Legal Concepts II

Question 1

What is a Buy/Sell Contract?

Answer 1

An agreement to buy & sale between the parties.

Question 2

What is a cash sale deed?

Answer 2

An instrument transferring the interest of the seller to the buyer by paying cash

Question 3

What information is needed in the appearance clause for both the seller and buyer when preparing a deed?

Answer 3

Full name of all parties, marital status, mailing address, parish of domiciled, last 4 of SSN

Question 4

What is a “plat” description?

Answer 4

Property description usually found in a subdivision

Question 5

What is a “metes and bounds” description?

Answer 5

Property description usually found in a rural area

Question 6

Is it necessary to set forth the purchase price in a Cash Sale Deed and Credit Sale Deed?

Answer 6

Yes, in Louisiana you have to disclose the full purchase price

Question 7

What is an “as is” clause?

Answer 7

Purchasing & selling it as is/where is

Waiver of Redhibition

Question 8

Is it necessary to state your intentions in a deed if you desire to reserve the oil and gas rights on the property you are selling?

Answer 8

Yes otherwise it is transferred to the purchaser

Question 9

What is a Credit Sale Deed?

Answer 9

An instrument transferring the interest of the seller to the buyer subject to a Promissory Note

Question 10

What is a Promissory Note?

Answer 10

A promise to pay a debt

Question 11

What is the “pro-ration” of taxes?

Answer 11

Division of parish/city property taxes between the seller & the buyer.
$1200/365=$3.28 Per Diem
Seller 120*328=393.60
Buyer 245*3.28=803.60
Try to make it equal the original 1200$

Question 12

What is a title examination?

Answer 12

Examination of the public records to verify ownership of the property (mortgage & conveyance records)

Question 13

What does it mean to “cure” title?

Answer 13

Fix any problems that exist pursuant to the title examination

Question 14

What is the difference between a Quit Claim Deed and a Warranty Deed?

Answer 14

A quit claim deed does not warrant title, A warranty deed does warrant title (guarantees the title)

Question 15

Is it necessary to have a deed executed before a Notary and two (2) witnesses? If so, what type of “act” is it called?

Answer 15

A. Yes

B. Authentic Act

Question 16

What is a Title Insurance Policy?

Answer 16

An insurance policy covering the property; It protects the mortgage company
It does not cover the owner, you can get an ownership policy

Question 17

What type of IRS Tax Form would you issue to the Grantors at the end of the year IF you or your attorney were the Notary?

Answer 17

1099S

Question 18

What does it mean when someone “defaults”?

Answer 18

Failure to pay; if you pay you stay, if you don’t you won’t

Question 19

Is it necessary to have default language in a Cash Sale Deed?

Answer 19

No, because you are paying cash for the sale

Question 20

Is it necessary to have default language in a Credit Sale Deed?

Answer 20

Yes, because it is owner financed

Question 21

Is it necessary to have a Promissory Note with a Credit Sale Deed?

Answer 21

Yes, because it is an agreement to pay. Promissory notes & credit sale deeds go hand in hand

Question 22

What is “Ne Varietur”?

Answer 22

For identification, As to one to the other

Question 23

When preparing a Credit Sale Deed and/or Mortgage, what information do you need in order to figure the monthly payments?

Answer 23

Purchase price, interest rate, term of mortgage, beginning date

Question 24

Where do you record Credit Sale deeds In the clerk of court?

Answer 24

Conveyance records and mortgage records

Question 25

Where do you record Cash Sale Deeds In the clerk of court?

Answer 25

Conveyance Records

Question 26

Where do you record Mortgages In the clerk of court?

Answer 26

Mortgage records

Question 27

How do you determine what parish to record a Cash Sale Deed, Credit Sale Deed and Mortgage?

Answer 27

Where the property is located

Question 28

Is it necessary that the date on the Credit Sale Deed and Promissory Note to be the same? If yes why; if no why not?

Answer 28

Yes, for cancellation purposes

Question 29

What is the difference between an "installment" note and a "due on demand" note?

Answer 29

An installment is payable on a certain date for a certain term for a certain amount. A due on demand note is due at request

Question 30

Is it necessary to include a legal description in the Mortgage?

Answer 30

Yes, because the property described is the collateral for the mortgage

Question 31

When would a "hold harmless" clause be used in a Deed or Mortgage? Who does it protect?

Answer 31

It protects the notary, to be used when the notary has not examined the title

Question 32

When accepting funds at a closing, what type of funds should they be?

Answer 32

Cashier's check or a money order

Question 33

What type of account would you run the "closing proceeds" through?

Answer 33

A trust account

Question 34

When would you use a Bill of Sale?

Answer 34

The transfer or the sale of a movable

Question 35

Who is the Grantor

Answer 35

The person selling

Question 36

Who is the Grantee

Answer 36

The person buying

Question 37

What is the difference between a "straight" Mortgage and "Collateral" Mortgage?

Answer 37

A straight mortgage is for the amount that you're borrowing only. A collateral mortgage you have borrowing power under it.