Chapter 12 Flashcards Preview

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Flashcards in Chapter 12 Deck (42):
1

What are 3 rights in a lease?

Possession, Quiet Enjoyment, Exclusion

2

What is the only legal way to evict a tenant?

Court Order

3

What are 2 illegal ways tenants are evicted?

1- Constructive (most common - LL makes apt uninhabitable by turning off services, etc)
2- Actual (LL takes stuff and puts it outside)

4

What is not necessary in a contract?
a- capacity
b- competence
c- agreement
d- written format

D- Written format

5

What is the statute of frauds?

Written NYS law declaring that in RE, some things MUST be written:
- Deeds
- RE Sales Contract

6

What must be written according to Statute of Frauds

- Deed, RE Sales Contract

7

What are 2 contracts creations and their differences?

- Expressed: can be spoken or written
- Implied: always spoken (if written, becomes expressed. technically valid but not preferred)

8

What is the option to buy/lease?

A basic contract where renters have the option to buy.

$2k rent. tenant pays $4k & $2k goes into Escrow (separate account). After 2 years, escrow has grown and tenant has option to buy but LL has to sell no matter what, making it a unilateral agreement

9

What is the difference between executory and executed contract statuses?

executory= working on it
executed= completed

10

What is the difference between valid and void contract valdities?

valid= all force of law
void= no force of law

11

A landlord discovers the tenant is only 17 years old. What is his lease status?

Voidable by the tenant.
Unenforceable by the land lord.

Tenant can void lease but doesn't have to. LL cannot force the contract; if the tenant doesn't pay the lease, he's a minor.

12

What are the essential elements of a contract?

- sound (competent) parties
- legal (lawful and possible objective)
- payment (consideration)
- description
- meeting of the minds (mutual agreement)
- written format & signatures

13

What do the following compose?:
- competent (sound parties)
- lawful and possible objective (legal)
- consideration (payment)
- description
- mutual agreement (meeting of the minds)
- written format & signatures

The essential elements of a contract

14

What are the 5 primary RE contracts?

- listing agreement
- buyer agency agreement
- sales or purchase contract
- lease
- option to buy or lease

15

What are the following?:
- listing agreement
- buyer agency agreement
- sales or purchase contract
- lease
- option to buy or lease

the 5 primary RE contracts

16

What are the 2 contract creations

express , implied

17

What are 2 contract promises

unilateral & bilateral

18

what are 2 contract statuses

executory & executed

19

what are 4 contract validities

valid, void, voidable and enforceable

20

What is the difference between unilateral and bilateral contract promises

unilateral= one party makes a binding promise to each other
bilateral= each party makes a promise to each other

21

What is the difference between voidable and unenforceable

voidable= one party can end an agreement without liability because of lack of legal capacity or other factor such as fraud or duress

unenforceable= a contract that may have been valid between the parties but that a court would refuse to enforce

22

When is a broker's commission earned?

When a ready, willing, and able buyer is produced

OR

There is a meeting of the minds

(Closing is when you pick up the check)

23

What is the law which requires seller to put aside commission so that if they decide to alter fee, account goes to judge?

Commission Escrow Act

must be in contract

24

What is the Commission Escrow Act?

the law which requires seller to put aside commission so that if they decide to alter fee, account goes to judge

25

What is contingency?

If a condition is not met, the parties can back out of the deal

26

What is it called when a condition isn't met, the parties can back out of the deal?

contingency

27

What is the most common contingency?

mortgage (if a client can't get a a mortgage, they can back out)

28

What is the home inspection contingency?

If home inspector doesn't like the RE, buyers can back out

29

What is the home sale contingency?

if buyer can't sell previous home, they can back out

30

What contract clause let's a seller continue to show the RE if the buyer has a contingency?

Escape clause

31

What are liquidated damages & an example?

Amount of money specified in a contract to be awarded in the event the agreement is breached
(where it says in the contract what happens if someone breaks the lease)

If you break the lease, you owe 2 months rent (which can lead to assignment & novation)

32

What is "assignment" in regards to a lease?

When you sign the duration of the lease over to someone (change the name on the lease)- not a sublease

33

Who is responsible for rent in a sublease?

Primary tenant

(Landlord--> tenant
tenant --> subtenant)

34

What are liquidated damages in a sale?

The contract deposit

35

What is novation?

the substitution of a new contract for an earlier contract, cancelling the original, and may also involve the substation of a new party for an original party

36

What is the best way to discharge a contract and the definition?

Full performance: when all parties to a contract have fulfilled their contractual obligation, contract is completed, and thus released.

37

What is the earnest money deposit?

An inducement to have the buyer's offer accepted & a means of showing the seller that the buyer is serious and able to follow through with the financing necessary to buy the property

38

What is the as is clause?

a provision in a purchase agreement stating the buyer accepts the property in its present conditions

39

What are riders?

ammendements to contracts

40

What are options of a sales-related contract?

Contracts that give one party the right to do something, without obligating him to do so (option to buy)

41

What is the right of first refusal?

A right to have the first chance to buy or lease a property if the owner decides to sell or lease it

42

What are installment sales contracts?

Agreements for which the buyer makes payments to the seller in exchange for the right to occupy and use the property, but no deed or title is transferred until all, or a specified portion of, payments have been made

(buyer doesn't get the deed until RE is fully paid for)