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CA RE Principles > CA RE Principles > Flashcards

CA RE Principles Flashcards

1
Q

Governing body that both administers AND enforces the real estate license laws and related regulation of CA real estate licensees

A

DRE

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2
Q

Main purpose of the DRE

A

Protect the public

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3
Q

Statutory Authority for DRE

A

B&P Code

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4
Q

Regulates licensing and subdivisions in CA

A

Real Estate Law (Sections 10000 to 10580)

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5
Q

Governs situations where licensee was acting like a RE performing licensed acts

A

Section 10176

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6
Q

False statement of fact

A

Misrepresentation

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7
Q

False statement about what the promisor is going to do

A

False Promise

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8
Q

Failure to inform all principals that the license is acting as an agent for more than one party in the transaction

A

Dual Agency or Divided Agency

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9
Q

Broker mixes principal funds w/ broker’s own money

A

Commingling

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10
Q

Specified date req’d in writing on all exclusive listings

A

Definite termination date

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11
Q

Broker makes a low offer through a dummy purchaser and sells it to another buyer with a high offer

A

Secret profit

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12
Q

If the form is both an option and a listing, principal must be informed of ____and _ must be obtained before exercising the option

A

the amount of profit the licensee will make
written consent approving this amount

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13
Q

Catchall for performing a licensed act w/o a license

A

Dishonest dealing

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14
Q

Brokers must obtain a written _______________ to sell from a business owner before securing signature of a prospective purchaser to any agreement providing for compensation to the broker if the purchaser buys the business

A

Business Opportunities Authorization

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15
Q

Situations where licensee was not necessarily acting the capacity of an agent

A

Section 10177

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16
Q

3 Violations governed by Section 10177

A

Franchise Investment Law, Corporations Code, Securities Law

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17
Q

Regulates the sale and lease of subdivided land

A

Subdivided Lands Law (Section 11000 to 11200)

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18
Q

Revenue for operation is derived from RE license fees, subdivision public reports, and various other permits goes into ________

A

RE General Fund

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19
Q

RE General Fund Reimbursement Process

A

Within 15 days: DRE will notify of any deficiencies

Within 90 days: DRE will pay, compromise or deny claim

If denied, within 6 mths: applicant can refile w/ court that rendered judgment

If payment made, debtor license is suspended until amount is paid back plus interest

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19
Q

Eligibility for RE General Fund Payment (4)

A

Must be intentional fraud or conversion of trust funds

Licensee must be properly licensed and performing licensed acts

Apply within 1 yr of final judgment or order

All reasonable efforts to satisfy judgment from all liable parties

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20
Q

Max amount of disbursement of RE General Fund

A

$50k per transaction,

$250k total series of judgments for individual licensees

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21
Q

RE Commissioner Eligibility

A

Min 5 yrs as CA broker/ 5 yrs of RE activity in CA during the last 10 years

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22
Q

RE Commissioner appointed by ____ and salary is paid by _____

A

CA Governor; State Treasury

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23
Q

RE Commissioner responsibility

A

Enforce RE and Subdivided Lands laws for max protection for RE consumers dealing with licensees and purchases of subdivided real property

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24
Q

Ad/info is NOT considered real estate if one of the condition applies (3)

A

i. Involves a service not directed to any customer in CA, general info about services offered to public, AND has: “The services referred to herein are not available to persons located within the State of California.”

ii. Does not involve a service in connection for which a real estate license is required

iii. Not being published, circulated, or transmitted on behalf of another persons

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25
Q

RE ad does not require license if any of the following apply (4)

A

Person publishing info is exempt from licensing requirements

Services do not require license

Direct comm w/ specific customer with policies and procedures in place to ensure they understand they are not acting in RE capacity

RE broker must state so on all ads/info clearly

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26
Q

Parties that DO NOT need to be licensed as real estate salespersons or brokers (BBLP CCCAF RV)

A

(B)ank and (B)roker employees
(L)ending instution employees
(P)ersonal property brokers

(C)emetery authorities
(C)ollectors of loans secured with RE
(C)lerical help
(A)gricultural associations
(F)ederally insured lenders

(R)esident managers
(V)acation rental agents

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27
Q

Only unlicensed person that may solicit for the sale of real property

A

Owner and/or his legal representatives

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28
Q

RE License Renewal Requirement

A

No Exams

Fee

45hrs CER

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29
Q

Broker Process after expired license

A

Activate license again, Salesperson Change application for each SP, Branch Office application

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30
Q

Change in address, employer, criminal history, or license history after license application

A

Amended supplement stating info with commissioner

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31
Q

SP License Expiration

A

4 years

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32
Q

SP License eligibility (4)

A

18 yrs old, exam, SSN/ITIN, honesty

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33
Q

Docs required for SP license (FALFT)

A

application,
license fee,
fingerprint card,
fingerprint processing fee, transcript for courses

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34
Q

Exam details (time, questions, passing)

A

3h15min, 150 ?’s, 70%+

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35
Q

Prohibits discrimination in housing based on RACE (selling, renting, inheriting, and conveying)

A

Civil Rights Act of 1866

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36
Q

Prevent discrimination financed by FHA and VA loans (federal funding)

A

Executive Order 11063

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37
Q

Prohibits discrimination in housing based on race, color, religion, or national origin

A

Civil Rights Act of 1968 Title VIII (Fair Housing Act

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38
Q

LGBT protection (only in federally supported housing programs)

A

New Fair Housing Regulation

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39
Q

Anti-discrimination and consumer protection laws enacted in the mortgage financing field to promote equal opportunity in housing

A

Fair Financing Laws

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40
Q

Requires lenders to be fair and impartial in determining who qualifies for a loan

A

Equal Credit Opportunity Act (ECOA)

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41
Q

Requires lenders involved with federally guaranteed or insured loans to exercise impartiality and non-discrimination in the geographical distribution of their loan portfolio (redlining)

A

Home Mortgage Disclosure Act

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42
Q

Practice of directly or indirectly channeling customers toward or away from homes and neighborhoods

A

Steering

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43
Q

Practice of inducing owners in an area to sell or rent to avoid an impending change in the ethnic or social makeup of the neighborhood that will cause values to go down

A

Blockbusting

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44
Q

Residential financing practice of refusing to make loans on properties in a certain neighborhood regardless of a mortgagor’s qualifications

A

Redlining

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45
Q

Fair Housing Act Exemptions (4)

A

Privately owned single-family home where no broker is used and no discriminatory advertising is used

Rental of an apt in a 1-to-4 unit building where the owner is also an occupant provided no discriminatory advertising

Facilities owned by private clubs and leased non-commercially to members

Facilities owned by religious organizations and leased non-commercially to members, provided membership requirements are not discriminatory

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46
Q

Age & Family Status Discrimination Exemptions (5)

A

In government-designated retirement housing

In a retirement community if all residents are 62 years of age or older

In a retirement community if 80% of the dwellings have one person who is 55 years of age or older, provided there are amenities for elderly residents

In residential dwellings of two to four units if one of the units is occupied by the owner

In single family houses if sold or rented by owners who have no more than three houses

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47
Q

2 options for discriminated persons (and timeframes)

A

File a complaint with Office of Fair Housing and Equal Opportunity (OFHEO) within HUD within 1 yr

File a suit within 2 yr

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48
Q

Professional Relationship Standards (4)

A

Forgo pursuit of unfair advantage

Arbitrate rather than litigate disputes

Respect the agency relationships of others

Conform to accepted standards of co-brokerage practices.

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49
Q

5 main articles of REALTOR Code of Ethics

A

Article 1: Protecting the best interests of the client

Article 2: Disclosure of pertinent facts

Article 9: Get it in writing

Article 12: Truth in advertising

Article 16: Respecting another agency relationship

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50
Q

Economic Characteristics of Land (DUSTS)

A

Demand
Utility
Scarcity
Transferability
Situs

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51
Q

Physical Characteristics of Land (3)

A

Immobile
Indestructible
Nonhomogeneous

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52
Q

Building Codes Goal

A

Safeguard health and safety of the public

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53
Q

Right of gov’t to take private property for public use with just compensation paid to owner

A

Eminent Domain

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54
Q

Parts Required for Eminent Domain

A
  1. The property owner must be paid compensation for the property.
  2. The property must be for the public good or use.
  3. The owner must have due process in the courts system.
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55
Q

Process by which property is acquired through eminent domain if owner/gov’t can’t come to an agreement

A

Condemnation

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56
Q

Two types of Taxes

A

Special Assessment

General (Ad Volorem)

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57
Q

3 Types of Special Assessment Taxes

A

HOA Fees, CC&R’s, Local City Fees for Special Assessment Districts (SAD’s)

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58
Q

2 Types of Riparian Rights

A

Navigable rivers: own water edge
Non-navigable rivers: own land to center of stream

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59
Q

Littoral Rights (what are they and what do owners own?)

A

Seashore/Beaches
Owns to average high water mark

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60
Q

State gov’t can give permission to nonadjacent land owner for crop irrigation

A

Doctrine of Prior Appropriation

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61
Q

Increase of land created by deposits of soil

A

Accretion

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62
Q

Decrease of land by gradual wearing away

A

Erosion

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63
Q

Sudden loss of land by an act of nature

A

Avulsion

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64
Q

Increase in land due to receding water

A

Reliction

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65
Q

Delta area where soil deposits from river

A

Alluvial Plain or Alluvion

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66
Q

Describes condo air space ownership

A

Horizontal Property Act

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67
Q

Type of Estate: “I own the property”, no definite end date

A

Freehold Estate

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68
Q

Types of Freehold Estates (3)

A

Fee simple absolute
Fee simple defeasible
Life Estate

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69
Q

Owns the bundle of rights (Highest degree of ownership, Has unlimited duration, Is inheritable, Is subject to only the government powers)

A

Fee Simple Absolute

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70
Q

Estate based on an occurrence or non-occurrence of a specified event

A

Fee Simple Defeasible

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71
Q

3 Types of Voluntary Life Estates

A

Estate in Reversion
Estate in remainder
Pur Autre Vie

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72
Q

Grantor -> Life Tenant -> Death of Tenant -> Grantor

A

Estate in Reversion

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73
Q

Grantor -> Life tenant -> Death of tenant-> Remainderman

A

Estate in Remainder

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74
Q

Life estate based on the life of another other than tenant

A

Pur Autre Vie

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75
Q

Property only inheritable by a monarch (not legal in the US)

A

Fee Tail

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76
Q

Type of Estate: “I rent the property”, usually a definite end date

A

Leasehold Estate

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77
Q

4 Types of Leasehold Estates

A

Estate for years
Estate for period
Estate at will
Estate at sufferance

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78
Q

One individual or corporation owning a property is called ________

A

Severalty/Separate ownership

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79
Q

Difference between tenancy in common, joint tenancy, tenancy in partnership

A

Tenancy in common: 2+ ppl hold equal or unequal interest in property. Inheritable.

Joint tenancy: 2+ ppl have identical interest in the whole property. Cannot be inherited.

Tenancy in partnership: 2+ combine interests, assets and efforts into a venture. Inheritable.

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80
Q

4 Things for Unity of Ownership for Joint Tenancy

A

Time, Title, Interest, Possession

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81
Q

Anything that burdens or limits your title to a property

A

Encumbrance

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82
Q

Document that uses a property to secure payment for a debt or discharge of an obligation owed

A

Lien

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83
Q

4 Descriptors of Liens

A

Voluntary
Involuntary
Specific
General

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84
Q

All mechanics must give _________ to the owner, contractor, and lender (if applicable) of their right to file a lien against the property

A

Preliminary 20 Day notice

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85
Q

Preliminary 20 Day notice must be served within 20 days of ______

A

Furnishing materials

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86
Q

4 Ways Projects are Completed

A
  1. Owner occupies and work stops
  2. Owner accepts work is finished and files a notice of completion
  3. Work ceases for a continuous 60d period
  4. Work on project ceases for 30+ days and owner files a notice of cessation
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87
Q

If owner files NOC within 10d of project completion, contractors have ____ and other have _____. If NOT, contractors have ____

A

60d, 30d
90d

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88
Q

States that the owner is not responsible for the work being done and releases any liability

A

Notice of Nonresponsibility

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89
Q

Notice of nonresponsibility should be filed by owner within _____ of discovering that an unauthorized person is completing construction on property

A

10d

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90
Q

Priority of mechanic lien over construction lien is determined by the ________

A

beginning project date

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91
Q

Property is seized and held (symbolically) until a pending suit has been decided

A

Attachment Lien

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92
Q

Lien due to Court decision as a result of a lawsuit and gives final determination of the rights of the parties in proceeding

A

Judgement Lien

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93
Q

Judgement lien is created once _____ and it runs for ___

A

Abstract of judgment is recorded

10 years

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94
Q

Priority of Liens in Foreclosure

A
  1. Cost of sale
  2. Property taxes
  3. First mortgage or deed of trust
  4. All other mortgages and other liens in order of priority
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95
Q

Protects homeowner’s equity in residence from a forced sale by certain types of creditors

A

Homestead exception

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96
Q

2 types of homestead exception

A

Formal declared
Dwelling House Exemption

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97
Q

Limits of Homestead Exemption

A

Minimum of $300k and max equal to median home price in the county (with a cap of $600k)

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98
Q

Right to use a part of the property while you retain ownership rights

A

Easements

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99
Q

5 ways to create easements (INCER)

A

Implication
Necessity
Condemnation
Expressed
Reservation

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100
Q

Landlocked situation creating easement

A

Implication of Law

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101
Q

5+ years of uninterrupted use creating easement

A

Long Use/Prescription

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102
Q

Adjacent properties or neighbors, run w/ land and can’t be sold separately

A

Appurtenant

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103
Q

5 requirements for prescription

A

Possession for 5 yrs
Open use
Actual
Continuous
Hostile

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104
Q

Unauthorized intrusion of a building or other improvements on another land

A

Encroachment

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105
Q

Owners have ____ to bring action against the other party for non-above-the-ground encroachments

A

3 years

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106
Q

Use encumbrance placed by grantor in a deed

A

Deed restrictions/restrictive covenants

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107
Q

3 types of deed restrictions

A

Covenant, condition, public restrictions

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108
Q

Promise who accepts an agreement to do or not do certain things

A

Covenant

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109
Q

Restriction that places a limitation on ownership

A

Condition

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110
Q

Gov’t imposed restrictions

A

Public restrictions

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111
Q

2 Ways to Record Documents

A

Actual notice: expresses information of a fact
Constructive notice: notice given by the public records

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112
Q

If same property is sold to 1+ person, _____________ is considered rightful owner

A

Whoever recorded first

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113
Q

Evidence of title that it is free and clear of problems and can be sold

A

Marketable Title

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114
Q

3 Parts of a Marketable Title

A

Abstract
Chain of Title
Certificate of TItle/Lawyer’s Opinion of Title

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115
Q

Brief history of all recorded instruments affecting title

A

Abstract

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116
Q

Record of property ownership

A

Chain of Title

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117
Q

Part of title that indicates a property is free and clear of significant liens, encumbrances, and reasonable doubt as to true ownership

A

Certificate of title/Lawyer’s opinion of title

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118
Q

Insurance that covers things in public record, most widely used policy

A

Standard policy/ALTA policy/CLTA policy

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119
Q

Covers things not in public record, such as encroachments

A

Extended policy

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120
Q

Substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to debt

A

Subrogation

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121
Q

Legal system of land registration used to verify ownership and encumbrances w/o additional search of public records necessity

A

Torrens System

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122
Q

Entire bundle of rights

A

Livery of Seisin

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123
Q

In condos, each owner owns ______ to their unit and common elements are owned as _________

A

Fee simple title
Tenancy in common

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124
Q

Five tests to determine if property is a fixture or personal property (MARIA)

A

Method of attachment
Adaptability
Relationship of parties
Intent of the parties
Agreement b/w parties

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125
Q

Oral or written contract

A

Express agreement

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126
Q

“Handshake” agreement

A

Implied agreement

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127
Q

Bilateral vs unilateral contract

A

Bilateral: there is a promise for a promise

Unilateral: only one party makes a promise to perform

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128
Q

Executed vs Executory contract

A

Executed: all promises have been fulfilled

Executory: something remains to be completed

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129
Q

4 Elements of a Contract

A

Legally competent parties
Offer and acceptance
Consideration
Legality

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130
Q

Once offer is signed, it must be ________ for it to be a contract

A

Communicated back to the person who made the offer

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131
Q

Rule that to be enforceable, RE contracts must be in writing

A

Statue of Frauds

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132
Q

Leases ____ must be in writing

A

> 1 year

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133
Q

Work must be performed within a certain period or there is breach of contract

A

Time is of the essence

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134
Q

Transfer of rights or duties to a third party

A

Assignment

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135
Q

Substitute a new contract for an old one

A

Novation

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136
Q

Term or condition that requires a certain act or event before contract is binding

A

Contingency

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137
Q

Cash deposit that shows buyer’s intention to carry out the terms of the contract

A

Earnest money

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138
Q

Seller agrees to an offer exactly as it was made

A

Mirror image

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139
Q

Amt of money or personal property agreed upon as damages if one party doesn’t live up to contract terms

A

Liquidated damages

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140
Q

Oral agreements prior to entering a written contract may not be used in court to dispute or contradict some written provision in the contract

A

Parol Evidence Rule

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141
Q

Interest the buyer has in property between time of contract acceptance and closing

A

Equitable title

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142
Q

Difference between valid, void, voidable, or unenforceable

A

Valid: binding and enforceable
Void: no legal effect
Voidable: valid, but may be rejected by one party
Unenforceable: valid b/w parties, but neither may force performance

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143
Q

3 Rights for Buyer if Seller Defaults

A

Buyer may cancel contract and receive earnest money

Buyer may file a suit for “specific performance” to force the seller to convey the property

Buyer may sue seller for compensatory damage

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144
Q

4 Rights for Seller if Buyer Defaults

A

Seller may declare the contract forfeited (retain earnest money)

Seller may rescind contract and return all payments made by the buyer

Seller may sue for specific performance

Seller may sue for compensatory damages

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145
Q

Statute of Limitations for mechanic’s lien

A

90d after filing

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146
Q

Statute of Limitations for removing encroachments

A

3 years

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147
Q

Statute of Limitations for written contracts

A

4 years

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148
Q

Statute of Limitations for recovery of title to a property

A

5 years

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149
Q

Equitable doctrine used by courts to bar or prevent the assertion of a right or claim b/c of undue delay or failure to assert a claim or right

A

Doctrine of Laches

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150
Q

Decedent died without a will and without heirs. Property become government’s

A

Escheat

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151
Q

6 types of involuntary alienation

A

Escheat
Eminent Domain
Adverse Possession
Suit to Quit TItle
Foreclosure
Bankruptcy

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152
Q

Similar to easement by prescription

A

Adverse possession

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153
Q

Court action used to clear a cloud on a title

A

Suit to Quit the Title

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154
Q

If grantor dies without a will but has heirs, then property will be transferred according to these laws

A

Statue of Descent and Distribution

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155
Q

Dying with a will

A

Testate

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156
Q

6 Legal Requirements of a Will

A

Legal age
Sound mind
Proper wording
No undue influence
Witnesses
Signed by testator (maker of will

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157
Q

Devise vs bequest

A

Devise is transfer of RE through a will, Bequest is PE

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158
Q

Amendement to a Will

A

Codicil

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159
Q

Will written in Testator’s own handwriting (Legal in CA)

A

Holographic

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160
Q

Deathbed will given orally by testator, written down by nurse, and witnessed by doctor

A

Nuncupative

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161
Q

5 Ways to Acquire Property

A

Succession
Will
Accession
Transfer
Occupancy

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162
Q

5 Parts of General Warranties

A

Seisin
Quiet Enjoyment
Against Encumbrances
Further Assurance
Warranty Forever

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163
Q

“I guarantee that I own it and have right to sell it” Warranty

A

Covenant of Seisin

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164
Q

“No one will interfere with your possession or right to use the property” Warranty

A

Covenant of Quiet Enjoyment

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165
Q

“I promise there are no hidden liens or encroachments other than those stated in the deed.” Warranty

A

Covenant Against Encumbrances

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166
Q

“If there is a defect, I promise to take care of any problems” warranty

A

Covenant of Further Assurance

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167
Q

“These promises go back as far as there were public records” Warranty

A

Covenant of a Warranty Forever

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168
Q

“I own it and convey it to you” Deed

A

General Warranty Deed

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169
Q

“I promise you that it’s been clear since I’ve had it. I’m not making any promises before that.” Deed

A

Special warranty deed

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170
Q

“I own it . . . but that’s about it! I’m not going to make any promises.” Deed

A

Bargain and sale deed

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171
Q

“If I own it . . . and I’m not saying I do . . . then I give you my interest.” deed

A

Quit claim

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172
Q

Most commonly used instrument for tranferring title to RE

A

Grant deed

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173
Q

Granted to the purchaser at a court-ordered sale

A

Sheriff’s deed

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174
Q

Granted as a gift of love and affection deed

A

Gift deed

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175
Q

Given if property is sold as payment of past-due unpaid property taxes

A

Tax deed

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176
Q

Deed used by gov’t to grant public land to an individual

A

Land patent

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177
Q

Deed given to the purchaser of property at a trust deed foreclosure sale

A

Trustee’s Deed

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178
Q

Grantor is held legally responsible to the grantee for the condition of the title (seldom used in CA)

A

Warranty Deed

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179
Q

2 things that sound like a deed but are NOT

A

Trust deed (security device)
Reconveyance deed (executed by trustee to the borrower)

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180
Q

3 Requirements for a deed to be valid

A

Premise
Habendum
Testimonium

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181
Q

Grantor, grantee, accurate legal description (part of deed)

A

Premise

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182
Q

Consideration, granting clause, to have an to hold clause, designation of any limitations, exceptions

A

Habendum

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183
Q

Signature of grantor, delivery by grantor and acceptance by grantee, dated by recorder of deeds

A

Testimonium

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184
Q

3 types of deed delivery

A

Manual delivery
Delivery through recording
Conditional delivery

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185
Q

Mandates that a specific event happen before the title can be passed, and title passes through a third party

A

Conditional Delivery

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186
Q

Deeds DO/DO NOT have to be recorded to be valid

A

DO NOT (but it protects ownership interests)

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187
Q

“Let the buyer beware”

A

Caveat emptor

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188
Q

Process in which a neutral third party, for a fee, acts as the closing agent for buyer and seller

A

Escrow

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189
Q

Escrow holder cannot be _____ and must be ______

A

NOT an individual
Licensed by the state

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190
Q

2 Requirements of a Valid Escrow

A

Binding contract b/w buyer and seller
Conditional delivery of transfer instruments and funds to a neutral third party

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191
Q

10 Step of Escrow Procedure

A
  1. Prepare escrow instructions
  2. Order preliminary title search and report
  3. Request lender’s demand
  4. Request for new loan instructions and documents
  5. Accept structural pest control report and other reports
  6. Accept fire insurance policies and complete settlement
  7. Request closing funds
  8. Audit file
  9. Order recording
  10. Close escrow
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192
Q

_________ right for lessor and ______ right for lessee (for a valid lease)

A

Reversionary; Possessory

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193
Q

Estate for Years
Beginning & End Date: ___
Notice to Terminate: _____
Renewal: ______
Amount of time: ____

A

Definite
Not necessary for lessee
NOT automatic
Any

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194
Q

Estate for Period to Period
Beginning & End Date: ___
Notice to Terminate: _____
Renewal: ______
Amount of time: ____

A

Not definite
By either party to term or 30d
Automatic for a period of time
Month to month

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195
Q

Estate at Will
Beginning & End Date: ___
Notice to Terminate: _____
Amount of time: ____

A

Indefinite
Either party w/o notice or death
Any

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196
Q

Tenant stays past the term of the lease known as holdover tenant

A

Estate at sufferance

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197
Q

4 Step Process for Eviction

A
  1. Serve a 3 day notice (if tenant has defaulted on rent or violated a term) or a 30 day notice (no tenant violations)
  2. If tenant refuses to leave, unlawful detainer is filed.
  3. If landlord wins, court will award landlord judgement and landlord will ask for a writ of possession to authorize the sheriff to evict that tenant.
  4. Sheriff will send eviction notice to tenant. If tenant still refuses to leave, sheriff will physically remove the tenant
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198
Q

Legal action in which a complaint is filed in court

A

Unlawful detainer

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199
Q

Landlord’s remedy to regain possession of property

A

Actual eviction

200
Q

Tenant’s remedy if property is not habitable

A

Constructive eviction

201
Q

Apartment, lessee pays flat fee, lessor pays all expenses

A

Gross lease

202
Q

Commercial, lessee pays flat fee & a % of expenses, lessor pays balance of expenses

A

Net lease

203
Q

Shopping mall, lessee pays flat fee & a % of gross sales, lessor pays all expenses

A

Percentage lease

204
Q

Long-term lease (99 yrs); tenant may build on a property with a this lease but property is landlord’s

A

Ground lease

205
Q

Lease is based on some type of index (cost of living) and adjusts (usually upward)

A

Index lease

206
Q

Lease which states a future date for a new appraisal

A

Appraisal lease

207
Q

Lease amount goes up at regular intervals

A

Graduated lease

208
Q

Tenant agrees to pay part of ownership expenses (utilities, property taxes, and special assessments)

A

Net lease

209
Q

Tenant pays for the insurance as well as ownership expenses

A

Net-Net lease

210
Q

Tenant pays for some agreed-upon items of repair and maintenance

A

Net-net-net (triple net) lease

211
Q

Clause in lease in which parties agree to an adjustment of rent based on set increases in costs

A

Escalator clause

212
Q

Mortgage clause which requires tenants cannot be disturbed if property is foreclosed upon

A

Non-disturbance clause

213
Q

Rental income that RE can command in an open, competitive market any given time

A

Economic rent/ Market rent

214
Q

Lease is based on some type of index (cost of living) and adjusts (usually upward)

A

Index lease

215
Q

If a lease is made, it must be signed by _______

A

Lessor

216
Q

5 Requirements for Lease

A

State duration of the lease

Amount of rent & due date

Names of parties

Sufficient description of the property

Evidence of both landlord’s and tenant’s intent to create a landlord-tenant relationship

217
Q

No gov’t agency may adopt any _____ restrictions on non-residential property

A

Rent control

218
Q

Leasehold estate in a property that lies b/w the ownership interest and operating interest

A

Sandwich lease

219
Q

Max Allowed Security deposits for unfurnished rental: ______
Furnished rental: ______

A

2 mths + 1 month
3 mths + 1 month

220
Q

Inspection report that states condition of property upon the tenant’s moving in and out of property

A

Statement of property condition

221
Q

Landlord has ___ days to refund the deposit if no damage occurred. If damage occurred, they need to give ____.

A

21 days max

Itemized, written statement

222
Q

If security deposit is retained, landlord is liable for ____

A

$600 + 2% monthly interest from due date until paid

223
Q

By renting, landlord is agreeing that the property meets the minimum health and housing codes

A

Implied right of habitability

224
Q

Once given notice, if landlord does not make repair, tenant can do 2 things

A
  1. Rental Offset: 1 mth in repairs (2x per 12 mths)
  2. Abandon the premises
225
Q

Mobile homes built before ___ must meet certain design and construction standards

A

June 15, 1976

226
Q

4 Steps for Transforming a Mobile Home into RE

A
  1. Obtaining a building permit;
  2. Attaching the mobile home to an approved foundation;
  3. Recording a document reflecting that the mobile home has been affixed to an approved foundation system; and
  4. Obtaining a certificate of occupancy
227
Q

2 requirements before removing mobile home from foundation

A

Anyone with title consents to removal

Owner notifies HCD and local assessor 30d prior

228
Q

RE cannot sell ___ mobile homes

A

New

229
Q

Used mobile homes may be sold if _______ and _______

A

They are registered
Are on a lot/mobile home park

230
Q

Mobile home must be capable of __________

A

Being transported over a road

231
Q

Notification of a mobile home sale and the ownership transfer must me made within _______ of the sale date

A

10 days

232
Q

Mobile homeowners must pay an _____ tax

A

In Lieu

233
Q

Mobile home loans are amortized over a ____ or ____ period

A

15- or 20- year

234
Q

4 Ways to Create Agency

A

Written/Expressed
Implied
Ostensible
Ratification

235
Q

Type of Agency where RES casually provides the type of guidance and advice that would be reserved for clients, but that consumer relies upon that advice

A

Implied Agency

236
Q

Type of Agency where agent appears to be working for a company or person, even though they may not have been officially hired or given authority to act

A

Ostensible Agency

237
Q

Type of Agency where client approves an act which has already been done in their name and on his behalf by RES who, in fact, had no actual authority to act on behalf of them

A

Ratification

238
Q

Agent handles all delegated business of principal (e.g. power of attorney)

A

Universal

239
Q

Agent handles multiple transaction of a client (e.g. property management)

A

General

240
Q

Agent handles one transaction for one seller of one property

A

Special

241
Q

Agent is a partner in the ownership of the property

A

Agency coupled w/ an interest

242
Q

Real estate broker who acts as an agent to only the seller or only the buyer

A

Single Agent

243
Q

Real estate broker who acts as an agent to both the seller and buyer in the same transaction

A

Dual Agent

244
Q

5 Duties Owed by an Agent to Client

A

Care
Obedience
Accounting
Loyalty
Notice

245
Q

Duties owed by an Agent to 3rd party customers

A

Honest
Accuracy
Disclosure of Defects

246
Q

Exaggeration or superlative comment, subjective opinion (legal)

A

Puffing

247
Q

Deception intended to cause a person to give up property or lawful right, intentional misrepresentation

A

Fraud

248
Q

Something known to seller, but not to purchaser and not discoverable by inspection

A

Latent defects

249
Q

3 Prohibitions by Sherman Antitrust Act

A

Price fixing
Group boycotts
Division of Markets by location/price

250
Q

Sherman Antitrust Punishments

A

$100M (corporations)

Fine up to $1M or 10 years imprisonment (individuals)

251
Q

SPs are _______ (type of employee)

A

Independent contractors

252
Q

Type of Listing agreement where broker is always entitled to a fee, regardless of who procures the buyer

A

Exclusive right to sell

253
Q

Type of listing agreement where one broker is allowed to act on behalf of the principal; however, if owner sells the property him/herself, no commission is paid to the broker

A

Exclusive agency

254
Q

Type of Listing Agreement where seller retains the right to hire any number of brokers to sell his property. Whoever sells gets commission.

A

Open

255
Q

Type of listing agreement where seller receives a certain amount of money for the sale and anything greater is paid to broker as a commission

A

Net (Illegal in most states)

256
Q

3 Options for Broker upon receiving a buyer’s money deposit

A

Give the money to the principal to the transaction

Put it into a neutral escrow depository

Put it into the broker’s trust fund at a bank or other financial institution

257
Q

Money must be deposited with the appropriate account or with the principal within ______ following receipt

A

3 business days

258
Q

Unlawful misappropriation of a client’s fund

A

Conversion

259
Q

Broker must record receipt of the check on the _______ and ensure it is ________

A

broker’s trust fund record

in a safe place

260
Q

____________ is NOT allowed in earnest money, only cash or check

A

Promissory note

261
Q

May be considered the equivalent of a promissory note

A

Post-dated check

262
Q

Inspections and disclosures that affect the value or desirability of the property

A

Transfer Disclosure Statement

263
Q

Transfer Disclosure Statement must be sent __________

A

Before or within 3 days after the deposit receipt is signed

264
Q

“Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker” is required in the _____ clause

A

Compensation

265
Q

Broker cannot use a form in which _________

A

The amount or rate is preprinted

266
Q

Broker MUST notify the seller of ______________ BEFORE the seller agrees to sign the purchase contract with the buyer

A

The amt of commission the broker is earning

267
Q

Seller MUST ___________ before seller cancels the agreement

A

Give Notice to Buyer to Perform

268
Q

In certain cities or counties, a seller might be required to provide specific info about the neighborhood or community using __________

A

Local Option Real Estate Transfer Disclosure Statement

269
Q

Disclosure for areas used for military training and which may contain live ammunition or areas 1 mile of such a hazard

A

Disclosure of Military Ordinance

270
Q

Disclosure for Registered sex offender info

A

Megan’s Law

271
Q

6 Requirements for Trust Account

A

Designated as a trust account in the name of the broker as trustee;

Maintained with a bank or recognized depository located in California;

NON-interest-bearing account;

Out-of-state trust account is permitted only if the FDIC insures the account

Account is used only to service specific first loans

A withdrawal may ONLY be made from a trust account upon the signature of specific parties

272
Q

2 Escrow or Trust Accounts for Property Manager

A

For security deposits

For current rents & management

273
Q

Selection and preparation of a mortgage or deed by a broker, in which a fee was charged, constituted the unlawful practice of law

A

1943 People v. Sipper

274
Q

Instructions for how SP with authorization makes a withdrawal from broker’s trust account is outlined in 2 laws: __________

A

California Business and Professions Code Section 10145

Commissioner’s Regulation 2832

275
Q

Trust account violation punishment

A

$10k max or within 6 months’ prison time (individuals)

$50k max (corporations)

276
Q

Closed-end mortgage or open-end LOC that is extended to a consumer for personal reasons

A

Covered loan

277
Q

3 Restrictions for Covered Loans

A

No Prepayment fee or penalty after first 36 mths

Specific disclosure

Loan principal balance limit

278
Q

Consumer credit transaction secured by real property in CA, which is used as the principal dwelling of the consumer that is improved by a one-to-four residential unit

A

Consumer Loan

279
Q

RE Fraud Prosecution Trust Fund Intent

A

Have an impact on RE fraud involving the largest # of victims

280
Q

RE Fraud Prosecution Trust Fund Split

A

60% DAs, 40% Local Law Enforcement

281
Q

Add marital status and sexual orientation to list of protected classes

A

Unruh Civil Rights Act

282
Q

Adds source of income to list of protected classes

A

CA Government Code Section 12955(l)

283
Q

Document recorded by an individual if their property has been placed under an unlawful restriction

A

Restrictive Covenant Modification

284
Q

Law that adds property tax disclosure

A

Bill 259 to Civil and Business and Professions Code

285
Q

Any person who intends to offer subdivided lands for sale or lease within California MUST _________ and submit a _______

A

File an application for a Subdivided Lands Public Report

Completed questionnaire

286
Q

Public report consisting of a notice of intention

A

Subdivided Lands Public Report

287
Q

2 New Exceptions to the Automatic Stay Rule by Federal Bankruptcy Abuse Prevention and Consumer Act (BAPCPA)

A

As long as the lessor took the action and obtained a judgment to obtain possession of the property BEFORE the date the lessee/debtor’s bankruptcy petition was filed, the previously-filed eviction, illegal detainer action, or other proceeding taken by the lessor will remain in effect.

With respect to evictions based on endangerment or illegal use of controlled substances on the property, eviction proceeding is excluded from automatic stay if it was commenced before the filing of the bankruptcy case and the action occurred within 30 days before the bankruptcy filing

288
Q

Creates and regulates common interest developments with amendments that became effective in 2006 and $____ per violation

A

Davis-Stirling Common Interest Development Act
500

289
Q

Bill that states RE broker who arranges the purchase of a fractionalized interest in a trust deed must record this fractionalized interest in the trust deed within _____ of the purchase

A

Bill 1729
10d

290
Q

Prohibits sending unsolicited advertising faxes ($500 per violation)

A

Bill 833

291
Q

Requires air conditioning and heating ducts with 15%+ leakage must be repaired

A

Building Energy Efficiency Standards (under Title 24)

292
Q

2 Parts to a Mortgage Loan

A

Pledge/Promissory Note
Collateral

293
Q

Borrower pays interest monthly and pays the entire principal on the due date

A

Straight note/ interest only note

294
Q

Borrower pays interest and principal monthly (most common pledge)

A

Installment Note

295
Q

Equal installment payments that liquidate loan

A

Fully amortized Loan

296
Q

Monthly interest and some of the principal for each payment and at the loan due date the remainder of the principal must be made

A

Partially amortized loan

297
Q

Long-term note not secured by collateral

A

Debenture

298
Q

If borrower defaults, lender can call the entire balance due and payable immediately

A

Acceleration clause

299
Q

Mortgagee or beneficiary declares the entire balance of loan becomes due and payable when property is transferred (not allowed in FHA or VA loan)

A

Alienation clause

300
Q

Subsequent mortgage or deed takes priority

A

Subordination clause

301
Q

Substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt

A

Subrogation

302
Q

Gives borrower the right to clear up debt prior to foreclosure

A

Equitable right of redemption

303
Q

Gives the borrower a certain amount of time after the sale to clear the debt

A

Statutory right of redemption

304
Q

General lien against the borrower by lender

A

Deficiency judgement

305
Q

Lender and borrower agrees that lender will become property owner instead of going through formal foreclosure process

A

Friendly foreclosure

306
Q

Charging interest in excess of state law

A

Usury or illegal interest

307
Q

Total dollar amount of interest and points paid by a borrower at closing

A

Prepaid interest

308
Q

One-time fee paid at closing to increase yield to the investor (lender)

A

Points or discount points

309
Q

____ discount points are required to increase % yield by 1%

A

8

310
Q

One way that loan officers and RE licensees are able to determine monthly payments. Cost per thousand required to create the principal and payment necessary to pay off the loan.

A

Factors

311
Q

Interest rate fluctuates and is usually tied to an index; increases are capped for each period and for the term of the loan

A

Adjustable Rate Mortgage (ARM)

312
Q

Interest rate minus index

A

Margin

313
Q

How often loan rate may be changed (usually yearly) is called

A

Adjustment period

314
Q

Lower payments first year, then payments increase

A

Graduated Payment plan

315
Q

Homeowner receives monthly payments based on accumulated equity rather than a lumpsum. Loan must be repaid upon death of owner or sale of property

A

Reverse Annuity Mortgage (RAM)

316
Q

Mortgage given as part of the buyer consideration for the purchase of RE and delivered at the same time as RE is transferred

A

Part Purchase Money/Purchase Money Mortgage (PMM)

317
Q

Loan on RE plus fixtures and appliances. Extensively used in condos.

A

Package mortgage

318
Q

Loan covers several pieces of land.

As certain sums are repaid, certain parcels are released (______ clause)

A

Blanket mortgage

Partial release

319
Q

Loan that is expandable by increments up to a max dollar amount

A

Open-end mortgage/deed of trust

320
Q

Additional financing from a second lender. One payment- two loans. New lender pays the first loan, but charges higher interest for a second. Original loan must be assumable w/o alienation clause.

A

Wraparound

321
Q

Payment is subsidized at the beginning by a builder or other party for 3-5 years, and thereafter, purchaser takes over

A

Buydown

322
Q

Long-term permanent financing for large construction projects, usually commercial

A

Takeout loan

323
Q

Owner sells his/her improved property and at the same time signs a long-term lease

A

Sale-leaseback

324
Q

Short-term interim loan for buyer, usually six months to one year in duration. May be placed on former house to buy new house until first house sells.

A

Bridge Loan

325
Q

Buyer does not receive legal title until final payment is made

A

Contract for deed/installment land contract

326
Q

Insurance is provided by a private insurer that protects lenders against loss in the event of a foreclosure and deficiency

A

Private Mortgage Insurance (PMI)

327
Q

Insurance is required for all loans with _____ down payment

A

Less than 20%

328
Q

Largest private insurer

A

Mortgage Guarantee Insurance Corporation (MGIC)

329
Q

Offer small investors the opportunities to invest in high-yield RE

A

Syndicate Equity Financing

330
Q

Straight bank loan that the borrower obtains based either on good credit or some NON-real property collateral

A

Commercial Loan

331
Q

Article that states limitations for brokers who negotiate trust deed loans

A

Article 7

332
Q

Article 7 (Broker negotiating trust deed) commission limitations

A

First loans:
5% principal of a loan of <3 years
10% principal of a loan of 3+ years

Second or other junior loans
5% principal of a loan of <2 years;
10% principal of a loan of 2-3 years;
15% principal of a loan of 3+ year

333
Q

Article 7 (Broker negotiating trust deed) Cost and Expenses limitations

A

Cannot exceed 5% of the loan or $390 (whichever is greater) to a max of $700

334
Q

Hard money loans (cash) of ___ for first trust deed loans, and ____ for junior deeds of trust broker can charge _____ commission

A

$30k+
$20k+
as much as borrower agrees to pay for

335
Q

Owner-occupied home loans negotiated by broker for a term of ___ years may not have a balloon payment. Seller must notify buyer between ___________ before payment is due.

A

6+, 60-150d

336
Q

Req’t to report annual and quarterly loan activities to the CA BRE

A

Threshold reporting

337
Q

Threshold reporting is required IF

A

Within the past 12 months, broker has negotitated 10+ loans or $1M in loans

338
Q

Article that states licensees must not pool funds i.e. broker cannot accept funds unless the funds are meant and noted for a specific loan transaction

A

Article 5

339
Q

Requirements before a broker can accept the lender’s money for loan

A

Broker must first OWN the loan OR have an unconditional written contract to buy a specific note;

AND the broker must also have the authorization from the prospective borrower, giving him permission to negotiate a secured loan for the borrower.

340
Q

Article that outlines anyone acting as the principal or agent, engaging in the business of selling RE securities OR who accepts funds to be reinvested in RE securities or to be placed in an account

A

Article 6

340
Q

Required to sell RE investment type security

A

Commissioner’s Permit

341
Q

____ is required for Commissioner’s Permit and it is valid for ____ and costs _____

A

$10k surety bond
1 year
$100

342
Q

Financing law that outlines disclosure requirements

A

Truth in Lending (Regulation Z)

343
Q

Truth in Lending (Regulation Z) does not apply to ________ transactions

A

Commercial

344
Q

Expression of the relationship of the total financing charge to total amount to be financed

A

APR

345
Q

Requirements to Be Considered a Lender (2)

A

Must lend funds 25x annually and/or for at least 5 housing loans

Not the owner

346
Q

Clause required by some state subdivided land sales laws, that informs a purchaser of his/her contract revocation rights as provided by state law

A

Rescission Clause

347
Q

Ensures buyer and seller in residential RE transaction have knowledge of all settlement cost

A

Real Estate Settlement Procedures Act (RESPA)

348
Q

Penalty for RESPA Violations

A

1 year in jail and/or $10k fine

349
Q

CA state law preventing discrimination and redlining

A

Holden Act

350
Q

2 Elements of a Business Opportunity Sale

A

Bill of Sale

Financial statements

351
Q

Gives a person the chance to channel private savings into RE investment for which other financing cannot be obtained or is not available

A

RE Syndication

352
Q

Process for Syndication

A

Origination
Operation
Completion/Liquidation

353
Q

4 Forms of Syndication

A

Corporate Form
General Partnership/Joint Venture
Limited Partnership
LLC

354
Q

Syndicate that allows for both centralized management and limited liability for the investors, but has negative tax features

A

Corporate Form

355
Q

Syndicate that avoids double taxation, but has unlimited liability provision and lack of centralized management

A

General partnership/ Joint venture

356
Q

Syndicate that offers the corporate advantages of limited liability and centralized management, and the tax advantages of a partnership

A

Limited partnership

357
Q

Syndicate that includes liability limitation

A

LLC

358
Q

Type of company that sells securities specializing in RE ventures

A

Real Estate Investment Trust (REIT)

359
Q

Real Estate Investment Trust (REIT) Requirements (4)

A

100 investors
No 5 or fewer owns more than 50% of interest
Transferable shares or certificates to prove interest
Each share/interest must carry a vote

360
Q

REIT that invests in RE itself or in several RE projects

A

Equity Trust

361
Q

REIT that invests in mortgages and other types of RE loans/obligations

A

Mortgage Trust

362
Q

REIT that invests in both equity and mortgage investments

A

Combination Trusts

363
Q

Appraisal Process

A
  1. Define problem
  2. Gather, record, and verify the necessary data
  3. Analyze and interpret using the following info: Neighborhood analysis, Neighborhood cycle, and Site analysis
  4. Estimate land value
  5. Estimate property value by each of the three approaches to value
  6. Reconcile estimated values for the final value estimates
  7. Report final value estimates
364
Q

Cost to replace the same materials as original construction

A

Reproduction cost

365
Q

Cost to replace the current materials and methods w/ utility and function similar to original

A

Replacement cost

366
Q

3 Replacement Cost Methods

A

Sqft cost
Unit in Place
Quantity Survey method (only for historical properties/new construction)

367
Q

3 Ways to Determine Value

A

Market Data/Sales Comparison
Cost/Summation
Income Capitalization Approach

368
Q

Value Approach that is Used for appraising residential property or vacant land

A

Market Data/Sales Comparison

369
Q

Value Approach that is used on buildings that do not have market data because they are unusual properties

A

Cost/Summation

370
Q

Value Approach that is based on present value of the rights to future income

A

Income capitalization approach

371
Q

6 Steps for Income Capitalization Approach

A
  1. Estimate annual potential gross income (equal to number of units times the annual rent for each unit)
  2. Deduct an allowance for vacancies to arrive at Effective Gross Income
  3. Add non-rental income to effective gross income to derive Annual Gross Income
  4. Deduct the annual operating expenses (don’t include debt service or mortgage payments) from Annual Gross Income to derive Net Operating Income
  5. Estimate the rate of return that an investor would demand for this investment. This rate of return is called Capitalization (Cap) Rate
  6. Divide cap rate into net operating income to identify the property’s value, or I/R=V; I: Net income, R: Cap Rate, V: Value
372
Q

Possible use of a property that would produce the greatest net income and thereby develop the highest value

A

Highest and Best value

373
Q

Max value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property

A

Substitution

374
Q

Value of a property increases when the supply is short and decreases when there is too much

A

Law of Supply and Demand

375
Q

The more a property or its components are in harmony with surrounding properties, the greater the contributory value

A

Conformity

376
Q

Occurs between dissimilar properties

A

Regression and Progression

377
Q

Property can increase or decrease in value in expectation of something in the future

A

Anticipation

378
Q

Value of any component of a property is what it gives to the value of the whole or the absence detracts of the whole

A

Contribution

379
Q

Combining of 2+ adjoining lots into one larger tract to increase their total value

A

Assemblage

380
Q

When one business attracts another business of similar type; together they may make more money than they would have singularly

A

Competition

381
Q

RE property is constantly changing

A

Change

382
Q

Reduction in utility or value resulting from an impairment of physical condition (curable or incurable)

A

Physical Deterioration

383
Q

Loss of value of an improvement due to functional inadequacies (often caused by age or poor design, curable or incurable)

A

Functional obsolescence

384
Q

Loss of utility resulting from extraneous factors that exist outside of the property (almost always incurable)

A

Economic (external) obsolescence

385
Q

Estimated period where an improved property will yield a return over and above economic rent

A

Economic Life

386
Q

Actual age or life of a structure that is considered habitable

A

Physical life

387
Q

4 Levels of Appraisers

A

Trainee (AT): supervised by a certified residential or general licensee in good standing at all times

Residential (AL): can appraise any non-complex 1-4 family property with a transaction value up to $1M or non-residential properties up to $250k

Certified Residential (AR): can appraise any 1-4 family property w/o regard to transaction value or complexity. Can appraise non-residential properties with transactional value up to $250k - 200h

Certified General (AG): can appraise all RE

388
Q

Appraisal Licenses are valid for ___ and CER is required every _____

A

2 years
4 years

389
Q

Multiplied times the taxes to make the rate of one county more equal to the rest of the stated

A

Equalization factor

390
Q

Mill

A

1/1000th of a dollar or 0.001

391
Q

Limits the max annual tax on real property at 1% of market value

A

Prop 13

392
Q

4 Exemption for Tax Transfer & Reappraisal

A

Between spouses

Principal residence of $1M or less between parents and children

Replacing a property due to government eminent domain

Replacing a property due to a disaster

393
Q

Homeowners 55+ years of age are allowed to transfer their base-year property tax value to another home of equal or lesser value in the same county and keep their low assessment from their former home

A

Prop 60

394
Q

Same as prop 60 but for another county, if that county’s board of supervisors chooses to apply

A

Prop 90

395
Q

Real property tax becomes a lien on _____

A

the January 1 that precedes the fiscal tax year

396
Q

Period of Redemption for Property Tax

A

5 years

397
Q

Owner-occupied residential dwelling is entitled to a $7k deduction from the full appraisal value

A

Section 218

398
Q

Provides for a CA resident who has served in the military during war time an exemption of up to $4k of full value of the property

A

Section 205

399
Q

Law used for street improvements and owner along the street is liable for paying a pro-rata share of that cost

A

Street Improvement Act of 1911

400
Q

Used to finance public services in newly developed areas

A

Mello-Roos Community Facilities Act of 1982

401
Q

Levied upon the transfer of real estate

A

Documentary Transfer Tax

402
Q

Taxes the estates of deceased persons

A

Estate and Inheritance tax (ELIMINATED in CA)

403
Q

Apply to the voluntary transfer of property from the owner (donor) to the receiver (donee) and it (IS/IS NOT) used in CA

A

Gift Tax
IS NOT (federal gov’t does)

404
Q

3 Systems for Legal Description

A

Lot and Block System
Metes and Bounds System
Rectangular Survey System

405
Q

Lists the lot, block, subdivision, county, city, and state

A

Lot and Block System

406
Q

Used where lot & block system is not in place OR irregular pieces of property and it starts at _______

A

Metes and Bounds system
Point of beginning (POB)

407
Q

Legal description system based on intersecting lines

A

Rectangular survey system

408
Q

______ N/S Lines
______ N/S parallel + 6 mi apart
______ E/W Lines
______ E/W parallel + 6 mi apart

A

Principal meridian
Range Lines
Base Lines
Township Lines

409
Q

36 square mile area formed by intersection of township and range lines

A

Township

410
Q

Law that was designed to protect the purchasers of property in new subdivisions from fraud of misrepresentation

A

Subdivided Lands Act

411
Q

Regulates the division of 2 or more lots for purposes of selling, leasing, or financing said lots, either at that time or in the future

A

Subdivision Map Act

412
Q

Primary concern of Subdivided Lands Act

A

Marketing

413
Q

Public reports are valid for ____

A

5 years

414
Q

Speculative subdivision development of 50+ vacant lots in a rural area with less than 1500 registered voters within 2 miles

A

Land project

415
Q

____ after signing offer to rescind offer on land project and receive a full refund

A

14 d (in writing, w/o cause)

416
Q

Regulates land sales b/w 2+ states and OOS buyers have ____ to rescind offer

A

Interstate Sales Full-Disclosure Act
7 days

417
Q

Org made up of citizens appointed by city council or board supervisors that advises elected officials on land use issues

A

Planning Commission

418
Q

Planning commission DO/DO NOT make actual decisions

A

DO NOT

419
Q

General Plan Steps

A

Resource Analysis
Formulation of Community Goals
Plan Implementation

420
Q

General Plan Step that recognize individual characteristics of the community (strong and weak points)

A

Resource analysis

421
Q

General Plan Step that is based on community residents. Very flexible and adaptable

A

Formulation of Community Goals

422
Q

General Plan Step where local gov’t utilizes various land-use controls so plan can be achieved

A

Plan Implementation

423
Q

Controls density and avoids overcrowding

A

Bulk zoning

424
Q

Requires new buildings to conform to specific types of architecture

A

Aesthetic zoning

425
Q

Encourages zoning as a planning tool to use land for its highest and best use

A

Directive zoning

426
Q

Term used to describe positioning of a structure on a lot so that one size rests directly on the lot’s boundary line (generally prohibited)

A

Zero Lot Line

427
Q

Statute creating the power or authority to carry out an activity or to do something not previously authorized

A

Enabling Acts

428
Q

Requires a builder of new residential housing to set aside a designated number of units for low- to moderate-income people

A

Inclusionary zoning

429
Q

5 Tests of Validity of Zoning Ordinances

A

The power must be exercised in a Reasonable manner.
The provisions must be Clear and specific.
The ordinance must be free from Discrimination.
The ordinance must promote Public health, safety, and general welfare under the police power concept.
The ordinance must apply to All property in a similar manner.

430
Q

Zoning exception that separate and screen residential areas from nonresidential areas

A

Buffer zones

431
Q

Zoning exception that existing properties are left in violation due to new ordinance

A

Nonconforming Use

432
Q

Conflicts with the zoning ordinances that were in place before the use commenced

A

Illegal nonconforming use

433
Q

May be sought to provide deviation from an ordinance such as installation of a sign for a business, or a change of zoning, so long as it is before the construction or reconstruction takes place

A

Variance

434
Q

Zoning exception that reclassifies one piece of property in an area for a specific purpose

A

Spot zoning

435
Q

Property that is deemed to be in the public interest contrary to the zoning that exists

A

Conditional Use Permit

436
Q

Provide procedures and information to ensure that governmental agencies will consider and respond to the environmental effects of their proposed decisions

A

California Environmental Quality Act of 1970 (CEQA)

437
Q

Controls on the 1,000-mile California coast

A

California Conservation Act

438
Q

National Environmental Policy Act requires an ___________ on all projects that use federal funding

A

Environmental impact report (EIR)

439
Q

City planning decisions are the duty of ________ or ________

A

City council or board of supervisiors

440
Q

FHA Loans _____________ for lenders

A

insures against loss by the HUD

441
Q

No prepayment penalties allowed for _________, ___________, or _________

A

FHA Loans
VA Loans
CalVet

442
Q

VA/FHA allows buyer to buy more than appraised value, if __________

A

They pay difference in CASH

443
Q

VA Loans _____________ for lenders

A

Repayment of Loans

444
Q

Qualification for VA Loans

A

181 days of active service, 90 days after active service

445
Q

Basic entitlement for VA Loans, but lenders will lend up to ________ w/o requiring down payment

A

$104,250
4x

446
Q

There IS/IS NOT a max for VA loan

A

IS NOT

447
Q

For VA Loan, if borrower defaults on a loan > $144k, VA will pay lender ___________ and ___________ assume liability

A

Up to 25% of Loan Amount
Veterans

448
Q

VA Loan has to be owner occupied for ____________

A

At least 1 year

449
Q

Veterans must apply for ______ to obtain a VA loan

A

Certificate of Eligibility

450
Q

Loan from State to Veteran

A

CalVet

451
Q

CalVet Requirements

A

90d active duty
Honorable discharge/Statement of Service
CA Home/Farm

452
Q

CalVet Loans ______ max and requires __________

A

$521,250
Structural Pest Control Report and Roof Inspection

453
Q

CalVet loans allows borrowers to borrow ______________ or ______________ down

A

Entire down payment

Put up to 20% of Sale Price or Appraisal Value

454
Q

Federal lender with USDA that makes loans for purchases/construction in rural areas and small communities outside metropolitan areas

A

Rural Economic and Community Development (RECD)

455
Q

Loan in which borrower is not held personally liable on the note

A

Non-recourse loan

456
Q

RE loans are sold in the financial market. Seller of the security is not liable if borrower defaults

A

Non-recourse clause

457
Q

Legal doctrine in which a person is prevented from asserting rights that inconsistent with a previous position made by act, conduct, or silence

A

Estoppel Certificate

458
Q

Clause sometimes inserted in a mortgage note in which lender waives right to a deficience judgement. In lease, it clears or relieves landlord from liability for tenants’ personal injury and property damage

A

Exculpatory Clause

459
Q

Fund of the buyer’s money that the lender sets aside for future needs relating to the parcel of property

A

Impounds

460
Q

Amount of money banks are required to keep on hand

A

Reserves

461
Q

If reserves increase, interest rates _______ in around ______ (timeframe)

A

Decrease
30-60d

462
Q

Rate at which Fed charges bank for money

A

Discount rate

463
Q

If discount rates increase, _______ consumers will qualify for loans and that impact happens ______ (timeframe)

A

fewer
quickly

464
Q

If the Fed is buying bonds, interest rates are _______ in _______ (timeframe)

A

lower
6 mths-1 year

465
Q

Sells seasoned mortgages and deeds of trust to individual investors and financial institutions

A

Fannie Mae (FNMA)

466
Q

Fannie Mae is controlled by ____ and it buys ______

A

A Private corp (Quasi Government)
FHA, VA, conventional loans

467
Q

Ginnie Mae is controlled by ____ and it buys ______

A

HUD
FHA/VA Loans

468
Q

Freddie Mae is controlled by ____ and it buys ______

A

A Private corp (Quasi Government)
Conventional loans

469
Q

Natural hazards disclosure must include (3)

A

special flood areas
wildland high fire severity areas
seismic hazard zones

470
Q

Cohen v. Shearer

A

cancellation or termination of escrow may not also cancel a purchase contract

471
Q

If an unlicensed person acts as a real estate salesperson, he or she will be guilty of ____ and will be penalized under the law.

A

Misdemeanor

472
Q

Once escrow instructions are signed by all parties, there MAY/MAY NOT be any changes made to the instructions unless _____.

A

MAY NOT
Both buyers agree

473
Q

Easton v. Strassburger

A

Held that a real estate broker employed by the seller must disclose facts materially affecting the value of the property if the broker should have known the facts through reasonable diligence.

474
Q

John vs Mayer

A

Prohibit private racial discrimination in the sale and rental of property

475
Q

Difference b/w North + South Escrow

A

*Time: north signs instructions 1-2d before close, south is at the start
*Fees: In north, buyer pays escrow. In south, it’s split 50:50.
*Institution: in north, escrow is performed by title insurance companies. In south, it’s independent escrow companies or financial instutions

476
Q

Forge or sign the name of someone else or a fictitious person, without authority

A

PC 470, 473

477
Q

Diversion of construction funds from their intended purpose

Using a false voucher to obtain construction loan funds

A

PC484b-c

478
Q

Copying docs owned by a title company w/o permission and with intent to use them

A

PC496c

479
Q

Unauthorized conversion of real estate into personal property and appropriation of the same

A

PC 487b-c

480
Q

Removal of a structure from mortgaged RE or after a foreclosure sale, with intent to defraud or injure the purchaser

A

PC 502.5

481
Q

Fraudulent appropriation of trust funds by a broker or other fiduciary

A

PC 506

481
Q

Failure by debtor, upon sale of property, to pay the secured party the amount due under the security agreement (or the proceeds, whichever is less)

A

PC 504b

482
Q

Obtaining property from another by threatening to accuse that person of a crime or expose secrets

A

PC 518, 519

483
Q

Making or benefitting from falsification regarding anyone’s financial info

A

PC 532a

484
Q

Offering/giving parcels of RE with tickets of admission or at drawings

A

PC 532c

485
Q

Giving a kickback of construction funds

A

PC 532e

486
Q

Fraudulently selling the same land twice to different persons

A

PC 533

487
Q

Willful concealment by a married person of the necessity for concurrence of a spouse in the sale or mortgaging of a property

A

PC 534

488
Q

Any false statement by a license regarding the price, other accounting, quality or quantity of a property or other lies, is a misdemeanor

A

PC 536

489
Q

Placement of advertising signs on public or private property w/o permission

A

PC 556-556.2

490
Q

Bribery of a lender to obtain credit OR acceptance of such bribery

A

PC 639-639.a

491
Q

Commercial bribery by a title insurance company, insurer, or controlled escrow company, or any employee of such companies pays (directly/indirectly) compensation/licensee who accepts such bribery

Penalty?

A

PC 641.4
$10k

492
Q

Seller (w/o buyer’s consent) under an unrecorded contract of sale encumbers land in an amt exceeding the present contract balance

A

CC 2985.2

493
Q

While there is a payment due on an obligation secured by the land, a seller under a contract of sale appropriates a payment received from the buyer to any purpose except payment on that obligation

A

CC 2985.3

494
Q

Failure by the seller under a contract of sale to apply to those purposes pro rata tax and insurance payments received from buyer

A

CC 2985.4

495
Q

Defendant must receive a min. __________ notice before either the injunction or restraining order is granted

A

5 days

CA RE Principles (6 decks)

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