Default of contract and types of damages - correct answer -In the event of default by the buyer, the seller may have several options, which
... [Show More] include:
-Liquidated damages. The seller can choose to accept the buyer's earnest money as liquidated damages, releasing all parties from any further obligation under the contract. Liquidated damages are damages that are established in the contract.
-Monetary damages. In addition to specific performance, the injured party may "seek such other relief as may be provided by law." This would be an award of monetary damages by the court. Because monetary damages are awarded by the court, one never knows what they will be until the court rules.
-Punitive and compensatory damages must be pursued in court. Punitive damages punish the default- ing party, and compensatory damages are set to cover the actual injury or economic loss.
Leases and "right of first refusal" - correct answer Some residential leases contain a right of first refusal, giving the tenant the right to purchase the leased property by matching or bettering any offer before the property will be sold to someone else.
Default remedies and their results - correct answer -Liquidated damages. The seller can choose to accept the buyer's earnest money as liquidated damages, releasing all parties from any further obligation under the contract. Liquidated damages are damages that are established in the contract.
-Monetary damages. In addition to specific performance, the injured party may "seek such other relief as may be provided by law." This would be an award of monetary damages by the court. Because monetary damages are awarded by the court, one never knows what they will be until the court rules.
-Specific performance. The injured party files a court action seeking an order of the court directing the defaulting party to perform according to the terms of the contract. Specific performance is the only remedy that would possibly result in the full execution (closing) of the transaction.
Paragraph 11 - legal vs illegal entries - correct answer
TVLB programs and provisions - correct answer The Texas Veterans Land Board Housing Assistance Program (VHAP) is a benefit that every buyer with a military background should consider. To participate in the program, the Veteran obtains an FHA, VA, or conventional loan from a participating lender. The qualification process is the same as for any other FHA, VA, or conventional loan. The difference is that the loan is sold to the Texas Veterans Land Board (VLB), as opposed to a secondary market purchaser such as Fannie Mae or Freddie Mac. The primary benefit to the Veteran is that the rate on the Veterans Land Board loan is often up to one percent below prevailing market rates.
Economic and physical characteristics of land- physical - correct answer -Indestructibility or durability refers to the fact that land cannot be destroyed. It remains, no matter what happens to it. It may go underwater, become a crater, or be added to. In any case, the land will still be there; it is permanent.
-Immobility refers to the fact that land cannot be moved. When personal property is pur- chased, the buyer can move it to a new location. When land or rights in land are purchased, the owner must go to the land.
-Nonhomogeneity refers to the fact that no two parcels of land are the same. Even two identi- cal-looking lots in a subdivision at least differ in their position on the earth. Each parcel of land is unique.
Economic and physical characteristics of land- Economic - correct answer -Scarcity comes from the theory of supply and demand. When there is a shortage of some- thing that individuals want, the price goes up. For example, in a new golf course commu- nity, only a limited number of lots can be "on" the golf course. The scarcity will increase the value of these lots. Another example is property in cities. Because of the higher demand for this land, it will be more valuable than land in suburban or rural areas.
-Modification refers to the fact that value is affected by man-made changes to the land. These changes can be on the land itself or off-site. Examples of modification include improved transportation, which makes land more accessible, such as the railroads crossing the United States or airports. When freeways are extended or widened, land in previously undeveloped areas becomes attractive for new residential and retail development. The most well-known case is probably that of the agricultural land in the Orlando, Florida area that experienced an enormous increase in value after the construction of Disney World®.
-Fixity refers to the fact that land, and additions to the land, such as buildings, take long pe- riods to pay for themselves. It may take twenty years for the owner of a new office building to recover the cost of the acquisition of the land, construction, and the cost of financing. Because of this, investors must analyze the long-term nature of owning an investment property. Fixity is also used to refer to the fact that land cannot be moved but is fixed in location.
-Situs refers to the location of the property or land from an economic, not a geographic viewpoint. The familiar phrase "location, location, location" is based on the preferences people have for specific characteristics in property and the fact that location dominates those preferences. Both natural and man-made factors will have an impact on preferenc- es. Climate, views, access to natural recreation, as well as schools, job opportunities, and transportation, will all be important. Situs may change over time as society changes and different lifestyles prevail.
Responsibility of agents when receiving an offer - correct answer The communication or submission of anoffer should be done promptly because the license holder'sduty is to keep the principal or client informed at all timesof material information. In most cases, the submission ofan offer (or, at least, communication to the principal that anoffer has been received) can easily be made within a shortperiod. Most states (including Texas) recognize the legaldoctrine of imputed notice. Under this concept, an offer ispresumed to have been delivered to the principal when it isdelivered to the agent. A license holder who fails to communicate an offer promptly may be subject to a lawsuit by the seller and may be disciplined by the real estate commission that issued the license.
Title policy, abstracts, commitments, opinion of title - correct answer Historically, when an individual was interested in acquiring title, he or she would ask an attorney or abstractor to do a title search, which is an investigation of all the documents that have been recorded about a property. This search would result in an abstract of title. An abstract of title is a complete history of the title of a piece of property that includes deeds, easements, liens, foreclosures, wills, marriages, deaths, life estates, fee simple estates, and anything else that may have ever been recorded about a property. This abstract was then given to an attorney. The attorney would read it and write up an attorney's opinion of title, which is an opinion regarding the state of the title and its ability to be transferred.
TREC Temporary lease agreements and features - correct answer -Buyer's Temporary Residential Lease - for use when the buyer occupies the property for no more than 90 days prior to closing.
-Seller's Temporary Residential Lease - for use when the seller occupies the property for no more than 90 days after closing.
Option contracts - correct answer An option is an agreement between a buyer and seller or landlord and tenant. A seller, in exchange for some form of consideration (an option fee), gives the buyer the right to purchase the property at some preset price and terms for a period. If a buyer has a one-year option to purchase a tract of land at $150,000 cash, the buyer can exercise the option and purchase the property at that price any time during the year. The buyer has the option but is under no obligation to purchase. However, under an option, the seller must sell if the buyer chooses to buy. The contract is said to be a unilateral contract because only one party is obligated to perform. A unilateral contract is said to lack mutuality.
Paragraph 11 - Special Provisions - what can an agent write - correct answer For states (like Texas) that use standard contract forms, a blank space is usually provided to allow forspecial provisions to the contract. This space is where terms can be addressed that are not covered in standard contracts or addenda forms. In all states, license holders are barred from the unlawful practice of law. Therefore, license holders should ensure that any special provisions added to a con- tract are factual statements that do not change the legal effect of the contract.
Prorations and prorated items at closing - correct answer At closing, prorations for property taxes and property owner association fees will be calculated. Taxes for the year that have not been paid will be deducted from the seller's proceeds, usually through the day of closing. Prepaid items such as property owner association fees will be collected from the buyer from closing to the end of the year.
Government rights in land (PETE) - correct answer Police Power
Eminent Domain
Taxation
Escheat
Police Power - correct answer the right of the government to regulate and control the way land is used. The most common example of police power is zoning. Other examples include wetlands legislation, environ- mental protection legislation, and health and fire codes. Government programs may include water conservation, land reclamation, crop programs, drought relief, and wildlife conservation.
Eminent Domain - correct answer is the right of the government to take private land for public use. The action of taking the land is called condemnation. Land must be taken for the good of all. Examples of valid reasons for taking the land include schools, parks, hospitals, government buildings, roads, and utili- ties. When this occurs, the owner is compensated for the land taken. If an individual is not satisfied with the price placed on his property, he may challenge this amount in court. The court will ask for expert opinions from several qualified appraisers before determining fair value.
Taxation - correct answer the government retains the right to tax real property. When the king first gave individu- als the right to own land, it was because land was the primary source of wealth to everyone due to the agrarian-based economy of the time. Those who had land had wealth. In addition, it was impossible to hide land ownership, as opposed to other types of assets. Property taxes are known as ad valorem taxes. That is, they are according to value. The greater the value of the property, the higher the taxes.
Escheat - correct answer if a person dies intestate (without a will) and without heirs, the government will take title to his real property under the right of escheat. If a property is abandoned, escheat will also be the solution. The government does not want land to be unowned. (Note: Single, without children does not mean without heirs.)
Offers - correct answer Some offers from buyers provide that the seller pays for specific items that are not typical, or that are normally paid by the buyer. Offers often include a provision that the seller pays for a residential ser- vice agreement (home warranty), or perform repairs and upgrades as a condition of the sale. When the seller agrees to this type of condition in a contract, the seller has made a concession. In some cases, a buyer might ask for a seller contribution to the buyer's closing costs. Seller contributions to the buyer's closing costs reduce the amount of cash needed by the buyer at closing.
Counteroffer - correct answer A counteroffer is made when a party changes an offer in some way and com- municates that change to the other party. The counteroffer is actually a two-step process: the rejection of theoriginal offer coupled
with a new offer.The counteroffer is normally done by one party striking out the provision that is not acceptable and writing the accept- able term next to it. The changed term will then be initialed and sent back to the other party.
Rejection - correct answer Inmost cases, a counteroffer is arejection of the original offer.As such, the original offer is no longer available for acceptance by the offeree. For example, consider a potential buyer offering to purchase a property at $245,000. If the seller responds with a counter- offer of $255,000, the original offer of $245,000 is no longer available for acceptance by the seller, because he or she rejected it with the $255,000 counter.
Acceptance - correct answer Acceptance of an offer means that the accepting party does so with no change to the contract what- soever. Any change, no matter how trivial, turns the offer into a counteroffer.
Real and Personal property transfer documents at closing - correct answer Things of a temporary or movable nature are not part of the real property. They are considered per- sonal property. Personal property is also known as personalty or chattel. If personal property is being transferred along with real property, a bill of sale is generally used to accomplish the transfer, which would normally accompany the deed.
Escrow and trust accounts, how they are used and who administers them - correct answer pg 177
RESPA - rules and prohibitions - correct answer RESPA prohibits any person who, pursuant to any agreement or understanding, gives or receives a fee or a thing of value (including payments, commissions, fees, gifts, or special priv- ileges) for the referral of settlement business. Payments in excess of the reasonable value of goods provided or services rendered are considered kickbacks.
Ownership estates - severalty - correct answer When a sole individual or entity acquires real estate, an estate in severalty is created. The sole or single owner is "severed" or "set apart" from all others. The advantage of ownership in severalty is total control of the property. The disadvantage is full responsibility. In addition to individuals, com- panies may hold ownership in severalty. A corporation may be composed of many shareholders, but the corporation is viewed, under the law, as a single legal entity. If only one signature is required on a deed conveying full ownership of the property to another, the seller owns an estate in severalty.
Ownership Estates- joint tenancy - correct answer A less popular type of ownership by more than one is joint tenancy. The unique aspect of joint tenancy is the right of survivorship of the tenants. When a joint tenant dies, his or her share is equally divided among the surviving joint tenants immediately. In order to create a joint tenancy, four unities are required.
Ownership Estates- Syndicate - correct answer When two or more parties join together to create and operate a real estate investment, it is called asyndicate.
Ownership Estates- Tenancy in common - correct answer Tenancy in common is ownership of real estate by two or more entities in undivided interests. Because these interests are undivided, all co-owners share the right of possession of the property. If a deed does not make the type of joint ownership clear, Texas courts will always assume that the owners are tenants in common.
Ownership Estates- Entirety - correct answer
Statute of Frauds - rules and exceptions - correct answer Competent parties
Offer and acceptance
legal purpose
In writing
Consideration
Competent parties - correct answer The general rule of law is that all parties to a contract have read it and understand it. This rule is true even if they are illiterate or not knowledgeable in the subject of the contract. Certain persons do not have full contractual capacity, including minors, individuals who have had guardians appointed, and those under the influence of drugs or alcohol.
Offer and acceptance - correct answer A valid contract must be based upon the consent of the parties. The contract must, therefore, reflect the intent and wishes of the parties. Mutual consent is often referred to as mutual consent or a "meet- ing of the minds." For a contract to exist, there must have been a meeting of the minds (offer and acceptance) between the parties. The determination of mutual consent is usually a question of fact and is completed by the process of offer and acceptance.
legal purpose - correct answer A contract for an illegal purpose is void, and the law treats the contract as if it were never created. An example of a void contract would be one to have somebody killed or to deliver illegal drugs.
In writing - correct answer In order to comply with the Statute of Frauds, contracts for the conveyance of an interest in real estate or leases for a term of more than one year must be in writing. If the contract is not in writing, it would be valid but not enforceable.
Consideration - correct answer Consideration is defined as something given in exchange for a promise. There is no requirement that the consideration be in the form of money. Consideration in a contract could be nothing more than a promise made by one party in exchange for a promise made by the other. In the typical real estate contract, the seller agrees to convey the property to the buyer, and the buyer agrees to pay the nego- tiated sales price. Therefore, the purchase or sales price of the property is the consideration for the contract. As a rule, an earnest money deposit will be collected from the buyer when entering into a contract. The earnest money should not be confused with consideration. Note that earnest money is not one of the requirements of a valid contract.
Limits on title - claims, liens, charges - correct answer A lien is a right given by law to certain creditors to have debts paid out of the property of a default- ing debtor, usually through a court sale. A lienholder does not own the property that is encumbered. Instead, the holder has an interest that, in some cases, may result in the foreclosure of the property. Common examples of liens include:
• Mortgages and Trust Deeds
• Tax Liens
• Judgments
• Mechanics and Materialman's (M&M) liens
Liens may also be categorized as voluntary or involuntary and as statutory or equitable. A voluntary lien is one that is freely given, usually as collateral for a loan. A mortgage lien is a common example of a voluntary lien. An involuntary lien is one that is placed on the property against the wishes of the property owner. Common examples of involuntary liens include judgment and tax liens. Because it is created by law, a tax lien would also be categorized as a statutory lien. Equitable liens arise out of common law. A judgment for unpaid debts would be an example of an involuntary equitable lien against real estate.
A required act or event in a contract - correct answer In most cases, contingencies should have a specific date by which the event happens or the task is completed. "Open-ended" contingencies may give a party an easy means by which the contract can be terminated at any time prior to closing. For example, a contract with a proposed closing in 60 days, coupled with a 60-day financing contingency, effectively gives the buyer an easy method of terminating the contract at any time before closing by informing the seller that he is unable to obtain approval.
The mortgage - correct answer A mortgage can be one of two forms, depending on state law and custom. A standard mortgage is a contract between two parties:
• The borrower (the mortgagor) and
• The lender (the mortgagee).
If the borrower fails to repay the note, the mortgage allows the lender to foreclose the property. Foreclosure is the legal procedure whereby the secured property may be sold to satisfy the unpaid promissory note. While the process varies from state to state, all states provide that the property be sold in a public auction. If the property fails to sell at the auction, ownership will transfer to the lender.
deed of trust vs the note - correct answer In other states, a three-party mortgage known as a deed of trust is used. The parties to a deed of trust include:
• The borrower (the mortgagor)
• The lender (the mortgagee)
• The trustee
When this form is used, the borrower signs a promissory note payable to the lender. A deed of trust is signed, conveying the property in trust to the trustee. The duty of the trustee is to release the mortgage when the note has been repaid and to foreclose the property in the event of default. Foreclosure is generally faster and easier in areas that are financed using a deed of trust. In many cases, a deed of trust provides for non-judicial foreclosure, which means that a lender has the ability to foreclose a property without the authorization of the court.
Lease clauses and provisions - correct answer A lease option allows a tenant to buy the property at a preset price and terms for a given period. This can also be called a lease with an option to buy. At the time the lease is negotiated, a purchase price is also negotiated. The tenant has the right to purchase the property at the preset price during the term of the lease. While the tenant is not obligated to buy, the landlord is obligated to sell. Clients who wish to enter into a lease-purchase agreement should be referred to an attorney. License holders in Texas are specifically prohibited from writing this type of agreement for their clients.
Executed vs executory contracts - correct answer Once all the terms of an offer have been agreed to and signed by the parties and the acceptance communicated to the offeror, the contract becomes binding on the parties. The contract is known as an executory contract from the effective date through the closing. An executory contract is definedas a contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed. The effective date is the date that acceptance was communicated to the offering party. For example, if a seller accepted an offer from the buyer on Monday, January 3rd, and the buyer was notified of the seller's acceptance on Tuesday, January 4th, the effective date of the contract is January 4th.
FHA loans - insurance premiums associated with them - correct answer Because the FHA is a mortgage insurance program, premiums are paid into a pool of funds, out of which claims are paid when a borrower defaults on a loan. The cost of the mortgage insurance is passed along to the borrower in the form of a mortgage insurance premium (MIP). The borrower pays two premiums, an upfront premium at closing, and an annual premium.
Up-Front Mortgage Insurance Premium (UFMIP): When a loan is funded, the FHA charges an Up-Front Mortgage Insurance Premium. The UFMIP can be paid at closing or added to the loan at funding. The UFMIP can be added to the loan even if it causes the loan to exceed the appraised value of the property.
DTPA coverage categories - correct answer -Goods — are defined as tangible chattels (real property is tangible when purchased or leased. Under DTPA, the sale of a house is considered a good).
-Services — means work, labor, or repair of goods. Brokerage is a service.
-Consumer — an individual, corporation, partnership, or government source who seeks to
acquire or purchase the goods or services.
Five elements of a valid and enforceable contract - correct answer -Competent parties
-Offer and acceptance (mutual agreement)
-Legal purpose
-In writing (when required by law)
-Consideration
Common law - correct answer Common law is a body of law developed in England and based upon "common sense" and local custom. Common law expanded over the years as a result of prior court decisions. Under common law, a court looks to the findings of prior courts when rendering a decision. The concept of common law was brought to the American colonies by English settlers.
Statutory law - correct answer Statutory law is the body of laws and regulations enacted by federal and state legislatures. Much of what was once embodied in common law is now codified in statutes passed at the state and federal levels.
Addendum - correct answer An addendum to a contract is an attachment that adds or further describes the rights and duties of the parties. Many of the contingencies discussed earlier are added to the contract as an addendum. A contract may be subject to the buyer obtaining acceptable financing. A financing addendum may be added that specifies the type of loan the buyer is obtaining, the term, rate of interest, origination fees, and other costs.
Amendment - correct answer As a transaction progresses, amendments to the original contract may be needed. Common amend- ments include:
• Changes to the closing date
• Changes to the sales price, downpayment, and/or amount financed
• Repairs that the seller agrees to perform
• Removal or waiver of contingencies
Appraisal contingency - correct answer Appraisal contingencies are related to financing contingencies because lenders use appraisals to determine the amount of money they will lend on a property. This maximum loan amount is a per- centage of the lesser of the sale price or appraised value. For example, a buyer is purchasing a home for $200,000. If the lender is willing to give the buyer an 80% loan, the buyer must have a 20% downpayment, which amounts to $40,000. The property must appraise for at least $200,000 for the buyer to limit the downpayment to $40,000.
Inspection Contingency - correct answer In some states (not Texas), it is common for a contract to be subject to satisfactory inspections. Hav- ing an inspection contingency is a good idea if any of the following are discovered on the property:
-Radon - Radon is a colorless, odorless gas that is a concern to some buyers. It is a special concern in the basement areas of certain homes. If a buyer is concerned about the presence of radon, he or she might make a contract subject to satisfactory radon testing.
-Lead-based paint - Under federal law, all sellers of homes built prior to 1978 must provide to the buyer a disclosure of their knowledge of possible lead-based paint hazards. Families, par- ticularly those with young children, have a special concern regarding lead-based paint because of the effect of lead on the immune systems of young children. Lead-based paint testing is recommended if this is a concern. In older homes, lead may have leached into the soil in the crawl space under a home or around the foundation as a result of paint peeling and accumu- lating in the soil.
Contingency - correct answer A contingency is a provision in a contract that requires that a specific act or event happens for the contract to be binding on the party. A contingency must be specific as to what action needs to take place, who must complete the action, and when it will be completed. Perhaps the most common contingency found in residential real estate contracts is the financing contingency. The term subject to is synonymous with contingent. A contract may be said to be "subject to the buyer obtaining financing." Likewise, a contract with a financing contingency may be said to be "contingent upon the buyer obtaining financing."
The SAFE Act - terminology - correct answer -The Secure and Fair Enforcement for Mortgage Licensing Act is designed to enhance consumer protec- tion and reduce fraud.
-The SAFE Mortgage Licensing Act was designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state- licensed mortgage loan originators, and the establishment of a nationwide mortgage licensing system and registry for the residential mortgage industry. All residential mortgage loan originators must register with the Nationwide Mortgage Licensing System and Registry (NMLSR).
Types of businesses - correct answer -sole proprietorship
-PARTNERSHIPS
-CORPORATE OWNERSHIP
sole proprietorship - correct answer A sole proprietorship is a venture that is owned by one individual. The primary benefit of a sole proprietorship is that the owner has total control of the business. The potential downside of this form of ownership is that the owner also has full liability for the financial and personal obligations of the business.
partnership - correct answer Another type of business entity is the partnership. A partnership is more easily created than a cor- poration and can be created with a simple written or oral agreement.
-General Partner - The general partner is responsible for the day-to-day operations of the busi- ness and has full liability. At least one general partner is required in a limited partnership. The general partner is most often the "promoter" who brought the limited partners into the venture.
-Limited Partners - The limited partner's liability is limited to the amount he or she invested in the partnership. The limited partner has no involvement in the day-to-day operation of the business. The limited partners are the investors in the venture.
CORPORATE OWNERSHIP - correct answer In most states, corporations are created with a filing with the Office of the Secretary of State or a similar agency. The corporate entity is comprised of three components:
-shareholders (stockholders) who are the owners of the corporation
-a board of directors elected by the shareholders who represent the interests of the shareholders
-corporate officers who are responsible for the overall management of the operation of the business
Contract definition - correct answer an agreement between two or more parties to do something or to refrain from doing
something. In many ways, contracts are entered into every day without being given any thought. Everyday transactions, both business and personal, involve creating contracts in a formal or informal manner. When an individual orders a meal in a restaurant, has a car repaired, or has improvements made to a home, the transaction involves a contract that is either a formal written contract or an oral agreement between the parties. Some transactions are sufficiently complex that a written contract is preferred or required by law to avoid disputes and misunderstandings between the parties.
Requirements of acceptance - correct answer -Communicated to a specific offeree. Hearsay knowledge does not constitute an offer. For example, if an individual in a public setting said that he or she would be happy to buy the Johnson place for $250,000, it is not an offer because it was not communicated to a specific offeree.
-Intended to be a serious offer. An offer made in jest is not a valid offer.
-Definite and certain enough to be accepted by the offeree. The offer must be specific so that the offeree, by exercising the power of acceptance, knows exactly what he/she is accepting. In most residential real estate transactions, the offer is usually in the form of a contract com- pleted by the buyer's agent, which is then delivered to the seller's agent. An offer with terms such as "price to be negotiated later" is not a valid offer because it is not specific.
Finance laws - ECOA - correct answer The Equal Credit Opportunity Act (ECOA), originally passed in 1974, ensures that all consumers are given an equal chance to obtain credit. The ECOA covers all creditors who regularly extend credit and impacts professionals, such as mortgage originators who are involved in granting credit.
Finance laws - TIL - correct answer The Truth In Lending Act (TILA) is a U.S. federal law designed to protect consumers in credit trans- actions by requiring clear disclosure of key terms of the lending arrangement and all costs. Most of the specific requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of TILA usually refers to the requirements contained in Regulation Z as well as the statute itself.
Finance laws - RESPA - correct answer The Real Estate Settlement Procedures Act (RESPA) was first passed in 1974. It applies to transactions with loans on residential property (1-4 units). RESPA requires certain disclosures that spell out the costs associated with the transaction, outline lender servicing, and escrow practices, and describe business relationships between settlement service providers.
RESPA is intended to:
• help consumers become better shoppers for settlement services; and
• eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settle- ment services.
Finance laws - CRA - correct answer A significant federal law that affects lenders is the Community Reinvestment Act. This federal law was passed to ensure that banks would serve the needs of the community in which they were chartered to do business. It prohibits redlining, which is the practice of refusing to provide financing in a particular area because of the location.
Finance laws - Dodd frank act - correct answer The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Obama on July 21, 2010. This landmark legislation represents a sweeping restructuring of U.S. financial regulation in response to the worst financial crisis in the United States since the Great Depression. The act spans over 2,300 pages and affects almost every aspect of the U.S. financial services industry. The official purpose of the law is to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail," to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes. The objectives ascribed to the act by its proponents in Congress and by the President include restoring public confidence in the financial system, prevent- ing another financial crisis, and allowing any future asset bubble to be detected and deflated before another financial crisis develops.
Wills and the associated terminology - correct answer -Probate
-Natural events that affect title
-PUBLIC RECORDS, RECORDING AND ACKNOWLEDGMENT
-Deeds
probate - correct answer The formal judicial proceeding to prove or confirm the validity of a will, to collect the assets of the decedent's estate, to pay the debts and taxes, and to determine the persons to whom the remainder of the estate is to pass is called probate. Even if there is no will, the estate is still subject to a probate action.
Natural events that affect title - correct answer -Accretion, the process that results in a gradual increase in land area through natural forces, is a natu- ral event that can affect title. Examples include soil and other material that flows downstream in a river that is deposited over time on the banks or a delta. Reliction is a gradual increase in land area when water gradually withdraws, as happens when the path of a stream or river changes over time.
-Alluvion is the material (soil) that is deposited through the process of accretion that is the result of avulsion, erosion, and reliction.
-Avulsion is the sudden addition to or loss of land when a stream or river changes course. Because it is a sudden change, no title is gained or lost. Determining whether an action involving water is accre- tion or avulsion is confusing, and depends on the definition of "sudden" and "gradual," a question often dealt with in the courts.
-Erosion is the gradual loss of land over time as the land bordering a river or stream washes away.
-Many coastal regions are experiencing subsidence due to the pumping of large quantities of under- ground water and oil. Rising water levels can also result in land being underwater due to submergence. Neither subsidence or submergence result in a loss or gain of title.
PUBLIC RECORDS, RECORDING AND ACKNOWLEDGMENT - correct answer -While recording is not a requirement for a valid deed, deeds should be recorded as soon as possible after delivery and acceptance. Deeds are recorded in the public records in the county courthouse in which the land is located. Recording a deed enters it into the public records and gives constructive notice to the world that ownership has been transferred. Constructive notice is the legal concept that a person received notice of a document or event even though the actual notice was not delivered directly to him or her. Constructive notice places a burden on future buyers, lenders, and others who may have an interest in the property. For example, a future buyer considering the purchase of the property is considered to be "constructively notified" of any document entered into the public records. The potential buyer cannot claim ignorance of a deed if it has been properly recorded. Recording also protects the owner against fraudulent claims of others.
-In order to record a deed, it must first be acknowledged. An acknowledgment is a statement made to a notary, or one authorized to take oaths, that one's signature was freely given. Because an acknowl- edgment verifies the signature only, it in no way implies that th [Show Less]