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101 Cards in this Set
- Front
- Back
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Personal Property |
Movable property that is transferable by a bill of sale ex: potted plants Furniture Automobiles Documents - leases, contracts, deeds of trust, promissory notes
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Real Property |
Property that is immovable and transferable by a deed. Land and the rights that accompany it. ex: Land Home
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Deed |
The Written instrument by which a property owner as "grantor" conveys and transfers to a "grantee" an ownership (freehold) interest in a real property. |
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Grantor |
GrantOR: Party to a deed, typically the seller or giver of the deed |
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Grantee |
GrantEE: Party to a deed. typically the buyer or receiver of the deed |
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Land |
Ownership Extends upwards to the sky and down to the center of the earth. Includes air rights and subsurface rights as they are available. Fixed Location Heterogeneity |
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Erosion |
The tearing away of land due to natural causes aka avulsion |
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Avulsion |
The tearing away of land due to natural causes aka erosion |
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Heterogeneity |
No two parcels of land are the same because land is different from place to place. |
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Appurtenance |
The rights and and improvements that are transferred with the land unless reserved or excepted. |
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Appurtenance: Tangible |
Improvements such buildings, fences, trees, sidewalks, Perennial plants, Eblements |
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Bundle of Rights Mineral rights (oil, gas, coal rights, etc.) Air Rights Riparian Rights (water next to a river or stream) Littoral Rights ( water next to an ocean or lake)
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Fixture |
An item which was once personal property but has been permanently attached to and has become real property. A fixture retains the characteristics of personal property. Is it permanently attached and will damage occur if it is removed. |
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Conversion |
The process of changing real property to personal property or personal property to real. ex: Trees can become personal property if cut in to lumber. |
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How does a court define a fixture? |
Can be determined by a court: was the article permanently attached and would damage occur if the item is removed? Was the intent to make the property a part of the real estate? |
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Police Power |
Government Rights Right to enact laws for health, safety and welfare of the public ex: zoning laws, health codes |
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Eminent Domain |
The right to take private property for public use with fair compensation paid. The process of taking property through eminent domain is condemnation |
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Taxation |
Government Right Charge against property to bear the cost of municipal functions |
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Escheat |
Government Right Reversion of property to the State due to owner dying without a will with no heirs |
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Dedication |
The transfer of privately owned land to the public, without consideration, with the intent that the land will be accepted and used for public purposes |
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Affidavit of Affixture |
Once recorded personal property becomes affixed and taxed as Real property. Ex Mobile homes start as personal property but can be converted to Real Estate |
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Condemnation |
The process of taking property through eminent domain |
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Emblements |
The right of a tenant or farmer to harvest crops after the lease has expired |
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Accretion |
The increase of land due to natural causes |
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1 mile = ft? |
5280 ft |
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1 acre = ft? |
43560 ft |
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1 square yard = ft2 |
9 square ft |
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Zoning |
An area set off by municipal authorities for specific use ie Residential Commercial, Agricultural, Industrial , Special purposes |
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Buffer Zone |
An area that separates two incompatible zones. |
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Setback |
The minimum distance from the street and or lot lines beyond which a structure can be built
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Variance |
A use granted in violation of the zoning ordinance 1: Most likely granted if owner shows the zoning poses an undue hardship 2: Might be granted to allow homeowner to build a garage closer to the property line than the setback allows. |
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Non Conforming Use |
Use which predates the zoning ordinance and therefore may continue. (Grandfathered In) |
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Encumbrance |
Any claim, right or interest held by one who is not the legal owner of the land, such as deed restrictions, easements, and liens. |
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Deed Restriction types |
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Deed Restrictions |
Restrictions on land use imposed by the developer for the benefit of all owners. Found in the deed or are recorded separately |
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Deed Restrictions can not? |
Violate law or public policy a: discriminatory provisions that violate Fair Housing law are unenforceable b: Can not prohibit an owner from giving testimony regarding zoning changes
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Deed Restrictions are enforced by? |
Home Owners Association or other property owners seeking injunctive relief in court |
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Easement |
The right to use another's property for a specific purpose |
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Easement Appurtenant |
A right across one property for benefit of the adjacent property a. it is permanent and created by deed or reservation b. The dominant parcel benefits c. The servient parcel bears the easment d. An easement may be for ingress and egress access to water or for utilities
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Easment In Gross |
A right across one property for the benefit of an outside or 3rd party. It benefits a company or person instead of a parcel. ex Utilities |
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Easement Personal |
One party has permission (license) to cross or use another's property. Not permanent May be revoked EX. Hunting License, Parking license |
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Easement of Necessity |
Created when land held by a single owner is broken down into to two or more parcels and one of the parcels is landlocked. The easement by necessity allows the landlocked parcel access to a public road. |
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Prescriptive Easement |
An easement created by adverse possession |
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Adverse Possession |
is a statutory method of taking title to the property of another. It must be proven in court that it was Notorious - Open - Continuous - Hostile or Adverse (Squaters rights) |
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An Easement can be terminated by? |
A. Merger B. Quit Claim Deed C. Quiet Title Actino |
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Merger |
Holder of easement buys property and the two properties are combined
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Quit Claim Deed |
A type of deed often used to clear title defects |
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Quite Title Action |
A court action to remove a cloud on title |
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Encroachment |
A building or improvement that invades or trespasses onto someone elses property EX: overhanging roof or Garage Revealed by survey |
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Lien |
A lien is a claim against property to secure a debt. A lien is a money encumbrance. |
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Involuntary liens definition and Types |
Are placed by action of law against a property without the owners consent Specific Liens- placed against a specific property General Liens- placed against an individual and all he or she owns both real and personal
1. Real Estate Taxes 2. Government Assessments 3. Mechanics Liens 4 Home owners Association Assessment Liens |
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Specific Liens |
placed against a specific property |
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General Liens |
placed against an individual and all he or she owns both real and personal |
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Leverage |
Increase in rate of return through using borrowed money |
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Borrowers Motivation |
1: Opportunity - couldnt become home owner any other way 2: Leverage: 3: Tax Advantage |
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Lenders Motivation |
1: High yield on the investment 2: Low Risk 3: Good security |
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Promissory Note |
A personal promise to repay the debt. Serves as evidence of the debt States: 1: who the lender and borrower are 2: The amount of the debt 3: The interest rate 4: The pattern of payments |
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Mortgage AKA Trust Deed |
Hypothecates the property as collateral for the debt. Includes provisions for the lender to foreclose if the borrower is in default. States: 1: States the legal description of the property 2: Usually recorded by the lender to establish priority of the lien |
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Amortized |
Level or constant payments including principal and interest |
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Principal |
the original loan amount or current balance |
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Interest |
the charge made to borrow money. In real estate loans the interest is usually simple interest |
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Balloon Payment |
One payment is larger than the monthly payments. May be partially amortized with the last payment being a balloon. |
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Budget |
Payments made PITI or Principal, Interest, Taxes, Insurance. Taxes and insurance go into an Escrow Account. Lender pays taxes and insurance when due. |
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Straight |
Interest only during term of loan with principal due at maturity (balloon Payment) Ex Construction loans aka Term Loan |
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Negative Amortizaion |
The monthly payments are less than the interest. The interest shortage is added to the unpaid principal and the loan balance increases over the term of the loan. |
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FHA Loan |
Insured by the Federal Housing Administration, HUD |
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VA Loans |
Guaranteed by the Department of Veteran's Affairs |
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Conventional Loan |
Made by lending institutions but without government guarantee or insurance |
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Purchase Money Loan |
Seller carry back financing. The title is transferred, the seller becomes the lender and the buyer the borrower. Most often used when the borrower has an insufficient down payment. |
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Wraparound Loan |
The seller remains liable for the existing loan and agrees to create a new loan for the buyer for a greater amount (includes the first loan) and at higher interest rate. Buyer takes on no liability for thee existing loan. |
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Adjustable Rate Loan (ARM) |
Interest rate and payments change periodically during the life of the loan |
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Graduated Payment Loan |
Loan in which payments are lower in the early years but increase in intervals until the loan becomes fully amortized. (Students)
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Blanket Loan |
Loan secured with more than one property (developers) |
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Package Loan |
Loan includes items of personal property (refrigerator, range, etc) |
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Open End Loan |
Allows borrower to borrower to borrow more funds within the same loan. EX: Home Equity Loans |
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Construction (interim) Loan |
Funds are advanced in installments as construction progresses. Short term loan usually with interest payments only. The principal is due at the maturity of the debt |
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Take out Loan |
Normal long term financing replacing and paying off construction loan |
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Gap Loan (Swing Loan, Bridge Loan) |
Short term loan used to bridge the gapbetween the time a construction loan expires and a take out loan is placed |
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Reverse Annuity Loan (RAM) |
The lender makes monthly payments to the borrower. Annuity means payment |
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Annuity |
Payment |
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Superior Loan |
Loan which has highest priority |
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Junior Loan |
Loan which is lower in priority to another loan. Is in a different lien position. A second, third, etc. |
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Non Recourse Loan |
Loan in which the borrower is not held personally liable for the debt |
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Acceleration Clause |
Allows lender to declare the loan balance immediately due and payable if borrower defaults |
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Alienation Clause (Due on Sale) |
Allows lender to declare debt due and payable if property is sold. Alienate means to sell, transfer or asign |
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Alienate |
Sell, Transfer, or Asign |
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Prepayment Clause |
Allows lender to charge prepayment penalty if loan is paid off early |
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Defeasance Clause |
Allows lender to charge prepayment penalty if loan is paid off early |
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Release Clause |
Allows individual parcels to be released from a blanket mortgage |
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Subordination Clause |
Calls for existing loan to be placed in lower priority ( junior) position to another lien. Ex the lender agrees to waive its rights in favor of another |
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Usury |
Charging more than the rates set by law. Arizona does not set a maximum on contract rates of interest on real estate loans |
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Contract Rate (Face Rate, Nominal Rate) |
The rate specified in the note or contract |
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Legal Rate |
In Arizona this is the rate that would apply when no specific rate appears in an agreement. It is also the rate which would apply to Judgements unless the court stipulated a different rate |
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In Arrears |
At the end of a period of time - Payments interest rates etc... |
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FHA Loan |
Federal Housing Administration |
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Truth in Lending Act (Regulation Z) |
Regulation Z - Federal law that requires lenders to disclose all the terms and costs in obtaining a consumer loan. Makes it easier for the consumer to compare loans from different companies and protects the public from hidden costs in obtaining credit
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Truth in Lending Act |
1. Requires disclosure of APR 2. For owner occupied 1-4 units 3. Applies to institutional lenders only 4. Advertising stipulations about trigger terms 5. On Refinances Only - Borrower has a three day right to rescind the loan
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APR |
Interest, discount points and loan costs expressed as an Annual Percentage Rate |
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Trigger Term |
down payment, number of payments, the amount of any payment, period of payments (monthly, etc.) The amount of any finance charge |
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REAL Estate Settlements and Procedures Act (RESPA) |
Requires: 1. Disclosure of settlement costs 2. Good faith estimate of costs - made by lenders 3. Use of HUD-1 uniform settlement statement (closing statement) ------------------------------------ 1. The borrower has the right to inspect the settlement statement HUD-1 one day prior to closing 2. Applies to 1-4 family properties financed with a federally related mortgage loan 3. Does not apply to seller carry backs or loan assumptions 4. Prohibits the lender from holding excess money in impound accounts. 6. Requires disclosure of affiliated business relationships and receipts of fees for other services 7. Prohibits kickbacks or unearned fees 8. Seller cannot require the buyer to use a specific company for title insurance. |
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Fair Credit Reporting Act (FCRA) |
1. The act is designed to protect the public from the reporting of inaccurate information by credit bureaus. 2. Consumer has the right to inspect the information in inaccurate information. 3. If consumer is denied credit because of their credit report, the identity of the credit bureau must be given to the consumer |
