LA Real Estate flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

LREC

Louisiana Real Estate Commission: the state agency that licenses brokers, salespersons, and schools, investigates complaints, holds hearings, and may fine, suspend, or revoke licenses.

Sponsoring broker requirement

A Louisiana salesperson must be affiliated with and sponsored by a licensed broker; the broker contracts with the public and pays the salesperson's compensation.

Unlicensed assistant limits

Unlicensed assistants may perform clerical tasks, answer phones, and deliver documents, but may not show property, quote commissions, or negotiate any term of a transaction.

Commingling prohibited

Brokers must keep client money such as earnest money and security deposits in a separate trust or escrow account, never mixed with business or personal operating funds.

License required before brokerage

Listing, marketing, showing, negotiating, or accepting deposits or rents for another person for compensation requires an active Louisiana license before the activity occurs.

Grounds for license discipline

Fraud, misrepresentation, material omission, undisclosed dual compensation, failure to account for funds, and a broker's failure to supervise are grounds for disciplinary action by the Commission.

Fiduciary duties

The six duties an agent owes a principal: loyalty, obedience to lawful instructions, disclosure, confidentiality, accounting for money and property, and reasonable care and skill.

Dual agency

Representing both the buyer and the seller in the same transaction; allowed in Louisiana only with the informed written consent of both parties, with no advocacy for either side.

Confidentiality after termination

An agent's duty not to reveal or misuse a former principal's confidential information continues after the agency relationship ends, unless disclosure is required by law.

Agency disclosure timing

The licensee must give the written agency disclosure and identify whom the licensee represents before the consumer signs a representation agreement or submits an offer.

Compensation does not create agency

Agency arises from a written agreement or the parties' conduct, not from who pays the commission; a seller paying a buyer's broker does not make that broker the seller's agent.

Termination of agency

An agency relationship ends by performance, expiration of its term, mutual agreement, revocation by the principal, renunciation by the agent, or death or incapacity of a party.

Material fact disclosure duty

An agent must disclose to the principal all known facts that could affect the principal's decision, including known property defects and transaction risks.

Earnest money deposit

The buyer's good-faith deposit, held in the broker's trust account, credited to the purchase price at closing, and returned or forfeited according to contract terms if the sale fails.

Contingency clause

A contract condition such as financing, inspection, or appraisal that must be satisfied by a stated deadline for the sale to proceed; otherwise the buyer may terminate and recover the deposit.

Loan-to-value ratio

The loan amount divided by the lesser of the purchase price or appraised value; it determines the required down payment and often whether mortgage insurance applies.

Discount points

Prepaid interest equal to a percentage of the loan amount; one point is one percent of the loan and generally reduces the interest rate on the note.

PITI

Principal, interest, property taxes, and hazard insurance: the four components of a typical monthly housing payment used by lenders to qualify a borrower.

Closing Disclosure timing

Under federal TRID rules the borrower must receive the Closing Disclosure at least three business days before consummation of the loan, allowing time to review final costs.

Redhibition

Louisiana Civil Code warranty requiring a seller to deliver property free of hidden defects that make it unfit for its intended use; the buyer may seek rescission or a price reduction.

Immovable

Louisiana civil-law term for real property, including land and the buildings and fixtures attached to it, as distinguished from movables, which are personal property.

Act of sale

The notarial writing that transfers Louisiana immovable property; it is passed before a notary and two witnesses and recorded in the parish conveyance records.

Usufruct

A Louisiana real right letting a person use and enjoy another's property and take its fruits, while naked ownership of the property remains with the owner.

Predial servitude

A Louisiana charge imposed on one parcel, the servient estate, for the benefit of another parcel, the dominant estate, such as a right-of-way or drainage easement.

Homestead exemption

Louisiana excludes the first $75,000 of assessed value of an owner's primary residence from parish property taxes, reducing the taxable assessed value.

Sales comparison approach

An appraisal method that estimates value by comparing the subject property with recently sold similar properties and adjusting for differences in size, condition, features, and location.

Capitalization rate

Net operating income divided by property value; rearranged, value equals net operating income divided by the capitalization rate, the basis of the income approach.

Fair housing protected classes

Federal law prohibits discrimination in the sale or rental of housing based on race, color, religion, sex, national origin, familial status, and disability.

Antitrust and commissions

Licensees may not agree with competitors on commission rates, splits, or market areas; brokerage fees are negotiable between each broker and each client.

RESPA Section 8

Bars paying or receiving anything of value for referrals of business involving federally related mortgage loans; kickbacks and unearned fees are illegal.

Advertising rules

Real estate advertising must be truthful, identify the brokerage, comply with fair housing law, and never market another broker's listing without permission.

Referral fee to unlicensed person

Paying a commission or referral fee to an unlicensed person for brokerage services is prohibited and exposes the licensee to fines, suspension, or revocation.

Conflict of interest disclosure

A licensee buying or selling property for their own account must disclose in writing their licensed status and their interest in the transaction to the other party.