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 -
4. Contract Preparation
5. Marketing Efforts
6. Advising on Price/Market Conditions
7. Meeting Deadlines
8. Disclosure of Material Facts/Defects
9. Loyalty - Client’s Interest First
10. Obedience - Unless prohibited by Law
11. Disclosure -
12. Conflicts of Interest
13. Other Offers
14. Material Defects
15. Agency Relationship Status
16. 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. Performance
2. Mutual Agreement
3. Expiration of Term
4. Revocation by Principal/Agent
5. Destruction of Property
6. Bankruptcy of Principal
7. Death/Incapicity of Principal/Broker

Hint: Potential Money Elimated, Reason Destroys Bank Deposit.

Answer 45

Ways to Terminate Ageny (7)

1. Performance
2. Mutual Agreement
3. Expiration of Term
4. Revocation by Principal/Agent
5. Destruction of Property
6. Bankruptcy 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

Commercial 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 represent 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
2. APR - Interest, discount pts, loan costs
3. Finance Charges
4. Owner-occupied: (1-4 units)
5. Institutional Lenders: Commercial Banks, Credit Unions, Investment/Insurance/Mortgage Companies - not Private Lenders
6. Advertising Trigger Terms - down/no/amount/period** of **payments, and finance charges - APR alone is okay.
7. 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
2. APR - Interest, discount pts, loan costs
3. Finance Charges
4. Owner-occupied: (1-4 units)
5. Institutional Lenders: Commercial Banks, Credit Unions, Investment/Insurance/Mortgage Companies - not Private Lenders
6. Advertising Trigger Terms - down/no/amount/period** of **payments, and finance charges - APR alone is okay.
7. 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:
4. Dismiss Charges
5. If Guilty may:
6. Award Damages
7. Attorney General - Send Findings
8. 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:
4. Dismiss Charges
5. If Guilty may:
6. Award Damages
7. Attorney General - Send Findings
8. 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. Demand - Desire
2. Utility - Marketability (unearned increment)
3. Scarcity - Supply
4. Transferability - 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?

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.

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.

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?

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 creates 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
7. 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 -

Pool 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. Promulgate: Commissioner’s Rules by pubic process.
   2. Audit: Licensees Books/Records
   3. Manage: AZ RE Dept - Daily Operations (hire/fire)
   4. Investigate: Written Complaints against Agents
5. Commissioner can “Subpeona Documents.”
6. 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
3. Cannot: “hold real estate license” after appointed
4. Duties (P A M I)
5. Promulgate: Commissioner’s Rules by pubic process.
6. Audit: Licensees Books/Records
7. Manage: AZ RE Dept - Daily Operations (hire/fire)
8. Investigate: Written Complaints against Agents
9. Commissioner can “Subpeona Documents.”
10. 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.

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):
5. Misdeanor/Felony
6. Real Esate Civil Suits - Judgments
7. 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):
5. Misdeanor/Felony
6. Real Esate Civil Suits - Judgments
7. 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:
3. Seller/Buyer and Lessor/Lessee: unable to perform
4. Material Defects
5. Liens/Encumbrance: on property being transferred.
6. Area Disclosures:
   
   1. Public/Private/Military Airport
   2. Ancillary Military Facility
   3. Military Training Route
7. Expeditiously Perform: All Acts
8. Controversy: shall not impeded transaction
9. 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
10. 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:
3. Seller/Buyer and Lessor/Lessee: unable to perform
4. Material Defects
5. Liens/Encumbrance: on property being transferred.
6. Area Disclosures:
   
   1. Public/Private/Military Airport
   2. Ancillary Military Facility
   3. Military Training Route
7. Expeditiously Perform: All Acts
8. Controversy: shall not impeded transaction
9. 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
10. 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 Default (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

TaxesDueLate

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

TaxesDueLate

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