Practice Exam 2 Missed Questions Flashcards
(31 cards)
Which of the following would not terminate an easement?
(a) Merger
(b) Acquiring the adjacent property
(c) Prescription
(d) Abandonment
(c) Prescription
Prescription is a way to create an easement by constant use of property without permission for the required number of years
Which of the following would not be an example of police power?
(a) Zoning
(b) Building codes
(c) Deed restrictions
(d) Regulation of coastal properties, floodplains, and wetlands
(c) Deed restrictions
Deed restrictions are private controls of land use rather than government controls.
Police power gives the government the right to regulate and control land use through zoning and building codes, and to regulate special land areas like coastal property, floodplains, and wetlands.
John owns a bar and restaurant on the corner of Broad St. The neighborhood is rezoned to category R-1(Residential Single-Family only). What does John have to do to keep his business at that location?
(a) Apply for a non-conforming use permit
(b) Nothing
(c) Apply for a variance
(d) John cannot keep his business at that location
(b) Nothing
John does not have to do anything because he developed his property legally and is automatically grandfathered as a non-conforming use.
Non-comforming use is PERMANENT.
A property is surrounded by a wooden fence. The owner removes the fence and now has a pile of lumber in the yard. This action is best described as:
(a) annexation
(b) severance
(c) destruction of an improvement
(d) sufferance
(b) severance
The action that converts real property into personal property is severance
A court order directing the county sheriff to seize and sell property of a debtor to satisfy a lien is:
(a) An injunction
(b) A writ of execution
(c) A lis pendens
(d) A judgment
(b) A writ of execution
A writ of execution is used to enforce payment of a lien
What is the main disadvantage to a lender who chooses to accept deed in lieu of foreclosure?
(a) It takes longer than foreclosure
(b) The lender must accept responsibility for subordinate liens on the property
(c) It is more expensive for the lender than foreclosure
(d) It is more complicated than foreclosure which results in loss of time and money for the lender
(b) The lender must accept responsibility for subordinate liens on the property
A deed in lieu of foreclosure is less expensive, quicker, and less complicated than foreclosure.
A three-year lease on office space would be terminated by:
(a) Death of the landlord
(b) Death of the tenant
(c) Mutual rescission
(d) Sale of the property
(c) Mutual rescission
Mutual rescission is an agreement by the parties to terminate either a contract or a lease.
A lease is NOT terminated by death or sale of the property!
A license holder has been asked to prepare a CMA on a single-family home for a prospective client. Which of the following facts will be most important to the license holder when choosing comparable?
(a) The assessed value of the comparable property
(b) The total value of all liens on the comparable property
(c) The depreciated value of the comparable property
(d) The date of sale of the comparable property
(d) The date of sale of the comparable property
The date of the sale of the comparable will be significant because the best comparable will have sold in the past 6 months or less.
The assessed value would be dramatically different then the market value.
A property is listed for $399,500. in a hot seller’s market. The contract sale price $415,000. The appraiser values the property at $405,000. What is the market value of this property?
(a) $399,500 – the list price
(b) $405,000 – the appraised value
(c) $415,000 – the contract price
(d) $406,500 – an average of the list price, appraised value, and contract price
(b) $405,000 – the appraised value
The lender will not rely on the contract price, but rather the appraised value of the property.
APPRAISED VALUE is ALWAYS the BEST estimate of the market value.
The sales price and listing price do not always match the actual market value.
An appraisal tool with a yearly component in the calculation is:
(a) the cost approach
(b) the GRM
(c) the GIM
(d) the income approach
(c) the GIM
THE GIM = average neighborhood price divided by average annual or yearly rent
THE GRM uses monthly rent
Income approach and cost approach are not appraisal tools; they are approaches to appraisal. Key word tools.
An agent has been contacted to list a unique property. Which of the following would be most likely to help the agent to value this property?
(a) A cost approach appraisal
(b) A CMA
(c) A BPO
(d) A GIM
(a) A cost approach appraisal
The cost approach appraisal values unique properties like churches and bowling alleys
A broker has entered into an agency relationship by securing a listing on a seller’s property. The broker must:
(a) Arrange financing for qualified buyers
(b) Manage the listed property
(c) Account for any funds received in connection with the property
(d) Accept any offer for at least list price
(c) Account for any funds received in connection with the property
An agent must always account for any funds received in connection with the property of his clients.
A listing agent is not a property manager, or a loan officer and he does not have the authority to accept offers.
All offers must be presented to the seller for the seller to decide.
Two brothers have inherited the family farm. The brothers are 19 and 16 years old. The 19-year-old does not want the property and deeds his share to the 16-year-old. The 16-year-old sells the property. At this point the sales contract is:
(a) void
(b) voidable due to incapacity
(c) terminated
(d) unenforceable
(b) voidable due to incapacity
In the eyes of the law the minor is at a disadvantage and lacks legal capacity, therefore the contract is voidable at the option of the minor.
A listing agreement is:
(a) a bilateral contract
(b) terminated by the death of the listing agent
(c) an employment contract
(d) a general agency agreement
(c) an employment contract
The listing agreement employs the broker to try to find a buyer for the seller. If the broker sells the property, then the seller will pay a commission.
This is a unilateral contract.
It is terminated by the death of the broker, or the seller, not the death of the salesperson.
A listing agreement creates a special agency NOT a general agency.
A sales license holder has negotiated a listing agreement with a seller. This agreement establishes an agency relationship between:
(a) the broker and the seller
(b) the seller and any prospective buyers
(c) the seller and the actual buyer
(d) the seller and the sales license holder
(a) the broker and the seller
Agency is broker to client
A builder and a buyer have negotiated a contract for a new home. The builder has added a clause into the contract stating that he will pay the buyer $250 for every day that he is late in delivering the completed project. The $250 per day is an example of:
(a) liquidated damages
(b) specific performance
(c) compensatory damages
(d) punitive damages
(a) liquidated damages
Damages written into a contract are liquidated damages
What type of contract falls into the “If…….Then…….” format?
(a) Implied
(b) Express
(c) Unilateral
(d) Bilateral
(c) Unilateral
Which of the following is NOT a requirement of a valid contract?
(a) Legal purpose
(b) In writing
(c) Offer and acceptance
(d) Competent parties
(b) In writing
A contract does not have to be in writing to be valid.
It must be in writing to be enforceable.
A valid contract must have:
Competent parties
An Offer and Acceptance
Legal Purpose
Consideration
A buyer has had inspections on property and is not pleased with some of the information. He has terminated his contract to buy. His right to do so suggests that his contract had:
(a) a due diligence clause
(b) a substitution clause
(c) a default clause
(d) an alienation clause
(a) a due diligence clause
A due diligence clause allows a buyer to have inspections done and to terminate within a set period based on those inspections.
Since the buyer has the right to terminate, there is no default or breach of the agreement.
An alienation or due on sale clause is found in a mortgage.
Which of the following is NOT a penalty for violation of the Federal Fair Housing Act?
(a) Fines
(b) Up to one year in jail
(c) Injunctions
(d) Assessment of attorney fees
(b) Up to one year in jail
Violation of Fair Housing Laws is a CIVIL offense.
Criminal penalties (jail) are NOT used.
Fines, injunctions, and assessment of attorney fees are all possible penalties.
A physically handicapped tenant has modified an apartment to meet his needs at his own expense. His lease is about to expire and he plans to move. The landlord wants the apartment restored to its original condition. What is true?
(a) The tenant has no responsibility to restore the apartment
(b) The tenant must restore the apartment at the landlord’s expense
(c) The tenant must restore the apartment at his own expense
(d) The tenant must restore it if structural changes he made might impair the rights of future tenants
(c) The tenant must restore the apartment at his own expense
A handicapped tenant who has modified an apartment to meet his needs must restore the apartment if the landlord requires that, at the tenant’s own expense.
A broker has placed his own funds with client funds in his trust account. He has then used those funds to pay his office rent. The broker is guilty of:
(a) commingling
(b) conversion
(c) subversion
(d) misrepresentation
(b) conversion
Spending commingled funds is conversion.
Mixing broker funds with client funds is commingling.
A buyer’s inspection report on a property shows the presence of asbestos on the property. Which of the following statements about asbestos is FALSE?
(a) The asbestos abatement plan outlines the control of asbestos on a property
(b) The owner of the property must remove the asbestos
(c) Methods of abatement include encapsulation
(d) The dust from the removal of asbestos is extremely hazardous
(b) The owner of the property must remove the asbestos
The owner does not have to remove or remediate the presence of the asbestos.
A sales agent has negotiated a listing with a commission rate of 5.5% with 3% going to the selling broker and 2.5% going to the listing broker. The property sells for $365,000. The listing sales agent receives 60% of her broker’s commission. How much does the listing sales agent receive?
(a) $9,125
(b) $10,950
(c) $6,570
(d) $5,475
(d) $5,475
The listing broker will receive 2.5% of the sale price.
2.5% x $365,000 = $9125
The sales license holder receives 60% of the broker’s commission.
$9125 x 60% = $5475
