Property Ownership

Question 1

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.

Answer 1

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.

Question 2

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.

Answer 2

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.

Question 3

Land subject to an easement is said to be:

A) - appurtenant thereto.
B) - encumbered.
C) - encroached upon.
D) - restricted.

Answer 3

B) - encumbered.

Answer: B—Land subject to an easement is said to be burdened or encumbered.

Question 4

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.

Answer 4

D) - intention of the parties.

Answer: D—The intention of the parties, particulary the intention of the person attaching it usually governs.

Question 5

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

Answer 5

C) - Joint tenancy

Answer: C—The right of of survivorship is the main characteristic of a joint tenancy holding.

Question 6

Studding in a single-family dwelling is usually:

A) - 16” O.C.
B) - 8” O.C.
C) - 24” O.C.
D) - 6” O.C.

Answer 6

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)

Question 7

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.

Answer 7

D) - riparian rights.

Answer: D—Riparian rights are the rights of an abutting owner to his/her fair share of water flowing past the land.

Question 8

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.

Answer 8

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.

Question 9

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

Answer 9

B) - builders are spacing roofing rafters closer together.

Answer: B—Placing rafters closer together strengthens a roof.

Question 10

Freehold estate includes:

A) - estates for years.
B) - leasehold estates.
C) - life estates.
D) - all of the above.

Answer 10

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

Question 11

The vertical structural support members are attached to the:

A) - mud sill.
B) - header.
C) - sole plate.
D) - None of the above

Answer 11

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.

Question 12

A township contains how many acres?

A) - 640
B) - 23,040
C) - 36
D) - 6

Answer 12

B) - 23,040

Answer: B—36 sections x 640 acres each = 23,040 acres

Question 13

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.

Answer 13

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.

Question 14

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

Answer 14

A) - Time, Title, Interest, and Possession

Answer: A—The four unities to a joint tenancy are: Time, Title, Interest and Possession. “TTIP”

Question 15

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

Answer 15

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

Question 16

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.

Answer 16

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.

Question 17

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.

Answer 17

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.

Question 18

A rectangular lot 1,320’ x 2,640’ contains:

A) - 40 acres.
B) - 80 acres.
C) - 120 acres.
D) - 320 acres.

Answer 18

B) - 80 acres.

Answer: B—1,320’ x 2,640’ = 3,484,800 sq. ft.

3,484,800 ÷ 43,560 (1 acre) = 80 acres

Question 19

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.

Answer 19

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)

Question 20

The word “fee” as used in connection with real estate means:

A) - commission.
B) - advance commission.
C) - estate of inheritance.
D) - listing price.

Answer 20

C) - estate of inheritance.

Answer: C—Fee simple title is sometimes referred to as “the fee” or “fee.”

Question 21

The parallel framing members under the flooring boards and in the ceiling are called:

A) - beams.
B) - ledges.
C) - joists.
D) - piers.

Answer 21

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)

Question 22

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.

Answer 22

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.

Question 23

Which of the following is considered personal property?

A) - land
B) - physical improvements
C) - growing trees
D) - trust deed

Answer 23

D) - trust deed

Answer: D—A mortgage or trust deed is personal property (lien).

Question 24

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.

Answer 24

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.

Question 25

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

Answer 25

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.

Question 26

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.

Answer 26

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.

Question 27

Which of the following best describes an estate of inheritance? A) - life estate B) - lease C) - fee simple D) - all of the above

Answer 27

C) - fee simple Answer: C—An estate of inheritance is a fee simple estate handed down by will.

Question 28

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.

Answer 28

D) - all of the above. Answer: D—All of these transfer with the land.

Question 29

"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

Answer 29

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.

Question 30

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'

Answer 30

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.

Question 31

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.

Answer 31

A) - one deed. Answer: A—With a joint tenancy ownership, only one title exists.

Question 32

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.

Answer 32

D) - all of the above. Answer: D—Most items affixed to the property by the tenant CAN be removed when the lease expires.

Question 33

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.

Answer 33

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.

Question 34

Which is the most common type of easement on residential property? A) - in gross B) - prescriptive C) - adverse D) - open-end

Answer 34

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.

Question 35

By law, all cities must have: A) - a city council. B) - a building department. C) - a planning commission. D) - an assessment appeals board.

Answer 35

C) - a planning commission. Answer: C—Every city, by law, must have a planning commission. From this comes a general plan.

Question 36

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

Answer 36

C) - 4 miles Answer: C—Section 6 and Section 31 are separated by 4 miles.

Question 37

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

Answer 37

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.

Question 38

The term "walk-up" refers to a(n): A) - drive-in restaurant. B) - agricultural subdivision. C) - apartment house. D) - subdivider's elevation sheet.

Answer 38

C) - apartment house. Answer: C—The term "walk-up" usually refers to three or more story apartment buildings with no elevation.

Question 39

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

Answer 39

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"

Question 40

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.

Answer 40

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.

Question 41

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.

Answer 41

D) - ask an attorney. Answer: D—The question of how to take title should be referred to an attorney.

Question 42

Easements are: A) - always an encumbrance. B) - always appurtenant. C) - liens. D) - encroachments.

Answer 42

A) - always an encumbrance. Answer: A—An easement is not a lien but would always be considered an encumbrance.

Question 43

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.

Answer 43

A) - English common law. Answer: A—In general, California's laws relating to real estate originated from English common law.

Question 44

Which of the following is NOT considered dry-wall construction? A) - plywood B) - sheetrock C) - wallboard D) - plaster

Answer 44

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.

Question 45

A completion bond would be for the protection of the: A) - subdivider. B) - contractor. C) - purchaser. D) - lender.

Answer 45

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.

Question 46

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.

Answer 46

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.

Question 47

Which of the following is NOT appurtenant to real estate? A) - growing trees B) - buildings C) - fences D) - trade fixtures

Answer 47

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.

Question 48

Which of the following is NOT considered an operating expense? A) - repairs B) - profit flow C) - property taxes D) - electric bill

Answer 48

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. ```

Question 49

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

Answer 49

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)

Question 50

A court order prohibiting an act from being done is a(n): A) - injunction. B) - judgment. C) - attachment. D) - estoppel.

Answer 50

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.

Question 51

Mark gives a life estate to Charlie. Mark's interest is: A) - personal property. B) - reversionary. C) - leasehold. D) - remainder.

Answer 51

B) - reversionary. Answer: B—Mark's interest reverts back to him after the death of Charlie.

Question 52

A lease would be a: A) - freehold estate. B) - fee simple absolute. C) - chattel real. D) - fee estate.

Answer 52

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.

Question 53

Horizontal rows of townships are known as: A) - ranges. B) - tiers. C) - layers. D) - base lines.

Answer 53

B) - tiers. Answer: B—Tier: A horizontal row of townships extending east and west.

Question 54

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

Answer 54

B) - concurrent co-ownership Answer: B—A joint tenancy estate requires two or more people; and therefore, could not be in severalty.

Question 55

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.

Answer 55

B) - It is of definite duration. Answer: B—Fee estates are of indefinite duration.

Question 56

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.

Answer 56

A) - encroachment. Answer: A—An encroachment is an unauthorized invasion or intrusion of an improvement or other real property onto another's property.

Question 57

Mortgage income value can be calculated quickest by using: A) - rent value. B) - fixed value. C) - net value. D) - adjustable value.

Answer 57

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.

Question 58

The building up of new soil adjacent to a river is called: A) - avulsion. B) - reliction. C) - accretion. D) - alluvion.

Answer 58

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.

Question 59

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.

Answer 59

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.

Question 60

The best possible estate to have is: A) - life estate. B) - estate for years. C) - fee simple. D) - reversionary.

Answer 60

C) - fee simple. Answer: C—A fee simple estate is the maximum possible, least limited, and most complete ownership.

Question 61

Deed restrictions based on race are: A) - illegal. B) - voidable. C) - valid. D) - void.

Answer 61

D) - void. Answer: D—Deed restrictions based on race have no effect, whatsoever.

Question 62

Under a lease, the leasehold interest lies in the: A) - lessor. B) - lessee. C) - landlord. D) - beneficiary.

Answer 62

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).

Question 63

The word "percolation" refers to: A) - coffee pots. B) - water mains. C) - smog. D) - water table.

Answer 63

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."

Question 64

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.

Answer 64

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.

Question 65

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.

Answer 65

C) - will it. Answer: C—A life estate only exists for the life of its owner or the life of some other designated person.

Question 66

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.

Answer 66

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.

Question 67

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.

Answer 67

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.

Question 68

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.

Answer 68

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.

Question 69

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

Answer 69

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.

Question 70

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

Answer 70

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.

Question 71

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.

Answer 71

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.

Question 72

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.

Answer 72

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.

Question 73

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

Answer 73

C) - 24 miles Answer: C—Six miles on each side x 4 sides = 24 miles

Question 74

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.

Answer 74

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.

Question 75

Tenants in common have equal right of: A) - time. B) - title. C) - interest. D) - possession.

Answer 75

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.

Question 76

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.

Answer 76

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.

Question 77

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

Answer 77

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).

Question 78

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

Answer 78

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.

Question 79

The highest structural point of a wood frame house is the: A) - header. B) - ridge board. C) - collar beam. D) - girder.

Answer 79

B) - ridge board. Answer: B—The highest point is the ridge or the ridge board.

Question 80

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.

Answer 80

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.

Question 81

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.

Answer 81

C) - a general lien. Answer: C—A judgment lien is a general lien.

Question 82

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

Answer 82

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.

Question 83

How many 50' x 100' lots will fit in one acre? A) - 10 B) - 8 C) - 5 D) - 4

Answer 83

B) - 8 Answer: B—50' x 100' = 5,000 square feet per lot 43,560 (1 acre) ÷ 5,000 = 8.71 lots

Question 84

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.

Answer 84

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.

Question 85

Emblements refer to: A) - bushes. B) - crops. C) - fixtures. D) - fences.

Answer 85

B) - crops. Answer: B—Vegetable chattels called "emblements" are the crops of the earth produced annually, not spontaneously, by labor and industry.

Question 86

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.

Answer 86

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.

Question 87

The insects that are considered to be the most destructive to wood are: A) - dry-wood termites. B) - wood beetles. C) - silverfish. D) - spiders.

Answer 87

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.

Question 88

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

Answer 88

C) - $48,888 Answer: C—$40,000 purchase price + 10% (profit) = $44,000 $44,000 (net to owner) ÷ 90% (100% - 10%) = $48,888

Question 89

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.

Answer 89

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.

Question 90

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.

Answer 90

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.

Question 91

If land has a servient tenement, it has a(n): A) - encumbrance. B) - flawed title. C) - appurtenance. D) - all of the above.

Answer 91

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.

Question 92

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.

Answer 92

C) - buy real property. Answer: C—Any real property purchased by husband or wife separately becomes community property.

Question 93

A brother and sister CANNOT hold property as: A) - tenants in common. B) - joint tenants. C) - community property. D) - a partnership.

Answer 93

C) - community property. Answer: C—Community property ownership requires marriage.

Question 94

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.

Answer 94

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.

Question 95

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.

Answer 95

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.

Question 96

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.

Answer 96

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.

Question 97

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.

Answer 97

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

Question 98

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.

Answer 98

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.

Question 99

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.

Answer 99

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).

Question 100

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.

Answer 100

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.

Question 101

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.

Answer 101

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.

Question 102

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.

Answer 102

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.

Question 103

Which of the following is neither a lien nor an encumbrance? A) - judgment B) - easement C) - homestead D) - trust deed

Answer 103

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.

Question 104

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

Answer 104

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.

Question 105

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.

Answer 105

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.

Question 106

An attachment is: A) - a judgment. B) - an addition. C) - a lien. D) - a fixture.

Answer 106

C) - a lien. Answer: C—An attachment is classified as a lien.

Question 107

An attachment lien is good: A) - forever. B) - for two years. C) - for three years from the date of levy. D) - for five years.

Answer 107

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.

Question 108

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.

Answer 108

B) - a life estate. Answer: B—A life estate is considered a freehold estate.

Question 109

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.

Answer 109

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.

Question 110

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.

Answer 110

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.

Question 111

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

Answer 111

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."

Question 112

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.

Answer 112

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.

Question 113

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.

Answer 113

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.

Question 114

All of the following describe a fee simple interest EXCEPT: A) - no encumbrances. B) - inheritable. C) - indefinite duration. D) - freely transferable.

Answer 114

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).

Question 115

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.

Answer 115

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.

Question 116

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.

Answer 116

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.

Question 117

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.

Answer 117

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.

Question 118

The number of principal base lines and meridians in California is: A) - 42 B) - 36 C) - 3 D) - 1

Answer 118

C) - 3 Answer: C—San Bernardino, Mt. Diablo, and Humboldt

Question 119

By conveying less than his fee estate, the grantor retains a: A) - reversionary interest. B) - remainder interest. C) - limited interest. D) - future interest.

Answer 119

A) - reversionary interest. Answer: A—Reversion is the estate remaining in the grantor who has conveyed a lesser estate from the original.

Question 120

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

Answer 120

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.

Question 121

Which of the following is considered a "less than freehold estate?" A) - lease B) - freehold estate C) - fee simple estate D) - easement

Answer 121

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.

Question 122

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

Answer 122

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.

Question 123

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.

Answer 123

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.

Question 124

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.

Answer 124

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)

Question 125

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

Answer 125

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.

Question 126

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.

Answer 126

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.

Question 127

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

Answer 127

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.

Question 128

CC&R's are found in: A) - deeds. B) - notes. C) - title policies. D) - loan documents.

Answer 128

A) - deeds. Answer: A—CC&R's are found in deeds.

Question 129

Mr. Kwan has a $30,000 loss on the operation of his rental property. This is his only rental investment. With respect to his income tax, he may do which of the following? A) - Write off $10,000 per year for 3 years B) - Take 40% of the loss C) - Offset this loss against capital gains D) - Take the full loss against his personal income

Answer 129

C) - Offset this loss against capital gains Answer: C—The $30,000 may be used to offset capital gains for income tax purposes. If he has no capital gains, the maximum loss that may be deducted would be $25,000 with the remaining as a "carryover" loss against future gains.

Question 130

Mr. and Mrs. Lee sell their house and agree to carry back a second trust deed from the buyer to help complete the financing for the sale. This is most likely due to: A) - The first trust deed is a VA loan. B) - The money market is tight. C) - The buyer has no cash. D) - The seller doesn't need the immediate cash.

Answer 130

B) - The money market is tight. Answer: B—When the Fed takes steps to implement a "tight money" market, it usually means an increase in interest rates and a decrease in available loan funds. The sales volume of existing home sales decreases and borrowers have more difficulty in obtaining loans. The net effect is that sellers are forced to take back seconds to sell their property.

Question 131

It is important for a landlord to obtain all the necessary information on a rental application to allow the landlord to make a decision about renting to a particular person or to more than one person. A landlord thinks it is important to know whether or not a couple is married. Is it legal for the landlord to inquire whether or not a couple is married on the rental application? A) - Yes, as it may affect the couple's ability to pay rent. B) - Yes, because this is a moral issue. C) - It is legal, but might be considered unethical. D) - No, this would be considered discrimination.

Answer 131

D) - No, this would be considered discrimination. Answer: D—Marital status may not be used as a basis for choosing tenants. This would be considered discrimination and may subject the landlord to penalties.

Question 132

According to California Real Estate Law an unlicensed person may be paid a finder's fee: A) - as long as it is disclosed. B) - at the conclusion of escrow. C) - when it is given just to influence someone to do something. D) - Never

Answer 132

C) - when it is given just to influence someone to do something. Answer: C—A finder's fee is allowed to be paid to an unlicensed person to influence them to do something; for example, to refer potential sellers or buyers to a real estate broker. The broker may not pay an unlicensed person to perform an act which would require a license.

Question 133

Which of the following is always required in joint tenancy ownership of real property? A) - The clause, "With right of survivorship". B) - Equal shares of interest in the property by each of the joint tenants. C) - A husband and wife relationship. D) - All of the above.

Answer 133

B) - Equal shares of interest in the property by each of the joint tenants. Answer: B—The four unities must be present for the existence of a joint tenancy: Time, Title, Interest, and Possession.

Question 134

Which of the following is an example of police power? A) - zoning B) - building codes C) - health and safety codes D) - all of the above

Answer 134

D) - all of the above Answer: D—Police power is the authority of the state to adopt and enforce laws and regulations to promote and support the public's health, safety, morals, and general welfare.

Question 135

The California State Contractor's law applies to all of the following except: A) - work done for less than $300. B) - work for less than $600. C) - an owner building or improving his own property which he agrees to sell within one year. D) - working for relatives.

Answer 135

A) - work done for less than $300. Answer: A—The California State Contractor's License Law does not apply to minor work not exceeding $300.

Question 136

An owner of a property which was located near an airport was constantly bothered by the noise of low flying aircraft. He wanted to bring court action and force the city to condemn the property because of the noise. This would be an example of: A) - condemnation. B) - inverse condemnation. C) - escheat. D) - eminent domain.

Answer 136

B) - inverse condemnation. Answer: B—Inverse condemnation: An action for just compensation brought by a person whose property has been effectively taken, substantially interfered with, or taken without just compensation. For example, when a governmental authority announces it will condemn an owner's property and then unduly delays in taking the property, the owner can bring legal action to force a condemnation and payment for the taking.

Question 137

A property owner, whose house is located next to the landing strip of a small airport, successfully sued and received judgment against the airport, forcing them to buy his house. This is known as: A) - equitable severance. B) - inverse condemnation. C) - condemnation. D) - eminent domain.

Answer 137

B) - inverse condemnation. Answer: B—Inverse condemnation is an action brought by a person whose property has been effectively taken, substantially interfered with, or taken without just compensation.

Question 138

The number of linear feet around a section is: A) - 5,280 B) - 21,120 C) - 640 D) - 4

Answer 138

B) - 21,120 Answer: B—5,280 x 4 = 21,120

Question 139

A licensee who speaks of a "grandfather clause" is probably referring to: A) - Inheritance rights of a direct descendant B) - Public restrictions on the use of a property C) - A change in zoning D) - Continuation of a non-conforming use

Answer 139

D) - Continuation of a non-conforming use Answer: D—When zoning is changed, the present use becomes a "non-conforming use". Since it was legal when it was put into service, it is "grandfathered" in, and the original use will remain legal.

Question 140

When the local building authority permits an inconsistency to the construction, systems, or standards within applicable building codes, it is referred to as a(n): A) - infraction. B) - exemption. C) - permit. D) - variance.

Answer 140

D) - variance. Answer: D—A variance is an exception to the zoning law.

Question 141

Property once zoned as commercial is re-zoned as residential. This is referred to as: A) - spot zoning. B) - split zoning. C) - down zoning. D) - up zoning.

Answer 141

C) - down zoning. Answer: C—Downzoning is action taken by local government to reduce the allowable density for a parcel of land, e.g., from commercial to residential.

Question 142

Abigail Blake leased an apartment in a recreation area from July 1, 2000 through August 31, 2001. She holds a(n): A) - estate at will. B) - estate in severalty. C) - estate for years. D) - freehold estate.

Answer 142

C) - estate for years. Answer: C—An interest or estate in land for a fixed period of time (a year, month, week) is called an estate for years.

Question 143

On a fully amortized loan, principal_________ as interest ____________. A) - increases, increases B) - decreases, increases C) - decreases, decreases D) - increases, decreases

Answer 143

D) - increases, decreases Answer: D—With an amortized loan, interest is charged on the unpaid balance each month. The principal is being paid down each month. The payment remains constant over the entire life of the loan. The interest decreases each month and the amount applied to principal increases each month.

Question 144

The designation "M" on a zoning map would stand for: A) - multiple units. B) - massive population C) - manufacturing. D) - mobile homes.

Answer 144

C) - manufacturing. Answer: C—The zoning designation "M" generally stands for manufacturing.

Question 145

In the event of a conflict between local building codes and the Health and Safety Code, which would prevail? A) - Health and Safety Code B) - Local building code C) - The more stringent of the two. D) - The one selected after a hearing.

Answer 145

C) - The more stringent of the two. Answer: C—This is always the rule.

Question 146

Which of the following is true regarding encumbrances? A) - Encumbrances never affect value. B) - Even beneficial restrictions can be encumbrances. C) - All encumbrances are liens. D) - None of the above.

Answer 146

B) - Even beneficial restrictions can be encumbrances. Answer: B—CC&R's are an example of a potentially beneficial encumbrance.

Question 147

Which of the following is a lessor not allowed to deduct from a security deposit? A) - unpaid rent B) - reasonable cleaning C) - damage beyond normal wear and tear D) - rent expenses for storage of personal property left on the premises

Answer 147

D) - rent expenses for storage of personal property left on the premises Answer: D—The landlord may deduct the first three choices. Rental on storage units for a tenant’s personal property left in the unit will be paid by the tenant when he takes the property out of storage. If the tenant fails to redeem the property within 90 days, it may be sold.

Question 148

A real estate licensee did not use diligence in researching problems with a home he had listed and failed to disclose these problems to the buyer. How long does the buyer have to bring a lawsuit against the agent? A) - 1 year B) - 2 years C) - 5 years D) - 7 years

Answer 148

B) - 2 years Answer: B—A lawsuit alleging a breach of a licensee's duty must be filed within two years from the date of occupancy or the date of recordation of the deed to the buyer or the date of close of escrow, whichever one occurs first.

Question 149

The Gonzales family wanted to purchase a property and assume the seller's VA loan, "subject to". Which of the following is correct? A) - The seller will be relieved of all liability for the loan. B) - Both the buyer and seller will be liable for the loan. C) - The seller will remain liable for the loan. D) - None of the above.

Answer 149

C) - The seller will remain liable for the loan. Answer: C—If the VA does not approve the assumption, the loan is taken "subject to" the existing loan. This means the original borrower will remain liable for the loan. If there is a foreclosure, it will be against the original borrower (the seller).

Question 150

A property owner intends to build an addition onto the back of his house. He should check: A) - CC&R's B) - local building codes. C) - zoning ordinances. D) - all of the above.

Answer 150

D) - all of the above. Answer: D—A property owner should check all of these.

Question 151

In making adjustments to effective gross income for management expenses, on which of the following would an adjustment be made: A) - An apartment which is occupied by an owner who is also the property manager. B) - An apartment which is occupied by an on-site manager who receives no compensation. C) - An apartment which is occupied by an on-site manager who lives in his apartment rent-free in return for his services. D) - A manager from a neighboring building owned by the same owner.

Answer 151

C) - An apartment which is occupied by an on-site manager who lives in his apartment rent-free in return for his services. Answer: C—Since the on-site manager is living in his unit rent-free, the amount of rent which should be paid by the manager is the management fee and can be deducted by the landlord as an operating expense. The owner may not charge for managing the property himself. If an on-site manager receives no compensation, there would be nothing for the owner to deduct. A manager's salary on another building owned by the same owner would be deducted as an expense against the income from the building he manages.

Question 152

A parcel of land, 36 miles square, would contain how many townships? A) - 36 B) - 22 C) - 6 D) - 18

Answer 152

A) - 36 Answer: A—Remember, 36 miles square is different than 36 square miles. A parcel of land 36 miles square is 36 miles on each side.

Question 153

Section 31 in a township is located where in the township? A) - NW 1/4 B) - SW 1/4 C) - SE 1/4 D) - NE 1/4

Answer 153

B) - SW 1/4 Answer: B—After referring to the township diagram, you will notice that section 31 is in the SW 1/4 of the section.

Question 154

If a corporation buys property and takes title in its corporate name, it may hold title: A) - in severalty. B) - in joint tenancy. C) - as a limited partnership. D) - any of the above.

Answer 154

A) - in severalty. Answer: A—If a corporation takes title in its name only, no co-owners may exist (in severalty).

Question 155

A township contains: A) - 640 acres. B) - 6 square miles. C) - 6 sections. D) - none of the above.

Answer 155

D) - none of the above. Answer: D—A township is 6 miles square and contains 36 square miles.

Question 156

The spread part at the bottom of the exterior of the foundation in a single-family dwelling is a: A) - foundation. B) - pier. C) - base. D) - footing.

Answer 156

D) - footing. Answer: D—The spread part of the foundation below the ground is referred to as the foundation footing.

Question 157

How many linear feet of single-strand wire would be required to fence a quarter section? A) - 1 mile B) - 2 miles C) - 4 miles D) - 1/2 mile

Answer 157

B) - 2 miles Answer: B—A quarter section is 1/2 mile on each side.

Question 158

As it relates to the field of real estate, the legal term "theft" would include all of the following except: A) - Entering into a home that is listed on the market and taking valuable items of personal property that belong to the owners. B) - Defrauding clients by siphoning funds from a broker's large property management trust account for the broker's own personal use. C) - Defrauding lenders by signing another person's name on loan documents without authorization. D) - Defrauding investors by creating phony trust deeds and notes, selling them, and using the proceeds for the broker's personal use.

Answer 158

C) - Defrauding lenders by signing another person's name on loan documents without authorization. Answer: C—The word "theft" is a broad term that basically means the improper taking and carrying away of the personal property of another person and would apply to Answers A, B, and D. Answer C is forgery which is committed by altering a written document by improperly signing someone else's name to an instrument.

Question 159

Vertical rows of townships are known as: A) - ranges. B) - tiers. C) - layers. D) - meridians.

Answer 159

A) - ranges. Answer: A—Range. A vertical row of townships running north and south.

Question 160

A power granted by an enabling act refers to: A) - zoning. B) - eminent domain. C) - fair housing laws D) - all of the above

Answer 160

A) - zoning. Answer: A—Zoning is the regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, lot sizes, types of structure permitted, building heights, setbacks and density. Counties and/or municipalities generally enact their own zoning ordinances pursuant to an enabling act of the state.

Question 161

The Mt. Diablo Base Line runs: A) - northwest and southwest. B) - north and south. C) - east and west. D) - north-northeast and south-southwest.

Answer 161

C) - east and west. Answer: C—Base lines always run east and west. Meridian lines always run north and south.

Question 162

Which of the following liens covers all the property of a person? A) - specific lien B) - mechanic's lien C) - general lien D) - none of the above

Answer 162

C) - general lien Answer: C—General liens apply to all the licenee's real and personal property.

Question 163

A certain lot in a commercial subdivision contains 1,320 square feet. If the lot is rectangular and has a 45 foot frontage on "A" Street, what is the maximum depth of the lot in feet? A) - 28 feet B) - 29 feet C) - 30 feet D) - 31 feet

Answer 163

B) - 29 feet Answer: B—1,320 sq. ft. ÷ 45 front feet = 29+ feet deep

Question 164

The doctrine of constructive severance applies to: A) - removal of fixtures. B) - sales of growing crops. C) - removal of trade fixtures. D) - moving of buildings.

Answer 164

B) - sales of growing crops. Answer: B—The "doctrine of constructive severance" states that when growing crops are sold, they are legally considered severed.

Question 165

Artificial monuments are: A) - streets and canals. B) - rocks and trees. C) - rivers and canals. D) - trees and fences.

Answer 165

A) - streets and canals. Answer: A—A monument is a visible marker, either a natural or artifical object set by the government or surveyors, used to establish the lines and boundaries of a survey. Streets and canals are both manmade.

Question 166

The S 1/2 of the NW 1/4 of the SE 1/4 contains: A) - 40 acres. B) - 20 acres. C) - 10 acres. D) - 5 acres.

Answer 166

B) - 20 acres. Answer: B—Go backwards: First: Find the SE 1/4. Second: Find the NW 1/4 of the first area. Third: Find the S 1/2 of the second area. The darkened area contains 20 acres.

Question 167

An acre is: A) - 43,560 square feet. B) - 264' x 165'. C) - 198' x 220'. D) - any of the above.

Answer 167

D) - any of the above. Answer: D—One acre contains 43,560 square feet. All equal one acre.

Question 168

A parcel of land that measures 160' x 200' and is rectangular in shape would contain less than: A) - 3/4 acre. B) - 1/2 acre. C) - 1/5 acre. D) - 1/6 acre.

Answer 168

A) - 3/4 acre. Answer: A—160' x 200' = 32,000 square feet 3/4 of an acre is 32,670 sq. ft. (43,560, sq. ft. per acre x 3/4)

Question 169

A contract for the sale of rural property requires a: A) - rural route address. B) - legal description. C) - parcel number. D) - common description; e.g., Jones Ranch.

Answer 169

B) - legal description. Answer: B—Some property, such as rural, undeveloped land cannot be identified by a street address. The best practice is to use a complete legal description. Most parcels of land are defined by one of three methods of legal description: lot and block, rectangular survey system, and metes and bounds.

Question 170

The word "percolation" deals with: A) - coffee pots. B) - water mains. C) - smog. D) - septic tanks.

Answer 170

D) - septic tanks. Answer: D—Percolation refers to the returning of water to the land. It is important that a septic tank system has good percolation. Percolation also refers to the recharging of the underground water system (water table).

Question 171

A lien imposed by court action would be: A) - voluntary. B) - general. C) - specific. D) - constructive.

Answer 171

B) - general. Answer: B—A lien imposed by court action is considered a judgment. Once it is recorded, it creates a general lien on all property of the debtor in the county in which it was recorded.

Question 172

For FHA purposes, acquisition costs include nonrecurring closing expenses. Which of the following would not be included: A) - Discount points B) - FHA appraisal fee C) - Credit report fee D) - Impounds for property taxes

Answer 172

D) - Impounds for property taxes Answer: D—Nonrecurring costs are only paid one time in escrow. Impounds for property taxes are recurring. They may collect a couple months in advance during escrow, but impounds will continue for the life of the loan.

Question 173

Community property is property owned by: A) - churches. B) - husband and wife. C) - the municipality. D) - the community.

Answer 173

B) - husband and wife. Answer: B—Community property is automatically owned equally by each spouse regardless of whose name record title is held under.

Question 174

Which of the following must be recorded to be effective? A) - easement B) - judgment C) - grant deed D) - none of the above

Answer 174

B) - judgment Answer: B—Although a judgment is valid when awarded, it is only effective when properly recorded.

Question 175

Who of the following may file a valid mechanic's lien? A) - architect B) - truck driver C) - subcontractor D) - all of the above

Answer 175

D) - all of the above Answer: D—A mechanic's lien exists in favor of every person who contributes to the work of improvement. The Civil Code covers all mechanics (skilled workers), materialmen, contractors, subcontractors, lessors of equipment, artisans, architects, registered engineers, licensed land surveyors, machinists, builders, teamsters, and truck drivers.

Question 176

How many board feet of wood are there in a board that is 9' long and 4" by 4"? A) - 4 B) - 6 C) - 8 D) - 12

Answer 176

D) - 12 Answer: D—9' x 12" = 108" long. Multiply 108" x 4" wide x 4" thick = 1,728 cubic inches. 1,728 cubic inches / 144 cubic inches per board foot = 12 board feet

Question 177

A plot plan drawn by an architect is designed to: A) - show the side and exterior views of the improvement. B) - outline the foundation system. C) - give detailed specifications of the building components. D) - define the lot and show the location of the improvements on the site.

Answer 177

D) - define the lot and show the location of the improvements on the site. Answer: D—A plot plan shows the layout of improvement on a property site. The plot plan usually includes location, dimensions, parking areas, landscaping, and the like.

Question 178

Property is: A) - real if an estate. B) - personal if a fixture. C) - personal if other than real. D) - all of the above

Answer 178

C) - personal if other than real. Answer: C—One of the most basic definitions of real property is: "All property is personal if not real."

Question 179

A water company's right to run a water line through private property would most likely be: A) - riparian rights. B) - correlative rights. C) - an easement in gross. D) - a dominant tenement.

Answer 179

C) - an easement in gross. Answer: C—This is an example of a commercial easement in gross.

Question 180

What is a kiosk? A) - a outside utility sink B) - a term for a sunken living room C) - a gazebo or pavilion D) - a type of foundation footing

Answer 180

C) - a gazebo or pavilion Answer: C—A kiosk is a freestanding structure (open sides usually multi-sided) located in a shopping center or mall from which merchandise is sold. Another answer encountered on the state exam may be "a multi-sided structure found in a shopping mall."

Question 181

An unlicensed person could receive a finder's fee from a broker: A) - if the action constituted no more than an introduction of a potential buyer to the broker. B) - as long as the fee is disclosed. C) - as long as the fee is not charged to either the buyer or the seller. D) - for any reason.

Answer 181

A) - if the action constituted no more than an introduction of a potential buyer to the broker. Answer: A—A broker may pay a finder's fee to an unlicensed person for recommending the broker to the buyer or seller providing the unlicensed person does nothing which would require a real estate license.

Question 182

A parcel of land known as the servient tenement: A) - is the property benefited by the easement. B) - has an easement appurtenant attached thereto. C) - loses its status upon transfer of title. D) - is the property burdened by the easement.

Answer 182

D) - is the property burdened by the easement. Answer: D—The servient tenement is the property burdened by the easement.

Question 183

What are the units used to measure the length of a nail? A) - common B) - mil C) - centimeter D) - penny

Answer 183

D) - penny Answer: D—The original system was to measure the nail in relation to a silver penny. Thus, a ten-penny nail weighed as much as ten silver pennies.

Question 184

When referring to the measurement of lumber, which of the following would equal one board foot? A) - 1' x 1' x 1' B) - 12" x 12" x 1 C) - 12" x 1" x 12" D) - All of the above

Answer 184

C) - 12" x 1" x 12" Answer: C—A board foot is a measure of lumber one foot square by one inch thick: 12" x 1" x 12" = 144 cubic inches. There is no standard shape. For example, a piece of wood 6" x 6" x 4" contains one board foot.

Question 185

Prescription most nearly pertains to: A) - use. B) - easements. C) - title. D) - conveyance.

Answer 185

B) - easements. Answer: B—Prescription is a term usually applied to easements. We refer to easements by prescription.

Question 186

Ingress and egress apply to: A) - deed restrictions. B) - zoning. C) - easements. D) - homesteads.

Answer 186

C) - easements. Answer: C—The term ingress and egress are associated with the word access. To ingress means to go upon the land and to egress means to exit or leave the land.

Question 187

The framing members over windows and doors are called: A) - headers. B) - braces. C) - plates. D) - guides.

Answer 187

A) - headers. Answer: A—A header is a framing member over an opening in a wall. The most common are those over windows and doorways which serve to transfer the load. (See construction terms)

Question 188

Insulation materials are rated by their effectiveness according to their "R-value." The rating system is used to rate the material's: A) - heat replacement rate. B) - energy efficiency. C) - resistance to flow of heat. D) - resistance to moisture.

Answer 188

C) - resistance to flow of heat. Answer: C—The R-value rating system is used to measure a material's resistance to the flow of heat.

Question 189

A roof which slopes upward from all four sides and joins at the ridge is called a: A) - gable roof. B) - mansard roof. C) - hip roof. D) - gambrel roof.

Answer 189

C) - hip roof. Answer: C—See diagrams.

Question 190

An agreement to sell community real property, signed by one spouse only is: A) - valid. B) - unenforceable. C) - enforceable. D) - illegal.

Answer 190

B) - unenforceable. Answer: B—Neither spouse alone can sell community real property.

Question 191

To obtain an easement by prescription, one must: A) - use the property B) - live on the property C) - maintain the property D) - pay for the property

Answer 191

A) - use the property Answer: A—Prescriptive easements are obtainable after using the property for five years. One does not need to occupy the property.

Question 192

The metal used by builders to prevent the seepage of water at certain joints in buildings is known as: A) - guttering. B) - draining. C) - stoving. D) - flashing.

Answer 192

D) - flashing. Answer: D—Flashing serves as protection against water entering the building framework at valleys in the roof and at other critical joints between the roof and wall sections. Flashing is usually made of galvanized steel. (See construction terms)

Question 193

A legal act to bring about a trust deed sale can be: A) - judicial. B) - judicial or trustee's sale. C) - trustee's sale. D) - public taking.

Answer 193

B) - judicial or trustee's sale. Answer: B—A mortgage without a power of sale can only be foreclosed judicially (i.e., by owner proceeding). A mortgage or deed of trust which expressly provides for power of sale may be foreclosed judicially or by trustee's sale.

Question 194

An interest in real property acquired by prescription is: A) - the right to use another's land. B) - a possessory title. C) - an equitable interest. D) - a private grant.

Answer 194

A) - the right to use another's land. Answer: A—Adverse possession refers to land while prescription is a term usually applied to easements. We speak of title by adverse possession and easements by prescription. An easement by prescription creates a right to use someone else's land.

Question 195

An easement may be created for what length of time? A) - perpetuity B) - the lifetime of a person C) - a term of years D) - any of the above

Answer 195

D) - any of the above Answer: D—An easement may be created for any length of time.

Question 196

How many cubic feet of concrete are there in a cubic yard? A) - 3 B) - 9 C) - 12 D) - 27

Answer 196

D) - 27 Answer: D—A cubic yard is a volume that contains 27 cubic feet.

Question 197

An easement differs from a license in that a license: A) - must be created by written instrument. B) - is of indefinite duration. C) - may be assigned. D) - may be revoked.

Answer 197

D) - may be revoked. Answer: D—A license is the personal, revocable, nonassignable permission to do some act on the land of another. An easement cannot be revoked.

Question 198

Who of the following generally installs conduit? A) - electrician B) - plumber C) - carpenter D) - inspector

Answer 198

A) - electrician Answer: A—Conduit is usually a metal pipe in which electrical wiring is installed.

Question 199

Which of the following are known as artificial monuments? A) - canals and streets B) - streets and trees C) - trees and fences D) - fences and rocks

Answer 199

A) - canals and streets Answer: A—A monument is an object that marks property lines or the like. Streets may or may not be artificial. Canals are not natural, therefore artificial.

Question 200

Before damming or diverting water, a landowner must have permission from: A) - the local flood control district B) - the state water commission C) - adjoining land owners D) - all of the above

Answer 200

A) - the local flood control district Answer: A—This is for the protection of the general public.

Question 201

What is considered real property? A) - stock in a mutual water company B) - unharvested crops C) - crops sold with the property D) - all of the above

Answer 201

D) - all of the above Answer: D—Stock in a mutual water company is appurtenant to the land, therefore it is considered part of the real property and would transfer when the property is sold. Crops growing in the ground are always considered real property while in the ground. Ownership of the crops could be in question, but not the fact that they are real property while still growing.

Question 202

The legal seizure of property for sidewalks by the government is referred to as: A) - zoning. B) - escheat. C) - eminent domain. D) - lis pendens.

Answer 202

C) - eminent domain. Answer: C—Eminent domain is condemnation by government for public purposes, just compensation must be paid. Condemnation is part of the government's right of eminent domain.

Question 203

A judgment will be most effective in the county where the: A) - judgment was originally rendered. B) - defendant resides. C) - plaintiff resides. D) - judgment is recorded.

Answer 203

D) - judgment is recorded. Answer: D—A judgment has no legal effect until recorded, and then only to the extent it is recorded in a county in which the defendant owns real property.

Question 204

Which of the following is NOT a type of soil or a soil condition? A) - alkaline B) - expansive C) - adobe D) - deciduous

Answer 204

D) - deciduous Answer: D—Deciduous pertains to plants that lose their leaves, not ground. Expansive soil is tightly packed, such as clay or adobe. Alkaline refers to the condition of the soil as to alkali content (salt).

Question 205

Soil pipe is usually used for: A) - sewers. B) - water systems. C) - gas lines. D) - sprinkler systems.

Answer 205

A) - sewers. Answer: A—Soil pipe is the pipe that carries waste from the house to the sewer in the street.

Question 206

In which of the following ways is fraud different from misrepresentation? A) - A misrepresentation is a deliberate attempt to deceive while fraud is not. B) - Fraud is a deliberate attempt to deceive while a misrepresentation is not. C) - There is no difference between fraud and misrepresentation. D) - A misrepresentation cannot result in discipline, and fraud will always involve discipline.

Answer 206

B) - Fraud is a deliberate attempt to deceive while a misrepresentation is not. Answer: B—Fraud involves a deliberate attempt to deceive, misrepresentation does not. A licensee may be disciplined for either fraud or misrepresentation.

Question 207

The higher the EER rating: A) - the lower the BTU's. B) - the higher the BTU's. C) - the bigger the unit is. D) - the more watts needed to run the unit.

Answer 207

A) - the lower the BTU's. Answer: A—The efficiency rating of an air conditioning unit is called is EER or Energy Efficiency Rating. The higher the EER, the more efficient the unit and the more money saved on cooling bills. With this question, it is correct to say the higher the EER rating, the lower the BTU's (British Thermal Unit).

Question 208

A judgment that has been recorded would be a(n): A) - involuntary lien. B) - superior lien. C) - equitablie lien. D) - inferior lien.

Answer 208

A) - involuntary lien. Answer: A—A judgment lien is an involuntary lien.

Question 209

B.T.U.'s would indicate: A) - water output. B) - butane gas pressure. C) - heating output. D) - electrical resistance.

Answer 209

C) - heating output. Answer: C—B.T.U. stands for British Thermal Unit. One BTU is the amount of heat required to raise one pound of water one degree Fahrenheit in temperature.

Question 210

Potable means: A) - drinkable. B) - water. C) - sewage. D) - land.

Answer 210

A) - drinkable. Answer: A—Potable means drinkable (safely and agreeably used for drinking).

Question 211

Which of the following is NOT necessary to establish title by adverse possession? A) - Possession open and notorious for five years B) - Paying taxes for five years C) - Use of the entire property D) - Against the true wishes of the owner

Answer 211

C) - Use of the entire property Answer: C—There are five requirements to acquire title by adverse possession: The possession must be by actual occupation and be open and notoroius. It must be hostile to the true owner's title. It must be under claim of right or color of title. Possession must be continuous and uninterrupted for a period of five years. Claimant must have paid all real property taxes levied and assessed for a period of five years continuously.

Question 212

Acquisition of property by its incorporation with other property is known as: A) - accession. B) - succession. C) - recession. D) - commingling.

Answer 212

A) - accession. Answer: A—Statement of fact

Question 213

A group of neighbors had pleaded with their neighbor Mr. Brown to stop burning garbage on his property. They finally obtained a court order to stop him from continuing to do so. This court order would be known as a(n): A) - judgment. B) - injunction. C) - inverse condemnation. D) - indenture.

Answer 213

B) - injunction. Answer: B—An injunction is a legal action whereby a court issues a writ that forbids a party defendant from doing some act or compels the defendant to perform an act. An injunction requires the person to whom it is directed to refrain from doing a particular thing, such as violating deed restrictions or house rules prohibiting pets.

Question 214

Who is responsible for disclosure of a Mello-Roos bond against the property? A) - seller B) - seller's agent C) - buyer's agent D) - both buyer's and seller's agent

Answer 214

A) - seller Answer: A—Based on passage of the Mello-Roos Community Facilities Act of 1982, certain housing tracts may be within what are called "community facilities districts" where special taxes are assessed to finance designated public facilities and/or services. Mello-Roos liens are usually municipal bonds issued to fund streets, sewers, and other infrastructure needs before a housing development is built. The seller of a property consisting of one-to-four dwelling unit or a lease (for more than five years) subject to the lien of a Mello-Roos community facilities district must make a good faith effort to obtain from the district a disclosure notice concerning the special tax and give the notice to the prospective buyer.

Question 215

The agent does not disclose a Mello-Roos tax. After close of escrow, the buyer may: A) - rescind the contract. B) - sue the seller for recovery. C) - sue the selling agent for recovery. D) - sue the listing agent for recovery.

Answer 215

A) - rescind the contract. Answer: A—Failure to give notice of a Mello-Roos tax before signing of the sales contract permits the buyer or tenant a three-day right of rescission after receipt of the notice.

Question 216

The Statute of Limitations on action for removal of an encroachment is: A) - one year. B) - two years. C) - three years. D) - five years.

Answer 216

C) - three years. Answer: C—The party being encroached upon must bring legal action for removal within three years of the discovery of the encroachment.

Question 217

An agent must submit all new offers to the owner until: A) - open of escrow. B) - close of escrow. C) - the agent decides. D) - the broker decides.

Answer 217

B) - close of escrow. Answer: B—Offers must be presented even after the seller has accepted an offer. It is a violation when acting as a listing agent to willfully fail to present any written offer to purchase received prior to the closing of the sale, unless expressly instructed by the owner not to present such an offer or unless the offer is patently frivolous.

Question 218

An appraiser would use which of the following approaches in appraising a shopping center? A) - Comparison Approach B) - Capitalization Approach C) - Replacement Cost Approach D) - Market Data Approach

Answer 218

B) - Capitalization Approach Answer: B—The shopping center would regularly produce income and would be valued using the capitalization (income) approach to value.

Question 219

Jackson leased his home to Sullivan with a verbal agreement to sell the property to Sullivan. Jackson knows that Sullivan has been making significant improvements to the property in reliance on that verbal agreement. Jackson now declines to sell the property to Sullivan. Which of the following best describes the rights of the parties? A) - Jackson must sell because he made an ostensible agreement. B) - Sullivan has no right to enforce the verbal agreement. C) - Jackson must sell because the doctrine of estoppel will apply in this case. D) - Jackson does not have to sell because of the Statute of Frauds.

Answer 219

C) - Jackson must sell because the doctrine of estoppel will apply in this case. Answer: C—The doctrine of estoppel would apply when one person allows another to rely on statements made to the detriment of that person. In this case, Jackson allowed Sullivan to rely on a verbal promise to sell and to make substantial improvements to the property. The court would "stop" Jackson from refusing to sell.

Question 220

Pest control reports which contain information concerning wood destroying insects are kept on file with the: A) - Department of Wood-destroying Control. B) - Structural Pest Control Board. C) - Environmental Protection Agency. D) - United States Department of Insect Control.

Answer 220

B) - Structural Pest Control Board. Answer: B—Statement of fact

Question 221

In purchasing a home, the purchaser generally gives a note secured by a first deed of trust to a lending institution. In addition, he may give the seller cash and a note secured by a second deed of trust on the property. A "request for notice" would be filed for the benefit of the: A) - mortgagor. B) - holder of the second. C) - trustor. D) - holder of the first.

Answer 221

B) - holder of the second. Answer: B—A "request for notice of default" is filed with the county recorder when the second trust deed is recorded. If there is a default on the first trust deed, the recorder will send a copy of the "Notice of Default" to the holder of the second. This gives the holder of the second time to reinstate the first and begin foreclosure on the second.

Question 222

Mechanic's liens are: A) - specific liens. B) - general liens. C) - voluntary liens. D) - none of the above.

Answer 222

A) - specific liens. Answer: A—A mechanic's lien only affects the property of the party against whom the lien is filed.

Question 223

Carter bought 10 acres of vacant land for $20,000 per acre, making a cash down payment of $20,000 and executing a straight note and a blanket deed of trust for the balance. As a part of the note, the lender agreed that when Carter made an additional payment of $20,000 on the principal, the trustee would issue a partial reconveyance for one acre. Carter has paid a total of $40,000 on the note and now owns two acres free and clear. The percentage of his equity in the encumbered property: A) - has been eliminated. B) - remains the same. C) - has increased. D) - has decreased.

Answer 223

C) - has increased. Answer: C—The owner's equity in the remaining lots has increased. When he purchased the entire parcel he made a down payment of $20,000. His equity in each lot is determined as follows: $20,000 / 10 = $2,000 per lot When he pays off two of the lots, he has 8 and his equity would be determined as follows: $20,000 ÷ 8 = $2,500 per lot

Question 224

Which of the following zoning classifications would permit the construction of a tri-plex (multi-family residential dwelling)? A) - A-4 B) - C-4 C) - R-3 D) - M-3

Answer 224

C) - R-3 Answer: C—Multi-family residential (tri-plex) would be R-3. "A" designates agricultural zoning.

Question 225

An estoppel is a: A) - plumbing fixture. B) - trade fixture. C) - notice to terminate agency. D) - document confirming tenant's rights and landlord's responsibilities.

Answer 225

D) - document confirming tenant's rights and landlord's responsibilities. Answer: D—A purchase of rental property might have the existing tenants execute estoppel statements acknowledging their obligation to pay the proper amount of rent according to the specified terms of their leases.

Question 226

The "Statement of Purpose" section of a narrative appraisal report would contain which of the following? A) - The type of value being given B) - The method of appraisal approach C) - The reconciliation of values D) - The valuation

Answer 226

A) - The type of value being given Answer: A—The type of value being given is stated in the "Statement of Purpose." Appraisals are used for various reasons (i.e., loans, insurance, taxation, public acquisition).

Question 227

Mechanic's liens are based on: A) - English common law. B) - the California Civil Code. C) - the Business and Professions Code. D) - Federal mechanic's lien law.

Answer 227

B) - the California Civil Code. Answer: B—Mechanic's lien law is statutory law contained in the California Civil Code.

Question 228

Which of the following is true regarding the separate rights of tenants in common? A) - Each owner has the right to possession of the entire property. B) - One owner cannot institute an action in court to divide the property. C) - One owner cannot convey his/her interest without the consent of the others. D) - One owner can exclude the other owners from possessing any of the property.

Answer 228

A) - Each owner has the right to possession of the entire property. Answer: A—Each owner in a tenancy in common has the right to possession of the entire property. Choice (D) is incorrect for this reason: Each of the owners can sell their interest without the consent of the others and anyone can sue for partition action.

Question 229

The practice of charging discount points on FHA insured loans is because the lender desires to: A) - equalize the yield on FHA loans to the yield on conventional loans. B) - create a competitive environment between FHA loans and conventional loans. C) - close the gap between FHA loans and conventional loans on the secondary market. D) - all of the above.

Answer 229

D) - all of the above. Answer: D—Lenders would not be willing to make FHA loans if they could not receive the same yield on FHA loans as they do on conventional loans. The secondary market would not be willing to purchase FHA loans if the yield was lower than on conventional loans. In order to solve this problem and to make these loans available to buyers, discount points are charged. They may be paid by either buyer or seller.

Question 230

A mechanic's lien has advantages over the other types of liens in that: A) - it has priority over recorded trust deeds. B) - it has priority over certain other types of liens. C) - its effective date is the date work commenced. D) - its effective date would normally be prior to the recording date.

Answer 230

C) - its effective date is the date work commenced. Answer: C—The effective date of a mechanic's lien is the date of commencement of work rather than the filing date. This would give them priority over subsequently recorded liens.

Question 231

A broker has a management contract on an apartment building complex. He collects rents and deposits them in his trust fund bank account. He also acts as a broker on other transactions and puts buyer deposits in the same trust fund bank account. Which of the following is correct regarding this practice? A) - It is legal as long as he keeps records of beneficiary transactions. B) - It is legal as long as he is bonded for the maximum amount of the trust fund bank account. C) - It is legal as long as he does not deposit more than $30,000. D) - This is never legal.

Answer 231

A) - It is legal as long as he keeps records of beneficiary transactions. Answer: A—A real estate broker may operate a property management company and a real estate sales office with his or her broker license. Client's trust funds from both activities may be placed in one trust account. It is not necessary for the broker to maintain separate trust accounts for each activity.

Question 232

In new construction financing, when does the lender usually release the final payment to the borrower? A) - When work is completed B) - When the owner accepts the property C) - When the lien period expires D) - When the Notice of Completion is recorded

Answer 232

C) - When the lien period expires Answer: C—The lender will not release final payment until the lien period has expired.

Question 233

Buyer B has purchased under a contract of sale from Seller A. "A" is one month behind in his mortgage payments on the property which is the same amount that "B" pays each month to "A". With regard to the current payment "B" makes to "A": A) - it must be immediately applied to A's mortgage B) - it need not be applied unless A is three months delinquent. C) - "A" should not have sold his property with an outstanding loan balance. D) - a buyer on a land contract should check on encumbrances before entering into a contract of sale.

Answer 233

A) - it must be immediately applied to A's mortgage Answer: A—The seller is required by law to apply the payment received from the buyer to the amount due on the existing trust deed.

Question 234

A homeowner took a $30,000 loss on his property. For federal income tax purposes, he can declare: A) - $10,000, B) - 40% of the loss as deductible. C) - the capital gain less the loss as deductible. D) - nothing as deductible.

Answer 234

D) - nothing as deductible. Answer: D—Although capital gains on the sale of the owner's principal place of residence may be taxed if the gain exceeds the statutory amount, losses on the sale of a principal place of residence are not deductible.

Question 235

Who funds private mortgage companies? A) - Government National Mortgage Association B) - Federal Deposit Insurance Corporation C) - Private premiums of insurance and pools of insurance policies D) - Federal Home Loan Mortgage Corporation

Answer 235

C) - Private premiums of insurance and pools of insurance policies Answer: C—Private mortgage companies are really Mortgage Bankers. Most Mortgage Bankers fund loans themselves through a contract with an insurance company.

Question 236

Which of the following would not be a valid reason for the seller to terminate a listing? A) - The broker's license was revoked. B) - The seller declared bankruptcy. C) - The broker was declared mentally incompetent prior to the listing. D) - The broker was declared mentally incompetent after the signing of the listing.

Answer 236

B) - The seller declared bankruptcy. Answer: B—If the broker's license is revoked, he cannot contract with the general public; therefore, the listing would be terminated. A contract becomes void when one of the parties is judicially declared incompetent. The fact that the seller declared bankruptcy could make the sale more difficult, but would not be grounds for terminating the listing.

Question 237

When the FED takes measures to implement a "tight money" market, the net effect usually results in an increase in the: A) - loan funds for new home construction. B) - use of second trust deeds in real estate financing. C) - sales volume of single family residence. D) - use of new first trust deed financing in real estate transactions.

Answer 237

B) - use of second trust deeds in real estate financing. Answer: B—The use of second trust deeds is most prevalent when there is a tight money market. This means that interest rates are high and money is more difficult to get.

Question 238

By law, a monthly payment on a mortgage loan is considered late when it is received by the lender: A) - 3 days after the due date. B) - 5 days after the due date. C) - 10 days after the due date. D) - more than 10 days after the due date.

Answer 238

D) - more than 10 days after the due date. Answer: D—Although most California mortage lenders allow the borrower a 15-day grace period in getting the payment to the lender, federal guidelines would allow the lender to declare the payment late if it is received more than 10 days after the due date.

Question 239

Personal property becomes real property when: A) - transferred. B) - hypothecated. C) - it is fully depreciated. D) - it becomes immovable.

Answer 239

D) - it becomes immovable. Answer: D—Property, whether real or personal, may undergo a change of class, as when personal property readily movable becomes immovable by becoming permanently affixed to land or improvements.

Question 240

If you went to the city/county and wanted to change the electrical requirements specific to the structure from the standard normal requirements, this would be a(n): A) - variance B) - exception C) - estoppel D) - emblement

Answer 240

A) - variance Answer: A—If the city or county allows you to do something on your property which differs from the building codes, it is called a variance.

Question 241

A man bought a mobile home two months ago and moved it to a mobile home park. He than wanted to list it for sale. Which of the following is true? A) - It cannot be listed because it is less than two years old. B) - It cannot be listed unless the mobile home park gives written permission. C) - It can only be listed if it is permanently attached to a foundation. D) - The mobile home may be listed for sale.

Answer 241

D) - The mobile home may be listed for sale. Answer: D—Since the owner owned the mobile home for two months, it is used. An agent can take a listing on a mobile home as long as the mobile home is "used".

Question 242

A mechanic's lien filed today would undoubtedly take precedence over: A) - a mortgage filed yesterday. B) - an unrecorded deed delivered last week. C) - a tax lien to be filed tomorrow. D) - none of the above.

Answer 242

B) - an unrecorded deed delivered last week. Answer: B—A mechanic's lien dates back to the commencement of work. It does have precedence over deeds whether they are delivered or recorded.

Question 243

Parsons wants to buy a property for sale at $289,000. He does not have the money so he persuades Jones to buy the property and immediately sell it to Parsons on a land contract for $330,000. This is a(n): A) - voidable transaction. B) - valid purchase and resale transaction. C) - void transaction. D) - illegal transaction.

Answer 243

B) - valid purchase and resale transaction. Answer: B—Such a sequence of events would be a valid procedure when one is not able to immediately pay cash for the property.

Question 244

Deed restrictions are: A) - encumbrances. B) - general liens. C) - specific liens. D) - all of the above.

Answer 244

A) - encumbrances. Answer: A—CC&R's are encumbrances but not liens.

Question 245

Susan owns an apartment house and deducted $10,000 from the gross income for depreciation on her federal income tax return. For income tax purposes, the basis of the property is: A) - adjusted only when sold. B) - unaffected. C) - increased by $10,000. D) - decreased by $10,000.

Answer 245

D) - decreased by $10,000. Answer: D—Basis is the value carried on the books of the owner. When the owner deducts $10,000 for depreciation, the book value/basis goes down by $10,000.

Question 246

Mr. Friedman purchased real property on which there was an old home. He removed the run down home and had the lot graded. He immediately obtained a construction loan secured by a deed of trust. During the construction period, a painter who had not been paid filed a mechanic's lien. Which of the following is correct? A) - The mechanic's lien takes priority over the trust deed because the priority dates back to when the construction actually began. B) - The trust deed takes priority because it was recorded before completion of construction. C) - The trust deed takes priority because it was recorded prior to the mechanic's lien. D) - Mechanic's liens always take priority over trust deeds.

Answer 246

A) - The mechanic's lien takes priority over the trust deed because the priority dates back to when the construction actually began. Answer: A—Since the improvements began prior to recordation of the trust deed, all materials and labor contributors have priority over the trust deed.

Question 247

An advertisement by a mortgage company that is soliciting real estate loans must include: A) - only the name of the broker or mortgage company. B) - the address of the broker or mortgage company. C) - the telephone number of the broker or mortgage company. D) - the name and license number of the broker or mortgage company.

Answer 247

D) - the name and license number of the broker or mortgage company. Answer: D—A mortgage loan broker must put both the name of the broker or mortgage company and license number in any ad.

Question 248

Private restriction on the use of land may be created by: A) - private land use controls. B) - written agreement. C) - general plan restrictions in subdivisions. D) - all of the above.

Answer 248

D) - all of the above. Answer: D—Private restrictions are created by means of covenants, conditions and restrictions (CC&R's) written into real property instruments such as deeds and leases.

Question 249

Once an offer has been made and accepted by the seller, the buyer would have: A) - pending title. B) - equitable title. C) - contract title. D) - no title.

Answer 249

D) - no title. Answer: D—Title remains with the owner (seller) until all the contingencies of the contract have been met and escrow closes. When escrow closes, legal title would transfer from the seller to the buyer.

Question 250

A broker wanted to operate a real estate office under the fictitious name MLB Realty. Before operating under a fictitious name, the broker must: A) - publish the fictitious name in a newspaper of general circulation. B) - file under the Secretary of State. C) - obtain a DRE license bearing the fictitious business name. D) - file with the city as a fictitious business.

Answer 250

C) - obtain a DRE license bearing the fictitious business name. Answer: C—Although the other choices may be steps in obtaining a fictitious business name, the broker may not do business under a fictitious name until he/she has a DRE license issued in the fictitious name.

Question 251

John wrote an offer that was accepted, and put down a deposit in the amount of $1,832. The lender was willing to give a first loan in the amount of 80% of the appraised value. John sold a note in the amount of $9,600 at a 30% discount and applied this cash to the purchase. Assuming the first loan was for $132,000, how much more cash does John need to cover the purchase? A) - $23,233 B) - $24,448 C) - $25,233 D) - $26,448

Answer 251

B) - $24,448 Answer: B—$132,000 ÷ .80 = $165,000 $165,000 - $132,000 = $33,000 Note: $9,600 - 30% = $6,720 (cash from note) $6,720 + 1,832 = $8,552 (cash John has) $33,000 - $8,552 = $24,448 (cash needed to complete sale)

Question 252

Ownership of an undivided interest in land with no right of survivorship is found in: A) - fee simple defeasible estates. B) - tenants in common. C) - severalty. D) - joint tenancy.

Answer 252

B) - tenants in common. Answer: B—The words "undivided interest" coupled with "no right of survivorship" refer to tenants in common.

Question 253

Cheryl Freeman purchased a property for $72,000. She financed the purchase with an interest-only loan for the first five years and paid no principal on her loan. She sold the property within a few years for twice as much as she paid for it. How much did her investment on the dollar increase? A) - 2 times B) - 4 times C) - 8 times D) - 10 times

Answer 253

A) - 2 times Answer: A—Cheryl sold her property for $144,000 (2 x $72,000 = $144,000). Since she originally invested $72,000 and sold the property for $144,000, each of the original dollars invested increased 2 times.

Question 254

A broker owns many rental properties. He is selling one of the properties and the buyer gives him a check as a deposit. He should: A) - place the deposit check and all rents in his trust account. B) - open a separate trust account for rents and put the deposit check in his old trust account. C) - have two separate trust accounts. D) - not deposit either the rents or the deposit check in his trust account.

Answer 254

C) - have two separate trust accounts. Answer: C—Although the other choices may be steps in obtaining a fictitious business name, the broker may not do business under a fictitious name until he/she has a DRE license issued in the fictitious name.

Question 255

Which of the following would contribute the most in creating a period of inflation? A) - Declining dollar value B) - Appreciation C) - Lack of investment D) - Rising rent costs

Answer 255

B) - Appreciation Answer: B—Appreciation is really a result of inflation as well as a contributor to inflation. Rising rent costs are a result of inflation. Declining dollar value abroad is also a contributor to inflation.

Question 256

A covenant in Johnson's deed states that he may not operate a dog kennel on the property. Johnson proceeds to build a commercial dog kennel. Adjoining land owners would have recourse by: A) - taking Johnson's property. B) - suing Johnson for damages. C) - seeking an injunction. D) - filing criminal charges.

Answer 256

C) - seeking an injunction. Answer: C—An injunction would compel Mr. Johnson to close the kennel.

Question 257

Concerning deed restrictions, which of the following is TRUE? A) - Zoning restrictions are public restrictions. B) - CC&R's are private restrictions. C) - Deed restrictions may be creatd by developers. D) - All of the above.

Answer 257

D) - All of the above. Answer: D—All of these are true with regard to restrictions.

Question 258

A commercial bank agreed to loan George $180,000 for a one year term, but required George to maintain a savings account of $180,000 at all times during the term of the loan. This provision is known as: A) - risk control. B) - compensation balance. C) - mortgage insurance. D) - security deposit.

Answer 258

B) - compensation balance. Answer: B—A compensation balance is used when the borrower has less than perfect credit. The lender will require a savings account. If the borrower defaults, the lender will use the funds in the savings account to offset any losses during foreclosure.

Question 259

Deed restrictions are created by: A) - governments. B) - grantors. C) - cities and counties. D) - all of the above.

Answer 259

B) - grantors. Answer: B—Deed restrictions (CC&R's) are created by grantors in their deeds.

Question 260

A broker has been in the business for many years. He currently has 40 exclusive listings in his office. The broker dies and his daughter who is also a broker, takes over for him. What should she do about the current listings? A) - Just inform the seller that she is taking over as broker. B) - She must attempt to renegotiate all of the listings. C) - She need only inform the Department of Real Estate that she is now the broker of record. D) - Do nothing

Answer 260

B) - She must attempt to renegotiate all of the listings. Answer: B—Listings are personal service contracts and terminate with the death of either party. The listing agreement is between the seller and the broker. When the broker dies, the listing terminates. The new broker must attempt to renegotiate the listings with the sellers.

Question 261

Steve has an old building where he runs his business. The city has just condemned the property through eminent domain. In this case: A) - the city pays only just compensation. B) - the city pays compensation for the property and separate compensation for his stock-in-trade. C) - the city must pay compensation for the property, stock-in-trade and cost of moving. D) - the city does not need to pay compensation.

Answer 261

A) - the city pays only just compensation. Answer: A—When a city condemns a property by means of eminent domain, it is required to pay just compensation for the property only. "Just compensation" is usually the fair market value of the property.

Question 262

Who develops deed restrictions? A) - developers. B) - cities and counties. C) - state government. D) - federal government.

Answer 262

A) - developers. Answer: A—CC&R's are commonly found in the Declaration of Restrictions filed by the developer in a subdivision plan.

Question 263

Subdivisions are controlled by: A) - the city in which the subdivision is located. B) - the city or the county. C) - the Department of Housing and Urban Development. D) - the California Department of Corporations.

Answer 263

B) - the city or the county. Answer: B—One of the two major laws that regulate subdivisions in California is the Subdivision Map Act. The purpose of this act is to develop a subdivision filing procedure to be followed at the city or county level and to make sure that subdividers comply with a city's or county's master plan. Cities and counties have the legal authority to enact subdivision ordinances. This gives them control over what type and size subdivisions may be built and the physical aspects of the subdivisions such as the streets, sidewalks, sewers, recreational areas, and flood control.

Question 264

A non-riparian landowner obtains the right to take water from another property by: A) - percolation. B) - appropriation. C) - allocation. D) - avulsion.

Answer 264

B) - appropriation. Answer: B—Appropriative water rights allow a non-riparian owner to divert water flowing on another owner's land or water flowing on the public domain.

Question 265

A flood hazard exists when an area floods: A) - once a year. B) - once in five years. C) - more than twice in ten years. D) - three times in ten years.

Answer 265

C) - more than twice in ten years. Answer: C—A flood hazard is an area which floods more than twice in ten years.

Question 266

A deed has a provision regarding racial and religious discrimination. The deed may be changed: A) - if the restrictions are discriminatory or offensive. B) - if the restrictions are pre-1978. C) - if a title company agrees the wording is discriminatory or offensive. D) - by court action.

Answer 266

A) - if the restrictions are discriminatory or offensive. Answer: A—Effective January 2000, a county recorder, title insurance company, escrow company, or real estate licensee who provide a declaration, governing documents, or deed to any person must provide a specified statement about the illegality of discriminatory restrictions and the right of the homeowners to have such language removed. The statement must be contained in either a cover page placed over the document or a stamp on the first page of the document.

Question 267

If you were granted the right to purchase a business with ready product, business plans, development plans and marketing plans; this would be a(n): A) - business opportunity. B) - franchise. C) - grant deed. D) - estate for years.

Answer 267

B) - franchise. Answer: B—A franchise agreement is an agreement between a franchisor and franchisee, whereby the franchisee is given the right to distribute goods and services under a marketing plan prescribed by the franchisor.

Question 268

A developer of a condominium project placed a restriction in the CC&Rs saying that no condominium owner could place a "for sale" sign in front of their condominium until all of the original condominiums had been sold. Regarding this restriction: A) - it is unenforceable because it infringes on the owner's right of alienation. B) - it is unenforceable because it infringes on the owner's right of hypothecation. C) - it is unenforceable because it violates the owner's right of free speech. D) - it is enforceable.

Answer 268

A) - it is unenforceable because it infringes on the owner's right of alienation. Answer: A—The courts have ruled that this restriction infringes on the owner's right of alienation. It is considered "restraint of trade." The owner has the right to place a "for sale" sign of reasonable size on the property. (See CC&R)

Question 269

Broker Jones receives a 3% deposit from a buyer for the purchase of a house. He also receives appraisal and credit report fees for another client. In addition, he receives rent money on an apartment building which he manages for a client. With regard to these funds: A) - he can put everything in one trust account. B) - he must have a separate trust account for the 3% deposit. C) - he must have a separate trust account for each client. D) - he must have three accounts - one for sales, one for rentals, and one for loans.

Answer 269

A) - he can put everything in one trust account. Answer: A—It is legal for a broker to operate a property management company, a real estate sales office, and/or mortgage loan brokerage office. It is legal for him to place all trust funds received into one trust account as long as he keeps accurate records of beneficiary transactions.

Question 270

The sudden tearing away or removal of land by water flowing through or over it is called: A) - avulsion. B) - accretion. C) - accession. D) - alluvion.

Answer 270

A) - avulsion. Answer: A—Avulsion is the loss of land as a result of its being washed away by a sudden or violent action of nature.

Question 271

Which of the following is an example of involuntary alienation? A) - sale for unpaid taxes B) - eminent domain C) - foreclosure sale D) - all of the above

Answer 271

D) - all of the above Answer: D—Involuntary alienation takes place when property is sold against the owner's will.

Question 272

Who would be responsible for paying the 1% origination fee on an FHA loan? A) - Escrow officer B) - The seller C) - The buyer D) - The lender

Answer 272

C) - The buyer Answer: C—The 1% loan origination fee is required by FHA and is paid by the borrower.

Question 273

Conditions differ from covenants in which of the following ways? A) - Only conditions "run with the land." B) - Covenants cannot be created by grant. C) - Conditions can only be created by grant. D) - Only covenants restrict the use of the land.

Answer 273

C) - Conditions can only be created by grant. Answer: C—A condition is a qualification of a grant of estate and can only be imposed at the time of the grant. A covenant, however, can be imposed at another time by mutual agreement. Both conditions and covenants can "run with the land."

Question 274

A landlord is trying to evict a tenant, and services an eviction notice. Under what circumstances could a tenant remain in the property? A) - The tenant has not had hot water for months. B) - Unlawful entry by the landlord. C) - The lessor failed to repair a weak staircase. D) - All of the above

Answer 274

D) - All of the above Answer: D—These are all examples of constructive eviction. When the landlord (lessor) engages in constructive eviction the tenant may move without giving the thirty day notice or may correct the situation by paying for the repair and deducting the bill from the rent. This is called "rental offset" and the tenant may do this twice in one twelve month period. The lessor may not evict a tenant if the problem is the lessor's fault.

Question 275

An agent becomes the agent of the seller when both the seller and the agent sign: A) - The purchase agreement B) - The Transfer Disclosure Statement C) - The Agency Disclosure Statement D) - The Listing Agreement

Answer 275

D) - The Listing Agreement Answer: D—The Listing Agreement creates the agency relationship between the seller and the listing agent.

Question 276

A listing broker wants to give $50 to a buyer and $50 credit against his commission to a buyer or seller who either lists with him or purchases one of his listings. With regard to his actions: A) - it is permissible to give $50 to the buyer but not the seller. B) - it is permissible to give $50 to the seller only. C) - it is permissible to give $50 to the buyer and to credit his commission with the seller. D) - it is against the real estate law to give $50 to either the buyer or the seller.

Answer 276

C) - it is permissible to give $50 to the buyer and to credit his commission with the seller. Answer: C—It is permissible for a listing broker to rebate a portion of his/her commission to the buyer or seller as long as the rebate and/or credit is disclosed to all parties.

Question 277

"O" held a fee simple estate and sold it to "A" but retained a life estate in the property and remained in possession. "O" then sold his interest to "B" and gave up possession to "B". When "A" was advised of the sale, he demanded possession. Who is entitled to possession? A) - "A" B) - "B" C) - "O" D) - "A" and "B"

Answer 277

B) - "B" Answer: B—The holder of a life estate may do anything he/she wants within the law. He/she may sell, give away, lease, encumber, or do nothing at all with the estate. Whatever was done to the estate; however, terminates at death.

Question 278

The purchase power of a dollar is measured: A) - by reference to price indexes. B) - by the interest paid on savings. C) - by the Federal Reserve Board. D) - by reference to the local real estate market.

Answer 278

A) - by reference to price indexes. Answer: A—The purchasing power of a dollar is measured by the Consumer Price Index.

Question 279

A negative declaration would indicate: A) - a negative influence of the development on the environment. B) - no significant influence of the development on the environment. C) - greater operating expenses than income. D) - a developer's poor financial status to protect purchasers.

Answer 279

B) - no significant influence of the development on the environment. Answer: B—Environmental Impact Reports (EIR) may be required by local government prior to approval of the map for a subdivision. If it is determined that the proposal will NOT have a potentially significant adverse affect, the city or county prepares a negative declaration prior to making a decision on the development.

Question 280

Joan Black owned property in severalty as a single woman. She later married and owned the property under her married name, Joan Redding. This may be confusing in the future because: A) - it will create a cloud on the title. B) - it may cause the property to automatically become community property. C) - it automatically creates a joint tenancy. D) - it may jeopardize her ownership rights.

Answer 280

A) - it will create a cloud on the title. Answer: A—This creates a cloud on the title. It can be cleared by Joan producing her marriage certificate or other proof that she is the same person.

Question 281

Local governments are authorized to create Community Redevelopment Agencies (CRA's) for the purpose of correcting blighted conditions and to expand the supply of low and moderate income housing within their jurisdiction. By law, CRA's must set aside a portion of the tax revenue increases generated by the higher valuation created by their development projects in a special fund. The name of this fund is the: A) - Incremental Tax Fund. B) - Tax Common Fund. C) - Low and Moderate Income Housing Fund. D) - CRA General Fund.

Answer 281

C) - Low and Moderate Income Housing Fund. Answer: C—The bonds issued by a redevelopment agency are secured by future, anticipated property tax revenues. This procedure which is called tax incremental financing, allows the CRA to receive any increases in project area property taxes that are a direct result of the CRA's development activities. The monies that must be set aside, however to retire these bonds must be placed in a legally required Low and Moderate Income Housing Fund.

Question 282

A broker is selling an apartment complex and puts together a prospectus which shows a 12% yield. In the prospectus, the broker shows the correct gross scheduled income, but fails to show a vacancy and bad debt deduction. He also fails to include management, maintenance and several other operating expenses. The buyer buys the property based on the income analysis given to him by the broker. The broker is guilty of: A) - fraud. B) - misrepresentation. C) - making a false statement. D) - none of the above.

Answer 282

B) - misrepresentation. Answer: B—Based on the facts presented in this question, answer (B) is the best choice. The question does not state whether the omission of the operating expenses was intentional or whether it was an oversight. If it was intentional, the broker would most likely have committed fraud since he would be attempting to deceive the buyer. If the broker's actions were not intentional, it would be misrepresentation. While there are no criminal penalties for misrepresentation, this type of conduct could make the purchase contract voidable, expose the licensee to civil damages and lead to the suspension or revocation of his/her real estate broker license.

Question 283

A broker is handling the sale of a house for a seller. The broker gave the buyer the required disclosures. The disclosures failed to disclose something which was recorded with the county recorder. What kind of notice did the buyer receive? A) - Actual notice B) - Constructive notice C) - Physical notice D) - Title insurance notice

Answer 283

B) - Constructive notice Answer: B—Recording a document gives constructive notice.

Question 284

An advertisement is placed in a newspaper. According to the guidelines established by the Department of Housing and Urban Development, which of the following phrases would be considered discriminatory? A) - "Good neighborhood" B) - "Retiree's dream house" C) - "Female roommate wanted" D) - "Chapel on site"

Answer 284

B) - "Retiree's dream house" Answer: B—Ads may not be written which are aimed at only a certain group of persons. "Retiree's dream house" implies that only retired persons would be welcome and is considered discriminatory.

Question 285

A mobile home park is defined as: A) - 5 motor homes for rent or sale. B) - 5 scattered mobile home sites for rent or sale. C) - 1 site with a mobile home. D) - 2 contiguous mobile home sites for rent or sale.

Answer 285

D) - 2 contiguous mobile home sites for rent or sale. Answer: D—A parcel (or contiguous parcels) of land divided into two or more mobile home lots for rent or sale.

Question 286

As spelled out in her deceased husband's will, Colleen can collect the rents from an apartment building for her lifetime, after which the apartment building goes to their church. Colleen holds a: A) - fee estate. B) - less-than-freehold estate. C) - life estate. D) - none of the above.

Answer 286

C) - life estate. Answer: C—Colleen has a life estate with the remainder interest held by the church.

Question 287

Identifying property as "personal" or "real" can be difficult because personal property can: A) - be alienated B) - be transferred C) - become real property D) - all of above

Answer 287

C) - become real property Answer: C—Identifying property as "personal" or "real" is complicated by the fact that personal property can become real property.

Question 288

What is the best way to appraise a land site? A) - Allocation B) - Residual C) - Income D) - Capitalization

Answer 288

A) - Allocation Answer: A—The allocation method (also called the abstraction or extraction method) is an appraisal method whereby the appraiser estimates the land value of any improved property by deducting or abstracting the value of any site improvements from the overall sales price of the property. The amount remaining is the estimated sales price or indicated value of the land.

Question 289

Where there is a conflict between local building codes and the State Housing Act, which will prevail? A) - Local building codes in unincorporated areas B) - Local building codes, since they are more specific than the State Housing Act C) - The one with the highest safety standards D) - State law has precedence

Answer 289

C) - The one with the highest safety standards Answer: C—Usually when there is a conflict, you must follow the most restrictive. Since you cannot tell which is more restrictive, you must follow the law with highest safety standards.

Question 290

A broker is representing a subdivider selling a new large subdivision of single family dwellings. The broker knows that conformity is the key to maintaining optimum value in the new subdivision. The broker and his salesperson decide that in order to achieve this goal they will quote higher prices to minorities than to other buyers. This would be: A) - illegal for the broker and the salesperson. B) - illegal for the seller. C) - not illegal for the broker or salesperson. D) - acceptable practice for all parties involved as this behavior is in the best interest of both the seller and buyers.

Answer 290

A) - illegal for the broker and the salesperson. Answer: A—This is discrimination. The broker and salesperson are behaving illegally. The question does not indicate the seller knew of the broker's plans, so choice A is the best choice.

Question 291

The best way to test for radon gas in a building is with a: A) - charcoal radon test kit. B) - radon water test kit. C) - short term radon test. D) - spectrometer.

Answer 291

D) - spectrometer. Answer: D—A spectrometer is a scientific devise that detects alpha particles that are emitted by radon gas and is considered to be highly reliable.

Question 292

The term "Housing Accommodation" refers to real property of how many units when occupied by the owner? A) - No more than 2 B) - No more than 3 C) - No more than 4 D) - No more than 5

Answer 292

C) - No more than 4 Answer: C—The phrase "Housing accomodations" is defined as improved or unimproved real property used or intended to be used as a residence by the owner and which consists of not more than four dwelling units.

Question 293

A high energy efficiency ratio (EER) on an air conditioner would mean: A) - high efficiency. B) - low efficiency. C) - use a lot of electricity. D) - high BTU.

Answer 293

A) - high efficiency. Answer: A—Manufacturers are required to provide EER's (energy efficiency ratios). The unit of measure is the British Thermal Unit (BTU). It takes about 12,000 BTU's to melt a ton of ice in one hour. It is also the amount of heat required to raise the temperature of 1 Lb. of water 1 degree Fahrenheit. The higher the EER, the higher the efficiency. The higher the efficiency, the less electricity the unit uses.

Question 294

A seller asks a broker about the race of an offeror. Which of the following is true? A) - The broker may not answer the question. B) - The broker may answer the question, but must advise the seller that he is not allowed to discriminate based on that information. C) - The broker should suggest that the seller not use the services of a broker. D) - The broker must answer the question because he is an employee of the seller.

Answer 294

A) - The broker may not answer the question. Answer: A—The broker is not allowed to answer the question. The race of a buyer is not a material fact.

Question 295

Partition action refers to: A) - tract homes. B) - court action to break up joint tenants. C) - subdivisions. D) - all of these.

Answer 295

B) - court action to break up joint tenants. Answer: B—Partition action refers to a court proceeding to divide the interests of co-tenants.

Question 296

All of the following statements are true about zoning EXCEPT: A) - Violations of zoning ordinances may render title unmarketable. B) - Zoning laws are generally enforced through building permits. C) - Zoning laws are concerned with regulating property values. D) - Zoning is retroactive.

Answer 296

D) - Zoning is retroactive. Answer: D—Zoning laws are NOT retroactive.

Question 297

Zoning that allows residential property to exist on land zoned for industrial use is called: A) - bulk zoning. B) - incentive zoning. C) - cumulative zoning. D) - directive zoning.

Answer 297

C) - cumulative zoning. Answer: C—Cumulative zoning permits higher uses (e.g., residential) to exist on land zoned for lower uses (industrial), but lower uses cannot occupy higher-zoned land.

Question 298

When water is returned to the water table by the process known as "percolation", the water belongs to: A) - the people. B) - the state. C) - the local water company. D) - the landowner above the water.

Answer 298

A) - the people. Answer: A—In California, the landowner has only a right in common with other owners to take his/her share of the water for beneficial use.

Question 299

In order to alienate property you must: A) - create an easement. B) - create a cloud on the title. C) - record a homestead. D) - convey the property.

Answer 299

D) - convey the property. Answer: D—Alienation: The act of conveying ownership, title or an interest or estate in real property from one person to another. Property is usually sold or conveyed by voluntary alienation as with a deed or an assignment of lease. Involuntary alienation takes place when property is sold against the owner's will as in a foreclosure sale or a tax sale.

Question 300

California's housing and construction are regulated by: A) - local building codes. B) - State Contractor's license laws. C) - the State Housing Act. D) - all of the above.

Answer 300

D) - all of the above. Answer: D—Statement of fact.

Question 301

Which of the following does not "go with the land?" A) - easement by necessity B) - easement by prescription C) - all easements D) - easement in gross

Answer 301

D) - easement in gross Answer: D—An easement in gross attaches personally to the owner, not to the land.

Question 302

A document which details the responsibilities of a property manager would be called: A) - a Maintenance Agreement. B) - a Management Agreement. C) - a Listing Agreement. D) - an Option Agreement.

Answer 302

B) - a Management Agreement. Answer: B—The Management Agreement would delineate the duties and responsibilities of the property manager. This contract creates an agency relationship with the owner of the property.

Question 303

Which "runs with the land?" A) - Stock in a mutual water company B) - Covenants made for the benefit of the land C) - Easements appurtenant D) - All of the above

Answer 303

D) - All of the above Answer: D—All of these run with the land including the mutual water company stock which is inseparable.

Question 304

An interest only loan has an interest rate of 11%. The monthly payments are $60 per month. What is the principal amount of the loan? A) - $6,545 B) - $545 C) - $6,600 D) - $720

Answer 304

A) - $6,545 Answer: A—$60 interest per month x 12 months = $720 annual interest $720 annual interest ÷ 11% = $6,545.45 loan amount

Question 305

The section east of Section 36 is: A) - Section 31 B) - Section 35 C) - Section 25 D) - Section 1

Answer 305

A) - Section 31 Answer: A—Section 31 of the adjoining Township is east of Section 36.

Question 306

Which of these pairs of terms have the closest relationship to each other: A) - Take-out/construction loans B) - Construction/interim loans C) - Take-out/interim loans D) - Wrap-around/construction loans

Answer 306

B) - Construction/interim loans Answer: B—Interim loan is another name for a construction loan.

Question 307

A person holding title to property in severalty would most likely have: A) - a life estate. B) - an estate for years. C) - ownership in common with others. D) - sole ownership.

Answer 307

D) - sole ownership. Answer: D—Severalty is sole ownership of real property.

Question 308

Which of the following would be considered a violation of the Fair Employment and Housing Act? A) - An owner of a single family residence who refuses to rent a room in his home for religious reasons. B) - Failure to include accommodations for handicapped people when constructing a new building. C) - An advertisement in a newspaper which states, "Catholic roommate wanted." D) - All of the above.

Answer 308

B) - Failure to include accommodations for handicapped people when constructing a new building. Answer: B—Under the Fair Employment and Housing Act, failure to design or build a multi-family dwelling of four or more units in a manner that allows disabled persons access and use is considered discrimination.

Question 309

Personal property can never: A) - become real property B) - be hypothecated C) - be alienated D) - none of the above

Answer 309

D) - none of the above Answer: D—Personal property sometimes becomes real property when it is affixed to real property. It can be hypothecated, as when a person borrows on a car and hypothecates the title. It can be alienated or conveyed to someone else.

Question 310

A limited partner is: A) - limited to a 40 hour work week. B) - the same in terms of liability as the general partners. C) - unlimited as to personal liability. D) - limited as to his/her personal liability.

Answer 310

D) - limited as to his/her personal liability. Answer: D—Liability is limited to the amount of their investment. (see limited partnership)

Question 311

Mr. Jones has a property that he was selling for $78,300. The property contained 347,605 square feet. Mr. Smith wanted to purchase a piece of Mr. Jones' property. Mr. Smith wanted to purchase a portion of the property which was 110.2 ft. by 100 ft. If Mr. Jones sold the property at the going rate of $78,300, what percentage would this represent? A) - Between 7%-10% of the amount B) - About 3% of the total C) - You cannot calculate this with the information given. D) - Between $3,000 and $4,000

Answer 311

B) - About 3% of the total Answer: B—$78,300 total sales price ÷ 347,605 sq. ft. = .2252 per square foot 110.2 ft. x 100 ft. = 11,020 square feet (portion Smith wished to purchase) 11,020 square feet x .2252 per square foot = $2,481.70 purchase price for lot $2,481.70 ÷ $78,300 = .03169 or 3.1% of the total

Question 312

Baker sells a property to Davis and executes a grant deed in favor of Davis. Davis then takes the deed and places it in a safety deposit box. Baker then sells the same property to Charles who subsequently records it. Which of the following is correct? A) - Davis can sue Baker for fraud. B) - Charles is the legal owner of the property. C) - Davis is the legal owner of the property. D) - Any loan on the property would be void.

Answer 312

B) - Charles is the legal owner of the property. Answer: B—The first to record is the legal owner. The only exceptions to the recording statute would involve possession or actual notice, neither of these apply in the example. Davis had the right to record and failed to do so.

Question 313

On a listing agreement what is included under the section, "Terms of the Sale?" A) - Terms of sale, personal property, and additional terms B) - Loan amount, personal property, and compensation to broker C) - Price, method of payment, and personal property D) - Price, compensation to broker, and deposit

Answer 313

C) - Price, method of payment, and personal property Answer: C—The "Terms of the Sale" section in a listing agreement lists the price and how the price is to be paid. It also discusses any personal property which is included in the price.

Question 314

All of the following are considered real property EXCEPT: A) - air space. B) - ground water. C) - growing trees. D) - trade fixtures.

Answer 314

D) - trade fixtures. Answer: D—A trade fixture is an article of personal property annexed or affixed to leased premises by the tenant as a necessary part of the tenant's trade or business.

Question 315

Gregorian owns an easement in Duran's property/land. Gregorian is not a property owner. What kind of easement does Gregorian have? A) - easement in gross B) - appurtenant easement C) - easement by necessity D) - easement by prescription

Answer 315

A) - easement in gross Answer: A—An easement in gross is the limited right of one person to use another's land (serviant estate) when such right is not created for the benefit of any land owned by the owner of the easement. In such case, there is no dominant estate, because the easement attaches personally to the owner, not the land.

Question 316

To determine ownership, what is the court action taken? A) - Partition action B) - Quiet title action C) - Declaratory relief D) - None of the above

Answer 316

B) - Quiet title action Answer: B—quiet title action: A court action intended to establish or settle the title to a particular property, especially where there is a cloud on the title. All parties with a possible claim or interest in the property must be joined in the action. A quiet title action is frequently used by an adverse possessor to substantiate the title, because having official record title makes it easier to market the property. Once the judgment or decree of the court has been recorded, proper record notice of the claimant's right and interest in the property is established.

Question 317

An estate in real property where lies an undivided interest in common plus separate interest in common areas, such as, swimming pools, parking, or shared walkways, describes which of the following? A) - cooperative B) - apartment community C) - condominium D) - none of the above

Answer 317

C) - condominium Answer: C—Condominium ownership is an estate in real property consisting of an individual interest in an apartment or commercial unit and an undivided common interest in the common areas in the condo project such as the land, parking areas, elevators, stairways, exterior structure, and so on.

Question 318

Gregorian owns an easement in Duran's property/land. Gregorian is not a property owner. What kind of easement does Gregorian have? A) - easement in gross B) - appurtenant easement C) - easement by necessity D) - easement by prescription

Answer 318

A) - easement in gross Answer: A—An easement in gross is the limited right of one person to use another's land (serviant estate) when such right is not created for the benefit of any land owned by the owner of the easement. In such case, there is no dominant estate, because the easement attaches personally to the owner, not the land.

Question 319

The technical definition of real property includes: A) - anything immovable by law. B) - chattel real. C) - method of acquisition. D) - the right to possess and use to the exclusion of others.

Answer 319

A) - anything immovable by law. Answer: A—In the strict legal sense, real property includes land, appurtenances, that which is affixed to the land, and that which by law is immovable.

Question 320

The classical definition of property ownership is ownership of: A) - the surface only. B) - horizontal and vertical areas above and below the property. C) - everything below the property in the shape of an inverted pyramid with its apex at the center of the earth and infinite airspace. D) - all that one can perceive.

Answer 320

C) - everything below the property in the shape of an inverted pyramid with its apex at the center of the earth and infinite airspace. Answer: C—This is the classical definition of ownership of land. Modern day, practical theory prohibits exercising absolute control beyond a reasonable distance above and below the surface of the land.

Question 321

Riparian rights are best described as: A) - reasonable use of adjacent water. B) - exclusive use of adjacent water. C) - reasonable use of private water. D) - exclusive use of private water.

Answer 321

A) - reasonable use of adjacent water. Answer: A—Riparian rights are the rights held in common with other riparian owners to make reasonable use of the waters that flow on, under or adjacent to a property, provided such use does not alter the flow of water or contaminate the water.

Question 322

Which of the following is considered real property? A) - Land and buildings B) - Artificial items which are immovable by law C) - Easements that convey rights-of-way over adjoining land D) - All of the above

Answer 322

D) - All of the above Answer: D—Real property includes land, that which is attached to it (physically or legally), and appurtenances (including easements).