Intro Flashcards
What is a Purchase Agreement/Contract?
A document involving a buyer and seller exchanging money for a deed evidencing transfer of ownership
Note: It generally contains terms and conditions of the transaction.
What are typical terms and conditions are included in a Purchase Agreement/Contract/Lease?
- The parties involved
- The purchase/lease price
- The property description
- Representations, warranties, and covenants
Note: These elements define the specifics of the agreement.
What does a Lease typically involve?
A landlord and a tenant exchanging money for a lease agreement.
Note: The lease agreement generally includes similar terms and conditions as a Purchase Agreement.
What is a Loan Transaction?
An agreement involving a lender and a borrower exchanging money for certain collateral.
What is collateral in the context of a Loan Transaction?
An interest in the property via a mortgage or deed of trust.
Note: This serves as a security interest for the lender.
What is the first role of a transactional lawyer?
Documenting the transaction/structuring the deal.
Note: This involves tailoring documents to the specific situation and reflecting the client’s preferences.
What should a transactional lawyer avoid when documenting a transaction?
Blind reliance on forms, each transaction should be customized to the needs of the clients rather than using generic forms.
What is the primary job of a transactional lawyer in relation to the deal?
To draw it up according to the client’s preferences, meaning, they do not create, re-trade, or restructure the deal.
What is the second role of a transactional lawyer?
Managing and organizing time (babysitting)
What responsibilities does a transactional lawyer have in managing time?
Keeping clients and lenders updated on developments and deadlines.
Provide reminders, ensure timely reviews, and confirm lender commitments
Note: Effective communication and organization are key.
What is the third role of a transactional lawyer?
Managing risk
Under the third role of a transactional lawyer, managing risk, what does that role involve?
This involves identifying, reducing, and shifting risks associated with the transaction.
What types of third-party reports should a transactional lawyer identify while managing risks?
Property inspection, title commitment, environmental report Phase I (and maybe Phase II), appraisal, zoning report, survey.
Note: These reports provide critical information about the property.
Fill in the blank: A transactional lawyer should _______ risks associated with the transaction.
Identify, reduce, shift
Note: These actions are essential for effective risk management.
What is an example of a third-party report that a transactional lawyer may need to manage?
Environmental report Phase I
Property Inspection
Title Commitment
Appraisal
Zoning Report
Survey
True or False: A transactional lawyer’s job includes re-trading the deal.
False
Note: Their role is to document the deal as per the client’s specifications, not to alter its fundamental terms.
What is the importance of a title commitment in a transaction?
It lays out everything in the real estate records
Note: This document is crucial for verifying ownership and any claims against the property.
In a RET, who is the client?
Individuals (including married couple) or Entities.
What is the primary reason for forming an entity?
Liability protections, this helps protect personal assets from business liabilities.
What is the most common entity for real estate deals?
Limited Liability Company (LLC)
Note: LLC is preferred for real estate transactions in Arkansas.
What does a Professional Limited Liability Company need?
Everyone must hold a professional license.
What are the 4 types of entities?
Limited Liability Company (LLC)
Professional LLC
Corporation
Partnership
LLC Documents: What is the purpose of the Articles of Organization?
To make the entity valid; it becomes a public record.
This is the first document filed when creating an LLC.
LLC Documents: What does the Operating Agreement define?
The managing structure of the LLC
It is an internal document which includes details about members, their percentages, and management type.
