La Doña Real Estate Flash Cards

Front 1

Broker

Back 1

(1) One who acts as an intermediary on behalf of others for a fee or commission.

(2) One who is licensed to list, lease, buy, exchange, auction, negotiate, or sell interest in real estate for others for a fee.

Front 2

Business cycles

Back 2

The upward and downward fluctuations in business activities generally characterized by four stages: expansion, recession, depression, revival.

Front 3

Demand vs supply

Back 3

Demand is the amount of goods people are willing and able to buy at a given price. Supply is the amount of goods available in the market to be sold at a given price.

Front 4

Hereditaments

Back 4

Any interests in real estate capable of being inherited

Front 5

Non provisional broker vs provisional broker

Back 5

A North Carolina real estate licensee that has completed the 90-hour post licensing education to remove the provisional license status; also called a full broker.

A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-charge. Must complete post licensing courses to remove the provisional license status.

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Market

Back 6

A place where goods can be bought and sold and value established.

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Heterogeneity or non homogeneity

Back 7

A lack of uniformity; dissimilarity. Real estate is nonhomogeneic because no two parcels of land are exactly alike.

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Highest and best use

Back 8

The possible use of a property that would produce the greatest net income and thereby develop the highest value.

Front 9

Land, real estate, real property

Back 9

Land: the earth’s surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.

Real Estate: Same as land but also includes all things permanently attached whether naturally or artificially (improvements).

Real property: the land, permanent improvements, and the interests, benefits, and rights inherent in real estate ownership (bundle of rights).

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Chattel or personal property or personalty

Back 10

Items that do not fit into the definition of real property; movable objects. Examples include furniture, jewelry, clothing, vehicles, money, etc.

Front 11

Situs

Back 11

The personal preference of people for one location over another, not necessarily based on objective facts or knowledge.

“Location, Location, Location!”

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Tenements

Back 12

Any structures attached to the land. Permanent improvements that make land real estate.

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Accretion

Back 13

The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea.

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agricultural fixtures

Back 14

In North Carolina, a fixture attached to a leased, property by a tenant farmer is considered the landowner’s real property rather than the tenant’s personal property.

Front 15

Air rights

Back 15

The right to use the open space above a property, usually allowing the surface to be used for another purpose.

Front 16

Appurtenances

Back 16

A right, a privilege, or an improvement belonging to, and passing with, the land.

Front 17

Avulsion

Back 17

The sudden tearing away of land, as by earthquake, flood, volcanic action, or the sudden change in the course of a steam. The loss or land may not result in loss of title to the property.

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Bundle of legal rights

Back 18

The concept of land ownership that includes ownership of all legal rights to the land (i.e. disposition, exclusion, enjoyment,possession, and control).

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Common elements

Back 19

Parts of a prop common used by all of the condominium residents. Each condominium owner has an undivided ownership interest in the common elements.

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Common interest community (hybrid) ownership

Back 20

Ownership that contains elements of both ownership in severalty and concurrent ownership.

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Concurrent ownership

Back 21

Ownership involving two or more owners

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Condominium ownership

Back 22

The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners.

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Cooperative ownership

Back 23

A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possessing a proprietary lease to a specific apartment in the building.

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Cooperative ownership

Back 24

A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possessing a proprietary lease to a specific apartment in the building.

Front 25

Doctrine of prior appropriation

Back 25

Followed primarily by Western states, this doctrine contends that water rights are determined by priority of beneficial use. The first person to use water or divert for a beneficial use or purpose can acquire individual rights to the water. In these states, property owners may have land that borders water but no rights to use that water.

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Emblements

Back 26

Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus industrials. Usually considered to be personal property.

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Erosion

Back 27

The gradual wearing away of land by water, wind, or other natural forces; the diminishing of property by the elements may cause loss of ownership.

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Fee simple absolute

Back 28

The maximum possible estate in real property; most complete and absolute ownership; indefinite in duration, freely transferable and inheritable.

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Fee simple defeasible

Back 29

An estate in which the holder has a fee simple title that may be terminated upon the occurrence or nonoccurrence of a specified event.

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Fee simple determinable

Back 30

An estate in real estate that continue “so long as” a prescribed land use continues. Estate ends automatically upon the termination of the prescribed use; no lawsuit is necessary for reversion.

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Fee simple with condition subsequent

Back 31

An estate in real estate that prohibits a specific condition on the property. Grantor has the right to re-enter the property and reclaim ownership through legal proceedings.

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Fixture

Back 32

An item of personal property that has been converted to real property by being permanently affixed to the realty.

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Freehold estates

Back 33

An estate in land in which ownership is for an indeterminate length of time, in contrast to a lease-hold estate.

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Fructus industriales

Back 34

Growing crops, such as grapes, and corn, that are produced annually through labor and industry; also called emblements. Usually considered to be personal property

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Fructus naturales

Back 35

Plants that do not require annual cultivation and are considered real property.

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Future interests

Back 36

A person’s present right to an interest in real property that will not result in possession or enjoyment until something in the future, such as a reversion or right of reentry.

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Homeowners association

(HOA)

Back 37

An organization of property owners in a subdivision, planned community, or condominium that makes and enforces rules for the properties within its jurisdiction.

Front 38

Homestead

Back 38

Land that is owned and occupied as the family home. In many states, a portion of the area or value of this land is protected for exempt from judgements for debts.

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Improvement

Back 39

(1) Any structure, usually privately owned, erect on a site to enhance the value of the property- - for example, a fence or a driveway.

(2) A publicity owned structure added to or benefiting land, such as a curb, sidewalk, street, or sewer.

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Improved land

Back 40

Land that has a building or buildings on it or land that has been prepared for development, such as with grading, installation of utilities, etc.

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Improved lot

Back 41

A lot that certain basic required services necessary to utilize it are available, such as electricity, telephone, street access, or water access.

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Joint tenancy

Back 42

A concurrent form of ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Ownership interest may be unequal. Right of survivorship is not automatic in North Carolina but can be added by an attorney.

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Lateral support

Back 43

The support a parcel of land receives from adjacent land; a neighbor’s duty to support adjoining land in its natural state.

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Life Estate

Back 44

An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.

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Limited common elements

Back 45

Common elements of a condominium project reserved for the exclusive use of one or more units, such as parking spaces or storage areas.

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Littoral rights

Back 46

(1) A landowner’s claim to use water in large navigable lakes and oceans adjacent to the property.

(2) The ownership rights to land bordering these bodies of water up to the average high water mark.

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Manufactured home

Back 47

Also known as mobile home or house trailer

A dwelling, built under HUD regulations with a permanent chassis.

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Modular home

Back 48

A dwelling consisting of a series of rooms or units built off site according to the North Carolina State Building Code; is considered real property as soon as it is assembled on the land. May be multistoried.

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Marital life estate

Back 49

North Carolina law permits that when someone dies without a will disinheriting a spouse or leaving him or her very little that the surviving spouse may choose an “elective share” of the estate instead.

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Nonfreehold

(Leasehold) estate

Back 50

A tenant’s right to occupy real estate during the term of a lease, generally considered a personal property interest.

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North Carolina Condominium Act Of 1986

Back 51

Specifies that a condominium Is created and established when the developer Of the property executes and records a declaration of its creation in the county where the property is located. The declaration must include any covenants, conditions, or restrictions on the use of the property. Other requirements include disclosure and other consumer protection measures in connection with new residential condominium unit sales.

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North Carolina Uniform Commercial code (UCC)

Back 52

A North Carolina statue which may protect the buyers from a seller’s unpaid debts; however, if a homeowner purchases an item on credit and gives the creditor a security agreement, that item remains personal property and may be removed by the creditor in the event of default.

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Planned unit development

(PUD)

Back 53

A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision.

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Probate

Back 54

A legal process by which a court determines who will inherit a decedent’s property and what the estate’s assets are

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Proprietary lease

Back 55

A lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder’s right as a tenant to an individual apartment.

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Pur autre vie

Back 56

For the life of another. A life estate pur auto vie is a life estate that is measured by the life of a person other than the grantee.

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Reliction

Back 57

Gradual recession of water which uncovers land that usually belongs to the riparian owner.

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Remainder interest

Back 58

A future interest in real estate created by the grantor for some third party that will be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another.

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Remainderman

Back 59

One entitled to receive a remainder interest in some estate sometime in the future.

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Reversionary interest

Back 60

A future estate that the grantor holds while granting a life estate to another person.

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Right of survivorship

Back 61

The surviving owners automatically absorbs the dying owner’s share of the property.

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Riparian rights

Back 62

An owner’s rights in land that borders on or includes a stream, river, or lake. The rights include access to and use of the water.

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Severalty

Back 63

Also called sole ownership

The ownership of real property by only one person or entity;

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Subjacent support

Back 64

The support of the surface of land by the land’s subsurface; duty of the owner of subsurface rights to support the surface of the land.

Front 65

Subsurface rights

Back 65

Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.

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Surface rights

Back 66

Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights).

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Tenancy by the entirety

Back 67

A concurrent form of ownership reserved for property owned by spouses. Right of survivorship is mandatory; making the surviving spouse owner in severalty immediately upon the death of a spouse.

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Tenancy in common

Back 68

A concurrent form of ownership in which each ownership holds an undivided interest in the real property. Ownership interests can be unequal and the right of survivorship is not allowed.

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Time-share ownership

Back 69

Any right to occupy a unit of real property during five or more separated time periods over a period of at least five years.

Front 70

Total Circumstance Test

Back 70

A method used by judges to determine whether an item is a fixture or personal property.

Front 71

Town house ownership

Back 71

A hybrid form of ownership where the owner holds fee title to their unit and the ground beneath; horizontal ownership. Frequent use of party walls; row houses. Common area are usually owned and maintained with other unit owners through an HOA.

Front 72

Trade fixture

Back 72

An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.

Front 73

Trust

Back 73

A fiduciary agreement whereby property is conveyed to a person or an institution, called a trustee, to be held and administered on behalf of another person called a beneficiary. The one who conveys the trust is called the truster.

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Waste

Back 74

An improper use or abuse of a property by a possessor who holds less than few ownership, such as a tenant, life tenant, mortgagor, or a vendee. Such waste ordinarily impairs the value of the land or the interest of the person holding the title or the revisionary rights.

Front 75

Leasehold estate

Back 75

A tenant’s right to occupy real estate during the term of a lease, generally considered a personal property interest nonfreehold estate.

Front 76

How can a manufactured home become real property ?

Back 76

Remove the moving hitch, wheels, and axles. Attach the unit to a permanent foundation on land owned by the owner of the manufactured home. File an affidavit attesting to these action with the Dept, of Motor Vehicles.

Front 77

Ad valorem taxes

Back 77

A tax levied according to value, generally used to refer to real estate tax.

Front 78

assessment

Back 78

(1) The imposition of a tax, charge, or levy, usually according to establish rates.

(2) Official valuation of property for the purpose of establishing assessed value for tax purposes.

Front 79

Deed restrictions

Back 79

Clause placed in a deed by the owner to control the future uses of the property.

Front 80

Dominant tenement

Back 80

A property that includes in its ownership the appurtenant right to use an easement over another person’s adjacent property (called the servient tenement) for a specific purpose; ownership of the easement runs with the land.

Front 81

Easement

Back 81

A right to limited use and enjoyment of the land of another for a specific purpose without ownership; a nonposessory interest in real estate. Two types of easement appurtenant and easement in gross.

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Easement appurtenant

Back 82

An easement that runs with the land; the easement is part of both the dominant and the servient tracts and conveys with the title to either tenement.

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Easement by necessity

Back 83

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; i.e., to allow a landlocked owner a right of ingress and egress over a grantor’s land.

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Easement by prescription

Back 84

An easement acquired through adverse use of another’s property for a period of 20 or more years in North Carolina.

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Easement in gross

Back 85

An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. There is no dominant tract. Personal easement in gross is not assignable; a commercial easement in gross is assignable.

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Encroachment

Back 86

An unauthorized intrusion of an improvement, or any part of an improvement, on the real property of another party: can make title to both parcels unmarketable. Best discovered by survey.

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Encumbrance

Back 87

Any charge, claim, lien, or liability held by someone other than the owner of property that may diminish the value or use and enjoyment of a property. May not prevent the transfer of title.

Front 88

General lien

Back 88

The right of a creditor to have all of a debtor’s current and future property for the next 10 years- - both real and personal- - sold to satisfy a debt; i.e., judgement lien.

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Judgement

Back 89

The formal decision of a court upon the respective rights and claims of the parties to an action or a suit. After a judgement has been entered and recorded with the county recorder, it becomes a general involuntary lien on the current and future real and personal property of the debtor in the country where recorded for the next 10 Years.

Front 90

License

Back 90

(1) A privilege or right granted to a person by a state to operate as a real estate broker.

(2) the personal revocable nontransferable right to a temporary use of another’s land- - a personal right that cannot be sold.

Front 91

Lien

Back 91

A right given by law to certain creditors to have their debts paid out of the property of a debtor, usually by means of a court sale. An encumbrance on real property that can be general or specific.

Front 92

Lien agent

Back 92

A title insurance entity that is designated under the North Carolina Mechanic’s Lein Law by real property owner to receive notifications of possible mechanics’ liens from construction project vendors.

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Lis pendens

Back 93

A recorded legal document giving constructive notice that an action potentially affecting title to a particular property has been filed in either a state or federal court; title is effectively unmarketable during the litigation.

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NC Machinery Act

Back 94

The North Carolina General Statues that govern the ad valorem taxation of property and provides the machinery for the listing, appraisal, and assessment of property and the levy and collection of taxes on property by countries and municipalities.

gives the right for your property to be charged taxes.

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Mass apraisal

Back 95

A valuation technique sometimes used for tax assessment purposes that applies a standard percentage increase or decrease to all property in a given location; sometimes referred to as horizontal adjustments.

Front 96

Mechanic’s lien

Back 96

A specific, involuntary lien secured by inter in real property to give security to contractors, laborers, and materialmen who have performed work or furnished materials in the erection or repair of a building

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Mill

Back 97

One-tenth of one cent. Some states use a mill rate to compute real estate taxes; for example, a rate of 52 mills would be 0.052 tax for each dollar of assessed valuation of a property.

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Octennial reappraisal

Back 98

In North Carolina, the statutory reappraisal of all real property in every county ever eight years for tax purposes.

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Priority

Back 99

The order of position or time. The priority of liens is generally determined by the chronological order in which the lien documents are recorded. Property tax and assessment liens have priority even over previously recorded liens.

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Servient tenement

Back 100

Land on which an easement exist in favor of an adjacent property (called the dominant tenement); also called a servient estate or tract. Easement runs with the land.

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Special assessment

Back 101

A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer.

Front 102

Specific lien

Back 102

A lien affecting or attaching only to a specific parcel of land or piece of real property; i.e. mortgage lien.

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Tax lien

Back 103

A statuary lien against real property for nonpayment of taxes. Real and personal property tax liens and assessment take priority over all other liens.Real property tax and assessment liens are specific liens; personal property tax liens are general liens.

Front 104

Writ of attachment

Back 104

At the request of a creditor, the court retains custody of the unsecured property during the lawsuit to ensure that the property remains available to satisfy a judgement ordered as a resolution of the suit by court. A recorded writ is an encumbrance on the property.

Front 105

Writ of the execution

Back 105

A court order directing the county sheriff to sell a defendant’s property as required by judgement or court decree.

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Base line

Back 106

The main line running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.

Front 107

Call

Back 107

In surveying, a reference to a course, distance, or monument when describing a property.

Front 108

Government (rectangular or geodetic) survey system

Back 108

A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines; used mainly west of the Mississippi River.

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Legal description

Back 109

A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it.

Front 110

Metes-and-bounds (boundary) description

Back 110

A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning.

Front 111

Monument

Back 111

A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description.

Front 112

Plat map

Back 112

A map of a subdivision indicating the location and boundaries of individual properties. Generally shows lots, blocks,easements, streets, floodplains,et cetera. Usually requires official approval before recordation.

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Point of beginning (POB)

Back 113

In a metes-and-bounds legal description, the starting point of the survey, situated at one corner of the parcel. All meters-and-bounds descriptions must follow the boundaries of the parcel back to the point of beginning.

Front 114

Principal meridians

Back 114

The main imaginary line running north and south crossing a base line at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.

Front 115

Range

Back 115

A strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description.

Front 116

Reference to a recorded plat (lot-and-block or,recorded plat system).

Back 116

A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat.

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Section

Back 117

A portion of township under the rectangular (government) survey system. A town os divided into 36 sections, numbered 1 through 36. A section is a square with mile-long sides and an area of one square mile, or 640 acres.

Front 118

Survey

Back 118

The process by which boundaries are measured and land areas are determined; the on-site measurements of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements.

Front 119

Tier (township strip)

Back 119

A strip of land six miles wide, extending east and west and numbered north and south according to its distance from the baseline in the government (rectangular) survey system of legal description.

Front 120

Topographic survey

Back 120

A survey that measures the features of the earths surfaces such as hills and valleys plus the location of roads.

Front 121

Township

Back 121

The principal unit of the rectangular (government) survey system. A township is a square with six-mile sides and an area of 36 square miles.

Front 122

What’s the square footage in acreage?

Back 122

An acre of land consists of 43,560 square feet.

Front 123

Abstract of title

Back 123

The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.

Front 124

Action to quiet title

Back 124

A lawsuit brought in a court in order to establish a party’s title to real property and to “quiet” any challenges or claims to the title.

Front 125

Adverse possession

Back 125

The open, continuous, exclusive, adverse, notorious possession of another’s land under a claim of title. Possession for a statutory period of 20 years in North Carolina may be a means of acquiring title.

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Alienation

Back 126

The act of transferring property to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.

Front 127

American Land Title Association (ALTA)

Back 127

A title insurance policy that protects the interest in a collateral property of a mortgage lender that originates a new real estate loan.

Front 128

Bargain and sale deed

Back 128

A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor May add warranties to the deed at his discretion.

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Chain of title

Back 129

The succession of title conveyances, from some accepted starting point, whereby the present holder of real property derives title.

Front 130

Cloud on the title

Back 130

Any document, claim, unreleased lien, or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title.

Front 131

Condemnation

Back 131

A judicial or an administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and justify compensates the owner.

Front 132

Connor Act

Back 132

A North Carolina law that requires many types of real estate documents to be recorded for protection against claims from third parties. These documents include deeds, mortgages, purchase contracts, installment land contracts, assignments, options, leases, exceeding three years, easements, and restrictive covenants; a pure race statue.

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Constructive notice

Back 133

The notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property.

Front 134

Covenant

Back 134

A written agreement between two or more parties in which a party or parties pledge to perform or not perform specified acts with regard to property; usually found in such real estate documents as deeds, mortgages, leases, and contracts for deeds.

Front 135

Deed

Back 135

A written instrument that, when executed and delivered, conveys title to or interest in real estate, evidence of title.

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Delivery and acceptance

Back 136

The actual delivery of a deed by grantor and the actual or implied acceptance of the deed by the grantee; recordation of the deed is viewed as acceptance.

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Eminent domain

Back 137

The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines fair compensation to be paid to the owner.

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Escheat

Back 138

The reversion of property to the state, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting or when the property is abandoned.

Front 139

Excise tax

Back 139

Deed transfer tax paid by the seller and required to be noted on a deed by state law; the rate is $1 per $500 of sales price.

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General warranty deed

Back 140

A deed in which the grantor fully warrants good clear title to the premises through four covenants in the deed. Used in most real estate deed transfers, a general warranty deed offers the greatest protection to the grantee of any deed.

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Grantee

Back 141

A person who receives a conveyance of real property from a grantor.

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Grantor

Back 142

(1)The property owner that is transferring title to or an interest in real property to a grantee.

(2) A borrower in a deed of trust loan transaction; also called trustor.

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Granting clause

Back 143

Words in a deed of conveyance that state the grantor’s intention to convey the property at the present time. This clause is generally worded as convey and warrant, grant, bargain and sell, or the like.

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Intestate

Back 144

The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent’s heirs as provided in the state law of descent.

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Testate

Back 145

Having made and left a valid will.

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Marketable title

Back 146

A good or clear title, reasonably free from the risk of litigation over possible defects.

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Material fact

Back 147

Any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction.

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Marketable Title Act

Back 148

The act is designed to eliminate obsolete defects in a chain of title. If a chain of title can be traced back for 30 years without a problem, it becomes a marketable title.

Front 149

North Carolina Intestate Succession Act

Back 149

The state law of descent that dictates distribution of the real and personal property of the deceased that died without a will (intestate).

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Quitclaim deed

Back 150

A conveyance by which the grantor transfers interest in the real estate, if any, without warranties or obligations; frequently used to remove clouds on the title.

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Recording

Back 151

The act of entering or recording documents into the public record at the recorders office established in each county. Until recorded, a deed or mortgage ordinarily is not effective against their parties, such as subsequent purchases or mortgagees.

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Special warranty deed

Back 152

A deed in which the grantor only warrants, or guarantees, the title against defects arising during the grantor’s tenure and ownership of the property and not against defects existing before that time, generally using the language by, through, or under the grantor but not otherwise.

Front 153

Title

Back 153

(1) the right to convey ownership of land.

(2) the evidence of ownership of land.

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Title insurance

Back 154

A policy insuring the owner and/or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy.

Front 155

Title search

Back 155

The search of public records to determine the current state of ownership of real estate; examining chain of title.

Front 156

Will

Back 156

A written document, property witnessed, providing for the transfer of title to property owned by the deceased.

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Quiet title

Back 157

A court action to remove a cloud on the title.

Front 158

Aesthetic zoning

Back 158

Zoning ordinances that regulate the appearance of real property, such as exterior color, exterior construction material, required screening and fencing.

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Buffer zone

Back 159

A strip of land, usually used as a park or designated for a similar use, separating and screening land dedicated to another use (e.g., residential from commercial).

Front 160

Building code

Back 160

An ordinance that specifies minimum standards of construction for buildings to protect public safety and health.

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Building permit

Back 161

Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes zoning ordinances. See certificate of occupancy.

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Certificate of occupancy (CO)

Back 162

A certificate issued by a government authority stating that a building is fit for occupancy and there are no building code violations The end result of a successful building permit.

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Cluster zoning

Back 163

The practice of slightly reducing the sizes of individual lots and clustering the lots around varying street plans such as cut-de-sacs to create more open space in a development.

Front 164

Conditional-use permit

Back 164

Written governmental permission allowing. a use inconsistent with zoning but in the public interest, such as locating an emergency medical facility in a predominantly residential area; special-use-permit.

Front 165

Declaration of restrictive covenants

Back 165

A statement of all covenant, conditions and restrictions (CC&Rs) affecting a parcel of land; sometimes noted on the plat map or in a separate document. Restrictions are appurtenant and aim to protect property values.

Front 166

Enabling act

Back 166

State legislation that confers zoning powers or municipal governments.

Front 167

Extra-territorial jurisdictions (ETJs)

Back 167

A municipality’s right to regulate development in areas adjacent to but not part of the city’s corporate limits. Population determines if the power extends for 1to 3 miles from the corporate limits.

Front 168

Federal Emergency Management Agency (FEMA)

Back 168

A federal agency responsible for disaster preparedness, response, and recovery. Now under Department of Homeland Security. Provides flood insurance.

Front 169

Flood hazard area

Back 169

Property identifies by flood certification to be in a flood-prone area with a likelihood that a flood may occur once every 100 years and therefore usually requiring flood insurance if federally related financing is involved.

Front 170

Historic preservation zoning

Back 170

Zoning to preserve the historic nature of a particular property for neighborhood. Change will require a certification of appropriateness from the necessary regulatory power.

Front 171

Interstate Land Sales Full Disclosure Act

Back 171

A federal law regulating the interstate advertising and sale or lease of lots in subdivision with 25 or more lots. Developer must provide a property report and register the subdivision with HUD.

Front 172

Laches

Back 172

A legal doctrine to bar a legal claim or prevent the assertion of a right because of undue delay or failure to assert the claim or right.

Front 173

Master plan

Back 173

A comprehensive plan to guide the longterm physical development of a particular area.

Front 174

Nonconforming use

Back 174

An existing use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area; a use that has been grandfathered in and is legal. Illegal nonconforming use occurs when zoning in place before the prohibited use.

Front 175

Overlay district

Back 175

A type of zoning that is superimposed over another type of zoning and can modify the use of the original zone.

Front 176

Plat map

Back 176

A map of a subdivision indicating the location and boundaries of individual properties. Generally shows lots, blocks, easements, streets, floodplains, et cetera. Usually require official approval before recordation.

Front 177

Police power

Back 177

The government’s right to impose laws, statues, and ordinances and building codes, to protect the public health, safety, and welfare.

Front 178

Property report

Back 178

The mandatory federal and/or state documents complied by developers to provide potential purchasers with material facts about a property prior to its purchase.

Front 179

Protective covenant

Back 179

Private agreements usually imposed by the owner when property is sold that limits the way the real estate ownership may be used; frequently used by owner/developer to maintain specific standards in a subdivision. The covenants are appurtenant. Also called restrictive covenant.

Front 180

Restrictive covenant

Back 180

Private agreements usually imposed by the owner when property is sold that limits the way the real estate ownership may be used; frequently used by owner/developer to maintain specific standards in a subdivision. The covenants are appurtenant. Also called protective covenant.

Front 181

Spot zoning

Back 181

Zoning that illegally singles out property for either special or more restrictive treatment than is usual under the area zoning ordinance.

Front 182

Subdivision

Back 182

A tract of land divided into two or more parcels by the owner; known as the subdivider; for the purpose of sale or development (either now or in the future); all land division involving the dedication of a new street or a change in an existing street.

Front 183

Variance

Back 183

Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exemption from ordinances due to unique hardship not created by the property owner.

Front 184

Variance

Back 184

Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exemption from ordinances due to unique hardship not created by the property owner.

Front 185

Zoning ordinance

Back 185

An exercise of police power by a municipality to regulate and control the character and use of property. Zoning is local in nature.

Front 186

Agency

Back 186

The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions

Front 187

Agent

Back 187

One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be the property owner’s agent.

(See Old Car)

Front 188

Apparent authority

Back 188

When someone claims to be an agent but there is no express agreement,the principal can establish an agency relationship by performing any act that accepts (ratifies) the conduct of the agent as that of an agent.

Front 189

Broker

Back 189

(1) One who acts as an intermediary on behalf of others for a fee or commission.

(2) One who is licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee.

Front 190

Brokerage

Back 190

The bringing together of buyers and sellers in in the marketplace.

Front 191

Broker-in-charge (BIC)

Back 191

Required for each brokerage firm and each branch office, the full broker responsible for displaying all licenses properly, notifying the North Carolina Real Estate Commission of any change of business address or trade name, ensuring that all advertising.

Front 192

Caveat emptor

Back 192

A Latin phrase meaning “let the buyer beware.” In a caveat emptor state, sellers do not have to enclose any facts about their property when selling.

Front 193

Client

Back 193

A main party to a transaction- - the person for whom the agent works.

AKA principal

Front 194

Co-brokered transaction

Back 194

A real estate transaction involving two or more brokerage firms, one firm representing the seller and the other representing the buyer.

Front 195

Commingling

Back 195

The illegal act by a real estate broker of placing consumer funds with personal funds. By law, brokers are required to maintain a separate trust or escrow account for other parties’ funds held temporarily by the broker.

Front 196

Commission

Back 196

Payment to a broker for services rendered, as in the sale or purchase of real property; traditionally a percentage of the gross sales price of the property but can be a flat fee or some other calculation.

Front 197

Common law of agency

Back 197

The basic framework of law that governs the legal responsibilities of the broker to the people the broker represents.

Front 198

Cooperating broker

Back 198

The broker/firm in a multiple-listing situation representing the buyer, as opposed to the listing broker who represents the seller. The listing broker and the cooperating broker may be the same person/ firm.

Front 199

Customer

Back 199

A third party to whom is owed honesty and fairness; not a fiduciary relationship.

Front 200

Designated dual agency

Back 200

An agency option, under dual agency that allows the firm, with both client’s permission, to appoint one or more licensees to exclusively represent the seller-client and one or more licensees to exclusively represents the buyer-client; also called designated agency.

Front 201

Dual agency

Back 201

Representing both parties to a transaction; must be consensual and reduced to writing prior to presentation of first offer.

Front 202

Employee

Back 202

Someone who works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and Social Security Taxes from the compensation of the employee.

Front 203

Express agreement

Back 203

An oral or written contract in which the parties state the contract’s terms and express their intentions in words.

Front 204

Fiduciary

Back 204

One in whom trust and confidence are placed; a reference to a principal- agent relationship.

Front 205

First substantial contract

Back 205

A flexible moment in time when conversation between a licensee and a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency choices to a consumer.

Front 206

Fraud

Back 206

An international misrepresentation of material fact so as to harm or take advantage of another person.

Front 207

General agent

Back 207

One who is authorized to represent the principal in a broad range of matters related to a specific business or activity; a property manager might have this power.

Front 208

Implied agreement

Back 208

A contract under which the agreement of the parties is demonstrated by their conduct.

Front 209

Implied authority

Back 209

An agency relationship created when principals and agents, without formally agreeing to the agency, act as if one exists.

Front 210

Independent contractor

Back 210

Someone who is retained to perform a certain act who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, an independent contractor pays all expenses and Social Security and income taxes and receives no employee benefits. Most real estate licensees are independent contractors.

Front 211

In-house sale

Back 211

A real estate transaction where the listing firm actually produces the buyer for their listing, as opposed to a co-brokered or cross sale that involves two firms

Front 212

Material fact

Back 212

Any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction.

Front 213

Multiple listing service (MLS)

Back 213

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLSs accept only exclusive right-to-sell or exclusive-agency listings from their member brokers.

Front 214

Negligent misrepresentation

Back 214

Unintentionally misinforming any party involved in a transaction about a material fact.

Front 215

Negligent omission

Back 215

Unintentionally failing to disclose a material fact to any party involved in a transaction.

Front 216

OLD CAR

Back 216

The mnemonic for fiduciary duties of obedience, loyalty, disclosure of information, confidentiality, accounting, and reasonable skill, care, and diligence.

Front 217

Oral buyer agency

Back 217

A non-exclusive verbal agency agreement between a firm and a buyer-client. There can be no time limit on oral agency, but it must be reduced to writing prior to presentation of first offer.

Front 218

Principal

Back 218

(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits.

(2) The original amount (as in a loan) of the total balance due and payable at a certain date.

(3) A main party to the transaction- - the person for whom the agent works; the client.

Front 219

Provisional broker

Back 219

A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-charge. Must complete post-licensing courses to remove the provisional license status.

Front 220

Puffing

Back 220

Exaggerated or superlative comments or opinions: e.g., “This house has the best view in town!”

Front 221

Ratification

Back 221

A method of creating an agency relationship in which the principal accepts/ confirms the conduct of someone who acted without prior authorization as the principal’s agent.

Front 222

Self-dealing

Back 222

AKA a secret profit, an illegal act by a licensee who takes advantage of clients by failing to disclose the appropriate value of property.

Front 223

Special agent

Back 223

One who is authorized by a principal to perform a single act or transaction. A real estate broker is usually a special agent of the seller authorized to find a ready, willing, and able buyer for a particular property, or a special agent of the buyer to find a specific type of property to purchase. Special agent has limited authority and cannot bind his principal.

Front 224

Stigmatized property

Back 224

Property regarded as undesirable because of events that occurred there; also called a psychologically impacted property. Some conditions that typically stigmatize a property are murder, gang-related activity, proximity to a nuclear plant, and even the alleged presence of ghosts.

Front 225

Subagent

Back 225

One who is employed by a person already acting as an agent; typically a reference to a provisional broker licensed under a broker (agent) who is employed under the terms of a listing agreement. A subagent has the same duties to the client as the agent.

Front 226

Tort

Back 226

A wrongful act, injury, or violation of legal right to the person or property of another.

Front 227

Undisclosed dual agency

Back 227

An illegal agency relationship where buyers and/or sellers are unaware of an individual broker or firms conflicting duties to their clients.

Front 228

Universal agent

Back 228

Person empowered to do anything the principal could do personally; unlimited authority; unusual in real estate; has power of attorney.

Front 229

Willful misrepresentation

Back 229

Intentionally misinforming any party involved in a transaction about a material fact.

Front 230

Willful omission

Back 230

Intentionally failing to disclose a material fact to any party involved in a transaction.

Front 231

Working with Real Estate Agents

(WWREA)

Back 231

A mandatory agency information brochure that a licensee must give to and review with consumers in all real estate sales transactions no later than first substantial contact; it does not create agency.

Front 232

Listing broker

Back 232

The broker/firm in a multiple-listing situation representing the seller, as opposed to the cooperating broker/firm that brings the buyer to the transaction. The listing broker and the cooperating broker may be the same person/firm.

Front 233

What does an agent owe a customer?

Back 233

-fair dealing

-honesty

-material facts

Front 234

Antitrust laws

Back 234

Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve in either price fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their areas of trade or dealing to certain areas of properties).

Front 235

Buyer agency agreement

Back 235

A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.

Front 236

Co-brokered sale

Back 236

A real estate transaction involving two or more brokerage firms, one firm representing the seller and the other representing the buyer.

Front 237

Co-listing

Back 237

Two brokerage firms team up to sell a property, usually to create a more effective marketing for the listing client.

Front 238

Comparative market analysis (CMA)

Back 238

A comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of location, style, and amenities; an estimate of market value; also called a broker price opinion.

Front 239

Cooperative listing service (CLS)

Back 239

Another term for MLS

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLSs accept only exclusive right-to-sell or exclusive-agency listings from their member brokers.

Front 240

Employment contract

Back 240

A document evidencing formal employment between employer and employee or between principal and agent. In real estate, this is generally a listing agreement, a buyer agency agreement, or a management agreement.

Front 241

Exclusive-agency listing

Back 241

A listing contract under which the owner appoints a real estate broker as the exclusive agent for a designated period of time to sell the property, on the owner’s stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission if the owner sells to a prospect who has not be introduced or claim by the broker.

Front 242

Exclusive right-to-sell listing

Back 242

A listing contract under which the owner appoints a real estate broker as the exclusive agent for a designated period of time to sell the property, on the owner’s stated terms, and agrees to pay the broker a commission when the property is sold, regardless of who sells the property.

Front 243

Extender clause

Back 243

A carry-over or protection clause in a listing contract that says the listing broker is entitled to a commission for a time period after expiration of the listing term if the property is transferred to a prospect that the broker introduced to the property during the listing term; override clause. This clause is void if the property is listed with another broker.

Front 244

Fee-for-service agreement

Back 244

Arrangement where consumer asks licensee to perform specific real estate services for a set fee; unbundling of services; limited service firms.

Front 245

Frontage

Back 245

The length of a property along the street or waterfront

Front 246

In-house sale

Back 246

A real estate transaction where the listing firm actually produces the buyer for their listing, as opposed to a co-brokered or cross sale that involves two firms.

Front 247

Limited services agreement

Back 247

AKA fee-for-service agreement that offers a menu of services and fees for separate broker activities that the client desires (unbundling of services).

Front 248

Listing agreement

Back 248

An employment contract between a property owner (as principal) and a real estate firm/broker (as agent) by which the broker is employed to find a ready, willing, and able buyer for the owner’s terms, for which service the owner agrees to pay a commission.

Front 249

Mineral and Oil and Gas Rights Mandatory Disclosure Statement

Back 249

Since 2015, a separate North Carolina disclosure form that must be completed by most sellers of residential dwellings regarding the status of mineral,oil,and gas rights.

Front 250

Multiple listing service (MLS)

Back 250

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and an buyers for their properties more quickly than they could on their own. Most MLSs accept only exclusive right-to-sell exclusive right-to-sell or exclusive-agency listings from their member brokers.

Front 251

National Do Not Call Registry

Back 251

A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive.

Front 252

Net listing

Back 252

A listing based on the net price the seller will receive if the property is sold. Under a net listing, the broker can offer the property for sale at the highest price obtainable to increase the commission. While this type of listing is illegal in many states, it is legal but not encouraged in North Carolina.

Front 253

North Carolina Residential Property Disclosure Act

Back 253

The state law that requires sellers to provide a prescribed property disclosure statement to any prospective buyer prior to presentation of first offer on the property. Exemptions include new construction, foreclosed properties, and lease purchases but not for sale by owner transactions.

Front 254

Open-listing

Back 254

A listing agreement under which the brokers commission is contingent on the broker personally producing a ready, willing, and able buyer before the property is sold by the seller or another broker.

Front 255

Override clause

Back 255

A carry-over or protection clause in a listing contract that says the listing broker is entitled to a commission for a time period after expiration of the listing term if the property is transferred to a prospect that the broker introduced to the property during the listing term; extender clause. This clause is void if the property is listed with another broker.

Front 256

Price fixing

Back 256

Brokers conspiring to set fixed compensation rates e.g.,

Front 257

Procuring cause

Back 257

The effort that began a chain of events that brings about the desired result. Under an open listing, the broker who is the procuring cause of the state receives the commission.

Front 258

Protection agreement

Back 258

An agreement between an unlisted property owner and a broker to secure payment for the broker of the property is sold to the particular buyer named in the agreement; it does not create a general listing, and may not agency at all- - only compensation for a buyer’s agent. Sometimes called a one-shot listing.

Front 259

Puffing

Back 259

Exaggerated or superlative comments or opinions: e.g., “This house has the best view in town!”

Front 260

Ready, willing, and able buyer

Back 260

One who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the transaction; one of the agent’s requirements for entitlement to commission.

Front 261

Retainer fee

Back 261

A small fee paid by the client upon creation of a buyer agency relationship as an advance partial compensation for services; it may be nonrefundable or applied to final compensation due depending on the agency agreement.

Front 262

Success fee

Back 262

Compensation that is due and payable upon the creation of a valid sales contract for property located by the buyer’s agent.

Front 263

Addendum

Back 263

A rider to a contract with additional terms or conditions.

Front 264

Amendment

Back 264

A change to contractual terms or conditions

Front 265

Assignment

Back 265

The transfer to another party in writing of rights or interest in a bond, a mortgage, a lease, or another instrument.

Front 266

Auction

Back 266

A form of selling property where oral bids are taken and the property is sold to the highest bidder.

Front 267

Bilateral contract

Back 267

All parties in a contract are legally bound to act as prescribed.

Front 268

Breach of contract

Back 268

The violation of any terms or conditions in a contract without legal excuses; for example, failure to make a payment when it is due.

Front 269

Compensatory damages

Back 269

Money damages awarded to the injured party to compensate them for the breach of contract but not to punish the breaching party.

Front 270

Consequential damages

Back 270

Award of special damages if the breaching party entered the contract with plans to breach; injured party may sue for lost profits.

Front 271

Consideration

Back 271

(1) That received by the grantor in exchange for a deed.

(2) Something of value, that induces a person to enter into a legally enforceable contract.

Front 272

Contract

Back 272

A legally enforceable promise or set of promises between legally competent parties that must be performed for consideration. If a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.

Front 273

Counteroffer

Back 273

A new offer made in response to the offer received. It has the effect of rejecting the original offer.

Front 274

Earnest money deposit

Back 274

Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price of the sales is closed.

Front 275

Executed contract

Back 275

A contract in which all parties have fulfilled their promises in the contract.

Front 276

Executory contract

Back 276

A contract under which something remains to be done by one or more of the parties.

Front 277

Express contract

Back 277

An oral or written contract in which the parties state the contract’s terms and express their intentions in words.

Front 278

Implied contract

Back 278

A contract under which the agreement of the parties is demonstrated by their conduct.

Front 279

Legality of object

Back 279

The purpose of a legally enforceable contract cannot be for illegal actions or acts against public policy.

Front 280

Legally competent parties

Back 280

People who are recognized by law as being able to contract with others; those of legal age and sound mind; a requirement of a legally enforceable contract.

Front 281

Liquidated damages

Back 281

An amount predetermined by the parties to a contract as compensation to an injured party if the other party breaches the contract.

Front 282

“Meeting of the minds”

Back 282

Mutual assent; A deliberate agreement between parties; offer and acceptance; A requirement of a legally enforceable contract.

Front 283

Mutual assent

Back 283

A deliberate agreement between parties; offer and acceptance; “meeting of the minds.” A requirement of a legally enforceable contract.

Front 284

Novation

Back 284

Substituting a new contract for an old one or substituting new parties to an existing contract.

Front 285

Offer

Back 285

The promise by one party to act or perform in a certain manner if the other party agrees to act or perform as requested; shows an intention to enter into a contract.

Front 286

Offeree

Back 286

The person receiving the offer

Front 287

Offeror

Back 287

The person who makes the offer

Front 288

Offer and acceptance

Back 288

A deliberate agreement between parties. Two essential components of a valid contract.

Front 289

Patrol evidence rule

Back 289

A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contradicted by prior or contemporaneous oral or written negotiations.

Front 290

Reality of consent

Back 290

If misrepresentation, fraud, mistake of fact, undue influence or duress are absent in contract formation, good contract is formed.

Front 291

Rescission

Back 291

The legal remedy of cancelling, terminating, or annulling a contract and restoring the parties to their original positions. Contracts may be rescinded due to mistake, fraud, or misrepresentation. There is no need to show any money damage.

Front 292

Specific performance

Back 292

A legal action to compel a party to carry out the terms of a contract.

Front 293

Statue of frauds

Back 293

A state law that requires that certain instruments that convey interest in real estate be in writing to be legally enforceable, such as deeds, real estate sales contracts, and certain leases.

Front 294

Statue of limitations

Back 294

That law pertaining to the period of time within which certain actions must be brought to court or be lost

Front 295

Time is of the essence

Back 295

A phrase in a contract that requires the performance of a certain act no later than a stated time or the noncompliant party is in breach and the contract may be voidable by the opposite party.

Front 296

Unenforceable contract

Back 296

A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, a verbal contract is generally unenforceable.

Front 297

Unilateral contract

Back 297

A one-sided-contract wherein one party makes a promise to induce a second party to do something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise.

Front 298

Valid contract

Back 298

A contract that compiles with all the essentials of a contract and is binding and enforceable on all parties to it.

Front 299

Voidable contract

Back 299

A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.

Front 300

Void contract

Back 300

A contract that has no legal force or effect because it does not meet the essential elements of a contract.

Front 301

What are the essential elements of a valid contract?

Back 301

(1) Mutual agreement

(2) competent parties

(3) consideration

(4) legal purpose

Front 302

Acceptance

Back 302

Expression of intent by the offeree to be bound by the terms of the offer; must be in writing if the contract pertains to real property. Acceptance must be communicated to the opposite party to create a contract.

Front 303

Backup offer

Back 303

An offer submitted to the property owner with knowledge that the owner is already under contract; a secondary offer.

Front 304

Contingency

Back 304

A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes binding; a condition of the contract.

Front 305

Due diligence

Back 305

(1) a buyer’s investigate process of having expert inspect the property; examine title, and review any leases to determine if the property meets the buyer’s needs and if the buyer wishes to proceed with the purchase. During the “due diligence period,” the buyer can terminate the purchase contract for any reason or no reason;.

(2) a licensee’s affirmative duty to discover and disclose any material facts about the property in question.

Front 306

Installment land contract

Back 306

A contract for the sale of real estate financed by the seller whereby the purchase price is paid in periodic installments by the purchaser; who is in possession of the property even though legal title is retained by the seller until a future date, which may not be until final payment. Also called a “contract for deed” or “land contract”

Front 307

Mailbox rule

Back 307

A rule of law stating that once written acceptance is placed in control of the mailing service, and out of the control of the offer, it is considered accepted - not when the acceptance is actually received by the offeror.

Front 308

NCBA/NCAR 2-T Offer to Purchase and contract (OPC)

Back 308

A form often used by REALTOR/ licensees and/or North Carolina attorneys to establish a legally binding agreement between the buyer and seller concerning the terms of purchase or transfer of residential real property.

Front 309

Option

Back 309

An agreement between the property owner (optioned) and the possible buyer (optionee), secured by the payment of an option fee, to buy or not to buy property within a specific time period at terms that have been negotiated in the underlying contract, also called “ option to purchase” or “option contract”.

Front 310

Optionee

Back 310

One who is granted or buys an option

Front 311

Optionor

Back 311

One or grants or sells an option

Front 312

Preemptive right

Back 312

A provision giving a person the first right to purchase real property; most often found in commercial leases.

Front 313

Right of first opportunity to purchase

Back 313

The right of a party to have the first opportunity to purchase or lease real estate for a designated price, if the owner ever decides to sell or lease; if the holder of the right does not opt to purchase, the owner may sell to a third party within a specified time. If sale to third party does not occur, the right is still valid and process restarts.

Front 314

Right of first refusal

Back 314

The right of a person to have the first opportunity to either purchase or lease real property, if the owner ever decides to sell or lease; no terms are negotiated.

Front 315

Uniform electronic Transaction Act (UETA)

Back 315

North Carolina version of the federal E-sign legislation that validates electronic contracts, documents, and signatures.

Front 316

Equitable title

Back 316

(1) the interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another’s name.

(2) The interest held by the grantor in a deed of trust that allows possession and use of the pledged property.

Front 317

Constructive eviction

Back 317

The actions of a landlord that so materially disturb or impair a tenant’s enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent.

Front 318

Covenant of quiet enjoyment

Back 318

The covenant implied by law by law which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenant’s possession or use of the property.

Front 319

Estate at suffereance

Back 319

The tenancy of a lessee who lawfully comes into possession of a landlord’s real estate but who continues to occupy the premises after the lease has expired against the landlord’s wishes.

Front 320

Estate at will

Back 320

An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate in indefinite and no prior notice to terminate is needed.

Front 321

Estate for years

Back 321

A possessory interest in property for a definite period of time leased for a specified consideration.

Front 322

Estate from period to period

Back 322

A possessory interest in leased property that automatically renews from period to period- week to week, month to month, or year to year; notice is necessary to terminate. Also called periodic tenancy.

Front 323

Fixed lease

Back 323

Also called gross lease

A lease of property under which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases fall under this category.

Front 324

Full-service lease

Back 324

A commercial lease where tenants share in overall operating expense, for the common areas of the building. Usually rent is paid as a base amount plus a prorated share of the complex’s operating expenses.

Front 325

Graduated lease

Back 325

A commercial lease that contracts for pre-set rental increases over the lease period.

Front 326

Gross lease

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Also called fixed lease

A lease of property under which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases fall under this category.

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Ground lease

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A lease of land only, on which the tenant is usually required to build as specified in the lease. Such leases are usually long-term net leases.

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Holdover Tenant

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A person who retains possession of leased property after the lease has expired; the landlord may continue to accept rent or start eviction procedures.

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Implied warranty of habitability

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A theory in landlord/tenant law in which the landlord renting residential property implies that the property is habitable and fit for its intended use.

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Index lease

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A commercial lease that allows the periodic adjustment of rent based on a named index such as Consumer Price Index (CPI).

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Law of negligence

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If a tenant or guest is injured on the landlord’s rental property, the landlord, and his/her agent, may be held liable due to their responsibility to maintain common areas and comply with the Residential Rental Agreement Act.

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Lease

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A written or oral contract between a landlord (the lessor) and a tenant (the lessee) that transfers the right to exclusive possession and use of the landlord’s real property to the lessee for a specified period of time and for a stated consideration (rent).

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Leasehold estate

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Also called

Nonfreehold Estate

A tenant’s right to occupy real estate during the term of a lease, generally considered a personal property interest.

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Lessee

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Tenant

receiver of lease

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Lessor

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landlord

giver of lease

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Net lease

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A lease requiring that the tenant pay rent plus some or all of the property charges, such as taxes, insurance, utilities, and repairs.

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North Carolina Vacation Rental Act

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An act that establishes uniform rules for landlords, tenants, and their agents involved in the handling of short-term rentals under 90 days in length where the tenant has a primary residence elsewhere.

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Novation

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Substituting a new contract for an old one or substituting new parties to an existing contract.

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Periodic tenancy

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A possessory interest in leased property that automatically renews from period to period- week to week, month to month, or year to year; notice is necessary to terminate. Also called estate from period to period.

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Residential Rental Agreement Act

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The state law that mandates delivery of habitable residential rental units; obligations of the landlord and the tenant are mutually dependent. Provides tenant with rights and remedies such as the Retaliatory Eviction Doctrine.

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Retaliatory eviction

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Illegal eviction of a tenant that has exercised protected rights under the law

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Sandwhich lease

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The sublessor’s (original lessee’s) interest in the real estate. refers to a situation in which one party leases a property from an owner, and subsequently leases that property to another party.

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Security deposit

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A payment by a tenant held by the landlord during the lease term and kept (wholly or partially) on default or destruction of the premises by the tenant.

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Self-help eviction

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Illegal eviction practices used by landlords instead of lawful use of summary ejectment.

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Sublease

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The leasing of premises by a tenant to a third party for part of the lessee’s remaining term.

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Summary ejectment

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Legal eviction procedure heard before a magistrate for removal of a tenant that has breached the lease terms.

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Tenant Security Deposit Act

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The state act that regulates the amount and use of money that can be required as a security deposit and how the landlord holds that deposit. The maximum amount of the deposit depends on the term of the tenancy.

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Percentage lease

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A commercial lease commonly used for retail tenants: rent is based on the tenant’s gross sales at the premises. There is usually a small base monthly rental plus a percentage of any gross sales above a certain amount.

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Trade fixture

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An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.

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real estate investment

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involves the purchase, ownership, management, rental and/or sale of real estate for profit.