Real Estate Exam Test Prep 1 Flashcards
appurtenance
used to describe rights, privileges or improvements that belong to and pass with the land
Improvements
man’s addition to land
buildings and landscaping
chattel / personality
personal property
right or interest in something of a temporary or movable nature
anything that’s not real prperty
bill of sale
is how ownership is transferred
fixture
personal property attached in such a way to make it real property
indicated by the word “installed”
annexation
the process of attaching
severance
process of real property becoming personal
fixture is uninstalled
trade fixtures
fixture installed by tenant to carry out a business
may be removed from leased property prior to termination of lease. If not removed become property of landlord
emblements
crops cultivated annually
considered personal property to farmer who cultivated them
not part of sale of farm/ranch
ownership can be transferred with bill of sale
farmer can make arrangements to harvest one time after sale closes and crops are ready for harvest
real property
land, improvements attached to land, benefits, rights, and ownership interests that go with the land
What are the 3 physical characteristics of land?
Nonhomogeneity
Immobility
Indestructibility
Nonhomogeneity
No two pieces are exactly alike
Uniqueness. Each piece of land is unique
Immobility
Land can’t be moved
Person must go to land
Indestructibility
Durability
It will always be there
What are the 4 economic characteristics of land?
Scarcity
Modification
Fixity
Situs
Scarcity
In short supply where demand is great
Based in geographic considerations
Modification
Land use and value greatly influenced by improvements made by man to land and to surrounding parcels of land
Fixity
Land and buildings and other improvements to land are considered fixed or permanent investments
They are not liquid assets
Situs
Location preference
Location from an economic rather than geographic standpoint.
Can change over time as people change
Legal Description
Determined by surveyor
Document allows you to go to the ground and identify the land
Metes and Bounds
Use terminal points and angles
Always have point of beginning
Uses compass directions, degrees, and minutes
Monuments are often starting points.
Play
Recorded map that includes lot, block and subdivision descriptions
Most common discrimination used in residential listing agreements
Rectangular Survey System or Government Survey System
Takes into consideration base lines meridians townships and sections
Vertical Land Descriptions
Used for air rights
Police Power
power given to a municipality to regulate and control the character and use of property for the health, safety and general welfare of the public
Non-conforming Use
results from a change in zoning
use was permissible under former rules, but new rules prohibit it
Variance
can request if property violates zoning
Buffer Zone
area of land separating one land use from another
Ex. Residential from Commercial
Eminent Domain
right of government to take private property for public use through the action of condemnation
Taxation
property taxes are the highest priority lien on real property.
property taxes are ad valorem - according to value
unpaid taxes create automatic lien
property taxes paid first at foreclosure
Escheat
property reverts to state when someone dies leaving no will, heirs, or kin
Injunction
issued to enforce deed restrictions
Reservation
withholds title to a parts of the land described in the deed
Ex: mineral rights, easement
Encroachment
structure or improvement overlaps into another’s property
Easement
limited use or enjoyment of another’s land’’
use without possession
Condemnation
government takes an easement for itself, utilities or the railroads
Dominant and Servant Estates
two parcels of land with a road across one parcel, the owner who crosses over the other’s land is dominant
dominant estate landlocked without the easement
the property with the road = servient to dominant estate
dominant estate benefits from easement, servient estate is encumbered.
Ex: most common reason is entry and exit from the property
the landowner owns the easement
Easement in Gross
belongs to a person or corporation
Ex: utility easement.
no matter who owns the land, the easement still belongs to the utility company
license
permission to do a particular act upon the land or property of another
Ex: theater ticket, sports event for use of a seat for the performance
Adverse Possession (Squatters Rights)
property acquired from the rightful owner through Statute of Limitations.
occupancy must be hostile, visible or open, actual or notorious, continuous and distant for the statutory period
Lis pendens
recorded notice (lawsuit) filed against a specific property but not yet resolved in court.
may become responsibility of new owner if not settled prior to closing
Estate in Severalty (Sole Ownership)
ownership by one person
corporations or partnerships often hold title this way
if one signature required, there is only one owner
tenancy in common
ownership by two or more without rights of survivorship
joint tenancy
ownership by two or more with rights of survivorship
Partition
procedure to divide co-tenant;s interests in real property
Tenancy by the entirety
specific type of joint tenancy
co-owners are husband and wife
avoids probate
property held in trust
property held by one party for the benefit of another
syndicate
two or more parties join together to create and operate a real estate investment
tenancy in common
most common
billable
estate of inheritance
unequal interest allowed
title passes at probate
joint tenancy
poor man’s will
right of survivorship
last man standing
unity of time, title, interest, possession
avoids probate - title passes at death
Time Shares
give individual part ownership of a property coupled with right to exclusive use for a specified number of days per year without responsibility of full ownership
interval ownership
Cooperative / Co-Ops
an investment for residents
land and buildings are owned by a corporation
residents buy shares in corporation in exchange for a proprietary lease on their unit.
Condominiums
each unit is a separate legal ownership
has tenancy in common interest in all common areas
Estate
interest in real property
freehold estate
ownership
Bundle of Rights
all legal rights that attach to the ownership of real property
the right to sell, lease, encumber, use, enjoy, exclude, will to heirs, etc.
Fee Simple / Fee Simple Absolute
ownership with the greatest bundle of rights
best type of ownership
owner has all available rights to property and can always pass to heirs
Fee simple defeasible
ownership with conditions or terms which if violated could cause ownership interest to be defeated or terminated.
When ownership is defeated it goes back to original grantor or their heirs
Fee simple defeasible (determinable)
violation of condition causes ownership to automatically go back to grantor
Fee simple defeasible (condition subsequent)
violation of condition doesn’t cause ownership to automatically go back to grantor
grantor must take steps to reclaim property in reasonable time period
Life Estate
ownership for the duration of someone’s life
Remainderman
person who gets property after life estate is ended
Life Tenant
the owner
has all rights and duties of an owner, except right to choose who gets property upon death
Life Estate Pur Ature Vie
if life estate based on the life of someone other that the life tenant
Life estate with reversion
life estate set up so that at end of life estate property goes back to the original owner
Leasehold estate
what lease agreements create
gives possession without ownership
Estate for years
lease with specific starting and ending date
survives death or sale of property
no notice required to terminate
periodic tenancy
lease with fixed period
automatically renewed
month-to-month lease
30day notice to terminate
estate at will
lease that can be terminated by either party at will without notice
tenancy at sufferance
lease expires and tenant refused to move out
landlord not receiving rent
holdover tenant
refuses to move out after lease expires
holdover tenancy
created when landlord accepts rent from a holdover tenant
Gross Lease
Landlord pays expenses and tending only pays rent
Net Lease
Tenant pays rent plus some expenses
Percentage Lease
All or some of rent based on tenants receipts of business
Ex: Shopping Center Lease
Graduated Lease
Lease with scheduled rent increases based off of business growth
Lease-purchase Agreement
Lease with option to buy
Gives tenant the right to purchase at a future date
Price set when agreement negotiated
Tenant-buyer has advantage
Ground Lease
Tenant makes long term commitment up to 99yrs
Usually for commercial or industrial land use
Oil and Gas lease
Gives tenant right to extract oil and gas from a specific property
Convenient of quiet enjoyment
Landlord prohibited from entering leased property unless need for maintenance, inspections, or emergency response
Right if first refusal
Tenant has right to match or better any offer before property sold to someone else
Lien
Charge against property as security for debt
Encumbrance
Voluntary Lien
Created by borrowers actions
Ex: taking out mortgage or home loan
Involuntary lien
Created by law
Can be statutory or equitable (common law)
Specific lien
Attached to one or more specific problems properties
Ex: Mortgage
General lien
Attaches to all property of debtor not exempt from forced sale
Writ of execution
Enforces payment of a lien if party wins a judgement and is unable to collect
Riparian Rights
The right to use water from a river or stream that borders your property
Littoral Rights
Rights to use water from a lake or ocean
Voluntary Alienation
Occurs when owner transfers title to another
Involuntary Alienation
Happens in a court as in foreclosure, bankruptcy, condemnation, escheat, adverse possession, reversion of defeaseable, partition, or inheritance without a will.
Requirements of a valid deed
Grantor & Grantee
Consideration
Words of conveyance
Execution
Delivery
Legal Description of the property
Types of Deeds include
General Warranty Deed
Special Warranty Deed
Bargain and Sale Deed
Quitclaim Deed
General Warranty Deed
Guarantees and protects against defects
Special Warranty Deed
Guarantees title only against defects arising under grantors period of ownership.
Defects existing before are not covered
Bargain and Sale Deed
Deed with only one covenant
Doesn’t provide any warranties about conditions of title
Quitclaim Deed
Deed gives no warranties or guarantees and offers least protection
Covenant of Seizin
Grantor claims to be owner with the right to sell the property
Covenant of Quiet Enjoyment
Grantor promises new owner will not be disturbed with claims on the property
Covenant of Further Assurance
Grantor responsible for any documentation needed to ensure title is transferred to grantee
