Unit 11 - 12 State - Real Estate Contracts Flashcards
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Statue of frauds
must be in writing and signed to enforceable
(lease agreement less than a year would not be covered by the statue of frauds)
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Unilateral Contract
only one party makes a promise to perform without receiving any promise of performance from the other party
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Executory contract
involves promise to perform at a later date
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remedy for breach - special performance
Sue to force them to perform as stated in contract
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Open listing
can list property with more than one broker, whoever brings buyer gets commission
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Lead-Base Paint Disclosure
disclose any lead-based paint if built before 1978
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Florida Statue 720
Laws for HOA and HOA disclosures
Unit 11
In addition to HOA Disclosure Summary, what else should the contract for sale and purchase include?
- buyer should not sign w/o receiving and reading HOA disclosure summary
- Contract is voidable if buyer does not receive HOA disclosure summary before closing
- give written notice to cancel within 3 calendar days after receipt of HOA disclosure summary
- After closing, no longer right to waive contract (if didn’t receive HOA summary disclosure but buyer signs contract, cannot cancel for that reason)
Unit 11
Real estate licensees may assist buyers and sellers with completion of 4 types of contracts
- listing agreement
- Buyer brokerage agreement
- Sale and purchase contract
- Option contract
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5 elements of Valid and Enforceable Real Estate Contract
COLIC (writing and signed makes it enforceable)
- competent parties
- offer and acceptance (mutual assent)
- legality of object (legal purpose)
- In writing and signed (not needed to be valid, only enforceable)
- consideration (obligation give to each party… not always money, NOT the earnest or good-faith deposit)
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Types of Consideration for Valid Contract
Valuable = promise to give money Good = NOT money, family promise, measured by love and affection, gifting property
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Statute of Limitations
period of time contract may be enforced
written = 5 years
oral (PAROL) = 4 years
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Ways an Offer is Terminated
WILD CARD
Withdrawal by offeror
Insanity
Lapse of time
Death
Counteroffer
Acceptance - offer becomes contract
Rejection
Destruction of property
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Remedies for Breach of Contract
Specific performance = court orders party to perform
Liquidated damages = not court ordered, usually earnest money deposit
Rescission = court ordered, contract cancelled and all restored to original positions
Compensatory damages = court order, actual monetary loss to a party
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novation
discharge original party and substitute new party
ex: assume a mortgage, be sure to have novation
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All written LISTING contracts must include (5)
- DEFINITE expiration date (NO auto renewal clause)
- description of property
- Listing price and terms
- fees or commission
- Signature(s) of all owner(s) of record
copy given within 24 hours of execution
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What the broker must do to be paid commission? (3)
- hold current, active real estate license
- employed by seller and/or buyer through a listing agreement or buyer broker agreement
- procuring cause = started chain of events (option for referral)
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Option Contract
Buyer purchases an option period (unilateral contract) owner (optionor) grants prospective buyer or tenant (optionee) the exclusive right to buy or lease owner’s property for specified price and terms within period of time
owner is the one who takes action… buyer pays for option to buy but does not have to
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Vendor vs Vendee
vendor = seller vendee = buyer
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When are both spouses signatures needed for real estate sale contract?
co-owned by married couple (estate in entireties) or homesteaded and ownership by one spouse
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“As Is” provision
Still obligated to disclose but saying “don’t like it, don’t buy it.”
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Do you have to share if someone died in your home?
AIDS? HIV?
Death = No, unless single agent and they ask (full disclosure)
AIDS and HIV = ABSOLUTELY NOT! Personal medical information
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If home older than 1978, must give (sale or lease) (3):
*disclose any known lead-based paint
*EPA pamphlet regarding danger of lead-based paint
*allow buyer 10-day period to inspect for presence of lead-based paint
