Property Ownership Flashcards
What is a commercial acre?
A) - An acre minus space for streets and parking.
B) - An acre minus space for warehouse structures.
C) - An acre minus space for all housing accommodations.
D) - An acre minus space for schools and emergency services.
A) - An acre minus space for streets and parking.
Answer: A—A commercial acre is that portion of an acre of newly subdivided land remaining after dedication for streets, sidewalks, parks and so on.
example costco - the building area is the commercial acre. not the parking involved in the lot.
Adams has an easement over Baker’s property. Adams leaves town for 21 years. When he returns, does he still have an easement over Baker’s land?
A) - No, because he was gone 20 years.
B) - Yes, he still has the easement right, since he was not gone over 30 years.
C) - Yes, Adams still has the easement.
D) - No, because Adams abandoned the easement.
C) - Yes, Adams still has the easement.
Answer: C—A granted easement does not “expire” through nonuse, only a prescriptive easement can be lost through nonuse.
granted easement- could be implied, utility easement, private easement and easement by necessity.
prescriptive easement - is an easement you want to stop from taken for granted. example kids use garden for passing to school. you have to make an agreement for use only for specific time or it could become implied easement.
Utility easements: As mentioned above, these easements give public utilities the right to access and maintain equipment on your property in order to provide service to the community as a whole. These arrangements might apply with electric, gas, water and cable/internet providers. The easements provide necessary access to town infrastructure.
Private easements: Private easements represent agreements between parties that the property owner will give the easement holder a right-of-way to suit a particular need. These can be sold or given by the owner of the property to the other party.
Implied Easements: Implied easements aren’t written contracts, but if two neighbors have been using the property a certain way that can be proven by habit over time, should a dispute ever arise, an implied easement can serve as legal theory for the party who isn’t the owner to have an easement.
Easements by necessity: An easement can be granted out of an absolute need if your property comes between your neighbor and access to a public road or other piece of necessary infrastructure. This can happen in landlocked situations, for example. This type of easement can be either written up or implied based on the fact that it’s necessary for the other party to fully use their property.
Prescriptive easements: These may cause some of the most controversy. A prescriptive easement occurs when someone openly and blatantly uses your land on a regular basis for a particular purpose. For example, if kids regularly walk or ride their bikes across your yard on the way to school, they may establish a right over time to use your property in this way if you don’t challenge it.
Land subject to an easement is said to be:
A) - appurtenant thereto.
B) - encumbered.
C) - encroached upon.
D) - restricted.
B) - encumbered.
Answer: B—Land subject to an easement is said to be burdened or encumbered.
Any property that has some or any type of easement. whether granted or prescriptive is said to be encumbered or burdened.
so if someone is asking is this land or property encumbered. he is asking - is there any easement/liens etc on this property. if yes then the property is encumbered or Burdened.
not all encumbrance are bad. some are good example zoning laws to prevent property owners from extending the height of the building or breaking the historic walls.. as that would make the neighbors property go down in value. example you cannot build a casino in a residential area.
The most important test of a fixture is:
A) - method of attachment.
B) - cost of installation.
C) - adaptability of the item.
D) - intention of the parties.
D) - intention of the parties.
Answer: D—The intention of the parties, particulary the intention of the person attaching it usually governs.
Generally speaking, the test for deciding whether an article is a fixture or a chattel turns on the purpose of attachment. If the purpose was to enhance the land, the article is likely a fixture; if the article was affixed to enhance the use of the chattel itself, the article is likely a chattel
Which of the following forms of ownership consists of an undivided interest with right of survivorship?
A) - Severalty
B) - Community property
C) - Joint tenancy
D) - Tenancy-in-common
C) - Joint tenancy
Answer: C—The right of of survivorship is the main characteristic of a joint tenancy holding.
Studding in a single-family dwelling is usually:
A) - 16” O.C.
B) - 8” O.C.
C) - 24” O.C.
D) - 6” O.C.
A) - 16” O.C.
Answer: A—The letters O.C. stand for “On Center.” Stud spacing is usually 16” O.C. This means that the distance between the center line of adjacent studs is 16” on center. (See construction terms)
The rights of a landowner whose property line touches on a lake or non-navigable river are called:
A) - sub-surface rights.
B) - high-low water rights.
C) - correlative user rights.
D) - riparian rights.
D) - riparian rights.( because non-navigable) moving water
Answer: D—Riparian rights are the rights of an abutting owner to his/her fair share of water flowing past the land.
if it was a lake that was navigable then it would be littorial rights.. littoral is standing water
An “S” corporation:
A) - is taxed as a partnership.
B) - avoids corporate taxation.
C) - passes tax liability through to shareholders.
D) - all of the above.
D) - all of the above.
Answer: D—With an “S” corporation, taxable income and net losses are passed through to the corporation’s shareholders. Double taxation at the corporate level is thus avoided.
Because of roofing regulations regarding load factor:
A) - manufacturers are making stronger plywood.
B) - builders are spacing roofing rafters closer together.
C) - manufacturers are making stronger joists.
D) - None of the above
B) - builders are spacing roofing rafters closer together.
Answer: B—Placing rafters closer together strengthens a roof.
Freehold estate includes:
A) - estates for years.
B) - leasehold estates.
C) - life estates.
D) - all of the above.
C) - life estates.
Answer: C—The distinctive characteristic of the freehold estate is that they endure for an interminable duration. Thus, freehold estates consist of:
(1) Estates in fee:
a. Absolute
b. Qualified-by condition or limitation
(2) Life Estates
The vertical structural support members are attached to the:
A) - mud sill.
B) - header.
C) - sole plate.
D) - None of the above
C) - sole plate.
Answer: C—The vertical structural support members (studs) are nailed to the horizontal plate (sole plate) which is attached to the subfloor.
A township contains how many acres?
A) - 640
B) - 23,040
C) - 36
D) - 6
B) - 23,040
Answer: B—36 sections x 640 acres each = 23,040 acres
The seizure of property prior to a judgment is known as:
A) - excessive force.
B) - an attachment.
C) - a seizure execution.
D) - serving the judgment.
B) - an attachment.
Answer: B—An attachment is the process by which real or personal property of a defendant in a lawsuit is seized and retained in the custody of the law for satisfaction of the judgment.
The four unities of joint tenancy are:
A) - Time, Title, Interest, and Possession
B) - Time, Interest, Possession, and Liability
C) - Title, Interest, Possession, and Ability
D) - Time, Possession, Liability, and Interest
A) - Time, Title, Interest, and Possession
Answer: A—The four unities to a joint tenancy are: Time, Title, Interest and Possession. “TTIP”
Terry owns a single family home which rents for $1,300 per month. A home across the street rents for $1,200 per month and was recently valued at $178,000. The value of Terry’s home would be most nearly:
A) - $190,000
B) - $192,850
C) - $195,000
D) - $197,850
B) - $192,850
Answer: B—$178,000 value of other home ÷ $1,200 monthly rent = 148.33 gross rent multiplier
$1,300 new rent x 148.33 gross rent multiplier = $192,833.33 value of Terry’s house
Closest answer is B
Mark enters into an agreement to lease to Steve for 10 years. Four years later, Mark dies. Steve then discovers that Mark’s interest was a life estate. Which of the following is correct?
A) - The ownership reverts to Steve.
B) - The ownership remains with Mark’s heirs.
C) - The lease is still valid for the full 10 years.
D) - The lease terminates with Mark’s death.
D) - The lease terminates with Mark’s death.
Answer: D—A life tenant (Mark) may not encumber his or her interest beyond the life of its owner or the life of some other designated person.
Smith and Jones own property as joint tenants. Jones, without Smith’s knowledge or consent, encumbers his interest by borrowing $10,000. Before making any payments on the loan, Jones dies. Smith now owns the property:
A) - totally, but subject to the $10,000 loan.
B) - with the mortgagee as joint tenants.
C) - in severalty and without liability for the mortgage.
D) - with the mortgagee as tenants in common.
C) - in severalty and without liability for the mortgage.
Answer: C—If one joint tenant dies, the surviving joint tenant becomes the sole owner of the property and is not liable to the creditors of the deceased who hold unforeclosed liens on the joint tenant’s interest in the property.
A rectangular lot 1,320’ x 2,640’ contains:
A) - 40 acres.
B) - 80 acres.
C) - 120 acres.
D) - 320 acres.
B) - 80 acres.
Answer: B—1,320’ x 2,640’ = 3,484,800 sq. ft.
3,484,800 ÷ 43,560 (1 acre) = 80 acres
A buyer signed a waiver relating to the delivery of the settlement disclosure statement required by the Real Estate Settlement Procedures Act (RESPA). As a result, a settlement statement must be delivered to him:
A) - at the close of escrow.
B) - as soon as practical after close of escrow.
C) - The settlement statement is not required.
D) - The borrower cannot waive his rights.
B) - as soon as practical after close of escrow.
Answer: B—Although a buyer may waive the right to a Real Estate Settlement Statement being delivered “on or before the close of escrow”, the agent must deliver such statement as soon as possible after the close of escrow. (See Real Estate Settlement Procedures Act)
The word “fee” as used in connection with real estate means:
A) - commission.
B) - advance commission.
C) - estate of inheritance.
D) - listing price.
C) - estate of inheritance.
Answer: C—Fee simple title is sometimes referred to as “the fee” or “fee.”
The parallel framing members under the flooring boards and in the ceiling are called:
A) - beams.
B) - ledges.
C) - joists.
D) - piers.
C) - joists.
Answer: C—A joist is a heavy piece of horizontal timber to which the boards of a floor or the lath of a ceiling are nailed. Joists are laid edgewise to form the floor support. (See construction terms)
A person who held a life estate leased the property for five years and then died. The new owners ordered the lessee to move out. The lease was:
A) - valid for the five years.
B) - valid until the man died.
C) - invalid from the beginning.
D) - invalid unless the deceased’s executor confirmed it.
B) - valid until the man died.
Answer: B—The holder of the life estate could only lease what he had which was the use of the property until he died.
Which of the following is considered personal property?
A) - land
B) - physical improvements
C) - growing trees
D) - trust deed
D) - trust deed
Answer: D—A mortgage or trust deed is personal property (lien).
One man transferred title to a house with a condition that no alcoholic beverages would be sold on the premises. The estate created is known as a(n):
A) - fee simple absolute.
B) - estate in forfeiture.
C) - fee simple defeasible.
D) - estate in reversion.
C) - fee simple defeasible.
Answer: C—A fee simple defeasible estate is created to exist only until the occurrence or non-occurrence of a particular event. This question describes a defeasible estate with a condition subsequent. If the condition is breached, the estate can revert to the grantor either automatically or by court action.
Of the following, which lists the events in their proper order?
A) - judgment, execution, attachment
B) - judgment, attachment, execution
C) - execution, judgment, attachment
D) - attachment, judgment, execution
D) - attachment, judgment, execution
Answer: D—The plaintiff gets an attachment lien before entry of the judgment, and thus is assured of the availability of the defendant’s property for eventual execution in satisifaction of the claim.
Truman deeded his farm to his sons, “A”, “B”, and “C” as joint tenants. “B” sold his interest to “W”. “A” died, but had previously willed his interest to “S” (his heir). “C” retained his inheritance. Ownership of the property would be:
A) - “C” and “W” as tenants in common, with “C” having 2/3 interest and “W” having 1/3 interest.
B) - “W” and “C” as joint tenants.
C) - Undecided until probate of “A’s” estate has been completed.
D) - “S”, “W”, and “C” as tenants in common, each having 1/3 interest.
A) - “C” and “W” as tenants in common, with “C” having 2/3 interest and “W” having 1/3 interest.
Answer: A—When “B” sold his interest to “W”, “W” became a tenant in common with BOTH “A” and “C”. Because “A” and “B” were joint tenants, “A” could NOT will his interest. It passed to “C” upon “A’s” death. This resulted in “C” and “W” becoming tenants in common.
Which of the following best describes an estate of inheritance?
A) - life estate
B) - lease
C) - fee simple
D) - all of the above
C) - fee simple
Answer: C—An estate of inheritance is a fee simple estate handed down by will.
The transfer (sale) of real property would not affect:
A) - CC&R’s
B) - easements by reservation.
C) - mechanic’s lien rights.
D) - all of the above.
D) - all of the above.
Answer: D—All of these transfer with the land.
“A” sells a farm to “B”. Crops are growing on the farm. “A” wants to harvest the crops. Who owns the crops?
A) - A
B) - B
C) - Both A and B
D) - Neither A nor B
A) - A
Answer: A—Emblements are regarded as personal property even before harvest; thus, a seller or tenant has the right to take the annual crop resulting from his/her labor, even if the harvest does not occur until after the sale or tenancy. Therefore, “A” has the right to re-enter the land to harvest any crops he/she had grown.
Which of the following is the largest parcel of land?
A) - 10% of a township
B) - 2 sections
C) - 4 square miles
D) - 5,280’ x 10,560’
C) - 4 square miles
Answer: C—Choice (A): 10% of a township = 3.6 sections or 3.6 square miles
Choice (B): 2 sections = 2 square miles or 55,756,800 sq. ft.
Choice (D): 5,280’ x 10,560’ also equals 55,756,800 sq. ft.
Choice (C): 4 square miles is the largest parcel of land.
If three different buyers take title to real property as joint tenants, there would be:
A) - one deed.
B) - three deeds.
C) - separate 1/3 ownerships.
D) - no right of survivorship.
A) - one deed.
Answer: A—With a joint tenancy ownership, only one title exists.
A lessee can remove:
A) - fixtures installed by the tenant for manufacture.
B) - fixtures installed by the tenant for domestic use.
C) - trade fixtures.
D) - all of the above.
D) - all of the above.
Answer: D—Most items affixed to the property by the tenant CAN be removed when the lease expires.
The liability of a limited partner for business debts is limited to:
A) - the same as the general partners.
B) - any amount agreed to in the partnership agreement.
C) - his/her contribution to the firm.
D) - the amount of the debts equally divided among all the partners.
C) - his/her contribution to the firm.
Answer: C—Limited partners are not responsible for the firm’s debts beyond their investment. At least one partner in such a firm must be a general partner with unlimited liability.
Which is the most common type of easement on residential property?
A) - in gross
B) - prescriptive
C) - adverse
D) - open-end
A) - in gross
Answer: A—Normally, the telephone company or electric company has an easement over the back of your property to string wires or place telephone poles. This right is called an easement in gross.
By law, all cities must have:
A) - a city council.
B) - a building department.
C) - a planning commission.
D) - an assessment appeals board.
C) - a planning commission.
Answer: C—Every city, by law, must have a planning commission. From this comes a general plan.
The distance between Section 6 and Section 31 is: (use the diagram on townships)
A) - 31 miles
B) - 3 miles
C) - 4 miles
D) - 5 miles
C) - 4 miles
Answer: C—Section 6 and Section 31 are separated by 4 miles.
A quarter section is:
A) - 1/2 mile by 1/2 mile
B) - 1/4 mile by 1/4 mile
C) - 1/2 mile by 1 mile
D) - 1/2 mile by 1/4 mile
A) - 1/2 mile by 1/2 mile
Answer: A—After referring to the Section diagram, you will see that a quarter section is 1/2 mile square.
The term “walk-up” refers to a(n):
A) - drive-in restaurant.
B) - agricultural subdivision.
C) - apartment house.
D) - subdivider’s elevation sheet.
C) - apartment house.
Answer: C—The term “walk-up” usually refers to three or more story apartment buildings with no elevation.
All of the following are factors considered when determining whether an item of personal property has become real property, EXCEPT:
A) - Agreement between the parties
B) - Method of attachment
C) - Cost of the article
D) - Relationship of the parties
C) - Cost of the article
Answer: C—Fixtures are items of personal property which have become attached to real property, thus becoming real property. The five tests of a fixture are: Method of attachment, Agreement of the parties, Relationship of the parties, Intention of the person attaching it, Adaptability of the item. Study aid: “MARIA”
Joint tenancy and tenancy in common both share the unity of:
A) - equal interests.
B) - survivorship.
C) - the right to pass title by will.
D) - equal rights of possession.
D) - equal rights of possession.
Answer: D—Both tenants in common and joint tenants hold an undivided interest in real property through the unity of possession.
If a client asks how they should take title, the broker should say:
A) - as tenants in common.
B) - as joint tenants.
C) - as community property.
D) - ask an attorney.
D) - ask an attorney.
Answer: D—The question of how to take title should be referred to an attorney.
Easements are:
A) - always an encumbrance.
B) - always appurtenant.
C) - liens.
D) - encroachments.
A) - always an encumbrance.
Answer: A—An easement is not a lien but would always be considered an encumbrance.
Community property laws are based on:
A) - English common law.
B) - ethical conduct statutes.
C) - Spanish law shaped by the Treaty of Guadalupe Hidalgo.
D) - none of the above.
A) - English common law.
Answer: A—In general, California’s laws relating to real estate originated from English common law.
Which of the following is NOT considered dry-wall construction?
A) - plywood
B) - sheetrock
C) - wallboard
D) - plaster
D) - plaster
Answer: D—Dry wall construction is any type of masonry work laid up without the use of mortar. It is the type of interior wall construction where finished material is used (other than plaster), such as wood paneling, plywood, plasterboard, or other types of wall board.
A completion bond would be for the protection of the:
A) - subdivider.
B) - contractor.
C) - purchaser.
D) - lender.
D) - lender.
Answer: D—Some lenders require an owner to provide a completion bond assuring the lender that the development will be completed whether or not the owner pays the contractor.
Brown leases a residence from Baker on a three-month written lease. Upon expiration of the written lease, Brown retains possession of the property without the consent of Baker. Brown now holds a(n):
A) - estate at sufferance.
B) - estate for years.
C) - estate at will.
D) - periodic tenancy subject to eviction.
A) - estate at sufferance.
Answer: A—An estate at sufferance is defined as one in which a lessee rightfully comes into possession of the land and retains possession after the expiration of the lease.
Which of the following is NOT appurtenant to real estate?
A) - growing trees
B) - buildings
C) - fences
D) - trade fixtures
D) - trade fixtures
Answer: D—Appurtenant means belonging to, adjunctive, appended or annexed to. For example, the garage is appurtenant to the house, and the common interest in the common elements of a condominium is appurtenant to each apartment. Appurtenant items run with the land when the property is transferred. Trade fixtures do not transfer with the property.
Which of the following is NOT considered an operating expense?
A) - repairs
B) - profit flow
C) - property taxes
D) - electric bill
B) - profit flow
Answer: B—Operating expenses are the costs of running and maintaining the property. Examples include:
accounting and legal services advertising insurance premiums maintenance management fees property taxes repairs reserves and replacement supplies utilities.
What is the unutilized space between the floor and ground of a structure called?
A) - air space
B) - belly space
C) - crawl space
D) - lee space
C) - crawl space
Answer: C—The minimum required crawl space is 18”. This is measured from the ground level to the bottom of the floor joists. (See construction terms)
A court order prohibiting an act from being done is a(n):
A) - injunction.
B) - judgment.
C) - attachment.
D) - estoppel.
A) - injunction.
Answer: A—An injunction is an order or decree of a court of equity prohibiting some act or compelling an act to be done.
Mark gives a life estate to Charlie. Mark’s interest is:
A) - personal property.
B) - reversionary.
C) - leasehold.
D) - remainder.
B) - reversionary.
Answer: B—Mark’s interest reverts back to him after the death of Charlie.
A lease would be a:
A) - freehold estate.
B) - fee simple absolute.
C) - chattel real.
D) - fee estate.
C) - chattel real.
Answer: C—A chattel is an item of personal property. The word chattel evolved from the word cattle, one of the early important possessions. Chattels real are annexed to real estate, whereas, chattels personal are moveable. A lease is an example of a chattel real.
Horizontal rows of townships are known as:
A) - ranges.
B) - tiers.
C) - layers.
D) - base lines.
B) - tiers.
Answer: B—Tier: A horizontal row of townships extending east and west.
Which of the following most accurately describes a joint tenancy estate?
A) - in severalty
B) - concurrent co-ownership
C) - by husband and wife
D) - community property
B) - concurrent co-ownership
Answer: B—A joint tenancy estate requires two or more people; and therefore, could not be in severalty.
Which of the following is false regarding a “fee estate”?
A) - It is freely transferable.
B) - It is of definite duration.
C) - It can be inherited.
D) - None of the above.
B) - It is of definite duration.
Answer: B—Fee estates are of indefinite duration.
The eave of your neighbor’s new house hangs six inches over your land. This describes a(n):
A) - encroachment.
B) - easement.
C) - private insurance.
D) - encumbrance.
A) - encroachment.
Answer: A—An encroachment is an unauthorized invasion or intrusion of an improvement or other real property onto another’s property.
Mortgage income value can be calculated quickest by using:
A) - rent value.
B) - fixed value.
C) - net value.
D) - adjustable value.
C) - net value.
Answer: C—Net value is another name for the effective yield to an investor. The effective yield is the true yield to the investor including the nominal rate (specified in the note) and any discount or premium paid at the time of purchase.
The building up of new soil adjacent to a river is called:
A) - avulsion.
B) - reliction.
C) - accretion.
D) - alluvion.
C) - accretion.
Answer: C—Accretion is the process by which fine material, such as sand or mud, is carried by water and deposited on land. Accretion is the process - alluvium is the material that builds up.
A property is owned by two persons in joint tenancy. Which of the following actions could destroy the joint tenancy?
A) - Foreclosure against one of the parties to the joint tenancy.
B) - One of the joint tenants places a deed of trust against his/her interest.
C) - One joint tenant wills his/her interest to another.
D) - Judgment and writ of execution are awarded.
A) - Foreclosure against one of the parties to the joint tenancy.
Answer: A—There are four unities to a joint tenancy.
Study aid: “TTIP”
TIME: That the co-owners became such at the same time.
TITLE: Created by a single will or transfer.
INTEREST: Equal shares.
POSSESSION: A right to use the whole and share in the profits and costs. Foreclosure breaks two of the unities: Time and Title.
The best possible estate to have is:
A) - life estate.
B) - estate for years.
C) - fee simple.
D) - reversionary.
C) - fee simple.
Answer: C—A fee simple estate is the maximum possible, least limited, and most complete ownership.
Deed restrictions based on race are:
A) - illegal.
B) - voidable.
C) - valid.
D) - void.
D) - void.
Answer: D—Deed restrictions based on race have no effect, whatsoever.
Under a lease, the leasehold interest lies in the:
A) - lessor.
B) - lessee.
C) - landlord.
D) - beneficiary.
B) - lessee.
Answer: B—A leasehold interest is the right to exclusive possession and use of real property for a fixed period of time held by the lessee (tenant).
The word “percolation” refers to:
A) - coffee pots.
B) - water mains.
C) - smog.
D) - water table.
D) - water table.
Answer: D—Percolation refers to the returning of water to the land. It results in the recharging of the underground water system called the “water table.”
In real estate, the word “tenancy” means:
A) - a tenacious person.
B) - two or more people joined in an enterprise.
C) - a mode or method of holding title to real property.
D) - a device.
C) - a mode or method of holding title to real property.
Answer: C—Tenancy means a method, mode or means of holding title by a lessee or owner.
The holder of a life estate can do all of the following EXCEPT:
A) - sell it.
B) - lease it.
C) - will it.
D) - borrow against it.
C) - will it.
Answer: C—A life estate only exists for the life of its owner or the life of some other designated person.
When a governmental body takes private land for public use, it is accomplished through the right of:
A) - rescission.
B) - police power.
C) - eminent domain.
D) - reversion.
C) - eminent domain.
Answer: C—Eminent domain is the right of the government (such as a city or county), to take private property for necessary public use with just compensation paid to the owner.
A, B, and C are co-owners of real property in joint tenancy. C sells his interest to D and shortly thereafter, dies. If C had also executed a will, leaving all of his property to his sole heir (whom we shall call E), title to the property would vest as:
A) - A and B as joint tenants, together with D a tenant in common.
B) - A and B as joint tenants, together with E a tenant in common.
C) - A, B, and D as tenants in common.
D) - A and B as joint tenants.
A) - A and B as joint tenants, together with D a tenant in common.
Answer: A—It is the right of any joint tenant to sell his share during ownership. In the example, the sale created a tenancy in common between D and the other joint tenants. The death of C had no effect as he died after the transfer.
Archer, Baker and Charles hold title to real property in joint tenancy. If Archer were to die:
A) - Baker and Charles remain joint tenants.
B) - Baker and Charles become tenants in common.
C) - Baker and Charles acquire Archer’s interest by succession.
D) - Baker and Charles become tenants in common with Archer’s wife.
A) - Baker and Charles remain joint tenants.
Answer: A—Upon the death of Archer, Archer’s 1/3 interest passes to Baker and Charles, who are still joint tenants with each holding a 1/2 interest.
Which of the following is considered a “fee estate”?
A) - estate with no limitations
B) - life estate
C) - estate for years
D) - all of above
A) - estate with no limitations
Answer: A—A fee simple estate is the greatest degree of ownership recognized by law, also referred to as fee simple absolute.
In order to accurately calculate a gross rent multiplier, what data would an appraiser obtain from comparable properties:
A) - Net income and selling price
B) - Original cost and the annual income
C) - Annual rent and the selling price
D) - Net income and the capitalization rate
C) - Annual rent and the selling price
Answer: C—The gross rent multiplier is arrived at by dividing the monthly or annual gross rent into the selling price of the property.
A property owner would post a notice of nonresponsibility to:
A) - perfect a security instrument.
B) - protect against unauthorized work.
C) - protect against judgments.
D) - all of the above.
B) - protect against unauthorized work.
Answer: B—A “notice of nonresponsiblity” is designed to relieve a property owner from responsibility for the cost of unauthorized work done on his/her property or materials furnished for such a project.
A limited partner may:
A) - use his or her name in the partnership.
B) - request an accounting from the partnership.
C) - consult for the partnership.
D) - act as CEO of the partnership.
B) - request an accounting from the partnership.
Answer: B—Limited partners are usually passive investors that share in the profits, but do not actively participate in its management or operation.
How much fence would be required to fence the perimeter of a township?
A) - 6 miles
B) - 36 miles
C) - 24 miles
D) - 4 miles
C) - 24 miles
Answer: C—Six miles on each side x 4 sides = 24 miles
When subdividers evaluate the topography of land,
A) - hillside topography is highly considered.
B) - hillside topography is least considered.
C) - hillside topography property is less desirable than flat mainstream property.
D) - topography is not a concern.
C) - hillside topography property is less desirable than flat mainstream property.
Answer: C—Topography is a graphic representation of the surface features or contour of a place or region on a map, indicating their relative positions and elevations. Flat land is cheaper and easier to build on. The subdivider can build more homes on flat land compared to hillside land.
Tenants in common have equal right of:
A) - time.
B) - title.
C) - interest.
D) - possession.
D) - possession.
Answer: D—Tenancy in common is a form of concurrent ownership where two or more persons hold separate legal title in the same property through the unity of possession. This means that each co-owner has an undivided fractional interest in the land and a right to use the whole property.
A form of business organization in which the co-owners are fully liable for the company’s debts is:
A) - a general partnership.
B) - a limited partnership.
C) - a corporation.
D) - all of the above.
A) - a general partnership.
Answer: A—All the owners are general partners and share a full liability for the debts and obligations of the partnership.
Which of the following is larger than a section?
A) - sixteen 40-acre parcels
B) - 1,000 feet x 4 miles
C) - 1/36th of a township
D) - 6,000 feet square
D) - 6,000 feet square
Answer: D—6,000 feet square means 6,000 feet on each side. A section is one mile square (5,280 feet).
We do not currently have the exact wording of this question but look out for these choices related to the term “topography.”
A) - hillside topography is highly considered
B) - hillside topography is least considered
C) - hillside topography property is less desirable than flat mainstream property
D) - topography is not a concern
C) - hillside topography property is less desirable than flat mainstream property
Answer: C—Depending on the actual wording of the question, we think the likely answer is (c) since subdividers build on flat land first because it is cheaper than building on hillside land. Please let us know if you see this question.
The highest structural point of a wood frame house is the:
A) - header.
B) - ridge board.
C) - collar beam.
D) - girder.
B) - ridge board.
Answer: B—The highest point is the ridge or the ridge board.
To hold real property as tenants in common, the individuals must:
A) - be husband and wife.
B) - hold undivided interests.
C) - hold equal interests.
D) - arrange for possession.
B) - hold undivided interests.
Answer: B—Whenever two or more people hold title to property together, they must hold an undivided interest. If you own 1/3 of the property, you CANNOT designate which 1/3.
Taylor was injured while swimming in Smith’s new pool. Taylor obtained a $2,500 judgment against Smith and recorded an abstract of judgment with the county recorder. The type of lien imposed was:
A) - a voluntary lien.
B) - a specific lien.
C) - a general lien.
D) - an equitable lien.
C) - a general lien.
Answer: C—A judgment lien is a general lien.
Which are specific liens?
A) - Mortgage, attachment, tax liens, and mechanic’s liens
B) - Mortgage, judgment, attachments, and tax liens
C) - Mortgage, judgment, tax liens, and mechanic’s liens
D) - Attachment, corporate bonds, decedent’s debts, and tax liens
A) - Mortgage, attachment, tax liens, and mechanic’s liens
Answer: A—A specific lien affects only a particular property, such as a mortgaged house. General liens apply to all the licenee’s real and personal property. Liens can also be statutory or equitable, voluntary or involuntary.
How many 50’ x 100’ lots will fit in one acre?
A) - 10
B) - 8
C) - 5
D) - 4
B) - 8
Answer: B—50’ x 100’ = 5,000 square feet per lot
43,560 (1 acre) ÷ 5,000 = 8.71 lots
The city’s master plan would include:
A) - access to water, drainage and sewage.
B) - subdivision design.
C) - future freeways.
D) - all of the above.
D) - all of the above.
Answer: D—The city’s master plan is a comprehensive plan to guide the long-term physical development of a particular area.
Emblements refer to:
A) - bushes.
B) - crops.
C) - fixtures.
D) - fences.
B) - crops.
Answer: B—Vegetable chattels called “emblements” are the crops of the earth produced annually, not spontaneously, by labor and industry.
When is a properly licensed real estate salesperson most likely to get his/her commission?
A) - When both the buyer and the seller have signed the deposit receipt.
B) - When the grant deed is signed.
C) - When the grant deed is recorded.
D) - When escrow closes.
D) - When escrow closes.
Answer: D—Be careful in reading this question. The salesperson is most likely to get his/her commission when escrow closes. He/she has earned his/her commission when acceptance of the offer is communicated to the buyer.
The insects that are considered to be the most destructive to wood are:
A) - dry-wood termites.
B) - wood beetles.
C) - silverfish.
D) - spiders.
A) - dry-wood termites.
Answer: A—One of the most damaging types of termites is the dry-wood termite. Also look for subterranean termite as a possible answer on the state exam.
A seller paid $40,000 for a property. He wants to sell it, and told the listing broker he needs to make a 10% profit after paying a 10% commission. How much does he need to sell the property for?
A) - $44,000
B) - $46,640
C) - $48,888
D) - $60,000
C) - $48,888
Answer: C—$40,000 purchase price + 10% (profit) = $44,000
$44,000 (net to owner) ÷ 90% (100% - 10%) = $48,888
When referring to his development, a contractor mentions his elevation sheet. He is referring to:
A) - reinforcing steel rods in the side walls of the building.
B) - the inside dimensions of each room.
C) - the exterior and architectural appearance.
D) - the building and site relative to other sites.
C) - the exterior and architectural appearance.
Answer: C—Elevations show the exterior sides of a building as it appears after all structural work has been completed. Views are often identified as front, rear, left, and right elevation. Symbols on elevation drawings indicate the kind of exterior materials, their placement and the height of their construction.
In order to find the architectural details of the footing, pier blocks, and sub-floor, a contractor or real estate broker would look at a(n):
A) - plot plan.
B) - floor plan.
C) - elevation plan.
D) - foundation plan.
D) - foundation plan.
Answer: D—A foundation plan provides details concerning size of footings, size and dimensions of piers, and construction measurements with details of sub-floor areas.
If land has a servient tenement, it has a(n):
A) - encumbrance.
B) - flawed title.
C) - appurtenance.
D) - all of the above.
A) - encumbrance.
Answer: A—A servient estate is land on which an easement or other right exists in favor of an adjacent property (called the dominant tenement). The land subject to the easement (servient tenement) is said to be encumbered.
A husband alone, without his wife’s consent, may:
A) - give away community property.
B) - sell community property.
C) - buy real property.
D) - sell community personal property.
C) - buy real property.
Answer: C—Any real property purchased by husband or wife separately becomes community property.
A brother and sister CANNOT hold property as:
A) - tenants in common.
B) - joint tenants.
C) - community property.
D) - a partnership.
C) - community property.
Answer: C—Community property ownership requires marriage.
If the interior side of an exterior wall is the same temperature to the touch on a winter day as the interior adjacent wall, this would indicate:
A) - it’s not that cold outside.
B) - there is plenty of heating duct work in that room.
C) - the home has a good heating system.
D) - there is adequate wall insulation.
D) - there is adequate wall insulation.
Answer: D—When an exterior wall is adequately insulated, the interior surface will be about the same temperature as the surface of interior walls because warm air will not be seeping through the walls. BE CAREFUL! The state has other versions of this same question, but the concept is the same.
Mr. Coronado has an easement granted by the government to extract minerals on a piece of property. Mr. Smith acquired the adjacent land and put up a fence which blocked Mr. Coronado’s access. Regarding Mr. Smith’s actions:
A) - Mr. Coronado could sue for damages.
B) - Mr. Smith had the right to put up the fence.
C) - Mr. Coronado has no rights.
D) - Mr. Smith could have Mr. Coronado arrested for trespassing.
A) - Mr. Coronado could sue for damages.
Answer: A—Mr. Coronado had an implied easement to cross Smith’s land to get to his land. This could also be an easement by necessity.
An easement by prescription may be lost by:
A) - nonuse for five years.
B) - merger of ownership between the dominant and servient tenements.
C) - express release by the holder of the dominant tenement.
D) - all of the above.
D) - all of the above.
Answer: D—A prescriptive easement may be lost by nonuse for five years, or from express release by a quitclaim deed signed by the holder of the dominant tenement, or by mutual agreement of the parties.
Among the principles involved in the “Bundle of Rights” is the right to:
A) - build, tax, destroy, and rebuild.
B) - design, plan, implement, and profit.
C) - possess, encumber, will, and sell.
D) - all of the above.
C) - possess, encumber, will, and sell.
Answer: C—The Bundle of Rights theory claims that ownership of a parcel of real estate embraces a great many rights, such as the right to possess, encumber, will and sell. Study aid: PEWS
A property owner’s petition for rezoning is rejected by the city planning commission. He/she:
A) - may appeal to the county planning commission.
B) - may appeal to the municipal court claiming an unjust ruling.
C) - may appeal to the city council.
D) - has no recourse and may not apply again later.
C) - may appeal to the city council.
Answer: C—An appeals process is available through the city council. Legal action would be the next step.
Rights of ownership include everything EXCEPT:
A) - the right to will.
B) - the right to gift.
C) - the right to encumber.
D) - the right of eminent domain.
D) - the right of eminent domain.
Answer: D—The rights of ownership include the exclusive right to possess, encumber, will and sell. Also included is the right to give the property away (gift).
A builder was going to build a home on a 75’ x 125’ lot, and wanted it to fit in relation to its surroundings. This placement would be known as:
A) - orientation.
B) - elevation.
C) - plottage.
D) - topography.
A) - orientation.
Answer: A—Orientation is the placing or positioning of a structure on its lot with regard to exposure to the sun, prevailing winds, privacy, and protection from noise.
A developer ordered two truckloads of backfill during the construction of a home. He ordered this for the purpose of:
A) - filling the area around the foundation.
B) - landscaping.
C) - septic tanks.
D) - drainage.
A) - filling the area around the foundation.
Answer: A—Backfill is earth or selected material such as aggregate, usually used to fill in around foundation walls after they are completed.
The person most likely to use a “bench mark” in his/her profession would be a:
A) - lawyer.
B) - carpenter.
C) - general contractor.
D) - surveyor.
D) - surveyor.
Answer: D—A bench mark is an identification symbol on stone, metal, or other durable matter permanently fixed to the ground from which differences of elevation are measured, such as tidal observations or topographical surveys.
Which of the following is neither a lien nor an encumbrance?
A) - judgment
B) - easement
C) - homestead
D) - trust deed
C) - homestead
Answer: C—An encumbrance is an interest or right in real property which diminishes the value of the fee, but does not prevent conveyance by the owner. A lien is a type of encumbrance that creates a charge against property, whereby the property is used as security for the payment of a debt, referred to as attachment liens (e.g.; trust deeds, taxes, judgments, etc.) Restrictions, easements, and reservations are encumbrances but not liens. Remember, all liens are encumbrances, but not all encumbrances are liens.
A bearing wall:
A) - generally has stronger supportive members.
B) - can be built at any angle to the door.
C) - is usually left alone during remodeling.
D) - All of the above
D) - All of the above
Answer: D—A bearing wall is a main or supporting wall referred to as a load-bearing wall, usually supporting a roof above. It usually is of stronger construction than other members and is usually left alone when remodeling. It is possible for a bearing wall to be built in a variety of angles to a door.
Why are housing prices so heavily weighted when calculating the Consumer Price Index?
A) - Increasing down payment amounts contribute significantly to inflation.
B) - The most significant portion of the CPI is building costs.
C) - Housing prices and the associated interest costs form the bulk of most homeowner’s outlay.
D) - All of the above.
C) - Housing prices and the associated interest costs form the bulk of most homeowner’s outlay.
Answer: C—The Consumer Price Index (CPI) is designed to measure the change in the average level of prices paid for consumer goods and services by all private households. In measuring the CPI, not all goods and services are treated equally or in other words, given the same weight. Since housing prices and the associated interest costs form the bulk of most homeowners’ outlay, changes in mortgage interest rates are heavily weighted when calculating the CPI.
An attachment is:
A) - a judgment.
B) - an addition.
C) - a lien.
D) - a fixture.
C) - a lien.
Answer: C—An attachment is classified as a lien.
An attachment lien is good:
A) - forever.
B) - for two years.
C) - for three years from the date of levy.
D) - for five years.
C) - for three years from the date of levy.
Answer: C—An attachment lien is good for three years from the date of levy and may be renewed.
All of the following are considered less-than-freehold estates EXCEPT:
A) - an estate for years.
B) - a life estate.
C) - a periodic tenancy.
D) - an estate at sufferance.
B) - a life estate.
Answer: B—A life estate is considered a freehold estate.
Which of the following statements regarding deed restrictions is true?
A) - A covenant is generally more severe than a condition.
B) - To be legally enforced, a private restriction must promote public health, safety, and welfare.
C) - The term “covenant” is an all-inclusive word embracing both restrictions and conditions.
D) - A violation of a condition is more severe than a covenant and might result in the loss of title.
D) - A violation of a condition is more severe than a covenant and might result in the loss of title.
Answer: D—Violation of a covenant may result in an injunction (court order to stop doing something) and monetary damages. Violation of a condition may result in loss of title which is more severe than an injunction.
The difference between a judgment lien and a mechanic’s lien is:
A) - mechanic’s liens may take priority earlier than the date they are recorded.
B) - judgment liens are involuntary liens.
C) - judgment liens are not enforceable until recorded.
D) - mechanic’s liens are created by statute.
A) - mechanic’s liens may take priority earlier than the date they are recorded.
Answer: A—The effective date of a mechanic’s lien is the date the work began on the property. A judgment becomes effective and takes priority when it is recorded.
In what year did the requirement for disclosure of lead based paint in dwelling units become effective?
A) - 1976
B) - 1980
C) - 1996
D) - 2000
C) - 1996
Answer: C—Lead based paint laws went into effect in 1996. The law applies to owners, lessors, and real estate licensees. This law requires the owner or lessor of dwelling units built before 1978 to provide the buyer or lessee with the federal booklet entitled “Protect Your Family from Lead in Your Home.”
Which of the following would be considered real property?
A) - A maturing grape crop which is under a sales contract to be harvested later.
B) - Trade fixtures that a tenant has installed but which are removable without damage.
C) - A built-in refrigerator in a mobile home that is not attached to a permanent foundation.
D) - A bearing wall in a single-family home.
D) - A bearing wall in a single-family home.
Answer: D—Since a bearing wall is part of the structure of a house and the house is real property, the bearing wall would also be real property.
Jack leases a single family dwelling property from Mr. Michaels. After the lease agreement is signed and Jack moves in, Mr. Michaels insists that Jack sign a contract agreeing to make substantial capital improvements to the property. This requirement by the lessor would render the lease contract:
A) - valid.
B) - voidable by the lessor.
C) - voidable by the lessee.
D) - void.
C) - voidable by the lessee.
Answer: C—This contract would be voidable on the part of the lessee not the lessor. The lessor cannot change or add to the lease contract after it is signed.
All of the following describe a fee simple interest EXCEPT:
A) - no encumbrances.
B) - inheritable.
C) - indefinite duration.
D) - freely transferable.
A) - no encumbrances.
Answer: A—Fee simple estates are usually encumbered by some kind of voluntary (e.g., mortgage) or involuntary lien (e.g., property tax).
Which of the following statements concerning deed restrictions is correct?
A) - A covenant includes conditions and equitable servitudes.
B) - A violation of a condition can result in forfeiture of title to real property.
C) - Private restricitons must be for public health, safety, and general welfare.
D) - Covenants are more restrictive and costly for the owner than conditions.
B) - A violation of a condition can result in forfeiture of title to real property.
Answer: B—A condition is any fact or event which, if it occurs or fails to occur, automatically creates or extinguishes a legal obligation. If a condition is violated, the owner may be forced to forfeit the title. A covenant is only a promise. If a person fails to adhere to a covenant, it will result in a cause of action for damages, but will not automatically extinguish the owner’s title.
A grant deed that conveys title to real property without limitation is called a:
A) - fee simple estate.
B) - license.
C) - qualified estate.
D) - leasehold estate.
A) - fee simple estate.
Answer: A—A fee simple estate is the maximum possible estate one can possess in real property. It is the least limited interest and the most complete and absolute ownership.
After paying his general contractor in full, a property owner files a notice of completion. Which of the following is correct?
A) - Mechanic’s liens may not be filed.
B) - A notice of nonresponsibility must be filed to protect the owner.
C) - As long as work has not stopped, workers may file mechanic’s liens.
D) - Unpaid workers can file mechanic’s liens up to 30 days after the owner files a notice of completion.
D) - Unpaid workers can file mechanic’s liens up to 30 days after the owner files a notice of completion.
Answer: D—A notice of completion is filed to give public notice that a construction job has been completed and that mechanic’s liens must be filed within 30 days.
The number of principal base lines and meridians in California is:
A) - 42
B) - 36
C) - 3
D) - 1
C) - 3
Answer: C—San Bernardino, Mt. Diablo, and Humboldt
By conveying less than his fee estate, the grantor retains a:
A) - reversionary interest.
B) - remainder interest.
C) - limited interest.
D) - future interest.
A) - reversionary interest.
Answer: A—Reversion is the estate remaining in the grantor who has conveyed a lesser estate from the original.
What is the purpose of the Equal Credit Opportunity Act?
A) - To standardize the minimum requirements for loan eligibility
B) - To standardize the down payment amounts to prevent discrimination
C) - To prohibit lenders from discriminating on the basis of race, color, religion, national origin, age, sex, family size, handicap, or marital status
D) - All of the above
C) - To prohibit lenders from discriminating on the basis of race, color, religion, national origin, age, sex, family size, handicap, or marital status
Answer: C—The main purpose of the Equal Credit Opportunity Act is to prohibit lenders from discrimination on the basis of race, color, religion, national origin, age, sex, family size, handicap, marital status, or on the grounds of receipt of income from a public assistance program.
Which of the following is considered a “less than freehold estate?”
A) - lease
B) - freehold estate
C) - fee simple estate
D) - easement
A) - lease
Answer: A—A less than freehold estate is an estate in possession generally referred to as a leasehold. Such interests exist for a definite period of time or successive periods of time until termination by notice.
As a general rule which of the following sources would be least satisfactory in providing a legal description for a parcel of real property?
A) - Deeds
B) - Preliminary title report
C) - Policies of title insurance
D) - Bill for real property taxes
D) - Bill for real property taxes
Answer: D—A legal description is required on all deeds, assignments of lease and mortgages. It is also used in most contracts for deed. The bill for real property tax does not include the legal description. It includes only a parcel number. An owner is taxed according to parcel number.
A general contractor hired a subcontractor to install the hardwood floors in a home under construction. If the subcontractor had to file a mechanic’s lien in order to get paid, the mechanic’s lien would date back to the date:
A) - work began on the house.
B) - work began on the hardwood floors.
C) - work ended on the house.
D) - work was completed on the hardwood floors.
A) - work began on the house.
Answer: A—A mechanics’ lien dates back in priority to the beginning of any work on the project, not the date the individual mechanic performs his labor.
According to the case of Easton vs. Strassburger, a real estate broker is required to reveal:
A) - all defects known and unknown.
B) - those defects which are known by the broker.
C) - those defects which are known or should be known by the broker.
D) - only those defects which the seller has revealed.
C) - those defects which are known or should be known by the broker.
Answer: C—The broker must do a competent, diligent visual inspection of the accessible areas and reveal all material facts. Competent implies that the broker should see certain defects that would be discovered by the ordinary standard of care. (See Easton vs. Strassburger)
The Alquist-Priolo Earthquake Fault Zoning Act resulted in the establishment of Earthquake Fault Zones. How wide is the “typical” zone boundary?
A) - 1/4 mile
B) - 1/2 mile
C) - 3/4 mile
D) - 1 mile
A) - 1/4 mile
Answer: A—The Alquist-Priolo Special Studies Zones Act of 1972, renamed the “Alquist-Priolo Earthquake Fault Zoning Act” in 1994, regulates development and construction of buildings intended for human occupancy in Earthquake Fault Zones. These zones span the “surface traces” of delineated active faults. The “typical” zone boundaries are set back approximately 660 feet on either side of the fault trace or 1/4 mile in width.
A broker is acting as the agent of the seller in a transaction in which the seller carried back a second trust deed. The broker must cause the deed of trust to be recorded or advise the seller to record the trust deed:
A) - within one week after close of escrow.
B) - one business day after close of escrow.
C) - 30 days after close of escrow.
D) - none of the preceding as this is not the responsibility of the agent.
A) - within one week after close of escrow.
Answer: A—Within one week after closing of a transaction, the broker must cause a deed of trust to be recorded with the county recorder or cause it to be delivered to the beneficiary with a written recommendation that it be recorded forthwith, unless written instructions not to record are received from the beneficiary. If the transaction is closed through escrow and the deed of trust is delivered to the escrow holder within one week, that shall be deemed compliance on the part of the broker.
Which of the following are ways in which the government has control over real property?
A) - VA and FHA agencies
B) - Real estate commissioner
C) - Building and zoning
D) - All of the above
D) - All of the above
Answer: D—There are many government controls (i.e., building codes, zoning, Subdivision Map Act). The VA and FHA exert control by requiring minimum property requirements before guaranteeing or insuring loans. The real estate commissioner has the authority to approve new subdivisions.
CC&R’s are found in:
A) - deeds.
B) - notes.
C) - title policies.
D) - loan documents.
A) - deeds.
Answer: A—CC&R’s are found in deeds.
