Principles of Real Estate Quiz | Test Your Real Estate Knowledge

1. Property management and real estate asset mangement are both real estate management professions. The primary distinction between the two is:

Property managers always report to an asset manager.

Asset managers have greater knowledge of a property's finances.

Property managers handle day-to-day operations while asset managers manage portfolios of properties.

Asset managers are primarily responsible for maintenance technicians.

2. People in the real estate business who primarily focus on creating new properties are

Broker

Developer

Zoning administrators

Excavators.

3. The term "commercial property" generally refers to

Non-owner-occupied properties.

Retail, office, and industrial properties.

Multi-tenant properties.

Retail properties.

4. Which of the following professionals involved in the real estate business are most concerned about procuring buyers and seller for clients?

Brokers and agents.

Property Managers

Corporate real estate managers.

Appraisers

5. 1.5 Which of the following ways of specializing is common in the real estate brokerage buisness?

By type of houses.

By geography.

By financial background of client.

By type of mortgage.

6. 1.6 What is an advisory service provider?

A broker of fee simple titles.

A corporate real estate broker.

A broker performing non-transactional services for a commission.

A broker who renders real estate services for a fee.

7. 1.7 The level of government which is most active in regulating real estate licensees is the

Federal goverment

State goverment

County goverment

Municipal government where the person resides.

8. 2.1 - What guarantees the right of the private ownership of real estate in the United States.

Common law.

Local statutes

The Napoleonic Code

The constitution.

9. 2.2 Which of the following is the best definition of real estate?

Land and personal property

Unimproved land

Land and everything permanently attached to it.

An ownership interest in land and improvements

10. 2.3 Which of the following is included in the legal concept of land?

The surface of the earth and all natural things permanently attached to the earth.

Only the surface of the earth that is delineated by boundaries.

The surface of the earth except for lakes and streams.

Everything above, on and below the surface of the earth.

The legal concept of land encompasses:

the surface area of the earth

everything beneath the surface of the earth extending downward to its center

all natural things permanently attached to the earth

the air above the surface of the earth extending outward to infinity.

Explanation

The legal concept of land encompasses:

the surface area of the earth

everything beneath the surface of the earth extending downward to its center

all natural things permanently attached to the earth

the air above the surface of the earth extending outward to infinity.

11. 2.4 What are the three unique physical characteristics of land?

Fixed, unchangeable, homogenous.

Immobile, indestructible, heterogenous.

Three-dimensional, buildable, marketable.

Natural, measurable, inorganic.

Physical characteristics. Land has three unique physical characteristics: immobility, indestructibility, and heterogeneity.

Explanation

Physical characteristics. Land has three unique physical characteristics: immobility, indestructibility, and heterogeneity.

12. 2.5 The primary distinction between the legal concepts of land and real estate is that

Real estate includes air above the surface and minerals below the surface.

Real estate is indestructable.

Land has no defined boundaries.

Land does not include man-made structures.

13. 2.6 The primary distinction between the legal concept of real estate and real property is that

Real property includes ownership of a bundle of rights.

Real property includes improvements.

Real property is physical, not abstract.

Real estate can be owned.

Real property is ownership of real estate and the bundle of rights associated with owning the real estate.

Explanation

Real property is ownership of real estate and the bundle of rights associated with owning the real estate.

14. 2.7 Which of the following is included in the bundle of rights inherent in ownership?

To inherit

To tax

To transfer

To vote

15. 2.8 Which of the following is an example of intangible property?

Real estate

Personal property

Artwork

Stock

16. 2.9 The right to use real property is limited by

The right of others to use and enjoy their property.

The police.

Taxation and subordination.

Title 12 of the U.S. Civil code.

17. 2.10 Surface rights, air rights and subsurface rights are

Inviolable.

Unrelated.

Seperable.

Not transferrable.

18. 2.11 Which of the following terms refers to the rights of a property that abuts a stream or river?

Allodial

Alluvial

Littoral

Riparian

19. 2.12 What part of a non-navigable waterway does the owner of an abutting property own?

To the low-water mark.

To the middle of the waterway.

To the high-water mark.

None

20. 2.13 What is the "Doctrine of Prior Appropriation?"

A pre-emptive zoning ordiance

The right of government to confiscate land and improvements.

A doctrine that gives the state control of water use and the water supply.

A real estate tax applied to owners of water rights

21. 2.14 Which of the following is considered real property?

A tree growing on a parcel of land.

A tree that has been cut down and is lying on a parcel of land.

A tractor used to mow grass on a parcel of land.

A prefabricated shed not yet assembled on a parcel of land.

22. 2.15 The overriding test of whether an item is a fixture or personal property is

How long it has been attached to the real property.

Its definition as one or the other in a sale or lease contract

How essential it is to the function if the property.

How it was treated in previous transactions

23. 2.16 What is an emblement?

A piece of equipment affixed to the earth.

B. A limited right to use personal property

C. A sign indicating a property boundary

D. A plant or crop that is considered personal property

Plants and crops requiring human intervention and labor are called emblements. Emblements, despite their attachment to land, are considered personal property.

Explanation

Plants and crops requiring human intervention and labor are called emblements. Emblements, despite their attachment to land, are considered personal property.

24. 2.17 An item can be converted from real to personal property and vice versa by means of which processes?

Assemblage and plottage

Application and dissolution

Affixing and severance

Personalty and severalty

25. 2.18 The major sources of real estate law are legislation at federal, state and local level, and

Court decision

Professional real estate associations

Real estate commissions

Local practices

26. 2.19 What is the primary thrust of federal involvement in real estate law?

Taxation

Licensing

Broad regulation of usage

Zoning

In regulating real property rights, the federal government is primarily concerned with broad standards of real property usage, natural disaster, land description, and discrimination.

The federal government does not levy real estate taxes.

Explanation

In regulating real property rights, the federal government is primarily concerned with broad standards of real property usage, natural disaster, land description, and discrimination.

The federal government does not levy real estate taxes.

27. 2.20 Which level of government controls zoning laws?

State

Taxing authorities

Federal

County and local

28. 2.21 A grocer temporarily installs special fruit and vegetable coolers in a leased grocery store in order to prevent spoilage. The coolers would be considered which of the following?

Trade fixtures that are real property.

Trade fixtures that are personal property

Permanent fixtures that are real property

Permanent fixtures that are personal property.

29. 2.22 Under the doctrine of littoral rights, an owner claims ownership of all of the land underlying a lake where there are three other abutting property owners. Which of the following is true?

The owner's claim is invalid, because the state owns the underlying land.

The owner's claim is invalid, because the underlying land is shared equally with the other owners.

The owner's claim is invalid, because he may only own underlying land to the middle of the lake.

The owner's claim is valid, because the lake is navigable.

Littoral rights: abutting property owners own land to high water mark; may use, but state owns underlying land.

Explanation

Littoral rights: abutting property owners own land to high water mark; may use, but state owns underlying land.

30. 3.1 An interest in real estate is best defined as ownership of?

The full bundle of rights to real property an estate.

One or more of the bundle of rights to real property.

An estate

The right to possession and use of real property.

31. 3.2 Encumbrances and police powers are

Interest that do not include possession.

Limited forms of an estate.

Unrelated to interests.

Types of public interests.

Interests are principally distinguished by whether they include possession. If the interest-holder enjoys the right of possession, the party is considered to have an estate in land, or, familiarly an estate. If a private interest-holder does not have the right to possess, the interest is an encumbrance. If the interest-holder is not private, such as a government entity, and does not have the right to possess, the interest is some form of public interest. An encumbrance enables a non-owning party to restrict the owner's bundle of rights. Tax liens, mortgages, easements, and encroachments are examples.

Explanation

Interests are principally distinguished by whether they include possession. If the interest-holder enjoys the right of possession, the party is considered to have an estate in land, or, familiarly an estate. If a private interest-holder does not have the right to possess, the interest is an encumbrance. If the interest-holder is not private, such as a government entity, and does not have the right to possess, the interest is some form of public interest. An encumbrance enables a non-owning party to restrict the owner's bundle of rights. Tax liens, mortgages, easements, and encroachments are examples.

32. 3.3 What distinguishes a freehold estate from a leasehold estate?

A freehold includes the right to dispose or use.

A leasehold endures only for a specific period of time.

A freehold cannot be defeasible.

A leasehold is subject to government restrictions.

33. 3.4 The highest form of ownership interest one can acquire in real estate is the

Dower and curtsey.

Conventional life estate.

Defeasible fee simple estate.

Absolute fee simple estate.

34. 3.5 The distinguishing feature of a defeasible free simple estate is that

It can be passed on to heirs.

It has no restrictions on use.

The estate may revert to a grantor or heirs if the prescribed use changes.

It is of unlimited duration.

The two types of fee simple defeasible are determinable and condition subsequent. Determinable. The deed to the determinable estate states usage limitations. If the restrictions are violated, the estate automatically reverts to the grantor or heirs. Condition subsequent. If any condition is violated, the previous owner may repossess the property. However, reversion of the estate is not automatic: the grantor must re-take physical possession within a certain time frame.

Explanation

The two types of fee simple defeasible are determinable and condition subsequent. Determinable. The deed to the determinable estate states usage limitations. If the restrictions are violated, the estate automatically reverts to the grantor or heirs. Condition subsequent. If any condition is violated, the previous owner may repossess the property. However, reversion of the estate is not automatic: the grantor must re-take physical possession within a certain time frame.

35. 3.6 Upon the death of the owner, a life estate passes to

The original owner or other named person.

The owner's heirs.

The state.

The owner's spouse.

36. 3.7 How is a conventional life estate created?

It happens automatically when title transfers unless a fee simple is specifically claimed.

A fee simple owner grants the life estate to a life tenant.

It is created by judicial action.

It is created by a statutory period of adverse possession.

37. 3.8 What distinguishes a pur autre vie life estate from an ordinary life estate?

The pur autre vie estate endures only for the lifetime of the grantor.

The pur autre estate endures only for the lifetime of the grantee.

The pur autre estate endures only for the lifetime of a person other than the grantee.

The pur autre estate cannot revert to the grantor.

Pur autre vie. A pur autre vie life estate endures over the lifetime of a third person, after which the property passes from the tenant holder to the original grantor (reversion) or a third party (remainderman).

Explanation

Pur autre vie. A pur autre vie life estate endures over the lifetime of a third person, after which the property passes from the tenant holder to the original grantor (reversion) or a third party (remainderman).

38. 3.9 Which of the following life estates is created by someone other than the owner?

Conventional life estate.

Ordinary life estate.

Legal life estate.

Community property life estate.

39. 3.10 Which of the following is true of a homestead?

A homestead interest cannot be conveyed by one spouse.

A homestead interest cannot be passed to the children of the head of household.

A homestead interest is a form of conventional life estate.

A homestead is a primary or secondary residence occupied by a family.

Homestead. A homestead is one's principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts.

Homestead laws generally provide that:

all or portions of one's homestead are exempt from a forced sale executed for the collection of general debts (judgment liens). The various states place different limits on this exemption.

tax debts, seller financing debt, debts for home improvement, and mortgage debt are not exempt

the family must occupy the homestead

the homestead interest cannot be conveyed by one spouse; both spouses must sign the deed conveying homestead property

the homestead exemption and restrictions endure over the life of the head of the household, and pass on to children under legal age. State laws define specifically how the interest transfers upon the death of the household head

homestead interests in a property are extinguished if the property is sold or abandoned

in some states the exemption is automatic; in others, homeowners must file for the exemption.

Explanation

Homestead. A homestead is one's principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts.

Homestead laws generally provide that:

all or portions of one's homestead are exempt from a forced sale executed for the collection of general debts (judgment liens). The various states place different limits on this exemption.

tax debts, seller financing debt, debts for home improvement, and mortgage debt are not exempt

the family must occupy the homestead

the homestead interest cannot be conveyed by one spouse; both spouses must sign the deed conveying homestead property

the homestead exemption and restrictions endure over the life of the head of the household, and pass on to children under legal age. State laws define specifically how the interest transfers upon the death of the household head

homestead interests in a property are extinguished if the property is sold or abandoned

in some states the exemption is automatic; in others, homeowners must file for the exemption.

40. 3.11 Dower refers to

Joint tenancy of husband and wife.

A wife's life estate interest in her husband's property.

A wife's homestead interest.

A child's life estate interest in his or her parents' homestead.

41. 3.12 Which of the following is an illustration of the legal concept of elective share?

A surviving spouse places a lien on a debtor's property.

A widow who was excluded from a will makes a claim to a portion of the couple's principal residence.

A spouse who loses her home because of her husband's gambling debt sues in court for exemption from the debt.

A widower whose spouse died without a will sues to change the provisions of the will.

Elective share. Elective share is a state-level statute enabling a surviving spouse to make a minimum claim to the deceased spouse's real and personal property in place of the provisions for such property in the decedent's will.

Explanation

Elective share. Elective share is a state-level statute enabling a surviving spouse to make a minimum claim to the deceased spouse's real and personal property in place of the provisions for such property in the decedent's will.

42. 3.13 A one-year lease on a house has expired, but the tenant continues sending monthly rent checks to the owner, and the owner accepts them. What kind of leasehold estate exists?

Estate for years

Estate from period to period

Estate at will

Estate at sufferance

The estate for years is a leasehold estate for a definite period of time, with a beginning date and an ending date.

In an estate from period-to-period, also called a periodic tenancy, the tenancy period automatically renews for an indefinite period of time, subject to timely payment of rent. At the end of a tenancy period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period.

The estate at will, also called a tenancy at will, has no definite expiration date and hence no "renewal" cycle. The landlord and tenant agree that the tenancy will have no specified termination date, provided rent is paid on time and other lease conditions are met.

In an estate at sufferance, a tenant occupies the premises without consent of the landlord or other legal agreement with the landlord. Usually such an estate involves a tenant who fails to vacate at the expiration of the lease, continuing occupancy without any right to do so.

Explanation

The estate for years is a leasehold estate for a definite period of time, with a beginning date and an ending date.

In an estate from period-to-period, also called a periodic tenancy, the tenancy period automatically renews for an indefinite period of time, subject to timely payment of rent. At the end of a tenancy period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period.

The estate at will, also called a tenancy at will, has no definite expiration date and hence no "renewal" cycle. The landlord and tenant agree that the tenancy will have no specified termination date, provided rent is paid on time and other lease conditions are met.

In an estate at sufferance, a tenant occupies the premises without consent of the landlord or other legal agreement with the landlord. Usually such an estate involves a tenant who fails to vacate at the expiration of the lease, continuing occupancy without any right to do so.

43. 4.1 When a single individual or entity owns a fee or life estate in a real property, the type of ownership is

Tenancy in severalty.

Tenancy by the entireties.

Absolute fee simple.

Legal fee simple.

If a single party owns the fee or life estate, the ownership is a tenancy in severalty. Synonyms are sole ownership, ownership in severalty, and estate in severalty.

Tenancy by the entireties is a form of ownership reserved exclusively for husband

and wife. It features survivorship, equal interests, and limited exposure to

foreclosure.

fee simple An estate representing the highest form of legal ownership of real property, particularly the fee simple absolute estate.

Explanation

If a single party owns the fee or life estate, the ownership is a tenancy in severalty. Synonyms are sole ownership, ownership in severalty, and estate in severalty.

Tenancy by the entireties is a form of ownership reserved exclusively for husband

and wife. It features survivorship, equal interests, and limited exposure to

foreclosure.

fee simple An estate representing the highest form of legal ownership of real property, particularly the fee simple absolute estate.

44. 4.2 Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is

Joint tenancy.

Equal ownership.

Tenancy in common

Estate in severalty.

45. 4.3 The "four unities" required to create a joint tenancy include which of the following conditions?

Parties must acquire respective interests at the same time.

Parties must be legally married at the time of acquiring interest.

Parties must be family members.

Parties must have joint financial resources.

joint tenancy A form of real property ownership in which co-owners share all rights and interests equally

and indivisibly; entails right of survivorship. Parties must establish tenancy at the same time and with a

single deed.

Explanation

joint tenancy A form of real property ownership in which co-owners share all rights and interests equally

and indivisibly; entails right of survivorship. Parties must establish tenancy at the same time and with a

single deed.

46. 4.4 Unlike tenants in common, joint tenants

Own distinct portions of the physical properties.

Cannot will their interest to a party outside the tenancy.

May own unequal shares of the property.

Cannot sell their interest to outside parties.

In a joint tenancy, two or more persons collectively own a property as if they were a single person. Rights and interests are indivisible and equal: each has a shared interest in the whole property which cannot be divided up.

Explanation

In a joint tenancy, two or more persons collectively own a property as if they were a single person. Rights and interests are indivisible and equal: each has a shared interest in the whole property which cannot be divided up.

47. 4.5 In a community property state, a basic distinction is made between

Property acquired together and property acquired separately over the duration of the marriage.

Property owned privately versus property owned by the state.

Property acquired during a marriage and property already owned by each party at the time of marriage.

Property acquired during the marriage and property acquired after the marriage.

48. 4.6 Who are the essential parties involved in an estate in trust?

Owner, trustor and lawyer.

Owner, trustor and trustee.

Trustee, title company, and beneficiary.

Trustor, trustee and beneficiary.

49. 4.7 The distinguishing features of a condominium estate are

Ownership of a share in an association that owns one's apartment.

Tenancy in common interest in airspace and common areas of the property.

Fee simple ownership of the airspace in a unit and an undivided share of the entire property's common areas.

Fee simple ownership of a pro rata share of the entire property.

A condominium unit is one airspace unit together with the associated interest in the

common elements.

Explanation

A condominium unit is one airspace unit together with the associated interest in the

common elements.

50. 4.8 Who owns the property in a time-share estate?

Ownership is shared by the developer and the broker.

The property is owned by tenants in common or by a freehold owner who leases on a time-share basis.

A real estate investment trust holds a fee simple estate.

A general partner holds a fee simple interest and interval estates are owned by limited partners.

51. 4.9 Which of the following is true of a cooperative?

A cooperative may hold an owner liable for the unpaid operating expenses of other owners.

The owners have a fee simple interest in the airspace of their respective apartments.

Owners may retain their apartments even if they sell their stock in the cooperative.

The proprietary lease is guaranteed to have a fixed rate of rent over the life of the lease term.

In a cooperative, or co-op, one owns shares in a non-profit corporation or cooperative association, which in turn acquires and owns an apartment building as its principal asset. Along with this stock, the shareholder acquires a proprietary lease to occupy one of the apartment units.

Since the corporation owns an undivided interest in the property, debts and financial obligations apply to the property as a whole, not to individual units. Should the corporation fail to meet its obligations, creditors and mortgagees may foreclose on the entire property.

Explanation

In a cooperative, or co-op, one owns shares in a non-profit corporation or cooperative association, which in turn acquires and owns an apartment building as its principal asset. Along with this stock, the shareholder acquires a proprietary lease to occupy one of the apartment units.

Since the corporation owns an undivided interest in the property, debts and financial obligations apply to the property as a whole, not to individual units. Should the corporation fail to meet its obligations, creditors and mortgagees may foreclose on the entire property.

52. 4.10 One difference between a cooperative estate and a condominium estate is that

The condominium owner must pay expenses as well as rent.

The coop owner owns stock and a freehold real estate interest whereas the condominium owner simply owns real estate.

The condominium owner owns the common elements and the airspace whereas the coop owner only owns the apartment.

53. 4.11 A unique feature of a land trust is that

The trustee controls both the trustor and the beneficiary.

The trustee takes ownership of both land and improvements.

The identity of the beneficiary may not be identified.

The properties in the trust are probated in the states where the properties are located.

54. 5.1 Easements and encroachments are types of

Lein.

Deed restriction.

Encumbrance.

Appurtenance

55. 5.2 An affirmative easement gives the benefited party

The right to possess a defined portion of another's real property.

The right to prevent the owner of a real property from using it in a defined way.

The right to a defined use of a portion of another's real property.

The right to receive a portion of any income generated by another's real property.

56. 5.3 There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the following in relation to property B?

Subservient estate

Servient estate

Senior tenant

Dominant tenement

dominant tenement The property that benefits from the existence of an easement appurtenant. The holder of

the easement is the dominant tenant.

Servient tenement A property containing an easement that must "serve" the easement use belonging to a

dominant tenement.

Explanation

dominant tenement The property that benefits from the existence of an easement appurtenant. The holder of

the easement is the dominant tenant.

Servient tenement A property containing an easement that must "serve" the easement use belonging to a

dominant tenement.

57. 5.4 Which of the following describes a situation in which an easement might be created against the wishes of the property owner?

58. 5.5 What is the primary danger of allowing an encroachment?

An encroachment automatically grants the benefiting party an easement.

Over time, the encroachment may become an easement by prescription that damages the property's market value.

An encroachment creates a lien.

59. 5.6 A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of

An injunction.

A deed restriction.

An easement

A land trust.

60. 5.7 What distinguishes a lien from other types of encumbrance?

It involves a monetary claim against the value of a property.

It lowers the value of a property.

It is created voluntarily by the property owner.

It attaches to the property rather than to the owner of the property.

61. 5.8 A certain property has the following liens recorded against it: a mortgage lien dating from three years ago; a mechanic's lien dating from two years ago; a real estate tax lien for the current year; and a second mortgage lien dating from the current year. In case of a foreclosure, which of these liens will be paid first?

First mortgage lien

Mechanic's lien

Real estate tax lien

Second mortgage lien

62. 5.9 The lien priority of junior liens can be changed by a lienor's agreement to

Forgive portions of the debt.

Assign the note.

Foreclose on the note.

Subordinate.

63. 5.10 Among junior liens, the order of priority is generally established according to

The date of recordation

The amount

The order of disbursement

Special agreement among lienees

64. 5.11 What is meant by a "lien-theory" state?

A state in which liens are given priority over other encumbrances

A state in which a mortgagor retains title to the property when a mortgage lien is created

A state in which liens exist in theory but not in practice

65. 5.12 A homeowner has hired a contractor to build a room addition. The work has been completed and the contractor has been paid for all work and materials but fails to pay the lumber yard for a load of lumber. What potential problem may the home owner experience?

The contractor may place a mechanic's lien for the amount of the lumber against the homeowner's real property.

The lumber yard may place a vendor's lien against the contractor and the homeowner for the amount of the lumber.

The lumber yard may place a mechanic's lien for the amount of the lumber against the homeowner's real property.

The homeowner has no liability because the contractor was paid for the lumber.

66. 5.13 The process of enforcing a lien by forcing sale of the lienee's property is called

Excution.

Attachment.

Foreclosure.

Subordination.

67. 5.14 An important difference between a judicial foreclosure and a non-judicial foreclosure is

There is no right to redeem the property in a non- judicial foreclosure.

A judicial foreclosure forces a sale of the property.

A non-judicial foreclosure ensures that all liens are paid in order of priority.

The lienor receives title directly in a non-judicial foreclosure.

68. 5.15 A defaulting borrower may avoid foreclosure by giving the mortgagee

A promissory note.

A deed in lieu of foreclosure.

A redemption notice.

A lis pendens.

69. 5.16 A property survey reveals that a new driveway extends one foot onto a neighbor's property. This is an example of

A easement appurtenant.

An encroachment.

An easement by prescription.

A party wall easement.

70. 5.17 A property owner has an easement appurtenant on her property. When the property is sold to another party, the easement

Terminates.

Transfers with the property.

Transfers with the owner to a new property.

Becomes a lien on the property.

The term appurtenant means "attaching to."

Explanation

The term appurtenant means "attaching to."

71. 5.18 A brick fence straddles the property line of two neighbors. The neighbors agree not to damage it in any way. This is an example of

A party wall.

An encroachment.

A trade fixture.

A deed restriction.

72. 5.19 A property owner allows Betty Luanne to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Betty given, and what happens to it in the future?

A personal easement in gross, which continues after the owner's death

An easement by prescription, which continues after the owner's death.

A license, which continues after the owner's death.

A license, which terminates at the owner's death.

73. 5.20 A court renders a judgment which authorizes a lien to be placed against the defendant's house, car, and personal belongings. This is an example of a

Specific judgment lien.

General judgment lien.

Voluntary judgment lien.

Superior judgment lien.

74. 6.1 Which of the following best describes the concept of "legal title" to real estate?"

Ownership of the bundle of righs to real estate.

The right of a buyer or lender to obtain ownership under certain circumstances.

Possession of a deed.

Absolute proof of ownership of real estate.

75. 6.2 A person claims ownership of a parcel of real estate to a prospective buyer, stating that she has lived on the property for five years and nobody has ever bothered her. The claimant also shows the buyer a copy of the deed. The legal basis of this claim is referred to as

Prescriptive notice.

Constructive notice.

Hostile notice.

Actual notice.

evidence of title Actual or constructive notice of real property ownership, including opinion of title, certificate of title, and title insurance.

constructive notice Knowledge one could or should have, according to the presumption of law; a demonstration to the public of property ownership through title recordation, "for all to see."

Explanation

evidence of title Actual or constructive notice of real property ownership, including opinion of title, certificate of title, and title insurance.

constructive notice Knowledge one could or should have, according to the presumption of law; a demonstration to the public of property ownership through title recordation, "for all to see."

76. 6.3 Constructive notice of ownership of a parcel of real estate is primarily demonstrated through

Direct inspection to see who is in possession.

Title insurance.

Title records.

A construction permit.

77. 6.4 An owner transfers title to a property to a buyer in exchange for a consideration. This is an example of

Voluntary alienation.

Escheat.

Hypothecation.

Estoppel.

Voluntary alienation. Voluntary alienation is an unforced transfer of title by sale or gift from an owner to another party.

Explanation

Voluntary alienation. Voluntary alienation is an unforced transfer of title by sale or gift from an owner to another party.

78. 6.5 For a deed to convey title, it is necessary for the deed to be

On a standard form.

Certified by the grantor.

Accepted by the grantee.

Signed by the grantee.

79. 6.6 The only required clause in a deed of conveyance is one that

States restrictions and limitations to the estate being conveyed.

States the parties and the type of estate being conveyed.

States that the grantor has done nothing to impair title to the property being conveyed.

States the grantor's intention, names the parties, describes the property, and indicates a consideration.

Granting clause, or premises clause

the only required clause; contains the conveyance intentions; names the parties; describes the property; indicates nominal consideration

Explanation

Granting clause, or premises clause

the only required clause; contains the conveyance intentions; names the parties; describes the property; indicates nominal consideration

80. 6.7 The purpose of a covenant clause in a deed of conveyance is to

State the grantor's assurance or warrant to the grantee that a certain condition or fact concerning the property is true.

State the grantee's promise to use the property in a prescribed manner.

Warrant that the grantor has never encumbered title.

Describe the consideration that the grantee promises to give in return for title.

Covenant, or warrant, clauses. Covenant clauses present the grantor's assurances

to the grantee.

Explanation

Covenant, or warrant, clauses. Covenant clauses present the grantor's assurances

to the grantee.

81. 6.8 The type of statutory deed that contains the most complete protection for the grantee is a

Guardian's deed.

Special warranty deed.

General warranty deed.

Quitclaim deed.

82. 6.9 A person wishes to convey any and all interest in a property to another without making any assurances as to encumbrances, liens, or any other title defects on the property. This party would most likely use which of the following types of deed?

A sheriff's deed.

A special warranty deed.

A partition deed.

A quitclaim deed.

83. 6.10 A one-time tax levied on a property for purposes of recording a transaction is called

An intangible sales tax.

A documentary stamp tax.

An ad valorem stamp tax.

A franchise tax.

84. 6.11 If a person dies with no legal heirs or relations and has left no valid will, what happens to real property owned by that person?

It is taken by the state according to the process called escheat.

It is reconveyed to the previous owner in the chain of title.

It is taken by the title insurance company according to the process called involuntary alienation.

It is conveyed to the highest bidder at a public auction.

85. 6.12 Just prior to passing away, a person tells two witnesses that she would like her estate to pass to her husband. One witness records the statement and signs his name. This is an example of

An enforceable holographic will.

An unenforceable holographic will.

An enforceable nuncupative will.

An unenforceable nuncupative will.

Nuncupative

made orally, and written down by a witness; generally not valid for the transfer of real property

Explanation

Nuncupative

made orally, and written down by a witness; generally not valid for the transfer of real property

86. 6.13 If a person having several heirs dies intestate, the property will

Pass to heirs by the laws of descent and distribution.

Escheat to the state.

Pass to the surviving spouse through elective share.

Pass to the surviving heirs according to the provisions of the will.

A court proceeding called probate generally settles a decedent's estate, whether the person has died testate (having left a valid will) or intestate (having failed to do so)

Explanation

A court proceeding called probate generally settles a decedent's estate, whether the person has died testate (having left a valid will) or intestate (having failed to do so)

87. 6.14 A property owner can avert the danger of losing title by adverse possession by

Recording proof of ownership in county title records.

Inspecting the property and evicting any trespassers found.

Claiming hostile and notorious possession.

Filing a claim of right with the county recorder.

88. 6.15 A hermit secretly lives in a cave on a 200-acre property. After twenty years, the person makes a claim of ownership to the property. This claim will likely be

Upheld through adverse possession.

Upheld because of the length of possession.

Declined through the doctrine of prior appropriation.

Declined because possession was secretive.

89. 6.16 The fundamental purpose of recording instruments that affect real property is to

Prove ownership of the property.

Avoid adverse possession.

Give constructive notice of one's rights and interests in the property.

Assemble all relevant documents in a single place.

90. 6.17 What is "chain of title?"

The list of all parties who have ever owned real estate.

The bundle of rights linked to the recorded title to a parcel.

A chronology of successive owners of record of a parcel of real estate.

Involuntary conveyance of title by statutory rules of descent.

91. 6.18 The Torrens System differs from other title recording systems in that

Title is conveyed only when conveyance is registered on the title certificate.

The Torrens System requires prior approval of a transaction before it can be registered.

The Torrens System is not recognized by title insurance companies.

It allows unrecorded encumbrances to cloud title.

The Torrens system. Certain states and counties use the Torrens System of recording. The Torrens system differs from other title recording systems in that title passes only when the conveyance has been duly registered on the title certificate itself. Encumbrances likewise have no legal effect until they are recorded. In effect, the Torrens title record is the title itself. It is not necessary to search public records to ascertain the status of title; it is all reflected on the title certificate.

Explanation

The Torrens system. Certain states and counties use the Torrens System of recording. The Torrens system differs from other title recording systems in that title passes only when the conveyance has been duly registered on the title certificate itself. Encumbrances likewise have no legal effect until they are recorded. In effect, the Torrens title record is the title itself. It is not necessary to search public records to ascertain the status of title; it is all reflected on the title certificate.

92. 6.19 To be marketable, title must be

Registered in Torrens.

Free of undisclosed defects and encumbrances.

Abstracted by an attorney.

Guaranteed by a title certificate.

93. 6.20 With the exception of a Torrens certificate, the best evidence of marketable title is

A signed deed.

A title certificate.

Title insurance.

An attorney's opinion.

94. 7.1 A lease contract is best described as

A temporary transfer of legal title.

An instrument of conveyance of limited title.

A conveyance of possessory interest.

A title conveyance in exchange for rent.

A lease is both an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations. As a conveyance, a lease conveys an interest, called the leasehold estate, but does not convey legal title to the property. For this reason, a leasehold is also called a less-than-freehold estate.

Explanation

A lease is both an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations. As a conveyance, a lease conveys an interest, called the leasehold estate, but does not convey legal title to the property. For this reason, a leasehold is also called a less-than-freehold estate.

95. 7.2 When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?

A freehold estate.

A reduced leasehold estate.

A leasehold estate.

A leased fee estate.

96. 7.3 When an owner leases her propeprty, she temporarily relinquishes the right to

Transfer the property.

Encumber the property.

Occupy the property.

Maintain the property.

97. 7.4 Which of the following happens when a leased property is sold?

The buyer acquires title subject to the lease.

The lease is cancelled.

The lease expires within thirty days unless renewed.

A new lease is automatically executed.

98. 7.5 A landlord and tenant complete a one-year lease. The following week, the landlord dies. Which of the following is true?

The lease is cancelled and must be re-written.

The tenant must continue to abide by all lease terms.

The tenant may annul the lease at his or her option.

The landlord's heirs may cancel the lease at their option.

99. 7.6 If a lease does not state a specific ending date, when does it terminate?

Immediately, since it is an invalid lease.

After one year.

When either party gives property notice.

Whenever the property is sold.

100. 7.7 In accordance with the Statue of Frauds,

Leases in excess of one year must be recorded to be enforceable.

Oral leases are not enforceable.

A five-year lease must be in writing to be enforceable.

An unwritten lease is fraudulent.

Statute of frauds. The statute of frauds requires that certain contracts must be in writing to be enforceable. Real estate contracts that convey an interest in real property fall in this category, with the exception that a lease of one year's duration or less may be oral.

Explanation

Statute of frauds. The statute of frauds requires that certain contracts must be in writing to be enforceable. Real estate contracts that convey an interest in real property fall in this category, with the exception that a lease of one year's duration or less may be oral.

101. 7.8 What is one important difference between a sublease and a lease assignment?

In an assignment, responsibility for the original lease is transferred completely to the assignee.

In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.

A sublease does not convey any of the leasehold interest.

A sublease conveys the entire leasehold interest.

102. 7.9 Which of the following lease types conveys rights other than the rights to exclusive use and occupancy of the entire property?

A rights lease.

A percentage lease.

A gross lease.

A net lease.

The practice of leasing property rights other than the rights to exclusive occupancy and possession occurs most commonly in the leasing of water rights, air rights, and mineral rights.

Explanation

The practice of leasing property rights other than the rights to exclusive occupancy and possession occurs most commonly in the leasing of water rights, air rights, and mineral rights.

103. 7.10 An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a

Proprietary lease.

Percentage lease.

Gross lease.

Net lease.

A net lease requires a tenant to pay for utilities, internal repairs, and a proportionate share of taxes, insurance, and operating expenses in addition to rent.

Explanation

A net lease requires a tenant to pay for utilities, internal repairs, and a proportionate share of taxes, insurance, and operating expenses in addition to rent.

104. 7.11 The percentage lease is most often used by

Industrial landlords.

Retail landlords.

Residential landlords.

Office landlords.

105. 7.12 Which of the following summarizes the general terms of a ground lease?

The landlord sells the ground to another, then leases it back.

A tenant buys the landlord's ground, then leases the improvements.

The landlord leases the ground floor of the building to a commercial tenant.

The tenant leases the ground from the landlord and owns the improvements.

106. 7.13 Among the usual remedies available to the injured party if tenant or landlord defaults on the terms of a lease is the right to

Sue to compel performance of the contract.

Enter a lien against the other's estate.

Lock the other party out of the premises.

Apply the security deposit to legal expenses.

107. 7.14 A lease automatically terminates under which of the following circumstances?

The tenant fails to pay rent.

The leased property is foreclosed.

The tenant goes out of business.

The landlord cancels the lease.

Foreclosure. A foreclosure extinguishes all prior interests in a property, including a leasehold.

Explanation

Foreclosure. A foreclosure extinguishes all prior interests in a property, including a leasehold.

108. 7.15 One of the aims of the Uniform Residential Landlord and Tenant Act is to

Create a standard residential lease for use nationwide.

Force states to enact tenants' rights laws.

Establish uniform rental rates for each type of property.

Discourage the use of unfair and overly complex leases.

109. 7.16 A primary theme of the Uniform Residential Landlord and Tenant Act is that both landlord and tenant

Waive their rights to sue for daamges.

Bargain with each other in good faith.

Give sixty days' notice of intent to terminate the lease.

Observe the Realtor's Code of Ethics.

110. 8.1 A central goal of public land use planning is to

Balance individual property rights with the community's welfare.

Develop an accord between property owners and tenants.

Impede development by for-profit developers and construction contractors.

Subordinate private interest to the public good.

111. 8.2 The best definition of a master plan is

An annual review of all land use permits and zones.

A comprehensive analysis of existing land use patterns in a market.

A state or regional land use law requiring compliance on a county-by-county basis.

A fusion of land use laws and local land use objectives and strategies.

112. 8.3 The principal mechanism for implementing a master plan is

Zoning.

Referendum.

Public elections.

Property management.

113. 8.4 Zoning, building codes, and environmental restrictions are forms of local land use control known as

Force majeure.

Pre-emption.

Police power.

Concurrency.

At the state level, the legislature enacts laws that control and restrict land use, particularly from the environmental perspective. At the local level, county and city governments control land use through the authority known as police power. The most common expressions of police power are county and municipal zoning.

Explanation

At the state level, the legislature enacts laws that control and restrict land use, particularly from the environmental perspective. At the local level, county and city governments control land use through the authority known as police power. The most common expressions of police power are county and municipal zoning.

114. 8.5 If a municipality exerts its power of eminent domain against a certain property owner, what happens?

The owner must pay higher property taxes or give up the property.

The owner must cede an easement without receiving any compensation.

The municipality annexes the property.

The owner must sell the property or grant an easement to the municipality for just compensation.

115. 8.6 In most jurisdictions, the master plan is managed by

The mayor or county superintendent.

The Board of Equalization.

The planning commission.

The zoning board of adjustment.

116. 8.7 Counties and municipalities have the legal right to control land use due to

The doctrine of appropriation.

Delegation of authority by state-level enabling acts.

Custom and tradition.

Consensus of the local community through referendum.

117. 8.8 To be valid, a local zoning ordinance must

Reasonably promote community health, safety and welfare.

Comply with federal zoning laws.

Apply only to unique properties.

Be published periodically in the local newspaper.

Ordinance validity. Local planners do not have unlimited authority to do whatever they want. Their zoning ordinances must be clear in import, apply to all parties equally, and promote health, safety, and welfare of the community in a reasonable manner.

Explanation

Ordinance validity. Local planners do not have unlimited authority to do whatever they want. Their zoning ordinances must be clear in import, apply to all parties equally, and promote health, safety, and welfare of the community in a reasonable manner.

118. 8.9 What is the fundamental purpose of a building permit?

To restrict the number of new development projects

To establish the basis for an inspection

To promote certificates of occupancy

To ensure that improvements comply with codes

119. 8.10 A primary objective of residential zoning is to

Control the value ranges of homes in a neighborhood.

Regulate density.

Ensure that only a limited amount of commercial and industrial activity is permitted in a particular residential zone.

Maximize intensity of usage.

120. 8.11 A non-profit organization wants to erect a much- needed daycare center in a residential zone. Given other favorable circumstances, the local authorities grant permission by allowing

A special exception.

An illegal nonconforming use.

A variance.

A license.

121. 8.12 A property that conformed with zoning ordinances when it was developed but does not conform to new ordinances is said to be

A special exception.

A variance.

A legal nonconforming use.

An anomaly.

Nonconforming use. A nonconforming use is one that clearly differs from current zoning. Usually, nonconforming uses result when a zoning change leaves existing properties in violation of the new ordinance. This type of nonconforming use is a legal nonconforming use.

Explanation

Nonconforming use. A nonconforming use is one that clearly differs from current zoning. Usually, nonconforming uses result when a zoning change leaves existing properties in violation of the new ordinance. This type of nonconforming use is a legal nonconforming use.

122. 8.13 One situation in which a zoning board might permit a variance is when

It would cause the property owner unreasonable hardship to bring the property into compliance with zoning ordinances.

The property owner is the one who brings the variance to the attention of the zoning board.

The variance was caused by a contractor rather than by the property owner.

The property is in conflict with no more than one zoning ordinance.

123. 8.14 The approval process for development of multiple properties in an area includes submission of

A covenant of restriction.

A plat of subdivision.

A court order.

A developer's pro forma.

124. 8.15 A county or municipal authority usually grants a certificate of occupancy for new construction only after

All contractors have been paid for services.

All work has been completed for at least thirty days.

The construction complies with building codes.

The tax assessor has valued the improvement.

125. 8.16 In addition to government entities, organizations that may be able to condemn property under the power of eminent domain include

Public utilities.

Financial institutions.

Major employers.

Neighborhood associations.

126. 8.17 A property owner is precluded by deed restriction from developing a thirty foot boat dock. The limitation prompts the owner to sell to another party. The new owner

Is free to build the dock since the next door neighbor built a similar dock two weeks later.

Takes title subject to the same restriction.

Can build the dock with special permission from the zoning board.

May build, since the restriction is extinguished by the sale.

127. 8.18 A declaration of restriction in a planned unit development is unlike a deed restriction in that

It applies only to aesthetic standards of property use.

It attaches to rights rather than interests.

It cannot be terminated by a single individual.

It takes effect only when approved by a homeowners' association.

The declaration of a subdivision, Planned Unit Development, condominium, and commercial or industrial park contains private use restrictions. These have the same legal effect as a deed restriction, as the declaration attaches to the rights in the property. A private party can not, however, extinguish a declaration restriction by agreement or quitclaim deed.

Explanation

The declaration of a subdivision, Planned Unit Development, condominium, and commercial or industrial park contains private use restrictions. These have the same legal effect as a deed restriction, as the declaration attaches to the rights in the property. A private party can not, however, extinguish a declaration restriction by agreement or quitclaim deed.

128. 8.19 A deed restriction or declaration of restriction may be enforced by means of a

Sheriff's warrant

Zoning commission order.

Foreclosure auction.

Court injunction.

129. 8.20 A distinguishing feature of a deed condition is that

It gives the grantor the right to re-possess the property if the grantee violates the condition.

It ceases to apply if a violation is allowed to continue for a certain period of time.

It can be filed at any time after title has been transferred.

It restricts who may own the property.

130. 9.1 What is the principal purpose underlying legal descriptions of real property?

To create a consistent, unchanging standard for locating the property.

To eliminate all possible boundary disputes.

To comply with federal laws.

To eliminate cumbersome metes and bounds descriptions.

131. 9.2 Which of the following is a distinctive feature of metes and bounds descriptions?

They use meridians and base lines.

They identify an enclosed area, beginning and ending at the same point.

They use lot and block numbers.

They incorporate elevation into the descriptions.

132. 9.3 A certain legal description contains the phrase,"...southeasterly along Happ Road to the stone landmark..." What kind of description is this?

Plat survey.

Government grid.

Metes and bounds

Rectangular survey

133. 9.4 The abbreviation POB stands for

Perimeters of boundaries.

Point of beginning.

Point of bounds.

Plat of boundary.

134. 9.5 What are the approximate dimensions of a township in the rectangular survey system?

Thirty-six miles on a side.

Twenty-five square miles.

Depends on the state.

Six miles by six miles.

135. 9.6 The area running north and south between meridians is a

Range

Township.

Strip.

Tier.

136. 9.7 The area running east and west between base lines is a

Range.

Tier.

Parameter.

Parallel.

The north-south area between consecutive meridians is called a range. All ranges are 6 miles wide.

Explanation

The north-south area between consecutive meridians is called a range. All ranges are 6 miles wide.

137. 9.8 How many sections are there in a township?

One

Six

Twelve

Thirty-six

138. 9.9 A section contains how many acres?

640

320

160

40

139. 9.10 How many acres are there in the S 1/2 of the NW 1/4 of Section 3?

20 acres

40 acres

80 acres

160 acres

140. 9.11 If a parcel does not have a lot and block number and is too irregular to be described as a fraction of a section, the legal description

Is the street address.

Will include a metes and bounds description.

Will use an estimate of the sectional fraction.

Will create a special reference number.

141. 9.12 The legal description of a parcel in a subdivision that has been recorded with lot and block numbers on a plat of survey is

The lot and block number, with section, township and meridian references.

The standard rectangular survey description.

The subdivision plat map.

The lot and block number.

the subdivision plat map is recorded in the county where the subdivision is located. The recorded lot and block numbers of a subdivision parcel, along with its section, township and meridian reference, become the property's legal description.

Explanation

the subdivision plat map is recorded in the county where the subdivision is located. The recorded lot and block numbers of a subdivision parcel, along with its section, township and meridian reference, become the property's legal description.

142. 9.13 A datum is a reference point used for legal descriptions of

Agricultural and ranch properties.

Properties that straddle state boundaries.

Properties located above or below the earth's surface.

Irregularly-shaped properties.

To describe property located above or below the earth's surface, such as the air rights of a condominium, a surveyor must know the property's elevation. Standard elevation reference points, called datums, have been established

throughout the country. The original datum was defined by the U.S. Geological Survey as mean sea level at New York harbor.

Explanation

To describe property located above or below the earth's surface, such as the air rights of a condominium, a surveyor must know the property's elevation. Standard elevation reference points, called datums, have been established

throughout the country. The original datum was defined by the U.S. Geological Survey as mean sea level at New York harbor.

143. 10.1 An important legal feature of a contract is

It represents a "meeting of the minds."

It must use precise wording in a document.

It is not voidable.

It can be created only by an attorney.

144. 10.2 According to contract law, every valid contract is also

Void.

Enforceable,

Enforceable or unenforceable,

Voidable.

Valid but unenforceable. State laws declare that some contracts are enforceable only if they are in writing. These laws apply in particular to the transfer of interests in real estate. Thus, while an oral contract may meet the tests for validity, if it falls under the laws requiring a written contract, the parties will not have legal recourse to enforce performance.

Explanation

Valid but unenforceable. State laws declare that some contracts are enforceable only if they are in writing. These laws apply in particular to the transfer of interests in real estate. Thus, while an oral contract may meet the tests for validity, if it falls under the laws requiring a written contract, the parties will not have legal recourse to enforce performance.

145. 10.3 The guardian for a mentally incompetent party enters into an oral contract with another party to buy a trade fixture. This contract

Does not meet validity requirements.

Is possibly valid and enforceable.

Must be in writing to be valid.

Is valid but unenforceable.

146. 10.4 A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, the status of the offer is

An accepted offer, therefore a valid contract.

An invalid contract.

A counteroffer.

An invalid offer.

147. 10.5 As part of a construction contract between a contractor and a buyer, the contractor promises to complete construction by November 20. This promise can be construed as

Competency on behalf of the contractor.

Mutual consent.

Good faith.

Valuable consideration.

Valuable consideration can be something of tangible value, such as money or something a party promises to do or not do.

Explanation

Valuable consideration can be something of tangible value, such as money or something a party promises to do or not do.

148. 10.6 An unscrupulous investor completes a contract with a buyer to sell a property the investor does not own. The sale contract for this transaction

Is voidable.

Must be in writing.

Is void.

Is illegal yet potentially enforceable.

149. 10.7 A homeowner encourages an agent to aggressively persuade a buyer to purchase his house by overinflating historical appreciation rates. The agent and the seller agree that 25% annual appreciation would work, even though this figure is four times actual rates. The pitch succeeds, and the seller accepts the buyer's resulting offer. This contract is

Enforceable.

Voidable.

Void.

Valid.

150. 10.8 The statute of limitations requires that parties to a contract who have been damaged or who question the contract's provisions.

Must act within a statutory period.

Must select a specific, limited course of action for recouping their losses.

Must arbitrate prior to taking court action.

Must wait a statutory period before they may take legal action.

151. 10.9 The purpose of the statute of frauds is to

Invalidate certain oral contracts.

Require certain conveyance-related contracts to be in writing.

Nullify oral leases and listing agreements.

Eliminate fraud in real estate contracts.

Statute of frauds. The statute of frauds requires that certain contracts must be in writing to be enforceable. Real estate contracts that convey an interest in real property fall in this category, with the exception that a lease of one year's duration or less may be oral. All other contracts to buy, sell, exchange, or lease interests in real property must be in writing to be enforceable. In addition, listing agreements in most states must be in writing.

Explanation

Statute of frauds. The statute of frauds requires that certain contracts must be in writing to be enforceable. Real estate contracts that convey an interest in real property fall in this category, with the exception that a lease of one year's duration or less may be oral. All other contracts to buy, sell, exchange, or lease interests in real property must be in writing to be enforceable. In addition, listing agreements in most states must be in writing.

152. 10.10 A seller immediately accepts a buyer's offer but waits eight days before returning the accepted document to the buyer. Meanwhile, the offer has expired. Which of the following is true?

The buyer is bound to the contract since it was accepted immediately.

The buyer has no obligations to the seller whatsoever.

The buyer may not rescind the expired offer.

The seller may sue for specific performance.

153. 10.11 A buyer agrees to all terms of a seller's offer except price. The buyer lowers the price by $1,000, signs the form, and mails it back to the seller. At this point, the seller's offer

Is void.

Becomes an executory contract.

Becomes a counteroffer.

Has been accepted.

By changing any of the terms of an offer, the offeree creates a counteroffer, and the original offer is void.

Explanation

By changing any of the terms of an offer, the offeree creates a counteroffer, and the original offer is void.

154. 10.12 A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first seller, and withdraws the offer. Which of the following is true?

The buyer may not revoke the offer in such a short period of time.

The first seller may sue the buyer for specific performance.

If the seller accepted the offer, the buyer must perform.

The original offer is legally extinguished.

155. 10.13 Real estate contracts that are not personal service contracts

May be assigned.

Are not assignable.

Must be in writing.

Are exempt from the statute of frauds.

Sales contracts, however, are assignable, because they involve the purchase of real property rather than a personal service.

Explanation

Sales contracts, however, are assignable, because they involve the purchase of real property rather than a personal service.

156. 10.14 Which of the following contracts must be in writing to be enforceable?

A parol contract.

A six-month lease.

A two-year lease.

An executory contract.

157. 10.15 A good example of a unilateral contract is

An option to purchase.

A listing agreement.

A personal services agreement.

A sale contract.

In a unilateral contract, only one party promises to do something, provided the other party does something. The latter party is not obligated to perform any act, but the promising party must fulfill the promise if the other party chooses to perform.

Explanation

In a unilateral contract, only one party promises to do something, provided the other party does something. The latter party is not obligated to perform any act, but the promising party must fulfill the promise if the other party chooses to perform.

158. 10.16 A contract is discharged whenever

There is a cooling period.

Both parties have signed it.

It is performed.

The parties agree to their respective promises.

159. 10.17 A contract may be defensibly terminated without damages if

It is abandoned by one party.

It is impossible to perform.

It is deemed to be valid.

Both parties breach its terms.

Infeasibility. An otherwise valid contract can be canceled if it is not possible to perform.

Explanation

Infeasibility. An otherwise valid contract can be canceled if it is not possible to perform.

160. 10.18 A landlord suddenly terminates a tenant's lease in violation of the lease terms. The tenant takes action to compel the landlord to comply with the violated terms. This is an example of a suit for

Rescission.

Specific performance.

Damages.

Forfeiture.

161. 11.1 The essence of the agency relationship between an agent and a principal can best be described as a relationship of

Mutual consent, consideration, and acceptance.

Diligence, results, and compensation.

Service, dignity, and respect.

Trust, confidence, and good faith.

162. 11.2 In an agency relationship, the principal is required to

Promote the agent's best interests.

Accept the advice of the agent.

Provide sufficient information for the agent to complete the agent’s tasks.

Maintain confidentiality.

The principal must provide the agent with a sufficient amount of information to complete the desired activity. This may include property data, financial data, and the client's timing requirements.

Explanation

The principal must provide the agent with a sufficient amount of information to complete the desired activity. This may include property data, financial data, and the client's timing requirements.

163. 11.3 A principal empowers an agent to conduct the ongoing activities of one of her business enterprises. This is an example of

Limited agency.

General agency

Universal agency

Special agency

General agency. In a general agency, the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise. Such delegation may include the authority to enter into contracts.

Explanation

General agency. In a general agency, the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise. Such delegation may include the authority to enter into contracts.

164. 11.4 A property seller empowers an agent to market and sell a property on his behalf. This is an example of

General agency.

Special agency.

Universal agency.

No agency.

Special, or limited, agency. Under a special agency agreement, the principal delegates authority to conduct a specific activity, after which the agency relationship terminates. In most cases, the special agent may not bind the principal

to a contract.

Explanation

Special, or limited, agency. Under a special agency agreement, the principal delegates authority to conduct a specific activity, after which the agency relationship terminates. In most cases, the special agent may not bind the principal

to a contract.

165. 11.5 Implied agency arises when

An agent accepts an oral listing.

A principal accepts an oral listing.

A party creates an agency relationship outside of an express agreement.

A principal agrees to all terms of a written listing agreement, whether express or implied.

Special, or limited, agency. Under a special agency agreement, the principal

delegates authority to conduct a specific activity, after which the agency

to a contract.

Explanation

Special, or limited, agency. Under a special agency agreement, the principal

delegates authority to conduct a specific activity, after which the agency

to a contract.

166. 11.6 An agency relationship may be involuntarily terminated for which of the following reasons?

Death or incapacity of the agent.

Mutual consent.

Full performance.

Renewal of the agent's license.

167. 11.7 A principal discloses that she would sell a property for $150,000. During the listing period, the house is marketed for $180,000. No offers come in, and the listing expires. Two weeks later, the agent grumbles to a customer that the seller would have sold for less than the listed price. Which of the following is true?

The agent has violated the duty of confidentiality.

The agent has fulfilled all fiduciary duties, including confidentiality, since the listing had expired.

The agent is violating the duties owed this customer

The agent has created a dual agency situation with the customer.

168. 11.8 A principal instructs an agent to market a property only to families on the north side of town. The agent refuses to comply. In this case,

The agent has violated fiduciary duty.

The agent has not violated fiduciary duty.

The agent is liable for breaching the listing terms.

The agent should obey the instruction to salvage the listing.

169. 11.9 An owner's agent is showing a buyer an apartment building. The buyer notices water stains on the ceiling, and informs the agent. The agent's best course of action is to

Immediately contract to paint the ceiling.

Immediately contract to repair the roof.

Suggest the buyer make a lower-price offer.

Inform the seller.

170. 11.10 An agent owes customers several duties. These may be best described as

Fairness, care, and honesty.

Obedience, confidentiality, and accounting.

Diligence, care, and loyalty.

Honesty, diligence, and skill.

A licensee is required by law to provide the following basic duties to all parties:

honesty

fairness

reasonable care and skill

disclosures

Explanation

A licensee is required by law to provide the following basic duties to all parties:

honesty

fairness

reasonable care and skill

disclosures

171. 11.11 An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. In this case, the agent

May be guilty of intentional misrepresentation.

Has an exposure to a charge of negligent misrepresentation.

Has little exposure, since the problem was not mentioned on the signed disclosure form.

Is not vulnerable, since the problem was not discovered.

172. 11.12 An agent informs a buyer that a clause in a contract is standard language. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for

Violating duties owed a customer.

Misinterpreting the clause.

Intentional misrepresentation.

Practicing law without a license.

173. 11.13 An outside broker locates a seller for a buyer representative's client. In this instance, the outside broker is acting as

A single agent.

A dual agent.

A subagent.

A secret agent.

174. 11.14 Bob, who works for Broker Bill, obtains an owner listing to lease a building. Bill's other agent, Sue, locates a tenant for Bob's listing. In the absence of any arrangement to the contrary, Broker Bill in this instance is

An implied agent.

A dual agent.

A single agent.

A subagnet.

175. 11.15 An agent is operating as a disclosed dual agent on a transaction. In this case, the agent

May not represent one party's interests to the detriment of the other.

Must withdraw from the relationships.

Must be obedient and loyal to both parties.

Must require that the principals share equally in paying the commission.

176. 11.16 The duties of an agent acting as a facilitator are most similar to those of a

Subagent.

Single agent.

Dual agent.

Implied agent.

177. 11.17 The meaning and import of the agency relationship should be disclosed to the client

Prior to completing a listing agreement.

Prior to or upon completion of an offer.

Upon the initial contact with the person.

Whenever a dual agency relationship is indicated.

Depending on state regulations, an agent who intends to represent a seller or owner must disclose the import of the proposed agency relationship in writing before the listing agreement is executed.

Explanation

Depending on state regulations, an agent who intends to represent a seller or owner must disclose the import of the proposed agency relationship in writing before the listing agreement is executed.

178. 11.18 Owner agents must disclose their agency relationship to tenants or buyers

Immediately prior to the initial contact.

Upon initial contact.

Whenever substantive contact is made.

Immediately following any offer executed by the customer.

179. 11.19 A tenant representative should disclose his or her agency relationship to the owner's agent

Immediately prior to the initial contact.

Upon initial contact.

Immediately prior to substantive contract

Immediately following any offer executed by the landlord.

A buyer agent must disclose the agency relationship to the seller or seller's agent on first contact. Substantive contact is assumed.

Explanation

A buyer agent must disclose the agency relationship to the seller or seller's agent on first contact. Substantive contact is assumed.

180. 11.20 A transaction broker should disclose his or her agency relationship to the transaction principals

Upon first substantive contact.

Upon completion of the listing agreement.

Immediately following completion of any offer

Upon initial contact.

181. 12.1 To be valid, a listing agreement

Must be in writing.

May be oral or written.

Must be an express agreement.

Must be enforceable.

A valid listing may be oral or written. However, many states consider only a written listing to be enforceable, particularly an exclusive right-to-sell listing.

Explanation

A valid listing may be oral or written. However, many states consider only a written listing to be enforceable, particularly an exclusive right-to-sell listing.

182. 12.2 The type of listing that assures a broker of compensation for procuring a customer, regardless of the procuring party, is a(n)

Exclusive right-to sell agreement.

Exclusive agency agreement.

Open listing.

Net listing.

183. 12.3 An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of a(n)

Exclusive right-to sell agreement.

Exclusive agency agreement.

Open listing.

Net listing.

184. 12.4 A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n)

Exclusive right-to sell agreement.

Exclusive agency agreement.

Open listing.

Net listing.

185. 12.5 A property owner agrees to pay a broker a commission, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n)

Exclusive right-to sell agreement.

Exclusive agency agreement.

Open listing.

Net listing.

186. 12.6 The most significant difference between an owner representation agreement and a buyer representation agreement is

The client.

The commission amount.

Agency law applications.

Contract law applications.

187. 12.7 A multiple listing authorization gives a broker what authority?

To list the owner's property in a multiple listing service.

To sell several properties for the owner at once.

To sell or lease the property.

To delegate the listing responsibilities to other agents.

188. 12.8 A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who

Has seen the property and reviewed all documents.

Is ready, willing, and able to transact.

Has completed an acceptable sale or lease contract.

Will successfully complete the transaction at closing.

189. 12.9 One of the most important actions an owner's agent is authorized to perform under an exclusive listing agreement is

Showing the property.

Assisting the customer in evaluating the relative merits of other properties.

Authorizing price adjustments in a timely manner.

Executing the sale or lease agreement.

Specific responsibilities. A listing agreement authorizes a broker to undertake actions relevant to achieving the performance objective. Authorized activities usually include the following:

show or seek property

locate buyer, seller, tenant, or landlord

communicate the client's transaction terms

promote features and advantages of the terms to customers

assist in negotiating a meeting of the minds between parties

Explanation

Specific responsibilities. A listing agreement authorizes a broker to undertake actions relevant to achieving the performance objective. Authorized activities usually include the following:

show or seek property

locate buyer, seller, tenant, or landlord

communicate the client's transaction terms

promote features and advantages of the terms to customers

assist in negotiating a meeting of the minds between parties

190. 12.10 An agent's performance of due diligence concerning a listing can best be described as

Initiating the marketing plan on or before a deadline.

Expending an amount of effort that is commensurate with the nature and size of the transaction.

Ascertaining the facts about the client and the property at the onset of the listing period.

Helping customers satisfy their needs to the extent they are entitled.

191. 12.11 The amount of a real estate broker's commission is

Established among competing brokers.

Established through negotiation with clients.

Established by the board of realtors.

Established by state real estate license law.

192. 12.12 A client suddenly decides to revoke an exclusive right-to-sell listing midway through the listing term. The reason stated: the client did not like the agent. In this case,

The client is criminally liable for discrimination on the basis of the cause for cancellation.

The client may be liable for a commission and marketing expenses.

The agent can sue the client for specific performance, even if no customer had been located.

The agent has no recourse but to accept the revocation.

193. 12.13 A "protection period" clause in an exclusive listing provides that

The owner is protected from all liabilities arising from the agent's actions performed within the agent's scope of duties.

Agents are entitled to extend a listing agreement's term if a transaction is imminent.

An owner is not liable for a commission if a prospective customer delays in completing an acceptable offer.

194. 13.1 Which of the following represents the core activity of real estate brokerage?

Prospecting for and qualifying potential customers

Buying and selling properties for one's company

Procuring customers for clients and effecting transactions

Negotiating sale or lease terms for a client

195. 13.2 What is co-brokerage?

An owner agent and a buyer agent combine efforts to complete a sale.

Outside brokers acting as subagents assist a listing agent in procuring a customer.

An owner or buyer lists with several brokers to complete a transaction.

Agents from a single agency cooperate to generate listings for the broker.

A transaction involving a cooperating subagent is called co-brokerage. In a cobrokered transaction, the listing broker splits the commission with the "co-broker," typically on a 50-50 basis. A broker may cooperate with other brokers on either side of a transaction, either assisting a listing agent to locate a buyer or tenant, or assisting a buyer or tenant representative in locating a seller or landlord.

Explanation

A transaction involving a cooperating subagent is called co-brokerage. In a cobrokered transaction, the listing broker splits the commission with the "co-broker," typically on a 50-50 basis. A broker may cooperate with other brokers on either side of a transaction, either assisting a listing agent to locate a buyer or tenant, or assisting a buyer or tenant representative in locating a seller or landlord.

196. 13.3 Which of the following best summarizes the critical skills in real estate brokerage?

Communications, market knowledge, mathematics, and analysis

Selling skills, law, and qualification

Fiduciary duties

Listing, marketing, facilitating transactions, and managing information

197. 13.4 Which of the following is a valid distinction between a corporation and a proprietorship?

A corporation has perpetual existence; aproprietorship terminates upon the owner's death.

Proprietorships are liable for their actions, while corporations are not.

Proprietorships may broker real estate, while corporations may not.

Corporations are not subject to taxation, while proprietorships are.

198. 13.5 One similarity between a general partnership and a limited partnership is that

Both are subject to double-taxation.

Both may broker real estate if properly licensed.

The partners in both organizations take an active role in managing the business.

All partners bear full liability for debts to the extent of the debt.

General partners are wholly responsible for business operations, while limited partners are investors who participate only in business profits. The general partners typically receive compensation for their management responsibilities. Other defining features are: limited partners: a limited partner must make an investment, which subsequently comprises the extent of the partner's liability. Limited partners are taxed once, on profits distributed by the partnership.

general partners: bear sole liability for debts and obligations A limited partnership may broker real estate. However, limited partners may not broker real estate for the partnership. State laws may require the general partners to

have active or inactive broker's licenses. Limited partners need not be licensed for the partnership to broker real estate.

Explanation

General partners are wholly responsible for business operations, while limited partners are investors who participate only in business profits. The general partners typically receive compensation for their management responsibilities. Other defining features are: limited partners: a limited partner must make an investment, which subsequently comprises the extent of the partner's liability. Limited partners are taxed once, on profits distributed by the partnership.

general partners: bear sole liability for debts and obligations A limited partnership may broker real estate. However, limited partners may not broker real estate for the partnership. State laws may require the general partners to

have active or inactive broker's licenses. Limited partners need not be licensed for the partnership to broker real estate.

199. 13.6 Two real estate companies agree to conjoin their resources for the development and sale of an apartment complex, for which profits will be shared equally. This is an example of

A cooperative association.

A real estate investment trust.

A limited partnership.

A joint venture.

200. 13.7 Which of the following characterizes a real estate franchisee?

A local brokerage owned and operated by a national franchisor

A locally-owned brokerage affiliated with a national franchisor for purposes of enhanced image and resources

A national brokerage company which charges local brokers fees for membership

A national firm which contracts with local franchisors to promote the national identity

Principles of Real Estate Quiz | Test Your Real Estate Knowledge

1. Property management and real estate asset mangement are both real estate management professions. The primary distinction between the two is:

2.

What first name or nickname would you like us to use?

2. People in the real estate business who primarily focus on creating new properties are

3. The term "commercial property" generally refers to

4. Which of the following professionals involved in the real estate business are most concerned about procuring buyers and seller for clients?

5. 1.5 Which of the following ways of specializing is common in the real estate brokerage buisness?

6. 1.6 What is an advisory service provider?

7. 1.7 The level of government which is most active in regulating real estate licensees is the

8. 2.1 - What guarantees the right of the private ownership of real estate in the United States.

9. 2.2 Which of the following is the best definition of real estate?

10. 2.3 Which of the following is included in the legal concept of land?

11. 2.4 What are the three unique physical characteristics of land?

12. 2.5 The primary distinction between the legal concepts of land and real estate is that

13. 2.6 The primary distinction between the legal concept of real estate and real property is that

14. 2.7 Which of the following is included in the bundle of rights inherent in ownership?

15. 2.8 Which of the following is an example of intangible property?

16. 2.9 The right to use real property is limited by

17. 2.10 Surface rights, air rights and subsurface rights are

18. 2.11 Which of the following terms refers to the rights of a property that abuts a stream or river?

19. 2.12 What part of a non-navigable waterway does the owner of an abutting property own?

20. 2.13 What is the "Doctrine of Prior Appropriation?"

21. 2.14 Which of the following is considered real property?

22. 2.15 The overriding test of whether an item is a fixture or personal property is

23. 2.16 What is an emblement?

24. 2.17 An item can be converted from real to personal property and vice versa by means of which processes?

25. 2.18 The major sources of real estate law are legislation at federal, state and local level, and

26. 2.19 What is the primary thrust of federal involvement in real estate law?

27. 2.20 Which level of government controls zoning laws?

28. 2.21 A grocer temporarily installs special fruit and vegetable coolers in a leased grocery store in order to prevent spoilage. The coolers would be considered which of the following?

29. 2.22 Under the doctrine of littoral rights, an owner claims ownership of all of the land underlying a lake where there are three other abutting property owners. Which of the following is true?

30. 3.1 An interest in real estate is best defined as ownership of?

31. 3.2 Encumbrances and police powers are

32. 3.3 What distinguishes a freehold estate from a leasehold estate?

33. 3.4 The highest form of ownership interest one can acquire in real estate is the

34. 3.5 The distinguishing feature of a defeasible free simple estate is that

35. 3.6 Upon the death of the owner, a life estate passes to

36. 3.7 How is a conventional life estate created?

37. 3.8 What distinguishes a pur autre vie life estate from an ordinary life estate?

38. 3.9 Which of the following life estates is created by someone other than the owner?

39. 3.10 Which of the following is true of a homestead?

40. 3.11 Dower refers to

41. 3.12 Which of the following is an illustration of the legal concept of elective share?

42. 3.13 A one-year lease on a house has expired, but the tenant continues sending monthly rent checks to the owner, and the owner accepts them. What kind of leasehold estate exists?

43. 4.1 When a single individual or entity owns a fee or life estate in a real property, the type of ownership is

44. 4.2 Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is

45. 4.3 The "four unities" required to create a joint tenancy include which of the following conditions?

46. 4.4 Unlike tenants in common, joint tenants

47. 4.5 In a community property state, a basic distinction is made between

48. 4.6 Who are the essential parties involved in an estate in trust?

49. 4.7 The distinguishing features of a condominium estate are

50. 4.8 Who owns the property in a time-share estate?

51. 4.9 Which of the following is true of a cooperative?

52. 4.10 One difference between a cooperative estate and a condominium estate is that

53. 4.11 A unique feature of a land trust is that

54. 5.1 Easements and encroachments are types of

55. 5.2 An affirmative easement gives the benefited party

56. 5.3 There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the following in relation to property B?

57. 5.4 Which of the following describes a situation in which an easement might be created against the wishes of the property owner?

58. 5.5 What is the primary danger of allowing an encroachment?

59. 5.6 A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of

60. 5.7 What distinguishes a lien from other types of encumbrance?

62. 5.9 The lien priority of junior liens can be changed by a lienor's agreement to

63. 5.10 Among junior liens, the order of priority is generally established according to

64. 5.11 What is meant by a "lien-theory" state?

65. 5.12 A homeowner has hired a contractor to build a room addition. The work has been completed and the contractor has been paid for all work and materials but fails to pay the lumber yard for a load of lumber. What potential problem may the home owner experience?

66. 5.13 The process of enforcing a lien by forcing sale of the lienee's property is called

67. 5.14 An important difference between a judicial foreclosure and a non-judicial foreclosure is

68. 5.15 A defaulting borrower may avoid foreclosure by giving the mortgagee

69. 5.16 A property survey reveals that a new driveway extends one foot onto a neighbor's property. This is an example of

70. 5.17 A property owner has an easement appurtenant on her property. When the property is sold to another party, the easement

71. 5.18 A brick fence straddles the property line of two neighbors. The neighbors agree not to damage it in any way. This is an example of

72. 5.19 A property owner allows Betty Luanne to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Betty given, and what happens to it in the future?

73. 5.20 A court renders a judgment which authorizes a lien to be placed against the defendant's house, car, and personal belongings. This is an example of a

74. 6.1 Which of the following best describes the concept of "legal title" to real estate?"

75. 6.2 A person claims ownership of a parcel of real estate to a prospective buyer, stating that she has lived on the property for five years and nobody has ever bothered her. The claimant also shows the buyer a copy of the deed. The legal basis of this claim is referred to as

76. 6.3 Constructive notice of ownership of a parcel of real estate is primarily demonstrated through

77. 6.4 An owner transfers title to a property to a buyer in exchange for a consideration. This is an example of

78. 6.5 For a deed to convey title, it is necessary for the deed to be