STUDY GUIDE FOR THE NY REAL ESTATE EXAM – Flashcards

According to IRS code section 3508[A, B], real estate agents are statutory non-employees and are therefore independent contractors. The code also states that there must be a written contract between the broker and the sales associate, also reviewed every 12-15 months · All records must be kept for 3 years · If sales associate not deemed independent then they will not be able to file "SCHEDULE C' of the federal return · The Independent Contractor Relationship Ø Salespersons are free to engage in outside employment Ø Either party may terminate the relationship at any time

The New York Department of State, Division of licensing Services is the regulatory agency that oversees and administers the licensure process. Most of the law pertaining to salespersons and brokers is contained in Article 12-A of the real property law.

is any person, partnership, association or corporation who, for another, and for compensation of any kind, negotiates any form of real estate transaction. Real estate brokers supervise and are responsible for the activities of associate brokers and salespersons in their employ.

cannot operate independently. Although licensed, they must work under a licensed Real Estate Broker

* Selling or purchasing real estate at an auction *Negotiating the sale of a business for which the values of the real estate transferred is not merely incidental to the transaction (RE value is worth more than the business * Salespersons must be 18 years of age. * Brokers must be 20 years old with 2 years experience * Points for Broker License work as salesperson & 3500 points or 3 years and 5250 points. *Licenses are renewed every two{2} years

Building superintendents or maintenance workers who perform tasks such as rent collecting for one owner, company or entity.

Ø Each officer of a corporation or member of a co-partnership must be licensed as a broker. Ø Salespersons licenses are not issued to officers of corporations or members of co-partnerships. Ø Salespersons and associate brokers may not be principals in the brokerage firm and may not own voting stock in the licensed brokerage corporation.

Ø Pocket Cards must be carried at all times and shown on demand. · Fees, Office Requirements, and Terms of Licensure Ø Brokers must pay $150.00 and Salespersons $50.00 for each term. Ø Additional licenses for each branch office cost $150.00.

is an individual who, for a fee, arranges and coordinates meetings between the current owners of real property, including apartment housing who wish to share their housing with others.

is an individual or entity licensed by the New York Banking Department to engage in the business of making residential mortgage loans. Licensed and lends.

Ø Salespersons may not accept compensation except from their sponsoring brokers Ø If brokers improperly pay any part of compensation to anyone who is not licensed or who is not exempt from the license law, they are in violation of the license law, this payment is called a kickback.

An unlicensed person, co-partnership or corporation cannot bring about a lawsuit to collect compensation for real estate services rendered because- only a licensed real estate broker or salesperson is entitled to a judgment by the courts.

Ø Failing to provide adequate disclosure regarding any or all of the following: a) if licensees purchase property listed by their firm, they must make their position clear to the seller, b) the licensee must make clear their position regarding the party for whom they are acting in a residential real estate transaction-seller, buyer or both. Ø Receiving compensation from more than one party in a real estate transaction without the knowledge and consent of all parties. Ø Being a party to an exclusive listing contract that contains an automatic continuation of the listing beyond the specified termination date. Listing contracts are renewed by the signing of a written renewal agreement. Ø Drawing up legal documents such as deeds or mortgages, giving an opinion as to the legal validity of any document, performing a title examination. A licensee may not perform any service that is performed by an attorney. Ø Brokers are prohibited from commingling or mixing the funds of others with their business or personal funds and are required to maintain adequate records regarding the deposit and disbursement of funds from their accounts. Ø Entering into a net listing contract. A net listing contract occurs when a seller authorizes a broker to procure a specified amount for the property and -then allows the broker to keep as a commission any money above the specified amount from the sale. · Discrimination because of race, creed, color, national origin, age, sex, disability, familial or marital status in the sale rental or advertisement of housing or commercial space covered by law · All ads placed by a broker must indicate that the advertiser is a broker. Ads that do not contain this are called BLIND ADS. · DOS Hearings and Appeals Ø Article 78 proceeding is the method for appeals against regulatory agencies such as DOS. Ø DOS may impose a fine not to exceed $1000. · The revocation or suspension of a broker's license suspends the license of the salespersons and associate brokers affiliated with the broker. · If license is revoked, must wait ONE YEAR for relicensure

When one person is hired to act on behalf of another person, an agency relationship is created. The person hired on the other person's behalf is the agent. · An agency relationship is consensual. · The person who selects the agent to act on his behalf is the principal or client. · The Customer of an agent is the party whom the agent brings to the principal as a seller or buyer of the property. · A General agent represents the principal in a specific range of matters. · E.G. A Property Manager · A special agent is someone who has narrow authorization to act on behalf of the principal. · EG: Real estate broker who has listing. · The term fiduciary means a position of trust.

Agent's Fiduciary Responsibilities to Principals * Obedience- the agent must act with obedience and obey reasonable and legal instructions from the principal. *Loyalty-An agent must demonstrate loyalty to the principal and must work diligently to serve the best interests of the principal under the terms of the employment contract *Confidentiality-information should not be given to prospective purchasers without the seller's permission. *care-using your best efforts and skills on behalf of their clients' respective interests. *accounting-the duty of accounting for all funds that are given to you *disclosure-to reveal any facts you are aware of that benefit your client.

The basis for imposing liability in case of misrepresentation consists of: Ø a false representation of a material fact Ø the fact that the person making the false representation knew or should have known it to be false Ø the fact that the misrepresentation was made with an intent to induce the party to act or refrain from acting in reliance upon the misrepresentation Ø the fact that the party relied upon the misrepresentation in acting or failing to act Ø the fact that there was damage to the party who relied upon the misrepresentation in acting or not acting

· Brokerage refers to the business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate. · Vicarious Liability means that one person is responsible for the actions of the other. · With strict disclosure regulations in New York, real estate agents must clearly define to buyers and sellers whom they represent in that real estate transaction.

Ø The fee or rate of commission paid to a real estate broker is strictly negotiable between the broker and the seller or buyer. Ø It is also illegal for two or more brokers to agree to charge certain commission rates to listing sellers. This is called price fixing and is an act in restraint of trade that violates the Sherman Antitrust Act.

Real estate firms generally establish their own individual office policy regarding the level of commission charged.

This type of commission arrangement is illegal in New York.

an agency relationship created by an oral or written agreement between the principal and agent.

exists when a principal does not stop an individual from representing his interests, thus creating an agency relationship between the two.

cannot be a subagent of the seller broker.

*In the case of the subagent, the principal accepts vicarious liability for the acts of the agents and subagents. * In the case of the broker's agent, the broker accepts vicarious liability for the acts of the agents working for his principal through him.

when a real estate firm or agent attempts to represent both the buyer and seller in the same transaction.

can occur if agents of the broker represent both the buyer and seller in the same transaction, as stated above, or if the broker offers services to a buyer, such as finding or negotiating a mortgage for the buyer, when the broker already represents the seller.

occurs if the buyer believes by the agent's actions and/or representations that the buyer is being represented by that broker. Illegal. Consensual Dual Agency · The law of agency in New York permits consensual dual agency with disclosure and informed consent of all parties to the transaction. Informed consent includes timely and complete disclosure of the nature and consequences of the dual agency.

When the listing takes place, the licensee should give a full explanation of dual agency although neither party should sign an acceptance of dual agency at this time. · A buyer's broker may perform a market analysis and advise the buyer on an offer.

The form must be explained by the agent, and read, acknowledged, and signed by the principal prior to signing the listing agreement.

Under the exclusive right to sell agreement, the property is listed with only one broker as the agent. If anyone else sells the property during the term of the listing, the broker is legally entitled to the commission. 1 broker-commission no matter who sells

In an exclusive agency listing, the property is listed with only one broker as the agent, if the broker affects the sale of the property or the listing is on MLS and any other broker sells it the broker is legally entitled to the commission agreed upon, but if the owner sells the property, the broker earns no commission. Ø 1 broker, commission only if broker sells New York prohibits automatic extensions of listings.

that licensees present a written agency disclosure form that details consumer choices about representation at the first substantive contact with a prospective seller or buyer. *The law does not cover vacant land.

shall make it clear for which party he is acting and he shall not receive compensation from more than one party - *except with the full knowledge and consent of all parties."

Ø At the first substantive contact and the buyer must sign and acknowledge the form. Ø The agent must provide a copy of the disclosure form to the buyer or seller and maintain a copy for a minimum of 3 years.

Ø Walk-ins-a prospective buyer or seller may walk into a real estate office and want to discuss listing or purchasing a property, at this point, disclosure must be made.

The agent should make notes in an appointment book of the names of the prospective buyers, the time, the date and the reason for refusal. At this point, the property may be shown.

Any business activity in which there is a monopoly, *a contract, a conspiracy or a combination that negatively impacts an individual or company's ability to do business. This is called restraint of trade. · The Federal Trade Commission-The FTC has the authority to enforce compliance with the Sherman Act and certain sections of the Clayton Act. · The antitrust division of the Department of Justice enforces the Sherman and Clayton Antitrust Acts. · Price Fixing-occurs when competitors in a group conspire to charge a same or similar price for services rendered.

· An encumbrance is anything that lessens the bundle of rights in real property. · At execution and foreclosure of liens, priority is based upon the time [day and hour] were recorded in office of county clerk. · In New York, liens for real property taxes and special assessments receive the highest priority of all liens!!!!!. · Taxes levied by a local government constitute a specific lien against the real estate. · Mechanic's lien is a specific lien filed by a person who provides labor to a property. · Materialmen's lien is a specific lien filed by a supplier of products required in the construction. · New York law requires that a mechanic and materialmen's lien for residential property be filed with the county clerk where the property is situated within 4 months from the date when the labor or materials were furnished. The time and date of filing determines the priority of the lien. In New York, mechanic's liens must be renewed annually. · Lis pendens means pending litigation. This filing is a legal notice that a lawsuit has been filed concerning the specific property. · If one has a possessory interest in property, that individual cannot own an easement. The common terminology for easement is right-of-way.[legal trespass] · Easements in gross are also called commercial easements in gross. The category is usually owned by the government, an agency of the government, or a public utility. · Easement appurtenant category includes all easements that are no in gross. The land that benefits from easement appurtenant is called the dominant tenement. The land that must suffer and allows the use is called the servient tenement. · A license is defined as permission to do a particular act or series of acts on another's land without possessing any estate or interest in the land. A license is not assignable, not inheritable, and is a temporary privilege. · PROFIT legal term the right to take products of the soil from someone else's land.

· Transfer of title to real property in law is called alienation. · A deed is the document used to convey title legality to real property, also known as a conveyance. · The deed must contain an adequate formal legal description of the property. · Habendum Clause "to have and to hold" · A full covenant and warranty deed is the strongest and broadest form of title guarantee. · The quitclaim deed contains no warranties whatsoever; it is simply a deed of release. · Execution of a judicial deed results from a court order; examples are guardian's deed, referee's deed, tax deed, and administrator or executor's deed. · Metes are the distances from point to point; · Bounds are the directions from one point to another. · Intestate Descent Ø When a person dies and leaves no valid will, the laws of intestacy determine the order in which the property is distributed to the heirs.

· Title is the evidence of the right to possess property. · Deed is the instrument used to convey title. · The final survey document is a type of blueprint showing measurements, boundaries and area of property. · Chain of title involves tracing the successive conveyances of title, starting with the current deed and going back an appropriate time. · An abstract of title is a condensed history of the title, setting forth a summary of all the links in the chain. · Real Estate Settlement Procedures Act (RESPA) Ø It regulates lending activities of lending institutions in making mortgage loans for housing. · Regulation Z, which covers all residential mortgages, addresses all advertisement of credit terms. · Co-op and Condo Fees Ø Cooperatives may have a flip tax imposed upon transfer, paid by the seller. · A closing usually involves proration, the division of expenses and income between buyer and seller.

an agreement between competent legal parties to do or refrain from doing some legal act in exchange for consideration.

Express Contract-the parties to the contract have definitely agreed on all the terms in the contract Ø Bilateral Contract-two parties have made promises of some kind to each other. The offer to purchase a home is bilateral because it is based on the exchange of promises in which the seller will sell and the buyer will buy. Ø Executory Contract-a contract that is not fully performed or completed

Contracts entered into by parties lacking legal capacity are voidable by the party lacking capacity. Individuals giving a person power of authority allow that person to act for them in legal transactions such as real estate contracts.

which in New York is codified in the General Obligations Law, state that contracts involving the creation or conveyance of an interest in real property must be written to be enforceable. · Oral testimony is not sufficient to create a contract involving the transfer of title to real property. · A form of agreement that terminates contracts is novation-the substitution of a new contract for a prior contract or the substitution of a new party for an old party. · Assignment is when a new party to the contract agrees to satisfy the former party's obligation. · Statute of Limitations Ø If a party to a contract fails to bring a lawsuit against a defaulting party within a time period set by statute, the injured party loses the right of remedy. In New York, the time limit by statute to bring legal action against a party in a real estate transaction is 6 years. · Specific performance means that the contract will be completed as originally agreed. · Liquidated damages are an amount of money to be paid upon certain breaches of the contract. · The time is of the essence rule means that the closing must take place on or before the exact date stipulated in the contract. · Installment Sales Contract The buyer contracts to obtain legal title to the property by paying the purchase price in installments, and the seller agrees to transfer the legal title to the buyer by delivering a deed upon the buyer's full payment of the purchase price. · Lease With Option To Buy An option is an express unilateral contract.

a contract, in which, for a consideration, an owner of property transfers a property interest to the tenant for a prescribed period of time. · The owner of the property is called the lessor, the tenant is the lessee. · Security deposit: The security deposit must be held in an escrow account. · Dwellings with 6 or more units, security deposit must be place in an interest-bearing account. Interest belongs to the tenant. · The assignment of the lease involves the transfer of the lease contract from the present tenant to the assignee. · In a sublease, the original tenant is still responsible to the owner for the lease payments under the lease contract. · Actual eviction is the removal of the tenant from the premises without the aid or control of the court system. · Lease agreement does not terminate when an owner sells, new owner is bound by terms of lease · A gross lease provides for the owner to pay all expenses, such as real property taxes, owner's insurance, liability insurance, and maintenance. · In a net lease, the tenant pays some or all of the expenses. · A percentage lease has a base rent plus an additional rent that is a percentage of the lessee's gross sales. Commercial · A graduated lease is one in which the rent changes from period to period over the term {escalates}

The Civil Rights Act of 1866-first significant statute affecting equal housing · Has no exemptions · 1968 case Jones v. Alfred H. Mayer Company-prohibited racial discrimination · Brown v. Board of Education-landmark decision-separate facilities were unequal Federal Fair Housing Act of 1968-prohibits discrimination in housing on the basis of race, color, religion or national origin · 1988-provision added to prevent discrimination based on mental or physical handicap or familial status · Owners must allow tenants with disabilities to make reasonable modifications to apartment AT THE TENANTS EXPENSE

is SENIOR HOUSING!!!

Blockbusting-illegal [scare tactic] · Steering-direct prospective purchasers from diverse backgrounds to presently integrated areas to avoid integration of nonintegrated areas. · Redlining-refusing to make loans to purchase, construct or repair a dwelling by discriminating · The Sexual Orientation Non-Discrimination Act (SONDA) (2002) added sexual orientation as a protected class under the Human Rights Law. · In housing discrimination only, punitive damages not exceeding $10,000 may be awarded to the complainant. · LAWFUL OCCUPATION is protected class only in NEW YORK CITY!!!! · Testers, either volunteers, employees of federal programs, or civil rights groups visit real estate offices posing as prospective homebuyers to see if race influences the information

Another name for "PERSONAL PROPERTY" is "CHATTEL" · Riparian rights belong to the owner of property bordering a flowing body of water (R-river) · Littoral rights apply to property bordering a stationary body of water (L-lake) · The real estate term for improvements both on and to the land is FIXTURE. · Trade fixtures-items of personal property that a business owner installs in rented building space. · Fee Simple Absolute-provides the most complete form of ownership and bundle of rights in real property. · The life estate is ownership, possession and control for someone lifetime. · With a life estate, two outcomes are possible upon death, Ø an estate in remainder, Ø An estate in reversion. Remainder interest is a fee simple present interest. · An estate at sufferance describes a tenant who is originally in lawful possession of another's property but refuses to leave after his right to possession terminates. · A tenant who does not leave upon expiration of the lease is termed a holdover tenant. · When title to real property is held in the name of only one person or entity, it is called ownership in severalty. · Right of survivorship means that if one or more of the co-owners die, the surviving co-owners automatically receive the interest of the deceased co-owner. · A special characteristic of joint tenancy is the right of survivorship. · Join Tenancy must have 4 unities= time, title ,interest, possession. · By acquiring as a joint tenancy, each joint tenant gives up the right of inheritance. · Ownership as tenants by the entirety is limited to husband and wife. · A corporation is an artificial being-invisible, intangible, and existing only pursuant to law. · Syndicates denote multiple joint participation in a real estate investment. · A joint venture is an organization formed by 2 or more parties for the purpose of investing in real estate or any other type of investment. · The greatest form of ownership in real property is fee simple absolute.

Individual owners have the right to place private controls on their own real estate. · Deed restrictions are in the form of covenants or conditions. These restrictions run with the land. · The environmental impact statement (EIS) is the process that describes and analyzes a proposed action that may significantly affect the environment. The EIS is available to the public for review and comment. · Eminent domain is the power of the government or its agencies to acquire private property for public use. · A "taking" occurs when private property is regulated by a government authority to the economic detriment of the owner, without compensation. · POWER OF ESCHEAT: if an owner dies intestate no valid will decedents property is distributed to heirs. If there are no heirs or creditors the state uses the power of ESCHEAT the property goes to the state · The Zoning Board of Appeals It is a local administrative appeal agency and an interpreter of the zoning ordinance. If the request is denied by the zoning board of appeals, the property owner may petition the New York Supreme Court through an · Article 78 proceeding- an appeal brought forth because of a ruling by a government agency. · Certificate of Occupancy document issued by gov't agency after satisfactory inspection of structure · A variance is a permitted deviation from specific requirements of the zoning ordinance. · Zoning Classifications [eg: residential, commercial, etc.] · Spot zoning-spot zoning is illegal in New York

A mortgage is a loan that constitutes a lien against the real property. The mortgage is a two-party instrument between the lender and borrower. · The borrower who gives the mortgage is called the mortgagor. · The lender who receives the mortgage is called the mortgagee. · Acceleration clause - enables the lender to declare the entire balance remaining immediately due and payable if the borrower is in default. · Alienation clause-entitles the lender to declare the principal balance immediately due and payable if the borrower sells the property during the mortgage term and makes the mortgage unassumable. · In making a mortgage, the lender requires the borrower to sign promissory note-providing evidence that a valid debt exists. · Equity of Redemption After default, and up to the time a foreclosure sale is held, the borrower has an equitable right to redeem his property by paying the principal amount of the debt, accrued interest, and lender costs incurred in initiating the foreclosure. · A JUNIOR MORTGAGE REFERS TO ANY MORTGAGE THAT IS SUBORDINATE TO ANOTHER MORTGAGE. Negative amortization-when a loan payment amount is not sufficient to cover interest due, the shortfall added back into the principal, causing the principal to grow larger after payment is made. · Graduated payment mortgage-the monthly payments are lower in the early years of the mortgage term and increase at specified intervals until the payment amount is sufficient to amortize the loan over the remaining term. · Blanket mortgage-two or more parcels of real estate are pledged as security for payment of the mortgage debt. The blanket mortgage usually contains a release clause that allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced by a specified amount. · Purchase Money Mortgage-another type of seller financing, is a mortgage given by a buyer to a seller to cover part of the purchase price. Here the seller becomes the mortgagee and the buyer becomes the mortgagor. · Conventional loans Ø In the uninsured conventional loan, the borrower's equity in the property, the difference between the value of the property and its liabilities, provides sufficient security for the lender to make the loan. Therefore, insurance to protect the lender in case of the borrower's default is not necessary. · The Federal Housing Administration (FHA) does not make mortgage loans, instead, FHA-insured loans protect lenders against financial loss. · VA Guaranteed Loan Program -offers a loan that guarantees repayment of the top portion of the loan to the lender in the event the borrower defaults. · Secondary Mortgage Market-buys and sells mortgages created in the primary mortgage market. · Truth-in-Lending Act (TILA) - Requires 4 chief disclosures: annual percentage rate, finance charge, amount financed, and total amount of money to be paid toward the mortgage in both principal and interest payments. · Regulation Z does not regulate interest rates, but instead provides specific consumer protections in mortgage loans for residential real estate, and advertises credit terms available. The only specific thing that may be stated is the annual percentage rate, and it must be spelled out in full. · USURY LAWS are used by New York State to fix a maximum allowable interest rate. · BUY DOWN is an choice given to the borrower to volunteer to pay discount points · Construction loan

An appraisal is an unbiased estimate of the nature, quality, value or utility based on factual data, of an interest in or aspect of identified real estate and related personality as of a certain date. (ESTIMATE OR OPINION OF VALUE) · Valuation is the process of estimating the market value of an identified interest in a specific property as of a given date. · Insured value is the cost of replacing or reproducing the structure in the event of a total loss because of an insured hazard. · Value in use is the value of the property based on its usefulness to an owner or investor. · Mortgage value is whatever the lender believes the property will bring at a foreclosure sale or subsequent resale. · Plottage value of land is the increase in value and utility when small plots of land are combined to form a larger plot. · Market value-the most probable price, as of a specific date, in cash or in other terms, for which the property should be sold after reasonable exposure in a competitive market, under conditions requisite to a fair sale, with the buyer and seller acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress. · Price is the amount a particular purchaser agrees to pay and a seller agrees to accept under the circumstances surrounding the transaction. · Direct costs include the cost of labor and materials [called HARD COST] · Indirect costs are costs that create and support the project. Surveyors, attorneys,

The building plan, also known as the blueprint, is a detailed architectural rendering of the structure that usually includes the plans for the mechanical systems. · The New York State Department of Health (NYSDOH) has regulations for sanitary and safe water that act as the guideline for well water. · Percolation is movement of water through soil. · The footing is the concrete base below the frost line that supports the foundation of the structure. · Of the 3 types of foundations built in New York, full basements are the most common (more than 80%), followed by slab-on-grade and crawl space. · Slab-on-grade construction-concrete slab is poured directly on the ground and therefore eliminates the crawl space or basement. · Floating slab-pouring the footing first and then pouring the slab. · Framing refers to the wooden skeleton of the house. · Studs-used vertically for the wall. · Joists-for floor and ceiling. · Rafters-roof framing system · The sill plate is the first wooden member of the house and is used as the nailing surface for the floor system. · The girder is the main carrying beam, either a steel beam or several wooden members fastened together. · The bearing walls support the ceiling and/or the roof and include the outside wall frame. · Platform framing is the most common type of framing used in residential construction. · The pitch is the slope of the roof. · Eaves are the overhangs, which are part of the sloped roof. · Flashing is a metallic material that is used in certain areas of the roof and walls to prevent water seepage into the structure. · Sheathing is a plywood covering placed over the exterior framing members. · R-factor means the degree of resistance to heat transfer of the walls, the larger the R-factor, the greater the degree of insulation HEATING: Ø HOT WATER SYSTEM Ø FORCED WARM AIR SYSTEM. When hot air is blown through the same ducts as air conditioning. · "BTU" is BRITISH THERMAL UNIT · A fuse is a device that will melt and open the circuit, causing electrical power to stop when overheating occurs. · Circuit breakers will trip, or switch the electrical power for a given circuit off if the current increases beyond the capacity of the system.

The Federal Safe Drinking Water Act of 1974 is the guideline for New York's drinking water regulations. New York State Department of Health (NYSDOH) is the regulatory agent that oversees the safety of drinking water. · One of the biggest concerns about the safety of water is that highly corrosive water may contain dangerous amounts of lead. · The installation and approval of individual residential on-site wastewater treatment systems of less than 1,000 gallons per day in NY are regulated by NYSDOH. · 1,000 gallons or more overseen by NYSDEC · Only an individual licensed by NYSDEC may apply pesticides. · NYSDEC oversees wetlands, and must be larger than 12.4 acres to be protected. · Asbestos is a fibrous material found in rocks and soil is a carcinogen · Friable refers to the crumbly or flaky texture of asbestos when hand pressure is applied. · Asbestos has been identified as a carcinogen, and is dangerous when inhaled. · Lead is a metallic element found worldwide in rocks and soils. It can be present in drinking water, interior and exterior paint and in soil. · The Residential Lead Based Paint Hazard Reduction Act of 1992 sets forth procedures disclosing the presence of lead based pint for sales of properties built prior to 1978. Penalties for noncompliance up to $10,000. · Many homes built prior to 1988 contain plumbing systems that use lead-based solder in pipe connections. · Radon is a colorless, odorless, tasteless, radioactive gas found worldwide as a by-product of the natural decay of uranium present in the earth. Radon from surrounding soil enters a home through small spaces such as cracks in basements · Under the State Environmental Quality Review Act (SEQRA) the state environmental quality review is a process that requires government to assess the environmental significance of actions for which they have discretion to review, approve, fund, or undertake. · The environmental impact statement is a report that describes and analyzes a proposed action that may have a significant effect on the environment. The Superfund Amendments and Reauthorization Act (SARA) (1986) an amendment to "CERCLA" expanded the definition of persons liable for cleanup costs. · Underground storage tanks are utilized by business and industry because the tanks are out of sight and are also protected against vandalism and fire. · Chlorofluorocarbons (CFCs) known as "freon"are manmade chemical substances that were used in refrigerators, air conditioners, Styrofoam, aerosol, and cleaning agents. · Hydro chlorofluorocarbons (HCFCs) are used in home air conditioners and are nontoxic. · Federal law mandates that in the sale or lease of pre-1978 residential properties, sellers or their agents must distribute a lead hazard pamphlet and disclose any known information concerning lead paint. The parties must agree to a 10-day period for a lead paint assessment.

Everything is done at the local level Real property tax based on assessed value Zoning board of appeals hears request for variance and special permits Tax assessor determines the assessed value does not determine tax

Liability insurance covers for financial losses Two most common policies dwelling and homeowners Dwelling policy covers loss to property as well indirect Flood insurance is purchased from "national flood insurance program" Deductible helps control cost of insurance Umbrella policy provide high limits of liability Mortgage clause covers the lender

New york property tax are based on the value Property tax liens have highest priority Non-assessable improvements e.g. landscaping, storm windows Exemptions: schools, federal gov't, hospitals religious groups Special assessments district [tax] areas designated for infrastructure cost for specific projects e.g. sidewalks, curbs.

Second homes have deductions, property tax and mortgage interest if not rented for more than 14 days Gains & losses: short term holding less than a year Exclusion couple filing joint returns $500,000 Types of income: active: job portfolio: stocks passive: rent Progressive tax is federal income tax Depreciation classes residential 27.5 years non-residential 39 years

Sponsor is developer Offering plan provided by sponsor offers detailed info on condo or co-op Cps1 is policy statement signed by attorney to test the market Share loan co-op loan buyer is purchasing shares in a corp. House rules address common area noise pets etc. Alteration agreement before any renovations are done. Board package all info on buyers Interview board sees all even children

No special license needed!!!!!!!! Must be 18years old Commissions: graduated percentage, fixed percentage, fixed fee, or retainer Cash flow measure of cash inflow and outflow from investment Market value is what a ready, willing and able buyer will pay. Remember market price is what they pay. This may be in other chapters Amenity purchaser values property on ability for his specific needs Liquidity: ability to convert asset into cash quickly without loss Leverage: use of borrowed funds to finance portion of purchase price. Financial risk: results when debt is used to finance an investment Legislative risk: risk that changes in law will affect e.g.: tax laws, land use, zoning. Negative leverage occurs when borrowed funds are invested at rate of return "lower" than cost of funds to the borrower. Four classes of office buildings generally are: a, b, c, d. Community shopping center main subject has area from 100,000 to 300,000 Ground leases also land leases tenants lease only "land" no improvements e.g. no buildings or structures Net operating income: income from property that remains after annual operating costs are paid. Operating statement used by current owner shows total revenues for a given period "cash flow components" "depreciation" incentive for investors to buy real estate instead of stocks for tax shelters. Depreciation is used in many chapters "be careful" Loss factor or "load factor" difference between rentable square footage and usable footage.

Property manager is a "general agent" Management agreement written agreement governs the relationship between owner and manager. Management proposal plan to oversee the property Operating budget created to project income over "one-year period" Stabilized budget is created for "five-year period" Anchor tenant major chain or department store in shopping center to give exposure to smaller stores.