Texas Real Estate Pre License Principles 1: Cumulative

living trust

a trust created during someone's life to manage their assets in life and in death

abstract of title

an abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances

accretion

the process that results in the gradual increase in land area through deposits of soil by action of water

acre

a measure of the surface of land (43,560 square feet)

ad valorem taxes

a tax calculated according to the assessed value of a piece of real estate

adaptation

the use and modification of a particular item for a specific use in a property

addenda

documents containing additional terms, information, or obligations that are attached to a contract

agency

an agreed-upon relationship between two individuals wherein one represents the interests or acts on behalf of the other

agency by ratification

an unauthorized action taken on behalf of a principal which is accepted and legitimized after the fact by the principal

agent

an individual with authority to act on behalf of another; a state license is required to operate as an agent in real estate

air lot

airspace above a parcel of land

air rights

the right to use the airspace above the surface of land

amendment

changes or modifications to an already agreed-upon contract

Americans with Disabilities Act

a federal law enacted to remove barriers for individuals with disabilities

amortization

the process of paying off a debt/mortgage in regular installments based on a fixed payment schedule

apartment locator

a real estate license holder who locates dwelling units for prospective tenants

appointed license holder

a license holder designated to work with a client as part of an intermediary transaction

approved forms

forms prepared and authorized by the Texas Real Estate Commission that can be used by real estate license holders

arbitration

a conflict resolution technique that requires a third party in the room to make a final decision on the best method of resolving the conflict

arrears

payment for an item or service after it is received

assignment

the transference of obligations in a contract from one party to another

attorney

a person who is licensed to give legal advice

avulsion

the sudden loss of land by flood, or when a stream or river changes course

bilateral contract

an agreement in which both parties give consideration and promise to perform the actions specified in a contract

broker

a person or business entity who is licensed to represent one of the parties in a real estate transaction in exchange for a commission or other valuable consideration

broker price opinion (BPO)

a broker's opinion of the value of a piece of real property, given in writing

bundle of rights

ownership of land with all of the legal rights of possession, control, enjoyment, exclusion, and disposition

buyer representation agreement

a document that creates agency between a broker and a buyer

Canons of Professional Ethics and Conduct

the Texas Real Estate Commission's code of ethics for real estate license holders; contained in Chapter 531 of the Texas Administrative Code

Civil Rights Act of 1866

the first law that began to promise equal rights for all citizens regardless of race or color

client

the person whom an agent is representing, made official through a representation document

cloud

any claim to or encumbrance on the title to a property which affects transferability

CLUE reports

stands for Comprehensive Loss Underwriting Exchange, a database used by insurance agencies that contains information on any claims made in the past five years by property owners on specific properties

Code of Ethics

a document created by the National Association of REALTORS that their members pledge to abide by

commingling

the illegal act of mixing personal funds with a client's funds

common elements

portions of a shared ownership property not controlled by any one owner or tenant; examples include parking lots, lobbies, fitness centers, elevators, etc.

community property

property owned by a married couple in which each spouse has 1/2 ownership of any property obtained during the marriage, plus a right of survivorship ownership after the death of either spouse

Community Reinvestment Act

helps commercial banks and savings associations meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods

comparative market analysis

a report comparing the prices of sold homes that are similar to the subject property (called comparables), created by a license holder to help the seller or buyer determine the market value

consumer

a person or company that buys or leases any product or service

contingency

stipulations or conditions that must be satisfied before the contract can be performed

contour map

a map where curved lines (contour lines) connect contiguous points of equal elevation to define the contours of the land, also called a topographic map

contract

a legally binding and enforceable agreement to do or not to do a specific thing

conventional life estate

a type of freehold life estate created by a deed or will that lasts for the duration of the tenant's life

conveyance

a transfer of ownership of a piece of real estate from one person to another

cooperating broker

the other broker or sales agent that shows the listed property to a buyer who subsequently purchases the property

cooperative (co-op)

a residential building in which the title is held by a corporation, the residents are stockholders in the corporation, and the residents have a lease

corporation

an entity that is doing business

datum

a base point from which measurement is taken by moving upward or downward, marking standard heights or depths

disability or handicap

a physical or mental impairment that substantially limits one or more major life activities, the record of such impairment, or being regarded as having such an impairment

easement

an interest in, or a right to use, another individual's land or property, generally for a specific, limited purpose

encroachment

physical property that crosses the boundary into a neighboring landowner's property

encumbrance

any claim or right against a property held by another that is not the fee title owner

equal opportunity in housing

the concept that everyone will have equal access to housing with no discriminatory actions taking place

equitable lien

a right that exists only in equity, with one party charging their property as security for a debt or loan

errors and omissions insurance

insurance that protects against mistakes a license holder might make in real estate transactions; it does not cover acts of fraud or other intentional misconduct

estate

the degree, quantity, nature, and extent of one's interest in property

estate for years

a leased possession of property for a certain, specific period of time; also known as a tenancy for years

exclusive agency listing

a listing agreement in which the owner retains the right to sell the property themselves without paying a commission, or the commission will be paid to the named broker if the broker or any other party sells the property

exclusive right to sell agreement

a listing agreement which gives the agent the sole right to sell the property and guarantees that the broker receives a commission if the property is sold, even if the seller brings the buyer themselves

executed contract

a contract in which all terms have been fulfilled by all parties

execution lien

lien created by a writ of execution issued by a court to force payment of monies owed from a judgment when a debtor does not pay

executory contract

a contract that is not completely executed or performed

express agency

agency created by a clear, specific agreement; can be written or oral

Fair Housing Act of 1968

a federal law that prohibits discrimination in housing based upon race, color, religion, or national origin and was amended to include sex, disability, and familial status

familial status

under the Fair Housing Act, a protected class composed of families who have children under 18, pregnant women, and people in the process of obtaining legal custody of a child

federal judgment lien

lien filed by the government for failure to pay certain debts

fee simple condition subsequent

a defeasible fee estate in which a grantor conveys a parcel of real estate subject to a condition of ownership; the grantor must go to court to assert their right to retake ownership (right of re-entry)

fee simple defeasible

a property interest characterized by perpetual ownership on the condition that the property is used for a certain purpose or under specific conditions; ownership reverts back to the original owner if these stipulations are violated

fee simple determinable

a defeasible fee estate that will come to an end automatically and immediately upon the occurrence of a designated event, the time of which is uncertain

fee simple estate

maximum ownership of real property; also called a fee or a fee simple absolute; it is of indefinite duration, freely transferable, and freely inheritable

fiduciary duties

a responsibility to act in the best interest of your client — the highest standard

fixture

"an object that was once personal property but is now firmly attached to the land in such a way that it is considered to be real property

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forbearance agreement

part of a contract that requires one or more of the contracting parties to refrain from actions they are otherwise legally entitled to perform

Four Corners Doctrine

a legal concept stating that the court can only consider information that appears within the four corners of the documents

fraud

a misstatement made intentionally to deceive

freehold estate

an estate in land in which ownership will last for an indeterminate duration

fructus naturales

trees, bushes, grass, and uncultivated plants, usually considered to be real property because of their permanence

general lien

a lien in which the real estate AND personal property may be sold to satisfy the debt

groundwater rights

property owners' right to use water under the surface through the rule of capture

Home Mortgage Disclosure Act

federal act that requires lenders to disclose specific lending information, which HUD then uses to map lending patterns

homestead

a property that a person or family owns and occupies as their primary residence

homestead tax exemption

reduces the amount of ad valorem taxes assessed on a homestead

Housing and Community Development Act

a 1988 amendment to the Fair Housing Act that added familial status and disability to the list of protected classes

immobility

characteristic of land stating that land has a particular geographical location that will remain constant, barring erosion or slow, geological changes

implied agency

agency that is created by the actions, conduct, and words of either or both parties without ever being expressly requested

improvement

any non-natural structure built on or affixed to land

individual ownership

a form of property ownership in which one person is the owner of a property and has absolute control over the distribution and use of the land

intermediary broker

a broker who negotiates a contract between two parties that are both being represented by that broker

involuntary lien

a lien that is created without the property owner taking any action to initiate it

joint tenancy

co-ownership in which the parties have an equal and undivided interest in the property; includes the right of survivorship rather than inheritance

fixity

refers to the fact that real estate exists in a fixed location and cannot be moved; describes this truth about land from an economic viewpoint

co-ownership

ownership of a property by more than one person

timeshare

a form of co-ownership where each owner has use of the property at a different prescribed period of time, also known as interval ownership

novation

the act of replacing an existing contract with a new, modified one

land

the surface of the earth, including all permanently attached natural features, extending downwards to the center of the earth and upwards to infinity

land surveying

the science of determining points and the distances and angles between them, often for the purpose of establishing land maps and boundaries for ownership transfers of real estate

land trust

a trust in which land is purchased to be held for a long period of time for the benefit of a named party

leasehold estate

a type of property interest allowing tenants to occupy and use a property they do not own; contains a reversionary right