Immovable, indestructible, unique, scarce.
Land is characterized as immovable because an entire parcel of real estate cannot be moved to another site. Land is considered indestructible because, in contrast to buildings, an entire parcel of real estate theoretically cannot be destroyed and/or need to be replaced. Land is considered unique because, at the very least, each parcel of real estate has its own different and distinct place on the planet. Finally, land is considered scarce because entire new parcels of real estate cannot be manufactured.Test-Taking Tip: Because the words "unique" and "indestructible" are in each answer choice, you do not need to spend valuable exam time considering them.B is incorrect. Land does not depreciate. Why not? Because, in contrast to a house or a building, an entire parcel of land does not wear out and need to be replaced. Test-Taking Tip: Make sure you remember this rule for your exam: Land does not depreciate. C is incorrect. Despite there being a lot of land, land is considered scarce as brand-new parcels of land cannot be created through human labor. D is incorrect. Land is not considered moveable. While topsoil or even a building can be moved, an entire parcel of real estate cannot be moved to a new location.
Both the life tenant and the remainderman will need to sign the loan documents to protect the lender's security interest in the property.
The life tenant (i.e., the aunt) can take out a loan on the property without the remainderman's signature. However, if only the life tenant life signs the loan documents, then the debt will die with her. In order to protect the lender's security interest in the event of the aunt's death, both the life tenant and the remainderman will need to sign the loan documents. The same would be true if the property were being sold: Both the life tenant and the remainderman would need to sign the deed in order to ensure that the buyer's ownership interest in the property would continue after the life tenant dies.Test-Taking Tip: Remember a life estate is an estate of ownership (aka a "freehold" estate). With a life estate, there is a "present interest" and a "future interest." A simple way to figure out who owns each interest is to ask yourself the following two questions: "Who has the right to possess the property in the present?" Here, the aunt does: She holds a present interest in the property, and, because she is the measuring life, she will hold that interest until she dies. "Who will have the right to possess the property in the future?" Here, the nephew does: He holds a future interest in the property.
As stated in the Fifth Amendment to the U.S. Constitution, governmental entities have the right to "take" private property for public purposes. This power is called eminent domain. Taking private property to widen a highway is a classic example of when the government (e.g., city, county, state, or federal) would exercise its power of eminent domain. However, the Fifth Amendment to the U.S. Constitution does state that government entities exercising this power must pay the private property owners just or fair compensation.
Test-Taking Tip: In addition to police power, eminent domain, and escheat, the government also has the power to tax real estate. Your memory aid for these four governmental powers over land is PETE: Police Power, Eminent Domain, Taxation, and Escheat. These are four separate powers. Be careful not to let the examiners trick you into lumping several powers into, say, police power.
Lessee. This is a breach of the Warranty of Habitability.
The landlord breached the implied Warranty of Habitability. For many jurisdictions across the United States, this promise of a habitable living environment is implied by law in residential leases. It need not be discussed verbally or included in writing in the lease. The basic living and safety standards in this implied warranty include necessities such as heat, plumbing, electrical systems, and water. By not responding in a timely manner to the tenant's repeated calls for help, the landlord was in breach of the implied Warranty of Habitability. Therefore, the tenant's abandonment of the leasehold property--and subsequent refusal to pay rent--would most likely be found by a court to be justified, relieving the tenant from any further obligations under the lease. Note: A failure on the part of the landlord to make a residential rental property habitable is referred to as "constructive eviction." This is not physical or legal eviction, but rather a failure on the part of the landlord that significantly affects the tenant's possession, enjoyment, or use of the leasehold property.
In order to maintain a Gross Rent Multiplier of 200, Jordan's offer for this additional property should be $500,000. The Gross Rent Multiplier (aka the "Gross Income Multiplier") is a simpler, less accurate alternative to capitalization takes into account the income generated by a parcel of real estate, but not the expenses charged to the property. This alternative to capitalization is most widely used with single-family residences. There are the three mathematical relationships related to the Gross Rent Multiplier you should know for your exam:• Gross Rent Multiplier X Rent = Value (e.g., 200 GRM X $2,500 rent = $500,000 Value)• Value ÷ Rent = Gross Rent Multiplier (e.g., $500,000 Value ÷ $2,500 Rent = 200 GRM)• Value ÷ Gross Rent Multiplier = Rent (e.g., $500,000 Value ÷ 200 GRM = $2,500 Rent)
The seller must inform prospective buyers of any lead-based paint he knows is on the property.
With regard to federal lead-based paint disclosure rules, "target housing" includes residential dwellings built before January 1, 1978. This is the difference that one day can make. If construction started on December 31, 1977, then the residential dwelling is target housing, and lead-based paint warnings must be given to prospective buyers and tenants. If construction started on January 1, 1978, then the dwelling is not target housing, and the lead-based paint disclosure requirements do not apply. However, even if construction of the house commenced on or after January 1, 1978, a seller or landlord with actual knowledge of lead-based paint on the property is under a duty to disclose this to prospective purchasers and tenants.
d. Prepaid property taxes.
The seller will be reimbursed for the prepaid property taxes for those four months of the remaining tax year when the Buyer will own the property.The other answer choices are all considered debits to the seller. Test-Taking Tip: A good way to remember this is that, for the Settlement Officer, a "credit" increases what a party can take from the closing, while a "debit" decreases what a party takes from the closing. In this test question, the prepaid property taxes will be a credit to the seller and a debit to the buyer. However, debits and credits on the closing statement are not always balanced equally between the two parties. Here, for example, the seller must pay off the outstanding mortgage lien, the mechanic's lien, and the brokerage fee, but these are not considered credits to the buyer.
In the government survey system (aka "rectangular survey system"), an entire section of land is one square mile. One square mile contains 640 acres. One quarter of a section has 160 acres (640 ÷ 4 = 160). A quarter of a quarter section has 40 acres (160 ÷ 4 = 40). Here, the legal description states that the purchased property is a quarter of a quarter of a section, thus, 40 acres. If the land is $3,542.45 per acre and the land purchased is 40 acres, then the purchase price is $141,698.00 ($3,542.45 X 40 = $141,698.00).