PA Real Estate Study Guide (Chapters 5-10)

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Legislation allowing police powers on to municipalities and counties: Enabling Acts
Acronym to remember government powers: Police powers
Eminent domain
Taxation
Escheat
PETE
The free and full owneship of land by private individuals: Allodial system
The RIGHT of the government to acquire privately owned real estate for public use: Eminent domain
The PROCESS by which the government exercises the right of eminent domain: Condemnation - can be by either judicial or administrative proceedings
Where does the state typically delegate its power of eminent domain?: Local government
The charge on real estate to raise funds to meet the public needs of government: Taxation
Avenue by which a state can acquire private property through an estate.: Escheat- Occurs when there are no heirs and no will
Defines the degree, quantity, nature and extent of owner's interest in real property: Estate in land
Two characteristics of an estate in land: Allows possession (now or in future) &
Must be measurable in duration
Two types of estates are determined by: Duration
Estates that last for an indeterminable length of time: Freehold estate
Estate which includes fee simple (or indefeasible fee), defeasible fee, and life estates: Freehold estate
Estate that lasts for a fixed period of time.: Leasehold estate
Highest quality of real estate recognized by law.: Fee simple - fee simple defeasible
A qualified estate subject to the occurrence or nonoccurrence of a specified event.: Fee simple defeasible (or defeasible fee)
Two types of defeasible estates: Subject to condition subsequent & those qualified by special limitation.
An action or activity specified that the new owner must not perform.: Fee simple defeasible estate qualified by condition subsequent
An estate which ends automatically upon the current owner's failure to comply with a limitation.: Fee simple defeasible qualified by special limitation
Another name for Fee simple with special limitation: Fee simple determinable. Words like "so long as", "while" or "during" characterize this type of estate
Freehold estate limited in duration to the life of the owner or to the life of another designated person: Life estate
Has full enjoyment of the ownership until the death of the person against whos life estate is measured: Life tenant
Life tenant injuring property or destroying building.: Waste - legal term
Term for a life estate based on the life of someone else: Estate pur autre vie
Person to whom the property will pass when the life estate ends: Remainderman
No remainderman is named and the fee simple estate is recaptured by fee simple owner: Reversionary interest
A form of life estate established by state law primarily for a spouse: Legal life estate - Surviving spouse is entitlted to 33% of value of deceased spouse estate
Support for the nonowning spouse after owning spouse's death: Dower (for the wife) and Curtsey (for husband)
A claim, charge or liability that attaches to and is binding on real estate.: Encumbrance
Two general classifications of encumbrances: Liens (usually monetary)
Encumbrances (restrictions, easements, and encroachments that affect the physical condition of the property)
A charge against property that provides security for a debt of the owner.: Lien
Use of anotherÂ’s land without permission for a period of 21 years (in PA): Easement by prescription
Easement created by government Â‘s right of eminent domain: Easement by condemnation (owner of servient tenement must be properly compensated)
Exterior wall of a building that sits on the boundary line between two lots: Party wall
Acronym for conditions to claim a prescriptive easement: Continuous
Adverse
Notorious
Open
Exclusive
CANOE
Easements may be ended Â…: Purpose no longer exists; owner of either tenement becomes owner of both; release of the right is given to owner of servient tenement; abandonment; nonuse; adverse possession by owner of servient; by destruction of the servient tenement; by lawsuit; by excessive use (residential converted to commercial)
A personal privilege to enter land which can be cancelled by owner or ending with the death of either owner or sale of land.: License
All or part of an improvement illegally extends beyond the land of its owner: Encroachment
Rights that refer to rivers, streams and similar waterways: Riparian
Rights that refer to lakes, oceans and commercially navigable waterways: Littoral
Owners have the unrestricted rights to use of water: Riparian Â– they own land to the exact center of waterway
Owners have unrestricted use of available water but only own land adjacent to the water up to the mean high water mark: Littoral
Right to use water is controlled by state rather than adjacent landowner: Doctrine of prior appropriation
Right to use the land of another party for a particular purpose: Easement
2 Categories of easements: -Appurtenant
_Gross
Involves 2 adjacent parcels of land w/ 2 different owners allowing one to use the other: Appurtenant easement
Interest or limited right to use someone elseÂ’s land. Easement benefits person rather than the land: Easement in gross
Parcel over which the easement runs is known as:: Servient tenement (Parcel that benefits is known as dominant tenement)
Personal easements in gross terminate onÂ…: Death of easement owner
Created by court order and based on the principle that owners have the right to enter and exit their land (landlocked): Easement by necessity
Tenants right of possession is consideredÂ…: Personal property
Estate for years =: Any definite period
Estate created when tenancy is indefinite time or year to year: Estate from period to period or periodic tenancy
2 characteristics of periodic tenancy: Indefinite term and automatically renewing
Estate for years expires and tenant remains in possession createsÂ…: Holdover tenancy
If original tenancy was for 5 years , holdover tenancy cannot exceed: One year (usually term of original lease)
Time required to terminate an estate from; month to month & year to year: One month (month to month), 3 mos. (yr. To yr)
Indefinite term estate which gives possession with landlords consent: Estate at will
When does an estate at will automatically terminate?: Death of landlord or tenant
Tenants previously lawful possession continued WITHOUT landlordÂ’s consent: Estates at sufferance
Term when a lease must be in writing: 3 years
Leases that might commonly have use restrictions: Retail and commercial
Terms where law requires payment of transfer taxes on leases: 30 years
Who owns alterations or fixtures in leased property?: Landlord
An assignment transfers ALL leasehold interests. A Sublease transfersÂ…: Less than all leasehold interests
Clause where Tenant authorizes the attorney of record to appear in court in the tenantÂ’s name and confess judgment in favor of landlord: Confession of judgement
Tenant pays a fixed rental and landlord pays all taxes, insurance, mortgage payments, repairs, etc.: Gross lease (usually consumer)
Tenant pays all or some of the operating expenses in addition to rent: Net Lease
Tenant pays basic rent plus percentage of gross sales: Percentage lease (commercial/industrial)
Lease which provides for increases in rent at set future dates in specified amounts: Variable leases
Lease based on changes in the consumer price index: Index Lease
Lease of unimproved land for tenant to erect a building on it: Ground lease (often run 50 Â–99 years)
Lease is discharged only when: The contract terminates
Does a lease terminate if the parties die?: No
When tenant breaches lease or retains possession improperly, landlord may regain possession through...: Suit for possession (aka Actual eviction)
If landlord breaches lease, or makes property uninhabitable, tenant may legally abandon the property.: Constructive eviction
Lessor who leases premises warrants that premises is fit for habitability: Warranty of habitability
Federal law passed in 1976 to standardize eviction procedures: Tenants Eviction Procedures Act
Right or ownership of property: Title
Real estate owned by one individual: Severalty
Two or more people holding an undivided fractional interest in property: Tenancy in common (each tenant in common holds interest in severalty, however, no individual tenant may transfer ownership of entire property)
In PA, if deed does not stipulate tenancy, it is automaticallyÂ…: Tenants in common
Unity of ownership Â– all owners collectively constitute one unit: Joint tenancy (CANNOT be created by operation of law)
To form unity of ownership, there MUST beÂ…: PITT
Unity of possession (undivided right to possession)
Unity of interest (equal ownership interest)
Unity of time (interest acquired at the SAME time)
Unity of title (same document)
PITT
If joint tenant conveys his or her interest in the title, what happens?: Unity of time and title are destroyed and new owner is now tenant in common along with the original Joint tenants
Surviving joint tenants acquire interest of deceased tenant: Right of survivorship (another distinguishing characteristic of Joint tenancy)
Special form of joint tenancy between husband and wife giving each spouse an equal, undivided interest in the property: Tenancy by the entirety (like a joint tenancy, must be created by deed or will)
Tenancy by entirety may be terminated by JÂ’s DAD: Judgment sale
Death
Agreement
Divorce
Is community property recognized in PA:?: No
Two categories of property: Community and Seperate
Real or personal property owned solely by either spouse before the marriage. Also acquired by gift or inheritance during marriage.: Separate property
Personal or real property acquired by either spouse during the marriage: Community property
A device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third person: Trust
Person or company (fiduciary) who will perform certain duties for beneficiary: Trustee
Person who creates trust: Trustor (in PA - settlor)
Real estate trusts that usually do not name a benefiary: Land trust
Two or more people who carry on a business: Partnership
All partners participate to SOME extent in operation and management of business: General partnership
General partners operate business and other silent partners are not legally permitted to participate in business: Limited partnership (liability is limited only to amount of investment)
In PA a partnership is recognized as legal entity and can hold title in partnershipÂ’s name According to this lawÂ…: Uniform Partnership Act
A legal entity (nonnatural person) which can hold title to real estate in severalty: Corporation
Hybrid organization where owners are characterized as members rather than partners or shareholders: LLC Limited liability company
Two or more people or firms joined to make and operate a real estate investment: Syndicate
2 characteristics of condominium ownership: Fee simple estate
Specified shares of the undivided interest in common areas
Under Uniform Condominium Act, in order to establish a condominium, owner must execute thisÂ…: Declaration of condominium
Declaration of condominium includes Â–: Legal description of units and common elements
Bylaws
Survey of property
Any restrictive covenants controlling rights of ownership
Prospective purchasers of condominiums must be given this at least 15 days before a sales contract is signed: Public offering statement (purchaser not provided the statement may sue for amount equal to 5% of sale price up to $2,000 or actual damages)
Newly converted condominium units must be given a warranty that lasts forÂ…: 2 years
Each succeeding purchaser (not the first) must be given what?: Copies of condominium declaration, bylaws and a RESALE CERTIFICATE
A corporation holds title to the land and building and offers shares of stock to prospective tenants: Cooperative (purchaser receives a proprietary lease to occupy)
A right conveyed by contract (personal property) to occupy and use facilities.: Time share USE (developer has only sold right to use, not a fee simple estate)
Right given by law to certain creditors to have their debts paid out of a debtors property, usually by court sale: lien
Created intentionally by a debtor's action: Voluntary lien
Created by law and not a matter of choice for debtor: involuntary lien
Type of lien that affects all property, both real and personal: General lien
Liens secured by a specific parcel of real estate: Specific lien
All liens are encumbrances, but...: not all encumbrances are liens
Rule for priority of liens: First in time, is first in line
What liens will always take priority over mechanics liens?: Tax & Special assessments
Written agreements between lienholders that change priorities of liens: Subordination agreements
Another name for general real estate taxes: ad valorem taxes (Latin for "according to value")
Controlling factor for determining whether property is tax-exempt: Used for public, charitable, not-for-profit purposes.
Normally a percentage of a property's market value: Assessed value
Used to achieve uniformity in calculating accurate assessed value.: Equalization factor
The way a taxing body authorizes the expenditure of funds: Appropriation
Five variables used to compute real estate taxes: Market value
Tax ratio
Assessed value
Tax rate
Tax amount
1/1000 of a dollar, or $.001: a mill
30 mills or $3 per $100 of assessed or $30 per $1,000 of assessed value
2 ways a special assessment can be determined: Front footage method
Benefit method
Specific, voluntary lien on real estate given to a lender as security for a mortgage loan: Mortgage lien
Specific, voluntary lient that gives security to those who perform labor or furnish materials for improvements.: Mechanic's lien
Time limit for a mechanics lien to be filed.: Four months - takes priority as of the first date of visible construction. Claimant must take steps to enforce the lien within two years.
A decree issued by a court.: A judgement. When money is involved, can be called a money judgement. Judgements are general, involuntary liens.
Judgements against real estate take priority when: as of the date they're filed. Judgements on personal property become a lien when the property is seized.
Suit is filed that affects title to real estate: Lis pendens (latin for litigation pending) Liens are backdated to the recording date of the lis pendens
Enables licensed real estate brokers (not associates or salespeople) to file a lien for payment.: Commercial Real Estate Broker Lien
ONLY applies to COMMERCIAL transactions. May be filed NO later than 90 days. Debt must be collected within TWO years.
Involuntary, General liens that may be filed on all Real estate owned by a person who has overdue child support obligations: Domestic Support Liens.
This serves 2 functions: represents owners bundle of rights & serves as EVIDENCE of that ownership: Title
Legal term for the voluntary transfer of title: Voluntary alienation
Person that conveys title by deed: Grantor
Person that receives title by deed: Grantee
Written instrument used to transfer title to Real estate: Deed
Grantor with legal capacity to execute A date Grantee named with reasonable certainty to be identified Recital of consideration Granting clause (words of conveyance) Habendum clause (defines ownership taken by grantee) Accur: Elements of a deed
A deed executed by a grantor found to be a minor is generallyÂ….: Voidable Â– deed executed by Grantor judged to be legally incompetent is void
Words of conveyance: Granting clause
Begins with the words Â“to have and to holdÂ”: Habendum clause (specifies the ownerÂ’s rights and how they are limited)
A formal declaration that the person signing agreement does so voluntarily and that the signature is genuine: Acknowledgement
In PA, an unacknowledged deed can not be recorded
Requires both delivery AND acceptance of title: Transfer of title
Provides grantee the greatest estate and protection of any deed: General warranty deed
Five covenants of general warranty deed: Covenant of Seizen (grantor warrants that they are owners and have the right to convey)
Covenant of encumberances
Covenant of quiet enjoyment (title will be good against claims from third parties)
Covenant of further assurance (grantor promised to obtain any instrument to make title good)
Covenant of warranty forever (guarantee to compensate for loss incase title fails at any future time)
Grantor defends the title against himself and all those who previously held title: Characteristic of General warranty deed
Warranty that grantor received title & Warranty that property was not encumbered by grantor: Two warranties of a Special warranty deed
Contains no express warranties against encumberances but does IMPLY that grantor holds title to property: Bargain and Sale Deed
Deed containing no covenant or warranties and the least protection: Quitclaim Deed (Used primarily to convey less than fee simple or to cure title defect)
Trustor conveys real estate to a trustee for the benefiet of a beneficiary: Deed in trust
Used when a trustee conveys real estate out of the trust to anyone other than beneficiary: Trustee's deed
Deed executed pursuant to court order: Judicial deeds
PA state transfer tax: 1% (note: tranfser taxes are also charged on leases in excess of 30 yrs)
Property transferred without the ownerÂ’s consent (usually by operation of law): Involuntary alienation
Claim to a property, takes possession and uses it may take title away from owner uninterrupted for 21 years: Adverse possession
Open and notorious Continuous Hostile (w/o consent Adverse: Characteristics of Adverse Possession
Person who has prepared the will: Testate
Person does not have a will...: dies intestate
Divisor or person who makes the will: Testator
The gift of real property by will: Devise; the person who receives the property is a devisee
Modification to a previously executed will is set for in a separate document known as;: Codicil
The formal judicial process that; Proves validity of will Determines assets of the deceased & Identifies to who assets pass: probate
Reversion of property to state where owner dies intestate without any heirs: Escheat
Act of placing documents in the public record: Recording
Where must documents affecting land be recorded?: In the county where the land is located
Legal presumption that information is available and can be obtained by an individual through diligent inquiry: Constructive notice Â– ALSO served by the physical possession of a property
Not only is information available, someone has been given the information and actually knows it: Actual notice Â– also known as direct knowledge
Order of rights in time: priority
The record of propertyÂ’s ownership over a period of time: Chain of title
Cloud on a title makes it necessary to Establish ownership through a court action: Suit to quiet title
Conveyance which establishes the source of the chain of title: Root of the title
Examination of all public records to determine any defects in the chain of title: Title search (sometimes back 40 to 60 yrs)
Summary report prepared by abstractor of various events affecting title throughout its history: Abstract of title
Written report prepared by attorney about the condition of ownership: AttorneyÂ’s opinion of title
Title that has no serious defects and does not expose a purchaser to litigation or threaten quiet enjoyment: Marketable title
A contract under which policy holder is protected from losses arising from defects in the title: Title insurance (covers events occurring before policy was issued, not future events)
Statement of opinion of the titleÂ’s status: Certificate of title Â– Not a guarantee of ownership, rather, certifies condition of title
After making payment to settle claim, Title company acquires rights to damages available to the insured.: Subrogation
Two kinds of proof of ownership in PA: Certificate of title (with attorneyÂ’s opinion of its validity) &
Title insurance
Title insurance policies available to insure title to property purchased in a court sale: Certificate of sale
This governs documents when personal property (chattels) is used as security for a loan: UCC Â– Uniform Commercial Code - Does not apply to Real estate.

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