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Managing Broker > PRACTICE OF REAL ESTATE > Flashcards

PRACTICE OF REAL ESTATE Flashcards

1
Q

Exchanging like-kind property for like-kind property, resulting in a deferral of capital gains tax; also called a tax-free exchange

A

1031 EXCHANGE

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2
Q

A federal law passed adding two new protected classes; Handicap and Familial Status

A

1988 AMENDMENTS TO THE FAIR HOUSING ACT

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3
Q

A client level duty relating to account of earnest money, actions, etc.

A

ACCOUNTING

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4
Q

A customer level duty relating to disclosure of all material defects (including latent or hidden defects) to any customer; e.g., leaky roofs, leaky basements, etc.

A

ACCURATE

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5
Q

An addition made to an original contract; e.g., adding the requirement that a roof be repaired. Also, sometimes referred to as an amendment

A

ADDENDUM

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6
Q

One who is hired to represent another

A

AGENT

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7
Q

A change made to an original contract; e.g., extending closing date on contract; also referred to as an addendu

A

AMENDMENT

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8
Q

A transfer of rights in contract to another party

A

ASSIGNMENT

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9
Q

A total transfer of rights in a lease where the original tenant and new tenant are both liable to the landlord for the lease payments

A

ASSIGNMENT OF LEASE

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10
Q

The title given to someone who has the power of attorney; can sign on others behalf

A

ATTORNEY-IN-FACT

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11
Q

A contract containing a promise for a promise; e.g., buyer and seller in selling and buying a house

A

BI-LATERAL

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12
Q

The illegal act of making a profit by inducing owners to sell by telling them that persons of a protected class are moving into their neighborhood

A

BLOCKBUSTING

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13
Q

Markers in a Metes and Bounds description; e.g., stake, well, etc.

A

BOUNDS

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14
Q

Where a party to a contract does not perform according to the terms of the agreement

A

BREACH

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15
Q

Profit made on an investment item, such as real estate

A

CAPITAL GAIN

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16
Q

A client level duty exercising knowledge and skill

A

CARE

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17
Q

Banned all racial discrimination

A

CIVIL RIGHTS ACT OF 1866

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18
Q

Banned discrimination in residential real estate on the basis of race, color, religion, national origin, sex, handicap, or familial status

A

CIVIL RIGHTS ACT OF 1968

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19
Q

Mixing escrow money with personal or business funds; illegal

A

COMMINGLING

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20
Q

An essential element of a contract; one must be of legal age and of sound mind

A

COMPETENT PARTIES

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21
Q

A client level duty relating to maintaining confidential information of the client

A

CONFIDENTIALITY

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22
Q

In leasing, a situation where the landlord constructively evicts the tenant by not maintaining the premises; e.g., no heat in the wintertime; lessee or tenant must actually leave the premises and is released from lease obligations

A

CONSTRUCTIVE EVICTION

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23
Q

A type of syndication where owners can limit their liability; a corporation who purchases real estate takes title in severalty

A

CORPORATION

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24
Q

A rejected offer and a new offer made back to the other party

A

COUNTER-OFFER

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25
Q

Buyer backs out of a contract, is release from the contract but the seller keeps the earnest money is liquidated or pre-arranged damages

A

DECLARE CONTRACT FORFEITED

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26
Q

An essential element of a contract; must have an adequate description of the real estate; generally a legal description

A

DESCRIPTION

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27
Q

A client level duty relating to disclosing to a client all materials facts regarding the transaction

A

DISCLOSURE

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28
Q

A situation where a broker represents both buyer and seller at the same time; must have written prior permission from both parties and informed consent

A

DUAL AGENCY

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29
Q

Good faith money

A

EARNEST MONEY

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30
Q

Liability insurance for real estate agents that protects against claims of failure to perform duties or mistakes being made

A

ERRORS AND OMISSIONS INSURANCE

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31
Q

A lease clause allowing a landlord to pass increased costs along to tenant; i.e., can raise rent to tenant if landlord`s costs go up

A

ESCALATION CLAUSE

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32
Q

Only for owner-occupied properties; a person can write off up to $250,000 of capital gains if single, $500,000 if married; must have been your personal residence for 2 of the past 5 years; can use exclusion repeatedly, not just once in a lifetime

A

EXCLUSION ON HOMES

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33
Q

A type of listing where the owner and one broker are authorized to sell and receive a commission

A

EXCLUSIVE AGENCY LISTING

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34
Q

A type of listing where only one broker is authorized to sell and receive a commission

A

EXCLUSIVE RIGHT TO SELL LISTING

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35
Q

The phase in a contract where the promises have been completed; e.g. contract closing

A

EXECUTED

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36
Q

The phase in a contract where the promises have been made but not completed; e.g. contract pending

A

EXECUTORY

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37
Q

Refers to a contractual obligation where all parties have clearly stated their intentions

A

EXPRESSED

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38
Q

A customer level duty relating to treating all customers fairly

A

FAIR

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39
Q

A person with a child under 18; a protected class under the 1988 Amendments to the Fair Housing Act

A

FAMILIAL STATUS

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40
Q

Loyalty and trust; what an agent owes to a principal (client)

A

FIDUCIARY

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41
Q

Linear (straight) feet along the street line; in essence, the width of your property along the street

A

FRONT FOOTAGE

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42
Q

A person who represents someone else in several areas on an ongoing basis; e.g., property manager to owner; also salesperson to broker

A

GENERAL AGENT

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43
Q

Insurance a real estate brokerage can obtain to protect against someone being harmed or injured on the brokerage premises

A

GENERAL LIABILITY INSURANCE

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44
Q

A form of legal description that uses benchmarks to identify land

A

GEODETIC SURVEY SYSTEM

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45
Q

A form of legal description that describes land in America using meridians (north and south) and base (east and west) lines; every six miles range and tier lines are drawn to form townships; also referred to as the rectangular survey system

A

GOVERNMENT SURVEY SYSTEM

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46
Q

A lease where the payments can go up or down, but are pre-determined

A

GRADUATED LEASE

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47
Q

A lease where the landlord pays taxes, assessments, insurance, etc.

A

GROSS LEASE

48
Q

A lease for ground; usually long-term; e.g., farmers, gas stations, etc.

A

GROUND LEASE

49
Q

A physical or mental impairment; a protected class under the 1988 Amendments to the Fair Housing Act

A

HANDICAP

50
Q

Insurance a real estate brokerage can obtain on business property to protect against vandalism

A

HAZARD INSURANCE

51
Q

A customer level duty relating to being honest with customers

A

HONEST

52
Q

Refers to a contractual obligation that is created by one`s actions

A

IMPLIED

53
Q

A lease where the payments can go up or down but are based on some type of index, such as the consumer price index

A

INDEX LEASE

54
Q

In 1968, the United States Supreme Court rules that one cannot discriminate racially under any circumstances

A

JONES VS MAYER

55
Q

An essential element of a contract; must be for a lawful purpose

A

LEGAL OBJECT

56
Q

A way to structure a business that combines the benefits of a partnership with pass through profits and losses to owners along with the limited liability protection of a corporation

A

LIMITED LIABILITY COMPANY (LLC)

57
Q

An arrangement where one can invest money with a general partnership; the limited partner is normally only liable for their investment; basically a financial backer; not involved in day to day running of business

A

LIMITED PARTNERSHIP

58
Q

A clause in a contract allowing for the earnest money to be forfeited to the seller if a buyer backs out of a contract; also called pre-arranged damages

A

LIQUIDATED DAMAGES

59
Q

A form of legal description which lists a lot #, block#, subdivision, county and state; recorded on a plat map; used primarily for new subdivisions

A

LOT AND BLOCK SYSTEM

60
Q

(Fiduciary) A client level duty relating to doing what is in your client`s best interest

A

LOYALTY

61
Q

Length measurements in a Metes and Bounds description; e.g., feet and inches

A

METES

62
Q

A form of legal description that gives a physical description of the property

A

METES AND BOUNDS

63
Q

False statement of a material fact

A

MISREPRESENTATION

64
Q

A clause in a contract where the buyer is obligated to buy only if loan approval is obtained; usually buyer gets earnest money back if mortgage is denied

A

MORTGAGE CONTINGENCY CLAUSE

65
Q

A lease where the tenant pays all or part of taxes, assessments, insurance, etc. Taxes paid by tenant would be tax deductible for the tenant.

A

NET LEASE

66
Q

Normally illegal; this is where the real estate commission is the sale price less the seller`s required proceeds

A

NET LISTING

67
Q

A clause in a lease and lending document allowing for continuation of a lease even if the property is foreclosed on

A

NON-DISTURBANCE CLAUSE

68
Q

(Performance) A client level duty following instructions of a client

A

OBEDIENCE

69
Q

In a real estate transaction, the buyer makes the first offer

A

OFFER

70
Q

An essential element of a contract; the parties must agree on the exact same terms

A

OFFER AND ACCEPTANCE

71
Q

A type of listing where everyone is authorized to sell and receive commission, including the owner; the only one who gets paid is the one who is the procuring cause (found the buyer)

A

OPEN LISTING

72
Q

Costs incurred in a property management situation, such as utilities and repairs; does not include vacancies

A

OPERATING COSTS

73
Q

A possibility contract where one party is bound to perform but the other party is not

A

OPTION

74
Q

Receiver of option (possible buyer)

A

OPTIONEE

75
Q

Giver of option (seller)

A

OPTIONOR

76
Q

Refers to a contractual obligation that is created by what appears to be; similar to implied

A

OSTENSIBLE

77
Q

A type of syndication where the partners have unlimited liability and generally share in profits, losses, taxes, etc.

A

PARTNERSHIP

78
Q

A lease where the rent is based on a percentage of sales; normally used in retail leases

A

PERCENTAGE LEASE

79
Q

A non-assignable contract; e.g., listing contract

A

PERSONAL SERVICES CONTRACT

80
Q

Used with the Lot and Block System, this map is a diagram of a subdivision

A

PLAT MAP

81
Q

A written document authorizing one to sign legal documents on behalf of another

A

POWER OF ATTORNEY

82
Q

A clause in a contract allowing for the earnest money to be forfeited to the seller if a buyer backs out of a contract; also called liquidated damages

A

PRE-ARRANGED DAMAGES

83
Q

One who hires an agent for representation

A

PRINCIPAL / CLIENT

84
Q

An agreement between an owner and property manager that shows basic duties of the property manager; generally this agreement does not contain a vacancy rate

A

PROPERTY MANAGEMENT AGREEMENT

85
Q

Protects broker in case negotiations extend past the expiration date of listing; this clause is normally standard in an agency agreement

A

PROTECTIVE PERIOD CLAUSE

86
Q

Subjective opinion; e.g., this home has a beautiful view; not a law violation

A

PUFFING

87
Q

(REIT) A type of syndication that is basically a giant mutual fund for real estate investments

A

REAL ESTATE INVESTMENT TRUST

88
Q

A form of legal description that describes land in America using meridians (north and south) and base (east and west) lines; every six miles range and tier lines are drawn to form townships; also referred to as the government survey system

A

RECTANGULAR SURVEY SYSTEM

89
Q

Lenders refusing to loan in certain areas based upon protected classes

A

REDLINING

90
Q

In a contract, this returns the parties to status quo; way they were before contract signed

A

RESCIND

91
Q

A contract where one is given the first opportunity to buy if a property is put up for sale

A

RIGHT OF FIRST REFUSAL

92
Q

A portion of ground measuring one mile square; also one square mile; contains 640 acres; every acre contains 43,560 square feet

A

SECTION

93
Q

Required if one sells investments to the general public, such as REIT`s (Real Estate Investment Trust)

A

SECURITIES LICENSE

94
Q

Amount of space between lot line and building line

A

SETBACK LINES

95
Q

A federal law that prohibits groups of brokers setting a fixed price for services

A

SHERMAN ANTI-TRUST LAWS

96
Q

An essential element of a contract; must have signatures of all parties to contract

A

SIGNED

97
Q

A simple business form under which a person can operate a business; it has no separate legal existence from the owner. Also, profits and losses flow through to the owner.

A

SOLE PROPRIETORSHIP

98
Q

A person who represents someone else one time in one area; e.g., broker to seller

A

SPECIAL AGENT

99
Q

Court action to force completion of a contract

A

SPECIFIC PERFORMANCE SUIT

100
Q

Length times width

A

SQUARE FOOTAGE

101
Q

A law that requires certain documents to be in writing to be enforceable; e.g., real estate sales contracts, deeds, leases over 1 year

A

STATUTE OF FRAUDS

102
Q

Directing people toward areas based upon their protected class

A

STEERING

103
Q

An agency situation where one agent is authorized to use another agent to represent the client; historically, this is where two brokers, the listing and selling broker, both represent the seller; buyer is a customer and is unrepresented

A

SUB-AGENCY

104
Q

A partial transfer of rights in a lease where just the original tenant remains liable for the lease payments; the new tenant is a lessee of the original tenant

A

SUBLEASING

105
Q

Two or more people investing together

A

SYNDICATION

106
Q

Exchanging like-kind property for like-kind property, resulting in a deferral of capital gains tax; also called a 1031 exchange

A

TAX-FREE EXCHANGE

107
Q

States that all terms of the contract must be completed in a timely manner

A

TIME IS OF THE ESSENCE CLAUSE

108
Q

A portion of ground measuring 6miles square; also 36 square miles

A

TOWNSHIP

109
Q

Separate account for holding other people`s money; usually held by broker; also referred to as escrow account

A

TRUST ACCOUNT

110
Q

A contract that may not be enforceable in court; e.g., an oral contract

A

UNENFORCEABLE

111
Q

A contract containing a promise for an action; e.g., a lease with an option to buy

A

UNI-LATERAL

112
Q

A contract containing all the essential elements, including being in writing

A

VALID AND ENFORCEABLE

113
Q

A contract with no legal effect; e.g., one of the parties not of sound mind

A

VOID

114
Q

A contract that can be voided by one of the parties; e.g., contract signed by a minor, under duress, or due to misrepresentation

A

VOIDABLE

115
Q

An essential element of a contract; contract doesn`t have to be in writing, but generally does to be enforceable (an oral contract generally cannot be enforced in court)

A

WRITING

Managing Broker (10 decks)

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