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NC Real Estate License > Unit 6: Real Estate Contracts > Flashcards

Unit 6: Real Estate Contracts Flashcards

0
Q

Voidable contract

A

One party has the right to void contract

Contract with a minor

Disadvantaged party may take legal action to dis affirm

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1
Q

Express contract

A

Terms have been explicitly declared, verbally or in writing

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2
Q

Implied contract

A

Created by the actions of the parties

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3
Q

Gross lease

A

Tenant pays rent only

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4
Q

Net lease

A

Tenant pays rent plus operating expenses

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5
Q

Option

A

Unilateral contract which the buyer has the right to purchase a property from seller is buyer chooses to do so

Owner: optionor

Buyer: optionee

Includes option fee: non refundable, holds option for buyer

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6
Q

Statue of frauds

A

Party attempting to enforce an oral executory real estate purchase contract would be stopped by thus

Requires real estate contracts be in writing

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7
Q

Mutual agreement

A

there was an offer and acceptance there was no fraud, misrepresentation, or mistake and the consent was genuinely freely given

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8
Q

Offeror

A

Party who makes an offer to another party

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9
Q

Communication of acceptance

A

When an accepted offer becomes binding on the offeror

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10
Q

Fraud

A

Actual knowledge to enter into a contract by intentionally deceiving a party

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11
Q

Consideration

A

Something of value given in exchange for something else :

Promise

Money

NOT earnest money (liquidated damages)

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12
Q

Executory contract

A

Buyer has equitable title

Contract has NOT been fully performed

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13
Q

Specific performance

A

Rights of parties to a contract to sue each other to perform the terms of the contract

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14
Q

Liquidated damages

A

When seller keeps only earnest money or other things of value of a buyer who is in default

Must be stipulated as a remedy

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15
Q

Unilateral contract

A

Exchanges a promise for performance

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16
Q

Essential elements of a contract

A

1) mutual agreement
2) a lawful objective
3) consideration

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17
Q

Purchase agreement

A

Creates conditions for closing

Binding on both parties

Offer becomes executory contract

Essential elements: buyer and seller signatures, property description, price a d terms, in writing and signed

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18
Q

Lease

A

Context that conveys right to quiet enjoyment and possession of property buy does not convey title

Bilateral

Landlord: lessor
Tenant: lessee

Essential elements: names of lessor, lessee and description of the property (street address)

19
Q

Notation

A

New contract that transfers all rights

20
Q

Offer becomes contract

A

when acceptance a d communication of acceptance take place

21
Q

2 forms of eviction

A

Actual

Constructive

22
Q

Bi lateral contract

A

Contract between 2 parties who each make a promise to perform certain acts

23
Q

Valid contract

A

Meets all essential elements bad all legal requirements

Binding and enforceable in court by both parties

24
Q

Void

A

No legal effect

Lacks 1 or more of the essential elements

25
Q

Offer

A

During negotiation period, no contract exists

May be countered and new offers made until ‘meeting of the minds’

Strike-thru changes must be initialed and dated by all parties (becomes counter offer)

26
Q

Termination of offer before acceptance results by any of:

A

1) revocation or withdrawl
2) rejection by offerer
3) any change to an offer
4) event that destroys property (fire)
5) death of either party
6) use of NCA of realtors Response to Buyer’s a Offer form

27
Q

Amendment

A

Required to name changes to a contract

28
Q

Counter offer

A

Terminates first offer but carries forward many terms from original offer

29
Q

Contractual Intent

A

Intent to be bound

No fraud or misrepresentation

No false statements or omission of material facts

30
Q

Material fact

A

If known, might change a decision and must be disclosed

Does NOT include ‘Puffung’: act of making a claim that anyone would understand is not literally true

31
Q

Caveat emptor

A

‘Buyer beware’… Not common in most states due to disclosure requirements

32
Q

Addendum

A

Additional material attached to and made part of an offer

33
Q

Assignment

A

Transfers contract rights but not necessarily all liability

All contracts are assignable unless contract prohibits

34
Q

Mutual rescission

A

Return of all parties to their original condition before contract

35
Q

Breach of contract

A

Seller who takes fixtures after closing

Earnest money returned for insufficient funds

36
Q

Parties

A

Seller is vendor and holds legal title

Buyer is vendee and holds equitable title

37
Q

Contingency clause

A

States that a party will not be responsible for completing the purchase under certain conditions

38
Q

Sale leaseback

A

Owner sells property to investor and leases it back

Converts equity to working capital w/o giving up possession

39
Q

Variable leases

A

Rent increases or decreases at pre determined intervals

1) graduated: increase at predetermined intervals bad amount set in lease
2) index: adjusted based on economic indicator

40
Q

Termination of leases

A

1) estate for years : expiration date, not death
2) periodic estate: notice - not death
3) Estate at will - notice or death
4) actual eviction- court action brought by landlord bc tenant is breach
5) constructive eviction : lessee must vacate due to Lessor’s act or failure to act

41
Q

Leae w/ purchase opinion

A

Tenant desires to purchase but does not want to fully commit up front

May apply part of rent to purchase price

42
Q

Agreement for preemptive rights

A

Rights to first chance to purchase property

Seller/landlord initiates

Right of first refusal

More flexibility for owner then option bc no sry price

Seller’s only obligation is to give potential buyer or HOA first right to buy

43
Q

Right of first opportunity

A

More formal then ‘first right of refusal’

Requires seller to give holder first opportunity to buy at designated terms

If opportunity holder declines, seller may fir a specified time accept an offer from another party based on what has Vern agreed to by the holder of opportunity

44
Q

Uniform Electronic Transaction Act (UETA)

A

Allows documents to be created and signed electronically

Contracts can be created and emailed or faxed

Electronic signature is binding

Original signatures can be obtained at closing for documents

NC Real Estate License (12 decks)

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