Indiana Real Estate Exam Prep

876 IAC 8-2-3 Closing statements Sec. 3. Every listing and selling broker shall deliver to the broker's client in every real estate transaction at the time such transaction is consummated, a complete detailed closing statement showing all of the receipts and disbursements handled by such broker. The listing and selling broker shall retain copies of such statements for at least five (5) years. The Indiana Code is silent on the specific requirements necessary to receive a commission check, however, a complete and accurate accounting of the transaction is necessary in order to create a commission check. Accordingly, commission checks are disbursed at the actual closing. The specific procedures, within a brokerage, for disbursing commission checks can be verified by the managing broker.

Tenancy in common (a) This section applies to a written contract in which a husband and wife: (1) purchase real estate;  or (2) lease real estate with an option to purchase. (b) Except as provided in subsection (d), a contract described in subsection (a) creates an estate by the entireties in the husband and wife.  The interest of neither party is severable during the marriage. (c) Upon the death of either party to the marriage, the survivor is considered to have owned the whole of all rights under the contract from its inception. (d) If: (1) a contract described in subsection (a) expressly creates a tenancy in common;  or (2) it appears from the tenor of a contract described in subsection (a) that the contract was intended to create a tenancy in common; the contract shall be construed to create a tenancy in common. Tenants by the entireties If: (1) a husband and wife execute a title bond or contract for the conveyance of real estate owned by them as tenants by the entireties;  and (2) one (1) of the spouses dies: (A) during the continuance of the marriage;  and (B) before the whole of the agreed purchase price has been paid; the interest of the deceased spouse in the unpaid part of the purchase price passes to the surviving spouse in the same right as the surviving spouse's rights of survivorship in real estate held as tenants by the entireties.

The Indiana Real Estate Commission (IREC) is online at: https://www.in.gov/pla/real.htm

IC 25-1-11-5 Practitioner compliance with professional standards; findings meriting disciplinary sanctions; fraud or material deception Sec. 5. (a) A practitioner shall comply with the standards established by the board regulating a profession. A practitioner is subject to the exercise of the disciplinary sanctions under section 12 of this chapter if, after a hearing, the board finds that: (1) a practitioner has: (A) engaged in or knowingly cooperated in fraud or material deception in order to obtain a license to practice, including cheating on a licensing examination; (B) engaged in fraud or material deception in the course of professional services or activities; (C) advertised services or goods in a false or misleading manner; or (D) been convicted of a crime or assessed a civil penalty involving fraudulent billing practices; (2) a practitioner has been convicted of a crime that: (A) has a direct bearing on the practitioner's ability to continue to practice competently; or (B) is harmful to the public; (3) a practitioner has knowingly violated a state statute or rule or federal statute or regulation regulating the profession for which the practitioner is licensed; (4) a practitioner has continued to practice although the practitioner has become unfit to practice due to: (A) professional incompetence, including undertaking professional activities that the practitioner is not qualified by training or experience to undertake; (B) failure to keep abreast of current professional theory or practice; (C) physical or mental disability; or (D) addiction to, abuse of, or severe dependency on alcohol or other drugs that endanger the public by impairing a practitioner's ability to practice safely; (5) a practitioner has engaged in a course of lewd or immoral conduct in connection with the delivery of services to the public; (6) a practitioner has allowed the practitioner's name or a license issued under this chapter to be used in connection with an individual or business who renders services beyond the scope of that individual's or business's training, experience, or competence; (7) a practitioner has had disciplinary action taken against the practitioner or the practitioner's license to practice in any state or jurisdiction on grounds similar to those under this chapter; (8) a practitioner has assisted another person in committing an act that would constitute a ground for disciplinary sanction under this chapter; (9) a practitioner has allowed a license issued by a board to be: (A) used by another person; or (B) displayed to the public when the license has expired, is inactive, or has been revoked or suspended; or (10) a practitioner has failed to comply with an order imposing a sanction under section 12 of this chapter. (b) If an applicant or a practitioner has engaged in or knowingly cooperated in fraud or material deception to obtain a license to practice, including cheating on the licensing examination, the board may rescind the license if it has been granted, void the examination or other fraudulent or deceptive material, and prohibit the applicant from reapplying for the license for a length of time established by the board. An applicant who is aggrieved by a decision of the board under this section is entitled to hearing and appeal rights under the Indiana administrative rules and procedures act (IC 4-21.5). (c) A certified copy of the record of disciplinary action is conclusive evidence of the other jurisdiction's disciplinary action under subsection (a)(7). These rules apply to all licenses issued by the State of Indiana. Keep in mind that the Indiana Real Estate Commission also has specific rules for the professional conduct of real estate brokers. Also, if you become a member of the National Association of Realtors, you are required to meet all ethical requirements that this membership requires.

Indiana Code 32-31-8-5. Landlord obligations Sec. 5. A landlord shall do the following: (1) Deliver the rental premises to a tenant in compliance with the rental agreement, and in a safe, clean, and habitable condition. (2) Comply with all health and housing codes applicable to the rental premises. (3) Make all reasonable efforts to keep common areas of a rental premises in a clean and proper condition. (4) Provide and maintain the following items in a rental premises in good and safe working condition, if provided on the premises at the time the rental agreement is entered into: (A) Electrical systems. (B) Plumbing systems sufficient to accommodate a reasonable supply of hot and cold running water at all times. (C) Sanitary systems. (D) Heating, ventilating, and air conditioning systems. A heating system must be sufficient to adequately supply heat at all times. (E) Elevators, if provided. (F) Appliances supplied as an inducement to the rental agreement.

Currently the only State Indiana has a written reciprocal agreement with is: 1. Illinois

Escheat is a common law doctrine that transfers the property of a person who died without heirs, to the state. It serves to ensure that property is not left in "limbo" without recognized ownership.

A holographic will is a will and testament that has been entirely handwritten and signed by the testator.

Anything that can be legally owned may be called property. All property can be grouped into two main categories: real property and personal property. Personal property can be further classified as chattels and intangibles. Real property describes land and things that are attached to the land, which is why land is sometimes called real estate or realty. Even though wood, steel, and other building materials aren’t land themselves, when they’re built into structures attached to the land, they become real property, too. Trees and other plants naturally growing on the land are also part of the real property. But plants that require regular human cultivation and labor, such as grains and vegetables, sometimes aren’t treated as part of the real property.

Elements of a contract: Every contract has certain, essential elements that need to be present to be considered valid in a court of law. At the heart of every contract is a promise between two or more persons to do or not do a particular act. Consideration These promises are bound by both parties by what’s called “sufficient consideration.” In the normal parlance of our times, or for the sake of simplicity, we can call it “money.” A simple contractual promise, backed by sufficient consideration could be: I promise to purchase your principal residence for $150,000. Offer & Acceptance Contracts must also consist of a clear offer and acceptance. If an offer is made, but has not been accepted, there can be no contract. Capacity Contracts must be entered into by two adults of sound mind. This doesn’t just mean that you must be free from mental incapacity, it also means that if you enter into a contract while under the influence of drugs or alcohol, you may be deemed incapacitated and the contract may be void. No Duress Contracts must also be entered into freely. If you are signing your name to a contract with a gun to your head, that contract is said to be entered into under duress and may be deemed invalid. While the terms of the duress may not be so dramatic, other signs of duress may be financial or emotional coercion. While contracts can be either oral or written, the law requires that certain contracts be written in order to be enforceable. Contracts for the sale of real property, for example, must be in writing. Oral argeements can be valid, but they are also rather difficult to enforce.

You must complete a state-approved 30-hour Broker postlicensing course within 2 years of your license issue date; this course is required and satisfies your initial continuing education (CE) requirement during the first 2 years of licensure. CE requirements after the first renewal are 12 hours per year. Practice Tip: Always keep your contact information updates with IREC so that you do not miss any important notices regarding your license status.

Dower rights are the interest that a person has in real property owned by his or her spouse. If one person owns property during a marriage, his or her spouse has a 1/3 life estate interest in that property. Indiana Code 29-1-2-11 Dower and curtesy abolished Sec. 11. The estates of dower and curtesy are hereby abolished. Practice Tip: Always have your clients consult a professional if the aims of titling property are unclear.

A 90 hour pre-licensing course must be completed prior to applying for an Indiana Broker license. The insturctions for applying for the license can be found here: https://www.in.gov/pla/files/Updated_Web_Instructions_for_BROKER_LICENSE_2014-2015.pdf

Illinois is the only state that the IREC has a written reciprocity policy with.

The requirements to become a licensed real estate broker in Indiana include completing the following: Must be at least 18 years old Must have obtained a high school diploma or equivalency certificate (GED) Must have successfully completed 90 hours of approved real estate education Completed a background check Successfully passed the Indiana Broker Real Estate Exam Be sponsored by an actively licensed real estate managing broker Schedule the Indiana broker licensing exam via Pearson Vue.

Indiana is not a community property state. States are either community property states or equitable distribution states, where property is divided fairly, but not always equally. A community property state presumes both spouses equally own all marital property and it will be split 50%-50 in a divorce. Even though Indiana does not recognize community property, it does require courts to determine a fair property division, and fair in most case means that each spouse gets about half of everything they own jointly. However, a court can decide that it is fair to have an unequal property division. In some cases, a spouse who gets more marital property of also takes on more marital debt.

Indiana has one of the most lenient statutes in the country for eviction for nonpayment of rent: A landlord must typically provide 10 days’ notice to pay rent or move before they can file to evict. Most other states have a waiting period of 3 to 7 days before filing. However, for other lease violations, Indiana allows landlords to file unconditional quit notices immediately. There’s no required waiting period for tenants holding over on expired leases, or month-to-month tenants ‘committing waste’ (damaging or vandalizing the rental property). Landlords can file evictions immediately upon providing the unconditional notice to quit. (See Indiana Code Ann. Section 32-31-1-8 for unconditional quit notice rules.) In Indiana, you can evict for nonpayment of rent, or for violation of lease provisions. Common examples of lease violations include violation of pet restrictions, and criminal or drug activity. You can also evict for committing or threatening to commit ‘waste’ to the property—that is, damaging or vandalizing the rental property. You cannot discriminate on the basis of a tenant’s status as a member of a protected class. In Indiana, these protected classes are: Race Color National origin Religion Sex Familial status Handicap You also cannot evict a tenant for having a service dog or therapy/emotional support animal, even if you have a prohibition on pets—they’re protected by the Fair Housing Act. [The Americans with Disabilities Act (ADA), in contrast, only protects service animals—but it’s the FHA that applies to residential rental properties, not the ADA!] If you’re ending a month-to-month tenancy, you must give the tenant a 30-day written notice to quit. A year-to-year tenancy requires 3 months’ notice. After 30 days, if the tenant has not vacated the premises, you can then proceed with the eviction proceedings below. However, if the lease contract specifies a specific end date, you don’t have to provide an additional 30 days after the end of the lease. For non-payment of rent evictions, you must first provide the 10-day notice to cure or quit. Preferably, you’ll serve the notice to the tenant directly. As a second option, you can serve the notice to another adult residing on the premises. You or the server must explain the content of the document. If no one is available to receive the notice, you can place it on the door, or another conspicuous spot on the property. (Indiana Code 32-31-1-9) The next step is to go to the township court in the county in which your property is located. The Clerk of the Court will schedule a hearing. You must then arrange for the tenant to be formally served a notice of a lawsuit. Bring a copy of the lease and any other relevant documents to the hearing. Often, the tenant won’t show up; and you’ll usually get a summary judgment that allows you to go forward to the next step of requesting a writ of possession—the process by which a tenant is forcibly evicted from the property. Never try to short-circuit the court process to hurry an eviction along. You cannot shut off utilities, change the locks, or otherwise interfere with the tenant’s enjoyment of the property during the eviction process. Doing so may allow the tenant to successfully sue you. (Indiana Code 31-32-5-6) If the tenant does show, but doesn’t raise an effective defense to the eviction, there will be a brief negotiation with the tenant to arrange a move-out time, usually within a few days of the hearing. Sometimes, health circumstances or other special circumstances apply; but judges will almost never push back a move-out date by more than a week or two. If the tenant still doesn’t move out by the specified date, you can get a writ of possession that’s good for 30 days. You can then schedule a time with a constable or sheriff’s deputy to supervise the removal of the tenant and their belongings. In some circumstances, you may be able to obtain an emergency possessory order (Indiana Code 32-31-6). Use this procedure if you believe that the tenant is vandalizing or destroying your property (i.e. committing waste), or if the tenant has threatened to do so. Once you file this petition, the court will schedule an emergency hearing within less than three days. If there are monetary damages, a separate hearing will usually occur between 30 and 45 days after the property has been vacated. If you prevail in the eviction hearing, you can file for a judgment awarding you reasonable court and attorney fees under Indiana Code 32-31-7-7.

The most common property deduction is the Homestead Standard Deduction, which is equal to 60% of the gross assessed value up to a maximum of $45,000. It is available for owner-occupied principal residences. The Supplemental Homestead Deduction is also for owner-occupied principal residences. This is equal to 35% of assessed value (after the Homestead Standard Deduction has been applied) up to $600,000 and 25% of assessed value over $600,000. Who is eligible for a homestead deduction? An individual who, on the assessment date or any date in the same year after an assessment date when an application is filed, either: (1) Owns the residence; (2) Is buying the residence under a contract, recorded in the county recorder’s office, that provides that the individual is to pay the property taxes on the residence; or (3) Is entitled to occupy the residence as a tenant-stockholder (as defined in 26 U.S.C. 216) of a cooperative housing cooperation (as defined in 26 U.S.C. 216). A trust is entitled to the homestead standard deduction for property owned by the trust and occupied by an individual if the county auditor determines that the individual: (1) Upon verification in the body of the deed or otherwise, has either: a. A beneficial interest in the trust; or b. The right to occupy the property rent free under the terms of a qualified personal residence trust created by the individual under United States Treasury Regulation 25.2702-5(c)(2); (2) Otherwise qualifies for the deduction; and (3) Would be considered the owner of the property under IC 6-1.1-1-9(f) or IC 6-1.1-1-9(g). A corporation, partnership, LLC or other entity may only receive the homestead standard deduction if the property satisfies the following requirements: (1) The property is located in Indiana and consists of a dwelling and the real estate (up to one (1) acre) that immediately surrounds that dwelling. (2) The property is the principal place of residence of an individual. (3) The property is owned by an entity other than an individual or trust. (4) The individual residing on the property is a shareholder, partner or member of the entity that owns the property. (5) The property was eligible for the homestead standard deduction on March 1, 2009.

IC 25-34.1-10-12 Licensee acting as limited agent Sec. 12. (a) A licensee may act as a limited agent only with the written consent of all parties to a real estate transaction. The written consent is presumed to have been given and all parties are considered informed for any party who signs a writing or writings at the time of entering into an agency relationship with the licensee that contains the following: (1) A description of the real estate transaction or types of real estate transactions in which the licensee will serve as a limited agent. (2) A statement that in serving as a limited agent, the licensee represents parties whose interests are different or even adverse. (3) A statement that a limited agent shall not disclose the following without the informed consent, in writing, of the parties to the real estate transaction: (A) Any material or confidential information, except adverse material facts or risks actually known by the licensee concerning the physical condition of the property and facts required by statute, rule, or regulation to be disclosed and that could not be discovered by a reasonable and timely inspection of the property by the parties. (B) That a buyer or tenant will pay more than the offered purchase price or offered lease rate for the property. (C) That a seller or landlord will accept less than the listed price or lease rate for the property. (D) What motivates a party to buy, sell, or lease the property. (E) Other terms that would create a contractual advantage for one (1) party over another party. (4) A statement that there will be no imputation of knowledge or information between any party and the limited agent or among licensees. (5) A statement that a party does not have to consent to the limited agency. (6) A statement that the consent of each party has been given voluntarily and that any limited agency disclosure has been read and understood. (b) A licensee acting as a limited agent may disclose and provide to both the seller and buyer property information, including listed and sold properties available through a multiple listing service or other information source. (c) A cause of action does not arise against a licensee for disclosing or failing to disclose information in compliance with this section, and the limited agent does not terminate the limited agency relationship by making a required disclosure.

The complete schedule for real estate licensing fees is available at: https://www.in.gov/pla/files/Updated%20Fee%20Schedule.pdf Remember, Indiana offers only a Broker class license and not a Salesperson license.

Mortgage points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can lower your monthly mortgage payments. One point costs 1 percent of your mortgage amount (or $1,000 for every $100,000).

The formats of deeds may differ because the wording is immaterial, as long as the intent to convey title is clearly expressed. Certain elements must be present in a deed to spell out clearly the necessary intent and the property to which it applies. To remember the elements of a deed, remember CEDDING: • Consideration (valuable or good) • Execution (signed by a competent grantor and two witnesses) • Description of property • Delivery and acceptance (voluntary) • Interest or estate being conveyed (habendum clause) • Names of a grantee and grantor • Granting and other appropriate clauses Novation is a separate issue from the elements of a deed. Novation is the substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party to the contract. It is distinguishable from the situation that occurs when another individual makes a guarantee that a debtor will pay what he or she owes to a creditor. In the case of a novation, the original debtor is totally released from the obligation, which is transferred to someone else. The nature of the transaction is dependent upon the agreement between the parties. A novation also takes place when the original parties continue their obligation to one another, but a new agreement is substituted for the old one.

A will which is handwritten and signed by the testator or testatrix is known as a holographic will. There are a number of states that recognize them as valid testamentary documents. Indiana is not one of those states. Simply writing out a will and signing it isn't going to guarantee that it will be admitted into probate. That is not to say that a handwritten will is always invalid. As long as the handwritten will meets all the requirements necessary for a valid will, including the formalities of execution, the fact that it is handwritten and not typed shouldn't invalidate it. In Indiana, there are several necessary formalities that must be followed to have a valid will. The first requirement is that the will must be in writing and express testamentary intent. That basically means that the document must make it clear that its intent is to distribute property following death. Attorneys use legalese to establish testamentary intent, but simple terms that make it clear that the document is intended to be a will and distribute property is probably enough. Something like "this is my will and I want my wife to get everything" is arguably enough. The second requirement is that the will must be signed by the testator/testatrix and that he or she must be a competent adult. A competent adult who knows what he is doing, why he is doing it and who the family is, has fairly good chances to meet the minimum competency requirements necessary to execute a will. The final requirement is that the will be witnessed by two disinterested witnesses. All that is needed is two people that aren't blood relatives to witness the signatures.  These are the minimum requirements to have a valid will. The problem is that the minimum is rarely enough. A will drafted by an attorney is going to meet all of the requirements, plus address a number of other issues. For example, the will drafted by the attorney is going to name personal representatives and guardians when appropriate to do so. Practice Tip: As in all cases where the circumstances are outside your scope of competency, refer to a third party professional for expert advice.

The IREC has 12 members. There are 11 members that are industry professionals and 1 member that represents Indiana consumers. The IREC can be contacted at: Staff Phone: (317) 234-3009 Staff Email: pla9@pla.in.gov Agency Fax: (317) 233-4236