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Real Estate Principles And Practices | by Philip A. Benson, Nelson L. North



The real estate business is one which engages the attention of a large number of people. Real estate, that is, land and buildings and all the varied interests in them, is of importance to nearly every one. It is logical then that a course on real estate should be included in the curriculum of a University School of Commerce. The present work is designed primarily as a college textbook. It is written for the benefit of the student, and aims to make the principles and practices of the business of real estate comprehensible to the lay mind. The book is not a law book but necessarily includes discussions of some of the legal principles governing real estate transactions.

TitleReal Estate Principles And Practices
AuthorPhilip A. Benson, Nelson L. North
PublisherPrentice-Hall, Inc
Year1924
Copyright1922, Prentice-Hall, Inc
AmazonReal Estate Principles and Practices

By Philip A. Benson, B.C.S., C.P.A. Lecturer On Real Estate, New York University

And

Nelson L. North, Jr., Ll.M. Lecturer On Real Estate, New York University

Prentice Hall, Inc.

Endorsement of the National Association of Real Estate Boards.

"Real Estate - Principles and Practices" is the most comprehensive general text-book yet written for the real estate field.

The work is admirable in scope, thorough in treatment, and clear in style. It appeals not only to the student of underlying principles, and to the worker interested in approved practices, but to the citizen conscious of his need for enlightenment on matters basic to the everyday activities of his community.

"Real Estate - Principles and Practices," with its appendices of forms and tables, is a manual of real estate service, and its timely merit is recognized with appreciation by The National Association of Real Estate Boards.

Real Estate Principles And Practices 2

Chairman, Publication Council,

National Association of Real Estate Boards.

-Preface
The real estate business is one which engages the attention of a large number of people. Real estate, that is, land and buildings and all the varied interests in them, is of importance to nearly every...
-Chapter I. Introductory. Real Estate A Business
Since the time mankind ceased nomadic existence and took up fixed habitations, land and buildings thereon and interests therein have been the subject of commercial transactions. Large areas of the ear...
-Ethics Of The Business
In every real estate transaction the parties must be governed by the highest ideals of fair dealing and honesty. This does not require either party to give away any fair advantage, nor confide to the ...
-Divisions Of The Business
Taking the view that every transfer of realty or an interest therein is a transaction within the meaning of the Real Estate business, we must divide the business into two general divisions, INACTIVE a...
-Agency
That branch of the active real estate business, known as agency, is the dealing in or with real estate for or on behalf of others. More persons by far are engaged in this class of the business than in...
-Property
In its legal conception property is the right to possess, use and dispose of a thing. Technically therefore property is not the thing itself but the right to, or interest in it. Practically however th...
-Realty And Personalty
Speaking again from the practical viewpoint property is of three kinds: Realty, personalty and mixed. Realty may be defined as the land and buildings thereon and anything permanently affixed to the la...
-Real Property And Personal Property
Considering these terms in their legal aspect, that is as indicating the interest in the thing rather than the thing itself, we find that there may be both real property and personal property in realt...
-Real Estate
For all commercial purposes the term real estate has two distinct meanings. First it is the article dealt in, and in this sense it includes realty and all interests therein whether they are legally re...
-Fixtures
As stated above, realty includes not only land and buildings but also anything permanently fixed to the land or building. Such are known as fixtures. It is sometimes a very difficult matter to decide ...
-Chapter II. Interests In Realty. Limitations Upon Ownership
Two principal systems of land ownership in England, were Feudal and Alodial. Historically they are very interesting and well worth fuller examination than the scope of this book permits. The Feudal sy...
-Police Power
The police power permits the municipality to restrict the use of realty so as to protect the health or morals of its citizens. Buildings must be of certain type depending on use, must have certain saf...
-Escheat
The original owner of all land was the State, from whom all titles are traced under a grant and subsequent conveyance. It would be impossible to conceive of land becoming unowned i.e., owned by no one...
-Eminent Domain
The right of eminent domain is the power inherent in the State, to take by due process of law from an owner, his land when necessity arises. Only two requirements must be met; the use must be public, ...
-Right Of Taxation
Under the right of taxation, the fourth limitation, the State levies taxes for its support, and the maintainance of all its varied branches which protect and benefit the citizens of the State. It is f...
-Estates And Chattel Interests
Rights in realty which in the legal sense amount to real property (extending in duration one or more lives or in perpetuity) are termed estates, while those which are personal property are known as ...
-Fee Simple
Fee, fee simple, and fee simple absolute, all having the same meaning, may be defined as the largest possible estate in real property. The owner of this estate may use it and dispose of it during his ...
-Fee Upon Condition And Fee Determinable
In both these estates the holder has a fee simple except that there is a limitation which may take his rights from him and give them to another. Both give the holder all the benefits of full fee owner...
-Life Estates And Remainders
These are very common and a simple example of fee splitting. A man gives land to A for his life and at A's death it is to go to B. A, who is known as the life tenant, takes a life estate, that is th...
-Dower
Dower is the estate for life which is given by law to a wife upon her husband's death, in all real property owned by him at any time during marriage. The requisites for the establishment of the estate...
-Curtesy
Tenancy by the curtesy is the life estate which is given by law to the husband in real property owned by his wife. It is established by 1. A valid marriage and birth of a child. 2. Ownership in the ...
-Joint Interests In Land
Land may be owned by two or more persons, it need not be entirely in the ownership of one person. These joint interests are often found and the most usual are the following: ...
-Tenancy In Common
This is the ownership of land by two or more persons, each of whom has an undivided interest which upon the death of one passes to the heirs or under the will of the one dying. Unless the instrument c...
-Joint Tenancy
A joint tenancy is similar to the tenancy in common except that upon the death of one his interest passes to the other - as the law terms it - by survivorship. To create this interest the instrument m...
-Estate By The Entirety
A deed of real property to a husband and wife as such gives them a joint interest known as an estate by the entirety. They each, under the law, own the entire property. Neither one can sell his or her...
-Title To Real Property
While not strictly in accord with legal theory, for practical considerations, title to real property passes usually in one of four ways. 1. By descent. 2. By will. 3. By voluntary alienation. 4. B...
-Chapter III. Liens. Liens
In addition to the estates and chattel interests already mentioned, there are various rights, known as liens, which affect the possession and ownership of realty. A lien is the right given by law to a...
-Lien Of Mortgage
A borrower of money, or one owing a debt may, for the purpose of securing payment of the amount due the lender or creditor, execute an instrument known as a mortgage. This instrument purports to trans...
-Taxes And Assessments
Taxes and assessments levied according to law become a specific lien on the real property affected thereby. If the charges are not paid the taxing body may take such action to enforce them as will res...
-Mechanics Liens
A mechanic's lien is a lien given by statute to those who perform labor or furnish material in the improvement of real property. The law recognizes the right of the material man and laborer to hold fo...
-Enforcement Of Mechanic's Lien
A mechanic's lien is enforced by foreclosure. The foreclosure is a legal action against the owner and those whose claims against the property are inferior to the lienor's. A judgment of the court in f...
-Discharge Of Mechanic's Lien
A mechanic's lien may be discharged or become non-effective as follows: (a) By expiration. This occurs one year after filing, unless an action to foreclose it or an action to foreclose a mortgage on ...
-Judgments
A judgment is the determination of the rights of parties through an action at law. All judgments are not money judgments, and only those which give a money award are here considered. Judgments for the...
-Discharge Of Judgment
A judgment is a lien on property from the time of being docketed until a specific time, usually about ten years, after its date when the lien expires. Under certain circumstances the lien may be renew...
-Attachments
Another form of lien on real property is the attachment which is a statutory privilege given to a plaintiff or complainant in the courts in an action for money damages before any judgment is procured....
-Lien Of Decedent's Debts
The real property of a decedent passes at his death to his devisees if he leaves a will, and to his heirs at law if he die intestate. Title to the property vests in the devisees or heirs subject to su...
-Transfer Tax
The collateral inheritance tax, or transfer tax, as it is often called, is a tax levied by the State upon the right to inherit from, or take under the will of a deceased person. It is not a tax upon t...
-Federal Estate Tax
This tax differs essentially from the transfer tax in that it is levied not upon the amounts passing to the beneficiaries, but upon the total estate. Under the law as it exists at the time of writing ...
-Corporation Franchise Tax
In most States corporations are taxed annually on their franchise, or right to do business in the State. There are various methods of computing the amount of the tax. It is usually based on the amount...
-Conditional Bill Of Sale
There are certain encumbrances against real property which are not true liens. One of these is the conditional bill of sale. This is an agreement for the sale of articles of personal property which ar...
-Other Encumbrances, Not True Liens
Other encumbrances against real property, which, although not liens must be considered, include easements, covenants and restrictions, governmental regulations and proceedings for their enforcement. ...
-Priority Of Liens
The usual rule as to priority of liens is that they rank in the order of their filing or recording in the office of the proper officials. A mortgage recorded yesterday has precedence over one recorded...
-Chapter IV. Taxes, Assessments And Water Rates. Lien Of Taxes
The ownership of property in a civilized community is subject to the right of the State to levy taxes upon it for the purpose of obtaining funds to defray the expense of government. As the expense is ...
-Determination Of Amount Of Tax
In order to ascertain the amount of tax against a particular piece of property a tax rate must be determined. To arrive at the tax rate, two factors are used - the budget or amount of money to be rais...
-The Budget
A budget is a statement of probable revenue and expenditure and of financial proposals for the ensuing year as presented to or passed upon by a legislative body. It is customary, in the preparation ...
-Assessed Valuations
Since the tax is apportioned to various properties in proportion to the value of each, it is necessary for the taxing body acting by its representatives to examine and equitably appraise all taxable p...
-Reduction Of Assessed Valuation
The value assigned to a piece of property by a tax official is merely the opinion of that official as to its value. The owner of the property may not agree with such opinion and may feel that his prop...
-Certiorari
The action of the tax officials is subject to review by the court. If an owner feels aggrieved by an assessment upon his property and is unable to secure a reduction upon protest to the officials, he ...
-Taxes In New York City
The practise followed in the levying of taxes is illustrated by the methods employed in New York City. There you will find a Board of Tax Commissioners consisting of a President and six Commissioners....
-Assessed Valuations, Tax Levy And Tax Rates, 1921 Assessed Valuation Of Property
The aggregate Taxable Valuations of property within The City of New York for the year 1921, by boroughs, as certified by Dept. of Taxes and Assessments, are as follows: Real Estate Per...
-Assessments. Definition Of Assessments
Assessments are charges upon real property benefited by a local improvement to pay all or part of the cost of such improvement. They do not recur regularly as taxes do, and they are not apportioned ac...
-How Assessments Are Levied
Assessments must be levied according to law and therefore due notice must be given to the property owners in order that the proceedings be valid and the resulting charge on the property be an enforcea...
-Assessments Laid By Authority Of The Courts
The proceeding under which land is taken for public purposes is called a condemnation proceeding. The property is said to be condemned and the proceeding is for the purpose of obtaining title to it ...
-Assessments Laid By Board Of Assessors
Many local improvements are made by public officials, acting on the initiative of the property owners or their representatives. Such improvements include sewers, sidewalks, grading, curbing, and pavin...
-When Assessments Become Liens
Assessments become liens when they are definitely known and fixed. In some cities by statute they become liens ten or more days after being confirmed and entered. By provision of law in some States an...
-Water Rates
Water is a commodity sometimes furnished by a private company and sometimes furnished by the municipality. When furnished by the municipality the charge for it is enforced in a manner similar to the c...
-Enforcement Of Lien Of Taxes
There are several methods of enforcing the payment of taxes. The property may be sold at public auction. At such auction sale the property is struck down to the highest bidder. The sale, however, is s...
-Chapter V. Contracts. Importance
Sales, purchases and exchanges of realty are continually being made and engage the attention of owners, purchasers and brokers. These transactions usually are voluntarily entered upon and almost witho...
-Competent Parties
Naturally there must be at least two parties to a contract; a man could not make an enforceable contract with himself. The parties must meet on the same mental plane; an idiot, or insane person cannot...
-Offer And Acceptance
The contract must create future obligations. A gives a deed of his house to B. There is no contract; the transaction is complete. The theory and intent of a contract is to create a binding obligat...
-Agreement Consideration
The promise of the one party to the contract must be supported by an undertaking of the other. Each must obligate himself. Each must put some consideration into the agreement. A mere promise would not...
-Legality Of Object
An agreement to be an enforceable contract must contemplate the attainment of an object not expressly forbidden by law nor contrary to public policy. For example: An agreement for the sale of realty t...
-Necessity Of Writing
The contract for the sale of real property is expressly required by law to be in writing and signed by the party to be bound by it. This is the old Statute of Frauds in its present form, and is inte...
-Form Of Contract of Sale
The following is the form of contract of sale used by the title insurance companies of New York. Other forms are in use and it is not compulsory to use this form. However, it contains in its printed p...
-Divisions Of Contract
An examination of the form shows that the contract falls into five general divisions. 1. Statement of parties. 2. Description of property. 3. Financial statement. 4. Closing date and place. 5. Mi...
-Statement Of Parties
Following the date, the words between............hereinafter described as the seller, and............hereinafter described as the purchaser, indicate the place for insertion of the names of the sel...
-Description Of Property
All that lot or parcel of land with the buildings and improvements thereon, are the formal opening words of the description of the property. All indicates that the contract is intended to cover ev...
-Street Numbers
A description by street number would be merely following the printed part of the contract, by the words known as and by the number 31 East 31st Street. Such a method of description should never be u...
-Lot Number On Map
Quite often the owner of a tract of vacant land has developed it by cutting through streets and subdividing it into lots upon a map which he has filed in the proper county office. The map shows the va...
-Metes And Bounds
A description by metes and bounds is usually found in the cities. Metes - measures, and bounds - direction, make possible a description of such accuracy as is requisite in locations where land is of c...
-Selection Of Form Of Description
The first and second forms of description are often used alone. The third and fourth are usually combined. The first or third are sometimes used to supplement the third or fourth or a combination of t...
-Description Of Improved Property
A purchaser in offering to buy improved property is always presumed to be intending to purchase three things: 1. the land, 2. the structure, capable of occupancy and rentable, and 3. the right to main...
-Limitations And Restrictions
It is customary to follow the description with a statement of the limitations subject to which the property is to be sold. The most common is tenancies. If nothing is mentioned in the contract concern...
-Financial Statement
Next upon the form appear the words the price is....... These open the financial statement. Here is set forth all the provisions with respect to amount and terms of payment, of the purchase price. F...
-Deposit On Contract
The deposit is the amount paid by the purchaser to the seller as earnest money. Its amount varies, being usually from 5 per cent to 10 per cent of the price. This deposit is forfeited to the seller if...
-Cash On Closing
The cash on closing is the amount to be paid by the seller upon delivery of the deed. ...... dollars in cash upon the delivery of the deed as hereinafter provided. Some forms provide for payment in...
-Existing Mortgage
Nearly all improved properties in the built-up districts are mortgaged for part of their value. These mortgages usually remain on the property indefinitely. Most contracts of sale, therefore, involve ...
-Purchase Money Mortgage
The purpose of a purchase money mortgage is to take the place of cash for part of the price. The purchaser may not have sufficient cash to pay the full price over the existing mortgage, and the seller...
-Installment Contracts
In some instances, particularly in the sale of vacant lots, it is found that the purchaser has not sufficient cash to pay a deposit and within the usual period take title, paying the balance. Possibly...
-Closing Date And Place
Following the space for the financial statement appear the words The deed shall be delivered upon receipt of said payment at the office of........ at.............. 19. .. The blanks should be filled...
-Miscellaneous Provisions
The first of these appears usually in the paragraph setting the closing date. It is customary to arrange as far as possible for the seller's interest to cease and the purchaser's commence on the day t...
-Provision For Broker's Commission
The form of contract under discussion contains as its next paragraph, The seller agrees that................brought about this sale and agrees to pay the broker's commission therefore. This provision...
-Apportionment Of Water Charges
Water is a commodity furnished by either the municipality or some private agency. If charged at a flat rate according to frontage and equipment in the building, there is usually no apportionment of ...
-Street Rights
The next paragraph is a specific declaration by the seller that he intends his sale of the premises described in the contract to include, and will convey also, whatever rights or title he may have to ...
-Form Of Deed
The deed shall be in proper statutory form for record, etc. This is most important. At no place in the contract up to this point has the seller stated any particular form of deed he would deliver. H...
-Violations Of Municipal Ordinances
Under the police power various municipal departments are empowered to prescribe rules and regulations for the character, conduct and condition of buildings. These rules are enforced in event of disreg...
-Personal Property
Many articles used in a building are practically part of it, yet legally the question of whether or not they were included in the sale, if not specifically mentioned, might give rise to dispute, such ...
-Deposit Money A Lien
By law the deposit paid by the purchaser is a lien upon the property, but so that there may be no doubt it is customary to expressly stipulate that not only the deposit but the reasonable expense of e...
-Loss In Case Of Fire
Equitably, the premises belong to the purchaser from the time the contract is made. The purchaser however is not in possession and presumably expects to receive the property in substantially the same ...
-Binding On Heirs And Executors
The parties having made a contract and both desiring that it be consummated, agree, for the purpose of preventing anything arising to prevents its completion that The stipulations herein are to apply...
-Execution Of The Contract
The law requires the contract to be signed by the party to be bound. The duplicate copies are customarily each signed by both parties. Signing may be by subscribing one's name or if unable to write, b...
-Non-Performance Of Contracts
Usually contracts of sale are fully carried out but the occasional breach renders necessary some understanding of the rights and liabilities which in that event may be invoked. The default may be, obv...
-Contracts For Exchange Of Real Estate
In the contract just discussed the purchaser agreed to pay cash for the property. Hence its name - contract of sale. Occasionally the purchaser does not wish to pay cash, but has some real estate of h...
-Form Of Contract For Exchange
The following is a usual form of this contract, and contains the customary clauses, though, as said with reference to the contract of sale, any form may be used which contains the necessary elements o...
-Divisions Of The Contract
An analysis of this form shows that it is similar in many respects to the contract of sale, except that the price is paid wholly or partly in property instead of cash. The instrument is dated and cont...
-Chapter VI. Auction Sales. Definition And Kinds Of Auction Sales
An auction sale is a public sale to any person bidding the highest price, upon terms and conditions previously announced. The sale described in the previous chapter was negotiated privately, a definit...
-Involuntary Auction Sales
The involuntary auction sale is brought about as the result of the enforcement of some lien upon the property. A lien, it will be recalled, entitles the holder in the event of non-payment to satisfy i...
-The Sale
If the lien is a judgment the sale is usually conducted by the sheriff. The other liens usually are satisfied by a sale conducted by a referee who is appointed by and responsible to the court. Notice ...
-Terms Of Sale
In any sale of real property, there must be a written contract. In a private sale the contract is prepared and signed by the parties after their negotiations have led to an agreement. Upon a sale at a...
-Description Of Terms Of Sale
Following the title of the action is the recital that the property described in the advertised notice (a copy of which should be attached to the terms of sale) is being sold by the referee, naming him...
-Fraudulent Bidding
The law prohibits any act by which the bidding upon property sold at involuntary auction is artificially limited or controlled. The property being sold is that of an unfortunate debtor. As much as pos...
-Voluntary Auction Sales
A voluntary auction sale is the free act of the owner. He may be unwilling to keep the property longer, or he may have urgent need of money, and may decide upon an auction sale as a means of disposing...
-Protective Bidding
It may be that at the time of sale the owner is unwilling to have the property sold for less than a certain sum, or if the property is being sold by an executor to raise funds to pay creditors or bene...
-The Terms Of Sale
The terms of sale in a voluntary auction sale may contain any provisions which the seller desires. Of course if he makes them too onerous he will get no bids, but there is no court (as in an involunta...
-Successful Auction Sales
The object of an auction sale is to realize the greatest price. In involuntary sales often no one is interested except the immediate parties; the lienor is seeking only to have the property bring the ...
-Chapter VII. Deeds. Purpose Of Deed
A deed is a writing in proper and efficient words conveying absolutely title to or an interest in realty. It is the instrument by which the transfer of title is effected. Every contract of sale or for...
-Forms Of Deed
There are various forms of deeds according to their purpose and objects, and differences will be found ill those of the several States. However the simple form of deed by which title is passed is subs...
-Consideration
The statement of the consideration (that which is given to the seller in return for the deed), comes next. There are several classes of considerations and since each may differently affect the title c...
-Expression Of Consideration
Some consideration should always be stated in a deed. This shifts the burden of proving lack of consideration to anyone attacking the deed. To be sure the seal at the end of the instrument imports con...
-Granting Clause
The words in the form, following the recital of the consideration, do hereby grant and release unto the party of the second part * * * and assigns forever, constitute what is known as the granting c...
-Appurtenances
Following the description is a recital With the appurtenances and all the estate and rights of the party of the first part in and to said premises. By appurtenances is meant all those rights which g...
-Habendum
The next clause, the habendum, commencing To have and to hold, etc., describes the estate granted to the grantee. It should be consistent with the granting clause. Any variation in the statement of ...
-Testimony Clause
In the deed now under discussion, the bargain and sale form, the final provision beginning with the words In witness whereof, etc., is the testimony clause. This paragraph is a purely formal recit...
-Signature
The deed must be signed by the party transferring the title. If he be married his wife being also a grantor, must if she has not otherwise released her dower, sign also. They do this, as in executing ...
-Seal
In many States it is necessary for an individual grantor to seal his deed. This may be done by pasting a wafer of paper after the signature or by indicating the place of seal by means of a sign or oth...
-Witness
No witness is necessary. Usually however some one present at the time signs his name as such. A witness is convenient only as evidence of the signing, or to prove the execution in event the signor fai...
-Acknowledgment
In some States a deed cannot be recorded unless the signor acknowledges his signature or the signature is proven by a witness. The manner of acknowledgment by an individual is explained fully in the c...
-Quit Claim Deed
The Bargain and Sale deed, which has been discussed, transfers full title to the property. It is used for the purpose of consummating a sale, particularly where the grantor is unwilling to make any co...
-Bargain And Sale Deed With Covenants
Of course every purchaser of property should, and usually does make an examination of the records to ascertain whether the seller's title is good. The records may show a good title in the seller, yet ...
-Covenant Against Grantor's Acts
Grantors who are fiduciaries, such as executors and trustees, have no interest in the property or the proceeds of its sale except as representatives of others. They do not wish to assume any future ob...
-Seizin
That the said (grantor) is seized of the said premises and has good right to convey the same. Under this covenant the grantor guarantees that he owns and is in possession of the property and that he...
-Encumbrance
That the said premises are free from encumbrances. Since this covenant guarantees against encumbrances, it is most important that any encumbrance, subject to which the property is sold, be stated in...
-Quiet Enjoyment
That the party of the second part shall quietly enjoy the said premises. By this covenant the seller guarantees that the purchaser shall not be disturbed in his possession of the property. It relate...
-Further Assurance
That the party of the first part will execute or procure any further necessary assurance of the title to said premises. The seller undertakes to procure and deliver any instrument other than the dee...
-Warranty
That said (grantor) will forever warrant the title to said premises. This covenant is an absolute guarantee by the seller to the purchaser of title and possession of the premises. It is the most imp...
-Effect Of Covenants
The five covenants discussed do not by any means guarantee a marketable title to the purchaser. The purchaser may have much actual trouble with his title and possession, yet no covenant be broken. The...
-Chapter VIII. Bonds And Mortgages. Purpose Of Bonds And Mortgages
When real property is transferred absolutely, the transaction is effected by delivery of a deed. Since very early times it has been customary for owners of realty to borrow money, pledging their prope...
-Form Of Bond
In several States a note is given by the borrower as evidence of the debt; in some even the interest amounts are represented by a series of notes given when the loan is made and maturing on the intere...
-Acknowledgment Of Indebtedness
Next appears the acknowledgment of indebtedness. The borrower's name is inserted. It is not necessary to add after his name his place of residence. That is often done however for identification. The b...
-Promise To Pay
The preceding language has been entirely a recital of indebtedness. Now the obligor states the terms of his promise to pay: Which sum said obligor does hereby ..............covenant to pay. If more ...
-Repayment In Instalments
Bonds such as have been discussed, by their terms make the principal payable in its entirety at a specified time. It may be agreed that the principal shall be payable in instalment at designated inter...
-Default Clause
The property pledged as security might be sufficient at the time the loan is made, yet if a large amount of unpaid interest accumulated, the security might not be great enough to cover both principal ...
-Execution Of Bond
The bond should be executed in the same manner as a deed. It must be signed. It need not be witnessed nor acknowledged since it is not usually recorded. The better practice however is to have the sign...
-Enforcement Of Bond
Customarily if the loan or interest or taxes be not paid, the lender seeks relief by foreclosing the mortgage upon the land, as in this action he can not only enforce the mortgage against the security...
-Usury
In nearly all States a maximum rate of interest is fixed by law. For the lender to collect more than that rate is usury. When a usurious loan is made in some States the lender may collect only the max...
-Taxation
At the present time the United States collects a tax upon all bonds at the rate of five cents for each $100. This tax is paid by the borrower who must affix to the bond and cancel proper internal reve...
-History Of Mortgage Lending
Anciently the borrower deeded his property outright, as security, to the lender, who thereafter was its legal owner. In case of any default he took possession. All the borrower retained was an equitab...
-Form Of Mortgage
The form of mortgage varies somewhat in the several States. In New York the form is prescribed by statute. It is substantially similar to that of many other States and is as follows: THIS MORTGAGE, m...
-Statement Of The Obligation
That to secure the payment of an indebtedness, etc., according to a certain bond or obligation bearing even date herewith. In these words the obligation of the bond is stated. Care should be exerc...
-The Pledge
As security for the performance of the obligation just stated, the mortgagor hereby mortgages to the mortgagee the realty pledged as security. Here should be set forth a description of the property....
-Purchase Money Mortgages
In many sales of realty the purchaser does not wish to pay the full price in cash. Under such circumstances it is stipulated in the contract between the parties that the purchaser give back to the sel...
-Covenants
The New York statutory form of mortgage contains nine covenants made by the mortgagor. Not all of these must be used; occasionally some of them are altered or omitted, and often others are added. Firs...
-Special Clauses
In addition to the nine foregoing covenants, it is usual to insert, when appropriate, certain additional clauses for the protection of either or both of the parties. ...
-Sale In One Parcel
One of these special clauses provides in substance that in the event of foreclosure of the mortgage the mortgaged premises may be sold in one parcel. Such a clause is naturally needed only in a mortga...
-Brundage Clause
Mortgages as has been said are personal property and hence subject to tax as such. The lender in considering the desirability of an investment takes into consideration not only the interest return, bu...
-Release Clause
A mortgage may cover several houses or a number of lots. An operator may have bought a tract of land and subdivided it into lots and placed a mortgage on the whole. His scheme is to sell the lots to i...
-Clauses In Junior Mortgages
Junior mortgages (those subject to others superior in lien) usually contain two appropriate clauses. The first is for the protection of the mortgagee and provides that if the mortgagor default in paym...
-Lifting Clause
The other clause usually found in junior mortgages is the subordination clause. This is designed for the protection of the mortgagor, the owner of the property. The junior mortgagee when he made his...
-Trust Mortgages
These are used when the amount of the loan is larger than any one person would be willing to advance. Such would be a loan of millions of dollars upon the property of a railroad. In these loans the mo...
-Satisfaction Of Mortgage
Every loan on bond and mortgage contemplates payment, ultimately, of the amount loaned with interest. The mortgage having been recorded constitutes an encumbrance on the mortgagor's title. When he rep...
-Remedies Of Mortgagee. Mortgagee In Possession
In event of failure to pay the loan when due or any other default, the mortgagee has numerous remedies in respect to the property pledged by the mortgage. The mortgagee may, with the consent of the m...
-Foreclosure By Advertisement
The mortgagee may foreclose his mortgage by exercising the right given him in the mortgage of selling the property to pay the indebtedness. It is not a proceeding in a court, but consists of giving no...
-Legal Foreclosure
The usual remedy is in foreclosure by action at law. A legal action is commenced in which the owner of the property and the maker of the bond and all persons who have any interest in the property su...
-Chapter IX. Transfer And Examination Of Title And Title Insurance. History Of Methods Of Transferring Title
Probably the earliest transfers of title were accomplished by the stronger taking possession from the weaker. This system was unjust and as society developed, protection was given to the owner in pres...
-The Statute Of Frauds
Transfers by delivery only necessarily gave rise to many disputes. There being no written record of the transaction, false statements permitted gross frauds. Possession was forcibly taken and held. Th...
-Present Methods Of Transferring Title
The term title must be considered as including not only the full fee simple but any interest in the real property. Under strict legal rules title to real property can be transferred in only two ways, ...
-Title By Descent
One who dies leaving no will, is said to have died intestate. Such property as he may have owned at his death passes to his family by operation of law. The rights and priorities of the persons entitle...
-Title By Will
An owner may dispose of his property during his lifetime, by deed, mortgage, lease, etc. He may also make disposition of it to take effect at his death. This is usually accomplished by will or as it i...
-Title By Voluntary Alienation
Alienation may be defined for practical purposes as the transfer of the owner's interest and title by the owner to another. Voluntary alienation may be by gift or sale. It is the normal commercial rea...
-Title By Involuntary Alienation
Involuntary alienation is a transfer of the title without the owner's volition. Tax sales are instances of involuntary alienation, also public sales in actions to enforce liens. The property of the in...
-Recording Of Conveyances
Possession of property is notice to the world that the possessor claims or has some title to the property. An owner in possession under a valid deed may be discovered to the actual knowledge of any on...
-Proof Of Execution
No instrument may be recorded unless proven either by acknowledgment of the signor or the affidavit of a subscribing witness. The following are the officials who are authorized to take acknowledgments...
-Examination Of Records
It is readily seen that, not only must one who contemplates a real estate transaction inspect the realty involved, but must also procure a thorough examination of the records to ascertain who is the o...
-The Title Examiner
The law of real property is complicated and technical. The average person dealing in real estate has no knowledge of these rules nor has he time to examine the title. He usually employs counsel or a c...
-Title Insurance
The system of title insurance came into use as a remedy for the previously described situation. Like all other insurance it is a distribution of loss among all insured. Title companies are organizatio...
-Title Insurance Policy
The usual form of title insurance policy contains four parts: 1. Agreement of insurance. 2. A schedule describing the subject matter of insurance. 3. A schedule of exceptions. 4. Conditions of the...
-Use Of Title Policy
Of course the insured seldom needs to resort to his policy to recover a loss. But he should always refer to it, in subsequent transactions with reference to the property. It tells him at once just wha...
-Necessity For Survey
The examination of title is simply a search of the records, revealing who appears front such records to be the owner of a certain particular piece of property. This search often shows nothing with ref...
-Encroachments On Others
The building on the lot may cover more land than is within the lot lines. Suppose it encroaches on the highway. The street is either owned by the municipality or else it has an easement to use the str...
-Encroachments By Others
The building may stand entirely upon the proper lot and a neighbor's building may encroach. Of course the title to so much as is not encroached upon is marketable, but it may be a grave question of wh...
-Survey In Building Operations
It is always important that a new structure be built upon its own lot, and particular care should be taken when the plans call for a building to run along the lot line. A surveyor should be employed w...
-Survey In Land Developments
The surveyor is always used in land development operations. He surveys the tract, locating and marking by monuments or stakes the streets and blocks. The blocks are usually laid out of such size as to...
-Chapter X. Closing Of Title. When Title Passes
Title to property passes when the instrument of conveyance is delivered. This is not necessarily the date of execution. The instrument may have been signed long before the day of delivery but no title...
-Delivery In Escrow
Occasionally it is found convenient to make a conditional delivery of the deed. For example, the seller is not ready at the closing to submit proof that he has paid a certain lien upon the property an...
-The Title Closing
The contract of sale or exchange designates a certain day and hour when, and place where the deed shall be delivered and the balance of the price shall be paid. This transaction between the seller and...
-Encumbrances Subject To Which The Purchaser Takes Title
The report of title furnished by the examining counsel or the title company probably sets forth several encumbrances. Some of these, it is provided in the contract, shall remain upon the property. The...
-Encumbrances To Be Removed
All encumbrances shown upon the report of title, other than those waived by the purchaser or which the contract provides are to remain, must be removed. This it is the seller's duty to do. He must del...
-Instruments To Be Delivered
The contract provides for the delivery of certain instruments. If a sale, there is a deed and often a bond and purchase money mortgage. These should be carefully examined to see that they are in accor...
-Adjustments
Upon the title being closed the seller's rights cease and the purchaser at once becomes entitled to every interest in the property. It is not practicable for the seller to settle and pay all his accou...
-Closing Exchanges, Leaseholds And Loans
The statement of adjustments in the closing of an exchange is similar to that in a sale except that there are a double set of debit and credit items. Each party is charged with the price of the proper...
-Rejection Of Title
If the seller is unable to deliver a title substantially such as he agreed to give in his contract, the purchaser may reject the title. He is then entitled to the return of the deposit he paid on the ...
-Chapter XI. Leases. Landlord And Tenant
Persons or corporations owning real property permit others to hire it and charge them for its use, the object of the owner being usually to derive an income or profit from the property. Out of the agr...
-Leases
The agreement under which the tenant hires the property from the landlord is known as the lease. It is the agreement under which the tenant goes into possession and specifies how long the possession s...
-Rent
Rent has been defined as a definite periodical return for the use of land. It may be payable in money, or it may be payable in the produce of the land. The amount of rent need not be definitely fixed ...
-Term Of Lease
There is no legal limitation upon the term of a lease.1 It may be for one day, or it may be for 999 years. It is customary in New York State, however, to make long term leases run for a period of twen...
-Verbal And Written Leases
Under the Statute of Frauds in New York, leases for more than one year must be in writing and subscribed by the party to be charged. It follows then that leases for terms up to one year may be verbal....
-Monthly Tenancies
A monthly tenancy is one made for a month only. It is self-renewing, however, from month to month unless notice is given by the landlord to the tenant of his intention to terminate it. The tenant need...
-Indefinite Tenancies
Many tenancies are made for indefinite periods and are known as tenancies at will. The tenant goes into possession under an agreement, usually verbal, to pay a certain rent periodically, but no term i...
-Tenancy For Term Of Year Or Years
A tenancy more important than the monthly, and at-will tenancy, is one for a definite term of a year or longer. The necessity for having such agreements in writing is governed by the statutes of the S...
-Ground Lease
A ground lease is one made for the rental of a parcel of unimproved land for a term of years. The agreement usually contains the provision that a building shall be erected on the land by the tenant. I...
-Termination Of Leases
Leases may be terminated by any one of the following events: (a) Expiration of term of lease. (b) Surrender and acceptance, either express or implied. (c) Breach of conditions of the lease. (d) Co...
-Dispossess Proceedings
The right to recover possession from a tenant through the summary proceeding known as dispossess is one given by statute and is not a common law right. The action is brought in courts, of minor jurisd...
-Emergency Rent Laws
The three causes for which dispossess may be principally granted have already been stated. They are non-payment of rent, holding-over at end of term and unlawful use of the premises. In New York and c...
-Form Of Lease
The essential parts of a lease are the premises, term, amount of rent and manner of payment, and the covenants and conditions agreed upon. The agreement is made between two or more parties known as le...
-Repairs
The general rule is that neither party to a lease is required to make repairs, but the tenant is required to surrender the premises at the expiration of the term in as good a condition as they were in...
-Improvements
All improvements become the property of the landlord when made. It is proper in some cases to provide that some or all improvements may be removed at or prior to the expiration of the lease. Fixtures ...
-Liens
The tenant may make repairs, alterations or improvements to the premises with the consent of the landlord. The landlord should guard against the contingency of the tenant neglecting to pay for the wor...
-Security Furnished By Tenant
A landlord when making an important lease may properly require that the tenant furnish security for the performance of the terms of the lease. This security may be in the form of cash or negotiable se...
-Additional Charges Paid By Tenant
The lease may provide that not only shall the tenant pay the landlord an agreed rental, but also that he shall pay some or all of the expenses and carrying charges of the property. In cases where the ...
-Fire Clause
The long form of lease given in the appendix provides that the tenant shall give the landlord immediate notice of any fire. It is then the landlord's duty to repair the damage as speedily as possible....
-Assignment And Mortgaging Of Lease And Sub-Lettings
The tenant's rights under a lease being personal property are assignable, unless the lease itself contains a covenant forbidding its assignment. A landlord often makes a lease relying on the financial...
-Use Of The Premises
Unless the lease contains a restriction, the tenant may use the premises in any legal manner. In his use of the premises he may not, however, interfere with occupants of other parts of the building. I...
-Compliance With Orders Of Governmental Authorities
Under the police power of the State, laws have been enacted governing and controlling the use, occupancy and condition of real property. These laws are enforced through various departments and bureaus...
-Guarantors And Sureties
The landlord may require and the tenant give a guarantee by a third party of the faithful performance of the terms of the lease by the tenant. The agreement of guaranty must be in writing and signed b...
-Tenant Liable After Re-Entry
It is frequently desirable to include in a lease provisions to the effect that if a tenant is dispossessed by summary proceedings, or if the tenant abandons the property and the landlord re-enters and...
-Right Of Redemption
In some states there is a provision of law that where a tenant is dispossessed and the lease that he held had a period of more than five years unexpired, that he has a right to come in at any time aft...
-Tenant To Indemnify Landlord For Damages
It is proper to provide in a lease that the tenant shall hold the landlord harmless from all claims for damages to both person and property of every kind and nature. This clause tends to relieve the l...
-Leases Subordinate To Mortgages
A lease of property is subject to mortgages and other liens upon the property of record when the lease is made; that is, such liens would be superior to the rights of the tenant. When the lease is mad...
-Covenants By Landlord
The covenant in the lease specifically made by a landlord is that of quiet enjoyment. There are implied covenants of possession and sometimes fitness for use. There is usually no warranty, as to the l...
-Chapter XII. Brokerage. Definition Of A Broker
Real estate brokers are those who negotiate between the buyer and seller of real property, either finding a purchaser for one desirous to sell, or vice versa; they also manage estates, lease or let pr...
-Compensation Of Brokers
The compensation paid a real estate agent or broker is called commission or brokerage. He is not paid a salary, for if he receives a salary from his employer he is a salesman, not a broker. The amount...
-Qualifications Of A Broker
A broker to be successful must possess the qualifications of a salesman. His salesmanship should be of the highest type, as he is dealing with a valuable commodity and there are often long and difficu...
-The Broker's Business
The ordinary real estate broker does a general business. His office is open to every transaction pertaining to real estate. He brings about purchases and sales, exchanges, rentals, mortgage loans; he ...
-The Mortgage Loan Broker
The mortgage loan broker must first of all obtain the application for a loan and then find a lender with whom to place it. This application should definitely state the amount of loan desired, the rate...
-Essentials Of Success
The broker's own stock in trade is his brains, ability, resourcefulness, salesmanship, and the goodwill he builds up through having satisfied customers. The qualities for success are the same in the r...
-The Broker's Authority
In New York and other states, the broker's authority to negotiate a sale, exchange, or lease of real property need not be in writing. In New Jersey and some states however, the statute provides that u...
-May Not Act For Both Parties
The broker is usually the agent or representative of his principal. As such he owes it to his principal to give faithful, honest service. He should not allow personal considerations to interfere with ...
-Sharing In Profits
To act in the interests of his employer is clearly the duty of an agent. This means that on a real estate transaction, the broker should get the best price and terms for his principal. It is highly im...
-Broker Must Be Employed
In order that a broker may be able to recover commission for his services, it is necessary that there be a contract of employment with the one for whom he acts. As already noted, this need not be a wr...
-When Commission Is Earned
A broker has earned his commission when he has accomplished that for which he was employed. If he was employed to sell, he must bring about a sale. He is not paid for making impressions, nor for inter...
-Broker Procuring Cause Of Sale
It is an established rule that if an authorized broker is the procuring cause of a sale, he is entitled to his commission. He does not have to introduce the parties, nor bring them together personal...
-General Rules As To Earning Commission
In order to recover commissions, the broker must: (1) show that he was employed; (2) be the procuring cause of the sale; (3) bring about the deal on the terms of his employer; (4) act in good faith; (...
-Deferring Or Waiving Commissions
A broker is entitled to his commission as soon as his work is done. He does not have to wait until title closes and any agreement he may make to do so, after his commission has been earned, would not ...
-Who Pays The Commission
It is the employer who is liable for the commission in every case. The employer of the broker is usually the owner of the property or the owner's representative. In some cases the purchaser employs th...
-Commissions On Exchanges, Loans And Rentals
The rules which apply to recovery of commission on sales apply also to exchanges. It is customary, however, for both parties to an exchange to pay a commission based on the value or price of their res...
-Duty Of Principal To Broker
The principal having employed the broker should give him a fair chance to accomplish his work. He cannot capriciously terminate the employment while the negotiations are being carried on, but the brok...
-Duty Of Broker To Principal
It is the duty of the broker to act in the best interests of his employer and to obtain the best price and terms for him. He is bound not only to good faith but to reasonable diligence, and to such sk...
-Statements Made By A Broker
A broker makes many statements in the course of negotiations which may be mere opinions or arguments or sidewalk conversation. He may not, however, make misstatements of fact as to material matters,...
-Termination Of Agency
The employment of the broker is not usually for a definite time. It is revokable at will in good faith by either party, or by mutual consent. If a reasonable period of time has elapsed and the object ...
-Rates Of Commissions
The amount of commission due a broker on any transaction may be fixed by a definite agreement between the parties. In the absence of an agreement, custom prevails. The rates established by a real esta...
-Chapter XIII. Management. Management As A Business
The management of improved real property is a branch of the agency division of the real estate business. It engages the attention of a number of real estate men, some of whom have built up organizatio...
-Principles Governing Management
There are at least two good reasons for the employment of a manager by an owner of real estate. First, the owner is relieved of the labor and detail involved in the collections of rents, the physical ...
-Choice Of A Manager
The choice of a manager naturally requires careful thought on the part of an owner. His desire will be to secure the services of an agent who will produce the best results with the property. The resul...
-Renting Space
The landlord's desire is to rent his property so that it will produce a proper income on his investment; the tenant wishes the use of a certain amount of space at the lowest possible cost to him. In r...
-Collections
Tenants are expected to pay rent promptly when due, and an alert manager will see that they are not permitted to get in arrears. A system of collections will include the mailing of bills in advance of...
-Expenditures
To spend money to operate and maintain a building, but to spend it wisely is part of the manager's work. Many expenditures are routine. These include the payment of the wages of the employees, the bil...
-Physical Care Of The Property
Those who manage property are usually charged with its physical care. They must maintain the character of the building in order that it shall not depreciate in value, that desirable tenants be attract...
-Accounting
Accounts with tenants are usually kept in a loose leaf ledger. There is a master sheet on which is written as a heading the location of the building. There will be columns in which are listed first, t...
-Insurance
Owners carry for their protection various kinds of insurance. Among them are fire, liability, plate glass, elevator, steam boiler, workman's compensation and rent insurance. The agent can assist in ke...
-Agent's Relations With The Tenant
The agent seeks to keep his tenants satisfied. He should give them opportunity to make complaints. Sometimes blanks are furnished tenants for the purpose of writing out complaints. If a tenant calls i...
-Agent's Relations With The Owner
It is advisable for the agent to make a contract of employment with the owner (appendix form 79). Having made the contract, the agent will use his efforts to give the owner efficient, honest and, succ...
-Compensation Of Manager
The compensation of the real estate manager for the service he renders consists of commissions for rentals made and a percentage of the gross rents collected. The contract of employment will govern th...
-Chapter XIV. The Valuation Of Real Estate. Theory Of Land Values
Agricultural land has value because of its fertility, that is, its ability to yield produce for its owners. However, the most fertile land is not always the most valuable. Proximity to communities and...
-Actual Or Potential Rent A Measure Of Value
The value of land in the final analysis is the amount of its economic or ground rent capitalized. In the case of farm land its fertility and accessibility determine its rent. Urban land must usually b...
-Comparisons Of Values With Respect To Use Of Land
The rent paid depends on the location of the land. Highest rents and consequently greatest values are found in those places where the most lucrative businesses are conducted, and values grade down to ...
-Structure Of Cities And Their Direction Of Growth
The location and creation of very few communities have been the result of a preconceived plan; neither did they come into being accidentally. Their existence and location have been due to influences o...
-General Rules For Determining Land Values
As has already been noted, ground rent capitalized at an appropriate rate is the real basis of land value. There is another basis of value known as exchange value; it is the value which is indicated b...
-Prices Paid At Auction Sales
The prices paid for property at auction sales are not usually true indications of value. The sale may be an involuntary one, as for instance, a sale resulting from the foreclosure of a mortgage. The p...
-The Unit Of Value
In estimating land values, some unit of value must be used. In country districts this may be the acre, and land is often quoted as so much per acre. Land in most communities is divided into lots of st...
-Lots Of Greater Or Less Depth Than A Typical Lot
All lots have not the same depth as the standard lot and the problem very often is to assign a value to a shorter or deeper lot. No absolute rule that will fit every case can be laid down, but rules h...
-The Hoffman And Davies Rules
In attempting to determine the relation of the parts of a lot to each other and to the total value, appraisers have established certain rules by a system of inductive reasoning. The rule most frequent...
-Value Affected By Width And Shape Of Lot
Just as all lots are not of the same depth as the standard lot, it is also true that all lots are not of the standard width. No rule can be laid down which can be applied in every case to determine th...
-Plottage
Two or more adjoining lots taken together have an added value known as plottage. The added value is due to the fact that the plot of two lots or more may be used or improved to greater advantage. A bu...
-Corners And Corner Influence
Corner lots, that is those located at the intersection of two streets are worth more than the ordinary inside lot. The amount of additional value given to a corner depends upon the importance of the i...
-Illustration Of Method Of Computing Valuations
As an illustration of some of the principles involved in an appraisal the following diagram and figures may be considered. Let it be assumed that the property fronts on a business street and that insi...
-Valuation Of Improved Property
Some principles governing the valuation of land having been laid down, consideration may be given to the valuation of the buildings on the land. These principles may be stated as follows: (a) It shou...
-Cost Of Buildings
The estimation of the cost of a new building involves a computation of the cubic contents of the building or the number of square feet of floor surface, and the use of the correct unit cost factor. Th...
-Values Computed From Rentals
It is generally recognized that if property is suitably improved its rental is a safe guide to value. This assumes the building to be fully rented at normal rents. The net rental is of course the amou...
-The Work Of The Appraiser In Condemnation Proceedings
Private property may be taken for public uses under the State's right of eminent domain. This right may be exercised by the United States Government, by the States and counties, and also by cities and...
-Consequential Damages
When a part of a parcel of land under one ownership is taken by condemnation, the value of the damages to be proved is often not the value by itself of the part taken but the difference between the va...
-Chapter XV. Mortgage Loans. The Demand For Mortgage Loans
Owners of real property are large borrowers of money, giving their land, both improved and unimproved, as security for the amounts loaned to them. The instrument by which the property is pledged is kn...
-Farmers
Farmers borrow on mortgage to purchase their farms, to erect buildings, to purchase tools, machinery, seed and fertilizer, to hire labor and to pay off existing indebtedness. Builders - Those who ere...
-Operators And Investors
Those who buy and sell real estate as operators or speculators, and those who purchase it for investment, find it desirable to invest their own funds in the property only to the extent of a part of th...
-Developers Of Vacant Tracts
When a tract of land is converted into building lots, that is, developed, or subdivided, a large amount of capital may be required to finance the purchase and the cost of the improvements incident to ...
-Home Builders And Buyers
That valuable and worthy citizen who seeks to own his own home is a constant borrower on mortgage. He puts his savings, it may be the first fruits of his thrift, towards the purchase price and borrows...
-Corporation Enterprises
Many large real estate projects are undertaken on borrowed money. They include some of the great hotels, office buildings, factories, loft buildings, warehouses, railroad terminals and stations. The b...
-Lenders Of Mortgage Money
There are many financial institutions in the United States which make mortgage loans for the purpose of investing their own funds. These include the life insurance companies, many of which are great i...
-Mortgage Loans Compared With Other Investments
The entire subject of the investment of funds covers a wide range and involves a consideration of many questions. The real estate mortgage as an investment has certain advantages and disadvantages as ...
-Safety In Mortgage Lending
As has already been noted a mortgage is a direct lien on the property covered. If the loan is not paid the property may be sold and the proceeds applied to pay it. From the point of view of safety the...
-Amortization
Some mortgage loans are made for short terms such as one year or three years. These loans at maturity may be paid off or renewed or allowed to run as open or past due mortgages. It is a matter determi...
-Advantages Of A Good Bond
Elsewhere in this book explanation is made of the bond or note which accompanies the mortgage. The bond or note is the personal obligation of the borrower to repay the sum borrowed. The mortgage on th...
-Fire Insurance A Necessity
All mortgages upon improved property should be accompanied by fire insurance policies having loss payable to the mortgagee. The insurance should be of sufficient amount and in companies of good standi...
-The Federal Farm Loan Act
The Federal Farm Loan Act as stated in its title is An Act to provide capital for agricultural development, to create standard forms of investment based upon farm mortgage, to equalize rates of inter...
-Western Farm Mortgage Brokers
A number of reliable individuals as well as banks and trust companies are in the business of making loans on western farm lands. These brokers and banks through their experts and attorneys carefully e...
-The Chicago Or Straus Plan Of Real Estate Financing
Several large firms and corporations in Chicago have specialized in the financing of building enterprises and the sale of mortgage bonds to the public. One of these firms is S. W. Straus & Co. who adv...
-Guaranteed Mortgages
In many cities there are a number of mortgage companies and title companies which conduct a successful business in guaranteed mortgages. The outstanding guaranteed mortgages of some of these companies...
-Building Loans
Reference has been made to the building loan mortgages of certain institutions. Other lenders make building loans, some as a regular business. Three methods may be described. An owner of land may sell...
-Participating Mortgages
A participating mortgage is one in which two or more persons own a share. These persons do not own the entire mortgage jointly, but each owns a specified interest in it. A mortgage may be made to a tr...
-Collateral Trust Real Estate Bonds
There is a plan of mortgage lending which has some special features and under which bonds are issued and sold to investors. Under this plan mortgages of various amounts, large and small, are assigned ...
-Unsound Debenture Issues
There is a wide difference between a bond secured by one or more real estate first mortgages, and an unsecured debenture bond. The former has definite real property pledged to secure it in addition to...
-Mortgage Loan Brokers
There is a large business conducted by brokers in placing mortgage loans. The broker acts as an intermediary. His services are of value to the borrower who wants the money and the lender who wishes to...
-Chapter XVI. The Work Of The Architect. The Architect's Relation To Real Estate
The work of the architect is of importance to those engaged in the real estate business in many respects. He is consulted by those who wish to erect a building on land they own and by those who contem...
-Preliminary Rough Sketches
The initial drawings made by the architect are called rough sketches. These rough sketches are merely diagrams of the proposed building showing the division of the floor space into rooms, closets and ...
-Working Drawings
When the arrangement of the floor space of a proposed building has been decided upon, the architect prepares working drawings, or plans, for it. These plans are drawn to scale and show in minute detai...
-Specifications
Specifications are prepared by the architect for the purpose of giving the owner, the builder, and the contractors full and accurate descriptions (kind, quality and dimensions) of the various material...
-The Architect's Services
Sometimes the architect is employed only to prepare preliminary rough sketches and the plans and specifications for a building, and having furnished these, the owner proceeds without him. At other tim...
-Methods Of Payment For Work
There are three methods of compensating contractors for work performed, viz. - (a) A fixed price for the work. Under this method the owner knows the cost at the time he enters into the contract. The ...
-Form Of Contract
A contract in general use between the contractor and the owner is known as the Uniform Contract. A copy of this agreement is reproduced in the appendix (form 86). This contract describes the work to...
-Decisions By The Architect
When the architect is employed to superintend the construction, he may reject any part of the work not conforming to the specifications. In considering the rejection of any work, or in deciding any co...
-Necessary Certificates
In many places, the authorities require certain certificates to be issued before a new building may be used for the purpose for which it was constructed. These may include a building department certif...
-Planning Buildings
A suggestion may be made regarding some of the principles upon which some buildings are planned Among these are economy of construction, economy of operation, a maximum of rentable space and facilitie...
-Chapter XVII. The Torrens System Of Land Title Registration. Origin Of The System
The idea of a system of land title registration originated with Sir Robert Torrens of Australia, and has generally become known as the Torrens System. Sir Robert Torrens was a business man who had b...
-The System In England
While we have said that the idea of a system of land title registration spread rapidly, it must also be said that the speed does not seem to have been maintained. A Land Registry Act, known as the Lo...
-The System In The United States
The Torrens System has had only a fair amount of success in this country. The first act in the United States was that of Illinois, in 1895. It was declared unconstitutional by the Supreme Court of the...
-Definition Of The Torrens System
The system has been defined by its creator, Sir Robert Torrens, as follows: The person or persons in whom singly or collectively the fee simple is vested, either in law or in equity, may apply to ha...
-The Law In New York
The land title registration law is found in Article 12, Sections 370 to 435, inclusive, of the Real Property Law. It may be summarized as follows: - 1. The person wishing to register the title to his...
-The Law In New York. Continued
A registration may be set aside if procured by fraud unless the rights of an innocent party are affected, but an action to set it aside for fraud must be commenced within 10 years of registration. An ...
-Arguments In Favor Of The Torrens System
It undoubtedly seems to be desirable to have a system of registration which accurately determines the ownership of a piece of land and all liens and claims upon it, records or registers these facts an...
-Objections To Torrens System
The following is a statement of some objections that have been made to the system in the United States: - (a) There can be no true Torrens system in this country because any law making a registered t...
-Appendices. No. 1. Notice Of Mechanic's Lien - New York
NOTICE UNDER MECHANIC's LIEN LAW To ........................ Esquire, Clerk of the ............... and all others to whom it may concern: PLEASE TAKE NOTICE, That (1.) .......... residing at .........
-No. 2. Conditional Bill Of Sale
KNOW ALL MEN BY THESE PRESENTS, That ............ hereinafter designated as the party of the first part, for and in consideration of the sum of ............ ($......) Dollars, lawful money of the Uni...
-No. 3. Chattel Mortgage
KNOW ALL MEN BY THESE PRESENTS, THAT...........of the first part, for securing the payment of the indebtedness hereinafter mentioned, and in consideration of the sum of one dollar to........ duly paid...
-No. 4. Facts To Ascertain Before Drawing. Contract Of Sale
1. Date of contract. 2. Name and address of seller. 3. Is seller a citizen, of full age, and competent? 4. Name of seller's wife and is she of full age. 5. Name and residence of purchaser. 6. Des...
-No. 5. Contract Of Sale - California
KNOW ALL MEN BY THESE PRESENTS, That this Agreement, made and entered into on this ...... day of ........ in the year 19... by and between ............. hereinafter known as the seller.. and .........
-No. 6. Contract Of Sale - Pennsylvania
Adopted for and by the Members of the Philadelphia Real Estate Board AGREEMENT, made this......day of........A. D. 19.... WITNESSETH, That..............Agent for................hereby agrees to sell ...
-No. 7. Option To Purchase - Massachusetts
KNOW ALL MEN BY THESE PRESENTS that ......................., the party of the first part, in consideration of........dollars paid by........ ........, the party of the second part, the receipt whereo...
-No. 8. Contract Of Sale - Massachusetts
AGREEMENT made this .........day of .........A. D. 19___between .................of the first part, and.................of the second part. The party of the first part hereby agrees to SELL, and the...
-No. 9. Sale Contract - Ohio
COLUMBUS, OHIO,..............19.... I hereby propose and agree to SELL real estate described as follows, to wit: ........................................................................................
-No. 10. Contract Of Sale - Illinois
THIS MEMORANDUM WITNESSETH, THAT..........hereby agree to purchase at the price of .......... Dollars, the following described real estate, situated in the County of..........and State of Illinois:......
-No. 11. Real Estate Board Sale Contract-Cook Co., Ills
Approved by Chicago Real Estate Board THIS MEMORANDUM WITNESSETH, That..........hereby agree.. to purchase at the price of (..........) Dollars, the following described real estate, situated in the C...
-No. 12. Installment House Contract
AGREEMENT, made this..........day of.........., 19......, between ........................................................................................................................................
-No. 13. Installment Lot Contract
AGREEMENT, made this.........day of...........nineteen hundred and ........, between .........., hereinafter throughout described as the Seller, and ........... hereinafter throughout described as th...
-No. 13. Installment Lot Contract. Continued
3rd: That neither the said party of the second part nor the heirs, successors or assigns of the party of the second part shall or will manufacture or sell or cause or permit to be manufactured or sold...
-No. 14. Contract To Sell With Building Loan
AGREEMENT made this......day........, 19..., between ............ hereinafter designated as the seller, and ............ hereinafter designated as the purchaser. The seller agrees to sell the lot of...
-No. 14. Contract To Sell With Building Loan. Continued
Whenever required, the purchaser shall deliver to the holder of said building loan mortgage, as further security for the building loan, a chattel mortgage duly executed, covering all articles of perso...
-No. 15. Acknowledgment - New York By Individual
STATE OF NEW YORK County of................ ss.: On this......day of........, in the year......before me came.......... to me known to be the person described in, and who executed the foregoing ins...
-No. 16. Acknowledgment - New York By A Corporation
STATE OF NEW YORK County of................ ss.: On this......day of........in the year......before me came.........., to me known, who, being by me duly sworn, did depose and say that he resides in...
-No. 17. Acknowledgment - New York By Subscribing Witness
STATE OF NEW YORK County of............... ss.: On this ...... day of........ before me came .......... the subscribing witness to the foregoing instrument, with whom I am personally acquainted, who...
-No. 18. Acknowledgment - New York By Firm By One Partner
STATE OF NEW YORK County of............... ss.: On this......day of........, before me came .........., to me known to be a member of the firm of .......... and the person described in and who execu...
-No. 19. Acknowledgment - New York. By Husband And Wife Known To The Officer
STATE OF NEW YORK County of............... ss.: On this......day of........, before me came.......... and .........., his wife, severally known to me to be the persons described in, and who executed...
-No. 20. Acknowledgment By Attorney In Fact-New York
STATE OF NEW YORK County of................ ss.: On the......day of........, nineteen hundred and......, before me came ............ to me known to be the attorney in fact of............ the indivi...
-No. 21. Acknowledgment - New Jersey. Husband And Wife
STATE OF NEW JERSEY County of................ ss.: BE IT REMEMBERED, that on this.......day of.........., in the year of our Lord, one thousand nine hundred and..........before me,........... perso...
-No. 22. Acknowledgment - Ohio
THE STATE OF............. ....................COUNTY. ss.: BE IT REMEMBERED, that on this.....day of.......A. D. 19.. before me, the subscriber, a .......... in and for said county, personally came...
-No. 23. Acknowledgment - Massachusetts. Commonwealth Of Massachusetts
ss.: .........................19.... Then personally appeared the above named .......... and acknowledged the foregoing instrument to be......free act and deed, before me. ............................
-No. 24. Acknowledgment - California
STATE OF CALIFORNIA COUNTY OF............. ss.: On this......day of........in the year 19... before me, ............ a Notary Public in and for said county, personally appeared ............known to...
-No. 25 Notary Public. Acknowledgment - Illinois
STATE OF................ COUNTY OF............. ss.: I,............, a Notary Public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that............personally known to me to be t...
-No. 26 Notary Public. Acknowledgment - Pennsylvania
STATE OF PENNSYLVANIA COUNTY OF................ ss.: ON THE ...... day of ........Anno Domini 19..., before me, the subscriber, ............ personally appeared the above-named ............ and in d...
-No. 27 Notary Public. Acknowledgment Before Consular Officer. United States Consulate General
.............................. ss.: I, .........., Consul-...... of the United States of America, .........., duly commissioned, and qualified, do certify that on this......day of 192.., before me p...
-No. 28. Acknowledgment Before Foreign Commissioner
REPUBLIC OF FRANCE, ss.: BE IT REMEMBERED, that on this....day of......, 192.., at the........ aforesaid, before me ........, Commissioner for the State of ........, residing in said........, person...
-No. 29. County Clerk's Certificate
STATE OF.......... County of............ ss.: I, ........, Clerk of the County of........, and also Clerk of the Supreme Court for said County (said Court being a Court of Record), DO HEREBY CERT...
-No. 36. Deed-New Jersey
THIS DEED, made this ...... day of........, in the year One Thousand Nine Hundred and ...... BETWEEN ............., of the ......... of........., in the County of ........, and State of........, of...
-No. 31. Warranty Deed - California
THIS INDENTURE, made the ...... day of ........ in the year of our Lord one thousand nine hundred and.......... BETWEEN ............................................................ ...................
-No. 32. Fee Simple Deed - Pennsylvania
THIS INDENTURE, made the ...... day of ........ in the year of our Lord nineteen hundred and ...... BETWEEN ............................................of the second part: WITNESSETH, That the said...
-No. 33. Warranty Deed - Massachusetts
KNOW ALL MEN BY THESE PRESENTS that..........in consideration of.......... paid by .......... the receipt whereof is hereby acknowledged, do hereby give, grant, bargain, sell and convey unto the said....
-No. 34. Deed, Statute Form - Massachusetts
.............................................................................................. .............................................................................................. of ........
-No. 35. Warranty Deed - Ohio
KNOW ALL MEN BY THESE PRESENTS: ............................ of the........of........, County of........and State of........, in consideration of the sum of........ Dollars, to........ paid by..........
-No. 36. Examples Of Restrictive Covenants
* That neither the said party of the second part nor the heirs, successors or assigns of the party of the second part shall or will erect, suffer or permit, maintain or carry on upon said premises or...
-No. 37. Mortgage-New Jersey
THIS INDENTURE, made the ........day of ...........in the year one thousand nine hundred and........ BETWEEN ......... party of the first part and ......... part.. of the second part; WHEREAS, the s...
-No. 38. Mortgage - California
THIS MORTGAGE, Made the......day of........in the year nineteen hundred and......by..............Mortgagor... to................Mortgagee..., WITNESSETH: That the Mortgagor.. mortgage.. to the Mortgag...
-No. 39. Mortgage - Pennsylvania
THIS INDENTURE, made the ......day of ........ in the year of our Lord one thousand nine hundred and........ (19...) BETWEEN .......... .................................................................
-No. 40. Trust Deed - Illinois
THIS INDENTURE Made this......day of........A. D. 19..., between .......... of the ........of......., County of....... and State of....... party of the first part, and.........of the .........of.......
-No. 41. Mortgage - Illinois
THIS INDENTURE WITNESSETH, That the Mortgagor ........ of the ........in the County of........ and State of........MORTGAGE.. and WARRANT.. to......of the......County of.......and State of........ ...
-No. 42. Mortgage - Ohio
KNOW ALL MEN BY THESE PRESENTS: That .............. of the County of........ and State of .......... in consideration of the sum of......dollars, to......paid by........the receipt whereof is hereby ...
-No. 43. Mortgage, Statute Form - Massachusetts
..................................................................................................................................................... of ........ County, Massachusetts, being unmarrie...
-No. 44. Mortgage - Massachusetts
KNOW ALL MEN BY THESE PRESENTS that ........ in consideration of ........paid by........ the receipt whereof is hereby acknowledged, do hereby give, grant bargain, sell and convey unto the said .........
-No. 45. Mortgage - New York (Old Form)
THIS INDENTURE, made the ...... day of...... in the year nineteen hundred and ........ between .................... hereinafter described as party of the first part, and............his wife, and.........
-No. 46. Assignment Of Mortgage - With Covenant
KNOW ALL MEN BY THESE PRESENTS, That I,......party of the first part, for and in consideration of.....dollars, lawful money of the United States, paid by...........party of the second part, do sell, a...
-No. 47. Satisfaction Of Mortgage
KNOW ALL MEN BY THESE PRESENTS, that I..................DO HEREBY CERTIFY, that a certain indenture of mortgage, bearing date the ......day of........ nineteen hundred and ........, made and execute...
-No. 48. Extension Of Mortgage
AGREEMENT, made the......day of......nineteen hundred and...... between .......... hereinafter designated as the party of the first part, and ...........hereinafter designated as the party of the se...
-No. 49. Subordination Agreement
AGREEMENT, made this ....... day of ........., nineteen hundred and twenty......, between............, part.. of the first part, AND ............, part., of the second part. WITNESSETH, that wherea...
-No. 50. Release Of Part Of Mortgaged Premises
THIS INDENTURE, made the......day of........nineteen hundred and ........between ..........of........party of the first part, and........, party of the second part, WHEREAS, .......... by indenture ...
-No. 51. Specimen Of Release Clause For Insertion In Mortgage
And the mortgagee hereby covenants and agrees for itself, its successors and assigns, to and with the mortgagor, its successors and assigns, that the owner of the premises above described shall have t...
-No. 52. Specimen Of Release Clause For Use In Release Agreement
NOW, THEREFORE, in consideration of such requests, and the further consideration of the sum of One ($1.00) Dollar and other good and valuable considerations to it in hand paid by the party of the seco...
-No. 53. Subordination And Default Clauses For Use In Junior Mortgages
This mortgage is subject and subordinate to.......mortgage.......given to secure the payment of..........Dollars and interest, recorded in the office of the..........of the County of........in Liber.....
-No. 54. Building Loan Agreement
AGREEMENT, made this......day of......19..., between............ hereinafter referred to as the borrower and ..........hereinafter referred to as the lender. WHEREAS, the borrower has applied to the...
-No. 55. Building Loan Mortgage
THIS MORTGAGE, made the......day of........nineteen hundred and ........, between.........., the mortgagor, and .........., the mortgagee. WITNESSETH, that to secure the payment of an indebtedness i...
-No. 56. Certificate Of Completion Of Building
..............do.. hereby certify that the building erected on the premises has been fully completed, and that the mortgage covering said premises made by ............ to ............ to secure .........
-No. 57. Measurement Tables. Table Of Linear Measure
12 inches (in.) make 1 foot, marked.................................. ft. 3 feet ,, 1 yard, marked.................................. yd. ...
-No. 57a. Rules For Measuring Land
The following rules will be found of service in many cases that may arise in land parceling, particularly in the computation of areas. To find the area of a four-sided tract, whose sides are perpendi...
-No. 58. Specimen Of Abstract Of Title. Abstract Of Title Of John Jones
to the premises shown on the following diagram and more particularly described below: ........................................................... ........................................................
-No. 60. Upon The Closing Of Title The Seller Should Be Prepared With The Following
1. Seller's copy of the contract. 2. The latest tax, water and assessment receipted bills. 3. Latest possible water meter reading. 4. Receipts for last payment of interest on mortgages. 5. Origina...
-No. 61. Upon The Closing Of Title The Purchaser Should Be Prepared With The Following
1. Purchaser's copy of contract. 2. Abstract of title. 3. Report of title. 4. Examine deed to see if it conforms to the contract. 5. Compare description. 6. See that deed is properly executed. 7...
-No. 62. Affidavit Of Title
STATE OF NEW YORK County of................ SS.: ............ being duly sworn, says, that he resides at .......... and is by occupation ............; that he is a citizen of the United States, twen...
-No. 63. Estoppel Certificate - From Owner
THE UNDERSIGNED, owning the premises situate in the .............., shown on the following diagram .......................................................................................................
-No. 64. Estoppel Certificate - From Junior Mortgagee
THE UNDERSIGNED, the owner and holder of......certain mortgage.., for......dollars,......and interest......dated the......day of....... 1-----, and recorded in the office of the........of the County ...
-No. 65. Bill Of Sale - With Affidavit Of Title
KNOW ALL MEN BY THESE PRESENTS, THAT......of the first part, for and in consideration of the sum of........lawful money of the United States, to......in hand paid, at or before the ensealing and deliv...
-No. 66. Form Of Statement Of Closing Title
TITLE TO PREMISES NO.......closed ... (date)... at......(place).... present ....(name persons attending closing)..... Title closed by delivery of following instruments: DEED ..........................
-No. 67. Lease
THIS INDENTURE, made the ...... day of ........ one thousand nine hundred ...... BETWEEN ............................................... party of the first part, and.....................................
-No. 68. Lease - Gilsey Form
THIS AGREEMENT between ........... as landlord, and ........... as Tenant.. WITNESSETH: - That the said Landlord.. let unto the said Tenant. . and the said Tenant.. hired from the said Landlord.........
-No. 69. Specimen Of Long Form Of Lease
THIS INDENTURE, made the......day of........in the year one thousand nine hundred and......, between REALTY ASSOCIATES, a corporation organized under the laws of the State of New York, hereinafter des...
-No. 69. Specimen Of Long Form Of Lease. Continued
14th. In case of fire to give immediate notice thereof to the Landlord, which shall cause the damage to be repaired as speedily as possible. If the damage be so extensive as to render the premises unt...
-No. 70. Agreement Guaranteeing Payment Of Rent
(TO BE ATTACHED TO LEASE) IN CONSIDERATION of the letting of the premises within mentioned to the within named ........ and the sum of one dollar to me paid by the said part.. of the first part.........
-No. 71. Schedule Of Commissions And Charges
REGULATIONS AS TO REAL ESTATE COMMISSIONS AS ADOPTED BY THE REAL ESTATE BOARD OF NEW YORK The following schedule of commissions has been approved by the Real Estate Board of New York, viz.: PRIVAT...
-No. 72. Schedule Of Real Estate Commissions
Adopted 1905, Amended Jan. 8, 1918, and April 12, 1921, by the BROOKLYN REAL ESTATE BOARD 189 Montague St., Brooklyn This schedule card is issued by the BROOKLYN REAL ESTATE BOARD for the use of i...
-No. 73. Schedule Of Commissions And Charges - Cook County Real Estate Board. Article 1. - Commissions And Charges
Section 1. For negotiating leases for business and residence property where rents are not collected by the agent, and where buildings are already erected, but not including ground leases. Where Term ...
-Schedule Of Commissions And Charges - Cook County Real Estate Board. Continued
Section 4. Ground Leases. - The following charges shall be made for ground leases whether the agent is managing and collecting rents on the property at the time of making lease or not. Where the Te...
-No. 74. Boston Real Estate Exchange Incorporated 1889
BOSTON, MASSACHUSETTS SCHEDULE OF BROKER's COMMISSIONS (In the absence of special agreement.) Adopted by the Board of Directors, February 27, 1920. In effect April 1, 1920. BOSTON PROPER (as defin...
-No. 75. Schedule Of Commissions And Charges Adopted By The Philadelphia Real Estate Board
In the absence of any contract to the contrary, the following rates of commission shall obtain, based on the total consideration, including all encumbrances thereon; irredeemable ground rents to be ca...
-Schedule Of Commissions And Charges Adopted By The Philadelphia Real Estate Board. Continued
22. For services rendered in attending to repairs, the broker or agent shall be entitled to charge the lessor 5% of the gross amount expended. MORTGAGES 23. City. For obtaining loans (including purc...
-No. 76. Brokerage Agreement Cook County Real Estate Board
CHICAGO, ILL., ..................19.... To .................................. ...... hereby grant you for a period of one year from this date, and thereafter until this agreement is revoked in writi...
-No. 77a. Application For First Mortgage Loan
1. Property, No................... St., Ave., Pl., City of ................ State of .............. Population of City ........ 2. Amount wanted, $........, at ....%, for........years. 3. Full name...
-No. 77b. Description Of Loan
Amount, $........ at........per cent for......years. Bond of.............. secured by.......mortgage covering premises shown on diagram and known as Nos....................................... Street....
-No. 78. Brokers Listing Card For Sale To Let For Exchange. Description Of Premises
Street No. of Property .................................... Location of Property ...................................... Between ................................................. Size of ...
-No. 79. Agency Contract
THIS AGREEMENT, made this........day of.......... 19....Between .................. hereinafter termed the Owner, and ADOLPH SPEAR & COMPANY, a domestic corporation, hereinafter termed Agent, WITNESS...
-No. 80. Complaint
Building................................. Date...................... Tenant.................................. Letter..................... Location................................. Telephone............
-No. 81. Building Manager's Order Form
Order No............... Mr................................... Address.............................. Date..................19.... Please ...................................................... Buildi...
-No. 82. Appraisal Of Real Estate
New York................19... Mr................. ........................... Dear Sir: We value the premises situated at..............as shown on the diagram; together with the improvements there...
-No. 83. The Hoffman Rule For The Valuation Of Short Lots
-No. 84. Davies Rule
Table based on the following formula, for estimating the value of strips of lot 25 feet wide, from one inch to one hundred and twenty-five feet, for each inch of depth, and from one hundred and twenty...
-No. 85. Agreement Between Owner And Architect On The Fee Plus Cost System
Copyright 1917 by the American Institute of Architects, The Octagon, Washington, D. C. THIS AGREEMENT made the......day of........in the year Nineteen Hundred and........by and between................
-No. 86. Agreement Between Owner And Contractor
Adopted and Recommended for General Use by the American Institute of Architects and the National Association of Builders. Copyrighted 1905 by the American Institute of Architects, Washington, D. C. ...
-No. 87. Torrens Law - Registrar's Certificate Of Title - New York
No.................. First registered........... CERTIFICATE OF TITLE (First Certificate) or (Transfer from No......) ........................... .......................................................









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