Summary 

In this section dealing with contracts and agencies, we have examined the essential characteristics of contracts and specific terms that apply to contract law. We learned how contracts are enforced. We examined the basic principles of brokerage, agency law, the duties of real estate licensees when acting as agents and considered how anti-trust laws apply to brokerage commissions. We looked at the general legal requirements surrounding escrow accounts. We dealt with the necessary elements for a valid listing contract, installment sales contract and lease contract. Finally, we considered the nature and extent of federal fair housing laws. 

Chapter 1: Real Estate Contract Law 

The Five (5) Essential Elements of a Contract 

• Legally Competent Parties 

• Clearly Identified Property Descriptions 

• Meeting of the Minds as to the essential terms 

• Acceptance 

• Revocation by offeror 

• Rejection 

• Counteroffer 

• Lapse of Time 

• Death or Insanity of either party prior to acceptance 

• Consideration 

• Legal Purpose 

Valid, Void and Voidable Contracts 

• Valid Contract 

• Void Contract 

Fraud, Misrepresentation, and Mistake 

• Fraud 

• Misrepresentation 

• Mistake 

• Puffing 

Enforcement of Contracts 

• Undue Influence 

• Statue of Frauds 

• Statute of Limitations 

• Death of Parties 

Termination of Contracts 

• Performance 

• Abandonment 

• Lapse of Time 

• Revocation by a party 

• Breach by one party 

• Recission by a purchaser 

Contract Characteristics 

• Contracts are voluntary agreements 

• Express/ Implied/ (Express Contract) 

• Unilateral 

• Bilateral 

• Executory or Executed 

Contract Terminology 

• Covenant 

• Condition 

• Restrictions 

• Private Covenants, Conditions and restrictions 

• Questions of Time 

• Time is of the essence 

• Novation and Assignment 

• Assignment 

• Power of Attorney 

• Attorney in Fact 

• Estoppel 

• Estoppel Certificate 

• Riders, Addenda, Amendments 

Chapter 2: Real Estate Agency & Escrow 

The History of Agency Representation (Common Law) 

• Agency Relationship 

• Common Law 

Common Law Definitions 

• Special Agent 

• General Agent 

• Universal Agent 

• Subagent 

• Fiduciary 

Duties of an Agent 

• Loyalty 

• Obedience 

• Disclosure 

• Confidentiality 

• Reasonable care and Due Diligence 

• Accounting 

Duties of Clients to an Agent 

• Availability 

• Informed 

• Compensation 

• Indemnification 

Agent’s Duties to Customers 

Creation of Agency 

• Express Agreement 

• Implied Agreement 

• Ratification 

• Estoppel 

Termination of Agency 

• Death or incapacity of either party 

• Destruction or condemnation 

• Expiration of the Agency 

• Mutual Agreement 

• Renunciation by the agent/ licensee 

• Revocation by the Principal/ client 

• Operation of Law (BK of the Princip[al) 

• Completion of the agency (performance) 

Dual Agency 

• In-house Sales 

• Designated Agency 

Escrow and Escrow Accounts 

• Escrow Agent 

• Commingling 

• Conversion 

• The Doctrine of Relations Back 

Escrow Accounts 

• Escrow Accounts Violations 

Chapter 3: The Real Estate Brokerage Business 

Introduction to the Brokerage Business 

• Compensations 

Antitrust Laws 

• Monopolistic Practices 

• Price Fixing 

• Boycotting 

• Allocate 

CanSpam 

• Don Not Call Registry 

Independent Contractor or Employee 

• Independent Contractor 

• Employee 

• Listing Agreement Seller-Representation 

• Broker as Agent 

• Completive Market Analyses 

• Listing Protection Clause 

Types of Listings 

• Open Listing 

• Exclusive Listing 

• Exclusive Right to Sell 

• Net Listing 

• Multiple Listing Service 

Termination of Listing Agreements 

• Abandonment of the Broker 

• Breach to One Party 

• Lapse of Specified or reasonable time 

• Performance by the broker 

• Mutual Agreement 

• Revocation by the client 

Employment Contract-Buyer Representation 

• Mutual Agreement 

• Revocation by the Buyer 

• Death, Insanity, BK of either client or agent 

Real Estate Sales Contract 

• Executory Contract 

• Earnest Money 

• Breach By Buyer 

• Non Disturbance Clause 

Installment Sales Contract 

• Vendee 

• Vendor 

Option Contracts 

• Optionor 

• Optionee 

• First Right of Refusal 

Lease Contracts 

• Statute of Frauds 

• Non-Disturbance Clause 

Chapter 4: Leases and Property Management 

The Nature of Leases 

• Five Essential Elements 

• Competency of parties 

• Meeting of the Minds 

• Consideration 

• Legal  Description 

• Intended use of property 

• Estate / Tenancy of Leaseholds 

• Estate/ Tenancy for Years 

• Estate Tenancy from year to year 

• Estate/ Tenancy at will 

• Estate / Tenancy at Sufferance 

• Sublease 

Covenants and Clauses in Leases 

• Covenant of Quiet Enjoyment 

• Restrictive Covenants 

• Protective Covenant 

• Subordination Clause 

• Option Clause 

• Escalator Clause 

• Sale- Leaseback 

Types of Leases 

• Gross Leases 

• Fixed 

• Flat 

• Net Leases 

• Percentage Leases 

• Graduated Lease 

• Ground (Land) Leases 

• Proprietary Leases 

• Revaluation (reappraisal) Lease 

Termination of Leases 

• Expiration of term 

• Proper Notice 

• Destruction or condemnation of the property 

• Agreement 

• Abandonment 

• Breach 

• Actual Eviction 

• Constructive Eviction 

• Ejectment 

Property Management 

• General Agent 

Chapter 5: Federal Fair Housing Laws 

Three Federal Acts 

• Civil Rights of 1886 

• The Federal Housing Act of 1968 

• The 1988 Amendment to the Fair Housing Act 

Fair Housing Definition 

• Dwelling 

• Familial Status 

• Family 

• Person 

• Handicapped 

Exceptions for Federal Fair Housing Laws 

Do not extend to Civil Rights Act o 1866 regarding racial discrimination 

• Private Individual Owners 

• Owner Occupants 

• Religious Organizations 

• Private Membership Clubs 

• All-Elderly Housing Exemptions 

• Threat to health or safety exception 

• Occupancy Restrictions 

Discriminatory Practices 

• Refusing to sell, rent or finance 

• Refusing to deal or negotiate 

• Quoting terms or conditions 

• Advertising 

• Dwelling not available 

• Steering 

• Blockbusting 

• Redlining 

• Denying Membership 

Construction and the Handicapped 

Reasonable Accommodation 

Affirmative Marketing 

Enforcement 

Section 3 Review 

Real Estate Contracts and Agency Section Quiz 

Chapter 1: Real Estate Contract Law 

Agent 

One who acts for another 

Assignment 

Transfer of one’s rights under a contract to an individual not a party to the original contract 

Bilateral Contract 

A contract where both parties are obliged to perform 

Blockbusting  

The illegal practice of inducing panic selling in a neighborhood for financial gain 

Caveat Emptor 

Let the buyer beware 

Commingle 

To combine escrow funds in the same account with personal or business funds 

Covenant 

A promise of legal validity 

Covenant of Quiet Enjoyment 

Dual Agency 

Representation of two or more parties in a transaction by the same agent 

Duress 

The use of threats or physical harm to force a person to do something against his will 

Earnest Money 

A deposit to show good faith / a down payment 

Escalation Clause 

Clause in a lease providing for the adjustment of rent based on specified indexes or circumstances 

Escrow 

Funds, property, or other things of value left in trust to a neutral third party and released upon fulfillment of certain conditions, or by agreement of the parties 

Estoppel 

A legal bar to a person alleging or denying a fact when his own previous actions have conclusively indicated the contrary  

Eviction 

The act of expelling a person from property in his possession, may be actual or constructive eviction 

Exclusive Listing 

The appointment of one real estate broker as the sole agent for the sale of a property for a designated period of time. The owner may sell without obligation to pay the agent a commission 

Executory Contract 

A contract where something remains to be done; a contract where performance is not completed 

Express Contract 

One where all terms and conditions are openly and explicitly stated and agreed upon 

Fiduciary 

A position of trust and confidence 

Fraud 

Willful deception of representation of facts 

Gross Lease 

Most common type of lease whereby landlord pays the expenses of ownership (repairs, taxes, maintenance etc) 

Implied Listing 

A listing that arises when the broker acts without expressed authorization but with the knowledge and consent of the owner 

Implied Contract 

A contract that is not expressed; rather it can be inferred from the actions of the parties 

Installment Sales Method 

Method of reporting gains on sale of property to spread out payment of taxes 

Misrepresentation  

A false presentation of the facts 

Mistake 

Net Lease 

A lease whereby the tenant pays most of the expenses of ownership (Repairs, taxes, general maintenance) 

Net Listing 

A listing where the net amount due to the seller is specified, rather than the selling price. The broker’s commission would be any sale price above the seller’s target price. These are illegal in most states. 

Novation 

The substitution of a new contract or new party for an old one 

Open Listing 

A listing made available to more than one broker (open = more than one) 

Option 

A binding promise to sell or lease property until a specified future date for a specified price and at specified terms. The optionor ( the owner) gives the option to the optionee (potential buyer or lessee) 

Percentage Lease 

A lease where the rental payments are based on the volume of gross sales 

Power of Attorney 

The written instrument appointing one to act as an attorney in fact 

Proprietary Lease 

Lease that gives tenant / shareholder the right to occupy a particular unit in a cooperative development  

Puffing 

Non factual or extravagant statements a reasonable person would recognize as such 

Red Lining 

The practice of refusing to make loans in certain neighborhoods 

Sales – Leaseback 

An agreement whereby the seller simultaneously leases the property from the buyer usually on a long-term lease 

Statute of Frauds 

An early English statute , enacted in 1677 that requires certain types of transactions be evidenced in writing in order to be binding or enforceable.  

Statute of Limitations 

A statute that restricts the period of time within which legal action may be brought 

Subordination  

A process in which the holder of a superior mortgage agrees to give up his priority position 

Undue Influence 

Unfair advantage to obtain a contract 

Unilateral Contract 

A contract where only one party is obligated to perform 

Universal Agent 

Void 

Of no legal force or effect, not binding. Also, to nullify or remove legal force from 

Voidable 

The which is capable of being adjudged void, but not void unless action is taken by one of the parties. A transaction that may be set aside by one party, but is binding upon the other party 

Deed 

Written instrument transferring ownership interests in real property 

Mortgage 

Legal document used to secure the performance of an obligation 

Offeree 

The one whom an offer is made 

Void Contract 

Not legally binding 

Covenant 

An agreement or pledge between two or more parties. 

Valid Contract 

Must contain certain essential elements 

Offeror 

The one who makes the offer 

Voidable Contract 

May be declared void 

Fraud 

Any intentional deceit by which one part intentionally attempts to gain unfair advantage of another 

Restrictions 

Private covenants and conditions imposed on the use of real property 

Puffing 

A statement of exaggeration that a reasonable person would recognize as such 

Estoppel 

A legal doctrine that stops a person from asserting certain rights 

1. An offer and acceptance between competent parties to do or not to do a specific legal act for consideration best describes the term contract 

2. A written agreement wherein one person agrees to purchase an another person agrees to sell real property is called a contract 

3. John, an adult, entered into a contract with Paul. Paul is 16 years old. When John learned that Paul was a minor, he decided to terminate the contract. He did this because the contract is / was valid and binding only on John not Paul. 

4. Performance is not required for a contract (for sale of real property to be valid and enforceable) 

With a valid and enforceable contract you need  

• Offer and acceptance 

• Consideration 

• In writing  

5. When a seller makes a counter offer 

• The original offeror becomes the offeree in the counter offer 

• It is a rejection of an earlier offer 

• It may be withdrawn at any time prior to acceptance 

** A counteroffer is not a partial acceptance 

6. One party to a contract has the right to change his mind and not to perform as agreed… this right 

• Can be a condition of the contract itself 

• Can be created by statute 

• May require payment of monetary damages 

7. The loan contingency clause in a valid sales contract will contain … 

• The amount of the loan 

• The date of the commitment 

• The interest rate of the loan 

** The name of the lender does not appear 

8. If there is a breach of a contract for the sale of real property, an option is available to the non-defaulting party is … suit for specific performance or actual damages 

9. Written Form is essential for a contract for the sale of real property to be held (upheld) by a court. 

10. A two-tier lease is subject to the statute of frauds 

If a minor enters into a contract it is not enforceable against the minor unless its for Necessities such as food or shelter. Persons declared legally incompetent by a court may not make a valid contract. If they attempt to enter into a contract, the contract is void. Persons who enter into a contract when intoxicated or influenced by drugs may void the contract, if they act promptly. The contract is said to be voidable by the person who was impaired. An offeror may withdraw his offer at any time prior to acceptance by the offeree. If an offeree rejects an offer and then makes a counter offer, the roles are reversed. 

1. Courts will not enforce contracts that require one to do something that is illegal 

2. A real estate contract survives the death of either party. If it’s a listing contract, the listing does not survive. 

3. An Open Listing is a Unilateral contract. The seller promises to pay upon performance, but the broker does not promise to do anything. 

4. If both seller and broker agree to do something a Bilateral Contract is in play. 

5. Someone assigns the assignor a contract to buy real estate. In this case, an assignor, unless released, the assignor remains secondarily reliable. Key word here… study assignments 

6. When the phrase “Time is of the essence” is used, it means that the contract must be performed within the time limit specified. 

7. A Novation is the substitution of a new legal obligation for an old one. 

8. Recission does not require proof of damages 

9. Oral Leases for a period of a year or less do not fall within the statute of frauds that requires many contracts to be in writing. 

10. A state law that sets a time frame within which someone must bring a lawsuit is called Statute of Limitations 

Chapter 2: Real Estate Agency & Escrow 

Client 

A person who has entered into a brokerage relationship with a licensee 

Customer 

A person who has entered into a brokerage relationship with a licensee, but for whom a licensee performs ministerial acts in a real estate transaction. 

Dual Agent 

A licensee who has a brokerage relationship with both seller and buyer 

Caveat Emptor 

Let the buyer beware 

Commingling 

Mixing personal funds with funds that should be held in trust for others in an escrow account 

Escrow 

Holding funds or documents for a client 

Conversion 

When applied to escrow, the misappropriation of entrusted funds 

Doctrine of Relation Back 

Under this doctrine, the title passes when the deed is delivered into escrow 

Agency 

A relationship in which a real estate licensee acts for or represent a person in a real estate transaction 

Implied Agency 

An agency relationship that is implied by the actions or words of the parties 

Express Agency 

An oral or written agency agreement 

Ratify 

To approve, sanction or make valid. 

1. When a real estate broker is retained to perform one special act for a client it is known as Special Agency 

2. In an agency representation, the employer is called the Client 

3. An escrow account is maintained by a broker for the purposes of impartial protection of both parties 

4. A client is obligated to her agent for Indemnification against loss not caused by the agent 

5. The client in a listing agreement would be the seller of the listed property 

6. A General Agency empowers the agent to transfer the client’s affairs in a certain business 

7. A Broker and Salesperson owe all to the purchaser/ customer 

• Honesty 

• Fairness 

• Disclosure of defects in the property 

** Sales and Brokerage do not owe Negotiation for lowest price to a customer/ purchaser 

8. Brokers must hold their client’s funds in a trust or escrow account 

A client owes an agent the duties of availability, information, compensation and indemnification. A licensee may act as a dual representative only with written consent of all parties to the transaction and full disclosure given to all parties in the relationship. Escrow accounts must be maintained as separate accounts from the business account and the institution must be ferally insured. 

1. In many states the Statute of Frauds applies to listing agreements. 

2. A salesperson may only receive compensation from his or her broker.  

3. If a Broker accepts a promissory note or post dated check as a deposit on an offer, that information must be disclosed to the seller. 

4. A salesperson must disclose all offers to the seller-client. 

5. The client may be obligated to compensate the salesperson for financial losses incurred as a result of actions by the client. 

6. The delivery of a deed into escrow related back to the date of delivery. 

7. The escrow account must be in the name of the brokerage firm. 

8. Escrow records must be kept for a period of years. It varies by state. 

9. Unless agreed to in writing by all parties, the broker is not entitled to a commission until the transaction has been consummated. 

10. A Broker must acknowledge the fact in the contract when accepting a non-negotiable deposit (for instance, promissory note or post dated check. 

Chapter 3: The Real Estate Brokerage Business 

Earnest Money Deposit 

A cash deposit that usually accompanies an offer to purchase 

Consideration 

Something of value given in exchange for someone’s promise to perform 

Option 

An agreement whereby an owner agrees to give a prospective buyer the right to buy a particular piece of property for a fixed price during an agreed upon period 

Lease Contract 

An agreement transferring the right of exclusive use and possession of real estate for a specified period of time 

Open Listing Contract 

A listing agreement given to any number of brokers and a unilateral seller agrees today upon performance 

Exclusive Listing Contract 

A listing agreement given to a single broker but doesn’t have to pay if owner sells first 

Exclusive Right-To-Sell 

Single broker / Agrees to pay broker even if owner sells 

Commission 

Compensation paid to a broker for performing real estate services 

Independent Contractor 

One who is hired to retain, or already retained, to do a particular job with little or no supervision as to how the work is to be performed. 

Employee 

One who works under the direct supervision of the employer 

Brokerage 

The aspect of the real estate business wherein a licensed agent brings together two or more persons to complete a real estate transaction 

Anti-Trust Laws 

State and Federal laws designed to protect consumers by preserving an maintaining competition among businesses  

1. The buyer in a contract for deed is known as the Vendee 

2. An Exclusive Right to Sell gives the broker maximum protection 

3. In an Optionee doesn’t buy, the Optionor has nothing to do after the expiration date. The property option is released automatically after the expiration date. 

4. When a buyer buys a property under an Installment Sale Contract. The seller retains the title to the property. 

5. To be legally binding, a real estate contract must contain a legal description. 

6. All listings must include a description of the property. 

7. The following are legally sufficient to support consideration for a sales contract. 

• Money 

• Property 

• Service 

8. When a contract is breached, the injured party may rescind the contract unilaterally. 

9. The following terminate an offer to sell real property 

• Lapse of reasonable time 

• Rejection of the offer by the offeree 

• Revocation of the offer 

10. If an offer is mailed to the seller, a contract exists when the seller mails his acceptance 

11. An owner can hand out as many Open Listings as he wants 

12. When the seller and the licensed salesperson agree to a listing, on terms acceptable to the broker, an agency relationship is established between the listing broker and the seller 

Any person, firm, partnership or corporation must be licensed if they perform any of these six services for a fee, commission or other valuable consideration with respect to real estate 

• Selling 

• Buying 

• Exchanging 

• Leasing 

• Renting 

• Negotiating 

A broker is usually considered to have earned his or her commission when he or she has produced a ready, willing and able buyer prepared to buy at the seller’s listing price and according to the terms of the listing agreement. 

1. If a broker brings the seller an offer meeting all the terms specified in the listing, the seller does not have to sell. 

2. Net Listing are illegal in most states 

3. Real estate commissions are negotiable and not set by the state law. 

4. Money paid at contract signing is an Earnest Money Deposit. 

5. A counter offer works as a rejection of the original offer. 

6. An Attorney in Fact need not be an Attorney at Law 

7. The seller and broker both named in the Open Listing may attempt to sell the listed property 

Chapter 4: Leases and Property Management 

Demise 

A term that means “to lease”. 

Estate / Tenancy for Years 

A lease for a definite period of time with termination date specified in the lease. 

Estate / Tenancy from Year- to Year 

A lease that automatically renews at set intervals and requires proper notice to terminate 

Estate / Tenancy at Sufferance 

Possession without the landlord’s consent 

Escalator Clause 

A clause that allows for an up or down adjustment or certain payments such as taxes and insurance 

Sale Lease-Back 

A real estate sales / financing technique whereby an owner sells property to an investor or lender, then leases the same property back. 

Covenant of Quiet Enjoyment 

A right to exclusive possession 

Gross Lease 

The lessee pays a fixed rate rent and the lessor pays taxes, insurance, and other charges related to the prophecy 

Net Lease 

A lease where the lessee pays a base rent and also pays a pro-rated share of taxes, insurance and specified operating expenses. 

Breach 

Violation of any of the terms or conditions of a contract without legal excuse. 

Constructive Eviction 

When a landlord’s actions, or lack of action, renders the lease premises uninhabitable. 

1. A lease that allows for annual rent to increase on each anniversary is a “graduated lease”. 

2. Generally, a property manager may not be compensated by receiving rebates from suppliers unless disclosed to the owner. 

3. When a property is sold with an existing lease the entire lease interest is transferred. 

4. A lease provision that prohibits using certain premises for a drugstore is called Use Covenant. 

5. A valid written lease generally requires 

• Legal capacity of both parties 

• A meeting of the minds 

• Consideration 

6. An action to oust someone who is not legally in possession or real property is called Ejectment. 

7. Jones leases a building and an earthquake destroys it, Usually the lease is no longer enforceable. 

8. When leased property is sold, the tenants are not affected. 

9. A landlord and tenant’s mutual agreement to cancel a lease is best described as Surrender and Acceptance. 

10. Is there a rental basis where the rent increases during the term of the lease… is it Graduated Rental Lease?? 

11. A property management contract is between the Property Manager and the Property Owner. 

12. An agreement in which rent is increased at specified intervals is known as a Graduated Rental Lease. 

The five essential elements of a valid real estate contract that must be present in a valid lease are …. 

• Competent parties 

• Offer & acceptance 

• Consideration 

• Legal description 

• Legal objective 

When a landlord guarantees a tenant the right of Quiet Enjoyment, the landlord retains legal title and a reversionary estate after the lease term expires.  

A written lease that has no fixed rental amount is known as a property lease. It is usually between a corporation and a stockholder. 

1. A Tenancy for Years is a lease for a definite period of time. It would be negotiated between the lessor and lessee and is not created by adverse posession. 

2. A proprietary tenant usually has an interest in a cooperative apartment 

3. Periodic leases that renew at set intervals require proper notice in order for one party to terminate. 

4. The legal process by which a landlord removes a tenant from leased premises when there has been a breach or lease terms is known as Eviction. 

5. Leases are bilateral contracts that survive the death of the parties… rent stays in play after death and no one enters until lease expired. 

6.  Leases are bilateral contracts that survive the sale of the property… a renter continues to lease until terms expire after the sale. 

7. In a revaluation lease, the rent is adjusted automatically according to the reappraisal of the real estate. 

8. Most leases do not allow assignment without the consent of the landlord 

Steering 

Illegally showing property onyx in specific areas in order to maintain or change the character of the area 

Blockbusting 

Illegally inducing owners to sell by making representations that unwanted or undesirable ethnic interests are moving into an area 

Families 

Include single individuals, whether male or female 

Right to Cancel 

A legal requirement associated with the second mortgage and refinance loans 

Civil Rights Act of 1866 

Prohibits racial discrimination 

Familial Status 

One or more individuals who have not attained the age of 18 years old who is domiciled with a parent or other legal custodian 

Federal Housing Act of 1968 

Title VIII of the federal civil rights act of 1968, as amended in 1974 and 1988, prohibiting discriminatory housing practices based on race, color, national origin, religion, sex, familial status and handicap 

Equal Credit Opportunity Act (ECOA) 

The law making it unlawful to deny credit on the basis of race, color, religion, national origin, sex, marital status, age, and dependence on public assistance 

Handicapped Persons 

A person having a physical or mental impairment that substantially limits one or more major life activities 

Redlining 

Unfair denial of a mortgage loan or insurance policy   

1. The 1988 Amendment to the Fair Housing Law affords protection on the basis of familiar status. It states a Family is a household in which there are children under 18 years of age. 

2. Everyone, without exception, is required to comply with the Civil Rights Act or 1866. 

3. XYZ Mortgage Company has an established 80% L/V ratio on loans for owner occupied housing it has further established that home loans made for property located in the sand hills subdivision require a L/V 70% ratio because this subdivision is considered less desirable. This established policy of XYZ is referred to Redlining. 

4. The Fair Housing Laws do not provide protection on the basis of homosexuality. 

5. Claims filed with HUD for alleged Fair Housing Violations must be filed within (1) year. 

6. A broker can best demonstrate his compliance with Fair Housing Laws by: 

• Display the equal housing opportunity poster in the office and all places of business 

• Document all transaction with all clients or customers 

• By showing all prospective buyers all property for which they are financially qualified 

7. An agent may discriminate against a potential buyer on the basis of inability to pay 

8. The Civil Rights Act of 1866 

• Was the earliest of the Anti-Discrimination Laws 

• Was the underlying basis of Jones vs. Mayer 

• Declared it unlawful to discriminate in all matters, not just housing, on the basis of the race of an individual 

9. Those who are specifically protected by the various Fair Housing Statutes 

• People in a particular religious group 

• People who are physically handicapped 

• Persons previously confined to a mental institutions  

** Drug users are not protected 

The Federal Fair Housing Law is administered by the (OEE) Office of Equal Opportunity under the direction of the Department of HUD. An aggrieved party has one (1) year to file a complaint with HUD and two (2) years to file a complaint in federal district court. The burden of proof is always on the complainant. As amended in 1972, Title VII requires that real estate brokers display HUD posters in all places of business, including model homes. It must contain the equal opportunity slogan, statement and logo. 

1. With respect to the Federal Fair Housing Laws, the term Family includes a single individual, whether male or female. 

2. With respect to The Federal Fair Housing Laws, the term Familial Status is applicable if at least one member is under the age of 18, is pregnant, or has applied for custody of a minor child. 

3. The Fair Housing Amendment Act or 1988 concerning handicapped access applies to Multiple Dwelling Units with (4) or more units. 

4. FHA- financed development must undertake affirmative marketing to attract a cross-section of the community. 

5. A seller who refuses to sell his home to a person from Bangladesh after the person has made a bona-fide offer for the home is violating the Federal Fair Housing Law. 

6. Tranvestites and drug addicts are not always protected classes under Federal Fair Housing Laws are not among the protected classes listed in the text…some states and municipalities have laws that add them to the various protected classes, but not the federal laws. 

7. A property management contract is between the property manager and the property owner. 

8. Legal laws can reasonably limit the number of occupants; this limiting scenario is not a violation. 

Quiz 

1. The following are required for a valid real estate contract 

• Offer and acceptance 

• Consideration 

• Be in writing 

** Performance is not required for real estate contract 

2. A forged deed is void 

3. The statute of frauds sets forth that contracts must be in writing to be enforced. 

4. If an offer is rescinded, it is terminated. 

5. If a seller breaches a valid and enforceable sales contract the purchaser may 

• Sue for damages 

• Rescind  

• Sue for specific performance 

6. The amount of a broker’s commission is the established by agreement between the broker and the seller/ buyer. 

7. A broker holding an earnest money deposit is a Trustee for their client. 

8. Baker gives a real estate licensee a power-of-attorney the licensee is called an Attorney-in-Fact. 

9. If a seller deposits the deed with an escrow agent but the seller dies before it is delivered to the purchaser, the transfer of title becomes effective on the date the deed was deposited in escrow due to the Doctrine of Relation- Back.  

10. The title passes in an Installment Contract (Land Contract) when the debt has been satisfied. 

11. Mark gives Susan the authority to sign for him in a real estate transaction. Susan is considered, in the eyes of the law, to be an Attorney-in-Fact. 

12. A contract between an adult and a minor is voidable by the minor. 

13. A counter offer can be withdrawn at any time before acceptance. 

14. The Federal Fair Housing Act may be enforced by bringing complaints to the Department of Housing and Urban Development. 

15. Soliciting listings based on a fear of racial change in the area is an example of Blockbusting. 

16. The most common type of lease used in shopping centers is a Percentage Lease. ** Commercial … percentage 

17. A clause in a lease that provides for increases in rent due to changes in costs or taxes is known as an Escalator Clause. 

18. An action to oust someone who is not legally in possession of real property is called Ejection 

19. Under a Net Lease, the tenant is required to pay  

• Taxes 

• Repairs 

• Utilities 

** Tenant is not required to pay mortgage 

20. All of the following are less than freehold estates 

• Estate at sufferance 

• Estate at will 

• Periodic estate