Florida Real Estate Sales Associate Exam Facts

Compendium of essential vocabulary, mnemonics, and legal facts for the Florida Real Estate Sales Associate exam.

Transaction Broker

The presumed default brokerage relationship in Florida which provides limited representation but no fiduciary relationship to both the buyer and seller in the same transaction.

Single Agent

A brokerage relationship where the agent owes full fiduciary duties to one party, characterized by the mnemonic OLD CAR (Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable skill, care, and diligence).

Dual Agency

An illegal practice in Florida where a broker represents both the buyer and seller as a single agent in the same transaction.

No Brokerage Relationship

A nonrepresentation relationship where the licensee gives limited assistance and does not represent the customer, but must deal honestly/fairly and disclose known facts affecting property value.

Lead-Based Paint Disclosure

A federal requirement for homes built before $1978$ involving an EPA pamphlet and a $10$-day opportunity for inspection.

DBPR (Department of Business and Professional Regulation)

The state agency responsible for issuing and renewing licenses, investigating complaints, and regulating licensees.

FREC (Florida Real Estate Commission)

A body consisting of $7$ members that enforces Chapter $475$, creates administrative rules, and sets education standards.

Homestead

A status providing creditor protection, property tax benefits, and limits on assessment increases for a primary residence.

Real Property

Legal term including land, buildings, and permanent improvements.

MARIA

A method used to test if an item is a fixture: Method of attachment, Adaptation, Relationship of the parties, Intention, and Agreement.

PETE (Bundle of Rights)

The rights associated with real property ownership: Possession, Enjoyment, Transfer, and Exclude.

Riparian Rights

Water rights associated with land bordering a river or stream.

Littoral Rights

Water rights associated with land bordering an ocean, lake, or sea.

Accretion

The gradual increase of land caused by water movemement.

Avulsion

A sudden change in land mass caused by water.

Easement in Gross

A right to use another's land that benefits a person or company (e.g., utility company) rather than a neighboring parcel.

Encroachment

An unauthorized physical intrusion, such as a fence or garage, that crosses a property boundary line.

Tenancy in Common

A form of ownership by two or more people where unequal ownership is allowed, there is no survivorship, and interest passes to heirs.

Joint Tenancy

A form of ownership characterized by the four unities (possession, interest, time, and title) and the right of survivorship.

Tenancy by the Entireties

A form of joint ownership reserved specifically for married couples that includes the right of survivorship.

Life Estate

A freehold estate where a life tenant uses property during their lifetime, after which it passes to a remainderman or returns to the original owner.

Metes and Bounds

A method of legal description that uses directions, distances, and monuments to identify irregular-shaped parcels.

Township

A square measurement in the Government Survey System measuring $6\times 6$ miles, totaling $36$ square miles or $36$ sections.

Section

A one-square-mile area of land within a township containing $640$ acres.

Acre

A unit of area measurement equal to $43,560$ square feet.

Eminent Domain

The government's authority to take private property for public use with just compensation.

Condemnation

The legal process used to exercise the power of eminent domain.

Escheat

The reversion of property to the State of Florida when an owner dies without heirs or a valid will.

General Warranty Deed

The type of deed that provides the greatest protection to the buyer, containing full warranties by the grantor.

Quitclaim Deed

A deed that provides no warranties and is typically used to clear title clouds or transfer property between family members.

Title Insurance

A policy that protects the owner or lender against past title defects.

Constructive Notice

Legal notice provided to the public by recording documents in public records.

COAL

The required elements of an enforceable contract: Competent parties, Offer and Acceptance, Legal purpose, and Legal consideration.

Statute of Frauds

A law requiring certain contracts, such as the sale of real estate or leases longer than one year, to be in writing to be enforceable.

Specific Performance

A legal remedy where a court orders a breaching party to perform the specific terms of a contract.

Promissory Note

The legal instrument that serves as evidence of a debt and contains the borrower's promise to repay.

Mortgage

The legal instrument that pledges the property as security for a loan.

Lien Theory

The legal concept followed in Florida where the borrower retains legal title while the lender holds a lien on the property.

Mortgagor

The borrower who gives the mortgage to the lender.

Mortgagee

The lender who receives the mortgage as security.

Equity

The difference between the current market value of a property and the debt owed against it.

Loan-to-Value (LTV) Ratio

A financial calculation determined by dividing the loan amount by the property value: $\frac{Loan}{Value}$.

Discount Point

A fee paid upfront to a lender to reduce the interest rate, where $1$ point equals $1\text{\%}$ of the loan amount.

Acceleration Clause

A mortgage provision allowing the lender to demand the entire remaining balance immediately if the borrower defaults.

Due-on-Sale Clause

A provision that prevents a buyer from assuming a mortgage by requiring the loan to be paid in full when the property is sold.

Millage Rate

The tax rate used in property tax calculations, where $1$ mill equals $\frac{1}{1,000}$ of a dollar.

Documentary Stamp Tax on Deeds

A Florida tax on the transfer of real property, typically calculated at $\frac{0.70}{100}$ of the purchase price.

Documentary Stamp Tax on Notes

A Florida tax on promissory notes, calculated at $\frac{0.35}{100}$ of the loan amount.

Nonrecurring Intangible Tax

A Florida tax on new mortgages, calculated at $\frac{0.20}{100}$ of the loan amount.

Sales Comparison Approach

An appraisal method that determines value by comparing the subject property to recently sold similar properties.

Cost Approach

An appraisal method based on the cost to replace improvements minus depreciation, plus the value of the land.

Income Approach

An appraisal method used for investment properties based on the property's ability to generate net operating income.

Progression

The appraisal principle that a lower-value home benefits in value from being surrounded by higher-value homes.

Regression

The appraisal principle that a higher-value home loses value when surrounded by lower-value homes.

External Obsolescence

A loss in property value caused by factors outside the property lines, such as a nearby airport or highway, generally considered incurable.

Situs

A term referring to the economic significance of a specific location preference.

Plottage

The increase in value resulting from combining two or more adjoining parcels into one larger tract.

Gross Lease

A common residential lease where the tenant pays a fixed rent and the landlord covers most operating expenses.

Net Lease

A common commercial lease where the tenant pays rent plus additional expenses like taxes, insurance, and maintenance.

Estate at Sufferance

A situation where a tenant remains in possession of the property after the lease has expired without the landlord's consent (holding over).

Blockbusting

The illegal practice of inducing owners to sell by suggesting that members of a protected class are moving into the neighborhood.

Steering

The illegal practice of directing buyers toward or away from specific neighborhoods based on protected characteristics.

Redlining

The illegal practice by lenders of refusing to provide financing in certain neighborhoods based on discriminatory factors.

RESPA (Real Estate Settlement Procedures Act)

A federal law that prohibits kickbacks and referral fees for settlement services and requires disclosure of closing costs.

TILA (Truth in Lending Act)

A federal law requiring lenders to disclose the true cost of credit, including the Annual Percentage Rate (APR).