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NC Real Estate Law & Brokerage Practice

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

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

net lease

tenant pays fixed rent plus some or all of the taxes, maintenance and insurance; landlord pays interest and principal on any mortgage loan Y19

ground lease

tenant pays ground rent plus taxes, maintenance and insurance and builds his/her own building on the property and pays interest and principal on any building loan Y19

fixed lease

aka flat lease; rent is set at a fixed amount for the life of the lease Y19

graduated lease

rent automatically increases at pre-set intervals Y19

precentage lease

tenant pays a minimum monthly base rent plus percentage of gross sells over a certain amount (often used in commercial leases for shopping centers) Y19

index lease

aka variable lease rent automatically increases or decreases according to some index such as the cost-of-living index Y19

full service lease

rent includes all expenses of the occupancy because landlord provides everything such as utilities, cleaning, etc Y19

actual eviction

aka summary ejectment; landlord evicts tenant for breaching the lease Y19

constructive eviction

when the landlord breaches the contract and the tenant leaves voluntarily; ex. landlord doesn't provide adequate heating Y19

NC residential rental agreement act

1. landlord must provide fit premises, comply with business codes, keep common areas safe, provide smoke detectors 2. tenant must keep leased premises fit and safe and not damage or remove property 3. tenant cannot be evicted by landlord for up to 12 months in retaliation for asserting legal rights Y20

self help eviction

taking an action to force a tenant out of the property (change the locks, turn off utilities, impound tenant's personal property, etc); is illegal in NC Y20

NC tenant security deposit act

1. must be placed in trust account in an insured NC bank or landlord must be bonded (if landlord is a licensee, deposit must be in trust acct); 2. can only be used for non-payment of rent, damages, unpaid bills; cost of rerenting or court costs; 3. tenant must be given itemized statement within 30 days Y20

maximum security deposit amounts

week-to-week - 2 weeks rent
month-to-month - 1.5 months rent
leases longer than month-to-month - 2 months rent Y21

pet fees

can be non-refundable and must be "reasonable". service animals (ex. seeing-eye dogs) cannot be charged pet fees Y21

NC vacation rental act

applies to short-term recreational rents for less than 90 days when the primary residence is somewhere else; provides for expedited evictions and addresses mandatory evacuations; if property is sold, new owner must honor rentals scheduled for next 180 days Y21

law of agency

aka common law; body of law that governs the relationship that exists between agents and principals Y21

agent

party who represents and acts on behalf of the principal in a real estate transaction under a brokerage contract; it is always the firm, not the individual licensee Y21

fiduciary

one in whom trust and confidence is placed; reference to a principal-agent relationship B610

principal

aka client; person who hires agent to represent him/her in a real estate transaction Y22

customer

aka third party; persons in real estate transaction who does not contract with and is not represented by the agent Y22

subagent

one who is employed by a person already acting as an agent; has the same duties to the client as the agent (ex. all individuals working for the same firm); unless contracted as buyer's agent, agents are subagents of the seller Y22

brokerage (agency) contract

it creates the agency relationship and establishes the scope of the agent's authority to work on client's behalf; every agreement except certain buyer agency agreements must be in writing from the time of the formation; must be for a definite period and terminate without notice Y22

buyer agency agreement

can be oral if there is no time limit on the agreement; must be in writing with a time limit if it is an exclusive agreement or no later than presentation of the first offer Y22

universal agency

agent is authorized to handle all of the principal's business under a power of attorney; real estate firm will rarely be one Y23

general agency

agent is authorized to perform a broad range of acts in connection with the principal's business; many property managers are general agents Y23

special agency

agent is authorized by a principal to do one or more specific acts according to detailed instructions; does not have the authority to bind the client; typical real estate contracts are this Y23

seller agency

the firm and employees represent only sellers in real estate transactions Y23

buyer agency

the firm and employees represent only buyers in real estate transactions Y23

single agency

when firm and employees represent only the buyer or only the seller in a particular transaction Y23

dual agency

when firm and employees resent both the buyer and seller in the same real estate transaction; need informed written consent of the seller and informed written consent of buyer before offer is presented; agent owes fiduciary duties to both buyer and seller equally; undisclosed dual agency is always illegal Y24

designated agency

a type of dual agency in which the BIC appoints one licensee to represent only the seller in a particular transaction and appoints another licensee to represent only the buyer; cannot share confidential information; each principal gets better representation Y24

working with real estate agents brochure

a brochure to be presented to consumer at first substantial contact explaining agency options (buyer/seller); ask consumer to sign and agent must keep on file for at least 3 years; if FSC is over phone, mail to consumer within 3 days Y25

first substantial contact

the time when the licensee's discussion with a buyer begins to focus on the buyer's specific property needs and desires or on his/her financial ability; anything that can be used against the buyer during negotiations; auctioneers are exempt Y25

LOADS

agent's duties to the principal:
Loyalty - agent must represent the best interests of the principal
Obedience - agent must obey the lawful instructions of the principal in accordance with the contract
Accounting - agent must maintain accurate records of all funds that relate to the principal
Disclosure - full and prompt disclosure of all material facts to the transaction and may affect the rights and interests of the principal
Skill, Care and Diligence - agent should have higher than average skill and expertise in real estate matters and use the skill on the principal's behalf Y26

agent's duties to 3rd party

Honesty and fairness - must be honest with all parties in the transaction
Material statement of fact - must disclose all material facts to all parties in the transaction Y27

willful misrepresentation

agent has actual knowledge of a material fact and intentionally lies about it B126

willful omission

agent has actual knowledge of a material fact and intentionally keeps his/her mouth shut regarding it B128

negligent misrepresentation

agent unintentionally misinforms regarding a material fact because they have no actual knowledge or have incorrect information B127

negligent omission

agent has no actual knowledge of a material fact but should reasonably have known of such a fact B128

puffing

opinion statements that exaggerate a property's benefits B125

principal's duties to agent

good faith - principal must cooperate with the firm
compensation - principal must assure compensation Y28

material facts in NC

presence of leaking polybutylene pipes even if repaired or replaced; use of synthetic stucco siding even if replaced; use of property as a meth lab; structural defects, pending zone changes, inoperative appliances, issues with: wiring, plumbing, drainage, percolation Y27

non-material facts in NC

stigmatized properties - death or crime that occurred on property; haunted house; sexual predator in the neighborhood; mere presence of mold Y27

tort

a wrongful act, injury or violation of legal right to a person or property of another; references when an agent does this while acting for the principal B623

contract

an agreement between two or more competent parties to perform or abstain from performing an act that is supported by legal consideration (something of value, usually money) Y29

classes of contracts (9)

express; implied; unilateral; bilateral; executed; executory; valid; void; voidable Y29

express contract

a contract that is stated in words, oral or written Y29

implied contract

a contract that is suggested from the conduct of the parties showing intent of contract (ex. neighbor paints a fence for another neighbor, implies payment/consideration) Y29

unilateral contract

a contract involving a promise on the part of one party if another party does something. only one party is obligated to act. ex. a real estate firm promises to pay a $5,000 bonus to all agents who close at least 4 sales in one month Y29

bilateral contract

a contract in which a promise is made by one party in exchange for a promise by another party. both parties must act. most real estate contracts are bilateral Y29

executed contract

a contract that has been performed in full. executed may also mean that a contract has been signed Y29

executory contract

a contract that has not been fully performed ex. a signed real estate contract in which the transaction has not been closed Y30

valid contract

a contract that satisfies all legal requirements and is fully enforceable in a court of law Y30

void contract

a contract that is not enforceable in a court of law. one of the parties must disaffirm the contract to make it void. ex. selling a home orally is legal, but is unenforceable as it's not in writing Y30

voidable contract

a contract in which performance can be voided by one of the parties based on some legal principal ex. a minor and adult make a contract and the minor can get the contract voided Y30

essential elements of a contract (5)

mutual assent - offer and acceptance, meeting of the minds, mutual agreement
consideration - anything bargained for and given in exchange for a promise
capacity of the parties - parties must be adults, sane and in their right minds
lawful objective - no illegal or immoral performance
certain contracts must be in writing; see statute of frauds Y31

mail box rule

the postmark date is considered to be the date that the contract is actually communicated if the addressee is the other party in the transaction Y30

offer termination conditions (7)

revocation or withdrawal by the offeror
rejection by the offeree
seller's response to buyer's offer form (rejection of offer)
a counteroffer
lapse of an unreasonable time period
an event that destroys the property
death of either principal Y31

statutes of fraud (definition)

states that certain contracts must be in writing in NC to be valid and enforceable Y31

statutes of fraud (required contracts)

any contract for the sale or conveyance of real property
any contract lasting longer than 3 years from the making
any contract not to compete in a certain business
any contract promising to pay debts for someone else
any contract promising to repay debts after bankruptcy options to purchase real estate Y31

UETA

Uniform Electronic Transaction Act (UETA). contracts can be created electronically and an electronic signature is binding; no court case has tried to test the enforceability of this act Y32

legal remedies for contract breach (3)

money damages, specific performance, rescission Y33-34

money damages (3)

compensatory damages - money to make injured party whole
consequential damages - punitive damages, damages for possible gains
liquidated damages - a specific amount determined in advance (ex. earnest money, tenant security deposit) Y33

specific performance

injured party can sue based on the uniqueness of the land Y34

rescission

returns the injured party to his/her original positions prior to signing the contract; usually granted when it can be proved there is no 'reality of consent' Y34

types of listing contracts (3)

exclusive right to sell - one firm is guaranteed to receive a commission, regardless of who brings in a buyer
exclusive agency listing - firm gets commission if they find buyer; owner can sell house him/herself
open listing - whoever brings in a buyer, gets a commission Y35

heated living space

adequate heated by permanently installed heating system, finished to generally acceptable standards, directly accessible from other living areas; stairs count on both levels and you can walk on it Y37

termination of listing contracts

death or insanity of owner; dissolution of the brokerage firm; death or insanity of individual broker working alone; destruction of the property; breach of the contract; property is sold and transaction is closed Y37

offer to purchase

an offer by a prospective buyer of real estate Y38

sales contract

aka purchase contract; an offer to purchase that has been accepted by the offeree Y38

due diligence period

allows the buyer to fully investigate the property, negotiate any repairs, apply for necessary funding, order an appraisal and survey, etc. buyer may pay seller a non-refundable due diligence period fee Y39

cash sale

means seller will receive the full price as stated in the sales contract less his/her closing expenses even if the buyer needs a loan for the financing Y40

installment land contract

a property is sold with seller financing; seller retains legal title and the deed to the property until all of the purchase price is paid; buyer doesn't receive deed until the property is paid for; if buyer defaults, buyer loses property, seller has cloud on title Y41

option to purchase

a contract that gives one person the right to buy or lease a specific property at a specific price for a specified period of time from the owner Y41

property management limitations (4)

1. cannot make capital improvements to the property
2. cannot pay owner's income taxes
3. cannot establish the depreciation schedule to be used
4. cannot reinvest profits for the owner Y43

NC Real Estate Law & Brokerage Practice

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