Essentials of New Jersey Real Estate

by Lank, Edith; Sobeck, Joan M.

• ISBN13: 9780793142286
• ISBN10: 0793142288
• Edition: 5th
• Format: Paperback
• Copyright: 2000-11-01
• Publisher: Dearborn Trade

Summary

Both conprehensive an up to date, this text provides an easy to understand overview of New Jersey real estate and contains all the necessary materials to teach a top notch licensing class.Highlights include: * "Getting Started in Real Estate" Appendix in Chapter 1 provides practical information for a career in real estate. * Complete reprint of the "New Jersey License Act and the state commission rules and regulations.

Table of Contents

Preface	ix
About The Authors	x
Acknowledgments	x
Real Estate Licensing	1	(9)
Key Terms	1	(1)
Who Must Be Licensed	1	(1)
Real Estate Commission	1	(1)
Real Estate Licenses	1	(3)
Classes of Licenses	1	(1)
Activities Covered	2	(1)
Exemptions	2	(1)
Payment for Services	2	(1)
License Qualifications	2	(2)
Guaranty Fund	4	(1)
Interstate Property	4	(1)
Rental Referral Agencies	4	(1)
Summary	4	(1)
Key Terms Review	5	(1)
Review Questions	6	(2)
Appendix: Your Career in Real Estate	8	(2)
Getting Started in Real Estate	8	(1)
Job Description	8	(1)
Choosing a Broker	8	(1)
Questions To Ask	9	(1)
Once You've Started	9	(1)
Commission Rules And Regulations	10	(8)
Key Terms	10	(1)
License Law and Rules	10	(1)
Place of Business	10	(1)
Main Office	10	(1)
Branch Office	10	(1)
Trust Account (Escrow Account)	10	(1)
Advance Fees	11	(1)
Cash Deposits or Withdrawals	11	(1)
Permanent Records	11	(1)
Regulation of Documents	11	(1)
Contracts	11	(1)
Other Documents	11	(1)
Broker Business Relationships	12	(1)
Listing Broker and Seller/Principal	12	(1)
Broker and Buyer/Principal	12	(1)
Broker as Disclosed Dual Agent	12	(1)
Broker as Transaction Broker	12	(1)
Broker and Salesperson	13	(1)
Advertising	13	(1)
Price-Fixing	13	(1)
Probation, Suspension and Revocation	14	(1)
Procedure	14	(1)
Violations	14	(1)
Summary	15	(1)
Key Terms Review	15	(1)
Review Questions	16	(2)
What is Real Estate?	18	(7)
Key Terms	18	(1)
Real Estate	18	(1)
Land versus Real Estate	18	(2)
Land	18	(1)
Real Estate	19	(1)
Real Property versus Personal Property	20	(1)
Fixtures	20	(1)
Tenant and Trade Fixtures	20	(1)
Legal Tests of a Fixture	21	(1)
Summary	21	(1)
Key Terms Review 1	22	(1)
Key Terms Review 2	22	(1)
Review Questions	23	(2)
Estates and Interests	25	(10)
Key Terms	25	(1)
Estates in Land	25	(1)
Fee Simple Estate	25	(1)
Fee Determinable	26	(1)
Life Estate	26	(1)
Dower and Curtesy	26	(1)
Encumbrances	26	(4)
Liens	26	(2)
Lis Pendens	28	(1)
Easements	28	(2)
Licenses	30	(1)
Encroachments	30	(1)
Deed Restrictions	30	(1)
Summary	30	(1)
Key Terms Review 1	31	(1)
Key Terms Review 2	32	(1)
Review Questions	32	(3)
Ownership of Real Estate	35	(10)
Key Terms	35	(1)
Forms of Ownership	35	(2)
Tenancy in Severalty	35	(1)
Tenancy in Common	35	(1)
Joint Tenancy	35	(1)
Tenancy by the Entirety	36	(1)
Business Ownership of Real Estate	37	(1)
Partnerships	37	(1)
Corporations	37	(1)
Limited Liability Companies	38	(1)
Other Forms of Ownership	38	(1)
Growth of Condominiums and Cooperatives	38	(1)
Condominium Ownership	39	(1)
Establishing a Condominium	39	(1)
Condominium Conversion	39	(1)
Cooperative Ownership	39	(1)
Town Houses	40	(1)
Time-Sharing	40	(1)
Summary	40	(1)
Key Terms Review 1	41	(1)
Key Terms Review 2	42	(1)
Review Questions	42	(3)
Real Estate Taxes	45	(6)
Key Terms	45	(1)
Tax Liens	45	(1)
Ad Valorem Tax (General Tax)	45	(1)
Special Assessments (Improvement Taxes)	46	(1)
The Taxation Process	46	(2)
Tax Appeal	46	(1)
Equalization	46	(1)
Tax Rates	47	(1)
Tax Bills	47	(1)
Tax Liens	47	(1)
Tax Sale	47	(1)
Income Tax Issues for Home Sellers	48	(1)
Summary	48	(1)
Key Terms Review	48	(1)
Review Questions	49	(2)
Land-Use Regulations and Environmental Issues	51	(12)
Key Terms	51	(1)
Land-Use Controls	51	(1)
Private Land-Use Controls	51	(1)
Deed Restrictions	51	(1)
Government Powers	52	(1)
Public Land-Use Controls	52	(1)
Planning	52	(1)
Zoning	52	(1)
Subdivision Regulations	53	(1)
Building Codes	53	(1)
Environmental Issues	53	(1)
Hazardous Substances	54	(4)
Asbestos	54	(1)
Lead-Based Paint and Other Lead Hazards	54	(1)
Radon	55	(1)
Urea-Formaldehyde	55	(1)
Carbon Monoxide	55	(2)
Electromagnetic Fields	57	(1)
Groundwater Contamination	57	(1)
Underground Storage Tanks	57	(1)
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)	58	(1)
Liability	58	(1)
Industrial Site Recovery Act (ISRA)9 and Wetlands Protection	59	(1)
Public Access to Beach Areas	59	(1)
Landmark Preservation	59	(1)
Direct Public Ownership	59	(1)
Summary	59	(1)
Key Terms Review	60	(1)
Review Questions	60	(3)
Agency, Brokerage and Ethical Considerations	63	(28)
Key Terms	63	(1)
Brokerage Defined	63	(1)
Broker-Salesperson Relationship	64	(1)
Salesperson and Broker	64	(1)
Independent Contractor versus Employee	64	(1)
Broker's Compensation	64	(7)
Salesperson's Compensation	71	(1)
Agency	71	(6)
Types of Agency	71	(1)
Creation of Agency With Sellers and Buyers	71	(1)
Disclosure of Agency	71	(5)
Furnishing the Consumer Information Statement (CIS)	76	(1)
Further Written Disclosures of Agency	76	(1)
Termination of Agcy	76	(1)
Buyer as Principal	77	(1)
Fiduciary Responsibilities	77	(2)
Care	77	(1)
Obedience	77	(1)
Accounting	78	(1)
Loyalty	78	(1)
Disclosure (Notice)	78	(1)
General Duty of Fair Dealing	79	(1)
Dual Agency	79	(2)
Dual Agency and Conflict of Interest	79	(2)
Disclosure Issues	81	(1)
Material Information	81	(1)
Off-Site Conditions	81	(1)
Megan's Law	81	(1)
Misrepresentation	81	(1)
Liability Criteria	82	(1)
To Avoid Misrepresentation	82	(1)
Antitrust Laws	82	(1)
Ethics, Liability and Disciplinable Offenses	83	(1)
Disciplinable Offenses	83	(1)
Defense Against Claims of Liability	83	(1)
Dual Contracts	84	(1)
Ethics	84	(1)
Professional Organizations	84	(1)
New Jersey Assocation of Realtors®	84	(1)
Designations	85	(1)
Summary	85	(1)
Key Terms Review 1	86	(1)
Key Terms Review 2	86	(1)
Key Terms Review 3	87	(1)
Review Questions	87	(4)
Fair Housing	91	(13)
Key Terms	91	(1)
Equal Opportunity in Housing	91	(1)
Federal Fair Housing Laws	91	(3)
Civil Rights Act of 1866	91	(1)
Federal Fair Housing Act of 1968	91	(1)
Equal Housing Opportunity Poster	92	(1)
Blockbusting and Steering	92	(2)
Redlining	94	(1)
Enforcement	94	(1)
Threats or Acts of Violence	94	(1)
New Jersey Law Against Discrimination	94	(3)
Prohibited Activities	94	(1)
Exceptions	95	(1)
Financing	95	(1)
Blockbusting and Record Keeping	95	(1)
Poster	95	(1)
Enforcement	95	(2)
Notice at Listing	97	(1)
State Regulations on Rentals	97	(1)
Source of Income, Children in Family	97	(1)
Other Provisions	97	(1)
Multiple Dwelling Reporting	97	(1)
Zoning Discrimination: Mount Laurel I and II	97	(1)
Code for Equal Opportunity	97	(2)
HUD/NAR Fair Housing Partnership	97	(2)
Implications for Brokers and Salespersons	99	(1)
Advertising	99	(1)
Testing	100	(1)
Summary	100	(1)
Key Terms Review	101	(1)
Review Questions	101	(3)
Listing Agreements	104	(10)
Key Terms	104	(1)
Listing Property	104	(6)
Listing Agreements	104	(1)
Open Listing	104	(1)
Exclusive-Agency Listing	104	(1)
Exclusive-Right-to-Sell Listing	104	(1)
Net Listing (Illegal in New Jersey)	105	(1)
Multiple-Listing Service	105	(1)
Termination of Listings	105	(1)
Obtaining Listings	105	(1)
Property Information for Listings	105	(4)
Responsibility for Disclosure	109	(1)
Responsibility for Investigation	109	(1)
Cooperation with Other Licensees	109	(1)
Negotiability of Commission	109	(1)
Attorney General's Memorandum	110	(1)
Expiration of Listing Period	110	(1)
Pricing the Property	110	(1)
Summary	110	(2)
Key Terms Review	112	(1)
Review Questions	112	(2)
Real Estate Contracts	114	(19)
Key Terms	114	(1)
Contract Law	114	(1)
Essential Elements of a Valid Contract	114	(1)
Statute of Frauds	115	(1)
Exception	115	(1)
Types of Contracts	115	(2)
Express and Implied Contracts	115	(1)
Bilateral and Unilateral Contracts	115	(1)
Executed and Executory Contracts	115	(1)
Validity of Contracts	116	(1)
Undue Influence and Duress	116	(1)
Performance of Contract	116	(1)
Assignment and Novation	116	(1)
Discharge of Contract	116	(1)
Default--Breach of Contract	117	(1)
Statue of Limitations	117	(1)
Contracts Used in the Real Estate Business	117	(11)
Preparation of Documents	117	(1)
New Jersey Requirements	117	(1)
Contract Forms	118	(1)
Listing Agreements	118	(1)
Buyer Brokerage Agreements	118	(1)
Transaction Broker and Dual Agency Agreements	118	(1)
Sales Contracts	118	(9)
Option Agreements	127	(1)
Land Contracts	127	(1)
Summary	128	(1)
Key Terms Review 1	129	(1)
Key Terms Review 2	129	(1)
Review Questions	130	(3)
Leases: Landlord and Tenant	133	(19)
Key Terms	133	(1)
Leasing Real Estate	133	(1)
Leasehold Estates	133	(1)
Estate for Years	134	(1)
Periodic Estate	134	(1)
Tenancy at Will	134	(1)
Tenancy at Sufferance	134	(1)
Standard Lease Provisions	134	(7)
Use of Premises	140	(1)
Term of Lease	140	(1)
New Jersey Requirements	140	(1)
Federal Lead-Based Paint Disclosure	140	(1)
Security Deposits	141	(1)
Late Payments	141	(1)
Legal Principles of Leases	141	(1)
Possession of Leased Premises	141	(1)
Improvements	141	(1)
Maintenance of Premises	141	(1)
Assignment and Subleasing	142	(1)
Destruction of Premises	142	(1)
Termination of Lease	142	(1)
Truth in Renting	142	(1)
Disclosure of Owners and Managers	143	(1)
Federal Crime Insurance	143	(1)
Rental Referral Services	143	(1)
Rent Control	143	(1)
Eviction	143	(1)
Constructive Eviction	143	(1)
Suit for Possession--Actual Eviction	143	(1)
Causes for Eviction	143	(1)
Types of Leases	144	(1)
Gross Lease	144	(1)
Net Lease	144	(1)
Percentage Lease	144	(1)
Other Lease Types	145	(1)
Property Management	145	(1)
Functions of the Property Manager	145	(2)
The Management Agreement	145	(1)
Budgeting Expenses	146	(1)
Renting the Property	146	(1)
Maintaining the Property	147	(1)
Insurance	147	(1)
The Management Field	147	(1)
Summary	147	(1)
Key Terms Review 1	148	(1)
Key Terms Review 2	149	(1)
Review Questions	149	(3)
Mortgages	152	(7)
Key Terms	152	(1)
Note and Mortgage	152	(1)
Trust Deeds	152	(1)
Provisions of the Note or Bond	152	(1)
Provisions of the Mortgage Document	153	(1)
Duties of the Mortgagor	153	(1)
Provisions for Default	153	(1)
Other Clauses	153	(1)
Assignment of the Mortgage	153	(1)
Recording Mortgages	153	(1)
Interest Rates	153	(1)
Usury	153	(1)
Imputed Interest	154	(1)
Prepayment	154	(1)
First and Second Mortgages	154	(1)
Satisfaction of the Mortgage Lien	154	(1)
Assuming a Seller's Mortgage	154	(1)
Buying Subject to a Seller's Mortgage	154	(1)
Alienation Clause	154	(1)
Foreclosure	155	(1)
Deed in Lieu of Foreclosure	155	(1)
Deficiency Judgment	155	(1)
Summary	155	(1)
Key Terms Review	156	(1)
Review Questions	157	(2)
Financing 1: Conventional, Fha and va Loans	159	(10)
Key Terms	159	(1)
Mortgage Financing	159	(1)
Payment Plans	159	(3)
Fixed-Rate Loans	160	(1)
Adjustable-Rate Mortgages	160	(1)
Interest	161	(1)
Tax-deductible Interest Payments	162	(1)
Points	162	(1)
Buydowns	163	(1)
Tax and Insurance Reserves	163	(1)
Conventional, Insured and Guaranteed Loans	163	(2)
FHA-Insured Loans	163	(2)
VA-Guaranteed (GI) Loans	165	(1)
New Jersey Homebuyers Program	165	(1)
Summary	166	(1)
Key Terms Review 1	166	(1)
Key Terms Review 2	167	(1)
Review Questions	167	(2)
Financing II: Primary And Secondary Markets	169	(10)
Key Terms	169	(1)
Financing Techniques	169	(1)
Seller-Buyer Arrangements	170	(1)
Sources of Real Estate Financing--The Primary Mortgage Market	171	(1)
Application for Credit	172	(1)
Pre-Approved Loans	172	(1)
FICO Credit Scores	172	(1)
Qualifying Rations	172	(1)
Government Influence in Mortgage Lending	172	(1)
Federal Reserve System	172	(1)
Government Influence in the Secondary Market	172	(1)
Nonconforming Loans	173	(1)
Financing Legislation	173	(1)
Regulation Z	173	(1)
Equal Credit Opportunity Act	174	(1)
Real Estate Settlement Procedures Act	174	(1)
New Jersey Truth-in-lending Act	174	(1)
Summary	175	(1)
Key Terms Review 1	175	(1)
Key Terms Review 2	176	(1)
Review Questions	176	(3)
Appraisal	179	(12)
Key Terms	179	(1)
What Is Appraisal?	179	(1)
Real Estate--The Business of Value	179	(1)
The Real Estate Market	180	(1)
Supply and Demand	180	(1)
Appraising	180	(1)
Value	180	(2)
Market Value	181	(1)
Basic Principles of Value	181	(1)
The Three Approaches to Value	182	(4)
The Sales Comparison Approach	182	(2)
The Cost Approach	184	(1)
Depreciation	184	(1)
The Income Approach	185	(1)
Reconciliation	186	(1)
Before-and-After Method	186	(1)
The Appraisal Process	186	(1)
The Profession of Appraising	187	(1)
Summary	187	(1)
Key Terms Review 1	187	(1)
Key Terms Review 2	187	(2)
Review Questions	189	(2)
Investment and Business Brokerage	191	(9)
Key Terms	191	(1)
Investing in Real Estate	191	(1)
Advantages of Real Estate Investment	191	(1)
Disadvantages of Real Estate Investment	191	(1)
The Investment	192	(1)
Income	192	(1)
Tax Benefits	192	(2)
Exchanges	192	(1)
Depreciation	193	(1)
Deductions and Federal Tax Laws	193	(1)
Installment Sales	194	(1)
Real Estate Investment Syndicates	194	(1)
Forms of Syndicates	194	(1)
Real Estate Investment Trusts	195	(1)
Business Opportunity Sales	195	(1)
Financing	195	(1)
Uniform Commercial Code--Bulk Transfers	195	(1)
Summary	196	(1)
Key Terms Review 1	197	(1)
Key Terms Review 2	197	(1)
Review Questions	198	(2)
Subdivision and Development	200	(7)
Key Terms	200	(1)
Developing and Subdividing Land	200	(1)
Subdivisions	200	(1)
Land Planning	200	(2)
Environmental Hazards	201	(1)
Coastal Regulations	201	(1)
Subdividing	201	(1)
Subdivision Plans	201	(1)
Subdivision Density	202	(1)
Coastal Area Facilities Review Act (CAFRA)	202	(1)
Interstate Land Sales Full Disclosure Act	202	(1)
New Jersey Land Sales	203	(1)
Building Regulations	203	(1)
Uniform Construction Code	203	(1)
Warranty and Builders Registration	203	(1)
Enforcement	203	(1)
Construction Permits	203	(1)
Certificate of Occupancy	203	(1)
Hotel and Motel Multiple Dwelling Health and Safety Law	204	(1)
Summary	204	(1)
Key Terms Review	205	(1)
Review Questions	206	(1)
Legal Descriptions and Deeds	207	(15)
Key Terms	207	(1)
Legal Descriptions	207	(3)
Metes and Bounds	207	(1)
Rectangular Survey System	208	(1)
Recorded Plat of Subdivision	208	(1)
Preparation and Use of a Survey	209	(1)
Measuring Elevations	209	(1)
Condominium Descriptions	210	(1)
Deeds	210	(6)
Types of Deeds	210	(1)
Warranty Deed	210	(3)
Requirements for a Valid Conveyance	213	(3)
Execution of Corporate Deeds	216	(1)
Summary	216	(2)
Key Terms Review	218	(1)
Review Questions	218	(4)
Transfer of Title	222	(5)
Key Terms	222	(1)
Title	222	(1)
Alienation of Title	222	(1)
Voluntary	222	(1)
Involuntary	222	(1)
Transfer of a Deceased Person's Property	223	(2)
Probate Proceedings	224	(1)
Transfer of Title by Will	224	(1)
Transfer of Title by Descent	224	(1)
Summary	225	(1)
Key Terms Review	225	(1)
Review Questions	225	(2)
Public Records, Titles and Closings	227	(14)
Key Terms	227	(1)
Public Records and Recording	227	(1)
Recording Acts	227	(1)
Necessity for Recording	227	(1)
Notice	227	(1)
Recording Sales Contracts	228	(1)
Chain of Title	228	(1)
Evidence of Title	228	(1)
Abstract of Title and Attorney's Opinion	228	(1)
Title Insurance	229	(1)
Torrens Certificate	229	(1)
Certificate of Title	229	(1)
Marketable Title	229	(1)
Closing the Transaction	230	(4)
Lender's Interest in Closing	230	(1)
Homeowner's Insurance	230	(1)
Federal Flood Insurance Program	230	(1)
RESPA Requirements	230	(1)
The Title Procedure	231	(1)
Checking the Premises	231	(1)
Releasing Existing Liens	231	(3)
Closing in Escrow	234	(1)
Preparation of Closing Statements	234	(3)
How the Closing Statement Works	234	(1)
Expenses	234	(2)
Items Credited to Buyer (Debited to Seller)	236	(1)
Items Credited to Seller (Debited to Buyer)	236	(1)
The Arithmetic of Proration	237	(1)
Closing	237	(1)
Other Documents At Closing	237	(1)
Summary	237	(1)
Key Terms Review	238	(1)
Review Questions	239	(2)
Real Estate Mathematics	241	(8)
Percentages	241	(1)
Rates	242	(2)
Area and Volume	244	(1)
Land Units and Measurements	245	(1)
Review Questions	245	(4)
Commissions	245	(1)
Insurance and Taxes	246	(1)
Investment	246	(1)
Seller's Net	246	(1)
Financing	246	(1)
Area	247	(1)
Miscellaneous	248	(1)
Cumulative Review Quizzes	249	(12)
Chapters 1 Through 8	249	(4)
Chapters 9 Through 15	253	(4)
Chapters 16 Through 22	257	(4)
Practice License Examinations	261	(18)
The New Jersey License Examination	261	(1)
Preparing for the Examination	261	(1)
Practice Examinations	261	(1)
Practice Test A	261	(9)
Practice Test B	270	(9)
Answer Key	279	(7)
Appendix A: Code of Ethics and Standards of Practice	286	(9)
Appendix B: The New Jersey Real Estate License Act---Statute and Rules	295	(132)
Glossary of Real Estate Terms	427	(13)
Index	440