LAW 335 Missouri State (Carol Miller) - Unit II Test

Select the False statement concerning Real Estate law

1. a real estate agent is entitled to a commission under an "exclusive right of sale" listing arrangement even if the seller finds his own buyer

2. the deed of trust is a document in which the seller-grantor promises the grantee that he has clear title to the property, with no hidden encumbrances

3. the mortgager is the grantee/borrower

4. the heir of a tenant-in-common can inherit the deceased tenant's ownership interest in the land

#2 is false

warnings of the hazards of lead paint must be provided in all the following situations EXCEPT:

a. by landlord for renovation of a child occupied apartment

b. by real estate agent of a house built before 1978

c. the seller of a business building built in 1920

d. by landlord to tenant before leasing residential dwelling built in 1940

c

which of the following best describes the use of replevin?

a. lien on real estate by laborers and suppliers of construction materials

b. court order to compel contribution to clean up costs in CERCLA cases

c. court order to compel delivery of personal property which is wrongfully being withheld from the complaint

d. bequest of personal property under a will

a revocable gift

c

CERCLA was enacted in 1980 to clean up _____ _____ from the environment...when they post an imminent and substantial threat to the environment & human health

hazardous substances

CERCLA was enacted in 1980 to clean up hazardous substances from the environment...when they post an ______ and ______threat to the environment & human health

imminent and substantial

under ______, the generator (tenant) and owner of the property where hazardous waste/pollutant is generated are both liable for clean up

CERCLA

under CERCLA the generator (tenant) and owner of the property where hazardous waste/pollutant is generated... who is liable for the clean up?

both the tenant and owner

potentially responsible parties forever have liability for the waste created when?

when they lived on or owned the land/estate

______ _____ _____ forever have liability for the waste created when they lived or owned it

potentially responsible parties

under CERCLA, does liability end after the sale of the land upon which pollutant was generated or stored?

no - liability continues even after sale

liability under _____ continues even after the sale of the land upon which pollutant was generated or stored

CERCLA

- liable even if independent contractor transports (changing location of waste)

- liable even after waste leaves company property

what is this duty called?

nondelegable duty under CERCLA

under CERCLA, nondelegable duty means the (PRPs - tenant or owner) are liable even if an ______ _____ transports the waste or after waste ____ the company property

independent contractor; leaves

changing location of waste is ______

transporting

does liability stop if independent contractor transports it off company property?

no

under CERCLA, the tenant and owner have what kind of liability?

how long does it last?

joint and several liability

forever

under CERCLA, laws are _______

even if there was no law then, you're responsible now under the new laws

retroactive

what does retroactive mean (in terms of a law)

even if there was no law then, you're responsible now under the new laws

what are the 5 defenses of CERCLA?

1. Lender & Trustee Liability defense

2. Superfund Recycling Equity Act defense

3. De Micromis polluter

4. Innocent Landowner defense

5. Bonafide Prospective Purchaser defense

1. Lender & Trustee Liability defense

2. Superfund Recycling Equity Act defense

3. De Micromis polluter

4. Innocent Landowner defense

5. Bonafide Prospective Purchaser defense

these are defenses for what law?

CERCLA

(defense under CERCLA)

if bank holds indicia of ownership primarily to protect a security interest, did not participate in management or control, and does not assume operational control and tries to promptly resell property

Lender & Trustee Liability defense

under the Lender & Trustee Liability defense, lenders and trustees cannot participate in _____ _____ at all if they want to not be held liable as a PRP

waste management

(defense under CERCLA)

promote the reuse and recycling of scrap material

foster goals of waste minimization and natural resource conservation while protecting the human health and environment

remove CERCLA disincentives to recycle

Superfund Recycling Equity Act defense

under the Superfund Recycling Equity Act defense, anyone looking to be under this defense must foster goals of ____ _____ and natural resource ______

waste management; conservation

(defense under CERCLA)

fair share instead of Joint & Several liability

De Micromis polluter

under De Micromis polluter, the parties have ____ ____ instead of joint & several liability

fair share

intellectual property falls under what category of property?

personal property

- copyright

- patent

- tradename

- trademark

- trade dress

- trade secret

these fall under what type of property?

intellectual property --> personal property

sale

gift

TOD or POD

Inheritance

Trust

Special Circumstance

these are all _____ of ______

methods of acquisition

items included in the sale price of real estate

appurtenances

items that are not included in the sale price of real estate

trade fixtures

what needs to be specified in a real estate contract?

if an item will be included in the sell price (appurtenances) or not (trade fixtures)

if an item is important for you to be able to remove it or important that it is still there, you want to _____ it in the contract

include

_____ lien attach only to real estate

mechanics lien

you want the waiver of mechanics lien _____ or _____ to giving all payment

before or simultaneously

false representation =

fraud

how many years do you have to bring a lawsuit involving fraud?

5 years

does Missouri have a law that sellers have to disclose if meth has ever been cooked in the house

yes

improvement that becomes part of the property (real estate)

accession

improvement to real estate that are not removable

examples: shingles, concrete driveway_

appurtenances

improvements to real estate that are removeable when the end of the lease or at termination of lease

example: tables, chairs, shelves

trade fixtures

in order to be sure a long lost cousin cannot come and claim a piece of the property (after you bought it), you need a ____ ____

marketable title

easements that are not recorded

example: having a fence on neighbors land

hidden encumbrances

if the builders or laborers and providers of materials have a right to be paid

if they are not, they can file a _____ ____ within six months

mechanics lien

a mechanics lien must be filed within ___ months

six

seller of real estate is obligated to disclose to a buyer all known facts that are ______ and _____ affect the value of the property (if they are not readily observable)

materially and adversely

if you're buying the house to live in, you want to know the ____ ____ of the house

example: flaws in foundation, fire or other damage, termites, water leaks, etc.

structural items

seller must disclose _____ _____ such as

- underground tanks, dump sites, toxic or hazardous substances

- proximity of known hazardous wastes sites

- asbestos

- lead paint or lead pipes

- meth labs

environmental hazards

warnings are required by owner or real estate agent of ___ ____ hazards upon sale or lease if these two conditions exist:

1. residential dwelling

2. built before 1978

lead paint

warnings are required by owner or real estate agent of lead paint hazards upon sale or lease if these two conditions exist:

1. residential dwelling

2. built before 1978

there is a (federal or state) ban on sale of lead-based paint for residential use

federal

true or false

sale of lead-based paint for residential and commercial use is banned under federal law

false - only residential

1. provide EPA pamphlet before sale or lease

2. Declaration of Disclosure Form

3. Retain documentation for 3 years

these are warnings required by owner or real estate agent for what?

lead paint hazards upon sale or lease of residential dwellings

built before 1978

disclose any lead testing

lead warning statement on lead hazards must be part of contract

buyer can hire inspector within 10 days signing contract

- contract can be rescinded If lead hazard is found or contract fails to warn

these must be on what form?

Declaration Disclosure Form

warnings required by owner or real estate agent for lead paint hazards upon sale or lease of residential dwellings built before 1978 are... (3)

1. provide EPA pamphlet before sale or lease

2. Declaration of Disclosure Form

3. Retain documentation for 3 years

renovators, risk assessors, and lead inspectors need _____ training

certification

what law/act protects workers from lead exposure

OSHA

OSHA protects workers from...

lead exposure

cannot collect money because they don't have any, they are judgment _____

proof

(under Doe Run)

bars punitive damages if ____ is making good faith to remediate the site

defendent

what is the cap for punitive damages for lead based paint?

$2.5 million cap under Doe Run

under _____ _____ law, firm and agents cannot discriminate race, age, religion, gender, etc.

Fair Housing

what are the 5 things agents have to disclose in real estate situations?

1. environmental hazards

2. material defects in the property

3. physical condition of the property (foundation)

4. material defects in the title

5. material limitations on the client's ability to perform under terms of contract

1. environmental hazards

2. material defects in the property

3. physical condition of the property (foundation)

4. material defects in the title

5. material limitations on the client's ability to perform under terms of contract

these things must be ____ by real estate agent

disclosed

(one of the disclosures required of the agent for real estate)

- buyer's agent has to disclose to seller's agent if there are issues

- any info he knows or should have known

material limitations on the client's ability to perform under the terms of the contract

to what standard is the real estate agent held regarding disclosures?

known or should have known

____ exists for...

fraud

misrepresentation

negligence

breach of contract

liability

is there a duty (of agent) to disclose the property was used for a meth lab?

yes

is there a duty to disclose other crimes that may have occurred on the premises (in MO)?

no --> if someone has been murdered in the house, you don't have to disclose

is there a duty to disclose "psychologically impacted property" issues?

no --> do not have to disclose ghosts or haunting

is there a duty/right to disclose that a household member was HIV positive?

no

what law does now allow you to disclose that a previous household member was HIV positive?

Fair housing law

commission issues applies to ___ ____ agents

real estate

what is typical commission for real estate agents?

6% of purchase price

- guarantees the agent commission if anyone finds a willing/ready buyer

- even if you find the buyer, you still have to pay the agent

what guarantees this?

Exclusive Power of Sale

what does Exclusive Power of Sale do?

ensures the agent commission if anyone finds a willing/ready buyer

a Quit Claim Deed only gives up ____, does not give up debts

rights

does a Quit Claim Deed need to be notarized ?

yes

what are the three parties involved in a Deed of Trust?

1. trustee

2. buyer

3. lender

1. trustee

2. buyer

3. lender

parties involved in...

a deed of trust

to quit your claim of ownership you have to get a ____ ____ ____

quit claim deed

grantor = _____

grantee = _____

(who is the seller and who is the buyer)

seller; buyer

earnest money = ____ ____

down payment

____ company records deeds and all other paperwork (involving closing)

escrow

what are the three types of insurance? (real estate)

1. hazard (home owner's) insurance

2. mortgage insurance

3. title insurance

if you do not have a down payment more than ___ percent of the loan, the lender may require it as Mortgage insurance as well as title insurance

20%

in a buyer/mortgager situation, if the buyer defaults on the loan, the lender can go to court and foreclose and sell estate by getting a ____ state

lien

____ state has to have a hearing, while a trust state does not.

lien

trustee looks out for both the buyer and ____

lender

when buyer pays full amount, within ____ days, the trustee has to file a release within the county

15

when buyer pays full amount, within 15 days, the trustee has to file a _____ within the county

release

when buyer pays full amount, within 15 days, the trustee has to file a release within the county

a release shows what?

they do not own it anymore

what type of loan is the most secure type of loan?

conventional residential loan

what type of mortgage has these characteristics:

- first 3-7 years payments are low

- after the grace period, mortgager faces much higher premium

- resale value risks and securitization issues

interest only mortgage

what type of mortgage has these characteristics:

- in exchange for a lower initial rate of interest, a large lump sum payment is due at the end of a fixed period of time

balloon payment

what four groups are involved in a Contract for Deed?

1. lender

2. investors

3. housing broker

4. home buyer

With a contract for deed:

investors buy property subject to loan by lender

housing brokers have no ____ as they make the monthly payments, until investors pay back

if anyone defaults, the lender can do what?

equity; kick out home buyer

a short term revocable right to use someone else's property for a specific purpose

license

right to enter someone else's property and remove something from it

example: go to xmas tree place and cut down/take tree

profit

what are the two nonpossessory rights in real estate?

1. license

2. profit