Section 6: Holding Title, Tenancy Interests, and Subdivisions Flashcards
1
Q
How To Take Title:
* Taking title to property depends on marital and what type of ownership status.
* There are FOUR Possible Options:
o Single Person or Individuals
o Co-Owners (but not married)
o Married Couple
o Trusts, Corporations or _____
A
Entities
2
Q
How To Take Title:
________ = Who, according to the state gets the property when the legal owner(s) die, or a manner of distributing the assets to the heirs.
* These laws in Arizona are important when deciding how to take title.
A
Laws of Descent
3
Q
How To Take Title:
_______ = Who, according to the state gets the property when the legal owner(s) die, or a manner of distributing the assets to the heirs
* These laws in Arizona are important when deciding how to take title.
A
Laws of Descent
4
Q
How To Take Title:
________=
IMPORTANT: This is the easiest form of title to transfer or convey to heirs when the owners die, the property will pass to the heirs as there is nobody else to claim it.
A
Laws of Descent
5
Q
How To Take Title:
*There are many factors involve how to take title and as agents, we should
understand these factors, but NEVER give the advice as to how – refer to an ______.
A
Escrow Agent or Attorney
6
Q
Single Person or Individuals:
* _______ = When a single “unmarried” individual buys property.
o This gives the singular owner absolute control over their property.
o It does not mean ‘several’ but it means that their ownership has been ‘severed’ from everyone else interest – they alone own it.
A
In Severalty
7
Q
Single Person or Individuals:
o Can be a natural person or it could be a legal entity (LLC or Corporation).
o Most Government land, buildings, roads, etc is owned “_______”.
o This is the easiest form of title to transfer or convey to heirs when the owners dies, the property will pass to the heirs as there is nobody else to claim it.
A
In Severalty
8
Q
Single Person or Individuals:
* Severalty = When a single “unmarried” individual buys property.
o This gives the singular owner absolute control over their property.
* Most Government land, buildings, roads, etc. is owned “in Severalty”
* Government owns in severalty, because there is no _____ rights.
A
Co-Ownership
9
Q
Not Married Forms Of Co-Ownership:
* (1) ______ = Used for ownership of real property with two or more owners who are not married.
o Interest in Real Property is ‘undivided’, each has rights to possession and use.
A
Tenancy in Common
10
Q
Not Married Forms Of Co-Ownership: Tenancy in Common:
o The amount of “ownership” interest could be ______ (50/50 or 70/30, etc).
o IMPORTANT: In State of Arizona, it is assumed that ‘TIC’ if not otherwise agreed upon by the owners.
o Each owner can sell, will, or give their ownership interest away.
A
Equal or Unequal
11
Q
Not Married Forms Of Co-Ownership: Tenancy in Common
o If an owner dies, their interest will automatically pass to their heirs (NOT to the other Co-Owners).
o IMPORTANT: There is NO Rights of Survivorship. The HEIRS by law will acquire the property ______.
A
Automatically
12
Q
Not Married Forms Of Co-Ownership:
* (2) _______.
o Rights of Survivorship = when one owner dies, their portion of the property will pass ‘automatically’ to the other owners and split equally.
o Known as a poor man’s will as the last man standing gets the whole property.
A
Joint Tenancy or Joint Tenancy With Rights of Survivorship (JTWROS)
13
Q
Not Married Forms Of Co-Ownership: Joint Tenancy or Joint Tenancy With Rights of Survivorship (JTWROS):
o ALL co-owners are considered “EQUAL owners” (Can not be unequal percentages).
o IMPORTANT: At time of closing, all parties (Grantees) must sign a ‘_______’.
A
Joint Tenancy Deed
14
Q
Not Married Forms Of Co-Ownership: Joint Tenancy or Joint Tenancy With Rights of Survivorship (JTWROS):
* Joint Tenancy MUST INCLUDE the ______.
* IMPORTANT: This Joint Tenancy is more for groups of people who ‘want’ or ‘wish’ that their interest / ownership in the property will pass to the other owner upon death, NOT to their heirs.
A
Rights of Survivorship
15
Q
Not Married Forms Of Co-Ownership:
* FOUR ITEMS required for Joint Tenancy include the acronym PITT:
1. ______ – ‘undivided’ ownership, all parties have equal rights to use whole property, it can’t be physically divided.
2. _____ - all co-owners have equal percentage of ownership, no one party can have a larger ownership interest than anyone else.
3. _____ – There can only be ONE deed because it is a joint tenancy with rights of survivorship, all parties are on one deed.
4. _____ – All ownership was created at the same time, it’s not possible to add someone else later on (Missing Time Element!).
A
Possession
Interest
Title
Time
16
Q
Not Married Forms Of Co-Ownership:
* FOUR ITEMS required for Joint Tenancy:
______ – ‘undivided’ ownership, all parties have equal rights to use whole property, it can’t be physically divided.
A
Possession
17
Q
Not Married Forms Of Co-Ownership:
* FOUR ITEMS required for Joint Tenancy:
______ - all co-owners have equal percentage of ownership, no one party can have a larger ownership interest than anyone else.
A
Interest
18
Q
Not Married Forms Of Co-Ownership:
* FOUR ITEMS required for Joint Tenancy:
______ – There can only be ONE deed because it is a joint tenancy with rights of survivorship, all parties are on one deed.
A
Title
19
Q
Not Married Forms Of Co-Ownership:
* FOUR ITEMS required for Joint Tenancy:
______ – All ownership was created at the same time, it’s not possible to add someone else later on (missing Time element!)
A
Time
20
Q
Not Married Forms Of Co-Ownership:
* IMPORTANT: ______ MUST INCLUDE the Rights of Survivorship. It is NOT POSSIBLE to will or devise one owner’s interest in a property (WROS)
A
Joint Tenancy
21
Q
Not Married Forms Of Co-Ownership:
o ______ = a clause in a will leaving real estate to someone else (inherit).
A
Devise
22
Q
Not Married Forms Of Co-Ownership:
* ______: Any owner may sell or give away their interest in the property without the consent of the other owners, however, the new co-owner WILL NOT have WROS with the others.
o The new owner will be missing the PITT (possession, interest, time, title).
o New co-owner would be a ‘tenant in common’ or TIC with the others.
A
Devise
23
Q
Not Married Forms Of Co-Ownership:
* _______ = If co-owners are not getting along or can not agree to sell the property court action will be required to manage or dispose of the property.
A
Partition Action
24
Q
Not Married Forms Of Co-Ownership:
Partition Action:
* IMPORTANT: Corporations, LLC’s and ‘entities’ CAN NOT take title as Joint Tenants or JTWROS.
o _______ don’t die, so it would not be possible under WROS.
A
Corporations
25
Not Married Forms Of Co-Ownership:
* _______ = If co-owners are not getting along or can not agree to sell the property court action will be required to manage or dispose of the property.
Partition Action
26
Married Forms Of Co-Ownership:
* (1) __________:
* Arizona is a ______ State
* These laws treat married couples as ‘equal partners’
* Equal Partners share everything, banks, real property, personal property etc.
Community Property (CP)
27
Married Forms Of Co-Ownership:
* (1) Community Property:
* Arizona is a Community Property State (CP).
* IMPORTANT: Anything bought or earned ‘______’ becomes CP.
* One spouse can ‘buy’ property during marriage, but it becomes CP AUTOMATICALLY.
After Marriage
28
Married Forms Of Co-Ownership:
* (1) Community Property:
* BOTH spouses must AGREE to sell or encumber.
o IMPORTANT: It takes 1 to buy, but 2 to sell
* ______ property is any type of asset or property that is owned by one of the spouses and is acknowledged to be the sole ownership of the other.
Sole and Separate
29
Married Forms Of Co-Ownership:
* (1) Community Property:
* Arizona is a Community Property State (CP).
* IMPORTANT: Property or assets owned ‘before marriage’ are separate as long as the property is NOT commingled with the CP.
o 1 spouse owns a house before marriage, it is his/hers separate from other spouse as long as it is NEVER ______.
Commingled
30
Married Forms Of Co-Ownership:
* (1) Community Property:
o Stocks, cars, assets acquired before marriage are also separate.
o _____ received ‘after marriage’ must also be kept separate from the Community Property, NOT commingled.
Inheritance or Gifts
31
Married Forms Of Co-Ownership:
* (1) Community Property:
* Arizona is a Community Property State (CP).
* ______= when one spouse’s separate property is mixed with the other spouse’s marital property (keep it separate if it’s yours).
Commingling
32
Married Forms Of Co-Ownership:
* (1) Community Property:
* IMPORTANT: In Arizona, prior to 1995, each spouse had the right to will, sell or transfer their interest to another, non-spouse, ‘WITHOUT’ the consent of the other spouse...then the laws changed and after 1995, Arizona became known as a _________.
Community Property State With Rights Of Survivorship (WROS)
33
Married Forms Of Co-Ownership:
* (1) Community Property
* Arizona is a Community Property State (CP).
* ______ = Obtain a loan against or to otherwise hinder the transferability of title.
Encumber
34
Married Forms Of Co-Ownership:
* (2) Community Property With Rights of Survivorship (CPWROS):
* Arizona is a Community Property State (CP).
* Married Couples ONLY in Arizona after ______.
1995
35
Married Forms Of Co-Ownership:
* (2) Community Property With Rights of Survivorship (CPWROS):
o Allows married couples tax benefits and avoids ______.
* IMPORTANT: The same PITT unities MUST be held for CPWROS.
Probate
36
Married Forms Of Co-Ownership:
* (2) Community Property With Rights of Survivorship (CPWROS):
* The deceased spouse's interest will now _____ pass to the other spouse.
Automatically
37
Married Forms Of Co-Ownership:
* (2) Community Property With Rights of Survivorship (CPWROS).
* Arizona is a Community Property State (CP).
* IMPORTANT: CPWROS is the assumed method for married couples in Arizona.
* 1 spouse can buy property and keep separate ‘after marriage’ but must have a disclaimer or quitclaim deed signed by other spouse.
* ______ = one spouse waiving their rights to that property.
Disclaimer Deed
38
Married Forms Of Co-Ownership:
* (2) Community Property With Rights of Survivorship (CPWROS).
* Arizona is a Community Property State (CP).
* ________ = one spouse waiving their rights to that property.
Disclaimer Deed
39
Married Forms Of Co-Ownership:
* (3) Tenancy by the Entirety:
* Arizona is a Community Property State (CP).
* This form of tenancy is NOT ______ in Arizona because we have CPWROS.
Legal
40
Married Forms Of Co-Ownership:
* (3) Tenancy by the Entirety:
* Treats both spouses as one single legal person (not as equal partners).
* Cannot be ended unless ______ parties agree.
*This is still found in the following states: Alaska, Arkansas, Delaware, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Wyoming.
Both
41
How To Take Title:
Ending A Co-Ownership Interest in Real Property: 1/4 Ways
1: ____________
* If Joint Tenants have Rights of Survivorship, any of the 4 units of PITT are broken, then that interest is gone for that owner BUT remains with the others.
EX. Abby, Bob, Candice and Dennis are all co-owners and have Joint Tenancy.
If Abby dies, Bob, Candice and Dennis all share now a 33% ownership.
If Abby sells to Emily, Bob, Candice and Dennis are Joint Tenants still with 25% ownership, and now Emily is a 25% Tenant in Common owner! (Emily can NOT have JT as she didn't have PITT)
Joint Tenancy PITT is Broken
42
How To Take Title:
Ending A Co-Ownership Interest in Real Property: 1/4 Ways
2: ________
* Legally acting, courts can issue a suit to partition where the co-owners are forced to either split up and sell or otherwise divide the property.
By Legal Action
43
How To Take Title:
Ending A Co-Ownership Interest in Real Property: 1/4 Ways
3: ______
* These can terminate a co-ownership.
Foreclosures and Bankruptcy
44
How To Take Title:
Ending A Co-Ownership Interest in Real Property: 1/4 Ways
4: _________
* Both or all co-owners agree to end the co-ownership (sale).
Voluntary
45
How To Take Title:
Business & Ownership:
* Business ‘entities’ CAN own real estate and take different forms depending on scope.
* Can hold title in either ______ or _______.
Severalty (Common) OR Tenants in Common
46
How To Take Title:
Business & Ownership:
* Can NEVER own _____ as WROS as an entity never dies.
* Entity = formed organization used to conduct business for profit or non-profit.
Title
47
How To Take Title:
Business & Ownership:
* ______= formed organization used to conduct business for profit or non-profit.
Entity
48
How To Take Title:
Business & Ownership:
* Business ‘entities’ can own real estate and take different forms depending on scope:
IMPORTANT: Can hold title in either Severalty (common) OR possibly as '______'.
Tenants in Common (TIC)
49
How To Take Title:
Business & Ownership:
* If held as TIC, it would be as a business holding owning with another person.
* Imagine a joint venture with a land owner and a developer, they would be TIC as the developer is a ______ and the land owner is a person
IMPORTANT: They can NEVER own title as WROS because a business entity never dies.
Corporation
50
How To Take Title:
Business & Ownership:
* Business ‘entities’ can own real estate and take different forms depending on scope:
* IMPORTANT: LLC or Limited Liability Corporations are treated as an individual ______ in AZ.
Person
51
How To Take Title:
Business & Ownership:
* Business ‘entities’ can own real estate and take different forms depending on scope:
o LLC’s are made up of members.
o Members each have limited liability.
o Members each have full control over management of the LLC.
o LLC as an entity do NOT pay taxes, it is members pass thru ______.
Income
52
How To Take Title:
Business & Ownership
* Business ‘entities’ can own real estate and take different forms depending on scope:
* IMPORTANT: Partnerships must have at least TWO people.
o Must be a FOR _____ business.
Profit
53
How To Take Title:
Business & Ownership
* Business ‘entities’ can own real estate and take different forms depending on scope:
Partnerships:
o Each partner has defined duties:
o ______:
Zero control in management
Liable only up to the extent of their investment
Limited Partner
54
How To Take Title:
Business & Ownership
* Business ‘entities’ can own real estate and take different forms depending on scope:
Partnerships:
o Each partner has defined duties:
o _______:
Full control in management
Full Liability for the entity
General Partner
55
How To Take Title:
Business & Ownership
* Business ‘entities’ can own real estate and take different forms depending on scope:
* IMPORTANT: __________:
These are partnerships with either people or corporations.
o Created for singular and specific projects.
o Typically dissolved upon completion of project.
o Corporations or people coming together on singular project for profit.
Joint Ventures
56
Business & Ownership
* Business ‘entities’ can own real estate and take different forms depending on scope:
* IMPORTANT:
_________:
o Publicly traded on an open exchange.
o Investors buy shares of common stock instead of physical property.
o These must have most of their stock invested in Property.
o Must pay out at least 90% of their income to investors as dividends.
Real Estate Investment Trust [REIT]
57
Business & Ownership
* Business ‘entities’ can own real estate and take different forms depending on scope:
* IMPORTANT:
______:
This is a group of people investing together.
o Individual Investors pool their capital to invest into real estate.
o Most often formed to purchase a single property.
Syndicate [Syndication]
58
Real Property Classifications:
* Single Family Residences:
o Most common form of property.
o House sits on land and - one home per lot.
o Almost always held in this status.
o IMPORTANT:
______ = highest form of ownership of real property.
Fee Simple Absolute
59
Real Property Classifications:
* ________:
o IMPORTANT: Unit sits on land and BOTH land and unit are owned.
o Usually shares at least one common wall.
Townhouses
60
Real Property Classifications:
* ______:
o Owned in Fee Simple Absolute.
o Each owner is a ‘member’ of the HOA, which in turn owns the common areas, grounds etc -
IMPORTANT: HOA owns these items in severalty.
Row Homes
61
Real Property Classifications:
* ______:
o Unit sits on a small lot and usually has a small yard.
o Commonly built directly on the lot line.
o Could share common walls or be staggered.
Patio Homes
62
Real Property Classifications:
* ______:
o Arizona Agents can now sell manufactured homes or mobile homes if on the resale market (not new from the factory).
o If attached to the land permanently (Can’t Move again) is considered to be real property (affixed to the earth).
Mobile/Manufactured Homes
63
Real Property Classifications:
* ______:
This would have this certificate to be purchased.
IMPORTANT:
______= conversion to real property from personal property and is filed with the county.
Certificate Of Affixture
64
Real Property Classifications:
* Mobile/Manufactured Homes:
o If sitting on rented space, not real property, unit is ‘personal property’.
o Agents can sell because it is considered ______ (unit + land).
o Agents can NOT sell units on rented or leased land (Personal).
Real Property
65
Real Property Classifications:
* Mobile/Manufactured Homes:
______ = right to sell non-affixed (movable) units.
Manufactured home would convey with a bill of sale.
Dealer’s License
66
*IMPORTANT: Manufactured homes, if sold by themselves, in Arizona, would convey with a ______ since there is NOT a Deed to the 'property'.
Bill Of Sale
67
Real Property Classifications:
* Timeshares:
o Units divided into fractional ownership usually weeks.
o Can be either Fee Simple or ______ depending on unit terms.
Leasehold
68
Real Property Classifications:
* Timeshares:
o Developers MUST furnish the Public Report to buyers.
o Agents can sell as REAL PROPERTY.
o Buyers have a _____ day right of rescission period.
7 Day
69
Real Property Classifications:
* _____:
o Since these don’t all sit on the ground, owner’s own “air rights”.
Condos or Condominiums
70
Real Property Classifications:
* Condos or Condominiums:
o ______ = ownership of the space between all common walls.
*These could also be used when an owner of a property has the 'rights' to the air above them. Ex. Radio antenna, billboards, signs etc.
Air Rights
71
Real Property Classifications:
* Condos or Condominiums:
o ______ = Developer action to create multiple deeds from a singular deed in order to sell condos.
Developers would do this in order to convert apartments to condos.
Horizontal Regime
72
Real Property Classifications:
* IMPORTANT: Horizontal Regime: “Developer action to create multiple deeds from a singular deed in order to sell condos”.
* Used to create multiple deeds from one singular deed
*Developers would do this in order to convert apartments to condos.
o Developers must furnish a “______”.
Public Disclosure Report
73
Real Property Classifications:
* Condos or Condominiums:
o HOA’s are created by developer who creates the CC&R’s.
HOA documents include declarations, by-laws, rules and responsibilities
pertaining to the association.
These ______ give the power to the HOA to levy assessments, penalties, fines and the right to file a lien.
By-Laws
74
Real Property Classifications:
* Condos or Condominiums:
o HOA’s are created by developer who creates the CC&R’s.
HOAs can legally foreclose due to unpaid _____ not penalty fees.
o Typically, all common areas, roof, and insurance is provided by HOA.
Assessments
75
Real Property Classifications:
* Condos or Condominiums:
o HOA’s are created by developer who creates the CC&R’s.
IMPORTANT:
o In a complex of 1 - 49 units.
______ are responsible for getting these documents to new buyers.
Owners
76
Real Property Classifications:
* Condos or Condominiums:
o HOA’s are created by developer who creates the CC&R’s.
IMPORTANT:
o In a complex of 50 units or more.
The _____ is responsible for getting these documents to new buyers.
Home Owner's Association [HOA]
77
Real Property Classifications:
* Co-ops or Co-opertives:
o Entire building is owned by a corporation.
o Individual owners don’t own the unit, but _____ in the corporation.
Shares
78
Real Property Classifications:
* Co-ops or Co-opertives:
o Entire building is owned by a corporation.
IMPORTANT: Each owner has a lease.
______: Lease given by corporation to an owner to use unit forever.
Proprietary Lease
79
Real Property Classifications:
* Co-ops or Co-operatives:
o Corporations have a board of directors and _____ to buy is required.
o Value of stock goes up and down just as real estate prices would.
Approval
80
Real Property Classifications:
* Co-ops or Co-operatives:
o If any owner defaults, the entire corporation is held ______.
This is why it is very difficult to obtain financing for co-ops.
Liable
81
Real Property Classifications:
* Co-ops or Co-operatives:
o ______:
A designated area that dictates a community is to have a mix of commercial, residential, parks, social, schools etc.
It is a zoning ordinance that promotes well-being in communities.
Planned Unit Development [PUD]
82
Real Property Classifications:
* Campgrounds:
o Ownership is NOT allowed in campgrounds.
o ______ is required and a license to use is granted to them.
Membership
83
Real Property Classifications:
* Campgrounds:
o NOT allowed to lease, rent or loan use of license (proprietary).
o Developers must issue full public report _____ sales.
Before
84
Real Property Classifications:
* Campgrounds:
o IMPORTANT: Rescission period cancellation of 7 days.
o IMPORTANT: Full Refund must be returned within ______ days of cancellation notice.
30 Days
85
Real Property Classifications:
* Campgrounds:
IMPORTANT:
YOU NEED to have a _______ if you want to sell, lease, exchange campground memberships.
Real Estate License
86
Subdivided vs. Unsubdivided Land:
* Subdivided Land:
Divided into 6 or more parcels (less than _____ acres each).
o IMPORTANT: Public report is REQUIRED.
36 Acres
87
Subdivided vs. Unsubdivided Land:
* Subdivided Land:
o This type of land is regulated by ______ and part of the overall responsibility of the Real Estate Commissioner.
Laws are in effect to prevent fraudulent and dishonest practices and to protect the public.
Arizona Real Estate Code
88
Subdivided vs. Unsubdivided Land:
* Unsubdivided Land:
Divided into 6 or more parcels (36 acres or more, but less than ______ acres).
o IMPORTANT: Public Report NOT Required.
160 Acres
89
Subdivided vs. Unsubdivided Land:
* ______:
A Person who divides the land.
o Provides the initial development - streets, sewers, sidewalks, etc.
Sub-Divider
90
Subdivided vs. Unsubdivided Land:
* ______: Person who builds improvements on the land.
Developer
91
Subdivided vs. Unsubdivided Land:
o May be the SAME person as the Sub-Divider.
o No ______ required for either.
Real Estate License
92
Land Use Controls: Who controls what you do with your land?
* ______:
o Gives the state the right to create subdivision law.
o Including Zoning.
o May require an Environmental Impact Report.
Police Power [Government]
93
Land Use Controls: Who controls what you do with your land?
* Police Power (Government):
o Gives the state the right to create subdivision law.
o Including ZONING.
o May require an _____.
Environmental Impact Report
94
Land Use Controls:
* Police Power (Government):
o Gives the state the right to create subdivision law.
o Including ______.
o May require an Environmental Impact Report.
Zoning
95
Land Use Controls:
* ______:
o CC&Rs to maintain the character of a property or subdivision.
o Legally binding.
Private Land Use Controls
[Not Government]
96
Subdivision Disclosure Report (SDR): This is a comprehensive public report to protect the public.
* Has 3 Names:
1. _______
2. _______
3. _______
1. Subdivision Disclosure Report
2. Commissioner’s Public Report
3. Public Report
97
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
1. Documentation on their ability to ______ the project, as well as some personal and professional history and background.
2. IMPORTANT:
A ______ Map.
3. ______:
Is it clear and marketable? And can they be issued a new one on subdivided land?
4. Certificate of ______ if in an Active Management Area. This is a geographical area which has been designated pursuant to as requiring active management of groundwater.
5. Permanent ______ to lots. Ex. roads, ingress, egress.
6. ______ Title:
Are there any liens on the property?
7. ______ disposal plan. Where is it and whose responsibility is it?
8. A ______ :
Filled out for the ADRE.
9. Physical feature of the land. ______ for water drainage.
10. ______ Condition of Title:
In process, obtained etc.
11. Status of _______ including streets and utilities (in, or in progress).
12. Costs passed onto _______ of subdivision improvements (CFD or paid already).
13.How sales will be _______ :
Will it be on site, via sales agent, etc?
14. Past law _______ of the Seller (If any).
15. IMPORTANT: Buyers must sign a statement that acts as a _______ stating that they have reviewed and were given a copy of the public report.
1. Finance
2. Plat [Sub-Division]
3. Title
4. Assured Water Supply
5. Access
6. Clear Title
7. Wastewater
8. Questionnaire
9. Topography
10. Owner
11. Improvements
12. Buyers
13. Conducted
14. Violations
15. Receipt
98
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
1. ______ on their ability to finance the project, as well as some personal and professional history and Background.
Documentation
99
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
2. IMPORTANT:
A Plat / Sub Division ______.
Map
100
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
3. Title:
Do they have clear title? and can issue ______ title on subdivided land?
New
101
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
4. Certificate of Assured Water Supply if in an ______.
Active Management Area [AMA]
102
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
5. ______ access to LOTS via roads, INGRESS, and EGRESS.
Permanent
103
In real estate, ______ refers to the right to enter a property or location.
Ingress
104
In real estate, ______ refers to the act of leaving or exiting that same property or location.
Egress
105
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
6. Clear title:
Realtor must verify if there any ______ on the property?
Liens
106
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
7. Wastewater ______ plan:
Where is it getting disposed? Whose responsibility is it to dispose of it?
Disposal
107
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
8. A Questionnaire:
This MUST be filled out for the ______.
Arizona Department of Real Estate [ADRE]
108
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
9. ______ features of the land. Ex. Topography for water drainage.
Physical
109
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
10. Owner ______ of Title. Is title in process, obtained, etc?
Condition
110
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
11. Status of Improvements:
Including streets and ______.
Are they already on property? Or are they in progress?
Utilities
111
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
12. Costs passed onto buyers of subdivision improvements. Is it _____? Or is the deed paid already?
Contract for Deed (CFD)[Land Contract]
112
A ______, is a legal agreement for the sale of property between a buyer and seller, alternative to a mortgage. When a homebuyer agrees to this option, the buyer holds the title on the home while the buyer makes payments until a pre-determined amount has been paid, at which time the property deed is officially transferred.
Contract for Deed (CFD) [Land Contract]
113
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
13. How will lot _____ be conducted. Will it be on site, via sales agent, etc?
Sales
114
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
14. Past law violations of the _____ (If any).
Seller
115
Subdivision Disclosure Report (SDR):
* Requires developers to submit:
15. IMPORTANT: Buyers must sign a statement that acts as a receipt stating that they have reviewed and were given a copy of the _____.
Public Report
116
Subdivision Disclosure Report (SDR):
* Requirements:
*IMPORTANT: The developer can NOT alter or change the public report without the consent of ______.
o If there is a material change that would ‘adversely affect’, any buyer would have 1**10 days to rescind or cancel their contracts.**
Arizona Department of Real Estate [ADRE]
117
Subdivision Disclosure Report (SDR):
* Requirements:
* It would be BREAKING THE LAW to subdivide land multiple times between friends, family or partners to avoid the subdivision _______ by dividing into smaller and smaller pieces per each owner.
* This is not common, but common enough to where the department is monitoring this and bringing action against those who try to do this.
Disclosure
118
Subdivision Disclosure Report (SDR):
* Requirements:
*IMPORTANT: The developer can NOT alter or change the public report without the consent of Arizona Department of Real Estate (ADRE).
o If there is a material change that would ‘adversely affect’, any buyer would have ______ days to rescind or cancel their contracts.
10 Days
119
When Is A Subdivision Disclosure Report (SDR) Not Required?
* ______ = “A split of 5 or fewer”
o A developer or owner can subdivide his property.
Example: If a 5 acre property can be subdivided into 5 one acre lots, NO public report is required.
A Lot Split
120
When Is A Subdivision Disclosure Report (SDR) Not Required?
* IMPORTANT: Lots of land 160 acres or more called _____. The seller of land isn’t relieved of liability, however. Sellers must furnish an affidavit of disclosure.
when selling less than 5 pieces of land to inform the buyers of what is known about that land.
Bulk Land
121
When Is A Subdivision Disclosure Report (SDR) Not Required?
* IMPORTANT: Sellers must furnish this document when selling less than 5 parcels of land to inform the buyers of what is known about that land.
______: "A sworn statement that the seller creates stating what is known about the land they are splitting"
Affidavit of Disclosure
122
When Is A Subdivision Disclosure Report (SDR) Not Required?
*IMPORTANT: A public report is NOT needed for the sale or lease of ______ or ______ areas.
Commercial or Industrial
123
_______:
* Plan that includes recreational amenities such as parks, golf courses, lakes, bike paths, and jogging trails. The variety of amenities clearly separates it from a normal plan for a housing subdivision.
Master Planned Communities
124
Master Planned Communities:
* ______: Once the community has been established, this type of deed is used to grant the ownership of the common areas to homeowners via the HOA using CC&R’s.
Master Deed
125
Advertising For Subdivisions:
* IMPORTANT: ALL other real estate advertising laws apply.
* Additionally must be REVIEWED by the Arizona Department of Real Estate (ADRE).
o Must NOT imply the subdivision is endorsed by the ______.
Commissioner
126
Advertising For Subdivisions:
* IMPORTANT: ALL other real estate advertising laws apply.
o Must NOT say that the risk of loss is ______.
o Intended to verify all facts and not mislead the public.
Impossible
127
Advertising For Subdivisions:
* IMPORTANT: ALL other real estate advertising laws apply.
o Must indicate that any pictures or scenes are an artist’s ______ and do not actually exist yet. Same with model homes built or under construction.
Rendering
128
Advertising For Subdivisions:
* IMPORTANT: ALL other real estate advertising laws apply.
o IMPORTANT: All material must be kept on file for ______ years.
3 Years
129
Advertising For Subdivisions:
* ______ :
Protects the public from unscrupulous land sellers. These are state statutes that protect the public against securities frauds of real estate companies.
Blue Sky Law
130
Blue Sky Law: Advertising For Subdivisions:
* ______: is when statements are made to exaggerate the properties qualities.
Puffing
131
Blue Sky Law: Advertising For Subdivisions:
* ______: is an unintentional false statement.
Misrepresentation
132
Blue Sky Law: Advertising For Subdivisions:
* ______: is an intentional false statement.
Fraud
133
Selling Subdivided Land:
* Seller may not sell any land until the Commissioner has reviewed and it has
approved the ______.
Subdivision Disclosure Report [SDR]
134
Selling Subdivided Land:
IMPORTANT: Seller may not sell any land until the Commissioner has reviewed and approved the Subdivision Disclosure Report (SDR).
* IMPORTANT: In the interim, the seller MAY take fully refundable Lot Reservations.
o CAN NOT exceed $______ and to be used as a HOLD or reservation.
$5,000
135
Selling Subdivided Land:
o IMPORTANT:
Earnest money, down payments, reservation money, hold money, and any other advanced money are paid directly to the ______ and NOT put into a neutral escrow account.
Seller
136
Selling Subdivided Land:
* Once the subdivision is ______, the buyer will receive a copy of the Subdivision Disclosure Report [SDR].
o Buyer MUST sign a receipt stating he/she has received the Subdivision Disclosure Report [SDR].
o IMPORTANT: The seller must keep a copy of the Subdivision Disclosure Report [SDR] receipt from the buyer for 5 years.
Approved
137
Selling Subdivided Land:
* Once the subdivision is approved, the buyer will receive a copy of the Subdivision Disclosure Report [SDR].
o Buyer MUST sign a ______ stating he/she has received the Subdivision Disclosure Report [SDR].
o IMPORTANT: The seller must keep a copy of the Subdivision Disclosure Report [SDR] receipt from the buyer for 5 years.
Receipt
138
Selling Subdivided Land:
* Once the subdivision is approved, the buyer will receive a copy of the Subdivision Disclosure Report [SDR].
o Buyer MUST sign a receipt stating he/she has received the Subdivision Disclosure Report [SDR].
o IMPORTANT: The seller must keep a copy of the Subdivision Disclosure Report [SDR] receipt from the buyer for ______ years.
5 Years
139
Selling Subdivided Land:
o If the buyer does NOT receive a copy of the SDR:
IMPORTANT: The contract is voidable for ______ years.
3 Years
140
Selling Subdivided Land:
o If the buyer does NOT receive a copy of the SDR:
Real estate licenses may be ______ or ______.
Suspended or Revoked
141
Selling Subdivided Land:
o If the buyer does NOT receive a copy of the SDR:
Civil penalty of up to $______ for each occurrence may be imposed.
$1,000
142
Rescission Periods:
* ______ : The remedy of cancelling a contract that restores all parties to original positions, making all parties whole again.
Rescission
143
Rescission Periods:
o IMPORTANT: ______ has a building on it already or has plans for a structure to be built within 2 years.
* On improved land there is NO rescission period
Improved Land
144
Rescission Periods:
o IMPORTANT: Improved land has a building on it already or has plans for a structure to be built within 2 years.
* On IMPROVED land there is ______ rescission period
No
145
Rescission Periods:
o IMPORTANT: On UNIMPROVED land, the rescission period is:
IF Buyer inspected: ______ calendar days
IF Buyer NOT Inspected: 6 months
7 Calendar Days
146
Rescission Periods:
o IMPORTANT: On UNIMPROVED land, the rescission period is:
IF Buyer inspected: 7 Calendar Days
IF Buyer NOT Inspected: ____ Months
6
147
Which of these statements is false about Tenancy in Common..
Its 'undivided', each party has rights to possess and use
Each owner cannot sell, will or give their ownership interest away without the approval of all involved.
If an owner dies, their interest will pass on to their heirs, not to the other co-owners
No rights of survivorship
Each owner cannot sell, will or give their ownership interest away without the approval of all involved.
148
Choose the correct statements that have to do with Joint Tenancy…
Rights of ownership is necessary for a joint tenancy
Corporations, LLC's and 'entities' can take title as joint tenants
Four items are required; Possession, Interest, Title, Time
Known as a "rich mans will"
Rights of ownership is necessary for a joint tenancy
Four items are required; Possession, Interest, Title, Time
149
Two individuals that are NOT married purchase a home together. Unless both parties sign a specific type of deed, Arizona will assume that if one owner dies, their share of ownership passes on to who?
This type of co-ownership is called?
This type of co-ownership is called Tenancy in Common and is used for ownership of real property with two or more owners who are not married. If an owner dies, their interest will automatically pass to their heirs (NOT to the other Co-Owners.
150
When a house in Arizona is owned in severalty and the owner dies, who does the property ownership pass on to by default?
Severalty is when a single “unmarried” individual owns property. This is the easiest form of title to transfer or convey to the owners heirs (his or her estate) when the owners dies, so in this case, the property will pass directly to the heirs as there is nobody else on title who can claim it.
151
Regarding the question above, when title transfers or conveys to the owners heirs what is the other type of co-ownership and what deed/document that MUST be signed by both parties?
Other type of co-ownership is Joint Tenancy or Joint Tenancy With Rights of Survivorship (JTWROS). Rights of Survivorship is when one owner dies, their portion of the property will pass ‘automatically’ to the other owners and split equally. At time of closing, all parties (Grantees) must sign a ‘joint tenancy deed’.
152
There are 4 items required for Joint Tenancy, name one…
FOUR ITEMS required for Joint Tenancy include (PITT) are
1. Possession
2. Interest
3. Title
4. Time
153
Four friends buy a piece of land in Kingman with the shared mindset of developing the property at some point in the future. They choose Joint Tenancy as their method of ownership. Suddenly and unexpectedly one of the co-owners dies. What will happen to that owners share of the property?
The heirs to his estate will now be equal co-owners with the other owners
The laws of decent will determine who gets his share
The Trustee must liquidate his share
That owners portion of the property will pass to the other owners equally
That owners portion of the property will pass to the other owners equally
154
Joint Tenancy must include which of the following?
Rights of Survivorship
Time and Title
Interest and Possession
All of these
All of these
155
When buying a property jointly, two individuals who are not married would most likely take title to a property how?
Tenants in Law
Equal Tenants
Tenants in Common
Joint Ownership with Rights of Disposal
Tenants in Common
156
Upon the finalization of the divorce, a single woman on her own purchases a new condo in a high rise complex. The ownership would probably be recorded as "an unmarried woman taking title __________."
Community Property
In Severalty
Single Tenancy
Tenancy in Common
In Severalty
157
Laws of Descent would be applied when determining what?
Who would claim ownership after the death of the legally recognized owners
Possession Rights
Ownership rights if more than one owner in a property
What must be agreed upon when taking title as Joint Tenancy
Who would claim ownership after the death of the legally recognized owners
158
Which of the following have rights of survivorship?
Community Property in AZ
Tenancy by the Entirety
Tenants in Common
Joint Tenancy
Community Property in AZ
Joint Tenancy
159
How To Take Title:
Business & Ownership
* _______ is considered the same as an individual in AZ.
o Shareholders make up ownership of the corporation.
o Corporations are taxed on their income.
o Shareholders are taxed on the dividends on their stock.
Corporations [C-Corp or S-Corp]
160
How To Take Title:
Business & Ownership
* Corporations (C-Corp or S-Corp) is considered the same as an individual in AZ.
o Shareholders make up ownership of the corporation.
o Corporations are taxed on their _______.
o Shareholders are taxed on the dividends on their stock.
Income
161
How To Take Title:
Business & Ownership
* Corporations (C-Corp or S-Corp) is considered the same as an individual in AZ.
o Shareholders make up ownership of the corporation.
o Corporations are taxed on their income.
o Shareholders are taxed on the _______ on their stock.
Dividends
162
How To Take Title:
Business & Ownership
* Corporations (C-Corp or S-Corp) is considered the same as an individual in AZ.
o Shareholder liability is only as much as the value of their stock.
o Shareholders don’t manage the company but have a _______.
Board of Directors
163
True or False: Can an Entity own property?
True
164
True or False: Business entities can own title with rights of survivorship.
True
False
False
165
In Arizona, a married woman buys a house in 2015. Should she die, who will receive full ownership? Why?
Married Couples ONLY in Arizona after 1995, the deceased spouses interest will automatically pass to the other spouse.
166
A man purchases a new TV and a week later he gets married. Does his wife own it too? What if he had purchased it after they were married?
TV acquired before marriage is separate and belong to husband only. If he had purchased it after they were married it belongs to both.
167
A married couple closes on a home and 5 years later files for divorce. How can the co-ownership be ended?
Legally acting, courts can issue a suit to partition where the co-owners are forced to either split up and sell or otherwise divide the property
168
How could a married woman buy a house and prevent her husband from owning it as well?
She can buy property and keep separate ‘after marriage’ but must have a disclaimer or quitclaim deed signed by her husband
169
A married but legally separated couple live in Arizona. The husband lists their summer home for sale in the mountains of Pinetop and receives a very attractive offer which he accepts. What type of contract is this considered?
Valid and the Husband must sell
Voidable by either party
Legal and common as it only takes one to sell in Arizona, but two to buy
Void as mutual consent to sell wasn’t granted
Void as mutual consent to sell wasn’t granted.
170
When buying a property jointly, two individuals who are not married would most likely take title to a property how?
Tenants in Law
Equal Tenants
Tenants in Common
Joint Ownership with Rights of Disposal
Tenants in Common
171
A couple who was married for many years decide to build a new home in Arizona as their primary residence. 3 years after living in that home, the wife inherits another house from her parents who recently deceased. This becomes community property in AZ:
Automatically as it is community property
Never as the husband has no legal claim to it
Once they move into it together
Once the husbands files a joint tenancy deed with the county where the property is located
Once they move into it together.
172
By properly signing a (an) ________________ , a spouse is legally separating themselves from a community property asset:
Disclaimer Deed
Non-Interest Deed
Community Property Waiver Agreement
Quiet Release
Disclaimer Deed
173
Real Property Classifications:
* Condos or Condominiums:
o The CONDO itself is owned in _______ but the owners of the condo own only a fraction of the common areas,
Fee Simple
174
Real Property Classifications:
* Condos or Condominiums:
If 100 units, 1 owner has _______ ownership in common areas.
Ownership in common areas is called Tenants in Common.
1/100
175
Real Property Classifications:
* Condos or Condominiums:
If the owner of the condo died, it wouldn't make sense for the other owners to take possession or ownership of that persons common areas - so the common area is ALWAYS held as _______.
Tenants in Common [TIC]
176
Subdivisions:
If someone splits land into 6 or more parcels from one parcel and each parcel is less then ______ acres, you have a subdivision in Arizona! This needs a public report.
Remember: 6 x 6 = 36 for the exams!
36
177
A developer of real property and the subdivider of the land, neither one needs to have a ________!
Real Estate License
178
Land Use Controls: Who controls what you do with your land?
* Private Land Use Controls (Not Government)
o ________ to maintain the character of a property or subdivision.
o Legally binding.
CC&Rs
179
Choose the following statements that are correct…
Single Family Residences are the most common form of property
Timeshares can never be sold as real property
Ownership is allowed in campgrounds
HOA can legally foreclose due to unpaid assessments
Single Family Residences are the most common form of property.
HOA can legally foreclose due to unpaid assessments.
180
Who owns the community pool in a Townhouse complex?
Owned in Fee Simple Absolute. Each owner is a ‘member’ of the HOA, which in turn owns the common areas, grounds etc. HOA owns these items in severalty.
181
What would convert a mobile home from Personal Property to Real Property? Could you as a real estate agent then sell it?
Mobile home, if attached to the land permanently (Can’t Move again) is considered to be real property (affixed to the earth). Agents can now sell manufactured homes or mobile homes if on the resale market (not new).
182
What is the difference between Subdivided and Un-subdivided land?
Subdivided Land is divided into 6 or more parcels, each of which is less than 36 acres each and a public report is required. Unsubdivided Land is divided into 6 or more parcels, each of which is 36 acres or more, but less than 160 acres and NO Public report would be required in that case. (Remember this - 6 x 6 = 36, it will come in handy!)
183
What are the two types of land use controls?
The two types of land use controls are Police Power (Government) and Private Land Use Controls (Not Government).
184
A buyer tours a timeshare presentation in Arizona while on vacation. The champagne was flowing and the sales staff made quite the impression and the buyer bought a timeshare. This contract is?
Enforceable since she was not a resident of Arizona
Rescindable by the Buyer for a period of 7 days
Valid
Unenforceable since she didn’t have 3 days to review the contract
Rescindable by the Buyer for a period of 7 days
185
Owners of Condo Units have what type of rights?
HOA Voting Rights
Board Leadership Rights
Fee Simple Determinable Rights
Air Rights
Air Rights
186
In a condo complex where there are only 24 total units in Arizona, which party in the transaction would be responsible for the delivery of all of the communities CCR’s and HOA documents to the buyer?
The current owner
The escrow company
The HOA Board
The current management company
The current owner
187
Unique to Arizona, what type of license is needed to sell timeshares?
Timeshare Sales License
Real Estate License
Developers License
Public Report Owners License
Real Estate License
188
The biggest reason why banks don’t typically lend money on Co-Ops is due to the fact that:
The prices are not determined by fair market
Owners have a proprietary leasehold interest in the building
Owners don’t have any form of ownership in the corporation
The sellers don’t have any input as to how the board is run
Owners have a proprietary leasehold interest in the building.
189
In the State of Arizona, in order to sell land and attached manufactured homes, you must have:
A Mobile Home Sales License
A valid and Active Real Estate License
Only the manufacturer can sell manufactured homes
A valid and Active Dealer’s License
A valid and Active Real Estate License
190
A buyer saw an advertisement in his local paper about 40 acres for sale in Northwestern Arizona. He and his wife purchased the property but didn't view it before the purchase. How long do they have to rescind their purchase?
0 days
7 days
3 months
6 months
6 Months
191
A Subdivision Disclosure Report is one of the three names for this type of report, name the other two…
The other two names are Commissioner’s Public Report and Public Report.
192
With a lot split, is a (SDR) required? A: A Lot Split is “A split of 5 or fewer”.
A developer or owner can subdivide his property (ie, a 5 acre property can be subdivided into 5 one acre lots, no public report is required.)
193
When advertising subdivisions, what is an additional advertising law that applies?
All other real estate advertising laws apply.
194
Land may not be sold in a subdivision until the Commissioner has approved the SDR. What can a developer do in the interim to help retain potential clients?
Seller may not sell any land until the Commissioner has reviewed and approved the SDR. In the interim, the seller may take fully refundable Lot Reservations but CAN NOT exceed $5,000 and to be used as a HOLD or reservation. Earnest money, down payments and any other advanced money are paid directly to the seller and NOT put into a neutral escrow account.
195
The idea behind Planned Unit Developments is:
Ensuring conforming designs
Ensuring identical zoning
Enhancing overall well being in the community
Mixing different types of residential properties
Enhancing overall well being in the community.
196
Several unrelated business associates want to acquire a commercial building and lease out the property to a new tech start up company that is looking for space in the area. These business partners agree that by forming a LLC together they could use that LLC to buy and take title to the building. Which method of holding title would this LLC be forced to take?
Joint Tenants w/ Rights of Survivorship
Community Property w/ Rights of Survivorship
Severalty
Tenants in Common
Severalty
197
A REIT must pay out how much of its income in the form of dividends?
75%
50%
90%
100%
90%
198
Which of the following would be a possible reason as to why it is hard to finance a co-op property?
The co-op is managed by a board who has control which make them hard to lease
Co-Op's are rare which make them difficult to finance
Co-Op's are owned in severalty making it difficult to finance
There is not a deed but an owners lease which makes it difficult to finance
There is not a deed but an owners lease which makes it difficult to finance.
