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FI318 Quiz 2
Real Estate Investment Professor Harrell
| Question | Answer |
|---|---|
| What is a right? | A claim that the government must enforce |
| What are the two categories of rights? | Personal, property |
| Where do property rights come from? | Customs & traditions, particular property rights in the US come from Anglo Saxon traditions |
| Fixture | Personal property that when attached to real property becomes real property |
| What are the four variables to decipher what's real vs personal property? | 1. Matter of Attachment 2. Character of the article (material) 3. (most important) Intent of purpose 4. Relation of the parties |
| What's a trade fixture? | When a tent put in a personal property is allowed to take it when they leave |
| What do most real versus properties arguments result in? | Settlements |
| What do possessory interests do? | Give value |
| What do non-possessory interests do? | Detract value |
| What drives value? | Estates (meaning rights) |
| What does free simple absolute mean? | The seller is selling the full bundle of rights of zoning |
| What does free simple conditional with reverter mean? | Subject to a condition, seller or seller's airs (in business terms other successors in interests; ie other businesses) have the right to use the reverter, enforce, take the property if the conditional is broken and doesn't have to give the money back |
| What does Ordinary Life Estate with remainder mean? | The seller sells the property but gets to retain for his or her life or the life of another |
| What does the buyer have in a Ordinary Life Estate and why would they agree to it? | Remainder interest, this gives them the option to potentially pay a lower price and to have free simple absolute once the property is theirs, becomes greater in value as the age of the life estate person is older |
| What does the seller have in a Ordinary Life Estate? | Life Estate Interest, the option to keep the property longer and still make some money, becomes greater in value as the age of the life estate person is younger |
| Who estimates life expencies? | Actuaries |
| What are the four type of leases? | 1. Tenancy for years 2. Periodic tenancy 3.Tenancy at will 4.Tenant at sufference |
| What does leased fee mean? | Subject to leases, most common one as the buyer gets fee simple absolute plus being able to buy an income producing property |
| What limits the USP theory? | Zoning & Regulations |
| What does zoning controls? | Land, improvements, our rights of the certain level, sub terrain rights down to a certain level |
| What does "tenancy for years" mean? | A lease term for a specific period of time |
| What does "tenancy at will" mean? | A lease that can be determinated by either party at any time |
| What does "tenant of sufferance" mean? | 1. There was a lease 2. The lease expires 3. The tenant continues to pay the landlord 4.The landlord accepts the rent |
| What does a "hold over tenant" mean? | There was a lease 2. lease expired 3.tenant continues to pay and landlord rejects or the tenant doesn't pay at all |
| What does a license provide? | The permission to use, specific limit & use (not rights), which a landlord could cancel it at anytime |
| What does a lease provide? | The rights of use & possession |
| What is an easement? | The right to use a land for a specific limited purpose |
| What is an easement appurtenant? | It involves two adjacent parcels, run with the land forever, affirmative or negative |
| How to describe the relationship between the dominant and servant parcel? | Dominant parcel gets the benefit from the servant |
| What does affirmative mean? | Allowed to do something |
| What does negative mean? | Not allowed to do something |
| What does easement in gross (commercial) mean? | Unrelated to adjacent parcels, can be granted any person or entity, usually for a limited time, can be exclusive or non-exclusive |
| What are restrictive covenants? | They impose restrictions on the land when it is conveyed |
| What are the two exceptions against covenants? | 1) Exception of the sub division, the buyers of the property can enforce it on each other 2) Government puts restrictive covenants for a life safety reason |
| What are liens? | They are evidence of judgement against a debtor, a creditor places on the record that the property had a debt to secure the debt, attaches the property to secure a debt |
| What are specific liens? | Related to the real estate taxes, mortgage, mechanics |
| What are general liens? | Not related to the property, non specific liens |
| What are the basic considerations for ownership entity? | 1) Financial 2) Control 3) Liability |
| What is Tenancy in Common? | An underlying fee simple interest in real estate where when one of the owner dies, his/her interests goes to his/her airs |
| What is Joint Tenancy | Is an undivided fee simple interest in real estate which where one of the owners dies his/her interests goes to the surviving owners due to right of survivorship |
| What is Tenancy by Entirety? | Is a joint tenancy for spouses |
| What does "undivided" mean? | The owners have assess to the entire property, it's not split up |
| Would businesses prefer Tenancy in Common or Joint Tenancy? | Would most likely prefer joint tenancy in common incase the successors than interest don't have the same goals/objectives as they do |
| What are two primary documents needed in a real estate transaction? | 1. Deeds 2. Purchasing Sales Agreement (PSA) |
| What are the three basic covenants? | 1. Covenant of seizin 2. Covenant of No Incumbrances (only for to ones stated in the deed) 3. Quiet Enjoyment |
| What are the five types of deeds? | 1. Empty Deed 2. General Warrantee Deed 3. Special Warrantee Deed 4. Bargain & Sale 5. Judicial & Trustee |
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