Final Deck Flashcards
What is Ostensible (apparent) Agency?
When someone who has not been authorized to represent another, acts as if they are that person’s agent
What is an “estoppel” and what does it prevent?
An estoppel is a legal doctrine that prevents a person from asserting facts that are inconsistent with earlier actions or statements.
When was the “Real Estate Settlement Procedures Act” (RESPA) prohibited?
1974
What form does a non resident real estate license applicant have to file?
Irrevocable Consent form
What is a “mortgage banker”?
A person or entity licensed to engage in the business of making mortgage loans
What is a “mortgage broker”?
A person or entity in the business of soliciting, processing, placing, or negotiating mortgage loans for others.
What are the 4 court order representatives that are exempt from obtaining a real estate license?
Executor
Administrator
Banktruptcy Trustee
Trustee/Guardian
What is an “administrator”? 3 ways one is an administrator
Court appointed person to handle the estate of someone who…
1) died without a will
2) with a will but no nominated executor
3) the executor named in the will has died, has been removed from the case or does not desire to serve.
What is an “executor”
Person named in a will to handle the property of someone who has died and carry out the terms of the will.
T/F : A sales person may NOT be an officer in the corporation nor own any voting stock.
True
What class is an “Individual broker”?
Class 35
What class is an “associate broker”?
Class 30
What class is a “trade name broker”?
Class 37
What class is a “Partnership Broker”?
Class 33
What are the exemptions from taking CE courses? (2)
1) Attorneys who have a license and are admitted to NYS Bar
2) Brokers with more than 15 years consecutive licensure before July 2008 and are actively engaged in real estate business
How much is the fee for a broker licenses?
$150 (same fee amount for name change as well)
T/F : License fees are set by the Division of Licensing Services
False : Set by Department of State
What notice does a licensee file when they want to leave a brokerage?
Termination of Association Notice w/ DOS
Within how many days must a broker file a new record of associate notice with the DOS?
Within 5 days
When a broker dies, an executor is given authority for how many days to complete any unfinished real estate transactions that were currently in process by anyone associated with that brokerage?
120 Days
When did the Financial Services Modernization Act pass?
1999
What does the Financial Services Modernization Act of 1999 include provisions for?
Includes provisions to protect and regulate the disclosure of consumer’s personal financial information
What does the “Safeguards Rule” require?
requires all financial institutions to
design, implement, and maintain safeguards to protect customer info
T/F : Every branch office must have its own supplemental license?
True
What is the fee for each branch office license and how often must it be renewed?
$150 and every two years
Within how many days must a broker notify the DOS of a new business address?
Within 5 days
What is the illegal act of “conversion”?
Occurs if a broker were to use any of the client’s money maintained in the trust account for personal or brokerage expenses
T/F : Money should be deposited into the escrow account as promptly as is practical
True
How long must you retain copies of all contracts and other records involving 1-4 family dwellings?
3 years
What are “compensatory damages”?
Damages award, usually money, intended to compensate plantiff
What are “punitive damages”
Damages award added to compensatory damages,
to punish defendant for malicious or outrageous conduct
and discourage others from engaging in similar acts
T/F : YARD SIGNS MUST include the office telephone number of the brokerage
True
Actual Authority
permission given intentionally to an agent by the principal
Express authority
Permission for a specific act or outcome communicated by the principal to the agent
Implied Authority
Authority to do everything reasonably necessary to carry out the principals express orders
What is the illegal act of “blockbusting” (panic selling)?
illegal practice of inducing owners to sell their homes by suggesting the ethnic or racial composition of the neighborhood is changing
What is the illegal act of “Steering”?
funneling prospective buyers or renters of protected classes to or away from neighborhoods to maintain or change the neighborhood character
Practicing w/o a License: DOS has the authority to impose the following monetary fines (3 offenses)
:
First Offense - not exceeding $150
Second Offense - Not Exceeding $500
Third Offense - Not exceeding $1000
What is tortious interference?
Interference with a contractual relationship so that one party fails to execute his or her promise
DOS Penalties: What are the examples of administrative discipline?
- refusal to issue or renew license
- reprimand
- license suspension
- licensee revocation
- fine up to $1000 per offense
- fine of up to 4x the amount of any commission earned
Before the DOS revokes, suspends, or fines a licensee, it must notify the licensee in writing of the charges at least how many days prior to the date set for the hearing?
10 days prior
Which article procedure give the licensee the right to appeal any penalties to the Supreme Court of NYS?
Article 78
T/F : Penalties imposed by the DOS could be in addition to any criminal charges filed by the State Attorney General punishable by a fine of up to $1000 and/or imprisonment of up to one year
True
What is ownership in severalty?
When property is owned by an individual, corporation, or other entity.
What is tenancy in common?
When more than 1 person buys or inherits property together (unless husband and wife).
If a tenant in common dies, the deceased person’s interest passes to their heirs or to the person specified in the terms of the deceased person’s will.
What is tenancy in entirety?
Married couples who own property as tenants by the entirety each own an undivided interested in the property, each has full rights to occupy and use it and has right of survivorship.
What is joint tenancy?
Two or more parties that own estate or property jointly.
the share of each passing to the other or others on death.
T/F : A real estate licensee could be classified as a statutory employee by the IRS
False; would be statutory non-employees
What are “statutory employees”?
Independent contractors specifically classified as employees by statute for social security and medicare taxes
4 Categories of Statutory Employees
Driver
Life Insurance Sales Agent
Individual that works At Home
Full Time traveling or City Salesperson
When was the Sherman Anti-Trust Act?
1890
What does the Sherman Antitrust act of 1890 outlaw?
Outlaws practices considered harmful to consumers, such as monopoloies.
When was the Clayton Antitrust Act passed?
1914
What does the Clayton Antitrust Act of 1914 enhance?
Enhances the Sherman Anti Trust Act.
When was the Federal Trade Commission Act passed?
1914
What is “illegal per se”?
a particular act is defined as illegal in the law and is so obviously harmful to competition that detailed analysis of the activity is not required.
What happens when a legal case is settled with a “consent decree”?
A binding agreement through which the accused party consents to change its behavior but admits to no misconduct
What happens when the state sues to enforce federal and invokes “parens patriae”.
allows states to sue on behalf of its people.
civil Suits for Antitrust Violations
What is “injunctive relief”?
A court-ordered prohibition against a particular act, often imposed for violating a cease and desist order.
3 Criminal Penalties for antitrust violations include…
1) Felony conviction
2) Fines not to exceed $350K for individuals, $10M for corporations
3) Imprisonment not to exceed three years
T/F : Only the US DOJ can file criminal charges for violating federal antitrust laws
True
What is “dangling commission”?
When a licensee receives commission from a former employing broker if the licensee was licensed under that former employing broker at the time commission was earned.
What is a resolution to keep disputes out of the courts?
Mediation
What is mediation?
When a third party facilitates a discussion between the parties involved
If mediation cannot resolve the dispute, what may be necessary next?
Arbitration
What happens in arbitration?
When the court appoints a disinterested arbitrator, who listens to the arguments from each side and renders a judgement that is legally binding
What is the purpose of arbitration?
To determine which broker initiated the unbroken series of events and followed through, resulting in the sale of the property
T/F : Within arbitration, agency relationship with the client and entitlement to compensation are considered as separate issues
True
What “affidavit of entitlement” do brokers who dispute commission file with the DOS?
Affidavit of Entitlement of Commission for completion of brokerage services
T/F : A broker must initiate any legal action within 6 months of deposit or will lose any claim for commission.
True
Fact: In NY, a broker has the right to file a mechanic’s lien on commercial real estate, or any interest in that commercial real estate, in the amount of commission the broker is due under a written agreement for a lease of at least three years.
A broker would have to record a notice of a lien within eight months from when the commission was due.
Within how many months would a broker have to record a notice of a lien from when the commission was due.
Within 8 months
T/F : Arbitration is a binding proceeding that parties in dispute can take to avoid court
True
Promissory notes are to ____ as mortgages are to _______
Financing instruments & security instruments
This market is where borrowers and lenders come together to negotiate terms and effectuate mortgage transactions.
Also, is the process of originating, processing, underwriting, closing, and funding a mortgage loan
Primary Market/Primary Mortgage Market
This market is when lenders sell the mortgage to an investor to receive funds so that they can make additional mortgage loans to others
Secondary Mortgage Market
Source of funds for primary mortgage market is largely made of ______ of individuals and businesses in the local area served
Saving deposits
These types of financial institutions specialize in taking saving deposits and making mortgage loans.
Sometimes called “thrifts”
Savings and Loan Associations
These types of financial institutions specialize in taking saving deposits and making mortgage loans.
Sometimes called “thrifts”
Savings and Loan Associations
Persons or entities in the business of making mortgage loans
Mortgage Bankers
Persons or entities in the business of soliciting, processing, placing, or negotiating mortgage loans or offering to solicit, process, place, or negotiate mortgage loans for others
Mortgage brokers
T/F : Mortgage bankers must be licensed, whereas mortgage brokers must be registered with the Superintendent
True
Financing instruments that are evidence to a promise to pay a specific amount of money to a specific person within a specific time frame
“Written promise to pay money”
Promissory Notes
What are two types of Security Instruments?
Deeds of Trust
Mortgages
What are two types of Security Instruments?
Deeds of Trust
Mortgages
In these type of theory states, the security instrument creates a voluntary lien against the property that must be repaid by the debtor
NY is this type of theory state
Lien Theory States
in these type of theory states, while the debt is outstanding, the lender holds legal title to the property. Borrower has possession of the property, but until the debt is fully paid, the borrower has only equitable title.
Title Theory States
T/F : Mortgages are the primary security instrument used in lien theory states
True
T/F : Deeds of Trusts are the primary security instruments used in title theory states
True
T/F : Under title theory, legal title is transferred to the lender until the debt is repaid in full
True
T/F : A Mortgage creates a voluntary lien
True
When a property is pledged as security for a debt, but the borrower still holds legal title and possession, it is known as….
Hypothecation
T/F: Under lien theory, the borrower has legal title while the lender has a lien on the property until the mortgage is fully paid
True
T/F: lien priority, RET are always paid first.
True
When a loan meets the criteria necessary to be sold in the secondary market, it is considered what type of loan?
Conforming Loan
This type of payment is a final lump sum that pays any remaining principal and/or interest at the end of a loan term
Balloon Payment
This type of loan has the total payments over the life of the loan will pay off the entire balance of principal and interest due at the end of the term.
AKA self-liquidating
Fully Amortized Loan
T/F : Adjustable Rate Mortgages (ARMs) are not considered traditional conventional loans
True
T/F : Amortized loans apply payments to the principal and interest
True
T/F : Private Mortgage Insurance is required for 90% conventional loans
True
This clause in a contract gives a mortgage recorded at a later date the right to take priority over an earlier recorded mortgage
Subordination clause
This is a statistical report that is generally reliable indicator of the approximate cost of money.
also an element of arm that determines whether the interest rate goes up or down.
An index
This type of mortgage incudes both real estate property and personal property.
Package Mortgage
This type of mortgage covers two or more parcels or lots..
Blanket Mortgage
this type of mortgage occurs between the termination of one mortgage and the beginning of the next
Bridge Mortgage
This type of mortgage is a secondary financing arrangement in which a lender, who is often the seller, leaves the original loan intact and gives the borrower a second, larger loan
Wraparound Mortgage
special type of mortgage where a seller finances all or part of the sale of property for the buyer
Purchase Money Mortgage
This type of lease enables tenants to lease only the land - not any structures or improvements on the land.
Structured to separate the ownership of the land from the ownership of hte buildings and improvements on the land
aka Ground lease
Land lease
this exchange allows a taxpayer to sell an investment property and purchase another investment property in its place without paying taxes on the proceeds from the sales
1031 Exchange
this type of buyer in a commercial real estate who uses the property for his or her own business purposes, as opposed to owning the property and leasing to others
Amenity Buyer
this is the greatest estate (ownership) one can have in real property
Fee simple absolute
this estate is a possessory interest in real property of uncertain duration
Freehold Estate
This estate is an interest that gives the holder, the tenant, a temporary right to exclusive possession of the estate, without title
Leasehold estate
this is an interest in property that entitles the holder to possess and occupy the property, now or in the future
Possessory interest
this is an income statement where certain amounts are hypothetical
Pro Forma
This is the risk that demand for space will affect rents, vacancy rates, and net operating income.
Space Market Risk
T/F : The principal that an investor pays on a mortgage is an example of using leverage to build equity
True
T/F : The ultimate goal of an operating statement to find the cash flow
True
Straight Line Depreciation - REsidential Income Properties = 27.5 years
Straight Line Depreciation - Non residential income properties = 39 years
this type of basis incudes gains and losses from taxes and boot
adjusted basis
this is the price paid for property, including losses and gains
basis
this is non-like-kind property that is part of a like-kind exchange
Boot
An investor who takes advantage of a 1031 Exchange has more buying power on the second purchase than another investor who simply sells one property to purchase another
True
This is a formal summary of a proposed venture, to potential investors
Prospectus
one of the most widely used approaches to determine value for income producing or investment properties.
relevant for appraisal assignments in which the subject property is leased, or could reasonably be leased, producing an income stream for the owner.
estimates the value of real estate by analyzing the amount of revenue or income the property currently generates or could generate.
aka - capitalization approach
income approach
This is a percentage rate used by investors to calculate the present value of future income
Capitalization Rate
this type of laws are those that define our relationships with other people, our rights and responsibilities.
Examples: contract law, law of agency, and real property law
Substantive Laws
this type of law describes how such rights may be enforced by defining the rules that govern how civil and criminal trials operate
Procedural laws
type of damage that is a sum of money OVER AND ABOVE the actual damages
Exemplary Damages
a breach of standards of reasonable conduct imposed by law that causes harm to another person
Tort
these damages are imposed to punish the wrongdoer and to deter others from similar acts
Punitive Damages
The two ways the NYS constitution can be amended.
- Constitutional Convention
- Legislative Proposal
T/F : When a federal law and a state law are in conflict with each other, the US constitution provides that federal law can preempt the state law in a number of different situations
True
Laws adopted by the US congress and by state legislatures are called…
Acts or Statutes
this law refers to the rules of law developed by judges in court decisions..
AKA common law
Case Law
a judge’s decision in a specific case can become a rule of law applied to all cases
doctrine of stare decisis
Personal property is also known as….
Chattel
a trust established by will or after death of trustor is called a ….
testamentory trust
This provides public notice of a pending lawsuit that could affect the property’s title
Lis pendens
This legal instrumental is used when selling significant personal property, trade fixtures, farm equipment, etc
also comes into play when purchasing shares in a coop building with respect to a proprietary lease
Uniform Commercial Code Financing Statement or UCC-1
an unconditional promise or order to pay a fixed amount of money.
Classified as an order or promise..
must be in writing and signed by the drawer
Negotiable Instrument
this is a two party negotiable instrument that serves as an acknowledgement by a bank or other financial institution of receipt of money deposited with a promise to repay it
Certificate of Deposit
this clause gives the holder or payee of a time to declare the entire balance due immediately b/c of some event, like default.
acceleration clause
T/F : If an instrument includes any other conditions, it is not negotiable, therefore not transferable
True
What is it called when a person dies w/o a will (intestate), and their property automatically descends to his natural heirs or next of kin as provided for by state law, which would include spouses, children, and relatives
Descent
What is it called when a person dies with a will (testate) and the property is transferred to their heirs (devisees) as indicated in the will
Devise
T/F : in NYS, a surviving spouse is entitled to the first $50,000 or 1/3 of the net estate, whichever is greater.
True
When property ownership is reverted back to the state b/c a person dies w/o valid will and no living heirs
Escheat
the right of surviving spouse who is not named in the will to choose a mandated dollar amount or percentage of the deceased’s estate, whichever is greater
right of election
the right of surviving spouse who is not named in the will to choose a mandated dollar amount or percentage of the deceased’s estate, whichever is greater
right of election
this easement occurs when the government uses its power of eminent domain to bring a condemnation lawsuit against a property to create an easement as well as to obtain fee simple title of that property
easement by condemnation
T/F : The difference between a taking and eminent domain is that the property is regulated by a government authority to the economic detriment of the owner, w/o compensation
True
T/F : A rezone that favors a particular property owner without justification is known as spot zoning
Generally, it is illegal
True
This is defined as the physical characteristics of a parcel of land including water sources, native vegetation, location of trees and rocks, soil type, and floodplains
Topography
T/F : Topographical maps help in determine the portion of the land that useable for development
True
A study to determine how many property units can be sold or rented in the marketplace during a certain period of time.
developers use this to predict market efficiency and for deciding if an oversupply or undersupply situation exists or will exist in the market
Absorption analysis
This document is part of a site plan that locates and measures the boundaries of a property and identifies improvements, encroachments, and easements associated with the land
Survey
The acquisition of title to land by its addition to real estate already owned, through human actions or natural processes…
accession
the gradual addition to dry land by the forces of nature
accretion
what is the land added through accretion known as?
alluvion
when land is lost due to sudden acts of nature such as floods or earthquakes…
avulsion
the gradual loss of soil due to the action of wind, water, or other forces
erosion
this right gives borrowers the chance to pay the outstanding debt on a mortgage or tax bill after default but before foreclosure occurs
equitable right of redemption
the acquisition of title to land by its addition to real estate already owned, through human actions or natural processes
accession
- sometimes called “general warranty deeds”
- the strongest and broadest type of titled guarantee
- legally bind the grantor to certain guarantees, also called covenants, promises or warranties, regarding status of the title
- guarantee against defects occurring during any previous ownership, not just the grantor’s period of ownership
- give the grantee the most protection
Full Covenant and warranty deeds
this type of deed…
-convey whatever right, title, or interest the grantor holds in the property or parcel of land without representation that there is any interest at all
- make no warranties regarding the title, if any, held by the grantor
- usually involve just a partial interest in the property
- may be used to clear up any claims, encumbrances, or defects that make the title to real property unmarketable
- may be used to remedy clouds on a title, or title problems
- typically may be used to convey an easment
quitclaim deed
this deed is given When a buyer purchases property through a foreclosure sale
aka referee’s deed
sheriff’s deed
What makes a deed valid?
- in writing (does not have to be ink)
- names of the parties
- consideration
- granting clause
- habendum clause
- legal description
- execution
- recitation
this clause in a deed states the grantor’s intent to convey title to the land
granting clause
these words identify the document as one which involves the transfer of interest from one person to another
aka words of conveyance
act of conveyance
this clause is typically included after the granting clause in many deeds
- begins “to have and to hold”
- clause further describes the type of estate granted, which must be consistent with any estate indicated in the granting clause
habendum clause
T/F : The deed has no legal effect until there has been delivery and acceptance that typically takes place at settlement. must take place while the grantor is alive or it has no legal effect
True
this is the intent by the grantor to transfer title immediately and unconditionally
donative intent
T/F : For a deed to be valid, it must include the signature of the grantee
False - just the grantor is needed. grantee must accept the deed
Recording a deed is not required however what does it ensure?
that its existence is clear to third parties as part of public records
T/F : In NY, a recorded deed takes precedence over any prior unrecorded deedT:
True
T/F : Recording a document provides constructive notice to the world of ownership
True
T/F : Recording a document also requires the acknowledgement of an authorized official that certifies that the signatures on the document are voluntary and genuine
True
This type of notice includes what someone personally saw, heard, read, or observed
Also known as actual knowledge
Actual Notice
This type of notice includes what someone personally saw, heard, read, or observed
Also known as actual knowledge
Actual Notice
