Basic Real Estate Concepts Quiz!

1. Real property includes the definition of real estate but adds to that definition the rights and interests that an owner has in the real estate.

True

False

Real property refers to land and any permanent structures attached to it, such as buildings. This definition also includes the rights and interests that an owner has in the real estate, such as the right to use, sell, or lease the property. Therefore, the statement that real property includes the definition of real estate but also encompasses the rights and interests of the owner is true.

Explanation

Real property refers to land and any permanent structures attached to it, such as buildings. This definition also includes the rights and interests that an owner has in the real estate, such as the right to use, sell, or lease the property. Therefore, the statement that real property includes the definition of real estate but also encompasses the rights and interests of the owner is true.

2. Fixtures are such an important part of a sales transaction that most agreements of sale have a special section on fixtures that have been carefully prepared to avoid any misrepresentation of what is included in the sale of real estate

True

False

The statement is true because fixtures are indeed an important part of a sales transaction. They are items that are permanently attached to the property and are typically included in the sale of real estate. To ensure transparency and avoid any misrepresentation, agreements of sale often include a specific section dedicated to fixtures, outlining what is included in the sale. This helps both the buyer and seller have a clear understanding of what is being sold and what is not.

Explanation

The statement is true because fixtures are indeed an important part of a sales transaction. They are items that are permanently attached to the property and are typically included in the sale of real estate. To ensure transparency and avoid any misrepresentation, agreements of sale often include a specific section dedicated to fixtures, outlining what is included in the sale. This helps both the buyer and seller have a clear understanding of what is being sold and what is not.

3. A trade fixture is a special fixture that is owned and installed by a business tenant into a rental unit as a part of a trade or business. An example would be a pizza oven needed for a pizza business in a rented store. Because it is considered to be essential to the operation of a business, it is clasified as personal property and is removable by the business tenant before the lease expires.

True

False

A trade fixture is a fixture that is owned and installed by a business tenant in a rental unit for the purpose of conducting their trade or business. It is considered essential to the operation of the business and is classified as personal property. As personal property, the trade fixture can be removed by the business tenant before the lease expires. Therefore, the statement "A trade fixture is removable by the business tenant before the lease expires" is true.

Explanation

A trade fixture is a fixture that is owned and installed by a business tenant in a rental unit for the purpose of conducting their trade or business. It is considered essential to the operation of the business and is classified as personal property. As personal property, the trade fixture can be removed by the business tenant before the lease expires. Therefore, the statement "A trade fixture is removable by the business tenant before the lease expires" is true.

4. There are only two (2) categories of property: (1) Real Property, and (2) Improved Property.

True

False

The two categories are: (1) Real Property and (2) Personal Property.

Explanation

The two categories are: (1) Real Property and (2) Personal Property.

5. Real estate is defined as land and whatever is permanently attached to land by either man or nature.

True

False

Real estate refers to land and any structures or improvements that are permanently attached to it, whether by human intervention or natural means. This includes buildings, fences, and other fixtures that cannot be easily moved or detached from the land. Therefore, the statement that real estate is defined as land and whatever is permanently attached to it is correct.

Explanation

Real estate refers to land and any structures or improvements that are permanently attached to it, whether by human intervention or natural means. This includes buildings, fences, and other fixtures that cannot be easily moved or detached from the land. Therefore, the statement that real estate is defined as land and whatever is permanently attached to it is correct.

6. All of these statements are characteristics of land: All parcels of land are different; land is essentially indestructible; and, land is fixed in its location.

True

False

Land is a unique asset, and all parcels of land have distinct characteristics that differentiate them from one another. Land is essentially indestructible, meaning that it cannot be destroyed or depleted like other resources. Additionally, land is fixed in its location, meaning that it cannot be moved or relocated. Therefore, all of these statements accurately describe the characteristics of land, making the answer true.

Explanation

Land is a unique asset, and all parcels of land have distinct characteristics that differentiate them from one another. Land is essentially indestructible, meaning that it cannot be destroyed or depleted like other resources. Additionally, land is fixed in its location, meaning that it cannot be moved or relocated. Therefore, all of these statements accurately describe the characteristics of land, making the answer true.

7. A tree remains real property even if it is cut into firewood.

True

False

A tree represents real property because it is attached to the land. If, however, the tree is cut down into firewood; it becomes detached through the process of severance.

Explanation

A tree represents real property because it is attached to the land. If, however, the tree is cut down into firewood; it becomes detached through the process of severance.

8. In real estate the definition of land includes ONLY what is on the surface of the earth and attached by nature such as trees.

True

False

Land includes what is on the surface of the earth and attached by nature such as trees, but it also constitutes everything that is below the surface to the center of the earth. That means all of the minerals, oils, water, or anything else contained in the earth.

Explanation

Land includes what is on the surface of the earth and attached by nature such as trees, but it also constitutes everything that is below the surface to the center of the earth. That means all of the minerals, oils, water, or anything else contained in the earth.

9. A fixture is an item of real property that has been changed into personal property as a result of permanent attachment to the personal property.

True

False

A fixture is an item of personal property that has been changed into real property as a result of permanent attachment to the real property.

Explanation

A fixture is an item of personal property that has been changed into real property as a result of permanent attachment to the real property.

10. If a fixture is missing from the listing agreement and is also missing from the agreement of sale, it would still be binding upon the parties, if there was an oral agreement as to a specific fixture.

True

False

The exclusion of a fixture must be in writing in the agreement of sale if it is to be binding upon both parties.

Explanation

The exclusion of a fixture must be in writing in the agreement of sale if it is to be binding upon both parties.