Principles of Real Estate Flashcards
How often should agents pay their portion of the IRS taxes to avoid a lump sum on April 15th
Quarterly
________ taxesCreate the highest priority lien against real property.
Property
Refers to how the item was attached to the property.
Method of attachment
ownership of real estate by two or more entities in undivided interests. Because these interests are undivided, all co-owners share the right of possession of the property. In the event that a deed does not make
the type of joint ownership clear, Texas courts will always assume that the owners are ____ ___ ______
Tenancy in common
Are considered personal property and may be harvested by the owner of the crop.
Emblements
Rights that give an owner the right to use water from a river or stream on or next to the property.
Riparian rights
refers to the fact that land cannot be moved.
Immobility
Air rights are commonly leased or conveyed in ______.
a. Cell tower leases
b. Condominiums
c. Outdoor advertising
d. All of these are correct
d. All of these are correct
the soil added to the land by the accretion.
Alluvion
What happens if the Recovery Fund goes above $3.5 Million
The remainder is placed in the state general revenue fund
Permission to perform a particular act upon the land or property of another. A
A license
When tenants add _______ to leased property, the _______ generally become the property of the landlord.
Fixtures
The _______ partner is responsible for the day-to-day operations of the business and has full liability.
General Partner
Syndicate
When two or more parties join together to create and operate a real estate investment,
a trust created during the lifetime of the trustor.
An inter vivos trust
This process of attaching personal property so that it becomes real property is called
Annexation
Rights that extend above the surface without limitation.
Air rights
Tenancy in common is an ______ of _______, and title passes at probate. Their interest will pass to their heirs or beneficiaries named in a will upon death.
estate of inheritance
Lease wherethe landlord pays all the expenses of the property.
A gross lease
Tenant pays rent plus a portion of the property’s expenses, such as taxes, maintenance, or utilities
Net lease
Personal property that has become attached to the land in such a way as to become real property
Fixture
Wha is the purpose of the TREC’s Recovery Trust Account.
The purpose of the account is to protect aggrieved individuals who suffer a monetary loss due
to illegal acts of license holders.
The court requires this form easement or states it is necessary for the benefit of the
owner. (Usually in the case of “landlocked” property.)
Necessity Easements
Proceeds from the sale of separate
property are _______
separate cash.
Do out of state attorneys have to have a license
YES
items necessary for an individual to carry out his or her trade or profession. May be moved before the lend of the lease.
Trade fixtures
Whats the most someone can receive from a settlement winning for attorney’s fees, interest, and court costs,
$50,000 period
A resident broker can collect a commission from a Texas broker form of a check or a gift
True
The primary determinants of real estate values
Supply and demand
Either the landlord or tenant may agree to terminate the lease “at will.”
An estate at will
Continuous use of the land over some time without the owner’s permission may establish the right to use the land.
Prescription - Continuous use of the land over some time without the owner’s permission may establish the right to use the land.
Ad valorem taxes
Based according to value. The greater the value of the property, the higher the taxes
foreclosure sale by a trustee under a deed of trust - Do they have to have a license
No
The _______ agency relationship is the most limited of all the agency relationships
The special agency
Example of a general agent
One common example of a general agent in real estate is the property manager.
Payments from the trust account for claims based on judgments against a single license or
certificate holder may not exceed a total of ______ until the license or certificate holder has ______ the trust account for all amounts paid.
$100, 000, reimbursed
What does it take for the servient estate to be released from an easement? against it.
Written agreement
this type of transaction occurs, the broker
becomes the Intermediary.
a set of rules that make it possible to bring client buyers and sellers together while at
the same time representing their best interests. When this type of transaction occurs, the broker
becomes the Intermediary.
How long does a person whose license has been revoked have to wait to reapply
2 years on the anniversary date
The government, under its power of eminent domain, takes an easement.
The government will take an easement for itself, the utilities, or the railroads.
Condemnation - The government, under its power of eminent domain, takes an easement.
The government will take an easement for itself, the utilities, or the railroads.
Homestead protection is automatic when a home is purchased
True
Joint tenancy has been referred to as a
“poor man’s will.”
When an individual owns real property, he is said to have a ______ _______ in that property
Freehold estate
An _________ that is allowed to remain can eventually acquire the right to be there.)
Encroachment
Body of law based on common sense
Common law
the owner can develop (improve) the surface and use the resources extracted fromor near the surface, including stone, gravel, water, and limestone
Surface rights
“three day right of rescission.”
Being able to cancel transaction within 3 days. Brokers are exempt from this. Section 1101.055 expressly exempts
real estate brokerage transactions from this right of cancellation.
How long do you hae to file. complaint with TREC
4th anniversary (years)
is owned equally by both spouses and cannot be conveyed or sold without the signature of both parties.
community property.
Continuous use of the land over some time without the owner’s permission may establish the right to use the land.
Prescription Easements
May also be called limitation.
Prescription
water washes away the land from one property and deposits it on another.
• Avulsion
water recedes, and dry land appears.
Reliction
As a ______, an individual has the right to represent a principal in a particular type of transaction or business.
general agent
the addition to the land by the action of water. Soil or rock is built up by the water.
Accretion
The _______ agent has full authority to conduct business on behalf of the client.
The universal agent has full authority to conduct business on behalf of the client.
How do you divide up a tenancy in common portion of land. 3 children owning 300 acres example. How much does each own?
partition. 1/3 of the whole.
The law prevents the forced sale of the homestead for payment of all debts, with five exceptions: PT ML MML A EL
The law prevents the forced sale of the homestead for payment of all debts, with five exceptions:
- Non-payment of property taxes
- Non-payment of a mortgage lien
- Non-payment of mechanic’s and materialman’s lien
- Non-payment of property owner association fees or dues
- Non-payment of a home equity loan
Can Attorneys licensed in Texas represent clients in real estate transactions without a license.
Yes
A neighbor’s fence that crosses a boundary or tree limbs extending over a boundary are examples of
Encroachment
a lease that automatically renews itself for like periods. Examples would be a month-to-month or a week-to-week lease.
periodic estate
Rights that give an owner the right to use water from a lake, ocean, or sea on or next to the property.
Littoral rights
If an easement was a personally held right to come onto a property for a specific reason (sometimes called a license)nan the person dies. What would happen to the easement agreement.
Death will terminate the easement
Condominiums are established under laws referred to as
horizontal property acts.
the unauthorized intrusion of another’sproperty onto an adjoining property.
An encroachment
Can an unlicensed assistant make telemarketing calls
No
The ______ agent can sign documents and bind (obligate) the client in the same manner the client would do in
person. It is the equivalent of having unlimited power of attorney and is very rare in real estate.
universal
agent
appropriative rights as it relates to water
The
first landowner to claim riparian rights has the exclusive right to take all the water for specific beneficial uses. Subsequent owners of nearby properties cannot claim water rights.
can be accomplished by the change in the direction of a river or a stream.
• Avulsion
How many years do you have to be licensed to be a broker
four years
the tenant’s rent is based, in whole or part, on the business receipts.
Percentage lease
A business entity that receives compensation on behalf of a license holder must be licensed as
a broker under this chapter. T or F
True
Any lease with a
specific starting and ending date.
The tenancy for years or estate for years
When a lease expires . tenant remains. no longer has any right to remain on the property
tenancy at sufferance
A custom-measured and installed fireplace screen would be considered ________.
Permanent Adaptation
Providing a professional opinion of the value of real property
Appraisal
Rights that give an owner the right to use water from a river or stream on or next to the property.
Riparian rights
The seller, in granting property to a buyer, reserves an easement in the deed. “B”
sold lot “A” and reserved the right to cross over “A” in the deed.
Reservation Easements
Any profit or income from separate property is considered _______. Ex: Rental income
community property.
Subsurface rights
rights to oil, gas, and other minerals.
refers to the fact that no two parcels of land are the same.
Nonhomogeneity
property coupled with the right to its exclusive use for a specified
number of days per year,
A timeshare features
Littoral rights
Give an owner the right to use water from a lake, ocean, or sea on or next to the property.
an be created with a simple written or oral agreement between to people
A partnership
if a broker operates under an assumed name, he/she must register the name with the
Texas Real Estate Commission
a claim against property to secure payment for a debt.
A lien is a claim against property to secure payment for a debt.
A testamentary trust
is a trust created by a will and is effective upon the decedent’s death.
Nonresident brokers must work through resident brokers may collect a commission from a Texas broker. True or False
True
Permanent Adaptation to the property refers to how the item fits the property. .
refers to how the item fits the property.
Surface, subsurface, and air rights are said to be ______.
a. Indivisible
b. Severable
c. Divisible
d. Unitary
a. Indivisible
Refers to the fact that outside forces cannot destroy land.
Indestructibility or durability
What are the four things that must be present to create a joint tenancy T T I P
- Time – Owners must acquire their interest at the same time.
- Title – They must acquire their interest from the same source (will, contract, deed, etc.).
- Interest – They must hold equal shares.
- Possession – Possession of the property must be shared equally.
Fixtures that may be moved before the end of the lease
Trade fixtures
Easements- In selling lot “B,” “A” did not explicitly grant the easement in writing but
in word or action that access to property “B” would be by an easement
Implied grant Easements
Property acquired before marriage is ______ as is inherited property and property purchased with inherited
funds.
separate property
No documents or claim needs to be registered by the owner to get Homestead protection
True
The easement is specifically given by one party to the other. “A” sold lot “B” and
granted the easement in the deed.
Grant Easements
A claim, lien, charge, or liability attached to and binding real property is an encumbrance.
encumbrance
Easements can be terminated by:
If the two properties become one, the easement terminates.
Merger
Overseeing the needs of the parties to a real estate transaction and seeing it to its completion
Brokerage
This process of attaching personal property so that it becomes real property is called
Annexation
If a broker wishes to terminate a licensed sales agent’s sponsorship, he/she must do what two things?
- notify the agent in
writing and - return the agent’s license to TREC immediately.
Property owned by a married person that is not community property is called ________.
separate property. Property
Syndicate.
When two or more parties join together to create and operate a real estate investment,
4 REQUIREMENTS OF A VALID LEASE C L A L
REQUIREMENTS OF A VALID LEASE
• Competent Parties (lessor and lessee)
• Let and take agreement
• Adequate consideration (rent)
• Legal purposeDescription of the property (street address is sufficient)
If an easement is no longer necessary, and the dominant estate shows by its
actions its intention to _______ the easement, it can be terminated.
Abandonment
The_______ partner’s liability is _______ to the amount he or she invested in the partnership. The ______ partner has no involvement in the day-to-day operation of the business. The ______ partners are the investors in the venture.
Limited Partners
How much does each licensee contribute to the the TREC Recovery Fund
$10
A _______ is required to determine if an encroachment exists.
Survey
If a property is listed by one firm
and later sold by another, the sale
is a
cooperative sale.
Body of laws and enacted by federal and state legislative bodies
Statutory law
Attorneys licensed in other states, but practicing real estate in Texas must be licensed. True or False
True
First is to prevent the forced sale of the home by creditors,second to provide a surviving spouse with shelter.
Homestead
Tenancy in common - What happens to their estate upon their death.
Their interest will pass to their heirs or beneficiaries named in a will upon death
TREC can assess administrative penalties of up to ______ per day against offending licensed and unlicensed individuals.
$5000
How long does a license holder have to notify TREC if they are convicted/pleas no contest to a felony of fraud
30 days
What is the purpose of TRELA.
To protect the public against unscrupulous brokers and sales agents. S
A claim, lien, charge, or liability attached to and binding real property is an
encumbrance.
limitations on our ownership rights,
Encumbrances
Does the salespeople representing a new home builder have to have a license
No
TREC Recovery Trust Accounts will pay ________ is the maximum per transaction, and ________ is the maximum on behalf of any one
license holder
$50,000, $100,000
the right of survivorship of the tenants is equally divided
immediately among the tenants.
JOINT TENANCY
Tenants in common own real estate in undivided shares
Tenants in common own real estate in undivided shares
The _______ is an employment contract between a seller or landlord and the broker
listing agreement
Gives the seller the right to list the property with multiple competing brokers and to
sell the property personally, without liability for payment of a commission.
open listing
the seller agrees to list the property with only one broker during the
listing term, with the provision that the seller can sell the property independently, without paying a commission.
In an exclusive agency listing,
which grants an exclusive right to sell the property during the listing term because they receive a commission even if the owner sells the property.
exclusive right to sell
the seller establishes a minimum net amount for his/her proceeds at closing.
Under a net listing
The exclusive right to sell and exclusive agency listing agreements usually call for the broker to place
the listing into
multiple listing services (MLS)
Comparative Market Analysis (CMA).
MLS data to show a seller the market value of the property.
Puffing
is marketing that uses adjectives and opinions rather than details or facts. For example, “the most beautiful landscaping.
Megan’s Law created in response to her
death.
requiring all states to release information to the public about known
convicted sex offenders, when necessary, to protect the public’s safety.
While it is a broker’s responsibility
to discover and disclose that there may be problems on a property, that responsibility is limited to
areas accessible for visual inspection
insurance that can protect a broker if the seller misrepresents property condition, the broker is unaware of the misrepresentation, and could not have detected it by visual inspection.
Errors & Omissions insurance
A ______ is an agreement between two or more parties to do something or to refrain from
doing something. Individuals enter into contracts every day without any thought.
contract
In this type of contract, both parties are obligated to perform
bilateral contract
A unilateral contract is said to lack ______
mutuality.
An _______ is an agreement between a buyer and seller or landlord and tenant.
Option
This temporary lease is for use when the buyer
occupies the property for no more than 90 days prior to closing.
Buyer’s Temporary Residential Lease
This temporary lease is for use when the seller occupies the property for no more than 90 days after closing
Seller’s Temporary Residential Lease
_______ consent or _______ agreement is often referred to as a
“meeting of the minds.”
Mutual consent or mutual agreement
This type of contract is defined
as a contract that is binding on the parties, with one or more of the parties having contractual duties
that have not yet been performed.
Executory contract
When is the
contract fully executed.
When the sale is closed
If the buyer defaults, what can the seller choose to accept as damages?
the buyer’s earnest money
If the seller defaults, what can the buyer choose to accept as damages?
Refund of earnest money
Monetary damages
An assignment of a contract transfers all of the rights related to the contract to another party known as the _______.
Assignee.
A _______ occurs when a new contract is substituted for an existing one.
A novation
If Guy’s mother decides to become a co-borrower and co-owner of the home, it will
make the most sense for the parties to have a contract _________.
a. Amendment
b. Termination
c. Assignment
d. Novation
d. Novation
________ is a “deposit” paid upfront by the buyer to show that he or she is serious in intent.
Earnest money
An ________ gives the buyer the unrestricted right to terminate the contract within a specific period.
option
The owner’s title policy can be paid for by either the buyer or seller. In most cases, the title policy is paid for by the ______.
Seller
Who usually issues the title policy?
The title company that is holding the earnest money.
Who usually holds the earnest money?
The title company
What time of contract/agreement can only be enforced against the seller
Unilateral contract
An ______ gives one the right to
use or pass over another’s property for a specific purpose.
easement
An _______ belongs to a person or corporation and does not belong to the land.The most common example of this is for utility
easement in gross
An ___________ is a right for the benefit of a piece of land. It runs with the land
and passes to new owners when the land is sold. The most common use
for ingress and egress (to enter and exit property).
easement appurtenant
If you have two parcels of land with a road across one parcel. Which one is dominant.
the owner who crosses over the other
owner’s land is dominant.
A property with the road is ______ to the dominant estate.
servient
A servient estate is _______ when regards to easements
encumbered
a contract that cannot be enforced because a flaw in the contract or some other issue
Unenforceable contract
Unilateral contract lacks what
lacks mutuality
a contract created by behavior
Implied contract
contract created by acceptance of an offer
Express contract
