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Property Characteristics & Law

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PROPERTY CHARACTERISTICS & LAW — CHEAT SHEET

Real vs. Personal Property

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Legal Descriptions & Land Use

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Easements, Licenses & Liens

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Lien Priority (highest to lowest): Tax/Assessment → Mechanic's → Mortgage → Judgment

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Ownership Forms

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Estates in Land

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Fee Simple Defeasible: Determinable (auto-reverts on condition) vs. Subject to Condition Subsequent (grantor must act to retake)

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Deeds & Title Transfer

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Property Value & Appraisal

Market value requires DUST: Demand, Utility, Scarcity, Transferability

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Depreciation types: Physical (wear—curable/incurable) | Functional (design—sometimes curable) | External (outside forces—ALWAYS incurable)

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Contracts (CALCO)

Valid contract requires: Competent parties, Agreement (offer + acceptance), Legality, Consideration, written (Statute of Frauds)

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CueAnswer
Real propertyLand + improvements + legal attachments (minerals, air, water rights)
Personal property (chattel)Movable; NOT permanently affixed; bill of sale transfer
Fixture test: MARIAMethod of attachment, Adaptability, Relationship of parties, Intention, Agreement (overrides all)
Trade fixturesCommercial tenant's equipment; remains personal property; removable
EmblementsAnnual crops; tenant's personal property; harvest rights survive tenancy
TypeKey Details
Metes & boundsPoint of Beginning (POB); direction/distance; closes at POB
Rectangular surveySection = 640 ac; ¼ section = 160 ac
Lot & blockPlatted subdivision
VarianceHardship deviation from zoning
Special use permitConditional use allowed by zoning board
Nonconforming usePre-zoning; legal to continue
Spot zoningInconsistent; often challenged
FeatureEasement AppurtenantEasement in GrossLicense
BeneficiaryParcel (dominant tenement)Person/companyPerson
TransferableYES (with dominant parcel)NO (personal)NO
RevocableNONOYES (revocable permission)
CreationExpress, prescription, necessity, implicationExpress onlyPermission only
FormUnitiesSurvivorshipSeveranceNotes
Joint tenancyTTIP (Time, Title, Interest, Possession)YESSale converts to TIC
Tenancy in commonPossession onlyNOPartition available
Tenancy by entiretyMarried couples; TTIPYESBoth sign; creditor protection
Community property9 states; marriage-acquiredVaries by stateBoth sign homestead conveyances
EstateTermNotice RequiredNext Occupant
Estate for yearsFixed termNOLessor
Periodic tenancyAuto-renewsYES (proper notice)Lessor
Tenancy at willNo fixed termEither party terminatesLessor
Tenancy at sufferanceHoldover (illegal occupation)Lessor can evictLessor
ElementRequirement
Valid deedCompetent grantor, identified grantee, words of conveyance, legal description, consideration, signature, delivery & acceptance (title passes HERE)
General warrantyGrantor warrants against ALL defects (past + present)
Special warrantyGrantor warrants only grantor's period
QuitclaimNO warranties; transfers only grantor's interest
Recording statute (most common)Race-notice: first to record wins IF no notice of prior claim
Title insurance: owner's policyLasts as long as owner has interest; passes to heirs
Title insurance: lender's policyExpires at payoff
ApproachFormulaBest For
Sales comparisonComp adjustment (Better→Subtract, Worse→Add)Residential
Cost approachLand + (Replacement Cost − Depreciation)Special-purpose
Income approachValue = NOI ÷ Cap RateInvestment property
EGIPGI − Vacancy & Credit LossesAll income approach
NOIEGI − Operating Expenses (NO mortgage)All income approach
TermRule
Statute of FraudsALL real estate contracts must be written (purchase, listing, buyer rep, options, leases > 1 yr)
Mirror image ruleAny modification = counteroffer; original offer dead
RevocationOffer revocable anytime before acceptance communicated
Holding openNOT binding without option payment
Breach Remedies:
  • Buyer defaults → Seller retains earnest money (liquidated damages) OR sues for specific performance
  • Seller defaults → Buyer gets earnest money back OR sues for specific performance (real estate is unique)

Listing types: Exclusive right to sell (commission regardless) | Exclusive agency (owner can sell, no commission) | Open (only procuring broker paid)

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Agency (OLD CAR)

Fiduciary duties to CLIENTS ONLY: Obedience, Loyalty, Disclosure, Confidentiality, Acc

Aligned to the PSI / Pearson VUE national real estate outline.

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