US Oregon Broker License Exam Set Two

The determination of whether an item is a fixture or personal property hinges on a series of legal tests designed to infer the intent of the annexor. In Oregon, courts analyze the method of annexation, the adaptation of the item to the real property’s use, the relationship of the parties, the annexor’s intent, and any existing agreements. While items installed by a commercial tenant for business purposes are generally considered trade fixtures and remain the tenant’s personal property, this presumption can be overcome. A critical factor is the method of attachment. Even if an item is not bolted down, constructive annexation can occur if its removal would cause significant damage or if it was installed in a way that implies permanence. In this scenario, the necessity of removing and rebuilding a wall to install the item suggests a high degree of intended permanence, weighing against its classification as a trade fixture. Furthermore, the language within the lease agreement is paramount. A clause stipulating that all improvements become the landlord’s property, even if general, can be interpreted by a court to include substantial installations like the one described, especially when coupled with the significant structural modification required to place it. Therefore, a court would likely find that the evidence of permanent installation and the contractual language of the lease are sufficient to overcome the general rule for trade fixtures, classifying the item as a fixture belonging to the property owner.

Oregon water law operates under a dual system that distinguishes between water uses established before and after the 1909 Water Rights Act. For water uses initiated after 1909, Oregon follows the doctrine of prior appropriation. This system, often summarized as “first in time, first in right,” grants a superior right to the first person who obtains a water right permit from the Oregon Water Resources Department (OWRD) and puts the water to a beneficial use. This right is a legal entitlement to a specific quantity of water for a specific purpose and is not dependent on land ownership adjacent to the water source. In contrast, water uses for purposes like domestic use and stock watering that were established before 1909 may be recognized as vested rights, which are based on common law riparian principles. However, for such a pre-1909 right to be legally enforceable against a junior, permitted water right holder, it must typically be confirmed through a formal court process known as a general stream adjudication. Without a court decree confirming the existence, priority date, and extent of the pre-1909 vested right, the modern, state-issued permit is the controlling legal instrument. Therefore, a landowner with a valid, current OWRD permit has a legally superior right to the water over a landowner with an unadjudicated historical claim, even if that historical use predates the permit. The holder of the unadjudicated claim bears the burden of initiating legal proceedings to have their vested right formally recognized.

This is a conceptual question and does not require a mathematical calculation. The scenario described involves the transfer of an interest in a property without the lender’s prior consent, which specifically triggers the alienation clause, commonly known as the due-on-sale clause. This clause is a standard component of mortgage instruments in Oregon and grants the lender the right, but not the obligation, to declare the entire outstanding loan balance immediately due and payable upon the sale or transfer of the property securing the loan. The primary purpose of this clause is to protect the lender’s security interest by preventing the loan from being assumed by a potentially less creditworthy buyer and allowing the lender to adjust the interest rate to current market rates. While the lender’s remedy is to accelerate the loan, the specific provision that gives them this right based on the transfer of title is the alienation clause. The acceleration clause is a broader term that allows the lender to demand full payment upon any default, such as missed payments, failure to pay taxes, or, in this case, an unapproved transfer of title. However, the alienation clause is the precise contractual trigger for this specific event. The defeasance clause is unrelated; it requires the lender to release the mortgage lien once the borrower has paid the debt in full. A prepayment penalty clause is also irrelevant here, as it pertains to fees charged for paying off a loan earlier than scheduled, not for an unauthorized transfer of title.

The logical conclusion is that the covenant is void due to its discriminatory nature. Under both federal and Oregon state law, deed restrictions that discriminate based on race are illegal and have no legal effect. Oregon Revised Statute (ORS) 93.270 explicitly declares that any provision in an instrument affecting real property which restricts occupancy based on race is void. Therefore, the covenant is not merely unenforceable through non-action, nor does it require a formal amendment to be invalidated; it is legally null from the outset. Restrictive covenants, often found in a subdivision’s Covenants, Conditions, and Restrictions (CC&Rs), are private agreements that limit the use of property. While generally enforceable to maintain neighborhood standards, they cannot violate the law or public policy. The Federal Fair Housing Act of 1968 prohibits discrimination in housing based on protected classes, including race. Any covenant that contravenes this act is illegal. Oregon law reinforces this protection. Specifically, ORS 93.270 renders any provision in a deed or other real property instrument void if it attempts to restrict conveyance or occupancy on the basis of race, color, religion, sex, national origin, and other protected classes. The term “void” is critical; it means the provision is treated as if it never existed. It is not simply “unenforceable,” which might imply it could be enforced under different circumstances. It is a legal nullity. Therefore, the covenant’s existence in the historical documents has no bearing on the current owner’s rights. It does not need to be formally removed by the homeowners’ association to be invalid, nor is its invalidity dependent on a history of non-enforcement (laches). Its illegality makes it automatically void.

The correct answer is determined by analyzing the specific action and its intended or likely effect under fair housing laws. The practice described is blockbusting. Blockbusting, also known as panic peddling, occurs when a real estate licensee induces or attempts to induce any person to sell or rent any dwelling by representations regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, familial status, national origin, or disability. In this scenario, the broker, Mei, published content that explicitly linked a demographic shift—the increasing presence of families with young children (a protected class under familial status)—with a negative economic forecast for property values. By suggesting that property values might “stagnate or decline” and that it is a “strategic time to sell,” she is creating a sense of urgency or panic among current homeowners. The representation is that the changing composition of the neighborhood will negatively affect their financial investment. This is the textbook definition of blockbusting. It is not steering, as steering involves directing prospective buyers or renters to or away from certain neighborhoods based on their protected class characteristics. It is not redlining, which is the discriminatory practice of refusing to provide loans or insurance in specific geographic areas. The action is not a permissible, objective market analysis because it weaponizes demographic data against a protected class to solicit listings, which is a clear violation of both federal and Oregon fair housing laws under ORS Chapter 659A.

The correct conclusion is that the broker’s license is automatically rendered inactive. According to Oregon Administrative Rule (OAR) 863-014-0060, a real estate broker’s license becomes inactive immediately and automatically if the principal real estate broker under whom they are licensed becomes inactive. A broker is only authorized to conduct professional real estate activity under the supervision of an active principal broker. Without an active principal broker, the associated broker has no legal authority to represent clients, manage transactions, or perform any other activity for which a license is required. This means the broker cannot proceed with any pending closings, sign new listing agreements, or even hold themselves out as an active real estate agent. The responsibility for the clients’ trust account lies solely with the principal broker, and an associated broker has no independent authority to disburse funds from it. The only legally permissible course of action is to halt all activities and inform all affected parties of the situation. The broker must then take steps to transfer their license to a new active principal broker to reactivate their license before resuming any professional real estate activity. There is no grace period, and attempting to complete transactions, even with client consent, would constitute unlicensed activity.

The claim will be denied. The fundamental purpose of a standard owner’s title insurance policy is to indemnify the insured against financial loss arising from defects in the title that are a matter of public record and existed prior to the policy’s effective date. It is a retrospective form of insurance, looking backward at the chain of title as documented in public records. A standard policy, such as the American Land Title Association (ALTA) Owner’s Policy, contains a list of standard exceptions. These typically include rights or claims of parties in physical possession of the property, facts that an accurate and complete survey would disclose, unrecorded easements, and other matters not shown by the public records. In this scenario, the neighbor’s fence encroachment is a physical condition that would have been revealed by a survey but is not part of the recorded chain of title. Because it falls under the standard survey exception, the title insurance company is not obligated to cover the loss under a standard policy. To obtain coverage for such off-record risks, a buyer would typically need to purchase an extended coverage policy, which often requires a current survey and involves the removal of some or all of the standard exceptions.

The core legal and ethical principle at play is the enduring nature of the fiduciary duty of confidentiality. Under Oregon law, specifically outlined in statutes like ORS 696.805, a real estate broker’s duty to maintain the confidential information of a client continues even after the agency relationship has terminated. In this scenario, the broker, Mei, learned about the buyer’s, Alex’s, personal financial situation (the pending inheritance) during a prior, separate agency relationship. This information is considered confidential because it was not publicly available and was shared within the context of that specific client relationship. When Alex makes an offer on a property listed by Mei’s new client, Kenji, Mei’s duty of confidentiality to her former client, Alex, remains fully intact. Her fiduciary duties to her current client, Kenji, include loyalty, obedience, disclosure of material facts, and reasonable care. However, the duty of disclosure does not obligate her to reveal confidential information obtained from a past client. The buyer’s financial capacity is a material consideration, but the specific source of those funds, learned under a promise of confidentiality in a past transaction, is protected. Disclosing the inheritance to Kenji would constitute a direct breach of Mei’s perpetual duty of confidentiality to Alex. Therefore, Mei must not disclose this information. Her proper course of action is to present Alex’s offer to Kenji and advise Kenji based on the terms of the offer itself, without revealing the confidential information she possesses about Alex’s financial prospects.

The situation described involves a broker acting as a disclosed limited agent, which is Oregon’s term for a dual agent. Under Oregon Revised Statutes (ORS) Chapter 696, a real estate licensee may act as a disclosed limited agent for both the seller and the buyer in a real estate transaction, but only with the prior written consent of both parties. When acting in this capacity, the agent’s fiduciary duties are modified. While the agent still owes duties of good faith, fair dealing, and accounting for all funds, the duties of undivided loyalty and full disclosure are limited. Specifically, a disclosed limited agent must not disclose confidential information obtained from one party to the other, unless that disclosure is authorized in writing. Confidential information includes the party’s motivation to buy or sell, the price they are willing to accept or pay, and any other information the party has designated as confidential. In this scenario, the buyer’s statement about their financial capacity and willingness to pay a higher price is confidential information. The agent’s primary obligation is to maintain that confidentiality. Disclosing this to the seller would breach the agent’s duty to the buyer and violate the principle of impartiality required of a disclosed limited agent. The agent cannot advocate for one party to the detriment of the other. Therefore, the agent must refrain from revealing the buyer’s financial position and instead facilitate the negotiation process neutrally.

The legal principle at the heart of this scenario is the doctrine of after-acquired title, which is a crucial component of Oregon real estate law, particularly in the context of deeds that contain warranties of title. When a grantor conveys property using a statutory warranty deed, as defined under Oregon Revised Statutes (ORS) 93.850, they are making several legally binding promises, or covenants, to the grantee. These covenants include the covenant of seisin, which is a promise that the grantor owns the estate they are purporting to convey. If the grantor does not actually own the full title at the time of the conveyance but later acquires it, the doctrine of after-acquired title comes into effect. This common law doctrine, upheld in Oregon, provides that the title, once acquired by the grantor, automatically passes to the grantee to make the original conveyance whole. It operates by estoppel, preventing the grantor from claiming that the original deed was invalid. The transfer of the after-acquired interest to the grantee is automatic and occurs by operation of law at the moment the grantor obtains the previously missing title. It does not require any new deed, court action, or legal proceeding initiated by the grantee to perfect their title. The original warranty deed is essentially self-curing in this situation.

The core responsibility of a real estate licensee preparing a Competitive Market Analysis in Oregon is governed by OAR 863-015-0190. This rule requires the analysis to be a competent, objective, and unbiased opinion of value based on sound market data. While a licensee has a fiduciary duty to their client, this does not extend to creating a misleading or unsupported valuation to meet a client’s price expectations. The strongest indicators of market value are recently sold comparable properties. Active listings reflect the current competition and asking prices, while expired listings can indicate a price ceiling the market will not support. A proper CMA involves selecting the most relevant comparables and making justifiable, documented adjustments for differences in features, location, and condition. The final analysis must include a clear statement that it is not an appraisal and has not been prepared under USPAP guidelines, along with the other required disclosures. The licensee’s professional judgment and adherence to these standards are paramount, even if the resulting value conclusion is not what the seller wishes to hear. The primary duty is to provide a good faith, realistic analysis to help the client make an informed decision, rather than simply validating a desired price.

No mathematical calculation is required for this question. Oregon’s fair housing laws, enforced primarily by the Bureau of Labor and Industries (BOLI), provide robust protections against discrimination in housing transactions. These laws expand upon federal protections by explicitly prohibiting discrimination based on source of income, marital status, sexual orientation, and gender identity, in addition to the federally protected classes. When a person believes they have been discriminated against, they have one year from the date of the alleged discriminatory act to file a formal complaint with BOLI’s Civil Rights Division. Upon receiving a complaint, BOLI will conduct a neutral investigation to determine if there is substantial evidence of a violation. This process often includes attempts at conciliation to reach a voluntary settlement between the parties. If conciliation fails and substantial evidence is found, BOLI may issue formal charges. The case can then proceed to an administrative hearing or, at the election of either party, to a state circuit court. A critical concept in real estate practice is vicarious liability. Under Oregon law, a principal real estate broker is responsible for the actions and conduct of all brokers and property managers associated with them. This means if a property manager engages in a discriminatory act, the supervising principal broker can be held liable for that violation, regardless of whether they had direct knowledge of or personally participated in the specific act. This underscores the importance of proper training, supervision, and policy implementation within a brokerage.

To establish a prescriptive easement in Oregon, a claimant must demonstrate by clear and convincing evidence that their use of another’s land was open, notorious, adverse, and continuous for a period of ten years, as codified in ORS 105.620. The element of “adverse” use, or use under a claim of right, is often the most difficult to prove and is central to this legal analysis. In Oregon, courts often apply a presumption that the use of unenclosed, wild, or vacant land is permissive, stemming from neighborly courtesy, rather than adverse. This presumption places a heightened burden on the claimant. The claimant cannot simply rely on the landowner’s silence or lack of objection. They must provide affirmative evidence that their use was not merely with the owner’s tacit permission but was instead an assertion of their own right, hostile to the title of the true owner. For instance, evidence of maintaining the path, communicating a claim of right to the owner, or using the path in a way that clearly indicates a non-permissive claim could help rebut this presumption. Without such evidence, a court is likely to find the use was permissive, which defeats the claim for a prescriptive easement, regardless of how long the use occurred.

The core of this scenario revolves around the legal distinction between an Option to Purchase and a Right of First Refusal (ROFR). An option contract grants a party the exclusive right to purchase a property at a predetermined price within a specified time, regardless of other offers. It is a unilateral contract binding the seller. In contrast, a Right of First Refusal is a conditional right. It does not obligate the owner to sell, but if the owner decides to sell and receives a bona fide offer from a third party, the holder of the ROFR has the right to match that offer’s terms. In this case, the clause is a Right of First Refusal, not an option, because the purchase mechanism is triggered by a third-party offer, which the tenant then has the right to match. The purchase price is not fixed in advance but is determined by the external offer. The additional monthly payment serves as valuable consideration, making the ROFR a binding contractual right and not merely an illusory promise. When the landlord decided to sell the property to her nephew, this action constituted a manifestation of her intent to sell. Even though the offer was not from an arm’s-length third party on the open market, Oregon courts generally interpret ROFR clauses to prevent owners from circumventing them through non-standard sales, such as to relatives or for below-market prices. The landlord’s agreement with her nephew triggers the tenant’s right to be offered the property on the same terms and conditions as those offered to the nephew. The tenant’s right is therefore enforceable.

The principle of highest and best use requires an analysis of four distinct criteria, applied sequentially. The proposed use must be legally permissible, physically possible, financially feasible, and finally, maximally productive. In this scenario, the subject property is a 15-acre parcel zoned as Exclusive Farm Use (EFU) in Oregon. First, we test for legal permissibility. A high-density residential subdivision is not permitted under EFU zoning. While an Urban Growth Boundary (UGB) is nearby, any expansion or rezoning is speculative and cannot be assumed for a current valuation. Therefore, residential development fails this test. The current use as a hayfield is legally permissible. A commercial vineyard is also a legally permissible farm use within an EFU zone. Second, we test for physical possibility. The scenario indicates the land is suitable for both farming and development, so all potential uses are considered physically possible. Third, we test for financial feasibility. The uses that are legally permissible are the hayfield and the vineyard. The hayfield provides a minimal return. A commercial vineyard, given the supportive climate and soil, is described as financially viable and capable of generating a substantial return, thus passing this test. Fourth, we determine the maximally productive use among those that passed the previous tests. We compare the hayfield and the commercial vineyard. The vineyard is projected to generate a significantly higher economic return than the hayfield. Therefore, the commercial vineyard is the use that results in the highest value for the property. It is the only use that satisfies all four criteria: it is legally allowed under current EFU zoning, physically possible, financially viable, and provides the highest return of all permissible uses.

In Oregon, the ability of a lender to pursue a deficiency judgment after a foreclosure is heavily dependent on the type of foreclosure action taken and the nature of the security instrument. A deficiency judgment is a personal judgment against a borrower for the remaining balance of a loan after the security property has been sold at a foreclosure sale for less than the outstanding debt. The Oregon Trust Deed Act, specifically under Oregon Revised Statute 86.797, governs this process for properties secured by a trust deed. When a borrower defaults on a loan secured by a residential trust deed, the lender, or beneficiary, has two primary foreclosure options: a non-judicial foreclosure or a judicial foreclosure. If the lender elects to use the non-judicial foreclosure process, which is conducted by a trustee via a “trustee’s sale,” it is a faster and less expensive method. However, by choosing this streamlined path, the lender explicitly waives its right to seek a deficiency judgment against the borrower. This statutory prohibition is a critical protection for homeowners in Oregon. Conversely, if the lender chooses to proceed with a judicial foreclosure, which is a formal lawsuit that goes through the court system, they may retain the right to obtain a deficiency judgment. This path is significantly more time-consuming and costly for the lender. Therefore, the choice of foreclosure method is a strategic one for the lender, balancing the speed and cost of recovery against the possibility of pursuing the borrower for any shortfall.

Under the Oregon Condominium Act, specifically ORS Chapter 100, the seller of a condominium unit is required to provide the purchaser with a comprehensive set of disclosure documents. A critical component of this package is the resale certificate, as detailed in ORS 100.480. The legal obligation to prepare and provide this certificate rests with the homeowners’ association, regardless of its size or whether it is professionally managed or self-managed. The law makes no exception for small associations. The resale certificate must contain specific, statutorily mandated information, including the amount of the periodic assessment and any unpaid assessments on the unit, other fees payable by the owner, any planned major capital expenditures, the amount of reserves for such expenditures, the association’s current financial statements, and a statement on any pending lawsuits or judgments against the association. Simply providing bank statements or meeting minutes is insufficient and does not meet the legal requirement. The association’s board of directors or an authorized officer must prepare and sign the certificate, certifying the information as accurate. The buyer’s five-business-day right of rescission begins only after they have received all the required documents, including a legally compliant resale certificate. Failure to provide it can lead to transaction delays and potential liability for the seller.

The initial ownership structure is a joint tenancy among four individuals: Amara, Ben, Chloe, and David. In a joint tenancy, each co-owner holds an equal and undivided interest, characterized by the four unities of time, title, interest, and possession. The defining feature is the right of survivorship. Each owner initially holds a \(1/4\) interest. When David sells his interest to Evelyn, this action severs the joint tenancy as it pertains to that specific \(1/4\) share because the unities of time and title are broken for the new owner. Evelyn becomes a tenant in common, holding a \(1/4\) interest relative to the other owners. The original joint tenancy, however, remains intact for the remaining original co-owners: Amara, Ben, and Chloe. They continue to be joint tenants with each other, holding a collective \(3/4\) interest. When Amara dies, the right of survivorship, which is a key element of her joint tenancy with Ben and Chloe, takes immediate legal effect. Her interest in the property automatically passes to the surviving joint tenants, Ben and Chloe, outside of probate. A will cannot defeat the right of survivorship. Therefore, Amara’s son, Felix, inherits no part of this specific property. Amara’s \(1/4\) interest is absorbed by Ben and Chloe, who now hold that original \(3/4\) interest together as the sole surviving joint tenants. The final state of the title is that Ben and Chloe hold a combined \(3/4\) interest as joint tenants with each other, while Evelyn holds her separate \(1/4\) interest as a tenant in common.

The analysis begins by identifying the type of title insurance policy Amelia received, which is a standard owner’s policy. The core issue is an unrecorded claim of a prescriptive easement. In Oregon, a prescriptive easement is established through long-term, open, notorious, adverse, and continuous use for a statutory period of ten years, and it does not need to be recorded in the public records to be legally valid. Standard owner’s title insurance policies are designed to protect against defects found within the public records. They contain a set of pre-printed, general exceptions for risks that a title search of public records alone would not disclose. One of the most common standard exceptions is for any facts, rights, interests, or claims that are not shown in the public records but could be discovered by a physical inspection of the property or by making an inquiry of persons in possession. The neighbor’s long-standing use of the path for access is precisely this type of unrecorded right. Because a physical inspection of the land or a conversation with the neighbor would have revealed the existence of the path and its use, this claim falls squarely within this standard policy exception. Consequently, the title insurance company has no obligation to defend the title against this claim or compensate for any loss in value under the terms of a standard policy. Coverage for such matters typically requires purchasing an American Land Title Association (ALTA) extended coverage policy, which omits or modifies certain standard exceptions, usually contingent upon a current property survey and inspection.

The correct action is the use of water for household needs and for irrigating a personal garden not exceeding one-half acre. Oregon water law operates under a dual system that recognizes limited riparian rights alongside a comprehensive prior appropriation system managed by the Oregon Water Resources Department (OWRD). The 1909 Water Rights Act established that for most uses, water rights are based on the principle of “first in time, first in right,” requiring a permit to appropriate water for a beneficial use. However, the law provides specific exemptions for certain uses that do not require a formal water right permit. The most significant of these is for domestic purposes. Under Oregon Revised Statutes, this exempt domestic use includes water for household needs, watering domestic animals, and irrigating a non-commercial lawn or garden up to one-half acre in size. This is a vested right tied to the riparian land itself. In contrast, any commercial or large-scale agricultural use, such as irrigating a ten-acre commercial orchard, is considered an appropriative use and legally requires a water right permit from the OWRD. Similarly, establishing a commercial bottling operation is an industrial use that requires a permit. The construction of structures like docks falls under different regulations, often involving the Division of State Lands, but the consumptive use of water for purposes beyond the domestic exemption is strictly governed by the OWRD’s permit system.

This scenario involves the rights of a borrower (trustor) under the Oregon Trust Deed Act when facing a non-judicial foreclosure. In Oregon, a deed of trust is the most common security instrument for real estate loans. It involves three parties: the trustor (borrower), the beneficiary (lender), and the trustee (a neutral third party). When a trustor defaults on the loan, the beneficiary can instruct the trustee to initiate a non-judicial foreclosure, also known as a trustee’s sale. This process is governed by specific state statutes that provide certain protections for the borrower. One of the most critical rights is the right of reinstatement. According to Oregon law, specifically ORS 86.778, the trustor has the legal right to stop the foreclosure process by curing the default. This involves paying all past-due payments, late charges, and any costs and fees incurred by the lender in the foreclosure process. This right is not unlimited; it must be exercised at least five days before the date of the scheduled trustee’s sale. By reinstating the loan, the borrower brings the loan current, and the deed of trust is restored as if the default had never occurred. This is distinct from the right of redemption, which typically occurs after a foreclosure sale and is a feature of judicial foreclosures, not the non-judicial process used for trust deeds in this context. Furthermore, a key feature of non-judicial foreclosure on a residential trust deed in Oregon is that the lender is barred from seeking a deficiency judgment after the sale.

The determination of the promissory note’s legal status is based on the requirements for negotiability under the Uniform Commercial Code (UCC), specifically Article 3, which is codified in Oregon law as ORS Chapter 73. One of the fundamental requirements for an instrument to be negotiable is that it must contain an unconditional promise to pay a “fixed amount of money,” also known as a “sum certain.” In the described scenario, the promissory note includes a provision that makes the final payment amount contingent upon the future appraised value of the property. Because this future value is unknown and not ascertainable from the face of the instrument at the time of its creation, the note fails to meet the “fixed amount” requirement. The total amount to be paid cannot be calculated with certainty from the document itself. Consequently, the instrument is classified as non-negotiable. While it remains a valid and legally enforceable contract between the original parties, the maker (borrower) and the payee (lender), its non-negotiable status has significant implications. It cannot be transferred to a third party in a way that would allow that third party to become a “holder in due course,” a status that provides protection against many legal defenses the original maker might have against the original payee. This lack of negotiability severely restricts the note’s marketability and liquidity.

The broker’s action constitutes illegal steering. Familial status, defined as having one or more individuals under 18 living with a parent or legal guardian, is a protected class under both the federal Fair Housing Act and Oregon’s fair housing laws (ORS Chapter 659A). Steering occurs when a real estate licensee influences a client’s housing choice by directing them toward or away from specific areas or properties based on their protected class. In this scenario, Broker Kenji, upon learning his client has children, intentionally limited the properties shown to her to a specific subdivision he perceived as suitable for families. By failing to show her all available properties that met her objective criteria (such as price range and size) in other demographically different areas, he restricted her housing choice based on her familial status. The broker’s intent, even if it was to be helpful and accommodate the client’s stated preference for a “family-friendly” area, is irrelevant. Fair housing laws are concerned with the effect of an action, not the motive behind it. The practice of steering, even when well-intentioned, perpetuates housing segregation. A broker’s duty is to provide comprehensive, unbiased information about all suitable properties and allow the client to make their own informed decision about which neighborhoods are desirable.

This question does not require a mathematical calculation. The solution is based on the legal principles governing tenancy in common in Oregon. In Oregon, tenancy in common is a form of concurrent ownership where two or more persons hold separate fractional interests in the same property. These interests can be equal or unequal. A defining characteristic of this form of ownership is that there is no right of survivorship. This means that when one tenant in common dies, their interest in the property does not automatically transfer to the surviving co-tenants. Instead, the deceased co-tenant’s share is an asset of their estate. It is treated like any other property they owned and is subject to probate. The interest will be passed on to their heirs, as determined by their will, or if they die intestate (without a will), according to Oregon’s laws of intestate succession. The surviving tenants in common simply continue as co-owners alongside the new owner or owners who inherited the deceased’s share. Each co-tenant, including any new heir, retains the right to possess the entire property, and their ownership interest remains distinct and alienable. They can sell, devise, or otherwise transfer their individual share without the consent of the other co-owners.

The core issue is whether Kenji’s email constitutes a written agreement sufficient to satisfy the Oregon Statute of Frauds for a real estate employment contract. According to Oregon Revised Statute (ORS) 41.580(1)(g), an agreement authorizing a broker to sell real estate for a commission is void unless it is in writing and subscribed by the party to be charged. The party to be charged here is Kenji, as Amara is seeking to enforce the commission agreement against him. The statute does not mandate a single, formal contract. A memorandum or a series of communications, including emails, can satisfy the requirement. The key is whether the writing contains the essential terms of the agreement. In this scenario, the email identifies the parties (Amara and Kenji, implicitly), the subject matter of the employment (marketing his 5-acre parcel on Tumalo Road), and the consideration for the service (a 6% commission). Furthermore, the Oregon Uniform Electronic Transactions Act (UETA) gives legal effect to electronic records and electronic signatures. An email sent from a person’s account can serve as a “subscribed” writing. Because Kenji sent the email from his account authorizing the work and stating the commission, it serves as a writing subscribed by him. Therefore, Amara has a legally sufficient memorandum to enforce the commission agreement, even without a formal, wet-signed document. The agreement is not void for lack of a formal contract or for missing terms like a specific listing price, as the essential elements of the commission agreement itself are present.

The legal conclusion is that a month-to-month periodic tenancy has been established. The initial lease was an estate for years, defined by a specific start and end date. When this lease terminated on August 31st, and the tenant, Leo, remained in possession without the landlord’s explicit consent, his status immediately became a tenancy at sufferance. This is often called a holdover tenancy, where the tenant’s possession is wrongful, but their initial entry onto the property was lawful. The landlord, Priya, then had a choice: either initiate eviction proceedings to remove the tenant or consent to the continued occupancy. In this scenario, Priya’s affirmative act of accepting the rent payment for September constitutes implied consent to Leo’s continued possession. Under Oregon law, specifically the Oregon Residential Landlord and Tenant Act, when a landlord accepts periodic rent from a holdover tenant, the tenancy at sufferance is extinguished and a new leasehold estate is created. Because the rent was paid for a monthly period, the law construes this as the creation of a month-to-month periodic tenancy. This new tenancy does not have a fixed end date and will continue to renew each month until either the landlord or the tenant provides the statutorily required written notice to terminate the agreement.

The lender’s calculation for the loan-to-value ratio (LTV) is based on the lesser of two figures: the property’s appraised value or the agreed-upon sales price. In this scenario, the sales price is \(\$520,000\) and the appraised value is \(\$500,000\). Therefore, the lender will use the lower figure, \(\$500,000\), as the basis for the loan calculation. The maximum loan amount is determined by the LTV percentage, which is \(80\%\). Maximum Loan Amount = Appraised Value × LTV Maximum Loan Amount = \(\$500,000 \times 0.80 = \$400,000\) The buyer is contractually obligated to pay the full sales price of \(\$520,000\). To determine the total cash the buyer must bring to closing, we subtract the maximum loan amount from the sales price. Total Cash from Buyer = Sales Price – Maximum Loan Amount Total Cash from Buyer = \(\$520,000 – \$400,000 = \$120,000\) This total cash requirement of \(\$120,000\) can be broken down into two components. First is the standard down payment required to achieve an \(80\%\) LTV on the appraised value, which is \(20\%\) of \(\$500,000\), or \(\$100,000\). The second component is the difference between the sales price and the appraised value, often called the appraisal gap or shortfall. This gap is \(\$520,000 – \$500,000 = \$20,000\). The buyer must cover this shortfall with their own funds because the lender will not finance it. Thus, the loan is based on the appraised value, and the buyer’s out-of-pocket expense increases to cover the portion of the sales price that exceeds the appraisal.

The legal status of the listing agreement is determined by applying the principles of agency termination by operation of law. 1. Identify the parties to the agency agreement. The listing agreement creates an agency relationship between the client (Mr. Chen) and the principal broker (Alistair), who represents the brokerage entity. The associated broker (Priya) acts as a subagent, deriving her authority from her principal broker. 2. Identify the terminating event. The death of the principal broker, Alistair. 3. Apply the relevant legal principle. In agency law, the death of either the principal or the agent automatically terminates the agency relationship by operation of law. In this context, the “agent” is the principal broker with whom the listing agreement is legally established. 4. Determine the consequence. Since Alistair, the sole principal broker, has died, the agency agreement is immediately and automatically terminated. It is not suspended, transferable, or merely voidable; it ceases to exist. Priya’s authority to market the property was granted by Alistair, and with his death, her legal authority to act on behalf of Mr. Chen under that specific agreement is extinguished. For Priya to continue representing Mr. Chen, a new listing agreement would need to be executed between Mr. Chen and a new, legally licensed principal broker. In Oregon, a real estate broker’s license is associated with a specific principal real estate broker. The listing agreement is a contract between the seller and the principal broker’s company. The associated broker is an agent of the principal broker. Therefore, when a sole principal broker dies, the legal entity that holds the listing agreements effectively ceases to be able to perform its contractual duties. This event triggers termination by operation of law, a concept distinct from termination by acts of the parties, such as revocation or mutual consent. The termination is immediate and does not require any action from the seller or the Oregon Real Estate Agency. Any further action by the associated broker under the old agreement would be unauthorized. The surviving duties of an agent, such as confidentiality regarding the client’s information, would still apply to Priya, but her authority to perform other duties like marketing the property is void.

The proposed action by the life tenant constitutes an act of voluntary waste. A life estate grants the holder, known as the life tenant, the right to possess, use, and derive income from a property for the duration of a specific person’s life. However, this right is not absolute and is limited by the doctrine of waste, which protects the interests of the future owner, the remainderman. The life tenant has a legal duty to deliver the property to the remainderman in substantially the same condition as it was received, allowing for normal depreciation. Waste is categorized into three types. Voluntary waste involves an affirmative, destructive act by the life tenant that diminishes the value or character of the property, such as demolishing a functional building. Permissive waste results from inaction or neglect, like failing to make necessary repairs. Ameliorative waste involves alterations that may increase the property’s market value but fundamentally change its character, which can still be impermissible if it violates the remainderman’s right to receive the property as intended. In this scenario, demolishing a historic structure is a clear example of voluntary waste. Even if the proposed new structure could potentially increase the property’s monetary value, the destruction of a significant, existing feature is a violation of the life tenant’s duty. The remainderman has the right to receive the entire property, including the barn, not a modified version of it, regardless of the financial outcome. The remainderman can seek legal remedies, such as an injunction, to prevent the commission of waste before the destruction occurs.

The core of this issue rests on Oregon’s specific fair housing laws under ORS 659A.421, which expand upon federal protections. In Oregon, it is illegal to discriminate in housing based on race, color, religion, sex, sexual orientation, national origin, marital status, familial status, disability, or source of income. The critical element in this scenario is the “source of income” protection. This means a landlord or their agent cannot refuse to rent to, or otherwise discriminate against, a prospective tenant because their income derives from a lawful source other than employment, such as Social Security, disability benefits, or housing assistance programs like Section 8 vouchers. The property owner’s instruction to favor tenants with employment income and avoid those on public assistance is an explicitly discriminatory and unlawful instruction. As a licensed real estate broker, Lin has an overriding legal and ethical duty to comply with all fair housing laws. This duty supersedes the agent’s duty to obey the client’s instructions when those instructions are illegal. Therefore, Lin must disregard the owner’s discriminatory preference. She is legally obligated to evaluate Anya’s application based on the total amount of her lawful income, regardless of its source, to determine if she meets the established financial qualifications for the property. To do otherwise, such as rejecting the application or attempting to discourage the applicant based on the income source, would constitute a direct violation of Oregon fair housing law, subjecting both the owner and Lin to significant legal penalties and disciplinary action from the Oregon Real Estate Agency.