Real Estate Dynamics: Chapters 8 And 10 Vocabulary

Front 1

oral or written communication to the offeror that the offer has accepted the offer

Back 1

actual communication

Front 2

a deliberate misrepresentation of a material fact, made with the intent of inducing the other party to act on it to one's detriment; can be done with words or silence

Back 2

actual fraud

Front 3

a page added to a form contract for the purpose of including essential terms to provide supporting documentation; such as plats or power of attorney; also called an exhibit

Back 3

addendum

Front 4

the process of settling disputes by disagreeing parties submitting their differences to a neutral third party and agree to be bound by that judgment

Back 4

arbitration

Front 5

the person to whom a right or legal interest is transferred

Back 5

assignee

Front 6

a legal transfer of one's rights and obligation under a contract to a third party

Back 6

assignment

Front 7

one who has authority to act on behalf of another under power of attorney

Back 7

attorney-in-fact

Front 8

a contract that the parties mutually exchange promises, binding all parties to perform

Back 8

bilateral contract

Front 9

anything of monetary value to induce another to enter into a contract

Back 9

consideration

Front 10

by operation of law; when an offer is made through a courier, such as mail, the offeree's acceptance is effectively communicated to the offeror, when the acceptance is sent, not when it is received by the offeror

Back 10

constructive communication

Front 11

the misrepresentation of material fact, without intending to deceive or mislead, but involving a breach of duty; such as negligence or carelessness

Back 11

constructive fraud

Front 12

an agreement to do or not to do a particular act or thing that is enforceable by law; for the agreement to be valid and enforceable it must contain the following elements - legally competent parties, mutual assent, genuine assent, consideration, lawful purpose, and be in writing when required by law

Back 12

contract

Front 13

a legal entity created under the authority of the state; a resolution of the board of director's authorizing certain officers to sign a contract is required to bind the entity

Back 13

corporation

Front 14

a proposal by an offeror to an offer or made in response of an offer; this would terminate the original offer; sometimes called qualified acceptance; a proposal made by the receiver of an offer to the one who made the previous offer

Back 14

counter-offer

Front 15

the purchaser's initial commitment of something of value to indicate that they want to buy the property according to the terms of the offer being submitted; earnest money deposits received by the broker must be placed in their trust account until the transaction has either closed or terminated

Back 15

earnest money

Front 16

the buyer's interest in a property from the time they enter into a contract until legal title is conveyed at closing; the ultimate right to receive title

Back 16

equitable title

Front 17

a contract in which all parties have fully performed their duties

Back 17

executed contract

Front 18

a contract not fully executed; something remains to be done by one or both parties

Back 18

executory contract

Front 19

a contract made orally or in writing

Back 19

expressed contract

Front 20

to not act; to give up a right to which a person is entitled

Back 20

forbear

Front 21

malicious or negligent misrepresentation of a material fact in a transaction on which one or more parties to the transaction relies and thereby suffers damages; it creates a voidable contract, possible court damages, and possible sanctions for a licensee

Back 21

fraud

Front 22

an essential element of a contract that requires all parties enter into the contract under their own free will, absent of fraud, misrepresentation, duress, menace, or undue influence

Back 22

genuine assent

Front 23

something without monetary value; love and affection

Back 23

good consideration

Front 24

one appointed by a judge to take care of and manage the property and affairs of another person who has been declared legally incompetent

Back 24

guardian

Front 25

a contract in which the promises are not expressed, but manifest through the conduct of the parties

Back 25

implied contract

Front 26

a person who lacks the legal capacity to form a contract due to infancy, insanity, intoxication, or other reasons

Back 26

incompetent

Front 27

misstatements of fact made without the intent to deceive and without a breach of duty

Back 27

innocent missrepresentation

Front 28

also know as an installment contract or contract for deed; a contract in which the buyer typically makes a small down payment, takes possession, pays the taxes, and makes installment payments of principle and interest to the seller until the purchase price is paid in full; the seller retains title until the buyer has paid all installments and otherwise performed under the contract

Back 28

land contract

Front 29

a sum of money specified in a contract as compensation to be paid to one of the parties if the other defaults

Back 29

liquidated damages

Front 30

a real estate broker's contract of employment with an owner; the agreement obligates the owner to pay the broker a commission if the broker finds a ready, willing, and able buyer; but it does not obligate the owner to contract wit the buyer

Back 30

listing agreement

Front 31

title to land that is free from reasonable objections leaving no doubt as to whom the owner is; a title that a title insurance company will insure at its regular rates only to standard objections

Back 31

marketable title

Front 32

mutual agreements to the terms and conditions of a contract by all parties involved

Back 32

meeting of the minds

Front 33

the threat of force to compel someone to enter into a contract against their will

Back 33

menace

Front 34

a person under the legal age of 18 or 21, depending on the state law of consent; a contract made by this person is voidable

Back 34

minor

Front 35

an expression of mutual agreement manifested by an unconditional acceptance of all terms and conditions of an offer

Back 35

mutual assent

Front 36

cancellation of a contract made voluntarily by all parties involved

Back 36

mutual rescission

Front 37

deliberate misrepresentation by failing to disclose vital information; such as defects that are not readily apparent from a reasonable inspection; a form of actual fraud

Back 37

negative fraud

Front 38

breach of duty, resulting from failure to exercise reasonable care required by the circumstances involved in each individual case

Back 38

negligence

Front 39

a false statement believed to be true, but is made without sufficient grounds of such belief due to carelessness or negligence; when relied on by another party it has the same affect as willful misrepresentation and results in constructive fraud

Back 39

negligent misrepresentation

Front 40

a process of discharging obligations under a contract by submitting a new contract for an existing contract or by substituting a new party for an old one

Back 40

novation

Front 41

a proposal to make a contract; it does not become a legal offer until it comes to the knowledge of the person to whom it is made; known as the offeree

Back 41

offer

Front 42

an essential element for the creation of a contract; also called mutual assent and meeting of the minds

Back 42

offer and acceptance

Front 43

the party to whom an offer is made

Back 43

offeree

Front 44

the party who makes the offer

Back 44

offeror

Front 45

a contract that binds one party to hold an offer open to another party for a specific time period

Back 45

option

Front 46

the party to whom the option is granted

Back 46

optionee

Front 47

the party who grants an option to another

Back 47

optionor

Front 48

rule of law disallowing oral evidence that disputes a written agreement

Back 48

parol evidence rule

Front 49

one that is readily apparent by an ordinary inspection

Back 49

patent defect

Front 50

a written instrument that authorizes a person to act on behalf of the one granting the authority

Back 50

power of attorney

Front 51

a statement of exaggeration that a reasonable person would recognize as untrue

Back 51

puffing

Front 52

a principle of law that allows a conveyance to be effective on the date the deed was deposited with the escrow agent, although the buyer or seller died before the deed was actually delivered by the escrow agent

Back 52

doctrine of relation back

Front 53

to disaffirm or cancel a contract; each party is restored to their legal and monetary positions in existence prior to the contract

Back 53

rescind

Front 54

also called contract of sale or purchase and sale agreement; an agreement that bonds the buyer and seller of real estate

Back 54

sales contract

Front 55

a legal action to force performance of the precise terms of a contract when one party defaults; this remedy of law is available to a seller only if a suit for damages is not adequate

Back 55

specific performance

Front 56

state law that requires certain contracts must be in writing in order to be enforceable in a court of law

Back 56

statute of frauds

Front 57

state law that limits the amount of time one has to seek a legal remedy when the other party defaults

Back 57

statute of limitations

Front 58

a contract provision that allows all or part of the agreement to survive after the closing and to remain binding on the parties after the deed has been delivered

Back 58

survival clause

Front 59

a contract provision that makes it essential that all time limits in the agreement are met

Back 59

time is of the essence

Front 60

using a position of trust and confidence to take unfair advantage of another person in order to obtain a contract

Back 60

undue influence

Front 61

a contract that does not entitle the parties to seek a legal remedy upon default because it fails to meet some legal requirement; such as the statute of frauds or statute of limitations

Back 61

unenforceable contract

Front 62

a contract involving the promos of only one party in exchange for an act or forbearance of another; only the party making the promise is obligated to perform

Back 62

unilateral contract

Front 63

a contract that contains all the essential elements of a contract; to be enforceable it must also be in writing as required by the statute of frauds in each particular state

Back 63

valid contract

Front 64

money or anything of monetary value; such as property, services, or a forbearance, when received as a benefit by one party resulting from a detriment of another

Back 64

valuable consideration

Front 65

buyer

Back 65

vendee

Front 66

seller

Back 66

vendor

Front 67

a contract that appears valid and enforceable on its face value, but is subject to rescission by the party or parties acting under a disability

Back 67

voidable contract

Front 68

a contract that has no legal effect because one or more essential elements of a contract is not present; under the law, this contract never existed

Back 68

void contract

Front 69

willful menace, destruction, or neglect of real estate by a person rightfully in possession that results in a decrease in value of the premises, to the detriment of another person who holds a future right of possession

Back 69

waste

Front 70

failure without legal excuse to perform to one's obligations under a contract; failure to fulfill a duty

Back 70

breach of contract

Front 71

legal process to remove a tenant who holds over after the right of possession has ended; usually from failure of rental payments

Back 71

actual eviction

Front 72

relative to a lease, it is the complete transfer of the tenant's remaining leasehold estate; the original tenant remains liable to the landlord for the unpaid rent should the new tenant default

Back 72

assignment

Front 73

lease provision that specifies proceeds be paid to the landlord in the event the leased premises are acquired by the government by condemnation

Back 73

condemnation clause

Front 74

occurs when the landlord's action or omission allows the leased premises to become uninhabitable for its intended use; usually a violation of the implied warranty of habitability or implied covenant of quiet enjoyment

Back 74

constructive eviction

Front 75

the amount of rent stated in the lease agreement

Back 75

contract rent

Front 76

legal process to have a trespasser or tenant at sufferance removed from the property

Back 76

ejectment

Front 77

lease provision that calls for changes on rental payments at specific intervals in the future

Back 77

escalation clause

Front 78

lease that provides for rental increases in relation to increased operating expenses

Back 78

escalator lease

Front 79

interest in real property held by a tenant who holds over without the consent of the landlord after the right of possession has terminated

Back 79

estate at sufferance

Front 80

a tenant's interest in real property for an indefinite period of time; either party may terminate the estate upon proper notice; death of either party terminates an estate at will; also known as tenancy for year

Back 80

estate at will

Front 81

tenant's interest in real property for a fixed period of time

Back 81

estate for years

Front 82

tenant's interest in real property for a period of time, such as a month or year, and without proper notice the period is automatically renewed

Back 82

estate from period-to-period

Front 83

action that results in dispossession of a tenant from a leased premises; the action may be either constructive or actual

Back 83

eviction

Front 84

any lease that provides for rental changes in the future

Back 84

graduated lease

Front 85

same as flat or straight lease; the tenant pays a fixed amount at specified intervals; the landlord pays all expenses associated with owning the leased premises

Back 85

gross lease

Front 86

long-term, net lease of unimproved land with permission for the tenant to make improvements

Back 86

ground lease

Front 87

tenant who remains in possession of leased premises after the right of possession has terminated; possession may be with or without the consent of the landlord

Back 87

holdover tenant

Front 88

the landlord's implied duty to keep a dwelling unit at a minimum level of livability

Back 88

implied warranty of habitability

Front 89

requires that rent be adjusted up or down periodically based on the changes in a designated index, such as the Consumer Price Index (CPI)

Back 89

index lease

Front 90

one who leases real property to another; also known as a lessor

Back 90

landlord

Front 91

contract that also conveys an estate by granting one person the exclusive right to temporarily use the property of another; at the same time specifies the rights and obligations of another; it is the personal property of the lessee

Back 91

lease

Front 92

landlord's estate in property leased by another

Back 92

lease fee estate

Front 93

tenant's right in real property granted to them by a lease

Back 93

leasehold estate

Front 94

improvements made to the leased property by the tenant

Back 94

leasehold improvements

Front 95

agreement that authorizes a property manager to act on behalf of the owner

Back 95

management contract

Front 96

lease that requires the tenant to pay the landlord a fixed rental amount plus all or part of certain operating expenses; such as taxes, insurance, maintenance, and repairs

Back 96

net lease

Front 97

lease that bases the rental amount on a percentage of gross sales, gross profits, or net income; generally the tenant is required to pay a flat rate fee plus a percentage of the gross sales that exceed a certain minimum; normally used in retail store operations

Back 97

percentage lease

Front 98

one who is given the responsibility of maintaining, preserving, and enhancing an owner's property and, at the same time, generate the highest possible net return from it

Back 98

property manager

Front 99

lease provision that prohibits certain use of the leased premises in order to eliminate competitive business within the same facility owned by the landlord

Back 99

protective clause

Front 100

lease that bases the rental amount on the market rent of the property; at set intervals the property is reappraised to establish the current rent at which time the rent is adjusted accordingly

Back 100

reappraisal lease

Front 101

rental rate for a property based on the current level of occupancy

Back 101

rent schedule

Front 102

lease provision that requires the leased premises to be used for certain purposes

Back 102

restrictive covenant

Front 103

landlord's right to regain possession of leased premises when the lease is terminated

Back 103

reversionary estate

Front 104

lease provision that secures the tenant of the right to buy the property at the same price offered by a bona fide purchaser

Back 104

right of first refusal

Front 105

financial arrangement that enables a business property owner to sell owned property with an arrangement to lease it back on a long-term, net lease from the investor who bought it

Back 105

sale-leaseback

Front 106

tenant's interest in the leased premises that has been sublet to another tenant

Back 106

sandwich lease

Front 107

lease that provides for rental payment increases in predetermined amounts

Back 107

step-up lease

Front 108

transfer of less than the tenant's entire remaining leasehold estate to another; also called a sublet

Back 108

sublease

Front 109

lease provision that makes the lease inferior in priority to a future mortgage placed against the leased premises

Back 109

subordination clause

Front 110

termination of a lease by mutual agreement of the parties; also known as surrender

Back 110

surrender and acceptance

Front 111

one who leases property from the landlord

Back 111

tenant

Front 112

an item of personal property attached to the land or building leased by a tenant, who uses them in a trade or business

Back 112

trade fixture

Front 113

legal action that puts a tenant on notice to pay past due rent or vacate

Back 113

unlawful detainer