Term
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Definition
| Uniform Common Interest Ownership Act: a uniform law that applies to all communities where a unit or homeowner pays a share of the real estate taxes, insurance premiums, maintenance, or improvement expenses related to the development. |
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Term
An unincorporated association can hold ownership of land.
T/F X |
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Definition
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Term
| In what ways does a HOA "act"? X |
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Definition
- as an agent of the property owners
- as a third-party beneficiary of the covenants in the declaration.
- as the assignee of the developer
- "convenient instrument by which the property owners may advance their common interests"
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Term
| What determines the powers, functions, title, rights, and duties of the HOA? X |
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Definition
| The declaration, the corporate charter and bylaws, and the state's not-for-profit corporation law |
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Term
| What are the stages in transfer of control of common areas? X |
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Definition
- Land acquisition and assembly
- Rezoning and plat approval
- Preparation, execution, and recording of declaration
- Up to this point the declaration lacks efficacy because the developer owns all the land
- Developer deeds out units
- At this stage the HOA is still in control of the developer, but his interest will decrease as sales proceed
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Term
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Definition
the power to pass reasonable laws for the good of the public.
Promote, improve, and enhance:
- health
- safety
- welfare
- morals
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Term
| What are the aspects that must be looked at for concurrency? X |
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Definition
- Roads
- Mass Transit
- Schools
- Recreation Facilities
- Solid Waste Disposal Facilities
- Sanitary Sewer Systems
- Drainage Systems
- Potable Water Systems
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Term
A junior mortgage can trigger a due in sale clause.
T/F X |
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Definition
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Term
| What happens when a Guarantor goes into bankruptcy? X |
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Definition
| Payments made on the guaranteed debt may be recovered by the trustee |
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Term
| What is the only money involved in a purchase money mortgage. x |
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Definition
| The "downpayment" called the purchase money/take-back |
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Term
| Typical clauses for a secondary mortgage. x |
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Definition
- If the first mortgage is in default, the second mortgagee can make the payments, add the sum to the second debt, accelerate and foreclose.
- Buy the first at a discount
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Term
| What is the difference between a junior and a wrap around? x |
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Definition
| The junior typically is secured by land that is already subject to senior encumbrances......The face amount of the wraparound represents the total of the amounts then due on the senior mortgage and the new money advanced under the wraparound. |
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Term
| What is the theory of subrogation? x |
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Definition
| The legal doctrine under which one who pays money on a senior lien is under certain circumstances entitled to claim the benefit of the priority enjoyed by the senior lien. |
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Term
| Why is a convertible mortgage attractive to the borrower and lender? x |
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Definition
- it is allows the borrower to retain all of the tax benefits associated with ownership until the lender exercises the conversion option
- it is attractive to the lender because the lender exercises its option at a time when the property has proven itself to be viable and has increased in value.
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Term
| What are the problems with a participating mortgage? x |
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Definition
| the possibility that the loan may be held to be usurious, unconscionable, a clog on the equity of redemption, or as creating a joint venture between the borrower and lender |
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Term
| Advantages of a Sale and Lease Back x |
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Definition
- Tax advantage ...deduct rent for income purposes instead of only interest from a mortgage
- Much more cash than if mortgaged
- may have restrictions on borrowing
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Term
Disadvantages of a Sale lease Back x
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Definition
- appreciation means bad news
- Lessee has burden of ownership since NET NET NET but lacks the benefits of ownership
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Term
| What are the possibilities a lender will exhaust before going through foreclosure? x |
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Definition
- extension of time or moratorium of payments
- restructuring the loan
- sale to a credit worthy borrower
- deed in lieu of foreclosure
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Term
| Subrogation/Nondisturbance/Attornment agreement x |
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Definition
| the tenant acknowledges that its lease is junior, but if a foreclosure sale occurs and the tenant is not behind, the tenant can stay |
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Term
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Definition
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
SUPERFUND
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Term
| CERCLA risks for lenders x |
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Definition
- borrower may not be able to pay if found contaminated
- decline in value
- loss of priority
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Term
| Private restrictions fall into 5 categories: x |
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Definition
- Whimsical
- Benefits for retained land
- Keeping development attractive
- Affirmative covenants
- Condition's with reversions if violated
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