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129 Cards in this Set
- Front
- Back
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Legatee is an...
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individual or organization that is bequeathed any portion of a testator's estate; AKA a devisee
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legator is...
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one that makes a will; AKA a devisor or testator
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Demise means...
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The transfer of leasehold interest (property management section)
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Devise means...
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To transmit or give (real property) by will
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Caveat emptor
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let the buyer beware; the buyer must examine goods or property and buy at their own risk
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caveat venditor
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let the seller beware
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FSBO
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for sale by owner
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boiler plate
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the standard language appearing in almost all contracts
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SPDS
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seller's property disclosure statement
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If designated broker is a member of MLS...
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the salesperson must be a member
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Listings must be submitted within...
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72 hours
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puffing is...
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agent making exaggerated statement or opinion
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A listing agreement is what kind of contract?
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it's an employment contract
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Consideration is...
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compensation
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safety clause
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protects broker's commission if property is shown to a buyer then buyer purchases directly from seller after the listing expiration date (typically 90 days)
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What document (signed by the seller) allows the broker to accept earnest money?
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the listing contract (agreement)
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Causes to terminate a listing are...
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1. performance - sale and subsequent close of escrow
2. expiration - listing has expired; automatic w/o notice required 3. abandonment - lack of broker performance 4. destruction of property (due to natural disaster) 5. mutual agreement 6. death or insanity or either the principal or broker 7. unilateral revocation - by owner for just cause; cannot be done in agency coupled with an interest; more than a personal service contract 8. Title can't be transferred 9. renunciation 10. change in use by outside force (zoning) 11. BK (bankruptcy) or either principal or broker |
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revocation
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seller's right to give up listing for non performance of broker (firing broker)
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incorporeal interests are...
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rights of an individual or right to use
easements; profits; covenants running with the land; equitable servitudes; and licenses |
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addendum
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Any provision added to an existing contract without altering the content of the original
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constructive notice is...
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also called legal notice; examination of public records;
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Bundle of Rights include... (deeds)
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possession
control enjoyment exclusion disposition |
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Title (deeds)
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right to ownership of property; owner has bundle of rights; evidence of ownership
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Classifications of Title (deeds)
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original title and derivative title
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original title (deeds)
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title held by the county or state; gained by conquest, discovery, cession, purchase;
patent = instrument used to convey original title to an individual |
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derivative title (deeds)
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title belonging to individual or legal entity; gained by descent, will, purchase, or gift
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alienation (deeds)
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transferring real property from one person to another
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dedication (deeds)
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voluntary conveyance of private land to the public
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descent (deeds)
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occurs when a person dies intestate (without a will); property of decedent (deceased person) inherited by heirs
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A deed is...
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a written document used to convey ownership of real property
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Bill of sale is... (deeds)
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a document used to convey personal property
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Grantor (deeds)
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seller/giver or real property
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Grantee (deeds)
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purchaser or receiver or real property
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Words of conveyance (deeds)
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essential for a valid deed; granting clause and Habendum clause
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Granting Clause (deeds)
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transfers property rights; transfers covenants = grantors promises
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Habendum Clause (deeds)
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means "to have and to hold"; states the manor in which the property is held
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General warranty deed
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offers greatest protection to grantee; imposes the greatest responsibility for grantor; used most often
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The Warranties (deeds)
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Covenant of Seisin (pronounced season)
Covenant of quiet enjoyment covenant against encumbrances covenant of warranty forever covenant of further assurance |
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covenant of Seisin (deeds)
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grantor is the legal owner; grantor has the right to convey
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covenant of quiet enjoyment (deeds)
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title is good against third parties who bring court action to establish superior rights
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covenant against encumbrances (deeds)
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free of encumbrances except those listed in the deed
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covenant of warranty forever (deeds)
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if at any time title fails, grantor will compensate the grantee for the loss
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covenant of further assurance (deeds)
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grantor will deliver any instrument needed to make the title good
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special warranty deed
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offers same covenants as a general warranty deed; except covenants are LIMITED TO PERIOD OF TIME grantor was in possession of property; used by trust department or new home builders
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bargain and sale deed
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for the grantee, it provides the least protection; contains 2 limited warranties:
1. grantor has right to convey and hasn't conveyed to anyone else 2. except for those listed in deed, property is free of encumbrances used in following situations: 1. a treasurers deed (after property tax sale) 2. sheriffs deed (mortgage foreclosure) 3. trustees deed (deed of trust foreclosure) |
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quitclaim deed
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releases or quits any claim a person has in the property; offers no warranties; used in after ownership situations such as divorce; also used to clear up clouds on title
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clouds on title (deeds)
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outstanding claim or encumbrance
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disclaimer deed
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used when one spouse acquires real property and wishes to hold title as separate property; on this property only, it breaks community property estate
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deed of confirmation
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sometimes called a corrective deed; corrects an error in the deed;
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grant deed
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popular in CA; in certain areas of the country, it replaces a warranty deed; contains 2 warranties:
1. owner has the right to convey the property 2. owner has not encumbered the property, except as noted |
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deed in trust
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used to convey real estate to a trustee; establishes a land trust
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Affidavit of property value (deeds)
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notarized statement signed by buyers and sellers; accompanies the deed to the recorders office; used to monitor property balues for ad valorem tax purposes; records accurate sales price of property conveyed
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ad velorem (deeds)
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according to value
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Color of title (deeds)
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believable appearance of ownership interest
could be an improperly prepared deed claim of ownership by inheritance: 1. must have occupied property for 3 years 2. pays property taxes |
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Lis Pendens
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means "lawsuit pending"
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chain of title (deeds)
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shows the linkage of ownership connecting the present owner to each prior owner
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marketable title (deeds)
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free from defect
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title insurance (deeds)
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used in AZ; assures property rights and interest
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abstract of title (deeds)
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not used in AZ; summary of all conveyances and legal proceedings affecting title; may include gossip; will show all liens and encumbrances affecting the property; does not guarantee the validity of title
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torrens system (deeds)
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not used in AZ; legal system for registration of land ownership; mandatory in states that use it; verifies the ownership of land, status of the title, and any encumbrances; registrar of titles gives the owner a certificate of title
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blue laws
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laws that prohibit writing contracts on Sundays and holidays
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blue sky laws
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laws designed to protect public from fraudulent practices in the sale of securities; applies to publicly traded REITs
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Feudal system (estates)
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all land owned by king; individual was merely the tenant with right to use and occupy
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allodial system (estates)
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individual entitled to property ownership rights; still subject to the 4 gov't powers (PETE)
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classifications of estates
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freehold estates and leasehold estates
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freehold estates
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acual ownership of land; ownership for an indefinite duration; legal matters tried under real property law;
freehold estates include: 1. fee simple estates 2. defeasible fee 3. life estates |
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leasehold estates
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less than freehold; no ownership, only possession for a definite duration; legal maters tried under personal property law;
leasehold estates include: 1. estates for years 2. periodic estates 3. estate at sufferance 4. estate at will |
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fee estates
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fee simple estate AKA fee or fee simple absolute; gives owner greatest interest possible; absolute ownership; ownership is fully transferable, inheritable; most common home ownership; known as an indefeasible fee; can't be terminated without action of owner
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qualified fee estates
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are said to be defeasible; ownership can be terminated if certain conditions are NOT met; uncommon
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3 types of qualified fee estates
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1. fee simple determinable
2. fee simple on condition subsequent 3. fee simple conditional (fee tail) |
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fee simple determinable (estates)
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ownership subject to occurence or nonoccurence of specified event (restriction included in deed); estate ends automatically on current owner's failure to comply with the limitation; former owner retains the possibility of reverter
limiting language (key words): 1. "for as long as" 2. "while" 3. "during the period" |
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fee simple on condition subsequent (estates)
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new owner must not perform some action or activity; former owner retains the right of re-entry BY LEGAL ACTION, not automatically
limiting language (keywords): 1. "provided that" 2. "on condition that" 3. "if" |
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fee simple conditional (fee tail) (estates)
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is fee simple with a restriction as the the right of inheritance; limiting right of inheritance to a fixed line of succession; illegal in AZ
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life estates
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when a freehold estate is limited to the duration of an individual's life; estate is NOT inheritable; estate cannot be devised
2 classifications: 1. conventional life estates 2. legal life estates |
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conventional life estates
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created intentionally by owner via a deed or will; estate conveyed to individual called a life tenant; ownership may be sold, mortgaged, or leased, but always subject to limitations of the life estate; life tenant can't injure property (called waste); can be based on the life of a person other than the life tenant;
future owner of the fee simple estate may be designated in 1 of 2 ways: 1. interest in remainder - upon death of life tenant, the property goes to a third person known as a remainderman 2. interest in reversion - upon death of life tenant, property will be returned to the grantor or grantor's heirs |
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legal life estates
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created by state law; when certain events occur, legal life estates become effective automatically;
3 life estates: 1. dower 2. curtesy 3. homestead |
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dower (estates)
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life estate wife has in real estate of her deceased husband; until death, these legal life estates are inchoate; not legal in AZ
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curtesy (estates)
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life estate husband has in real estate of his deceased wife; until death, these legal life estates are inchoate; not legal in AZ
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inchoate (estates)
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means incomplete
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homestead (estates)
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legal life estate in real estate occupied as the family home; home is protected from creditors during the occupants lifetime; up to $150,000 of the value of the property is exempt from GENERAL creditors; homestead not protected from SPECIFIC liens (property taxes or mortgage); absence of 2 years (abandonment) terminates homestead
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chattel real (estates)
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leasehold interest is personal property interest with roots in land
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classifications of leases
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estate for years
periodic estate (estate from period to period) estate at will estate at sufferance |
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estate for years (estates)
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period of time is definite; has a beginning and ending date; termination of lease doesn't require notice
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periodic estate
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no definite expiration date; renews automatically; termination of lease requires notice
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estate at will
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no formal agreement; automatically terminates by death of either party; often referred to as the "mother in law" lease; sometimes called a license to use one's property; can terminate by verbal notice
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estate at sufferance
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lowest type of estate; occupying property without permission; remedy is eviction; lessee who stays in possession after expiration of lease is called a holdover tenant
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Contract for Deed (finance)
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a method of seller financing; AKA a land contract, an installment contract, a contract for sale, or an agreement for sale; vendor (seller); vendee (buyer); DOESN'T have an accompanying promissory note; during period that payments are made, the buyer has equitable title and upon final payment, the seller delivers the deed; if the buyer defaults, AZ's law of forfeiture applies (seller doesn't foreclose because the buyer doesn't have legal title);
time periods for redemption depend on amoun of the purchase price paid: less than 20% = 30 days 20% but less than 30% = 60 days 30% but less than 50% = 120 days 50% or more = 270 days |
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various clauses in promissory notes (finance)
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maintenance clause, prepayment clause, alienation clause, acceleration clause, defeasance clause, subordination clause, assignment of rents clause, non-disturbance clause, nonrecourse clause, participation clause
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maintenance clause (finance)
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charges mortgagor (borrower) with responsibility to maintain and preserve property to protect mortgagee's interest in property
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prepayment clause (finance)
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enables the borrower to prepay the note prior to its due date without penalty
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alienation clause (finance)
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conveyance of title without the lender's express approval could give the lender the right to accelerate the final maturity date and immediately call the entire balance of the note due and payable (seller cannot sell as land contract)
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acceleration clause (finance)
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enables the lender to call the loan due and payable in the event of a default
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defeasance clause (finance)
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if the debt is paid by the due date, the lien that the lender holds is not valid
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subordination clause (finance)
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lender will agree to a lesser position of security and allow another person/lender to place a lien in front of original lender; common with seller carry=back agreements and construction loans
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assignment of rents clause (finance)
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if the property includes rental units, lender can collect the rent if the borrower is in default
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non-disturbance clause (finance)
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if the landlord goes into default, the tenant will not be disturbed
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nonrecourse clause (finance)
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lender cannot attach other assets with a deficiency judgment
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participation clause (finance)
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when a lender loans the funds and becomes a partner in the project (99% commercial)
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CERCLA stands for...
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Comprehensive Environmental Response, Compensation, and Liability Act; also called the superfund
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Prior appropriation refers to...
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Doctrine of AZ water rights
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Earnest deposit goes to...
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buyers broker
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Interest is collected in...
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arrears;
example: |
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If a seller requests they don't want the house to be sold to a certain race, what should you do?
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refuse the listing
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What is the rescission period on an unimproved lot?
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7 days
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"Acknowledgment" means...
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notarization; to get something notarized; it assures the identity of parties involved and they they aren't under duress
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Can a buyer who has given an offer back out and keep the earnest money?
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Yes, until the seller accepts the offer (and is communicated), the buyer can back out at any time
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What is the purpose of an Affidavit of Value?
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to determine the assessed value
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Cap rate equation for commercial property is...
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NOI (
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How many sections are in a township?
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36 sections
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Do FHA and VA loans have a prepayment penalty?
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No
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Market Approach
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-AKA Comparative Analysis Approach
-single family homes -sales price compared to similar properties recently sold -minimum of 3 comparable properties |
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Cost Approach
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AKA Summation
-schools, churches, and public buildings -based on principle of substitution 5 steps: 1. est land value 2. est replacement cost 3. est depreciation 4. deduct depreciation 5. add land value |
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Depreciation (what kinds)
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Physical deterioration (curable or incurable; economic life)
functional obsolescence (curable or incurable; outdated design/equipment) economic obsolescence (incurable; caused by outside force) |
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Income Approach
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AKA Capitalization
-income producing properties (apartments, commercial, etc) -the present value of the rights to future income 5 steps: 1. est annual gross income 2. deduct est vacancy/bad debt = effective gross income 3. deduct annual operating expenses = Net Operating Income 4. arrive at capitalization rate; rate of return (or yield) on investment is the Cap rate 5. Net income divided by the cap rate = value of subject property |
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GRM
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gross rent multiplier
-NOT an approach to value -good for quick estimate of value based on sales price to monthly rent -use at least 4 properties to establish neighborhood GRM |
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Intervivos means...
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within one's life
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5 rights in bundle of rights are...
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possession
control enjoyment exclusion disposition |
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All advertisements must be supervised by who?
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the DESIGNATED broker
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To file a mechanic's lien, the claimant must be...
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licensed, bonded, and insured
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An estate at will is what kind of agreement?
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it's an INFORMAL agreement
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In a deed of trust, who is the beneficiary?
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the LENDER
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If a seller's agent can't be reached within 24 hours, what should the buyer's agent do?
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the buyer's agent should get written permission from the seller to present the offer
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A deed of trust may be released from the title record by a...
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deed of reconveyance
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What is the redemption period under a non-judicial foreclosure?
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there is NO redemption period
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WQARF stands for...
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Water Quality Assurance Revolving Fund
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What is a contingency in a contract?
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it states that if an event happens, a party may cancel the contract without penalty
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If a judgment was discovered during the preliminary title search, who requests a letter of satisfaction?
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it is the SELLER's duty
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What document transfers title to real property?
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deed
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What does a Public Report on a property in an AMA show?
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certificate of assured water supply
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