question

A1:

answer

...

question

Code Enforcement

answer

1. Building permits 2. Public Safety 3. Fire 4. Public health (hospitals)

question

City Planning

answer

Get a bigger tax base 1. General Plan - 10 years 2. Neighborhood Plan Deed restrictions, HOAs, subdivisions 3. Urban (new) development 4. Redevelopment - revitalization e.g., Temple Town Lake area

question

Corporeal

answer

Real property -land and tenements 1. Land: surface; subsurface (mineral rights) - appurtenant; air rights - caissons 2. Tenements: buildings & improvements, fixtures, natural fruits

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Incorporeal

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Rights and relationships 1. Easements and rights of way 2. Hereditaments - inherited property

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Ownership rights

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U = Use P = Possession E = Exclusion T = Transfer E = Encumber

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Fixtures

answer

Test to determine: M = Method of attachment A = Agreement R = Relationship to owner I = Intent (intent to stay) A = Adaptability

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Government Rights/Restrictions

answer

P = Police power E = Eminent domain T = Taxation E = Escheat

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Physical characteristics of real property

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1. Immobile 2. Indestructable 3. Non-homogenous (no two parcels exactly the same) 4. Law of situs (location)

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Economic characteristics of real property

answer

1. Scarcity 2. Modification - can or can't crete value 3. Fixity - does it move? 4. Situs - location

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Transfer of title

answer

Transfer via Deed (Title Co.) 1. Voluntary 2. Will - who will inherit? 3. Intestate succession: spouse, children, parents, siblings 4. Court order - probate - order of descent

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Affidavit of Affixture

answer

Paperwork that makes personal property a fixity (corporeal)

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Chattel

answer

Personal property 1. Tangible (objects), will be on Bill of Sale 2. Intangible (rights and relationships): e.g. trademark, patent, lease for equipment

question

Overdraft

answer

When ground water is depleted Arizona water supply: 30% underground, 30% from Colorado River, 30% storage lakes

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Groundwater

answer

Regulated and controlled by Arizona Department of Water Resources (ADWR) 1. Need a Groundwater Permit to pull water from ground 2. Exempt domestic well (don't need permit, just notice) a. Beneficial use - residential b. No more than 35 gal/minute c. Less than 2 acres of land

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Surface water

answer

Controlled by ADWR 1. Right of "prior appropriation" - 1st in time, 1st in right; grandfathered (e.g., SRP) 2. Beneficial use to land - no other sources available; residential only 3. Riparian rights (rivers and streams) - not in Arizona 4. Littoral rights (lakes & oceans)

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Water volume measurement

answer

CFS = Cubic ft per second for moving, flowing water Acre feet for non-moving water (1 acre foot = 43,560 ft)

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Ownership - Abutting Streams

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Water rights not affected; for the dirt under the water 1. Navigable streams - own the edge of the "high water mark" 2. Non-navigable streams - own to center of stream for "low water mark"

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Taxation

answer

1. Ad valorem - according to value 2. Based on assessed value; assessment ratio: a. 10% residential b. 16% vacant land c. 20% commercial/industrial

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Tax due dates

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1st half - October 1 2nd half - March 1

question

Tax delinquent dates

answer

1st half - November 1 2nd half - May 1 Penalty for delinquency = 16%

question

Property Tax Lien Sale

answer

1. Online auction 2. If no successful bidder, goes back to county 3. "Certificate of Purchase" - rights to income from taxes - you buy the investment

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Property Tax Lien Sale - Owner

answer

1. Owner's redemption period a. 3 years from first advertised (Jan.) b. Tax foreclosure sale after 10 years 2. Treasurer's Deed a. After 3 years, lien holder gets property

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Eminent Domain

answer

Take private property for public use 1. Court procedure (state government) 2. Compensation required - fair and just

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Escheat

answer

Reversion of property to state when owner dies intestate and without heirs 1. 5 year absence of heirs - county must advertise and maintain property 2. Proceeds of sale to State Gen. Fund 3. Appropriation procedure if heir materializes - 7 years (5 years + 2 years)

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Emblements

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Right to harvest cash crop (industrial fruit)

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Treasurer's Deed

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Bargain & Sale Deed

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Private Controls

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Deed restrictions - e.g., CC&Rs

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Zoning

answer

Regulation of structures and uses of property within districts and zones 1. Maintains & upholds value 2. Enforced with permits & inspections (city) 3. Overseen by Planning Commission 4. Pay penalty or tear down if don't comply

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Rezoning

answer

Apply for variance

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Zoning Variance

answer

Prove you or land in hardship; must give notice to neighborhood

question

A2:

answer

REAL ESTATE INTEREST AND OWNERSHIP

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Estate Classifications

answer

1. Freehold (indefinite duration) 2. Less Than Freehold (definite duration)

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Fee/Freehold Estate

answer

Indefinite duration; inheritable 1. Fee Simple/Absolute 2. Defeasible Fee 3. Fee Tail

question

Fee Simple/Absolute Estate

answer

Highest degree of ownership Hereditament

question

Defeasible Fee Estate

answer

Limitation set by condition 1. Fee determinable (date) 2. Fee conditional (condition) These contain clauses in the deed with condition(s)/date(s)

question

Fee Tail Estate

answer

Only give property to blood relatives (Not legal in Arizona)

question

Life Estates - Freehold

answer

An estate for the life of some stated person Not inheritable Created by Kings & Queens (grantors)

question

Life Estates - Characteristics

answer

Grantor still has ownership (Habendum clause - limitation) NOT Fee Simple or Defeasible Fee Grantee is life tenant - holds freehold estate

question

Life Estates

answer

Always accompanied by a 2nd estate (Future Estate) - REVERSIONARY 1. Reversion - future (reverts back) 2. Remainder - is there a will? a. Vested - named in will (testate) b. Contingent - no will, who is in line? Children, parents, ... intestate

question

Pur Autre Vie

answer

Someone other than Grantee

question

Rights of a Life Tenant

answer

Possess Use Exclude

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Life Tenant Cannot

answer

Encumber (place a lien on) Transfer the property

question

Statutory (Legal) Life Estates

answer

1. Dower (not in Arizona) - deceased husband gives wife his estate (community property) 2. Curtesy (not in Arizona) - deceased wife gives husband her estate 3. Homestead - exemption protection

question

Homestead Exemption

answer

Protects homeowners against judgements Established by state law, automatic right Maximum protection up to $150,000 Up to 18 mos. equity protected

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Homestead Exemption Limitations

answer

Only individuals, not corporations Only involuntary liens Does not protect against foreclosure Judgements follow person, not property

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Homestead Exemptions - How Terminated

answer

Sell the house Transfer interest On Death

question

Community Property - Arizona Law

answer

Spouses have equal share Surviving spouse has same protection

question

Leasehold Estates - Less Than Freehold Estates

answer

When you are party to a lease Lease conveys possession of property

question

Parties to a Lease

answer

1. Lessor = owner/landlord 2. Lessee = renter/tenant (holds the leasehold 3. Lease is personal property 4. Lease is chattel real - conveys possession of real property

question

Types of Leasehold Estates

answer

1. Estate for years - Beginning and ending date; has to expire 2. Estate from period to period - e.g., month-to-month 3. Estate at will - verbal right to be there, nothing in writing 4. Estate at sufferance - Right of holdover tenant, stays beyond rightful time - LOWEST possible degree of interest

question

Requirements of a Valid Lease

answer

1, All RE contracts must be in writing to be enforceable, except leases of less than 1 yr 2. Lessor must sign 3. A statement of intent of lessor to "let & demise" the premises - conveys possession

question

Requirements of a Valid Lease (contd)

answer

4. State a consideration ($) for right to occupy 5. An adequate description of the property 6. State a time period of occupancy 7. Be delivered & accepted (possession implies acceptance)

question

Types of Lease by Manner of Rent Calculation/Payment

answer

1. Gross Lease - Landlord pays expenses (utilities) 2. Net lease - Tenant pays expenses 3. Percentage lease - % of gross sales & lower amount in rent (restaurants, etc.) 4. Index lease - escalator clause - rent is tied to rate of inflation (apartments)

question

Types of Lease by Manner of Rent Calculation/Payment (contd)

answer

5. Graduated lease/step-up lease - New biz, rent gradually increases 6. Ground lease/land lease - Another owner of land under the building 7. Sale and leaseback - Write sale and lease together

question

Estoppel Certificate

answer

Verifies the amount of rent and the lease conditions - benefits the investor

question

Assignments vs. Subleases

answer

1. Assignment - limitation - original lessee no longer liable 2. Subletting - limitation (aka sandwich lease) - lessee becomes original lessor - original lessee stays liable

question

Lease Terminology

answer

1. Contract rent - rent stated on lease 2. Economic rent - what market will bear 3. Positive leasehold - tenant pays less than market rent 4. Negative leasehold - tenant pays more than market rent

question

Termination of Lease

answer

1. Expiration of term (no notice required) 2. Agreement of the parties (surrender and acceptance) 3. Abandonment by the lessee (lessor must hold items for 10 days) 4. Destruction of the property - tenant doesn't have use of the unit

question

Termination of Lease (contd)

answer

5. Condemnation of property - eminent domain 6. Merger of the leasehold and fee estates - when lessee buys the property 7. Breach of terms & conditions by either party 8. Death - does not terminate a normal lease, only if lessor is Life Tenant

question

Breach of Terms & Conditions on a Lease

answer

Evictions: 1. Actual = tenant breaches (e.g., non-payment) 2. Constructive - landlord breaches

question

License

answer

Right to use real property (e.g., vendor) - privilege or right granted - revocable

question

Easement

answer

Irrevocable right once created 1. Right acquired by one party to use the land of another for a special purpose 2. Since the easement is a right or interest in use, it is not an ownership interest in the land

question

Classifications of Easements

answer

*See Title Report for encumberances 1. Easement appurtenant a. 2 separate properties required b. 2 different owners required

question

Easements: Servient & Dominant Property

answer

1. Servient property - serves the dominant, has the easement 2. Dominant property - uses the property *If the property is sold, easement stays with the land (appurtenant)

question

Easement in Gross

answer

1. Right or interest to a person - no land involved (e.g., utilities) 2. Holder of easement not required to own property adjacent to the servient property 3. Ordinarily cannot be sold to 3rd party and ceases on death or liquidation of the easement holder

question

Easement Creation

answer

1. Agreement (prescription) 2. Condemnation (ask for fair and just compensation) 3. Necessity (implication) 4. Prescription

question

Easement Termination

answer

1. Release - both parties agree and document 2. Merger - 2 lots become one, easement not needed 3. Failure of purpose - no longer needed 4. Abandonment - easement no longer in use; file court action after 5 yrs non-use

question

Tenancy

answer

The mode, manner, quality and way that ownership of an estate is held by person(s) or legal entity

question

Types of Tenancies

answer

*Will state on deed 1. Sole & Separate 2. Co-ownership a. Community Property b. Tenancy in Common c. Joint Tenancy d. Comm. Property w/ Rights of Survivorship (CPWROS) e. Tenancy by the Entirety

question

Sole & Separate Tenancy

answer

All benefits go to individual owner (single entity, corporation)

question

Co-ownership Tenancy

answer

Concurrent - 2 or more persons

question

Community Property Tenancy

answer

Equal shares by marriage 1. Creation by marriage 2. Characteristics - both equally liable 3. Termination - death; property goes to heirs unless otherwise stated (e.g., 2nd marriage?)

question

Tenancy in Common

answer

1. Creation - equal or unequal shares 2. Characteristics - 2 or more adults; default partners/unmarried 3. Rights, benefits, liabilities, limitations - if one dies, their share goes to their heirs 4. Partition action - partition according to amount of ownership

question

Joint Tenancy

answer

1. Creation - Joint Tenancy With Rights of Survivorship (JTWROS) 2. Characteristics - four unities required a. Posession b. Time c. Interest d. Title

question

Community Property With Rights of Survivorship (CPWROS)

answer

1. Who qualifies - husband and wife 2. Purpose - equal rights 3. Benefits - goes to other spouse 4. Difference between CPROS & JTROS = marriage

question

Tenancy by the Entirety

answer

*Not in Arizona 1. Husband and wife treated as one owner 2. Right of Survivorship does exist

question

A3

answer

TRANSFER OF TITLE AND TITLE INSURANCE

question

TRANSFER OF TITLE

answer

Happens by a deed (real property)

question

Transfer of Title Methods

answer

1. Voluntary alienation - own free will a. Public grant - giving/selling to gov't b. Private grant - giving/selling to someone other than gov't 2. Involuntary alienation - by court order 3. Descent - die intestate, set by state statute (law) 4. Will - die testate, voluntary (you choose)

question

DOCUMENT DEED

answer

1. Prepared by attorneys, RE brokers, grantors 2. Parties a. Grantor - the one giving the deed, executor or seller - must be competent b. Grantee - the one receiving the deed, unlimited # of grantees; do not have to be competent

question

Document Deed - Basic Requirements

answer

1. In writing 2. Competent grantor 3. Identifiable grantee 4. Granting clause - "I agree to give" 5. Legal description - req'd in deed, mortgage, trust deed, purchase contract 6. Legal consideration - something given in exchange a. Valuable - $, goods & services b. Good - love & affection (family member)

question

Document Deed - Basic Requirements (cont'd)

answer

7. Signature of grantor - proves free will 8. Acknowledgement - 3rd party witness, required by state law 9. Delivery to grantee a. Actual - handing the deed off b. Escrow - grantor gives to escrow co. with instructions to deliver (i.e., collect $)

question

Optional Deed Clauses

answer

1. Habendum Clause a. Specifies degree of interest conveyed b. Sets forth limits of interest in a deed - limits how you can use a property 2. Exceptions or reservations - excludes a portion of the property (i.e., mineral rights, air rights)

question

COVENANTS AND WARRANTIES

answer

...

question

Covenants

answer

Promises; all conveying deeds will have

question

Covenant of Seizin

answer

1. Library of Seizin in Feudal Europe - pass the dirt literally 2. Grantor has the right to convey - has the right to give

question

Covenant of Quiet Enjoyment

answer

Grantor promises to defend grantee against the claims of third parties

question

Covenant Against Encumbrances

answer

Grantor promises the property is free from encumbrances (easements, property taxes, CC&Rs, etc.) except those revealed

question

Warranties

answer

Difference in deeds is the warranties offered

question

Further Assurance Warranty

answer

1. Obligates the grantor to perfect the title - clear what can be cleared (tax lien, mortgage, etc.) 2. Contained in Special and General Warranty deeds *Perfect titles do not exist - always encumbrances

question

Warranty Forever

answer

1. Requires the grantor to defend the grantee's title forever - heirs honor the title 2. Contained only in a General Warranty deed

question

Types of Deeds

answer

1. Bargain & Sale - contains all covenants, no warranties a. Sheriff's - Mortgage foreclosure or judgement - seize assets b. Treasurer's (tax) - non payment of property taxes c. Executor's (administrator) - through probate d. Trustee's - Bankruptcy and foreclosure in Deed of Trust

question

Types of Deeds (cont'd)

answer

2. Patent Deed - 1st time government sold to private party 3. Conveying or Granting Deed - give title to real title 4. Warranty a. Special Warranty, also called Limited Warranty Deed; contains all covenants and only Further Assurance warranty b. General Warranty - Contains all covenants and warranties

question

Releasing/Other Types of Deeds

answer

1. Quit Claim - does not provide an insurable title a. Removes "clouds on title" (releases an interest), requires Quiet Title Suit (court action) b. No covenants or warranties c. May convey, but not designed to convey d. Color of Title - appearance of title, ownership but may not be ownership

question

Releasing/Other Types of Deeds (cont'd)

answer

2. Gift Deed a. Type of quit claim deed b. Used between relatives - "good" consideration (love & affection) 3. Disclaimer Deed a. Used for denial of spouse's interest in property b. Signed at time of purchase c. Contains no covenants or warranties

question

Releasing/Other Types of Deeds (cont'd)

answer

4. Correction Deed - "OOPS" deed, used to correct errors (common: marital status) 5. Fiduciary Deed - Given when one is holding title/ownership for another (e.g., underaged child)

question

Recordation of Deed

answer

Not mandatory, but really good idea; protects grantee, grantee must initiate 1. Purpose: provides constructive notice a. Gives enforceability of claim to title b. Does not guarantee validity c. Chain of Title - history of property ownership

question

Affidavit of Value/Affirmation of Value

answer

Contains consideration (how much paid/what exchanged; helps assessor determine property value for taxes) 1. Signed by buyer and seller 2. Records with deed - when docket # and page # are assigned 3. Who pays? Seller 4. Who records? County Recorder's Office 5. How much does it cost? $2

question

Title

answer

An accumulation of facts which, if proven, would enable a person to recover or retain possession of a piece of real property.

question

Title (cont'd)

answer

A composite of: 1. Constructive notice - recorded documents 2. Actual notice - handed to someone 3. Quality of claim - strength of title: a. Abstract of title (no deed) and possession (weakest) b. Unrecorded deed and no possession c. Recorded deed and no possession d. Unrecorded deed and possession e. Recorded deed and possession (strongest)

question

Title (cont'd)

answer

4. Evidence of proof a. Abstract of title and opinion (AKA Certificate of Title) - attorney's opinion b. Torrens' certificate - used when no title insurance (not in Arizona) c. Title Insurance - most common in Arizona

question

Title Insurance - Owner's Policy

answer

Standard policy 1. For the benefit of buyer (vendee) 2. Paid for by seller (vendor) 3. Paid once - at the beginning 4. Issued in the amount of the purchase price 5. Valid as long as the buyer or heirs own the property 6. Void when owner sells the property

question

Title Insurance - Owner's Policy (cont'd)

answer

7. Does not insure against a. Items in the public record b. Rights of parties in possession c. Unrecorded documents, i.e., mechanic's liens, adverse possession, prescriptive easement d. Gaps in chain of title

question

Title Insurance - Owner's Policy (cont'd)

answer

8. Insures against a. Errors by title insurance company b. Incorrectly given marital status c. Hidden (undiscovered) defects - forgery

question

Title Insurance - Lender's Policy

answer

AKA: 1. ALTA (American Land Title Association) 2. Extended coverage 3. Broad form coverage

question

Title Insurance - Lender's Policy (cont'd)

answer

1. Insures the lender has an enforceable lien against the property 2. For the benefit of the lender (mortgagee or beneficiary) 3. Paid for by the borrower (mortgagee or trustor) 4. Paid once - at the beginning 5. Issued in the amount of the original loan

question

Title Insurance - Lender's Policy (cont'd)

answer

6. Valid if property is collateral - remains valid if property is sold and loan is assumed 7. Void when load is paid off 8. Does not insure against a. Items in the public records b. Gaps in the chain of title 9. Insures against a. Rights of parties in possession b. Unrecorded documents c. Questions of survey

question

Title Insurance - Special Terms

answer

1. Subrogation - waiving rights in exchange for something of value 2. Title examiner - examines ownership history of property 3. Title plant - collection of construction notice info/recorded docs

question

Title Insurance - Special Terms

answer

4. Schedule A - describes property & parties for a life estate a. Name of insured b. Legal description c. Defines the estate covered 5. Schedule B - everything bad about the property a. Standard exceptions - gaps in chain of title b. Special exceptions - things not covered on the property

question

Involuntary Alienation

answer

Natural causes 1. Alienation a. Erosion - gradual wearing away of soil b. Avulsion - violent and sudden loss of land (e.g., mudslide) 2. Acquisition a. Accretion - acquiring soil through a river or stream b. Alluvial deposits - soil acquired by accretion c. Reliction - non-navigable stream, when water recedes the additional land belongs to the owner

question

Involuntary Alienation (cont'd)

answer

Operation of Law 1. Property tax foreclosure sale - Treasurer's Deed 2. Bankruptcy sale - Trustee's Deed 3. Mortgage foreclosure - Sheriff's Deed 4. Trustee's sale - Trustee's Deed 5. Judgement execution - Sheriff's Deed 6. Escheat - intestate and w/out heirs, property reverts back to state after 5 yrs

question

Involuntary Alienation - EMINENT DOMAIN

answer

Condemnation - court action where gov't gives you just and fair compensation for public use

question

Involuntary Alienation - ADVERSE POSSESSION

answer

Acquire title and ownership without permission of owner, EXCEPT for government property 1. Prescription Suit a. Open b. Hostile (w/out permission) c. Notorious (overt) d. By claim of right in court e. Continuous or tacking - either you or those following - can tack them together 2. Most common use: fence/property lines 3. Title (ownership) vs. Right (prescriptive)

question

Involuntary Alienation - DESCENT

answer

1. Intestate Succession a. Administrator (personal representative) b. Staute of descent and distribution set by state law c. Probate court 2. Title transfers at death (probate)

question

Involuntary Alienation - WILL

answer

1. Testate Succession 2. Title transfer at death - subj. to probate a. Real property - called a DEVISE - given in a will b. Personal property - BEQUEST or LEGACY 3. Types of wills a. Formal/conventional - requires 2 signatures, not heirs b. Holographic - hand written, requires no witnesses c. Nuncapative - oral - not valid in AZ 4. Codicil - amendment/change to will

question

Marketable Title

answer

Title a court would compel a purchaser to accept

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