Real Estate Flashcards

Question

Who oversees Massachusetts environmental laws? A The EPA B The DEP C The CWA D CERCLA

Answer 1

Topic: Massachusetts Real Estate Licensing Law Explanation: The Massachusetts DEP, or Department of Environmental Protection, oversees Massachusetts environmental laws. B The DEP

Answer 2

Topic: Massachusetts Real Estate Licensing Law Explanation: Agency disclosures must include the agent's name, license number, signature, and the date. They must be kept on file for 3 years after signing, and are subject to inspection by the Board. C Include his license number on the document

Answer 3

Topic: Massachusetts Real Estate Licensing Law Explanation: All offers and counteroffers (written, verbal, or otherwise) must be brought to the client. There are no exceptions to this rule, even if the buyer won't give a binder (a deposit.) B Submit the offer

Answer 4

Topic: Consumer Protection Laws Explanation: The Property Transfer Notification Form is the lead paint form for sales transactions. Any sales of homes built prior to 1978 must have this form and the seller always signs first so they can provide the information they have about the presence of lead based paint in the property. A Seller

Answer 5

Topic: Consumer Protection Laws Explanation: Agents are required to disclose any known environmental hazards, such as the presence of radon, as defects to the prospective buyer. However, the presence of such a defect does not prevent the sale of real estate. D Does not prevent sale

Answer 6

Topic: Consumer Protection Laws Explanation: For any rental property built prior ot 1978, both the landlord and the tenant will need to sign the Tenant Lead Law Notification Form. D Tenant Lead Law Notification Form

Answer 7

Topic: Consumer Protection Laws Explanation: Under Massachusetts General Law Chapter 93A, also known as the Consumer Protection Act, licensees such as real estate agents are considered businesses. This protects consumers from unfair, deceptive business practices. B Businesses

Answer 8

Topic: Leases Explanation: Tammy is violating the covenant of quiet enjoyment by stopping by the apartment constantly and because of this, Ron has a right to stop the payment of rent. Constructive eviction is when the landlord breaches the lease or violates the covenant of quiet enjoyment and this gives the tenant the right to vacate the premises and end all obligations under the lease. In real life, though, always be sure to consult an attorney before breaking a lease! B Yes, because Tammy is in violation of the covenant of quiet enjoyment and Ron has a right to constructive eviction

Answer 9

Topic: Massachusetts Real Estate Licensing Law Explanation: Biennially means once every two years. Real estate licenses are renewed every two years in Massachusetts, and continuing education classes are required to renew a real estate license. Biannually means once every six months (the same as semi-annually). B Biennially

Answer 10

Topic: Massachusetts Real Estate Licensing Law Explanation: The Massachusetts Board of Registration of Real Estate Brokers and Salespersons is in charge of administering and promulgating the licensing laws and regulations, which includes issuing real estate licenses. A The Board of Registration

Answer 11

Topic: Massachusetts Real Estate Licensing Law Explanation: The Board of Registration of Real Estate Brokers and Salespersons enforces license law in Massachusetts and was created in 1960.

Answer 12

Topic: Massachusetts Real Estate Licensing Law Explanation: Open houses do not require a written notice for each prospective purchaser or seller who attends the open house; however, agents must - by sign, poster, distributed listing literature, or property description form - conspicuously disclose their agency relationship with the seller. D By sign, poster, literature, or property description forms

Answer 13

Topic: Transfer Of Property Explanation: Mortgagee protection means lender protection. The lender's title insurance policy covers an outstanding loan balance. D An outstanding loan balance

Answer 14

Topic: Massachusetts Real Estate Licensing Law Explanation: The MA Board of Registration of Real Estate Brokers and Salespersons is made up of three brokers with at least seven years of experience, and two lay people (unlicensed people who represent the public interest). One member of the Board is designated the chairperson, they are all appointed by the governor, and they all serve five year terms. A Three lay people

Answer 15

Topic: Massachusetts Real Estate Licensing Law Explanation: Agents renting real estate must provide each tenant with a written notice at their first meeting. The notice must state whether the prospective tenant will pay any fee; the amount, manner, and time the fee is to be paid; and whether any fee will be payable if a tenancy is not created.

Answer 16

Topic: Massachusetts Real Estate Licensing Law Explanation: Both Massachusetts and California are physical location states. This means that for out of state licensees to receive a commission, they must remain in their home state while offering any services to their clients. In this case, Ellen would need to assist Leon from afar in Massachusetts if she wants to be entitled to a commission as his buyer's agent. B Remain in Massachusetts and assist Leon from afar

Answer 17

Topic: Massachusetts Real Estate Licensing Law Explanation: All licensed brokers, including corporations and inactive licensees, must provide the Board with a $5,000 surety bond. This bond is for the benefit of any person harmed by the loss of escrow funds caused by the broker; it is not insurance for the broker. A The benefit of a person harmed by the broker losing escrow funds

Answer 18

Topic: Consumer Protection Laws Explanation: The fire department and MA DEP must be present when underground oil tanks are removed. A Have the fire department present

Answer 19

Topic: The Basics Explanation: A broker or salesperson must report to the Board his or her conviction of any crime, including any misdemeanor or felony under the laws of the Commonwealth, the United States, or laws of another jurisdiction which, if committed in Massachusetts, would constitute a crime under Massachusetts law. The conviction must be reported to the Board within 30 days. A 30 days

Answer 20

Topic: Massachusetts Real Estate Licensing Law Explanation: Massachusetts requires 2 real estate licenses for a real estate brokerage corporation: one in the name of the corporate entity, and one for the corporation's broker of record (the human representative of the corporation).

Answer 21

Topic: Massachusetts Real Estate Licensing Law Explanation: The term of office for each member of the Board is 5 years. This includes the chairperson, who serves a 5 year term, and is NOT selected annually. D The chairperson is selected annually

Answer 22

Topic: Massachusetts Real Estate Licensing Law Explanation: The Board must provide the accused party (agent) with at least 10 days' written notice of the hearing and a copy of the complaint or charges. B 10

Answer 23

Topic: Massachusetts Real Estate Licensing Law Explanation: In the event of the death of a sole proprietor broker and upon application by a legal representative, the Board may issue a temporary, non-renewable license to the applicant or to someone he or she designates (approved by the Board). The temporary license requires a fee and bond and is effective for not more than 1 year from the date of death. A Anyone

Answer 24

Topic: Consumer Protection Laws Explanation: A seller's statement of condition is a form filled out by the seller and notifies all potential buyers about any known material defects and any information the seller has about their property. B A seller statement of condition

Answer 25

Topic: Real Estate Financing Explanation: A short sale is a sale for a price "short" of what the seller owes on their home loan. The bank settles for the difference between the sales price and the loan balance. Short sales are often used by homeowners to avoid foreclosure. B A sale for less than the seller owes on their loan

Answer 26

Topic: Real Estate Financing Explanation: The promissory note or note is the evidence of debt. The mortgage is security for the note. Collateral is oftentimes the property and is considered the security for the debt. C Collateral

Answer 27

Topic: Property Valuation Explanation: The capitalization rate would be the most appropriate method here, since the property is an income-producing building. C The capitalization rate

Answer 28

Topic: Property Valuation Explanation: The value (price) of a home is ultimately determined by what a buyer will pay. D Buyer

Answer 29

Topic: Real Estate Agency Explanation: Implied agency is when the authority for agency exists because of the principal and agent's actions, even though it is never directly stated. Jamie and Samara are acting as though they are in a buyer-agent agency relationship, however, neither has explicitely stated that. C Implied Agency

Answer 30

Topic: Real Estate Agency Explanation: Maria's listing agreement is an illegal net listing because of the commission agreement. Exclusivity does not influence whether or not the listing is a net listing, and net listings can be any type of listing (exclusive listing, open, or exclusive right to sell). D None of the above

Answer 31

Topic: Real Estate Agency Explanation: This couple's listing contract with Frank was almost certainly an exclusive listing. Under an exclusive listing, the sellers hire one real estate agent to sell their home, but if the sellers find a buyer without the agent's help, they are not required to pay the agent a commission. B Exclusive listing

Answer 32

Topic: Transfer Of Property Explanation: Title insurance will cover undiscoverable title defects, not any issues that could be discovered via public record or government actions, such as zoning issues or publicly recorded restrictions. B Land use changes due to zoning laws

Answer 33

Topic: Transfer Of Property Explanation: Section 36 is on the southeastern most section of a township map, directly below section 1, in a government rectangular survey. Since each section is 1 mile, and a township is 6 miles by 6 miles, section 36 begins 4 miles below the end of section 1. B 4 miles

Answer 34

Topic: Transfer Of Property Explanation: One chain is equal to 66 feet.

Answer 35

Topic: Transfer Of Property Explanation: A bargain and sale deed implies an interest or rights to convey property, but it does not warrant (promise) title to it. D Bargain and sale

Answer 36

Topic: Leases Explanation: Property managers are typically general agents of the landlord, since they can perform many different tasks on behalf of the landlord. A special agent is an agent whose duties are limited to one specific task (e.g. only collecting rent for a particular property). While property managers can be special agents depending on the scope of their responsibilities, they are most often general agents. B General agent

Answer 37

Topic: Leases Explanation: The lessee (tenant) holds the lease renewal option, not the lessor (landlord). Therefore, answer B is not true, and is the correct answer choice. All of the other answer choices are correct. Managing brokers cannot hire salespersons under their license; only the employing broker can do that. Banks use the lesser of the purchase price and appraised value for residential loans. And a P&S made between a 39 year old and a 14 year old is indeed enforceable (because it is voidable - not void - and is thus valid and enforceable unless voided by a court). Tricky! B The lessor can exercise their lease renewal option before their lease expires to renew the lease

Answer 38

Topic: Contracts Explanation: The mortgagor is the borrower. In this circumstance, the borrower is most likely the lessor, or the landlord. A Lessor

Answer 39

Topic: Fair Housing Law Explanation: Service animals may only be a dog or a miniature horse. Remember the difference between a service animal (a specially trained animal that cannot be barred from businesses, homes, etc.) and an emotional support animal (any animal designated by a doctor to be a support animal). D A dog or a miniature horse

Answer 40

Topic: Fair Housing Law Explanation: When someone has an emotional support animal, the only question you can ask is if they have a doctor's note for the animal. You may not ask what task the animal performs (that is only for service animals) nor can you ask why the person needs the animal. Any condo buildings with no pet policies are not permitted to deny service or support animals. B Not ask Sam why he needs Sparky

Answer 41

Topic: Interests In Real Estate Explanation: Condo owners own their units in fee simple ownership and have a unit deed. Coop owners own shares in the corporation that owns the building and rents back to them which is why they have proprietary leases instead of unit deeds. A Condo owners have unit deeds, while coop owners have proprietary leases

Answer 42

Topic: Interests In Real Estate Explanation: Land trusts are trusts that only own real estate. These types of trusts can't contain any other assets. C A penthouse apartment, a cottage in Newport, and a small goat farm

Answer 43

Topic: Property Right Limitations Explanation: The fact that Jill is in the garden for some season of the year has no effect on her claim, since her continuous use of the land is regular (but not necessarily uninterrupted). All of the ONCHA elements are therefore present: O (Open)- Jill openly maintained use and possession (via the fence), N (Notorious)- the neighbors knew about it, C (Continuous)- the fence and Jill's use happened for more than 20 years, H (Hostile)- Jill did not have Bill's permission, and A (Adverse)- Jill initially took possession by trespassing. A Jill has a claim, because all the elements of ONCHA are present

Answer 44

Topic: Property Right Limitations Explanation: Mortgage liens are not an exception to the idea of "first in time, first in right." Mortgage liens have a claim to the property in the order they were placed against the property (which is typically evidenced by the recordation of a municipal lien certificate). Unpaid property taxes and condominium fees are exceptions to the rule because they take automatic priority over other claims. Subordination clauses explicitly create an exception to the rule by permitting a later claim against the property to take priority over the claim containing the subordination clause. B Mortgage liens

Answer 45

Topic: Property Right Limitations Explanation: Franny would need a variance to build her guest house. In order to receive a variance, a property owner must show that existing zoning regulations present an unreasonable burden on their property rights (known as a hardship), and receive approval from the local zoning board of appeals (not the local zoning enforcement officer). The property owner's neighbors do not need to approve the application for a variance, though they will get a say in its approval, and since there is no guest house on the property currently Franny would not be able to show an existing use that would help her build a new guest house. C She must demonstrate the difficulties imposed by the existing zoning rules

Answer 46

Topic: Contracts Explanation: This is an assignment, or a transfer of the remaining rights and obligations under a contract. C Assignment

Answer 47

Topic: Contracts Explanation: Verbal listing agreements are always open listings. In order to create an exclusive listing agreement you MUST get the agreement in writing. Mikey's listing agreement with Rebecca is therefore an open listing, making Rebecca's actions legally permissible. Note that the Statute of Frauds does not apply to listing contracts, since they are hiring agreements, and not real estate contracts. B Permissible, because the listing is an open listing

Answer 48

Topic: The Basics Explanation: In order to become a realtor, one must be a license real estate agent or broker and join a realtor affiliated brokerage. The employing broker and all of the agents in that brokerage must become realtors to avoid fines. C Finish the course, pass the exam and join a realtor affiliated brokerage

Answer 49

Topic: Fair Housing Law Explanation: Only service or support animals would be permitted regardless of whether building rules or condo docs had a no pet policy. A therapy dog is technically not a support or service animal. Unless Fetch ALSO had one of those designations, in addition to being a therapy dog, Fetch would not be permitted in a no pet building. D No, because there's a no pet policy and a therapy dog is not a support or service animal

Answer 50

Topic: Fair Housing Law Explanation: Close proximity to all of the best shops and restaurants is the most inclusive of all of the marketing descriptions. The others could suggest that people with disabilities may not be welcome to view or buy the property, which would be in violation of fair housing. C Close to all of the best shops and restaurants

Answer 51

Topic: Property Right Limitations Explanation: A license is permission for someone to access a property for a certain time period and purpose (like Mary is giving Jane in this example). It is personal, revocable, and non-assignable. B License

Answer 52

Topic: Contracts Explanation: Under the agreement, Jamie has the option to purchase the property within a certain time frame. Only one party has therefore made a "concrete" promise: Judy promises to sell if Jamie wishes to buy. The agreement is therefore unilateral. D Unilateral

Answer 53

Topic: Contracts Explanation: If the expiration date on an offer has passed, this renders the contract void because there was no offer and acceptance during the time the offer was valid. C The offer is void

Answer 54

Topic: Contracts Explanation: The seller under a contract for deed (also known as an installment sales contract or land contract) is the vendor. B Vendor

Answer 55

Topic: Contracts Explanation: Counteroffers automatically void the original offer, so Mark's offer is void in this scenario. D Void

Answer 56

Topic: Contracts Explanation: Liquidated damages are pre-agreed upon damages in the event of a breach of contract. B Liquidated damages

Answer 57

Topic: Contracts Explanation: Their contract is most likely voidable at Maurice's discretion, due to Robert's misrepresentation of the property's acreage.

Answer 58

Topic: Transfer Of Property Explanation: Bargain and Sale Deeds are often seen with tax foreclosures. The town has the right to sell the property, but they do not technically own the property. Both Quitclaim Deeds and Bargain and Sale Deeds do not offer the grantee any warranties. D With the Bargain and Sale Deed, the grantor can sell the property, but does not technically own it

Answer 59

Topic: Transfer Of Property Explanation: The laws governing who receives the property owned by a deceased person without a will are the laws of descent and distribution. C The laws of descent and distribution

Answer 60

Topic: Real Estate Agency Explanation: As real estate agents, we are not licensed mortgage bankers or brokers so to recommend a specific loan program to our clients would be operating outside our scope of expertise. If a client asks for specific financing information, you should recommend that they consult an expert in the field. D Consult a mortgage banker or broker

Answer 61

Topic: Real Estate Agency Explanation: The Fair Housing Act of 1968 (and amendments) protects against discrimination on the basis of race, color, religion, national origin, sex, familial status, and disability. It does not protect against discrimination on the basis of veteran status, unlike many states' fair housing laws. C The refusal to sell a home to someone on the basis of their military service

Answer 62

Topic: Government Financing Programs And Regulations Explanation: The TILA-RESPA integrated disclosure rule (TRID) was established under the Dodd Frank act. C Dodd Frank

Answer 63

Topic: Real Estate Financing Explanation: Ronda's debts will be paid in order of priority. Ordinarily her first mortgage ($174,216.40) would have priority. However, HOA fees (also known as condo fees) take priority over all other debts, so her unpaid fees ($2,112.00) will most likely be paid first in the event of a foreclosure, ahead of other debts. A $2,112.00

Answer 64

Topic: Government Financing Programs And Regulations Explanation: The boot in a 1031 like kind exchange is unreplaced property value. It is subject to capital gains tax. C Any unreplaced property value in an exchange

Answer 65

Topic: Introduction To Real Estate Financing Explanation: The mortgagor is the buyer and the mortgagee is the bank, therefore the buyer gives the notes (IOU) and mortgage (evidence of debt) to the bank in a basic financing arrangement. B The mortgagor gives the note and the mortgage to the mortgagee

Answer 66

Topic: Consumer Protection Laws Explanation: While all of the above would apply to any "material defects" that should be disclosed, asbestos is the only "hazardous material" listed in the answer choices, and is therefore the correct answer. B Asbestos

Answer 67

Topic: Consumer Protection Laws Explanation: A landlord is required to provide the tenant the lesser of 5% interest or current bank rates on a security deposit and last month's rent if a security deposit is taken. The interest is due annually, within 30 days of the annual tenancy anniversary. B 5%

Answer 68

Topic: Consumer Protection Laws Explanation: The property owner will not have to do anything, so long as the asbestos is not friable (in good repair, and not dangerous). He can remove the asbestos if he wants, but he is not required to. D Do nothing if the asbestos is in good repair

Answer 69

opic: Massachusetts Real Estate Licensing Law Explanation: Massachusetts real estate licensing law requires that any compensation payable to a real estate salesperson be accepted on the behalf by their employing broker. Under Massachusetts law, real estate salespersons cannot be paid by their client directly. A No, any compensation must be accepted by the broker, not the agent

Answer 70

Topic: Consumer Protection Laws Explanation: Effective March 31, 2006, all homes in Massachusetts that are equipped with fuel burning, carbon monoxide producing equipment or that have indoor parking (i.e., a garage) adjacent to living areas must have carbon monoxide (CO) detectors on every level of the home. New home construction or renovations must have hard-wired detectors; older homes may be brought into compliance with battery-operated detectors. Thus, the minimum requirement for ALL homes is battery operated detectors. A Battery operated CO detectors

Answer 71

Topic: Massachusetts Real Estate Licensing Law Explanation: The real estate broker's bond is made payable to the Commonwealth of Massachusetts, and may not be used by the broker to defray legal expenses. It can only be cashed in by the Board in order to compensate a party harmed by a broker's mishandling of escrow funds. B May be cashed in by the Real Estate Board

Answer 72

Topic: Massachusetts Real Estate Licensing Law Explanation: Salespersons, when advertising, must include the name of the brokerage they are working for. Not putting the name of the brokerage in the ad is called blind advertising and is not allowed. B Yes, because he included the name of the brokerage he works for

Answer 73

Topic: Massachusetts Real Estate Licensing Law Explanation: The landlord is legally responsible for snow removal under the Massachusetts sanitary code, regardless of any lease or management agreements that might be in place. B The landlord

Answer 74

Topic: Consumer Protection Laws Explanation: A 21E Certificate certifies that a property is free from contamination. Most banks will require this certificate for the lending on commercial property.

Answer 75

Topic: Massachusetts Real Estate Licensing Law Explanation: Because the home was built after 1978, Sarah does not have to test or delead her home, because there is no danger of lead based paint. D She doesn't have to do anything

Answer 76

Topic: Fair Housing Law Explanation: Support animals, drug addiction, and HIV/AIDS are all covered by the disability protections of the Fair Housing Act. A landlord would therefore not be able to evict a tenant for any of those reasons. Illegal drug use, though, is criminal activity, and is not protected by fair housing law. A landlord would thus be able to evict a tenant because of illegal drug use. C Illegal drug use

Answer 77

Topic: Fair Housing Law Explanation: Nothing about fair housing law requires, or prohibits, ads in any particular language or publication. So long as the broker does not target or exclude a protected class in the content of their ads, the ads are legal, regardless of the language or publication they are presented in. B This is not a violation of fair housing because the broker did not mention a protected group in their ad

Answer 78

Topic: Interests In Real Estate Explanation: Life estates automatically transfer upon the death of the life tenant (Tim in this example). Unlike an ordinary sale, with a life estate, anything the life tenant (Tim) sets up ends when the life tenancy ends, including leases. In practice this would be a bit more complicated because of state eviction laws, but the exam doesn't get into state laws, so that's the rule to remember for the exam! C Lease is terminated

Answer 79

Topic: Interests In Real Estate Explanation: Fee simple subject to condition subsequent is an interest which is lost when there is a deed restriction that is violated and a lawsuit is brought to retake the property. C Fee simple subject to condition subsequent

Answer 80

Topic: Property Rights Explanation: A fixture is a piece of property that has been attached to real estate. It is treated as part of the real estate. D Fixture

Answer 81

Topic: Interests In Real Estate Explanation: When Panine sold her interest to Penny, it established a tenancy in common (the default form of co-ownership) between Penny and the other two surviving joint tenants. Patty and Pam would remain joint tenants, but Penny's interest is not part of the joint tenancy, since she did not acquire ownership at the same time as Patty and Pam (a requirement of joint tenancy). Therefore, Penny's interest is inheritable, and would be left to a devisee (heir receiving real estate) in her will.

Answer 82

Topic: Property Right Limitations Explanation: In the event of a conflict between private and public restrictions, the more restrictive prevails. The minimum required setback will therefore be 60 feet, since it is the more restrictive requirement. D 60 feet

Answer 83

Topic: Contracts Explanation: A contract that was created under duress is considered to be voidable. Captain Hook's threat of having Wendy walk a plank in order to get her to sign a contract would be an example of duress. Therefore, at Wendy's option, the contract may be voided or enforced. B Yes, but Wendy may void the contract if she decides to do so

Answer 84

Topic: Leases Explanation: A lease can be terminated if a property is destroyed. The tenant does not need to continue to pay rent once that occurs. B The Roadrunner can stop paying rent

Answer 85

Topic: Leases Explanation: Under novation, Jan's friend would sign a new lease with the landlord and Jan's lease would be canceled. This would release her from all of her obligations under the lease and allow her to enjoy her time in the Caribbean. D Novation

Answer 86

Topic: Transfer Of Property Explanation: The first thing we need to know to solve this problem is how big an acre is: 43,560 square feet. We can use this to convert the acres to square feet by performing the following calculation: 43,560 x 3 = 130,680 square feet. Tammy has to set aside 50,000 square feet for roads, so she will have 130,680 - 50,000 = 80,680 buildable square feet of land. Each lot Tammy will build is 125 by 125 feet, so each lot is 125 x 125 = 15,625 square feet. She can therefore build: 80,680 / 15,625 = 5 lots x $100,000 = $500,000. Always round DOWN on the number of lots, since you can't sell a partial lot. B $500,000

Answer 87

Topic: Transfer Of Property Explanation: A lien theory state is one where the borrower holds legal title. Banks in these states will sometimes use deeds of trust so that they can more easily foreclose on delinquent loans. A Lien theory state

Answer 88

Topic: Transfer Of Property Explanation: To calculate what Rita should sell for, first add the purchase price of the property and the cost of her improvements to it to calculate her total investment: $150,000 + $23,000 = $173,000. Next, calculate what she should sell the property for in order to receive a 25% profit: $173,000 * 1.25 = $216,250 sales price.

Answer 89

Topic: Transfer Of Property Explanation: Heirs receiving personal property in a will are the legatees. D Legatees

Answer 90

Topic: Real Estate Agency Explanation: If an agent is asked whether a house is haunted, the agent should disclose any information they know. In this case, the listing agent disclosed their knowledge of whether the house is haunted when asked, which is the correct thing to do. C Yes, if the agent is asked if the house is haunted and is are aware that it may be haunted, he or she should disclose that information

Answer 91

Topic: Real Estate Agency Explanation: This is an example of steering (directing clients to certain areas based on their protected class status). B Steering

Answer 92

Topic: Property Valuation Explanation: The home sold for 110% of its purchase price, so to calculate the original purchase price you would perform the following calculation: $250,000 / 1.1 = $227,272.73 (rounded up to $227,275 in answer A, which they often do the on the real estate exam).

Answer 93

Topic: Property Valuation Explanation: Regression is the idea that properties with low values will negatively impact the value of other properties surrounding them. D Regression

Answer 94

Topic: Property Valuation Explanation: Potential gross income - vacancies = effective gross income - operating expenses = NOI (net operating income). So: $100,000 x .05 = $5,000, $100,000 - $5,000 = $95,000 - $10,000 = $85,000 / 2 (semi-annual NOI) = $42,500 (answer).

Answer 95

Topic: Government Financing Programs And Regulations Explanation: APR includes any charges charged by the lender. The appraisal fee is charged by the appraiser, and is therefore not a part of APR. A Appraisal fees

Answer 96

Topic: Real Estate Financing Explanation: A graduated payment mortgage (GPM) has initial loan payments that are adjusted down to make them affordable, and increase over time as the borrower's income increases. The initial loan payments do not cover the interest owed, resulting in negative amortization of the interest (the unpaid interest is rolled back into the principal). A Negative amortization

Answer 97

Topic: Consumer Protection Laws Explanation: Mold is a type of environmental hazard. Conditions that contribute to mold growth include moisture and poor ventilation. A Airtight rooms

Answer 98

Topic: Massachusetts Real Estate Licensing Law Explanation: The Board of Registration of Real Estate Brokers and Salespersons requires that 3 of its 5 members be real estate brokers with at least 7 years of experience and that 2 members be unlicensed. Johnny will need to wait a little longer to be a member. D No, because he will need to be a broker with at least 7 years of experience.

Answer 99

Topic: Consumer Protection Laws Explanation: If a business advertises property incorrectly, even if accidentally, that business could be liable under 93A. Real estate agents are considered a business and therefore, could be liable in this instance. A Yes, because even though she didn't mean to advertise incorrect information, she is still liable under 93A

Answer 100

Topic: Massachusetts Real Estate Licensing Law Explanation: Nico represents the seller, and he is therefore a seller's agent. In order to become a dual agent, Nico would need the written permission of BOTH the buyer and seller. Without that written permission, he remains the seller's agent. A A seller's agent

Answer 101

Topic: Consumer Protection Laws Explanation: Consumers must give the offending party 30 days to respond to the claim (hence why a 93A letter is sometimes called a 30 day demand letter). C 30 days

Answer 102

Topic: Massachusetts Real Estate Licensing Law Explanation: All members on The Board must be appointed by the Govenor. They must be willing to serve 5 year terms and either be an unlicensed member of the public or a broker with at least 7 year experience. B Be appointed by the Govenor

Answer 103

Topic: Consumer Protection Laws Explanation: Double damages are the MINIMUM amount in damages. This question is asking for the MAXIMUM damages, so double damages is not the correct answer. Treble and triple damages mean the same thing, and attorney's fees would be added to those to award the maximum amount. This question is tricky, but it's not wrong - double check the wording above ("except")! D Double damages

Answer 104

Topic: Property Rights Explanation: The right of survivorship is specific to certain forms of co-ownership; namely, joint tenancy and tenancy by the entirety. The bundle of rights refers to all of the rights that typically go with ownership of realty. B Right of survivorship

Answer 105

Topic: Property Rights Explanation: Vineyards and the products from them, such as the grapes, are considered real property. They are not emblements since they are not replanted annually, and are therefore included in the sale. Whoever owns the property at the time that the grapes are ready to be harvested (in this case, Jim Henry, the new owner), would own the grapes and be able to harvest them. D Jim Henry

Answer 106

Topic: Property Right Limitations Explanation: Easements in gross are personally held easements (in contrast to easements appurtenant, which are held by adjoining properties). A Easement in gross

Answer 107

Topic: Contracts Explanation: Executory is the status given to contracts that have not yet been finished. Although both parties have agreed to terms and conditions of the sale, the P&S has not yet been completed by both parties. Once all the terms and conditions have been met, then it will be considered executed, such as closing day. A Executory

Answer 108

Topic: Contracts Explanation: If a party to a contract was not sober when it was executed, that contract may be voided at the option of the party who was not sober. In this case, Bill was extremely drunk when he granted his house to Dom. As a result, Bill's is probably not going to be considerd to have the requisite competence to understand what he was signing over to Dom, and could void the contract with a court's permission B Void

Answer 109

Topic: Contracts Explanation: A lease is bilateral (both parties make a promise) and executory (not yet completed). Options may be unilateral, but the lease is still bilateral even if it contains an option. B Executory and bilateral

Answer 110

Explanation: A habendum clause is a "to have and to hold" clause in a deed which defines or limits the quantity of the estate granted. For a life estate, the deed will specify in a habendum clause who receives the life estate upon the grantee's death. Such a clause is not necessary to convey a fee simple interest. A A life estate

Answer 111

Topic: Transfer Of Property Explanation: A video will would be an example of a verbal will, or nuncapative will. This type of will is unenforceable in most states. C A nuncapative will and is unenforceable in most states

Answer 112

Topic: Property Valuation Explanation: Tom is most likely using the cash on cash method to analyze his investment. The cash on cash method finds a rate of return based on a property's cash flow before taxes (CFBT), which is the property's income less expenses, vacancy, debt service, and capital expenditures. D Cash on cash

Answer 113

Topic: Government Financing Programs And Regulations Explanation: The prime rate is the lowest theoretical rate charged by the banks to their best customers. Since Bill has excellent credit, he would be eligible for the prime rate (though in practice, he would likely get some margin over prime). C Prime rate

Answer 114

Topic: Real Estate Agency Explanation: Whether or not a real estate agent must disclose this information regarding stigmatized properties varies from state to state. In Massachusetts, you would need to disclose only if asked, however other states require agents to act differently. A Knows the laws in their state regarding stigmatized properties

Answer 115

Topic: Consumer Protection Laws Explanation: MGL Chapter 93A is designed to protect consumers from unfair/deceptive practices that businesses (including licensees) may conduct. A To protect consumers from deceptive business practices

Answer 116

Topic: Property Right Limitations Explanation: Under the Massachusetts Rivers Protection Act, which amended the Massachusetts Wetlands Protection Act, local conservation commissions have authority over the construction of property in riverfront areas. B The local conservation commission

Answer 117

Topic: Consumer Protection Laws Explanation: When a septic system fails its Title V inspection, as long as it is disclosed, the buyer and seller negotiate who will bring it into compliance. The seller can take care of it before the sale and then the Title V certificate will be obtained by closing, or the buyer can choose to take care of it as long as it is brought into compliance within 6 months after the sale. In this second case, the Title V certificate would be obtained after the closing. C The home can be sold as long as Rita discloses that the septic system has failed its Title V inspection.

Answer 118

Topic: Property Valuation Explanation: NOI or Net Operating Income is calculated by first finding the effective gross income (potential gross income - vacancies = effective gross income) and then substracting the operating expenses (such as day to day maintenance) to get the NOI. Essentially, effective gross income - operating expenses = net operating income. The mortgage is not part of theses equations. A Mortgage on the property

Answer 119

Topic: Interests In Real Estate Explanation: Tenancy in common would allow this group of friends to acquire title at different times and offers inheritability so that Howard has the right to will his portion of equity to a family member. D Tenancy in Common

Answer 120

Topic: Property Rights Explanation: Low altitude flights are considered to be an invasion of a landowner's property. However, flights that are 500 feet or above in altitude are generally considered to be under the control of the Federal Aviation Administration (FAA) and are therefore considered to be navigable air space. The planes that fly over Charles' farm fly too high over his property to allow him compensation from the airlines. C No, because the jets are flying at a high enough altitude that it is considered to be navigable air space

Answer 121

Topic: Property Right Limitations Explanation: Ingress means entrance. A right of ingress is therefore a right of entrance. A A right of entrance

Answer 122

Topic: Contracts Explanation: Execution is the completion of a contract. Thus, a purchase and sale agreement, which is an agreement to sell real estate, is executed at closing (when real estate is sold). Don't confuse acceptance (agreement or signing) with execution (completion). D Closing

Answer 123

Topic: Contracts Explanation: An attorney-in-fact is someone holding a written power of attorney. An attorney-in-fact is permitted to act on the behalf of the person granting the power of attorney in a legally binding way.

Answer 124

Topic: Leases Explanation: Privity of estate is the interest two parties simultaneously share in the same property. It is established in all of these agreements (which are different types of rental agreements), except for a life tenancy (also known as a life estate). Remember: estate, interest, and tenancy are interchangeable. C Life tenancy

Answer 125

Topic: Leases Explanation: When a landlord rents an apartment to a tenant and that landlord enters the apartment without good cause, it is considered to be trespassing, and is not allowed even if he owns the property. A No, because Thomas has rented the apartment from Leonard

Answer 126

Topic: Real Estate Agency Explanation: Employing brokers have vicarious liability for all of the activities of their associated real estate salespersons performed under their license. C All activities of associated salespersons

Answer 127

Topic: Government Financing Programs And Regulations Explanation: The Interstate Land Sales Disclosure Act is enforced by the Consumer Financial Protection Bureau (or CFPB). C The CFPB

Answer 128

Topic: Real Estate Financing Explanation: Adjustable rate mortgages are those mortgages where the interest rate changes. While this results in the payments changing, the payment changes are a result of the loan's interest rate changing, not the payments themselves changing. B The interest rate

Answer 129

Topic: Real Estate Financing Explanation: Chattel mortgage are for personal property only and use personal property as the collateral for any default on the loan terms. D Chattel Mortgage

Answer 130

Topic: Massachusetts Real Estate Licensing Law Explanation: This is an example of conversion (the unauthorized use of client money). The use of any escrow monies to pay for commissions must be agreed to in writing by the buyer and seller. B Conversion

Answer 131

Topic: Massachusetts Real Estate Licensing Law Explanation: Properties built before 1975 are required to have a smoke detector certificate under Massachusetts law. A A single family home built in 1969

Answer 132

Topic: Massachusetts Real Estate Licensing Law Explanation: MA Real Estate Board decisions can be appealed within 20 days.

Answer 133

Topic: Consumer Protection Laws Explanation: MGL Chapter 93A claims must involve a business or licensee. A for sale by owner home would not fall under a Chapter 93A claim. C A FSBO with lead paint that the seller didn't disclose

Answer 134

Topic: Massachusetts Real Estate Licensing Law Explanation: The Board may suspend, revoke, or refuse to renew a license where the broker paid or divided a commission or fees with any person who is not licensed but should be. Also, referral kick-backs that are not disclosed in advance to the client are not permitted.

Answer 135

Topic: Consumer Protection Laws Explanation: Effective March 31, 2006, all homes in Massachusetts that are equipped with fuel burning, carbon monoxide producing equipment or that have indoor parking (i.e., a garage) adjacent to living areas must have carbon monoxide (CO) detectors on every level of the home. New home construction or renovations must have hard-wired detectors; older homes may be brought into compliance with battery-operated detectors. Thus, the minimum requirement for ALL homes is battery operated detectors. A Battery operated CO detectors

Answer 136

Topic: Fair Housing Law Explanation: The maximum penalty for a single (though not first) federal fair housing law violation is a $100,000 civil penalty, if the accused is a repeat offender. D $100,000

Answer 137

Topic: Fair Housing Law Explanation: Jones v. Alfred H. Mayer Co. established that racial discrimination is never permissible in the private or public sale or rental of real estate, regardless of any exemptions that might otherwise apply. C Racial discrimination is always prohibited in real estate transactions

Answer 138

Topic: Property Rights Explanation: Roxanne is in the right. If Zach had removed the solar panel before putting the home on the market, Roxanne would have no claim to it. However, because it was attached to the property when the P&S was signed, and it was not excluded from the sale in writing (remember the Statute of Frauds - verbal agreements don't count for real estate!), it was part of the real estate being sold. The solar panel is therefore now owned by Roxanne, and Zach has no right to remove it. B Roxanne is in the right. The solar panel is directly attached, and therefore hers as part of the sale.

Answer 139

Topic: Property Rights Explanation: A fixture is a piece of property that has been attached to real estate. It is treated as part of the real estate. D Fixture

Answer 140

Topic: Interests In Real Estate Explanation: When Panine sold her interest to Penny, it established a tenancy in common (the default form of co-ownership) between Penny and the other two surviving joint tenants. Patty and Pam would remain joint tenants, but Penny's interest is not part of the joint tenancy, since she did not acquire ownership at the same time as Patty and Pam (a requirement of joint tenancy). Therefore, Penny's interest is inheritable, and would be left to a devisee (heir receiving real estate) in her will. A A devisee

Answer 141

Topic: Interests In Real Estate Explanation: This is an example of pur autre vie, a life estate granted for as long as some third party is alive. Pur autre vie roughly translates to "for another's life." Hence, under this type of ownership, Summer owns as long as Jerry is alive. B Pur autre vie

Answer 142

Topic: Interests In Real Estate Explanation: Joint tenancy is a form of co-ownership providing a right of survivorship; it is not limited to married couples. Always recommend that your client consult an attorney when there is a question pertaining to the law; real estate agents are not permitted to give legal advice. A That they should own as joint tenants, but should speak with an attorney

Answer 143

Topic: Property Right Limitations Explanation: High risk flood zones are determined by FEMA. Homes located in those zones must have flood insurance if their community participates in the National Flood Insurance Program.

Answer 144

Topic: Property Right Limitations Explanation: The CWA regulates the pollution of navigable (and connected) waters, like the Gulf of Mexico, and was established with the goals of eliminating the release of high amounts of toxic substances into water, eliminating water pollution, and ensuring that surface waters meet standards necessary for human sports and recreation. In 2010, the federal government brought both civil and criminal charges under the CWA against several companies when an oil rig named "Deepwater Horizon" exploded and accidentally spilled millions of barrels of oil into the Gulf of Mexico. B Clean Water Act (CWA)

Answer 145

Topic: Transfer Of Property Explanation: Dedication is the donation of property rights for public use. This type of transfer of property is common for museums and parks. D Dedication

Answer 146

Topic: Real Estate Agency Explanation: Property stigmas (information that the property was the site of a death, murder, suicide, criminal activity, or paranormal activity) do not need to be affirmatively disclosed in all states. For example, stigmas do not need to be affirmatively disclosed in Massachusetts, but they must be disclosed in California if they occurred within the past 3 years. B Stigmas

Answer 147

Topic: Property Valuation Explanation: Value in use is the value to a particular user of a property. In this case, Mr. Snowball is a farmer who values this property more than Mr. Napoleon, who is not a farmer. D Value in use

Answer 148

Topic: Property Valuation Explanation: The principle of highest and best use is illustrated when a property is used at its most optimal level. In a high rental income area, a multi-family would be best used as two rental units as opposed to its current use as a single family unit. B Highest and best use

Answer 149

Topic: Property Valuation Explanation: The idea that maximum value is achieved when a property is more or less in line with other surrounding properties is called conformity. Although grandiose, since the house is in a neighborhood with relatively modest houses, the value of his home would not be as high. If his house were in a neighborhood with other comparable properties, the value of his home would be higher. D Conformity

Answer 150

Topic: Real Estate Financing Explanation: The note is an I.O.U to the bank for the money borrowed. It also known as the promissory note and the mortgage note. D All of the above

Answer 151

Topic: Property Right Limitations Explanation: In a tax foreclosure, under Equity Right of Redemption, the owner has up to one year from the date of the auction to pay back what they owe plus interest if they want to regain title to the property. In a bank foreclosure, the owner has up to the date of the auction to pay back what they owe plus interest if they want to regain title. D In a bank foreclosure, the owner can regain title if they can pay what they owe plus interest before the auction date

Answer 152

Topic: Consumer Protection Laws Explanation: All properties built or rehabbed after 2011 must have hardwired smoke detectors in the units and common areas. Although D could technically be true, most lenders (and even cash deals) are going to require a smoke certificate in order to close the transaction, so this answer is not correct on the exam. Photoelectric detectors are not required throughout homes - just near the kitchens and bathrooms - and 10 year sealed detectors are not required for any detectors less than 10 years old, so anything installed after 2011 is fine for the time being. B Hard wired smoke detectors

Answer 153

Topic: Real Estate Agency Explanation: Massachusetts fair housing law builds upon federal fair housing law and similarly creates an exception to the laws for state and federally approved housing developments for elderly homeowners. Those developments that are for ages 62+ years old only, or that have more than 80% occupancy by those aged 55 years+, are exempt from housing laws regarding familial and age status. B 80% occupancy by those 55 years and older

Answer 154

Topic: Consumer Protection Laws Explanation: When a septic system fails the Title V certification, the seller and buyer must negotiate who will bring it into compliance, and one of them must bring it into compliance within 6 months. D Either buyer or seller must bring the system into compliance

Answer 155

opic: Consumer Protection Laws Explanation: MGL 93A only applies to businesses (including real estate licensees); private sales, like a for sale by owner property, are not covered under the law. D A for sale by owner

Answer 156

Topic: Interests In Real Estate Explanation: A freehold is an ownership interest, and a non-freehold is a possessory interest (for example, a rental).

Answer 157

Topic: Property Right Limitations Explanation: An easement by implication occurs when there is no recorded easement, but circumstances suggest that an easement was intended to exist. In this case, because the seller (grantor) owns the lot that would provide access to the purchased property, the seller likely intended to create an easement, which might result in the creation of an easement for the grantee (purchaser). B Implication

Answer 158

Topic: Leases Explanation: To calculate, we need to take the total usable square footage of 1,200 and add the additional 10% common load factor to get the rentable square footage. 1,200 x .10 = 120, 1,200 + 120 = 1,320sq.ft this is our rentable square footage. Then we multiple our price per square foot $30 x 1,320 sqft. of rentable square footage = $39,600 total rent per year. C $39,600

Answer 159

Topic: Transfer Of Property Explanation: A monument is a market on the metes and bounds survey so an apple tree or concrete post would be an example of this. C A Monument

Answer 160

Topic: Property Valuation Explanation: The appraisal principal of balance states that properties achieve their highest possible value when the local municipality is providing services in balance with the needs of the local community. B Their municipality is providing the right amount of services

Answer 161

Topic: Government Financing Programs And Regulations Explanation: The discount rate is the rate at which the Fed loans to the banks. The banks can borrow from the Fed at this rate as a last resort if they cannot borrow from other banks at the Fed funds fate. C Borrow from the Fed at the discount rate

Answer 162

Topic: Real Estate Financing Explanation: Fannie Mae is a secondary market loan buyer. It is one of three major entities on the secondary mortgage market, and was established by the U.S. government to encourage lenders to make borrower friendly loans and to inject liquidity into the market, which makes loans more readily available. C Inject liquidity into the credit market

Answer 163

Topic: Introduction To Real Estate Financing Explanation: The note contains the acceleration clause, which permits the lender to demand full payment immediately, in case of default. The note may also contain a prepayment penalty clause, which requires the borrower to pay a fee for prepayment of the loan. This clause is not common in residential loans, but more common in commercial loans, usually to guarantee the lender a certain amount of interest. A Acceleration clause

Answer 164

Topic: Massachusetts Real Estate Licensing Law Explanation: This is an example of blind advertising, and is prohibited under Massachusetts law. Salespersons are prohibited from advertising under their own name only; they must include their brokerage in their advertisements. Broker and salesperson ads must contain the name of the broker, their full business address (not just a PO box number), and identify the broker as a real estate broker (and not the seller or homeowner). C Blind advertising

Answer 165

Topic: Consumer Protection Laws Explanation: Underground storage tanks (USTs) represent an environmental hazard and are banned in MA under MGL 21E.

Answer 166

Topic: Property Rights Explanation: Any structure directly (or indirectly) attached to the land is called an improvement.

Answer 167

Topic: Interests In Real Estate Explanation: Waste is a cause of action that future interest holders can bring against a life estate tenant when that tenant causes damage to the property. In this case, Tom can bring a waste action against Jimmy in order to eject him from the property because he is causing damage to it. C Waste

Answer 168

Topic: Property Rights Explanation: Once Moe sold his interest to Shemp, Shemp would own as a tenant in common with Larry and Curly, who would continue to own as joint tenants together. Larry would thus receive Curly's interest if Curly passed. C Curly's interest will pass to only Larry

Answer 169

Topic: Property Right Limitations Explanation: Escheat is the power of the state to take property when the owner dies without a will or any heirs to inherit the property. D It escheats to the state

Answer 170

Topic: Property Right Limitations Explanation: A mortgage is a security for debt. It is considered an encumbrance because it is a financial limitation that restricts property rights. It is a voluntary lien because you willingly put it on your property. It is not a public limitation, e.g. local zoning or building codes. D Public limitation

Answer 171

Topic: Contracts Explanation: The contract is voidable, because Tommy was intoxicated at the time of agreement. C Voidable

Answer 172

Topic: Real Estate Agency Explanation: This is an example of puffing, which is an overstatement of the quality of the goods offered for sale. In this case, the agent is overstating the home's proximity to the beach (it is not merely steps from the beach; in fact, it is several blocks away). Puffing is outlawed in most states. D Puffing

Answer 173

Topic: Real Estate Agency Explanation: A universal agent is someone who can act on behalf on the principal on any matter. As the president of a corporation, one could have the authority to sign documents for the transfer of real estate, business activities, or other legal documents. B Universal agent

Answer 174

Topic: Real Estate Agency Explanation: Discrimination on the basis of race is a violation of the Civil Rights Act of 1866.

Answer 175

Topic: Property Valuation Explanation: Operating expenses are any costs associated with operating a business. Debt service, which includes monthly interest payments, is not categorized as an operating expense. C Monthly interest payments

Answer 176

lanation: This is a tricky one. Tom's total investment is his purchase price plus his renovations. We don't know what that total investment is, but we do know what he sold the property for ($303,000), and his profit on his total investment (44% over his investment, or 144% total). We can therefore calculate his total investment as $303,000 / 1.44 = $210,416.67. This investment, less the costs of renovations, is his purchase price: $210,416.67 - $27,000 = $183,416.67 (rounded to $183,417 in the answer).

Answer 177

Topic: Introduction To Real Estate Financing Explanation: The assumption clause (also known as the due on sale clause) prevents assumption of the mortgage. Selling the property subject to an existing mortgage is one way that a loan can be assumed, and is thus prevented by the assumption clause. The assumption clause does not impact any of the other answer choices one way or another. A The sale of the property subject to a mortgage

Answer 178

Topic: Government Financing Programs And Regulations Explanation: The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires lenders to provide borrowers with information on closing costs for financing 1-4 family residential homes and sets forth additional prohibitions. Banks must provide a borrower with a bona fide ("good faith") estimate of the amount and range of charges for real estate settlement within 3 days of the loan application. D RESPA

Answer 179

Topic: Massachusetts Real Estate Licensing Law Explanation: All licensed brokers, including corporations and inactive licensees, must provide the Board with a surety bond of $5,000 for the benefit of any person harmed by the loss of trust (escrow) funds through fault of the broker. The bond is not insurance for the broker. A To insure trust accounts

Answer 180

Topic: Interests In Real Estate Explanation: Because the couple is not married yet, they would not be eligible to purchase a property in tenancy by the entirety. Tenants in common would give each of them the ability to devise the property to whomever they might wish and is therefore the best option. A Tenants in common

Answer 181

Topic: Contracts Explanation: Listing contracts are automatically voided by the death of either party, so Mary's listing contract is void.

Answer 182

Topic: Contracts Explanation: The Statute of Limitations (which is the legal time limit for bringing a lawsuit under a contract) renders a contract unenforceable after the legal time limit for enforcement has elapsed. D Unenforceable

Answer 183

Topic: Transfer Of Property Explanation: General warranty deeds do not feature a covenant of agreed value (indeed, no commonly used deed features such a warranty). B Covenant of agreed value

Answer 184

Topic: Real Estate Agency Explanation: Brokers have vicarious liability for their agents' actions. B Vicarious liability

Answer 185

Topic: Property Valuation Explanation: GRM, Cap Rate and Cash on Cash return are all approaches to determine investment value. GRM does not include operating expenses and is an outdated way of determining investment value. Cash on Cash return looks at the cash investment into a property and not simply at the property's total value. A They are approaches to determining investment value

Answer 186

Topic: Massachusetts Real Estate Licensing Law Explanation: If you had a license in the past, you will need to reinstate that license by sending a written request to the Board of Registration of Salespersons and Brokers.

Answer 187

Topic: Massachusetts Real Estate Licensing Law Explanation: Tristram's Landing v Wait establishes the criteria for earning a real estate commission in Massachusetts.

Answer 188

Explanation: Because the home was built after 1978, Sarah does not have to test or delead her home, because there is no danger of lead based paint. D She doesn't have to do anything

Answer 189

Topic: The Basics Explanation: In Massachusetts, once you've had a real estate license, no matter how long ago, the process is the same. Write a letter to The Board of Registration of Real Estate Brokers and Salespersons asking to reinstate the license and then pay a license fee. The Board will also require you to take continuing education before issuing the license. C Write a letter asking the Board to reinstate her license, pay a fee, and take continuing education

Answer 190

Topic: Introduction To Real Estate Financing Explanation: The assumption clause, also known as the due on sale clause, allows the bank to speed up the maturity date of the loan when a title transfer takes place. This clause prevents mortagage takeovers by third parties. In this case, Jim wouldn't be able to assume his parents' mortgage if their mortgage contains a due on sale clause. B Assumption clause

Answer 191

Topic: Property Valuation Explanation: Insurance companies will typically focus on the cost to replace the improvements on a piece of property and not so much on the value of the land. D Replacement cost

Answer 192

Topic: Real Estate Agency Explanation: Personal information about the seller or buyer which does not impact the property or the ability of the party to proceed with the transaction must not be disclosed by the respective agent, even though the other party would want to know it (e.g., the lowest price a seller will take or the highest price a buyer will pay). C No, because she should not have disclosed that information

Answer 193

Topic: Transfer Of Property Explanation: A person who dies testate left a will. Their real estate would therefore devise (transfer by will) to any devisees named in the will. Property is bequeathed when it is personal property. D Devise

Answer 194

Topic: Transfer Of Property Explanation: Deeds are used to convey property. They must be delivered by the grantor, and accepted by the grantee, to convey title. They do not need to be recorded or witnessed, and merely writing a deed is not sufficient to transfer title to real estate without offer and acceptance (though it is required in addition to offer and acceptance, per the Statute of Frauds). D Accepted

Answer 195

Topic: Contracts Explanation: Since Tammy is under 18, Tammy and Ned's agreement is voidable. This means that the contract is valid until a court of law voids it, at the discretion of the party potentially harmed by the creation of the contract (in this case, Tammy). The contract is therefore currently enforceable by either party, and will remain enforceable unless a court of law voids the contract at Tammy's request. A The contract is enforceable by either party

Answer 196

Topic: Property Rights Explanation: Littoral rights typically extend to the accretion line (which is the median high tide line, or the water's edge if the body of water is not tidal). A The accretion line

Answer 197

Topic: Property Rights Explanation: Rights to water in an ocean or lake are littoral rights (remember, L = Littoral = "Large bodies of water" or "Lakes and oceans"). B Littoral rights

Answer 198

Topic: Interests In Real Estate Explanation: The four unities of time, interest, title, and possession are features of joint tenancy. C Two investors purchasing a property jointly

Answer 199

Topic: Property Rights Explanation: The act of severance makes real property become personal property; an example is digging up a tree. C Severance

Answer 200

Topic: Property Rights Explanation: Hela will have a life estate pur autre vie because her interest is based on the life of another- in this case, Odin. Once Odin passes away, the house will pass to Loki. C Life estate pur autre vie

Answer 201

opic: Property Rights Explanation: Riparian rights are primarily used to determine water rights in eastern states, especially the original 13 colonies. Western states typically use the Doctrine of Prior Appropriation. C Eastern states

Answer 202

Topic: Property Rights Explanation: Emblements are annual or semi-annual crops that, despite their attachment to the land, are treated as personal property (or chattel) under the rules about property. Corn and wheat are examples of such crops. B Corn plants

Answer 203

Topic: Property Rights Explanation: Barber shop chairs are an example of trade fixtures, or property used in the ordinary course of business. Despite the attachment of trade fixtures to real estate, they are treated as personal property (or personalty), and are an exception to the usual rules defining real estate. A Personalty

Answer 204

Topic: Property Right Limitations Explanation: Avulsion is the sudden separation of land from one property and its attachment to another property caused by the flooding or change of course in a river. C Separation of land from one area and its attachment to another by water

Answer 205

Topic: Leases Explanation: Typically, foreclosure terminates the lease. (State laws vary; in Massachusetts, for example, the tenant will be given at least 90 days' notice to vacate in the event of foreclosure.) C Are terminated

Answer 206

Topic: Transfer Of Property Explanation: Property developments with more than 25 units for sale at the same time, or lots sized more than 20 acres each, must be registered with the Consumer Financial Protection Bureau (CFPB) when sold on an interstate basis. A property with 40 units might (not must) therefore need to be registered with the CFPB if the units are being sold at the same time, since 40 units is more than 25. B 40 units

Answer 207

Topic: Transfer Of Property Explanation: Under the government rectangular survey system, townships are always 23,040 acres.

Answer 208

Topic: Transfer Of Property Explanation: One chain is equal to 66 feet.

Answer 209

Topic: Real Estate Agency Explanation: A broker is owed a commission if they were: 1) the procuring cause of sale (the agent's actions resulted in the buyer and seller coming together for the sale), 2) they bring a buyer who is ready, willing, and able, and 3) the buyer is prepared to consummate the sale at closing. The broker's effort to bring the buyer is known as being the "procuring cause of sale." B Procuring cause

Answer 210

Topic: Real Estate Agency Explanation: Agents owe their clients OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Account, and Reasonable Care (not doubt). D Reasonable doubt

Answer 211

Topic: Real Estate Agency Explanation: This couple's listing contract with Frank was almost certainly an exclusive listing. Under an exclusive listing, the sellers hire one real estate agent to sell their home, but if the sellers find a buyer without the agent's help, they are not required to pay the agent a commission. B Exclusive listing

Answer 212

Topic: Real Estate Agency Explanation: The FTC Do Not Call List prohibits unsolicited business calls to residential phone numbers on the Do Not Call List, as well as mobile phone numbers. Fines for violations are up to approximately $40,000 ($40,654) per call as of 2017. C $40,000 per call

Answer 213

Topic: Property Valuation Explanation: A municipality might be thought of as out of balance if it has too much of one kind of real estate and not enough of another, e.g. not enough grocers for a subdivision, or insufficient fire fighting services for a municipality. C Balance

Answer 214

Topic: Introduction To Real Estate Financing Explanation: A mortgage allows a lender to use a piece of property as collateral for a loan and provides security for the note. B Mortgage

Answer 215

Topic: Government Financing Programs And Regulations Explanation: Trick question! Truth in Lending (Regulation Z) covers ALL consumer credit advertisements. This includes both print and online advertisements (as well as TV, radio, etc). Watch out for this sort of question on the exam! B Truth in Lending

Answer 216

Topic: Consumer Protection Laws Explanation: Chlordane is a pesticide that is used as an insect barrier to prevent termite infestations. A Termites

Answer 217

Topic: Consumer Protection Laws Explanation: If a child under the age of 6 lives in the home, or someone living in the home becomes pregnant, the property owner must delead within 90 days. There are no exceptions or waivers permitted, and the requirement applies to all owners of residential real estate, except for vacation rentals (rentals lasting less than 100 days). B 90 days

Answer 218

Topic: Consumer Protection Laws Explanation: The EPA/HUD lead paint pamphlet must be provided for all homes built prior to 1978. B 1978

Answer 219

Topic: Consumer Protection Laws Explanation: 30 day demand letters are used to request monetary damages when a consumer has been wronged by a business or licensee, such as a real estate agent, under MGL Chapter 93A. Because Betty is simply a home owner and not a business or licensee, Benita would need to file a civil suit if she wanted to recover the loss in profit due to the misrepresentation of the acreage. D No, because Betty is not a business or licensee

Answer 220

Topic: Property Right Limitations Explanation: Under the Massachusetts Rivers Protection Act, which amended the Massachusetts Wetlands Protection Act, local conservation commissions have authority over the construction of property in riverfront areas. B The local conservation commission

Answer 221

Topic: Massachusetts Real Estate Licensing Law Explanation: The Board may suspend, revoke, or refuse to renew a license due to a broker having accepted, given, or charged any undisclosed commission, rebate, or profit on expenditures for a client (principal); it is a potential conflict of interest. Referral kickbacks not disclosed in advance to the client are not permitted. The gift that Randy received from the attorney is an example of a kickback that is outlawed under the Massachusetts licensing law. D Yes, it is a potential conflict of interest

Answer 222

Topic: Interests In Real Estate Explanation: A remainderman is a person who inherits or is entitled to inherit property held as a life estate when the person whose life determines the duration of the life estate passes away. B Remainderman

Answer 223

Topic: Contracts Explanation: Forfeiture is the loss of money or anything of value, such as a deposit, due to failure to perform according to the terms of a contract. It is a type of liquidated damages, but since it is more specific, it is the better answer. B Forfeiture

Answer 224

Topic: Transfer Of Property Explanation: Seisin is a freehold, or ownership, claim to real estate. B Ownership of property

Answer 225

Topic: Real Estate Agency Explanation: Only the first floor units have to be handicapped-accessible. The Americans with Disabilities Act requires that the first floor, and every floor serviced by an elevator, be handicapped-accessible, but there is no requirement that an elevator be installed. Since this building will not have an elevator, only the first floor will need to be accessible. A The first floor condos must be handicapped-accessible

Answer 226

Topic: Property Valuation Explanation: These are all examples of appraisal principles of value. C Principles of value

Answer 227

Topic: Property Valuation Explanation: The idea that properties will be highly valued when they are optimally used is called highest and best use. The investors see the value in this single family house that is in an area zoned for multifamily properties. Eventually, and most likely, a multifamily building would be built on that plot and be worth much more. C Highest and best use

Answer 228

Topic: Property Valuation Explanation: Appraisers will usually use a combination of approaches when valuing a property. In a municipality with few multi-family homes, an appraiser would probably focus primarily on the income approach rather than the sales comparison approach, because of lack of sales data in that area from the last six months. In this case, though, there is plenty of area sales data for other muti-family homes, and an appraiser would therefore likely use both approaches. C Sales comparison approach and income approach

Answer 229

Topic: Government Financing Programs And Regulations Explanation: The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires lenders to provide borrowers with information on closing costs for financing 1-4 family residential homes and sets forth additional prohibitions. Banks must provide a borrower with a bona fide ("good faith") estimate of the amount and range of charges for real estate settlement within 3 days of the loan application. D RESPA

Answer 230

Topic: Massachusetts Real Estate Licensing Law Explanation: People who are buying, selling, and renting property may do so for themselves. However, if another person assists with advertising on behalf of a seller, that person must be licensed. Thelma is licensed so she may advertise on behalf of Louise. D No, because she is not advertising the property on MLS, and she has Thelma to do that

Answer 231

Topic: Consumer Protection Laws Explanation: MGL Chapter 93A allows for consumers to write a 30 day deman letter to any business that they feel wronged or deceived them causing monetary damages. In this case, the termite damage would be a material defect that should have been disclosed. The homeowner now may have recourse under MGL Chapter 93A. C The real estate agent that represented the seller didn't disclose that there was termite damage in the basement

Answer 232

Topic: Massachusetts Real Estate Licensing Law Explanation: All of these answers are exemptions to the Massachusetts real estate licensing law except for the assistant at the open house. In order to assist with the open house, which involves the sale of real estate, the assistant would need to be licensed as a real estate salesperson or broker. C Assistant at an open house

Answer 233

Topic: Property Right Limitations Explanation: In order to exercise the equity right of redemption in a tax sale, a homeowner must pay back what they owe on their tax bill, plus interest, to the town within one year after the date of the auction. D Pay back what he owes on his property tax bill plus interest within one year from the date of the tax auction

Answer 234

Topic: Interests In Real Estate Explanation: Dower rights entitle a surviving spouse up to a 1/3 interest in their deceased spouse's real estate, in lieu of what was left to them in the will. B 1/3

Answer 235

Topic: Property Right Limitations Explanation: An easement in gross allows someone to use a right of way across a property that they no longer own. C Easement in Gross

Answer 236

Topic: Contracts Explanation: Under the severability clause, one portion of a contract may be voided, while leaving the rest of the contract intact. The contract is therefore still valid (even though the individual clause was voided). A Valid

Answer 237

Topic: Contracts Explanation: This is an assignment, or a transfer of the remaining rights and obligations under a contract. C Assignment

Answer 238

Topic: Leases Explanation: If a landlord collects a security deposit, a landlord's statement of condition is required at the start of the lease, and the landlord must also pay interest on the security deposit each year of tenancy. D Larry has done the wrong thing, because Larry did not pay interest on the security deposit to Tim

Answer 239

Topic: Transfer Of Property Explanation: When the lemon plant was in a pot in Mark's kitchen, it was considered personal property. However, when Mark planted it in the ground, it was attached to the land and became real estate. The term for this is annexation. A Annexation

Answer 240

Topic: Transfer Of Property Explanation: Sections in a township are always 1 mile square, or 640 acres. C 640 acres

Answer 241

Topic: Real Estate Agency Explanation: Hannah does not need to return her commission. Randy, the seller, paid the commission, and did not disclose the pipes on his seller's disclosure. Since Hannah brought ready, willing, and able buyers, and the sale has closed, she does not need to return her commission. She might choose to as a professional courtesy, but it is not required. B No, because she provided ready, willing and able buyers and the sale had closed

Answer 242

Topic: Massachusetts Real Estate Licensing Law Explanation: Agency disclosures must include the agent's name, license number, signature, and the date. They must be kept on file for 3 years after signing, and are subject to inspection by the Board. C Include his license number on the document

Answer 243

Topic: Property Right Limitations Explanation: MGL Chapter 21E regulates the transportation, storage, and disposal of oil and other hazardous waste. It authorizes the DEP to take or arrange for response actions whenever it has reason to believe that oil or hazardous material has been released or that there is a threat of release of oil or other hazardous material. D Massachusetts General Law Chapter 21E

Answer 244

Topic: Property Right Limitations Explanation: The Wetlands Protection Act is a Massachusetts state law requiring a buffer zone of 100 feet from wetlands for development, with minor changes permitted after 50 feet, subject to approval. C 100'

Answer 245

Topic: Massachusetts Real Estate Licensing Law Explanation: The MA Board of Registration of Real Estate Brokers and Salespersons is made up of three brokers with at least seven years of experience, and two lay people (unlicensed people who represent the public interest). One member of the Board is designated the chairperson, they are all appointed by the governor, and they all serve five year terms. A Three lay people

Answer 246

Topic: Massachusetts Real Estate Licensing Law Explanation: CO detectors are required in all homes with either 1) an attached garage or 2) gas burning equipment (e.g. a gas fireplace). D A single family home with a gas fireplace

Answer 247

Topic: Property Right Limitations Explanation: An installment sales contract is essentially a 'rent to own' contract and is voluntary, because you enter it willingly and specific, because the lien only covers property and nothing else, such as your car or bank account. D Voluntary and Specific

Answer 248

Topic: Massachusetts Real Estate Licensing Law Explanation: MA Real Estate Board decisions can be appealed within 20 days.

Answer 249

Topic: Consumer Protection Laws Explanation: A 21E Certificate certifies that a property is free from contamination. Most banks will require this certificate for the lending on commercial property.

Answer 250

Topic: Property Right Limitations Explanation: Accretion is the increase of property by the gradual, natural action of wind or water.

Answer 251

Topic: Consumer Protection Laws Explanation: While all of the above would apply to any "material defects" that should be disclosed, asbestos is the only "hazardous material" listed in the answer choices, and is therefore the correct answer. B Asbestos

Answer 252

Topic: Consumer Protection Laws Explanation: Property disclosures must be provided before the signing of the purchase and sale agreement, at the very latest (and ideally should be provided as an attachment to the listing on MLS). C Before singing the purchase and sale agreement

Answer 253

Topic: Introduction To Real Estate Financing Explanation: A mortgage allows a lender to use a piece of property as collateral for a loan and provides security for the note. B Mortgage

Answer 254

Topic: Introduction To Real Estate Financing Explanation: Your income does not have an impact on what your credit score would be. The other three options would play a factor. D Income

Answer 255

Topic: Property Valuation Explanation: The church would likely use the Quantity Survey method to produce a reproduction cost, whereas the new construction condo would likely use the Comparative Unit method to produce a replacement cost. However, both approches will also include the Unit in Place Method, which evaluates the value of the components and the systems, such as HVAC, plumbing, electrical, etc. C Unit in Place Method

Answer 256

Topic: Transfer Of Property Explanation: A bargain and sale deed implies an interest or rights to convey property, but it does not warrant (promise) title to it. D Bargain and sale

Answer 257

Topic: Transfer Of Property Explanation: A Metes and Bounds survey would likely be used for an irregular shaped land and although subdivisions use lot and block surveys, the individual lots themselves would be described with metes and bounds.

Answer 258

Topic: Contracts Explanation: A contingency clause means making something reliant on something else. This clause can be found in real estate contracts when we want to express that in order for the sale of real estate to happen, something such as a buyer obtaining financing or reviewing condo documents, must happen. B Contingency Clause

Answer 259

Topic: Interests In Real Estate Explanation: When the life estate passed back to the original grantor upon the life tenant or grantee's death, this is an example of life estate in reversion. C Life estate in reversion

Answer 260

Topic: Interests In Real Estate Explanation: Real estate owned in severalty has one owner. In a cooperative, the corporation owns the property, and the occupants of the property own shares in the corporation. The real estate in a cooperative is therefore owned in severalty (it has one owner, the corporation). D Cooperative

Answer 261

Topic: The Basics Explanation: Errors and ommissions insurance is liability insurance that will cover mistakes made by a broker or their agents. E&O will not cover fair housing or consumer protection lawsuits. General liability insurance would cover personal property being broken, such as the client's heirloom. C A lost offer deposit

Answer 262

Topic: Property Rights Explanation: Chattel is an article of personal property; it is defined as being moveable, except in the cases of trade fixtures and emblements. Rick's corn is an emblement (an annual or semi-annual crop), and is therefore treated as chattel, despite being attached to the land. D Chattel

Answer 263

Topic: Property Right Limitations Explanation: The servient tenement is the property that is encumbered by someone else's right (the dominant tenement). In this scenario, Louis is the one who has to allow Larry to walk across his property; therefore, he is the one who is encumbered. A Servient tenement

Answer 264

Topic: Transfer Of Property Explanation: A plat plan or plat map is the publicly recorded map of a subdivision, using the lot and block method. B Plat plan

Answer 265

Topic: Property Valuation Explanation: When a transaction is federally related (for example, a bank in several states), a formal appraisal must be ordered. A residential real estate transaction is highly regulated under federal law; therefore, this transaction example is federally related. Under most circumstances, though, the borrower will pay the cost of the appraisal, and there aren't requirements about that under law. A Yes, because the bank is in several states and as a result, an appraisal must be ordered

Answer 266

Topic: Property Valuation Explanation: Market price is the amount actually paid for the property. The market value is how much it might sell for. Assessed value is the value for taxes. Investment value is the value to investors. B Market price

Answer 267

Topic: Consumer Protection Laws Explanation: Effective March 31, 2006, all homes in Massachusetts that are equipped with fuel burning, carbon monoxide producing equipment or that have indoor parking (i.e., a garage) adjacent to living areas must have carbon monoxide (CO) detectors on every level of the home. C March 31, 2006

Answer 268

pic: Consumer Protection Laws Explanation: Effective March 31, 2006, all homes in Massachusetts that are equipped with fuel burning, carbon monoxide producing equipment or that have indoor parking (i.e., a garage) adjacent to living areas must have carbon monoxide (CO) detectors on every level of the home. New home construction or renovations must have hard-wired detectors; older homes may be brought into compliance with battery-operated detectors. Thus, the minimum requirement for ALL homes is battery operated detectors. A Battery operated CO detectors

Answer 269

Topic: Fair Housing Law Explanation: If you refuse to work with someone because of their ethnicity which would be considered race or national origin, then you would be violating fair housing law. If someone is making you feel uncomfortable, they are trying to violate the law with their demands, or they aren't willing to pay you what you feel you are worth, then you do not have to work with them. A They are not the same ethnicity as you are

Answer 270

Topic: Interests In Real Estate Explanation: Tenancy by the entirety is a form of co-ownership permitted for married couples only. It is similar to a joint tenancy but also includes creditor protections, including a limitation on the forced sale of the property and an automatic homestead protection. Other forms of co-ownership do not have these protections by default. C Creditor shielding

Answer 271

Topic: Interests In Real Estate Explanation: Real estate owned in severalty has one owner. In a cooperative, the corporation owns the property, and the occupants of the property own shares in the corporation. The real estate in a cooperative is therefore owned in severalty (it has one owner, the corporation). D Cooperative

Answer 272

Topic: Property Right Limitations Explanation: Soil deposited by wind, such as sand dunes or silt, is called aeolian soil.

Answer 273

Topic: Property Right Limitations Explanation: Brownfields are properties contaminated by hazardous materials or other pollutants. The EPA, under CERCLA (also known as the Superfund Act), can provide funds to assist with the cleanup of these properties. D EPA

Answer 274

Topic: Contracts Explanation: The standard listing agreement is a unilateral contract because only one party is making a promise to the other. The listing agent promises to sell the seller's home, but the seller does not necessarily make any promises to the listing agent. They may, or may not, pay them, depending on if the agent sells the home. Therefore only one promise is being made. A Unilateral contract

Answer 275

Topic: Transfer Of Property Explanation: Metes and bounds surveys begin and end at a monument that is designated the "point of beginning."

Answer 276

Topic: Transfer Of Property Explanation: General warranty deeds do not feature a covenant of agreed value (indeed, no commonly used deed features such a warranty). B Covenant of agreed value

Answer 277

Topic: Real Estate Agency Explanation: Jeanie is a subagent, which means that she is an agent's agent. At Mansion Realty, June is the special agent and Jeanie is her subagent. Although Jeanie is a listing agent, that is not her relationship to June. B Subagent

Answer 278

Topic: Property Valuation Explanation: These are all examples of appraisal principles of value. C Principles of value

Answer 279

Topic: Property Valuation Explanation: The last step in the appraisal process is reconciling the data found via the three approaches to value. C Reconciling the data

Answer 280

Topic: Real Estate Financing Explanation: A defeasance clause in a mortgage automatically relieves the collateral of the bank's claim when the loan is paid back - an important occurrence for the mortgagor (borrower). A The defeasance clause

Answer 281

Topic: Consumer Protection Laws Explanation: The law requires that prospective purchasers of residential property built prior to 1978 must be notified of their lead paint rights by the Property Transfer Lead Paint Notification prior to signing the purchase & sale agreement, as well as the Protect Your Family from Lead in Your Home Pamphlet created by the EPA, HUD, and the Consumer Product Safety Commission. Sellers do not have to delead, though. Only the buyer will be required to, since they will own the property when the child under 6 moves in. C The seller must give the buyers the Property Transfer Lead Paint Notification

Answer 282

Topic: Massachusetts Real Estate Licensing Law Explanation: Massachusetts attorneys are entitled to an automatic broker's license, without having to take the course or pass the state exam. They must still apply and pay a licensing fee to the state. A She would need to apply for licensure, pay a licensing fee and then be entitled to her broker's license

Answer 283

Topic: Property Valuation Explanation: With the cost approach, value is given with the following formula: cost of construction - depreciation + land value. $535,000 - $100,000 +$375,000 = $810,000

Answer 284

Topic: Transfer Of Property Explanation: Generally speaking, probate will occur where the property is located and where the deceased last resided (but not where they passed away). A In the county where the property is located

Answer 285

Topic: Transfer Of Property Explanation: Maria's contract is an example of an option contract (an agreement where the seller promises to sell their property at pre-agreed terms on or before some date, but where the buyer is not obligated to purchase the property if they are unable or do not want to). C Option contract

Answer 286

Topic: Contracts Explanation: A listing contract, such as an open listing agreement, may be oral; however, it is best to put a listing contract in writing. Most real estate contracts must be in writing pursuant to the Statute of Frauds. An offer is not an agreement. B A listing contract

Answer 287

Topic: Contracts Explanation: The offeror may revoke an offer if it has not yet been accepted in writing by the offeree. The offeree, however, cannot revoke an offer. Since they receive the offer, it is not theirs to revoke. So the correct answer is simply no, the offeree cannot revoke an offer (though they certainly could reject it!) D No

Answer 288

Topic: Property Right Limitations Explanation: Soil deposited by wind, such as sand dunes or silt, is called aeolian soil. B Aeolian soil

Answer 289

opic: Property Rights Explanation: Property bordering a navigable river has rights up to the accretion line, or where the river meets the land. Those who own property bordering a non-navigable river own to the mid-point of the river. So Rob, who owns property next to a navigable river, would own up to the accretion line. B The point where the river meets the shore

Answer 290

Topic: Fair Housing Law Explanation: Steering is when an agent directs prospective purchasers or renters away from, or towards, certain areas based on a protected class. In this case, Spock wants to live with other Vulcans, which is a race of people. The agent directing him towards the west side of the galaxy to live with other Vulcans would be an example of steering. C Steering

Answer 291

Topic: Interests In Real Estate Explanation: Real Estate Mortgage Investment Conduits, or REMICs, invest in portfolios of mortgages. C Portfolios of mortgages

Answer 292

Topic: Interests In Real Estate Explanation: Life estates are freehold (or ownership) interests in real estate. A Freehold

Answer 293

Topic: Property Right Limitations Explanation: Alienation is the loss of title or ownership to a property. A short sale is an example of voluntary alientation, or willing loss of title since it is a choice that the home owner makes vs. a situation of foreclosure where the bank forces the sale. B Short Sale

Answer 294

Topic: Contracts Explanation: Execution is the completion of a contract. Thus, a purchase and sale agreement, which is an agreement to sell real estate, is executed at closing (when real estate is sold). Don't confuse acceptance (agreement or signing) with execution (completion). D Closing

Answer 295

Topic: Transfer Of Property Explanation: Heirs receiving personal property in a will are the legatees.

Answer 296

Topic: Real Estate Financing Explanation: The Federal National Mortgage Association (Fannie Mae) was founded in 1938 and is one of three major entities on the secondary mortgage market. It exists primarily to encourage lenders to make more borrower-friendly loans and to inject liquidity into the market by purchasing loans from banks. D Purchases loans

Answer 297

Topic: Consumer Protection Laws Explanation: Black mold is the common name for S. chlorohalonata and S. chartarum, molds of the genus Stachybotrys. It is likely the black substance that Francine has discovered in the poorly ventilated, damp bathroom.

Answer 298

Topic: Massachusetts Real Estate Licensing Law Explanation: Escrow account deposits are the client's money. Legally, the seller is the ONLY person entitled to hold escrow money, though the seller's broker often holds the deposits with the written consent of both the seller and the buyer. B Seller

Answer 299

opic: Transfer Of Property Explanation: The purchase price was $200,600, rounded up to the nearest $500 = $201,000. Remember, stamps are purchased in $500 increments and you can't purchase a partial stamp. Stamps are only assessed based on the cash portion of the transaction. Since $100,000 of the price was an assumed loan, no stamps are assessed on that amount. So, $201,000 - $100,000 = $101,000 / $500 = 202 stamps x $2.28 fee per stamp = $460.56 fee.

Answer 300

Topic: Fair Housing Law Explanation: The owner-occupied fair housing law exception only applies to 2 family properties in Massachusetts. Katie would not be able to utilize any of the exceptions if she owns a 3 family. D Nothing

Answer 301

Topic: Property Rights Explanation: It's best if the sellers remove the tree before listing or advertising the property. In this case, if it's something large like a tree, it's best to replace it for buyers. If the sellers disclose that they are taking the tree after it's listed, it could be an issue for them to take it with them if the buyer wants the tree, as it is real property and included in the sale unless otherwise disclosed. A Remove the tree and replace it with something else before listing the property

Answer 302

Topic: Property Right Limitations Explanation: An easement for an individual is an easement in gross. It can't be passed on, and unlike some easements, the right does not pass with ownership of the land. It is instead granted to the individual.

Answer 303

Topic: Property Right Limitations Explanation: Modular homes are subject to the same construction standards (or building code) as traditional, stick built homes. C Their construction standards differ from stick built homes

Answer 304

Topic: Consumer Protection Laws Explanation: Buyers are given a 10 day period in which to complete a lead paint inspection of the property.

Answer 305

Topic: Real Estate Financing Explanation: A wraparound mortgage is a type of seller financing. The seller would be the one receiving the note and the mortgage and therefore, would be the mortgagee. B The Seller

Answer 306

Topic: Massachusetts Real Estate Licensing Law Explanation: The Massachusetts DEP, or Department of Environmental Protection, oversees Massachusetts environmental laws. B The DEP

Answer 307

Topic: Consumer Protection Laws Explanation: All properties built or rehabbed after 2011 must have hardwired smoke detectors in the units and common areas. Although D could technically be true, most lenders (and even cash deals) are going to require a smoke certificate in order to close the transaction, so this answer is not correct on the exam. Photoelectric detectors are not required throughout homes - just near the kitchens and bathrooms - and 10 year sealed detectors are not required for any detectors less than 10 years old, so anything installed after 2011 is fine for the time being. B Hard wired smoke detectors

Answer 308

opic: Fair Housing Law Explanation: MGL 151B is the statute that includes all protected classes in Massachusetts that fall under fair housing law. D MGL 151B

Answer 309

Topic: Consumer Protection Laws Explanation: The EPA suggests mitigating radon when a level of 4 pCI/L or higher is present in a home, however this is not a requirement for the sale of real estate. B The radon should be mitigated

Answer 310

Topic: Real Estate Agency Explanation: Lead paint is a hazardous material that must be disclosed. Easements and assessments are both property right limitations and also must be disclosed. D They must all be disclosed.

Answer 311

Topic: Property Right Limitations Explanation: Federal tax liens are involuntary encumbrances (encumbrances that are forced on the property owner, rather than willingly taken on). B Involuntary

Answer 312

Topic: Fair Housing Law Explanation: This is an example of blockbusting. Blockbusting is when an agent uses the perceived or prospective entry of a protected class (national origin, in this example) into a neighborhood to incite homeowners to sell their homes. Any time an agent discusses a protected class in relation real estate, it is potentially blockbusting- so don't talk about the people living in a neighborhood with your clients! B Blockbusting

Answer 313

Topic: Property Rights Explanation: Corn crops are typically considered emblements, which are treated as personal property. They are planted with the intention of being harvested. In this case, Talia has rights to the corn even though she sold her property to Lionell. B The corn is still Talia's property and she may harvest it

Answer 314

Topic: Interests In Real Estate Explanation: Condominium fees are charged in proportion to unit fair market value (which determines the unit's common area interest, and thus its fees). B Unit fair market value

Answer 315

Topic: Property Rights Explanation: A fixture is a piece of property that has been attached to real estate. It is treated as part of the real estate. D Fixture

Answer 316

Topic: Interests In Real Estate Explanation: Joint tenancy with a right of survivorship is a form of co-ownership where if one of the co-owners passes away, their interest passes on to the surviving co-owners.

Answer 317

Topic: Property Rights Explanation: Trade fixtures are items that are permanently attached to the land but are intended to leave with the business owner once he or she leaves the property. A jewelry display case is considered a trade fixture and should leave with Steve now that the lease has ended. B Steve, because the display cases are considered to be trade fixtures

Answer 318

Topic: Property Right Limitations Explanation: The Clean Water Act, or CWA, regulates the pollution of navigable waterways. B Navigable waterways

Answer 319

Topic: Leases Explanation: A fit up (also called a build out or fit out) is when the lessor, lessee, or both, pays to customize the leased premises for the tenant (lessee). It is most common in commercial leases. A The lessor

Answer 320

Topic: Transfer Of Property Explanation: Since a plat map (a publicly recorded plan for a subdivision) divides a property into blocks using streets, streets is the correct answer. B Streets

Answer 321

Topic: Real Estate Agency Explanation: A listing contract is essentially a service contract. The agent is offering services to the seller. It does not have to be exclusive. B Service Contract

Answer 322

Topic: Real Estate Financing Explanation: A trust deed is often used in lieu of a mortgage, making it easier for the lender or in this case, seller because of seller financing, to foreclose on the property C Trust Deed

Answer 323

Topic: Massachusetts Real Estate Licensing Law Explanation: MA Real Estate Board decisions can be appealed within 20 days. C 20 days

Answer 324

Topic: Real Estate Agency Explanation: The not-for-profit rental of a private club's property to members of the club is an exemption to the Fair Housing Act of 1968, unless the discrimination is on the basis of race. This situation is therefore legal. D Legal, because the meeting hall is not open to the public and it is not rented for a profit

Answer 325

Topic: Real Estate Financing Explanation: A short sale is a sale for a price "short" of what the seller owes on their home loan. The bank settles for the difference between the sales price and the loan balance. Short sales are often used by homeowners to avoid foreclosure. B A sale for less than the seller owes on their loan

Answer 326

Topic: Property Right Limitations Explanation: Licenses are personal, revocable, and non-assignable permission to enter someone else's property for a particular purpose. Since the neighbor was able to revoke Bohdi's right to pass through the property to the beach, Bohdi had a license. B License

Answer 327

Topic: Property Right Limitations Explanation: A court may grant an easement by necessity if a property owner cannot legally access their property ("landlocked land") so that the owner can access their land. C Easement by necessity

Answer 328

Topic: Transfer Of Property Explanation: Land that has been designated for public use cannot be adversely possessed. D No, because you cannot adversely possess property that has been dedicated for public use

Answer 329

Topic: Property Right Limitations Explanation: The Wetlands Protection Act is a Massachusetts state law requiring a development buffer zone of 100 feet from wetlands, with minor changes permitted after 50 feet, subject to approval. D 50 feet

Answer 330

Topic: Massachusetts Real Estate Licensing Law Explanation: The buyer and buyer's agent have a duty to disclose information about the buyer that will adversely impact the buyer's ability to purchase the property. The seller's agent would also have a duty to disclose any known information to them to their client. D The buyer's plans to file for bankruptcy

Answer 331

Topic: Property Right Limitations Explanation: A lis pendens is a publicly recorded notice that a property's ownership is subject to litigation. It is an issue with property ownership, and is therefore classified as a "cloud on title." It is not a lien, because it is not associated with a specific debt, though it is a financially related limitation on real estate. A A cloud on title

Answer 332

Topic: Property Right Limitations Explanation: The Coastal Zone Management Act protects coastal zones such as the Gulf of Mexico from overdevelopment. It limits and often times, completely eliminates development in this type of area. C Coastal Zone Management Act

Answer 333

Topic: Property Right Limitations Explanation: A covenant is a property right restriction that is typically written by the developer of a subdivision in order to keep a certain aesthetic or style to the community. Covenants are private restrictions that run with the land and are enforced by a home owner's association (HOA). A A covenant

Answer 334

Topic: Real Estate Agency Explanation: Under the fiduciary duty of reasonable care, an agent must protect the principal from forseeable risks of harm, exercise care and competence, and recommend expert advice when the principal's needs are beyond their expertise or area of competence. No legal advice or any legal work on behalf of the principal is allowed (unless you're an attorney). In this case, Sergio is not an attorney and should not be giving legal advice, let alone doing any legal work for Henrik, thereby violating the fiduciary duty of reasonable care. D Reasonable care

Answer 335

Topic: Real Estate Agency Explanation: Because Angela will represent Heather, the principal, in all matters related to a particular business or activity, such as the hotel business, she would be considered a general agent. D A general agent

Answer 336

Topic: Property Valuation Explanation: An appraiser absolutely must be licensed whenever the transaction is federally related. C When the transaction is federally related

Answer 337

Topic: Real Estate Financing Explanation: The promissory note or note is the evidence of debt. The mortgage is security for the note. Collateral is oftentimes the property and is considered the security for the debt. C Collateral

Answer 338

Topic: Consumer Protection Laws Explanation: A 21E Certificate certifies that a property is free from contamination. Most banks will require this certificate for the lending on commercial property. B 21E Certificate

Answer 339

Topic: Consumer Protection Laws Explanation: All properties built or rehabbed after 2011 must have hardwired smoke detectors in the units and common areas. Although D could technically be true, most lenders (and even cash deals) are going to require a smoke certificate in order to close the transaction, so this answer is not correct on the exam. Photoelectric detectors are not required throughout homes - just near the kitchens and bathrooms - and 10 year sealed detectors are not required for any detectors less than 10 years old, so anything installed after 2011 is fine for the time being. B Hard wired smoke detectors

Real Estate Flashcards

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