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Law of Contracts
Texas Real Estate License Exam Section 4 of 6: Law of Contracts
| Question | Answer |
|---|---|
| an abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances | |
| Addendum | an additional form attached to a real estate contract |
| Air rights | ownership rights to the air above a prop- erty, extending from the surface of the land up into space |
| Amendment | a document that changes the terms in a sales contract that has been previously agreed to by all the parties; requires all parties to sign the amendment for it to be valid |
| Closing | the final step in the homebuying process, when the title to the property is transferred from the seller to the buyer and consideration is paid to the seller |
| a special form of joint ten- ancy that exists between a married couple, with each owning a one-half interest; any house or real estate purchased during a marriage is considered commu- nity property | |
| the legal written document that conveys the intangible ownership rights (title) of a real estate property to another party | |
| a security instrument which places the deed to the property in a trust held by the lender until the mortgage is paid off, when the trustee will transfer the deed to borrower | |
| money the buyer offers to deposit towards the purchase price of the property in order to show their serious intentions to the seller | |
| any restriction, encroachment, claim, or lien on a property (such as a mortgage) that affects the value or use of the property | |
| a legal protection of consumers against unfair and discriminatory lending; located in Title VII of the Consumer Credit Protection Act | |
| contracts promoted by the Texas Real Estate Commission and required for use by all real estate sales agents when completing the trans- action for which the contract was created | |
| contracts that are allowed by the Texas Real Estate Commission but not required | |
| law derived from past judicial decisions of courts | |
| law formally created by legislatures | |
| the surface of the earth, extending down to the center of the earth and up into space | |
| any permanent man-made addition to land | |
| includes the land AND any permanent man-made improvements attached to it | |
| Real Property | includes land and any permanent man-made improvements attached to it, plus the bundle of legal rights of ownership |
| movable assets a.k.a. “chattel” and “personalty” | |
| Deed | |
| Bill of Sale | a certificate of transfer of personal property |
| Fixture | an object that was once personal property but is now firmly attached to the land in such a way that it is considered to be a part of the real estate |
| Trade Fixture | objects affixed to the leased proper- ty that are owned by and necessary for the tenant’s trade or business |
| Annexation | attaching (or affixing) personal property to real estate in a way that transforms the personal property into real property |
| Adaptation | |
| Intention | the owner’s intent for an item — was it designed to be a part of the real property |
| Severance | the act of separating real property from the land (hence, turning it into personal property) |
| Emblements | crops growing on a property which require annual care and are considered the personal property of the owner |
| Land | the earth’s surface, or the physical portion of real estate — land has unique characteristics that are different from any other type of investment |
| Situs | the economic significance of a property’s location |
| Fixity | |
| In Severalty | describes undivided ownership of an estate, with an interest that is exclusive from other owners |
| Co-Ownership | ownership of an estate by multiple individuals or entities |
| Joint Tenancy | co-ownership in which the parties have the right of survivorship — when one dies, the others receive that person’s portion of the estate |
| Community Property | property owned by a married couple in which each spouse has 1⁄2 owner- ship of any property obtained during the marriage, plus a right of survivorship ownership after the death of either spouse |
| Tenancy in Common | co-ownership for non-spouses, with rights of inheritance; assumed form of co-ownership if joint tenancy is not declared |
| Trustor | the transferor or creator of the trust |
| Beneficiary | |
| Trustee | the manager of the trust |
| Testamentary Trust | a type of trust that is effective upon the death of the trustor |
| Living Trust | type of trust created during someone’s life to manage their assets in life and in death |
| Sole Proprietorship | |
| Partnerships | a business entity legally formed for two or more individuals to share profits |
| Corporation | a company or group of people recognized as one entity under the law; owners purchase stocks in the corporation (shareholder) and the corporation is run by the board of directors (elected by the shareholders) |
| S Corp | a corporation (that can only be formed with less than 100 shareholders) that is similarly taxed like a partnership to avoid double taxation |
| General Partner | person who takes the lead on day-to-day relationships and assumes full liability for the business |
| Limited Partner | person who is only liable for the amount they have invested into the business venture |
| Joint Venture | a partnership formed by a group of investors for one venture — it dissolves after the venture is complete |
| Condominium | a single unit in a residential complex, which may or may not share common walls with neighbors, in which the owner owns the unit and a share of the common elements, but not the land |
| Cooperative | a residential building in which the title is held by a corporation and the residents are stockholders in the corporation and have a lease |
| Townhouses | detached or adjoining housing units in which common elements are shared and each owner owns their home and the land it sits on |
| Timeshare | residence with multiple owners who share the right to possession for a specific period of time with the other owners |
| Fair Housing Act | a federal law that prohibits discrimination in housing based upon race, color, reli- gion, or national origin and was amended to include sex, disability, and familial status |
| Promissory Estoppel | |
| Contract | a legally binding agreement that can be written or oral |
| Consideration | something of value exchanged by the parties as evidence of agreement to the terms of a contract |
| Agency | a relationship where one party is authorized to act on behalf of the other |
| Unilateral | having or involving one side; performed by one party without imposing obligation of performance on another party |
| Bilateral | having or involving two sides, often with some degree of reciprocal impact or obligation |
| Statute of Limitations | legal concept that establishes time limits from the date of event for bringing certain kinds of legal actions |
| The Doctrine of Laches | a legal principle used to bar dated claims; used in conjunction with an unreasonable delay or negligence in asserting or defending one’s rights |
| Allodial System | |
| Interest | |
| Estate | |
| Municipalities - cities or towns with local government, regulate land use through government powers | |
| Police Power | |
| Building codes - sets of regulations for building design, materials, safety, sanitation, and structure | |
| Freehold Estate | |
| Leasehold Estate | |
| Fee Simple Estate | |
| Defeasible Fee Estate | aka fee simple defeasible or qualified fee is a type of freehold estate in which el person who has possession of the property is only able to hold the property until event takes place or doesn't. (abbrev. definition) |
| Fee Simple Determinable Estate | |
| Fee Simple Subject to Condition Subsequent | |
| Life Estate | |
| Conventional Life Estate | |
| Pur Autre Vie | |
| Legal Life Estate | |
| Reversionary Interest | |
| Estate for Years | |
| Periodic Estate | |
| Remainderman interest | |
| Easement - the right to use another owner’s proper- ty for a specific purpose | |
| Deed Restriction - a provision in a deed that re- stricts the land use of a property | |
| Encumbrance - any claim or right against a property held by another that is not the fee title owner | |
| Lien | |
| Encroachment | |
| Riparian Rights - rights that govern the use of flowing water, such as rivers and streams that pass through or border a property | |
| Littoral Rights | |
| Severance | |
| Homestead | |
| Separate Property | |
| Contract | |
| Forbearance Agreements | |
| Performance Agreements - part of a contract that requires the contracting parties either to perform cer- tain actions or to uphold certain contractual promises | |
| Executed Contract - a pre-existing contract in which all terms have been fulfilled by all parties | |
| Executory Contract | |
| Breach of Contract - occurs when the terms or conditions of a contract have been violated | |
| Rescission - the act of terminating the contract with- out suffering any consequences | |
| Actual Damages - monetary compensation given to an injured party for losses that were a result of the actions or omissions of another party | |
| Liquidated Damages | |
| Exemplary Damages | |
| Exclusive Agency Listing | |
| Exclusive Right-to-Sell Listing - a listing agreement which gives the agent the sole right to sell the property and guarantees that the broker receives a commission if the property is sold, even if the seller brings the buyer themselves | |
| Reversionary Right - possession of property reverts back to the landlord after the lease term has expired | |
| Periodic Estate - a fixed lease period, the lease is automatically renewed at the end of each lease period until the landlord or tenant act to terminate it | |
| Estate at Will - when a tenant is occupying a property and the landlord wants the tenant occupying the property | |
| Tenancy at Sufferance - occurs when a tenant remains in possession of the property beyond their lease’s terms, without the consent of the landlord | |
| Security Deposit - any advance of money (other than a rental application deposit or an advance pay- ment of rent), given to secure a residential lease that has been agreed to by both a landlord and tenant | |
| Competence - the mental capacity of an individual to participate in legal proceedings or transactions | |
| Offer and Acceptance - the mutual agreement of all parties to a lease to consent to all terms contained within the contract and to perform according to those terms | |
| Lease Term - the initial rental period from commence- ment to expiration; the duration of the lease | |
| Gross Lease - a lease in which the tenant will be re- sponsible for the payment of a fixed monthly charge, while the landlord is responsible for paying all operat- ing expenses | |
| Net Lease - a lease where the tenant pays a base rent rate plus all or part of the operating expenses | |
| Percentage Lease - a commercial lease where the tenant pays a base rent amount and a percentage of their business profits to the landlord | |
| Variable Lease - a leasehold agreement in which the base rent changes | |
| Graduated Lease - a variable lease agreement in which the amount of rent increases periodically at regular intervals | |
| Index Lease - a lease agreement that also allows for a graduated increase of rent at periodic intervals | |
| Ground Lease - a leasing of bare, undeveloped land | |
| Sale and Leaseback Agreement - a way for land- owners to free up capital while maintaining the same overhead expenses by selling their interest in a prop- erty and leasing it back at the same monthly rate | |
| Discharge - the termination of a lease agreement | |
| Eviction - the process by which a tenant is expelled from a property | |
| Sublease - when a tenant transfers part of their right of possession in a leased property to another person for the period of the lease term | |
| Option Agreement - unilateral contract to give one party the right to do or not do something without making a commitment to do anything | |
| Contract for Deed - an agreement between the seller and buyer for the sale of real estate wherein the seller holds legal title to the property until it is paid in full | |
| Express Acceptance - when the parties explicitly state that they agree to the terms of the offer | |
| Implied Acceptance - when the parties bound by the contract act in a manner that just implies accep- tance of the offer; unenforceable in Texas | |
| Conditional Acceptance - acceptance based upon a specific condition or event happening | |
| Defect - an item that was installed or is attached to the home and has an imperfection | |
| Malfunction - when something is designed or built to perform a certain function and no longer does so | |
| Conveyance - the voluntary alienation and transfer of an interest and rights in real property, such as a home or commercial real estate | |
| Ownership Interest - an undisputed right of an owner to their property | |
| Partial Performance - occurs when one or more of the contracting parties perform only a portion of the agreed-upon contractual duties. | |
| Substantial Performance - occurs when a party performs the majority of the contract’s requirements but does not perform according to the contract’s stipulations | |
| Mutual Agreement - a means of cancelling a con- tract in which all parties agree to the cancellation | |
| Contingencies - stipulations or conditions that must be satisfied before the contract can be performed. | |
| Assignment - the transference of obligations in a contract from one party to another | |
| Novation - the act of substituting one contract for another | |
| Contingency - a provision within a contract that makes performance conditional upon the occurrence of a stated event | |
| Title Contingency - allows the buyer to verify that a home’s title is clear of any liens or other issues before completing the purchase of the home | |
| Financing Contingency - requires that the buyer get approved for a loan before being able to complete | |
| Inspection Contingency - gives the buyer the right to get the home inspected and negotiate further if there are repair issues | |
| Sale of Other Property Contingency - makes the transaction contingent on the buyer selling their current property first | |
| Addendum - a document that’s attached to a pur- chase agreement that includes additional informa- tion or requests items not included in the purchase agreement | |
| Amendment - a change in a legal document made by adding, altering, or omitting a certain part or term | |
| Time is of the Essence - a phrase used to commu- nicate when a party to a contract must perform their contractual duties by a specific date and time in order to avoid a material breach of contract | |
| Civil Rights Act of 1968 - Federal act prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, and national origin a.k.a. the Fair Housing Act | |
| The Americans with Disabilities Act - identified and defined protected disabilities; required all new build- ings with employees or public access to provide rea- sonable access for people with protected disabilities | |
| Housing for Older Persons Act - established that a planned living community could require a minimum age for new residents | |
| Dodd-Frank Wall Street Reform Act - created a new consumer watchdog to prevent mortgage companies and payday lenders from exploiting consumers | |
| Consumer Financial Protection Bureau (CFPB) - independent agency created under the Dodd-Frank Wall Street Reform Act to supervise financial com- panies, banks, and credit unions as well as enforce federal consumer financial laws | |
| Promissory Note - also known as just a note, it’s a document in which the borrower acknowledges their debt and promises to repay the holder of the promis- sory note | |
| Negotiable Instrument - a transferable, written promise by a party to pay a specific amount of money | |
| Deed of Trust - security instrument which places the deed to the property in a trust held by the trustee, who holds it as security on behalf of the beneficiary (lender) | |
| Acceleration Clause - clause in a security instrument (mortgage/deed of trust) which makes the entire loan amount due immediately upon default | |
| Power-of-Sale Clause - gives lenders the ability to post property for foreclosure if the debtor is behind on payments | |
| Lien Theory States - principle where mortgagors (borrower) retain legal and equitable rights to their property; mortgagee (lender) has a lien on the prop- erty until payment of loan | |
| Title Theory States - principle where the trustor (borrower) conveys the legal title to the lender (or an- other party) and the borrower retains equitable title and right of possession until payment of loan | |
| Seller Financing - a loan that is provided by the seller to the purchaser of the property | |
| Foreclosure - the legal process whereby a lender takes control of a property held by a borrower in default and sells it to recover the lender’s losses | |
| Judicial Foreclosure - a foreclosure that is processed through the court | |
| Non-Judicial Foreclosure - a foreclosure that does not involve a suit or ruling of the court — the two types are power-of-sale foreclosures and strict foreclosures | |
| Equitable Redemption - occurs before the fore- closure sale (auction) of the property and allows defaulting debtors to pay the defaulted portion of the debt and prevent foreclosure | |
| Statutory redemption - occurs after the foreclosure sale (auction) of the property and allows defaulting debtors to regain possession of the property | |
| Short Sale - a real estate transaction in which the property is sold for less than the existing mortgage balance | |
| Supply and Demand - the existing inventory of a commodity, product, or service available and the desire of consumers for it; factors that combine to influence price | |
| Community Reinvestment Act (CRA) - legislation that ensures depository institutions meet the credit needs of low- and moderate-income families | |
| Truth in Lending Act (TILA) - educates and protects consumers against inaccurate and unfair credit billing and credit card practices by requiring lenders to to standardize the way costs associated with borrowing are calculated and disclosed | |
| Real Estate Settlement Procedures Act (RESPA) - an act designed to protect consumers from predatory lending and educate them about closing and settle- ment services | |
| FICO Score - a credit scoring system used by most lenders to determine credit risk | |
| Title - the actual ownership of a real property that in- cludes the bundle of rights in which a party may own a legal or equitable interest; not an actual document | |
| Deed | |
| Stand-by Fees - fees charged by the water district to unimproved property in an area where the property has potable (drinking) water and sewers available | |
| Special Assessment - a charge that the government can assess against real estate parcels for specific public projects | |
| Utility Easement - an easement that allows a utility provider the right to use and access a specific area of another’s property for gas, electric, water, and/or sewer lines | |
| Alienation - the process and act of transferring property from one party to another | |
| Dedication - the voluntary gift of one’s land to the public | |
| Testate - a person who dies with a will | |
| Intestate - a person who dies without a will | |
| Eminent Domain - the power of government or public entity to take private property for public use without consent of the property’s owner | |
| Market Value - the price for which a property will sell if offered openly under normal conditions | |
| Inverse Condemnation - occurs when the government has over-regulated a property so that it can’t be fairly used via restrictions, permitting, etc., that virtually eliminate any use of the property | |
| Escheat - the legal doctrine by which the decedent’s property will pass to the state without their consent if that individual dies without a will, a surviving spouse, lineal descendants, or other known heirs | |
| Reversion - a future interest in land that is created when a grantor transfers a qualified interest to another party for a specific amount of time, under the condition that the interest will revert to the grantor when that period expires | |
| Accession - refers to the acquisition of new land or real property by artificial or natural means | |
| Conveyance - the voluntary alienation and transfer of an interest and rights in real property | |
| Life Estate - an interest in property measured by the duration of an individual’s life, usually the person receiving the property | |
| Foreclosure - when a court requires a property be sold to repay the debt, occurs when a borrower cannot repay a loan for which their property serves as security | |
| Eminent Domain - the power of government or public entity to take private property for public use without consent of the property’s owner | |
| Actual Notice - notice given to a specific party regarding the ownership of a property | |
| Constructive Notice - recording of the deed in publicly accessible records | |
| Mortgage Lien - a lien on the property that was purchased with money borrowed from a lender | |
| Judgment Lien - a lien that reflects a court decision concerning the rights and claims of parties in a suit | |
| Mechanic’s Lien - a lien that establishes a claim against a property to secure payment for labor or materials used to improve that property | |
| Easement - an interest in, or a right to use, another individual’s land or property, generally for a specific, limited purpose | |
| General Warranty Deed - the most frequently used deed format, provides the greatest protection of all the deeds | |
| Special Warranty Deed - a deed that only provides one covenant instead of five | |
| Quitclaim Deed - a deed used to correct a title defect usually discovered after the fact | |
| Termination Option - gives the buyer the right to terminate for any reason, within a limited time frame, if the buyer has purchased an option to terminate | |
| Default - failure to fulfill an obligation by duty, con- tract, or law | |
| Consumer Financial Protection Bureau (CFPB) - a regulatory agency created to oversee financial products and services offered to consumers | |
| Kickback - payment made to the facilitator of a transaction, usually covertly and/or illicitly | |
| Accessible - (as defined by the Standards of Prac- tices) That which can be approached, entered, or viewed without hazards, specialized equipment, or damaging property | |
| Deficiency - (as defined by the Standards of Prac- tices) A condition that, in the reasonable judgment of the inspector, adversely and materially affects the performance of a system, or component or consti- tutes a hazard to life, limb, or property | |
| Title | |
| Deed | |
| Power of Attorney | |
| Good Funds | |
| Proration | |
| Closing | |
| Funding | |
| Effective Date | |
| Option Period | |
| Legal Description | |
| Abstract of Title | |
| Deed | |
| Deed of Trust | |
| Encumbrance | |
| Equal Credit Opportunity Act | |
| Promulgated | |
| Common Law | |
| Statutory Law | |
| Land | |
| Improvement | |
| Real Estate | |
| Personal Property | |
| a legal document that is signed and delivered, especially one regarding the ownership of property or legal rights | |
| the use and modification of a particular item for a specific use in a property — specific use for a property could deem an item as real property | |
| the fact that real estate exists in a fixed location and cannot be moved | |
| the individual who receives the trust | |
| a business entity in which revenue, liability, and all responsibilities are owned by one person | |
| a legal doctrine that forces a party to keep a promise and prevents a party from backing out of an agreement | |
| system of ownership in which land is owned completely, without an obligation of services or duties to another | |
| the degree, quality, nature, and extent of one’s interest in property | |
| Municipalities | cities or towns with local government, regulate land use through government powers |
| the state’s inherent right to regulate an individual’s conduct or property to protect the health, safety, welfare, and morals of the community | |
| Building codes | sets of regulations for building design, materials, safety, sanitation, and structure |
| an estate in land in which ownership will last for an indeterminate duration | |
| a type of property interest allowing tenants to occupy and use a property they do not own; contains a reversionary right | |
| a defeasible fee estate that will come to an end automatically and immediately upon the occurrence of a designated event, the time of such occurrence being uncertain | |
| a defeasible fee estate in which a grantor conveys a parcel of real estate subject to a condition of owner- ship; the grantor must go to court to assert their right to retake ownership (right of re-entry) | |
| an interest in real estate that will end upon the death of the life tenant or the pur autre vie life | |
| a type of freehold life estate created by a deed or will that lasts for the duration of the tenant’s life | |
| a type of freehold life estate creat- ed by an act of law; a Texas homestead would be one example | |
| refers to an estate wherein, upon the death of the life estate owner, full ownership reverts to the original fee simple owner; also known as a revisionary right | |
| a leased possession of property for a certain, specific period of time; also known as a tenancy for years | |
| a party who has been named as the recipient of a life estate by a grantor — the remainderman gains fee simple estate after the life estate is conveyed | |
| Easement | the right to use another owner’s property for a specific purpose |
| Deed Restriction | a provision in a deed that restricts the land use of a property |
| Encumbrance | any claim or right against a property held by another that is not the fee title owner |
| a claim or charge against property, usually as security for a debt | |
| Riparian Rights | rights that govern the use of flowing water, such as rivers and streams that pass through or border a property |
| the division of the mineral estate and surface estate | |
| a personal residence that is protected from creditor seizure except for mortgage liens, tax liens, or mechanic’s liens | |
| property owned by either spouse prior to the marriage or by gift or inheritance during the marriage | |
| an agreement with two or more parties by which one party will receive consideration and the other will either perform an act or refrain from performing an act | |
| part of a contract that requires one or more of the contracting parties to re- frain from actions they are otherwise legally entitled to perform | |
| an official document that conveys interest in real property from one entity or party to another | |
| a legal document conferring the right for one individual to act on behalf of another | |
| funds a buyer is expected to bring to or have available for closing in a format acceptable to the title company | |
| the act of dividing or allocating expenses between buyers and sellers based on the actual period of usage of the item or service | |
| the completion or settlement of a real estate transaction | |
| disbursal of funds after closing that usual-ly precedes possession of a property | |
| the date the contract become binding between the parties | |
| describes the property in such an precise and distinct manner as to unmistakably identify it from all surrounding properties | |
| Community Property | |
| Earnest Money | |
| Approved | |
| a deed that only provides one covenant instead of five | |
| a deed used to correct a title defect usually discovered after the fact | |
| gives the buyer the right to terminate for any reason, within a limited time frame, if the buyer has purchased an option to terminate | |
| failure to fulfill an obligation by duty, con- tract, or law | |
| a regulatory agency created to oversee financial products and services offered to consumers | |
| payment made to the facilitator of a transaction, usually covertly and/or illicitly | |
| Deficiency | (as defined by the Standards of Practices) A condition that, in the reasonable judgment of the inspector, adversely and materially affects the performance of a system, or component or consti- tutes a hazard to life, limb, or property |
| a bundle of rights with regards to a piece of property in which a party may own a legal or equitable interest | |
| the window of time during which a buyer can opt out of a contract without penalty; a right that is purchased by the buyer | |
| a right or legal share in a property | |
| maximum ownership of real property; also called a fee or a fee simple absolute and is of indefinite duration, freely transferable, and freely inheritable | |
| a type of freehold life estate that grants someone ownership of a property for the duration of another person’s life | |
| has a fixed lease period, meaning that the lease is automatically renewed at the end of each lease period until the landlord or tenant acts to terminate it; also known as periodic tenancy | |
| a structure (or extension of) that extends onto another party’s property | |
| rights that govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property | |
| Executed Contract | a pre-existing contract in which all terms have been fulfilled by all parties |
| a contract that is not com- pletely executed or performed | |
| Rescission | the act of terminating the contract without suffering any consequences |
| Liquidated Damages | damages established by the contract in the event of default |
| fines used to punish the breaching party | |
| a listing agreement in which the owner retains the right to sell the property themselves without paying a commission, or the commission will be paid to the named broker if the broker or any other party sells the property | |
| part of a contract that requires the contracting parties either to perform cer- tain actions or to uphold certain contractual promises | |
| occurs when the terms or conditions of a contract have been violated | |
| monetary compensation given to an injured party for losses that were a result of the actions or omissions of another party | |
| a listing agreement which gives the agent the sole right to sell the property and guarantees that the broker receives a commission if the property is sold, even if the seller brings the buyer themselves | |
| possession of property reverts back to the landlord after the lease term has expired | |
| when a tenant is occupying a property and the landlord wants the tenant occupying the property | |
| Tenancy at Sufferance | occurs when a tenant remains in possession of the property beyond their lease’s terms, without the consent of the landlord |
| any advance of money (other than a rental application deposit or an advance pay- ment of rent), given to secure a residential lease that has been agreed to by both a landlord and tenant | |
| the mental capacity of an individual to participate in legal proceedings or transactions | |
| the mutual agreement of all parties to a lease to consent to all terms contained within the contract and to perform according to those terms | |
| the initial rental period from commencement to expiration; the duration of the lease | |
| a lease in which the tenant will be responsible for the payment of a fixed monthly charge, while the landlord is responsible for paying all operating expenses | |
| a lease where the tenant pays a base rent rate plus all or part of the operating expenses | |
| a commercial lease where the tenant pays a base rent amount and a percentage of their business profits to the landlord | |
| a leasehold agreement in which the base rent changes | |
| a variable lease agreement in which the amount of rent increases periodically at regular intervals | |
| a lease agreement that also allows for a graduated increase of rent at periodic intervals | |
| a leasing of bare, undeveloped land | |
| the termination of a lease agreement | |
| the process by which a tenant is expelled from a property | |
| unilateral contract to give one party the right to do or not do something without making a commitment to do anything | |
| an agreement between the seller and buyer for the sale of real estate wherein the seller holds legal title to the property until it is paid in full | |
| when the parties explicitly state that they agree to the terms of the offer | |
| Implied Acceptance | when the parties bound by the contract act in a manner that just implies accep- tance of the offer; unenforceable in Texas |
| acceptance based upon a specific condition or event happening | |
| an item that was installed or is attached to the home and has an imperfection | |
| when something is designed or built to perform a certain function and no longer does so | |
| an undisputed right of an owner to their property | |
| occurs when one or more of the contracting parties perform only a portion of the agreed-upon contractual duties. | |
| occurs when a party performs the majority of the contract’s requirements but does not perform according to the contract’s stipulations | |
| a means of cancelling a contract in which all parties agree to the cancellation | |
| stipulations or conditions that must be satisfied before the contract can be performed. | |
| the transference of obligations in a contract from one party to another | |
| Contingency | a provision within a contract that makes performance conditional upon the occurrence of a stated event |
| requires that the buyer get approved for a loan before being able to complete | |
| makes the transaction contingent on the buyer selling their current property first | |
| Amendment | a change in a legal document made by adding, altering, or omitting a certain part or term |
| a phrase used to communicate when a party to a contract must perform their contractual duties by a specific date and time in order to avoid a material breach of contract | |
| Federal act prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, and national origin a.k.a. the Fair Housing Act | |
| identified and defined protected disabilities; required all new buildings with employees or public access to provide reasonable access for people with protected disabilities | |
| established that a planned living community could require a minimum age for new residents | |
| created a new consumer watchdog to prevent mortgage companies and payday lenders from exploiting consumers | |
| also known as just a note, it’s a document in which the borrower acknowledges their debt and promises to repay the holder of the promis- sory note | |
| a transferable, written promise by a party to pay a specific amount of money | |
| security instrument which places the deed to the property in a trust held by the trustee, who holds it as security on behalf of the beneficiary (lender) | |
| clause in a security instrument (mortgage/deed of trust) which makes the entire loan amount due immediately upon default | |
| gives lenders the ability to post property for foreclosure if the debtor is behind on payments | |
| Title Theory States | principle where the trustor (borrower) conveys the legal title to the lender (or an- other party) and the borrower retains equitable title and right of possession until payment of loan |
| a loan that is provided by the seller to the purchaser of the property | |
| refers to the acquisition of new land or real property by artificial or natural means | |
| the voluntary alienation and transfer of an interest and rights in real property |
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