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Real Estate Law and Contracts Final
Terms in this set (149)
What is CERCLA?
Comprehensive Environmental Response, Compensation and Liability Act; States what needs to be cleaned, how it is to be cleaned, who is to pay for it, and who to get the money
Land Installment Contract
A contract in which the buyer pays the purchase price on an installment process while the seller retains title until the price is paid in full; also known as a "Contract for Deed"; **
REALLY BAD IDEA
What is the importance of Brown v. Board of Education?
Repealed "separate but equal" as had been practice since Plessy v. Ferguson; Brown v. Board of EDU established equal protections
Established by Brown v. Board of Education; The constitutional mandate that all people be treated equally under the law
Denial of a loan by a lending institution or the institution of harsher terms for loans in certain parts of a city for unlawful, discriminatory reasons
Channeling of prospective homebuyers to, or away from, certain areas
Inducing the sale or rental of any dwelling inducing that a particular class of person has entered or will enter the neighborhood
The regulation of structures and uses of land within designated zones
Land uses that pre-exist the adoption of a zoning law or amendment but are allowed to continue (but are not allowed to be expanded or enlarged.)
Permission obtained from the appropriate governmental authorities to deviate somewhat from the designations under the zoning code
Special Use Permit
A system whereby special exceptions to the zoning ordinance are granted by the land-use administrator under a permit arrangement
Restrictions on the division of a parcel of land into two or more units; A subdivision will require prior approval by an administrator such as a planning board
A device requiring a subdivider to fund major, off-site infrastructure expansion that serves the community at large as well as the subdivision residents
A zoning amendment made by the legislative body that created the zoning code
Permitted uses provided for in the ordinance that are inconsistent with the designated zone
A fund created by CERCLA to clean up hazardous waste sites. Money for the fund comes from taxing chemical products; aka. Hazardous Substances Response Fund
5 Requirements to be Able to Recover from Responsible Party
1. The place involved is a facility
2. The facility caused a release, or threat of a release, of a hazardous substance
3. The defendant is a potentially responsible party
4. The damages sought were the necessary costs incurred responding to a release
5. The plaintiffs followed the NCP
Innocent Purchase Defense
A defense under the Superfund Amendments and Reauthorization Act (SARA) that covers landowners who obtain contaminated land without knowledge of the contamination
Brownfields refer to former industrial sites in urban communities have fallen into disuse and decay; the Brownfield Initiative refers to the federal government's attempts to revitalize these urban communities by encouraging the cleanup and redevelop "brownfield" sites
Clean Water Act
A statute whose purpose is to cleanse, maintain, and enhance the quality of the nation's water sources
Components that Comprise the Law
Highest Court in the US
principles established by prior cases
A form of ADR in which the parties choose an impartial third party to hear and decide the dispute--ENFORCEABLE BY LAW
A doctrine under which certain federal laws preempt, or take precedence over, conflicting state or local laws.
Depreciable improvements to land, such as fencing, sprinklers, paving, signs, and lighting.
An article of personal property which has been installed in or attached to land or a building thereon, in such a manner that it is now considered to be a part of the real estate.
An item added to land or buildings by a tenant to be used in the tenant's trade or business; ex. the large refrigerators in a grocery store
Three Tests of a Fixture
1. What was the intention of the annexing party?
2. Was the item physically attached to the realty?
3. Was the item peculiarly adapted to the use being made of the realty?
Requirements for a security interest to become an attachment
1. The debtor and secured party (creditor) agree that a security interest attaches.
2. The secured party (creditor) gives value to the debtor.
3. The debtor has or acquires rights in the collateral
Purpose of Perfecting Security Interests
Puts world on record/constructive notice of creditor's existence
Unrestricted rights granted to owners of land located along the course of a river, stream, or lake.
Water rights of landowners whose land touches a commercial lake, sea or ocean.
enter the owner's land or property without permission
Natural Flow Doctrine
lower riparian owners are entitled to receive the water's natural flow without any significant alteration in quantity, quality or velocity
Reasonable Use Doctrine
Allow full use of the watercourse in any way that is beneficial to the riparian user as long as it does not unreasonably interfere with the beneficial use of others
Ad Codium Doctrine
Who ever owns the soil owns the heavens
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.
Fee Simple Determinable
A defeasible fee that terminates automatically if a stated act or even occurs
Fee Simple Subject to Condition Subsequent
A fee that may be terminated by the grantor when a certain condition is fullfilled
A system in which land is owned without obligation to pay rents; private ownership
An interest in real property created to last for an uncertain period of time
When do homestead rights and protections vest?
A personal privilege to enter another's property for a specific purpose
Life Estate Pur Autre Vie
Also known as the estate for the life of another.The estate is owned for the lifetime of some named third party.
Co-ownership in which the entire estate passes to the survivor on the death of the other joint tenant
Tenants in Common
A form of co-ownership in which each owner possesses an undivided right to the entire property.
Joint Tenancy v. Tenants in Common
Joint tenancy has rights of survivorship, tenants in common do not
Requirements for Joint Tenancy
1. Unity of Possession
2. Unity of Interest
3. Unity of Time
4. Unity of Title
A form of co-ownership between husband and wife in which each has a 1/2 interest in property acquired through the labor of either during the marriage
Unlimited liability; the personal assets of all partners can be reached to satisfy the obligations of the partnerships
Limited liability for the limited partners, but unlimited liability for the general partner
Limited Liability Company
Owners are only liable for up to the amount that they have invested in the stock
How to acquire mineral rights
1. Mineral Deed
2. Mineral Reservation
3. Mineral Lease
4. Mineral Rights Option
A declaration describes condominium ownership. It commits the property to condominium development, defines the complex and the air spaces, the general common elements and limited common elements and establishes the basic rights and obligations of the owners. In addition, it provides for the creation of a management association with the authority to collect common expenses and otherwise act for the benefit of all owners. It makes it possible for the assessor to tax each unit separately.
"Real Estate Investment Trust"; a tax shelter that exempts certain qualified real estate investment syndications from corporate taxes where 90% or more of the ordinary income is distributed annually to the beneficiaries or investors, and other income and asset tests are met
A form of ownership in which the land and the buildings are (usually) owned by a corporation; individual unit residents own stock in the corporation and have a proprietary lease in a specific unit or apartment..
Those parts of a condominium development which are owned by all of the unit owners, such as grounds, recreation facilities or hallways.
How to create an Easement
in writing, implied by law (landlocked), prescription (long use)
An estate in land that is subject to use in some way by the owner of another property, the dominant estate.
The right of an owner of a parcel of land to benefit from the use of another's land
Easement by Necessity
An easement granted by the courts to a landlocked property owner who is unable to gain access any other way
Termination of Easements
2. Merger (of both estates)
7. Eminent Domain
Profit a Prendre
A nonpossessory interest in real property that permits the hold to remove part of the soil or produce of the land
Allows the govt to take property for public use but also requires the govt to provide just compensation (fair market value +damages) for that property
Power reserved to the state to regulate the health, safety, and welfare of its citizens.
A provision in a deed limiting the uses that may be made of the property
Environmental Impact Statement
A statement describing and analyzing the environmental impacts of a proposed action
Privity of Estate
The successive relationship of the parties to the land
Any response to an offer (other than outright rejection) which presents alternative terms for a contract.
Termination of Offers
4. Lapse of Time
5. Destruction of Subject Matter
6. Insanity of Offeror
7. Death of Offeror
The ability to accept an offer from the offeree by the same mode of communication the offeror used to communicate with the offeree; if an offer is mailed, then the acceptance is binding when the notice of acceptance is placed in the mailbox
A doctrine that prevents a party from denying that a promise is supported by consideration
The ability to make void a contract; ex: a minor entered a contract and wishes to be released
Breach of Contract Remedies
1. Money Damages
5. Specific Performance
An anticipatory breach occurs when one party to a contract makes it clear prior to the time performance is due that he or she will not perform. An anticipatory breach may be expressed in words or by action. The promisee may elect to sue immediately for damages or may wait until after performance has become due to then file suit.
An agreement in which a creditor agrees to discharge an existing debt and to substitute a new obligation and a new debtor in its place
Estate for Years
A conveyance of realty for a definite stated period of time. The term may be one year, one month, one week or even one day. No notice needed to terminate.
A lease, which has the original terms automatically renewed for successive periods, until proper notice to terminate is given by either the landlord or tenant. Month to month rental.
Elements of Lease
1. Valid Contract
2. Statute of Frauds
4. Description of Premises
5. Statement of Lease Term
Statute of Frauds
A statute necessitating that certain contracts, to be enforceable, be supported by a written memorandum and signed by the party against whom enforcement is sought
Memorandum of Lease
Outlines the terms and conditions of a lease agreement
Triple Net Lease
A lease where, in addition to rent, the lessee pays the taxes, insurance, and operating costs
IRS Section 1031 allows a taxpayer to sell investment property and purchase another investment property in its place, deferring payment of capital gains taxes.
When a mortgage or any other company signs an agreement stating that they will not foreclose on a home (or another issue) for nonpayment. It is an important agreement within real estate because of the fact that most people who can show hardship need the ability to gain the amount of money needed for payment.
Covenant of Quiet Enjoyment
A promise that no one has superior or paramount title to that of the grantor; assures the grantee of peaceful possession without fear of being ousted by a person with a superior claim to the property.
Covenant of Fitness of Premises
An assurance that the premises are fit for habitation.
Remedies for Landlord with Tenant Breach of Contract
An exculpatory clause is a provision in a contract that is intended to remove liability from one or more of the contracting parties that may result from certain acts or events.
Parol Evidence for Ambiguous Contracts
only time it is allowed
A clause in a real estate sales contract that makes the agreement conditional on such factors as the availability of financing, properly inspections, or obtaining expert advice
Payment of Purchase Price
Contracts and Notaries
Not required to finalize a contract, but is needed to be able to record
Real Estate Broker License for LLC or LP are
A broker who obtains a listing from a seller to act as an agent for compensation.
Exclusive Right to Sell
A listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.
An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone.
A written employment agreement between a property owner and a broker authorizing the broker to sell, lease or exchange the realty.
A breach of duty, as by a person in a fiduciary capacity, without an actual fraudulent intent, which gains an advantage to the person at fault by misleading another to the other's prejudice. Any act of omission declared by law to be fraudulent, without respect to actual fraud.
An act intended to deceive another, e.g., making a false statement, making a promise without intending to perform it, suppressing the truth.
Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.
Opinion statements that exaggerate a property's benefits.
Certificates stating the condition of systems; ex. the HVAC, Hotwater heater, etc.
A decision by an administrative agency granting some other part permission to violate a law or rule that would otherwise apply to it
..., Also called a closing statment or a HUD-1. A document that presents a final, detailed accounting for a real estate transaction, listing each party's debits and credits and the amount each will recieve or be required to pay at closing.
A lien that attaches to all property owned by an individual. Real and personal.
..., A statutory lien levied on property by a person who is wrongfully not compensated after providing labor (mechanic) or material (material-man) for the improvement to land; Only on the specific property where the work was complete
The charge upon the land of a debtor, resulting from the decree of a court, entered in the judgment docket
A lien that belongs to a vendor for the unpaid purchase price of land, where the vendor has not taken any other lien or security beyond the personal obligation of the purchaser.
Right of Redemption
The legal ability to buy back one's property within the time specified in each state after a judicial sale by paying the debt, interest and certain costs.
General Warranty Deed
Deed that offers the most protection in which grantor fully warrants good clear title to the premises
Bargain & Sale Deed v. Quitclaim Deed
Bargain & Sale Deed has a conveyance; A quitclaim deed relinquishes any possible entitlement to a property
Gap in Title
When tracing the title from it's original purchase from the state to current owner, there is a gap; EX: State to Paul S., Paul S. to Dono D.; Cat W. to Marvin M-----there is a "gap" between Dono and Cat where the ownership and conveyance is unknown
A will written entirely in one's own handwriting
Covenant of Seisen
this document states that he seller does indeed have possession of the property and has the right to sell it
Elements of a Deed
1. Words of Conveyance
2. Competent Grantor
3. Identifiable Grantee
4. Adequate Legal Description
5. Proper Execution
6. Delivery and Acceptance
Fixed natural or artificial object used to establish real estate boundaries for a metes and bounds description
Metes and Bounds Description
A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract back to the point of beginning.
Buyer's Prep for Closing
1. Obtain Financing
2. Examine Title
3. Secure Hazard Insurance
4. Determine $$ Needed at Closing
5. Inspect Premise
Seller's Prep for Closing
1. Obtain Evidence of Title
2. Prepare Deed
3. Remove Encumberances
4. Gather Utility Bills and Certificates
5. Bring Sundry Certificates
Conditions in the instrument or a covenant used to regulated land use
A map of a subdivision indicating boundaries of individual properties; also includes details such as lot numbers, blocks, streets, public easements, and monuments
Mother Hubbard Clause
Also referred to as a cover all clause, the purpose of this clause is to perfect any small errors in the description and to cover oddly shaped bits of land contiguous with adjoining or adjacent to the described tract.
Condemnation Payment/Eminent Domain
When private land is taken by a gov't entity, payment of fair market value must be paid to the land owner in addition to any and all possible damages
"Real Estate Settlement Procedure Act"; a federal law that requires lending institutions to disclose certain information to purchasers of residential real estate and prohibits those institutions from engaging in certain fraudulent activities
Trespass to Try Title
A civil action used in certain jurisdictions to determine title to land which is in dispute; only method of settling a title dispute in Texas
Title Subject to Prior Right
A person takes possession of title subject to prior encumberances that may be attached
Closing a real estate transaction with an escrow agent because financing is involved
1. Valid Deed
2. Enforceable Contract
4. Escrow Agent
5. Escrow Agreement
Acquisition of title to real estate by means of wrongful occupancy for a period of time established by statute or common law; must be:
The reverting of property to the State when heirs capable of inheriting are lacking.
When a person dies without a will
Notice given by the public records.
Cloud on Title
A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or a quiet title legal action.
The theory that a mortgage is a lien, as it is a device used by debtors and creditors to secure a debt
Deed of Trust
A deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender. Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party)
A foreclosure under power of sale in which the deed of trust does not have to be foreclosed through a court action.
A contract between a grantor/mortgagor and a grantee in which the grantee agrees to undertake responsibility for the mortgage debt
Balloon Payment Mortgage
A mortgage with relatively small monthly payments for several years (generally five or seven years), after which the loan must be paid off in one large balloon payment.
the practice of lending money at exorbitant rates
Escrow Agents Serve...
"Dead Pledge"; A lien on real property as security for a debt. A special contract by which the borrower conveys to the lender a security interest in the mortgaged property.
When mortgage payments are missed, the mortgage company calls the entire balance of the mortgage due in order to reclaim their money by foreclosure of the property and sale at auction
Square feet in an acre
Due on Sale Clause
When a mortgagee sells the property, the balance of the mortgage is due
Deed in Lieu of Foreclosure
Instead of going through the foreclosing process, the party in default may turn over the deed to the property
Acceptance of Offer is Negated by
Fraud, Mistake, Duress, Unintentional Misrepresentation
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