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Questions and Answers

What constitutes actual fraud?

  • Making a statement based on assumptions
  • Substantiating a claim with non-factual documentation
  • Promising something without intending to keep it (correct)
  • Providing information with good faith belief

What does 'ad valorem' refer to?

  • A fee paid before services are rendered
  • A type of mortgage agreement
  • An adjustment to interest rates
  • Taxation based on property value (correct)

What is an addendum in the context of a sales contract?

  • A term referring to adjustable mortgage rates
  • A legal statement of ownership
  • A supplementary document attached to a contract (correct)
  • A method for increasing property value

What characterizes an adjustable rate mortgage (ARM)?

<p>Rates that change periodically within a certain range (A)</p> Signup and view all the answers

What does an advance fee imply in real estate brokerage?

<p>An upfront fee with no promise of a transaction (C)</p> Signup and view all the answers

How does adverse possession generally function in property law?

<p>It provides title based on open and notorious possession (A)</p> Signup and view all the answers

What is the primary concern regarding advance fees in real estate?

<p>They must be documented accurately (C)</p> Signup and view all the answers

Which of the following statements about actual notice is accurate?

<p>It means having specific, actual knowledge of a fact (D)</p> Signup and view all the answers

What is an abstract of title?

<p>A summary of the condition of title to real property based on public records. (D)</p> Signup and view all the answers

Which best describes an acceleration clause?

<p>A clause that enables a lender to demand full repayment upon a specific event. (C)</p> Signup and view all the answers

What does the term 'acceptance' refer to in contract law?

<p>The expression of intent to be bound by the terms of an offer. (D)</p> Signup and view all the answers

What is the role of accounting in a fiduciary relationship?

<p>To maintain and preserve the property and money of the principal. (C)</p> Signup and view all the answers

What does the term 'accretion' refer to in property law?

<p>A natural addition to land from gradual actions of bodies of water. (B)</p> Signup and view all the answers

What is the purpose of an acknowledgment in property documentation?

<p>To prevent documents from being forged or fraudulently induced. (D)</p> Signup and view all the answers

What is an acre defined as?

<p>A measure of land equaling 160 square rods or approximately 43,560 square feet. (D)</p> Signup and view all the answers

Which type of damages are recognized by a court as a direct result of a wrongful act?

<p>Compensatory damages that arise directly from the wrongdoing. (A)</p> Signup and view all the answers

What is a key characteristic of a cooperative building?

<p>Residents own shares in a corporation and have proprietary leases. (D)</p> Signup and view all the answers

In co-ownership, what does it mean to have an undivided interest?

<p>All co-owners have equal rights to access and use the property. (B)</p> Signup and view all the answers

What defines a corporation in legal terms?

<p>A separate legal entity with rights and responsibilities distinct from its owners. (C)</p> Signup and view all the answers

What is primarily assessed in the cost approach to property appraisal?

<p>The replacement cost of improvements minus depreciation. (B)</p> Signup and view all the answers

What does the term 'cost of money' typically refer to?

<p>The interest rate incurred for borrowing funds. (D)</p> Signup and view all the answers

What is the effect of making a counteroffer?

<p>It cancels the original offer and proposes new terms. (B)</p> Signup and view all the answers

What role does a county treasurer fulfill?

<p>Handling public revenues and expenditures. (C)</p> Signup and view all the answers

Which of the following is true about covenants in property transactions?

<p>They impose specific duties or restrictions on property use. (B)</p> Signup and view all the answers

What is typically included in a property declaration?

<p>A description of the land and its uses (B)</p> Signup and view all the answers

What differentiates a deed of trust from a standard mortgage?

<p>It involves three parties (D)</p> Signup and view all the answers

What is a deed restriction?

<p>A limitation on how the property can be used (D)</p> Signup and view all the answers

What does a default typically represent in a contract?

<p>A breach of contract obligation (C)</p> Signup and view all the answers

What is the role of a trustee in a deed of trust?

<p>To transfer title back to the borrower upon repayment (C)</p> Signup and view all the answers

In relation to mortgages, what function does a defeasance clause serve?

<p>To enable the mortgagor to redeem the property (B)</p> Signup and view all the answers

What issue may arise with junior liens related to a quit claim deed?

<p>Conflicting ownership claims (D)</p> Signup and view all the answers

Which statement accurately describes a quit claim deed?

<p>It conveys ownership interest without warranty (D)</p> Signup and view all the answers

What is required to be disclosed when selling a house?

<p>Major physical defects such as a leaky roof (D)</p> Signup and view all the answers

What does 'disintermediation' refer to in the context of real estate?

<p>Investing savings directly instead of through banks (C)</p> Signup and view all the answers

What does 'discrimination' in real estate law prohibit?

<p>Any unequal treatment based on group affiliation (C)</p> Signup and view all the answers

What is the significance of the Civil Rights Act of 1866 in real estate?

<p>It prohibits discrimination based on race in property dealings (C)</p> Signup and view all the answers

What is meant by 'disparate impact' in discrimination cases?

<p>Neutral actions affecting protected classes more significantly (C)</p> Signup and view all the answers

What are discount points in the context of mortgages?

<p>Amounts paid to reduce the loan interest rate (D)</p> Signup and view all the answers

Which statement best describes the process described by 'disclosure' in real estate?

<p>It requires revealing major defects in a property (B)</p> Signup and view all the answers

Which of the following does NOT represent a common requirement in real estate transactions?

<p>Waiting for buyer approval before listing (B)</p> Signup and view all the answers

What is the term for the crops produced annually through labor and industry?

<p>Emblement (C)</p> Signup and view all the answers

Which legal principle allows the government to acquire property for public use?

<p>Eminent Domain (B)</p> Signup and view all the answers

What does encapsulation of asbestos-containing material aim to prevent?

<p>Release of fibers into the air (D)</p> Signup and view all the answers

What is the definition of encroachment in property law?

<p>The act of building on another's property (B)</p> Signup and view all the answers

Which of the following describes encumbrances on real property?

<p>May restrict the use of property (C)</p> Signup and view all the answers

What does the term entitlement refer to in the context of VA loans?

<p>The amount guaranteed by the government (C)</p> Signup and view all the answers

Which agency is responsible for managing federal pollution control activities?

<p>Environmental Protection Agency (A)</p> Signup and view all the answers

What is enforceability related to in legal terms?

<p>Ability to carry out effectively (A)</p> Signup and view all the answers

Flashcards

Abstract of Title

A summary of a property's ownership history based on public records, showing deeds, transfers, and encumbrances.

Acceleration Clause

A clause in a loan document that allows the lender to demand immediate payment of the entire loan if certain conditions aren't met.

Acceptance

A clear agreement to accept the terms of an offer. The agreement must be communicated.

Accession

Adding property to existing property through natural causes or by another person's actions.

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Accounting

Agent's duty to track and account for a principal's funds and property.

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Accretion

Land increase from natural causes, typically by water.

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Acknowledgment

A formal statement of authenticity for a document, confirming the signature is genuine and voluntary.

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Acre

A unit of land area (43,560 square feet).

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Actual Fraud

An act meant to deceive, like making a false promise or lying.

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Actual Notice

Knowing a fact directly, not just through hints.

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Ad Valorem

Taxation based on value.

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Addendum

Extra material added to a document.

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Adjustable Rate Mortgage (ARM)

A loan with interest rates that can change over time.

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Advance Fee

A fee paid before service, often without guarantees.

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Adverse Possession

Claiming ownership through continuous, open use.

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Possession

Physical control or ownership.

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Cooperative

A building/housing where residents are shareholders owning a proprietary lease to a unit, and can use common areas.

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Co-Ownership

Two or more people/entities owning an undivided interest in a property.

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Corporation

A legal entity separate from its owners, created by law.

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Cost Approach

Valuation method estimating improvements' cost, subtracting depreciation, and adding land value.

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Cost of Money

The interest rate charged for borrowing money.

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Counteroffers

A new offer in response to a previous one, rejecting the initial offer.

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County Treasurer

Government officer managing public funds.

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Covenant

Agreements in deeds promising specific actions or restrictions on property use.

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Declaration

A detailed document describing a real estate project, including land ownership, apartment details, building use, and legal requirements.

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Deed

A legal document transferring ownership of real property from a grantor to a grantee.

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Deed of Trust

A legal document where property ownership is transferred to a trustee as security for a loan, with three parties involved: borrower, lender, and trustee.

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Deed Restriction

Limitations in a deed that dictate permitted uses of a property.

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Default

Nonperformance of a duty or obligation in a contract, leading to potential legal remedies for the non-defaulting party.

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Defeasance Clause

The clause in a mortgage allowing the borrower to reclaim their property by fulfilling their obligations to the lender.

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What is Deed in Lieu of Foreclosure?

A legal document where the borrower voluntarily transfers property title to the lender to prevent foreclosure.

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What is a Quitclaim Deed?

A deed that transfers any and all interests a grantor has in a property to a grantee, without guarantees of ownership.

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Effective Date of Value

The specific day the conclusion of value applies.

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Emblement

Crops produced annually, by labor and industry, as distinguished from crops that grow naturally on the land.

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Eminent Domain

The right of the government to acquire property for necessary public or quasi-public use by condemnation; the owner must be fairly compensated.

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Employee

One who works under the supervision and control of another.

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Encapsulation

The process of applying a sealant to asbestos-containing material, which penetrates the material’s surface, preventing the release of the dangerous fibers into the air.

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Encroachment

The building of a structure or construction of any improvements, partly or wholly on the property of another. A form of trespass.

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Encumbrances

Any claim, lien, charge or liability attached to and binding on real property that may lessen its value or burden, obstruct or impair the use of a property but not necessarily prevent transfer of title.

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Enforceability

The ability to carry out effectively

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Disclosure

The act of revealing or making known important information, especially about potential problems with a property.

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Discount Point

A fee paid upfront to a lender to lower the interest rate on a mortgage. Each point equals 1% of the loan amount.

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Discrimination

Treating someone unfairly based on their membership in a particular group or class.

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Disintermediation

When people withdraw their savings from banks and invest directly, leading to less money available for mortgages.

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Disparate Impact

A legal doctrine that shows discrimination even if there's no direct intent, based on a rule that negatively affects a protected group more than others.

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What is the purpose of disclosure in real estate?

Disclosure in real estate aims to provide buyers with all the necessary information about a property, including potential defects, to make an informed decision.

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How does a discount point affect a mortgage?

A discount point lowers the interest rate on a mortgage, but the buyer pays a fee upfront to the lender.

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Why is discrimination against certain groups prohibited in housing?

Prohibiting discrimination ensures that everyone has equal access to housing opportunities, regardless of their race, religion, or other protected characteristics.

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Study Notes

Flash Cards

  • Professional, published flash cards are available for purchase in the admissions office.
  • If you want to make your own, three definitions are provided per page.
  • Cut horizontally along the perforated lines, then fold in half.
  • The vocabulary word is on one side, and the definition is on the reverse side.

Abstract of Title

  • A summary of the condition of title to real property.
  • Uses an examination of public records.
  • Includes a digest of deeds, transfers, encumbrances, and other instruments reflecting ownership.

Acceleration Clause

  • A clause in a trust deed or mortgage.
  • Gives the lender the right to call all sums due and payable immediately upon a certain event.

Acceptance

  • The expression of intent to be bound by the terms of an offer.
  • Acceptance must be communicated to the offeror.
  • Can be a written/verbal or even a nod of the head.
  • If the offer is in writing, and pertains to real property, the acceptance must be in writing.

Accession

  • Gaining title when property is added to a property by another or a natural action.

Accounting

  • The fiduciary duty of an agent to maintain and preserve the property and money of the principal.
  • Agents must keep accurate records of all funds and documents received.

Accretion

  • An addition to land from natural causes (e.g., from gradual action of the ocean or river waters.)

Acknowledgment

  • To recognize as genuine or valid; A formal declaration made before a duly authorized officer (like a notary public).
  • By the person who signed the document.
  • The document itself can be acknowledged.
  • Designed to prevent forged or fraudulently induced documents.

Acre

  • A measure of land.
  • Equivalent to 160 square rods, 4,840 square yards, 43,560 square feet, or about 208.71 feet square.

Actual Damage

  • Damages that a court of law will recognize and that are a direct result of a wrong.

Actual Fraud

  • An act meant to deceive another.
  • Such as making a promise without intending to keep it, suppressing the truth, or making a false statement.

Actual Notice

  • Having actual knowledge of a fact.
  • Compared with implied or inferred notice.

Ad Valorem

  • A Latin phrase meaning "according to value."
  • Usually used in connection with real estate taxation.

Addendum

  • Additional material attached to and made part of a document.
  • Used when there is insufficient space for all transaction details on the sales contract/agreement.
  • Should be incorporated into the agreement and dated/signed by all parties.

Adjustable Rate Mortgage (ARM)

  • A loan (mortgage or deed of trust) with rates and terms that change.
  • Governed by guidelines from the Comptroller of the Currency (national banks) and the Office of Thrift Supervision (federal savings and loan associations).
  • Allows interest rates to increase or decrease within a certain range at certain time intervals.

Advance Fee

  • A fee paid before services are rendered.
  • Often used in real estate brokerage to cover advertising expenses, but without guarantee of a sale.
  • Brokers must keep accurate records of expenditures.

Adverse Possession

  • Claiming based on open and notorious possession and occupancy.
  • Usually under a claim or right, denying or opposing the title of another claimant.

Affidavit

  • A written statement sworn to or affirmed before an authorized officer.

Agency

  • A relationship created when one person (the principal) delegates the right to act on their behalf in business transactions to another (the agent).
  • With discretion.
  • A fiduciary or statutory relationship with specific duties, obligations, and high standards of good faith and loyalty for the agent.

Agent

  • A person authorized to represent and act on behalf of another person (the principal) in a matter.
  • Can be a real estate broker acting on behalf of a seller or buyer.

Agreeing

  • To consent to a particular course of action.

Air Rights

  • The rights in real property to use the air space above the surface of the land.

Alienation

  • The act of transferring property (and possession of lands or other things) from one person to another.

Alienation Clause

  • A clause in a note or trust deed that allows the payee or beneficiary to declare the entire unpaid balance immediately due and payable upon a subsequent sale of the property.

Allodial Tenure

  • A real property ownership system that can be complete ownership, except for rights held by the government.

Alluvion

  • Soil deposited by accretion or increase of earth on a shore or bank of a river.

Amended

  • To change or modify for the better, improve, amend the situation, etc., especially in phraseology or formally.

Americans with Disabilities Act (ADA)

  • A federal law (1992) designed to eliminate discrimination against individuals with disabilities.
  • Mandates equal access to jobs, public accommodations, government services, public transportation, and telecommunications.

Amortization

  • The liquidation of a financial obligation on an equal installment basis.
  • Also includes the recovery of cost or value over a period.

Annexation

  • The addition of property by adding or attaching other property to it.
  • Can include fixtures, or the addition of unincorporated territory to a city/town.

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