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Real Estate License > Law of Promulgated contracts > Flashcards

Law of Promulgated contracts Flashcards

1
Q

5 elements of valid contract

A 
Competent Parties
Mutual Agreement
Lawful Objective
Consideration
In Writing
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2
Q

Duress:

A

When a party is acting while under threat or in some manner is being forced into the contract

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3
Q

commission act of fraud

A

intentionally committing an act that would be fraudulent or lying

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4
Q

omission act of fraud

A

intentionally leaving out information that should be disclosed

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5
Q

Electronic Signatures in Global and National Commerce Act (ESIGN)

A

signed by Congress in 2000 to regulate e-signatures in interstate and foreign transactions. electronic writing is just as valid as the writing on a piece of paper

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6
Q

parol evidence rule

A

prevents a party to a written contract from presenting additional evidence that adds to the written terms of the contract.

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7
Q

How long does an agent have to deposit the earnest money once a binding contract has been negotiated?

A

by end of second working day after execution of contract

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8
Q

types of unilateral contracts

A

option to buy, listing agreement, buyer representation agreement

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9
Q

reasonable time

A

it describes dates and deadlines that can change a little if circumstances demand it

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10
Q

time is of the essence

A

not flexible on deadline

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11
Q

If a contract says “time is of the essence,” that means that it is due:

A

as soon as possible

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12
Q

2 places in a contract with time is of the essence

A

option money and ernest money

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13
Q

Quitclaim Deed

A

Transfers ownership of whatever the grantor owns but make no guarantee of ownership and no promise to defend

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14
Q

novation

A

The substitution of a new contract for an existing contract, relieves the original party of liability

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15
Q

assignment

A

The transfer of rights to a third party

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16
Q

delegation

A

The transfer of duties to a third party

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17
Q

Statute of Limitations

A

A law establishing a time limit for civil suits

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18
Q

Doctrine of Laches

A

it’s up to the discretion of the judge whether or not the plaintiff provided an “undue delay in seeking relief.”

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19
Q

Real estate broker lawyer committee

A

created in 1983 - 6 brokers, 6 lawyers and 1 public member - 6 year terms

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20
Q

All of TREC’s members are appointed by the

A

governor

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21
Q

Broker lawyer committee has members appointed by

A

the state bar of Texas, TREC and the governor

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22
Q

TREC’s 2 approved addenda

A

non realty items and sellers disclosure of lead based paint

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23
Q

3 stages to a contract

A

offer, acceptance of the offer and performance

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24
Q

effective date

A

The final date of acceptance, when the contract becomes binding between the parties

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25
Q

title commitment must be provided to buyer within

A

20 days of the title company receiving the contract

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26
Q

who is responsible for writing in the effective date

A

listing broker

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27
Q

Loan-to-Value Ratio (LTV)

A

A ratio that represents how much of the sales price is covered by the mortgage loan

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28
Q

Recourse Loan:

A

A loan in which the lender is allowed to seize the collateral property, and could also go after the borrower’s other assets if the sale of the property doesn’t cover the whole amount owed to the lender

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29
Q

Addendum for Release of Liability on an Assumed Loan and/or Restoration of Seller’s VA Entitlement

A

used to make the sales contract contingent upon the seller’s lender and FHA or VA, relieving the seller from any liability on the loan that’s being assumed by the buyer.

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30
Q

earnest money check must be deposited by escrow agent by

A

close of 2nd business day after contract is executed to title company

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31
Q

if mediation fails, a lawsuit may be filed. Lawsuits seeking damages under $10,000, including attorney fees, can be filed in

A

justice court

32
Q

if mediation fails, a lawsuit may be filed. Lawsuits seeking damages exceeding $10,000, including attorney fees, can be filed in

A

county court at law

33
Q

Option fee must be delivered within

A

3 calendar days to seller or sellers agent

34
Q

Title Policy (also known as Title Insurance)

A

Policy that protects homeowners (and likewise, lenders) from certain financial losses due to title issues, such as defects, encumbrances, and liens- and is paid for by the seller or buyer (negotiated)

35
Q

Mortgagee Title Policy (also known as a Loan Policy):

A

Title insurance for mortgage lenders, which protects their interests should a problem with the title arise and is paid for by buyer

36
Q

endorsements

A

Amendments to the standard coverage in the title policy

37
Q

restrictive covenant

A

A type of encumbrance that restricts how a buyer could use the property they are buying

38
Q

stand by fees

A

are fees charged by the water district to unimproved property in an area where the property has potable (drinking) water and sewers available even though their property is not improved at this time

39
Q

exceptions to title policy

A

restrictive covenants and stand by fees (fees, taxes and assessments)

40
Q

The buyer will receive a copy of the restrictive covenants at the _____ expense, according to the TREC contract.

A

buyers

41
Q

Buyer should receive a copy of title policy document within __ days

A

20

42
Q

survey

A

A professional assessment of a specific piece of real estate, showing the exact borders of the property and any easements or encroachments that may affect it

43
Q

Residential Real Property Affidavit (Also known as the T-47

A

A form completed by the seller to assure the buyer that they haven’t changed the boundaries of the property since the last survey was done

44
Q

After the seller receives the objections, they have __ days to cure them or the contract is terminated and the earnest money is refunded to the buyer.

A

15

45
Q

The notice in Paragraph 6E(5), Annexation, satisfies the requirement of the:

A

texas property code

46
Q

hydrostatic testing

A

see if there are any water leaks in pipes in the foundation.

47
Q

The Seller’s Disclosure Notice meets the requirement of the:

A

Texas property code

48
Q

lead paint inspections allow buyer to

A

inspect within 10 days and terminate within 14 days after execution of contract

49
Q

Residential Service Contract:

A

Also known as a Home Warranty; an agreement by a company to maintain, repair, or replace applicable components of a home for a specified period of time

50
Q

casualty loss

A

A sudden, unexpected event, like a fire, flood, storm, earthquake that causes serious damage

51
Q

How many TREC promulgated contracts are there?

A

6

52
Q

Rollback Taxes:

A

Taxes that can be assessed if the zoning (usage) of a property changes

53
Q

Condo owners own what?

A

do not own the land or the exterior of the building, only the inside of the unit itself

54
Q

townhome owners own what?

A

own the home AND the land that it sits on.

55
Q

Paragraph 6G(8) of the Farm and Ranch Contract informs the buyer that if the property is subject to a private transfer fee:

A

the seller must notify them

56
Q

The Federal Trade Commission requires the builder to disclose the _____ on all new construction homes.

A

R-value of the insulation being used

57
Q

A back-up contract was executed on August 9th. The parties agreed to a 12-day option period. On August 15th, the seller notified the buyer that the first contract had terminated. When does the back-up buyer’s option period end?

A

5pm on August 27

58
Q

minerals estate

A

The right of the owner to exploit, mine, and/or produce any or all of the minerals lying below the surface of the property

59
Q

The mineral estate does NOT include _________.

A

sand, gravel and limstone

60
Q

once receiving the Addendum for Property Subject to Mandatory Membership in an Owner’s Association it gives the buyer

A

3 days to terminate the contract

61
Q

When does the option money and earnest money need to be paid on a contract with a short sale addendum attached?

A

Option money should be paid to the seller within three days of original effective date, and earnest money should be paid to the title company by the close of business on the second working day.

62
Q

When does the right to terminate begin in the Short Sale Addendum and the Back-Up Addendum?

A

on the original effective date

63
Q

The Non-Realty Items Addendum clarifies that the items on the list _______.

A

are not included in the sales price, but paid for in addition to the sales price

64
Q

Can real estate agents charge referral fees?

A

real estate agents can only take money for actual services rendered

65
Q

The Addendum for Property Subject to Mandatory Membership in an Owner’s Association gives the buyer X days to terminate the contract.

A

3 days

66
Q

Which statement is TRUE about the Consumer Notice Concerning Hazards or Deficiencies?

A

the form is approved but not promulgated

67
Q

Who is meant to complete the Resale Certificate for Property Subject to Mandatory Membership in a Property Owners’ Association?

A

the Homeowner’s association

68
Q

House Flipping:

A

A type of real estate fraud in which someone purchases a property and then quickly resells it at an artificially high value through the use of a false appraisal

69
Q

Predatory Lending:

A

Lending practices that take advantage of consumers by charging unnecessary fees or unsubstantiated interest rates, making loans that are too big or risky for the borrower, or pressuring buyers into loans

70
Q

Buyer Rebate:

A

Illegal action during a transaction that causes money to go back to the buyer, either at or after closing, without the knowledge of the lender

71
Q

fair housing act

A

A federal law that prohibits discrimination in housing based on race, color, religion, or national origin and was amended to include sex, disability, and familial status

72
Q

fair lending laws

A

Laws prohibiting lenders from discriminating against all of the same protected classes as the Fair Housing Act, with the addition of age, marital status, and receipt of public income

73
Q

disability

A

A physical or mental impairment that limits one or more major life activities

74
Q

occupancy standards

A

Rules about the maximum number of people allowed to live together in a single dwelling

75
Q

Who creates occupancy standards?

A

local laws and some housing providers; not HUD or Fair Housing Act

76
Q

All of these are classes that are protected from being discriminated against by lenders EXCEPT

A

sexual orientation

Real Estate License (7 decks)

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