Chapter 7 - Disclosures in Real Estate Vocabulary

Question 1

“as is”

Answer 1

Term stating the seller will not be responsible for the cost of repairing any “OBSERVABLE” defect.

Question 2

Affidavit of Title

Answer 2

A statement, sworn in front of a notary public or other authorized official, by the seller or grantor of property that identifies the grantor, identifies the grantor’s marital status, and certifies that the grantor has no new judgments, liens, divorces, unrecorded deeds, or other potential title defects since the title examination was completed. It also certifies that the grantor is indeed in possession of the property.

Question 3

Affiliated Business Arrangement (AfBA)

Answer 3

A situation where a person in a position to refer settlement services—or an associate of that person—has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1% in a provider of settlement services and who then refers business to that provider or in some way influences the selection of that provider.

Question 4

Asbestos

Answer 4

A fibrous material that was once very common in many building materials because of its insulating and heat-resistant value; can cause breathing issues and illness. been found to cause lung and stomach cancer.

Question 5

Attestation

Answer 5

The act of witnessing a person’s signing of an instrument by a notary public.

Question 6

Carbon Monoxide

Answer 6

Colorless, odorless gas that is a natural byproduct of fuel combustion; dangerous when inhaled.

Question 7

Caveat Emptor

Answer 7

A Latin phrase meaning “Let the buyer beware.”

Question 8

Disclosure

Answer 8

A real estate licensee’s fiduciary obligation to reveal material facts or defects.

Question 9

disclosure statement

Answer 9

The statement required by the Truth-in-Lending Law whereby a creditor must give a debtor a statement showing the finance charge, annual percentage rate, and other required information.

Question 10

Easton vs Strassburger

Answer 10

case resulting in RE agents must perform a visual inspection of the property and SELLERS must complete a Transfer Disclosure Statement.

Question 11

flood (100-year)

Answer 11

Boundary indicating areas of moderate flood hazards.

Question 12

flood hazard boundary maps

Answer 12

Maps that identify the general f lood hazards within a community.

Question 13

Formaldehyde

Answer 13

A chemical organic compound found in building materials which may be a carcinogen.

Question 14

hazardous household waste

Answer 14

Consumer products such as paints, cleaners, stains, varnishes, car batteries, motor oil, and pesticides that contain hazardous components.

Question 15

hazardous waste

Answer 15

Materials—chemicals, explosives, radioactive, biological— whose disposal is regulated by the Environmental Protection Agency (EPA).

Question 16

Latent Defect

Answer 16

A defect that is not visible or apparent; a hidden defect that would not be discovered in a reasonably thorough inspection of property.

Question 17

lateral support

Answer 17

The support which the soil of an adjoining owner gives to a neighbor’s land.

Question 18

Mello-Roos Act

Answer 18

Allows developers to make improvements (roads, parks, schools, fire stations) while making each homeowner pay for the improvements. These improvements are listed in the property taxes.

Question 19

Mello-Roos District

Answer 19

An area where a special assessment is imposed on those real property owners within a Community Facilities District. Public services such as roads, sewers, parks, schools and fire stations in new developments may be financed under this law.

Question 20

Patent Defect

Answer 20

A visible, apparent defect that can be seen in a reasonably thorough inspection of property.

Question 21

Planned Unit Development (PUD)

Answer 21

A type of subdivision in which developers do not have to comply with all standard zoning and subdivision regulations such as setback and lot size requirements.

Question 22

Preventive Maintenance

Answer 22

Routine maintenance and inspections to keep equipment and the property in good working order.

Question 23

public record

Answer 23

(1) A document disclosing all important facts about the property, its marketing and the financing of the subdivision. (2) Also known as public report.

Question 24

Radon

Answer 24

Decaying uranium that emanates from the earth as an odorless, colorless, and tasteless gas; may cause cancer if allowed to build up in high concentrations. gas that is a carcinogen detected by a spectrometer.

Question 25

Real Estate Advisory Commission

Answer 25

A 10-member commission to offer advice to the Commissioner on matters pertinent to the Bureau of Real Estate.

Question 26

Real Estate Transfer Disclosure Statement

Answer 26

A document that the seller must provide to any buyer of residential property (one-to-four units).

Question 27

red flag

Answer 27

Something that alerts a reasonably observant person of a potential problem.

Question 28

Residential Lead-Based Paint Hazard Reduction Act

Answer 28

A federal law that requires sellers and landlords to disclose known lead paint hazards for homes built before 1978.

Question 29

short fund

Answer 29

When a home is sold and the homeowner’s insurance policy is cancelled, the seller or owner of the policy receives a refund which is less than the credit they would receive if the buyer were to take over the existing homeowners’ insurance.

Question 30

sinking fund

Answer 30

A fund set aside from the income from property which, with accrued interest, will eventually pay for replacement of the improvements.

Question 31

Stigmatized Property

Answer 31

A property that is undesirable to most people because of a past event, such as a crime or death. Such stigmas as not considered material facts that must be disclosed. Also known as psychologically impacted property.

Question 32

Subdivided Lands Law

Answer 32

A state law protecting purchasers of property in new subdivisions from fraud, misrepresentation or deceit in the marketing of subdivided property.