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Real estate > Legal Descriptions > Flashcards

Legal Descriptions Flashcards

1
Q

Define Survey

A

A legally valid drawing of the dimensions of a piece of real estate, including its boundaries and the location of improvements

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2
Q

Metes and Bounds

A

legal land description method identifying a piece of real estate’s exact dimensions and location in reference to a fixed and permanent monument

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3
Q

Define Point of Beginning

A

The definite starting point for a metes and bounds description

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4
Q

Define Monument

A

An object used to mark the boundaries of a piece of real estate

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5
Q

Define Rectangular Survey System

A

method to describe land by using principal meridians and base lines; also known as the government survey system

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6
Q

Define Lot and Block

A

A way to describe a piece of land by referring to the lot and block numbers in a subdivision that were assigned by the developer

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7
Q

Street numbers and place names are

A

Informal references

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8
Q

A street address is not

A

an adequate legal description.

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9
Q

In order for a document to be recorded for a real estate transaction, it has to contain a specific legal description, called a

A

valid legal description.

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10
Q

methods of surveying:

A

Metes and bounds

Rectangular survey system

Recorded plats (lot and block)

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11
Q

Metes and bounds are also considered the most accurate method of identifying a piece of land, which is probably why they’re the

A

most common method used for land description in Texas today.

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12
Q

Metes and bounds are a written legal land description identifying

A

a piece of real estate’s exact dimensions and location in reference to a fixed and permanent monument.

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13
Q

Metes refers to

A

the distance measurements used in the description.

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14
Q

Bounds are the descriptions

A

of the boundaries that enclose a parcel of real estate.

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15
Q

monuments were used as

A

corner markers for metes and bounds.

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16
Q

Monuments are typically a

A

metal pin or piece of rebar driven into the ground at each point of the description.

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17
Q

When a system of metes and bounds is used, the description of the property is made up of several

A

points described in relation to each other.

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18
Q

After point of beginning, the next point is described as

A

“X (number) of feet from the point of beginning.”

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19
Q

(Meters and bounds) This path of points usually moves in a

A

clockwise direction from the monument around a parcel of land, describing size/distance in feet and direction in degrees, minutes, and seconds.

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20
Q

rectangular survey system uses a more refined version of

A

longitude and latitude system of mapping with a surveyed grid of meridians, baselines, townships, and ranges to describe a piece of land.

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21
Q

lot and block system, also known as

A

recorded plats.

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22
Q

Lot and block uses metes and bounds to first

A

locate the borders of each parcel, or a sectioned off portion of real estate.

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23
Q

The Lot and Block (Recorded Plat) System has a handful of terms that could get confusing. Here’s a quick definition of each:

A

Plat - A drawing of a development used in the lot and block method
Parcel - Individual lots combined to make a block
Lot - Individual parcel of land measured and defined by the metes and bounds system
Block - A collection of lots (parcels)
Tract - The totality of the property represented on a plat

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24
Q

Define Plat

A

A drawing of a development used in the lot and block method

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25
Q

Define parcel

A

Individual lots combined to make a block

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26
Q

Define lot

A

Individual parcel of land measured and defined by the metes and bounds system

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27
Q

Define block

A

A collection of lots (parcels)

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28
Q

Define tract

A

The totality of the property represented on a plat

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29
Q

1 township =

A

36 sections

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30
Q

1 section =

A

640 acres (a square mile)

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31
Q

1 acre =

A

43,560 square feet

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32
Q

1 mile =

A

5,280 linear feet

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33
Q

A benchmark is a

A

permanent marker of known location and elevation(as established by a government survey team. Elevation is determined in relation to sea level.)

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34
Q

Longitude Lines/Meridians:

A

Units of measurement that run north to south to Earth’s poles

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35
Q

Latitude Lines/Parallels:

A

Units of measurements that run east to west, parallel to the equator

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36
Q

Range:

A

A column created by drawing a parallel line every six miles east and west of a principal meridian

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37
Q

Township Lines:

A

Lines that intersect with range lines to create 36-square-mile parcels (6 x 6 square miles) called townships

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38
Q

Acre:

A

A measure of the surface of land (43,560 square feet)

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39
Q

Section:

A

A square made up of mile-long boundaries (1 square mile) that equates to 640 acres

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40
Q

Here are the three main ways we describe real estate:

A

Metes and bounds
Rectangular survey system
Lot and block (recorded plat)

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41
Q

Meridians:

A

A true meridian running through an initial point, which, together with the baseline, forms the highest level framework for all rectangular surveys in a given area.

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42
Q

Baselines:

A

A parallel of latitude, referenced to and established from a designated initial point, upon which all rectangular surveys in a defined area are based.

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43
Q

Ranges:

A

A measure of the distance east or west from a referenced principal meridian, in units of six miles.

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44
Q

Tiers:

A

A measure of the distance north and south from a referenced principal baseline, in units of six miles.

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45
Q

Sections:

A

An approximately one-square-mile block of land (640 acres). There are 36 sections in a survey township.

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46
Q

Townships:

A

Also known as a survey township. A square parcel of land of 36 square miles, or a measure of the distance north or south from a referenced baseline, in units of six miles.

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47
Q

There are also longitude lines that serve as principal meridians, and latitude lines that serve as

A

Baseline

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48
Q

a section can then be divided into

A

halves (320 acres) and quarters (160 acres). Those halves and quarters can then be halved and quartered again.

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49
Q

Every 24 miles north and south of a baseline, we name a

A

correction line, or standard parallel.

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50
Q

And every 24-by-24 mile area created by a guide meridian and a standard parallel is known as a

A

Check

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51
Q

Datum:

A

base point from which measurement is taken by moving upward or downward, marking standard heights or depths

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52
Q

Air Lot:

A

Airspace above a parcel of land

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53
Q

Contour Map:

A

map where curved lines (contour lines) connect contiguous points of equal elevation to define the contours of the land, also called a topographic map

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54
Q

All of the real estate description methods we’ve previously discussed are

A

surface identification methods.

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55
Q

Legal descriptions

A

are ways of describing exact boundaries of a piece of land to accurately understand what a person owns or has possession of

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56
Q

A datum is a base point from which

A

Elevation is measured

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57
Q

A datum is established by the

A

Mean sea level

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58
Q

And just in case you’re doing business in New York City, datum is measured there by

A

water level.

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59
Q

An air lot is

A

the space above a particular parcel.

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60
Q

You’ll need two key pieces of information to locate an air lot:

A

The location of the parcel of land where the air lot is believed to be

The elevation (from the point of the datum) of where the air lot is thought to extend

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61
Q

A contour map, also called a

A

Topographic map

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62
Q

A contour map shows hills…. and

A

valleys, plateaus, and other patterns that may affect water drainage, runoff, or other development issues.

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63
Q

A developer uses a contour map to determine the need for

A

leveling, grading, and engineering any potential problem.

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64
Q

vertical land description is most commonly used when

A

air rights and subsurface rights need specific explication. (This is also the method for expressing condominium ownership boundaries.)

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65
Q

Vertical land descriptions can help when determining

A

air rights, water rights, and subsurface rights.

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66
Q

a parcel of land does NOT need a new description every time it changes hands. Previously recorded descriptions can be referenced for the new conveyance for up to

A

Seven years

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67
Q

After seven years, a new survey is needed by

A

lenders and title companies.

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68
Q

Land Surveying:

A

The science of determining points and the distances and angles between them, often for the purpose of establishing land maps and boundaries for ownership transfers of real estate

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69
Q

A survey ultimately certifies the

A

legal description of the land being sold.

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70
Q

Surveys show the size and dimensions of the tract of land, as well as the

A

location and shape of the property.

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71
Q

An improvement survey is a type of survey that looks specifically at

A

current or future improvements on the land to make sure they’re within the property boundaries.

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72
Q

With an improvement survey, the drawing shows where the …

A

building, fences, and other human-made objects are located.

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73
Q

plat is a legal form of property description only if the developer

A

records it in the public record.

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74
Q

Contract:

A

A legally binding and enforceable agreement to do or not to do a specific thing

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75
Q

Performance Agreement:

A

a contract that requires the contracting parties either to perform certain actions or to uphold certain contractual promises

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76
Q

Forbearance Agreement:

A

Part of a contract that requires one or more of the contracting parties to refrain from actions they are otherwise legally entitled to perform

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77
Q

Because contracts create obligations that can be legally enforced, it is extremely important both parties

A

understand and accept all of the stipulations in any contractual agreement.

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78
Q

In Texas, all real estate contracts

A

must be in writing and signed by the party to be charged if they are to be enforceable in favor of a license holder.

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79
Q

a client or customer may be able to enforce an

A

oral contract against you.

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80
Q

Bilateral Contract:

A

An agreement in which both parties give consideration and promise to perform the actions specified in a contract

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81
Q

Unilateral Contract:

A

An agreement in which one party promises to perform and the other party accepts this promise, requiring only one party to act

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82
Q

Executed Contract:

A

contract in which all terms have been fulfilled by all parties

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83
Q

Executory Contract:

A

contract that is not completely executed or performed

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84
Q

Addenda

A

Documents containing additional terms, information, or obligations that are attached to a contract

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85
Q

Four Corners Doctrine:

A

legal concept stating that the court can only consider information that appears within the four corners of the documents

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86
Q

Amendment:

A

Changes or makes modifications to an already agreed upon contract

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87
Q

These skills ensure real estate professionals provide their clients with awesome service by helping them understand what contracts actually mean (without ….

A

giving legal advice, of course).

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88
Q

the 13-member Broker-Lawyer Committee, which is a part of the Texas Real Estate Commission,

A

drafts and edits the contract forms.

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89
Q

If the broker receives a deposit or earnest money, the broker must deposit the money by the

A

close of business on the second working day after the execution of the contract.

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90
Q

If the broker finds the deposit or earnest money check has been dishonored by the bank, the broker shall immediately

A

notify both parties.

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91
Q

lease with option to buy is a

A

contract in which the buyer can lease a property for a period of time (usually a year) and then have an option to buy the property at the end of the lease period.

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92
Q

When a dispute goes to court, the court is bound by the four corners doctrine. This is a legal concept that states that the court can

A

ONLY consider what appears within the four corners of the documents. Nothing outside of what appears in the contract will be considered.

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93
Q

License holders must make certain any verbal agreements between the parties are also in the contract. These are conveyed through

A

Addenda

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94
Q

The big thing to remember is that an amendment is not the same as an

A

Addendum

Side note: An amendment is created and agreed to by the parties after the contract has been finalized.

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95
Q

The buyer asks for an extension of the closing date to properly get the financing in place. The seller agrees to the extension with the use of the TREC form

A

Amendment to Contract.

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96
Q

Here’s the list of all the addenda TREC promulgates for use by license holders:

A

Addendum for Sale of Other Property by the Buyer

Addendum for Back-Up Contract

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

Seller Financing Addendum

Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum

Addendum for Coastal Area Property

Addendum for Property Located Seaward of the Gulf Intracoastal Waterway

Addendum for Property Subject to Mandatory Membership in a Home Owner’s Association

Third Party Financing Addendum

Loan Assumption Addendum

Addendum for Reservation of Oil, Gas and Other Minerals

Short Sale Addendum

Addendum for Property in a Propane Gas System Service Area

Promulgated Temporary Leases:
Seller’s Temporary Residential Lease

Buyer’s Temporary Residential Lease

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97
Q

TREC promulgates six contract forms:

A

One to Four Family Residential Contract (Resale) — standard form for sale of residential properties
Unimproved Property Contract — land without improvements
New Home Contract (Incomplete Construction) — builder selling residential property where construction is incomplete
New Home Contract (Completed Construction) — builder selling residential property where construction is complete
Farm and Ranch Contract — acreage properties that typically have both farm and ranch improvements as well as residential improvements
Residential Condominium Contract (Resale) — properties that include ownership of one unit in a multiple-unit structure plus ownership in an undivided interest in the land and any other common elements

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98
Q

In a bilateral contract, it

A

obligates both parties to fulfill certain terms.

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99
Q

Agents who have property listings on the MLS should make sure the listing reflects what stage the

A

contract is in.

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100
Q

When there is an executory contract for the sale, the property will be called

A

pending rather than for sale.

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101
Q

Once the contract is executed, the property’s listing status in the MLS will need to be changed from pending to

A

Sold

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102
Q

Statute of Frauds:

A

A law which requires certain types of contracts to be in writing and signed by all parties who are bound by the contract

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103
Q

Parol Evidence Rule:

A

A legal term that states that if the important details of an agreement were discussed but fail to make it into the written contract, the written and signed contract is given authority over any word of mouth

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104
Q

Valid contracts are legal agreements meeting…

A

all the essential, basic requirements of the law.

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105
Q

The five components of a valid contract are:

A

Mutual assent

Legally competent parties

Consideration

Lawful objective

Adherence to the Statute of Frauds

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106
Q

mutual assent requires all the contracting parties to…

A

agree to all of the contract’s provisions and conditions

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107
Q

Mutual assent requires:

A

An offer and acceptance

A counteroffer to the original offer can exist

Acceptance of the original offer is not required

The absence of fraud, misrepresentation, or duress

The absence of mistakes

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108
Q

the offeror is the person extending the contract and the offeree is

A

the person accepting the contract.

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109
Q

An offer remains open until it is:

A

Accepted

Rejected

Retracted prior to acceptance (For example: The offeror can revoke the offer at any time if they have not heard from the offeree, whether the offeree has technically accepted the offer or not.)

Countered

Expired

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110
Q

Express acceptance:

A

A candid and unqualified outward manifestation of an agreement, such as: “Yes, I agree to your offer.” In real estate, since the contract must be in writing, the acceptance would be expressed.

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111
Q

Implied acceptance:

A

When the parties bound by the contract act in a manner implying acceptance of the offer

When all parties involved act out the contract’s obligations instead of openly stating an agreement or acceptance

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112
Q

Conditional acceptance:

A

Requires a specific condition to be satisfied or an event to take place before acceptance of the contract

Can be viewed as a counteroffer

Example: “I will buy this shirt if you give me a 20% discount.”

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113
Q

There are three types of (offer) acceptance:

A

Express acceptance

Implied acceptance

Conditional acceptance

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114
Q

exchange of consideration means…

A

that no one may obtain anything of value without providing some form of compensation (in a contract, you cannot get something for nothing).

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115
Q

Lawful Objective

A

means that a contract cannot explicitly or implicitly call for any illegal activities.

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116
Q

Lawful objective in a contract includes:

A

Considering all relevant laws and statutes

Confirming there are no illegal action(s) being required of any parties involved

Becoming void if it implicitly or explicitly requires illegal conduct

Being held accountable for attempting to fulfill a contract devoid of lawful objective

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117
Q

A valid contract must adhere to the statute of frauds, a law which requires

A

certain types of contracts to be in writing and to be signed by all parties who are bound by the contract.

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118
Q

The statute of frauds requires contracts to be in writing if the situation falls under at least one of these categories:

A

It involves the sale or transfer of real estate.
It concerns debts or specific duties.
The terms extend for a period of more than one year.
The terms extend beyond the lifetime of the promisor.
It involves the sale of goods valued at $500 or more under the Uniform Commercial Code.

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119
Q

History: The term “statute of frauds,” is derived from

A

“An Act for Prevention of Frauds and Perjuries.”

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120
Q

The statute of frauds applies to most real estate contracts including, but not limited to:

A

Sales Contracts

Listing Agreements

Buyer Representation Agreements

Property Management Agreements

Trust Deeds

Mortgages

Leases for periods of longer than one year (less than one year does not require this)

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121
Q

Parol literally means “word of mouth.” So, the parol evidence, then, are the terms and conditions the parties

A

discussed before the final contract was written.

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122
Q

the parol evidence rule holds that when important details of an agreement discussed between two or more parties fail to make it into the written contract, the written, signed contract is

A

given authority over any parol evidence.

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123
Q

Partial Performance:

A

This occurs when one or more of the contracting parties perform only a portion of the agreed-upon contractual duties

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124
Q

Substantial Performance:

A

Occurs when a party performs the majority of the contract’s requirements but does not perform according to the contract’s stipulations

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125
Q

Contingencies:

A

Stipulations or conditions that must be satisfied before the contract can be performed

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126
Q

Assignment:

A

The transference of obligations in a contract from one party to another

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127
Q

Novation:

A

The act of replacing an existing contract with a new, modified one

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128
Q

If one or more of the contracting parties either partially or completely fails to fulfill the contractual obligations, this is referred to as a

A

Breach of contract

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129
Q

When a contract is discharged, the terms and conditions of the contract are either

A

cancelled or satisfied.

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130
Q

The five common reasons for discharging a contract are:

A 
Partial performance
Substantial performance
Non-performance due to legal issues
Mutual agreement
Operation of law
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131
Q

In the case of a breach, the party who has honored their contractual obligations has the right to seek

A

compensation for any damages suffered as a result of the other party’s breach.

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132
Q

When there is a breach of contract, the non-breaching party or the party who fulfills (or wants to fulfill) their part of the contract has four options:

A

1) forfeit
2) rescind
3) Sue for specific performance
4) Sue for compensatory damages

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133
Q

Forfeit:

A

no longer any contractual relationship.

This means the seller is entitled to keep the earnest money and all other payments collected from the prospective buyer.

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134
Q

Rescind:

A

means the non-breaching party can cancel the contract entirely.

It also means the seller must return all payments received from the buyer.

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135
Q

Sue for specific performance:

A

legal remedy results in a court order requiring all parties to carry out the promises stipulated in a contract.

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136
Q

Sue for compensatory damages:

A

does not force the parties to abide by the original contract,

but it DOES require the party who breached the contract to compensate the party who did not.

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137
Q

Financing contingency:

A

Makes the purchase contract conditional upon the buyer’s ability to obtain financing

138
Q

Inspection contingency:

A

Makes the purchase contract conditional upon the outcome of the home inspection report or appraisal report

139
Q

the contracting parties may have the option of transferring their rights and duties to a third party. This transfer is known as

A

Assignment

140
Q

Assignment is also very common in commercial real estate. Often the person or entity that puts the property under contract is not the same one that will close. The contract could be assigned to a new buyer with a fee paid to the original buyer. This is known as

A

wholesaling

141
Q

Novation

A

the act of replacing an existing contract with a new, modified one with different obligations.

Legally, it is understood to be the exchange of one contract for another.

142
Q

Recording:

A

The placing of documents about the claims and ownership of real estate in the county clerk’s office at the courthouse

143
Q

Abstract of Title:

A

condensed history of title to a tract of land that summarizes the transfers of ownership and encumbrances

144
Q

Attorney’s Opinion of Title:

A

document written by a lawyer that identifies any defects in an abstract of title that may or may not state that the seller has marketable title to the property bill of sale; a document written to pass ownership of personal property to someone else

145
Q

Title Insurance:

A

Insurance to protect the owner of a property if any other person proves ownership; covers the insured person’s investment into the property but does not guarantee continued ownership

146
Q

actual notice is:

A

An action by taking possession of the property

A way of showing ownership

147
Q

constructive notice of ownership is:

A

recording the deed

which is part of the normal process in real estate closings. Usually, the title company sends the deed to the County Clerk’s Office for recording and the recording company sends the recorded deed to the purchaser.

148
Q

chain of title

A

the complete history of the title, including all transfers from the original owner up until the present owner

149
Q

Real estate license holders are required to tell every buyer they should obtain an abstract of title and

A

have it examined by an attorney or receive a policy of title insurance.

150
Q

early real estate “sales agents” were not acting in an

A

agent capacity.

151
Q

Estate:

A

The degree, quantity, nature, and extent of one’s interest in property

152
Q

Statutory Estate:

A

An estate that is created as a matter of state law

153
Q

Freehold Estate:

A

An estate in land in which ownership will last for an indeterminate duration

154
Q

Leasehold Estate:

A

A type of property interest allowing tenants to occupy and use a property they do not own; contains a reversionary righ

155
Q

Fee Simple Estate:

A

Fee Simple Estate:

156
Q

Defeasible Fee Estate:

A

Also known as fee simple defeasible or qualified fee, is a type of freehold estate in which the person who has possession of the property is only able to hold the property until an event takes place or does not occur; two common defeasible fee estates are fee simple determinable and fee simple subject to condition subsequent

157
Q

Fee Simple Subject to Condition Subsequent:

A

A defeasible fee estate in which a grantor conveys a parcel of real estate subject to a condition of ownership; the grantor must go to court to assert their right to retake ownership (right of re-entry)

158
Q

Fee Simple Determinable Estate:

A

A defeasible fee estate that will come to an end automatically and immediately upon the occurrence of a designated event, the time of which is uncertain

159
Q

Life Estate:

A

An interest in real estate that will end upon the death of the life tenant or the pur autre vie life

160
Q

Conventional Life Estate:

A

type of freehold life estate created by a deed or will that lasts for the duration of the tenant’s life

161
Q

Legal life estate:

A

type of freehold life estate created by an act of law; a Texas homestead would be one example

162
Q

Pur Autre Vie:

A

type of freehold life estate that grants someone ownership of a property for the duration of another person’s life

163
Q

Remainder:

A

Refers to the estate that will pass to another party at the death of the person upon whom the life estate is based

164
Q

Reversion:

A

The portion of an estate that will return to the original grantor when a life estate has ended

165
Q

Reversionary Interest:

A

Refers to an estate wherein, upon the death of the life estate owner, full ownership reverts to the original fee simple owner; also known as a revisionary right

166
Q

Remainderman:

A

Refers to recipient of the remainder — either the grantor who set up the life estate or a designated third party

167
Q

Estate for Years:

A

A leased possession of property for a certain, specific period of time; also known as a tenancy for years

168
Q

The interest one holds in real estate can be limited by the rights or interest of others. These limiting interests of others can take the form of:

A

Statutory, as in tax liens, or

Encumbrances, such as the rights of others to use specific rights of way on a parcel of land, liens, etc.

169
Q

The four main types of estates in land are:

A

Freehold Estates
Leasehold Estates
Equitable Estates
Concurrent Estates

170
Q

The individual, depending on the type of freehold estate, may also have a right of

A

Disposition or right to convey the interest they own.

171
Q

freehold estate is. Let’s break it down further into three categories:

A

Fee simple absolute estate

Defeasible fee estate (also called “qualified fee”)

Life Estate

172
Q

Two common forms of defeasible fee estates are:

A

Fee Simple Determinable

Fee Simple Subject to Condition Subsequent

173
Q

with the fee simple subject to condition subsequent estate, the previous owner would have to go to

A

court to prove that they should be the proud owner again.

174
Q

Fee simple determinable language relieves the grantor of the need to pursue court approval whereas the wording used for fee simple subject to condition subsequent

A

Does not

175
Q

The life estate documents identify the party to whom the estate will pass at the time of the death of the individual upon whom the life estate is based. Sometimes it passes to a

A

new owner and sometimes it reverts back to the original owner.

176
Q

There are certain terms that apply to a life estate that you’ll want to learn. They are:

A

Remainder refers to the estate that will pass to another party at the death of the person upon whom the life estate is based.

Reversion is the concept that that the property will revert back to the person who granted the life estate in the first place.

Remainderman refers to recipient of the remainder — either the grantor who set up the life estate or a designated third party.

177
Q

Life estates may be created by

A

agreement of the parties or by operation of the law (state statute).

178
Q

Upon the death of the life tenant, the holder of either the

A

reversionary or remainder interest will own a fee simple absolute estate.

179
Q

There are two different types of life estates:

A

Conventional life estate

Legal life estate

180
Q

categories and subcategories of freehold estates:

A

Fee simple absolute estate
Defeasible fee estate (also called “qualified fee”)
Fee Simple Determinable
Fee Simple Subject to Condition Subsequent
Life estate
Conventional (including pur autre vie)
Legal

181
Q

In a leasehold estate, one party owns the property, but

A

someone else lives there

182
Q

whereas a freehold estate may be evidenced by a deed, a leasehold estate may be evidenced by

A

A lease

183
Q

Keep in mind that the most important aspect of the leasehold estate is that

A

the tenant’s right of possession continues until the lease has expired

184
Q

Leasehold estates are established when a tenant has

A

possession of a property and has the legal right to use the property, but they do not have actual ownership interest (i.e., they do not hold legal title and cannot legally sell the property).

185
Q

Tenant has “right of possession” aka..

A

Possessory Estate

186
Q

reversionary right

A

means possession of the property reverts back to the landlord after the lease term has expired.

187
Q

The landlord’s interest in the property is specifically known as a

A

leased fee estate plus reversionary right

188
Q

There are four types of leasehold estates:

A

Estate for Years
Periodic Estate
Estate at Will
Tenancy at Sufferance

189
Q

An estate for years has a definite ending period, there is no automatic renewal, AND

A

no notice is required.

190
Q

A periodic estate (also known as a periodic tenancy)

A

has a fixed lease period wherein the lease is automatically renewed at the end of each lease period until the landlord or tenant act to terminate it.

191
Q

Although, like an estate for years, a periodic estate lasts for a pre-determined length of time, the periodic estate does not have to

A

have an ending date. It goes for as long as both the landlord and the tenant want it to last.

Notice is required.

192
Q

estate at will (also known as tenancy at will)

A

tenant is occupying a property with the landlord’s knowledge and consent, but without a formal lease agreement

193
Q

Under an estate at will, the landlord and tenant have all of the typical

A

rights and obligations under any other type of leasehold estate, except that the tenant or landlord both have the right to terminate the lease agreement at any time.

194
Q

tenancy at sufferance, Also known as an estate at sufferance

A

tenancy at sufferance occurs when a tenant remains in possession of the property beyond their lease term, without the consent of the landlord.

195
Q

When a tenancy at sufferance occurs, the tenant is referred to as the

A

holdover tenant, because they no longer have a standard tenant-landlord relationship.

196
Q

The word “sufferance” in tenancy at sufferance means

A

to passively allow or tolerate something.

197
Q

Equitable estate

A

occurs when a freehold estate owner has ownership interest on the property, but another party has interest in the property that is less than the interest afforded by ownership.

198
Q

Liens and easements are considered types of

A

Encumbrances (any claim or right against a property held by another that is not the fee title owner.)

199
Q

concurrent estate, which is an estate that is

A

owned by two or more individuals (i.e. co-ownership).

200
Q

Joint Tenancy:

A

Property that is owned by two or more persons at the same time who all have an equal, undivided interest in the property

201
Q

Tenants in Common: (in concurrent Estate)

A

When two or more parties own a property as a tenancy in common, each owner has a partial ownership interest and partial rights in a property

202
Q

Community Property:( type of concurrent Estate)

A

Recognized in Texas (and 8 other states), as the type of joint tenancy that exists between married couples

203
Q

The type of estate that is created by community property is also referred to as a

A

statutory estate since it’s an estate that was established by law in the legal union of marriage.

204
Q

Easement:

A

A right to use or cross someone else’s land for a specific purpose

205
Q

Restriction:

A

An outline of what someone may not do on their own personal piece of property

206
Q

License:(in reference to encumbrance)

A

The permission to use someone else’s property for a temporary period of time

207
Q

Conveyance:

A

A transfer of ownership of a piece of real estate from one person to another

208
Q

Probate:

A

The legal process in which a court decides who will inherit property

209
Q

Encroachment:

A

When an owner’s property (such as a fence, tree, driveway) crosses the property boundaries of another landowner.

210
Q

What is considered a nonpossessory interest in someone else’s land?

A

Encumbrance

211
Q

Encumbrances are attached to the title, not the

A

Owner of the property

212
Q

An easement appurtenant exists

A

when two tracts of adjacent land are owned by two different people. Because property cannot be landlocked in Texas, one of the owners has the easement, or right to cross the other’s land. If they didn’t have this right, they would never be able to leave their land.

213
Q

When an easement appurtenant exists, there is one parcel of land which benefits at the (relative) expense of another. These are known as

A

the dominant tenement and servient tenement respectively.

214
Q

easement in gross

A

an individual or company is allowed to be on the owner’s property for specific purposes.

Example: An electric company would have the right to be on someone’s land to clear limbs from power lines thanks to an easement in gross.

215
Q

It is also possible for someone to obtain an easement by prescription after:

A

using a portion of someone’s property for some time without the owner’s permission.

216
Q

Here in Texas, to establish an easement by prescription, the area in question would have to have been used by the non-owner of the property for at least

A

Ten years

217
Q

easement by prescription

A

Person would have to use the easement continuously, exclusively, and without the owner’s permission.

218
Q

easement by necessity

A

owner cuts up a larger piece of property into two or more pieces to sell them off, it is possible that the owners of the properties in the back will not have a road or way to get in or out of the property unless they drive across someone else’s land. Since there is NO OTHERS CHOICES but to use someone else’s land, the people who need a way in and out will be granted an easement by necessity.

219
Q

restrictions (often called restrictive covenants)

A

outline what someone may not do on their own personal piece of property.

Common in subdivisions

220
Q

The type of encumbrances known as restrictive covenants (sometimes called deed restrictions) are added by

A

previous owners or added to deeds by the developers for specific subdivisions.

221
Q

An encroachment uncontested over 10 years could result in

A

legal right to use the land of that adjacent property owner by creating a prescribed easement.

222
Q

The most common type of encroachment is a

A

fence that was not placed on the property line.

223
Q

(Encumbrance to Title) Although the attorneys handling the divorce should

A

transfer the ownership to the proper person, it does not always happen that way.

224
Q

quitclaim deed is a document

A

the ex would have to sign to clear up the title, which “quits” or terminates their rights or claim to the property.

225
Q

cloud on the title

By “cloud,” we mean dispute

A

Another problem with the title may be created if there was a death and the property was inherited.

226
Q

Statutory Lien:

A

A lien brought by a government entity such as a tax lien

227
Q

General Lien:

A

A lien in which the real estate AND personal property may be sold to satisfy the debt

228
Q

Specific Lien:

A

A lien that is against only the real estate

229
Q

Priority of Liens:

A

The order in which debts or taxes levied by the government will be paid off through a court sale

230
Q

Governments typically levy two types of taxes on real estate:

A 
Special assessments (also called improvement taxes)
Ad valorem taxes (based on the assessed value of the property)
231
Q

Special assessments are also called …

A

improvement taxes

232
Q

Ad valorem taxes

A

based on the assessed value of the property

233
Q 
Special assessments (also called improvement taxes)
Ad valorem taxes (based on the assessed value of the property)
Both types of taxes are
A

specific, involuntary, statutory liens on a taxpayer’s real estate.

234
Q

A tax lien is a kind of

A

statutory lien that is imposed against real property if the property owner becomes delinquent in the payment of taxes.

235
Q

Liens are claims that a

A

lender, tax office, or a repair person has against a property.

236
Q

The lien could be against the real estate only, but it could also include

A

the personal property.

237
Q

Texas has a statutory redemption period for property tax liens. If a person loses their property for nonpayment of their property taxes, they could potentially

A

get their property back as many as two years afterwards if the property was their homestead. For all other properties, the time frame is six months.

238
Q

A property could have a special assessment put on it if the local government did anything in the way of

A

improving the area through fixes like the installation of curbs, sidewalks, or even paving the street.

239
Q

The term ad valorem is Latin for

A

according to value

240
Q

Many governmental bodies have the authority to levy and use ad valorem taxes, including the following:

A 
Counties
Cities
Towns
Districts containing parks or preserved forests
Hospital districts
Water districts
School districts
241
Q

Ad valorem taxes are specific,

A

involuntary, statutory (created by law) liens.

242
Q

If a property owner wants to protest the appraised value, they would take their opinion and objections (and any evidence of why the number is wrong) to the

A

appraisal district office for the county.

243
Q

The actual method by which a district imposes a tax is called

A

Appropriation

244
Q

When the district officially imposes the tax, the action is called a

A

Tax levy

245
Q

When talking about taxes, local due dates are also called

A

penalty dates

246
Q

A knowledge of local due dates, also called penalty dates, is especially important for the

A

proration of taxes when a property is sold.

247
Q

In Texas, ad valorem tax bills are usually received in the month of

A

October, each year

248
Q

Real estate taxes are paid in arrears. This means they’re paid

A

after the time period for which the owner is being taxed.

249
Q

Make sure that you, as an agent, prepare everything for the closing at the very beginning of the listing.
Here are some of the ways you can do this:

A

Obtaining a copy of an existing survey is a good start with the seller
Getting the buyer pre-approved for a loan
Call, prod, and move forward everyone that is involved in the transaction

250
Q

(Investment in tax liens)

The buyer receives a tax lien certificate, which entitles them to one of the following:

A

A yield from the lien that must be paid by the defaulting taxpayer upon redemption (which we’ll go over in more detail later)
Title to the property after a specified period of time

251
Q

If the former homeowner is behind on taxes and can come up with the funds during the first year, they will have to pay the tax bill plus

A

25%

252
Q

If the former homeowner is behind on taxes and can come up with the funds during the second year, the interest jumps to

A

50%

253
Q

Special assessments are levied for common improvements, such as:

A 
Gutters
Street lights
Curb improvements
Street paving
Sidewalks
254
Q

Special assessments may be imposed by implementing the following general procedure:

A

1) A local government body submits a proposal for an improvement, or affected property owners petition the city for an improvement. Both submissions must indicate the need for or desirability of the improvement.
2) The proper authority holds hearings on the improvement after the affected property owners have been notified of the proposal or petition.
3) An ordinance is passed that describes the improvement, the cost of the project, and the area affected.
4) The amount to be assessed is calculated against all assessable properties in an assessment roll. The assessment roll indicates how the cost will be divided, usually according to front footage or estimated individual benefit.
5) Public hearings are held to confirm the assessment roll. Community members can raise objections at this time; the proposal is then decided by a local court.
6) The special assessment becomes a lien on the affected owners’ properties.
7) Local authorities issue a warrant after the improvement is completed that allows a local collector to issue bills to begin collecting the special assessment.

255
Q

Special assessments become liens on affected homeowners’ properties after

A

the warrant and bills are issued.

256
Q

Real estate transfer taxes are usually paid by

A

purchasing tax stamps,

…which are affixed to a deed at the time of recording at the county clerk’s office.

257
Q

Some property transfers are exempt from transfer taxes. Common examples include:

A

Transfers between governmental bodies

Transfers by educational or religious institutions

Transfers of real estate as security for a loan

Real estate gifts

258
Q

In 2015, with the full backing of TAR, the state legislature passed legislation that said there would never be a

A

transfer tax on real estate.

This legislation later became a part of Texas’ state constitution.

259
Q

federal tax lien is a general…

A

involuntary, statutory lien that is held against all of the defaulting taxpayer’s property.

260
Q

When a person does not pay Internal Revenue Service (IRS) taxes, such as the federal income tax, the IRS may obtain a

A

Federal tax lien

261
Q

The IRS will first assess the taxpayer’s liability, then send a

A

Notice and Demand for Payment to the taxpayer.

262
Q

If the taxpayer does not respond within ten days after receiving the Notice and Demand for Payment,

A

the IRS may then create a lien for the amount of the debt.

263
Q

federal tax lien creates a claim on the taxpayer’s

A

real and personal property, including any property purchased after the lien is filed.

264
Q

Homeowners and investors must pay federal income tax on profit made from the sale or use of real estate. However, both homeowners and investors can reduce these taxes through the use of

A

Tax shelters

265
Q

The priority of mechanic’s liens is established not by the date of filing, but by the date

A

the work began or materials were delivered to that specific property.

266
Q

tax liens take priority over

A

non-tax liens

267
Q

Subordination agreements are

A

written compromises between lien holders to change the priority of their liens.

Ex: When buyers obtain a mortgage loan to purchase a property, lenders often require a highest-priority lien. (Highest priority liens are said to be “in first position.”)
The bank will almost always want to be in the first position.

268
Q

Voluntary Lien:

A

A lien that is created on purpose and with the agreement of the owner of the property in question, such as a mortgage

269
Q

Involuntary Lien:

A

A lien that is created without the property owner taking any action to initiate it

270
Q

Statutory Lien:

A

Lien established by local, state, or federal law for a specific set of circumstances

271
Q

Equitable Lien:

A

A right that exists only in equity, with one party charging their property as security for a debt or loan

272
Q

Mechanic’s Lien:

A

A lien created when a worker has not been paid for work done on a property

273
Q

Execution Lien:

A

Lien created by a writ of execution issued by a court to force payment of monies owed from a judgment when a debtor does not pay

274
Q

Federal Judgment Lien:

A

Lien filed by the government for failure to pay certain debts

275
Q

Lis Pendens:

A

A document recording at the courthouse giving notice that a lawsuit is pending on a particular piece of property

276
Q

Vendor’s Lien:

A

A lien the seller has against a buyer as a security for the unpaid balance of the purchase price

277
Q

Vendee’s Lien:

A

A document declaring a claim from a buyer that the seller has not transferred title to the buyer according to the agreement

278
Q

General liens affect

A

any property an individual or institution owns, including both real and personal property. This includes many kinds of taxes, such as IRS and inheritance taxes.

279
Q

Specific liens are claims against

A

particular parcels of real estate and they do not affect any other property.

Examples of specific liens are vendor’s liens, execution liens, vendee’s liens, surety bail bond liens, mechanic’s liens, mortgages, special assessments, property taxes, and attachments.

280
Q

Liens are

A

legal claims or rights to a debtor’s property that serve as a security interest for obligations or debt.

281
Q

Lenders may also require a preferred lien, which means

A

that no other liens can take priority.

282
Q

Mortgage liens can also be deed of

A

trust liens.

Under a deed of trust (or trust deed), title is held by a trustee as security for a debt until it is paid.

283
Q

Mortgage liens are

A

specific, voluntary liens.

Buyers choose to have lien and only in RE.

284
Q

Judgments are decrees given

A

By courts

285
Q

When judgments specify the amount of money owed, they are called

A

money judgments.

286
Q

Judgment liens are general, and

A

involuntary liens, so they apply to both real and personal property.

287
Q

The written court decree is called an

A

Abstract of judgement

288
Q

A writ of execution can be issued by

A

a court to force payment of monies owed from a judgment when a debtor does not pay.

It gives court officers the right to confiscate and sell the debtor’s property to satisfy the debt.

289
Q

The government can file a federal judgment lien for

A

failure to pay certain debts, such as student loans. These liens are filed in the county where real property is held.

290
Q

A judgment lien is a

A

general, involuntary lien. It may attach to all of the owner’s property except their homestead property.

291
Q

A notice called a lis pendens is used to inform

A

the public when a lawsuit is filed that affects a specific piece of real estate.

292
Q

A lis pendens notice is often useful because a

A

considerable time period may elapse between the time a lawsuit is filed and the time a judgment is rendered.

293
Q

A writ of attachment is also called an

A

attachment lien.

Plaintiffs in a lawsuit may seek a writ of attachment, in which the court seizes property until it reaches a judgment. This protects creditors from a conveyance of title before a judgment is rendered.

294
Q

An attachment lien is a

A

general, involuntary lien and may attach to all of the owner’s property except their homestead property.

295
Q

Certain kinds of property are exempt from attachments and executions. Exemptions are often limited to a certain value. They vary from state to state, but might include items such as:

A 
Tools used for a trade or business 🔨
Social Security 🔒
Basic household appliances and furniture 🚽
School books 📚 
Money owed to debtors for child support or injury 💰
Prescription health supports 💊
Basic wages 💵
Cemetery lots 🕯
296
Q

A vendor’s lien is a

A

specific, involuntary lien on a property as security for the purchase price that arises when a seller has not yet received full payment for the property.

297
Q

80-10-10 loans

A

This name meant that the buyer would make a 10% down payment, borrow 80% of the sales price from a mortgage company, and then finance the last 10% with the seller.

298
Q

Leveraging an asset means

A

using borrowed money to help purchase it.

299
Q

vendee’s lien

A

is a specific, involuntary lien that protects buyers.

300
Q

bail bond lien:

A

Bail bonds can be put up in the form of real estate in lieu of cash when a property owner is accused of a crime.

specific, statutory, involuntary lien enforceable by a court officer or the sheriff if the accused property owner does not appear in court.

301
Q

Bundle of Legal Rights:

A

Ownership of land with all of the legal rights of possession, control, enjoyment, exclusion, and disposition

302
Q

Groundwater Rights:

A

Property owners’ right to use water under the surface through the rule of capture

303
Q

Accretion:

A

The process that results in the gradual increase in land area through deposits of soil by action of water

304
Q

Avulsion:

A

The sudden loss of land by flood or when a stream or river changes course

305
Q

In accordance with riparian rights, a property owner does NOT own the water, but they may use

A

the water and share those same rights and uses with other property owners whose land also interacts with the water.

306
Q

Littoral use prohibits the property owner from artificially

A

changing the water’s location.

307
Q

Groundwater in Texas follows the rule of capture, meaning

A

the landowner does not actually own the water under the property, but they have have the right to drill for the water and use it.

308
Q

soil that gets deposited is also referred to as

A

alluvion

309
Q

Texans should be aware that there is an Open Beach Law. This gives the public the right to

A

Use the beaches

310
Q

In Texas, the agency responsible for governing water rights is the Texas Commission on Environmental Quality (TCEQ). They are also responsible for

A

applying federal and state laws under the Texas Water Code.

311
Q

Texas Commission on Environmental Quality (TCEQ) is made up of

A

3 members who are appointed by the governor and confirmed by the state senate. They function to hold hearings to authorize permits involving water.

312
Q

All western states, including Texas, have enacted laws that require water users to obtain a permit from the state. In general, those laws provide the highest priority to the earliest water users. This is known as the

A

Doctrine of Prior Appropriation and is sometimes called “first in time, first in right.”

313
Q

Homestead:

A

A property that a person or family owns and occupies as their primary residence

314
Q

Separate Property:

A

Property owned by either spouse prior to the marriage or by gift or inheritance during the marriage

315
Q

state constitutional homestead rights are

A

Automatic and protects homeowners from claims by creditors being made against their homes, preventing any eviction by these creditors.

316
Q

When a married couple occupies a separate property (owned by just one of them), the non-owner acquires

A

homestead rights.

317
Q

Municipal Utility District (MUD):

A

Rural districts of Texas with lower tax rates that exist to provide developers a way to finance or be reimbursed for utility improvements they make

318
Q

Public Improvement District (PID):

A

A district where property owners can decide on government financed and approved improvement projects for which they will be taxed

319
Q

Disclosures required by Texas law:

A

Every potential buyer, seller, or agent is entitled to be told immediately if the broker is representing anyone on the property they are inquiring about.

Every unrepresented buyer or seller must be given the Information About Brokerage Services form at the first substantive discussion about specific real property.

Every buyer must be advised, in writing, that they should get an abstract of title examined by an attorney of their choice or obtain a policy of title insurance.

320
Q

All buyers must be advised that the property they are interested in may have lead paint if it was built prior to

A

Jan 1, 1978 through the Addendum for Seller’s Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards as Required by Federal Law.

321
Q

A material fact in a real estate transaction is

A

any fact that is significant or essential to the transaction – that is, any piece of information that could reasonably be expected to influence a prudent individual’s decisions regarding the transaction.

322
Q

Members of the Texas Association of REALTORS® have a

A

Legal Hotline they can call for advice on disclosure issues.

323
Q

In 1991, the Padgett family entered into a real estate contract from the Stone Point development for

A

$207,500.

324
Q

additional tax liability. If the license holders involved in the transaction do not disclose tax liability, then the title company will

A

likely do so at the closing. This extra tax liability happens most commonly in the sale of ranches.

325
Q

another disclosure that has to be made is about the conditions under

A

the surface of the property. This will usually take place when selling a piece of property that is unimproved.

326
Q

there may be a natural gas line that runs under the property that the buyer would need to be informed of. The buyer might want to build an improvement on the land in the future, and building it over the pipeline could result in

A

its damage.

Needs to be disclosed

327
Q

So how do you know if a property comes with mandatory membership in an HOA? You could look up previous sales in the neighborhood in the MLS in an effort to find out that information, but that would not be the best route. Why?

A

Well, if the previous agent made a mistake filling out the MLS sheet, then you might duplicate the same misrepresentation.

328
Q

When obtaining HOA info for buyers, Since the HOA representative on the phone may not give the best answer and you don’t want any extra liability, it would be better if the inquiry took place over email. This way, you’d have

A

Written record

329
Q

What do members get in exchange for paying their association dues?

A

Sometimes it’s access to recreation areas, which are maintained using the proceeds from the fees.

330
Q

Smaller towns that surround cities across Texas are areas known as

A

Extra Territorial Jurisdictions (ETJ)

331
Q

The distance limit for what counts as an ETJ is dependent on the

A

population of the town or city.

332
Q

The other reason why a buyer needs to be informed about an ETJ is because

A

they might be planning on building on the land someday.

333
Q

Some buyers who purchase small acreage in rural areas have no idea what they are getting themselves into. For example, they will need water in order to live on their property. There are two basic possibilities for accessing water:

A

Drill a well

Have a local utility service company provide the water

They could have the water trucked in to the property. 🚚

334
Q

Is buying is considering drilling for a well for water in rural property, agent should advise buyers to

A

consult with a local well driller. There are fluctuations in how deep the ground water is in various areas, so making rough estimates that might inform the buyer’s decision to purchase is not a good idea.

335
Q

Because of the potential distance between the service provider and the buyer’s land, there could be a long time period before the buyer would be able to get utility service. This needs to be

A

disclosed by the seller to the buyer.

336
Q

If you live outside of a city area in Texas, your property is most likely covered by

A

a taxing entity called the Municipal Utility District (MUD).

337
Q

The reason MUDs exist is to protect against pollution of water and to look after septic issues. If a property is being purchased in a MUD, there will be a special

A

addendum attached to the contract.

338
Q

disclosure concerns properties along the coast. This disclosure is made through the use of the Addendum

A

for Coastal Area Property.

This addendum notifies the buyer that if their property has a common boundary with lands that are submerged at certain tides, then there will be restrictions on how the property may be used and developed.

339
Q

Maybe the county paved a road that was previously dirt. The homeowners in the area would be taxed for the footage that they own along the road. If that tax is in place at contract time

A

let the buyer know or the buyer can terminate the contract.

340
Q

If a home has had mold in the past, but the mold has been removed, the owner will receive a

A

Mold Remediation Certificate from the company who worked on the home.

That certificate is good for five years.

341
Q

State law says the seller is supposed to tell the buyer about

A

liens on the property.

342
Q

Some builders have been known to charge a private

A

transfer fee to buyers when they purchased one of their homes.

The fee was set up in such a way that every time the home sold, the fee would be paid to the builder.

Real estate (13 decks)

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