REL 4413 1st EditionExam # 1 Study Guide Legal Aspects of Real Estate Study Guide Chapters One – FourChapter One: Introduction to the Legal SystemSources of Law1) Law:a) A body of rules of action or conduct prescribed by controlling authority and having binding legal force.Page: 42) Public Law:a) The law that concerns the government or its relations with individuals. Example: real estate licenses for realtors and brokers.b) Purpose: defines, regulates, and enforces rights in which the government (agency) is a party to the subject matter. Page: 4-53) Private Law: a) Deals with relationships between individuals, such as contracts, property, and torts.b) Law of property regulates the ownership, employment, and disposition of property (including real property, tangible and intangible property).Page: 4-54) Sources of Law: Constitutionsa) The U.S. has fifty-one constitutions (50 state constitutions, one U.S. constitution):b) U.S. Constitution is the supreme law of the land.i) 14th amendment guarantees “due process” before taking away life, liberty, or property. State constitutions cannot impair rights granted under the 14th amendment.Page: 5-75) Statutory Law:a) Laws enacted by legislative bodies (federal, state, or local).b) Courts interpret statutes, but statutes prevail over conflicting judicial decisions.Page: 76) Administrativea) Administrative agencies are created at federal, state, and local levels, and deal directly with citizens.b) They provide assistance and expertise in often highly technical areas. c) Agencies create laws by rule-making in the Federal Register.Page 8-97) Judicial Decisions: (Major Source of Law)a) A primary source for determining how the Constitution is interpreted and applied.i) Courts also interpret statutes and decide cases and controversies.ii) Decisions can become significant and guidance for other courts.b) Citations : information listing the volume and page where a decision may be found. Page: 9c) Common Law : From England, the principle of stare decisis, of abiding by previously decided cases; provides stability, predictability, but also flexibility. i) Distinguished from Civil (Roman) Law which decides cases based on a legal code. Page: 10-11d) Jurisdiction: i) The authority of a court to hear a case, decide facts, apply the law, and enter judgment. Page: 11e) Res judicata: i) once a suit has been decided, the parties may not bring suit again regarding the same matter. f) Equity: i) Justice administered according to fairness, created to temper the strict rules of English common law. g) Injunction: i) A court order prohibiting someone from doing something, or commanding someone to undoa wrong or injury. h) Specific Performance: i) A type of injunction ordering the defendant to perform a specific act. Page: 12-13Source of Law Who Creates Law? Examples of Real Estate-Related LawsU.S. Constitution U.S. Constitution originally ratified by statesFifth Amendment requires just compensation for land taken for public purposesSate Constitutions Enactment varies by state Homesteads are exempt from general creditors under some state constitutionsFederal Statutes U.S. Congress Fair Housing Act, Real Estate Settlement Procedures ActState Statutes State Legislature Licensing requirements for real estate salespersons and brokersCommon Law Courts Trespass and nuisanceEquity Originally courts of equity, now in courts of general jurisdictionRemedies: Injunctions prohibiting entry to land, specific performance of a real estate contractFederal Administrative Regulations Federal Administrative Agencies Clean air standards, disclosure requirements in interstate land salesState Administrative Rules and RegulationsState Administrative Agencies Regulation of real estate salespersons, brokers, and buildingcontractorsCounty and City Ordinances County Commissions, City Councils Building permits and inspections, fire codes8) The Role of Ethics in the Law:a) Laws often represent the moral (ethical) consensus. Page: 13-14The Court System9) State Courts:a) Lowest “trial” courts divided into courts of general and limited jurisdiction.i) Trial courts can appeal to intermediate appellate courts. No new trial, just the record.(1) Highest court is usually the State Supreme Court. Page: 14-15 10) Federal Courts:a) U.S. District court is the “trial” court. Can hear cases involving federal law, diversity jurisdiction, and federal criminal cases. i) Thirteen circuits in U.S. Courts of Appeal.ii) U.S. Supreme Court hears only selected cases. iii) Diversity of citizenship involves parties from different states. Page: 15-16Legal Procedureb) Substantive law is law which creates or defines rights.c) Procedural law provides a process for enforcing those rights. d) An action is a proceeding in a court of law by which one seeks a remedy for an alleged wrong. i) But most real estate transactions are resolved by mediation or arbitration.Page: 16Overview - Stages of Litigatione) Plaintiff files a complaint.i) Complaint is the original or initial pleading setting forth a plaintiff’s claim for relief against the defendantf) Defendant’s Response may be a motion to dismiss, a motion for summary judgment, a counter-suit or an answer. g) Discovery is a pretrial devices that can be used by one party to obtain gacts and information about the case from the other party may include:i) Depositions (1) A pretrial device in which one party orally questions the other party or a witness for the other partyii) Interrogatories(1) A discovery device consisting of written questions generally submitted to one side of the lawsuit from the otheriii) Subpoenas Duces Tecum(1) A discovery device in which the court commands the production of specified documents or goods or allows the inspection of real propertyiv) Requests for admissionPage: 16-1811) The Trial:a) Opening Statementsb) Direct Examination; Cross-Examinationc) Motion for Directed Verdictd) Motion for J-NOVe) Jury VerdictPage:1912) Concluding Stages:a) Appeal(s) – the lower may appeal to the Appellate Courtb) Writ of Execution – the process of carrying out the judgmentc) Garnishment – satisfaction of the debt from the losing party’s propertyPage:19-20Alternative Methods of Resolving Disputes13) Settlements:a) An agreement to terminate all or part of a lawsuit as a result of the parties’ voluntary resolution of the dispute.14) Administrative Adjudication:a) Arbitration – submission of the dispute to a neutral 3rd