Real Estate Law (10-11)

Front 1

What statements of fact are included in a title affidavit?

Back 1

a) The affiant owns the real property.
b) The boundary lines of the property are certain.
c) The affiant has a right to possession of property.
d) There are not liens, encumbrances, etc. unless they are identified on the affadavit.
e) There are no judgments, bankruptcies, or other restrictions against the affiant owner.
f) The affadavit is being made by the affiant with knowledge that it will be relied on by purchasers, lenders, and title insurance company involved with the real estate.

Front 2

When is a corporated resolution required in a closing transaction and why is it important?

Back 2

It is required in any closing transaction where the buyer or seller is a corporation. It authorizes the sale or purchase on behalf of the corporation and empoweres officers to sign the purchase and sale documents.

Front 3

You are a legal assistant involved in a real estate sale transaction. The seller is Susan T. Clark. The title examination of the property reveals that there are five judgments against Susan Clark, S.T. Clark, and Sue Clark. You call the seller, Susan T. Clark, and tell her about the judgments. She informs you on the phone she is not the Susan Clark mentioned in the judgments. What do you do to protect the purchaser in the closing?

Back 3

An affidavit from Susan Clark would be required swearing she is not the individual named in the judgments. The matter would also need to be discussed with the title insurance company.

Front 4

You are a legal assistant involved in a real estate transaction. The sale is to close on September 10. The title examination reports that county real estate taxes have been paid by the seller for the current year in the amount of $1,640. The tax year begins Feb. 1 and ends Jan. 31. You have been asked to calculate the tax proration between the purchaser and seller. What is the amount of tax proration, and on which line of the HUD-1 would the amount appear?

Back 4

$996.78 and it would appear on lines 107 and 407 of HUD-1.

Front 5

You are assisting in a real estate closing transaction. The loan is $80,000 at an interest rate of 12% per annum. The loan is closing on March 14, and the lender wants the first payment on the loan to begin on May 1. The lender also requires the borrower to pay in advance all interest accruing during March. How much interest would you collect from the borrower at closing?

Back 5

The amount of interest at closing would be $480.06.

Front 6

A title examination reports that real estate taxes for the current year are unpaid in the amount of $1,350 and the taxes are due on November 15 of the year. The closing takes place May 10. The closing also involves a loan in which the lender wants taxes escrowed. The lender's first payment under the note will be July 1. Calculate the tax proration between the seller and purchaser. Calculate the amount of taxes to be escrowed for the lender. Are the amounts the same? If not, should they be?

Back 6

The tax proration between the seller and purchaser is a $481 credit to the purchaser. Taxes to be escrowed to the lender are $787.50. There are two different calculations and situations so the amounts will be different.

Front 7

You are preparing a title affidavit for a real estate closing. Exhibit A to the affidavit is a legal description of the real property, and Exhibit B is a list of title exceptions to the real property. Where would you get information to complete Exhibits A & B?

Back 7

Information to complete Exhibit A would come from the title examination or from a legal description from a survey. A list of title exceptions on Exhibit B would came from the title examination or title commitment.

Front 8

A title examination shows there is an outstanding loan to Second Bank and Trust on the property. You believe the closing will take place on July 10. You obtain a satisfaction and payoff letter form the bank indicating how much money is needed to pay the loan off as of July 10. The loan closing is delayed and does not occur until July 15. Is there any additional information needed from the bank for the July 15 closing?

Back 8

An updated payment letter from the bank is required along with the five days additional interest due.

Front 9

A contract for a home is $86,500. The broker's commission is 6% of the price and other closing costs are $600. In addition there is an outstanding loan on the property to be paid in the amount of $28,400. Real property taxes in the amount of $2,150 are also unpaid. The tax year is the calendar year and the closing takes place August 15. In preparing the Uniform Settlement Statement how much net money would the seller take home from the closing?

Back 9

The net amount to the seller would be $50,972.97.

Front 10

The contract purchase price for a home is $115,000. Settlement costs to the purchaser are $3,230 and taxes for the current year amount to $1,650 and have been paid by the seller. The tax year is a calendar year on closing will occur on September 25. The purchaser has paid an earnest money deposit of $5,000 for the property and has obtained a loan for $90,000. You are preparing a Uniform Settlement Statement. How much money does the purchaser need to bring to the closing to consummate the sale?

Back 10

The purchaser will need to bring $23,668.44 to the closing.

Front 11

What is the penalty for false affidavit?

Back 11

The penalty is perjury.

Front 12

What is a same name affadavit and why is it used?

Back 12

A same name affidavit is used any time an owner of property is referred to in the chain of title in more than one way.

Front 13

What is a bill of sale and how is it used?

Back 13

It transfers ownership of personal property.

Front 14

What information is generally contained in an assignment of leases?

Back 14

a) List of leases assigned.
b) Indemnities between the assignor and assignee regarding defaults under the leases either prior to or after the assignment.

Front 15

What is an affidavit of no material change and why is it used?

Back 15

This certifies that no change has taken place in the buyer's financial condition from the date of loan application to loan closing.

Front 16

A swimming pool in a condominium development would be a limited common area.

Back 16

False

Front 17

A condominium owner buys stock in a corporation which owns the condominium, and this stock gives the condominium owner a right to live in the condominium unit.

Back 17

False

Front 18

A condominium form of ownership once created can never be terminated.

Back 18

False

Front 19

A governing body of most condominiums is a nonprofit corporation in whci each owner is entitled to one vote.

Back 19

True

Front 20

Taxes on the individual condominum units are common expenses paid by the condominium association.

Back 20

False

Front 21

A condominium association can foreclose and sell an owner's condominium unit if the owner fails to pay common area assessments.

Back 21

True

Front 22

A condominium owner's obligation to pay common area assessments is conditioned upon the condominium association's providing services.

Back 22

False

Front 23

Condominiums and cooperatives are the same thing.

Back 23

False

Front 24

A cooperative owner generally does not have any restrictions on the owner's right to resell the cooperative unit.

Back 24

False

Front 25

Most cooperatives are financed by indiviual mortgages on the individual cooperative owner's unit.

Back 25

False

Front 26

What does the owner in a condominium own?

Back 26

A unit is owned as well as an undivided share in the condominium common area.

Front 27

Describe briefly some items that would be considered common areas or common elements of a condominium.

Back 27

a) Exterior building walls.
b) Stairwells.
c) Elevators.
d) Walks, yards, roofs, entryways.
e) In some situations recreational areas.

Front 28

What is a condominium declaration?

Back 28

It is a contractual set of covenants that govern ownership and control of the condominium.

Front 29

What is a limited common area and give an example?

Back 29

This is an area of use limited to one or more owners. Examples are an enclosed backyard or patio.

Front 30

The internal operations of a condominium are governed by what organization?

Back 30

Condominium association.

Front 31

Taxes on individual units of a condominium are paid by whom?

Back 31

Owner of the unit.

Front 32

How is insurance on a condominium generally handled?

Back 32

Insurance is generally handled by a master policy that insures the entire condominium.

Front 33

If you were representing a condominium purchaser, which issues and questions would you be interested in finding answers to?

Back 33

a) Reputation of the developer.
b) Does the condominium documentation comply with state law?
c) How are assessments made and who controls the budget?
d) Who controls the board of directors of the association.
e) Review all restrictions on the use of the unit and common areas.
f) Is there any control on resale of the property?

Front 34

What is a cooperative?

Back 34

This is ownership where a corporation owns residential property and shareholders of the corporation are entitled to lease apartments in the property.

Front 35

How does a cooperative differ from a condominium?

Back 35

A cooperative unit owner owns only shares in the corporation and a lease on their individual units.