Section 3 - Real Estate Contracts & Agency Flashcards
abrogation
The abolition or repeal of a law.
acceptance
Agreement to the terms and conditions of an offer, thereby creating a binding contract. (2) A necessary element in the execution of a deed.
actual evidence
The legal process that results in the tenants being physically removed from the leased premises.
affidavit
A sworn and acknowledged statement in writing.
agency
A contractual relationship whereby one person represents another.
arbitration
The process or act of resolving a dispute.
assignee
One to whom an interest is assigned or transferred.
assignment
Transfer of one’s rights under a contract to an individual not a party to the original contract.
attorney-in-fact
An individual with written authority to act for another. See Power of Attorney.
bilateral contract
A contract where both parties are obligated to perform.
binder
A preliminary agreement to perform, accompanied by a valuable consideration as good faith. (See Deposit Receipt.)
blockbusting
The illegal practice of inducing panic selling in a neighborhood for financial gain.
bona fide
In good faith and without deceit or fraud.
broker
Real estate licensee with job of bringing two contracting parties together.
brokerage
The bringing together of parties interested in making a real estate transaction.
bulk transfer
All or a major part of a business is sold.
certificate of no defense, estoppel certificate
A legal instrument executed by a mortgagor (when a loan is sold) setting forth the exact balance of a mortgage. Once executed, the mortgagor cannot claim that he did not owe the amount indicated in the certificate (i.e., he is thereafter and forever “stopped” from proving anything to the contrary).
A written opinion on the status of a piece of property based on an examination of the public record.
certificate of title
clause
A distinct article or provision in a contract or other formal or legal written document .
color of title
That which is not title but gives the appearance of title.
common law
(ordinary Old English) Unwritten law that takes its force from customs and usage; based on the concept of justice as opposed to inflexible rules.
confirmation of sale
A court approval of the sale of property by an executor, administrator, guardian or conservator.
consideration
Something of value given in return for the act or promise of another. An essential element of a contract.
convenant
A promise of legal validity.
damages
Losses suffered through the action or inaction of another. Assessed damages are the sum that the law allows an injured to recover as compensation. Liquidated damages refer to an amount of damages that is specified in the contract to be paid in case of breach.
default
Non-performance of a duty or obligation.
demise
To lease; death of an individual.
disclosure of interest
The making known of one’s true position or interest in a transaction.
disclosure statement
A statement required by law in which the sellers of specific types of real property or under certain circumstances must reveal specified information to potential buyers.
dual agency
Representation of two or more parties in a transaction by the same agent.
duty of care
The duty of licensees to exercise a reasonable amount of care in their dealings with others.
duty of disclosure
Disclosure of relevant information or material facts.
duty of loyalty
Owed by an agent to the principal- the agent must not do anything to harm the principal.
duty of obedience
Obligation of an agent to follow all lawful instructions of a principal in all matters relating to the agency relationship.
earnest money
A deposit to show good faith; a down payment.
escalation clause
Clause in a lease providing for the adjustment of rent based on specified indexes or circumstances.
escrow
Funds, property, or other things of value left in trust to a neutral third party and released upon fulfillment of certain conditions, or by agreement of the parties.
eviction
The act of expelling a person from property in his possession; may be actual or constructive eviction.
exclusive agency listing
The appointment of one real estate broker as the sole agent for the sale of a property for a designated period of time. The owner may sell without obligation to pay the agent a commission.
exclusive authorization to sell
A written agreement between owner and sole agent giving the agent the right to collect a commission if the property is sold by anyone during the term of the agreement.
executed contract
A contract in which all parties have fulfilled their promises and thus performed the contract.
executory contract
A contract where something remains to be done; a contract where performance is not completed.
express authority
express authority
express contract
One where all terms and conditions are openly and explicitly stated and agreed upon.
false advertising
Formulating an advertisement that is untrue, deceptive, or misleading.
federal fair housing law
An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status.
fiduciary
A position of trust and confidence.
filial relationship
Relationship of parent and child.
garnishment
A court ruling that requires that money be deducted from a person’s paycheck involuntarily in order to pay a debt.
graduated lease
A lease where the rent will increase periodically in amounts specified in the lease.
gross lease
Most common type of lease whereby landlord pays the expenses of ownership (repairs, taxes, maintenance, etc.).
ground lease
A lease of land only on which the lessee usually owns the building or is required to build as specified by the lease.
ground lease (ground rent)
Rent or lease payments based on the value of the unimproved land. Normally used in long-term leases.
holdover tenant
Tenant who remains in possession of leased property after the expiration of the lease term.
HUD
U.S. Department of Housing and Urban Development.
implied authority
The authority implicitly conferred on an agent by custom or a principal’s conduct indicating intention to confer such authority.
implied contract
A contract that is not expressed, rather it can be inferred from the actions of the parties.
implied listings
A listing that arises when the broker acts without expressed authorization but with the knowledge and consent of the owner.
implied warranty
An unwritten guarantee that the good or service is fit for the purpose for which it was sold.
indenture
An agreement or contract.
independent contractor
One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer. An independent contractor is not an employee but may be an agent.
inducement
Something of value given or offered with the intention of influencing another’s reason or judgment.
injunction
A court order requiring a party to do or to refrain from doing specified acts.
instrument
A general term covering all written legal documents.
judgment
The use of available evidence or facts to formulate a rational opinion.
laches
Unreasonable delay in asserting ones rights causing the loss of such rights.
lease, lessor, lessee
An agreement whereby one gives up possession of real property, but not title, for a stipulated period of time. The lessor (landlord) leases the property to the lessee (tenant), who pays rent.
lease option
Allows tenant to buy property at preset price and terms.
lease purchase
The purchase of real property, the consummation of which is preceded by a lease, usually long-term, that is typically done for tax or financing purposes.
legal description
Identification of the location and boundaries of a parcel of land.
legal notice
Same as constructive notice.
license
An official document that permits something.
listing
A real estate broker‘s authority to act as agent for a principal.
listing agent
Works on behalf of the seller to list, advertise, and market the seller’s property.
litigate
To carry on a suit in a court of law.
mandamus
A writ ordering an individual or organization to perform some specified action.
meeting of the minds
Mutual agreement to the terms and conditions of a contract by all parties involved.
misrepresentation
A false presentation of the facts.
multiple listing
A form of exclusive authorization to sell listing in which the listing is made available to other brokers who belong to the multiple listing organization. The process assures the client that his property will have wide exposure.
negotiable instrument
An instrument that is transferable by delivery, in the ordinary course of business. Endorsement may or may not be necessary. Example: promissory notes, checks, and some types of bonds.
net lease
A lease whereby the tenant pays most of the expenses of ownership (repairs, taxes, general maintenance).
net listing
A listing where the net amount due to the seller is specified, rather than the selling price.
notary public
A bonded officer licensed by the state to acknowledge signatures.
notice to quit
A notice to a tenant to vacate rented property.
novation
The substitution of a new contract or new party for an old one.
offer, offeree, offeror
A proposal to enter into a contract under certain specified terms and conditions. The offeror gives the offer; the offeree receives the offer.
oil and gas lease
Lease to dig for oil or gas; may include royalties.
open listing (general listing)
A listing made available to more than one broker.
option, optionor, optionee
A binding promise to sell or lease property until a specified future date for a specified price and at specified terms. The optionor (owner) gives the option to the optionee (potential buyer or lessee).
percentage lease
A lease where the rental payments are based on the volume of gross sales.
plaintiff
The person who brings suit against another or charges another with a crime.
power-of-attorney
The written instrument appointing one to act as an Attorney in Fact.
price fixing
An agreement among firms to charge one price for the same good.
principal
One who employs an agent to act on his behalf. Also amount owed on a loan.
procuring cause
The person who, through his efforts, is responsible for bringing the parties together, and who is thus entitled to the commission.
prospect
The potential buyer or customer to whom real estate is shown.
puffing
Nonfactual or extravagant statements a reasonable person would recognize as such.
quiet enjoyment
A covenant in a deed or lease giving the possessor the right to enjoy his property without being disturbed.
ratification
The word ratify means “to approve or sanction…to make valid.”
recordation
The placing of a document on the public records, thereby effecting public notice.
recording
The process of placing documents into the public record.
redlining
The practice of refusing to make loans in certain neighborhoods.
release
To give up a legal right.
renunciation
The giving up of one’s rights or interests under a contract.
rescission (recission)
The canceling or annulling of a contract, by mutual consent or by either party for cause.
revocation
The withdrawal of a contract offer by the offeror.
sale and leaseback
An agreement whereby the seller simultaneously leases the property from the buyer, usually on a long-term lease.
security
Any deposit or personal pledge that guarantees payment of a loan or the performance of a contractual duty.
seisin
The actual possession and ownership of a freehold interest in real property.
sequestration
The action of taking legal possession of assets until a debt has been paid or other claims have been met.
servient estate
The estate of the owner whose land is burdened by an appurtenant easement (see dominant estate).
Sherman Anti-Trust Act
An 1890 law that banned the formation of trusts and monopolies in the United States .
specific performance
A legal action to compel a party to carry out the terms of a contract.
statute
A law enacted by the legislative branch of a government.
statute of frauds
An early English statute, enacted in 1677, that requires certain types of transactions be evidenced in writing in order to be binding or enforceable.
statute of limitations
A statute that restricts the period of time within which legal action may be brought.
statutory
Created by law.
steering
The illegal practice of directing minority members to or away from certain neighborhoods.
subagent
An agent of an agent; a person that an agent has delegated authority to, so that the subagent can assist in carrying out the principals orders.
sublease
An agreement whereby a lessee leases part of his interest to another. He becomes the landlord to the sub-tenant.
subpoena
A court order directing a person to appear as a witness.
suspend
To temporarily make ineffective.
surety
A personal guarantee of the performance of another.
syndicate
A group of individuals who act together in a business undertaking.
tenancy by the entireties
A form of joint ownership between husband and wife.
tenancy-in-common
A form of joint ownership without right of survivorship.
tester
Undercover checker who monitors fair housing compliance.
time is of the essence clause
A clause in a contract that emphasizes that punctual performance is an essential requirement of the contract.
tort
A civil wrong; a wrongful act.
unilateral contract
A contract where only one party is obligated to perform.
uniform commercial code
A group of statutes that regulate business transactions in personal property. It does not apply to real property transactions.
valid
Legal; having legal strength or force.
valid contract
A binding agreement containing all of the essential legal elements.
vendee
Buyer.
vendor
Seller.
void
Of no legal force or effect; not binding. Also, to nullify or remove legal force from.
void contract
A contract having no legal force or binding effect.
voidable contract
An agreement that may be terminated by one of the parties.
waiver
A written instrument wherein one waives or renounces a claim or privilege of one’s own free will.
