Principles of Real Estate I Flashcards
This act prohibits only and all racial discrimination
Civil Rights Act of 1866
Directing home seekers to a particular neighborhood based on the fair housing protected classes
Steering
Real estate agents creating fear in a neighborhood in order to induce the owner of the houses to sell the properties at a loss to the agents
Blockbustering
This act prohibits discrimination based on race, color, etc. and receipt of income from a public assistance program.
Equal Credit Opportunity Act of 1974
Land, improvements and the rights to own them is known as
Real property/real estate
Anything put on the land with the intent of making the land better
Improvements
This is the formal name for personal property
Chattel
The right or privilege attached to the land that goes with the land when the ownership of the land changes
Appurtenance
- Method of annexation
- Fitness or adaptation to the property
- Intention of the parties
Three tests of a fixture
Something that is attached to a property under a commercial lease
Trade Fixture
Uses distance and directions to define and describe the shape and boundaries of the property
Metes and Bounds
Used to mark elevation
Datum
Uses latitude, longitude, standard, and baselines to divide earth into areas
Rectangular Survey System
Areas of Earth = 36 sq. miles
Townships
1 sq. mile or 640 acres
Unit
1 acre
43,560 feet
Land is increased in size because of the natural deposit of rock and soil
Accretion
Sudden removal of land by water
Avulsion
Gradual wearing away of land or rock by water
Erosion
This separates the use of the property
Zoning
The right the government has to take privately owned property for public use
Eminent Domain
Process the government uses to TAKE the land through eminent domain
Condemnation
What the owner receives through eminent domain
Severance Damages
When a person dies without a will and no heirs, their property will (blank) to the state
Escheat
Taxing “according to value”
Ad Valorem
Centralized agency established in each county to appraise each property in the county for ad valorem taxes
Central Appraisal District (CAD)
Lowers tax bill by lowering the value of the property
Exemption
Exemption for people who live or will live in the property they own (up to $15K)
Homestead exemption
Exemption for being over 65 (up to $10K)
Age Exemption
Exemption for people with a disability (up to $10K)
Disability Exemption
This act reduced several federal income taxes on capital gains
Taxpayer Relief Act of 1997
This gives the owner many rights to the property. Said to be the greatest type of ownership interest that can be held in real property.
Fee Simple Absolute
Fee Simple Estates, life estates, and estates created by statute are all
Freehold estates
Person who gives land as a gift but decides how it is used.
Grantor
Conveys an estate in land for the duration of someone’s life
Life Estate
The person whose life is how long they have the land for
Life tenant
If the life tenant dies, the land reverts back to you, making you the (blank)
Reversionary Interest
Claim on a property that limits the fee simple estate, a stick that has been removed from the bundle
Encumbrance
A right or privilege one person has to the use of a property that belongs to another person
Easement
Example: Utility easement is the right the utility company has to place utility poles, lines, and pipes across private property
Easement of Gross
When a property has become landlocked and there is no ingress or egress to the property, the owner has a right to an easement across the other property to a road or street
Easement by Necessity
Used between two lots to allow the owner of one lot to cross the other’s property
Easement Appurtenant
Estate that benefits from the easement
Dominant Estate
Estate that is burdened by the easement
Servient Estate
A restriction placed by the developer of a property and are a private control
Deed Restrictions/Deed Covenants
Something that extends across a property line onto the property line of another
Encroachment
Legal claim on someone’s property as security for debt
Lien
Lien placed on the property by the owner of the property
Voluntary Lien
Placed on the property by the operation of law
Involuntary Lien
Lien only on one specific property
Specific Lien
Lien against all of the properties the person owns
General Lien
Lien that is placed against a property when the property owner borrows money on the property
Mortgage Lien
Lien placed on all properties at the beginning of the year and is superior to any other lien.
Property tax lien
Lien placed on the property by anyone who furnished labor or materials for the property if payment was not received.
Mechanics Lien
Lien placed on the property for money damages
Judgment Lien
Personal privilege given to someone to use the land
License
A title to a property held by only one owner
Estate in Severalty
When a property is owned by more than one person. The owners may have unequal shares. Also, two or more people who acquire a property and do not state how they will take ownership.
Tenancy in Common
The owners do not have unequal shares in the property and they may not sell, give away, or leave the property to someone upon their death. The remaining owners own the property upon the death of one of the owners.
Joint Tenancy with the Right of Survivorship
Form of ownership used for married couples that do not have community property. The four unities plus the unity of person.
Tenancy by the Entirety
Flexible form of a company that blends elements of partnership and corporation ownership
Limited Liability Company
Contract that is in writing or oral where the parties state the terms and conditions of the contract as well as the duties each will carry out
Expressed contracts
An understanding between parties
Implied contract
A promise in exchange for a promise. (Ex: Seller and agent)
Bilateral contracts
Promise in exchange for an act. (Ex: Seller and buyer)
Unilateral contract
Contract that has been completely performed
Executed contract
Contract that is being carried out
Executory contract
A good contract that meets all of the legal requirements for a contract and is enforceable in a court of law
Valid contract
Was never a contract and will never be a contract
Void contract
Binding against one part but not against the other party
Voidable contract
One that cannot be enforced in a court of law
Unenforceable contract
- Competent Parties
- Legal Objective
- Consideration
- Offer and Acceptance
- Contract in writing and signed
Five essential elements that make a contract valid
The substitution of a contract for a contract
Novation of Contracts
Most often used sales contract in real estate
One-to-four Family Residential Contract
The broker will receive a commission if the property sells while the listing is in effect no matter who produces the buyer
Exclusive Right to Sell Listing
The seller may sell the property himself and not pay a commission to the broker
Exclusive Agency Listing
No exclusive right
Open listing
Seller states the amount of money they require from the sale of the property and allows the broker to keep all money above this amount received from the sale
Net Listing
Legal relationship involving a person and another who acts for the person
Agency
The agent can represent the client in any matter
Universal Agency
Has the power to bind the principal
General Agency
Allows the agent to do only specific acts
Special Agency
All parties to the agreements know who the agent represents
Expressed Agency
Created by actions and customs
Implied Agency
Relationship based off of trust
Fiduciary Relationship
Act of using or spending the commingled money
Conversion
Exaggerating praise of something
Puffing
Landmark statute of competition law. Prohibits certain business activities that reduce competition in the market place
Sherman Antitrust Act
Several brokers all agree to set a commission rate that will be charged for their services
Price fixing
Refusing to deal with other brokers or organizations
Boycotting
Dividing the market between companies and not competing with each other
Allocation of customers
