Real Test 2

Freehold estate

Indefinite estate for life or in fee

Nonfreehold or leasehold estate

Ownership interest in land with fixed duration

Fee simple absolute

Estate limited absolutely to owners and heirs

Fee simple defeasible

Fee estate that may end upon specified event

Fee simple determinable

Defeasible fee that ends automatically upon forbidden land use

Possibility of reverter

Future interest associated with fee simple determinable

Fee simple subject to an executory limitation or interest

Defeasible fee that ends automatically upon forbidden land use, vests in someone other than grantor

Executory interest

Future interest associated with fee simple subject to an executory condition

Fee simple subject to a condition subsequent

Defeasible fee that allows grantor to end interest after grantee breaches condition

Right of entry

Future interest associated with fee simple subject to a condition subsequent

Restraint on alienation

Provision prohibiting transfer of property

Fee tail

Estate that descends to grantee's direct lineal heirs

Life estate

An estate measured by the life of a person

Reversion

Future interest left in the grantor after conveying a smaller estate

Remainder

Future interest created in favor of a party other than the grantor

Vested remainder

Future interest where the remainderman has an absolute right to possessory interest

Contingent remainder

Future interest dependent on the occurrence of an uncertain event

Remainderman

Holder of a remainder interest

Right of estovers

Life tenant's right to take wood for fuel or repairs

Waste

Destructive use of real property by rightful possessor

Trust

Arrangement where trustee manages property for beneficiary

Concurrent estate

Ownership or possession of property by two or more people at the same time

Joint tenancy

Ownership of property by two or more people with right of survivorship

Four unities

Unity of time, title, interest, and possession

Severance

Joint tenant's transfer that terminates joint tenancy

Tenancy by the entirety

Tenancy between husband and wife with right of survivorship

Tenancy in common

Concurrent tenancy with unity of possession but not time, title, or interest

Undivided interest

Interest of a concurrent owner in the whole property

Probate

Court procedure to prove the validity of a will

What is community property?

Property acquired during a marriage, 50% interest.

What is separate property?

Property acquired before marriage or through gift/inheritance.

What is community property with the right of survivorship?

Property owned by spouses as community property with a right of survivorship.

What is syndication?

Group of investors combining funds and resources to acquire assets.

How is a partnership defined?

An association of two or more persons co-owning a business for profit.

What is joint and several liability?

Liability where creditor can demand payment from one or more parties.

What is tenancy in partnership?

Manner in which partners co-own partnership property.

What is a limited partnership?

Partnership with general partners managing the business and limited partners contributing capital.

What is a corporation?

Business organization owned by shareholders, managed by a board of directors.

What is piercing the corporate veil?

When courts disregard the separation between a corporation and its stockholders.

What is an S corporation?

A closely held corporation with no more than 100 shareholders who elect to be taxed like partners.

What is a limited liability company?

A hybrid form of business organization that provides the limited liability of a corporation and the tax advantages of a partnership.

What is a Real Estate Investment Trust (REIT)?

An entity that invests in real estate ventures and must distribute at least 90 percent of its net income to investors.

What is an Umbrella Partnership Real Estate Investment Trust?

A type of REIT in which an umbrella partnership, rather than the REIT, owns a direct interest in the properties.

What are securities?

Any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, etc.

What are Blue Sky laws?

State laws that regulate the offer and sale of securities.

What is a real estate broker?

An agent authorized under state real estate licensing laws to operate independently in a real estate brokerage business.

What is a commission?

Payment by a seller of real estate to a real estate broker for finding a buyer.

What is a real estate salesperson?

An agent authorized under state real estate licensing laws to act in real estate brokerage transactions only under the control and direction of a licensed real estate broker.

Who are Realtors?

Licensed real estate brokers and salespersons who are members of the National Association of Realtors.

What is a listing agreement?

A contract between a seller of real estate and a real estate broker in which the broker is authorized to serve as the seller's agent.

What is an exclusive right to sell?

A listing agreement between a seller of real estate and a real estate broker that gives the broker the sole right to sell the property and to receive a commission on the sale regardless of whether the broker is responsible for the sale.

What is an exclusive agency?

Listing agreement giving broker exclusive right to sell.

What is an open listing agreement?

Non-exclusive right for broker to sell property.

What is the procuring cause of sale?

Broker's actions that directly cause a real estate sale.

What is a net listing agreement?

Broker is paid commission on sale price exceeding set price.

What is a multiple listing service?

Service providing real estate listings from competing brokers.

What is a subagent?

Agent representing the interests of another agent.

What does the Sherman Antitrust Act regulate?

Anticompetitive behavior.

What are Little Sherman Acts?

State antitrust laws regulating anticompetitive behavior.

What is a general agent?

Agent with broad authority to act on behalf of principal.

What is a special agent?

Agent with authority for a single or limited series of transactions.

What is express authority?

Authority specifically granted by principal to agent.

What is implied authority?

Authority necessary to carry out express authority granted by principal.

What is apparent authority?

Authority that a person appears to have as an agent, even if it doesn't exist.

What is a partially disclosed principal?

Principal whose existence is known but identity is not.

Undisclosed principal

Principal unknown to third party

Secret agent

Agent representing unknown principal

Fiduciary duty

Duty to act for another's benefit

Mandatory agency disclosure laws

Laws requiring agent disclosure to consumers

Dual agency

Agent representing both sides in a transaction

Buyer broker

Agent acting on behalf of the buyer

Interstate land sales full disclosure act

Federal law regulating property sales across state lines

1866 civil rights act

Federal law prohibiting race discrimination in property transactions

1968 Fair housing act

Law prohibiting housing discrimination based on race, color, religion, sex, and national origin

Fair housing amendments act of 1988

Amendment adding familial status and handicap as protected classifications

Steering

Showing different properties based on race or ethnicity

Blockbusting

Promoting sales in racially transitional neighborhoods

Americans with Disabilities Act of 1990

Prohibits discrimination based on disability, requires reasonable accommodation

Contracts

Promises recognized by law with remedies for breach

Installment contract

Seller finances sale, buyer pays over time

Statute of Frauds

Requires written agreement for land contracts

Part performance

Exception to Statute of Frauds for oral land contracts with partial performance

Estoppel

One cannot claim rights to detriment of another if they relied on conduct

Parol evidence rule

Written contract is final, prior agreements cannot contradict it

Revocation

Termination of offer by offeror before acceptance

Option contract

Enforceable promise limiting offeror's power to revoke

Mailbox rule

Acceptance effective when letter is in transit

Mirror image rule

Acceptance must exactly match offer for valid contract

What is a counteroffer?

A statement that rejects the original offer and proposes a new one.

What is a letter of intent?

An instrument that gauges commitment before a formal contract.

What is consideration?

The motive that induces a party to enter a contract.

What is marketable title?

Real estate title reasonably free from encumbrances.

What is a patent?

A grant of privilege or authority by the government.

What are marketable record title acts?

State laws that limit enforceability of old claims.

What is the root of title?

A transaction in the seller's chain of title.

What is the merger rule?

Contract merges into the deed, except collateral promises.

What is equitable conversion?

Buyer is regarded as equitable owner upon signing.

What is earnest money?

Portion of purchase price given as evidence of good faith.

What is a contingency?

An event that may or may not occur.

What is the substantial performance doctrine?

Contractor deserves payment for substantial completion.