contracts Flashcards
1
Q
Contracts
A
Consideration, Offer and Acceptance, Legal purpose & capacity, Agreement
2
Q
Addendum
A
Something added to printed contract – Page listing other things buyer wants
3
Q
Option contract
A
Agreement to allow a buyer to purchase or not, at a future date
4
Q
Lease/ Purchase
A
two contracts – lease for a period and option or sale contract
5
Q
Consideration
A
something for something - promise to give money for title
6
Q
Contingency
A
Provision in contract that requires a certain act be done before contract becomes binding
7
Q
Offer
A
One party offers to do something for something in return
8
Q
Counteroffer
A
response to offer with another offer
9
Q
Unilateral
A
one sided – offer
10
Q
Bilateral
A
Promises made by two parties - two sided - sales contract
11
Q
Duress
A
contract signed under threat
12
Q
Express contract
A
Contract in writing
13
Q
Implied contract
A
an agreement based on the actions of the parties
14
Q
Executory contract
A
contract in which something remains to be done (closing)
15
Q
Executed contract
A
closed
16
Q
Execute
A
Sign contract
17
Q
Listing agreement
A
between broker and principle to pay commission if broker sells property
18
Q
Assignment
A
transferring interest in instrument to another
Mortgages are assigned to secondary market
19
Q
Conveyance
A
Transference or refers to any document that transfers title to real property
20
Q
Acknowledgement
A
Notorized for recording
21
Q
Offer and acceptance
A
“meeting of the minds”
22
Q
Void contract
A
one that did not meet the requirements of a valid contract (forged name)
23
Q
Voidable contract
A
one that appears to be valid , but may be voided (minor signed)
24
Q
Minor
A
Alabama must be 19 or 18 and married to sign contract
25
Rescission
canceling of contract
26
Novation
substituting another contract
27
Breach of Contract
violation of contract without excuse
28
Earnest Money
good faith money to prove intention - not required for valid contract
29
Liquidated damages
– an amount predetermined as the total damages for breach of contract (earnest)
30
Specific performance
– legal action to compel a party to carry out terms of contract
31
Statute of Frauds
–law that requires instruments involving real estate to be in writing to be enforceable
32
Statute of Limitation
– law that puts time limits on bringing action in court
33
Time is of the essence
– clause in contract that requires performance within a certain time
34
Laches
Loss of rights due to delay in asserting claim (property inspection)
35
Building permit
written government permission to construct or alter a structure
36
Certificate of Occupancy
– government permission to use structure – all inspections passed
37
Conditional Use Permit
Permission to allow use that conflicts with zoning (day care in residential)
38
Brokerage
Bringing together sellers and buyers for a fee
39
Agent
person employed to act on behalf of another
40
Broker
Qualifying Broker- Responsible for all acts of all agents
| Primary business, supervision of all agents, signor on escrow accounts, place of business
41
Transaction Broker
Relationship begins as TB, assisting parties until agency agreement is signed
42
Single agent
agent working for one party in a transaction – must be in writing
43
Dual agent
agent working for both sides of transaction – must be in writing and signed by all
44
Branch office
different locations must have a qualifying broker
45
Independent contractor
- responsible for end results, not subject to employee controls
46
Procuring cause
person who’s efforts acquire a ready, willing and able buyer
47
RECAD
Real Estate Consumer Agency Disclosure –
| Must be given to consumer at first contact before confidential information is disclosed to another
48
Land
earth’s surface, including below and above & anything permanently attached to it
49
Situs
Personal preference for one area over another
50
Real property / Real Estate
interest, rights, and benefits inherent in real estate ownership
51
Appurtenant
– right, privilege, or improvement belonging to and passing with property
52
Tangible
physical – the property
53
Intangible
Non –physical – rights that go with property
54
Appurtenant Easement
– easement that attaches to one property that allows use by adjacent landowner
55
Annexation
– Process of converting personal property to real property (planting a tree)
56
Severance
Process of converting real property to personal property (cutting down a tree)
57
Fixture
Personal property (chattel) that has become real property Ceiling Fan
58
Improvement
any structure erected on a site to enhance the value of the property
59
Trade fixture
Personal property that does not become real property Restaurant equipment
60
Chattel
– personal property – personalty
61
Fructus Industriales
Emblements - Fruits of Industry / agricultural crops – personal property
62
Fructus Naturales
Trees & bushes – real property
63
Mineral Rights
Subsurface rights may be sold separately
64
Water rights
Adjacent lands have rights that water not be restricted or contaminated
65
Littoral rights
non-flowing – Lunar – to high water mark
66
Riparian rights
flowing water – River – right to access and use water
67
Title
Right to ownership of land, Evidence of ownership of land – Not a piece of paper
68
Eminent domain
Government right to take private property
69
Condemnation
– process of taking private property for public use through eminent domain
70
Dedication
voluntary transfer of private property to public use
71
Inverse Condemnation
Action taken by adjacent property owner for damages (airport expansion)
72
Manufactured Housing
Wheel Estate – Built offsite and trucked in on wheels Only 5% moved again
73
Modular Housing
Built offsite and trucked in, then placed with cranes (Legos)
74
Equity
Current market value minus mortgage
75
Demand
– Amount of goods people are willing and able to buy at a given price
76
Supply
– Amount of goods producers are willing to offer at a given price
Absorption Rate - # of homes sold in 1 year divided by # of homes so
77
Absorption Rate
of homes sold in 1 year divided by # of homes sold in previous month
78
Demographics
Density & Distribution of people
79
Capital gain
profit earned from the sale of an asset
80
Short Term
held for less than 1 year & taxed at ordinary income rates
81
Long Term
held for more than 1 year & taxed at capital gains rates (lower tax)
82
Monetary policy
- government regulation of the amount of money in circulation (Federal Reserve)
83
Tax policy
government policy to support its goals
84
Contracts-
Consideration, Offer and Acceptance, Legal purpose & capacity, Agreement
85
Contract
- legally enforceable set of promises that must be performed or breach occurs
86
Addendum
Something added to printed contract – Page listing other things buyer wants
87
Option contract
– Agreement to allow a buyer to purchase or not, at a future date
88
Lease/ Purchase
two contracts – lease for a period and option or sale contract
89
Consideration
something for something - promise to give money for title
90
Contingency
– Provision in contract that requires a certain act be done before contract becomes binding
91
Offer
– One party offers to do something for something in return
92
Counteroffer
response to offer with another offer
93
Unilateral
one sided – offer
94
Bilateral
– Promises made by two parties - two sided - sales contract
95
Duress-
- contract signed under threat
96
Express contract
– Contract in writing
97
Implied contract
an agreement based on the actions of the parties
98
Executory contract
contract in which something remains to be done (closing)
99
Executed contract
– closed
100
Execute
Sign contract
101
Listing agreement
– between broker and principle to pay commission if broker sells property
102
Assignment
- transferring interest in instrument to another Mortgages are assigned to secondary market
103
Conveyance
Transference or refers to any document that transfers title to real property
104
Acknowledgement
Notorized for recording
105
Offer and acceptance
“meeting of the minds”
106
Void contract
one that did not meet the requirements of a valid contract (forged name)
107
Voidable contract
one that appears to be valid , but may be voided (minor signed)
108
Minor
– Alabama must be 19 or 18 and married to sign contract
109
Rescission
canceling of contract
110
Novation
substituting another contract
111
Breach of Contract
violation of contract without excuse
112
Earnest Money
good faith money to prove intention - not required for valid contract
113
Liquidated damages
– an amount predetermined as the total damages for breach of contract (earnest)
114
Specific performance
– legal action to compel a party to carry out terms of contract
115
Statute of Frauds
–law that requires instruments involving real estate to be in writing to be enforceable
116
Statute of Limitation
– law that puts time limits on bringing action in court
117
Time is of the essence
clause in contract that requires performance within a certain time
118
Laches
Loss of rights due to delay in asserting claim (property inspection)
119
Building permit
written government permission to construct or alter a structure
120
Certificate of Occupancy
– government permission to use structure – all inspections passed
121
Conditional Use Permit
- Permission to allow use that conflicts with zoning (day care in residential)
122
Nonconforming Use
use of property may continue after zoning ordinance change (residential changes)
123
Zoning
– Power given to local governments by state police power to regulate use of land
124
PETE
government powers – Police, Eminent Domain, Taxation, Escheat
125
Density Zoning
– Restriction on maximum number of housing units per acre
126
Bulk zoning
establishes restrictions in bulk – downtown Birmingham buildings are < 34 floors (airport)
127
Setback line
– bulk zoning that establishes distance from structure to property lines
128
Variance
permission to build a structure that is prohibited by zoning
129
Restrictive covenants
– Private restriction on land use
130
Clustering
Grouping housing on smaller lots with larger common areas
131
Gridiron
– Placing housing in rows on a grid
132
Subdivider
improving land by dividing into lots then putting in streets and utilities
133
Subdivision
planned community of similar homes
134
Developer
- improving land (building structures)
135
Master Plan
Long term plan for land use
136
PUD
Planned Unit Development ( Riverchase)
137
MUD
– Multi Use Development – High rise with retail on street floor, offices above, residence above that
138
Brokerage
Bringing together sellers and buyers for a fee
139
Agent
– person employed to act on behalf of another
140
Antitrust
Price fixing, Group boycotting, Allocation of Customers, Allocation of markets, Tie-in agreements
141
Broker
- Qualifying Broker- Responsible for all acts of all agents
| Primary business, supervision of all agents, signor on escrow accounts, place of business
142
Transaction Broker
– Relationship begins as TB, assisting parties until agency agreement is signed
143
Single agent
– agent working for one party in a transaction – must be in writing
144
Dual agent
agent working for both sides of transaction – must be in writing and signed by all
145
Branch office
different locations must have a qualifying broker
146
Independent contractor
responsible for end results, not subject to employee controls
147
Procuring cause
person who’s efforts acquire a ready, willing and able buyer
148
RECAD
Real Estate Consumer Agency Disclosure –
| Must be given to consumer at first contact before confidential information is disclosed to another
149
Escrow Accounts
Commingling
| Conversion
150
Commingling
– placing other’s money (held in trust) into account other than escrow (trust ) account
151
Conversion
using other’s money held in trust for any reason
| Money must be held in FDIC bank with branch in Alabama
152
Risk management
ACT Avoid, Control, Transfer
153
Property Disclosure
required for Health & Safety – known structural defects, Lead Paint
154
Caveat Emptor
“Let the buyer beware” does not apply to:
| Health and safety issues, Assumption of Duty, New Construction, Direct question
155
Latent defect
Hidden structural defect that could not be discovered by ordinary inspection
156
Concealment
– illegal failure to disclose a material fact
157
Fraud
When agent conceals Knowledge of , duty to disclose, harm comes to party
158
Ad Valorem tax
tax according to value (tax assessed)
159
Mill
one- thousandths 1/1000 tax rate of 6 mills is $6 per $1000 of taxable value
160
Millage rate
tax rate applied to tax assessed value to compute tax owed for year October 1st
161
Special assessment
– tax charge applied for improvements (adding sidewalks)
162
Involuntary Lien
Placed on property without consent of owner (Tax)
163
Voluntary Lien
Placed on property with owners consent (Mortgage)
164
Statutory Lien
– lien imposed by statue (law) (tax lien)
165
Equitable Lien
From common law – mechanics or material man
166
General Lien
– lien on all creditor’s property both personal and real (judgment)
167
Specific Lien
– Lien on one property (mortgage)
168
Judgment
court order to attach lien on property of defendant
169
First Lien
First recorded lien against property gets first funds from foreclosure
170
Junior lien
– second recorded or later in line to collect money in foreclosure
171
Subordination
giving right to be first in line to collect to a junior position holder
172
Property taxes
are unrecorded liens that are paid before first lien in a foreclosure sale
173
Mechanics or Material man lien
filed by creditor for nonpayment of debt for services or material
174
Mortgage lien
Death Note paid until note dies Voluntary, Specific
175
Tax lien
– Charge against property for ad valorem taxes
176
Tax certificate sale
sale of tax debt on a property for non a payment of valorem taxes
177
Foreclosure
sale of property for non payment of debt
178
Equitable right of redemption
pay off debt before sale
179
Statutory right of redemption
- Alabama - redeem property up to one year after foreclosure sale
180
1031
Tax deferred exchange of like property
