LAW OF CONTRACTS - CHAMPIONS SCHOOL OF REAL ESTATE 2024-2025, Exams of Nursing

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LAW OF CONTRACTS - CHAMPIONS SCHOOL OF REAL

ESTATE 2024 - 2025

TERLA - ANSWER - >- Texas Real Estate License Act

• Created in 1939 TREC - ANSWER - >- Texas Real Estate Commission
• Created in 1949 to administer/enforce TERLA Real Estate Center - ANSWER - >- Located at Texas A&M University
• Created in 1970 TREC-Promulgated Forms/Leases (Residential): - ANSWER - >- One-to-Four Family Residential Contract (Resale)
• New Home Contract (Completed Construction)
• Residential Condo Contract (Resale)
• New Home Contract (Incomplete Construction)
• Unimproved Property Contract
• Farm and Ranch

(Note: TREC has promulgated contract addenda and other forms, listed on Thepage 18) Four categories of unlawful trade practices are: - ANSWER - > 1 - Misleading or deceptive conduct employed by any person that was relied upon by the consumer to the consumer's detriment 2 - Breach of express or implied warranties 3 - Violation of the Texas Insurance Code (Chpt 51) 4 - An unconscionable action or course of action by any person Physical Characteristics of Land - ANSWER - >- Indestructibility: cannot be destroyed

• Immobility: cannot be moved
• Non-homogeneity: no two parcels are the same Economic Characteristics of Land - ANSWER - >- Scarcity: supply and demand
• Modification: value is affected by man made changes
• Fixity: additions take long periods of time to pay
• Situs: location, location, location

Personal property - ANSWER - >- Things of a temporary or movable nature Emblements - ANSWER - >- Annual crops that are considered personal property even though they are attached to the land Statutory law - ANSWER - >- the body of laws and regulations enacted by federal and state legislatures Bill of Sale - ANSWER - >- used to accomplish the transfer of personal property along with real property Fixture - ANSWER - >- personal property that has become attached to the land in such a way as to become real property Annexation - the process of attaching personal property so that it becomes real property Severance - removing fixtures to create personal property Trade Fixtures - ANSWER - >- items necessary for an individual to carry out his/her trade or profession In most states (including Texas), ownership of real estate can be held in three different ways: - ANSWER - > 1 - An estate in severalty involves ownership of real estate by one individual or entity

2 - Co-ownership involves ownership of real estate by two or more entities Ex 1. Tenancy in Common Ex. 2 Joint Tenancy 3 - A property may be placed in a trust, with ownership conveyed to a trustee for the benefit of others Syndicate - ANSWER - >- when two or more parties join together to create and operate a real estate investment Blockbusting - ANSWER - >- any attempt to induce panic selling in a neighborhood for financial gain Todd planted two live oaks and four magnolia trees on his 3 AC property. These trees are examples of - ANSWER - >* - Improvements*

• Emblements
• Fixtures
• Personal property Patti, David, and Arthur inherited several acres from their parents. They each own a third of the estate. What type of ownership do the siblings have? - ANSWER - >- Joint tenancy
• Estate in severalty - Tenancy in common
• Community property

Novation - ANSWER - >- occurs when anew contract is substituted1 for an existing one In order to comply with the ______, contracts for the conveyance of an interest in real estate or leases for a term of more than one year must be in writing - ANSWER - >- Statute of Frauds Broker Bernardo has signed a sales contract that has not yet gone to the closing table. Therefore, Bernardo has a(n) ______________ contract - ANSWER - >- Executory Bryan's client shows up to his closing after drinking three beers at a baseball game. Due to his consumption of alcohol, the closing cannot take place because Bryan's client is not legally __________ - ANSWER - >- Impaired Freehold estate - ANSWER - >- Occurs when an individual owns property Equitable estate - ANSWER - >- Rights or privileges in land that are less than ownership, but exist Statutory estate - ANSWER - >- Created by law Police power - ANSWER - >- The government's right to regulate land usage

Prior appropriation - ANSWER - >- First in time is first in right (water law) The most common example of police power is - ANSWER - >- zoning Downzoning - ANSWER - >- changing the zoning of a property to a lower value use Buffer zone - ANSWER - >- an area of land separating one land use from another Setback - ANSWER - >- the amount of space required between the lot line and the building line Building codes - ANSWER - >- apply to all types of commercial and residential buildings Eminent Domain - ANSWER - >- the right of the government to take private land for public use. The action of taking the land is called condemnation. Easements by condemnation are also allowed under the right of eminent domain (inverse condemnation occurs when a landowner sues the government, to force the government to buy his land) Taxation - ANSWER - >- the government retains the right to tax real property

• death Riparian rights - ANSWER - >- the rights an owner has to use water from a river or a stream on or next to a property Littoral rights - ANSWER - >- the right to use water from a lake, ocean, or sea on or next to property Appurtenance - ANSWER - >- a right or privilege or improvement that belongs to and passes with land, but is not necessarily a part of the land Enroachment - ANSWER - >- intrusion of one's property onto another's property creates an encroachment. Examples: a neighbor's fence that crosses a boundary, or a tree limb extending over a boundary Environmental Site Assessment (ESA) - ANSWER - >Phase 1
• Site Inspection
• Review of regulatory records
• Interviews with former or current owners and are locals who may have information about the history of the property Phase 2
• Samples of soil, surface water, and groundwater are collected from the flagged areas and tested for contamination. The specific cause of the contamination will be determined. The

assessment will recommend remediation to clean the property of hazardous materials Phase 3

• The remediation phase
• Clean-up phase
• Soil excavation, soil washing, air stripping, pump and treat, and chemical oxidation Listing Agreement - ANSWER - >- employment agreement for listing broker Buyer-agency agreement - ANSWER - >- employment agreement for selling broker Lease - ANSWER - >- an agreement that transfers the right to possess a property for a period of time Option Agreement - ANSWER - >- gives potential buyer or tenant the right to purchase or lease a property Contract for deed - ANSWER - >- also called an installment contract, a land contract or real estate contract A contract is considered "discharged" when - ANSWER - >- all parties have performed
• full execution most often is achieved at the closing of the transaction

• Broker's duties to clients/customers
• Compensation agreement
• Consent for the broker to represent other buyers
• Fair-Housing language
• Signatures of parties
• Intermediary consent (Buyers who do not sign a representation agreement with an agent are considered customers) Elements of a Property Management Agreement - ANSWER - >- duties/responsibilities of the property manager and property owner
• management term
• detailed description of the property
• policies and procedures for repair of the property (traditional approach to management fee is to take a percentage of the rent for the service offered) Contract vs Economic Rent - ANSWER - >Contract rent - the rental income stipulated by the parties in a lease Economic rent - the rent the property could currently command on the open market Types of Leasehold Estates - ANSWER - >- Estate for years (definite beginning and end)
• Periodic tenancy (month-to-month; week-to-week)

• Tenancy at sufferance (holdover tenant)
• Tenancy at will (uncertain time period) Common addenda forms - ANSWER - >- financing addendum
• lead-based paint
• flood hazard
• mineral reservation
• seller financing
• property owners association