Real Estate Licensee Forms and Contracts Guide, Exams of Real Estate Management

Download Real Estate Licensee Forms and Contracts Guide and more Exams Real Estate Management in PDF only on Docsity! MO Real Estate Questions and answers Mo Statute 339 CORRECT ANSWERS✅ License Law RSMO 1986. License Law CORRECT ANSWERS✅ Any person who performs a RE service on behalf of another party for CONSIDERATION must be licensed; i.e. broker transactions, managing property, appraising, counseling, syndicating, auctioning Consideration CORRECT ANSWERS✅ Includes $ compensation, exchange of free services, or any other valuable good or service that a person expects to be paid (Vital in license law requirement) MO Real Estate Commission (MREC) CORRECT ANSWERS✅ -authority is: 1. Regulatory 2. Judicial 3. Administrative State level gov't entity that regulates and administers license law by passing rules and making known in license law - violate MO license law and guilty= Class B Misdemeanor MREC - State regulator of RE licenses, established by legislature, 7 members 5 years, protect the public: suspend, revoke, or probation - can never fine a licensee and will not involve in a commission $ dispute -subpoenas -civil penalty $2,500 fine/occurrence - can investigate without complaint - can file complaint in ANY COURT OF COMPETENT JURISDICTION MO Real Estate Questions and answers MREC CAUSES COMPLAINT FILED WITH ADMIN HEARING COMMISSION; The Missouri Real Estate Commission was created by an act of the 61st General Assembly and approved by the governor on July 31, 1941. The Commission consists of seven voting members. Six of those members must have at least 10 years experience as real estate brokers. A public member serves as the seventh member. Each commissioner is appointed for a five-year term. Under the provisions of the real estate act, no real estate broker or salesperson may act as such without first procuring a license from the Commission. Other responsibilities include investigating complaints generated by consumers against the acts of a real estate licensee and auditing real estate escrow accounts to verify proper handling of buyers' earnest money. The Commission also approves all real estate prelicensing and continuing education courses. The Commission meets regularly to review complaints, investigations and audits and to take up other matters. The Missouri Real Estate Commission performs duties necessary to carry out the provisions of the real estate license law. MO Admin Hearing Commission (MAHC) CORRECT ANSWERS✅ Determines guilt/innocence; if guilty, sent to MREC for punishment or dismissal. - 3 attorneys, work for attorney general - public crimes (other than license laws) sent to attorney general for disposition Brokers License Types CORRECT ANSWERS✅ - Individual: active or inactive - corporation MO Real Estate Questions and answers Advertising Laws (sec 6)**** CORRECT ANSWERS✅ Discrimin. Adv - illegal and violation of Federal Fair Housing Law - NO inducements: valuable consideration for secure customer to lease, purchase, list, sell - Guaranteed profit: guaranteeing future profits if resale not allowed - Co name must always appear - Salesp contact info, equivalent brokerage info - Blind Advertising: must include broker's reg biz name Institutional Advertising: Advertise company or individual, not specific property Listing Agreements must include: CORRECT ANSWERS✅ Price, commission (incl any bonuses), beginning & expiration date, seller & listing broker signature, type of listing (exclusive agency, exclusive right to sell, or open) Any changes initialed and sig of all parties Dual Agency CORRECT ANSWERS✅ Must disclose, commission source must be wirtten, sig/date of all parties, copies Listing broker FIRST disclose to buyer the broker agency relationship with the seller BEFORE buyer gives personal or financial info Listing licensee = transaction broker unless otherwise specified in writing Dual Agents = Transaction Brokers MO Real Estate Questions and answers Broker Record Keeping CORRECT ANSWERS✅ Must retain true copies of records for minimum of 3 years, if not class B misdemeanor Carry Over clause CORRECT ANSWERS✅ legal; broker collect commission after listing over if buyer introduced "ready willing, and able" prospective buyer to seller during listing Going behind the sign CORRECT ANSWERS✅ licensee from another co contacts seller with property listed with another broker - violation of license law Exclusive Right to Represent CORRECT ANSWERS✅ Licensee representing a buyer or TT is limited agent with specific duties and obligations Salesperson can close transaction IF CORRECT ANSWERS✅ under direct supervision of manager or broker Hulse v. Criger CORRECT ANSWERS✅ =MO court decision what RE licensees can and cannot do. Earn commission for producing ready, willing, and able buyer, use standard contract forms approved by counsel; complete form by filling in blanks, forms include: - Warranty deeds - Quitclaim deeds - Promissory notes - bill of sale - deed of trust - security agreements - lease MO Real Estate Questions and answers - listing agreements - buyer agency agreements - purchase agreements 12 hours of continuing education: 3 hrs core + 9 elective - failure to complete continuing ed and 3 months later renew > late fee of $50/mo not to exceed $200, and take MO Practices 24 hr course Salesperson: 9/30 even years Broker: 6/30 odd years Quit claim deeds CORRECT ANSWERS✅ - to transfer property or correct mistakes made in previous transfers of property - one of the forms licensees can use Warranty deed CORRECT ANSWERS✅ used to transfer title from one party to another one of the forms licensees can use Bill of sale CORRECT ANSWERS✅ when personal property (movable in nature, "Chattel" or "Personalty") not listed on sales contract one of the forms licensees can use deed of trust CORRECT ANSWERS✅ deed held by 3rd party until obligation made one of the forms licensees can use MO Real Estate Questions and answers Both are tenancies Freehold TT: owner of freehold estate Leasehold TT: the renter or lessee Fee Simple Freehold Estate ??? CORRECT ANSWERS✅ http://thismatter.com/money/real-estate/estates-in-land.htm Life Estates (pg 30) Conventional Vs. Legal CORRECT ANSWERS✅ Conventional: - Ordinary: ends w/ death of life est owner & reverts back to orig owner - Pur Autre vie= another's life Legal (created by state law): -Homestead: principal residence -Dower & Curtesy: d: wife's right, c: husbands right -Elective share: state level statute, surviving spouse makes mininmum claim Leasehold Estates Define & types CORRECT ANSWERS✅ =non-ownership possessory estates of LIMITED DURATION 1. Estate at Will (tenancy at will): no definite expiration and no auto renewal; terminate by proper notice or by death of either party 2. Estate at Suffrance: TT occupies without consent or agrmt MO Real Estate Questions and answers 3. Est for years: Specific, stated duration, per LEASE 4. Est from Period to Period: lease term renews automatically upon acceptance of monthly or periodic rent, "periodic tenancy", ex: apt lease Ownership - sole ownership Tenancy in severalty CORRECT ANSWERS✅ =single party owns the fee or life estate AKA sole ownership, ownership in severalty, estate in severalty Ownership - coownership Tenancy in Common Joint Tenancy Tenancy by the Entireties CORRECT ANSWERS✅ Coownership (cotenants)= if 1+ party owns an estate in land 1. Tenancy in common: most common coownership if own and not married. 2+ owners, indivisible, identical rights, interestes individually owned, electable ownership shares, no survivorship (heirs), no unity of time 2. Joint tenancy: 2+ own property as if a single person. Rights are indivisible and equal. Joint TTs can only convey ints to outside parties as TT in common ints; unity of ownership (single title), equal ownership shares, transfer of interests, surviivorship, X pass to heirs, to create joint TT all owners must have 4 UNITIES: - Unity of time, Unity of Title (same deed of conveyance), Unity of Interest, Unity of Possession MO Real Estate Questions and answers -terminate by partition suit (court to divide prop phys), foreclosure, bankruptcy 3. Tenancy by the Entireties: MARRIED COUPLES; survivorship (passes to spouse), equal interests, limited exposure to foreclosure; Terminate by death, divorce, mutual agreement, judgements for mutual joint debt - Community property: all other prop earned or acq by either party during marriage - Separate property: owned at time of marriage, acquired by spouse by inheritance/gift, acquired by separate property funds or income 4. Tenancy in Partnership= ownership by biz partners by Uniform Partnership Act; equal rights to all partners, but property must be used in connection with part of business; invid rights not assignable Estate in trust CORRECT ANSWERS✅ created by a deed, will or trust agreement Trustee holds title Living trust CORRECT ANSWERS✅ trustor, during his/her lifetime, conveys title to a trustee for benefit of 3rd party Testamentary trust CORRECT ANSWERS✅ same as living, but takes effect when trustor dies Land trust CORRECT ANSWERS✅ Trustor conveys fee estate to trustee and names self the beneficiary (real property only); LIMITED TERM MO Real Estate Questions and answers -typically apply to land use, size and type of structures, min. costs of structures, engineer/arch standards 2 types: - Condition: created with transfer of ownership; iv violated, suit force owner to forfeit ownership back to original -Covenant: created by mutual agreement; violation, injunction force compliance or $ Lien CORRECT ANSWERS✅ =Creditor's claim against personal or real property as security of debt -Lienor: places lien -Lienee: debor who owns property -volumtary, involuntary, general/specific, superior or inferior (junior); superior: RET, special assessmts, inheritance tax, inferior: income tax Lienholder can voluntarily change status of lien by agreeing to subordinate the lien Priority established as superior or junior and the date of recorded lien Tax liens - Superior & Inferior CORRECT ANSWERS✅ Superior: RET lien, special assessment lien, federal and state inheritance tax lien Inferior: MO Real Estate Questions and answers Fed income tax lien, state corp inc tax lien against corporate prop, state intangible tax lien, st corp franch tax lien Judgement Lien CORRECT ANSWERS✅ result from lawsuit, attaches to real and personal property, 20 years unless extended within code - homestead and joint tenancy are exempt -satisfaction of judgement of clear title records Foreclosure - mortg lien forecl -judicial forecl -non judicial forecl -strict forecl CORRECT ANSWERS✅ =enforcement of liens through liquidation or transfer of property Mortgage lien foreclosure: liquid. or transfer of collateral property by judicial, nonjudicial, or strict foreclosure - Lis Pendis: public noticre property soon have judgement against it - Write of Execution: court authorizes official to seize and sell forecl of property Judicial foreclosure: lawsuit and court ordered public sale; deficiency judgements, lender=lien if deficient funds from sale, redemption rights - Stat Rt of Redemption: recover property -Right of Reinst: cure default MO Real Estate Questions and answers Non-judicial forecl: when "power of sale" provision in deed doc, force sale without foreclosure suit Strict Forecl: court proceeding gives lender title directly instead of $ from public sale; begin with proper notice to DQ borrower, value of property< value of debt Deed in lieu of foreclosure CORRECT ANSWERS✅ transfers legal title to mortgagee (avoid court actions) Avoid foreclosure options: short sale, refinance, temporary arrangement with lender (loan workout and bankruptcy) Legal title CORRECT ANSWERS✅ Possess all ownership interests Equitable title CORRECT ANSWERS✅ interest or right to obtain legal title in accordance with sale or mortgage contract Title Evidence: Actual notice vs Constructive/legal notice CORRECT ANSWERS✅ Actual notice: learning through direct experience or communication Notice= knowledge Constructive/legal notice: knowledge of fact that a person could or should have obtained -i.e. recordation of ownership docs in public record, specifically, title records Alienation CORRECT ANSWERS✅ =transfer of title to real estate MO Real Estate Questions and answers Transfer tax: state tax on conveyances based on price Last Will & Testament CORRECT ANSWERS✅ =voluntary transfer to heirs after deadh -maker: devor or testator -heir (beneficiary): devisee -estate (property transferred): devise Will types CORRECT ANSWERS✅ 1. Witnessed - in writing and two ppl 2. holographic- in maker's handwriting, dated and signed 3. approved- pre printed forms meeting state reqs 4. nuncupative- orally and written down by witness, generally not valid for real property transfer Probate CORRECT ANSWERS✅ =court proceeding to settle estate -testate= left a valid well -intestate= failed to do so Probate of real property occurs in court where property is located 3 Channels: 1. testate proceeding 2. Intestate w/ Heirs - state laws (1/3 spouse, remaining kids) 3. Intestate w/o Heirs - escheat after claims/liens cleared MO Real Estate Questions and answers Involuntary Title Transfer CORRECT ANSWERS✅ -Laws of Descent: state laws determine distribution of share to heirs (or state without) -Abandonment: for statutory period of time may escheat to state or county -Foreclosure -Eminent Domain -Adverse Posession: lose legal title to adv possessor, must: ...be able to show cl of right or color of title, have notorious possession (w/o concealment), hostile possesion, occupy continuous for X time, pay taxes (in some states) -- To avoid Adverse Possession, owner could sue to quiet title or Torrens system Title Records CORRECT ANSWERS✅ All instruments affecting title must be recorded - give public notice, protect owners, protect lienholder's claims Title evidence: needed to prove marketable title as well as who owns -forms of evidence- Torrens (acts as deed of conveyance), title insurance (insurer's guaranty against defects), attorney's opinion of abstract, title certificates Abstract of title CORRECT ANSWERS✅ chronology of recorded owners, transfers, encumbrances Torrens Registry CORRECT ANSWERS✅ require court action initially; legal title doesn't pass until recordation occurs MO Real Estate Questions and answers Title Insurance CORRECT ANSWERS✅ Protects lender against possibility that lender's lien can't be enforced Insurer's guaranty against defects Public Land Use & Control Goals Thru: CORRECT ANSWERS✅ 1. Master Plan: LT growth and usage strategies -Development: goals/objects/Land Use 2. Planning Commission (Administration) - comprehensive land use plans, control growth rates, accomedate demand for services and infrastructure 3. Zones/Codes/Permits - Implementation Preserve prop values, highest and best use, safeguard public health, safety and welfare, control growth, incorporate community consensus Zoning CORRECT ANSWERS✅ =police power granted by state level enabling acts; Zoning ordance: creates zones, usage restriction, regulations, requirements Zoning Board of Adjustment: oversee rule administration and appeals APPEALS: -Nonconforming use: legal if use prior to zone creation -Variance: exception based on hardship (i.e. house 2 ft up) -Special Exception: based on public interest (i.e. museum from historic home) -Amendment: change of zones, rezoning (agricultural > comm employer) MO Real Estate Questions and answers Sections: townsh / into 36 squares called sections; each side 1 mile, 640 acres*** Recorded Plat Method (Lot & Block System) CORRECT ANSWERS✅ used in surveyed subdivisions Subdiv plat map: surveyed plat of subdivided tract; legal descriptor if approved and recoreded *Lot #, block ident, subdiv name, section location, township, county, state Describing elevation: -Datum: Std elevation reference pt -Benchmark: elevation market officially surveyed and registered; local elevation markers to provide reference elevations for nearby properties Contract CORRECT ANSWERS✅ =intangible agreement "mtng of hte minds" Valid contract is legally enforceable by meeting contract law requirements: Competent parties, mutual consent (offer & acceptance), valuable consideration, legal purpose, voluntary act of good faith Conveyance validity if RE: in writing, contain legal descrip, signed by 1+ (excl 1 yr lease) Contracts: Statute of limitations vs Statue of Frauds CORRECT ANSWERS✅ Stat of Limitations: restricts time period for injured party in contract to rescind or disaffirm; VALIDITY MO Real Estate Questions and answers Statute of Frauds: ENFORCEABILITY; certain contracts must be in writing to be enforceable Uniform Electronic Transactions Act accepted legal electronic sigs Classification of Contracts CORRECT ANSWERS✅ Oral v Written Express v Implied Bilateral v Unilateral Executed v Executory -executed: fully performed and fulfilled (i.e. expired lease) -executory: performance yet to be completed (i.e. sales contract prior to closing) Unconscionable Contract CORRECT ANSWERS✅ Unduly favors 1 party Adhesion Contract CORRECT ANSWERS✅ 1 has greater bargaining advantage Aleatory contract CORRECT ANSWERS✅ "dependent on chance"; effects are triggered by the occurrence of a chance event Breach of Contract Legal Remedies CORRECT ANSWERS✅ Breach of Contract (default)= failure to perform terms of agreement MO Real Estate Questions and answers Legal remedies: -Rescission- cancels and return parties to pre contract condition (include refunds) -Forfeiture- breaching party give up something (i.e. earnest # dep) -Suit for Damages- sue for $ damages in civil court; liquidated damages= specified $, unliq= contract doesn't specify amount -Suit for specific performance- attempt to force to comply --reformaation: to correct or modify the contract if errors Ad Valorem CORRECT ANSWERS✅ taxies levied based on assessed value Tax Base Tax/Millage Rate CORRECT ANSWERS✅ =total of appraised or assessed values of all real property wtihin boundaries (excl exempt props) Tax Base= Assess Vals - Exemptions Tax/Millage Rate=how much of a tax levy the base will receive =tot amt rev required/ tax base Sale of Tax Certificates CORRECT ANSWERS✅ =buyer of tax certificate agrees to pay teh taxes due and after period of time may apply for tax deed Tax deed= conveys title in the tax sale MO Real Estate Questions and answers Allodial System CORRECT ANSWERS✅ Individual entitled to own property without proprietary control by the king/govt (U.S. system) Fed Reg: broad stds of real prop usage, nat disaster, land descrip, and descrim. State Reg (*primary regulator of RE): est RE license laws and qualifications, regional influence on usage and environemental control, ownership and inheritance Local: land use control, improvements, and taxation Judicial: case law and common law applications to ownership and use Real v Property Differentiation CORRECT ANSWERS✅ Intention & Adaptation, Functionality, Relationship of Parties (trade fixt=PP), sale or lease provisions Trade/Chattel Fixt: TT's PP affixed to conduct business Emblements: natural crops/plants= real property; those requiring human intervention= embl & PP Conversion=change of classification -Severance: real property to PP by detach -Affixing/Attaching: PP > real prop Residential Property CORRECT ANSWERS✅ 1-4 units, vacant land classified as residential, cooperatives, condo MO Real Estate Questions and answers License Law CORRECT ANSWERS✅ Ch 339, RSMO (1986) Commercial Property CORRECT ANSWERS✅ Over 4 units and other income property Statutory Right of Redemption V Right of Reinstatement CORRECT ANSWERS✅ Stat Rt of Red.=recover property Rt of Reinst= cure default Recording Deed= CORRECT ANSWERS✅ Giving Notice Deed: legal instrument by owner (grantor) to transfer title to RE voluntairly to grantee --- Deed conveys title Deed conditions= continguencies, created only at time of ownership transfer Littoral rights CORRECT ANSWERS✅ concern bodies of water not moving; i.e. lakes and seas (if not under Doctr of Prior Appropr): - owners don't own water or land beneath water -ownership extends to the high water mark of body of water -"navigable" and public property owned by state MO Real Estate Questions and answers Riparian Rights CORRECT ANSWERS✅ Flowing water, i.e. streams and rivers rights det by navigable or non-navigable -navigable: water is public easement -non-navig: owner unrestric use and owns land beneath stream to streams mid point Value of Contribution CORRECT ANSWERS✅ principle of value that holds that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from the whole Effective Age CORRECT ANSWERS✅ -not the actual age, but the age the property "appears" to be based on maintenance, care or neglect etc. If a prop has not been cared for and has deteriorated a lot, an appraiser may raise the effective age of the property to compensate for this Functional obsolescence is due to: CORRECT ANSWERS✅ Poor design or floor plan Which of these controls would be used to prevent a neighboring lot owner from violating the recorded deed restrictions in a subdivision? CORRECT ANSWERS✅ Injunction Disputes b/t neighbs regarding land use are handled in court. If the court deems a neighbor is violating land use and restrictions need to be enforced, it will issue an INJUNCTION to prevent a neighboring lot owner from violating the restrictions MO Real Estate Questions and answers Restrictive Covenants CORRECT ANSWERS✅ =promises by those who purchase property in the subdivision to limit use of their property to comply wtih the requirements of the restrictive covenants - negative easements Restrictions must be reasonable, and they must benefit all property owners alike if subdiv is in zoned area, restrictive covenants have priority over the zoning ordinance, but won't be enforced if they go against public law Restric cov may be terminated if the specified time period of covenant expires or owners vote to end the restrictions Adhesion Contract CORRECT ANSWERS✅ dictated by the party who has the greater bargaining advantage aleatory contract CORRECT ANSWERS✅ one whose effects are triggered by the occurrence of a chance event Executed v executory contract CORRECT ANSWERS✅ executed: fully performed and fulfilled executory: one in which performance is yet to be completed Calculating acreage of parcel CORRECT ANSWERS✅ Multiply denominators of fractional descriptions together Divide 640 by the resulting number MO Real Estate Questions and answers Fair Housing Act CORRECT ANSWERS✅ Fair Housing Act Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing- related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability. Civil Rights act of 1866 prevented discrim based on RACE