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Intent

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One of four tests for fixtures. The primary test considered by courts. Contact law states that fixtures in/on the property at the time the contact is ratified, and in the absence of an agreement between the parties, the fixture must remain with the property.

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Trade Fixture

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• A piece of equipment, or personal property, on or attached to the real estate by the tenant which is used for trade or business. • Differ from other fixtures because they may be removed from the real estate (even if attached) at the end of tenancy of the business. • The business tenant must compensate the owner for any damages due to removal of trade fixtures or repair such damage. • If the fixture is not removed prior to the expiration date of the lease, it will become real property and belong to the landlord.

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Real Property Rights

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Mining, electricity distribution, sewer system disposal and air travel have all conspired to erode the principal of property rights.

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Agreement

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• Best of the four tests of fixture • Parties to the transaction can agree in the contact of sale as to whether the fixture stays or goes.

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Annexation

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• One of the four tests of fixture. • An addition to property by the act of joining or uniting one thing to another. • Attaching personal property to real property. • Ex: sink joined by pipes or a fence around property.

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Real Property

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• Land and all things attached to it. Real property is considered fixed, Immovable, and indestructible. • Can become personal property by severance.

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Real Estate (Realty)

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A piece of land, including the air above it and the ground below it, and any buildings or structures on it.

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Land

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• The material of the earth that begins at the surface and includes free or occupied space for an indefinite distance upward into the airspace as well as subsurface downward to the center of the earth. •Land is not considered Scarce.

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Personal Property (Personalty)

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• Anything that can be owned that is not real property such as cars, bank accounts, wages, securities, a small business, furniture, insurance policies, ect. • may also be called personal effects, movable property, goods, chattel, emblements (annual crops), and Personalty.

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Improvements

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Man-made additions to land including buildings, fences, paving, pipelines, bridges, and landscaping.

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Appurtenances

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• Rights, privileges, or improvements permanently attached to the land. • Rights would include giving one the right of way, or easement, to use one's property.

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Fixtures

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• Articles which were once a personal property or chattel, but which has now become a part of the real estate because the article is permanently attached to the soil or to something attached to the soil. • Ex: Ceiling Lights, awnings, window shades, and doorknobs • Are automatically included in the sale, unless specifically mentioned in the contact as going to the seller. • Agents should infirm clients of potential problems • If seller desires to remove them when they move, they should remove them and replace them prior to listing the property for sale.

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Mineral Rights

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• Property owners, unless otherwise stipulated in the deed of conveyance, also own the subsurface rights of the land. • Rights may be sold or leased for recovery. • Any exclusion should be identified in the deed of conveyance.

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Water Rights

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• Generally emerge from a person's ownership of the land bordering the banks of water (river, steam, lake, or ocean) or from a person's actual use of the water. • Are conferred and regulated by judge-made common law, state and federal legislative bodies, and other government departments. • Can also be created by contact, as when one person transfers his rights to another.

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Riparian Rights

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• Rights of a landowner whose land borders on a stream or water coarse to use and enjoy the water which is adjacent to or flows over the owner's land provided such use does not injure other adjacent land owners. • Property boundary would be the center of a nonnavigable river.

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Littoral Rights

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• Rights of a landowner whose land borders a pond, lake or ocean shoreline where the body of water is non-flowing. • Rights extend to the mean high water mark.

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Accretion

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• The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake or sea. • Gradual and imperceptible addition of land by deposits of soil through natural causes, such as shoreline movement caused by streams or rivers. • 3 different forms

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Alluvion

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The increase in the area of land due to the deposit if sediment by a river.

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Reliction

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The increase of the land by the permanent withdrawal of the ocean or a river

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Accession

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The process in which the land changes in size due to alluvion over time.

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Erosion

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The gradual loss of Soil due to the operation of currents, tides, or winds

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Avulsion

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The sudden tearing away of land as by earthquake, flood, volcanic action, or the sudden change in the course of a stream.

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Air Rights

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• The first legal limits were set on Air rights in the 20th century due to airplanes • Owners only have the rights to as much air rights as they can reasonably use.

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Physical Characteristics of Land

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1) Immovable - Location cannot be changed 2) Indestructable - It cannot be destroyed 3) Unique - No two parcels are in the same location

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Economic characteristics of land

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1) Scarcity - It's not scarce 2) Improvements - Will increase or decrease the value based on improvements done and its original purpose 3) Location - it's true value is based on Location!

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Types of Legal Property Descriptions

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•Used to determine the precise location of parcels of land. • The system used in the original 13 colonies is the Metes and Bounds System. • Other states may use the Government Rectangular System.

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Metes and Bounds System

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• Metes refers to distance and Bounds refers to direction. • This requires a surveyor to first locate the monument, which may be natural or man made, v which with the distance and a compass heating, will lead to the Point of Beginning (POB)

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Lot and Block System

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• The most commonly used method of land description • Requires Plat Map to be filed with the county • Developers commonly use this system by subdividing areas and then dividing the subdivision into lots and blocks.

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Plat Map

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Am engineer's map showing the land use for the land in question.

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Agency

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A consensual fiduciary relationship authorizing a broker to act on behalf of and represent a client in a real estate transaction. Agents may not provide any professional services without an agency relationship.

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Fiduciary Relationship

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A relationship in which one party places special trust, confidence, and reliance, and is influenced by another another who has a fiduciary duty to act for the benefit of the party. Also called a confidential relationship. May be created by express agreement of the parties, or may be imposed by law where established by the conduct of the parties.

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Fiduciary

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One, such as an agent of a principal that stands in a special relation of trust, confidence, or responsibility in certain obligations to others, client.

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Principal

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A person, or client, who empowers another, the agent, to act as his or her representative in a real estate transaction.

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Client

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The party for which professional services are rendered, as by a Broker In Charge. They have entered into an express written agreement for representation.

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Agent

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One empowered to act for or represent another in a real estate transaction. The Broker In Charge of a real estate company. Affiliated licensees are not agents to the principal.

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Subagent

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Agent who is appointed by the Broker In Charge, and for whom the principal agent is responsible or liable.

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Third Party

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One other than Principal involved in a transaction. There could be several in a transaction. All parties that are not represented by the Agent in the real estate transaction.

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Customer

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One who desires the services of an agent, but opts not to establish an agency relationship for legal representation. Agents must ensure to clearly explain agency relationships to all potential buyers and sellers of real estate. If after the agency relationships have been fully explained, and the buyer/seller elects to use the services of an agent, but without legal representation, agents can not provide any professional services. Can elect to become clients (principals) later if they so choose.

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Power Of Attorney

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A legal instrument authorizing one to act as another's attorney or agent to the extent authorized in this document.

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Attorney-In-Fact

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An attorney or agent who may or may not be a lawyer, who is given written authority (P.O.A.) to act on anther's behalf as specified by a Power Of Attorney

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Common Law

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Body of law that is based on custom and general principals and embodied in case law and that serve as precedent or is applied to situations not covered by statute.

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Single Agency

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When an agent represents only one client in the same real estate transaction. (The buyer or seller)

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Dual Agency

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When the agent represents two clients in the same real estate transaction. (Both buyer and seller)

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Proxy

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An agent legally authorized to act on behalf of another party. (Client)

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Seller Agency

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The practice of a real estate agent only representing the seller in a reel estate transaction.

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Buyer Agency

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The practice of a real estate agent only representing the buyer in a real estate transaction.

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Designated Agency

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When am agent may designate an individual associated licensee to act solely on behalf of a client. The licensee has a duty to promote the best interest of their client, including negotiating a price. The Broker In Charge will remain the dual agent. One Broker, two subagents A type of Dual Agency

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Transactional Broker (Neutral or intermediary)

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Not legal in South Carolina Only perform ministerial acts for both parties. No agency relationship or fiduciary responsibilities and do not provide representation to either the buyer or seller.

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Agency Relationships

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Are fiduciary, or legal in nature, in which principal enters into a consensual written relationship with an agent for legal representation. There are six legal obligations (fiduciary duties) the agent owes the principal, but it is critical that one understand trust and confidentiality are paramount in this type of relationship. Confidentiality will never end. Will be terminated for different reasons at different times, but confidential information given can never be disclosed unless otherwise stipulated by South Carolina Statute.

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Company and Sub-Agency

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Real estate agents must work with a Broker In Charge for a minimum amount of time as required by state statute. (South Carolina is three years) The Broker In Charge (B.I.C.) will always be the Agent in every real estate transaction. Do not represent principals. The Agent is the only one who can legally represent the principal.

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Representation Agreements - licensees and company

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Most subagents are typically hired as independent contractors, although they may also be hired on as employees. Agreements between the company and licensee establish express authority detailing what a licensee may do in representing the company. It must also establish if licensee is an independent contractor or an employee.

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Permissible forms of Agency in South Carolina

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1) Seller Agency 2) Buyer Agency 3) Dual Agency 4) Sub-Agency

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Seller A agenc

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On reaching an agreement to provide brokerage services for a seller, a seller's agent shall: 1) Perform the terms of written brokerage agreement made with seller 2) promote interest in seller by performing duties such as A) Seeking sales price and terms stated in brokerage agreement B) present all offers and counteroffers in a timely manner C) Disclose to seller all reelecting facts concerning transaction D) Advise seller to obtain expert advise on matters beyond expertise of agent E) Account for all money and property in timely manner

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Buyer Agency

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On reaching an agreement to provide brokerage services to a potential buyer, a buyer's agent shall: 1) Perform terms of written brokerage agreement made with buyer. 2) Promote best interest of buyer by performing the buyer's agent duties which include: A) Seeking property at price and terms stated in brokerage agreement B) Presenting all offers and counteroffers in timely manner to and from buyer. C) Disclosing to buyer all relevant facts concerning the transaction known to agent. D) Advising buyer to obtain expert advise in all manners beyond agent's expertise. E) Accounting for all money and peppery in a timely manner (Earnest Money) 3) Exercising reasonable skill and care in discharging the buyer's agent's agency duties.

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Disclosed Dual Agency

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A licensee may act as a disclosed dial agent only with the prior informed and written consent of all parties. The informed consent must be evidenced by a Dual Agency Agreement, promulgated by the commission, and must be signed by the buyer before writing an offer and by the seller before signing the sales contract.

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Dual Agency Agreement

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Must specify the transaction in which a licensee is serving as dual agent and must state that: 1) in acting as dual agent, a licensee represents clients whose interests may be adverse and that agency duties are limited. 2) The agreement may disclose information gained from one party to another party if the information is relevant to the transaction, except if the information concerns: A) the willingness or ability if a seller to accept less than asking price B) the willingness or ability of a buyer to pay more than an offered price C) confidential negotiating strategy not disclosed in an offer as terms of sale; or D) the motivation of a seller for selling property or the motivation of a buyer for buying property. 3) Clients may choose to accept dual agency or reject it. 4) The clients have read and understood agency disclosure form and acknowledge their consent is voluntary. 5) A Broker In Charge and his affiliated licensees in broker's office may conduct business with client in any of broker's branch offices as a customer or client without creating a dual agency relationship, so long as branch offices each have sperate broker in charge and do not share the same broker in charge or real estate licensees as main office.

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Types of Liability

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1) Joint 2) Several 3) Vicarious

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Joint Liability

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The agent and Subagent are Fully Liable

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Several Liability

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The Agent or Subagent are only Liable for their proportionate share of the obligations.

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Vicarious Liability

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Secondary Liability that arises under the common law doctrine of agency. Anything a sub-agent knows or should know, it is presumed the agent also has knowledge.

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Three Types of Agents

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1) Universal 2) General 3) Special

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Universal Agent

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Has very broad authority in conducting business.

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General Agent

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Authorized to represent a client on behalf of another Agent. Usually an Independent Contractor.

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Special Agent

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Broker In Charge

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Types of Principals

answer

1) Disclosed 2) Undisclosed 3) Partially Disclosed

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Disclosed Principal

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Identity is known to third parties. Most commonly used.

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Undisclosed Principal

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Agent cannot reveal identity of Principal or even that they are representing a principal. Agent acts like they are the principal.

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Partially Disclosed Principal

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Agent can disclose that they are representing a principal but not the identity of the principal. Practiced very seldom.

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Sub-agency

answer

In a cooperative sell, the cooperative, or selling, broker is a sub-agent of the listing broker when the buyer is a customer of the cooperating broker.

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Fiduciary Relationship

answer

A relationship in which one party places special trust, confidence, and reliance in and is influenced by another who has a fiduciary duty to act for the benefit of the party A.K.A. confidential relationship

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Confidentiality

answer

One of six fiduciary duties that never expires

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Fiduciary Duties

answer

1) Obedience 2) Loyalty 3) Full Disclosure 4) Confidentiality 5) Accounting 6) Reasonable Care, Due Diligence

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Obedience

answer

Fiduciary Duty that agents must do what principal asks unless illegal

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Loyalty

answer

Fiduciary duty that Agents are required to offer advise, opinions and due diligence to all principals and put the principals best interest above all others including the agents

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Accounting

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Fiduciary duty that agent must account for all money, property, and paperwork in a timely manner.

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Reasonable Care

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Make sure it's the right property for the principal. Handling offers, counteroffers, and multiple offers promptly.

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Fiduciary Duties That are limited in Dual Agency

answer

1) obedience 2) Loyalty 3) Disclosure

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Principals Duties to Agent

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1) Compensation 2) Reimbursement 3) Opportunity 4) Good Conduct 5) idemnity 6) Good Faith

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Idemnity

answer

When a party secures another against loss or damage due to the happening of a specific event or to compensate for incurred damage.

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Procuring Cause

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The agent that has a written agency agreement with the buyer and without any break in the chain of events between signing the agency agreement and closing the transaction.

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Monitorial Duties

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Services an agent can provide a customer, secretarial duties

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Customer

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Those involved in a real estate transaction with no agent agreement

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Services an Agent can offer a costumer

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1) show property 2) provide statistics 3) provide blank contacts and agreements 4) Act as scribe 5) provide list of experts 6) locate schools, stores, restaurants etc. near property

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