MT Real Estate flashcards

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

Montana Board of Realty Regulation

The Montana board within the Department of Labor and Industry that licenses salespersons, brokers, and property managers and hears disciplinary complaints against licensees.

Montana property management license

A Montana license authorizing leasing, rent collection, and management of another person's real property for compensation, separate from sales and brokerage activity.

Commingling

Mixing client, tenant, or earnest money trust funds with a broker's personal or operating funds; prohibited and grounds for license discipline.

Broker supervision

The requirement that a Montana salesperson be affiliated with and supervised by a licensed broker, who is answerable for the salesperson's real estate activities.

Dual agency

Representing both buyer and seller in the same transaction; permitted in Montana only with the informed written consent of both parties.

Fiduciary duties

Care, obedience, loyalty, disclosure, accounting, and confidentiality owed by an agent to a principal; a customer receives only honesty and fair dealing.

Material fact disclosure

An agent's duty to reveal known facts that could affect a reasonable party's decision or a property's value, such as defects, zoning, or inability to perform.

Confidentiality after termination

The duty to keep a former principal's confidences continues after the agency ends, even though loyalty and full disclosure duties generally do not.

Easement appurtenant

A right to use neighboring land that benefits and runs with the dominant parcel and passes automatically when that property is sold.

Lien priority

Generally liens rank by recording date, but real property tax liens and special assessments take priority over previously recorded mortgages and other liens.

Prior appropriation

Montana's water rights doctrine in which the earliest beneficial use holds the superior right, administered by the Department of Natural Resources and Conservation.

Statute of Frauds

Requires real estate sale contracts and leases longer than one year to be in writing and signed by the party against whom enforcement is sought.

Counteroffer

A response that changes the terms of an offer; it rejects and terminates the original offer, which can no longer be accepted.

Equitable title

The buyer's beneficial interest created when a binding sale contract is signed; legal title stays with the seller until the deed is delivered.

Liquidated damages

A contract provision fixing the amount a seller keeps if the buyer defaults; enforceable when reasonable and not a penalty.

Lien theory state

Montana's approach in which the borrower keeps title and the lender holds only a lien; deeds of trust with a power of sale allow nonjudicial foreclosure.

PITI

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

Discount points

Prepaid interest charged at closing, with one point equal to one percent of the loan amount, paid to lower the note interest rate.

Highest and best use

The use that is legally permissible, physically possible, financially feasible, and produces the greatest value as of the appraisal date.

Capitalization rate

Net operating income divided by property value or sale price; used in the income approach to convert income into an indicated value.

Sales comparison adjustment rule

Comparables are adjusted toward the subject: subtract value when the comparable is superior, add value when the comparable is inferior.

Quitclaim deed

Conveys whatever interest the grantor may have with no warranties of title; often used to clear clouds or transfer between family members.

Constructive notice

Notice of recorded interests imputed to the entire world through the public record, whether or not a party actually saw the document.

Race-notice recording

A later purchaser prevails over an earlier unrecorded interest only if the purchaser takes without notice and records first; Montana follows this rule.

Blockbusting

Inducing panic selling by telling homeowners that members of a protected class are moving into the neighborhood; prohibited under fair housing law.

Reasonable accommodation

A change in rules, policies, or practices needed so a person with a disability can use and enjoy housing, such as permitting an assistance animal.

Lead-based paint disclosure

Federal rule requiring sellers and landlords of pre-1978 housing to disclose known lead hazards and give buyers a 10-day inspection opportunity.

Security deposit return

Montana landlords must return a residential tenant's deposit along with an itemized written statement of any deductions within the statutory period after move-out.

Assignment versus sublease

An assignment transfers the tenant's entire remaining term and creates privity with the landlord; a sublease transfers only part of the term.

Proration

Splitting an annual or monthly expense or income at closing by multiplying the amount by the fraction of the period each party held the property.

Prepaid interest debit

A buyer closing charge for interest from the closing date through month end: loan balance times annual rate divided by 365 times the days remaining.

Points charged

The dollar cost of discount points at closing, computed as the loan amount multiplied by the point percentage, with one point equal to one percent.