Real Estate Chapters

I.   Leasing Real Estate

A.   Definition - Lease

1.   A contract between owner of real estate (lessor) and tenant (lessee) to transfer rights of exclusive possession and use in exchange for the payment of rent and other obligations
2.   The owner retains the reversionary right to possession.
3. Lessor’s interest is now a leased fee plus a reversionary right.

B.   Statute of Frauds (Consult your local laws)

1.   In most states, to be enforceable, a lease for more than one year must be in writing.
2.   A lease that can be performed in a lesser period of time is usually enforceable in court even if it is oral.

C.   In Practice: The best practice for the protection of all parties is to use written    leases. Any written agreement must be signed by both parties.

A.   Estate for years (Tenancy for years)

1.   Continues for a definite period of time, regardless of how long
2.   Specific beginning and ending dates
3.   No notice is required to terminate
4.   Does not automatically renew

B.   Estate from period to period (Periodic tenancy)

1.   Exists for a fixed period of time but automatically renews itself
2.   The payment and acceptance of the rent extends the lease for another period.
3.   Proper notice must be given to terminate the lease.
4. Holdover tenancy

a. created when tenant with estate for years remains in possession.
b. landlord may evict or treat holdover tenant as one who has periodic tenancy.

C.   Estate at will (Tenancy at will)

1.   Exists with the consent of the landlord
2.   Usually informal and oral
3.   Indefinite in length
4.   Proper notice must be given to terminate
5.   Automatically terminates at the death of either party

D.   Estate at sufferance (Tenancy at sufferance)

1.   Created when the tenant who legally obtained the possession of the property now illegally remains in possession
2.   Exists without the consent of the landlord
3.   Examples

a.   Tenant whose lease has expired but refuses to move out
b.  Owner whose property has been foreclosed but refuses to vacate the premises
c.   Owner whose property has been taken under eminent domain but refuses to leave

A.   Requirements (essential elements) of a valid lease

1.   Offer and acceptance*meeting of the minds of the parties
2.   Consideration*usually rent but can be labor or other services
3.   Capacity to contract*all parties must be legally competent
4.   Legal objectives*intent of the contract must be legal

B.   A complete description of the premises should be clearly stated, including specific facilities included in the lease.

1. Preprinted lease agreements better suited for residential property
2. commercial lease more complex, legal counsel should be consulted.

C.   Possession of premises.

1. The covenant of quiet enjoyment for the tenant is implied by law regardless of whether addressed in the lease.
2. Landlord is allowed to enter property with tenant’s permission.

D.   Use of premises*if the use is to be limited in any manner, that use must be    specifically stated in the lease.
E.   Term of lease*dates should be stated precisely
F.   Security deposit (consult your local laws)

1.   Held by the landlord during the lease
2.   Applied to unpaid rent or repairs
3.   State or local law may set minimums or maximums
4.   In Practice: The lease should specify whether such funds are security deposits or advance payments of rent.

G.   Improvements

1.   Generally, neither party is required to make improvements.
2.   The tenant may make improvements with permission.
3.   Any trade fixtures should be identified in the lease.
4. Accessibility
a. Federal Fair Housing Act (see Chapter 21) makes it illegal to discriminate on basis of physical disabilities. Tenants may make reasonable modifications to property but must restore at end of  lease term.
b. American with Disabilities Act (ADA) applies to commercial,  nonresidential property; requires they be free of architectural barriers or provide reasonable accommodations for people with  disabilities.

H.   Maintenance of premises

1.   Historically, the landlord is not obligated to make repairs.
2.   Under current landlord-tenant laws, some jurisdictions require landlords to make repairs on residential units to keep them in habitable condition     and maintain the common areas.
3.   The tenant must return the premises in the same condition as received, except for ordinary wear and tear.

I.   Destruction of premises

1.   The tenant is obligated to pay rent if the improvements are destroyed when

a.   The property is agricultural land
b.   In most states, the lease is a ground lease
c.   In some cases, the tenant rents an entire building

2.   If part of a building is destroyed, the tenant is usually not required to continue to pay rent.
3.   In Practice: Destruction of the premises should be addressed in the lease.

J.   Assignment and subleasing (see Figure 16.2)

1.   Can be prohibited by the terms of the lease
2.   Assignment is the transfer of all of the tenant's interest.
3.   Subleasing is the transfer of part of the tenant's interest.
4.   Either may require the lessor's consent.
5.   The tenant/sublessor's interest in a sublease is known as a sandwich     lease.

K   Recording a lease

1.   Recording*varies according to state laws and the length of the lease; leases of three years or longer generally are recorded.
2.   Possession of leased premises*state law generally governs whether the landlord must give the tenant actual possession or only the right of possession.
3. In some states. only a memorandum of lease is recorded.

L.   Options

1.   The privilege of renewing or extending the lease or purchasing the property at a predetermined price and time
2.   The tenant must give notice of intention to exercise the option.
3.   The lease is the primary consideration, the option is secondary.

A.   Gross lease

1.   The tenant pays a fixed rental amount.
2.   The landlord pays all of the property charges.
3.   The result is a gross income to the landlord.
4.   Most often used for residential apartment rentals (may differ by local     custom)

B.   Net lease

1.   The tenant pays a fixed rental amount.
2.   The tenant also pays some or all of the property charges (net or double-    net or triple-net)
3.   The result is a net income to the landlord.
4.   Generally used for all non-residential property leases.

C.   Percentage lease

1.   The tenant pays a fixed amount of rent plus a percentage of the gross    income of the business.
2.   The percentage and basis agreed to between the parties
3.   Most commonly used in retail locations
4.   Specifics vary with the type of business and its location
5. Math Concept: Calculating percentage lease rents

D.   Other lease types

1.   Variable leases*provide for increases in rent during the lease period

a. Graduated lease*provides for increases in rent at set futuredates in specified amounts
b.   Index lease*periodic increase or decrease in rent based  on changes in some economic index

2.   Ground lease

a.   Usually involves separate ownership of land and buildings
b.   Allows the tenant to construct a building on land that he or she      does not own and use the premises thereafter
c.   Generally set up as a net lease
d.   Typically for 50 years or more

3.   Oil and gas lease

a.   The owner receives cash for giving exploration rights.
b.   If petroleum is found, the owner usually receives one-eighth of      its value as a royalty.

4.   Lease-purchase

a.   The tenant leases the property in advance of its purchase      usually for tax or financing reasons.
b.   The purchase is the primary consideration, the lease is       secondary.

5.   Agricultural lease

a.   Rent can be paid by the tenant in advance (cash rents).
b.   The tenant and owner can share the profits from the sale of the crop when it is sold (sharecropping).

A. Termination

1.   No notice is required to terminate a tenancy for years.
2.   The parties can mutually agree to cancel the lease.
3.   The tenant may surrender the leasehold interest if the landlord is willing     to accept it.
4.   A tenant who abandons the property is still liable for the terms of the     lease, including rent payments.
5.   When the owner of leased property dies or the property is sold, the lease    does not terminate except for

a.   A lease from the owner of a life estate
b.   The death of either party to a tenancy at will
c. A sale clause in the lease

6.   Oral and written leases without specific expiration dates require proper     notice to terminate as required by law.
7.   If a lease is breached, it may be terminated by according to state law.

B.   Breach of lease

1.   If the tenant breaches the lease, the landlord may sue for overdue rent,     damages to the premises or other defaults.
2.   Suit for possession*actual eviction

a.   The landlord must serve notice to the tenant; the number of      days varies according to law.
b.   If the tenant does not leave peaceably, the court may have the      tenant and his or her possessions forcibly removed.

3.   Tenants' remedies*constructive eviction

a.   If the landlord breaches the lease, the tenant has the right to sue      for damages.
b.   The tenant may abandon the premises if

(1)  The landlord's action or inaction has rendered the premises       uninhabitable.
(2)  The tenant must remove himself or herself because of the       premises not being usable.

C.   Pro-tenant legislation

1.   Uniform Residential Landlord and Tenant Act

a.   The result of consumer awareness
b.   Adopted in whole or in part by most states
c.   Provides that both parties have certain obligations
d.   Provides state-specific remedies for both parties

2.   Tenants' Eviction Procedures Act of 1976

a.   Applies to government-owned and government-subsidized units  and those with government-backed mortgage loans.
b.   Does not supersede state laws
c.   Provides recourse for tenants in states that have no such laws

A. Fair Housing Laws

1. To ensure that all persons have access to housing of their choice, including rentals, within their ability to pay, without differentiation in terms and conditions, because of their:

race
color
religion
sex
familial status
handicap
national origin (consult local laws for additional protected classes)

2. Changes in 1988 have significant impact on rental practices.

a. Protections for people with disabilities
b. Protections for families with children

3. Examples: cannot segregate individuals in sections of a complex; must allow people with disabilities to alter the premises; cannot charge different amounts of rent or security deposit

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I.   The Property Manager

A.   Property management*a specialized profession

1. Responsible for the fiscal, physical and administrative management

B. Preserve the value of an investment property while generating income as an agent for the owner.  Accomplished by

1. Securing suitable tenants
2. Collecting the rents
3.   Caring for the premises
4.  Budgeting and controlling expenses
5.   Hiring and supervising employees
6.   Keeping proper accounts
7.  Making periodic reports to the owner

C. Securing management business

1. Sources of business

a. corporate owners
b. apartment developers and landlords
c. condominium associations
d. homeowners’ associations
e. investment syndicates
f. trusts
g. absentee owners

2. Determine owners have realistic expectations

D.   The management agreement (see Figure 17.1)

1.   Description of the property
2.   Time period the agreement will cover
3.   Definition of management's responsibilities
4. Statement of owner’s purpose
5.   Extent of manager's authority as an agent
6.   Reporting*frequency and detail
7.   Management fee*a negotiable percent or flat fee or both
8.   Allocation of costs
9. Math Concept: Rental Commissions

A. Budgeting expenses  The professional property manager should be certain that the building owner has realistic income expectations and is willing to spend money on necessary maintenance.

1.   The budget should be based on anticipated revenues and expenses.
2.   Fixed expenses include

a.   Employees' salaries
b.   Real estate taxes and insurance premiums

3. Variable expenses include

a. Repairs
b. Decorating
c. Supplies

B.   Capital expenditures

1.   Funds should be set aside for renovations if they will enhance the value of the property over the long term.
2. Life cycle costing*the cost of renovation or equipment to be installed must be evaluated over its useful life, including the initial and future operating costs.

C.   Renting the property

1.   Using an in-house service assures control.
2.   Using a leasing agent may increase the manager's liability.

D.   Setting rental rates

1.   Must cover fixed charges and operating expenses as well      as provide a fair return on the investment
2.   Must consider the prevailing rates in comparable buildings
3.   Must consider the current level of vacancy in the property to be rented

a. high vacancy level may indicate poor management.
b. A high occupancy level may indicate rents are too low.
c. Math Concept: Calculating monthly rent per square foot

E.   Selecting tenants

1.   The size of the space meets the tenant's requirements
2.   The tenant has the ability to pay
3.   The tenant's business will be compatible with the building and      with the other tenants.
4.   If the tenant is likely to expand in the future, expansion space      will be available.
5.   Landlord must comply with applicable fair housing laws and ADA.

F.   Collecting rents

1.   Select tenants carefully.
2.   Substantiate their ability to pay through their financial references.
3.   Maintain a firm and consistent collection plan.

 G.   Maintaining good relations with tenants

1.   Keeping tenants satisfied minimizes turnover and expenses for the landlord.
2.   A good property manager will

a.   Use tangible and intangible benefits to keep tenants happy
b.   Ensure that maintenance requests are attended to promptly
c.   Enforce all lease terms and building rules fairly
d.   Keep accurate records regarding rental payments and lease expirations

 H.   Maintaining the property

1.   The property manager must balance the service requirements of the property with the costs they entail.
2.   The physical integrity of the property must be protected.

a.   Preventive maintenance*regularly scheduled activities to  maintain the structure
b.   Repair or corrective maintenance*fixing items that are broken
c.   Routine maintenance*routine cleaning and repairs
d.   Construction*in non-residential properties, the alterations to make tenant improvements

3.   Hiring employees versus contracting for service*decision based on the size of the building, complexity of the requirements and availability of suitable labor
4. Tenant improvements: major alterations to meet commercial or industrial property tenant needs.

I.   Handling environmental hazards

1.   Be aware of the possible environmental hazards (asbestos, formaldehide,….)
2.   May arrange an environmental audit
3.   Must provide proper disposal of waste
4.   May have to provide facilities for recycling

J. The American with Disabilities Act

1. Adopting nondiscriminatory employment procedures (by July 26, 1994 if  have 15 or more employees)

a. Recruitment, interviewing, selection, hiring, promotion, termination etc.
b. Providing reasonable accommodations to enable a person with a disability to perform essential job functions

2. Ensuring access to services and facilities for people with disabilities  (See Figure 17.1)

a. Conducting a building audit to determine compliance with ADA
b. Preparing and executing a plan to retrofit or restructure a      building that is not in compliance
c. Removing barriers and providing accommodations when they      can be accomplished in a readily achievable manner

III.   Risk management
A.   The property manager must evaluate the perils of any risk by deciding to

1. Avoid it by removing the source of the risk
2. Control it by taking preventive measures
3. Transfer it by taking out an insurance policy
4.  Retain it by insuring with a large deductible

B. Security of tenants

1. Recent court decisions held landlords and their agents responsible for physical harm inflicted on tenants by intruders.
2. Property managers should evaluate measures to protect tenants from unauthorized entry to building and secure individual apartments.

C.   Types of insurance coverage

1.   Fire and hazard*can be extended to cover windstorm, hail, smoke damage and civil insurrection
2.   Consequential loss, use and occupancy*covers the loss of revenue if the property cannot be used to produce income
3.   Contents and personal property*covers contents and personal property when they are not physically located on the premises
4.   Liability

a.   Public liability*protects the public while on the premises
b.   Workers' compensation*protects employees while they work either under a state program or a private insurance policy

5.   Casualty*usually written to cover a specific risk, it can cover theft, burglary, vandalism, machinery damage and health and accident
6.   Surety bonds*cover an owner against financial loss resulting from an employee's criminal acts or negligence
7.   Multiperil policies*comprehensive packaged insurance program

D.   Claims

1.   May be based on depreciated actual or cash value
2.   May be based on current replacement cost
3.   Commercial policies usually include coinsurance clauses

A.   The Institute of Real Estate Management (IREM)
B.   The Building Owners and Managers Association International (BOMA)

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A.   Appraisal*opinion of value or a supportable estimate of value
B.   Regulation of appraisal activities. With the passage of the Financial Institutions Reform, Recovery, and  Enforcement Act of 1989 (FIRREA), appraisals performed as part of a federally  related transaction as of January 1, 1993 must be performed by a state-licensed or state-certified appraiser.

1.   Federally related transaction is any real estate-related financial transaction in which a federal financial institution or regulatory agency engages.
 2. Residential property at $250,000 or less and commercial valued at $1
 million are exempt.

C.   Competitive market analysis (CMA)

1. Real estate licensees must be familiar with appraisal techniques to perform a competitive market analysis (CMA) when assisting a seller to set the listing price for a property.
2. CMA not an appraisal.

A.   Characteristics of value ("DUST")

1.   Demand*the need or desire for possession or ownership backed by the financial means to satisfy that need
2.   Utility*the capacity to satisfy human needs and desires
3.   Scarcity*a finite or limited supply
4.   Transferability*the relative ease with which ownership rights can be transferred

B.   Market value

1.   The most probable price a property will bring in a fair sale.

a. In a competitive and open market
b. The buyer and seller are each acting prudently, knowledgeably and without undue influence.
c. price not affected by unusual circumstances.

2. Essential to determine market value

a.  The most probable price is not average or highest price
b.   The buyer and seller must be unrelated and acting withoutundue pressure.
c.   Both the buyer and the seller must be well informed of the  property's use and potential, including its assets and defects.
d.   A reasonable length of time must be allowed for the property to be exposed in the open market
e.   Consideration paid in cash or its equivalent
f. Price must represent a normal consideration, unaffected by special financing

C.   Market value versus market price

1.   Market value*an estimate based on the analysis of comparable sales     and other pertinent market data
2.   Market price*what the property actually sold for; sales price

D. Market value versus cost

1. Common misconceptions that cost represents market value.
2. Cost and market value may be the same if improvements are new

E.   Basic principles of value*primarily economic principles

1.   Anticipation*value can increase or decrease if one anticipates some     future benefit or detriment from the property.
2. Change*no physical or economic condition remains constant.
3. Competition*excess profits tend to attract competition.
4. Conformity*maximum value is realized if the use of the land conformsto existing neighborhood standards.
5. Contribution*the value of any component of a property is what its     addition contributes to the value of the whole or what its absence detracts from the value of the whole.
6. Highest and best use*the most profitable single use to which a property can be adapted. Must be:

a. legally permitted
b. financially feasible
c. physically possible
d. maximally productive

7. Increasing and diminishing returns*improvements to land and structures will eventually reach a point at which they will no longer have a positive effect on property value.
8. Plottage*the merging or consolidation of adjacent lots held by separate owners into one larger lot may produce a higher total value than the sum of the two lots valued separately.
9. Regression and progression*between dissimilar properties, the worth of the better property is affected adversely by the presence of the lesser-quality property; usually, the higher valued property decreases significantly, while the lesser-valued property increases slightly.
10. Substitution*the maximum value of a property tends to be set by the     cost of purchasing an equally desirable replacement.
11. Supply and demand. Principle says value depends on

a. number of properties available in marketplace
b. prices of other properties
c. number of purchasers
d. price buyers willing to pay

A.   The sales comparison approach (see Table 18.1)

1.   An estimate of value is obtained by comparing the subject property (the property under appraisal) with recently sold comparable properties  (properties similar to the subject).
2.   The factors for which adjustments to the comparable properties are     made

a.   Property rights*in cases where less than the full bundle of      rights is involved
b. Financing concessions*events such as differences in mortgage      loan terms or owner financing
c. Conditions of sale*motivational factors such as foreclosure or a     sale between family members
d. Date of sale*changes in economic conditions between the date     of the sale of the comparable property and the date of the appraisal
e.   Location*compensate for locational or neighborhood differences
f.   Physical features and amenities*physical difbetween the comparable properties and the subject

3.   A dollar value or percentage adjustment is assigned to each difference between the subject property and the comparable properties.
4.   Adjustments are made as follows

a.   If the comparable property is better than the subject property or has a feature that the subject property lacks, the value of the comparable is decreased accordingly.
b. If the comparable property is not as good as the subject property or lacks a feature that the subject property has, the value of the comparable is increased accordingly.

B.   The cost approach (see Table 18.2)

1.   Steps in the cost approach to value

a.   Estimate the value of the land as if it were vacant and available      to be put to its highest and best use.
b.   Estimate the current cost of constructing the building(s).
c.   Estimate the amount of accrued depreciation resulting from  physical deterioration, functional obsolescence and external  obsolescence.
d.   Deduct the accrued depreciation from the estimated  construction cost of new building(s).
e.   Add the estimated land value to the depreciated cost of the  building(s) and site improvements to arrive at the total property value.

2.   Reproduction cost versus replacement cost

a.   Reproduction cost*the current cost of a duplicate of the subject property, including both the benefits and the negative features of the property
b.   Replacement cost*the current cost of improvements with utility or function similar to the subject property

3.   Determining reproduction or replacement cost new

a.   Square-foot method*based on the average cost-per-square-foot or cost-per-cubic-foot of recently built similar structures; also called the comparison method
b.   Unit-in-place method*replacement cost based on the installed costs of the structure's components; also called the segregated cost or the component cost method
c.   Quantity survey method*the cost of the raw materials plus the cost of the construction labor plus indirect costs
d.   Index method*a factor representing the percentage of increase or decrease in construction costs to the present time is applied to the original cost of the improvements

4.   Depreciation

a.   Physical deterioration*normal wear and tear

(1)  Curable*repairs that are economically feasible
(2)  Incurable*repairs that are not economically feasible

b.   Functional obsolescence*outmoded items and poor design

(1)  Curable*outdated physical or design features that could bereplaced or redesigned economically
(2)  Incurable*outdated physical or design features that could  not be replaced or redesigned economically or        physically

c.   External obsolescence*incurable, because it is caused by a  problem external to the property and, therefore, beyond the property owner's control

5.   Depreciation is usually calculated on a straight-line basis (age-life method), the assumption being that depreciation occurs at an even rate  over the structure's economic life
6. Cost approach used for appraising newer or special-use buildings, such as schools, churches and public buildings.

C.   The income approach*based on the present value of the rights to future income    (see Table 18.3)

1. Income divided by rate equals value (IRV)
2.   Steps in the income approach to value

a.   Estimate the annual potential gross income*income from all sources, including rent, concessions and vending
b.   Deduct for vacancies and collection losses ("bad debt") to obtain     the effective gross income.
c.   Deduct the annual operating expenses to obtain the net  operating income; does not include

(1)  Debt service (principal and interest payments)
(2)  Depreciation (a non-cash expense)
(3)  Capital expenditures/capital improvements
(4)  The owner's personal income tax liability

d.   Estimate the price an investor would pay for the income produced by this particular type and class of property.

(1)  Compare the annual net operating incomes of recently-sold similar properties to
(2)  The sales price of those properties
(3)  The annual net operating income divided by the sales price  results in the capitalization ("cap") rate.

e.   Apply the capitalization rate to the subject property's annual net operating income to obtain an estimated value.

3.   Gross rent multipliers and gross income multipliers*informal substitutes for income capitalization (see Table 18.4)

a.   Gross rent multiplier (GRM)

(1)  Used for single-family residences and duplexes
(2)  Based on the gross monthly rent of recently-sold similar       properties
(3)  The sales price divided by the gross monthly rent results in       the gross rent multiplier

b.   Gross income multiplier (GIM)

(1)  Used for non-residential income properties
(2)  Based on the gross annual income (from all sources) of recently-sold similar properties
(3)  The sales price divided by the gross annual income results       in the gross income multiplier.
c.   In Practice: Multipliers are of limited practical value.

D.   Reconciliation*obtaining the final value estimate

1.   The three approaches to value usually produce three different      indications of value.
2.   All three should be used in estimating the final value.
3.   The three indications of value should not be averaged.
4.   Depending on type of property, one approach would be given more weight than others.

A.   State the problem*what type of value is being sought?
B.   List the data needed and the sources.
C.   Gather, record and verify the necessary data.

1.   General data*national, regional, city, and neighborhood data; data  about factors not located on the property
 2.   Specific data*data on the subject land and improvements
3.   Both general data and specific data would include information regarding     each of the three approaches to value.

D.   Determine the highest and best use of the site.
E.   Estimate the land value*usually by sales comparison analysis.
F.   Estimate the value by each of the three approaches.
G.   Reconcile the estimated values for the final value estimate.
H.   Report the final value estimate.

I. Land Use Controls

A. Land use controlled by public and private restrictions and public ownership of  land.
B.   The police power of the states is the inherent authority to create the regulations necessary to protect the public health, safety and welfare.
C.   The states, in turn, allow local municipalities to make regulations that are    consistent with the general laws.

A.   Developed to ensure that social and economic needs are balanced  against environmental and aesthetic concerns
B.   Provides the municipality with the goals and objectives for its future development

1.   Land use*that which is proposed for residential, industrial, business, agriculture, traffic and transit, utilities and common  facilities, including recreation
2.   Housing needs*that which is anticipated for future residents,  including rehabilitation of declining neighborhoods and accommodation of new housing in different dwelling types for households in all income levels
3.   Movement of people and goods*highways, public transit,      parking, pedestrian and bikeway systems
4.   Community facilities and utilities*education, libraries, hospitals, recreation, fire and police, water resources, sewerage and waste treatment, storm drainage and flood management
5.   Energy conservation*reduction in energy consumption and promotion of renewable energy sources

A. Zoning ordinances

1. Are local laws that regulate the use of land and structures within designated zones, affecting items such as

a. permitted uses of each parcel of land
b. lot sizes
c. building height
d. setbacks
e. style and appearance of structures
f. density
g. protection of natural resources

2.   Zoning is made possible by state enabling acts.
3. No nationwide or statewide zoning ordinances

B. Zoning Objectives

1. Zoning classifications generally divide land uses into

a.   Residential
b.   Commercial
c.   Industrial
d.   Agricultural
e.   Multiple-use, such as planned unit developments (PUD)

2.   Buffer zones*such as parks and playgrounds, may be included to separate residential areas from non-residential areas
3. Certain land use objectives can be achieved with

a. Bulk zoning*to control density and avoid overcrowding
b. Aesthetic zoning*to specify certain types of architecture
c. Incentive zoning*to ensure that certain types of use are       incorporated into developments

4. Constitutional issues and zoning ordinances

a. 14th Amendment prevents states from depriving “any person of life, liberty or property, without due process of law.
b. The tests commonly applied in determining the validity of zoning ordinances require that

(1)   The power be exercised in a reasonable manner
(2) The provisions be clear and specific
(3)   The ordinance be free from discrimination
(4)   The ordinance promote public health, safety and welfare
(5)   The ordinance apply to all property in a similar manner

5. Taking: 5th Amendment - “nor shall private property be taken for public use, without just compensation”.

a. may be negotiated
b. “before and after method”
c. Downzoning may be found in court to be an unfair exercise of eminent domain.

6. Zoning Permits.

a. Zoning hearing boards*established to hear complaints about the effects zoning may have on specific parcels of property
b.   Nonconforming use*generally applies to properties that conformed with  the zoning before it was subsequently changed
c. Variance*a permanent exception to the zoning ordinance
d. Conditional-use permit*granted to a property owner to temporarily allow a special use that is in the public interest

A. Specify minimum construction standards
B.   Require building permits and periodic construction inspections
C.   Require the issuance of certificates of occupancy

A. Subdivision and land development ordinances part of comprehensive  plan

1. Subdividor: buys undeveloped acreage and divides into smaller lots for sale
2. Developer: constructs improvements on subdivided parcels.

B. Regulation of land development

1. Controlled by state and local government
2. State sets minimum requirements; local government has higher standards
3. Land development plan must comply with municipality’s comprehensive plan.
4. Plats

a. Detailed map showing individual lots.
b. Includes engineering data and restrictive covenants

5. Subdivision Plans  Zoning ordinances *generally provide for:

a. streets
b. road and highway specifications
c. water main
d. sanitary sewer and storm sewer installation
e. easements or right of ways for public utilities
f. minimum lot sizes and setback lines
g. areas to be reserved or dedicated for public use.

6. Density zoning ordinances restrict average maximum number of houses per acre

a. Street patterns (See Figure 19.1)

(1) Gridiron pattern
(2) Curvilinear system

b. Clustering for open space (See Figure 12.2) Developer may choose to cluster building lots for open space.

A.   Deed restrictions*originated at the time ownership is conveyed (deed) to limit the use

B. Restrictive covenants*included in a subdivision plat or separate recorded    document to set standards for all the parcels in a subdivision including

1.   The type of building allowed on the property
2.   The use to which the land may be put
3.   The type of construction
4.   Height, setbacks, square footage

C. Legal Issues regarding private restrictions

1.   Restrictions that prohibit the free alienation (transfer) of property     ownership are usually against public policy and, thus, void and unenforceable.
2.   Restrictions that limit land use are usually valid.
3.   Overly-broad and repugnant restrictions are usually overturned by     the courts.
4.   If restrictions conflict with the zoning ordinances, the more      restrictive of the two will take precedence.
5.   Enforcement of private restrictions usually requires an injunction.
6.   Delaying in such enforcement can result in laches.

A. Interstate Land Sales Full Disclosure Act

1. Regulates sales of land across state borders
2. Required to register details with HUD
3. Must provide purchasers with property report in any development that exceeds 25 lots.

B. State Subdivided-Land Sales Laws

1. Some affect only sale of land located outside the state to state residents
2. Other states  regulate sales of land located both within and outside of state.

I.   Equal Opportunity in Housing

A.   All real estate licensees must be aware of federal, state and local fair housing laws.

B. Purpose of the laws is to create an open, unbiased housing market in which    every person has the opportunity to live where he or she chooses within his or    her ability to pay.

C.   Failure to comply with the laws is not only a criminal act but may also be    grounds for disciplinary action against a licensee.

D. State and local laws may be more restrictive than federal law.

E. Civil Rights Act of 1866*prohibits discrimination in housing based on race,  without exception  Court 1896 decision, Plessy V Ferguson

F. "Separate but equal" doctrine created classes among citizens because separate was rarely equal.

A. Protected classes

1. race
2. color
3. religion
4. sex
5. handicap
6. familial status
7. national origin
8. including people who are associated with these individuals

B. Equal Housing Opportunity Poster (See Figure 20.2)

1.   Refusing to sell, rent or negotiate the sale or rental of housing
2. Making a dwelling unavailable to any person
3. Changing terms, conditions or services for different individuals      as a means of discrimination
4. advertising that restricts the sale or rental of residential property
5. Representing that a properties not available for sale or rent when in fact it is.
6. Profiting by inducing owners of housing to sell or rent because of the prospective entry into the neighborhood of persons in the protected classes
7. Altering the terms or conditions of a home loan or denying a loan as a means of discrimination
8. Denying membership or participation in any multiple listing service, real estate organization or other facility related to the sale or rental of housing as a means of discrimination

C. Definitions

1. Housing—”dwelling: any building or part of a building designed for occupancy by one or more families.
2. Familial status*one or more individuals who have not reached the age of 18 being domiciled with a parent, guardian or other person with legal custody
a. All properties available; under the same terms and       conditions as for others
b. Cannot use advertising or occupancy standards with the intent      or effect of restricting families with children
3. Disability—physical or mental impairment (or having a history of same) that substantially limits one or more major life activities
a. Does not include current illegal use of or addiction to a controlled substance
b. Does protect individuals in addiction recovery programs
c. Must provide accommodations and allow reasonable       modifications that are necessary at tenants own expense
d. See federal and state laws for accessibility guidelines.

D. Exemptions to the Fair Housing Act

· The sale or rental of a single-family residence when the home is owned by an individual who does not own more than three such homes at one time and a real estate broker and discriminatory advertising is not used
· The rental of rooms or units in an owner-occupied one- to four-family dwelling
· Dwelling units owned by religious organizations may be restricted to people of the same religion if membership in the organization is not restricted to individuals in the protected classes.
· A private club that is not open to the public may restrict the rental or occupancy of the lodgings that it owns to its members as long as the lodgings are not operated commercially.
1. Housing for older persons is exempt from the familial status protection.
a. Must be occupied solely by persons at least 62 years old or:
b. At least 80 percent of the units must be available for occupancy by at least one person at least 55 years of age and certain      facilities for the elderly are provided
2. Jones v. Mayer (based on the Civil Rights Act of 1866)*where race is involved, no exceptions apply a. Supreme Court interpretation expanded definition of race to include  characteristics common to nationality groups.
b. Affords due process of law for complaints.

E.  Equal Credit Opportunity Act (ECOA)*prohibits discrimination in the granting of   credit based on race, color, religion, national origin, sex, marital status or age (if    the applicant is of legal age)

F. Americans with Disabilities Act*provides for nondiscriminatory employment    procedures and accessibility to goods and services by people with disabilities

1. Title I*employment of qualified job applicants regardless of disability
2. Title III*accessibility to goods and services; barrier free

A.  Blockbusting*inducing homeowners to sell by making representations regarding   the entry or prospective entry of into the neighborhood by people in the     protected classes
B.   Steering*channeling homeseekers into or out of particular areas on the basis of  race, color, religion, national origin or other protected class; the effect of limiting   choices
C. Advertising*language that indicates a preference or limitation is discriminatory,    such as

1. cannot attract one population to exclusion of others.
2. selection of media

D. Appraising*cannot consider factors related to the protected classes when    preparing valuations or appraisals
E. Redlining*refusing to make mortgage loans or issue insurance policies in    specific areas without regard to the economic qualifications of the applicant
F. Intent and effect*without intention to discriminate, certain activities can have    that effect; disparate impact.

A. Administered by the Office of Fair Housing and Equal Opportunity (OFHEO)  under the direction of the Secretary of HUD.

1. A complainant has one year after the alleged act of discrimination to file a charge with HUD or two years to bring a federal suit.
2. HUD will investigate to see if discrimination actually occurred. HUD will     attempt to resolve by reconciliation
3. Unless someone connected with the charge requests that it be heard in federal district court, an administrative law judge from HUD will hear the charge.
4. The administrative law judge has the authority to issue an injunction, award actual damages and impose civil penalties of

a. Up to $10,000 for first offense
b. Up to $25,000 for second offense within 5 years
c. Up to $50,000 for further violations in 7 years

5. Cases heard in federal court can result in the award of actual and unlimited punitive damages.
6. Complaints brought under Civil Rights Act of 1866 taken directly to     federal court

B. State and local enforcement agencies

1. Many states and municipalities have own fair housing laws.
2. All complaints filed with HUD referred to local enforcement agencies if their laws are substantially equivalent with federal law. ATTORNEY GENERAL

C.   Threats or acts of violence*the Fair Housing Act protects those who seek or encourage the exercise of open housing rights.

A.   Real estate industry largely responsible for creating and maintaining open    housing market.

1. Social as well as legal responsibility
2. Reputation of industry cannot afford even the appearance of illegal     discrimination.

B.   Good business practices will minimize the potential for charges of discrimination.

1. Office policies and procedures to avoid discrimination
2. Standardized inventory
3. Consistent practices
4. Verifiable and measurable criteria for property seekers
5. Written documentation of all aspects of a transaction
6. "Are we doing this for everyone?"
7. The broker should display the equal housing opportunity poster.

A. Not a housing law
B. Affects place of business/public access
C. Define “disability”

A. Professional conduct involves more than compliance with the laws.

1. State license laws establish activities that are legal.
2. Ethics is a system of moral principles, rules and standards of conduct.

B. Codes of ethics are written systems of standards for ethical conduct*specific in    dictating rules that either prohibit or demand certain behavior; must provide    sanctions for violators.

1. Example*Code of Ethics of the National Association of REALTORS*  for its membership.

2. Some states require real estate commissions to establish code or canon     of ethical behavior.

I. Environmental Issues

 A. Need to balance commercial use of land with preservation of vital resources and protection of the quality of water and soil.
B. Prevention and cleanup of pollutants and toxic wastes revitalize land and add    greater opportunity for responsible development.
C. Environmental issues are important in practice of real estate

1. Consumer more health and safety-conscious.
2. Licensees must be alert to existence of environmental hazards.

a.  disclosure at time of transfer of property
b.  familiar with state and federal environmental laws and regulatory agencies.

A. Asbestos

1. Once used as insulation; banned in 1978
2. About 20 of the nation’s commercial and public buildings contaminated.
3. Health hazard.

a. inhaling
b. harmful only when disturbed or exposed.
c. highly friable.
d. no safe level of asbestos exposure.

4. Used also in residential properties

a. to cover pipes, ducts.
b. fire resistant property made it popular

5. Costly to remove

a. Requires state licensed technicians and specially sealed environments.
b. Disposal at licensed facilities.
c. Encapsulation, or sealing off of disintegrating asbestos, may be preferable method of containment.

B.  Lead-based Paint and Other Lead Hazards. (See Figure 21.2)

1. Lead used as paint pigment.
2. present in about 75% of private homes.
3. elevated levels in body cause serious damage to brain, kidneys,
4. nervous system and red blood cells.
5. Lead particles can be present anywhere in sand. ground water and
6. Banned in 1978
7. No federal regulations that homeowners test for presence of lead-based paint.

a. EPA and HUD regulations require disclosure of any known  lead-based paint hazards to potential buyers and renters. Must attached to all residential leases and sales contracts along with hazard pamphlet.
b. Purchasers have 10 days to conduct risk assessment or inspection.
c. Purchasers not bound by real estate contract until 10-day period expired.

C. Radon

1. Caused by natural decay of other radio-active substance. Eastern United States high in radon.
2. When trapped in buildings high concentration.
3. Colorless/tasteless- impossible to detect without testing.
4. Levels of radon can be reduced by installing ventilation systems or     exhaust fans.
5. Home radon-detection kits available. Most accurate testing by      radon detection professionals.

D. Urea-Formaldehyde (UFFI)

1. Used in insulation
2. Consumer Product Safety Commission banned use in 1982.
3. Ban reduced to warning by courts.
4. Causes several health problems.
5. Tests can be  conducted to determine presence of or level of      formaldehyde gas  in home.

E. Carbon Monoxide

1. Colorless, odorless gas byproduct of burning fuels due to incomplete combustion.
 2. Improper ventilation of equipment, malfunction creates problems.
 3. Detectors are available, mandatory in some areas.

F. Electromagnetic Fields

1. Produced by electric currents
2. Controversy over claims whether they cause health problems.
3. Buyers reluctant to purchase property near power lines/transmitters.

A. Contamination of underground water threatens supply of pure clean water    for private wells or public water supplies.

1. Contamination from run off waste disposal site, leaking underground     storage tanks, use of pesticides and herbicides.
2. Contamination can spread far from source.
3. Numerous state and federal regulations exist.

A. Three to 5 million underground storage tanks (USTs) in the United States

1. Commonly found

a. where petroleum products used or gas stations/auto repair shops     located.
b. commercial/industrial establishment
c. printing/chemical plants
d. wood treatment, paper mills
e. paint manufacturers
f. dry cleaners/food processing plants.
g. chemical or other process waste storage facility.
h. military bases and airports
i. residential heating oil tanks.

2. Currently in use or abandoned . Once common to bury toxic waste

B. State and Federal Regulations

1. Govern:

a. Installation
b. Maintenance
c. corrosion prevention
d. overspill prevention
e. monitoring
f.  record-keeping

2. Exemptions

a. Tanks less than 110 gal.
b. Farm/residential 1,100 gallons or less of motor fuel used for non-commercial purposes.
c. Heating oil tanks
d. Tanks in basement (on or above floor of underground area)
e. Septic tanks

3. Federal Laws regulated by EPA
4. Some state laws more stringent than federal laws.

A. Landfill used as disposal site for garbage.

1. Layering process used.
2. Capping by laying 2-4 feet soil over top and planting grass or other vegetation.
3. Ventilating with pipe through cap to release accumulation of natural gas.

B. Federal, state and local regulations govern location, construction, content and maintenance. (See Figure 21.3)
C. In Practice: location to garbage incinerator and waste disposal site lowers market
  value of homes.

A.  Comprehensive Environmental Response, Compensation and Liability Act

1. Created “SuperFund” ($9 billion)
2. Created process by identifying responsible parties (PRPs)
3. Administered by EPA

B. Liability is strict, joint and several and retroactive

1. Landowner held responsible for cleanup regardless of whether responsible for contamination.
2. Cleanup of own property and any neighboring property.
3. If not responsible can seek recovery of costs from previous landowners or other responsible  party or the SuperFund.
4. If  PRP do not voluntarily undertake cleanup EPA can hire contractors, then bill PRP.

C. Superfund Amendments and Reauthorization Act (SARA)

1. Amended act clarifies obligation of lenders.
2. Innocent landowner immunity: criteria created by which to judge if person or business could be exempt from liability.

a. that pollution caused by 3rd party
b. property acquired after the fact
c. no actual or constructive knowledge of damage by landowner.
d. “due care” exercised
e. responsible precautions taken in exercise of ownership rights.

A. Actual & Potential Liability

1. Sellers carry most exposure
2. Buyers may be held liable
3. Lenders may end up owning property.
4. Real estate [professionals held liable for improper disclosure.
5. Appraisers must identify problems; responsible to lenders who rely on  them  to identify.
6. Insurance Carrier may be affected.

a. Mortgage Insurance will protect lender.
b. Hazard Insurance carrier may be directly responsible for damage if coverage included in policy.

B. Discovery of Environmental Hazards

1. Real Estate licensees must be aware of possible hazard and where to     look for professional help.
2. Ask owner if tests were done.
3. Seek scientific or technical experts.

a. Environmental audit.
b. Trained inspectors.

C. Disclosure of Environmental Hazards

1. State laws require disclosure
2. Licensees may be liable if they should have known of a condition even  if seller did not disclose.

I. Pre-closing Procedures

A.  Consummation of real estate transaction

1. Promises made in sales agreement fulfilled.
2. Mortgage loan funds distributed
3. Title transferred

B. Buyer’s issues   The buyer will want to be assured that

1.   The seller is delivering good title.
2.   The property is in the promised condition. Inspecting

a. the title evidence
b. the seller’s deed
c. any documents regarding removal of liens and encumbrances
d. the survey
e. the results of property inspection
f. any leases

C. Final property inspection to make certain

1. necessary repairs made
2. property is well maintained
3. fixtures are in place
4. no unauthorized removals or alterations

 D. Survey

 E. Seller’s issues. The seller will want to be assured that

1.   The buyer has obtained the stipulated financing.
2.   The buyer has sufficient funds to complete the sale.

F. Title procedures

1.   The buyer needs to be assured that the seller's property and title comply with the contract requirements.
2. The seller is usually required to show proof of ownership by producing current  title evidence (form that is customary in your area).
3. The title or abstract company usually makes two title searches.

a. The first shows the seller's status as of the contract date.
b. The second is made for the date the deed is recorded.
c. The seller may be required to execute an affidavit of title. In areas where closed in escrow, not needed.

A.   Terminology varies by geographic region

1. Settlement and transfer
2. Passing the papers
3. Escrow

B.   Face-to-face closing*the gathering of the parties interested in the real estate transaction at which the promises made in the real estate sales contract are kept or executed

1.   Two closings can occur

a.   The closing of the buyer's loan
b.   The closing of the sales transaction

2.   May be held at

a.   The title insurance company
b.   The lending institution
c.   One of the parties' attorneys office
d.   The broker's office
e.   The county recorder (or other local recording official) office
f.   The escrow company

3.   May be attended by

a.   The buyer
b.   The seller
c.   The real estate licensees (brokers and salespeople)
d.   The attorney(s) for the seller and the buyer
e.   The representative of the involved lending institutions
f.   The representative of the title insurance company

4. The closing agent or closing officer*the person who presides over the closing.
5. The exchange; made when all parties satisfied that everything is      order.

C.   Closing in escrow

1. The method of closing in which a disinterested third party is authorized to act as the escrow agent and coordinate the closing activities.
2.   Because the escrow agent is placed in a position of trust, many states have laws regulating escrow agents and limiting who may serve in this capacity.

D. Escrow Procedure

1. After escrow agent selected and contract signed, broker deposits earnest money with escrow agent.
2.   Before the closing, the seller will deposit with the escrow agent

a.   The deed conveying the property to the buyer
b.   Title evidence (whatever is customary in your area)
c.   Existing hazard insurance policies
d.   A letter from the lender and an estoppel certificate stating the      exact principal remaining if the buyer is assuming the seller's loan
e.   Affidavits of title (if required) – Affidavits of Value in AZ
f.   A reduction certificate (payoff statement) if the seller's loan is to      be paid off
g.   Other documents necessary to clear the title or complete the      transaction

3.   Before the closing, the buyer will deposit with the escrow agent

a.   The balance of the cash needed to complete the purchase,     usually in the form of a certified check
b.   Loan documents if the buyer is securing a new loan
c.   Proof of hazard insurance, including, if required, flood insurance
d.   Other documents necessary to complete the transaction

4.   The escrow agent is given the authority to examine the title evidence

a.   If the title is marketable and all other conditions are met, the      escrow agent will disburse the funds and record the documents.
b.   If the title has liens, they will be paid off first.
c.   If the sale cannot be completed, the parties will be restored to      their former status.

F. IRS reporting requirements*Form 1099-S

1. Contains the seller's social security number, sales price and the amount     of property tax that was reimbursed to the seller by the buyer (seen as income by the IRS)
2. Must be filed by the closing agent; if this person does not the      responsibility rests on the mortgage lender or ultimately the brokers  involved.

G.   Broker's role at closing*varies from simply collecting the commission to     conducting the proceedings
H.   Lender's interest in closing*to protect its security interest in the property, the    lender can require

1.   A title insurance policy
2.   A fire and hazard insurance policy
3.   A survey
4.   A termite or other inspection report
5.   A certificate of occupancy (for newly-constructed buildings)
6.   Reserve or escrow accounts for tax and insurance payments
7.   Representation by its own attorney at the closing – Not in Arizona

A. Purpose

1. To provide consumers with greater and more timely information      on the nature and costs of settlement
2. To eliminate "kickback" and other referral fees that tend to unnecessarily increase the costs of settlement and

B.   RESPA requirements must be complied with when the purchase of a ne-to-four-family residential unit is financed by a federally-related new     first mortgage loan

1.   Made by a federally-chartered lending institution
2.   Made by an institution whose deposits are federally-insured
3.   FHA-insured
4.  VA-guaranteed
5.   Administered by HUD
6.   Intended to be sold to Fannie Mae, Ginnie Mae, or Freddie Mac

C. Exceptions to the "new loan" requirement

1. purchase money mortgages
2. Installment sales (land contracts)
3. buyer’s assumption of existing mortgage
4. no exception if

a. the terms of assumed loans are modified
b. Assumed loans for which the lender charges more than $50 for the assumption

D. Controlled business arrangements (CBAs)*affiliated firms offer package of services to consumers.

1. The relationship between the firms must be disclosed in writing to consumers.
2. Consumers must be free to obtain the services elsewhere.
3.  Fees are not exchanged among the affiliated companies    simply for the referral of business.

E. Disclosure requirements

1.   The lender must give a copy of special informational HUD booklet to every person from whom they receive or for whom they process a loan application.
2.  Within three business days of the loan application, the lender  must provide the borrower with a good-faith estimate of the settlement costs the borrower is likely to incur.
3.   The loan closing information must be prepared on the Uniform  Settlement Statement (HUD Form 1) and available for inspection at or before settlement.

F. Kickbacks and referral fees

1. Kickbacks and unearned referral fees are prohibited.
2. The payment or receipt of any fee or thing of value where no    service is actually rendered is prohibited.

A.   How the closing statement works (See Figure 22.2)

1.   A debit is a charge (an expense).
2.   A credit is an amount entered in a person's favor.

B.   The buyer's debits and credits are totaled; when the credits are subtracted from  the debits, the difference is the cash the buyer must bring to the closing.
C.   The seller's debits and credits are totaled; when the debits are subtracted from    the credits, the difference is the amount the seller will receive at closing.
D.   Expenses (See Figure 22.2)

1.   Broker's commission
2.   Attorney's fees
3.   Recording expenses
4.   Transfer tax
5.   Title expenses
6.   Loan fees
7.   Tax reserves and insurance reserves (escrow or impound accounts)
8.   Appraisal fees
9.   Survey fees
10.   Additional fees

A.   The arithmetic of prorating

1. Four considerations

a. the nature of item being prorated
b. whether it is accrued item requiring determination of earned amount
c. whether it is prepaid item that requires the unearned amount refunded
d. what arithmetic processes must be used.

B.  Accrued and prepaid items

1. accrued items = buyer credit
 2. prepaid items = seller credit

C.   General rules for calculating prorations

1.   The yearly charge is divided by a 360-day year (commonly called a     banking year) or twelve months of 30 days each.
2.   The yearly charge is divided by 365 (366 in a leap year) to determine the    daily charge; then the actual number of days in the proration period is     determined; and this number is multiplied by the daily charge.
3. The final figure will vary depending on the method used and the number of  decimal places to which the division is carried.
4.   Guidelines

a.   In most states, the seller owns the property on the day of closing     and prorations are made to and including that date.
b.   Prorations are computed using a 30-day month and a 360-day year or using the actual number of days in the month in a 365 day year (refer to area practices).
c.   Accrued real estate taxes are usually prorated; special  assessments for public improvements are not.
d.   Rents are usually prorated based on the actual number of days      in the month of closing.
e.   Security deposits belong to the tenants and must be transferred      intact from the seller to the buyer.

5.   Real estate taxes

a.   If they are paid in advance, the seller should be reimbursed    for the portion of the year remaining after the buyer     takes ownership.
b.   If they are paid in arrears, the buyer is credited for the time      the seller was occupying the property.

6. Mortgage loan interest*usually paid in arrears

A.   The Uniform Settlement Statement (HUD Form 1) (see Figure 22.3)

B. Basic information of offer and sale

C. Computing the prorations and charges

D. The Uniform Settlement Statement

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Math Review

I. Real estate mathematics review

A. Most math consists of fairly simple calculations.
B. Approach to math problems

1. Read the question carefully.
2. Analyze the question and sort the facts that are necessary.
3. Determine the procedure to calculate the answer.
4. Calculate the answer.
5. Check the answer to determine if the question has been answered.
6. Look at the answer to see if it makes sense.

C. Calculator Skills

1. Learn to use the calculator properly.
2. Select calculator most comfortable to use.
3. Familiarize yourself with it and read the manual.
4. Be sure to enter numbers correctly.
5. Be certain that decimals are entered correctly.

D. Be sure that you are working in similar units of measure – for example,     multiplying feet by feet rather than feet by inches.

A. Important definitions

1. Annual
2. Biannual
3. Biennial
4. Calculate
5. Capitalization rate
6. Cubic measure
7. Distracter
8. Dimension
9. Fact
10. Fraction
11. Front foot
12. Income
13. Interest
14. Linear measure
15. Mill
16. Percentage
17. Principal
18. Quarterly
19. Rate
20. Square measure
21. Tax
22. Time

B. Measurements

1. Linear
2. Square
3. Cubic

C. Units of measure

1. 12”(inches) = 1’ (foot)
2. 1 mile = 5,280 feet
3. 1 acre = 43,560 sg. ft.
4. 1 rod = 16 1/2 feet
5.  mile = 320 rods

D. Conversions

1. Square feet to square inches
2. Square inches to square feet
3. Square yards to square feet
4. Square feet to square yards
5. Square yards to square inches
6. Square inches to square yards
7. Square feet to acres
8. Cubic feet to cubic yards

E. Fractions

1. Parts of a fraction
2. Proper fraction
3. Improper fraction
4. Mixed number
5. Converting fractions to decimals
6. Multiplying fractions
7. Dividing fractions

F. Percentages

1. Converting simple fractions to decimals, then to percentages
2. Converting percentage to decimals
3. Adding, subtracting, multiplying and dividing with decimals
G. Capitalization rate: IRV

H. Computing area and volume

1. Index to symbols
2. Parallelogram
3. Computing volume
4. Triangle
5. Trapezoid
6. Irregular polygons
7. Sample problems

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Math

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