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CA Real Estate License Exam > Legal Aspects of RE - Chpt 1 Law Overview > Flashcards

Legal Aspects of RE - Chpt 1 Law Overview Flashcards

1
Q

What are the two main courts in the United States?

A

The federal court system and the state court system

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2
Q

What are judicial circuits?

A

Areas served by the US Court of Appeals

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3
Q

What are the two types of courts in California?

A

Trial courts and appellate courts

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4
Q

What do appellate courts do?

A

Hear and make decisions on the appeals from the decisions of the trial courts

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5
Q

What is the basis of law in the United States?

A

Common law

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6
Q

What do we call the overall accumulation of judicial decisions?

A

Case law

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7
Q

What did the Romans contribute to the legal system?

A

Civil law

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8
Q

Why did Spanish civil law form the basis for California’s early legal system?

A

California was originally under Spanish control.

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9
Q

What is a substantive law?

A

A law that establishes and controls the rights and duties of parties. Laws regarding contracts and real property fall into the category of substantive law. A law that prohibits trespassing on someone else’s property is an example of a substantive law because it creates and explains trespassing and gives potential trespassers warning about their possible liability or punishment for disobeying the law.

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10
Q

What is a procedural law?

A

A law that sets out the methods for enforcing the rights and duties under substantive law. A specific example of a procedural law is a statute of limitations. A statute of limitations creates a time limit for filing a civil lawsuit or initiating a criminal prosecution. Normally, the time limit is measured from the date the event occurred. This means that in a personal injury case, for example, a lawsuit must be brought within a certain period of time after the injury occurred; otherwise, it cannot be initiated. Even if a case is substantively very strong, a court will discharge the case on procedural grounds.

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11
Q

What is Civil Law?

A

The law of private rights and duties. An example of a civil law is a law providing that all property sale contracts must be in writing. This is a civil law because it addresses the duties between private parties. Any violation of a civil law is an offense between the parties, not an offense against the whole community. A person who suffers injury due to the act of another person typically has the right to sue that person for compensation. When a person brings such a suit, it is called a civil suit, a civil action, or civil litigation.

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12
Q

What is Criminal Law?

A

The law of public rights and duties. Criminal law creates and controls offenses committed against the whole community. We call criminal law violations crimes. Some examples include assault, burglary, and robbery. The government takes more interest in criminal acts than it does other types of injury. The government will often take action to prosecute an individual accused of a crime, even without cooperation from the victim. On the other hand, a personal injury civil case will only go to trial if the injured person decides to sue.

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13
Q

What is an injunction?

A

An injunction is a court order requiring a party to do, or not to do, an act. For example, after finding a corporation liable for patent infringement, a judge may issue an order enjoining the corporation from further infringing of the patent.

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14
Q

What is Specific performance?

A

Specific performance is a court order requiring a party to perform a contractual duty. For example, a purchaser who paid money for real property may sue the seller seeking the equitable remedy of specific performance if the seller refuses to deliver the deed. The purchaser wants the property and the deed, not a refund of the money paid.

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15
Q

What is a substantive law?

A

A law that establishes and controls the rights and duties of parties

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16
Q

What is a procedural law?

A

A law that sets out the methods for enforcing the rights and duties under substantive law

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17
Q

Define civil law and criminal law.

A

Civil law is the law of private rights and duties.

Criminal law is the law of public rights and duties.

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18
Q

What are four areas of difference between civil law and criminal law?

A

Concerns
Party filing the case
Burdens of proof
Goals

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19
Q

What is Due process?

A

Amendments 5 and 14 guarantee due process, which requires a fair hearing by an impartial judge. This would be important for an agent accused of misrepresentation or other misconduct.

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20
Q

What is Equal Protection?

A

Amendment 14 prohibits governments from adopting laws that discriminate between and among certain groups of people.

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21
Q

What is just compensation?

A

Amendment 5 prohibits the government from taking private property for public use “without just compensation.” Eminent domain allows the government to take private property, but not without paying the fair value of the property it takes.

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22
Q

Define “No unreasonable searches or seizures”

A

Amendment 4 requires that a judge issue a warrant for a search. A warrant may be issued only if there is “probable cause” for such a search.

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23
Q

Define “Defense against certain government actions”

A

The government may not take an action that interferes with certain rights. For example, Amendment 1 protects freedom of speech, so a local government cannot pass a law that says groups cannot congregate in a public place for a peaceful rally. Note however, that the owner of a shopping center can prohibit that same group from conducting the rally on his parking lot because that is his private property, unless the local government passes a law that requires shopping center owners to allow peaceful rallies on their property.

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24
Q

Name three important sources of United State law.

A

US Constitution
State constitutions
Court decisions

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25
Q

How does the Bill of Rights protect individual rights?

A

By limiting government power

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26
Q

What is due process?

A

A fair hearing by an impartial judge

27
Q

What are the implied powers that the Constitution gives to Congress?

A

Implied powers include making any law that is not prohibited by the Constitution or one that does not violate the letter or spirit of the Constitution.

28
Q

Some of the laws that apply to real estate include:

A

Federal laws:
Civil Rights Act of 1866
Civil Rights Act of 1968
Section 504 of the Rehabilitation Act of 1973
Housing and Community Development Act of 1974
Equal Credit Opportunity Act of 1974

Other Laws:
Fair Housing Amendment of 1988
Title II of the Americans with Disabilities Act of 1990 (ADA)
The Housing for Older Persons Act of 1995 (HOPA)
Real Estate Settlement Procedures Act (RESPA)
Fair Credit Reporting Act
Equal Credit Opportunity Act
Truth in Lending Act
Interstate Land Sales Full Disclosure Act
Foreign Investment in Real Property Tax Act
Internal Revenue Code
Federal Bankruptcy Act

29
Q

Some of the federal agencies involved in real estate-related issues are:

A

The Federal Trade Commission (FTC)
The Department of Housing and Urban Development (HUD)
The Federal Housing Administration (FHA)
The Internal Revenue Service (IRS)
The Environmental Protection Agency (EPA)

30
Q

Some state laws that apply to real estate include:

A 
Business and Professions Code
Rumford Act
Holden Act
Uniform Commercial Code
The Bulk Sales Law
Statute of Frauds
Revenue Acts
The Landlord and Tenant Act
31
Q

State agencies involved in real estate-related issues include:

A

California Department of Real Estate
California Bureau of Real Estate Appraisers
California Department of Business Oversight
California Department of Insurance
California Department of Public Health
California Environmental Protection Agency

32
Q

What is a negotiable instrument?

A

an unconditional order or promise to pay an amount of money, with or without interest.

Negotiable instruments are an alternate form of cash. The money represented by the instrument can be transferred to other persons, so there are laws in place to protect the parties to transactions involving a negotiable instrument.

Negotiable instruments include:

Drafts
Checks
Promissory Notes
Certificates of Deposit

33
Q

What power do federal administrative agencies have?

A

To make rules and regulations that carry out the statutes passed by Congress and to enforce the law, meaning they can mandate compliance with the law, forbid actions, and levy penalties and fines for any violation of the agency’s rules, regulations, and their underlying statutes

34
Q

What laws belong exclusively to the states and not to the federal government?

A

Divorce law and the common law of torts and contracts remain under the domain of the individual states.

35
Q

Why was the Uniform Commercial Code enacted?

A

Simplify, clarify and modernize the law governing commercial transactions.
Permit the continued expansion of commercial practices through custom, usage, and agreement of the parties.
Make uniform the law among the various jurisdictions.

36
Q

What are local ordinances?

A

Enactments by local legislative bodies such as the city council or the town board

37
Q

What are the two main courts in the United States?

A

The federal court system and the state court system

38
Q

What are judicial circuits?

A

Areas served by the US Court of Appeals

39
Q

What are the two types of courts in California?

A

Trial courts and appellate courts

40
Q

What do appellate courts do?

A

Hear and make decisions on the appeals from the decisions of the trial courts

41
Q

Who are the parties involved in a civil lawsuit?

A 
Plaintiff
Defendant
Attorneys
Judge
Jury
42
Q

What are the main steps in a civil case?

A 
Pleadings
Discovery
Pretrial
Trial
Post trial
43
Q

What happens during discovery?

A

The clients and their attorneys research the law, review and organize documents, and interview witnesses to evaluate the merits of claims and defenses.

44
Q

If a defendant does not have insurance to cover a judgment, what avenues are available for collection?

A

Judgment lien or garnishment

45
Q

Define Compensatory Damages

A

Compensatory Damages - These damages are intended to pay the person who was injured. The court could also choose to assess a party with court costs and attorney fees.

46
Q

Define Exemplary Damages

A

Exemplary Damages – These damages are often called punitive damages and are awarded when the defendant’s deliberate acts were malicious, violent, oppressive, fraudulent, cruel, or grossly reckless.

47
Q

Define Liquidated Damages

A

Liquidated Damages – This compensation is awarded by a court judgment or by a contract stipulation regarding breach of contract for a loss or injury to a person or a person’s rights or Generally, contracts that involve the exchange of money or the promise of performance have a liquidated damages stipulation, which establishes a predetermined sum that must be paid if a party fails to perform as promised.

48
Q

Define Nominal Damages

A

Nominal Damages – These damages are issued by a court when a legal wrong has occurred, but where there was no actual financial loss as a result of that legal wrong. Typically, when a nominal damage award is used, the plaintiff will be awarded $1 or $2

49
Q

Define Specific Performance

A

Specific Performance - This remedy forces a party to execute a contract according to the precise agreed-upon terms or to execute it extensively so that justice is achieved between the Specific performance grants the plaintiff what he or she actually bargained for in the contract rather than damages for not receiving it.

50
Q

Define Rescission

A

Rescission – This remedy relates to the mutual release of both parties from the contract. When this happens, any money given is returned. This results when a contract becomes impossible to perform for some reason.

51
Q

Define Reformation

A

Reformation - This refers to the judicial correction or change of an existing document by court order when one of the parties enters a petition for a change. Reformation will be ordered if the parties have entered into a binding agreement and some related writing does not conform to their agreement, either due to mistake or fraud.

52
Q

Define Injunction

A

Injunction - This remedy comes in the form of a court order that requires a party to do or refrain from doing specific acts. Any party that fails to comply with an injunction faces criminal or civil penalties, including possible monetary sanctions and even imprisonment.

53
Q

Define Foreclosure

A

Foreclosure – This action seeks to terminate a person’s interest in a property. It is brought by a lienholder, such as a lender or someone who holds a mechanic’s lien on a property.

54
Q

Define Quiet Title

A

Quiet Title – This is a legal action to determine who holds ownership in a parcel of real property. It is used to provide an owner with clear title to a property or to remove a cloud on a title.

55
Q

Define Declaratory Relief Action

A

Declaratory Relief Action - This remedy refers to a judgment of a court which determines the rights of parties without ordering anything be done or awarding damages. The party requesting the declaratory judgment is looking for an official declaration of the status of a matter in controversy. For example, a party to a contract may seek the legal interpretation of a contract to determine the parties’ rights.

56
Q

What is mediation?

A

The use of a third party to listen, discuss, and attempt to help the disputing parties resolve their issue

57
Q

What is arbitration?

A

A shorter, less expensive version of litigation where both sides are allowed to present evidence and arguments and an arbitrator has the power to make a final, binding decision

58
Q

What is the purpose of Laws?

A

Laws set standards, preserve order, settle disputes, and safeguard liberties and rights. Another important function of law is enforcing promises.

59
Q

Define Law

A

Laws are the minimum standards that a society will tolerate.

60
Q

Define Morals

A

Morals are a person’s standards of behavior or beliefs regarding what is right or wrong.

61
Q

Define Ethics

A

Ethics are rules of conduct or accepted behavior based on moral principles.

62
Q

Define Equitable remedies

A

Equitable remedies are non-monetary and are based on what is considered to be right. These remedies include:

Specific Performance
Rescission
Reformation
Injunction
Foreclosure
Quiet Title
Declaratory Relief Action
63
Q

Define monetary damages

A

Several types of monetary damages can be awarded as a result of a suit:

Compensatory Damages
Exemplary Damages
Liquidated Damages
Nominal Damages

CA Real Estate License Exam (4 decks)

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