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Basic Residential Appraisal Principles > CH 4: Transfer of Interests: Instruments and Agreements > Flashcards

CH 4: Transfer of Interests: Instruments and Agreements Flashcards

1
Q

Deed

A

Written proof of title

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2
Q

Title

A

actual lawful ownership, NOT a document

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3
Q

Equitable title

A

actual title will be transferred at a future date

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4
Q

essential deed elements

A
  • competent grantor
  • identifiable grantee
  • Act (word) of conveyance
  • consideration
  • legal description
  • habendum clause
  • Limitations
  • exceptions and reservations
  • signatures
  • delivery and acceptance
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5
Q

Habendum Clause

A

“to have and to hold”

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6
Q

General warranty deed

A
  • grantor warrants the title against defects before or during grantor’s period of ownership
  • “convey and warrant forever”
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7
Q

Warranties included in a general warranty

A

covenant of seizen
covenant against encumbrances
covenant of quiet enjoyment
covenant of warranty forever

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8
Q

covenant of seizen

A

assures the grantor holds title noted in deed being conveyed

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9
Q

covenant against encumbrances

A

assures property is free of encumbrances (usually real property taxes that haven’t been assessed)

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10
Q

covenant of quiet enjoyment

A

ensures grantee can possess land w/o claims of title from others

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11
Q

covenant of warranty forever

A

provides grantor will defend the grantee’s interests against all unlawful claims of title

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12
Q

Full covenant and Warranty Deed

A
  • strongest guarantee
  • covenant of right to convey
  • covenant of further assurances
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13
Q

covenant of right to convey

A

states grantor owns land and convey it

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14
Q

covenant of further assurances

A

requires grantor to remedy any defects in title

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15
Q

special warranty deed

A
  • limited warranty
  • bargain and sale deed w/ covenants
  • grantor warrants title only against defects during the time the grantor owned property
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16
Q

bargain and sale deed (judicial deed)

A

-grantor has right to convey property, but there are no warranties with it.

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17
Q

Judicial deeds

A 
executor's deed
administrator's deed
guardian's deed
sheriff's deed
referee's deed
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18
Q

executor’s deed

A

executor of estate conveys property of the deceased

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19
Q

administrator’s deed

A

court appoints person to convey property of deceased (usually no will)

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20
Q

guardian’s deed

A

court-appointed rep uses a guardian’s deed to convey property by a court

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21
Q

sheriff’s deed

A

a doc giving ownership rights in property to a buyer at a sheriff’s sale

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22
Q

referee’s dead

A

doc giving ownership during a bankruptcy or foreclosure

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23
Q

quitclaim deed (deed of release)

A
  • no warranties
  • conveys any interest
  • used to remedy clouds on a title
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24
Q

clouds on a title

A

when someone may have a claim on title, but terminates his interest

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25
Q

Methods of transferring Ownership

A
  • Voluntary Alienation
  • Involuntary Alienation
  • devise or descent
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26
Q

ways of voluntary alienation

A

Sale of property
Gift of a Deed
Grant

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27
Q

Involuntary Alienation

A

Eminent Domain
Foreclosure
Adverse Possession
Accession

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28
Q

Adverse Possession

A

requires open, notorious, hostile, adverse, continuous, and exclusive use of another’s land for a specified period of time - matures into title

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29
Q

accession

A

acquisition by it’s addition to real estate already owned through human/natural processes

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30
Q

Accretion/alluvion

A

gradual addition to dry land by nature (lake depositing silt)

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31
Q

avulsion

A

land lost due to sudden acts of nature

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32
Q

reliction

A

body of water gradually recedes, exposing land that was underwater

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33
Q

devise vs descent

A

devise- transfer with a will

descent - without a will

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34
Q

testate/intestate

A

dying testate = having a will

dying intestate = not having a will

35
Q

Elements of a contract

A
  • voluntary
  • competent parties
  • lawful and possible objective
  • consideration
  • description
  • mutual agreement
  • written format and signatures
36
Q

competent parties (contract elements)

A
  • 18+ years (only minor can void a contract)
  • mental competence
  • proper authorization
37
Q

severable contract (contract elements)

A

one part or provision can be held unenforceable w/o making the entire contract unenforceable

38
Q

consideration/valuable consideration (contract elements)

A

anything of value given to induce another to enter into a contract

39
Q

forberance

A

promise not to do something

40
Q

Contract characteristics

A
  • sufficient, not necessarily adequate consideration
  • given freely
  • not under fraud, undue influence, duress, mistake
  • written format
  • power of attorney
41
Q

attorney in fact has to be an attorney T/F?

A

False - can be anyone

42
Q

Breach of contract

A

one party fails to perform - non-defaulting party can take legal action

43
Q

substantial performance/ substantial breach (discharge of contracts)

A

promisor doesn’t perform all contractual obligations, but does enough so that the promisee is required to fulfill their obligation

44
Q

material breach

A

breach on contract important enough to excuse the non-breaching party

45
Q

“time is of the essence”

A

if deadline passes, contract is automatically voidable - material breech
- unless both parties agree to extend deadline

46
Q

conditions/ contingency (discharge of contract)

A

party’s rights/obligations depend on occurrence/nonoccurence of certain events

47
Q

Discharge of contracts

A
  • agreements of the parties
  • partial performance
  • full performance
  • impossibility of performance
  • operation of law
48
Q

remedies for breach of contract

A 
cancelation
compensatory damages
injunction
liquidated damages
reformation
recission
specific performance
49
Q

(remedy for breach) cancelation

A

termination of contract w/o undoing what was performed under it

50
Q

(remedy for breach) compensatory damages

A

compensate plaintiff for harm caused by defendant’s act/failure to act

51
Q

(remedy for breach) injunction

A

court order for party to do/not do certain acts as opposed to monetary reward

52
Q

(remedy for breach) liquidated damages

A

amount of money specified in a contract to be awarded in the event the agreement is breached

53
Q

(remedy for breach) reformation

A

a court/judge changes a contract to reflect true intent (usually when parties make clerical error)

54
Q

(remedy for breach) recission

A

destruction, annulment, termination of contract and all parties must give back anything under it

55
Q

(remedy for breach) specific performance

A

(forced sale) court orders breacher to perform as agreed rather than simply paying damages

56
Q

(discharge of contract) partial performance

A

both parties agree to accept something different than original terms

57
Q

(discharge of contract) full performance

A

all parties have fulfilled their obligations

58
Q

(discharge of contract) impossibility of performance

A

obligation becomes illegal

59
Q

(discharge of contract) operation of law

A

when rights/liabilities are changed by application of law

60
Q

Assignment of contract

A

assignor transfers rights to another (assigned) person

61
Q

Novation

A

substitution of a new contract for an earlier contract (new contracts cancel original)

62
Q

Real estate sales contracts contain 3 things

A
  1. buyers initial offer (and counter offers)
  2. receipt of any earnest money deposit
  3. contract between buyer and seller
63
Q

termination of an offer

A
  1. lapse of time
  2. death/incapacity
  3. revocation - must be made before offer is accepted
64
Q

Requirements for acceptance of an offer

A
  • “meeting of minds”

- must be communicated to offerer directly

65
Q

escape clause/ bump clause/ 72 hour clause

A

buyer has to sell his home in order to purchase the property… this clause allows other buyers and sellers some options

66
Q

Option to purchase

A

contracts that give one party the right to do something w/o obligating them to do it

  • usually renting w/ the option of buying
  • inforcible by optionee
67
Q

Right of First Refusal

A

right to have first chance to a lease property if owner decides to sell/lease it

68
Q

Gross lease

A
  • common for residential rentals

- landlord pays for all expenses

69
Q

modified-gross lease

A

lessor and lessee are sharing expenses

70
Q

net-lease

A

leasee is paying some or all expenses

71
Q

(Net-lease) single net

A

lessor pays for maint repairs and taxes/insurance

lessee pays EITHER taxes/insurance

72
Q

(Net-lease) double net - net/net

A

lessor pays maint/repair

lessee pays BOTH taxes and insurance

73
Q

(Net-lease) triple net

A

lessor pays for building repairs

lessee pays taxes, insurance/maint

74
Q

(Net-lease) absolute net

A

lessee pays everything

75
Q

Flat lease / level payment lease

A

rent payments are consistent throughout lease

76
Q

variable lease

A

payments made at regular interval but may change

77
Q

step lease

A

rent amount changes a PERCENT over time at set interval

78
Q

revaluation lease

A

payments change over time to allow market changes

79
Q

annual increase lease

A

rent changes an AMOUNT specified over time at set interval

80
Q

percentage lease

A
  • usually business

- paying base guaranteed minimum, plus a percent of the sales

81
Q

T/F: leases are standardized and appraisers just need to know the type

A

False, appraisers have to look at each individual lease

82
Q

Lease terms of interest to appraiser

A
  • rent
  • term of lease
  • terms to change rent
  • beginning and ending date of lease
  • personal property included in lease
  • expenses paid by landlord and tenant
  • other services provided by landlord
83
Q

Breakpoint rent / overage rent (percentage lease)

A

Breakpoint - minimum guaranteed rent

overage rent- percent of sales

Basic Residential Appraisal Principles (4 decks)

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