RE Unit 2 Quiz

Question 1

Real property taxes are computed based on the property’s

a. subjective value.
b. market value.
c. assessed value.
d. income value.

Answer 1

c. Assessed value × tax rate = property tax.

Question 2

The process by which the government exercises its power to take private lands for public use is

a. condemnation.
b. escheat.
c. foreclosure.
d. eminent domain.

Answer 2

a. The process is condemnation; the power is eminent domain.

Question 3

All of the following are governmental powers

EXCEPT

a. deed restrictions.
b. taxation.
c. zoning.
d. escheat.

Answer 3

a. Deed restrictions are private restrictions on the use or sale of a property.

Question 4

Building codes, under police power, would determine all of the following EXCEPT

a. acceptable land uses.
b. types of plumbing and electrical materials allowed.
c. height and structure requirements.
d. methods of construction to be used.

Answer 4

a. Building codes determine types of plumbing and electrical materials allowed. The height and structure requirements and methods of construction to be used are also determined by building codes. Zoning codes determine acceptable land uses.

Question 5

The term “estate” refers to

a. the amount of property owned by an individual.
b. the rights held by someone who has a possessory interest in real estate.
c. a claim against or interest in land held by someone other than the owner of the property.
d. an exercise of police power.

Answer 5

b. An estate in land refers to the collection or bundle of rights held by someone who has a possessory interest in a piece of real estate.

Question 6

When an individual or entity holds a claim against another’s property, this is a(n)

a. chattel.
b. life tenancy.
c. encumbrance.
d. license.

Answer 6

c. An encumbrance is a right in or claim against property held by someone other than the property owner.

Question 7

A claim against real property to secure repayment of a debt is a(n)

a. deed restriction.
b. encroachment.
c. easement.
d. lien.

Answer 7

d. A lien secures payment of indebtedness.

Question 8

Which of the following would be used by a purchaser to reveal encroachments?

a. Standard title insurance
b. Abstract of title
c. Survey or Improvement Location Certificate (ILC)
d. Attorney’s title opinion

Answer 8

c. A survey would be used to point out zoning violations or encroachments.

Question 9

Which of the following liens has top priority?

a. Mechanic’s lien
b. First mortgage
c. Property taxes
d. Court judgment

Answer 9

c. Government liens for property taxes and special assessments always have top priority.

Question 10

The grantor of a life estate may retain

a. a leasehold estate.
b. a qualified fee estate.
c. rights of remainder.
d. reversionary interest.

Answer 10

d. If the grantor of a life estate retains reversionary rights, ownership in fee simple reverts to the grantor at the end of the life estate.

Question 11

If Ann grants a life estate to Ben and specifies that title will be transferred to Carl upon the death of Ben, all of the following are true

EXCEPT

a. Ben is the life tenant.
b. Carl has a reversionary interest.
c. Ben owns the property.
d. Carl is the remainderman.

Answer 11

b. A reversionary interest could only be held by Ann, the grantor.

Question 12

The holder of a fee estate

a. has rights of alienation.
b. can change deed restrictions.
c. may terminate a servient tenement.
d. must hold a reversionary interest.

Answer 12

a. A fee estate gives the owner the right to sell, will, or give the property away, which is known as alienation.

Question 13

A married couple has been granted the right to occupy and use a 10-acre tract of land forever.

Which of the following does the couple hold?

a. A fee simple estate
b. An estate for years
c. A life estate
d. A joint tenancy estate

Answer 13

a. The right to occupy and use land forever is a fee simple estate.

Question 14

In most life estates, the life tenant may do all of the following EXCEPT

a. will the property.
b. sell the property.
c. lease the property.
d. improve the property.

Answer 14

a. Most life estates terminate upon the death of the life tenant, and therefore cannot be willed. (One exception: a life estate pur autre vie, in which the life of someone other than the life tenant is used as the measuring life.)

Question 15

All of the following could be encumbrances on real estate EXCEPT

a. a lien.
b. an easement.
c. a restrictive covenant.
d. a fixture.

Answer 15

d. A fixture is real estate. Liens, easements, and restrictive covenants are encumbrances.

Question 16

An estate that lasts only so long as a specified condition is met is known as

a. a life estate.
b. a qualified fee.
c. a fee simple absolute.
d. a deed restriction.

Answer 16

b. A fee simple defeasible estate (also called qualified fee) lasts “so long as” a condition is met.

Question 17

The right of the government to establish zoning and land use laws is an exercise of which of the following?

a. Police power
b. Escheat
c. Government survey
d. Eminent domain

Answer 17

a. The police power is the government’s right to enact and enforce laws to protect the public health, safety, morals, and general welfare (including land use laws).

Question 18

The grantor of a qualified fee has set the requirement that the property “must be used only as a school”; this requirement is known as a

a. qualified condition.
b. remainder interest.
c. reversionary interest.
d. deed condition.

Answer 18

d. Deed conditions are used to create the requirements of qualified fee estates.

Question 19

A leasehold estate with a definite expiration date is a(n)

a. estate at will.
b. fee simple absolute.
c. estate at sufferance.
d. estate for years.

Answer 19

d. An estate for years has a specific termination date.

Question 20

When the state acquires private property through condemnation, upon payment of just compensation it has exercised which of the following governmental rights?

a. Escheat
b. Police power
c. Taxing power
d. Eminent domain

Answer 20

d. Condemnation is the process by which the government exercises its power of eminent domain.

Question 21

The difference between freehold and leasehold estates is

a. Freeholds are estates of possession and leaseholds are estates of ownership.
b. Freehold estates have an indefinite duration while leaseholds can terminate.
c. Freeholds do not need to be in writing while leaseholds do.
d. Freehold estates must be fee simple while leasehold estates can be a life estate.

Answer 21

b. Freehold estates are of indefinite duration. Leaseholds will terminate.

Question 22

A holder of a life estate has all of the following interests EXCEPT

a. title.
b. ownership.
c. possession.
d. remainder.

Answer 22

d. A life tenant owns the property, therefore, they have title and possession. The remainder estate belongs to the party who will obtain title upon death of the measuring life.

Question 23

An irrevocable right to use lands of another is called a(n)

a. escheat.
b. license.
c. encroachment.
d. easement.

Answer 23

d. Easements are non-revocable rights of use to another’s property.

Question 24

A holder of a freehold estate has rights of

a. escheat.
b. illegal use.
c. ownership.
d. domain.

Answer 24

c. Freehold estates are estates of ownership.

Question 25

Which is NOT an estate of ownership?

a. Estate for years
b. Life tenancy
c. Fee simple
d. Qualified fee

Answer 25

a. An estate for years is a right of possession, not ownership. Life tenancy, like all other freehold estates, is an estate of ownership.

Question 26

All of the following would be considered to have an interest in land EXCEPT

a. a farmer who is leasing 20 acres.
b. a holder of an easement.
c. a hunter who has been given permission to hunt in a field.
d. a lender holding a mortgage lien.

Answer 26

c. Granting permission to use one’s land creates a license, which is not an interest in land.

Question 27

Which of the following estates usually does NOT terminate on the death of the holder of the estate?

a. Life estate
b. Estate for years
c. Estate at will
d. Estate at sufferance

Answer 27

b. An estate for years is a contract and terminates on the date specified in the lease, not upon death of the lessor or lessee.