Short Simple Terms Flashcards
Real Estate Terms
Chattel Real
Personal Property
Fixture
Was Personal now real through
MARIA (Method, Adaptability, Relationship, Intention, Agreement)
Trade Fixture
Personal property used to conduct business
Reliction
Gradual recession of water leaving land permanently uncovered
Free Simple Estate
Infinite duration, no limitations, highest form of ownership
Less than Freehold Estate
Personal, limited, rental, leasehold estates
Estate from Year to Year (Periodic Tenancy)
Month to month lease; notice required to terminate
Estate at Will
End at anytime
Estates at Sufferance
Landlord is suffering as tenant is in possession passed agreed upon time
Lease
Personal property goes with the person; possession not ownership from lessor to lessee
Net Lease
Tenant pays taxes, insurance, and maintenance
Gross Lease
Tenant pays fixed amount
Sandwich Lease
Owner is lessee and lessor
Tenant Improvement Allowance
Money to customize usually for business
Abandonment
Leave with no notice
Subleases
Possession but not responsibility
Assignment
Possession AND responsibility
Surrender
Return property to landlord before end of lease
Constructive Eviction
Landlord fails to provide something they have a legal duty to provide (ex. heat)
Deeds
Evidence of transfer
Grant Deed
Transfer of real property to another person/entity
Quitclaim Deed
Deed releasing a person’s interest with no warranties; usually non-sale of property
Warranty Deed
Deed warrants a clear title to buyer of real property
Special Warranty Deed
Seller only warrants the title against defects that may have come up during the period of ownership of the property
General Warranty Deed
Seller warrants the title against defects that may have come up during the ENTIRE LIFE of the property
Quiet Title Action
Lawsuit in order to establish a party’s title
Title Insurance
Ensure clear and marketable title
Standard Policy of Title Insurance
Standard Coverage: Defects found in public records, forged documents, incompetent grantors, incorrect marital statements, improper delivery of deeds
ALTA Policy of TItle Insurance
Protects real property owners & mortgage lenders against losses from defects in titles
Extended Policy of Title Insurance
Includes everything in a standard policy plus defects found in a property inspection…including unrecorded rights of parties in possession, examination of survey, unrecorded liens, not known by a policyholder.
Severalty
One-Owner
Concurrent Estate
Ownership with Others
Joint Tenancy
Right of Survivorship; No Wills; PITT -possession, interest, time, title, interest
Tenancy in Common
Unity of Possession
Encumbrances
Limitations
Dominant Tenement
Gaining the benefit of the easement
Servient Tenement
Suffers the burden of the easement
Easement by Prescription
Granted after hostile, continuous and open use for a statutorily period
Appurtenant Easement
Right to use adjoining property that runs with the land
Easement in Gross
No dominant tenement
Government Powers
PETE- Police, Escheat, Taxation, Eminent Domain
Variance
Exception to the rule
Grandfather Clause
Exempt from new rule
Building Codes
Protect public health, safety, and general welfare
Probate
Executor for the estate of a deceased person sells property in order to divide the property among the beneficiaries
Marginal Tax Rate
Percentage taken from your next dollar of taxable income
1031 Tax Deferred Exchange
Defer taxes; Identify 45 days, acquire in 180 days of closing previous property
Boot
Fair market value of other property received in an exchange
Inverse Condemnation
Suing the government for money when property is taken
General Liens
Lien against ALL person property
Specific Liens
Liens against one single property
Voluntary Liens
Liens that exists because of actions taken by debtor
Involuntary Liens
Liens that were imposed on an individual (taxes, judgment)
Mechanics Lien
Lien on behalf of those who have supplied labor or materials that improve the property
Judgment Liens
Lien placed by the court
Injunctions
Court order that compels a party to do or refrain from specific acts
Escrow
Neutral third party
Debit
Money owed
Credit
Money received
Short Rate
Higher periodic rate for a shorter term than what was originally contracted
Impounds
Money set aside by a lender to pay for reoccurring costs that take priority over the loan such as taxes and insurance
RESPA
Elimination kickbacks and referral fees which add unnecessary costs to settlement services
TILA
Inform use of consumer credit; Require disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.
Fed Fair Housing Act of 1968
Can’t discriminate: race, color, religion, sex, national origin
Americans w/Disabilities Act
1990 act prohibiting discrimination against people with disabilities in employment transportation, public accommodation, communications, and government activities
Material Fact
a fact that if known might have caused a buyer or seller of real estate to make a different decision
Steering
Buyers- You should live by “those” people
Blockbusting
Sellers- You better sell because you don’t want to live by “those” people
Panic Selling
Sellers- You better sell because you don’t want to live by “those” people
Panic Peddling
Sellers- You better sell because you don’t want to live by “those” people
Redlining
Denying loans or raising prices to residents of certain areas based on race and ethnicity.
Misrepresentation
The action or offense of giving a false or misleading account of the nature of something
Actual Fraud
Committed with the intent to deceive and thereby injure another
Constructive Fraud
Person gained an unfair advantage over another by unfair methods; intent does not need to be shown
Commingling
Mixing of funds
Caveat Emptor
Latin: Buyer Beware
Bilateral Contract
Promise for a promise (exclusive listing)
Unilateral Contract
Promise for an act (open listing or option contract)
Executed Contract
Contract fully performed
Executory Contract
a contract that has not yet been fully performed
Statute of Frauds
Contracts must be in writing
Statute of Limitations
States time frames for certain contracts
Novations
Latin: New as in certain contracts
Codicil
Amendment
Fiduciary
Position of trust, good faith, and honesty
Actual Authority
Expressly confirmed by a principal to an agent to act on the principal’s behalf
Ostensible Authority
Authority granted by acceptance of action on the principle’s behalf
Dual Agent
Buyer & seller has the same BROKER
General Agent
Authorized to perform any and all acts associated w/the job
Real Estate licensee acting in the capacity of a property manager
Special Agent
Limited authority granted to him or her through a principal
Estoppel
Prevents asserting something contrary to what is implied by a previous action or statement
Listing
Bilateral employment contract
Exclusive Listing
One Broker to be paid
No need to show procuring cause in order to be paid
Exclusive Agency Listing
Owner sells agent doesn’t get anything
Agent must show you’re the procuring cause in order to be paid
Exclusive Authorization and Right to Sell Listing
Broker gets paid if property sold regardless of procuring cause
Open Listing
Seller can hire multiple brokers
Broker that proves procuring cause would be compensated
Net Listing
Money received above and beyond a designated amount
Protection Period Clause (Safety Clause)
Compensated after the listing expires if agent proves to be procuring cause
Contingency Clause
Condition or action that must be met in order for a real estate contract to become binding
Hold Harmless Clause (Liability Waiver)
Parties agree not to hold the other party responsible for any loss, damage, or legal liability that may arise under the agreement
Interim Occupancy Agreement
Staying after the sale
Deposit
Something of value to show that you are serious about your offer
Value
What a willing and able buyer will pay on an open market
Essentials Elements of Value (STUD)
STUD- Scarcity, Transferability, Utility, Demand
Principle of Substitution
No one would pay very much for a property when another one readily available that has the same use, design, and income and is less.
Principle of Contribution
How much does an item contribute to the net income of a property?
Principle of Regression
Value of a more expensive home in a neighborhood of less expensive homes will drop in value
Principle of Progression
Value of less expensive properties will increase when placed in the area of more expensive properties
Principle of Highest & Best Use
How much of a net return you can get while building on a property?
If the use is temporary it would then be considered the interim use
Plottage
Joining of several parcels to make a larger better one together (1+1=3)
Appraisal
Estimate of value
Narrative Appraisal
Comprehensive report is a “complete” apprasal
Market Data (Comparison) Approach
Examination and comparison of actual sales of comparable properties.
Best used to find values of houses and vacant lots.
Cost (Replacement) Approach
How much would it cost to replace a brand new building (libraries, government offices)
Capitalization (Income) Approach
Converts income into value
Property that can prove to bring in more income will increase the value. (Shopping center)
Gross Multipliers
Price➗Rent
Cap Rate
Higher cap rate represents higher risk
Acre
43,560
Commercial Acre
acre minus streets, curbs and sidewalks
Depreciation
Loss in value to any cause
Physical Deterioration
Wear and tear
Functional Obsolescence
Poor planning (1 bath 5 beds)
Economic Obsolescence
Outside causes
Mortgage Brokers
Intermediary between consumers and lenders
Originates loans while mortgage lender funds loans
Mortgage Banker
Direct mortgage lender
Interest
Rent on money
Leverage
Borrowed capi/
Injunction
Deed restriction; Enforcement thru the courts
Fructus Naturales
Trees, bushes, flowers, planed items that will be permanent (real property)
Easement
The right to cross another’s property
Permanence of Improvement
Permanent commercial development of land and construction of improvements
Freehold Estates(Fee Simple)
Qualified Fee Estate Life Estate Estate in Remainder Life Estate pur autre vie Reversion Estate Statutory Estate
Termination of Contract
Performance Abandonment Lapse of Time Permissible revocation Breach Recession
Qualified Fee Estate (Fee Simple Defeasible)
Unless…or as long as
Must be used under conditions
Defeasance Clause
Lender must release the lien upon repayment
Lis Pendens
Legal notice of a pending lawsuit
Life Estate
When a person owns a property for the rest of their life and property reverts back to the original owner when he/she dies
Appurtenances
All right, privileges and improvements belong to the land
Described in the deed
Marketable Title
Reasonably free from doubt
Legal Title
Ownership with rights of possession and use
Chain of Title
History of conveyances and encumbrances
Abstract of Title
Summary of chain of title
Cloud on Title
Problem with the title (lien or forged deed)
Percentage Lease
Tenant pays lease plus % of sales (mall tenant)
(Agency) Agent Duties
ACOLD: Accounting, Confidentiality, Obedience, Loyalty. Disclosure
1 Mile
5,280 FT
Inquiry Notice
Should have investigated
Deed of Trust
Used instead of a mortgage
Sherman Anti-Trust
Prohibits monopolies, price-fixing, boycotts, market allocation, tie-in arrangement
Government Survey (Rectangular Survey)
Meridian & Baselines; Townships & Sections
Lease 1 year or less
Doesn’t have to be in writing
Granting Clause
Grants title and ID’s parties and property
Life Estate Pur Autre Vie
Giving one person ownership; Based on someone else’s life
Torrens System
Registration of title with a court (old method)
Taxation
Government power to levy property taxes
3 Types of legal descriptions
Metes and Bounds
Rectangular Survey
Recorded Plat
Equitable Title
Right to legal title upon completion of a contract
Tenancy of Entireties
Just like joint but married couples only
Certificate of Title
A written opinion of title
Police Power
Power of govt. to regulate use through zoning and building codes
Escheat
Power of govt. to take property when owner dies without a will
Eminent Domain
Power of govt. to take property for public use
Assemblage
Combining two or more parcels of land
Satisfaction of Lien
Documents recorded to release the lien
Priority of Liens
Determined by the date of recordation
Valid Contract
Have 5 essential elements & are enforceable
Intestate
To die without a will
Testate
To die with a will
Patent Deed
Deed from government
4 Unities of Joint Tenancy
PITT- P- All enjoy possession of property I- All own same interest of property T- All got title at same time T- One title (all owners named on deed)
Fructus Industriales
Crops that need to be seeded (personal property)
Annual Interest
Loan amount X Interest Rate
Deed in Trust
Used to create a trust
Recorded Plat
Blocking off a track of land and each block has plats of land
Puffing
Harmless statement of exaggeration
5 Essential Elements of a Contract
Legally competent parties Clearly ID property Meeting of the minds Contract must include consideration Lawful purpose
Void Contract
Missing one or more of essential elements
Voidable Contract
Appears valid on face but could be voided by either or both parties
Property Taxes
First priority of all liens
Attachment Lien
Makes property collateral for lawsuit
Economic Characteristics of Land
Scarcity, Situs, Permanency of Improvements, Production, Assemblage
Situs
Another word for location
Estate in Remainder
Property goes to a third party when life estate has died
Township
36 Sections
Condemnation
Process of eminent domain
Lien
Monetary claim-making property security for payment of debt
Constructive Notice
Should have known (recorded deed made public)
Trusts
Title held by a trustee on behalf of a beneficiary
Actual Notice
Known as a fact
Estate for Years
Start date and end date
Any definite period
No notice to terminate required
Encroachment
When an improvement impeeds a neighbor’s land
Ad Valorem
According to Value
Prior Appropriation
First in time; First in right
Zoning Ordinance
Specific ruler regarding types of improvements, lot size, setbacks, etc
Special(limited) Warranty
Only one promise made which is from the act of grantor (Usually trust or bank owned)
Bundle of Rights
Rights that come with ownership: Possession Control Enjoy Exclude others from entering Encumber as with a mortgage Dispose of by selling, will or transfer
Alienation
To sell or convey (any change of ownership)
Personal Easement of Gross
Attached to a person
Non-assignable
Servient estate only
Down Zoning
More density to less (commercial to residental)
Holographic Will
Written entirely in testator’s handwriting, with date and signature
Accretion
A natural increase in the land by phenomena
Avulsion
Natural tearing away of land
Littoral Rights
Lake/bay rights only to the high watermark
Riparian Rights
Rights to land at a river
Real Estate
land and all manmade structures permanently attached to it
Personal Property
all property not real; except trade fixtures and emblements
