Chapter 11 Section 3

Question 1

essential elements of a sales contract

Answer 1

-must meet all of the essential elements for other contracts that include: competent parties, lawful subject matter, meeting of the minds, and consideration
-witnesses not required

Question 2

information included in a sales contract

Answer 2

-parties to contract
-property description
-real/personal property
-price
-effective date
-closing date
-occupancy and possession
-financing terms
-closing costs
-required disclosures
-property inspections
-addenda and additional terms
-signatures

Question 3

equitable title

Answer 3

-the interest held by one who has agreed to purchase the property but has not yet closed
-imposes on the vendor the obligation to maintain the property in the same condition it was when the agreement was entered into

Question 4

right to prepare contracts

Answer 4

-real estate licensees can legally prepare listing contracts, sales contracts, option contracts, and buyer representation agreements
-licensees are not allowed to prepare contracts for mortgages, deeds, leases, assignments, or other legal documents

Question 5

leases

Answer 5

-a licensee: may not modify these lease forms in any way, must refer any and all questions regarding the interpretation of these lease forms to an attorney, may prepare the purchase or option portion of a lease-purchase or lease-option agreement, must use an approved lease form for the lease portion of a lease-purchase or lease-option agreement or allow an attorney to prepare it

Question 6

As is contracts

Answer 6

-sellers of residential property in florida are required to disclose any material defects
-the use of an “as is” provision in a contract does not relieve the seller of this responsibility
-with an “as is” contract, the seller is in no obligation to repair the defects

Question 7

known material facts

Answer 7

-all real estate licensees have a duty to disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer

Question 8

lead-based paint

Answer 8

-federal law prohibits the use of lead-based paint
-seller or landlord must disclose information such as the location of the lead-based paint
-buyers must be given a 10-day period after a contract is signed to test for lead-based paint, although tenants do not have the right to conduct tests

Question 9

Radon gas

Answer 9

-any party interested in either buying or leasing for periods of more than 45 days must be provided with a written disclosure containing the following wording

Question 10

energy efficiency

Answer 10

-a prospective buyer of real property containing a building for occupancy must be provided with an energy-efficiency information brochure at the time of or prior to the execution of the contract for sale or purchase

Question 11

Property tax

Answer 11

-a prospective purchaser of residential property must be presented a disclosure summary at or before execution of the contract for sale

Question 12

FIRPTA

Answer 12

-the sale of a U.S real property interest by a foreign person is subject to the Foreign Investment in Real Property Tax Act of 1980 income tax witholding

Question 13

CDD

Answer 13

-community development district is a local unit of special-purpose government authorized by F.S 190
-provides mechanism for the financing and management of new communities
-F.S 190 requires the disclosure of the power to impose tax levies or assessments be provided in the sales contract of real estate within a district

Question 14

HOA

Answer 14

-F.S 720 requires that homeowner’s association disclosure be provided when membership in such association is mandatory
-if sales contract does not conform to the requirements of this subsection in florida law, the buyer may void it within 3 days or prior to closing, whichever comes first

Question 15

HOA disclosures

Answer 15

-the owner is required to be a member of HOA
-recorded private restrictions govern the use and occupancy of the property
-owner is obligated to pay assessments to the HOA with failure to pay leading to possible lien recording and enforcement with foreclosure
-there may be land use/recreation fees
-developer may have the right to amend the restrictive covenants without the approval of the association membership

Question 16

Flood insurance

Answer 16

-if the property is in a floodplain, this must be disclosed to the buyer, as well as the fact that flood insurance will be required to close the mortgage
-whether the property is in a floodplain or not, F.S requires that the seller must complete and provide a written flood disclosure to the buyer at or before the time the sales contract is executed (signed)

Question 17

Timeshare

Answer 17

-whenever a broker negotiates a purchase contract for the resale of a timeshare unit, the contract must contain specific language related to common area expenses, ad valorem taxes, and other ownership charges

Question 18

Timeshare listing agreement

Answer 18

-the following disclosure must appear in conspicuous type just above the space reserved for the signatures of the owner: there is no guarantee that your timeshare period can be sold at any particular price or within any particular period of time

Question 19

Cooperative

Answer 19

-each prospective purchaser who has entered into a contract for the purchase of an interest in a cooperative is entitled, at the seller’s expense, to a current copy of the articles of incorporation of the association, the bylaws, and rules of association

Question 20

condominium

Answer 20

-each contract for the resale of a condominium unit must include one of the two clauses:
-the buyer hereby acknowledges that buyer has been provided a current copy of the declaration of the condominium, articles of incorporation of the association, bylaws and rules of the association, and a copy of the most recent year-end financial information….
-this agreement is voidable by buyer by delivering written notice of the buyer’s intention to cancel within three days.