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Texas Real Estate Exam > Texas Law of Contracts > Flashcards

Texas Law of Contracts Flashcards

1
Q

Abstract of Title

A

Compressed history of title prepared by abstracter

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2
Q

Deed of Trust

A

Temporary title

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3
Q

Funding Fee

A

VA

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4
Q

Joint Tenancy

A

Owned by two or more and have access to whole property. Upon death transfers to other tenants

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5
Q

Lien Theory State

A

Texas interprets mortgage as lien and is removed once paid

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6
Q

Power of Sale Clause

A

Allows lender to foreclosure

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7
Q

Prepaid Item

A

Expense that seller has paid before closing that must be divided between buyer and seller at closing

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8
Q

Real Property

A

Land, growth, buildings, crops. Doesn’t move and attached to land

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9
Q

RESPA

A

Real Estate Settlement Procedures Act – disclosures necessary at closing

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10
Q

Special Assessment

A

Tax on property for improvements – street repairs, lighting

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11
Q

Tenants in Common

A

Multiple percentages of ownership with inheritance rights

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12
Q

Title Theory State

A

Title is given to lender as security for loan – Texas is NOT

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13
Q

TREC

A

9 members / 6 RE / 3 Public / 2 years

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14
Q

Texas Legislature Meets

A

2nd Tuesday in January of each odd year – 140 calendar days

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15
Q

Texas Association of Realtors

A

6 subcommittees (business issues, commercial, infrastructure & utilities, land use, property management and taxation

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16
Q

Broker Lawyer Committee

A

13 members / 6 attorneys / 6 brokers / 1 public

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17
Q

Option Fee

A

Non-refundable fee created by TREC which is clause in contract to negotiate time for buyer to fully evaluate property condition

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18
Q

Promulgated forms

A

Intended to be “reasonable time” unless they specifically say “time is of the essence”

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19
Q

Ernest Money

A

Must be deposited by close of business on 2nd day after contract execution

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20
Q

Deceptive Trade Practices

A

Licensee could face damages of double or triple

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21
Q

Prohibited Disclosures about a person

A

Familial status, race, handicap, religion, national origin and color. Ethnicity is not prohibited

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22
Q

DTPA

A

Deceptive Trade Practices Act

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23
Q

Allodial

A

Owning property independent of any superior landlord

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24
Q

Feudalism

A

All land owned by the state (king, queen)

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25
Q

Fief

A

A portion of land under feudalism that was neither given nor sold to vassals but only loaned for use to provide a return to owner

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26
Q

Vassal

A

Peasants

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27
Q

Chattel

A

Personal Property / Personalty

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28
Q

Severance

A

Converting real property into personal property – taking out a tree

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29
Q

Fixture

A

Formerly personal property and now is part of real property

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30
Q

Promissory Estoppel

A

Forces party to keep promise and not back out

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31
Q

Doctrine of Laches

A

Disallow aged claims

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32
Q

Parole Evidence Rule

A

Prevents consumer from using things outside of written contract to make a claim

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33
Q

Uniform Commercial Code

A

Regulates sale or transfer of personal property

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34
Q

Non Durable Power of Attorney

A

Effective immediately – General Power of Attorney (grants agent broad decision making authority and Limited Power of Attorney for specific purposes

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35
Q

Durable Power of Attorney

A

Act for principal once he is not competent to make decisions

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36
Q

Springing Power of Attorney

A

When principal anticipates an event that will render him incapable of making decisions

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37
Q

Mutual Assent

A

Meeting of the Minds

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38
Q

Express Offer and Acceptance

A

No mistake as to whether parties agreed to an offer

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39
Q

Implied Acceptance

A

Implication of acceptance

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40
Q

Conditional Acceptance

A

Accept with conditions

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41
Q

Implied Contracts

A

Contracts that are inferred from the actions of parties

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42
Q

Express Contracts

A

Oral and written contracts in which parties express their intentions and expectations regarding the contract. Lease Agreement

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43
Q

Bi-Lateral Contracts

A

Both parties give consideration and promise to perform

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44
Q

Unilateral Contract

A

Only one party makes a promis

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45
Q

Unenforceable Contract

A

Statute of Limitations has expired. For collecting debt, it is 6 years

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46
Q

Doctrine of Laches

A

Use it or lose it

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47
Q

Executory Contract

A

Not completely executed or performed – in process

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48
Q

Philosophy behind Consideration

A

A person cannot do something of value without receiving something in turn

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49
Q

Fee Simple Absolute

A

Greatest Interest in property

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50
Q

Joint Tenancy 4 unities of ownership

A

Time, Title, Interest, Possession
Each owner must:
Receive title at same time
Receive title via same deed or instrument
Receive same proportionate and equal share of ownership
Have identical right of possession

Right of Survivorship
If a joint tenant sells or conveys interest to 3rd party, joint tenancy is broken and Tenancy in Common is deemed to have been created

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51
Q

Tenancy in Common

A

Hold one unity. Interest of deceased passes to heirs and can agree to have unequal shares

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52
Q

Possessory Interests

A

Most common form is leasehold estate

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53
Q

Leasehold Estate varieties

A

Tenancy for Years – normal lease
Periodic Tenancy – month-to-month
Tenancy at Will – can be terminated by either party any time
Tenancy at Sufferance – tenant wrongfully remains in possession after prior lawful possession expired

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54
Q

Tenancy for Years

A

Normal lease

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55
Q

Periodic Tenancy

A

Month-to-month

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56
Q

Tenancy at Will

A

Either party can terminate any time

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57
Q

Tenancy at Sufferance

A

Tenant wrongfully remains in possession after prior lawful possession expired

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58
Q

Government land use controls which are called “urban planning”

A

Zoning
Regulation of subdivisions
Building codes
Environmental protection laws

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59
Q

Police Power

A

State’s inherent right to regulate an individual’s conduct or property to protect the health, safety, welfare, and morals of the community

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60
Q

Final stage of subdivision development

A

Start-up or Disposition
When actual construction starts
Infrastructure is put into place – roads, water, gas, electric routed to home sites and then lots are ready to be sold

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61
Q

Average density for subdivision

A

Gross Density

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62
Q

Plat

A

Detailed map that notes the property lines dividing individual lots

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63
Q

Plat Patterns

A

Gridiron and Curvilinear

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64
Q

Gridiron Pattern

A

Evolved from the government’s rectangular survey system; it features large lots, wide streets, and some limited-use service alleys. Sidewalks usually run parallel to the street, possibly separated from the road by a small, grassy area. While the gridiron system makes a subdivision easy to navigate, its drawbacks include most homes being located on or near busy streets and a lack of open space

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65
Q

Curvilinear Pattern

A

Integrates major feeder roads with smaller streets and cul-de-sacs. Prevents monotony and increases open space, minimizes service alleys and the more complex road patterns can be difficult to navigate. Provides for quieter and safer neighborhoods

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66
Q

Eminent Domain

A

The power of the state to seize a citizen’s private property, or seize a citizen’s rights in property (with compensation), but without the consent of the owner

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67
Q

Condemnation

A

Term used to describe formal act of eminent domain to transfer title to the property

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68
Q

Inverse Condemnation

A

Term to describe situation where government fails to pay just compensation

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69
Q

Government Power (PETE)

A

P for Police Power
E for Eminent Domain
T for Taxation
E for Escheat

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70
Q

Feet in a mile

A

5 Tomatoes – 5,280

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71
Q

Square feet in an acre

A

43,560 – Remember 7-11 (4+3=7) (5+6=11)

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72
Q

Freehold Estate Types

A

Fee Simple Absolute

Life Estate

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73
Q

Life Estate

A

Owned for duration of life owner’s life

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74
Q

Non-Freehold Estate

A

Leasehold estate

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75
Q

Mineral Rights in Texas

A

In Texas, a mineral estate and surface estate are separate that may be severed. One person may own the surface estate and another the mineral estate. Mineral estate is dominant.

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76
Q

Water Rights

A 
Above surface water belongs to the State of Texas
Ground water (Percolating water) belongs to owner and can be captured and pumped regardless of the effects on neighboring wells
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77
Q

Riparian Doctrine

A

Water rights are controlled by land ownership bordering natural river or stream. Owner can use the water reasonably

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78
Q

Common Enemy Rule

A

Drainage water is common enemy . Law allows owner to take any measure to protect their property regardless of the consequences to other neighbors.

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79
Q

Civil Law Rule / Natural Flow

A

Landowner is entitled to rely upon continuation of natural flow of water. If landowner increases runoff causing flooding, he is liable for damages

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80
Q

Reasonable Flow

A

Allows landowner to divert water even if it harms adjoining neighbors as long as it is reasonable considering circumstances

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81
Q

Air Rights

A

Controlled by FAA. Though landowners own the air above their land, because of air travel and drones, the navigable airspace is set at 500 feet in urban or suburban areas and 300 in rural

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82
Q

Texas Homestead Act

A

Texas is a homestead state. When a married couple both occupy property that was once separate property, the non-owner acquires homestead rights.

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83
Q

Possessory Estate

A

A tenant has a special kind of “possessory estate” in the property for the duration of his or her lease, as long as he or she honors the terms and conditions of the lease contract.

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84
Q

Holdover Tenancy

A

Tenant refuses to vacate the premises after the appropriate and legal termination of his or her lease.

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85
Q

Kick out contingency

A

Seller retains right to sell property to another party after giving buyer 72 hours notice to remove their contingency

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86
Q

Essential elements of valid contract

A

Competent Parties
Mutual Agreement
Lawful Objective
Consideration

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87
Q

Mutual Assent

A

Meeting of the minds

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88
Q

Unjust Enrichment

A

If someone receives something of value they aren’t entitled to

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89
Q

Mutual Mistake

A

Either party can void contract if mutual mistake

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90
Q

Discharge of Contract

A 
Termination of contractual obligations.  Can be discharged by the following:
Performance -- most discharged this way
Contract by Substituted Agreement -- Novation
Lapse of Time
Operation of Law
Impossibility of Performance
Accord and Satisfaction
Breach
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91
Q

Discharge by Substituted Agreement types

A

Novation
Rescission
Alteration
Waiver

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92
Q

Discharge by Operation of Law types

A

Unauthorized material alteration of written document
Statutes of Limitations
Insolvency
Merger

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93
Q

Anticipatory Breach

A

Breach by Repudiation – One party states they cannot carry out contractual obligations on agreed date or intends to perform differently

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94
Q

Discharge by Performance types

A 
Partial performance
Substantial performance --  mostly performed
Non performance due to legal issues
Mutual agreement
Operation of Law
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95
Q

When Seller Defaults, Buyer can…

A

Rescind
Sue for specific performance
Sue for compensatory damages
Accept earnest money as liquidated damages

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96
Q

When Buyer Defaults, Seller can…

A

Rescind
Sue for specific performance
Sue for compensatory damages
Accept earnest money as liquidated damages

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97
Q

Rescission

A

Unilateral Rescission

Mutual Rescission – Terminating contract without suffering any consequences

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98
Q

Remedies for Breach

A

Actual damages
Liquidated damages
Exemplary damages – for intentional fraud or gross negligence – fines to punish and make example of

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99
Q

Discharge by Merger

A

If John has a lease that will not expire for six more months. John decided to purchase the property and closed yesterday. John’s lease was discharged by merger

100
Q

Discharge by Impossibility

A

If a lot is under contract for a home builder to build a home on it and suddenly the zoning is upzoned to commercial property the contract will be discharged by the impossibility of performance.

101
Q

Legal Property Description

A

Metes and Bounds
Rectangular Survey System
Recorded Plats – lot and block

102
Q

Ernest Money

A

Used for liquidated damages in case of default

103
Q

Time is of the essence

A

Agents can NOT add this to any contract

104
Q

Listing Agreement Types

A

Open Listing
Exclusive right-to-sell Listing
Exclusive Agency Listing
Net Listing

105
Q

Open Listing

A

MLS does NOT accept) – allow for a seller to list his or her property concurrently with a number of competing brokers

106
Q

Exclusive Right-to-Sell Listing

A

Most preferred. Broker holds exclusive rights to commission. Even if owner sells themselves, they still owe commission to broker

107
Q

Exclusive Listing

A

Named listing broker is owed commission only if the property is sold by anyone other than the owner

108
Q

Net Listing

A

MLS does NOT accept – will receive as commission the difference between the actual selling price and the seller’s desired net amount

109
Q

Reasons for terminating listing agreement

A 
Unilateral Revocation
Bankruptcy of Seller (court can block sale)
Destruction of property
Fulfillment of listing agreement
Death or incapacity of seller or broker
Mutual Agreement
Change in use of property
110
Q

What entity has Listing Agreement

A

Texas Association of Realtors

111
Q

Universal Agent

A

Has great deal of authority in principal’s affairs

112
Q

General Agent

A

Limited authority – licensees usually also have a relationship of general agency with their sponsoring brokers

113
Q

Special Agent

A

Most limited authority – may not enter into or sign contracts on behalf of principal

114
Q

Express Agreement

A

Most agency relationships are formed this way where principal appoints agent and agent accepts

115
Q

Double Net Lease

A

Community area maintenance and property taxes in addition to base rent

116
Q

Triple Net Lease

A

Tenant pays prorated portion of all operating expenses and sometimes even interest on lessor’s loan

117
Q

How long must broker maintain records of trust accounts

A

4 years

118
Q

8 types of leases

A 
Gross
Net
Percentage
Variable
Ground -- 30-99 years
Oil and Gas
Lease Purchase
Sale Leaseback
119
Q

Net Listing

A

Employment contracts in which the seller pays any amount over the listing price set in the contract as commission. Net listings are illegal in some states and not recommended in many others because they tend to create tensions between a licensee’s own interests and his or her obligations to serve clients’ best interests.

120
Q

Buyer may terminate the contract for any reason within how many days after receiving Seller’s Disclosure Notice

A

7

121
Q

If the cost of lender required repairs and treatment exceeds what percent of sales price may buyer terminate contract and be refunded earnest money

A

5%

122
Q

If seller fails to complete agreed repairs before closing date, buyer may extend closing by up to how many days

A

5

123
Q

Which Addenda include the words “time is of the essence”?

A

Addendum for Sale of Other Property by Buyer
Addendum for Back-Up Contract
Third Party Financing Addendum
Short Sale Addendum

124
Q

TREC Promulgated forms for addendums

A

Third party financing
Release of Liability on an Assumed Loan and/or Restoration of VA Entitlement
Sale of Other Property by Buyer
Seller Financing, Environmental Assessment, Threatened or Endangered Species and Wetlands
Coastal Area Property
Property Located Seaward of the Gulf intra-coastal Waterway
Property Subject to Mandatory Membership in Owner’s Association
Loan Assumption
Unimproved Property Located in a Certificated Service Area of a Utility Service Provider
Back-Up Contract
Reservation of Oil, Gas and other Minerals
Short Sale
Property in Propane Gas System Service Area
Buyer’s Temporary Lease
Seller’s Temporary Lease

125
Q

Other Notices through TAR, etc…

A

Notice to Prospective Buyer
Seller’s Disclosure of Property Condition
Texas Real Estate Consumer Notice concerning Hazards or Deficiencies
Information About Brokerage Services
Lead Based Paint Addendum
Non Realty Items Addendum
Disclosure of a Relationship with a Residential Service Company

126
Q

USDA Loans

A

Borrowers living in rural and suburban communities in Texas – 0 down and no mortgage insurance

127
Q

Reverse Mortgage

A 
For over 62
Large down payment
No monthly payments
Interest added to loan balance monthly
Can pass to heirs who can pay mortgage or let lender take it
128
Q

Temporary Lease Agreement

A

For situations where the possession of the property is not the same as the closing and funding date of the sale. They can only be used in situations where the lease will be for less than 90 days.

129
Q

Lien Theory State

A

the buyer holds the deed to the property during the mortgage term

130
Q

Title Theory State

A

Mortgagee holds title until debt is paid

131
Q

CFPB (Consumer Financial Protection Bureau)

A

Supervises financial institutions and consumer financial laws – Know Before You Owe.
Doesn’t cover Reverse Mortgages, home equity lines of credit or mobile home loans

132
Q

CFPB Daily Penalties

A

$5,000 for failure to follow the law
$25,000 for gross negligence
$1 million for intentional violations

133
Q

SAFE Act

A

Secure and Fair Enforcement of Mortgage Licencing Act establishes minimum standards for individual States to license and register mortgage loan originators. MLOs must be licensed in State and National, education, etc.

134
Q

Secondary Mortgage Market

A 
Fannie Mae
Freddie Mac
Ginnie Mae
FHLB -- Federal Home Loan Bank
Farmer Mac
135
Q

REMICS (Real Estate Mortgage Investment Conduits

A

Investment vehicles hold mortgages in trust and issue securities, pass-thru certificates, multiclass bonds in them

136
Q

Mortgage Backed Securities

A

Asset-backed security secured by collection of mortgages sold to a group of individuals (a government agency or investment bank) that packages the loans into a security that investors can buy

137
Q

Judicial Foreclosure

A

Processed through court – all creditors with a claim

138
Q

Non Judicial Foreclosure

A

Some deeds of trust and mortgage documents contain a power-of-sale clause which allows lender to bypass courts. Texas allows

139
Q

Auction

A

Lender bids first with outstanding balance and any fees

140
Q

Deficiency Judgement

A

Unsecured money judgment against a borrower whose foreclosure sale did not produce sufficient funds to pay the loan, in full. Some states won’t allow

141
Q

Non-Recourse Financing

A

Where there is not Deficiency Judgement allowed, this is a loan secured by property. If the borrower defaults, the issuer can seize the collateral but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount.

142
Q

Equitable Redemption

A

Right of a mortgagor in law to redeem his or her property once the debt secured by the mortgage has been discharged

143
Q

Statutory Redemption

A

Period in which debtors have a specified length of time to recover their property

144
Q

Trustee Deed / Sheriff’s Deed

A

If debtor doesn’t come forward, purchaser gets deed

145
Q

Housing Affordability Index

A

If over 100, the median income family could qualify for an 80% loan, if under 100, cannot qualify

146
Q

Inflation Predictors

A

Exchange Rate
GDP
Unemployment

147
Q

Inflation and Interest

A

When inflation is low, so is interest and visa versa

148
Q

Property Tax Incentives (exemptions, deductions, credits)

A

Homestead Exemption
Disability Exemption
Senior Citizen Exemption

149
Q

Tax Deductions in Texas

A 
Mortgage Interest
Real Estate Taxes
Discount points paid at closing
Loan origination fees
Married couple exempt from capital gains tax up to $500,000
Single owners up to $250,000
150
Q

Float-To-Fixed Rate Loans

A

Initial interest rates determined by a margin and an index. After the initial float rate period (one or two years, typically) the loan converts to a fixed-rate loan. These loans allow borrowers to take advantage of the lower earlier rates but avoid the risk of later rate increases

151
Q

80-10-10 Piggyback Loans

A

2 mortgages in 1. Loan for 80 percent of the sale price at the market rate and a smaller loan for 10 percent of the sale price at a higher interest rate. No PMI. Interest on 2nd is not tax deductible

152
Q

Growth Equity Mortgage

A

Increasing payment schedule to principal. Tied to index and not interest rate

153
Q

Blanket Mortgage

A

Has more than one collateral property

154
Q

Package Mortgage

A

Includes personal property as collateral

155
Q

Open End Mortgage

A

Allows borrower additional funds at a later date

156
Q

FHA 203K Property Rehabilitation Program

A

Facilitating renovation and restoration

157
Q

Equity Participation Mortgage

A

Lender has partial equity interest in income producing property

158
Q

Computerized Loan Origination

A

Origination of a mortgage loan, usually by someone who is not a loan officer, with the assistance of specialized computer software that ties the originator to one or more mortgage lenders

159
Q

Desktop Underwriter

A

Fannie Mae encourages lenders to use its automated electronic underwriting system based on formulas

160
Q

Mortgage Insurance

A

PMI for conventional and MIP for FHA

161
Q

Know before you owe

A

Dodd-Frank

162
Q

Deed of Trust

A

Three party instrument and is the most commonly used form in mortgages in Texas: the borrower, the lender, and the trustee. The borrower gets title to the property at the time of purchase

163
Q

Real Estate Liens

A

In Texas a mortgage is regarded as a lien, not a complete transfer of title, and if not repaid the debt is recovered by foreclosure and sale of the real estate

164
Q

Title

A

Evidence of and right to ownership and bundle of rights

165
Q

Deed

A

Written instrument to legally transfer title

166
Q

Title Process

A 
Title Abstract
Survey
Property Taxes
Title Insurance
Loan docs for closing
Closing
Docs recorded in courthouse
167
Q

Representations and Warranties

A

Representations and Warranties. A representation is an assertion as to a fact, true on the date the representation is made, that is given to induce another party to enter into a contract or take some other action. A warranty is a promise of indemnity if the assertion is false

168
Q

Contract for Deed

A

Use for Seller Financing because seller retains the deed until the purchase price has been paid in full – A new Texas law says that if a contract for deed is recorded (filed) in the deed records of the county where the property is located, it is treated the same as deed with a vendor’s lien. That means the seller can no longer rescind, forfeit, or accelerate payments on the contract

169
Q

Gift Deed

A

Voluntary transfer without exchange of money

170
Q

Guardians Deed

A

Original owner is incapable of making decisions

171
Q

Involuntary Alienation

A 
Foreclosure
Adverse possession
Eminent Domain
Erosion
Avulsion
172
Q

Avulsion

A

Sudden separation of land from one property and its attachment to another, especially by flooding or a change in the course of a river

173
Q

Option Check

A

Delivered to the Seller within 3 days after executed contract

174
Q

Title Company

A

In most transactions, title company acts as escrow agent

175
Q

How many days after getting title commitment does seller have to deliver to buyer

A

20 days

176
Q

ABCs of a Title Commitment

A

Schedules A-D
A – Actual Facts-Names, Legal, Price, Lender
B – Buyers Notice of items not covered by the title policy
C – Closing – Things that have to be resolved prior to
D – Disclosure of all parties who will share part of the title insurance premium

177
Q

General Home Inspector

A

Generalist looking for red flags. The inspector may recommend the buyer have a roofer or a structural engineer or an electrician do an inspection because he has identified a red flag. Non-invasive

178
Q

Loan approval consists of 2 approvals

A

Approval of buyer and approval of the property

179
Q

RESPA Requirement

A

RESPA requires the loan estimate must be provided to the consumer within three days after receiving the loan application and the closing disclosure and must be delivered to the consumer three days prior to closing

180
Q

Actual Damages

A

Compensated damages

181
Q

Adhesion Contract

A

One-sided contract favoring the party who drafted it. Contains fine print or unethically biased tactics

182
Q

Aleatory Contract

A

Performance by one party is contingent upon a certain event like getting an insurance policy

183
Q

Anticipatory Breach

A

Words of one part convey intent not to perform

184
Q

Antitrust Laws

A

Laws preserving free enterprise of the open marketplace that minimize unfair competition by making conspiracies illegal – price fixing, boycotting competitors

185
Q

Appurtenance

A

Pass with property but not necessarily part of property – rights-of-way, easements, water rights and property improvements

186
Q

Assignment

A

Method of transferring rights and obligations to a 3rd party without canceling contract

187
Q

Boilerplate

A

Standard language in a contract

188
Q

Forbearance

A

One party doesn’t take actions legally entitled to take

189
Q

Subagent

A

Represent principal through principal’s agent but is not affiliated with that agency

190
Q

When a court orders a party to uphold a verbal contract, it is known as

A

Promissory Estoppel

191
Q

What is the statute of limitations for a written real estate contract in the State of Texas?

A

4 years

192
Q

Within the State of Texas, where can you find the Statute of Frauds?

A

Uniform Commercial Code

Texas Commerce Business Handbook

193
Q

If a lender accepts a deed in lieu of foreclosure from a mortgagor, which of the following disadvantages could occur?

A

A guarantees or FHA insurance is lost

194
Q

When two associate are appointed by a broker to represent each principal in a transaction:

A

Each associate represents one principal

195
Q

Under Texas regulations, which of the following can cause civil action in the absence of a written contract?

A

promissory estoppel

196
Q

Which of the following is allowed to purpose a change in a TREC Statutory Form?

A

Texas Real Estate Broker Lawyer Committee

197
Q

When TREC issues an order for a hearing to a licensee, TREC must give how many days notice?

A

14 days

198
Q

What is the maximum fine amount charged as a penalty against a licensee for one offense?

A

$5,000

199
Q

Under Texas community property laws, when the 1st spouse dies:

A

50% of the property can be passed by will to heirs

200
Q

If a licensee is involved with a serious wrong, TREC is allowed to:

A

treat each day of the violation as separate wrongs for fining purposes

201
Q

Lenders with a specific lien on a property:

A

have a higher priority in the event of foreclosure

202
Q

have a higher priority in the event of foreclosure

A

seek a deficiency judgment

203
Q

In practice, a broker functioning as an intermediary is functioning as:

A

In practice, a broker functioning as an intermediary is functioning as:

204
Q

Which of the following is correct about the Texas Statute of Frauds?

A

leases less than 1 year do not have to be in writing

205
Q

The advantage of a lender accepting a “deed in lieu of foreclosure” is:

A

less legal costs

206
Q

Which of the following could be ruled exempt from continuing education requirement when renewing a license?

A

brokers (not agents) licensed prior to Oct 31, 1991

207
Q

How many hours of continuing education are required for well established licensees?

A

15

208
Q

An unlicensed office worker would be allowed to:

A

install For Sale signs and lock boxes

209
Q

In order to lock a tenant out of his/her lease premise, the landlord must give how many days notice?

A

5

210
Q

The term that describes a party held liable for “enjoying the services of another” is called:

A

vicarious liability

211
Q

The affiliated licensees (the salespersons) represents:

A

Their broker and not principals

212
Q

A leasehold estate for years can be created by:

A

Express contract

213
Q

Johnstone, Inc. subleased its building to another business without the landlord’s consent as stated in its lease. The sublease is:

A

voidable by the landlord

214
Q

Under Texas Environmental laws, if property with tenancy in common with 4 owners has toxic waste on it, how would the clean-up responsibility be determined?

A

each owner is responsible for 100% of the clean-up cost

215
Q

A good lawyer would establish a/an ____________ for his/her client as a buyer of property with possible future tenant claims against the property.

A

estoppel certificate

216
Q

Who establishes the maximum license renewal fee charged by TREC?

A

by legislative statute

217
Q

The type of lease when a tenant pays the owner $1500 a month PLUS property taxes, utilities, insurance, and maintenance is most likely a:

A

net lease

218
Q

What is the fee TREC will charge you for a moral character determination?

A

$50

219
Q

Who is allowed to issue final decisions in contested cases?

A

Specified TREC employees

220
Q

Salesperson Jana has a buyer who wants to buy a house listed with another broker. If the transaction goes forward Jana would be a/an:

A

Sub agent

221
Q

Bobbi listed her house with broker Sam at Sam’s Realty. Bobbi has appointed Sam as her:

A

Special agent

222
Q

Vi is being hired by a seller and buyer as an intermediary with both parties giving written intermediary permission. Another broker is handling the sale. Vi is:

A

a dual agent involving the intermediary action

and not an agent of the sale

223
Q

Which of the following is not a standard exclusion for title insurance?

A

claims of encroachment by neighbors

224
Q

Who usually pays for the title insurance as specified on the Residential (resale) Contract?

A

The buyer

225
Q

The TREC “Notice To Prospective Buyer” is designed to inform the buyer of his/her rights regarding:

A

hiring an attorney

notice of the property tax indebtedness and rate

226
Q

In order to lock a tenant out of his/her lease premise, the landlord must give how many days notice?

A

5

227
Q

A lease can stipulate that eviction proceeding can begin once a full rent payment is how many days late?

A

7

228
Q

If a tenant does not pay his/her rent, after what period of time can a landlord can lock the tenant out?

A

12

229
Q

The burden of proof in a dispute between the landlord and tenant for repairs is required of the:

A

Tenant

230
Q

When a tenant is locked out and pays the rent, a key must be made available by the landlord within:

A

2 hours

231
Q

To be classified a subagent, a salesperson must:

A

work with a principal with the consent of the principal’s broker

232
Q

The Deceptive Trade Practices Act is a:

A

State of Texas act

233
Q

If a consumer appears to be pursuing a frivolous claim against a licensee, the State can:

A

bill the consumer for legal expenses

234
Q

What is the maximum fine for one unintentional violation of the Deceptive Trade Practices Act?

A

$20,000

235
Q

What would be the maximum civil penalty if the State of Texas determined that the firm committed a fraud against a consumer?

A

$250,000

236
Q

The main reason that the Deceptive Trade Practices Act was put in place was to:

A

allow buyers to receive satisfaction without having to go to court

237
Q

The Community Reinvestment Act was devised by:

A

Federal Government

238
Q

Which of the following agencies is the regulatory arm of the Community Reinvestment Act?

A

Federal Reserve Board

239
Q

How could you benefit a client with information about the Community Reinvestment Act?

A

explaining the program for a possible buyer of a low income apartment

240
Q

Each Commission appointee must take the constitutional oath of office not later than what day after the date of their appointment?

A

1 month

241
Q

Who enforces the TREC discriminatory program?

A

The administrator

242
Q

Who determines the salaries of the administrator, officers, and employees of the Commission?

A

The Commission

243
Q

The administrator of the Commission is an employee of TREC.

A

true

244
Q

Who enforces legal action taken against a licensee by the Commission?

A

the Attorney General’s Office

245
Q

What is the fee for the broker’s license application?

A

$310

246
Q

If a complaint is lodged against a licensee, the Texas Real Estate Commission must update its records at least:

A

Quarterly

247
Q

Once a complaint is lodged against a licensee, TREC must launch an investigation within:

A

4 years

Texas Real Estate Exam (5 decks)

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