Part 2 Flashcards
What does an option grant to the lessee?
The privilege of renewing the lease with notice by a specific date
The lessee must give notice on or before a specific date to exercise the option.
What is a pro forma statement?
An estimate and projection of net operating income from property activities in future periods
It reflects expected income and expenses.
When can a listing be terminated?
On the death or bankruptcy of either party or fulfillment of the agency’s purpose
A kitchen fire does not allow for termination unless the property is destroyed.
What are riparian rights?
The owner’s rights in land bordering a river or stream
What must occur for a transfer of title by deed to take effect?
Actual delivery of the deed by the grantor and acceptance by the grantee
What is the cost recovery period for residential income-producing property?
27.5 years for properties with 80% of income from improvements
What is a loss run schedule?
A schedule showing previous claim history used in underwriting
Insurers review this before extending a policy.
What is a mortgage contingency clause?
A provision allowing the buyer time to obtain financing commitment at a specified rate
How is a salesperson’s compensation determined?
By agreement between the broker and the salesperson
What are the freehold estates recognized in New York?
- Fee simple
- Qualified (determinable) fee
- Fee on condition
- Life estates
The first three estates continue indefinitely and can be inherited; a life estate ends at the death of the person it is based on.
What is the role of a mortgage broker?
To place, negotiate, solicit, and process residential or commercial mortgage loans
What is the 365-day rule?
A method for computing prorations using actual days in the calendar year
What is a mortgage?
A pledge of property given as security for a loan
Who guarantees mortgage loans for eligible veterans?
The Department of Veterans Affairs
What is depreciable basis?
Total acquisition cost of real property interest minus land value
What is the most commonly used insulation material?
Fiberglass
What is an alternative to foreclosure?
Deed in lieu of foreclosure, also known as friendly foreclosure
What does federal civil rights legislation forbid?
Discriminatory advertising based on country of origin and other protected classes
What responsibility does an agent have regarding property tax?
To determine the true tax for a property before entering into a contract
What was the 80/20 rule regarding condops?
An IRS rule limiting nonshareholder passive income for cooperatives
Who has the power to regulate zoning in New York?
Municipal governments
What do insurance policies usually require regarding coverage?
Coverage up to 80% of the building’s replacement value due to coinsurance clauses
What is required for new construction before occupancy?
A certificate of occupancy from the Buildings Department
What materials have traditionally been used for bathtubs, toilets, and sinks?
Cast iron or pressed steel coated with enamel, plastic, or artificial marble
Modern bathtubs increasingly use fiberglass.
