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Real Estate Exam > National Part 1 > Flashcards

National Part 1 Flashcards

1
Q

What is a license?

A

A license is a personal privilege to use the land of another. A license is not considered a true interest in the land because it can be taken away at any time and does not transfer with title. Examples of a license would include being able to park your car in a garage or having a ticket to the movie theater. A license can be created with a spoken agreement like giving someone permission to fish on your lake.

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2
Q

Real estate license is called a real estate license because

A

Real refers to Real property, and Estate has to deal with duration of ownership.

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3
Q

The OR - EE rule

A

The suffix “OR” is used for the person who performs in action. The suffix “EE“ is used for the recipient of that action.

Grantor- Grantee
Lessor- Lessee
Vendor- Vendee
Optionor- Optionee
Trustee- Trustee
Mortgagor- Mortgagee
Offeror- Offeree 

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4
Q

“OR” gives
“EE” receives

A nice sentence to remember is

A

“GrantOR, lessOR, vendOR, makes me the givOR of the propertOR for your pleasOR”

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5
Q

The bundle of rights includes the right to:

A

•use
•give away
•sell
•mortgage
•lease
•rent
•enter
• refuse to exercise any of these rights

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6
Q

Encumbrance on a property is a

A

Restriction 

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7
Q

Real property:

A

Incorporates all things attached to the land and all rights inherit with that land. Real property usually involves things that are immovable such as homes and buildings.

Real = immovable 

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8
Q

Personal Property:

A

Personal property involves things that are generally movable. Can include things like furniture, drawing clothing or other household goods also called chattels or personality. Cattle Sounds like chattels.
Cattle mooooves

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9
Q

Severance is:

A

Changing an item from real property to personal property by detaching it from the land

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10
Q

Annexation is:

A

Adding to property by attaching an item to the property. Attaching personal property to Real property. Thus creating a fixture annexation can also mean a touching a smaller piece of land to a larger one. Or attaching a smaller document to a larger one annexation is used to describe the manner in which a child is joined to a property. For example, a sink becomes a fixture when it is annexed to the plumbing outlet and therefore real property.

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11
Q

A Fixture

A

Personal property that becomes real property. It was some thing that went with the person but now it goes with the real estate being sold. Such as a chandelier. Something that was movable but now it is attached to the property. Example is a sink or a toilet. 

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12
Q

MARIA

(For fixtures)

A

-Method
-adaptability
-Relationship
-intention
-agreement

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13
Q

Method of attachment:

A

Is the item permanently attached to the wall, ceiling, or floor, using nails, glue, cement, pipes, wires, or screws? Even if you can easily remove it the method used to attach it might make it a fixture.

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14
Q

Adaptability:
(Of a fixture)

A

If the item becomes an integral part of the home, it cannot be removed. For example, a pool covering is a fixture because that cover goes with that pool, even though it can be easily folded up and put away.

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15
Q

Relationship of the parties:

(For a fixture)

A

If there is a dispute between Byron and seller, the buyer is likely to win. If the dispute is between tenant and landlord, the tenant is likely to win this comes up an exams when dealing with emblements. These are crops grown on land that is being rented.

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16
Q

Intention of the party when the item was attached:

(For a fixture)

A

When the installation took place, was the intention to make a permanent attachment? If so, the item is a fixture.

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17
Q

Agreement between parties:

(For a fixture)

A

Read your purchase contract most container closet expressly defines an agrees on items included in the sale. They are often referred to quote all existing fixtures and fittings that are attached to the property” remember what two people agree upon with Trump all the other rules about a fixture.

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18
Q

A trade fixture:

A

A trade fixtures is a piece of equipment on or attached to the Real Estate, which is used in a trade or business. Trade fixtures are different from other fixtures because they may be removed from the Real Estate making it a personal property even if attached at the end of the business tenancy. The business tenant must compensate the owner for any damages due to removal of trade fixtures or else repair the damage trade fixtures remain the tenants property, so they are personal property. 

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19
Q

Appurtenance

A

Appurtenance is a term for what belongs to and goes with something else. The pertinence is always less important than what it belongs to. Appurtenance is something which belongs to something else. It can be attached or not. It could be a barn to a house or an easement to a land. The appurtenance is part of the property and passes with it upon sale or other transfer. 

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20
Q

Encroachment

A

Encroachment is when a structure or improvement of one person’s land physically intrudes on the land of another person. Examples might also include a Fincher driveway which crosses a property line. Your property line also extends upwards towards the sky so a tree hanging over your property is also an encroachmentcan be found by survey. Encouragement is a form of trespass.

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21
Q

Emblements

A

Emblements are annual crops which have been legally cultivated and belong to the tenant. The tenant has an implied right to its harvest so implements are treated as the tenants property. They are considered personal property. 

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22
Q

Water rights

A

No one has title to Water. Property owners whose land is next to bodies of water have a reasonable right to use the water, but that water is not theirs so there are limits on what you can do with that water. 

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23
Q

Riparian rights

A

That way property owner to use water from moving water such as a river, stream or creek

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24
Q

Littoral rights

A

Concern properties next to an ocean, sea or lake rather than a river or strength. Latorial rights are usually to do with the use and enjoyment of the shore.

An easy way to remember this is that riparian rights have to do with the water that is moving in one direction. Littoral rights have to do with water that does not have a direction.

think riparian = river Latorial = lake 

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25
Q

Correlative use

A

Allows a property owner of the use of underground water or water from a river for irrigation

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26
Q

Doctrine of prior appropriation

A

Determines the use of water. According to this doctrine and the use of water is determined by the state not the owner, whose property is next to the body of water.

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27
Q

Accretion

A

When soil is brought by the water and increases the size of the property when water moves back new land is acquired. This is called “reliction”

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28
Q

Erosion

A

When Landers soil is worn away by wind, water, currents, or ice. If natural causes tear away land in a violent way, this is called “avulsion”. A damn breaking or an earthquake is an example of avulsion.

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29
Q

A “freehold estate”

A

An estate where you have the exclusive right to enjoy the possession of a property for an indefinite period of time.

A less than freehold estate is for fixed defined period

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30
Q

Three types of freehold Estates

A

-fee simple absolute
-fee simple defeasible
-Life Estate 

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31
Q

Fee simple absolute.
also called fee simple. Also called fee.

A

A few simple is an estate in land. This type of ownership cannot be claimed by previous owners or previous owners heirs. However, it is not free from encumbrances. Feesimple could be limited by conditions in the deed. Fee simple is the greatest interest in a parcel of land that could possibly own. It’s the most common way of owning real estate.

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32
Q

Fee simple defeasible

A

A defeasible estate is created when a grantor puts a condition on a fee simple estate. This means that a particular event happens, the estate could be lost.

Two types of defeasible estates are the:
-fee simple determinable,
-and the fee simple subject to a condition subsequent

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33
Q

Few simple determinable

A

The grantor may state a specific duration such as they want their land to be used as a park. If or or when the specified event happens, the estate will automatically end and go back to the grantor or the grantors Estate.


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34
Q

See simple subject to a condition subsequent

A

The grand tour may state a specific condition such as no alcohol to be served. This would be a condition subsequent. You could lose title if you serve alcohol.

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35
Q

Life Estate

A

A life estate is an interest in real property, which last the duration of one person’s lifetime. This may be the lifetime of the person holding the estate, or it may be the lifetime of another person.

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36
Q

Less than freehold Estates

A

A less than freehold to stay is in Estate help by someone who rents or releases property. It is also known as a leasehold estate. The key element of a less than freehold estate is the limitation of time. Lease is illegal Estate so lease estate can be bought and sold on the open market.

37
Q

Types of less than freehold Estates

A

Estate for years, periodic tenancy, estate at will, or an estate at sufferance

38
Q

An assignment in regards to a lease

A

The transfer of contract rights to another person

39
Q

An assignment in regards to a lease

A

The transfer of contract rights to another person

40
Q

Constructive eviction

A

A term used in property law to describe a situation where Landlord either does something or fails to do something that he has a legal duty to do

41
Q

A property manager

A

Has a fiduciary relationship to the owner. The main goal of the property manager is to generate the highest net income while maintaining the value of the property. A property manager is a general agent of the owner because they are engaged in an ongoing business relationship. Most States require property management agreements to be in writing. A property manager may be paid according to the gross or net income the property produces.

42
Q

Duties of a property manager include

A

Preparing a budget.
Allocating for money for fixed expenses, operating expenses, and reserve funds
Selecting quality tenants
Offering concessions to attract tenants

43
Q

Property management info

A

The lease should say when the rent is due. If the lease does not give a date, rent is due on the last day of the leasing period. The property manager must keep funds for expenditure, like remodeling and renovating the property.

44
Q

A property manager should have knowledge of the following

A

Market conditions
Recordkeeping
Expenses
How to handle environmental hazards
Risk management

45
Q

Risk management in property management involves, judging whether insurance is needed to protect the owner and manager from certain risks such as:

A

Loss of revenue
Liability from injury of anyone on the premises
Lost due to fire
Medical coverage for employees
And casualty losses

46
Q

The four options a property manager has for avoid risk are:

A
  1. Avoid the risk by removing the problem.
  2. Deal with the risk by purchasing insurance with a large deductible.
  3. Control the risk by installing protective equipment
  4. Transfer the risk by obtaining insurance with no deductible.
47
Q

Types of leases:

A

Gross lease
Percentage lease
Net lease
Lease option

48
Q

Gross lease:

A

A gross lease is a rental agreement where the tenant pays a fixed amount which never changes as a result of changes a various expenses of the property. The landlord pays for the expenses, which might include repairs taxes, and operating expenses. It is the opposite of a net lease. 

49
Q

Net lease:

A

A net lease where the Lessee has the responsibility to pay taxes, insurance, and maintenance as well as the monthly lease payment. This is often referred to as a triple net lease.

50
Q

Percentage lease

A

A percentage lease is a rental that is based on a percentage of the monthly or annual gross sales made on the premises. Percentage leases are common with large retail stories, especially in shopping centers. If fundamental concept of the percentage leases that both the landlord and tenant should share the advantages of the location.

51
Q

Lease option:

A

A lease option is a rental agreement where the tenant has the option to buy the property during the term or at the end of the lease. Here, the owner of the property would be the optionor and the tenant would be the optionee.

52
Q

Consideration in a lease

A

Consideration is given to the optionor to secure the option for the optionee. The consideration can be monthly payments are can be money upfront towards a down payment on an already established amount. 

53
Q

Easement

A

An easement is when one person has the right to use the land of another for a specific purpose. The easement “runs with” the land, meaning that when the property is sold, the right transfers to the new owner.

54
Q

An appurtenant easement

A

Involves two properties, owned by two different owners. The two properties are called dominant and servient.

Dominant means they’re dominating, so they are in charge. Servient means they are serving, so therefore the servient is serving another person. 

55
Q

Express easements

A

The best way to create an easement. There are two ways to create an express easement. Creating an
“express easement express Grant” and an “express reservation.”

56
Q

Express easement express Grant

A

An express easement is created by express grant, is given by the servient estate to the dominant estate. This type of easement is usually bought and bargained for.

57
Q

Express reservation
Easement

A

An express easement created by express reservation is when the owner of one large piece of land splits the land into two more pieces. She places an easement on one or more pieces of land to allow access to the other parcels.

Look up with this one is more .

58
Q

Easement by necessity

A

An easement by necessity is similar to an implied easement. It is an easement created by the courts. In fact, an easement by necessity and many ways is a type of implied easement. Courts will only create an easement by necessity when the easement is necessary to use some piece of property. Example of this would be land that is completely landlocked.

In the future, if new ways are created to access the land within the easement by necessity is revoked .

59
Q

Easement in gross

A

An easement engross involves only one property. An example of this would be a utility company which needs to cross the property, but they are not trying to get to another. An easement in gross there is no dominant property.

It is a right for a specific person, not a piece of property an easement engross does not transfer with the property when sold

60
Q

Implied easement

A

An implied easement is an unrecorded easement by which legally necessary; it could be for light, air, or access to a landlocked parcel. This is a fancy way of saying that is it is an easement that is created by the courts.

Courts will have to come in and determine that people can use easements that have not been formally created.

61
Q

How do you create an implied easement?

A

You must show that there was a unity of ownership of the dominant and servant estates, and that the use was
1. Apparent.
2. In existence at the time of the Grant.
3. Permanent.
4. Continuous.
5. Reasonably necessary to the enjoyment of the premises granted. 

62
Q

Prescriptive easement

A

An easement created from an open, adverse, and continuous use, hostile to the true owners title over a statutory period

63
Q

Government power
Four powers of the government

PETE

A

•Police Power
•Eminent Domain
•Taxation
•Escheat

PETE

64
Q

Police power

A

Please powers the states right to regulate an individuals conduct or property to protect their health, safety, welfare, and morals of the community.

Common examples of police power are zoning, building codes, rent control.

65
Q

Eminent domain

A

Eminent domain refers to the power of the state to take property for a public use. In some jurisdictions, the state gives its eminent domain power to the public and private companies like utility companies, so they can run telephone, power, water, or gas lines. The owner of any appropriated land is entitled to “reasonable compensation” usually defined as the fair market value of the property.

66
Q

Taxation

A

A charge on Real Estate used to pay for services provided by the government

67
Q

Escheat

A

As cheat is where a property goes back to the state because an individual has died without a will, and without errors. As she ensures that property always has an owner. Ownership of the estate property would revert back to a rightful heir if they eventually come along. Think of this as the government cheated to get the property. 

68
Q

Zoning

A

Zoning is the regulation of private land use and development by local government. Zoning is a police power zoning for land is generally divided into.

Residential
Commercial
Agricultural
Industrial
Special use properties

69
Q

Examples of zoning

A

R stands for residential. R-3 would be zoned as multifamily unit residential special purpose properties our properties that benefit the public, such as schools, hospitals, police stations

70
Q

Zoning ordinances are a set of laws which control the

A

Height of buildings
Setback
Density
Floor area ratios
Buffers
Buffer zones
Variances

71
Q

A setback

A

The distance from the edge of the rotor sidewalk to the structure that was built. It could also be the distance from the center of the road, check with your local zoning to see where the setback line is for you.

72
Q

Density

A

Usually associated with subdivisions and restrict the number of houses that can be built per acre within that subdivision

73
Q

Floor area ratio

A

The ratio of square footage to land area. The floor area ratio can be used in zoning to limit the amount of building in a certain area.

74
Q

Buffer

A

A buffer is found between two lots, such as a fence, wall, or a row of trees

75
Q

Buffer zone

A

A space of land between two used districts, such as a park, playground, or a Highway

76
Q

Down zoning

A

A change in zoning to permit less intensive developments than are currently permitted. So for example, a zone could go from commercial to residential. 

77
Q

A variance
Zoning

A

Is an exception to the zoning rule. A variance is only granted an exceptional situations, and it will not affect the rest of the community.

78
Q

Condemnation

A

The name for the ACT ITSELF whereby title is transferred from its private owner to the government, like an easement.

79
Q

Eminent domain

A

The POWER to take land

(Condemnation is the act itself)

80
Q

Inverse condemnation

A

Where the government takes private property, but fails to pay the just compensation. The owner that needs to sue the government to get any compensation. 

81
Q

An agent

A

An individual or corporation who represents another

The other person or corporation is known as the “principal “ 

82
Q

Three parties referred to an agency law:

A

The principal, an agency, and third persons.

In real estate transactions, the agency is the real estate broker who represents the client for specific purposes. The principal is the client, such as a seller buyer, landlord or tenant. Third persons are individuals or associations other than the brokers client

83
Q

An agency can be created by

A
  1. Express agreement, whether oral or written.
  2. Implication, based on the custom or practice of the trade.
  3. Conduct of the principal under the legal doctrine of estoppel, the principal must admit to the existence of an agency if it is properly formed.
84
Q

If fiduciary relationship is a legal relationship that creates a position of trust and confidence. The acronym ACOLD will help you remember your duties in a fiduciary relationship. 

A

A -accountable
C- use Care and skill
O- obey legal instructions
L- Loyal to your client
D- disclose all pertinent information

85
Q

Agency relationship

A

A relationship in which an agent is authorized to perform certain acts on behalf of a principal. If the agency relationship changes at any time during the transaction, the change must be disclosed in writing, and the party must give consent to the change.

86
Q

A universal agent

A

One who has been given full power to act on behalf of a person or business

87
Q

A general agent

A

Is authorized by the principal to perform any and all acts in the ongoing operation of the job or business. So, a real estate licensee acting as a property manager is a general agent to the owner.

88
Q

A special agent

A

Is one who has limited authority granted by the principal. The relationship with the principal is not expected to be continuous. The listing contract creates a special agency relationship with the seller. They can only fulfill certain duties written down in the listing contract and the relationship ends when the terms have been fulfilled.

Real Estate Exam (3 decks)

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