Real Estate Practice in Unit Flashcards

Real Estate Practice in Unit Flashcards What type of appraisal report is commonly relied upon in California by a lender financing the purchase of a single-family residence?a. Self-Contained Reportb.Summary Reportc. New Subdivision Public Reportd. Home Inspection Report

• Summary ReportThe Summary Report is an appraisal

with a level of detail sufficient for lenders financing either the purchase or the refinance of residential property. The appraiser "summarizes" the information included in the work file of the subject property, and reports an estimate of the subject property's market value.A is incorrect. The self-contained report (aka the "narrative report") is the most detailed and comprehensive type of appraisal. The appraiser would report and explain--rather than merely summarize--the information in the work file of the subject property. C is incorrect. The Public Report for new subdivisions is not a type of appraisal. It is a disclosure statement issued by the DRE to inform the public about the new subdivision. With some exceptions, developers of new subdivisions of 5 or more units must apply to the DRE for the Public Report. Without a Final Public Report from the DRE, developers are not allowed to close escrow on any real estate parcels in the new subdivision. D is incorrect. A home inspection report is not a type of appraisal. A home inspector reports on the condition of a property's major systems and components (e.g., heating, air conditioning, electrical, plumbing, foundation, walls, insulation, etc.).Which California Fair Housing law provides protection from discrimination by business establishments?Unruh Civil Rights ActThe Unruh Civil Rights Act provides protection from discrimination by all business establishments in California, including housing and public accommodations. The Rumford Act (the Fair Employment and Housing Act) prohibits discrimination in the sale, rent or financing of housing, while the Holden Act prohibits discrimination in loan activities.All of the following contracts must be in writing to be

enforceable in CA except:a. A lease of a parcel of real

estate for a term of one year.b. A purchase and sale agreement for real estate.c. A listing agreement.d. An agreement by a buyer to pay a loan secured by a lien upon the real estate purchased.

• A lease of a parcel of real estate for a term of one

year.In Californai, the Statute of Frauds requires that certain contracts be in writing in order to be enforceable. A lease is a contract between the landlord and the tenant, and any lease with a term that is longer than one year must be in writing (e.g., one year and one day). However, a lease of real estate for a term of one year or less does not

need to be in writing. Test-Taking Tip: Before the state

exam, make sure to review the Statute of Frauds so that you know which contracts must be in writing to be enforceable.B, C, and D must be in writing to satisfy the Statute of Frauds.

Jon Brown is the sole owner of a condominium in CA with a list price of $900,000. The listing broker learns that a prospective buyer, Samantha Southerland, owes $75,000 in delinquent child support. Which duty owed only to the principal will require the listing broker to disclose the delinquent child support to Jon Brown?a.Honestyb.Good faithc.Disclosured.Disclosure of material facts c.DisclosureIn CA, disclosure is a fiduciary duty owed by an agent to a principal. Here, the agent is the listing broker and the principal is the seller. The listing broker owes the seller the disclosure of relevant and pertinent information pertaining to the listing broker's duties. One of the listing broker's duties is to counsel the seller as to a prospective buyer's ability to complete a sale. Information related to the delinquent child support must be disclosed by the listing broker to Jon Brown as it pertains to Samantha Southerland's financial ability to buy the condominium.A, B, and D are incorrect. Real estate licensees owe both parties to a transaction the duties of honesty, good faith, fair dealing, and a full disclosure of all material facts related to

the desirability or value of the property. Test-Taking Tip: Be

careful to distinguish "the fiduciary duty of disclosure" from the "disclosure of all material facts related to the property." The "fiduciary duty of disclosure" is owed by an agent to his or her principal. The fiduciary duty of disclosure is not owed to an unrepresented member of the public. In contrast, the "disclosure of all material facts related to the property" is owed by a real estate licensee to both parties in a transaction, and does not depend on an agency relationship.Which Fair Housing Law added sex to the list of protected classes?Housing and Community Development ActTitle VIII prohibited discrimination in housing based on race, color, religion, or national origin. In 1974, the Housing and Community Development Act added sex to the list of protected classes, and the Fair Housing Amendments Act added handicap and familial status.

2.Which of the following is an example of the government's realty-related police power?a. The SWAT team breaking down the door of a unit in an apartment complex.b. A city changing the zoning from industrial to residential in an entire area.c. A county forcing owners out of their homes through eminent domain.d.The state--without the prior owner's permission--acquiring permanent title to realty through escheat.

• A city changing the zoning from industrial to residential in

an entire area.Control over real estate and land use by a government entity is called "public control." There are four basic governmental powers over real estate ownership and

land use: Police Power, Eminent Domain, Taxation, and

Escheat (Your memory aid is "PETE"). The government's

police power over real estate includes things like: zoning,

building codes, city planning, public health, public safety, and general welfare. Answer Choice "B" is a classic example of Police Power. Here, the city exercised its Police Power to enhance public health and safety--by separating the new residential area from industrial activity. Escheat, Eminent Domain, and Taxation are not part of the government's Police Power. The state examiners frequently write questions trying to trick examinees into incorrectly lumping one of these other three powers into

Police Power.A is incorrect. A Special Weapons and Tactics (SWAT) team uses specialized equipment and tactics to respond to criminal activity posing an elevated risk to the public or to law enforcement personnel. That's an entirely different type of "police power." C is incorrect.Under the power of Eminent Domain, the government can take private property for public purposes (e.g., widening a highway), but must pay the owner of the property just or fair compensation. In contrast, the government would not typically have to pay owners if there is a decline in value due to a zoning change. D is incorrect. The state can exercise its power of Escheat when a parcel of real estate has been abandoned, or if the owner dies without a will and no heir can be found. After 5 years, the real estate permanently escheats and belongs to the State of

California. Test-Taking Tip: The state examiners may try to

trick you into lumping one or more of these four, separate powers together.