Midterm Exam 2

Question 1

Which of the following estates have a limitation(s) placed upon it?

a.
Indefeasible

b.
Fee simple qualified

c.
Fee simple abject

d.
Fee simple

Answer 1

b.
Fee simple qualified

Question 2

By failing to maintain the property that was left to their child after their parents death The property value declined sharply due to what?

a.
Waste

b.
Poor tenancy

c.
Tenant control

d.
Free condition subsequent

Answer 2

a.
Waste

Question 3

When the IRS is owed money and takes it from personal property, this is referred to as a

a.
Collection

b.
Levy

c.
Impound

d.
Repossession

Answer 3

b.
Levy

Question 4

The IRS has the power to lien both personal and real property. This is what type of encumbrance?

a.
General, specific, involuntary

b.
General but involuntary

c.
General, Involuntary, Statutory

d.
Specific but involuntary

Answer 4

c.
General, Involuntary, Statutory

Question 5

Unique to Arizona, what type of license is needed to sell timeshares?

a.
Public Report Owners License

b.
Timeshare Sales License

c.
Developers License

d.
Real Estate License

Answer 5

d.
Real Estate License

Question 6

Which party would be responsible for handling all monies in a real estate conveyance?

a.
Buyer’s broker

b.
Title agency

c.
Escrow agency

d.
Seller’s broker

Answer 6

c.
Escrow agency

Question 7

Sam’s Place leased a 2400 sq ft commercial space from Bogeys Piano Factory for a period of 5 years. What type of lease does Sam’s Place have?

a.
Estate for years

b.
Estate at will

c.
Periodic estate

d.
Estate at sufferance

Answer 7

a.
Estate for years

Question 8

An HOA can foreclose for failure to pay dues or assessments but the minimum owed must be at least how much?

a.
$900

b.
$1200

c.
$500

d.
$280

Answer 8

b.
$1200

Question 9

All of the following are required to have a real estate license in Arizona except

a.
Real estate auctioneer

b.
Out of state agents who do only 1 transaction in Arizona per year

c.
Timeshare sales

d.
Property manager who manages only 1 property for someone else

Answer 9

d.
Property manager who manages only 1 property for someone else

Question 10

What recourse does an HOA board have against homeowners who do not pay their assessments?

a.
Placing a lien on the property

b.
Placing an adverse possession notice on title

c.
Placing a judgment against a person’s personal property

d.
Placing a notice of intent to remand notice on title
Clear my choice

Answer 10

a.
Placing a lien on the property

Question 11

Which of the following is not a typical type of real estate brokerage office with regards to commissions and agents earnings?

a.
Where agents receive full-time salaries and benefits

b.
Commission sharing offices

c.
100% commission offices

d.
Mentor and agent sharing of commissions

Answer 11

a.
Where agents receive full-time salaries and benefits

Question 12

A buyer tours a timeshare presentation in Arizona while on vacation. The champagne was flowing and the sales staff made quite the impression and the buyer bought a timeshare. This contract is?

a.
Valid

b.
Rescindable by the Buyer for a period of 7 days

c.
None

d.
Enforceable since she was not a resident of Arizona

Answer 12

b.
Rescindable by the Buyer for a period of 7 days

Question 13

Earnest money is held in what type of account?

a.
Impound account

b.
Savings account

c.
Brokers Personal Account

d.
Escrow account

Answer 13

d.
Escrow account

Question 14

Rhonda took her required continuing education courses on time, but failed to notify the state on time by submitting her hours. What happens to her license now?

a.
Her broker will assume her files until she gets current

b.
Her license is terminated

c.
She enters into a grace period of 1 year

d.
She must retake the full 90 hours classroom and pass the exam again to be reinstated

Answer 14

c.
She enters into a grace period of 1 year

Question 15

In Arizona, what gives agents the power to draft and write contracts?

a.
Arizona Revised Summary Article

b.
Article XXVI of the Arizona Constitution

c.
Arizona Contract Law Act of 1976

d.
Authority passed on by the Designated Brokers

Answer 15

b.
Article XXVI of the Arizona Constitution

Question 16

The Public report is

a.
Provides a right to sell lots in a subdivision before final report is done

b.
All of the above

c.
Approved and accredited by the Commissioner

d.
Issued by the Arizona Department of Real Estate

Answer 16

b.
All of the above

Question 17

An unlicensed sales assistant while working at a brokerage cannot do which of the following?

a.
Collect all contracts, settlement statements, offers and drafts to organize and distribute paperwork to all parties

b.
Discuss pricing of specific homes listed with the brokerage, but are being sold on behalf of a small builder

c.
Answer phones from clients who are already under contract

d.
Set up open houses on behalf of the designated broker, invite other brokers and create the marketing materials

Answer 17

b.
Discuss pricing of specific homes listed with the brokerage, but are being sold on behalf of a small builder

Question 18

How would two individuals who are not married most likely take title to a property when they’re jointly buying a property?

a.
Tenants in law

b.
Joint ownership with rights of disposal

c.
Tenants in common

d.
Equal tenants

Answer 18

c.
Tenants in common

Question 19

Which of the following would be a possible reason as to why it is hard to finance a co-op property?

a.
The co-op is managed by a board who has control which make them hard to lease

b.
Co-Op’s are owned in severalty making it difficult to finance

c.
Co-Op’s are rare which make them difficult to finance

d.
There is not a deed but an owners lease which makes it difficult to finance

Answer 19

d.
There is not a deed but an owners lease which makes it difficult to finance

Question 20

To further protect against large losses, a lessor might want to obtain what type of insurance policy that would cover them once their primary insurance is exhausted or runs out?

a.
Umbrella Policy

b.
Jumbo Policy

c.
Gap Insurance Policy

d.
Lender Comprehensive Policy

Answer 20

a.
Umbrella Policy

Question 21

You can shorten the time of continuous use for adverse possession in Arizona from 10 years to 3 years by doing what:

a.
Filling a motion to quiet title

b.
Using the property full time

c.
Openly displaying continuous and actual use

d.
Paying the taxes

Answer 21

d.
Paying the taxes

Question 22

The ___________ would transfer full ownership rights back to the grantor from the grantee.

a.
Beneficiary Deed

b.
Intent to convey

c.
Deed Clause

d.
Reverter Clause

Answer 22

d.
Reverter Clause

Question 23

All of the following are required to satisfy adverse possession except

a.
Exclusive

b.
Inheritable

c.
Hostile

d.
Continuous

Answer 23

b.
Inheritable

Question 24

In order to be up to date on changing issues, all agents must take how many hours of continuing education

a.
12 hours per year

b.
24 hours per year

c.
24 hours every 2 years

d.
24 hours every 3 years

Answer 24

c.
24 hours every 2 years

Question 25

A salesperson must apply to the State of Arizona to activate their license within how many years of passing the State Examination?

a.
2

b.
No limit

c.
1

d.
10

Answer 25

c.
1

Question 26

The most common type of deed that is used in Arizona is

a.
Warranty Deed

b.
Trustee’s Deed

c.
Quit Claim Deed

d.
Special Deed

Answer 26

a.
Warranty Deed

Question 27

How long does a licensee have to file a written reply to the Department of Real Estate if a complaint has been filed?

a.
30 Days

b.
20 days

c.
5 Days

d.
10 Days

Answer 27

b.
20 days

Question 28

What would happen if someone were found to be operating as a real estate agent in the State of Arizona without being duly licensed?

a.
Civil penalties could be issued against the offender

b.
Their commission would be confiscated

c.
A temporary retro-active license could be granted with the permission of the Commissioner

d.
Parties could enact a suit for specific performance

Answer 28

a.
Civil penalties could be issued against the offender

Question 29

Members of The Advisory Board earn how much per year?

a.
$0

b.
$42,000

c.
$36,000

d.
$25,000

Answer 29

a.
$0

Question 30

A couple who was married for many years decide to build a new home in Arizona as their primary residence. 3 years after living in that home, the wife inherits another house from her parents who are recently deceased. This becomes community property in AZ

a.
Once the husbands files a joint tenancy deed with the county where the property is located

b.
Never as the husband has no legal claim to it

c.
Once they move into it together

d.
Automatically as it is community property

Answer 30

c.
Once they move into it together

Question 31

The Advisory Board consists of _____members who serve for ___years each.

a.
5, 6

b.
10, 6

c.
8, 4

d.
6, 5

Answer 31

b.
10, 6

Question 32

The IRS has the power to lien both personal and real property. This is what type of encumbrance?

a.
General, Involuntary, Statutory

b.
Specific but involuntary

c.
General but involuntary

d.
General, specific, involuntary

Answer 32

a.
General, Involuntary, Statutory

Question 33

One way to determine what type of lease somebody has would be to

a.
Identify the duration

b.
Review what was originally agreed upon

c.
Determine if the rent is at fair market value

d.
Ask the courts for interpretation

Answer 33

a.
Identify the duration

Question 34

How many days does a licensee have to notify the commissioner and the department of changes in their address

a.
30 Days

b.
It must be done immediately

c.
10 Days

d.
15 Days

Answer 34

c.
10 Days

Question 35

CC&R violations discovered by an escrow company would be?

a.
Control of Use

b.
Voluntary Cloud on Title

c.
General Lien

d.
Encumbrance

Answer 35

b.
Voluntary Cloud on Title

Question 36

Different lenders may require different Title Policy Endorsements. In addition, builders or even communities may need a title endorsement. Which of the following would best describe what endorsements would commonly do?

a.
Designed to protect the lender in case of fraudulent sale

b.
Provide an endorsement of the properties condition

c.
Ensure the seller will pay for any damages caused by fraud

d.
Be tailored to fit the specific needs of the seller or lender

Answer 36

d.
Be tailored to fit the specific needs of the seller or lender

Question 37

A possessor of property that is not legally theirs can add onto the time that some else was illegally using the property by doing what

a.
Tacking On

b.
Trailing behind

c.
Adverse Protection

d.
Adverse Property

Answer 37

a.
Tacking On

Question 38

Several unrelated business associates want to acquire a commercial building and lease out the property to a new tech start up company. These business partners agree that by forming an LLC together they could use that LLC to buy and take title to the building. Which method of holding title would this LLC be forced to take?

a.
Community property w/ rights of survivorship

b.
Severalty

c.
Tenants in common

d.
Joint tenants w/ rights of survivorship

Answer 38

b.
Severalty

Question 39

After entering into the grace period, all of the following apply except:

a.
That person cannot advertise themselves as being a licensed agent

b.
That person cannot earn any new commissions

c.
That person cannot act as a real estate agent

d.
That person cannot take continuing education courses

Answer 39

d.
That person cannot take continuing education courses

Question 40

A homeowner who resides on the banks of the Apache Wash Basin in North Phoenix suffers catastrophic damage to their home due to flooding from the 100 year floods in 2018. They would be covered if they had flood insurance which is backed by which government agency?

a.
Fannie Mae

b.
FEMA

c.
PMI

d.
HUD

Answer 40

b.
FEMA