Real Estate Flashcards
What is the Allodial System?
a legal system that allocates full property rights to individuals the allodial system is the basis for property right in the us. Example:under the allodial system an individual may obtain fee simple ownership of a parcel of real estate. The allows the individual to enjoy the full set of rights entailed in the property ownership, subject to restriction only by government powers of taxation, police power, and eminent domain.
What is Fee Simple Ownership?
The law recognizes this form of estate (ownership) in real estate as the highest form. The property owner is entitled to full enjoyment of the property, limited only by zoning laws, deed or subdivision restrictions or covenants. The duration of this ownership is not limited and can be passed along in a will to the owners heirs.
What is Vicarious Liability?
The legal principle of vicarious lability apples to hold one person liable for the actions of another when engaged in some form of joint of collective activity. I.e. guilt by association
According to Tristam’s Landing, a broker is entitled to his/her commission only when what 3 conditions are met?
- The broker produces a purchaser ready, willing, and able to buy on the terms of the owner
- The purchaser enters into a binding contract with the owner to purchase the property
- The purchaser completes the transaction by closing the title in accordance with the provisions in the contract
What is Chapter 93A?
mass consumer protection law prohibits unfair and deceptive trade practices
What 8 requirements are needed to make a valid deed?
- Must be in writing
- Must be of sound mind
- Must identify the parties
- Must identify the property (legal description)
- Must contain a granting clause (I hereby grant)
- Must state consideration ($)
- Must be signed by grantors
- Delivered to and accepted by Grantee
What 6 things must be included in a purchase and sales?
Must contain the following 6 items to be valid:
- The names of all parties to the transaction
- Description of land
- Sales price
- Amount of buyers earnest money deposit
- Date of contract
- Signatures of buyers and sellers
What is Encroachment?
when property improvement extends onto adjoining parcel of land.
What is Squatters Rights?
Massachusetts 20 years open and notoriously using the property
What are 3 types of Liens?
Specific lien - mortgage or a city tax lien
General lien - a lien on all a persons property, such as a judgement lien/ IRS lien
Mechanics lien - involuntary lien available to anyone who provides material or labor for an improvement and was not paid for the service
What are 3 types of Deeds?
General warranty deed - not used in MA. Carries grantors express or implied assurances regarding the validity of the deed
Special warranty - not used in MA, carries grantors assurances only as to the state of the title after the grantor acquired ownership
Quit claim deed - Used in MA - transfers whatever interest the grantor may own but does not warrant that the grantor actually has any interest in the described property
What are 5 types of Leases?
Gross - landlord pays all expenses (property tax, insurance, maintenance). Generally used for apartments or other residential property
Net or triple lease - tenant pays all expenses
Percentage lease - requires that the tenant pay a percentage of gross sales as rent in addition to a base rental amount specified in a lease (shopping centers)
Graduated lease - calls for a periodic stated changes in rent during the term of the lease
99 year lease - long term land lease typically used for commercial development often used by fast food chains or signature properties
What is a bi-lateral contract?
two parties exchange promise to do or refrain from something (real-estate contract )
What is a unilateral contract?
one party makes a promise and other party does not promise but can make the contract a binding agreement by taking some action (example: lost dog poster with a reward)
What is the Torrens System?
land court - registered land
When the title (deed) has been searched by land court and given a numbered certificate.
What is a timeshare?
you do not need to be licensed to sell timeshares
Multiple owners own a proportional interest in a single condo unit with an exclusive right to use for a specific period of time each year.
What is a Cooperative?
apartments owned by a corporation, holds title to entire property, responsible for taxes, each purchaser of an apartment is a stockholder and receives a stock certificate. default of monthly fees effects the entire corporation.
What is Chapter 183-A (Condo’s)?
6-d certificate - insures that all condo fees are paid up to date
Super Lien bill- priority lien and takes precedence over the actual mortgage lien. (If you haven’t paid your condo fees the association will foreclose on the unit and then owns the unit and can resale it)
What is a feasibility Study?
every 5-10 years to calculate condo fees and reserve money
What is an open listing?
an agreement that a commission will be paid to the listing broker only if that are the procuring cause of the sale. A seller may enter into an open listing with an unlimited amount of borrowers.
What is an exclusive agency listing?
means that only one listing broker represents the seller. If the property sells through the efforts of the broker or through cooperation with MLS, the listing broker receives a commission. However the seller retains the right to sell the property on their own.
What is an exclusive right to sell listing?
provides the greatest protection to the listing broker, who will be paid a commission no matter who sells the property.
What is a Net listing?
offers the property owner a guaranteed sales price, with the listing broker taking any part of the purchase price over that amount. Net listings are illegal in MA.
How much is a brokers bond?
5k
How many years must and agent work for a broker?
3 years
What does FSBO stand for?
For sale by owner
How many hours are required of class time to get your agents license?
40 hours
What is real property?
Property affixed to the property, nailed, screwed, bolted
Lead paint evaluation is required when?
House before 1978, when a child under the age of 6 living there
How many recommendations do you need to give clients?
3 recommendations
What are the elements of the real estate cycle?
- listing
- qualifying
- showing
- offer/purchase and sales
- financing
- closing
How many members does the governor appoint to the mass board of real estate brokers and sales people?
5
How many members of the real estate board are active agents/brokers?
3
How long must board members have been active agents?
7
How many board members are required for a quorum?
3
What are the bundle of rights of ownership?
Rights of possession, control, enjoyment, disposition
Who is the grantor?
Owner
Who is the grantee?
Buyer
What is the civil rights act of 1866?
Based upon discrimination of race only
Federal fair housing act of 1968 (title 8)
Prohibits discrimination against sex, race, color, religion, national origin, handicap and familial status
What is chapter 151b?
Mass fair housing law
Cat 1 - same as title 8
Cat 2 - people who receive public assistance
Cat 3 - children up to 18 years or until they are not in school full time
What is a 21e certificate?
Hazardous waste cert used for commercial properties
Who is responsible for a smoke certificate?
Seller
How long is a smoke certificate valid?
30 days
What are three types of tenancy?
Tenancy in common, joint tenancy, tenancy by entirety
What are three types of liens?
Mechanic, specific, and general
What is tenancy in common?
2 or more people that own individual ownership w/o right of survivorship (business partners)
What is joint tenancy?
2 or more people that own undivided ownership and includes rights to survivorship (siblings)
What is tenancy by entirety?
Married couples. Neither spouse can sell independently and provides right of survivorship to remaining spouse.
When was agency law enacted?
July 1, 2005
What must be presented on the first meeting w/ buyer or seller?
Mass mandatory license consumer relationship form
What are the 5 types of agents?
Sellers, buyers, duel, facilitator, designated
What does CMA stand for?
Comparative market analysis
What does the real estate settlement procedures act of 1974 require?
Disclosures by lenders. Special HUD book within 3 days, good faith estimate that shows closing costs, make available a HUD statement 1 day prior to closing.
What are mass tax stamps?
4.56 per thousands of selling price - sellers responsibility
What is regulation Z?
Truth in lending act of 1968.
What does the truth in lending act of 1968 require?
Requires lenders to make full disclosure regarding loans, interest rates, and the 3 day right of recession.
What is the exculpatory clause?
A provision in a contract under which either of two things is stipulated:
- One party is relieved of any blame or liability arising from the other parties wrong doing
- One party, usually the one that drafted the agreement, is freed of all liability arising out of performance of that contract.
What is required for a valid purchase and sales?
- Name of all parties
- Description of land
- Sales price
- Amount of Ernest deposit
- Date of contract
- Signature of buyers and sellers
What is the formula for determining the value of an investment property?
Net operating income / capitalization rate = value
what approach is best suited for determining the value of appraising unique properties?
cost approach
who is the principle?
the client of the agent/broker
