study guide b3

  1. Capital Gain Exclusions

    • $250,000 for unmarried individuals, $500,000 for married couples filing jointly.

  2. Foreign Investment & Real Property Tax Act

    • Ensures that nonresident aliens and foreign corporations pay US income tax based on gains from selling US property.

  3. 1031 Tax Deferred Exchange

    • A property owner may exchange one property for another and defer taxation of the capital gain.

  4. Sherman Anti-Trust Law

    • Prohibits monopolies, price fixing, group boycotts, and restraint of trade.

PROPERTY MANAGEMENT

Common Law Term

Definition

Louisiana

Basic Functions or Property Manager

1. Produce income from the property.

2. Maintain value of the property.

Tenancy for Years

Runs for a specified length of time to the date of expiration; does not automatically renew – e.g., hotels.

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Periodic Tenancy

Runs for a specified length of time, but automatically renews at the end of the term for another term of equal length.

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Tenancy at Will

Runs indefinitely; has no specified term or expiration date.

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Tenancy at Sufferance

Tenant occupies premises without the landlord’s consent.

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Oral Leases

Valid if one year or less; leases of more than one year must be in writing.

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Notice to Vacate

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If it is not specified, 5 days’ notice is required.

Eviction

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5 days’ notice is required for agricultural leases; extend for one year and automatically renew for a year.

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All other leases; renew month to month unless otherwise stated.

  1. Lease Types

    • GROSS LEASE: Also called fixed or straight lease; fixed payments at specified intervals.

    • NET LEASE: Lessee pays a fixed amount of rent plus a share of the operating expenses, such as taxes, insurance, and maintenance.

    • PERCENTAGE LEASE: Rent is based on a percentage of the business's gross income.

    • GRADUATED LEASE: Rent increases at set dates in the future.

    • INDEX LEASE: Rent is tied to some external standard such as cost of living index.

    • GROUND LEASE: Lessee pays a fixed rent plus property expenses; lessee rents only the land and supplies the building himself.

    • ACTUAL EVICTION: Results from direct, intentional action of the lessor.

    • CONSTRUCTIVE EVICTION: Results from the lessor's failure to maintain his part of the lease agreement.

  2. License Law

    • ASSOCIATE BROKER: A person who holds a broker's license but is exclusively affiliated with a sponsoring broker.

    • QUALIFYING BROKER: The sponsoring broker for a licensed corporation, LLC, or partnership.

    • CLIENT: One who engages the professional advice and services of a licensee as his agent.

    • BUYER'S AGENT: A licensee who is employed by and represents only the buyer in a real estate transaction.

    • COMMINGLING: Putting personal funds and funds belonging to other persons in one account.

  1. MEMBERS OF THE COMMISSION

    • Eleven (11) members appointed by the governor; one (1) from each of the seven (7) Supreme Court Districts, two (2) members shall be appointed at large.

    • Two (2) members shall be appointed from the following districts: one (1) appointee from either the Fourth Congressional District or the Fifth Congressional District and one (1) appointee from either the First, Second, Third, Sixth, or Seventh Congressional District. Each appointment by the governor shall be submitted to the Senate for confirmation.

  2. POWERS OF THE COMMISSION

    1. Issue licenses, registrations, and certificates.

    2. Censure same.

    3. Suspend or revoke same.

    4. Impose additional continuing education requirements.

  3. POST LICENSING

    • 45 hours required within the first full calendar year after licensing for salespersons and brokers.

  4. FAIR HOUSING ACT

    • Every applicant for a license shall submit a sworn statement of knowledge of the Fair Housing Act of 1968 and the Equal Housing Opportunity Act.

  5. LICENSING OF CORPORATIONS, LLC’S, PARTNERSHIPS

    • Any corporation, limited liability company, or partnership may be granted a real estate broker’s license and must have a qualifying broker.

  6. INACTIVE LICENSE

    • Any licensee in good standing may place his license on inactive status.

  7. CE REQUIREMENTS FOR INACTIVE LICENSEES

    • 1 to 3 years of inactive status – 20 hours CE.

    • 3 to 5 years of inactive status – 40 hours CE.

    • Over 5 years of inactive status – 80 hours CE.

  8. NOT REQUIRED TO HOLD LICENSE

    1. Any person, partnership, LLC, association, or corporation that sells, buys, manages, or leases their own property; EXCEPT persons in the business of selling or managing timeshare interests.

    2. An attorney on behalf of a client.

    3. A receiver, trustee in bankruptcy, administrator, executor, tutor, or civil sheriff.

    4. A trustee selling under a deed of trust or mortgage.

    5. Any salaried person working for a licensee as long as they perform only ministerial acts.

    6. Any person employed by a housing authority to manage its property.

    7. Any person managing agricultural property.

  9. RETURN OF LICENSE

    • Upon termination or transfer of the licensee, the sponsoring broker must return the license to the commission within 5 days.