Contract Law Part I Flashcards
What is the purpose of TRELA?
To safeguard the public interest and protect consumers of real estate services
How many commission members are there and how many must have at least five years of service as brokers before being appointed to the commission?
There are nine members. Six of the members must have been active as real estate brokers for at least five years prior to their appointment.
What is an easement?
A right to cross or otherwise use someone else’s land for a specified purpose.
What is meant by the term involuntary alienation?
The loss of property due to an adverse action such as a foreclosure or tax sale.
What is the difference between an addendum and an amendment?
An addendum is a document attached to and made a part of the original contract. An amendment is a document that makes a change to the ratified sales contract.
What is a Contingency
A provision in a real estate contract that specifies the contract would cease to exist upon the occurrence of a certain event.
Define Counteroffer
An offer made in response to a previous offer by the other party during negotiations for a final contract
What does the term proration mean?
The amount of or the act of determining a portion or share of a cost or benefit to be allocated between two parties
In 1939 the Texas legislature passed
the Real Estate Dealer’s License Act, which required real estate agents to obtain licenses. In 1955 the act’s name was changed to the Texas Real Estate License Act (TRELA).
Purpose of TRELA
to safeguard the public interest and protect consumers of real estate services. The commission has rule-making authority and any rules they make have the full force and effect of law.
TRELA Commission Members
There are nine commission members. Six of the members must have been active as real estate brokers for at least five years prior to their appointment, and three members must have no financial interest in the real estate business.
Air Rights
The right to control, occupy, or use the vertical space (air space) above a property, subject to necessary and reasonable use by neighbor(s) and others (such as aircraft).
Bilateral contract
A reciprocal arrangement between two parties where each promises to perform an act in exchange for the other party’s act.
Bundle of rights
A set of legal rights afforded to the real estate title holder which can include the right of possession (the property is owned by the title holder), the right of control (the owner controls the property’s use), the right of exclusion (the holder can deny people access to the property), the right of enjoyment (the holder can use the property in any legal manner) and the right of disposition (the holder can buy or sell the property).
Easement
A right to cross or otherwise use someone else’s land for a specified purpose.
Eminent Domain
The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.
Encroachment
A situation where a property owner violates the property rights of his neighbor by building something on the neighbor’s land or by allowing something to hang over onto the neighbor’s property
Encumbrance
A claim against, limitation on or liability against real estate; encumbrances include liens, deed restrictions, easements, assessments and taxes.
Equitable Title
The portion of control that a buyer has while a party in a contract for deed or an installment contract for the property; the ability to gain full control and title to property while someone else owns legal title.
Estate at Sufferance
An agreement in which a property renter is permitted to live in a property after a lease term has expired, but before the landlord demands the tenant vacate the property.
Estate at Will
A tenancy agreement where a tenant occupies property with the consent of the owner, but without an agreement that specifies a definite rental period or the regular payment of rent.
Estate for Years
An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time.
Estate from Period to Period
An interest in leased property that continues from period to period - week to week, month to month, or year to year.
Executed Contract
A contract that has been fully performed by both parties.
Executory Contract
A contract under which one or more parties has not yet performed.
Express Contract
A contract whose terms are clearly spelled out, usually in writing.
Freehold Estate
An estate in which ownership is for an undefined length of time.
Homestead
A legal life estate occupied as the family home
Involuntary Alienation
The loss of property due to an adverse action such as a foreclosure or tax sale.
Leasehold Estate
A form of property tenure where one party buys the right to occupy land or a building for a given length of time.
Legal Description
The geographical description of a real estate property for the purpose of identifying the property for legal transactions.
Legal Life Estate
A form of life estate created by state law
Littoral Rights
Rights relating to the ownership of property that abuts an ocean, sea, or lake.
Marketable Title
Ownership and possession of real property that is readily transferable since it is free from valid claims by outside parties.
Personal Property
A type of property which can include any asset other than real estate.
Primary Mortgage Market
The market where borrowers and mortgage originators come together to negotiate terms and effectuate mortgage transactions; includes mortgage brokers, mortgage bankers, credit unions and banks.
Real Property
Any property that is attached directly to land, as well as the land itself.
Riparian Rights
A system for allocating water among those who possess land along its path.
Secondary Mortgage Market
A market for buying and selling mortgages.
Subsurface Rights
Landowner’s rights to the water and other substances below the surface of land.
Surface Rights
Ownership rights in a parcel of real estate that are limited to the surface; does not include air rights or subsurface rights.
Survey
An assessment of property lines to determine the exact amount of land that a homeowner owns.
Title
A legal document evidencing a person’s right to or ownership of a property.
Unilateral Contract
A contract created by an offer than can only be accepted by performance.
Valid Contract
A contract that meets all requirements of law, is binding upon its parties, and is enforceable in a court of law.
Void Contract
A formal agreement that is illegitimate and unenforceable from the moment it is created.
Voidable Contract
A formal agreement between two parties that may be rendered unenforceable for a number of legal reasons.
Voluntary alienation
A transfer of real property through one’s intentional actions.
Water rights
One of the interests that may attach to real estate ownership, and pertain to the rights to use adjacent bodies of water.
