Real Property and Title Law Midterm Flashcards
1
Q
What is an interest of land as defined in Federal Law?
A
“interest in land” means any ownership or possessory right with respect to real property
2
Q
Freehold (interest in land)
A
ownership of the land
3
Q
Leasehold (interest in land)
A
possession of the land
4
Q
Intangibles (interest in land)
A
use of the land
5
Q
Future Interests (interests in land)
A
present day interests that exist as “future interests” because in the future, these interests will become ownerships.
6
Q
Four Types of ownership
A
Fee simple absolute, fee simple determinable, life estate, Fee simple upon condition subsequent
7
Q
Fee simple absolute
A
the expected duration is “forever” (until sold and if person dies this affects how it is distributed)
8
Q
Fee simple determinable
A
indefinite as long as a condition is met (“so long as” a condition is met or “until” specific occurrence takes place)
9
Q
Life Estate
A
ownership goes to the “life tenant” for a lifetime (determined by the measuring life person), once they die the property goes to remainder person who was appointed by the grantor
10
Q
Grantor in a life estate
A
creator
11
Q
“life tenant” in a life estate
A
owner of the life estate
12
Q
measuring life in a life estate
A
the person whose life span determine how long the life estate will last
13
Q
remainder person in a life estate
A
future interest holder who will have fee simple absolute as soon as the measuring life dies
14
Q
Fee simple upon condition subsequent
A
ownership will rely on a condition being satisfied “Upon condition that…” (the only future interest is a power of termination, not another person)
15
Q
Four types of leaseholds
A
Lease, Month to Month, Tenancy at Will, and Tenancy at sufferance
16
Q
Lease
A
is a fixed tenancy = the termination date of the tenancy is known on the first
17
Q
Month to month
A
periodic = there are rules that dictate the notice required to terminate the tenancy
18
Q
Tenancy at will
A
either party can terminate with 30 days notice (depending on how long the tenant has lived there)
19
Q
Tenancy at Sufferance
A
a tenancy that is after the judge has signed a warrant of eviction and prior to the execution of eviction (status above that of a trespasser)
20
Q
Three types of intangible interests
A
license, easement, profit
21
Q
License
A
permission to use land of another (can be withdrawn)
22
Q
Easement
A
Right to use of another (access cannot be denied)
23
Q
In gross/utility (easement)
A
for a utility company, must give notice if it is reasonable (generalized right)
24
Q
Appurtenant Easement (easement)
A
legal right of owner of one property to use a part of the neighboring property as well (shared driveway or private land)
25
Easement by necessity (easement)
use another person's property to access their own land //no other way to access public road and can be very costly
26
a parcel
a piece of land
27
Four types of easements
In gross/ utility, appurtenant, easement by necessity, prescriptive easement
28
Prescriptive easement
10 years of open, notorious, hostile "use" with a claim of the right to use
29
Profit
an agreement between the landowner and harvester of natural resources
30
Future Interests
Interests that either can be or will be transformed into ownership in the future
31
Four forms of ownership for real property...
in severalty/sole, joint tenants with rights of survivorship, tenants in common, tenants by entirety
32
Sole ownership
with one human being or one corporation only
33
Joint tenants with rights of survivorship
two or more individuals (all equal shares w/ time, title, interest, possession, etc), if one dies then all ownership rights transfer to surviving party
34
Tenants in common
2 or more owners with equal or unequal shares // no rights of survivorship
35
Tenants by entirety
a married couple, rights of survivorship, divorce and equitable distribution
36
Where is the "form of ownership" created ?
in the grantee portion of the deed
37
12 steps in closing time on residential real estate in NYS
Listing Agreement, Purchase Agreement, Inspection Phase, Contract of Sale, Inspection Phase, Mortgage Commitment, Title Search, Survey, Municipal Search, Final Walk Thru, Closing Adjustments, Closing Day
38
what is a listing agreement ?
basic contract between seller and listing broker
39
What conditions are in a listing agreement ?
identification of premises being sold (what is included), commission to be paid to broker, list price, duration, claw period
40
Claw Period
seller may be required to return portion of the sale to the buyer in instances where property value decreases etc
41
if someone offers the list price to the seller, can the seller increase the price that is asked?
No they are obligated to sell to this person
42
types of listing agreements
exclusive agency and exclusive right to sell
43
exclusive agency
only sign with one agent, reserves the right to sell to named persons themselves with no commission being paid
44
exclusive right to sell
contract transferring the right to sell to real estate agent for duration
45
Listing agent and seller relationship
represents seller by looking out for sellers best financial interest
46
selling agent and seller relationship
represents seller by looking out for sellers best interest
47
buyer agent and buyer relationship
represents buyer by looking out for buyers best financial interest
48
What is the selling agents job?
to identify a ready, willing, and able purchaser
49
What is a purchase agreement ?
If purchase offer is accepted by the seller it creates a purchase agreement (between buyer and seller)
50
What has to be inspected in the first inspection phase?
full condition of house and property (water, wood destroying insects, infestations, private septic, mold, underground oil tanks)
51
What happens on contract day?
purchaser is the first to sign, seller is second to sign and the contract is dated the day the seller signs
52
Inspection phase #2
handle any inspections that are not completed and are specifically permitted in the contract
53
What is a Mortgage Commitment ?
a contract between lender and borrower; lender is all in and has committed to the loan
54
What does the lender have to consider when making a determination with respect to a mortgage commitment ?
contract of sale, proof of downpayment with verification of the source, appraisal, credit score, and verification of income
55
What does a title search do?
Prove that the seller is the true owner
56
How to conduct a title search ?
Chain of ownership (60 year chain is constructed) and encumbrances (look back for any to see if they are open for relevant time periods like mortgages, tax liens, judgements, etc)
57
What is a title policy?
A policy to protect against the new owner and lender from any claims against the property incase the title search is performed wrong
58
Survery
a map of the property and written description of the boundary of the property
59
Metes and Bounds
a very precise mathematical description of the boundary of real property. The description uses landmarks to provide the precise location of the boundaryline
60
Subdivision Plat Reference
a very brief description that refers to premises by lot # on an outer boundary map
61
What is a part of the municipal search?
Certificate of Occupancy, Certificate of Compliance, Street Report (private or public road?), Pre Date Letter (if house was built prior to a certain code), Violations
62
what is a certificate of occupancy?
Verifies that the building is safe to live in
63
what is a certificate of compliance?
meets the correct requirements and standards
64
When does the final walk through occur?
Anywhere from 48 to 2 hours prior to closing
65
what happens in the closing adjustments?
math surrounding money (school taxes, land taxes, rents, fuel oil left in tank?)
66
How far away is closing day from contract day?
usually like 30-60 days later
67
What happens on closing day?
Grantor gives deed to grantee. Grantee hires mortgagor to pledge a mortgage to mortgagee, then the mortgagee lends money to the mortgagor. This money is given to the Grantor to complete this transaction.
68
What is a mortgage?
a pledge of real property as security for a debt (something that someone is given in exchange for a loan)
69
What is in Paragraph 1 of a contract of sale?
identifying the premises (property) being sold by legal address, tax map id number, and legal description from the previous deed
70
What is the basic rule of what is included/excluded from a sale?
Personal property is excluded unless specifically included and fixtures are included unless specifically excluded
71
what is in Paragraph 2 of a contract of sale?
identifies any personal property that may be included in the sale and any fixtures that may be excluded
72
What is the 3 part test that courts use to decide if something is a fixture or personal property?
Annexation, Adaptation, and Agreement
73
Describe Annexation, Adaptation, and Agreement in terms of fixtures or personal property
Is it attached? How well has it adapted to the property/ would it be difficult to move it or use it somewhere else? Is there agreement between the parties?
74
How do you find the balance due at closing ?
Purchase price - (downpayment+any credit) = balance due at closing
75
what does "credit for purchase money mortgage to seller" mean?
the seller and does not need the whole payment right away. this piece will be paid to the seller over time in payment plans and with interest // seller is also acting as a lender
76
what does "credit for assumption of existing mortgage" mean?
being lended money to give to the seller and the purchaser will be obligated to pay back that money to the lender as they are now in debt of another.
77
IOLA
Interest on Lawyer Account type of escrow account
78
Escrow Account
purpose for holding other peoples money thats in transit // attorney has a obligation to safeguard the money until they are certain the funds have been cleared
79
Mortgage Commitment Contingency Clause
deadline for purchaser to obtain a mortgage commitment as a safety net // if they cannot obtain financing contract will be canceled and downpayment is returned
80
permitted exceptions - "subject to"
tells purchaser that the property is being sold subject to certain conditions
81
Property condition disclosure law notwithstanding
seller must respond to statements themselves and it must be attached to the contract of sale
82
Marketable Title
seller must make this title stating that it is marketable and free from significant defects (saying "you will be able to get title insurance")
83
"as is"
selling the property in its current condition without any repairs or improvements and the buyer accepts this
84
"Time is of the essence"
is material term of the contract (strict adherance to deadline is crucial, if it is not followed other party can terminate and seek damages)
85
"on or about"
not a material term of the contract // lenient date
86
what happens if purchaser defaults on contractual obligation?
seller keeps downpayment as liquidated payment
87
what happens if seller defaults on contractual obligation?
purchaser can sue money and/or specific performance
88
What is a deed?
an instrument of conveyance used to transfer title from the grantor to the grantee
89
Common mistake about a deed
it is NOT proof of ownership
90
How does one prove ownership of real property?
Chain of ownership and encumbrances
91
what date marks the transfer of the property to the new owner?
the day the deed was delivered by the grantor to the grantee
92
what date is the world notified about the transfer of property?
the day the deed is recorded in the County Clerk's Office
93
the significance of the phrase "this indenture..."
an indenture is a contract and a deed is a contract
94
what 2 dates must match in a deed?
the date the deed is signed by the grantor must match the date of notary's acknowledgement
95
who is the party of the first part?
Grantor
96
who is the party of the second part?
Grantee
97
two types of consideration clauses
actual consideration and nominal consideration
98
actual consideration
used to report the actual purchase price (required when there is a fiduciary involved as the grantor)
99
nominal consideration
uses $10, $100, $1 instead of the actual purchase price
100
Granting clause
the interest in real estate being conveyed is described in the granting clause
101
Granting Clause - "forever"
fee simple absolute
102
Granting Clause - "so long as"
fee simple determinable
103
mirror image rule
declaring something so important that it goes in the deed 2 times (beginning and end)
104
Reservations
grantor reserves a right for himself. the grantor is not transferring this right or interest to the grantee
105
examples of reservations...
right of habitation, life estate, right of way over the premises
106
restrictions on land
they run with the land forever and people can add but not take them away; limit the development and use of the real estate
107
"being clause"
helps to locate the deed where the grantor was the grantee
108
"together with all rights, title and appurtenances"
this clause is passing on any prescriptive easements, adverse possession, encroachements
109
what is the mirror image of the granting clause?
Habendum Clause
110
"to have and to hold the premises herein granted"
Habendem Clause
111
Covenant Clause
contains the promise made by the grantor to the grantee, the grantor promises that all encumbrances are part of the record
112
Law Lien Recitation
protects the grantee from a grantor who transfer the property without paying for improvements made to the property ("as is")
113
Signatures on the deed
all grantors must sign the deed or they still own the property
114
acknowledgements
the notary makes a sworn statement that grantor named in the deed signed the document in notary's presence
115
rider/addendum
extension of the contract
116
what is the point of a rider?
opportunity to cover the specific of this transaction
117
atypical scenario for rider : lease
tenant stays in possession
118
atypical scenario for rider : early occupancy by purchaser
create a license and set predire $($ paid per day to stay there)
119
atypical scenario for rider : post closing occupancy by seller
hold back all $ at closing until possession is delivered to buyer
120
atypical scenarios require a paragraph stating...
the date the possession of the property will pass from grantor to grantee, the consequence for not delivering possession on this date, cost that the party that needs possession incur
121
Lead Paint Rule on a rider
if property was built prior to 1978, contract of sale must have : copy of "Protect Your Family from Lead in Your Home", a lead paint disclosure signed by the seller, and providing purchaser 10 days to test for lead paint which can lead to cancelled contract if found
122
home inspections on a rider
identify inspection necessary, # of days to complete inspection, describe what is a satisfactory result of the inspection, # of days to notify of a failed test and give intention to cancel the contract
123
Carbon monoxide and smoke detector on a rider
affirms both are present on the premises
