ND Real Estate cheat sheet

Freehold estates (fee simple absolute, defeasible fee, life estate) last indefinitely or for a measured life; leasehold estates are personal property interests held for a term or periodically.

An easement appurtenant benefits and passes automatically with the dominant parcel; an easement in gross benefits a person or entity and is not tied to any parcel. A license is revocable and conveys no recorded interest.

Easement by prescription requires open, notorious, hostile, and continuous use for the statutory period; an easement by necessity requires unity of ownership, later severance, and strict necessity.

North Dakota is a lien-theory state: a mortgage creates a lien, the borrower retains title, and foreclosure of real property is judicial with a statutory redemption period (generally one year).

A spouse must join in a conveyance or mortgage of the homestead, and the homestead carries a statutory exemption from forced sale up to stated limits.

Fixture status is decided by annexation, adaptation to the property's use, and the parties' intent; items meant to stay personal property must be expressly excluded in the purchase agreement.

A variance relieves a hardship created by applying the ordinance to a specific parcel; a conditional or special use permit authorizes a use compatible with the plan but not allowed as of right.

Riparian rights attach to land bordering a watercourse and littoral rights to land bordering a lake; gradual accretion moves the boundary while avulsion does not.

Fiduciary duties are care, obedience, loyalty, disclosure, accounting, and confidentiality; an agent may not buy the principal's property without full written disclosure and consent.

North Dakota permits disclosed limited agency (dual representation) only with written disclosure to and informed written consent from all parties; absent consent the broker represents only the original client.

An agreement to pay a real estate commission must be in writing and signed to be enforceable; oral listing or buyer-broker compensation promises generally fail the statute of frauds.

Contract formation requires offer, acceptance, consideration, competent parties, and legal purpose; a counteroffer operates as a rejection plus a new offer.

Purchase agreements for land must be written, identify the parties and the property, state the price, and be signed by the party to be charged.

Earnest money is held in trust; a clause allowing the seller to keep the deposit is enforceable only as reasonable liquidated damages, not as a penalty.

Financing, inspection, and appraisal contingencies are conditions precedent; failing to satisfy or waive one within the stated period generally lets the buyer terminate and recover the deposit.

Agency terminates by performance, expiration, mutual agreement, revocation, renunciation, death, or incapacity; assignment delegates duties but a novation is needed to release the original party.

Sales comparison approach: adjust each comparable toward the subject; subtract when the comparable is superior to the subject and add when it is inferior.

Cost approach: value = replacement or reproduction cost new minus accrued depreciation (physical, functional, external) plus land value; most reliable for new or special-use buildings.

Income approach: value = net operating income divided by the capitalization rate; capitalization rate = net operating income divided by sale price.

Net operating income = effective gross income (potential rent plus other income minus vacancy and collection loss) minus operating expenses; debt service, depreciation, income tax, and capital improvements are excluded.

Gross rent multiplier = sale price divided by gross monthly rent; it screens comparable income properties but does not establish final value.

Depreciation categories: curable or incurable physical deterioration, functional obsolescence from outdated design, and external obsolescence from outside the site such as a nearby freeway.

Conventional qualification guidelines: housing expense ratio near 28% of gross monthly income and total debt ratio near 36%; FHA-insured loans use roughly 31% and 43%.

One discount point equals 1% of the loan amount and is prepaid interest that lowers the note rate; loan-to-value = loan divided by value or price, whichever is lower.

A fully amortizing loan retires principal over the term with level payments; a balloon loan carries a partially amortized balance due before full amortization.

Deed requirements: competent grantor, named grantee, words of conveyance, legal description, grantor's signature, and delivery accepted by the grantee; consideration need only be recited.

A general warranty deed carries the broadest covenants; a special warranty deed limits the warranty to defects arising during the grantor's ownership; a quitclaim deed conveys only the grantor's present interest with no warranty.

Recording in the county recorder's office gives constructive notice; in North Dakota a later purchaser for value without notice is generally protected against an unrecorded prior interest.

A forged deed is void and passes no title even if recorded; a deed from an adjudicated incompetent grantor or one obtained by duress is voidable.

An owner's title policy protects the buyer for as long as the buyer or heirs hold title; a lender's policy protects only the declining loan balance.

North Dakota requires a written seller's property disclosure for residential transfers; the statement reports known conditions and is neither a warranty nor a substitute for inspections.

At closing, accrued taxes, interest, and rent are prorated as of the closing date, with the seller typically paying through the day of closing on the settlement statement.

North Dakota imposes no state real estate transfer tax; typical closing charges are recording fees, title insurance premiums, and lender fees.

North Dakota Century Code ch. 43-23 governs broker and salesperson licensing; the Real Estate Commission adopts rules, investigates complaints, and may suspend, revoke, or fine.

A license is required to list, sell, buy, exchange, lease, or negotiate for another for compensation; exemptions include an owner selling their own property and persons acting under court order or power of attorney.

A salesperson must be affiliated with a licensed broker, and the broker is accountable for supervising affiliates and for handling trust funds.

Grounds for discipline include misrepresentation, false promises, breach of fiduciary duty, commingling, failure to account for funds, undisclosed compensation, and conviction of a crime involving fraud or dishonesty.

Commission rates are negotiated between broker and client; no rate is fixed by statute or by the Commission.

A licensee must disclose in writing any personal interest in property being bought, sold, or leased, including an intent to purchase the listing personally.

Continuing education must be completed each biennial renewal cycle; a license not renewed by the deadline becomes inactive or expired, and continued activity is unlicensed practice.

Advertisements must identify the brokerage by its licensed name; a salesperson may not advertise in a manner suggesting independent brokerage status.

Unlicensed assistants may perform clerical work but may not negotiate price or terms, solicit listings, or perform other acts that require a license.

Exclusive right to sell: the broker is paid whoever procures the buyer, including the seller; exclusive agency: the seller keeps the right to sell without commission; open listing: only the procuring broker is paid.

Trust funds such as earnest money and deposits must be placed in a broker's trust account, kept separate from business funds, and disbursed only as the transaction documents or written authorizations permit.

The broker must keep records of all trust account receipts and disbursements and make them available for Commission examination.

When buyer and seller dispute earnest money, the broker generally holds the funds until the parties agree in writing or a court orders disbursement.

A commission is earned when the broker produces a ready, willing, and able buyer on the seller's terms, unless the listing agreement says otherwise or the seller's own breach prevents closing.

Agency disclosure must be written and made before the party signs an agreement; limited agency requires the written consent of both parties.

Referral fees or other compensation may not be paid to unlicensed persons for brokerage activity.

All advertising, including internet and social media listings, must be truthful, must not misrepresent the property, and must comply with fair housing law.

Federal Fair Housing Act protected classes are race, color, religion, sex, national origin, familial status, and disability; the Act reaches sales, rentals, advertising, brokerage services, and financing.

North Dakota's Human Rights Act adds age (40 and over), marital status, status with respect to public assistance, and disability to the protected classes for housing in the state.

Prohibited practices include refusing to show or negotiate, steering, blockbusting, redlining, offering different terms, and discriminatory advertising.

Familial status protects households with a child under 18, pregnant women, and persons securing legal custody; blanket adults-only policies generally violate the Act.

Disability requires reasonable accommodation in rules, policies, and services and reasonable modification of the unit at the tenant's expense, with restoration where reasonable.

Advertising is never exempt: the Fair Housing Act exemptions for owner-sellers and owner-occupied four-unit buildings do not permit discriminatory advertisements.

HUD handles federal complaints, generally filed within one year of the discriminatory act; state human rights complaints go to the North Dakota Department of Labor and Human Rights.

Material misrepresentation, false or misleading advertising, and deceptive high-pressure tactics expose licensees to Commission discipline and to state consumer fraud claims.