Property-Only cheat sheet

Freehold estates: fee simple absolute (potentially infinite duration, inheritable, no conditions); fee simple defeasible (determinable, condition subsequent, or executory limitation); life estate (measured by a life, reversion or remainder follows).

Leasehold estates: estate for years (fixed term, no notice to terminate), periodic tenancy (renews automatically, notice required), tenancy at will (either party may terminate), tenancy at sufferance (holdover).

Concurrent ownership: tenancy in common (unequal shares, no survivorship), joint tenancy (equal shares, right of survivorship, four unities: time, title, interest, possession), tenancy by the entirety (spouses only, survivorship, creditor protection in some states).

Community property (nine states) treats most property acquired during marriage as owned equally; separate property is acquired before marriage or by gift/inheritance.

Ownership of land includes surface, airspace (to a reasonable height), and subsurface mineral rights; these may be severed and conveyed separately.

Water rights: riparian (adjacent to watercourse, reasonable use), prior appropriation (first in time, first in right, beneficial use), littoral (adjacent to lake/sea).

Fixtures are personal property permanently attached to realty; tests: annexation, adaptation, intention. Trade fixtures remain personal property of a tenant if removed before lease ends.

Title theory vs. lien theory: in title theory states the mortgagee holds legal title; in lien theory the mortgagor retains title and the mortgagee holds a lien.

Adverse possession elements: actual, open and notorious, exclusive, hostile, continuous for the statutory period; color of title and payment of taxes can shorten the period in some states.

Encumbrance = any right or interest in real property held by someone other than the owner that diminishes value or use (liens, easements, encroachments, deed restrictions).

Easement appurtenant benefits a dominant parcel and burdens a servient parcel; it runs with the land. Easement in gross benefits a person or entity, not a parcel.

Easement creation: express grant/reservation, implication (prior use, necessity), prescription (adverse use for statutory period), estoppel, dedication.

Easement termination: merger, release, abandonment (requires intent plus act), prescription, destruction of servient tenement, expiration.

License = revocable permission to use land; not an interest in land and not assignable.

Lien priority generally follows recording order (first in time, first in right) unless a statute gives super-priority (e.g., property tax liens, some mechanic's liens).

Mechanic's lien: filed by suppliers/contractors for labor or materials; requires strict statutory notice and filing deadlines; priority often dates to commencement of work.

General liens (judgment, tax) attach to all property; specific liens (mortgage, mechanic's) attach to identified property.

Encroachment = physical intrusion of a structure or improvement onto another's land; may ripen into an easement by prescription or require removal.

Statute of Frauds requires real estate contracts, leases over one year, and easements to be in writing and signed by the party to be charged.

Essential contract elements: competent parties, mutual assent (offer/acceptance), consideration, lawful purpose, legal description of the property.

Marketable title: title free from reasonable doubt and encumbrances; delivered at closing unless the contract states otherwise.

Deed essentials: grantor, grantee, words of conveyance, legal description, signature of grantor, delivery and acceptance. Consideration is not required for validity.

Deed types: general warranty (six covenants), special warranty (grantor warrants only acts of grantor), bargain and sale, quitclaim (no warranties).

Recording acts: race (first to record wins), notice (first to receive notice without notice of prior interest wins), race-notice (first to record without notice wins).

Title insurance: owner's policy protects the buyer; lender's policy protects the mortgagee; standard exceptions include survey, unrecorded easements, and parties in possession.

Closing documents: settlement statement, deed, bill of sale, promissory note, mortgage/deed of trust, title affidavit, transfer tax forms.

Prorations at closing are typically calculated to the day of closing; taxes and rents are prorated, and the seller usually pays through the day before closing.

Fiduciary duties owed by an agent: loyalty, obedience, disclosure, confidentiality, accounting, reasonable care and skill.

Agency creation: express (written or oral), implied (conduct), ratification, or estoppel. No consideration is required.

Types of agency: universal, general, special. In real estate, special agency is most common (limited to a specific transaction).

Single agency represents one party; dual agency represents both buyer and seller and requires informed written consent in most states.

Designated agency: the brokerage represents both parties but different licensees within the firm represent each side, avoiding dual agency.

Transaction broker / non-agency: assists both parties without representing either; duties are limited to honesty, fairness, and disclosure of known material facts.

Subagency: a cooperating broker works for the listing broker and owes fiduciary duties to the seller.

Termination of agency: completion, expiration, mutual agreement, revocation by principal, renunciation by agent, death or incapacity, bankruptcy.

Commingling (mixing client funds with personal funds) and conversion (misuse of client funds) are prohibited; earnest money must be held in a trust/escrow account.

Sales comparison approach: estimate value by adjusting comparable sales for differences (location, size, condition, date of sale); adjustments are made to the comparable, not the subject.

Cost approach: value = replacement cost new − depreciation + land value. Depreciation types: physical deterioration, functional obsolescence, external (economic) obsolescence.

Income approach: value = net operating income ÷ capitalization rate. Cap rate = NOI ÷ value.

Gross rent multiplier (GRM) = sale price ÷ gross monthly rent; used for quick income-property comparisons.

Highest and best use: the legally permissible, physically possible, financially feasible, and maximally productive use.

Appraisal principles: substitution, contribution, conformity, progression, regression, anticipation, balance, change.

CMA (comparative market analysis) is prepared by a licensee to help price a listing; it is not an appraisal and must not be represented as one.

Reconciliation: the appraiser weighs the approaches and selects a final value estimate based on relevance and reliability of data.

Mortgage = pledge of real property as security for a debt; note = promise to pay; deed of trust uses a trustee and power-of-sale foreclosure.

Lien theory states: borrower retains title; title theory states: lender holds title until debt is paid.

Loan-to-value (LTV) = loan amount ÷ appraised value or sale price (whichever is lower). Down payment = 1 − LTV.

Qualifying ratios: front-end (housing expense ÷ gross monthly income) and back-end (total debt ÷ gross monthly income); conventional guidelines often 28/36, FHA 31/43.

PMI (private mortgage insurance) is generally required when LTV exceeds 80%; it protects the lender, not the borrower.

Amortization: fixed-rate fully amortized loan payment = P × [i(1+i)^n] ÷ [(1+i)^n − 1], where i = monthly rate, n = number of payments.

Types of loans: conventional, FHA (government-insured), VA (government-guaranteed), USDA; adjustable-rate mortgages (ARM) have initial fixed periods and periodic caps.

Foreclosure types: judicial (court-supervised), non-judicial (power of sale), strict foreclosure. Deed in lieu and short sale are alternatives.

Truth in Lending (Regulation Z) requires disclosure of APR, finance charge, amount financed, and total payments within three business days of application.

Zoning ordinances regulate use, height, bulk, density, and setbacks; nonconforming uses are allowed to continue but generally cannot be expanded.

Variance = permission to deviate from a zoning requirement due to hardship; conditional use permit = allowed use subject to conditions.

Police power: zoning, building codes, health codes; eminent domain requires public use and just compensation; taxation is a separate power.

Subdivision regulations govern platting, streets, utilities, and dedication of public areas.

Restrictive covenants run with the land if there is intent, notice, touch and concern, and privity; enforced by injunction, not by government.

Property management duties: lease enforcement, rent collection, maintenance, accounting to owner, adherence to fair housing and landlord-tenant law.

Management agreement should specify scope, fees, authority to lease/repair, and handling of security deposits.

Security deposits: many states limit amount and require separate escrow, itemized accounting, and return within a statutory period (e.g., 14–30 days).

Environmental regulations: CERCLA liability for hazardous substances, wetlands (Section 404 permits), and endangered species restrictions can limit land use.

Area: rectangle = length × width; triangle = ½ × base × height; circle = πr². One acre = 43,560 square feet.

Commission = sale price × commission rate; split = commission × broker's share.

Seller net = sale price − loan payoff − closing costs − commissions ± prorations.

Proration formula: (annual amount ÷ 365) × number of days; or (annual amount ÷ 12) × months.

Property tax = assessed value × assessment ratio × mill rate ÷ 1,000 (if mill rate is per $1,000).

Loan-to-value = loan ÷ value; equity = value − loan balance; appreciation = (new value − old value) ÷ old value.

Points: 1 point = 1% of loan amount; discount points are paid to reduce the interest rate.

Capitalization: value = NOI ÷ cap rate; NOI = gross income − vacancy/credit loss − operating expenses (excludes debt service and depreciation).

Gross rent multiplier = price ÷ gross rent; price = GRM × gross rent.

Federal Fair Housing Act (Title VIII) prohibits discrimination based on race, color, religion, sex, national origin, familial status, and disability (handicap).

Prohibited acts: refusal to rent/sell, different terms, steering, blockbusting, redlining, discriminatory advertising, and denial of reasonable accommodation.

Reasonable accommodation: a change in rules, policies, or services for a person with a disability; reasonable modification: physical change to the unit at the tenant's expense (some exceptions).

HUD enforces the Fair Housing Act; complaints may also be filed with state/local agencies or in federal court.

RESPA (Real Estate Settlement Procedures Act) prohibits kickbacks and unearned fees for settlement services; requires a settlement statement (Closing Disclosure) and disclosure of affiliated business arrangements.

TILA/Regulation Z requires loan disclosures and prohibits certain loan originator compensation practices; HOEPA covers high-cost mortgages.

Equal Credit Opportunity Act (ECOA) prohibits discrimination in credit based on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of rights.

Fair housing advertising must avoid words or images that indicate preference or limitation based on protected classes; use equal opportunity language.

State and local laws may add protected classes (e.g., source of income, sexual orientation, gender identity, military status).