Texas Pre-License Principles of Real Estate 1 Key Terms

Vocabulary flashcards covering key terms and definitions for Texas Pre-License Principles of Real Estate I.

abstract of title

an abbreviated history of a property, including information 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 natural forces

acre

a measurement of land equal to $43,560$ square feet

ad valorem taxes

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

addenda

additions to a completed contract that specify supplementary information to the contract

agency

a relationship where one party is authorized to act 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

area above parcels of land that are defined by elevation boundaries

air rights

the right to use the airspace above the surface of land

amendment

change or modification to an already agreed-upon contract

Americans with Disabilities Act (ADA)

a federal civil rights law passed in $1990$ which prohibits discrimination against and creates standards for people 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

arrears

payment that occurs at the end of a period to compensate for charges accrued during that time

assignment

the transference of rights and 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

a contract wherein both parties are obligated to perform in an exchange of promises

blockbusting

the illegal act of causing owners to sell their homes by creating fear that members of a protected class are moving into the area; aka panic peddling

broker

a licensee who holds a broker license and who engages in an activity enumerated in the license law 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

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

buyer representation agreement

an agency agreement between a broker and a buyer wherein the broker represents the buyer in their effort to purchase or lease a property

Canons of Professional Ethics and Conduct

the ethical and professional standard for the real estate industry in Texas

Civil Rights Act of 1866

a federal law that prohibits discrimination in housing based on race

cloud

any claim to or encumbrance on the title to a property that 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 $5$ years by property owners on specific properties

co-ownership

ownership of a property by more than one person

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 $\frac{1}{2}$ ownership of any property obtained during the marriage, plus a right of survivorship ownership after the death of either spouse

Community Reinvestment Act (CRA)

legislation that seeks to enable all parts of a community to have access to credit

comparative market analysis (CMA)

a report that compares the prices of recently sold or listed homes ("comparables") in order to estimate the market value of a similar property (the "subject property") located in the same area

condominium

property where each owner has a separate interest in their own unit and undivided interest in the common areas

contingency

a provision within a contract that makes performance conditional upon the occurrence of a stated event

contour map

a map in which curved lines (contour lines) connect contiguous parts of equal elevation to define the contours of the land; aka topographic map

contract

a legally enforceable and binding agreement between parties wherein a promise to do or not do something is given in exchange for valuable consideration

conventional life estate

a life estate in which the measuring life is that of the life tenant; an estate created by a deed that lasts for the duration of the tenant's life

conveyance

an instrument that transfers a grantor’s interest in real property

cooperating broker

the broker who assists another broker in showing the listed property to a buyer who subsequently purchases the property

cooperative

property where each owner owns shares in a corporation that owns a building, then has a proprietary lease for their unit

corporation (INC)

a legally created business entity representing the interests of more than one person

datum

a designated base reference point to elevation used by surveyors to determine the elevations of land or property in an area

defeasible fee estate

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

disability

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

a non-possessory interest in a property that burdens the title

Equal Credit Opportunity Act (ECOA)

a fair lending law that aims to bar discriminatory lending practices

equal opportunity in housing

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

equitable lien

a lien imposed by the courts 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, and extent of interest one owns in property

estate for years

a lease with a specific starting and ending date; aka tenancy for years

exclusive agency listing

an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects

exclusive right to sell listing

an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer

executed contract

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

execution lien

a lien on a property seized by writ of execution

executory contract

a contract that has not yet been fully performed (both sides have not yet completed their obligations)

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

a general, involuntary lien imposed by the government that can attach to all of the owner’s property except their homestead property

fee simple determinable estate

a type of defeasible fee estate which causes the title to automatically revert to the original owner if the deed requirements regarding property use are violated

fee simple estate

maximum ownership of real property; is of indefinite duration, freely transferable, and freely inheritable; aka fee or fee simple absolute

fee simple subject to condition subsequent

a type of defeasible fee estate that comes with specific requirements (or conditions) that, for ownership to change, the grantor of the estate must prove in court that the condition has been violated within a certain time frame

fiduciary duties

the full sum of obligations owed to the client in an agency relationship that ensures that the agent always acts in the best interest of the client

fixity

the economic principle that says that real estate exists in a fixed location and cannot be moved

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

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

a form of ownership with an indeterminate length

fructus industriales

plants or crops intended for harvest and treated as personal property, aka emblements

fructus naturales

trees, perennial plants, and uncultivated plants usually treated as real property because of their permanence

general lien

a lien for 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

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

homestead

a legal life estate that prevents a person's primary residence from being forcibly sold to pay certain kinds of debts

homestead tax exemption

an exemption that a homeowner can file to reduce the amount of ad valorem taxes paid on their 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

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

in severalty

describes undivided ownership of an estate, with an interest that is exclusive from other owners

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 obtained through an action of law without the owner's consent

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

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; aka surveying

leasehold estate

an interest in the occupation of a property, established through a lease, aka non-freehold or less-than-freehold

legal life estate

any life estate created by a function of law as opposed to the actions or desires of a property owner

license

the right to use the land of another that can be granted as well as terminated by the property owner

lien priority

the order in which liens against a property will be settled

life estate

a type of estate limited to the duration of a measuring life

limited liability company

a type of corporation in which none of the owners of the company can be held personally liable for debt

lis pendens

a document recording at the courthouse giving notice that a lawsuit is pending on a particular piece of property

listing agreement

a contract between a principal and a broker to sell or lease a property