NC Real Estate Law & Brokerage Practice

224 terms by MicheleHRPA 

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my personal flash cards to study law and brokerage practice for the NC real estate license exam.

manufactured home

aka mobile home or trailer. personal property that becomes real property when hitch and axles are removed, home is permanently attached and DMV title is canceled. Built to federal HUD building codes. Y3

modular home

never movable by itself; always real property once it has been assembled. Built to NC state building codes. Y3

fructus naturales

"fruits natural" naturally occurring vegetation that does not require annual planting and cultivation (flowering bushes, trees, etc.) Y3

fructus industrialies

"fruits industry" farming; crops that require annual planting and cultivation (corn, wheat, etc). aka emblements Y3

chattel

aka personal property aka personalty; any personal effects that are not real; movable; use a bill of sale to transfer ownership Y3

fixture

an item that used to be personal property but has been permanently attached to real property
related: trade fixtures, agricultural fixtures Y3

IRMA

Total Circumstances Test - is it real or personal?
Intent of person attaching item (is it supposed to be temp?); Relationship of attaching person (owner or tenant?); Method of attachment (removal causes damage?); Adaptability (has property or item been altered to work together) Y3,4

trade fixtures

items attached to real property by a tenant under a commercial lease; personal property of the tenant ex. refrigeration, sink, shelves
if not removed by end of lease, it becomes real property of the owner Y4

agricultural fixture

items attached to real property by a tenant under a farm lease; becomes real property when attached and remain when tenant leaves Y4

UCC

Uniform Commercial Code
if personal property is purchased on credit, it remains personal property until paid off (ex. new furnace or kitchen); creditor can still come and remove it if buyer defaults Y4

fee simple

aka fee simple absolute; absolute ownership with no time limit; highest form of estate; only form of real estate that agents are authorized to sell. Y5

freehold estate

ownership that lasts at least a lifetime
related: fee states, nonfee estates Y4

nonfreehold estate

possessor does not own the property; possession does not last a lifetime (ex. lease) Y4

estate

an interest in real property that includes a present or future right of possession
related: freehold estates, nonfreehold estates Y4

subjacent support

right to have surface property supported from beneath Y9

lateral support

right to have adjacent property support the natural boundaries of the land Y9

subsurface rights

aka mineral rights; right to use the space below ground level and to extract natural resources Y9

air rights

right to air above the land itself Y9

avulsion

sudden loss of land due to force of nature like hurricane or flood Y9

erosion

gradual reduction in land due to water action Y9

reliction

gradual increase in land by permanent recession of body of water Y9

accretion

increase in land due to gradual accumulation of soil Y9

foreshore

strip of land between high and low tide lines; owned by state of NC Y9

water ownership

no tide non-navigable bodies of water - land owner owns to center of body of water
no tide navigable bodies of water - land owner owns to water's edge
oceans and lakes with tides - landowners owner to water's edge
foreshore - state of NC owns Y9

appurtenance

a right or privilege that goes with the ownership of the land B18

riparian rights

the right of landowners on a shore of a river, stream or lake to use the water (swim, boat, fish, etc) Y9

littoral rights

the right of landowners on a shore of an ocean or a large lake with tides to use the water (swim, boat, fish, etc) Y9

real property

land, improvements to the land, improvements on the land, and rights inherent to the land Y3/B619

categories of real property

Residential - housing
Commercial - businesses
Industrial - factories
Agricultural - farming
Special Purpose - government, churches, cemeteries, etc B9

provisional broker

a real estate licensee who performs real estate activities under the supervision of a licensed broker-in-charger B618

broker

a licensed agent who negotiates the sale, purchase or rental of property on behalf of others for a fee or commission B604

land

Earth's surface, below the surface to the center of the Earth, above the surface to infinity; immobile, indestructable, and unique (uniqueness=heterogeneity) B2

encumberance

any right or interest in land which normally diminishes the value of the estate Y10

lien

right to collect a debt out of someone else's real property Y10

general lien

a lien against someone's current and future real and personal property Y10

judgment lien

a general lien owed as a result of a judgment imposed by a court of law; becomes valid when judgment is docketed; valid for 10 years; should be attached in the county where the property is located Y10

docketed

when a judgment is entered and indexed in a judgment book at the county courthouse Y10

specific lien

a lien against a specific piece of real estate Y10

mortgage or deed of trust

a specific lien on a piece of real estate used as collateral for a loan Y10

IRS lien

a general lien owed to the federal government Y10

NC Dept of Revenue lien

a general lien owned to the state of NC Y10

personal property tax lien

a general lien owned on personal property Y10

mechanic's lien

a specific lien for failing to pay a contractor or subk for services performed on a property; must be filed within 120 days of the last day that labor/materials were furnished; valid from first day labor/materials were furnished Y10

special assessment lien

a specific lien for failing to pay for a special assessment (improvement) on the land Y10

real property tax lien

aka ad valorem tax lien; a specific lien for taxes to the county and/or city in which property is located Y11

ad valorem

amount of tax varies in accordance with the value of the property being taxed B49

Machinery Act

governs standards for real estate property taxation, tax assessment, tax appraisal and requirements for tax-exempt status B49

octennial reappraisal

real property is reassessed for ad valorem taxes every 8 years

horizontal adjustement

every 4 years between octennial reappraisial in which ALL property within a county/city can be adjusted up/down by a percentage. may or may not happen Y11

easement

a right or privilege one entity has in the land of another related: appurtenant easement, easement in gross Y11

appurtenant easement

an easement that runs with the land itself; continues indefinitely, transfers with title Y11

dominant estate

land that receives the benefit of the easement Y11

servient estate

land that has the easement attached to it Y11

easement in gross

an easement granted to a person or entity for a lifetime; is void when entity ceases to exist Y11

prescriptive easement

easement acquired through adverse use. Related: adverse possession Y11

restrictive covenants

aka protective covenants, deed restrictions; a private restriction which limits use of real property; are private land use controls and must be enforced in a civil court Y12

defeasible fee estate

may be lost on the occurrence or nonoccurence of a specified event; aka qualified fee estate; related: fee simple determinable, fee simple subject to a condition subsequent B26

fee simple determinable

requires that a specified activity or land use continue; if owner no longer uses the land for that purpose, ownership reverts automatically back to original owner (ex. Land can only be used for church purposes) Y5

fee simple subject to a condition subsequent

states what action or activity that an owner cannot perform; if owner performs that action, former owner can retake possession through court proceedings (ex. Do not sell alcohol on property) Y5

pur autre vie

estate for the life of another; one person is given the right to use the property as long as another person is alive; can use estovers of the land, must pay ad valorem taxes and interest on pre-existing loans; entitle to all income and property arising during the life tenancy (ex. A daughter-in-law live in a house as long as grandchildren are alive) Y5

life estate

a freehold estate in which a tenant has the right to a certain property for his/her lifetime; at death the property reverts to original owner or passes to a remainder man Y5

estovers

"leftovers" of the land. Life estate tenants live off the land but cannot do anything to waste the life estate (ex. Use wood, but not sell timber rights); Y5

nonfreehold estate

temporarily transfer possession, not ownership. Have a definite end period at some point; aka leasehold estate Y6

estate for years

has a definite term with a beginning and end date; terminates automatically without notice ex. Hotel room, beach house rental Y6

estate from year-to-year

aka periodic tenancy; tenancy of indefinite duration; automatically renewed; notice must be given to terminate this tenancy ex. Renting an apartment Y6

notice required to terminate periodic tenancy

week-to week tenancy - 2 days notice; month-to-month tenancy - 7 days notice; year-to-year tenancy - 30 days notice; leases for longer than 30 days require 30 days notice of termination Y6

estate at will

tenacy at both the pleasure of the landlord and tenant; normally on a friendly basis and either party can terminate at any time without notice Y6

estate at sufferance

tenant entered into the estate lawfully, but now retains possession unlawfully; possession is on a hostile basis and eviction is required to terminate ex. refusing to leave a rented house Y6

severalty

sole ownership; ownership by only one person or entity Y6

concurrent ownership

ownership by more than one person or entity Y6

tenancy by the entireties

exists only between husband and wife; survivorship always exists automatically Y7

tenancy in common

two or more people who are not married; survivorship can not exist; each owner may encumber has part of the property; each owner has the right to force a division of the property by asking for a partition on the property Y7

joint tenancy

owners have equal undivided interest that they acquired at the same time; can be joint tenants with the right of survivorship; normally exists for same-sex couples or couples planning to be married; Y7

NC Condominium Act

in effect for all condos created on or after October 1, 1986; developer records: a) declaration with a description at the register of deeds b)detailed plat giving physical description of the complex c) a set of bylaws to provide for internal management of the unit owners Y8

consumer protection provisions of nc condo act

a) purchaser of a new condo with a copy of a public offering statement before sales contract can be signed b) purchaser of a new condo has the right to cancel within 7 calendar days c) purchasers of a resale condo must be given a resale certificate stating the monthly common expense assessment and any other fees Y8

townhouse ownership

owner owns individual unit, including shared walls and the land underneath; pay monthly dues to the homeowner's association and maintains the common areas Y9

cooperative ownership

owners own shares of stock in a corporation that owns the entire property; have a stock certificate as evidence of your ownership and owners lease units within the cooperative; have a proprietary lease Y9

voluntary alienation

voluntarily transferring title by deed through a sale or gift; deed is tangible evidence of title to real estate Y12

grantor

the seller that gives the deed Y12

grantee

the buyer that receives the deed Y13

devise

when one gives a title to real property in a will Y12

bequeath

when one gives a title to personal property Y12

testate

a person dies with a last will and testament Y12

intestate

a person dies without a last will and testament Y12

intestate succession law

tells how property will be distributed if you die intestate Y12

involuntary alientation

giving up title to real estate involuntarily Y13

lien foreclosure sale

occurs when one defaults on a loan or fails to pay property taxes Y13

adverse possession

occurs when a person occupies another's property for the statutory period (7 years if possessor has color of title; 20 years otherwise) related: OCEAN Y13

OCEAN

Open (well known); Continuous (uninterrupted); Exclusive (not shared with another); Adverse (intent to take land); Notorious (hostile, no permission by owner) B77

escheat

occurs when state takes title to real estate because there are no heirs Y13

eminent domain

the state's power or right to take private property Y13

condemnation

the state uses eminent domain and actually takes title of private property and pays fair compensation Y13

police power

the right of the government to restrict the uses of private property in order to promote the health, safety and welfare of the general public Y13

illegal use

a use that is in direct violation of an existing zoning ordinance. Can be detected and punished at any time Y13

nonconforming use

when existing land use does not conform to a new zoning ordinance but is allowed to continue under a grandfather clause; normally cannot expand, enlarge or improve the use Y13

lis pendens

a recorded notice informing all interested parties that a legal action has begun which may affect the title of a real property Y12

encroachment

an improvement that extends across the boundary lines of a property without authorization and encroaches on an adjacent property; the only encumberance not discovered by a title search Y12

variance

allowing an individual to deviate from normal zoning ordinances if they can prove undue hardship Y14

special use permit

aka conditional-use permit; allows a particular property to be used for a special purpose which is in the public interest ex. church or hospital in a residential area Y14

spot zoning

when a parcel of real estate for special zoning that is inconsistent with zoning in the area; illegal Y14

building codes

specific requirements with respect to the construction of buildings to make them safer; NC codes are less stringent than federal (HUD) codes Y14

bulk regulations

building restrictions that apply to all property in an area (ex. Minimum setback from street) Y14

subdivision ordinances

city and county laws that govern the development of land including streets, water, sewage and parks Y14

street status disclosure

requires sellers to disclose whether neighborhood streets are public or private; a material fact Y14

interstate land sales full disclosure act

a sellor or lessor of 25 or more lots of unimproved land is required to file a statement of record with HUD and to provide each purchaser or lessee with a printed property report disclosing pertinent information at least 3 days before contract creation Y15

deed

a written instrument that transfers an interest in real property from the grantor to the grantee

closing

the moment when the deed is actually recorded at the register of deeds Y15

required elements of a deed

1. must be in writing 2. grantor must be true owner of the real estate 3. both grantor and grantee must be named in the deed 4. property must be adequately described 5. language in deed must be adequate to show conveyance 6. the grantor must sign the deed 7. deed should be delivered by the grantor and voluntarily accepted by the grantee Y15

general warranty deed

grantor promises to defend the title forever against anyone making a claim; includes from original title Y16

special warranty deed

grantor promises to defend the title against anymore making a claim covering the time the seller actually owned the property Y16

quit claim deed

releases the person who signs it from any interest that he/she may have the property; used to remove a cloud on title Y16

trustee's deed

given by trustee at a deed of trust foreclosure sale Y16

sheriff's deed

given at execution sale for a judgment against the property owner Y16

tax deed

given at a tax foreclosure sale Y16

deed of gift

used to give a gift of real property; must be recorded within 2 years to be valid Y16

timber deed

used to transfer timber rights Y16

mineral deed

used to transfer subsurface rights Y16

covenant of seisin

part of a general warranty deed in which grantor warrants that he/she is the legal owner of the property and has the right to convey title B67

devisee

a person who receives real property by will B78

beneficiary

a person receiving personal property by will B78

marketable title

title must be: 1. free from any significant liens and encumberances; 2. disclose no serious defects; 3. be free of doubtful questions regarding validity; 4. protect a purchaser from any threat of quiet enjoyment; 5. convince a reasonably well-informed person that it could be sold or mortgaged at fair market value B78

title search

examination of all public records that might affect a title B78

chain of title

shows the record of ownership of the property over a period of time B78

abstract of title

condensed history of the title B79

marketable title act

provides that if a chain of title can be traced back for 30 years and no other claim has been recorded during that time B79

title insurance

a contract by which a title insurance company agrees to indemnify (compensate) the insured against any losses sustained as a result of defects in a title B79

ALTA

American Land Title Association policy - extended title license insurance policy to cover risks that may be discovered only through inspection of the property B78

Connor Act

state law that provides that many real estate documents are not valid as to third parties unless they are recorded; pure race state - first one to record the deed prevails B82

ETJs

extra-territorial jurisdictions; allows a municipality to regulate development in areas adjacent to, but not within, the corporate limits (1 to up to 3 miles) B89

overlay district

a type of zoning that is superimposed over another type of zoning ex. a residential flood plain B91

historic preservation zoning

to preserve historic buildings and sites that are irreplaceable

aesthetic zoning

when an area is zoned strictly for aesthetic or appearance considerations B91

subdivision

all divisions of a tract or parcel of land into two or more lots, building sites or other divisions for the purpose of sale or building development B92

plat map

a map of the subdivision indicating the location and boundaries of individual properties B617

subdivision process

initial planning stage - analyze property for highest and best use; final planning stage - final plans are approved, budgets prepared; start-up stage - carries the subdividing process to a conclusion B95

CO

certificate of occupancy - given by the building inspectors once completed structure has been inspected and found satisfactory B96

flood hazard areas

areas bordering on rivers and streams which are subject to federal regulations concerning improvements and construction in those areas; required to have flood insurance if federally related mortgage is used B96

laches

the loss of a right through undue delay or failure to assert it B98

metes and bounds

a type of property description in which a surveyor begins at a readily identifiable point of beginning and describes the boundaries of a property through a series of calls (direction and distance between landmarks or monuments); must return to POB Y16

townships

aka government survey; a type of property description in which each township contains 36 equal sections of land which are 1 mile long and 1 mile wide; not used in NC Y17

references to a recorded plat

a type of property description uses a subdivision lot number and page number of a map book in the courthouse to describe real estate Y17

reference to a prior recorded deed

a type of property description that makes reference to a deed that has already been recorded for the property (prior deed should have metes & bounds desc) Y17

informal reference

a type of property description that only uses a street address or house number to describe the property; acceptable use for a lease but not to convey ownership; should be combined with a reference to recorded plat Y17

excise tax definition

aka revenue stamps/deed stamps; a deed transfer tax paid by the seller; is required to be noted on a deed by state law B610

MLS

multiple-listing service; when brokers share information about properties they have listed B105

caveot emptor

"let the buyer beware" - sellers do not have to disclose any facts about the property being sold. NC is a caveot emptor state B605

broker-in-charge

the full broker responsible for notifying the NC Real Estate Commission of changes, maintaining the trust account; maintaining all transactions properly and supervising all provisional brokers; required for each brokerage firm and branch office B605

lease

a contract that temporarily transfers possession of real estate but not ownership Y18

gross lease

tenant pays fixed rent; landlord pays taxes, maintenance, insurance, principal and interest on any mortgage loan Y19

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