Module 7 Flashcards
What are the five basic elements of a contract?
- Voluntary
- An agreement or promise
- Legally competent parties
- Legal consideration
- Legal act
It is a voluntary, legal act between legal parties, for legal consideration that people agree upon
Contracts may be _________ or ___________.
Express or Implied. Both are valid contracts and both may be in written form or given verbally.
True or False
A implied contract is just as binding as an Expressed.
True
A______ contract is an agreement in which all the elements of a contract are present and, therefore, legally enforceable.
Valid Contract
A ______ contract has no legal effect and cannot be enforced in a court of law. This may be due to the absence of one or more specific contract elements.
Void Contract
A _______contract is technically valid but gives one or more parties the power to legally void the agreement and thus cancel performance.
Voidable contract
What constitutes the “meeting of the minds” in a contract?
Offer and acceptance
An ________ is in essence an agreement (or contract) to make a contract.
Option
An option is a unilateral contract because it binds one party, and acceptance of the option is based on performance. (true or False)
True
Land contracts are also known as __________
contracts for deed
and
installment (sale) Contracts
The parties to a land contract are the _____
vendor and the vendee
Land Contract is the course means
Seller Financing
Leases involve what two players?
Landlord (Lessor)
and
Tenant (Lessee)
The landlord has a ______interest in the property.
Leased fee interest
In a lease contract the tenant has a _____ interest in the property.
Leasehold interest
What are the four types of leasehold estates?
- Estate for years
- Estate at will
- Estate from period to period
- Estate at sufferance
__________The lessor pays some or all of the operating expenses. When a landlord pays most, but not all, of the operating expenses, this may be referred to as a modified gross renal lease.
Gross rental lease
____________The tenant pays all the operating expenses.
Net Rental Lease
A lease with a specified level of rent that continues throughout the lease term
Flat rental
A lease that provides for specified changes in rent at one or more points during the lease term
Graduated rental
A lease that provides for periodic rent adjustments based on the market rental rate of the space. This is sometimes accomplished through appraisal or arbitration.
Revaluation Lease
A lease, usually for a long term, that provides for periodic rent adjustments based on the change in an economic index, e. g., a cost-of living index.
Index lease
A lease in which the rent or some portion of the rent represents a specified percentage of the volume of business, productivity, or use achieved by the tenant. This type of lease is most frequently used for retail properties and typically specifies a guaranteed minimum rent with overage rent being possible.
Percentage lease
Rents paid in shipping centers and malls are often percentage leases.
Can be either gross or net lease.
A lease in which an intermediate, or sandwich, leaseholder is the tenant of one party and the landlord of another.
Sandwich
Solar photovoltaic leases or power purchase agreements (PPA’s) vary widely in terms but are generally for 20 years. The leases usually state that the solar photovoltaic system is personal property and the property owner is responsible for paying personal property tax. What must the appraiser do?
verify ownership and seek a copy of the lease. Some lease terms may have a negative impact on the property’s market value.
In ______land the buyer actually receives a certificate rather than an abstract.
Registered land
Also known as torrens land
Government gaurantees the title
The combination of all elements that constitute proof of ownership
Title
Title also serves as the evidence of ownership. However, title is not a printed document that a landowner can show someone.
True
A written, legal instrument that conveys an estate or interest in real property to someone else, assuming it is executed and delivered.
A deed
______ is the most common deed and binds the grantor to defend the title against all lawful claims that might be made against the property.
General Warranty Deed
__________Deed. The grantor provides two covenants:
1 The grantor received title to the property.
2. The grantor and his heirs will defend title to the lands against legal claims created by the actions or omissions of the grantor or his heirs.
Special warranty Deed
_________Deed. The grantor conveys the property but does not guarantee clear title; This is used by court officials and fiduciaries to convey property they hold by force of law but to which they do not hold title. It is also used in foreclosure tax sales. Title insurance is recommended.
Bargain and sale deed
_____Deed. The grantor conveys any interest held in the property to the grantee without warranty of title. A quitclaim deed offers the least protection to the buyer. It is often used to clear a defect in the title when someone is thought to have an interest or right in a particular property.
Quitclaim Deed
This involuntary transfer of property takes place when a party makes a property claim by taking possession over a period of year, and the owner fails to contest the possession.
Adverse possession
The right to use another’s land, which is established by exercising this right openly, hostilely, and continuously over a statutory period of time. The use must be open, notorious, continuous, exclusive, and with out the owner’s permission. In this case the claimant gains a legal easement rather than legal title to the land.
Prescriptive Easement
What are the requirements for prescriptive Easement?
- Open
- Notorious (others know about it)
- Continuous
- Hostile (without consent of the landowner)
- Adverse
An option agreement is a __________ type of contract.
Unilateral
Parties to a valid contract must enter the agreement voluntarily to satisfy the element of __________
consent
A contract where the seller acts in the role of a lender is called a
Land contract
In a _________lease, the tenant pays a fixed rent and the landlord pays the property’s operating expenses.
Gross
In a leased property, the landlord has a _______ interst.
leased fee
When a party conveys whatever interest he or she has with no warranties, the type of conveyance used is called a __________________
quitclaim deed.
The involuntary transfer process by which a party takes possession and use of another’s land over a period of years is known as _________
adverse possession.
A tenant has an ice cream sop in a shopping mall and pays $2000 per month plus 4% in overage rent based on gross sales after the first $100,000. This is an example of a ___________lease.
percentage.
