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109 Cards in this Set
- Front
- Back
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Deed |
Written legal document that TRANSFERS ownership of real property amongst parties |
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Title |
Written legal document that PROVIDES EVIDENCE of ownership |
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8 elements of a valid deed |
1) In writing 2) Identify grantor and grantee 3) Grantor must be of legal age and sound mind 4) Identify the property 5) Contain words of conveyance, "Grantor does hereby grant and convey..." 6) State that consideration was given 7) Signed by only grantor to execute the deed 8) Delivery and acceptance of deed (generally when deed is recorded) |
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Covenant |
Written agreement or promise |
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Warranty |
Guarantee that something is true as stated |
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Texas recognizes these two covenants: |
Covenant of seizen: grantor has not conveyed the same estate in any form previously to anyone but the grantee Covenant Against Encumbrances: estate is F&C of all encumbrances, except those specified upon execution of the deed |
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Acknowledgement |
Grantor appears before a notary public or other public officer and formally declares that he signed the document voluntarily Not necessary for a valid deed between the parties Required to record the deed for public record |
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General Warranty Deed |
Warranty title FOREVER that grantor is true owner No clouds on the title No claims against the RE, unless specified No party with superior claim |
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Special Warranty Deed |
Warrant title only DURING GRANTOR'S OWNERSHIP that he is true owner |
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Bargain and Sale Deed |
Implication of ownership Generally between family or business partners After-Acquired Title protection = if grantor conveys interest he does not have, but later acquires property conveyed, title automatically passes to initial grantee No covenants, so no assurance grantee is acquiringtitle |
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Quitclaim Deed |
No implication of ownership Warrants nothing related to title Divorce or property settlement Removes clouds on title Grantor relinquishes whatever rights he may have No After-Acquired Title protection |
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Transferring Real Estate |
1. Purchase agreement 2. Inheritance 3. Gift 4. Foreclosure or Taxsale 5. Eminent Domain 6. Escheat 7. Partition 8. Adverse Possession 9. Easement byPrescription 10. Accession 11. Public Grant /Dedication 12. Reversion 13. Alienation |
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Intestate |
Dying with no will or an invalid will |
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Texas decides who receives estate via: |
Title by Descent |
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Title by Descent order |
Surviving spouse and children Grandchildren Parents Grandparents Siblings Nieces / Nephews State of Texas via escheat Heirs - non "lineal descendants" |
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Testate |
Dying with a valid will |
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Testator |
Deceased person |
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Devise |
Willed real property |
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Bequest / Legacy |
Willed personal property |
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Excutor |
One named to carry out the will |
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Administrator |
Court-appointed one to carry out the will |
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Probate court |
Admits and certifies will's authenticity and validity |
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Holographic Will |
Handwritten will dated and signed by testator, but not witnessed Enforceable in 19 states, including Texas Not recommended, as testator may not know the law |
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Oral Will |
Used by terminally ill to dispose of personal property (RE is intestate) |
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Codicil |
Amendment to existing will Must be signed, dated, and witnessed |
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What does a condominium owner have a fee estate over? |
The air space that the unit occupies |
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Townhouse |
Also own air and subsurface rights |
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Separate Elements |
Exclusively owned and used as a fee simple estate |
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Common elements |
Areas owned by all as TC |
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Master Deed |
Legal framework that converts landinto a condo subdivision |
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Covenants, Conditions, and Restrictions (CC&Rs) |
Filed list of restrictions by which all owners must abide |
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Bylaws |
Rules by which the HOA operates |
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Unit deed |
Each purchaser receives deed |
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Maintenance fees (5 points) |
Costs of maintaining comman areas are allocated among all unit owners Generally collected monthly Replacement reserves created Taxes and Insurance premiums paid Condominium management fee |
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Legislation against abuses of Condos |
Uniform Condominium Act Conversions (from apartments) HOAs Cooperative Apartments Timesharing |
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Advantages of Condo Living |
Lower cost Low maintenance Location Amenities Ownership |
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Disadvantages of Condo Living |
Close proximity to all Loss of control Fees Board of Directors Bylaws |
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Planned Unit Development |
Ownership in a community association thatowns common areas, along with ownership ofyour lot and home |
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Cooperative Apartments |
Organized by forming a non-profit corporation Sell shares of stock to each occupant– Purchaser is a “cooperator”– Own personal property, not real estate Corporation borrows money by mortgagingthe building Own undivided interest in entire building Proprietary lease over your unit Legally discriminate |
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Timeshare |
Method of dividing up and selling a living unitat a vacation facility for specified lengths oftime each year Right-to-Use – contractual right to occupy aliving unit for 1-2 weeks a year for 20-40 years Fee Simple – right to fee ownership of 1-2weeks each year into perpetuity |
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Texas Timeshare Act |
Real estate license required to market unit,unless otherwise exempt Must register property with Texas Real Estate Commission (TREC) Grants power to investigate all aspects of the development to TREC Right to cancel– 6 days, which cannot be waived Required statement attached to contract (p. 126) |
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Zoning |
Master plan for systematic use |
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Development |
Limit growth by not issuing permits, limiting police/fire protection |
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Eminent Domain |
Take private property for public use |
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Environmental Controls |
Decrease Pollution |
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Social Goals |
Limit uses for social welfare (e.g. no billboards or signs to enhance beauty) |
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Zoning Laws |
Greater effect on RE than all other land-use controls Regulates purpose for which buildings may be constructed, along with height and bulk Establishes lot's buildable area Establishes number of parking spaces Sets the number of persons that can be accommodated |
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Common Zoning Symbols: R, C, I, A, M, M-4, R-1, PUD |
R - Residential C - Commercial I - Industrial A - Agriculture M - Manufacturing M-4 - Heavy Manufacturing R-1 - Single-family residential PUD - Planned use/unit development |
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Enforcement of zoning laws - Who enforces? |
Authority derived from police power - To protect public's safety, health, and welfare - Police power one of four public limitations - Most zoning at local level |
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Non-conforming use |
May continue use if it existed before new zoning law - RE may not be altered - Passing title extinguishes non-conforming use |
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How to change zoning? |
Must obtain an "amendment" from P&Z |
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Zoning Variance |
Change of use for only one owner - Must prove undue hardship under current zoning - Example: Signage blocked by protected trees |
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Conditional-use permit |
Allows specific use opposed to zoning law; use cannot change Example: High-rise parking in uptown Dallas |
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Spot zoning |
Rezoning small area of land in existing neighborhood - Must serve a useful purpose (e.g. daycare, 24-hour medical facility) |
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Downzoning |
Reverse zoning to lower density |
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Taking |
If zoning devalues RE to minimal amount, considered condemnation with compensation |
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Buffer Zone |
Strip of land separating one land use from another - e.g. apartments separating commercial from SFD |
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Subdivision regulations |
Building codes, deed restrictions, HOA actions |
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Building codes |
Minimum acceptable materials and construction standards needed to protect public's S, H, and W Designed to eliminate inferior quality construction that may endanger life or property Includes standards for structural load and stress, windows and ventilation, size & location of rooms, fire protection, exits, plumbing, heating, lighting |
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Deed Restrictions |
Restrictions on land use that developer places in the deed to control future development |
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Examples of deed restrictions |
(Deed restriction also known as restrictive covenant) Minimum lot size or LA, fencing, garage placement, farm animals, setbacks, height limits on structures |
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Deed restrictions: Enforceable in court? Compare it to zoning |
Enforceable in court More functional than zoning because they don't have to enhance public's S, H, and W |
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HOA Foreclosures - TX Residential Property Owners Protection Act. Define. |
Limits attorney fees to greater of 1/3 of actual costs or $2500 Limits foreclosure for fines and attorney fees Must make all records available to all members |
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HOA Foreclosures - Right to redeem property in how many days? |
30 |
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HOA foreclosures - 2011 TX Legislature tried to pass numerous additional protections for members: Name some |
Flags, solar panels, military personnel, phone calls and personal visits to property |
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Environmental Impact Statement |
Used to determine the effect of a proposed project on the total environment |
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Environmental Impact Statement Elements (4) |
- Probable impact on area - Adverse environmental effects - Alternatives to proposed project - Listing of irreversible commitment of resources, if project is implemented |
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Lease |
Written legal document conveying a possessory interest in RE from lessor to lessee |
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Lessee |
Tenant |
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Lessor |
Owner/Landlord |
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Reversion |
Right of owner to _____ at end of lease period |
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Estate for years |
Specific starting & ending date |
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Estate at will |
Terminated at any time by either party |
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Periodic Estate |
One that renews itself automatically |
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Tenancy at Sufferance |
Holdover Tenant |
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8 elements of a valid lease |
1) Lessor and Lessee 2) Description of premises 3) Agreement to convey & accept possession 4) Rent payment provisions 5) Start date and duration of lease 6) Permissible uses 7) Maintenance responsibilities 8) Signature of parties to lease |
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Home ownership: 2 points |
- Permanent need - Investment from appreciation and equity build up |
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Tax benefits of home ownership |
- Deduct some closing costs - Ignore up to $500,000 in capital gains if married-jointly and live in house 2 of past 5 years |
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3 benefits of home ownership |
- More freedom of control - Hedge against inflation - Pride of ownership |
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Renting: When to rent |
- Move often - Too expensive to buy - No money for down payment and closing costs - Can't qualify for loan (bad credit, low income, new job - < 2 years, cash shortage) |
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Benefits of renting (2) |
- No property taxes - No major maintenance |
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Residential Tenants (7 points) |
- Smaller RE projects - SFD and all sized apartments - Short term lease - Habitable living conditions - More concerned with physical amenities - Considered a "home" - Maintenance primarily by owner |
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Commercial Tenants (4 points) |
- Larger, more sophisticated tenants - Retail, office, hotels, stores - Larger financial transactions - Longer term percentage / escalation leases of 5-25 years |
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Industrial Tenants (6 points) |
- Very large improvements + acreage - Factories, w/h, plants, manufacturing - Custom designed lease - Unfinished interior - Concerned with access, production efficiency, and safety - Very long-term NNN (triple net) lease |
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Landlord-Tenant Laws - Notice of tenancy termination. How many days? |
Generally 30 days unless Estate for Years
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Landlord-Tenant Laws - Interruption and exclusion of use |
Cannot exclude tenant from premises; only change locks |
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Landlord-Tenant Laws - Landlord's lien for rent |
Cannot take lessee's possessions for back rent |
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Landlord-Tenant Laws - Need for security devices |
Install requested window latches, dead bolts, pen locks, and night latches |
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Landlord-Tenant Laws - Smoke Detectors |
One outside each bedroom |
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Landlord-Tenant Laws - How many adults are allowed to occupy each bedroom? |
3 |
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Landlord-Tenant Laws - Security deposits - How many days to return? |
30 day rule for residential tenant (60 days for commercial) or give notice |
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Landlord-Tenant Laws - Duty to mitigate |
Make all efforts to re-lease to reduce losses |
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Landlord-Tenant Laws - Family violence |
Terminate lease with court order protecting tenant |
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Landlord-Tenant Laws - Service members |
Terminate lease with evidence of entry into military |
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Gross Lease |
AKA Fixed rental fee or flat rent Fixed rental fee for term of lease |
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Graduated Rent |
AKA Step-up Rental Escalating rent payments over term |
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Rent Escalation Clause |
Allows owners to pass along increases in taxes, insurance, and maintenance to tenants |
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Percentage Lease |
Tenant pays a base rent plus percentage or gross income over a break point - Owner has incentive to maintain property - Tenant pays less when economy declines |
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Net Lease |
Tenant pays base rent plus NNN expenses |
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Option Clause |
Right to lease or lease-purchase in future at agreed rental fee |
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Assignment |
Tenant transfers entire remaining leasehold interest, without reversion |
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Sub-lease (define and 3 points) |
Tenant transfers part of leasehold interest, with reversion - No contract between landlord and sub-lessee - Original tenant not released from lease - Sub-lessee pays lessee, who pays landlord |
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Ground Lease |
Lease of land, generally 25-99 years |
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Contract Rent |
Amount specified in lease |
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Economic Rent |
FMV rent in competitive market |
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Eviction - Forcible Entry and Detainer (3 points) |
- Deals with "holdover" tenants at detriment of landlord - Requires 3 days written notice to vacate premises (ONLY FOR RESIDENTIAL) - Justice of Peace Court hears case within 10 days of filing (ONLY FOR RESIDENTIAL) |
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Lease termination - 7 ways a lease can be terminated |
1) Expiration of lease 2) Mutual agreement between lessor and lessee 3) Destruction of premises 4) Eminent Domain 5) Mortgage Foreclosure, if mortgage was recorded before lease 6) Breach of contract 7) Abandonment of premises (rarely upheld) |
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Rent Control - When did it originate? |
During WW1 and WW2 to keep rents affordable |
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6 ways Rent control is harmful to tenants and owners |
1) Depressed rents and artificially depressed values 2) Depressed values lead to deferred maintenance 3) Results in slums and unsafe dwellings 4) Lower values reduce tax base for schools, police, fire, etc 5) Lenders don't want RE as collateral 6) Investor not assured of reasonable ROI |
