Texas Law of Contracts - Chp. 5 Contracts Used in Real Estate

Form 20-12

David is a real estate agent in Dallas. Which of the following Texas promulgated contract forms will David most likely use in his practice...?

Form 20-12

Form 12-A

Form OP

Form 10-1

One to Four Family Residential Contract (resale)

Which of the following is the most commonly used promulgated contract form...?

Optional Residential Contract

Form OP

Residential Listing Contract

One to Four Family Residential Contract (resale)

Optional contracts

Which of the following are not considered promulgated contract forms...?

Standard contracts

Optional contracts

Required contracts

All of the above

'OP'

Optional TREC contracts are designated by which of the following...?

'OP'

'OT'

'PO'

'ST'

TREC website

The Texas promulgated contract forms can be found at the...?

TREC website

U.S. Attorney General website

NAR website

Bureau of Real Estate website

1-4 Family for Residential Property Resale (one to submit offers) Most widely used form in Texas

Form 20-12

Performance

A contract that requires a party to do something is considered a .......................... contract?

Forbearance

Unilateral

Performance

Optional

Forbearance

A contract that requires a party to not do something is considered a ...................... contract?

Performance

Forbearance

Unilateral

Optional

Salesperson

An independent contract agreement exists between a broker and a...?

Salesperson

Principal

Client

Buyer

A lease

A sales contract

An independent contractor agreement

All of the above

Which of the following is considered a bilateral contract...?

A lease

A sales contract

An independent contractor agreement

All of the above

T (True)

Listing contracts can be either a unilateral or bilateral contract...?

T (True)

F (False)

Bilateral contract

A Buyer/Tenant Representation Agreement is considered what type of contract...?

Unilateral contract

Bilateral contract

Optional contract

Forbearance contract

Broker

A listing contract exists between the client and the...?

Customer

Salesperson

Broker

Buyer

Statute of Limitations

A law establishing the time period within which certain lawsuits may be brought.

Full performance

Assignment

Novation

All of the above

A contract can be discharged by which of the following means...?

Full performance

Assignment

Novation

All of the above

Full performance

Which of the following is the best way to discharge a contract...?

Full performance

Breach of contract

Novation

Assignment

Listing Contract

A contract in which a property owner employs a real estate broker to market the property described in the contract.

F (False)

Listing contracts are promulgated by TREC...?

T (True)

F (False)

All of the above

Which of the following information may be included in a listing contract...?

Location of lock boxes

When a 'For Sale' sign can be placed in the yard

The amount of commission to be paid to the broker

All of the above

Exclusive Agreement (Exclusive Right to Sell Listing Agreement)

A listing given to only one broker who is entitled to the commission if anyone sells the property during the term of the listing contract.

Non-Exclusive Listing (Open Listing)

A listing given to one or more brokers in which the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner when the owner sells the property.

Exclusive Right to Sell Listing Agreement

A listing given to only one broker who is entitled to the commission if anyone sells the property during the term of the listing contract is referred to as a/an...?

Exclusive Agency Agreement

Exclusive Right to Sell Listing Agreement

Net Listing Agreement

Open Listing Agreement

Open listing agreement

Which of the following is an example of a non-exclusive listing agreement...?

Exclusive agency agreement

Exclusive right to sell agreement

Open listing agreement

Net listing agreement

Listing contract

Which of the following contracts describes how the real estate broker will be compensated...?

Listing contract

Purchase contract

Trust contract

Sales contract

Special agent

According to the listing agreement, a seller's broker is considered a...?

General agent

Special agent

Dual agent

Universal agent

T (True)

Regardless if an agent helped obtain a listing contract, the agent's sponsoring broker still owns the listing...?

T (True)

F (False)

After the agent finds a ready, willing, and able buyer

When is a seller's agent entitled to be compensated...?

After the agent finds a ready, willing, and able buyer

After the agent closes on the deal

After the seller earns his/her profit from the transaction

After the buyer moves into the house

broker gets paid

Ready, willing and able buyer means

Multiple Listing Service (MLS)

An association of real estate agents providing for a pooling of listings and the sharing of commission on a specified basis.

None of the above

Which of the following listing contracts are illegal in Texas...?

Net listing agreements

Open listing agreements

Exclusive agency agreements

None of the above

Sellers

The listing agent primarily represents which of the following...?

Sellers

Buyers

Customers

Brokers

3% (percent)

If the commission on the sale of a property is 6%, how much will the cooperating broker earn if the seller's broker offered a 50/50 split...?

1.5% (percent)

3% (percent)

4% (percent)

6% (percent)

There is no standard commission rate

What is the standard commission rate for brokers in Texas...?

2% (percent)

3% (percent)

6% (percent)

There is no standard commission rate

Cooperation fee

A broker who finds a buyer for a listing on the MLS is entitled to which of the following...?

Bonus

Salary

Cooperation fee

All of the above

The MLS allows a broker's listing to get more exposure...?

T (True)

F (False)

T (True)

Buyer Agency Agreement

An employment contract that appoints a brokerage firm as a buyer's agent for the purpose of finding a suitable property for the buyer.

Lease

A contract between owner and tenant, setting forth conditions upon which tenant may occupy and use the property and the term of the occupancy. Sometimes used as an alternative to purchasing property outright, as a method of financing right to occupy and use real property.

Estate for Years

An interest in land by virtue of a contract for the possession of them for a definite and limited period of time. May be for a year or less. A lease may be said to be an estate for years.

Estate From Period to Period

An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year. Also called a periodic tenancy.

Tenancy at Will

A property tenure that can be terminated at any time by either the tenant or the owner (landlord). It exists without a contract or lease, and is unspecific in duration or the exchange of payment.

Estate at Sufferance

An estate arising when the tenant wrongfully holds over after the expiration of the term. The landlord has the choice of evicting the tenant as a trespasser or accepting such tenant for a similar term under the conditions of the tenant's previous holding. Also called a tenancy at sufferance.

Estate for Years

A typical lease is considered a/an...?

Estate for Years

Estate From Period to Period

Estate at Sufferance

Periodic Estate

Estate From Period to Period

An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year is referred to as a/an...?

Estate for Years

Estate From Period to Period

Estate at Sufferance

Absolute Estate

A property tenure that can be terminated at any time by either the tenant or the landlord is known as a/an...?

Tenancy at will

Estate at sufferance

An estate arising when the tenant wrongfully holds over after the expiration of the term is referred to as a/an...?

Tenancy at will

Estate at sufferance

Tenancy for years

Estate from period to period

Eviction

An estate at sufferance may lead to which of the following...?

Condemnation

Eminent domain

Eviction

Escheat

Lessor

An owner who enters into a lease agreement with a tenant; a landlord.

Lessee

One who contracts to rent, occupy, and use property under a lease agreement; a tenant.

Statute of Frauds

A State law, based on an Old English statute, requiring certain contracts to be in writing and signed before they will be enforceable at law, e.g. contracts for the sale of real property, contracts not be performed within one year.

Leasehold Estate

A tenant's right to occupy real estate during the term of the lease. This is a personal property interest.

Contracts for the sale of real property

Leases longer than 1 year

Leases longer than 2 years

All of the above

According to the statute of frauds, which of the following contracts must be in writing...?

Contracts for the sale of real property

Leases longer than 1 year

Leases longer than 2 years

All of the above

Leasehold estate

A tenant's right to occupy real estate during the term of the lease is referred to as a...?

Freehold estate

Fee simple estate

Leasehold estate

Fee simple determinable estate

According to the statute of frauds, all leases must be in writing...?

T (True)

F (False)

F (False)

Legally competent parties

Lawful objective

Offer and acceptance

All of the above

A lease must contain which of the following elements...?

Legally competent parties

Lawful objective

Offer and acceptance

All of the above

Security Deposit

A sum of money that the landlord requires of the tenant prior to the lease; it is to be refunded at the end of the lease based on the condition of the premises.

Commingling

The illegal mixing of personal funds with money held in trust on behalf of a client.

Assignment

The transfer of legal rights and obligations by one party to another.

Sublease

The transfer of only part of a lease term with reversion to the lessee; a lesser lease estate.

A sum of money that the landlord requires of the tenant prior to the lease is known as a...?

Assignment

Conversion

Security Deposit

Down payment

Security Deposit

The illegal mixing of personal funds with money held in trust on behalf of a client is referred to as...?

Assignment

Commingling

Condemnation

Novation

Commingling

The transfer of legal rights and obligations by one party to another is referred to as...?

Assignment

Conversion

Rescission

Novation

Assignment

The transfer of only part of a lease term with reversion to the lessee is known as a...?

Sublease

Temporary lease

Rescinded lease

Converted lease

Sublease

How does a longer term lease typically impact the amount of rent paid...?

The rent will be lower

The rent will be higher

The rent will stay the same

The amount of rent paid is not related to the lease term

The rent will be lower

A lease in which the lessor pays all costs of operating and maintaining the property and real property taxes

Gross Lease

A lease requiring a lessee to pay charges against the property such as taxes, insurance and maintenance costs in addition to rental payments.

Net Lease

Lease on the property, the rental for which is determined by amount of business done by the lessee; usually a percentage of gross receipts from the business with provisions for a minimum rental.

Percentage Lease

Lease which provides for a varying rental rate, often based upon future determination; sometimes rent is based upon result of periodical appraisals; used largely in long-term leases.

Graduated Lease

An agreement for the use of land only, sometimes secured by improvements placed on the land by the user.

Ground Lease

Ground lease

A lease for the use of land only, sometimes secured by improvements placed on the land by the user is referred to as a...?

Net lease

Gross lease

Ground lease

Graduated lease

Graduated lease

A lease which provides for a varying rental rate, often based upon future determination is known as a...?

Net lease

Gross lease

Ground lease

Graduated lease

Percentage lease

A lease in which the rent is determined by the amount of business done by the lessee is known as a...?

Percentage lease

Ground lease

Gross lease

Graduated lease

Gross lease

A lease in which the lessor pays all costs of operating and maintaining the property and real property taxes is referred to as a...?

Net lease

Graduated lease

Gross lease

Percentage lease

Optionor

A person who gives an option.

Optionee

A person who receives an option.

An options agreement is included in which of the following contracts...?

Net Listing Agreement

Exclusive Right to Sell Agreement

One to Four Family Residential Contract (resale)

Residential Listing Contract

One to Four Family Residential Contract (resale)

Principal

The buyer is the .....................in a Buyer Agency Agreement?

Agent

Principal

Broker

Customer

Which of the following exists without a contract or lease, and is unspecified in duration or exchange of payment...?

Estate for years

Temporary estate

Tenancy at sufferance

Tenancy at will

Tenancy at will

Is ready to sign the sales contract

Is ready to move towards closing on the property

All of the above

Has the financial means to close on the property

A ready, willing, and able buyer means the buyer...?

Is ready to sign the sales contract

Is ready to move towards closing on the property

All of the above

Has the financial means to close on the property

Lessee

A tenant is also referred to as a...?

Lessee

Lessor

Grantor

Grantee