Texas Real Estate Exam Memory Tips and Study Notes Volume 3

Comprehensive vocabulary flashcards covering property ownership, deeds, financing, foreclosure clauses, survey terminology, taxation, contracts, and Texas real estate regulations from Kaplan Principles of Real Estate in Texas I (Volume 3).

Title Insurance

An insurance policy that primarily protects against covered title defects or events that existed before the policy date, even if discovered later.

Community Property (Texas)

Generally, property acquired during marriage, except separate property such as qualifying gifts and inheritances.

Separate Property

Property owned before marriage and property acquired individually by gift or inheritance, among other exceptions.

Fixture vs. Trade Fixture

A regular fixture generally becomes real property, whereas a tenant's trade fixture generally remains personal property.

General Warranty Deed

A deed that provides the broadest warranties of title, covering warranted defects arising throughout the chain of ownership.

Constructive Notice

Legal notice arising from properly recorded or otherwise legally available information, even without actual knowledge.

Encumbrance

A claim, lien, restriction, or other burden affecting ownership rights, title, or property use.

Ownership in Severalty

Sole ownership of property by one person or one legal entity.

Texas Primary Land-Description Methods

Metes and bounds and recorded subdivision plat (lot and block).

Abstract of Title

A condensed history of instruments affecting a particular parcel of land.

Land, Real Estate, and Real Property

Land is the physical earth and natural attachments; real estate adds improvements; real property adds ownership rights and interests.

Void Deed (Wholly Fictitious Grantee)

A deed rendered void because there is no legally existing or identifiable recipient capable of taking title.

Fee Simple Absolute

The broadest form of ownership, generally transferable, inheritable, and unlimited in duration.

Conventional Life Estate Termination

The end of a life estate upon the death of the life tenant, whereupon possession passes to the reversioner or remainderman.

Real Estate Investment Trust (REIT)

An entity that invests investor funds in income-producing real estate, mortgages or mortgage-related investments, or both.

Time-Share

An arrangement granting different owners or users rights to occupy the same property during designated periods.

Illiquidity of Real Estate

The characteristic of real estate where converting property into cash generally requires time for marketing, sale, and closing.

Marketable Title vs. Insured Title (Texas)

Marketable title concerns reasonable freedom from title doubts; title insurance covers specified risks and does not guarantee marketability as such.

Modular vs. Manufactured Homes

Modular units or components are assembled under applicable building codes; manufactured homes are constructed under federal HUD standards, generally on a chassis.

Trustor

The borrower in a deed of trust who pledges property as security for a loan.

Lender's Title Insurance Policy

A title policy that protects the mortgage lender and its insured mortgage interest, not the buyer's ownership equity.

Owner's Title Policy

A title policy designed to protect covered ownership risks.

Acceleration Clause

A loan clause that allows the lender to declare the unpaid loan balance immediately due following a specified default.

Power-of-Sale Clause

A clause that authorizes nonjudicial foreclosure under applicable law without first obtaining a court judgment.

Alienation Clause

A due-on-sale provision potentially requiring loan repayment when the property is transferred.

Federal Judgment Lien Duration (28 U.S.C. §3201)

A lien that is generally effective for $20\,\text{years}$, with a possible additional $20\,\text{year}$ renewal.

Super-Priority Real Estate Liens

Real property tax liens and qualifying special assessments, which generally receive highest priority subject to legal exceptions.

Texas Homestead Unsecured Debt Protection

Constitutional protection preventing Texas homesteads from being foreclosed for ordinary unsecured debts, such as unsecured medical bills.

Permitted Texas Homestead Foreclosure Liens

Qualifying loan purposes that permit homestead foreclosure, including home purchase, qualifying improvements, and qualifying refinancing, among other constitutional exceptions.

FIRPTA Withholding Responsibility

The obligation generally placed on the buyer (transferee) to withhold tax when acquiring property on a foreign seller's disposition.

FIRPTA Noncompliance Liability

The liability incurred by a buyer who fails to remit required withholding, making them liable for the withholding tax plus applicable interest and penalties.

Mortgagee

The lender or secured creditor in a mortgage transaction.

Judgment Lien vs. Judgment Execution (Texas)

A properly recorded judgment lien generally affects nonexempt real estate, whereas execution may reach eligible nonexempt personal property.

Acceleration vs. Foreclosure

Acceleration makes the debt balance due; foreclosure is the legal enforcement process against collateral.

Physical Characteristics of Land

Immobility, indestructibility, and nonhomogeneity.

Economic Characteristics of Land

Scarcity, improvements (permanence of investment), location or area preference, and situs-related demand.

Nonhomogeneity

The physical characteristic stating that every parcel of land is unique in location or physical characteristics.

Texas 10-Year Adverse Possession Acreage Limit

Generally $160\,\text{acres}$ without a qualifying title instrument, subject to statutory conditions.

Texas Survey Sections

Survey sections in Texas described in this exam as larger than $640\,\text{acres}$, unlike the standard rectangular survey section.

Texas Surface Water Ownership (Water Code §11.021)

Specified surface waters generally owned by the State of Texas, subject to recognized exceptions and private rights.

Eminent Domain Requirements

A government taking requiring a qualifying public use or purpose, just compensation, and lawful procedure.

Texas Post-Condemnation Repurchase Right

A right permitting qualifying former owners to repurchase condemned property when statutory conditions concerning progress toward the public use are met.

Severed Mineral and Surface Estates

The legal relationship where the mineral estate is generally dominant, retaining reasonable surface-use rights subject to limitations.

Datum

A reference surface or level used to measure elevation in surveying.

Benchmark

A fixed point with a known elevation relative to a datum in surveying.

Texas Reappraisal Cycle

The requirement that Texas appraisal districts perform property reappraisal activities at least once every $3\,\text{years}$.

Public-Use Ad Valorem Tax Exemption

A tax exemption applying to qualifying government-owned public-use property, such as municipal parkland.

Appraisal vs. Tax Assessment

An appraisal develops an opinion of property value; a tax assessment relates to determining taxable property value or liability.

Tax Credit

A direct reduction of tax liability, distinct from a deduction from taxable income.

Acre (Square Feet)

$43,560\,\text{square feet}$.

Land-Price Formula

$\text{Acres} \times 43,560 \times \text{dollars per square foot}$.

Constitutional Authority

Legal principles establishing governmental powers and their legal limitations, while protecting individual rights.

Federal Lead-Based Paint Disclosure Law

A statute requiring disclosure of known hazards and prescribed information for most pre-$1978$ housing, rather than universal testing or removal.

Fair Housing Act Protected Classes

The $7$ federally protected classes: race, color, religion, national origin, sex, familial status, and disability.

Landlord Sexual Harassment (Fair Housing)

Unlawful landlord conduct that can constitute prohibited sex discrimination under the Fair Housing Act.

Source of Income Protection

A classification that is not a federally enumerated Fair Housing Act protected class, though state or local laws may add protections.

Non-U.S. Citizen Property Acquisition (Texas)

Real estate transactions where citizenship alone is not a general contract requirement, though applicable foreign-ownership restrictions can limit certain purchases.

Brokerage Sole Proprietorship Requirement (Texas)

The mandate that a real estate brokerage sole proprietor must hold a broker's license to operate independently as a real estate broker.

Texas Property Code §92.020

A statutory rule requiring landlords with onsite management to provide a $24\,\text{hour}$ emergency telephone contact method for habitability emergencies.

Express Contract

An agreement whose terms are communicated through spoken or written words.

Bilateral Contract

A contract formed by exchanging promises between two parties.

Impossibility of Performance

A circumstance in which performance becomes objectively impossible, potentially excusing contractual obligations under applicable law.

Prepaid Closing Item

An expense paid in advance that includes a period after closing, such as prepaid HOA dues.

Seller's Prepaid Expense Proration

A closing adjustment entered as a credit to the seller and debit to the buyer for the unused period benefiting the buyer.

Net Listing

A listing agreement specifying the seller's desired net proceeds, with broker compensation based on the excess over that amount.

Option Contract

A contract giving the option holder the right, but not the obligation, to purchase under agreed conditions within a stated period.

Four Traditional Listing Types

Exclusive right-to-sell, exclusive agency, open listing, and net listing.

Limited Partnership Structure

A business partnership formed by at least one general partner and at least one limited partner.

Residential Service Contract Referral Payments (Texas)

A rule stating that legitimate non-transaction-related services may be compensable with proper disclosure and compliance, while prohibited referral or contingent payments remain restricted.

Sex Offender Disclosure Rule (Texas)

The rule that nearby registration information generally is not an affirmative mandatory disclosure by owners or agents, though public registry information may be consulted.

Kaplan Course Final Exam Passing Score

$70\%$ on the course final examination.

Texas Qualifying Education Requirement

$180\,\text{hours}$ of qualifying education required for licensing.

CLEAR Mnemonic

Memory shortcut for property definitions: Chattels are personal, Land is physical, Estate adds improvements, Associated rights create real property, Recorded title reveals claims.

MAP Mnemonic

Memory shortcut distinguishing deeds and ownership concepts: Marketable title, Abstract of title, and Policy of title insurance.

P.A.S. Mnemonic

Memory shortcut for lending clauses: Power of sale forecloses, Acceleration makes balance due, and Sale/alienation triggers a due-on-sale condition.

PIG Mnemonic

Memory shortcut for permitted Texas homestead liens: Purchase, Improvement, and qualifying General refinancing.

DATE Mnemonic

Memory shortcut for surveying terms: Datum equals Altitude reference; Tied Elevation point equals benchmark.

F.O.R. Mnemonic

Memory shortcut for life estates: For life, Ownership interest ends, and Remainder/reversion follows.