Needs Improvement Flashcards
The system of ownership of real property in the United States is what?
“Allodial” is the modern form of ownership and is often contrasted with “feudal” in which land is held on the condition of rent or service due the government. For example, a medieval knight held property subject to coming to his baron’s service when called. Similarly, the baron’s land holdings were conditional on his raising an army and fighting for the king in times of conflict. Failure of any party to “perform as promised” was cause for holdings to be confiscated, often as a preliminary step to more extreme actions.
To create a joint tenancy relationship in the ownership of real estate, there must be unities of
possession, time, interest, and title.
This essentially means that all parties to the agreement share equally in all aspects of the property, including the length of time it’s been held. That means if one party sells or transfers interest in a joint tenancy relationship, his or her place is taken by another in the same capacity.
A mechanic’s lien would be properly classified as a(n)
statutory lien.
A “statutory lien” is one that arises out of specific law (otherwise known as statutes). By contrast, an “equitable lien” has its roots in common law or custom. A “voluntary lien” is one entered with the property owner’s knowledge and consent, such as a mortgage. A “general lien” grants a creditor the right to file a claim against all of a debtor’s assets, not just a particular property.
The covenant in a deed which states that the grantor is the owner and has the right to convey the title is called
covenant of seisin.
Another outgrowth of the feudal system, “seisen” derives from the French meaning to “sit upon or own” and gives owners the right to sell or transfer property at will.
The title to real estate passes when a valid deed is
delivered and accepted.
Fundamentally, real estate transactions only involve two parties–the buyer and the seller. All that’s necessary to create a legal sale is for one party to make an offer the other accepts. Recording, escrow, real estate licensees, mortgage companies and the like facilitate and support the transaction process but are not requirements of a legal sale.
The primary purpose of a deed is to
transfer title rights.
A deed is the instrument by which ownership of a property is transferred from one person to another, while a title is evidence of that ownership.
When a claim is settled by a title insurance company, the company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is known as what?
Subrogation.
For example, let’s say Amanda buys a property and the seller provides a general warranty deed stipulating clear title. However, that turns out not to be the case and a third party provides a valid claim to a share of the property. Since Amada took out title insurance, the title insurance company negotiates and pays a settlement with the claimant on Amanda’s behalf. Amanda’s right to sue the seller then transfers to the title insurance company, which will take action to recover the amount they paid on Amanda’s behalf.
A competent and disinterested person who is authorized by another person to act in his or her place and sign a contract of sale is called
an attorney in fact.
“Disinterested” means being able to act in an objective manner without any hidden motivation or prospect of gain. For example, a person who made a secret deal to sign a contract contrary to his client’s best interests in exchange for an under-the-table payment would not be “disinterested.”
An option …
requires the optionor to complete the transaction.
It is up to the optionor (seller)to finish the transaction. The optionee (buyer) does not have to complete (close) on the property, but would lose whatever option monies that have been deposited.
When a prospective buyer makes a written purchase offer that the seller accepts, then the
buyer receives equitable title to the property.
“Equitable title” means that the prospective buyer has obtained the right to acquire ownership of a property currently owned and occupied by another.
A(n) _______ is when an owner takes his property off the market for a definite period of time in exchange for some consideration, but he grants the right to purchase the property within that period for a stated price.
option
It’s important to note that options generally give flexibility to only one side of the transaction. For example, let’s say Barney is expecting a big promotion in six months and wants to buy Fred’s house for $300,000 if it comes through. In exchange for keeping his home off the market for six months and agreeing to sell it to Barney for $300,000 at Barney’s option, Barney gives Fred $3,000. The $3,000 is Fred’s to keep no matter what. However, Barney is not obligated to buy Fred’s house; it’s his choice. Further, if he does get the promotion and wants to exercise his option, Fred must sell Barney his home for $300,000, even if market conditions have now made it worth more.
To assign a contract for the sale of real estate means to
transfer one’s rights under the contract.
Assigning a contract means to transfer it to another.
The broker-owner of a sole proprietorship dies leaving his estate in the care of his son, a non-licensee. The broker’s employees and associated salespeople ask the son if he would like them to continue doing “business as usual” for now. Which of the following is the son required to do under Pennsylvania law?
He must notify the Commission after he’s appointed another broker to supervise the termination of the business and within 15 days of his father’s passing.
Upon the death of a broker who has a sole proprietorship, the broker’s estate must appoint another licensed broker to supervise the termination of the broker’s business. Such an appointment, and the notification of this to the Commission must be done within 15 days.
A broker receives an earnest money deposit from the buyer for an offer on a house. What must the broker do with the money?
Deposit the money into the brokerage’s existing non-interest-bearing escrow account for all such transactions.
Earnest money must be deposited into an account for escrow funds; although the account need not separate one client’s funds from another client’s funds, in no circumstances may the money be commingled with the broker’s personal funds.
Which of the following would be considered an exclusive listing agreement?
An exclusive right-to-lease agreement.
An exclusive listing agreement can be the exclusive agency of the broker, an exclusive right-to-sell agreement, or an exclusive right-to-lease agreement - a listing agreement does not only refer to purchases.
