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Real Estate License Exam > Vocab > Flashcards

Vocab Flashcards

1
Q

Hypothecation

A

To pledge property as security for an obligation or loan without giving up possession of it

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2
Q

Rescission

A

Returns parties to their original position; return any money exchanged. *Applies to provisions of TILA regarding “consumer credit” transactions

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3
Q

Novation

A

Substituting a new obligation for an old one or substituting new parties to an obligation

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4
Q

Net Lease

A

A lease that requires a tenant pay not only rent but also any costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs

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5
Q

Equal Credit Opportunity Act (ECOA)

A

The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age or marital status

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6
Q

CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act)

A

A federal law administered by the EPA that establishes a process for identifying parties responsible for creating hazardous waste sites, forcing liable parties to clean up toxic sites, bringing legal action against responsible parties, and funding the abatement of toxic sites. *See superfund

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7
Q

Truth in Lending Act (TILA)

A

Federal legislation that allows the government to regulate the lending practices of mortgage lenders. Often called “Regulation Z”

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8
Q

TILA-RESPA Integrated Disclosure Rule (TRID)

A

Rule that implements provisions of the Dodd-Frank Act intended to combine and clarify disclosures to consumers

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9
Q

Closing Disclosure (CD)

A

A lender’s disclosure required by TRID, which shows all the costs of closing, in addition to, the costs of the loan, and a comparison from the Loan Estimate with actual costs. The CD must be issued 3 business days before consummation of the loan

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10
Q

Consumer

A

A person or entity seeking or receiving licensed activities

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11
Q

Client

A

A person who is being represented by a licensee; the principal

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12
Q

Customer

A

A consumer who is not being represented by the licensee, but for whom the licensee is performing ministerial acts

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13
Q

Ministerial Acts

A

In Illinois, acts that a licensee may perform for a consumer that are informative and do not constitute active representation

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14
Q

Pur Autre Vie

A

“For the life of another” A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee

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15
Q

Subrogation

A

The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant. Subrogation is used by title insurers to acquire from the injured party rights to sue to recover any claims the insurers have paid

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16
Q

Exclusive Buyer Agency Agreement

A

Exclusive right to represent. The broker is entitled to commission whether or not they locate the property the buyer ultimately chooses

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17
Q

Exclusive-Agency Buyer Agency Agreement

A

Exclusive contract between buyer and broker. Brokers are entitled to payment if they locate the property the buyer ultimately chooses. *The risk is educating the buyer.

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18
Q

Open Buyer Agency Agreement

A

Nonexclusive buyer agency agreement. Buyer is permitted to enter into similar agreements with an unlimited number of brokers. The buyer is obligated to compensate only the broker who locates the property the buyer ultimately purchases

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19
Q

Consummation

A

The point at which something is complete and/or finalized

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20
Q

Appurtenance

A

A right, privilege, or improvement belonging to and passing with the land

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21
Q

Appurtenant Easement

A

An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor’s land

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22
Q

Easement in Gross

A

An individual or company interest in or right to use someone else’s land. I.e. a railroad’s right-of-way is an easement, or a utility company’s easement

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23
Q

Easement by Necessity

A

An easement that is created when an owner sells a parcel of land that has no access to a street or public way except over the seller’s remaining land. Created by a court order based on the principle that owners must have the right to enter and exit their land

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24
Q

Easement by Prescription

A

If the claimant has made use of another’s land for a certain period of time. *10-21 years

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25
Q

Easement by Condemnation

A

Acquired for a public purpose, through eminent domain. The owner of the servient tenement must be compensated for any loss in property value

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26
Q

License

A

A personal privilege (not a right) to enter the land of another for a specific purpose. Differs from an easement because a license can be canceled by the licensor at any time

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27
Q

Bargain and Sale Deed

A

A deed that carries with it no warranties against liens or other encumbrances but does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his discretion

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28
Q

General Warranty Deed

A

A deed in which the grantor fully warrants good clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed

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29
Q

Quitclaim Deed

A

Provides the grantee with the least protection of any deed. It carries no covenants or warranties. Used primarily to convey less than fee simple or to cure a title defect

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30
Q

Deed in Trust

A

Trustor conveys real estate to a trustee for the benefit of the trustee

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31
Q

Trustee’s Deed

A

Conveyance from trustee to third party

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32
Q

Ownership in Severalty

A

Occurs when property is owned by one individual or corporation

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33
Q

Co-ownership

A

Illinois recognizes co-ownership i.e. joint tenancy and tenants in common but does not recognize community property because Illinois is a Marital Property state

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34
Q

Tenancy in Common

A

Each tenant holds an undivided fractional interest in the property i.e. one-half or one-third. The co-owners have “unity of possession” meaning they are entitled to possession of the whole property.

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35
Q

Joint Tenancy

A

Owned by two or more people. The feature that distinguishes Joint Tenancy from Tenancy in Common is “unity of interest.” Title is held as though all the owners, collectively, constitute one unit. Joint Tenancy includes “right of survivorship”: upon the death of a joint tenant, the deceased’s interest transfers directly to the surviving joint tenant(s).

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36
Q

Creating Joint Tenancies

A
  1. Unity of Possession
  2. Unity of Interest
  3. Unity of Time
  4. Unity of Title
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37
Q

Terminating Joint Tenancies

A

A joint tenancy is terminated when any of the four unities is terminated. The new owner cannot become a joint tenant in the original joint tenancy and will hold interest as a tenant in common. Rights of other joint tenants, however, are unaffected.

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38
Q

Three Categories of Appraisers:

  1. Associate Real Estate Trainee Appraiser
  2. Certified Residential Real Estate Appraiser
  3. Certified General Real Estate Appraiser
A
  1. Entry level appraiser; all reports must be cosigned by a state-certified residential real estate appraiser or state-certified general real estate appraiser
  2. Qualified to appraise residential property of one to four units without regard to transaction value or complexity, but with restrictions in accordance with Title XI, USPAP, and criteria established by the AQB
  3. Qualified to appraise all types of real property without restrictions as to the scope of practice subject to USPAP requirements
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39
Q

Calculating RE Taxes p. 176

A

(Assessed Value x Equalization Factor) - (Exemptions x Tax Rate) = Annual Tax

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40
Q

Homestead

A

A legal life estate in real estate occupied as the family home. The home is protected from unsecured creditors during the occupant’s lifetime. Every homeowner in Illinois is entitled to $15K per head of household, $30K for two heads of household (max amount)

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41
Q

Estates in Land:

  1. Freehold estates
  2. Leasehold estates
  3. Fee Simple Absolute
  4. Fee Simple Defeasible p.120
  5. Fee Simple Determinable
A
  1. Last for an indeterminate length of time
  2. Last for a fixed period of time i.e. for years & period to period
  3. Highest interest recognized by law. Absolute ownership; entitled to all rights to the property
  4. (Defeasible fee) A qualified estate, that is, it is subject to the occurrence or nonoccurrence of some specified event i.e. condition subsequent or fee simple determinable
  5. A Fee Simple Defeasible estate that may be inherited
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42
Q

Economic Characteristics of Real Estate

A
  1. Scarcity
  2. Improvements
  3. Permanence of Investment
  4. Location
43
Q

Physical Characteristics of Real Estate

A
  1. Immobility
  2. Indestructibility
  3. Uniqueness
44
Q

Bundle of Legal Rights

A
  1. Right of Possession
  2. Right to Control the property
  3. Right of Enjoyment
  4. Right of Exclusion
  5. Right of Disposition
45
Q

Illinois License Renewal

A
  1. Leasing Agents license expires on July 31st of each even-numbered year
  2. Brokers license expires on April 30th of each even-numbered year
  3. Managing Broker license expires April 30th of each odd-numbered year
46
Q

Conditional-use Permit i.e. Special-use Permit

A

Awarded to current owner; is usually granted to a property owner to allow a special use of property, defined as an allowable conditional use within that zone, such as a day care center in a residential district

47
Q

Variance (Run with the land)

A

Provides relief if zoning regulations deprive an owner of the reasonable use of the property. To qualify for a variance, the owner must demonstrate the unique circumstances that make the variance necessary. In addition, the owner must prove that she is harmed and burdened by the regulations. Example: If an owner’s lot is level next to a road but slopes steeply 30 feet away from the road, the zoning board may allow a variance so the owner can build closer to the road than setback requirements generally allow.

48
Q

Comparative Market Analysis

A

Based on:

  1. Recently closed (sold) properties
  2. Properties currently on the market
  3. Properties that did not sell
49
Q

Market Value

A

Most probable price a property would bring in the open market

50
Q

Government Check

A

Irregular area created by corrections; 24 miles apart

51
Q

Must Know Measurements (Legal Descriptions of Land)

A
  1. Sections are smaller than townships
  2. Township = 36 sections
  3. Section = 1 square mile or 640 acres
  4. 43,560 square feet per mile
  5. 5,280 feet per mile
52
Q

Government Lots

A

Areas smaller than full-quarter sections

53
Q

Annual Tax Calculation

A

(Assessed Value x Equalization Rate) - (Exemptions x Tax Rate)

54
Q

Tax Deed

A

Tax deed must be recorded within one year after the expiration of the redemption period, or else it is absolutely void with no right or reimbursement

55
Q

CAN-SPAM Act of 2003

A

Establishes requirements for commercial email, spells out penalties for email senders and gives consumers the right to have emailers stop sending emails to them

56
Q

Accretion

A

To increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake or sea

57
Q

Accession

A

Acquiring title to additions or improvements to real property as a result of the annexation of fixtures.

58
Q

Special Warranty Deed

A
  1. Warranty that the grantor received title
  2. Warranty that the property was not encumbered during the time the grantor held title, except as otherwise noted in the deed
59
Q

Title Theory State

A

Some states interpret a mortgage to mean that the lender is the owner of mortgaged land. On full payment of the mortgaged debt, the borrower becomes the landowner.

60
Q

28/36 Ratio

*Also known as 28/43

A
  • The 28 means “total monthly housing payment (PITI, as well as mandatory assessments and PMI) cannot exceed 28% of gross monthly income
  • The 36 means “recurring long-term debts and housing payment combined may not exceed 36% of gross monthly income.”
61
Q

Police Power

4 Government Powers: PETE

A

The government’s right to impose laws, statutes and ordinances, including zoning ordinances and building codes, to protect the public health, safety and welfare

PETE:
Police Power
Eminent Domain
Taxation
Escheatment
62
Q

Assignment

A

A transfer of rights or duties under a contract. i.e. “the substitution of parties”

63
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

64
Q

Fair Housing Act

A

The federal law that prohibits discrimination in housing, based on race, color, religion, sex, handicap, familial status, and national origin

65
Q

General Lien

A

The right of a creditor to have all of a debtor’s property (both real and personal) sold to satisfy a debt

66
Q

Specific Lien

A

A lien affecting or attaching only to a certain, specific parcel of land or piece of property

67
Q

Real Property

A

The interests, benefits, and rights inherent in real estate ownership

68
Q

Personal Property

A

Items, called chattels, that do not fit into the definition of real property; movable objects. Also called personalty.

69
Q

Leasing Real Estate in Illinois

A

The statute of frauds in Illinois requires that lease agreements be in writing to be enforceable if they are for more than one year

70
Q

Judgement

A

The formal decision of a court on the respective rights and claims of the parties to an action or suit. After a judgement has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant.

71
Q

Actual Eviction

A

The legal process that results in the tenants being physically removed from the leased premises

72
Q

Constructive Eviction

A

Actions of a landlord that so materially disturb or impair a tenant’s enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent

73
Q

Constructive Notice

A

Notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property

74
Q

Actual Notice

A

Express information or fact; that which is known; direct knowledge

75
Q

Quick-take

A

A summary proceeding permitted by Illinois law in which a plaintiff/condemnor may obtain immediate fee simple title to real property, including the right of possession and use

76
Q

Tenancy by the Entirety

A

The spousal joint ownership of the principal residence acquired during marriage. Upon death of one spouse, the survivor becomes the owner of the property

77
Q

Inverse Condemnation

A

An action brought by a property owner seeking just compensation for land taken for public use when the taker of the property does not intend to bring eminent domain proceedings. Property is condemned because its use and value has been diminished due to an adjacent property’s public use.

78
Q

Intermediate Mortgage Theory State

A

Theory based on the principles of title theory states but still requiring the mortgagee to foreclose to obtain legal title

79
Q

Bilateral Contract

A

A contract by which all parties to the instrument are legally bound to act as prescribed

80
Q

Option Listing

A

Listing with a provision that gives the listing sponsoring broker the right to purchase the listed property

81
Q

Unilateral Contract i.e. Option contract

A

A one-sided contract wherein one party makes a promise so as to induce a second party to do something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise

82
Q

Per IL, Article 15 Statute of Limitations actions being brought against licensees must be taken…

A

Within 5 years after the facts become known

83
Q

In IL, Escrow Records must be maintained for at least…

A

5 years

84
Q

Subagent

A

One who is employed by someone already acting as an agent. I.e. Serhant’s team working with him on a listing

85
Q

Cost Approach

A

The process of estimating the value of a property by adding to the estimated land value the appraiser’s estimate of the reproduction or replacement cost of the building, less depreciation

86
Q

Gross Lease

A

A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are gross leases.

87
Q

In Illinois, if a landlord wants to terminate a year-to-year tenancy, how much notice must the tenant receive?

A

60 days

88
Q

What is the relationship between the Illinois Agency Statutes and the Common Law of Agency?

A

Illinois Agency Statutes supersede the common law of agency in Illinois

89
Q

Description of the review process for a final administrative decision of IFDPR?

A

The accused may petition the circuit court of the county in which the accused resides. The circuit court’s decision may be appealed directly to the Illinois Supreme Court.

90
Q

Every Illinois Broker who applies for renewal of a license must successfully complete how many hours of continuing education courses in each two-year license renewal period?

A

12 hours

91
Q

A person who successfully completed her Illinois real estate education requirement on November 1, 2014, may take the state license exam no later than

A

October 31, 2018 I.e. 4 years to take the exam

92
Q

Tenancy at will

A

Gives the tenant the right to possess property with the landlord’s consent for an unspecified or uncertain term

93
Q

Tenancy at sufferance

A

Arises when a tenant who lawfully possessed real property continues in possession of the premises without the landlord’s consent after the rights expire. I.e. a holdover tenancy

94
Q

Curtesy

A

The identical interest that a husband has in the real estate of his deceased wife. NOT IN ILLINOIS - WE HAVE HOMESTEAD

95
Q

Dower

A

The life estate a wife has in the real estate of her deceased husband. NOT IN ILLINOIS - WE HAVE HOMESTEAD

96
Q

Deed Restrictions

A

Private agreements that affect land use

97
Q

Easement

A

The right to use the land of another for a particular purpose

98
Q

Land in the Northwest corner of Illinois is in reference to which principle meridian?

A

The 4th Principle Meridian - Goes down to Beardstown

*The 3rd P.M. goes from Rockford to Centralia - Centralia is the baseline
The 2nd P.M. is in Indiana

99
Q

Section 16 is set aside for…

A

School purposes

100
Q

The General Datum plane referred to by surveyors throughout Illinois is the…

A

North American Vertical Datum

101
Q

In Illinois, legal descriptions of land are usually based on the…

A

Rectangular Survey System

102
Q

You may terminate the loan’s escrow account when the remaining balance is equal to or less than…

A

65%

103
Q

A non-possessory interest in real property is also called an…

A

Encumbrance

104
Q

Encumbrance

A

Anything (for example, a mortgage, tax, or judgement lien; an easement; a restriction on the use of the land) that may diminish the value or use and enjoyment of a property

Real Estate License Exam (1 decks)

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