Real Estate

Question 1

covenant of seisin

Answer 1

right to convey; the grantor owns the estate that the deed says it conveys to the grantee

Question 2

covenant of quiet enjoyement

Answer 2

covenant that promises that the grantee or tenant be able to posses the premise in peace without disturbances by hostile claimants/third parties

Ex. prevents a tenant form being evicted by a person with superior title

Question 3

covenant of warranty

Answer 3

warranty of the grantor of title to real property that the grantor will DEFEND any claims against the grantee’s title and will indemnify the grantee for any loss resulting from claims against title [TITLE CLAIMS]

Question 4

covenant of right to convey

Answer 4

the seller is legally entitled to transfer the property to the buyer

Question 5

covenant of no encumbrances

Answer 5

a promise by the seller that the land is owned free and clear - not subject to any LIENS, mortgages, taxes, leases, easements, etc.

Question 6

covenant of further assurances

Answer 6

a promise that the grantor will do whatever is reasonably necessary to help the grantee PERFECT THE TITLE should the need arise

Question 7

ad valorem taxes

Answer 7

taxes imposed on the value of real property and any improvements

Question 8

eminent domain

Answer 8

governmental intrusion; taking private property for public use

Question 9

restrictive covenants

Answer 9

agreement that requires buyers to either take or abstain from a specific action

Question 10

easements

Define & list the 3 types

Answer 10

enforceable right to USE real property of another for a particular reason

1. ingross
2. appurtenant
3. perscriptive

Question 11

ingross easement

Answer 11

attaches a particular right to an individual or entity rather than to the property itself

ex. a utility company requiring the use of property to provide their service

Question 12

appurtenant easement

Answer 12

“runs with the land”; a right to use adjoining property that transfers with the land

ex. the dominant has access to the servient’s estate to reach public roads

Question 13

prescriptive easement

Answer 13

an easement earned by regular use; it is not something that is purchase, negotiated, or granted; it is simply the RIGHT TO USE property, similar to adverse possession, but in this case, the user does NOT gain title to the land

Question 14

Legal description

define and list the 3 types

Answer 14

provides parties with a precise delineation of the property

1. metes & bounds
2. government survey
3. plat method

Question 15

metes and bound

Answer 15

a type of legal description; outlines the boundary lines of a parcel of real property by establishing a starting point, describing the direction and distance each boundary line travels around the perimeters of the property

metes = distance of a line
bounds = direction of a line

Question 16

government survey

Answer 16

a type of legal description; aka rectangular survey method (mostly used); works on a grid system, the basic grid structor is built around intersecting government lines running north to sound and east to west

Question 17

plat method

Answer 17

a type of legal description; aka lot and block method; the simplest of the 3 methods, it describes a particular parcel of real property by making reference to its location on a plat map recorded in the land records in the county

Question 18

real estate broker

Answer 18

a person licensed under state law to facilitate a real estate transaction

Question 19

realtor

Answer 19

real estate licensee who becomes a member of a local board of realtors

Question 20

real estate agent

Answer 20

can be a real estate licensee and a real estate broker

Question 21

brokerage

Answer 21

name given to the business engaged in real estate brokers

Question 22

multiple listing service

Answer 22

organization of brokers who agree to publicize their listings to other broker members

Question 23

special warranty deed

Answer 23

the grantor warrants only against defects occurring DURING their ownership

Question 24

general warranty deed

Answer 24

where the grantor guarantees that he holds clear title to the piece of real estate and has a right to sell it; this deed includes such warranties as they pertain to parties who claim an interest under the grantor, but also parties under ALL of the grantor’s predecessors

Question 25

quite claim deed

Answer 25

used to transfer interest in real property (contains no warranty); a seller who owns property can give a quitclaim deed to a buyer and thereby transfer the seller’s entire interest in that property to the buyer; this deed is often used to clear a title defect.

When the title holder gives up ownership, they sign a quit claim deed. Note: banks will not take their name off a loan though

Question 26

trustee deed

Answer 26

wherein equitable title in real property is transferred to a trustee, which holds it as a security for a loan (debt) between a borrower and lender

Question 27

sheriff’s deed

Answer 27

used to convey title following a foreclosure on a mortgage or a court ordered sale for a judgment and contains no warranties

Question 28

lease option

Answer 28

a property owner and tenant agrees that at the end of a rental period, the renter has the option to purchase the property

Question 29

right of first refusal

Answer 29

real estate contract that gives a party the right to be the first allowed to purchase the property if it is offered for sale

Question 30

in order to regain possession of the property and evict a tenant, the landlord must…

Answer 30

sue the tenant in court and obtain a court order evicting the tenant

Question 31

motgage

Answer 31

a loan in which property or real estate is used as collateral; the borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full

Question 32

mechanics lien

Answer 32

typically used by subcontractors and suppliers, and are a legal claim against property that has been remodeled or improved

Ex. you are remodeling your bathroom and the supplier who supplied the bathtub isn’t paid by the general contractor, a lien can be placed against your house to recover the money

Question 33

note

Answer 33

aka mortgage note; a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise; it is a document signed as part of the mortgage transaction, however, it is NOT a complete transaction;

Question 34

a secured transaction (and its default)

Answer 34

A secured transaction is a loan or a credit transaction in which the lender acquires a security interest in collateral owned by the borrower and is entitled to foreclose on or repossess the collateral in the event of the borrower’s default

A default is the failure to make schedule payments including bankruptcy of the debtor

Question 35

periodic tenancy

Answer 35

has a fixed term which is automatically renewed unless steps are taken t terminate it

Question 36

tenancy for a term

Answer 36

has a fixed term, but does not automatically renew

Question 37

tenancy at will

Answer 37

aka estate at will; is a property tenure without a lease or written agreement that can be terminated at any time by either the tenant or landlord; it exists without a contract or lease and usually does not specify length of a tenant’s duration or the exchange of payment

Question 38

tenancy at sufferance

Answer 38

an agreement in which a property renter is legally permitted to live on a property after a lease term has expired but before the landlord demands the tenant vacate the property; the original lease conditions must be met including the payment of any rents during this time

Question 39

gross lease

Answer 39

aka full service lease, rent is ALL INCLUSIVE; expenses or “nets” as well as utilities and janitorial services are included under a gross lease

Question 40

modified gross lease

Answer 40

aka modified net lease, is similar to a gross lease in that rent is paid in one lump sum, but utilities and janitorial services for the premises are excluded from the rent and are directly the the tenant

Question 41

single net lease

Answer 41

a commercial real estate lease agreement in which the tenant agrees to pay property taxes in addition to rent. A single net lease is a form of pass through lease in which taxes associated with the property become the responsibility of the tenant instead of the landlord

Question 42

nets

Answer 42

in regards to rental fees: taxes, insurance, and common area maintenance associated with the property

Question 43

wrongful dishonor of a check

Answer 43

a banks failure to honor a valid negotiable instrument such as a check or draft that has been presented to it for payment

Question 44

TRID closing disclosure form

Answer 44

Required to be used for real estate transactions that involves a close-ended consumer mortgage; the form is not required for all real estate transaction

Question 45

Close-end mortgage

Answer 45

also known simply as a “closed” mortgage, is one of the more restrictive home loans; you can’t renegotiate the mortgage, refinance your home or take out a second mortgage or a home-equity loan without receiving permission from your lender or paying a fee

Question 46

Title defect

Answer 46

Legal claim or circumstance that hinders the verification of the title and identification of the true owner of a real property. These defects occur usually when the ownership or transfer of ownership is not properly recorded, or where any lien recorded due to an unpaid obligation was not removed on satisfaction of the obligation.