Pearson Vue Real Estate Exam Study Guide Based on Outline

Pearson Vue Real Estate Exam Study Guide Based on Outline Fixture An item of personal property that has been converted to real property by being permanently affixed to the realty. Trade Fixture An article installed by a tenant under the terms of a lease that is removable by the tenant before the lease expires. Emblement Growing crops, such as corn, that are produced annually through labor and industry; also called 'fructus industriales' Attachment The act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor. Severance Changing an item of real estate to personal property by detaching it from the land (e.g cutting down a tree) Bill of Sale A document used to transfer ownership of personal property. Economic Characteristics The four economic characteristics of real property that affect its value as a product in the marketplace are scarcity, improvements, permanence of the investment, and area preference. Physical Characteristics Immobility, Indestructibility, Uniqueness Metes and Bounds A method used to describe a parcel of land that begins at a well-marked point and follows the property's boundaries, using directions and distances around the tract, back to the place of beginning (POB) Rectangular Government Survey System A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines. Recorded Plat (Lot & Block) A map of a subdivision filed as a public record showing the location and boundaries of the individual parcels. Survey The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements. Encumbrance Anything—such as a mortgage, tax, or judgment lien; an easement; a restriction on the use of the land; or an outstanding dower right—that may diminish the value or use and enjoyment of a property. Police Power The government's right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare. Eminent Domain The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner. Taxation The process by which a government body raises monies to fund its operations. Escheat The reversion of property to the state or county, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting, or when the property is abandoned. Zoning Ordinances exercise of police power by a municipality to regulate and control the character and use of property Covenants, Conditions and Restrictions (CC&Rs) Private agreements that affect land use. They may be enforced by an owner of real estate that benefits from them and can be included in the seller's deed to the buyer. HOAs Usually enforces CC&Rs, is set up by the developer and turned over to the homeowners when a specified number of properties has been sold Easement A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land because it does not include a right of possession. Easement Appurtenant An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land. Easement by Implication An easement that occurs when a party's actions reflect the intention to create an easement. Easement by Necessity An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land. Easement by Prescription An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law. Easement in Gross An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. For example, a right granted by a property owner to a friend to use a portion of the property for the rest of the friend's life would be an easement in gross. License The revocable permission for a temporary use of land-a personal right that cannot be sold. Encroachment A building or some portion of it - a wall or fence for instance - that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or a street or alley Forms of Ownership 1) Ownership in Severalty (sole owner) 2) Co-ownership (concurrent owners) 3) Ownership by a trust Tenancy in Common Co-ownership of property in which each party owns an undivided interest that passes according to the decendent's will - to his or her heirs at death. There is no right of survivorship for the other owners. Joint Tenancy ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. upon the death of a joint tenant, the decedent's interest usually passes to the surviving joint tenant or tenants (right of survivorship) Freehold Estate An estate in land in which ownership is for an indeterminate length of time. Fee Simple Absolute The maximum possible estate or right of ownership of real property, continuing forever. Fee Simple Determinable a fee simple estate qualified by a special limitation. Language used to describe the limitation includes the words so long as, while, or during. Fee Simple Subject To a Subsequent condition An estate carrying the limitation that, if it is no longer used for the purpose conveyed, it reverts to the original grantor by the right of re-entry. Fee Simple Defeasible An estate in which the holder has a fee simple title that may be divested upon the occurrence or nonoccurence of a specified event. There are two categories of defeasible estate: fee simple on condition precedent (fee simple determinable) and fee simple on condition subsequent. Life Estate An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons. Bundle of Rights The concept of land ownership that includes ownership of al legal rights to the land - possession, control within the law, enjoyment, exclusion, and disposition. Leasehold Estate A tenant's right to occupy real estate during the term of a lease, generally considered to be a personal property interest. Estate (tenancy) for years An interest for a certain, exact period of time in property leased for a specified consideration. Estate (tenancy) from period to period An interest in leased property that continues from period to period - week to week, month to month, or year to year Estate (tenancy) at will An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite. Estate at Sufferance The tenancy of a lessee who lawfully comes into possession of a landlord's real estate but who continues to occupy the premises improperly after the lease rights have expired. Gross Lease Tenant pays a fixed rent and some or all of the utility expenses, while the landlord pays all taxes, insurance, repairs, any other utility expenses, and maintenance connected with the property. Net Lease The tenant pays all or most of the property expenses, such as hazard insurance, property taxes, and/or common area maintenance charges, in addition to the lease. Percentage Lease This type of lease is commonly used for retail business leases. The rent is based on a minimum fixed rental fee plus a percentage of the gross income received by the tenant doing business on the leased property. Lien A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale Lien Priority Refers to the order in which the claims against a property will be satisfied. (First to record, first in right) Surface Rights Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights). Subsurface Rights Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property. Deed A written instrument that, when executed and delivered, conveys title to or an interest in real estate. Title 1) the right to ownership or the ownership of land 2) the evidence of ownership of land Transfer of Title Title to real estate may be transferred voluntarily by sale or gift, alternatively, title may be transferred involuntarily by operation of law. Recording of Title The act of placing documents in the public record. To be eligible for recording a document must be tried and executed according to state law Elements of a Valid Deed (1) written instrument, (2) competent grantor, (3) identity of the grantee, (4) words of conveyance, (5) adequate description of the land, (6) consideration, (7) signature of grantor, (8) witnesses, and (9) delivery of the completed deed to the grantee. General Warranty Deed Deed that offers the most protection in which grantor fully warrants good clear title to the premises. Usually includes 5 covenants. Special Warranty Deed Limits the grantor's defense of the title transferred by warranting: -that the grantor received title -that the property was not encumbered during the time the grantor held title, except as otherwise noted in the deed Bargain and Sale Deed Contains no express warranties against encumbrances, but it does imply that the grantor holds title and possession of the property. Quitclaim Deed Provides the grantee with the least protection of any deed. It carries no covenants or warranties and generally conveys only whatever interest the grantor may have when the deed is delivered. Deed of Trust The means by which a trustor conveys real estate to a trustee for the benefit of a beneficiary Reconveyance Deed A deed used by a trustee under a deed of trust to return title to the trustor. For example when a loan is secured by a deed of trust has been fully paid, the beneficiary notifies the trustee. The trustee then conveys the property back to the trustor. (In a Lien Theory State, rather than transferring title, a document called a satisfaction of mortgage fulfills this same purpose) Trustee's Deed A deed executed by a trustee is a trustee's deed. It is used when a trustee conveys real estate held in the trust to anyone other than the trustor. Deed executed pursuant to a court order Are established by State Statute and are used to convey title to property that is transferred by will or by court order Voluntary Alienation Legal term for the transfer of title during the property owner's lifetime Involuntary Alienation Title to property may be transferred without the owner's consent, such as condemnation, foreclosure, or a sale to satisfy delinquent tax or mortgage liens Constructive Notice Notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property. Actual Notice Express information or fact; that which is known; direct knowledge. Title Abstract A report containing the history of the title associated with a particular property. Chain of Title The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.