US Nebraska Broker License Exam Set Two

The situation described results in the creation of a periodic tenancy, specifically a month-to-month tenancy. The original lease was an estate for years, which is a leasehold interest for a fixed, definite period. This type of lease automatically terminates on its expiration date, in this case, July 31st, without any requirement for notice from either the landlord or the tenant. When Anya remained in the apartment after July 31st without the landlord’s consent, her status immediately became that of a tenant at sufferance. She was a holdover tenant, and the landlord, Mr. Chen, had the legal right to begin eviction proceedings. However, the landlord’s action of accepting the rent payment for August fundamentally changed the legal relationship. Under the Nebraska Uniform Residential Landlord and Tenant Act, when a landlord knowingly accepts rent from a holdover tenant (who is not a tenant at will), this action is treated as consent to the tenant’s continued occupancy. This consent terminates the tenancy at sufferance and creates a new leasehold estate. Because the rent was paid and accepted on a monthly basis, the law presumes the creation of a month-to-month periodic tenancy. This new tenancy continues on a monthly basis until either the landlord or the tenant provides the other with proper written notice of termination, which in Nebraska for a month-to-month tenancy is at least thirty days prior to the periodic rental date specified in the notice. The tenancy is not at will, as the regular payment establishes a clear period. It is also not a renewal of the original one-year estate for years, as this would typically require an explicit agreement; the default action creates a more flexible periodic arrangement.

The legal principle most relevant to this situation is the doctrine of abandonment of a restrictive covenant. A restrictive covenant is a private agreement that limits the use of a property and is binding on subsequent owners, a concept known as “running with the land.” These are typically enforced by a homeowners’ association or other property owners within the development through civil legal action, such as seeking an injunction. However, the right to enforce a covenant is not absolute and can be lost through inaction. When violations of a specific covenant become so widespread, long-standing, and tolerated that the original purpose of the restriction is defeated and property owners have come to rely on the lack of enforcement, a court may rule that the covenant has been abandoned. In this scenario, the fact that a significant percentage of homes have had similar detached structures for decades without any enforcement action from the HOA strongly suggests abandonment. The HOA has effectively waived its right to enforce this particular restriction by acquiescing to numerous past violations. A court would likely view the HOA’s sudden attempt to enforce the rule against a new owner as inequitable and apply the doctrine of abandonment or the related defense of laches, which prevents a party from asserting a right after an unreasonable delay that has prejudiced the other party. The existence of the covenant in the public record or its age does not guarantee its enforceability if the right to enforce has been effectively waived over time. Furthermore, public zoning regulations and private covenants operate independently; obtaining a municipal permit or variance does not negate a stricter private restriction.

The federal Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X) imposes specific obligations on sellers, lessors, and real estate agents for most housing built before 1978. The primary goal is to ensure that buyers and renters receive information about known lead-based paint and related hazards before becoming obligated under a contract. In this scenario, the seller’s vague statement about a past “paint issue” combined with their refusal to provide details creates a significant red flag for the associate broker. The seller’s disclosure form, which states they have no knowledge, appears to be a misrepresentation. A real estate licensee’s duty under both federal law and Nebraska Real Estate Commission regulations extends beyond simply transmitting forms. The agent must ensure that the seller is complying with the law. When an agent has reason to believe a seller’s disclosure is inaccurate or incomplete, they cannot simply proceed with the transaction. Doing so would make the agent complicit in the misrepresentation and subject them to severe penalties, including fines, potential imprisonment, and disciplinary action from the NREC, such as license suspension or revocation. The proper course of action is to counsel the seller on their legal obligations to disclose all known information, even if it is just a memory and not supported by formal reports. If the seller refuses to make a truthful and accurate disclosure, the licensee’s professional and legal responsibility is to withdraw from the transaction and terminate the listing agreement to avoid participating in an unlawful act.

The core issue revolves around the handling of a promissory note used as earnest money when a dispute arises. According to the Nebraska Real Estate Commission’s rules, a promissory note is an acceptable form of earnest money, provided the seller agrees to it in the purchase agreement. When a broker accepts a promissory note, they assume a fiduciary responsibility to handle it according to the terms of the note and the purchase contract. This responsibility includes making a reasonable and diligent effort to collect the funds from the promisor (the buyer) on the date the note becomes due. In this scenario, the note is past due, and the buyer has communicated their intent not to pay, while the seller is demanding the funds. This creates a clear dispute. The broker cannot unilaterally decide who is entitled to the funds or simply void the instrument. Their primary duty is to first fulfill their obligation to attempt collection. If these reasonable collection efforts fail due to the buyer’s refusal, the broker’s role shifts. They cannot initiate legal action on behalf of their client. Instead, the broker must hold the note and advise the seller that their recourse is to pursue a civil action to enforce the promissory note and compel payment from the buyer. The broker must safeguard the note as it is evidence of the debt, pending either a mutual written release from both parties or an order from a court of competent jurisdiction.

The core issue is the conflict between the property’s current use and the evolving character of its surroundings. The principle of conformity states that a property achieves maximum value when it is in harmony with its neighborhood in terms of design, use, and age. In this scenario, the large, single-family residence is becoming an anomaly in an area transitioning to mixed-use commercial and high-density residential. This lack of conformity creates economic obsolescence for the existing structure. While the land itself may be increasing in value due to its potential for redevelopment, the value of the property as a single-family home is negatively impacted because it no longer fits the prevailing land use pattern. A potential buyer would likely not pay a premium for the house itself, but rather for the land it sits on, with the intention of demolishing the structure to build something that conforms to the new zoning. This is a classic example of an underimprovement, where the existing improvements do not represent the land’s highest and best use. The decline in the property’s utility and value as a residence, directly resulting from its disharmony with the changing neighborhood, is a direct manifestation of the principle of conformity.

The legal analysis concludes that Ms. Rodriguez has not acquired a prescriptive easement. To establish a prescriptive easement in Nebraska, the claimant’s use of the land must be adverse, under a claim of right, continuous and uninterrupted, open and notorious, and exclusive for the statutory period of ten years. The critical element in this scenario is the nature of the use being “adverse” or “hostile.” Adverse use means the use is without the owner’s consent or permission. When Mr. Chen, the owner of the servient property, provided explicit verbal permission to Ms. Rodriguez six years into her use, the nature of that use was fundamentally altered. It ceased to be adverse and became permissive. The ten-year clock for prescription resets at the moment permission is granted. Since Ms. Rodriguez’s use was permissive for the last six years, she cannot meet the continuous ten-year period of adverse use required by Nebraska law. Her use is merely a license, which is a revocable, personal privilege to use the land of another for a specific purpose. It does not create an interest in the land itself and can typically be revoked by the landowner at any time. The claim fails because the element of hostility, a cornerstone of any adverse possession or prescriptive easement claim, was broken by the owner’s grant of permission.

The deed being offered in this scenario is a Special Warranty Deed. This type of deed is distinct from a General Warranty Deed because the grantor’s warranty is limited. Specifically, the grantor warrants to the grantee that they have not personally done anything to cloud or encumber the title during the time they held ownership. However, this warranty does not extend back in time to cover the actions of previous owners. Therefore, the grantor is only liable for title defects that arose during their specific period of ownership. This is a common practice for grantors who have a limited history with the property, such as corporations, banks selling foreclosed properties, or fiduciaries like executors or trustees. They can attest to their own actions but are unwilling to assume liability for the entire history of the property’s title. For the grantee, this means they are protected against any liens, encumbrances, or other title problems created by the immediate grantor. However, they remain vulnerable to claims or defects that existed before the grantor acquired the property. To protect against these older, unknown risks, it is crucial for the grantee to obtain a thorough title search and purchase an owner’s title insurance policy, which would provide financial protection against most undiscovered defects in the historical chain of title.

The deed in question conveys the property “to Leo, Maya, and Chloe, as joint owners with rights of survivorship.” Under Nebraska law, this specific language is crucial. While the default form of co-ownership for multiple grantees is tenancy in common, an instrument can create a joint tenancy if it clearly expresses the intent to do so. The phrase “with rights of survivorship” is a clear expression of such intent, establishing a valid joint tenancy among the three individuals. In this joint tenancy, Leo, Maya, and Chloe each held an equal and undivided one-third interest. A primary and defining feature of joint tenancy is the right of survivorship. This legal principle dictates that when one joint tenant dies, their interest in the property is automatically extinguished and their share is absorbed by the surviving joint tenants. The deceased’s interest does not pass to their heirs or through their will. Therefore, upon Leo’s death, his one-third interest in the property did not become part of his estate and could not be passed to his son, Finn, via his will. Instead, Leo’s interest was automatically and equally divided between the surviving joint tenants, Maya and Chloe. Consequently, Maya and Chloe now hold the entire property together. Their ownership status remains a joint tenancy, but now between only the two of them, with each holding an undivided one-half interest.

The logical deduction to determine the outcome is as follows: First, analyze the language of the deed. The deed conveys the property to Alejandro and Beatrice “as joint tenants.” Under Nebraska law, for a joint tenancy with the right of survivorship to be created, the instrument of conveyance must contain specific language clearly expressing the intent to create such an estate, such as “with right of survivorship” or “and not as tenants in common.” The simple phrase “as joint tenants” is generally insufficient to overcome the statutory presumption of a tenancy in common. Therefore, the ownership is a tenancy in common. Second, in a tenancy in common, each owner holds a separate, undivided interest. Alejandro and Beatrice each hold a one-half interest. Third, a creditor of an individual tenant in common can attach a judgment lien to that tenant’s specific interest in the property. The lien against Alejandro attaches to his one-half interest. Fourth, upon the death of a tenant in common, their interest does not automatically transfer to the surviving co-tenant. Instead, it passes to their heirs or devisees through probate, subject to any valid liens. Therefore, when Alejandro dies, his one-half interest, encumbered by the creditor’s lien, passes to his estate. The creditor can then enforce its lien against that one-half interest now held by the estate. Beatrice retains her original one-half interest, free from the creditor’s claim. In Nebraska, the creation of a joint tenancy with the right of survivorship requires a clear and explicit expression of intent in the conveying document. The law presumes that co-ownership between non-spouses, or even spouses if not specified otherwise, is a tenancy in common. A tenancy in common is a form of ownership where two or more persons hold separate fractional interests in the same property. These interests can be equal or unequal, but they are undivided, meaning each tenant has the right to possess the entire property. A key feature of a tenancy in common is that there is no right of survivorship. When a tenant in common dies, their interest in the property does not pass to the surviving co-owners. Instead, it is transferred to the decedent’s heirs or beneficiaries as specified in their will or by the laws of intestacy. This interest is part of the decedent’s probate estate. Consequently, any valid liens or judgments attached to the decedent’s interest, such as a creditor’s lien, remain with that interest as it passes to the estate. This is in stark contrast to a joint tenancy with right of survivorship, where the decedent’s interest is automatically extinguished upon death and the surviving joint tenant or tenants acquire the entire property, typically free from the claims of the deceased’s unsecured creditors. Nebraska does not recognize tenancy by the entirety.

The core issue is the interplay between a financing contingency deadline and the buyer’s duty to act in good faith. A financing contingency provides a buyer with a specific period to secure a loan. If they fail to do so within this timeframe and provide notice as required by the contract, they can typically terminate the agreement and recover their earnest money. However, once this contingency period expires without termination, the contingency is waived, and the buyer is obligated to proceed with the purchase. The contract becomes firm regarding the financing aspect. In this scenario, the buyer’s loan denial occurred after the contractual financing contingency period had already passed. Therefore, the protection afforded by the contingency was no longer in effect. The buyer’s failure to secure funds by the closing date constitutes a breach of the purchase agreement. Furthermore, the concept of good faith and fair dealing, which is implied in all Nebraska contracts, requires that the buyer make a diligent and honest effort to obtain financing. By voluntarily quitting her job, an act that would foreseeably lead to a loan denial, the buyer arguably did not act in good faith. Due to this default after the contingency’s expiration, the seller is generally entitled to the remedies specified in the contract, which almost always includes the retention of the earnest money deposit as liquidated damages for the buyer’s breach. The broker holding the funds must disburse them according to the contract’s terms or, if a dispute arises, initiate an interpleader action with a court.

Calculation: Let’s assume a borrower has a total gross monthly income (GMI) of $6,000. Their proposed monthly housing payment (PITI) is $2,100, and they have other recurring monthly debt payments (like car loans and student loans) totaling $600. The total monthly debt is the sum of the housing payment and other debts: \[\$2,100 + \$600 = \$2,700\] The back-end debt-to-income ratio is calculated by dividing the total monthly debt by the gross monthly income: \[\frac{\$2,700}{\$6,000} = 0.45\] To express this as a percentage, we multiply by 100, resulting in a DTI of 45%. A back-end debt-to-income ratio is a critical metric used by lenders to assess a borrower’s capacity to repay a mortgage. It represents the portion of a borrower’s gross monthly income that goes toward all of their recurring monthly debt obligations, including the proposed new mortgage payment. Lenders view this ratio as a primary indicator of default risk. When a borrower’s DTI is near or slightly above the lender’s established maximum threshold, it signals a heightened risk profile. This is especially true when a significant portion of the borrower’s income is variable or non-traditional, as lenders may apply a more conservative analysis to such income streams. A high DTI suggests that a smaller portion of the borrower’s income is available for discretionary spending, savings, and unexpected expenses, making them more vulnerable to financial distress if their income decreases or expenses increase. Consequently, the lender may impose stricter loan conditions to offset this perceived risk. These conditions are not punitive but are risk mitigation strategies designed to protect the lender’s investment and ensure the long-term viability of the loan.

The Nebraska Real Estate Commission mandates that all active real estate licensees, including brokers, must complete eighteen hours of approved continuing education during each two-year renewal period to be eligible for license renewal. The renewal period concludes on December 31st of each even-numbered year. Within these eighteen hours, a minimum of six hours must be dedicated to specific topics designated by the Commission as mandatory. A critical point of regulation, and often a source of confusion, pertains to newly licensed individuals. While a person obtaining their initial salesperson license during the second year of a renewal period is exempt from the continuing education requirement for that first renewal, this exemption explicitly does not apply to those upgrading to a broker license. Therefore, an individual who obtains a broker license at any point during the two-year cycle, even in the final year, is still responsible for completing the full eighteen hours of continuing education, including the six mandatory hours, prior to the license expiration date. There is no provision for prorating the required hours based on the date the broker license was issued. Fulfilling this requirement is a prerequisite for the timely renewal of the broker license.

Step 1: Identify the primary action described in the scenario. The City of Grand Island is adopting a new “Corridor Revitalization Overlay Zone.” Step 2: Categorize this action. The creation and implementation of a zoning ordinance, including an overlay zone, is a direct exercise of a municipality’s police power. Step 3: Analyze the nature of police power in the context of real estate value. Police power is one of the four main governmental powers over real property (along with eminent domain, taxation, and escheat). It is the authority to enact laws and regulations to protect public health, safety, morals, and general welfare. Zoning is the most prominent example of this power affecting property value. Step 4: Differentiate the primary action from its consequences. The overlay zone is intended to *stimulate* economic activity (an economic force) and alter the neighborhood’s character (a social force). However, the zoning change itself is the foundational governmental act that enables these subsequent changes. It is the direct and immediate influence being applied. Step 5: Conclude the primary force. The adoption of the overlay zone is a governmental force, specifically an exercise of police power to regulate land use, which directly impacts the value of the affected properties by changing their legally permitted uses and development potential. The value of real property is influenced by a dynamic interplay of four major forces: physical, economic, social, and governmental. In this scenario, the most direct and foundational force at play is governmental. The City of Grand Island is exercising its police power, a right granted by the state of Nebraska, to regulate land use for the public’s general welfare. This power manifests through zoning ordinances, building codes, and comprehensive planning. The creation of a “Corridor Revitalization Overlay Zone” is a specific zoning tool. It does not physically alter the properties, but it legally changes what can be done with them. This governmental action is the catalyst for all other changes. While the goal of this zoning is to produce positive economic outcomes, such as attracting new businesses and increasing property tax revenue, and to foster social changes, like creating a more vibrant, walkable community, these are secondary effects. The initial and most direct influence on the properties’ value stems from the new set of land-use regulations imposed by the municipal government. An appraiser or broker analyzing this situation must first recognize the governmental action as the primary driver before considering the potential economic and social consequences that will follow.

The legal analysis proceeds as follows: 1. Identify the asset in question: A primary residence in Nebraska, qualifying as a legal homestead. 2. Identify the ownership structure: Sole title held by one spouse, Marcus. 3. Identify the legal event: The death of the title-holding spouse, Marcus, with a will devising the homestead to a third party, Liam, and disinheriting the surviving spouse, Eleanor. 4. Apply relevant Nebraska law. Nebraska has specific statutes governing the rights of a surviving spouse to a homestead. Nebraska Revised Statute § 30-2322 grants the surviving spouse a homestead allowance. More importantly, the surviving spouse has a right to occupy the homestead for life, which constitutes a life estate. This right exists independently of who holds the title and cannot be defeated by a will. 5. Contrast with other rights. While Nebraska has abolished dower and curtesy, it replaced them with the concept of an elective share of the augmented estate under Nebraska Revised Statute § 30-2313. Eleanor could choose to take this elective share, which is a claim to a percentage of the total value of Marcus’s estate. However, this is a separate right from the homestead life estate. 6. Conclusion: The provision in Marcus’s will is not void, but it is subject to Eleanor’s superior statutory rights. Her most direct right concerning the physical property is the homestead life estate, which allows her to remain in the home. Under Nebraska law, the concept of a homestead provides significant protections for a family’s primary residence. These protections extend to a surviving spouse, even if they are not on the property’s title. When a spouse dies, their will cannot unilaterally terminate the surviving spouse’s homestead rights. In this situation, the surviving spouse, Eleanor, is entitled to a life estate in the homestead property. This means she has the right to possess and occupy the home for the remainder of her life. The ownership interest bequeathed to the son, Liam, is subject to this life estate; he would hold a remainder interest, gaining full possession only upon Eleanor’s death. This protection is a cornerstone of Nebraska probate and property law, ensuring a surviving spouse is not displaced from their home. This right is distinct from, and can be chosen instead of or in conjunction with, the surviving spouse’s right to an elective share. The elective share pertains to a percentage of the total value of the deceased’s augmented estate, providing financial security, whereas the homestead right specifically secures the physical dwelling. Therefore, the will’s attempt to transfer the property directly and freely to the son is encumbered by the surviving spouse’s legally mandated homestead life estate.

The logical conclusion is that Marcus holds superior title to the property. The issuance of a treasurer’s tax deed in Nebraska creates a new, paramount title. This new title is derived directly from the sovereign authority of the state and is not merely a transfer of the previous owner’s title. Consequently, it extinguishes all prior private titles, liens, encumbrances, and inchoate rights, including a developing claim of adverse possession. In this scenario, the government’s lien for unpaid property taxes attached to the land in 2010. This tax lien is superior to all other private interests. The county’s sale of the tax certificate to Marcus in 2013 and the subsequent issuance of the treasurer’s tax deed in 2017 represent the enforcement of this superior lien. When Marcus received the tax deed, the title of the previous owner, Leo, was extinguished. Simultaneously, any claim Anya was developing through adverse possession was also cut off. Her possession from 2011 to 2017 was adverse to Leo’s title, not the government’s tax lien. The tax deed created a new title in Marcus, free and clear of Anya’s prior activities. For Anya to successfully claim adverse possession against Marcus, she would need to begin a new ten-year period of hostile possession starting after Marcus acquired his title in 2017. Therefore, her quiet title action in 2022, based on possession that began in 2011, is legally insufficient against the holder of a valid tax deed.

Not applicable. A license in real property is a personal, revocable, and non-assignable privilege to perform an act on the land of another without possessing any interest in the land itself. It is mere permission. Typically, a license can be revoked at any time by the landowner (the licensor) and is automatically terminated upon the sale of the property or the death of either party. However, a key exception to this rule is the doctrine of an irrevocable license, also known as a license by estoppel. This doctrine applies when a licensee, in reasonable reliance on the license, has expended substantial money or labor to make improvements on the property. If the licensor has knowledge of these expenditures and has permitted them, the law may prevent the licensor from revoking the license because it would be unjust. In such a case, the license becomes irrevocable. This irrevocable license can function much like an easement. Crucially, if a subsequent purchaser of the property has notice of the circumstances creating the irrevocable license, the right can be enforced against that new owner. Notice can be actual (being told about the right) or constructive (the existence of a visible improvement like a paved road that would prompt a reasonable person to inquire about its status). This situation is distinct from an easement by prescription, which requires the use to be adverse or hostile, not permissive, for a statutory period. Since the initial use was by permission, it cannot be considered adverse for the purpose of a prescriptive claim.

The central issue is determining whether the custom dough proofer is a fixture belonging to the real property or a trade fixture, which is the tenant’s personal property. In Nebraska, courts evaluate several factors to determine fixture status, with the primary test being the intention of the party making the annexation. Other tests include the method of attachment (how it is affixed) and the adaptation of the item to the use of the realty. However, a special category exists for commercial tenancies known as trade fixtures. A trade fixture is an item of personal property installed by a commercial tenant on leased property for the purpose of conducting their business. There is a strong legal presumption that such items are intended to remain the tenant’s personal property and are removable by the tenant before the lease expires. In this scenario, Alistair installed the proofer specifically for his baking business. Even though it is large, custom-built, and connected to building systems, its purpose is directly related to his trade. Because the lease is silent, the law defaults to the trade fixture doctrine. The intention, inferred from the nature of the item and the commercial landlord-tenant relationship, is that the item was for the business’s use, not to permanently improve the landlord’s property. Therefore, Alistair has the right to remove the proofer, but he is also responsible for repairing any damage to the premises caused by its removal.

In Nebraska, a Sanitary and Improvement District, commonly known as an SID, is a political subdivision of the state created to finance and install public infrastructure such as streets, sewers, and water systems for a new development, typically in an unincorporated area. SIDs have the authority to issue bonds to cover these costs and to levy special assessments against the properties within the district to repay those bonds over a period of years. When a municipality, such as a city of the primary or first class, annexes the territory encompassed by an SID, a specific legal process unfolds as dictated by Nebraska statutes. The annexation legally dissolves the SID as a governing entity. However, the financial obligations of the SID, specifically its outstanding bond debt, are not extinguished. The annexing municipality is required by law to assume all the assets, liabilities, and contractual obligations of the dissolved SID. This means the city takes over the responsibility for servicing the bond debt. To do this, the city continues to levy and collect the special assessments against the properties that were part of the original SID. These collections continue precisely as they were under the SID until the bond debt that financed the original improvements is fully paid off. This ensures continuity for bondholders and correctly allocates the cost of the infrastructure to the properties that directly benefited from it. The process is an automatic function of the law upon annexation and does not require separate legal action or petitions from the property owners.

The deed from Amara to the Platte River Conservancy created a fee simple subject to a condition subsequent. This type of defeasible estate is characterized by specific conditional language, such as “on the express condition that,” “provided that,” or “but if.” When the condition is violated, the estate does not automatically terminate. Instead, the violation gives the grantor, or their heirs, a future interest known as the right of entry or power oftermination. The language in this deed, “on the condition that the land is used solely for agricultural education,” followed by the clause “the grantor or her heirs shall have the right to re-enter and reclaim the property,” is the classic phrasing for creating a fee simple subject to a condition subsequent. This is distinct from a fee simple determinable, which uses durational language like “so long as” or “until” and results in an automatic reversion of title to the grantor upon breach of the condition. In this scenario, the Platte River Conservancy breached the condition by leasing the land for commercial sand and gravel extraction. However, this breach does not, by itself, end the Conservancy’s ownership. Their fee simple estate continues, although it is now subject to being cut short. For the title to revert to Amara’s heir, Beatrice, Beatrice must take affirmative action to exercise her right of entry. This typically involves filing a legal action to quiet title or physically re-entering the property and giving notice of termination. Until Beatrice takes such an action, the Platte River Conservancy remains the legal owner of the property, holding a fee simple estate that is now defeasible.

The oral agreement for the sale of the farm is likely enforceable under the doctrine of part performance, which is an exception to the Statute of Frauds. Nebraska’s Statute of Frauds, specifically Neb. Rev. Stat. § 36-105, mandates that any contract for the sale of land must be in writing and signed by the party to be charged (the seller) to be enforceable. An oral agreement that does not meet these requirements is generally considered void. However, courts of equity may enforce such an oral contract to prevent the Statute from being used to perpetrate a fraud. This is where the doctrine of part performance applies. For this doctrine to be successfully invoked, the party seeking enforcement must demonstrate actions that are unequivocally referable to the alleged oral contract. In this scenario, Leo performed several acts. He made a partial payment, took possession of a portion of the property by moving in his equipment with Beatrice’s consent, and, most critically, he made substantial, valuable, and permanent improvements to the land by installing a new irrigation system. These improvements were made with Beatrice’s knowledge and acquiescence. The combination of possession and the making of valuable improvements that would not have been undertaken without an agreement to purchase provides strong evidence of a contract. Therefore, a court would likely find that Leo’s actions constitute sufficient part performance to take the oral agreement out of the Statute of Frauds, making it an enforceable contract despite the lack of a written document.

The core of this issue rests on the conflict between the actions of the parties, which might suggest an implied contract, and the specific legal requirements for real estate brokerage agreements in Nebraska. The original express, bilateral listing agreement between the broker, Leto, and the seller, Alia, had expired. An express contract has its terms explicitly stated, while an implied contract is created by the conduct of the parties. Alia’s statement to “bring me a solid offer” and her subsequent cooperation with the showing could be interpreted as creating an implied agreement. However, Nebraska Revised Statute § 36-107, which is part of the Statute of Frauds, mandates that any agreement providing for a commission or compensation for the sale of real estate must be in writing and signed by the party to be charged. This statutory requirement for a written document supersedes any common law principles of implied or oral contracts in this specific context. Because there was no current, valid written agreement between Leto and Alia at the time the offer was procured and accepted, the contract for commission is unenforceable. Even if Leto was the procuring cause of the sale, the absence of a written contract as required by state law is the dispositive factor, preventing him from legally compelling the payment of a commission. The public policy behind this statute is to prevent disputes and fraudulent claims based on verbal or assumed understandings.

The calculation demonstrates the financial risk of charging a usurious interest rate in Nebraska. The seller-financed portion of the loan is \$200,000. The proposed interest rate is 18%. Nebraska’s general legal maximum interest rate is 16% per annum. The maximum legal simple interest that could be charged for one year is calculated as: \[\$200,000 \times 0.16 = \$32,000\] The proposed simple interest for one year is calculated as: \[\$200,000 \times 0.18 = \$36,000\] Under Nebraska law, the penalty for usury is not simply the reduction of the rate to the legal limit. Instead, the lender forfeits the right to collect any interest whatsoever. Therefore, by attempting to charge an extra \$4,000 in interest (\(\$36,000 – \$32,000\)), the seller risks losing the entire \$32,000 of interest that would have been legally collectible. The total potential loss from this illegal term is the forfeiture of all interest payments for the life of the loan. Under Nebraska Revised Statute § 45-101.03, the maximum legal rate of interest is generally established at sixteen percent per annum on the unpaid principal balance. While certain exceptions exist, such as for corporate borrowers or loans over a specific threshold, they may not apply in this common seller-financing scenario. A contract that stipulates a rate higher than the legally permissible one is considered usurious. The consequence of usury in Nebraska, as defined in § 45-105, is severe: the lender is barred from collecting any interest on the debt. They are only entitled to recover the principal amount originally loaned. A real estate licensee has a fundamental professional and ethical obligation to act with reasonable skill and care, which includes having knowledge of relevant state laws that materially affect a transaction. A broker must not knowingly participate in or facilitate an illegal act, such as the creation of a contract with a usurious interest rate. The broker’s duty is to inform the client of the law and the significant legal and financial risks associated with their instruction, thereby protecting the client from potential penalties and ensuring the transaction is legally sound. This duty to uphold the law and act competently supersedes any instruction from a client to the contrary.

The legal outcome is determined by the specific rules governing the statutory right of redemption within a Nebraska judicial foreclosure. The process does not end with the sheriff’s sale; it concludes only when the court formally confirms the sale. Under Nebraska law, the mortgagor, or property owner, retains a statutory right to redeem the property. This right can be exercised at any time after the decree of foreclosure is issued and up until the court enters an order confirming the sheriff’s sale. To redeem, the owner must pay the full amount of the debt as specified in the foreclosure decree, along with all accrued interest and the costs of the legal action and sale. In the described situation, the sheriff’s sale occurred on September 15th, but the court had not yet confirmed it. The owner’s action on October 1st, by tendering the full required payment before the confirmation hearing, falls squarely within the legally prescribed window for redemption. Consequently, this action is a valid exercise of the owner’s statutory right. The court is obligated to recognize this redemption, which effectively nullifies the auction sale to the third-party bidder. The sale will be set aside, and the property title will be restored to the original owner, free and clear of the mortgage lien that was foreclosed upon. The third-party bidder’s rights were always contingent upon the sale being confirmed, which cannot happen if the property is redeemed.

The correct priority of payment for the liens, after satisfying the superior real estate tax lien, is determined by Nebraska statutes governing lien priority. The primary rule is generally “first in time, first in right,” based on the date of recording or attachment. However, Nebraska’s Construction Lien Act introduces a critical exception. Under Nebraska Revised Statute § 52-139, a construction lien’s priority relates back to the date of “visible commencement of operations” on the property. In this scenario, the contractor began visible work on January 10, 2023. Therefore, the effective priority date for the construction lien is January 10, 2023, even though it was filed later on May 20, 2023. The home equity mortgage was recorded on February 15, 2023. Since the construction lien’s effective date (January 10) is earlier than the mortgage’s recording date (February 15), the construction lien takes priority over the mortgage. The judgment lien was docketed on July 1, 2023, making it junior to both the construction lien and the mortgage. Consequently, after the delinquent real estate taxes and foreclosure costs are paid, the proceeds must first be applied to the construction lien, followed by the home equity mortgage, and finally the judgment lien.

The core issue in this scenario revolves around a specific type of loan structure that can lead to negative amortization. In a standard, fully amortizing loan, each payment made by the borrower is allocated to cover both the interest accrued for that period and a portion of the principal loan balance. Over time, this systematically reduces the amount owed. However, certain loan products, such as payment option Adjustable Rate Mortgages (ARMs), allow the borrower to make a minimum payment that may be insufficient to cover the full amount of interest that has accrued. When the payment does not cover the interest, the unpaid interest is not forgiven; instead, it is added back to the outstanding principal balance. This process is called negative amortization. The consequence is that despite making regular monthly payments, the borrower’s total debt actually increases. This can lead to a situation where the borrower owes more than the original loan amount, eroding equity and increasing financial risk, especially if property values decline. Under the Nebraska Real Estate License Act, a broker has a statutory duty to exercise reasonable skill and care and to promote the best interests of their client. A critical part of this duty is ensuring the client fully understands the terms and potential risks of a transaction, particularly complex financial instruments. Explaining the potential for the loan balance to grow is a fundamental aspect of fulfilling this professional obligation.

The correct outcome is determined by the specific timeline for the right to cure a default under the Nebraska Trust Deeds Act. In Nebraska, a non-judicial foreclosure is conducted using a power of sale clause within a Deed of Trust. The process begins when a beneficiary instructs the trustee to record a Notice of Default due to the trustor’s failure to meet their obligations. Following this, a Notice of Sale is issued, setting the date for a public auction of the property. A critical provision within the Nebraska Trust Deeds Act, specifically Neb. Rev. Stat. § 76-1012, grants the trustor a statutory right to reinstate the loan. This means the trustor can stop the foreclosure by paying all past-due amounts, including principal, interest, taxes, insurance, and any costs incurred by the beneficiary and trustee. However, this right is not unlimited. The statute explicitly states that this right to cure the default and reinstate the loan expires five business days prior to the date of the scheduled trustee’s sale. In the scenario presented, the sale is scheduled for Friday, September 27th. Counting back five business days from this date (Thursday the 26th, Wednesday the 25th, Tuesday the 24th, Monday the 23rd, and Friday the 20th), the deadline for reinstatement would have been the end of the business day on Thursday, September 19th. The homeowner’s attempt to tender the reinstatement funds on Monday, September 23rd, falls after this statutory deadline has passed. Therefore, the trustee is no longer legally obligated to accept the reinstatement payment. The trustee’s primary duty at this point is to the beneficiary and to the integrity of the sale process as dictated by statute. The trustee must refuse the late tender and proceed with the scheduled sale. After the five-day window closes, the only way for the homeowner to stop the sale is typically by paying the entire loan balance in full, not just the delinquent amount.

The primary legal issue revolves around the distinction between real property and personal property, specifically focusing on the concepts of fixtures and trade fixtures. Real property consists of land and anything permanently affixed to it. Personal property, or chattel, is generally movable. An item of personal property can become real property if it is attached or annexed in such a way that it is considered a fixture. Courts in Nebraska apply a series of tests to determine if an item is a fixture, often summarized by the acronym MARIA: Method of annexation, Adaptability of the item to the land’s use, Relationship of the parties, Intention of the annexor, and Agreement between the parties. The intention of the party who installed the item is the most significant test. However, a critical exception exists for trade fixtures. A trade fixture is an item of personal property installed on real property by a business owner for the purpose of conducting their trade or business. Despite being firmly attached, trade fixtures are legally considered to remain the personal property of the business owner. They can be removed by the owner before their tenure ends, provided any damage caused by the removal is repaired. In this scenario, the grain drying and storage system was installed specifically for the commercial farming operation. Its purpose is directly tied to the business, not to the general improvement of the land itself. Therefore, it qualifies as a trade fixture and remains the personal property of the business operator. In contrast, items like permanent irrigation systems with concrete footings or residential improvements like custom cabinetry are typically considered standard fixtures intended to be permanent additions to the real estate.

In Nebraska, the concept of homestead rights provides significant protection for a family’s primary residence. According to state law, any property that qualifies as a homestead cannot be conveyed or encumbered unless the legal instrument for the conveyance or encumbrance is signed and acknowledged by both the husband and wife, if the owner is married. This requirement holds true regardless of how the title to the property is held, whether in one spouse’s name alone or by both spouses as joint tenants or tenants in common. The purpose of this law is to protect the family home from the unilateral actions of one spouse and from certain creditors. In a situation where one spouse attempts to create a lien, such as a mortgage or deed of trust, against the homestead property without the other spouse’s signature, that lien is considered void and unenforceable. It does not attach to the property at all, not even to the signing spouse’s partial interest. The joint tenancy with right of survivorship is a distinct ownership structure that dictates how property passes upon death, but it does not override the statutory homestead protections concerning encumbrances made during the owners’ lifetimes. The homestead law is paramount in this context, ensuring the stability and security of the family residence.

A corporation, under Nebraska law and general legal principles, is considered a single legal entity, separate and distinct from its shareholders, officers, or directors. This concept is often referred to as the corporate veil or creating a “legal person.” When this legal person acquires real property, it takes title as a sole owner. The form of ownership for a single, sole owner is tenancy in severalty. The term “severalty” indicates that the ownership interest is severed from all other interests. Even though Sandhills Development, Inc. is comprised of multiple shareholders, those individuals own stock in the corporation, not a direct, fractional interest in the real estate the corporation purchases. The corporation itself, as one unified legal entity, holds the title. Other forms of ownership, such as tenancy in common or joint tenancy, are designed for co-ownership by two or more distinct persons, whether natural or legal. A corporation cannot hold title in joint tenancy with another party because a corporation does not “die” in the same way a natural person does, making the principle of survivorship inapplicable. Therefore, the appropriate and legally recognized method for a corporation to hold title to real estate by itself is in severalty.

Step 1: Identify the deed used in the final transaction. Ben conveyed the property to Caleb using a Special Warranty Deed. Step 2: Define the scope of warranties provided by a Special Warranty Deed under Nebraska law. This deed warrants the title only against claims and defects that arose during the grantor’s (Ben’s) period of ownership. The grantor does not warrant against title defects that existed before they acquired the property. Step 3: Determine the origin of the title defect. The restrictive covenant was created and recorded in 2010 by Anya, a predecessor in title. This was before Ben acquired the property in 2015. Step 4: Apply the deed’s warranty to the specific defect. Since the restrictive covenant was created by Anya, not by Ben, it is a pre-existing defect. Therefore, it falls outside the scope of the warranties Ben provided to Caleb in the Special Warranty Deed. Step 5: Conclude Ben’s liability to Caleb. Ben has no direct liability to Caleb for the breach of the covenant against encumbrances, as the encumbrance was not created by him. Caleb’s potential recourse would be to leverage the protections Ben received from Anya via the General Warranty Deed, but a direct claim against Ben based on the Special Warranty Deed is invalid. A Special Warranty Deed provides a more limited set of protections to the grantee compared to a General Warranty Deed. In Nebraska, as in other states, the critical distinction lies in the time frame covered by the grantor’s warranties. The grantor of a Special Warranty Deed covenants that they have not personally done anything to cloud or encumber the title. They are only warranting the title against defects that arose during their specific period of ownership. This contrasts sharply with a General Warranty Deed, which provides the most comprehensive protection. A General Warranty Deed contains covenants that warrant the title against all defects, regardless of when they arose, extending back through the entire chain of title. In this scenario, the encumbrance in question is a restrictive covenant placed on the property by Anya, a previous owner. When Ben sold the property to Caleb, he used a Special Warranty Deed. By doing so, Ben was legally promising Caleb that he, Ben, had not created any new encumbrances during his ownership. Since the restrictive covenant was established by Anya long before Ben even owned the property, the defect pre-dates Ben’s ownership. Consequently, this specific defect is not covered by the warranties in the Special Warranty Deed Ben gave to Caleb. Caleb cannot successfully sue Ben for a breach of warranty based on this deed. Caleb’s remedy might involve pursuing a claim against the original grantor, Anya, under the more extensive protections of the General Warranty Deed she gave to Ben, as those covenants may run with the land to subsequent owners.