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					Real Estate Law Review and Study Guide for Final Exam

Chapter 1: REAL ESTATE PRACTICE

Keywords

easements                                              estate for years
fixtures                                               community property
license                                                concurrent ownership
personal property                                      joint tenants
real property                                          partition
realty                                                 survivorship
riparian rights                                        tenancy by the entireties
estate in fee tail                                     tenants in common
fee simple absolute                                    unity of person
fee simple                                             unity of possession
determinable                                           unity of purpose or interest
fee simple subject to a                                unity of time
condition subsequent                                   unity of title
freehold estate                                        condominium
less-than-freehold                                     general partnerships
life estate                                            joint stock association
per autre vie                                          joint venture
reversion                                              limited partnerships
estate at sufferance                                   real estate investment trusts
estate at will



Review Questions

1. How is real property distinguishable from personal property?

2. Define what a fixture is and how it differs from personal property.

3. Discuss the nature of less-than-freehold estates, including the differences in its various forms.

4. What is “tenancy by the entireties”?

5. Give and define various examples of an easement.

6. Does Concurrent ownership require unity of time, title, interest and possession? Why or Why
   not?

7. What is the role of the paralegal in a real estate transaction?
8. What estate conveys only partial ownership? Explain.

9. Name and discuss which estate is characterized by a wrongful possession?

10. A reversion exists in what type of estate? How does this differ from other estates?

Chapter 2: PRELIMINARY ACTIVITIES FOR REAL ESTATE PRACTICE

Keywords

broker                                     listings
real estate agents                         exclusive agency
exclusive agency                           agreement
exclusive listing                          exclusive right to sell
flat fee listing                           listing
net listing                                open listing
caveat emptor                              caveat misrepresenter
caveat venditor                            implied warranty of habitability
latent defects                             patent defects
property disclosure statement              disclosure
fiduciary duty                             good faith




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Review Questions

1. What are the functions of a real estate agent and broker? How do their functions differ?

2. Discuss the various buyer agency relationships.

3. What is the purpose of an Exclusive Listing Agreement?

4. Does an Open Listing differ from a Multiple Listing Service? Why or why not?

5. What is the difference between an Exclusive Agency Agreement and an Exclusive Listing
Agreement?

6. What is the doctrine of Caveat Emptor?

7. What are the five types of misrepresentations that have been recognized by the courts?

8. Discuss an implied warranty of habitability.

9. What is the function of a property disclosure statement?

10. What is a fiduciary duty?

Chapter 3: AGREEMENTS OF SALE

Keywords

release                                     agreements or contracts of sale
contract                                    Statute of Frauds
assignment                                  binder
default                                     escrow
flood insurance                             homeowner’s insurance
legal description                           prorations
risk of loss                                time is of the essence
title insurance                             transfer taxes
zoning classification                       agreement to rescind
cancellation                                land installment contract
option                                      recovery of possession

Review Questions

1. The Statute of Frauds requires writings in transactions involving the transfer of real
   property. Prove true or false.



                                                                                              3
2. In a standard Agreement of Sale three (3) parties have an interest in the content of the
   agreement. Name them.

3. When interpreting a Sales Agreement the parties must be attentive to specific time
   lines. The broad standard "time is of the essence" controls the party's conduct. Give
   four (4) examples of timely action under most real estate contracts.

4. What types of disagreements typically result from the interpretation of real estate
   contracts?

5. How are changes normally made to an executed Agreement of Sale?

6. Under what circumstances is the language “time is of the essence” normally seen?

7. What is the difference between a land installment contract and an option contract?

8. Define the terms cancellation, rescission and release as they relate to agreements of
   sale.

9. What clauses must exist for an agreement of sale to be valid and enforceable?

10. Name three clauses that are not mandatory and only need to be included under certain
    circumstances.

Chapter 4: CONDITIONS, CONTINGENCIES AND OTHER QUALIFICATIONS

Keywords




                                                                                              4
addendum                                   Comprehensive Environmental
condition                                    Response, Compensation, and
condition                                    Liability Act
contingency                                condition precedent
hazardous material                         subsequent
major defect                               endorsement
contingency                                home inspection
pest infestation                           mortgage
rider                                      notice to terminate
underground storage tank                   radon
wipeout                                    right of first refusal
zoning variance                            Urea Formaldehyde Foam Insulation

Review Questions

1. A conditional contract, or a contract with a contingency, is unenforceable until the condition
   or contingency is met or removed. True or False? Explain.
2. Name three of the more common contingencies in a real estate contract.

3. If buyers cannot get mortgage financing as outlined in the mortgage/financing clause of a
   contract, what are the possible results?

4. Explain the difference between a condition and a contingency.

5. What is the purpose of an addendum?

6. In a home inspection addendum, what clauses are normally seen?

7. What hazardous materials are commonly mentioned in contingency language?

8. Contingency language never contains remedial language. Prove true or false.

9. What is a “Right of First Refusal?”

10. Under what condition is a notice to terminate utilized?


Chapter 5: TITLE

Keywords

       conveyancer                                judgment
       lien                                       owner’s policy
       quitclaim deed                             sheriff’s deed
       special warranty deed                      title


                                                                                                5
       title company                              title examinations
       title insurance                            abstract of title
       free and clear                             impediments
       marketable title                           title defects
       conveyance search                          covenant
       grantor                                    grantee
       restriction                                Russell system
       encumbrance search                         judgment
       mechanic’s lien                            affidavit of title
       binder                                     report of title
       title commitment                           title insurance policy


Review Questions:
1. Prove this statement True or False: Title insurance runs with the land upon conveyance.

2. Give three examples of impediments to title.

3. How could the three examples of impediments to title from question 2 be rectified?

4. How does title insurance assure the buyer of a clear and protected exchange?

5. What are some of the expenses related to assuring good title.

6. When abstracting title, the paralegal can begin with varied information. Beside the name of
   the grantor or grantee, how can the chain of title be identified?

7. What are five records searched in the abstraction of title?

8. Explain the difference between a conveyance search and an encumbrance search.

9. Outline the process for obtaining title insurance.

10. What system of recording is used in your area? Briefly explain how mortgage, judgment and
    deed books are organized.

Chapter 6: DEEDS

Keywords

deed                                       grantee
grantor                                    indenture
Statute of Frauds                          covenant
covenant of further assurances             covenant of Seisin
Covenant of Title                          Covenant of Warranty


                                                                                                 6
express covenant        future covenant
implied covenant        perfecting the title
present covenant        Quiet Enjoyment
Right to Convey         acknowledgment
encumbrance clause      habendum clause
metes and bounds        nominal consideration
recital                 recording
testimonium clause      administrator
bargain & sale deed     corporate deed
executor                general warranty deed
guardian deed           limited warranty deed
quitclaim deed          sheriff’s deed
special warranty deed   trustee’s deed
hereditaments           mining rights
quiet enjoyment         restrictive covenant
riparian rights         single family covenant




                                                 7
Review Questions

1. Prove this statement true or false: The Statute of Frauds must be considered when drafting a
   deed.

2. Are deeds are the only acceptable way to legally transfer a property? Why or why not.

3. Seller has no obligation to present clear and free title in a general warranty deed. Is this
   statement true? Explain.

4. What clauses must a deed minimally contain?

5. What is the purpose of a quitclaim deed?

6. Explain the difference between a general warranty and a limited warranty deed.

7. There are several special deed types. Name three and explain their purpose.

8. Define the term “hereditament.”

9. What deed clause would be included to address natural resources that exist under the surface
   of the earth?

10. What is the purpose of the covenant of quiet enjoyment? Is it included in documents other
    than deeds?


Chapter 7: MORTGAGES

Keywords

deed of trust                               mortgage
mortgage note                               mortgagee
mortgagor                                   adjustable rate mortgage
amortization                                assumption
balloon mortgage                            cap
due-on-transfer rider                       Federal Housing Administration (FHA)
fixed rate mortgage                         Graduated Payment Mortgage (GPM)
prime rate of interest                      Purchase Money Mortgage (PMM)
reverse mortgages                           Veterans’ Administration (VA)
appraisal                                   borrower authorization
fee disclosure                              good faith estimate
survey



                                                                                                  8
Review Questions

1. Explain the basic features of a balloon mortgage.

2. What government document estimates the costs of a loan?

3. What is the purpose of an acceleration clause?

4. Explain the difference between a mortgage and a note.

5. In addition to credit rating, what other factors are considered by a lender when deciding to
   approve/disapprove a loan?

6. What various types of governmental mortgage programs exist?

7. What type of mortgage uses a Due on Transfer Rider?

8. Name three government notification documents that are used during the application process?

9. What is the purpose of a mortgage commitment?

10. What is mortgage insurance?




Chapter 8: CLOSING AND SETTLEMENT

Keywords

Real Estate Settlement and Procedures Act (RESPA)
settlement statement
truth in lending disclosure

Review Questions

1. At settlement, the paralegal is responsible for a host of documents, mortgage and financing
   forms. List five (5) examples.

2. What are some of the tasks that are the responsibility of the paralegal at closing?

3. What types of entries on a settlement sheet are pro-rated?



                                                                                                  9
4. What circumstance may call for an escrow deposit at closing?

5. During closing and settlement process, the paralegal must be certain that bills to
governmental authorities are fully paid and properly pro-rated. What are some costs that are
normally equally shared by the Buyer and Seller?

6. What are the types of charges a Seller can expect to pay which are listed on the settlement
   sheet?

7. What types of government required documentation must be signed at closing?

8. What is the difference between a RESPA and Non-RESPA settlement sheet?

9. What is the recordation procedure and costs in your area?

10. What types of funds are normally escrowed?

Chapter 9: LEASES IN THE REAL ESTATE TRANSACTION

Keywords

ejectment                                  eviction
forcible entry and detainer                holdover
landlord                                   lease
leasehold                                  lessee
lessor                                     option
plain English                              real estate management agreement
reentry                                    tenancy
tenant                                     trespass

Review Questions

1. What is the definition of a lease?

2. What are the needed elements in a lease?

3. Why are plain English requirements applicable to leases?

4. Why would a person enter into a lease with an option to purchase?

5. If buyers in a real estate transaction enter into an early possession agreement, what additional
documentation should be drafted to protect the seller’s interests?

6. What is the purpose of a real estate management agreement?



                                                                                                 10
7. Is a notice document required before a landlord begins any other remedial procedure?

8. What must a general eviction complaint include?

9. What are common remedies used by a landlord to recover his or her property?

10. What is forcible entry and detainer?

Chapter 10: RESOLUTION OF REAL ESTATE DISPUTES

Keywords

alternative dispute resolution             arbitration
binding                                    breach of contract
demand for arbitration                     mediation
nonbinding                                 settlement
specific performance                       submission to arbitration

Review Questions

1. What is the purpose of ADR?

2. What is the difference between mediation and arbitration?

3. Explain the difference between binding and non-binding arbitration.

4. Are there any public arbitration programs? What kind are they and who orders them? Find
   out if your state has a program such as this.

5. What is the process during an arbitration hearing?

6. Under what circumstances is “binding” arbitration not binding?

7. What are the advantages of mediation?

8. What is the difference between a Demand for Arbitration and a Submission to Dispute
   Resolution?

9. What actions in law are available for real estate disputes?

10. Explain Specific Performance.




                                                                                          11
Chapter 11: FORECLOSURE

Keywords

acceleration clause       default
foreclosure               chilled bidding
deed of trust             equity of redemption
judicial foreclosure      junior lienholder
necessary party           power-of-sale foreclosure
property party            senior lienholder
strict foreclosure        clog the equity of redemption
deficiency judgment       equity of redemption
fair value legislation    interpleader
one action rule           redemption
sale surplus              statutory redemption
bankruptcy                bankruptcy estate
Chapter 7                 Chapter 11
Chapter 12                Chapter 13
discharge                 exemption
involuntary petition      liquidate
means test                nonexempt
property                  trustee
voluntary petition




                                                          12
Review Questions

1. What is a foreclosure?

2. What is the purpose of an acceleration clause?

3. How does a party satisfy their obligations to omitted junior lienholders?

4. What is the order in which judicial foreclosure proceeds are distributed?

5. What is a strict foreclosure?

6. How does a Power-of-Sale foreclosure differ from a judicial foreclosure?

7. What are the two forms of redemption?

8. When is an action for deficiency judgment initiated?

9. What are the differences between a voluntary and involuntary petition for bankruptcy?

10. Outline the process, and list the forms used for filing bankruptcy.




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