Chap 11 Flashcards
To Remember: Elements of a Valid and Enforceable Real Estate Sale Contract
C Competent parties
O Offer and acceptance (meeting of the minds)
L Legal purpose
I In writing and signed (statute of frauds applies to real estate contracts)
C Consideration (valuable or good)
RE contracts to be enforceable must be in writing
A contract specifies the amount of money that must be paid if the buyer defaults. Which remedy for breach does this describe?
A) Compensatory damages B) Valuable consideration C) Liquidated damages D) Good consideration
Explanation
The answer is liquidated damages. Frequently the parties will stipulate an amount of money, called liquidated damages, to be paid in case of default by the buyer.
Which court case made clear that material defects affecting the value of residential property must be disclosed to prospective buyers?
A) Jackson v. Johnson B) Johnson v. Davis C) Rowe v. Wade D) Jones v. Mayer
Johnson V Davis
A buyer has breached a real estate sale contract. The seller wants to recover damages in excess of the earnest money deposit. Which remedy for breach should the seller use?
A) Specific performance B) Rescission on breach of contract C) Liquidated damages D) Compensatory damages
Explanation
The answer is compensatory damages. The party bringing suit seeks an amount of money equal to the extent of loss suffered (compensatory damages).
What does Florida’s homeowner associations law require of sellers who own property subject to a mandatory homeowners association?
A)
Sellers are not required to provide any disclosures to buyers, provided the information is available in the public records.
B)
Sellers must provide buyers with a disclosure summary regarding the association.
C)
Sellers must inform buyers that they will be required to escrow the association dues.
D)
Sellers must provide buyers with copies of property tax records from the past three years.
The answer is the sellers must provide buyers with a disclosure summary regarding the association. Florida law requires sellers of property subject to a homeowners association to provide buyers with a disclosure summary regarding the association, the existence of restrictive covenants, and any assessments that the association imposes.
Within what period of time must the seller be given a copy of a written listing agreement?
A) 5 days B) 3 days C) 48 hours D) 24 hours
24
Which information must NOT be included in a listing agreement?
A) Owner's signature B) Automatic renewal clause C) Definite expiration date D) Commission structure
b. automatic renewal
Who must receive the lead-based paint disclosure?
A)
Tenants and buyers of all residential property built before 1978
B)
Tenants and buyers of all rental property if a family member is younger than age two
C)
Tenants and buyers of all residential property
D)
Buyers of all single-family homes
aThe answer is tenants and buyers of all residential property built before 1978. The lead-based paint disclosure law applies to buyers and tenants of residential property built before 1978.
Which element is NOT required of a valid real estate contract?
A) Acknowledgment B) Offer and acceptance C) Legality of object D) Consideration
The answer is acknowledgment. Real estate contracts must include consideration, be for a legal purpose, and include a meeting of the minds (offer and acceptance). Real estate contracts are not required to be acknowledged to be valid.
A seller receives an offer from a buyer to purchase a property for $300,000. The seller changes the price to $320,000 and submits it to the buyer. Which term describes the price change?
A) Meeting of the minds B) Counteroffer C) Breach of contract D) Annulment
The answer is counteroffer. When the offeree (the person receiving the offer) alters the terms of the original offer, it creates a counteroffer.
Which statement is TRUE regarding the Florida Building Energy-Efficiency Rating Act?
A)
Most lenders require that an energy-efficiency rating be conducted before approving a mortgage loan.
B)
Buyers must be given an information brochure notifying the buyer of the right to conduct an energy-efficiency rating on the structure.
C)
Sellers are required to pay the cost of an energy-efficiency rating on all homes built before 1978.
D)
If requested in writing, sellers must furnish buyers with an energy-efficiency rating for the structure.
The answer is buyers must be given an information brochure notifying the buyer of the right to conduct an energy-efficiency rating on the structure. The Florida Building Energy-Efficiency Rating Act requires that buyers, before signing the sale contract, receive an information brochure notifying the purchaser of the option for an energy-efficient rating on the building.
