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465 Cards in this Set

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State-regulated fund used to pay purchasers of real estate who have suffered a loss due to actions or inactions of licensee...
Recovery Fund
Act that prohibits descrimination against race & color in certain real estate transactions...
Civil Rights Act of 1866
Act that prohibits descrimination against race, color, religion, national origin, gender, familial status & handicap in certain real estate transactions...
Federal Fair Housing Act
Act of 1890 which ensures fairness in the market place...
Sherman Antitrust Act
Act which requires full disclosure of all costs involved in obtaining financing & closing on a property...
Real Estate Settlement Procedures Act (RESPA)
Advertisements placed by a sales agent that do not include the employing broker's name...
Blind Ads
True or False: It is legal to not put the name of the employing broker on an advertisement placed by a sales agent...
False. It is illegal not to.
Implies a higher standard of concern for what is right or fair for all parties involved & is realted to thinking...
Ethical
Tends to be concerned with accepted codes for good behavior or sanctions of a community & is related to feeling...
Moral
True or False: It is illegal to advise buyers on forms of ownership.
True. Advise buyers to seek advice of an attorney.
A set of principles of conduct to achieve a higher standard of conduct than that required by law...
Code of Ethics
Disclosing all cost in financing & closing on a property is required by...
RESPA
What does RESPA stand for?
Real Estate Settlement Procedures Act
Under the Fair Housing Act of 1968, it is prohibited to discriminate against...
Race, Color, Religion, National Origin, Gender, Familial Status & Handicap
If a group of brokers talk about price-fixing, this is illegal by law governed under the...
Sherman Antitrust Act
When making a real estate transaction, the seller is the...
Client or Principal
When does a "customer" become a "client"?
When the customer agrees to and enters into a working relationship with the agent by signing the "Buyer- Broker Employment Agreement"
Price-fixing refers to...
brokers' discussion of commission rates.
Ms. Smith sold one of her investment properties for $225,000. If 25% of this sales price represented profit, what was the original cost?
$168,750. (225,000 x .75 = 168,750)
The annual interest rate on your loan is $15,400. The loan amount is $158,000. What is your interest rate?
9.7% (15,400 / 158,000 = 0.097 x 100 = 9.7)
True or False: The Fair Housing Act applies to states that do not already have default laws in place.
False. The Fair Housing Act applies to ALL states.
A client and his wife ask their agent which box they should check for Form of Ownership on a purchase contract. The agent should...
Advise them to seek legal advise from an attorney.
What happens after a complaint is filed for alleged violation of the code of ethics?
The complaint is reviewed by the Grievance Committee
True or False: A real estate agent who is promating and protecting the best interest of their client will show the client all offers that come in.
True
A broker has had a property on the market for 6 months & wants to place an ad to encourage an offer. The ad states information about the house but does not include who placed the ad. Is this acceptable?
No, it's not acceptable because it's a blind ad and blind ads are illegal.
The Recovery Fund pays out $30,000 for a licensee's mistake. How much more can the fund legally pay out to the individual who is making the complaint?
$0. The max an individual can collect is $30,000.
True or False: Real estate brokers do not have a responsibility to record all members of their team with the ADRE.
False. Brokers must record all members of their team to the ADRE.
True or False: An ad uses the words "Our real estate team." The team must consist of all agents under the same employing broker.
True
Two real estate companies team up to put a competitor out of business. What act does this violate?
Sherman Antitrust Act
What must a brokerage display at all times?
An equal housing opportunity sign.
True or False: When a company decides to advertise on the internet none of the same advertising rules apply.
False. Many of the same advertising rules apply.
An ad states the property's square footage, number of bedrooms & bathrooms and the location. What else MUST the ad include?
Broker & company name.
True or False: If someone violates the Civil Rights Act they are discriminating against race.
True
Is a sign advertising a property for rent to "Christians only" an example of a violation of the Civil Rights Act of 1866?
No. The Civil Rights Act of 1866 does not pertain to religion, it only pertains to race & color.
Does a real estate broker have a public responsibility or a fiduciary responsibility?
Both
What is the maximum penalty for violating the Sherman Antitrust Act?
$100,000 & 3 years prison
A $98,000 property shows a 13% return. What is the monthly return?
$1,061.67
(98,000 x 13% (.13) = 12,740 / 12 = 1,061.67)
What amount of commission will the designated broker receive if she sells a property for $58,000 & the rate of commission is 6%?
$3,480
(58,000 x 6% (.06) = 3,480)
True or False: As a rule of thumb, if a course of action is practical, it is also ethical.
False. Because something is practical does not mean it's also ethical.
It would be unethical for an agent not to inform a customer that he was a seller's agent.
True
True or False: A blind ad does not show a photo of the property being advertised.
False. A blind ad does not have the broker's name and company listed.
True or False: Only brokers can file a complaint with the recovery fund.
False. A member of the general public or a realtor may file a complaint with the recovery fund.
True or False: The FFH Act of 1968 prohibits discrimination against race, color, religion or national origin.
True
True or False: Mary can file a claim with the recovery fund within 5 years of the violation.
True
A broker sold a home at a commission rate of 6%. The gross commission was $5,400. What was the sales price?
$90,000.
(5,400 / 6% (.06) = 90,000)
What is the commission rate if a broker received a gross commission of $6,650 on a $95,000 sale?
7%
(6650 / 95000 = 0.07 x 100 = 7%)
How a building is placed on a lot in regard to its surroundings is called...
Orientation
The lowest part of a structure, usually beneath the ground is called...
Foundation
The external facing for an exterior wall is called...
Siding
The internal facing for an exterior wall is called...
Sheathing
When obtaining a building permit for new construction, the charge for the added cost of services such as hooking up water and sewer is called...
Impact Studies/ Fees
Building and construction standards for environmental and public health that are enforced by the state are called...
Building Codes
Certificates of Occupancy are only given...
When new buildings or structures are completed and in compliance with all applicable codes and ordinances.
What does CLUE in Clue Report stand for?
Comprehensive Loss Underwriting Exchange
How long is the warranty a new home builder is required to provide?
1 year on structure, 2 years on mechanical equipment.
True or False: A Subdivision ad must always say "recommended by the real estate commissioner" if it has been approved by the real estate commissioner & a report has been issued.
False. Subdivision ads must never say "recommended by the commissioner" or "no risk" even though subdivisions must have the approval of the real estate commissioner.
Land and anything permanently attached to it is called...
Real Property
Personal Property changed to real property by permanently attaching it to the real estate is called...
Fixture
Movable items not attached to real estate are called...
Personal Property
Personal property used in a business or trade that is attached to real estate is called...
Trade Fixture
Touching at any point is called...
Contiguous
Butting against each other is called...
Abutting
A 24-mile-square parcel that contains16 townships is called...
Government Check
A map that only shows lot loacations and size is called...
Plat Map
Any claim attached to real property that may lessen its value or impair its use is an...
Encumbrance
A claim against one property owner as security for debt is...
Lien
Lien placed on your property for the labor and/or material rendered in the improvement of a property is called...
Mechanic's Lien
Easement that is attached to the land and passes with the land is called...
Easement Appurtenant
The state that benefits from the easement is called the...
Dominant Estate
The estate that is the giver of the easement is called the...
Servient Estate
A common wall between properties is called a...
Party Wall
Not an interest in land but merely permission to use the land of another for some limited purpose is called...
Having a license.
An unauthorized intrusion of real property reducing its value is called an...
Encroachment
The ability to exit a property is...
Egress
The ability to enter a property is...
Ingress
Lien created when a court ordered lien is placed against a property and filed with the courts when the homeowner fails to pay a debt is called...
Judgment Lien
An acre equals how many square feet?
43,560
How many linear feet are in a mile?
5,280
Principal meridians are...
Lines that run north to south.
Lines that 6 miles apart and run north to south and parallel to principal medians are called...
Range Lines
Transfer of personal property is done with a...
Bill of Sale
An item of personal property is called...
Chattel
The rights to everything above & below the land and its profits are called...
Mineral Rights
True or False: Mineral rights are usually not conveyed with real property.
False. They usually ARE conveyed with real property
The rights to airspace above property owned (i.e. roof-top lease)...
Air Rights
In condominiums _______ refers to the airspace as horizontal planes being the floor & ceiling
Horizontal Regimes
True or False: Airspace is real property when described as 3 dimensions above property.
True
True or False: Air is real property
False. Air is not real property.
The transfer of real property is by...
Deed
A _______ signals the end of one ownership and the beginning of another.
Deed
What describes a piece of real property for use in real property conveyance documents accepted by state courts?
Legal Land Description
What is required to legally convey any interest or estate in real property?
Legal Land Description
What insures identity of real property in the future?
Legal Land Description
A deed must clearly identify the land being conveyed by a...
Legal Land Description
What are 4 tests of a fixture?
1. Removal- it can be removed
2. Intention 3. Method of adaptation & attachment 4. Mutual agreement between parties
What are the 3 methods used to legally describe land?
1. Government Rectangular Survey 2. Metes & Bounds 3. Lot, Block & Tract
The method of legally describing land perimeters that uses principal meridians & base lines is called...
Rectangular Goverment Survey
How many principal meridians & how many base lines are there across the country?
35 Principal Meridians, 32 Base Lines
True or False: All states recognize rectangular government survey as a method of legally describing land perimeters.
False. Not all states have this type of land description.
Where are rectangular government surveys mainly used?
West of the Mississippi
The method of legal land description that begins at a certain well-defined point and then follows the exterior boundaries by directions & distances is called...
Metes & Bounds
True or False: When using Metes & Bounds to legally describe land, you won't necessarily return to the point of beginning.
False. You must return to the point of beginning.
What method of legally describing land perimeters uses points and angles?
Metes & Bounds
In what method of legally describing land must a surveyor be given directionals & distances?
Metes & Bounds
True or False: A subdivider is required to file a map or plat of a tract with the county clerk in the county where the property is located.
True
What method of legal land description is most commonly used in subdivisions?
Lot, Block & Tract
Lot, Block & Tract is conveyed using....
A recorded plat or survey; a plat map
A section is how many square miles?
1 square mile
Townships are divided into how many sections?
36 sections
How many acres does one section of a township contain?
640 acres
How many square miles does a township contain?
36 square miles (6m x 6m)
Which method of legal land description describes even the smallest parcel of land?
Lot, Block & Tract
True or False: Road T1S runs north to south & 1 mile east of the principal meridian.
False. T1S runs east to west & 1 mile south of the base line.
36 sections arranged in a 6 by 6 array, measuring 6 miles by 6 miles is called a...
Township
Basic unit of the township & range system, a square tract of line one mile by one mile containing 640 acres is called a...
Section
True or False: Sections of a township are numbered beginning with the northeast-most section, proceeding west to section 6, south to abutting section 7, east to 12, south to 13 and so on.
True
_______ is assigned to a township by measuring east or west of a Principal Meridian.
Range
North to south lines which mark township boundaries are called _______.
Range Lines
East to west lines which mark township boundaries are called...
Township Lines (or Tiers)
The _______ is the reference or beginning point for measuring east or west ranges
Principal Meridian
The _______ is the reference or beginning point for measuring north or south townships
Base Line
Any Claim attached to real propery that may lessen its value or impair its use is called
Encumbrances
Any document, claim, unreleased lien or encumbrance that may impair or invalidate the marketability of the title are called
Clouds
What are 4 examples of encumbrances?
1. Liens or mortgage loans; 2. Easements or encroachments; 3. Leases; 4. Unpaid taxes
What are 5 examples of property restrictions?
1. Encumbrances; 2. Liens; 3. Easements; 4. Encroachments; 5. CC & Rs
A lien or charge against a specific parcel of property only is called
Specific Lien
Property tax liens are an example of what type of lien?
Specific Lien
What type of lien is a charge against all of a debtors' real & personal property?
General Lien
Income taxes & judgements are examples of what type of lien?
General Lien
What type of lien is created by the intentional action of a property owner?
Voluntary Lien
A mortgage lien is an example of what type of lien?
Voluntary Lien
What type of liens are created by law?
Involuntary Liens
Property taxes or assessment taxes are examples of what type of lien?
Involuntary Liens
What are the 4 classifications of liens?
1. Specific; 2. General; Voluntary; 4. Involuntary
What type of lien gives security to those who perform labor or furnish materials for improvements?
Mechanic's Lien
True or False: A mechanic's lien is a general, involuntary lien.
False. It is a SPECIFIC, involuntary lien
When is the effective date of a mechanic's lien?
The date the work began
Why must a mechanic's lien be recorded?
To establish the position of the lien (i.e. the time & place)
How long does a general contractor have to file a mechanic's lien?
120 days from when job is finished
What is the time frame for a subcontractor to file a mechanic's lien?
120 days from completion of the whole project
What must a contractor supply as proof of a valid mechanic's lien?
a contract (expressed or implied) with the owner's authorization
Where will a Judgement Lien be recorded?
in the land records where the debtor owns any real property (it's going to be filed in the county where the land is held)
In what type of lien must a creditor sue the debtor for a money judgement and seek to enforce it against any property the debtor may own?
Judgement Lien
True or False: Judgement liens can become "dormant" after a specific number of years and cannot be renewed.
False. The can be renewed indefinitely.
Easements are ________ interest in the land, not ________.
Easements are ACTUAL interest in the land, not OWNERSHIP
Appurtenant means
goes with the property
True or False: The Statute of Frauds applies to easements
True
With an easement, the _______ estate (tenement) benefits.
Dominant
With an easement, the _______ estate (tenement) gives or serves.
Servient
Easement by necessity is created _______ in cases where justice & necessity dictate it.
by a court of law
In a landlocked situation, what is the type of easement called
Easement by necessity
What are the 3 types of easements?
1. Easement by necessity; 2. Easement by prescription; 3. Easement in gross
Ingress & Egress pertain to what type of easement?
Easement by necessity
In what type of easement does the user have to have adverse, hostile, open, actual, notorious & continuous use of the land
Easement by prescription
What type of easement grants the right by an adverse user to use the land of another
Easement by prescription
How is an easement by prescription aquired?
by adverse possession
In an easement by prescription, the time period for use is _________.
10 years
The limited right of one person to use another's land is called
easement in gross
True or False: Easement by license gives permission to use the land & the license can be revoked at any time
True
If an owner gives a neighbor permission to cross over his land to fish in a lake it is a personal ____________.
Easement in gross
True or False: A personal easement in gross is assignable.
False. A personal easement in gross is NOT assignable
A commercial ___________ gives utility companies the right to install pipelines & power lines.
Easement in gross
True or False: A commercial easement in gross is a substantial property interest and is assignable
True
When the owner of a dominant estate becomes the owner of a subservient estate the easement is _____________.
Terminated
True or False: When an easement is abandoned, assignment automatically occurs.
False. Termination occurs
____________ is a result of an easement taken by eminent domain or lost by adverse possession
Termination
Improper use (overburdening) of an easement results in _________.
Termination
True or False: All encroachemtns must be physical in nature.
True
A roof, fence, driveway, barn or shed that's intruding on another's land, thus reducing its value is called
Encroachment
What does CC & R stand for?
Covenants, Conditions & Restrictions
________ place private restrictions on the use of real property.
CC & Rs (covenants, conditions & restrictions)
True or False: CC & Rs are enforced in court by the county in which real property is located.
False. CC & Rs are enforced by the court by the property owners.
What type of map shows lot locations and sizes?
A plat map
True or False: A government check is a type of legal description.
False. There are only 3 legal desriptions: 1. Government rectangular survey; 2. Lot, block & tract; 3. Metes & bounds
If two sections of a township are touching at any point, they are ________.
contiguous
Fractional sections are always on what two sides of a township?
north & west
Which type of legal description must always return to the POB (point of beginning)?
metes & bounds
How many acres are in an area that is 1/4 mile wide by 1/4 mile long/
page 78
When dividing a section what does the word "and" mean?
stop and start over again
True or False: If a right to use the land is appurtenant that means it terminates when the owner dies.
False. if it's Appurtenant, that means it's "attached to the land"
What does a property restriction have to be for it to be an encroachment?
physical in nature
What is the name of something that was personal property and has been transformed to real property by permanently attaching it to the land?
fixture
Bob bought a piece of land without viewing it first, when he arrived at his land he noticed it was landlocked from the road. What type of easement does Bob need?
Easement of necessity
What kind of estate or tenemant do you own if you property is landlocked from the road and requires an easement of necessity?
dominant
An easement of gross was issued to Karen for her property in Kansas. Karen dies and her sister moves into her home. What happens to the easement in gross?
it is terminated
If a property owner is in violation of a particular CC & R, how is the rule enforced and by whom?
in court, by property owners
True or False: An item of personal property is called chattel.
True
True or False: There are 5280 square feet in an acre.
False. There are 43,560 square feet in an acre.
True or False: Income taxes are a type of specific lien.
False. Income taxes are a typr of general lien, PROPERTY TAXES are a type of specific lien.
True or False: The ability to enter a property is called egress.
False. the ability to enter is called INGRESS
True or False: A general contractor has 180 days to file for a mechanic's lien?
False. He has 120 to file.
True or False: Range lines are 6 miles apart & run West to East.
False. Range lines are 1 mile apart & run North to South
How long does a person have to have continuous use of a land to gain an easement by prescription?
10 years
True or False: A servient estate benefits from an easement.
False. The dominant estate benefits, the servient gives.
True or False: A license to use another's land is appurtenant, and stays with the land.
False. It can be revoked at any time.
In Government Rectangular Survey, how many fractional sections are made by correctional lines?
11 (1-7, 18, 19, 30 & 31)
Created for regulating the relationship between landlord and tenant in residential leases is the ____________________.
Universal Residential Landlord & Tenant Act of 1973
A contract between a lessor and a lessee that transfers the right to EXCLUSIVE possession and use of the property for a specified period of time in exchange for rent is a __________.
a lease
A lessor is the_________.
landlord
A lessee is the ________.
tenant
Transferring part of a lessee's interest for a portion of the term of the lease is __________.
subletting
The legal process that results in the tenant being physically removed from the leased premises is ______________.
actual eviction
Actions of a landlord that disturb or impair the tenant's enjoyment of the leased premises and causes him to leave is _________.
constructive eviction
When the right and interest is transferred to another for the entire term it is called_______.
assignment
The landlord's lagal right to seize a tenant's personal belonings for damages or rents in arrears under court order is called__________.
distraint
A privately owned entity that provides services or accomodations to the public is a ___________.
public accomodation
The right to take back possession of a property if a lease ends is called __________.
reversionary rights
What is the designation given by to a property manager by the Institute of Real Estate Management
Certified Property Manager (CPM)
What are 8 duties of a property manager in achieving the owner's objectives...
1. Generate income & manage staff; 2. Preserve the value of the property; 3. Secure suitable tenants through screening; 4. Collect rents; 5. Caring for the premises; 6. Payment & disbursement of funds; 7. Monthly income & expense reports; 8. Keeping all rental agreements on file for 1 year from expiration dates.
A property manager is "caring for the premises" by _________ & __________.
preventive, routine maintenance & repair maintenance (repairing broken items)
In Property Management, what are examples of fixed expenses?
taxes, insurance, salaries, etc.
In Property Management, what are examples of variable expenses?
reapairs, advertising, decorating & supplies, etc.
Name the 4 Property Management Classifications...
1. Residential; 2. Industrial; 3. Commercial; 4. Special Purpose
In property management, the contract between the property and broker is the __________.
Management contract
In property management, "identification" is a required part of the management contract. This must include ___________ & __________.
names of the parties involved & street address of the property (informal reference vs. legal description)
What 5 "terms" must be specified in a management contract between a propert manager and property owner?
1. Term of management; 2. The property managers power to hire, fire & supervise personnel. 3. The property manager's authority to rent, operate & manage the premises; 4. It must have a beginning & ending date; 5. It must contain a termination provision.
What type of reponsibility is shared between a property manager & a property owner in the management agreement?
fiduciary responsibility
In property management, who is a "finders fee" paid to?
tenants only
In property management, what are 4 rules pertaining to finders fees?
1. May only be paid to tenants; 2. Can't exceed $200; 3. Can't have more than 5 in a 12 month period; 4. Credit toward rent only.
Upon termination of a management agreement, the subject property manager must provide copies of all rental agreements when?
immediately
Upon termination of a management contract, the subject property manager has 5 day to provide what?
a list of all tenant security deposits
Within 35 days of a management agreement termination, the subject propery manager must provide _____________________, excluding _____________.
reimbursement of all monies remaining in property accounts excluding unpaid obligations
Upon termination on a mangement contract, how much time does the subject property manager have to provide final accounting of all monies including bank reconciliation?
75 days
In a lease, what rights are retained by the lessor?
reversionary rights
Under the Uniform Residential Landlord and Tenant Act of 1973, what is the maximum occupancy per bedroom?
no more than 2 people per bedroom
Under the Uniform Residential Landlord and Tenant Act of 1973, who is liable for a guest's actions?
Tenants are liable for their guest's actions
Under the Uniform Residential Landlord and Tenant Act of 1973, what rules must a tenant know when signing a rental agreement?
The complex rules or HOA rules.
Under the Uniform Residential Landlord and Tenant Act of 1973, how much notice must a landlord give a tenant prior to entering the premises
48 hours
In Arizona, non resident property owners must do what?
appoint a statutory agent, who lives in AZ, to represent them.
The "lessor" refers to ________.
the landlord
The "lessee" refers to ________.
the tenant
Does the Statute of Frauds apply to leases?
yes
What does the Statute of Frauds convey?
Everything must be in writing
In what 2 instances is a contract exempt from the Statute of Frauds?
Leases of 1 year or less & contracts between brokers.
Who must sign a lease?
Landlord (or lessor) & tenant (or lessee)
Most leases only allow subletting with___________.
owner's consent
The rental amount on the lease contract is called ____________.
Contract rent
The rental amount that the current market is demanding is called ____________.
Economic Rent
What type of lease is the most commonly used lease in residential property?
Gross lease
In which type lease does the tenant pay a fixed amount of rent?
Gross lease
In which type of lease does the landlord pay all taxes, insurance, mortgage payments, repairs, etc. on the property?
Gross lease
In which type of lease does a tenant pay a percentage of his income in addition to a gross lease or a net lease?
Percentage lease
Which type of lease is usually used in retail operations and is based on income?
Percentage lease
In a lease option, the _________ gives the tenant the right to purchase the property.
First Right of Refusal
What are 5 conditional requirements of a lease option?
1. is appurtenant; 2. No extension beyond the term of the lease; 3. Consideration can be rent; 4. Delionquent rent payment can result in end of option; 5. Can be assigned separately.
When an owner sells a property on the market & then turns around and leases it, is called _________.
Sale & leaseback
In which type of lease do rent payments start at a fixed rate, but then increase at set intervals during the lease term?
Graduated Lease
In what 2 instances is a graduated lease often used?
for commercial tenants or in a tough economy
An index lease is known as an ________ lease.
escalation
In what type of lease do rents adjust according to changes in a price index?
Index lease (or escalation lease)
What indexes are often used to calculate rents in an index (escalating) lease?
Consumer price index or wholesale price index
What are 6 components of a valid lease?
1. Legal ability of all parties to enter into a valid contract; 2. Must be for legal purpose; 3. Offer & acceptancce; 4. Consideration (rent) 5. Property description; 6. Terms of lease
According to the AZ Landlord & Tennant Act, how much notice must be given to cancel a month to month lease agreement?
30 days
According to the AZ Landlord & Tennant Act, can a landlord change property rules already agreed upon in a lease contract?
Yes. A landlord must give 30 days notice to tenants prior to changing the property rules.
What are 4 exemptions from the AZ Landlord & Tennant Act?
1. Mobile homes (that can be moved); 2. Public housing; 3. Hotels; 4. Fraternity, sorority, dormitory
According to the AZ Landlord & Tennant Act, what must be given to a tenant upon move in? (5)
1. Name and address of the property manager or owner; 2. Notice of where they can obtain a free copy of Landlord Tenant Act, 3. Move in inspection form; 4. Pool safety notice; 5. Lead-based paint disclosure for property
A _____________ must be given to buyers or renters of properties built in 1977 or earlier.
Lead-based paint disclosure
Upon move out, a written notice from the landlord is required and the tenant should be present for the ___________.
Move out inspection
A landlord may apply _________ against any _______ or ________ when the lease is over.
A landlord may apply the DEPOSIT against any ACCURED RENT or DAMAGE TO THE PREMISES when the lease is over.
An _______ list of _______ must be given to the the tenant and any ____________ must be returned to the tenant within ____________.
An ITEMIZED list of DAMAGES must be given to the the tenant and any BALANCE REMAINING must be returned to the tenant within 14 BUSINESS DAYS.
Upon move out, if all money owed to a tenant is not returned within ____________, the tenant has the right to recover up to __________________.
Upon move out, if all money owed to a tenant is not returned within 14 BUSINESS DAYS, the tenant has the right to recover up to TWICE THE AMOUNT WRONGFULLY HELD.
A violation of any of the terms of the lease agreement without legal excuse is called ___________.
Breach of contract
How long does a landlord have to fix problems to avoid constructive eviction?
10 days
In constructive eviction, how much rent is owed upon termination of the lease?
none
To avoid constructive eviction, a tenant can repair property and be reimbursed ________ or ________, which ever is _______.
To avoid constructive eviction, a tenant can repair property and be reimbursed UP TO $300 or 1/2 OF THE RENT, which ever is GREATER.
In actual eviction, a tenant is _______________.
forced to move out.
How much notice is a landlord required to provide before actual eviction?
5 days
How long is a landlord required to store a tenants personal property before it can be destroyed or claimed against money owed for damage or any accured rent?
21 days
When a tenant moves out without notice / payment of rent it's called ___________.
Skip/ abandonment
If a lessee dies, what happens to the lease?
It fall to the heirs
A lease may be terminated upon ______________ of both parties.
Mutual agreement
What's the maximum security deposit amount?
One and a half months rent
Security deposits are treated as ____________.
Trust money
If a lessor is foreclosed upon, the tenant cannot be disturbed if there is a ____________ in place.
Non-disturbance Clause
If a lessor defaults on the loan, _______________ allows the lender to collect rent.
Assignment of Rents Clause
What is true of a property manager of one property?
A real estate license is not required
A property manager tries to steer a minority couple away from their apartment complex. This action is:
illegal, because fair housing rules apply
Property managers working in the commercial sector must be sure they abide by what set of rules?
ADA (Americans with Disabilities Act)
True or False: A legal description is not necessarily a component of a valid lease.
True
Bob rents a 2-bedroom apartment. He sleeps in one bedroom and his four children sleep in another. This violated the 2-person occupancy rule stated in ________________.
Uniform Residential Landlord & Tenant Act of 1973
What does it mean to sublet a property?
A lessee has another person take over the terms of their current lease.
Which type of lease has a tenant paying rent and most of all property charges?
Net lease
One who performs real estate activities while employed by or associated with a broker is a ________.
Salesperson
One who supervises all activities of sales agents and is liable for their actions is a ___________.
Designated Broker (DB)
A firm name, company name or entity (not a person) is called ____________.
Employing Broker
Real estate broker receiving a client/customer from another broker from another broker is a ___________.
Referring broker
A broker or a slaesperson is _____________.
An agent
A broker who steps in to manage a brokerage if the designated broker is unavailable for more than 5 days is a _____________.
Temporary broker
A broker who assists another broker in a real estate transaction is ____________.
Cooperating broker
A document that is filed with the county when changing a mobile home from personal property to real property is called __________________.
Affidavit of affixture
An individual who talks with others regarding terms of a property listing is required to have a real estate license. What are 3 examples of "terms" in this instance?
1. Price of the property; 2. Financing the property; 3. Availability of the property
True or False: A hostess of a model home is not required to have a real estate license.
False. The hostess is required to have a license, a greeter doesn't have to be licensed.
What licenses must an Auctioneer at a public auction hold?
Real estate license & auctioneer's license
An individual who talks with others regarding terms of a property listing is required to have a real estate license. Name the 4 exemptions to this rule.
1. Executor of an estate; 2. Property manager of only 1 property; 3. For sale by owner; 4. Attorneys & power of attorney
An agent must notify _________ before offering a cemetery lot for sale.
The Commissioner
What 3 steps must be taken and/or conditions met before an agent may offer cemetery lots for sale?
1. Notify RE Commissioner, 2. Commissioner must examine the lots & make findings public; 3. If acceptable, the commissioer shall issue a Certificate of Authority for Sales
How long must records for cemetery plot sales be kept?
5 years from receipt of payment in full.
True or False: It is illegal to sell a membership camping contract without the RE Commissioner issuing a final Membership Camping Public Report.
True
If a person purchases a membership camping site and is not given a Final Membership Camping Public Report, the contract is __________.
Voidable
The owner of a membership camping site must give the Final Membership Camping Public Report to each buyer and _________, the owner & licesed broker must _____________.
The owner of a membership camping site must give the Final Membership Camping Public Report to each buyer and COLLECT A RECEIPT, the owner & licesed broker must KEEP THIS RECEIPT FOR 5 YEARS.
An AZ resident buying a membership camping site may cancel the contract _________________.
For any reason, at any time before midnight on the 3rd business day after signing it.
A nonresident of AZ may cancel a membership camping contract ___________.
Before 7 business days
Commissions are earned when the ________________.
Agent finds a ready willing and able buyer that submits an acceptable contract.
When are commisions paid?
At close of escroe (COE)
Who are commissions paid to?
The listing firm
A sales agent's compensation (commission) is paid through _______________.
Their employing broker
Commissions are negotiable between ___________ & ___________.
Commissions are negotiable between THE SELLER (PRINCIPAL) & THE AGENT (BROKER).
What happens to an agent's commission if that agent leaves the brokerage while the transaction is in escrow?
The agent will be paid directly from the former employing broker.
True or False: In certain instances unlicensed people may receive real estate commissions.
False. Only licensed agents receive commissions. If someone does not hold a license they can only receive a "gift" (and it needs to be called a "gift")
All parties receiving any commission on a transaction must be ____________.
Disclosed
How long may a temporary broker step in if a DB becomes ill or dies?
No more than 90 days. Can be renewed every 90 days for up to 15 months.
What is a referral fee?
A fee charged by one agent or broker to another for a client referral.
What are 6 areas that licensed agents may work in?
1. Resale of residential properties or rentals; 2. New home sales; 3. Commercial; 4. Time Shares; 5. Property management rentals, 2 or more properties; 6. Mobile homes that include the land
True or False: An affidavit of Affixture changes personal property to real property.
True
What is true if the broker belongs to the NAR (National Association of Realtors)?
The salesperson must belong as well
What is true if your broker belongs to MLS?
It's optional for you to belong
How long do you have to activate your license after passing the state exam?
1 year. You must dom SOMETHING with it within a year
What 5 requirements must be met before a sales license will be issued by ADRE?
1. Education certificate for completing 90 hours of classroom instruction on broker prelicensing; 2. Pass state real estate exam with a 75% or better; 3. 18 years of age; 4. Fingerprint clearance card; 5. 6 hours contract writing certificate; AZ residency is not required
What 6 requirements must be met before a broker license will be issued by ADRE?
1. Education certificate for completing 90 hours of classroom instruction on the basic principles of real estate; 2. Pass state real estate broker exam with a 75% or better; 3. Active sales license for 3 out of the last 5 years anywhere; 4. Fingerprint clearance card; 5. Broker Management Clinic Certificate
True or False: ADRE will not issue more than 1 license at any time
True
True or False: Intro to contract writing must be completed before you can take the state exam.
False. You can take Into to contract writing after all exams have been taken but it's required before an actual salesperson's license will be issued.
What is Broker Management Clinic?
3 hour course required for a broker's license.
If a licensee terminates employment from an employing broker, the designated broker must ________.
Sever the license
If a licensee terminates employment with one broker and finds a new broker, what must the licensee do?
Fill out a hire form and submit to ADRE for new license under the new employing broker
ADRE may issue a ___________ if a statute has been violated within ___ years prior to licensure.
ADRE may issue a PROVISIONAL LICENSE if a statute has been violated within FIVE years prior to licensure.
When you go to get your license, you have to fill out a ___________ thats full of disclosures
Candidate form
A provisional license is subject to ___________ and Commissioner's ___________ apply while holding license.
A provisional license is subject to CONSENT ORDER and Commissioner's RESTRICTIONS apply while holding license.
AZ real estate license is good for ___ years & is valid until ______________ that it was originally issued.
AZ real estate license is good for TWO years & is valid until THE LAST DAY OF THE MONTH of which it was issued.
If you received your license on April 10, 2011, when will it expire?
April 30, 2013
A real estate license must be renewed every _______ & requires __________________.
A real estate license must be renewed every TWO YEARS & requires 24 HOURS OF CONTINUING EDUCATION
What is a designated broker required to complete as part of continuing education for license renewal every 2 years?
Broker Management Clinic
What happens if a licensee fails to renew their license on time? (4)
1. Severance of license; 2. Licensee cannot practice real estate; 3. There is a 1 year grace period to make up 24 hours of continuing ed & pay late fee of $10 per month for up to 6 months; 4. If 1 year grace period expires, licensee loses license and must sit for state exam again (prelicensing ed is typically good for 10 years)
What changes must a licensee report to ADRE within 10 days? (4)
1. Change of address (business or residence); 2. Involved in a lawsuit involving real estate or ethics; 3. If you're convicted of any crime; A brokerage moves (office sign must be taken down IMMEDIATELY)
The Real Estate Advisory Board has ___ members total, consisting of____________________.
9 members total consisting of 2 brokers, 2 residential brokers, 2 subdividers & 3 public members
How are members of the Real Estate Advoisory Board Selected & how long do they serve?
Appointed by governor & serve a 6-year term.
Two duties of the Real Eastate Advisory Board are to _______________ & _______________.
Two duties of the Real Eastate Advisory Board are to EVALUATE THE COMMISSIONER YEARLY FOR THE GOVERNOR & SUBMIT RECOMMENDATIONS TO COMMISSIONER.
How is the Real Estate Commissioner selected and what is the length of term?
Appointed by the governor & there is no specified term.
True or False: The Real Estate Commissioner must hold an active real estate license for the duration of their term?
False. the commissioner cannot hold an active real estate license during their term.
To be eligible for consideration for the position of commissioner, what type of experience must a potential candidate possess & for how long?
Must have 5 years experience in either real estate, banking, title insurance or mortgage broker AND 3 years of administrative experience.
True or False: The RE Commissioner only has the authority to investigate a licensee upon written complaint.
False. The commissioner has the authority to investigate any licensee at any time & MUST investigate upon written complaint
What are 7 duties of the RE Commissioner?
1. Governs requirements of all agents; 2. Creates rules & regs; 3. Manages all employees of ADRE; 4. Administers recovery fund; 5. Publish quarterly bulletin (www.azre.gov); 6. Provides approval or disapproval for subdividing land; 7. Can audit a real estate agent or broker without notification.
List 4 things the RE Commissioner does not do (duty exemptions):
1. Does not set commission rates; 2. Does not create laws; 3. Does not terminate a real estate license without a proper legal hearing; 4. Does not settle disputes between licensees (disputes are handled by the court)
When can the RE Commissioner assess a civil penalty against a licensee & what is the penalty?
The RE Commissioner can assess a civil penalty if after a hearing, a licensee is found to have violated any rule of the Commissioner. The penalty cannot exceed $1000 per infraction.
True or False: It is not the RE Commissioner's responsibility to notify an agent of a suspension, revoking or denying renewal of license.
False. The Commissioner must provide licensee with Notice of Opportunity for a hearing & the licensee must repond within 20 days notice of hearing.
True or False: The RE Commissioner may suspend a license immediately if he/she feels public health, safety or welfare is in jeopardy.
True.
What is a summary suspension & what recourse does a licensee have?
The RE Commissioner may impose a summary suspension, which immediately suspends the license of an agent if he/she feels public health, safety or welfare are in jeopardy. The licensee can request a hearing in writing within 30 days. A summary suspension is final if the licensee has not responded within 30 days.
If an employing broker decides to move office locations, he must notify ADRE within __ days.
within 10 days.
If a buyer makes an offer and the seller accepts, who pays the sales agent?
The sales agent's employing broker.
True or False: You must have a real state license to sell cemetery plots.
False. You must have a cemetery sales license, not a real estate license
A licensed real estate agent cannot sell membership camping sites.
True
True or false: In AZ a power of attorney trustee does not have to abide by current real estate licensing laws.
True
True or False: An individual who talks about price, terms & availability must hold a license.
True
True or False: The employing broker is the same as the designated broker.
False. The employing broker is the firm's name (or entity) and the designated broker is the broker responsible for the actions of all agents under their supervision
When brokers direct buyers away or to some of their listings to change or keep the character of an area the same it's called __________.
Steering
The practice of lending istitutions denying loans based on ethnicity instead of financial reasons is called _________ & it's _________.
Redlining & it's illegal
The FFH law is administered by ____________.
Office of Equal Opportunity (OEO)
Failure to display the equal opportunity poster constitutes ______________.
Evidence of Discrimination
Which act prohibited discrimination against race & color?
The Civil Rights Act of 1866
Where must equal housing opportunity poster be displayed?
Must be displayed at brokerage houses, model home sites, mortgage offices & other related businesses
What does EEOC stand for & what does it enforce?
Equal Employment Opportunity Commission, enforces federal laws against discrimination in the work place.
What is protected under the Fair Housing Act of 1968?
Race, color, national origin & religion
What is protected under the Housing & Community Developement Act of 1974?
Gender
What is protected under the Fair Housing Amendment Act of 1988?
Disability & Familial Status
What was mandated by the ADA (Americans with Disabilities Act)?
Mandates that public facilities, goods & services must be accessible to persons with disabilities & applies to facilities that operate places of public accomodation.
"Inducing Panic" is also known as ____________.
Blockbusting
The Truth in Lending Act was implemanted by ___________ of the _____________.
Regulation Z; Federal Reserve Board
True or False: The Truth in Lending Act requires all lenders to fully disclose all finance charges & APR
True
Whenever monthly payments or interest rates are quoted what must always be shown?
APR
If a lender rejects a loan application, that lender must do what?
Provide applicants with written reason for rejection within 30 days
When a real estate agent goes into a neighborhood and tells homeowners that a minority was moving into their neighborhood and they'd better sell their homes before property values dropped, this is called ___________.
Blockbusting or inducing panic
Which FFH Act prohibits discrimination against someone with AIDS?
1988 Fair Housing Amendments Act
If a disabled person moves into a rental and makes reasonable modifications to aid his mobility, what happens when this person moves out?
Tenant is responsible to restoring property to pre-modified state.
What are 7 examptions to Fair Housing Laws?
1. For Sale By Owner (if no discriminatory advertising is used); 2. Sale or rental of single family housing if neither a broker nor discriminatory advertising is used; 3. Rental of rooms or units in an owner-occupied multiple dwelling for 2-4 families; 4. Religious organizations can give preference to their own members; 5. Private Club can give preference to its members; 6. Commercial & industrial property is exempt; 7. Housing exclusively for older people.
What are the monetary penalties/awards for noncompliance with FFH laws?
A minimum penalty of $10,000 for 1st offense; $25,000 for second offense & $50,000 for further violations within 7 years
What is true of FFH noncompliance penalties? (3)
1. Civil action in a US district court within one year; 2. Enforced by HUD administrative law judge; 3. Statute of limitations is one year and civil penalties up to $50,000 may be assessed in a HUD proceeding.
True or False: Sexual Harassment is not included in the Housing & Community Development Act.
False. Sexual Harassment IS included, SEXUAL ORIENTATION is not included.
Which act limits who has access to a person's credit history?
Fair Credit Reporting
Who controls the nation's money supply?
Federal Reserve (FED)
What is collateral?
property that is pledged as security for a loan or debt.
What permits a trustee to sell the property, without a court of law, if the borrower (or trustor) defaults?
Power of sale
To pledge property as security for a loan without giving up possession is to __________.
Hypothecate
Value over and above what is not debt is called ________.
Equity
An unconditional promise in writing to repay a debt is called a ____________.
Promissory note
A written instrument to secure repayment of a debt for real property is called a __________.
Mortgage
In a mortgage, the borrower is called the __________.
Mortgagor
In a mortgage, the lender is called the __________.
Mortgagee
When a mortgage is sold or assigned to another lender is ____________.
Assignment
A legal documant in which the title to a property is transferred by a borrower to a third party as security for the beneficiary or lender is __________.
Trust Deed (or Trustee's Deed or Deed of Trust)
In a deed of trust, the borrower is called the __________.
Trustor
In a deed of trust, the impartial third party is called the ________.
Trustee
In a deed of trust, the lender is called ___________.
The beneficiary
When the lienholder causes the property to be sold so that the unpaid lien can be satisfied is called __________.
Foreclosure
The process in which a bank takes a property back as a result of a loan default is called __________.
Foreclosure
The loss of a right or something of value as a result of failure to perform on a contract is called _________.
Forefeiture
What are the 7 rules of contract law that apply to mortgages and deeds of trust?
1. Must be in writing (statute of frauds); 2. Names of competent parties; 3. Legal descriptions; 4. Consideration; 5. Must state the amount of debt; Must be signed by the borrower (aka mortgagor or trustor, depnding on type); 6. Must have a defeasance clause.
When a mortgagee records a lien on the property & the mortgagor retains title, this is called ____________.
Lien theory
True or False: Lien theory is not used in Arizona.
False. Lien theory IS used in Arizona
What are 2 examples of security instruments?
1. Mortgage; 2. Deed of Trust
True or False: In a contract for deed the note is separate.
False. In a contract for deed there is no note, it's all in one document
When a mortgagee holds the title to the property until the mortgagor repays the debt in full it is called _______ theory.
Title theory
Within 30 days a satisfaction piece is recorded with the county to release to release the debt when a _______ is paid in full.
Mortgage
Foreclosure pertains to what type of security instrument?
Mortgage only
A successful bidder from a mortgage sale gets a ________.
Sheriff's Deed
If money from a mortgage sale is not sufficient to cover a debt, the borrower (mortgagor) receives a ___________.
Deficiancy judgement
A nonjudicial mortgage foreclosure is what?
Sale of a property, to satisfy a lien, without court proceedings
When a property may be sold by court order after a mortgagee (lender) gives public notice it's called a ________ mortgage foreclosure.
Judicial mortgage forclosure
When a court gives legal title to the lender without public sale it's called a _________ foreclosure
Strict foreclosure
In which type of loan is principal as well as interest paid during the term of the loan whereby you end with a zero balance?
Amoritized loan (i.e. a 30-year fixed)
The charge for using another's money is called _______.
interest
When a lender charges an interest rate above that allowed by law is called ________.
usury
A fee charged by the lender for making the loan is the ___________.
origination fee
When a buyer assumes the current loan under the same terms and conditions of the original borrower is called _______.
assumption
Substituting a new obligation for an old one or for new parties to an existing obligation is _____________.
novation
Legal instrument verifying the exact amount, the current rate of interest and date to which interest is paid is called ______________.
estoppel certificate
Ratio of a mortgage principal to the property appraised value or its sale price, whichever is lower is __________.
loan to value ratio (LTV)
Standardized conventional loan that meets the requirements of Fannie Mae & Freddie Mac is a ___________.
conforming loan
loan that fails to meet the requirements of fannie mae and freddie mac is a __________.
non-conforming loan
When a borrower is not shown the appraisal, they may withdraw from the sale penalty free. This is called ___________.
an escape clause
What is typically required of a buyer to successfully close escrow? (3)
1. Cash- sufficient down payment and closing costs; 2. Credit- pay stubs, tax returns & acceptable FICO score; 3. Collateral- other assets of value
What is the name of the secondary lender, established in 1938 as Federal National Mortgage Association, now a private corporation, buys FHA, VA & conventional loans?
Fannie Mae
What is the name of the secondary lender, established in 1970 as Federal Home Loan Mortgage Corp, who buys primarily conventional loans with no government guarantee to make good on them?
Freddie Mac
What is the name of the secondary lender, established as Government National Mortgage Association, who guarantees payment of risky Fannie Mae loans?
Ginnie Mae
What does PMI stand for?
Private Mortgage Insurance
What measures risk for an investment?
Capitalization Rate (CAP Rate)
The government's right to enact legislation for the health, safety and general welfare of the public is called ___________.
police power
The right of the government to take back private property for "necessary public use" in exchange for compensation is called ____________.
eminent domain
The process by which the government takes property by eminent domain is ___________.
condemnation
When an owner requests that his property be condemned because of damages caused by government actions, this is called __________.
inverse condemnation
The partial taking of property through eminent domain is called ____________.
severance damages
Damage that ocurrs due to something off the subject property, but that causes loss of value is called ____________.
consequential damages
The right of the government to tax private property to pay for the costs of government and area improvements is called __________.
taxation
Ad valorem means ___________.
according to value
The reversion of property to the state or county is called _________.
escheat
A specific levy for a definite purpose, such as adding curbs or sewers in a neighborhood, is called ________.
assessment taxes
A land owner's right to use available water based on a government administered permit system in called ________.
prior appropriation
Areas where the water supply is limited and where water management programs are most needed are ____________.
Active Management Areas (AMAs)
The rights associated with navigable waterways are ___________
litoral rights
The rights associated with non-navigable waterways are ___________
riparian rights
The amount of space required between lot line and building line is called ___________.
set back
Permitted use of real property that no longer conforms to current zoning laws is called ______________.
non-conforming use
Permit deviations from current zoning laws is called _________.
variance
The strip of land separating one land use from another is called __________.
buffer zone
Land with 6 or more parcels under 36 acres each is considered _____________.
subdivided land
Land with 6 or maore parcels of 36 or more, but less than 160 acres is called __________.
unsubdivided land
The 4 government property rights are:
1. Police Power; 2. Eminent Domain; 3. Taxation; 4. Escheat; (PETE)
What is the property tax assessment ratio for Residential (owned or rented)? Agriculture/ Vacant Land? Commercial/ Industrial?
Residential= 10%; Agriculture/Vacant Land= 16%; Commercial/ Industrial= 25%
How is assessed value calculated?
Full cash value x assessment ratio = assessed value
How is tax rate calculated?
Budget divided by assessed value of all property in district = tax rate
What is the general tax rate?
Dollars per $1000 of assessed valuation
How is Arizona tax rate expressed?
Dollars per $100 of assessed value
According to Arizona's Revised Statutes, within how long from contract date does a structure have to be built on an Improved Lot?
2 years
What does CPR stand for?
Commissioner's Public Report
Agency, whether written or oral, that was clearly expressed in words is called _________.
expressed agency
Agency with someone who appears to act on behalf of a principal with no formal listing agreement is _____________.
implied agency
To later acknowledge or restate a previously implied relationship is ______________.
agency by ratification
When the principal creates agency becasue he fails to "esstop" someone from acting like his agent is called __________.
estoppel agency
A competent and disinterested person who is authorized by another person to act in his or her place is ______________.
attorney in fact
One authorized by a principal to perform one particular act is a _______________.
special agent
One authorized by a principal to act on behalf of the buyer and seller with written consent is a _____________.
dual agent
When the actions of an agent constitute agency between an owner and agent and the owner can be held liable for the agent's actions, this is called _____________.
ostensible agency
What are the 5 fiduciary responsibilities an agent has to their client?
1. Care; 2. Obedience; 3.Loyalty; 4. Accountability; 5. Disclosure
The agency in which one is authorized to act on behalf of another with the broadest authority that can be given, this is called____________.
Universal agency
A reduction or decrease is ____________.
abatement
If a seller sells the property himself the agent gets nothing, this is called ____________.
exclusive agency
When a broker is guaranteed a commission regardless of who sells the property, even if the seller sells it himself, this is called ____________.
Exclusive right to sell