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Real estate > Unit 10-12 > Flashcards

Unit 10-12 Flashcards

1
Q

General rule for priority of liens

A

First to record, first to right

Exceptions:
Real estate taxes
Special assessments

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2
Q

When would a superior prior lien give a junior lien priority and what is his called?

A

Subordination
And when someone is refinancing
(And probably when there was enough equity where they’re not worried about losing money)

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3
Q

What are the two types of real estate taxes?

A 
Ad valorem (aka general)
And
Special assessment (aka improvement)

Ad valorem means according to value (of property)
Special assessment is for specific areas and for the people who will use the improvement (aka new sidewalks in GLP)

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4
Q

Explain mill

A

A way to express the tax rate which is used for the tax levy which is used to collect property taxes.

1/1,000 of a dollar or $.001

A tax rate of .032, or 3.2%, could be expressed as 32 mills or $3.20 per $100 of assessed value or $32 per $1000 of assessed value

An example of this on your tax bill:
Property assessed at $160,000
Tax rate is 30 mills or 3%
Tax bill will be $4800 ($160,000 x 0.03)

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5
Q

Equalization

A

To correct inequalities in statewide tax assessments using a formula that promotes uniformity
We do not use this in CT

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6
Q

Rights of redemption

A

Collecting delinquent property taxes two ways:

Equitable
and
Statutory

E comes before S

Equitable is redeeming before a tax sale
Statutory is redeeming after tax sale

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7
Q

Other liens

A

Mortgage, mechanics,….IRS, bail bond.

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8
Q

General or specific liens

A

The two types differ bc general affects ALL the debtors property; specific only identified property

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9
Q

What is a tax sale

A

A way to enforce tax liens from a delinquent taxpayer

If no one bids, property can be forfeited to state

Purchaser will receive CERTIFICATE OF SALE, gaining the right to take possession
Debtor will get SATISFACTION OF JUDGEMENT

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10
Q

Lis pendens

A

In a judgement and while lawsuit is pending regarding a general lien–
A lis pendens is filed to give notice of the future lien and it establishes priority

After notification, a WRIT OF ATTACHMENT can be sought to seize the property to prevent debtor from attempting to transfer

WRIT OF EXECUTION is the actual seizing of property

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11
Q

List of specific liens vs general

A

G: Judgements, estate/inheritance taxes, decedent’s debts, corporate franchise debts, irs taxes

Sp: vendors lien, mechanics lien, mortgage, real estate tax lien, special assessments/utilities

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12
Q

Does a real estate tax lien need to be recorded?

A

No

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13
Q

4 ways a lien is created

A

V- voluntary (ex: mortgage)
I - involuntary (IRS)
S - statutory (real estate tax)
E - equitable (debtor’s delinquincies)

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14
Q

Consideration

A

Offered by one party, accepted by another as an inducement to act
Deemed “good and valuable” between the parties

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15
Q

Valid vs Void vs Voidable vs Unenforceable

A

Valid - has all elements, enforceable, binding
Void - lacks one or all elements, no legal force, was never a legal
contract
Voidable - may be rescinded by one or more of the parties
[Ex. mentally ill, under duress, under the influence,
misrepresentation, intent to defraud, minor]
Unenforceable - has legal elements but is only enforceable between
the parties [ex. Oral agreement for the sale of real estate]
Unenforceable means you can’t sue

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16
Q

An oral agreement for the sale of real estate is non-enforcable - T/F?

A

True

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17
Q

Land contract

A

Buyer obtains possession; seller remains legal title until terms are satisfied

18
Q

Statute of frauds

A

When a contract must be in writing to be enforceable

19
Q

Contracts must:

A
  • be voluntary
  • be made by legally competent parties
  • have (legal) consideration [which means it must have value for one party and legal sufficiency to support the contract]
  • legal act [cant be illegal]
20
Q

Bilateral

A

Two parties; two promises

Example: exclusive-right-to-sell

21
Q

Unilateral

A

One sided agreement

Ex. An Option

(Or a wanted poster or bonus for top-selling agent)

22
Q

Executed vs executory contracts

A

Executed - all parties have fulfilled their promises

Executory - one or both still have an act to perform

At closings, executory contracts become executed

23
Q

Express vs implied

A

Written/oral vs demonstrated/acted

24
Q

Assignment

A

Substitution of parties

Make an ass out of yourself at parties

25
Q

Novation

A

Substitution of a new contract

26
Q

Counter offer

A

New offer, rejects old

27
Q

Acceptance

A

If seller agrees to an offer exactly as it is made AND the buyer is made aware of its acceptance – it is accepted

28
Q

Binder

A

A shortened version of a sales contract

Which will later be drawn up by an attorney after acceptance
Sometimes used when details are too complicated

29
Q

Earnest money deposits

A

A -customary- check provided by the buyer when making an offer to be used as a deposit - not a requirement

Broker puts it in an escrow account

Amount determined between parties and is used for:
Discouraging buyer from defaulting
Encouraging seller to take it off market
Cover any expenses if buyer defaults

30
Q

Other names for LAND CONTRACTS:

A
  • contract for deed
  • bond for title
  • installment contract
  • land sales contract
  • articles for agreement for warranty deed
31
Q

Contingencies

A

Additional conditions that must be satisfied before contract is enforceable

They must include:

  • what needs to be done
  • in what time frame
  • who is paying for costs involved
32
Q

Example of an OPTION

A

Lease to buy

33
Q

Amendment vs addendum

A

Amendment is a change to an existing contract
[ex. Modifying the dates]. Must be initialed/signed

Addendum is not a change but an added provision. [ex splitting the cost of repairs found in home inspection]. Essentially a new contract that must be signed by all parties but nothing has changed from the original

34
Q

What is a land contract

A

When seller/vendor keeps title
Buyer/vendee takes possession

Buyer get equitable title, gives down payment, makes monthly payments, pays real estate taxes, insurance, repairs & upkeep. At a certain length of time, the buyer will relieves title after enough payments and terms have been satisfied

35
Q

The interest held by a buyer during the time between the signing of a sales contract and the transfer of title is known as Equitable Title –
T/F?

A

True

36
Q

An option agreement is a unilateral contract – T/F??

A

True

37
Q

Revocation (to revoke)

A

Cancel or withdraw rights/offer

38
Q

Liquidated damages

A

An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract

39
Q

Equitable title

A

When the buyer/vendee has given monies required but doesn’t have the actual legal title in hand yet

40
Q

Land / installment vs option

A

Holds title, blah, blah vs lease to buy

Real estate (11 decks)

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