certificate issued by the VA to veterans stating **eligibilty and "guaranteed amount" (entitlement).** When eligibility is paid-off eligibility is restored. Chap 7

Question 87

What is charged in place of MIP in a VA loan?

Answer 87

**VA Funding Fee -** Charges in place of MIP on a VA loan. Chap 7

Question 88

What is an **appraisal** called in a **VA loan**?

Answer 88

**CRV - Certificate of Reasonable Value -** **Appraisal for VA Loan. 100% LTV** Chap 7

Question 89

Assists lenders to provide low/moderate income households homes in **eligible rural areas**.

Answer 89

**USDA Guranteed Loans (US Dept Agriculture) -** **Assists lenders** to provide low/moderate income households homes in **eligible rural areas**. Chap 7

Question 90

**AZ Dept of Housing** provides housing in **hardest hit foreclosure areas.**

Answer 90

**Down Payment Assistance (Pathway to Purchase) -** **AZ Dept of Housing** provides housing in **hardest hit foreclosure areas.** Chap 7

Question 91

Insured loan **81%-97% of appraised value** that requires MI or PMI?

Answer 91

**Insured Conventional Loans -** Insured loan **81%-97% of appraised value** that requires MI or PMI? Chap 7

Question 92

**Fee charged** by lender to **increase the lender's yield** or to **reduce borrower's interest rate**/payment.

Answer 92

**Discount Points/Buydown** - **Fee charged** by lender to **increase the lender's yield** or to **reduce borrower's interest rate**/payment. Chap 7

Question 93

Must be at least **10% of** **HOA "budgeted income"**, **20% if "owner-occupancy: is _under 50%._**

Answer 93

**HOA Reserve Funding -** Must be at least **10% of HOA "budgeted income"**, **20% if "owner-occupancy" is _under 50%_.** Chap 7

Question 94

**Concerning Commercial Properties -** 1. Gross Rent (YR) - Oper Expenses (YR) = Net Income 2. Net Income (YR) / Annual PI =

Answer 94

**DCR - Debt Coverage Ratio (above 1) -** Concerning Commercial Properties - 1. **Gross Rent (YR) - Oper Expenses (YR) = Net Income** 2. **Net Income (YR) / Annual PI = DCR** Chap 7

Question 95

Property acquired for **(personal, family or household) purposes** - owner occupied 1-4 units.

Answer 95

**Consumer Credit Transaction -** Property acquired for **(personal, family or household) purposes** - owner occupied 1-4 units.

Question 96

**When seller "does not" want to be liable for the loan**, he must get what from lender?

Answer 96

**Written Release from Lender (For Seller) -** When **seller "does not" want to be liable for the loan**, he must get what from lender? Chap 7

Question 97

**Process** of lender **rewriting terms of an existing loan** is called?

Answer 97

**Novation -** **Process** of lender **rewriting terms of an existing loan.** Chap 7

Question 98

**Buyer receives from lender** - verifying loan balance and terms when he **takes over existing loan.**

Answer 98

**Reduction Certificate/Assumption Letter** - **Buyer receives from lender** - verifying loan balance and terms when he **takes over existing loan.** Chap 7

Question 99

In the **Primary Mortgage Market** these lenders are also called? 1. **_Commercial Banks/Credit Unions_** - ***Buy Loans*** 2nd Market 2. **_Insurance Companies_** - ***Buy Loans*** 2nd Market 3. **_Portfolio Lenders_** - Only Provide Loans 4. **_Mortgage Bankers/Bankers_** - **_"Sell Loans"_** 2nd Market

Answer 99

**Financial Intemediaries (Primary Mortgage Market) - Originate Loans directly to borrowers** 1. **_Commercial Banks/Credit Unions_** - ***Buy Loans*** in 2nd Market 2. **_Insurance Companies_** - ***Buy Loans*** in 2nd Market 3. **_Portfolio Lenders_** - Only Provide Loans 4. **_Mortgage Bankers/Bankers_** - ***"***_**Sell Loans**"_ in 2nd Market Chap 7

Question 100

Who primarily **"originates loans" in primary market** and **"buys loans" in secondary market**?

Answer 100

****_Commercia_**l Banks/_Credit_ Unions -** Who primarily **"originates loans" in primary market** and **"buys loans" in secondary market**? **_Note_: Insurance Companies and Fannie Mae "buy loans."** Chap 7

Question 101

What type of companies: 1. **Makes** **Large Loans** - directly to **commercial and industrial borrowers.** 2. **Originate "Residential Loans"** *_through_* **Mortgage Companies** 3. **Buys Loans** in **Secondary Market**

Answer 101

**Insurance Companies -** 1. **Makes** **Large Loans** - directly to **commercial and industrial borrowers.** 2. **Originate "Residential Loans"** *_through_* **Mortgage Companies** 3. **Buys Loans** in **Secondary Market** Chap 7

Question 102

**Mortgage Brokers/Bankers** are **licensed by**?

Answer 102

**AZ Dept of Financial Institutions -** Licenses **Mortgage Brokers and Bankers** Chap 7

Question 103

1. Who may **represent** institutions such as **life insurance** co**, pension** funds**, and private investors** _in originating loans._ 2. **Sell Loans** to Secondary Market

Answer 103

**Mortgage Brokers/Bankers -** 1. Who may **represent** institutions such as **life insurance co, pension** funds**, private investors** _in originating loans._ 2. **Sell Loans** to Secondary Market 3. License by **AZ Dept of Financial Institutions** Chap 7

Question 104

**Mortgage Loan Originators** represent the Mortgage Brokers/Bankers and are **license by and regulated by**?

Answer 104

**Mortgage Loan Originators** **_represen_**t the **Mortgage Brokers/Bankers** **_License by:_ AZ Dept of Financial Institutions.** **_Regulated by:_ Nationwide Mortgage Licensing System (NMLS)** Chap 7

Question 105

**When lender assigns a loan**/**owner sells a property**, they obtain a **certificate verifying** (What is certicate called?) 1. **_Borrower of Loan_** - Loan Balance and Interest Rate 2. **_Tenant of Lease_** - Lease Terms

Answer 105

**_Estoppel Certificate -_** When **lender assigns a loan**/**owner sells a property,** they obtain a **certificate verifying:** 1. **_Borrower of Loan_** - Loan Balance and Interest Rate 2. **_Tenant of Lease_** - Lease Terms Chap 7

Question 106

All Entities that "**buy loans" in secondary market** are?

Answer 106

**"Buy loans" in Secondary Market** - 1. **Commercial** Banks/**Credit** Unions/**Insurance** Companies 2. **Fannie Mae** Chap 7

Question 107

All Entities that **"sell loans"** in Secondary Market?

Answer 107

**"Sell Loans" in Secondary Market** - 1. **Mortgage** Brokers/Bankers 2. **Ginnie Mae and Fannie Mae (Gov Sells)** **Hint: The govenment and Mortgage Companies** Chap 7

Question 108

Who _issues_ **certificates guaranteeing FHA and VA loans** to **secondary market purchasers**?

Answer 108

**Ginnie Mae (Gov Nat Mortgage Assoc) -** 1. **Issues** **"certificates" _guaranteeing FHA and VA loans_** to **secondary market purchasers** 2. Offers ***_Special Assistance:_*** **Federally Assisted "Low Income Housing."** Chap 7

Question 109

What government agency? 1. **_Main Purpose:_** ***Buy*** ***Conventional Loans*** in secondary market 2. **_Sell Loans:_** ***by Issued Bonds*** secured by Mortgages 3. **_Conventional Loans_****:** ***Set Standards*** 4. **_Created Loan App:_** (FNMA Form 1003)

Answer 109

**Fannie Mae (Fed Nat Mortgage Assoc) and Freddie Mac (Feddie Home Loan Mortgage Corp) -** 1. **_Main Purpose:_** ***Buy*** ***Conventional Loans*** in secondary market 2. **_Sell Loans:_** ***by Issued Bonds*** secured by Mortgages 3. **_Conventional Loans_****:** ***Set Standards*** 4. **_Created Loan App:_** (FNMA Form 1003) Chap 7

Question 110

**Federal law** that required lenders to **Disclose All the Terms and Costs** in obtaining a consumer loan

Answer 110

**Truth in Lending Act (Regulation Z)** **Federal law** that required lenders to **Disclose All the Terms and Costs** in Obtaining a Consumer Loan. **RESPA: Actual Disclosure of Settlement Costs (Loan Estimate/TRID Disclosure)** Chap 8

Question 111

Lender must **Disclose All Terms and Costs** to Obtain a Consumer Loan **under this Federal Law.** 1. Requires disclosure of 1. **_APR_** - Interest, discount pts, loan costs 2. **_Finance Charges_** 1. **_Owner-occupied:_** (1-4 units) 2. **_Institutional Lenders:_** Commercial Banks, Credit Unions, Investment/Insurance/Mortgage Companies - **not Private Lenders** 3. **_Advertising Trigger Terms_** - **_down/no/amount/period**_ of _**payments_**, and finance charges - **APR alone is okay.** 4. **_Refinances_**

Answer 111

**Truth in Lending Act (Regulation Z) -** Lender must **Disclose All Terms and Costs** to Obtain a Consumer Loan **under this Federal Law.** 1. Requires disclosure of 1. **_APR_** - Interest, discount pts, loan costs 2. **_Finance Charges_** 1. **_Owner-occupied:_** (1-4 units) 2. **_Institutional Lenders:_** Commercial Banks, Credit Unions, Investment/Insurance/Mortgage Companies - **not Private Lenders** 3. **_Advertising Trigger Terms_** - **_down/no/amount/period**_ of _**payments_**, and finance charges - **APR alone is okay.** 4. **_Refinances_** Chap 8

Question 112

Disclosure of settlement costs under what Act? 1. **_Loan Estimate_** - 3 business days of loan application 2. **_Your Home Loan Tool Kit_** - CFPB's settlement costs 3. **_TRID Closing Disclosure_** - 3 days prior to closing 4. **_Federal Mortgages Only_** - FHA, VA, USDA 5. **_Excess Money in Impounds_** - Prohibited 6. **_Affiliated Business Relationships_** 7. **_Kickbacks_** - unearned fees prohibited. 8. **_Title Companies_** - Seller cannot make buyer use Chap 8

Answer 112

**Real Estate Settlement Procedures Act (RESPA) -** 1. **_Loan Estimate_** - 3 business days of loan application 2. **_Your Home Loan Tool Kit_** - CFPB's settlement costs 3. **_TRID Closing Disclosure_** - 3 days prior to closing 4. **_Federal Mortgages Only_** - FHA, VA, USDA 5. **_Excess Money in Impounds_** - Prohibited 6. **_Affiliated Business Relationships_** 7. **_Kickbacks_** - unearned fees prohibited. 8. **_Title Companies_** - Seller cannot make buyer use Chap 8

Question 113

Act that protects public against **"inaccurate information"** reported by credit bureaus.

Answer 113

**FCRA - Fair Credit Reporting Act -** 1. Act that protects public against **"inaccurate information"** reported by credit bureaus. 2. **Consumer has right to inspect** credit bureau information reported and have corrected Chap 8

Question 114

Prohibits discrimination in the **extension of credit** on basis of **race, color, national origin, religion, sex**, but also * **Marital Status** * **Age** * **Public Assitance Programs** **Hint: Revoking Credit Never Really Sounds "_Morally Accepted_" or "_Publicly Allowed_"**

Answer 114

**ECOA - Equal Credit Opportunity Act -** **Prohibits _discrimination**_ in the _**extension of credit_** on basis of **race, color, national origin, religion, sex**, but also * **Marital Status** * **Age** * **Public Assitance Programs** **Hint: Revoking Credit Never Really Sounds "_Morally Accepted_" or "_Publicly Allowed_"** Chap 8

Question 115

**Prohibits discrimination** against **persons** **with disabilities** by requiring **equal access to public accomodations.** **_Commerical Properties required:_** 1. Handicapped **Parking Spaces** 2. Wheel Chair **Ramps** 3. Handicapped **Restrooms**

Answer 115

**ADA - Americans with Disabilities Act -** **Prohibits discrimination** against **persons** **with disabilities** by requiring **equal access to public accomodations.** **_Commerical Properties required:_** 1. Handicapped **Parking Spaces** 2. Wheel Chair **Ramps** 3. Handicapped **Restrooms** Chap 8

Question 116

Establishes a code of fair practices _governing_: **collection, use, maintenance and _dissemination of_** **_information_** **_about individuals_**. Must have written consent.

Answer 116

**"_Consumer Privacy_" Act of 1974** - Establishes a code of fair practices _governing_: **collection, use, maintenance and _dissemination of information**_ _**about individuals_**. Must have written consent. Chap 8

Question 117

**Prohibits discrimination** in the **sale/rental, advertising, and financing of housing** based on: 1. Race 2. Color 3. Religion 4. Sex 5. **Handicapped (1988)** 6. **Familial (1988)** 7. National Origin **Hint: Realtors Can Really Sell Houses Fast Now**

Answer 117

**Federal Fair Housing Laws 1968 -** Prohibits discrimination in the **sale/rental advertising, and financing of housing** based on: 1. Race 2. Color 3. Religion 4. Sex 5. **Handicapped (1988)** 6. **Familial (1988)** 7. National Origin **Hint: Realtors Can Really Sell Houses Fast Now** Chap 8

Question 118

This act prohibits: 1. **_Refusing_** **to sell/rent/negotiate**, and ***making housing unavailable.*** 2. **_Quoting_** **different terms**,conditions, services to ***different races, religions***, etc 3. **_Advertising_** to **certain people** 4. **_Steering:_** **Denying housing**, ***steering people away*** or towards certain areas 5. **_Blockbusting:_** **Encouraging owners to sell/rent** because **minorities *_moving in_***. 6. **_Redlining:_** Lender **altering terms in specific areas.**

Answer 118

**Federal Fair Housing Act 1968** (Prohibits - 1. **_Refusing_** **to sell/rent/negotiate**, and ***making housing unavailable.*** 2. **_Quoting_** **different terms**,conditions, services to ***different races, religions*, etc** 3. **_Advertising_** to **certain people** 4. **_Steering:_** **Denying housing**, ***steering people away*** or towards certain areas 5. **_Blockbusting:_** **Encouraging owners to sell/rent** because **minorities _moving in_**. 6. **_Redlining:_** Lender **altering terms in specific areas.** Chap 8

Question 119

**Examples, such as the following are considered?** 1. **Visual** 2. **Hearing** 3. **Speech Impairment,** 4. **Mental Illness** 5. **Heart Disease** 6. **Cancer** 7. **HIV Infection** 8. **Zoning/Deed Restrictions to prevent Group Homes "prohibited."**

Answer 119

**Handicap (disability)** - 1. **Visual** 2. **Hearing** 3. **Speech Impairment,** 4. **Mental Illness** 5. **Heart Disease** 6. **Cancer** 7. **HIV Infection** 8. **Zoning/Deed Restrictions to prevent Group Homes "prohibited."** Chap 8

Question 120

What are these exemptions pertaining to? 1. **_Sale of SFR (3 max units owned)_** - * Broker not used * Discriminatory Advertising "not used" 1. **_Rental of Rooms (1-4units)_** 2. **_Religious Organizations_** - race, color, national origin not restricted 3. **_Private Clubs_** - Restricted to own members okay. **(if not commercially operated)**

Answer 120

**_Exemptions_: Federal Fair Housing Act 1968 -** 1. **_Sale of SFR (3 max units owned)_** - * Broker not used * Discriminatory Advertising "not used" 1. **_Rental of Rooms (1-4units)_** 2. **_Religious Organizations_** - race, color, national origin are not restricted 3. **_Private Clubs_** - Restricted to own members okay. **(if not commercially operated)** Chap 8

Question 121

Refusing to rent or sell home to **families with children under 18** is part of what Fair Housing Amendment of 1988?

Answer 121

**Familial Status** - Refusing to rent or sell home to **families with children under 18** is part of the **Fair Housing Amendment of 1988** Chap 8

Question 122

What must **Broker obtain from HUD** and **display in his office?**

Answer 122

**Equal Housing Poster -** Broker must obtain from HUD and **display in his office or considered discrimination**. Chap 8

Question 123

What would this language be categorized as in advertising? 1. No Wheelchairs 2. Christian Handyman wanted 3. Close to Catholic Schools 4. White Neighborhood 5. Group pic with only some races

Answer 123

**Discriminatory Advertising -** 1. No Wheelchairs 2. Christian Handyman wanted 3. Close to Catholic Schools 4. White Neighborhood 5. Group pic with only some races Chap 8

Question 124

What is complaint process for Fair Housing Acts? 1. **_1 year_** - to **file compaint** to HUD 2. **_Investigation_** - try to **conciliate** problem 3. **_After Investigation (Report Prepared) may_**: 1. **Dismiss Charges** 2. **_If Guilty may_**: 1. **Award Damages** 2. **Attorney General** - Send Findings 3. Recommend: **Suspension/Revocation**

Answer 124

**Fair Housing Act 1968 and 1988 / Complaint Process -** 1. **_1 year_** - to **file compaint** to HUD 2. **_Investigation_** - try to **conciliate** problem 3. **_After Investigation (Report Prepared) may_**: 1. **Dismiss Charges** 2. **_If Guilty may_**: 1. **Award** Damages 2. **Attorney General** - Send Findings 3. Recommend: **Suspension/Revocation** **Chap 8**

Question 125

What is process for filing **complaints on Civil Rights Act of 1866** (race and color) in federal court?

Answer 125

**Civil Rights Act of 1866 (race and color) -** **2 years** to file complaints in **federal court.** Chap 8

Question 126

**4 Major Elements of Value** are?

Answer 126

**4 Major Elements of Value -** 1. **D**emand - Desire 2. **U**tility - Marketability (unearned increment) 3. **S**carcity - Supply 4. **T**ransferability - Liquid Chap 9

Question 127

Buyer/Seller **willing to pay** is called?

Answer 127

**Market Value (Willing) -** Buyer/Seller **willing to pay**. 1. **_Appraisers estimate market value_** 2. **_Arm's Length transaction_** - parties have ***equal bargaining positions*** 3. **_Non Arm's Length transaction_** - foreclosures, relative sales, condemnation sales. Chap 9

Question 128

**Actual amount paid** for property.

Answer 128

**Market _"Price_" -** **Actual amount paid** for property. **_Note_**: *"Market Value" is what parties "willing" to pay.* Chap 9

Question 129

**Value of physical items** subject to loss due to hazards.

Answer 129

**Insurance Value -** **Value of physical items** subject to loss due to hazards. Chap 9

Question 130

Value is affected by **"scarcity"** and **"desire"** for a product.

Answer 130

**Principle of Supply and Demand -** Value is affected by **"scarcity"** and **"desire"** for a product. Chap 9

Question 131

Use of property which will **produce the greatest "Net Return"** is the principle of what?

Answer 131

**Principle of Highest and Best Use:** Use of property which will **produce the greatest "Net Return"** 1. **_Only One_ "Highest and Best Use" at any one time** 2. **_Highest and Best Use based on_** - *_zoning_, _bldg codes*_, and _*surrounding market_* 3. **_Excess Land_** - Not used to support use. Chap 9

Question 132

**Principle** that real estate **values "do not" remain constant**. Changing economy and social conditions affect value.

Answer 132

**Principle of Change -** **Principle** that real estate **values "do not" remain constant**. Changing economy and social conditions affect value. Chap 9

Question 133

**Principle** that property goes through **phases of growth, stability, and decline.**

Answer 133

**Principle of Development, Equalibrium, and Disintegration -** **Principle** that property goes through **phases of growth, stability, and decline.** Chap 9

Question 134

Growth is known as?

Answer 134

**Development -** Also known as "Growth" Chap 9

Question 135

Stability is?

Answer 135

**Equilibrium -** Stability, Opposing forces balanced. Chap 9

Question 136

Decline means?

Answer 136

**Disintegration -** Decline

Question 137

**Principle** where **"profit breeds competition"** and then **reduces profit.**

Answer 137

**Principle of Competition** - **Principle** where **"profit breeds competition"** and then **reduces profit.** Chap 9

Question 138

Principle that **values affected** by expectation of **future events.**

Answer 138

**Principle of Anticipation -** Principle that **values affected** by expectation of **future events.** Chap 9

Question 139

**Principle** that **factors outside property** can have _positive_ or _negative_ **effect on value.**

Answer 139

**Principle of Eternalities -** **Principle** that **factors outside property** can have _positive_ or _negative_ **effect on value.** Chap 9

Question 140

Direction that city/community is growing.

Answer 140

**Directional Growth -** **Direction** that **city/community is growing.** Chap 9

Question 141

**Increase** due to **effort of owner.**

Answer 141

**Earned Increment -** **Increase** due to **effort of owner.** Chap 9

Question 142

**Increase** due to **positive zoning changes, inflation, population increase**, or **increase in demand**.

Answer 142

**Unearned Increment -** **Increase** due to **positive zoning changes, inflation, population increase**, or **increase in demand**. Chap 9

Question 143

**Loss of value** due to **"wear and tear,"** such as _termites_, _weather damage_, _leaky roof_, _cracked paint_.

Answer 143

**Deterioration -** **Loss of value** due to **"wear and tear,"** such as _termites_, _weather damage_, _leaky roof_, _cracked paint_. Chap 9

Question 144

**Loss due** to **"outdated features," poor design, and "technological advances.**

Answer 144

**Functional Obsolescense -** **Loss due** to **"_outdated features,_" poor design, and "_technological advances_."** Chap 9

Question 145

**Loss** due to **outside factors, usually "incurable."** 1. Neighborhood conditions **(Air/Noise Pollution)** 2. **Over-Improvement of Property** 3. Negative Legislative Changes **(Adverse zoning)** 4. **Business/Market Conditions**

Answer 145

**Economic Obsolescense -** **Loss** due to **outside factors, usually "incurable."** 1. Neighborhood conditions **(Air/Noise Pollution)** 2. **Over-Improvement of Property** 3. Negative Legislative Changes **(Adverse zoning)** 4. **Business/Market Conditions** Chap 9

Question 146

**Increase value** by **merging small parcels** under **one ownership.**

Answer 146

**Plottage (Assemblage) -** **Increase value** by **merging small parcels** under **one ownership.** Chap 9

Question 147

**Estimating value** of "**_subject property_**" **by comparing** similar **recently sold** properties **(principle of substitution).** 1. **_Relies Heavily On_: Homes/Vacant Land** 2. Relies on "lots of buyers" active in market 3. **_Comparables:_** ***"At Arms Length" (Equal Bargaining Position)*** 4. **_Adjustments:_** **(Sold Date, Local, Financing, Features, Special Concessions - Cash, FSBO,REO)**

Answer 147

**_Comparison-Direct Sales Approach/Market Data_ -** **Estimating value** of "**_subject property_**" **by comparing** similar **recently sold** properties **(principle of substitution).** 1. **_Relies Heavily On_: Homes/Vacant Land** 2. Relies on "lots of buyers" active in market 3. **_Comparables_**: ***"At Arms Length" (Equal Bargaining Position)*** 4. **_Adjustments:_** **(Sold Date, Local, Financing, Features, Special Concessions - Cash, FSBO, REO)** Chap 9

Question 148

Three types of **"Hybrid Appraisals?"**

Answer 148

**Hybrid Appraisals -** **_Drive-By Appraisal_ - Exterior Inspections** (Lender Comparables **_Desktop Appraisal_ -** No physical inspection - **uses tax records or MLS data.** **_Automated Valuation Model (AVM)_ - Mathematical Model (Algorithm)** combined with a database. Chap 9

Question 149

1. Cost to produce **"reasonable"** duplicate**?** 2. Cost to produce **"exact"** duplicate**?**

Answer 149

1. **_Replacement Cost_** - Cost to produce **"reasonable"** duplicate 1. **_Reproduction Cost_** - Cost to produce **"exact"** duplicate Chap 9

Question 150

What appraisal formula is this for? ## Footnote **Building Cost** **- Depreciation** **_+ Land Value_** **Apraised Value**

Answer 150

**Cost Approach/Summation -** **Building Cost** **- Depreciation** **_+ Land Value_** **Apraised Value** **_Heavily Relies:_ Churches, Muni Bldgs, New Construction - One of a Kind Properties** Chap 9

Question 151

Measuring **"exterior of building,"** but only areas **heated/cooled.** **_Not Included:_** Porches, Garages, Carports

Answer 151

**Square Footage - Living Area -** Measuring **"exterior of building,"** but only areas **heated/cooled.** **_Not Included:_** Porches, Garages, Carports Chap 9

Question 152

Area of building **"under roof."** **_Includes:_** Garages, Patios, and eaves.

Answer 152

**Square Footage Under Roof -** Area of building **"under roof."****_Includes:_** **Garages, Patios, and eaves.** Chap 9

Question 153

URAR stands for?

Answer 153

**URAR -** **Uniform Residential Appraisal Report** Chap 9

Question 154

Process of converting "_**net income into value**"_.

Answer 154

**Capitalization -** Process of **converting "_net income into value"_.** Chap 10

Question 155

**Period of time** over which **property will produce income.**

Answer 155

**Economic Life -** **Period of time** over which **property will produce income.** Chap 10

Question 156

What is this the formula for? **Gross Income** **_- Operating Expenses_** **What type of Income**

Answer 156

**Net Operating Income - (Formula)** **Gross Income** **_- Operating Expenses_** **Net Operating Income** Chap 10

Question 157

The **"Rate of Return"** an **investor wants** to receive **or that property will produce.**

Answer 157

**Capitalization Rate (Cap Rate) -** The **"Rate of Return"** an **investor wants** to receive **or that property will produce.** **Note: If risk, Cap Rate Increases, value decreases.** Chap 10

Question 158

What is this method for? **_Net (Income) Per Year_** **Value x Cap (Rate)**

Answer 158

**Capitalization (Income Approach) - IRV** **_Net (Income) Per Year_** **Value x Cap (Rate)** Chap 10

Question 159

What is used to **estimate values** of **"small income properties?"**

Answer 159

**GRM - GROSS RENT MULTIPLIER -** Used to estimate values of **"small income properties."** **_Value (SP)_** **Gross Inc (Mo) x GRM**

Question 160

Process of **bringing data together** _from_ _three appraisal methods_ to **determine final value.**

Answer 160

**Reconciliation of Data -** Process of **bringing data together** _from three appraisal methods_ to **determine final value.** Chap 10

Question 161

May appraise 1-4 units **under $1,000,000**

Answer 161

***_Licensed_* Appraiser -** May appraise 1-4 units **under $1,000,000.** Chap 10

Question 162

May appraise **_all types_ of 1-4 units** **_residential_**.

Answer 162

**Certified Residential - Appraiser:** May appraise **_all types_ of 1-4 units** **_residential_**. Chap 10

Question 163

May appraise **all types** of **_properties_.** ## Footnote **Hint: All __ go to war in all lands.**

Answer 163

**Certified _General_ - Appraiser -** May appraise **_all_ types of _properties_.** **Hint: All _Generals_ go to war in _ALL_ lands** Chap 10

Question 164

A company that **"acts as a firewall"** **between lender and an appraiser** to prevent lender from choosing appraiser directly.

Answer 164

**Appraisal Management Company -** A company that **"acts as a firewall" between lender and an appraiser** to prevent lender from choosing appraiser directly. Chap 10

Question 165

**Analysis of current market conditions** to help consumers to determine **_list price_, _sales price**_ or _**purchase price._**

Answer 165

**CMA - Competitive Market Analysis -** **Analysis of current market conditions** to help consumers to determine **_list price_, _sales price**_ or _**purchase price._** Chap 10

Question 166

**Evaluation** prepared **by broker/salesperson** **for lender** who is considering **_short sale_, _foreclosure**_ or _**home equity line of credit._** ## Footnote **May not be called an appraisal!**

Answer 166

**BPO - Broker Price Opinion -** **Evaluation** prepared **by broker/salesperson** **for lender** who is considering **_short sale_, _foreclosure**_ or _**home equity line of credit._** **May not be called an appraisal!** Chap 10

Question 167

**ADEQ** stands for? Sets **"state environmental"** standards

Answer 167

**ADEQ - AZ Dept of Environmental Quality -** Sets **"state environmental"** standards Chap 10

Question 168

**ADWR** stands for? Regulates **ground water use.**

Answer 168

**ADWR - AZ Dept of Water Resources -** Regulates **ground water use.** Chap 10

Question 169

ADRE stands for? ## Footnote **Commissioner's rules require disclosure**

Answer 169

**ADRE - AZ Dept Real Estate -** **Commissioner's rules require disclosure.** Chap 10

Question 170

This requirement under **HUD Title X** and pertains to **homes built before 1978.**

Answer 170

**Lead-Based Paint -** This requirement under **HUD Title X** and pertains to homes **built before 1978.** 1. _Disclose_ Presense**.** 2. Provide _Records/Reports_ 3. **Provide Lead-Based Paint Pamphlet** 4. **Provide 10days+ Inspect Property or Waive Right** 5. **_Sales/Lease Contracts:_** Language Disclosure/Acknowlegements Chap 10

Question 171

**Ordorless**, tasteless, radioactive gas - **lung cancer**.

Answer 171

**Radon -** **Ordorless**, tasteless, radioactive gas - **lung cancer**. Chap 10

Question 172

**Airborne** fibers - **Respitory Diseases.**

Answer 172

**Asbestos -** **Airborne** fibers - **Respitory Diseases.** Chap 10

Question 173

Caused by **"excess moisture"** in buildings. **Airtight windows (poor ventilation).**

Answer 173

**Mold -** Caused by **"excess moisture"** in buildings. **Airtight windows (poor ventilation).** Chap 10

Question 174

_What type of contamination?_ 1. **_Contaminated_** **Well Sites** 2. Underground **Plums** 3. **Waste Disposal Systems** 4. **LUST** - Leaking Underground **Storage Tanks**

Answer 174

**Contamination of "_Surface/Groundwater_" -** 1. **_Contaminated_** **Well Sites** 2. Underground **Plums** 3. **Waste Disposal Systems** 4. **LUST** - Leaking Underground **Storage Tanks** Chap 10

Question 175

What type of contamination? 1. **Pesticides/Herbicides** 2. **Fertilizers/Solvents** **_Hints_:** **Pest goto Herbs /** **Fertilizers Solve Problems**

Answer 175

**Soil Contamination -** 1. **Pesticides/Herbicides** 2. **Fertilizers/Solvents** **_Hints_:** **Pest goto Herbs /** **Fertilizers Solve Problems** Chap 10

Question 176

Caused by **_extensive groundwater withdrawals_**. **Cracks in valley floors.**

Answer 176

**Fissures:** Caused by **_extensive groundwater withdrawals_**. **Cracks in valley floors.** Chap 10

Question 177

Process of **"investigating property"** to determine if **"hazardous substances/pollution** exist on property.

Answer 177

**Discovery/Due Dilligence -** Process of **"investigating property"** to determine if **"hazardous substances/pollution** exist on property. Chap 10

Question 178

Defunct, **abandoned commercial/industrial** building **contaminated by hazardous wastes.**

Answer 178

**Brownfield -** Defunct, **abandoned commercial/industrial** building **contaminated by hazardous wastes.** Chap 10

Question 179

**Inspecting property**, **reviewing public records**, and **"interviewing owners/tenants" (1) if contamination exists.**

Answer 179

**Phase 1 Assessment -** **_Inspecting property**_, _**reviewing public records_**, and **"*_interviewing owners/tenants_*" (1) if contamination exists.** Chap 10

Question 180

**Taking samples (2)** to analyze if **pollution** exist.

Answer 180

**Phase II Assessment -** **Taking samples (2)** to analyze if **pollution** exist. Chap 10

Question 181

As per "Real Estate Commissioner" what must be **done by realtor concerning contamination sites.**

Answer 181

**Superfund/Mini-Superfund Sites** - Properties within these sites, **must be disclosed by Realtors.** Chap 10

Question 182

**Core Samples** and more detailed assessments and **actual clean-up of contamination.**

Answer 182

**Phase III Assessment -** **Core Samples** and more detailed assessments and **actual clean-up of contamination.** Chap 10

Question 183

Set up by the federal **"Comprehensive Environmental Response - Compensation and Liablity Act (CERCLA) to bear cost of clean-up** of polluted property.

Answer 183

**Superfund -** Set up by the federal **"Comprehensive Environmental Response - Compensation and Liablity Act (CERCLA) to bear cost of clean-up** of polluted property. **_Strict Liability_ - Current/Previous Owners** Chap 10

Question 184

Set up under **AZ (State) Law** known as **"_Water_ _Quality_ _Assurance_ _Revolving_ _Fund_ (WQARF) to bear cost of clean-up "_not covered_" under CERCLA.** **_Strict Liability_ - Current/Previous Owners**

Answer 184

**Mini-Superfund -** Set up under **AZ (State) Law** known as **"_Water_ _Quality_ _Assurance - Revolving Fund_ (WQARF) to bear cost of clean-up "_not covered_" under CERCLA.** **_Strict Liability_ - Current/Previous Owners** Chap 10

Question 185

**Flat portion of land** located **_along rivers/streams_** which are **subject to flooding.** 1. **_Maps_** are developed **by FEMA** (Federal Emergency Mgmt Agency). If home deemed within this area, the **lender will require "flood insurance" purchased.** 2. **_National Flood Insurance Program_ -** Operated by FEMA, provides **insurance for owners/tenants/businesses.** 3. **_Flood Elevation Certificates -_** Used by FEMA and private insurance companies **"to rate" flood insurance policies.**

Answer 185

**Floodplain -** **Flat portion of land** located **_along rivers/streams_** which are **subject to flooding.** 1. **_Floodplain Maps_** are developed **by FEMA** (Federal Emergency Mgmt Agency). If home deemed within this area, the **lender requires "flood insurance" purchased.** 2. **_National Flood Insurance Program_ -** Operated by FEMA, provides **insurance for owners/tenants/businesses.** 3. **_Flood Elevation Certificates -_** Used by FEMA and private insurance companies **"to rate" flood insurance policies.** Chap 10

Question 186

**Maps developed by FEMA** (Federal Emergency Mgmt Agency). If home deemed within this area, **the lender requires "flood insurance" purchased.**

Answer 186

**_Floodplain Maps_** **Maps developed by FEMA** (Federal Emergency Mgmt Agency). If home deemed within this area, the **lender requires "flood insurance" purchased.** Chap 10

Question 187

Operated by FEMA, **provides "insurance" for _owners/tenants/businesses_ located in floodplain areas.** **_Note_**: Floodplain Maps are developed by FEMA (Federal Emergency Mgmt Agency). If home deemed within this area, the lender requires "flood insurance" purchased.

Answer 187

**National Flood Insurance Program -** Operated by FEMA, **provides "insurance" for _owners/tenants/businesses_ located in floodplain areas.** **_Note:_** Floodplain Maps are developed by FEMA (Federal Emergency Mgmt Agency). If home deemed within this area, the lender requires "flood insurance" purchased. Chap 10

Question 188

**_Used by FEMA/Private Insurance_** **_Co_:** **"****_to rate_****"** **flood insurance policies**. **_Note_**: Floodplain Maps are developed by FEMA (Federal Emergency Mgmt Agency). If home deemed within this area, the lender requires "flood insurance" purchased.

Answer 188

**Flood "Elevation" Certificates -** **_Used by FEMA/Private Insurance_** **_Co_:** **"****_to rate_****"** **flood insurance policies**. **_Note_**: Floodplain Maps are developed by FEMA (Federal Emergency Mgmt Agency). If home deemed within this area, the lender requires "flood insurance" purchased. Chap 10

Question 189

Land where "groundwater near the surface" so as to produce?

Answer 189

**Wetlands -** **Land where "groundwater near the surface"** so as to produce wetland community. Subject to **_federal_**, **_state_**, and **_local environmental_** controls for **perservation and conservation.** Chap 10

Question 190

Regarding "**Arizona On-site _Wastewater Facilities_**" (Septic Tanks), what are the **seller's responsibilites**?

Answer 190

**"Arizona On-site _Wastewater Facilities_" (Septic Tanks) - Seller Responsibilities -** 1. **_Within 6 mos Prior to Transfer_** - System *_inspected_*, *_pumped/cleaned_* and *_certified._* 2. **_Inspection Report_** - to Buyer Chap 10

Question 191

Regarding **"Arizona On-site Wastewater Facilities"** (Septic Tanks), what are the **buyer's responsibilites**?

Answer 191

**"Arizona On-site Wastewater Facilities" (Septic Tanks) - Buyer's Responsibilities -** **_Notice of Transfer_ - Buyer** Complete **- 15 days of purchase.** Chap 10

Question 192

Ability of **ground to absord/drain water**

Answer 192

**Percolation -** Ability of **ground to absord/drain water.** Chap 10

Question 193

**Test done** to determine *suitability* *of site* for **"installation of septic tank."**

Answer 193

**Perc Test -** Test done to determine **suitability of site** for **"installation of septic tank."** Chap 10

Question 194

Compressed Soil - added to site to fill in low areas.

Answer 194

**Compaction -** Compressed Soil - added to site to fill in low areas. Chap 10

Question 195

An **Ownership Interest**. **Exclusive rights to enjoy the possession of a property.**

Answer 195

**Freehold Estate -** **An Ownership Interest.** **Exclusive rights to enjoy the possession of a property** for an undefined length of time. **Estate: degree/extent of interest in property (right, interest, tenancy, equity)** Chap 11

Question 196

**Right to possess/use property of another**. Less than freehold estate.

Answer 196

**Leasehold Estate -** **Right to possess/use property of another**. Less than freehold estate. Chap 11

Question 197

1. **Ownership** last as long as "**certain conditions are met**." 2. Reverts back to grantor (reverter) **if conditions violated.**

Answer 197

**Defeasible Fee Simple -** 1. **Ownership** last as long as **"certain conditions are met."** 2. **Reverts back to grantor (reverter)** _if conditions_ **violated.** Chap 11

Question 198

Ownership created **_for the life of one person_**. Holder is a life tenant.

Answer 198

**Life Estates -** Ownership created **_for the life of one person_**. Holder is a life tenant. Chap 11

Question 199

Life Estate created by one person, **"for life of another person."**

Answer 199

**Conventional Life Estate -** **Life Estate** created ***_by one person_***, "**for life of another person (life tenant).** 1. **Cannot "Will" interest** 2. **Cannot commit "waste (damage)" to property or its value.** **Life Estate: Ownership created _by the life of certain person_. Holder is "life tenant."** Chap 11

Question 200

If Son creates "life estate" for Mom, and **at Mom's death reverts by to son**. What type of estate?

Answer 200

**Estate in Reversion -** If Son creates "life estate" for Mom, and **at Mom's death reverts by to son**. Son holds "Reversionary Interest" Chap 11

Question 201

**Interest held** by grantor "reverter" **when _property_ will be _re-aquired._**

Answer 201

**Reversionary Interest -** **Interest held** by grantor "reverter" when **_property_ will be _re-aquired_.** Chap 11

Question 202

Son created a "life estate" for Mom. **At Mom's death it is passed to Sister. What type of estate?**

Answer 202

**Estate in Remainder -** **Son create**s a "life estate" for Mom. **At Mom's death it is passed to Sister.** Chap 11

Question 203

**Interest held** by one person **"other than grantor"** that will **"aquire interest in future."**

Answer 203

**Remainder Interest -** **Interest held** by one person **"other than grantor"** that will **"aquire interest in future."** Chap 11

Question 204

**Mom conveys fee simple title to Son,** but _***reserves a life estate** **for herself.***_ **Person who holds interest is a Remainderman**. What type of interest is held?

Answer 204

**Remainder Interest -** **Mom conveys fee simple title to Son,** but *_reserves a life estate for herself._* **Person who holds interest is a Remainderman.** Chap 11

Question 205

A lease is know as what?

Answer 205

**Demise -** **Lease** Chap 11

Question 206

**Rent paid** for a **"specified"** and **"definate period of time."**

Answer 206

**Estate for Years (Tenancy) -** **Rent paid** for a **"specified"** and **"definate period of time."** Chap 11

Question 207

Tenancy month to month, year to year, but for **"indefinte period."** 1. Automatically renews, no termination date 2. **Notice required**

Answer 207

**_Estate of Periodic_ Tenancy (Period to Period) -** Tenancy month to month, year to year, but for **"indefinte period."** 1. Automatically renews, no termination date 2. **Notice required** Chap 11

Question 208

Estate where lessor gives **"permission"** to **lessee to use property.** A form of **license or privilege.** 1. Unspecified Time 2. No Notice to Terminate

Answer 208

**Estate at Will -** Estate where lessor gives **"permission"** to **lessee to use property.** A form of **license or privilege.** 1. Unspecified Time 2. No Notice to Terminate Chap 11

Question 209

**_Estate_ with _existing lease terminated**_ but _**tenant_ is _holding over wrongfully_ (holdover tenancy)** 1. **Rent is neither being paid or accepted.**

Answer 209

**Estate in Sufferance -** **_Estate_ with _existing lease_** **_terminated_** but **_tenant_ is _holding over wrongfully_ (holdover tenancy)** 1. **Rent is neither being paid or accepted.** Chap 11

Question 210

**Fixed Rent** by tenant. **_Lessor pays all property expenses_.**

Answer 210

**Gross Lease -** **Fixed Rent** by tenant. **Lessor pays all property expenses.** Chap 11

Question 211

**Tenant pays rent _plus_:** 1. Property **Expenses** 2. **Utilities** 3. Real Estate **Taxes** 4. **Insurance** Premiums 5. **Maintenance** **Lessor just pays Debt Service (Mortgage Payments PI)**

Answer 211

**Net Lease/Triple Net Lease - (means everything paid by little man)** **Tenant pays rent _plus_:** 1. Property **Expenses** 2. **Utilities** 3. Real Estate **Taxes** 4. **Insurance** Premiums 5. **Maintenance** **Lessor just pays Debt Service (Mortgage Payments PI)** Chap 11

Question 212

Base Rent paid plus **_percentage_ of "gross sales volume."** Common in leasing retail space.

Answer 212

**Percentage Lease -** Base Rent paid plus **_percentage_ of "gross sales volume."** Common in leasing retail space. Chap 11

Question 213

Owner sells property to investor who **_leases it back to seller_**. **Seller becomes tenant.** **_Benefits for Seller_** 1. Frees Working Capital 2. **Rent "Tax Deduction"** 3. No Property Managment Anymore

Answer 213

**Sale Leaseback -** Owner sells property to investor who **_leases it back to seller._ Seller becomes tenant.** **_Benefits for Seller_** 1. Frees Working Capital 2. **Rent "Tax Deduction"** 3. No Property Managment Anymore Chap 11

Question 214

**Increases/Decreases in rent.** Lease with **"escalator clause."**

Answer 214

**Graduated Lease -** **Increases/Decreases in rent.** Lease with **"escalator clause."** **_Note_**: Grades go up and down Chap 11

Question 215

Rent tied to **Consumer Price Index. Can go up/down.**

Answer 215

**Index Lease -** Rent tied to **Consumer Price Index. Can go up/down.** Chap 11

Question 216

Lease with "major tenant" such as **department store.**

Answer 216

**Anchor Lease -** Lease with "major tenant" such as **department store.** Chap 11

Question 217

Lease in "co-op" where tenant has right to rent particular unit.

Answer 217

**Proprietary Lease -** **Lease in "co-op"** where tenant has right to rent particular unit. Chap 11

Question 218

Lease where tenant (sub-lessor) **rents to new tenant (sub-lessee).** 1. Sub-Lessee (new tenant) pays Sub-Lessor 2. **Sub-Lessor _liable to/pays_ Lessor (as usual).**

Answer 218

**Sublease/Sandwich Lease -** Lease where tenant (sub-lessor) **rents to new tenant (sub-lessee).** 1. Sub-Lessee (new tenant) pays Sub-Lessor 2. **Sub-Lessor _liable to/pays_ Lessor (as usual).** Chap 11

Question 219

The Lessee (Assignor) transfers all rights to lease to **"Third Party" (Assignee) who takes over lease.** 1. **Assignee (third party) pays Lessor** 2. **\*\*\*\*Both _Assignor/Assignee_ liable to Lessor.**

Answer 219

**Assignment of Lease -** The Lessee (Assignor) transfers all rights to lease to **"Third Party" (Assignee) who takes over lease.** 1. **Assignee (third party) pays Lessor** 2. **\*\*\*\*Both _Assignor/Assignee_ liable to Lessor.** Chap 11

Question 220

Difference between contract rent and economic rent is...

Answer 220

**Excess Rent -** Difference between contract rent and economic rent. Chap 11

Question 221

When "economic rent is higher" than contract rent.

Answer 221

**Positive Leasehold -** When "economic rent is higher" than contract rent. Chap 11

Question 222

When **"contract rent is higher"** than economic rent..

Answer 222

**Negative Leasehold -** When **"contract rent is higher"** than economic rent. (negative excess rent). Chap 11

Question 223

**Alterations or improvements** to _leased space_ **for tenant.**

Answer 223

**Tenant Improvements (TIs) -** **Alterations or improvements** to _leased space_ **for tenant.** Chap 11

Question 224

Roof, walls, floor, windows, and doors. Seperates inside from outside of building.

Answer 224

**Building Shell -** Roof, walls, floor, windows, and doors. Seperates inside from outside of building. Chap 11

Question 225

A certificate issued by government agency stating **"building in compliance with building codes"** and suitable for occupancy.

Answer 225

**Certificate of Occupancy -** A certificate issued by government agency stating **"building in compliance with building codes"** and suitable for occupancy. Chap 11

Question 226

**Fees charged to _commercial tenants_** to maintain ***_parking lots***_, _***walkways***_, _***area lighting_***, etc.

Answer 226

**CAMs - Common Area Maintenance Charges -** **Fees charged to _commercial tenants_** to maintain ***_parking lots***_, _***walkways***_, _***area lighting_***, etc. Chap 11

Question 227

Lease provisions, 1. **_Limits Landlord's "Operating Expenses_"** 2. _**Tenant** **Pays**_ **_Increases_: In Taxes; Heating/Cooling Costs**, etc.

Answer 227

**Expense Stop -** 1. **_Limits Landlord's "Operating Expenses_"** 2. _**Tenant** **Pays**_ **_Increases_: In Taxes; Heating/Cooling Costs**, etc. Chap 11

Question 228

Concerning Lease what are these? 1. **_Surrender and Acceptance_** - Mutual Agreement 2. **_Expiration of Term_** - Estate for Years 3. **_Breach of Terms_** - **Actual Eviction** (Tenant); **Contructive Eviction** (Landlord) 4. **_Destruction of Property_** 5. **_Eminent Domain_** - Condemnation Clause cancels lease 6. **_Foreclosure of Mortgage_** - **_Protecting Tenants at Foreclosure Act_** Tenant - 90days Notice to Vacate/Honor Time of Lease **_Note_: Death Does Not Terminate: in "Sale of Property/Death of Lessor/Lessee**

Answer 228

**Termination of Leases - 6 Ways -** 1. **_Surrender and Acceptance_** - Mutual Agreement 2. **_Expiration of Term_** - Estate for Years 3. **_Breach of Terms_** - **_Actual Eviction**_ (Tenant); _**Contructive Eviction_** (Landlord) 4. **_Destruction of Property_** 5. **_Eminent Domain_** - Condemnation Clause cancels lease 6. **_Foreclosure of Mortgage_** - **_Protecting Tenants at Foreclosure Act_** 1. Tenant - 90days Notice to Vacate/Honor Lease **_Note_: Death Does Not Terminate: in "Sale of Property/Death of Lessor/Lessee** Chap 11

Question 229

2 Rights of Lessor?

Answer 229

**Lessor Rights** - 1. **Receive Rent** 2. **_Reversionary Rights_** - At Termination of Lease reverts back to Lessor. Chap 11

Question 230

Rights of Lessee?

Answer 230

**Rights of Lessee -** 1. **_Right to Quiet Enjoyment_ -** Use of property without interference by lessor. 2. **_Trade Fixtures (Commercial)_ - Personal property of tenant's business**. Example: Partitions, Drapes, Machinery - **Must be removed by termination of lease.** Chap 11

Question 231

Person who died?

Answer 231

**Decedent -** **Person who died** Chap 12

Question 232

At death decedent's estate is probated. This is called.

Answer 232

**Inheritance -** At death **decedent's estate is probated.** Chap 12

Question 233

**Court Proceeding** that **validates the will**, **totals assets** of deceased. and **distributes them to heirs.**

Answer 233

**Probate -** **Court Proceeding** that **validates the will**, **totals assets** of deceased. and **distributes them to heirs.** Chap 12

Question 234

Dies with a "will".

Answer 234

**Testate -** Dies with a "will". **_Hint:_** T for Testimonial Chap 12

Question 235

Dies with "no will".

Answer 235

**Intestate -** Dies with "no will". Chap 12

Question 236

**"Person named in will"** to carry out its provisions. **_Hint_**: Executor "executes will."

Answer 236

**Executor/Executrix -** **"Person named in will"** to carry out its provisions. **_Hint_**: Executor "executes will." Chap 12

Question 237

**"Person appointed by Court"** when no executor is named.

Answer 237

**Administrator/Admnistratrix -** **"Person appointed by Court"** when no executor is named. **_Hiint_**: **Courts always have administrators.** Chap 12

Question 238

**"Forced Transfer"** through any of following: 1. **_Eminent Domain_** - Right of Gov to Take Property 2. **_Adverse Possession_** - Take Title by Court Action (Notorious, Open, Continuous, Hostile) 3. **_Foreclosure_** - Trust Deed, Mortgage Default

Answer 238

**Involuntary Alienation -** **"Forced Transfer"** through any of following: 1. **_Eminent Domain_** - Right of Gov to Take Property 2. **_Adverse Possession_** - Take Title by Court Action (Notorious, Open, Continuous, Hostile) 3. **_Foreclosure_** - Trust Deed, Mortgage Default Chap 12

Question 239

"**Uncoerced Transfer**" by gift (dedication) or deed.

Answer 239

**Voluntary Alienation -** "**Uncoerced Transfer**" by gift (dedication) or deed. Chap 12

Question 240

**Severalty Ownership** by one person.

Answer 240

**Tenancy in Severalty (Sole and Separate) -** **Severalty Ownership** by one person. 1. **_Natural or Legal Persons_** - Corps, Cities, etc 2. **_At Death_** - Decedent's estate passes to heirs. Chap 12

Question 241

**Right to Survivorship. _No Corps_**, **Convey interest** **of Joint Tenant**, to a **"Tenant in Common"** 1. **_Time_** - Interest same time 2. **_Title_** - Same Deed 3. **_Interest_** - Equal Interest 4. **_Possession_** - Equal Rights to Possess

Answer 241

**JTWRS - Joint Tenancy with Right to Survivorship -** **Right to Survivorship. _No Corporations_**, Convey interest of Joint Tenant, to a **"Tenant in Common"** 1. **_Time_** - Interest same time 2. **_Title_** - Same Deed 3. **_Interest_** - Equal Interest 4. **_Possession_** - Equal Rights to Possess Chap 12

Question 242

Property acquired by spouses during marriage. 1. **_Both Spouses_** - Must Convey 2. **_At Death_** - Spouses half goes to heirs 3. **_Property received_** - ***_by gift***_, _***inheritance***_, _***separate funds_*** or acquired _before marriage_ is "separate property."

Answer 242

**Community Property** - Property acquired by spouses during marriage. 1. **_Both Spouses_** - Must Convey 2. **_At Death_** - Spouses half goes to heirs 3. **_Property received_** - ***_by gift***_, _***inheritance***_, _***separate funds_*** or acquired _before marriage_ is "separate property." Chap 12

Question 243

**Co-ownership** by **two or more persons** (natural or legal persons) with _no right of survivorship_. 1. **AZ law assumes property is held** **as such** unless otherwise specified. 2. Each holds **_separate_ and _distinct undivided interest_** 3. **Possession is only unity** 4. At decedent's (person who dies) death, **_goes to heirs._**

Answer 243

**Tenancy in Common -** **Co-ownership** by **two or more persons** (natural or legal persons) with _no right of survivorship_. 1. **AZ law assumes property is held as such** unless otherwise specified. 2. Each holds **_separate_ and _distinct undivided interest_** 3. **Possession is only unity** 4. At decedent's (person who dies) death, **_goes to heirs_.** Chap 12

Question 244

**Legal action** used to _terminate_ a **"tenancy in common"** or **"joint tenancy."**

Answer 244

**Suit for Partition -** **Legal action** used to _terminate_ a **"tenancy in common"** or **"joint tenancy."** Chap 12

Question 245

**Pool of resources** _for Investment._

Answer 245

**Real Estate Syndications -** **P****ool of resources** _for Investment_. Chap 12

Question 246

**Each partner** has **full liability** of debts in partnership.

Answer 246

**General Partnership -** **Each partner** has **full liability** of debts in partnership. Chap 12

Question 247

Composed of general and limited partners. **_General Partners_** 1. Have full liability for debts 2. Actively manage the partnership **_Limited Partners_** 1. Liability limited to original agreement 2. Passive Investors (Put Up Money)

Answer 247

**Limited Partnerships -** Composed of general and limited partners. **_General Partners_** 1. Have full liability for debts 2. Actively manage the partnership **_Limited Partners_** 1. Liability limited to original agreement 2. Passive Investors (Put Up Money) Chap 12

Question 248

**Business entity** made up of **one or more** persons **(who receive stock shares)** that is **treated as a separate entity.**

Answer 248

**Corporation -** **Business entity** made up of **one or more** persons **(who receive stock shares)** that is **treated as a separate entity.** Chap 12

Question 249

Arrangement under which **legal title** to property is **transferred and managed by trustee**, for benefit of beneficiary.

Answer 249

**Trust -** Arrangement under which **legal title** to property is **transferred and managed by trustee**, for benefit of beneficiary. Chap 12

Question 250

A company with at least 100 investors. 1. **Own "income producing" real estate.** 2. **Investors** received **"favored tax treatment."** 3. Must invest **75% of assets _in real estate_** 4. **Payout to shareholders** - **_90% taxable income_.**

Answer 250

**REIT - Real Estate Investment Trust -** A company with at least 100 investors. 1. **Own "income producing" real estate.** 2. **Investors** received **"favored tax treatment."** 3. Must invest **75% of assets _in real estate_** 4. **Payout to shareholders** - **_90% taxable income_.** Chap 12

Question 251

With any **"business entity"** what is necessary to determine?

Answer 251

**With any "Business Entity" -** Must determine **who is authorized to sign** on its behalf. Chap 12

Question 252

The **sale interest of any entity** is considered what?

Answer 252

**Security -** The **sale interest of any entity** is considered a "security". Chap 12

Question 253

What **regulates "Securities" or interest in a company?** **_Enforced by_**: 1. **Securities & Exchange Commission (SEC) - Federal** 2. **Arizona Corporation Commission - State** **Note: *_Real Estate Agents_ - Need Securities License.***

Answer 253

**Blue Sky Laws -** Regulates "Securities" or interest in a company **_Enforced by_**: 1. **Securities & Exchange Commission (SEC) - Federal** 2. **Arizona Corporation Commission - State** **Note: *_Real Estate Agents_ - Need Securities License.*** Chap 12

Question 254

**Individual fee simple "ownership of a unit"** **_plus**_ shared _**ownership of common areas_** (bldg, land, parking, stairs, pool). 1. Can be **_Residential**_, _**Office_**, **_Industrial_** 2. **_Rules_** governing in **_Bylaws_** 3. **_Board of Directors_** - **Meet Annually**

Answer 254

**Condominium -** **Individual fee simple "ownership of a unit**" **_plus**_ shared _**ownership of common areas_** (bldg, land, parking, stairs, pool). 1. Can be **_Residential**_, _**Office_**, **_Industrial_** 2. **_Rules_** governing in **_Bylaws_** 3. **_Board of Directors_** - **Meet Annually** Chap 12

Question 255

**A corporation** **_holds title_** **to building and unit**. _Buyer "purchases shares" (stock) in corporation_. **_Stockholder_** receives long term **"Proprietary Lease" for apartment.** 1. **_No Deed_** - to unit holder 2. **_Owner Sells_** - stock/leasehold interest 3. **_One Tax Statement_** - **entire cooperative.**

Answer 255

**Cooperative -** **A corporation** **_holds title_** **to building and unit**. _Buyer "purchases shares" (stock) in corporation_. ***_Stockholder_*** receives long term **"Proprietary Lease" for apartment.** 1. **_No Deed_** - to unit holder 2. **_Owner Sells_** - stock/leasehold interest 3. **_One Tax Statement_** - **entire cooperative.** 4. **_Cooperative_**: is a legal entity owned by a group of people who come together voluntarily for their mutual benefit. Chap 12

Question 256

Transfers ownership of real property

Answer 256

**Deed -** Transfers ownership of real property. Chap 12

Question 257

**Conveys the grantor's interest** but has **no expressed warranty, only "_implied warranty_"** - *Grantor has* *right to convey.* **_Types_** - ***_Guardian's Deeds_***, ***_Executor's Deeds_***, ***_Trustee's Deed_***

Answer 257

**Bargain and Sale Deed -** **Conveys the grantor's interest** but has **no expressed warranty, only "_implied warranty_"** - *Grantor has* *right to convey.* **_Types_** - ***_Guardian's Deeds_***, ***_Executor's Deeds_***, ***_Trustee's Deeds_*** Chap 12

Question 258

What type of deed? 1. Grantor **specifies who will receive real estate** at his death 2. Grantor **_records deed_** (can be recinded or changed). 3. **_Supercedes_ Grantor's Will** 4. **Property being sold when grantor dies**, the **contract enforceable after death**.

Answer 258

**Beneficiary Deed -** 1. **Grantor specifies who will receive real estate** **at death**. 2. Grantor **_records deed_** (can be recinded or changed). 3. **_Supercedes_ Grantor's Will** 4. **Property being sold when grantor dies**, the **contract enforceable after death**. Chap 13

Question 259

Document **signed by one spouse prior to other spouse acquiring property**, preventing community property.

Answer 259

**Disclaimer Deed -** Document **signed by one spouse prior to other spouse acquiring property**, preventing community property. Chap 13

Question 260

Requirements for what type of Deed? 1. **_Signed by the Grantor_** 2. **_Acknowledgment by Grantor:_** Acknowledgment/Notarization - **Formal declaration** made **before** **Notary Public.** **_Protects against forgery_**. **"Recorded."** 1. **_Delivery/Acceptance:_** **Recording implies** delivery/acceptance - grantee accepts deed **final step**. Does not have to be recorded to be valid.

Answer 260

**Valid Deed Requirements (Signed,Acknowledged,Delivery/Accept)** 1. **_Signed by the Grantor_** 2. **_Acknowledgment by Grantor:_** Acknowledgment/Notarization - **Formal declaration** made **before** **Notary Public.** **_Protects against forgery_**. **"Recorded."** 1. **_Delivery/Acceptance:_** **Recording implies** delivery/acceptance - grantee accepts deed **final step**. Does not have to be recorded to be valid. Chap 13

Question 261

**_Notice_ given when _document recorded_** in county where property exists. Means by operation of law.

Answer 261

**Constructive Notice -** **_Notice_ given when _document recorded_** in county where property exists. Means by operation of law. **_Note_**: **Whatever deed is recorded 1st has stronger claim.** Chap 13

Question 262

**'_Notice**_ _**by inspection of property**_", "_**other records**_," or by "_**actual knowledge_**" of a fact.

Answer 262

**Actual Notice -** **'_Notice**_ _**by inspection of property**_", "_**other records**_," or by "_**actual knowledge_**" of a fact. **_Note_**: **Whatever deed is recorded 1st has stronger claim.** Chap 13

Question 263

What must accompany a deed? 1. Must **accompany deed** when recorded 2. **Signed by both parties** 3. **Sales Price/Property Description** stated 4. **Informs County Assessor of Sales Price** 5. No "Transfer Tax" Stamps in AZ

Answer 263

**Affidavit of Value -** 1. Must **accompany deed** when recorded 2. **Signed by both parties** 3. **Sales Price/Property Description** stated 4. **Informs County Assessor of Sales Price** 5. No "Transfer Tax" Stamps in AZ Chap 13

Question 264

**Clause** that **"defines interest**" in deed. Also means **"to have and to hold."**

Answer 264

**Habendum Clause -** **Clause** that **"defines interest**" in deed. Also means **"to have and to hold."** Chap 13

Question 265

Clause where **_Grantor holds back_ (reserves) some *_interest or list_*.**

Answer 265

**Reservation/Exception Clause -** Clause where **_Grantor holds back_ (reserves) some *_interest or list_*.** Chap 13

Question 266

Clause that **"conveys interest"** in deed.

Answer 266

**Granting Clause -** Clause that **"conveys interest"** in deed. Chap 13

Question 267

**Witness Clause** in deed citing **act/date of execution.**

Answer 267

**Testimonium Clause -** **Witness Clause** in deed citing **act/date of execution.** Chap 13

Question 268

Title without cloud or defect.

Answer 268

**Merchantable/Marketable Title -** **Title without cloud or defect.** Chap 13

Question 269

**_Protects Buyer against defects_** - 1. **Forged/Misfiled** and **Improperly Drawn/Delivered** **Docs** 2. **Incompetent Grantors** 3. **Only One Spouse Signed** 4. **Uknown/Undiscovered Heirs**

Answer 269

**Owner's Title Policy -** **_Protects Buyer against defects_** - 1. **Forged/Misfiled** and **Improperly Drawn/Delivered** **Docs** 2. **Incompetent Grantors** 3. **Only One Spouse Signed** 4. **Uknown/Undiscovered Heirs** Chap 13

Question 270

In Owner's Title Policy, the items **_not covered_** found where? 1. **_Existing liens_/encumbrances** of record 2. **_Mechanic's Liens_ unrecorded** 3. Persons **_in Possession_** 4. **_Encroachments_ and Errors - Survey reveals**

Answer 270

**Page of Exceptions -** 1. **_Existing liens_/encumbrances** of record 2. **_Mechanic's Liens_ unrecorded** 3. Persons **_in Possession_** 4. **_Encroachments_ and Errors - Survey reveals** **_No Policy Covers_: Existing Ecumbrances, Zoning Ordinances, Defects Known to insured. _Encumbrances_** include liens, deed restrictions, easements, encroachments, and licenses Chap 13

Question 271

Insurance Policy that **"_protects lender_"** against **defects found** by **_Constructive Notice_****: public records, or _Actual Notice_: inspection of property**. **Buyer usually purchases**, _premium by loan amount_. Protects Lender against: 1. **_Forged/Misfiled_** and **_Improperly Drawn/Delivered Docs_** 2. **Incompetent** Grantors 3. **Only One Spouse Signed** 4. **Uknown**/Undiscovered **Heirs........*.but also*** 5. **Mechanic's Liens** **_unrecorded_** 6. **Persons In Posession** 7. **Encroachments or Errors** - Survey Reveals. **_No Policy Covers_**: **Existing Encumbrances**, **Zoning, Defects Known. _Encumbrances_**: include liens, deed restrictions, easements, encroachments, and licenses.

Answer 271

**ALTA Title Policy (Lenders) -** Insurance Policy that **"_protects lender_"** against **defects found** by **_Constructive Notice_****: public records, or _Actual Notice_: inspection of property**. **Buyer usually purchases**, _premium by loan amount_. Protects Lender against: 1. **_Forged/Misfiled_** and **_Improperly Drawn/Delivered Docs_** 2. **Incompetent** Grantors 3. **Only One Spouse Signed** 4. **Uknown**/Undiscovered **Heirs..........._but also_** 5. **Mechanic's Liens** **_unrecorded_** 6. **Persons In Posession** 7. **Encroachments or Errors** - Survey Reveals. **_No Policy Covers_**: **Existing Encumbrances**, **Zoning, Defects Known. _Encumbrances_**: include liens, deed restrictions, easements, encroachments, and licenses. Chap 13

Question 272

**Duplicae set of public records** with **Title Company.**

Answer 272

**Title Plant -** **Duplicae set of public records** with **Title Company.** Chap 13

Question 273

**Commitment of Title Insurance** issued **prior to closing** of sale.

Answer 273

**Preliminary Title Report -** **Commitment of Title Insurance** issued **prior to closing** of sale. Chap 13

Question 274

**Substitution of third person in claim or debt.** _Example_: Buyer **gives rights to title company** to **sue seller** after insurance company pays claim.

Answer 274

**Subrogation -** **Substitution of third person in claim or debt.** _Example_: Buyer **gives rights to title company** to **sue seller** after insurance company pays claim. Chap 13

Question 275

**_Governs_**: 1. **Commercial/Business** Transactions 2. **Sales/Financing** of **Personal Property**

Answer 275

**(UCC) Uniform Commercial Code -** **_Governs_**: 1. **Commercial/Business** Transactions 2. **Sales/Financing** of **Personal Property** Chap 13

Question 276

What type of Agreement? 1. **Places lien on personal property**. 2. UCC-1 establishes **"Lien Priority" by "filing UCC-1"** with **Secretary of State.** 3. **_Property Sold:_** **Title Company does "****_UCC-1 search_****"** through Seretary of State. to determine if liens outstanding.

Answer 276

**Security Agreement -** 1. **Places lien on personal property**. 2. UCC-1 establishes **"Lien Priority" by "Filing UCC-1"** with **Secretary of State.** 3. **_Property Sold:_** **Title Company does "****_UCC-1 search_****"** through Seretary of State. to determine if liens outstanding. 4. **_Solar Leased_** - UCC-1 is Filed. Chap 13

Question 277

**Provides buyer of business** with **"Seller's Creditors LIst".**

Answer 277

**Bulk Sales Affidavit -** **Provides buyer of business** with **"Seller's Creditors LIst".** Chap 13

Question 278

What are types of Personal Property documentation?

Answer 278

**Personal Property Documentation -** 1. **Bill of Sale** 2. **Security Agreement** 3. **UCC-1 Filling of Security Agreement** Chap 13

Question 279

**Detailed accounting of escrow** company showing: 1. Cash received 2. All Charges (Debts/Credits) 3. Money Paid Out 4. **_TRID Closing_** - Terms of Loan to Borrower

Answer 279

**Closing Statement -** **Detailed accounting of escrow** company showing: 1. Cash received 2. All Charges (Debts/Credits) 3. Money Paid Out 4. **_TRID Closing_** - Terms of Loan to Borrower Chap 13

Question 280

On closing statement, everything that is a **debit to who only:** 1. **1st Loan Payoff** 2. **Owner's Policy** 3. **Commission**

Answer 280

**Seller's Debit Only** on Closing Statement - 1. **1st Loan - Payoff** 2. **Owner's Title Policy** 3. **Commission**

Question 281

On closing statement, everything that is a **debits/credits to who only:** **_Debits:_** 1. **Loan Origination Fee** 2. **ALTA Policy** 3. **Impounds** **_Credits:_** 1. **Earnest Money** 2. **New 1st Loan**

Answer 281

**Buyer Debits/Credits Only** on closing statement - **_Debits:_** 1. **Loan Origination Fee** 2. **ALTA Policy** 3. **Impounds** **_Credits:_** 1. **Earnest Money** 2. **New 1st Loan** Chap 14

Question 282

Items **charges to both seller and buyer** on closing statement? 1. **_Sales Price:_** *???* 2. **_Escrow Fees:_** *???*

Answer 282

Items **charges to both seller and buyer** on closing statement? 1. **_Sales Price:_** *Credit* Seller / *Debit* Buyer 2. **_Escrow Fees:_** ***Debit* *both*... Seller/Buyer** Chap 14

Question 283

**Projected rent if** **it was** **100% occupied** (actual rents plus economic rents).

Answer 283

**Gross Scheduled Income -** **Projected rent if** **it was** **100% occupied** (actual rents plus economic rents). Chap 14

Question 284

Once you **subtract "vacancies" and "credit losses"** _from_ ***Gross Scheduled Income*** what do you have?

Answer 284

**Effective Gross Income is -** Gross Scheduled Inome - Vacancies _- Credit Losses (uncollected rent)_ Chap 14

Question 285

These costs are called what? 1. Property Management Fees 2. Utilities 3. Repairs/Mantenance 4. Taxes/Insurance 5. Advertising

Answer 285

**Operating Expenses (Not Morgage/Debt Service)** 1. Property Management Fees 2. Utilities 3. Repairs/Mantenance 4. Taxes/Insurance 5. Advertising Chap 14

Question 286

**Effective Gross Income** (Gross Sched Inc -Vacancies/Credit Losses) **- Operating Expenses**?

Answer 286

**Net Operating Income -** Effective Gross Income - Operating Expenses **_Remember:_** **Effective Gross Income (Gross Sched Inc - vacancies/credit losses).** Chap 14

Question 287

What is Debt Service?

Answer 287

**Debt Service** - **Principal/Interest only of payments.** Chap 14

Question 288

After **paying** all **"operating expenses"** and **"debt service"**

Answer 288

**_Cash Flow Before Income Taxes_ -** After **paying** all **"operating expenses"** and **"debt service"** **_Formula:_** * ***Gross Scheduled - Vacancies/Credit Losses (unpaid)*** * ***Effective Gross Income - Operating Expenses*** * ***_Net Operating - Debt Services =_*** * ***Cash Flow Before Income Taxes*** Chap 14

Question 289

Income from **salaries, wages, commissions and interest.**

Answer 289

**Ordinary Income -** Income from **salaries, wages, commissions** and **interest.** Chap14

Question 290

**Profit Income** **realized** from **sale of an asset.**

Answer 290

**Capital Gains** - **Profit Income realized** from **sale of an asset.** 1. **_Short Term_ - Less than 1 year** 2. **_Long Term_ - More than 1 year** Chap 14

Question 291

**_Tax Deductions_** for **_Owner-Occupied_/_Second Residence_.** 1. **_Real Property Taxes_ - upto $\_\_\_\_\_\_\_\_\_** 2. **_Loans_ upto $\_\_\_\_\_\_\_ Purchase/Improve - Interest Deduction.** 3. **_Not_: Home Equity Loans**

Answer 291

**_Tax Deductions_** for **_Owner-Occupied_/_Second Residence_.** 1. **_Real Property Taxes_ - upto *$_10,000_*** 2. ***_Loans upto $750,000_* Purchase/Improve - Interest Deduction.** 3. **_Not:_ Home Equity Loans** Chap 14

Question 292

**_Capital Gain exclusions_** ***Personal Residence _Capital Gain_*** ***_Exclusion_*** from being taxed (**_Owner Occ_** - **2 years out of 5 years**). 1. **Single: $\_\_\_\_\_\_** of gain exclusion 2. **Married: $\_\_\_\_\_\_\_** of gain exclusion

Answer 292

**_Capital Gain exclusions_** ***Personal Residence _Capital Gain_*** ***_Exclusion_*** from being taxed (**_Owner Occ_ - 2 years out of 5 years**). 1. **Single: $250,000** of gain exclusion 2. **Married: $500,000** of gain exclusion Chap 15

Question 293

1. **_Federal law_** which subjects **_non-resident aliens_ *_to pay_*** US Income Tax on "gain from sale" of US real property." 2. **_Escrow must withhold 15%_** of sale amount. Buyer could be liable.

Answer 293

**(FIRPTA) Foreign Investment in Real Property Tax Act -** 1. **_Federal law_** which subjects **_non-resident aliens_ *_to pay_*** US Income Tax on "gain from sale" of US real property." 2. **_Escrow must withhold 15%_** of sale amount. Buyer could be liable. Chap 15

Question 294

**_Tax Deductions_** for what type of property? 1. **Operating Expenses/Interest on Loans** 2. **_Depreciation (Cost Recovery)_** 3. **_Land/Personal Residence_ -** *No Depreciation* 4. **_Recovery Periods_**: 1. **_27.5 yrs_** - Residential **(Income)** 2. **_29 yrs_** - Non-Residential **(Commercial)** 3. **_Straight Line Depreciation_** - Same each year. 4. **_None_** - Land/Residential

Answer 294

**_Tax Deductions_** for **_Investment Properties_:** 1. **Operating Expenses/Interest on Loans** 2. **_Depreciation (Cost Recovery)_** 3. **_Land/Personal Residence_ -** *No Depreciation* 4. **_Recovery Periods_**: 1. **_27.5 yrs_** - Residential **(Income)** 2. **_29 yrs_** - Non-Residential **(Commercial)** 3. **_Straight Line Depreciation_** - Same each year. 4. **_None_** - Land/Residential Chap 15

Question 295

**Period** over which the **owner may take deductions to _recover investment._** **_Recovery Periods (Depreciation):_** 1. **_27.5 years_** - ***Residential (Income)*** 2. **_39 years_** - ***Non-Residential*** ***(Commercial)*** 3. **_Straight Line Depreciation_** - **Same each year**. 4. **_None_** - *Land/Residential*

Answer 295

**Recovery Period -** **Period** over which the **owner may take deductions to _recover investment_.** **_Recovery Periods (Depreciation):_** 1. **_27.5 years_** - ***Residential (Income)*** 2. **_39 years_** - ***Non-Residential*** ***(Commercial)*** 3. **_Straight Line Depreciation_** - **Same each year.** 4. **_None_** - *Land/Residential*

Question 296

What allows **tax on** **gain to be deferred into future years**?

Answer 296

**1031 Exchanges** - Allows **tax on** **gain to be deferred into future years**. * **_Like Kind_** - Properties held for Income or Investment * **_Simultaneous Exchange_** - Property traded for another. * **_Delayed Exchange_** - "New Property" must be acquired by specific time frame. * **_Boot:_** "Unlike kind" property received in exchange. Chap 15

Question 297

**_Properties_** held for **_Income or Investment_ for exchange. (deferred gains)**

Answer 297

**_Like Kind (Income)_** - **_Properties_** held for **_Income or Investment_ for exchange (deferred gains).** Chap 15

Question 298

***Property*** **_traded_ for another (deferred gains).**

Answer 298

**_Simultaneous (traded) Exchange_**- **Property _traded_ for another (deferred gains).** Chap 15

Question 299

**"New Property"** must be **_acquired by_** **"_specific time_" frame (deferred gains).**

Answer 299

**_Delayed (Specific Time) Exchange_ -** **"New Property"** must be **_acquired by_** "**_specific time_" frame (deferred gains).** Chap 15

Question 300

**"Unlike kind"** property received **in exchange (deferred gains).**

Answer 300

**Boot -** **"Unlike kind"** property received **in exchange (deferred gains).** Chap 15

Question 301

Gives agents authority to "**prepare real estate contracts**," but only **if incidental to their fuction** and **there is no fee**. 1. **_Statute of Frauds_** - Real Estate Contracts must be in writing 2. **_Commissioner's Rules_** - Force/Effect of Law, but not law 3. **_(SPS) Substantive Poliy Statement_** - Establish/Clarify ADRE policies on statute/rules.

Answer 301

**_Article XXVI of Arizona Constitution_ -** Gives agents authority to "**prepare real estate contracts**," but only **if incidental to their fuction** and **there is no fee**. 1. **_Statute of Frauds_** - Real Estate Contracts must be in writing 2. **_Commissioner's Rules_** - **Force/Effect** of Law, but not law 3. **_(SPS) Substantive Poliy Statement_** - **Establish/Clarify ADRE policies** on statute/rules. Chap 15

Question 302

**Real Estate Contracts** must be **in writing.**

Answer 302

**Statute of Frauds -** **Real Estate Contracts** must be **in writing.** Chap 15

Question 303

**Force/Effect of Law,** but "_not law_."

Answer 303

**Commissioner's Rules -** **Force/Effect of Law**, but "_not law_." Chap 15

Question 304

**Establish/Clarify ADRE policies** on statute/rules.

Answer 304

**(SPS) Substantive Policy Statement -** **Establish/Clarify ADRE policies** on statute/rules. Chap 15

Question 305

**Legal Cases** that have **_settled_** or **_established law_**.

Answer 305

**Case Law -** Legal Cases that have **settled** or **_established law_**. **_Revised Arizona Statutes:_** www.azleg.gov Chap 15

Question 306

**Articles 1-10** of Title 32, Chap 20 are called. * Title 32: Professions and Occupations * Chap 20: Real Estate

Answer 306

**Arizona Revised Statutes (Actual Laws) -** **_Articles 1-10_** of Title 32, Chap 20 * Titile 32: Professions and Occupations * Chap 20: Real Estate Chap 15

Question 307

1. **_Appointed by Governor_** 2. **_Qualifications_**: ***Admin:*** **_3 yrs_** */* ***Real Estate:*** **_5 yrs_** 3. **_Cannot:_ "hold real estate license" after appointed** 4. **_Duties (P A M I)_** 1. **P**_romulgate_**:** Commissioner's Rules by pubic process. 2. **A**_udit_**:** Licensees Books/Records 3. **M**_anage_**:** AZ RE Dept - Daily Operations (hire/fire) 4. **I**_nvestigate_**:** Written Complaints against Agents 1. Commissioner can "Subpeona Documents." 2. Ask Superior Court to "Compel Complance with Subpeona."

Answer 307

**_Real Estate Commissioner_ (3yr-Admin/5yr-Real Estate)** 1. **_Appointed by Governor_** 2. **_Qualifications_**: ***Admin**:* **_3 yrs_** */* ***Real Estate:*** **_5 yrs_** 1. **_Cannot:_ "hold real estate license"** after appointed 2. **_Duties (P A M I)_** 1. **P**_romulgate_**:** Commissioner's Rules by pubic process. 2. **A**_udit_**:** Licensees Books/Records 3. **M**_anage_**:** AZ RE Dept - Daily Operations (hire/fire) 4. **I**_nvestigate_**:** Written Complaints against Agents 1. Commissioner can "Subpeona Documents." 2. Ask Superior Court to "Compel Complance with Subpeona." Chap 15

Question 308

**Real Estate Advisory Board (10 Members)** 1. **Appointed by Governor/Meet Quarterly/No Compensation** 2. __ **Real Estate Brokers** 3. __ **Subdividers** 4. __ Persons engaged in **residential real estate** (last 5yrs) 5. __ Persons engaged in **_multi-family real estate_** (last 5yrs) 6. __ **Public Members**

Answer 308

**Real Estate Advisory Board (10 Members)** 1. **Appointed by Governor/Meet Quarterly/No Compensation** 2. **_2_** Real Estate **Brokers** 3. **_2_ Subdividers** 4. **_2_** Persons engaged in **residential real estate** (last 5yrs) 5. **_1_** Persons engaged in **multi-family real estate** (last 5yrs) 6. **_3_ Public Members** Chap 15

Question 309

Gives state the **right to license brokers and salespersons.**

Answer 309

**Police Power** - Gives state the **right to license brokers and salespersons.** Chap 15

Question 310

Someone who is **compensated to perform real estate services for another.**

Answer 310

**Real Estate Broker -** Someone who is **compensated to perform real estate services for another.** Chap 15

Question 311

These are qualification for whom? **_Qualifications_**: 1. __ **Experience** (last 5 years) **as licensee or equivalent.** 2. __ **Hour** broker prelicensing course (last 10 years) 3. __ **Pass** both **school and state examination** **_Other Requirements:_** 1. Definite **"place of business"** - tell commissioner 2. Display **"Sign" at the Entrance,** 3. **Brokers License/Fair Housing Sign** in Office 4. **Separate Branch Office Licenses** (Broker/Agent can run)

Answer 311

**Real Estate Broker (3 in 5yr Exp/90 Hour)-** **_Qualifications_** - 1. **_3yr_** **Experience** (last 5 years) **as licensee or equivalent.** 2. **_90_ Hour** broker prelicensing course (last 10 years) 3. **Pass** both **school and state examination.** **_Other Requirements:_** 1. Definite **"place of business"** - tell commissioner 2. Display **"Sign" at the Entrance,** 3. **Brokers License/Fair Housing Sign** in Office 4. **Separate Branch Office Licenses** (Broker/Agent can run) Chap 15

Question 312

Qualifications for whom? 1. 18 year old 2. __ Hour licensing (past 10 years) 3. __ Hour Contract Class (activate) 4. Pass both school and state examination _Other Requirements:_ 1. License is held in employing broker's office 2. Must be "licensed to broker" **(DRE: Hire Form/Sever Forms)** 3. License with **Cemetery/Membership Camping Broker okay.**

Answer 312

**Real Estate Salesperson (90 and 6Hrs)-** **_Qualifications:_** 1. **18 year old** 2. **_90_** **Hour** licensing (past 10 years) 3. **_6_** **Hour** Contract Class (activate) 4. **Pass** both **school and state examination** **_Other Requirements:_** 1. **_License_** is held in employing broker's office 2. Must be **"licensed to broker"** **(DRE: Hire Form/Sever Forms)** 3. License with **Cemetery/Membership Camping Broker okay.** Chap 15

Question 313

What are **PLLC's and PC's** for?

Answer 313

**Brokers and Agents** can have **licenses issued to:** 1. (PLLC) - Professional Limited LIability Company 2. (PC) - Professional Corporation Chap 15

Question 314

There individuals are required or not required to have a license? 1. **_Persons/Corp Officers_** - Buying/Selling/Leasing/Renting/Exchanging their own or corp properties 2. **_Attorney in Fact_** - Holds Power of Attorney to do specific thing. 3. **_Bankruptcy Referee_** - Person acting under court order. 4. **_Trustee_** - Under Deed of Trust 5. **_Government Employee_** - Performing duties 6. **_Manager/Lease Agent_** - Res Rental Property - one location 7. **_Personal Admins_** - Clerical, acctg, bookkeeping, etc.

Answer 314

**Individuals "_not required_" to be Licensed** - 1. **_Persons/Corp Officers_** - Buying/Selling/Leasing/Renting/Exchanging their own or corp properties 2. **_Attorney in Fact_** - Holds Power of Attorney to do specific thing. 3. **_Bankruptcy Referee_** - Person acting under court order. 4. **_Trustee_** - Under Deed of Trust 5. **_Government Employee_** - Performing duties 6. **_Manager/Lease Agent_** - Res Rental Property - one location 7. **_Personal Admin_** - Clerical, acctg, bookkeeping, etc. Chap 15

Question 315

Concerning Licensing, what process? 1. **_Broker/Agent_** - 1 year of exam date to **get licensed**. 2. **_License Issued (Active)_** - 2 years (end of month of activation) 3. **_Agent:_** 6-Hour Contract Class 4. **_Broker:_** Broker Management Clinics

Answer 315

**Activation of License -** 1. **_Broker/Agent_** - _1 year_ of exam date to **get licensed**. 2. **_License Issued (Active)_** - _2 years_ (end of month of activation) 3. **_Agent:_** 6-Hour Contract Class 4. **_Broker:_** Broker Management Clinics Chap 15

Question 316

Concerning Licenses what process? **_Licenses_** - Renew every 2 years (last bus day of month) **_Expired_** - ***_12 months (grace)_*** with **late fee charge** **_Agent/ Assoc Bkr (Cont Ed)_** - 24hours **_Broker/Self Emp/Ass Bkr w/Authority (Cont Ed) :_** 30hrs (Includes: 3 Bkr Mgmt Clinics)

Answer 316

**_Renewal of Broker/Sales Agent Licenses_** - **_Licenses_** - Renew every 2 years (**last business day** of month) **_Expired_** - ***_12 months (grace)_*** and **late fee charge** **_Agent/ Assoc Bkr (Cont Ed)_** - 24hours **_Broker/Self Emp/Ass Bkrw/Authority (Cont Ed) :_** 30hrs (Includes: 3 Bkr Mgmt Clinics) Chap 15

Question 317

May be issued for **90 day period** to **_surviving spouse_**, **_next of kin_** or **_executor of will._**

Answer 317

**Temporary Broker License:** **Broker Deceased or Incompetent -** May be issued for **90 day period** to **_surviving spouse_**, **_next of kin_** or **_executor of will_** **.** Chap 15

Question 318

Requirements of what type of account? 1. **_Deposits_**: with **deposit slips (date/amt/party names)** 2. **_Monies:_** only for purposes specifiied 3. **_Records:_** (Main/Branch Office) 4. **_GAAP:_** General Accepted Acctg Principles shall be used. Includes **_receipt_, _disbursement journal_, _client ledger_.** 5. **_Client Ledger_**: **Balance** **Monthly** 6. **_Excess Interest Earned_** - Remove Yearly 7. **_Not Commingling_** - Deposits not exceed $3000

Answer 318

**Trust Accounts Requirements -** 1. **_Deposits_**: with **deposit slips (date/amt/party names)** 2. **_Monies:_** only for purposes specifiied 3. **_Records:_** (Main/Branch Office) 4. **_GAAP:_** General Accepted Acctg Principles shall be used. Includes **_receipt_, _disbursement journal_, _client ledger_.** 5. **_Client Ledger_**: **Balance** **Monthly** 6. **_Excess Interest Earned_** - ***Remove Yearly*** 7. **_Not Commingling_** - Deposits not exceed $3000 Chap 15

Question 319

**Closed/Terminated Transactions/Binding Offers (Signed/Cancelled)** - Broker must keep records for?

Answer 319

**_Closed/Terminated Transactions/Binding Offers_** **_(Signed/Cancelled)_** - **Broker must keep records for - 5 years** Chap 15

Question 320

Earnest Money must be?

Answer 320

**Earnest money must be -** **Cash, Check, Promissory Note and stated in purchase contract. Places in a neutral escrow, or trust fund (federally insured bank)** Chap 15

Question 321

These are part of what? 1. **Confirmation monies handled properly.** 2. **_Copies:_** Listing Agreement, Employment and Purchase Contract, Escrow Instructions and Receipts, Closing Statement.

Answer 321

**Transaction Folders** - 1. **Confirmation monies handled properly.** 2. **_Copies:_** Listing Agreement, Employment and Purchase Contract, Escrow Instructions and Receipts, Closing Statement. Chap 15

Question 322

All contracts must be **reviewed by Broker in __ days of execution**, but still valid. ## Footnote **_Note_: Except Residential Lease Agreements**

Answer 322

**All Contracts** - All contracts must be **reviewed by Broker in** **10 days** of execution, but still valid. **_Note_: Except Residential Lease Agreements** Chap 15

Question 323

**Rejected Offers** of Purchase Contract - **retained** for __ year(s).

Answer 323

**Rejected Offers (Purchase Contract) -** **Rejected Offers** of Purchase Contract - **retained** for **1 year(s).**

Question 324

Contract hiring broker to buy/sell property for compensation are called?

Answer 324

**Employment Contracts (Listing/Buyer Broker Agreement) -** Contract hiring broker to buy/sell property for compensation. Must be **_written_**, **_all material facts_**, **_inception/expiration_**, and **_signed by all parties_**. Chap 15

Question 325

Actions for collection of compensation are handled where?

Answer 325

**_Civil Courts_**: Collection of **Compensation Actions** - 1. Taken in **Civil Courts of Arizona**, 2. Commissioner: **_Does Not_** handle! Chap 15

Question 326

**How many reasons does statute list** for **denying**, **suspending**, **revoking** license according to commissioner's rules (included violations).

Answer 326

**Statute list 30 reasons -** How many reasons does statute list for **denying**, **suspending**, **revoking** license according to commissioner's rules (included violations). **_Cease and Disist Order**_ - used if "_**Act, Practice or Transaction_**" **_violated_** by Statute or Commissioner's Rules Chap 15

Question 327

Used if **"Act, Practice or Transaction"** _violated_ by Statute or Commissioner's Rules

Answer 327

**_Cease and Disist Order_ (Commission Issued) -** Used if **"Act, Practice or Transaction"** _violated_ by Statute or Commissioner's Rules Chap 15

Question 328

What must be done for **"Out-of-State Broker"** to perform real estate services in Arizona?

Answer 328

**_Written Cooperation Agreement_ with AZ Broker -** Neede for **"Out-of-State Broker"** to perform real estate services in Arizona. Chap 15

Question 329

Whom does this apply to? 1. May receive **"performance bonuses"**. 2. **_Bonus_**: **paid monthly** **only.** 3. **_Not Exceed_**: 1/2 regular compensation.

Answer 329

**Managers/Leasing Agents** - 1. May receive **"performance bonuses"**. 2. **_Bonus_**: **paid monthly** **only.** 3. **_Not Exceed_**: 1/2 regular compensation. Chap 15

Question 330

**Unlicensed Assistants** are regulated by?

Answer 330

**SPS - Substantive Policy Statement -** **_Regulates_** **Unlicensed Assistants.** Chap 15

Question 331

What must "**real estate teams" include in all marketing**?

Answer 331

**Real Estate Company Name** (Real Estate Team Marketing)- Must be included in all **marketing of the "Real Estate Teams"** Chap 15

Question 332

This fund protects against: 1. **Performance Acts, Fraud or Misrepresentation**. 2. **_Lawsuit:_** Must be **filed _within_ _5 years_** 3. **_Commissioner Notified:_** in **_45 days of action_** 4. Max per **_Cause:_** $30,000/**_Agent:_** $90,000 5. **_License Terminated_** until paid back w/ interest.

Answer 332

**_Real Estate_ _Recovery Fund_ (5yr Lawsuit/45dy Notice/C30k/A90K)** - 1. **Performance Acts, Fraud or Misrepresentation**. 2. **_Lawsuit:_** Must be **filed _within_ _5 years_** 3. **_Commissioner Notified:_** in **_45 days of action_** 4. Max per **_Cause:_** $30,000/**_Agent:_** $90,000 5. **_License Terminated_** until paid back w/ interest. Chap 15

Question 333

Recovery Fund Fees - **_Originating License:_** * Broker $\_\_ / Agent $\_\_ **_Renewing License (Dips under $600K by 6/30):_** * Broker $\_\_ / Agent $\_\_

Answer 333

**Recovery Fund Fees** **(under 600K by 6/30 Renew)** - **_Originating License:_** * Broker $20 / Agent $10 **_Renewing License (Dips under $600K by 6/30):_** * Broker $20 / Agent $10 Chap 15

Question 334

**Statement of important facts relating to subdivision** which allows purchaser to make decision on property. 1. Name/Address (Owner/Subdivider) 2. **Condition** of **_Title/Liens_** and **Conditions/Terms** of **_Sale_** 3. **Map** of **Subdivision** / **Restrictive Covenants** 4. **\*\*\*Permanent Access\*\*\* to site/parcels** 5. **If AMA - Certificate of Assured Water Supply (ADWR)**

Answer 334

**Public Report (Subdivison Disclosure) -** **Statement of important facts relating to subdivision** which allows purchaser to **make decision** on property. **(Buyer Receipt Kept- 5 years)** 1. Name/Address (Owner/Subdivider) 2. **Condition** of **_Title/Liens_** and **Conditions/Terms** of Sale 3. **Map** of **Subdivision** / **Restrictive Covenants** 4. **\*\*\*Permanent Access\*\*\* to site/parcels** 5. **If AMA - Certificate of Assured Water Supply (ADWR)** Chap 16

Question 335

**If Amended Public Report** issued as per Commissioner, **buyer has __ days** to review or cancel.

Answer 335

**Amended Public Reports - 10 days review** As per Commissioner, buyer has **_10 days_** to review or cancel. Chap 16

Question 336

Pertaining to Public Report, what are these? 1. **_One Buyer_****-** *_Bulk Sale_* or *_Leases_* 6 or-more lots 2. **_160 acres or more_** - Sale/Lease 3. **_Commercial/Industrial Zoned_** - Sale/Lease 4. **_Subsequent Owner Exempt_** - ***Report in past 5 years*** can use if accurate public report.

Answer 336

**_Exemptions_ to _Pubic Report_ - (1byr Bulk/Lease 6+/160+/Commercial)** 1. **_One Buyer_****-** *_Bulk Sale_* or *_Leases_* 6 or-more lots 2. **_160 acres or more_** - Sale/Lease 3. **_Commercial/Industrial Zoned_** - Sale/Lease 4. **_Subsequent Owner Exempt_** - ***Report in past 5 years*** can use if accurate public report. Chap 16

Question 337

**Lot Reservations** - 1. **_Max $ deposits_** - (in escrow) per lot 2. **_Public Report Delivered_** - **\_\_ days** of issuance to buyer. 3. **_Termination Lot Reserve_** - **\_\_ bus** days of _buyer's receipt_ of _Public Report_ (unless Purchase Contract Signed) 4. **_Cancel Lot Reserve_** - Buyer may cancel prior to Purchase Contract

Answer 337

**Lot Reservations** - **_($5000/15dy Rpt Delivery/7dys to Lot End)_** 1. **_Max $5,000 deposits_** - (in escrow) per lot. 2. **_Public Report Delivered_** - **_15 days of issuance_** to buyer. 3. **_Termination Lot Reserve**_ - _**7 business days_ of _buyer's receipt_** **of _Public Report_** (unless Purchase Contract Signed) 4. **_Cancel Lot Reserve_** - Buyer may cancel prior to Purchase Contract Chap 16

Question 338

**Concerning public reports** in a sales contract. **What are rights of purchaser?**

Answer 338

**_Public Report (Sale Contract):_** **_No Approval/Not Provided:_ (Void/3yr Legal Action)** **Purchaser may _void sale**_ and has _**3 years to take legal action_.** Chap 16

Question 339

**_Property divided:_** 6 or more lots; **36-159 acres each**.

Answer 339

**Unsubdivided Lands -** **_Property divided:_** 6 or more lots; **36-159 acres each**. Chap 16

Question 340

Ochestrationg scheme to circumvent subdivision laws is illegal. Example: Land split into 5 lots, One buyer buys one lot and splits into 2.

Answer 340

**Lot Splits** - (Effective for 10 years) Ochestrationg scheme to circumvent subdivision laws is illegal. **_Example:_** Land split into 5 lots, One buyer buys one lot and splits into 2. Chap 16

Question 341

What disclosure does this refer to? **_Improved/Unimproved Property_** - in unincorporated area of county (not subdivided). 1. **_Requires Disclosure:_** _Water Availability_, _sewer/septic_, _legal access_, _easements_, etc. 2. **_Deliver to Buyer_**: ***_7 days prior to close_***. Buyer 5 days to recind.

Answer 341

**_Unimproved Land/Affidavit of Disclosure:_ _Record w/Deed_ (7dy Rpt Delivery/5dy Recind) -** **_\*\*\*Improved/Unimproved Property\*\*\*_** - in _unincorporated area of county_ (not subdivided). 1. **_Requires Disclosure:_** ***_water availability***_, _***sewer/septic***_, _***legal access***_, _***easements_***, etc. 2. **_Deliver to Buyer_**: ***_7 days prior to close_***. Buyer *can _recind in_ _5 days._* *Chap 16*

Question 342

When are **Timeshare Public Reports** required?

Answer 342

**Timeshare Public Report -** Required for **12 or more** timeshare estates. Chap 16

Question 343

What type of report has these requiremens? 1. **_Name/Address_** - (Owner/Developer) 2. **_Timeshare Program_** - ***_Comprehensive Stmt_*.** 3. **_Legal Description/Location_** of Land 4. **_Statement of Assurance_ -** *_Improvement Installs_* (Offsite included).

Answer 343

**Timeshare _Pubic Report_ Requirements** - 1. **_Name/Address_** - (Owner/Developer) 2. **_Timeshare Program_** - _***Comprehensive Stmt***._ 3. **_Legal Description/Location_** of Land 4. **_Statement of Assurance_ -** *_Improvement Installs_* (Offsite included). Chap 16

Question 344

**Timeshare Purchase -** May **recind offer in __ days** without cause.

Answer 344

**Timeshare Purchase (Recind 7 days w/o Cause) -** May **recind offer in 7 days** without cause. Chap 16

Question 345

If **Timeshare Public Report** **_not issued/delivered_** to buyer. **Legal Action** to void sale must be done in **\_\_ years.**

Answer 345

**Timeshare Public Report _not issued/delivered_** - **Sale Voidable. Legal Action** **3yrs** to void sale**.** Chap 16

Question 346

What are these "general requirements" for? 1. **\*\*\*Licensee Disclosure Questionaire\*\*\*** 2. **_Fingerprints_, Social Security Number** 3. **Filing Business/Residence _Addresses_** 4. **_Commissioner (10 days Notify):_** 1. **_Misdeanor/Felony_** 2. **_Real Esate Civil Suits_** - Judgments 3. **_Professional License_** - Restrictions/Suspensions/Revocations A

Answer 346

**License "General Requirements"** - 1. **\*\*\*****_Licensee Disclosure Questionaire_****\*\*\*** 2. **_Fingerprints_, Social Security Number** 3. **Filing Business/Residence _Addresses_** 4. **_Commissioner (10 days Notify):_** 1. **_Misdeanor/Felony_** 2. **_Real Esate Civil Suits_** - Judgments 3. **_Professional License_** - Restrictions/Suspensions/Revocations Chap 16

Question 347

When "renewing license" what must happen if untimely renewal?

Answer 347

**Late Renewal of License -** **Late Penalty Fee** required. **(12 month grace period)** Chap 16

Question 348

When an **agent wants to sever with** their **employing broker**, what must they do?

Answer 348

**Administrative Severance (Dept of RE) -** When an **agent wants to sever with their employing** broker, the can process it with the **Admin Severance.** Chap 16

Question 349

Licensed Agent **advertising own property** must disclose?

Answer 349

**Owner-Agent** - Licensed Agent **advertising own property must** disclose that he/she is agent. Chap 16

Question 350

**On web pages** how should **broker name appear**?

Answer 350

**Web Pages -** **Broker Name** should appear on **"top of every page."** Chap 16

Question 351

These are provisons of what? 1. Licensee **"shall not"** _describe_ **premium offered** at ***_no cost*_ or _*reduced cost_*** as an "award/prize" or use similar term. 2. **_Terms/Cost/Conditions/Restrictions/Expire Date_** of "premium offer" shall be clearly disclosed "in writing" before offeree may participate in offer. 3. **_Licensee "may not" solicit/sell/offer to sell interest_** **_in development_**: as lottery or game of chance, drawing, contest to "influence purchaser." 1.

Answer 351

**Promotional Activities** - 1. Licensee **"shall not"** describe "**_premium offer_" (sales promotion)** at ***_no cost_* or *_reduced cost_*** as an "award/prize" or use similar term. 2. **_Terms/Cost/Conditions/Restrictions/Expire Date_** of "**_premium offer_**" shall be clearly disclosed "in writing" before offeree may participate in offer. 3. **_Licensee "may not" solicit/sell/offer to sell 'interest_** **_**_i_**n development_**': as lottery or game of chance, drawing, contest to "influence purchaser." Chap 16

Question 352

What **entities** are able to **apply for approval**: Conduct Lottery, Game of Chance, Contest Drawing

Answer 352

**_Subdivider_/_Timeshare_ Developer/_Campground_ Memebership Operator may apply for:** Approval of: **Conduct Lottery, Game of Chance, Contest, or Drawing.** Chap 16

Question 353

Real Estate Broker shall **_disclose**_ to all parties "_**in writing before closing**_" all _**employing brokers who will receive compensation_** from transaction.

Answer 353

**_Compensation Sharing Disclosure_** - Real Estate Broker shall **_disclose**_ to all parties "_**in writing before closing**_" all _**employing brokers who will receive compensation_** from transaction. Chap 16

Question 354

This concerns what part of transactions 1. **_During listings_**: All offers must be submitted 2. **_Upon Permission_**: Agent may disclose existence and terms of all additional offers on property. 3. **_Prior to Closing_**: Submit all Offers 4. **_Volutarily Submit Offers_**: Dispite limitations in Listing

Answer 354

**Offers Requirements:** 1. **_During listings_**: All offers must be submitted 2. **_Upon Permission_**: Agent may disclose existence and terms of all additional offers on property. 3. **_Prior to Closing_**: Submit all Offers 4. **_Volutarily Submit Offers_**: Dispite limitations in Listing. Chap 16

Question 355

This is part of what type of conduct? 1. **_To Clients:_** Fiduciary duties and protect interest. 2. **_Material/Adverse affects to money paid by_**: 1. **_Seller/Buyer and Lessor/Lessee_**: unable to perform 2. **_Material Defects_** 3. **_Liens/Encumbrance_**: on property being transferred. 1. **_Area Disclosures_**: 1. Public/Private/Military Airport 2. Ancillary Military Facility 3. Military Training Route 2. **_Expeditiously Perform_**: All Acts 3. **_Controversy_**: _shall not_ impeded transaction 4. **_Prospective Interest/Conflict_**: 1. **Agent principal in contract** 2. Buyer/Seller member of **Agent's Family** 3. Buyer/Seller **relation to Broker** 4. Agent or Fam Memeber - **Financial Interest** 5. **_Dual Compensation_** - Written Consent needed.

Answer 355

**Professional Conduct (Duites to Client) -** 1. **_To Clients:_** Fiduciary duties and protect interest. 2. **_Material/Adverse affects to money paid by_**: 1. **_Seller/Buyer and Lessor/Lessee_**: unable to perform 2. **_Material Defects_** 3. **_Liens/Encumbrance_**: on property being transferred. 1. **_Area Disclosures_**: 1. Public/Private/Military Airport 2. Ancillary Military Facility 3. Military Training Route 2. **_Expeditiously Perform_**: All Acts 3. **_Controversy_**: _shall not_ impeded transaction 4. **_Prospective Interest/Conflict_**: 1. **Agent principal in contract** 2. Buyer/Seller member of **Agent's Family** 3. Buyer/Seller **relation to Broker** 4. Agent or Fam Memeber - **Financial Interest** 5. **_Dual Compensation_** - Written Consent needed. Chap 16

Question 356

When **client hires an agent** that has **lack of experience to do something**. What needs to be done?

Answer 356

**Lack of Experience Disclosure** - If Agent is hired to complete a task **out of the scope of this expertise**. **He must disclose this in writing first.** Chap 16

Question 357

If you cannot get a hold of representing **Broker/Agent within 24 hours**. What can seller do?

Answer 357

**_Seller (Principal) Waive Right in Writing_** - **May waive right in writing**, if broker/agent **not available n 24 hours.** Chap 16

Question 358

What is this reasonable control over? 1. **_Establishes and Enforces_**: 1. _Written Polices_; 2. _Rules_; 3. _Procedures_; and 4. _Systems_. 2. **_Governs:_** _Activities of employed_ Agents/Brokers

Answer 358

**Broker Supervision and Control** - 1. **_Establishes and Enforces_**: 1. _Written Polices_; 2. _Rules_; 3. _Procedures_; and 4. _Systems_. 2. **_Governs_**: _Activities of employed_ Agents/Brokers Chap 16

Question 359

Three types of Voluntary Liens are?

Answer 359

**Voluntary Liens -** **Mortgages, Trust Deeds, Agreements of Sale** Chap 17

Question 360

**Pledge of real estate property as security** without giving possession of property to lender?

Answer 360

**Hypothecation -** **Pledge of real estate property as security** without giving possession of property to lender. Chap 16

Question 361

**Serves as evidence of debt.** A **promise to repay** the debt.

Answer 361

**Promissory Note -** **Serves as evidence of debt.** A **promise to repay** the debt. Chap 17

Question 362

Secures note with **real property as collateral in judicial type note.**

Answer 362

**Mortgage -** Secures note with **real property as collateral.** **_Mortgagor_** - Borrower Gives **_Mortgagee_** - Lender Recieves Chap 17

Question 363

What is **"pay-off"** called?

Answer 363

**Defeasance -** Same as Pay-Off. Chap 17

Question 364

**In a mortgage**, what is **"pay-off"** called?

Answer 364

**Satisfaction of Mortgage** - **Lender** required to **deliver pay-off in 30 days.** Chap 17

Question 365

Type of Foreclosure? 1. **_Equity of Redemption_** - *_Before Sale, Until Sale_* 2. **_Lis Pendens_** - Litigation pending (lawsuit) 3. **_Court Action_** - takes place 4. **_Sheriff's Sale_** - Highest Bidder gets "***_Sheriff's Cert of Sale_***" 5. **_Statutory Right of Redemption_****- 6 mos** 6. **_Sheriff's Deed_ -** If no redemption

Answer 365

**_Mortgage (Judicial Foreclose) 6 mos Stat Right of Redeem after Sale_ -** 1. **_Equity of Redemption_** - *_Before Sale, Until Sale_* 2. **_Lis Pendens_** - Litigation pending (lawsuit) 3. **_Court Action_** - takes place 4. **_Sheriff's Sale_** - Highest Bidder gets "***_Sheriff's Cert of Sale_**"* 5. **_Statutory Right of Redemption_****- 6 mos** 6. **_Sheriff's Deed_ - After Redeem Period,** If no redemption Chap 17

Question 366

**Excess Funds** belongs to foreclosed borrower.

Answer 366

**Excess Money Bid -** **Excess Funds** belongs to foreclosed borrower. Chap 17

Question 367

Foreclosure costs paid from "Excess Money Bid." and **paid when**?

Answer 367

**Foreclosure costs paid** from "***_Excess Money Bid_**.*" and paid **"after property taxes."** Chap 17

Question 368

Secures note with property as collateral, with a non-judicial type note?

Answer 368

**Trust Deed -** Secures note with property as collateral _**Trustor** -_ **_Borrower_** / _**Beneficiary** - Lender_ **_Trustee_** **_(Third Party):_** ***Acts behalf of Beneficiary*** 1. Acts when **_Trust Deed Paid-Off/Default_**, as per _written instructions_ from Beneficiary. **_Deed of Reconveyance (Pay-Off)_** - Beneficiary **instructs Trustee** to send in **30 days of payoff.** Chap 17

Question 369

Beneficiary instructs Trustee to send in, 30 days of payoff of a Trust Deed.

Answer 369

**_Deed of Reconveyance (Pay-Off) / Trust Deeds_** - Beneficiary instructs Trustee to send in 30 days of payoff of a Trust Deed. Chap 17

Question 370

What type of foreclosure? 1. **_Notice of Default/Trustee's Sale_** - Recorded and sent to Trustor and anyone requesting 2. **_Right of Reinstatement (90 days)_** - Trustor/Borrower may payback cost and penalties. 3. **_Trustee's Sale (Final!)_** - *_Trustee's Deed_* to highest bidder. 4. **_No Deficiency Judgements after sale_** - If property 2 **1/2 acres or less** (Single Fam Res).

Answer 370

**_Trust Deed D_****_efault (Non-Judicial)_ - _90dy Reinstate then Trustee's Sale Final_** 1. **_Notice of Default /Trustee's Sale_** - Recorded and sent to Trustor and anyone requesting. 2. **_Right of Reinstatement (90 days)_** - Trustor/Borrower may payback cost/penalties. 3. **_Trustee's Sale (Final!)_** - ***_Trustee's Deed_*** to bidder. 4. **_No Deficiency Judgements after sale_** - If property **2 1/2 acres or less** (Single Fam Res). Chap 17

Question 371

**Sale of Property/Financing Instrument all in one**. Deed not delivered at closing, must pay-off first.

Answer 371

**Agreement for Sale** **/ Land Contract /** **Contract for Deed /** **Vendor's Lien** **/ Contract for Sale of RE -** ***_Sale of Property/Financing Instrument_*** all in one. Deed not delivered at closing, must pay-off first. **Vendor -** Seller **/ Vendee -** Buyer **_Contract_ -** Recorded at Closing; shows ownership Chap 17

Question 372

**_The mortgage/trust_** deed does **_not convey_ any ownership to lender. _Arizona supports this theory._**

Answer 372

**_Lien Theory_** - **_The mortgage/trust_** deed does **_not convey_ any ownership to lender. _Arizona supports this theory._** Chap 17

Question 373

**Legal title** is **conveyed** **to** the **lender.**

Answer 373

**Title Theory -** **_Legal_** **_title_ is conveyed to the lender. (Not used in AZ)** Chap 17

Question 374

**Judgement** _obtained by lender_ when foreclosure **_sale brings less than amount owed_**. **_Arizona Prohibits Deficiency Judgment for:_** 1. **_2.5 acres or less_** and **SFR or 2-Family Residence** 2. If married couple quit claims **spouse** out, **still liable for judgement.**

Answer 374

**Deficiency Judgment -** **Judgement** _obtained by lender_ when foreclosure **_sale brings less than amount owed_**. **_Arizona Prohibits Deficiency Judgment for:_** 1. **_2.5 acres or less_** and **SFR or 2-Family Residence** 2. If married couple quit claims **spouse** out, **still liable for judgement.** Chap 17

Question 375

Instead of going through foreclosure, **the borrower _gives lender property_**, for **_cancellation of debt_**.

Answer 375

**Deed in Lieu of Foreclosure -** Instead of going through foreclosure, **the borrower _gives lender property_,** for **_cancellation of debt_.** Chap 17

Question 376

What does a **Junior Lien holder** do **to get paid** in a foreclosure?

Answer 376

**Junior Lien** holder **has right to cure prior lien defaults** and **then foreclose the junior lien**. Chap 17

Question 377

What happens when Junior Lien is foreclosed?

Answer 377

**_If Junior Lien is foreclosed_** - **Property given to highest bidder** but **subject to higher priority liens**. Chap 17

Question 378

**Sale** in which the **_loan balance is higher_ than _property's value**_ and _**lender_ agrees to _accepts a reduced (short) payoff_.**

Answer 378

**_Short Sale (Loan Higher than Value)_ -** **Sale** in which the **_loan balance is higher_ than property's value** and **_lender_ agrees to _accept a reduced (short) payoff._** Chap 17

Question 379

Property **acquired through foreclosure auction** _by lender._

Answer 379

**Bank Owned Property (REO Real Estate Owned)** - Property **acquired through foreclosure auction** _by lender_. Chap 17

Question 380

**Lender** agrees to **delay foreclosure.**

Answer 380

**Forebearance -** **Lender** agrees to **delay foreclosure.** Chap 17

Question 381

**_Licensed Contractors (_****_not_** **_req'd improvements)_** **-** Properties "**_intended to be owner-occupied**_" and "_**not sold**_" or "_**leased_**." **_Licensed Contractors (required improvements)_** - Properties offered to be "**_sold/leased_**" within one year of completion or "certificate of occupancy" issued. Improvements $1,000 plus.

Answer 381

**Fix and Flips** - **_Licensed Contractors (_****_not_** **_req'd improvements)_** **-** Properties "**_intended to be owner-occupied**_" and "_**not sold**_" or "_**leased_**." **_Licensed Contractors (required improvements)_** - Properties offered to be "**_sold/leased_**" within one year of completion or "certificate of occupancy" issued. Improvements $1,000 plus. Chap 17

Question 382

**Claim against property** to secure debt, **money encumbrance.**

Answer 382

**Lien** - _**Claim against property** **to secure debt**_, **money encumbrance.** Chap 18

Question 383

What type of assessed value is this for? 1. **_FCV Determined:_** **_*Start of Year* (for next year)**_. _***To Owner* *by mail*_**. 2. ***_FCV High (Appeal)_:*** to ***_Assessor_*;** then ***_State Board of Equalization (SBOE)***_; and then _***Tax Court._*** 3. **_New Construct / Supplemental Notice:_** - In **September** to owner. **25 days to appeal to (SBOE)**. May be revalue as "partial complete."

Answer 383

**Full Cash Value -** 1. **_FCV Determined:_** ***_Start of Year_*** **_(for next year)**_. _***To Owner by mail*_**. 2. ***_FCV High (Appeal)_:*** to ***_Assessor_*;** then ***_State Board of Equalization (SBOE)***_; and then _***Tax Court._*** 3. **_New Construct / Supplemental Notice:_** - **September** to owner. **25 days to appeal to (SBOE)**. May be revalue as "partial complete." Chap 18

Question 384

All **_real property taxes_** are calculated **based on the (LPV) - Limited Prop Value.** _**Cannot exceed FCV (Mkt Value)**._ Limited to **_5% previous year's LPV_.**

Answer 384

**LPV - Limited Property Value -** All **_real property taxes_** are _calculated_ **based on the LPV. _Cannot exceed FCV (Mkt Value).**_ Limited to _**5% previous year's LPV_.** * Limited Property Value * x _Assessed Value **Ratio**_ * = **Assessed Value** * * Assessed Value * x _Tax Rate_ * = **Real Property Taxes** Chap 18

Question 385

What are these called? * **18%** - Commercial **(Class 1)** * **15%** - Vacant Land **(Clase 2)** * **10%** - Owner-Occ Residential **(Class 3)** * **10%** - Residential- Income Property **(Class 4)** * **_Residential Rental Property Registration Form_** - must be filed with County Assessor for **(Class 4)** **_Example_**: ***Owner-Occupied Res*** with tax rate of $18 per $100 of assessed value (180 mills) * $100,000 Limited Property Value * _x .10__Assessed Value Ratio_ * 10,000 Assessed Value * _x .18__Tax Rate_ * 1,800 Taxes

Answer 385

**Assessed Value Ratio -** * **18%** - Commercial **(Class 1)** * **15%** - Vacant Land **(Clase 2)** * **10%** - Owner-Occ Residential **(Class 3)** * **10%** - Residential- Income Property **(Class 4)** * **_Residential Income Property Registration Form_** - must be filed with County Assessor for **(Class 4)** **_Example_**: ***Owner-Occupied Res*** with tax rate of $18 per $100 of assessed value (180 mills) * $100,000 Limited Property Value * _x .10__Assessed Value Ratio (Res Tax Rate)_ * 10,000 Assessed Value * _x .18__Tax Rate_ * 1,800 Taxes Chap 18

Question 386

**1st half of taxes (Jan-June)** are **due** and **deliquent** when?

Answer 386

**_Taxes_****_Due_****_Late_** **1st half (Jan-June) Oct 1 Nov 1** 2nd half (July-Dec) Mar 1 May 1 (next year) **_Hint_**: Owe No More Money Chap 18

Question 387

**2nd Half Taxes (July-Dec)** are **due** and **deliquent when?**

Answer 387

**_Taxes_****_Due_****_Late_** 1st half (Jan-June) Oct 1 Nov 1 **2nd half (July-Dec) Mar 1 May 1 (next year)** **_Hint:_** **Owe No More Money** Chap 18

Question 388

What type of foreclosure? 1. **_Deliquent Tax_: 16% interest per annum** 2. **_Treasurer's Sale_: Highest bidder** issued **"*_Certificate of Purchase (Tax)_*."** (Auction live or online) 3. **_3-Year Redemption_: Pay amount due plus interest** 4. **_No-Redemption Process:_** 1. **_Owner Notified_**: by **Cert-Mail 30 days** b4 Action. 2. **_Treasurer's Deed_:** At Judicial Foreclosure Action 3. **_Within 10 Years:_** Accrue interest, then foreclosure action within that period.

Answer 388

**Deliquent Tax Lien Sale Foreclosure (Treasurer Sale, then 3yr Redeem):** 1. **_Deliquent Tax_: 16% interest per annum** 2. **_Treasurer's Sale_: Highest bidder** issued **"*_Certificate of Purchase (Tax)_*."** (Auction live or online) 3. **_3-Year Redemption_: Pay amt due plus interest** 4. **_No-Redemption Process:_** 1. **_Owner Notified_**: by **Cert-Mail 30 days** b4 Action. 2. **_Treasurer's Deed_:** At Judicial Foreclosure Action 3. **_Within 10 Years:_** Accrue interest, then foreclosure action within that period. Chap 18

Question 389

**_Special taxing districts_** formed **to _finance_** **_(through bonds)_** "public infrastructure" in a planned community. **_Handles_**: 1. _Aquisition_, _Construction_, _Operation_, and _Maintenance_ of same. 2. Charged On: Property Tax Bill

Answer 389

**_CFD - Community Facilities District_** - **_Special taxing districts_** formed **to _finance_** **_(through bonds)_** "public infrastructure" in a planned community. **_Handles_**: 1. _Aquisition_, _Construction_, _Operation_, and _Maintenance_ of same.. 2. Charged On: Property Tax Bill Chap 17

Question 390

**Lien** against property for **public improvements** (Paving, Sewers, Sidewalks, etc) **_Note: Lien Priority_** 1. **Property Taxes - #1** 2. **Special Assessments - #2** 3. **Mechanic's Liens - by Start Work Date** 4. **HOA Assessment Liens**

Answer 390

**Special Assessments** - **Lien** against property for **public improvements** (Paving, Sewers, Sidewalks, etc) **_Note: Lien Priority_** 1. **Property Taxes - #1** 2. **Special Assessments - #2** 3. **Mechanic's Liens - by Start Work Date** 4. **HOA Assessment Liens** Chap 18

Question 391

**Lien for labor or materials** supplied to a property. **_Preliminary Lien Notice_** - _Contractors/Suppliers_ must **_notice to owner_** in **20 days of starting work.** **_Mechanic's Lien_** - _Record_ in **120 days of completion** of work. **_Foreclose_** - **6 months (180dys)** of recording Mechanics Lien

Answer 391

**Mechanic's Lien - Lien for labor/materials** supplied/ **_Forclose 180dys (6mos)_** **_Preliminary Lien Notice_** - _Contractors/Suppliers_ must **_noitce to owner_** in **20 days of starting work.** **_Mechanic's Lien_** - _Record_ in **120 days of completion** of work. **_Foreclose_** - **6 months (180dys)** of recording Mechanics Lien Chap 18

Question 392

**Lien Subordinate priority** to _first mortgage_, _deed of trust_ and _agreement of sale_ liens. **_Foreclosure (Judicial)_**: _**Not paid over 1 year**,_ must be **_$1200 or more due_**.

Answer 392

**HOA Assessment Liens** - **Lien Subordinate priority** to _first mortgage_, _deed of trust_ and _agreement of sale_ liens. **_Foreclosure (Judicial)**_: _**Not paid over 1 year**_, must be _**$1200 or more due_.** Chap 18

Question 393

What is a court ordered general lien?

Answer 393

**Judgements** - **Court ordered general lien**; **renewed every 10 years**. Levied by attachment (writ of execution). **_Revealed by_**: 1. Title Report 2. County Recorder's Records 3. Credit Reports Chap 18

Question 394

**Claims** placed by the **IRS/AZ government** for **nonpayment of income taxes** **"General Lien".** 1. Priority is established when recorded. 2. No special priority over other recorded liens.

Answer 394

**Income Tax Liens** - **Claims** placed by the **IRS/AZ government** for **nonpayment of income taxes "General Lien".** 1. **Priority** is established **when recorded**. 2. **No special priority** **over other recorded liens**. Chap 18

Question 395

Arizona Residential Landlord and Tenant Act **Who's Obligations**? 1. **_Tenant Must Receive_**: Signed lease, Move-In Form; Move-Out Inspection Notice (to be present) 2. **_Security Deposits_**: **1 1/2 months rent** max (prepaid rent and deposits included). 3. **_Cleaning/Redecorating Deposits_**: Refundable unless stated otherwise 4. **_Itemized Written Statement_**: **14 Days of Termination**; Tenant must receive for landlord to collect from deposits. 5. **_Landlord does not Comply_**: Subject to 2x security deposit for damages 6. **_Non-Refundable Fees_**: **Cleaning/Pet Fees** _above_ **security deposit**.

Answer 395

**Landlord Obligations -** 1. **_Tenant Must Receive_**: Signed lease, Move-In Form; Move-Out Inspection Notice (to be present) 2. **_Security Deposits_**: **1 1/2 months rent** max (prepaid rent and deposits included). 3. **_Cleaning/Redecorating Deposits_**: Refundable unless stated otherwise 4. **_Itemized Written Statement_**: **14 Days of Termination**; Tenant must receive for landlord to collect from deposits. 5. **_Landlord does not Comply_**: Subject to *2x security deposit* for damages 6. **_Non-Refundable Fees_**: **Cleaning/Pet Fees** _above_ **security deposit**. Chap 19

Question 396

What must Landlord Disclose?

Answer 396

**Landlord must Disclose** - 1. **Premise Manager** 2. **_Service of Process Person_**: Owner/Agent 3. **_Landlord Tenant Act_** (AZ Dept of Housing) Chap 19

Question 397

What must Landlord comply to provide?

Answer 397

**_Landlord must comply to provide_**: 1. **_Comply with_**: _health_,_safety_ and _building codes_ 2. **_Premises_**: _Fit_, _Habitable_ and _Safe_ 3. **_Mechanical Equipment_**: In Working Order 4. **_Trash:_** Receptable and Removal 5. **Hot/Cold Water** and **Heat/Air Conditioning** 6. **_Emergencies:_** Landlord give 2day Notice to Enter Chap 19

Question 398

What are tenant obligations?

Answer 398

**_Tenant Obligations_ -** **_Use Premises_:** Safe Manner/Keep Clean **_Use Mechanical Equip_**: Reasonable Care **_Neighbors Quiet Enjoyment_**: Dont Disturb **_Rules/Regulations_**: Follow and Obey **_Emergencies:_** Landlord give **2day Notice to Enter** Chap 19

Question 399

**If Landlord in non-compliance**, tenant may?

Answer 399

**Landlord Non-Compliance** - **_Tenant may deliver "notice to terminiate" lease by_**: **_5 Day Notice_** - Health/Safety Hot/Cold Heat/Air Breaches **_10 Day Notice_** - Other breaches. Chap 19

Question 400

**Self-Help for Minor Defects** may be done by the tenant. What is process?

Answer 400

**Self-Help for Minor Defects -** **_Landlord gets 5 days_ -** Health/Safety **_Tenant Cost ($300 or 1/2 Rent)_** - **_Which ever is higher_** in cost. Chap 19

Question 401

**_In a Periodic Tenancy (Month to Month)_** - **how does the landlord/tenant terminate lease?**

Answer 401

**Periodic Tenancy (Month to Month) -** Terminate by 30 day Notice **_Example:_** Landlord give notice on March 15th. Tenant will vacate on May 1st. Chap 19

Question 402

**Tenant fails to pay rent** and given written notice. How many days notice is it?

Answer 402

**Tenant fails to pay rent -** **Landlord** gives **5 Days Notice to pay rent.** Chap 19

Question 403

What tenant process is this? 1. **_Notice of Abandoment_** - _Certified Mail_ and Post _Notice on Door_ (5 days). 2. **_Hold Personal Property_** - _14 days_ and then apply to outstanding rent.

Answer 403

**Abandonment of Tenant** - 1. **_Notice of Abandoment_** - _Certified Mail_ and Post _Notice on Door_ (5 days). 2. **_Hold Personal Property_** - _14 days_ and then apply to outstanding rent. Chap 19

Question 404

When can a tenant terminate a lease without penalty?

Answer 404

**_Victim of Domestic Violence_** - Tenant may terminate lease without penalty. Chap 19

Question 405

Holding **tenant's personal property for back rent** (abolished in Arizona).

Answer 405

**Distraint** - Holding **tenant's personal property for back rent** (abolished in Arizona). Chap 19

Question 406

Landlord Tenant Act is enforce in what court system?

Answer 406

Landlord Tenant Act is enforced in **"civil courts."** Chap 19

Question 407

This applies to what? 1. **_Current Bedbug Infestation_** - Landlord may not enter into contract with tenant. 2. **_Bedbug Educational Material_** - Provide to tenants 3. **_Items with Bedbugs_** - Tenants shall not move in infested materials. 4. **_Presence of Bedbugs_** - Written/Electronic Notice 5. **_SFR_** - excluded from provisions.

Answer 407

**Bedbug Control** - 1. **_Current Bedbug Infestation_** - Landlord may not enter into contract with tenant. 2. **_Bedbug Educational Material_** - Provide to tenants 3. **_Items with Bedbugs_** - Tenants shall not move in infested materials. 4. **_Presence of Bedbugs_** - Written/Electronic Notice 5. **_SFR_** - excluded from provisions. Chap 19

Question 408

Aspect of real estate that deals with **_leasing**_, _**managing**_, _**marketing**_, and _**maintenance_** of property for others. **Broker (General Agent of Owner)**. Ficudiary duty to Owner.

Answer 408

**Property Management** - Aspect of real estate that deals with **_leasing**_, _**managing**_, _**marketing**_, and _**maintenance_** of property for others. **Broker: General Agent of Owner.** Ficudiary duty to Owner. Chap 19

Question 409

Who is concerned with getting **"highest net return"** **on owner's investment** and **protecting owner from foreseeable risk?**

Answer 409

**Property Manager** - Who is concerned with getting **"highest net return"** **on owner's investment** and **protecting owner from foreseeable risk.** Chap 19

Question 410

Duties for? * Collecting Rents Keeping Accounts * Leasing Units Filing Reports * Vacancies Buying Supplies * Advertising Remodeling * Hiring Employees **_Recommendations_**: Maintenance, Fire Insurance, Liability/Workmans Compensation Insurance

Answer 410

**Property Manager Duties -** * Collecting Rents Keeping Accounts * Leasing Units Filing Reports * Vacancies Buying Supplies * Advertising Remodeling * Hiring Employees **_Recommendations_**: Maintenance, Fire Insurance, Liability/Workmans Compensation Insurance Chap 19

Question 411

What type of Agreements shall have: 1. **_Terms/Conditions:_** Firm's Service, Obligations, Duties, Responsibilities to owner 2. **_Compensation:_** Terms/Conditions 3. **_Cancellation Provisions:_** Agreed by both parties 4. **_Monies Collected_**: Disposition 5. **_Status Reports:_** Frequency 6. **_Operating Reserve Monies_** - Purpose/Amounts 7. **_Trust Acct Interest:_** Disposition/Allocation

Answer 411

**Property Management Agreements:** 1. **_Terms/Conditions:_** Firm's Service, Obligations, Duties, Responsibilities to owner 2. **_Compensation:_** Terms/Conditions 3. **_Cancellation Provisions:_** Agreed by both parties 4. **_Monies Collected_**: Disposition 5. **_Status Reports:_** Frequency 6. **_Operating Reserve Monies_** - Purpose/Amounts 7. **_Trust Acct Interest:_** Disposition/Allocation Chap 19

Question 412

**Desginated at "trust accounts."** Only desginated broker, licensees, employees may sign checks **(owners may not sign checks).**

Answer 412

**Property Management Accounts:** **Desginated at "trust accounts."** Only desginated brokeer, licensees, employees may sign checks **(owners may not sign checks).** Chap 19

Question 413

What are **Property Management Record Keeping** timelines? Residential and Commercial

Answer 413

**Property Management Record Keeping -** **Residential:** * **Leases/Finder Fees - 1 year** * **Financial - 3 years** **Commercial:** * **All Records - 5 years** Chap 19

Question 414

**Terminated - Management Agreement** Timelines?

Answer 414

**Terminated Management Agreement -** * **Security Deposits:** 5 days * **Property Mgmt Accts:** 35 days * **Accounts Receivable/Payable:** 75 days * **Bank Account Reconciliation:** 75 days Chap 19

Question 415

**Finder Fees** are **paid to Tenants** how?

Answer 415

**Tenant Finders Fees** - Paid only as rent credit/reduction. Chap 19

Question 416

**Real Estate Development with real estate owned by association**, created to manage, maintain, improve property. **Separate parcel owners are mandatory members** and **pay** association **assessments**.

Answer 416

**Planned Community -** **Real Estate Development with real estate owned by association**, created to manage, maintain, improve property. **Separate parcel owners are mandatory members** and **pay** association **assessments.** Chap 19

Question 417

Documents needed for what? **_Within 10 Days_**: 1. **By-laws and Association Rules** 2. **Planned Community Declaration** 3. Contact of Association 4. **Association's Assessments** 5. **Reserve Money** Amounts 6. **Current Operating Budget/Annual Financial Rpt** 7. **Alterations/Improvements** that violate Com Dec 8. **Litigation Pending:** against Owner/HOA

Answer 417

**Resale of Units in Planned Community -** **_Within 10 Days_**: 1. **By-laws and Association Rules** 2. **Planned Community Declaration** 3. Contact of Association 4. **Association's Assessments** 5. **Reserve Money** Amounts 6. **Current Operating Budget/Annual Financial Rpt** 7. **Alterations/Improvements** that violate Com Dec 8. **Litigation Pending:** against Owner/HOA Chap 19

Question 418

**When FCV is too High**, who does Owner appeal to and in what order?

Answer 418

**_FCV High -Owner May Appeal to_**: 1. **Assessor** 2. **State Board of Equalization (SBOE); and then** 3. **Tax Court.** Chap 18

Question 419

For **New Constructions** assessed cash values, a "**_Supplemental Notice_**" is sent to owner in what month? An what is the **appeal process**?

Answer 419

**_New Construct Cash Value_** **_Supplemental Notice_**: Sent **_September_** to owner. **_Appeal_**: **In 25 days to (SBOE)**. May be revalue as "partial complete." Chap 18