Unit 2 Quiz Flashcards
(20 cards)
When an owner of real estate sells the property to someone else, which of the “sticks” in the bundle of legal rights is she using?
A) Disposition
B) Exclusion
C) Control
D) Legal enjoyment
Explanation
The answer is disposition. The right of disposition means to sell, will transfer or otherwise dispose of or encumber the property.
A buyer is interested in a house that fits most of her needs, but it is located in a busy area where she is not sure she wants to live. The real estate characteristic associated with her concern is
A) immobility.
B) permanence of investment.
C) area preference.
D) physical deterioration.
Explanation
The answer is area preference. The economic characteristic of location, sometimes called situs, does not directly refer to a geographic location but rather to people’s preferences for given areas.
A man inherited a farm from his uncle. As a new owner, the first thing he did with the vacant property was to remove all the topsoil, which he sold to a landscaping company. He then removed a thick layer of limestone and sold it to a construction company. Finally, he dug 40 feet into the bedrock and sold it for gravel. When the farm owner died, he left the farm to his daughter. Which of these statements is TRUE’?
A) The daughter inherits a large hole in the ground, but it is still a farm, down to the center of the earth.
B) The man’s estate must restore the land to its original condition.
C) The daughter inherits nothing because the farm no longer exists.
D) The daughter owns the gravel, limestone, and topsoil, no matter where it is.
Explanation
The answer is the daughter inherits a large hole in the ground, but it is still a farm, down to the center of the earth. The right to use the surface of the earth is called surface rights. However, real property ownership also can include subsurface rights, which are the rights to the natural resources lying below the earth’s surface.
Which of these is considered the MOST important characteristic of land?
A) Permanence
B) Air rights
C) Location
D) Subsurface rights
Explanation
The answer is location. This economic characteristic, sometimes called situs, is a reflection of the desirability of a particular geographic location.
Which of these is considered personal property?
A) Awnings
B) Woodburning fireplace
C) Patio furniture
D) Bathtubs
Explanation
The answer is patio furniture. Personal property is property that is movable and not affixed to or associated with the land.
A homeowner is building a new enclosed front porch on his home. A truckload of lumber has been left in his driveway for use in building the porch. At this point, the lumber is considered
A) personal property.
B) a chattel that is real property.
C) a fixture, because it will be permanently affixed to existing real property.
D) a trade fixture or a chattel fixture.
Explanation
The answer is personal property. Personal property (or personalty) is property that is movable and not affixed to or associated with the land.
Intent of the parties, method of attachment, adaptation to real estate, and agreement between the parties are the legal tests for determining whether an item is
A) real property or real estate.
B) a fixture or personal property.
C) an improvement.
D) a trade fixture or personal property.
Explanation
The answer is a fixture or personal property. The primary test that is used in determining whether an item is a fixture or personal property is a question of intent. In determining intent, courts use three basic tests: method of attachment, adaptation to real estate, and agreement.
Which of these is an example of an appurtenance?
A) Personal property
B) Water rights
C) A fixture
D) A trade fixture
Explanation
The answer is water rights. An appurtenance is anything associated with the property, although not necessarily a direct part of it. Typical appurtenances include parking spaces in multiunit buildings, easements, water rights, and other improvements.
The buyer and the seller of a home are debating whether a certain item is real or personal property. The buyer says it is real property and should convey with the house; the seller says it is personal property and would not convey without a separate bill of sale. In determining whether an item is real or personal property, a court would NOT consider
A) the cost of the item when it was purchased.
B) whether its removal would cause severe damage to the real estate,
C) any relevant agreement of the parties in their contract of sale,
D) whether the item is clearly adapted to the real estate.
Explanation
The answer is the cost of the item when it was purchased. The primary test that is used in determining whether an item is a fixture or personal property is a question of intent. In determining intent, courts use three basic tests: method of attachment, adaptation to real estate, and agreement.
When moving into a newly purchased home, the buyer discovered that the seller had taken the electric lighting units that were installed over the vanity in the bathroom. The seller had not indicated in the sales contract that these would be removed. Which of these is TRUE?
A) Original lighting fixtures are real property, but replacement lighting is personal property and can be taken by the seller.
B) These lighting fixtures are considered trade fixtures and could be removed.
C) Installed lighting units normally are considered real estate fixtures.
D) The lighting fixtures belong to the seller because he installed them as personal property.
Explanation
The answer is installed lighting units normally are considered real estate fixtures. A fixture is personal property that has been so affixed to land or a building that, by law, it becomes part of the real property. Examples of fixtures are heating systems, elevator equipment in highrise buildings, radiators, kitchen cabinets, attached bookcases, light fixtures, doors, and plumbing fixtures.
All of these rights are included in the right to control one’s property EXCEPT
A) sell the property to a neighbor,
B) erect “No Trespassing” signs,
C) enjoy profits from its ownership.
D) exclude utility meter readers.
Explanation
The answer is exclude utility meter readers. Property owners have the right to control their property within the framework of the law. They have the right to use it, earn income from it, transfer it to others, and enforce their property rights. However, the meter readers do have an easement in gross (Unit 7) which allows them access to their meters on the property.
Parking spaces in multiunit buildings, water rights, and other improvements are classified as
A) subsurface rights.
B) emblements.
C) trade fixtures.
D) appurtenances.
Explanation
The answer is appurtenances. An appurtenance is anything associated with the property, although not necessarily a direct part of it. Typical appurtenances include parking spaces in multiunit buildings, easements, water rights, and other improvements.
A person buys a parcel of natural forest. The person then immediately cuts down all the trees and constructs a large shed out of old sheets of rusted steel for storing turpentine, varnish, and industrial waste products. Which of these statements is TRUE about this rusty shed?
A) The owner’s action constitutes improvement of the property.
B) If the owner is in the business of storing toxic substances, the shed is a trade fixture.
C) The shed is personal property.
D) Altering the property in order to construct a shed is not included in the bundle of rights.
Explanation
The answer is the owner’s action constitutes improvement of the property. Real estate includes the natural land along with all human-made improvements. An improvement is any artificial addition to land, such as a building or a fence. Whether the artificial attachment makes the property better-looking, more useful, or more or less valuable, the land still is said to be improved.
A bookstore owner rents space in a commercial building. The bookstore has large tables fastened to the walls where customers are encouraged to sit and read. Shelves create aisles from the front of the store to the back. The shelves are bolted to both the ceiling and the floor. Which of these BEST characterizes these tables and shelves?
A) The shelves and the tables are trade fixtures and will be sold when the owner sells the building.
B) Because the shelves and tables are attached to the building, they are treated the same way as other fixtures.
C) The shelves and the tables are trade fixtures and must be removed before the bookstore’s lease expires; the tenant is responsible to the landlord for any damage that their removal causes to the premises.
D) Because the bookstore is a tenant, the shelves and the tables are fixtures and may not be removed, except with the owner’s permission.
Explanation
The answer is the shelves and the tables are trade fixtures and must be removed before the bookstore’s lease expires; the tenant is responsible to the landlord for any damage that their removal causes to the premises. A special category of fixture includes property used in the course of business. An article owned by a tenant and attached to a rented space or building or used in conducting a business is a trade fixture (or chattel fixture). Trade fixtures must be removed on or before the last day of the lease term. The tenant is responsible for any damage caused by the removal of a trade fixture.
The phrase bundle of legal rights is properly included in
A) real estate transactions.
B) a legal description.
C) the definition of real property.
D) leases for less than one year.
Explanation
The answer is the definition of real property. Real property includes the surface, subsurface, airspace, any improvements, and the bundle of legal rights—the legal rights that attach to ownership of a parcel of real estate.
According to law, a trade fixture is usually treated as
A) personalty.
B) a fixture.
C) a license.
D) an easement.
Explanation
The answer is personalty. Personal property (or personalty) is property that is movable and not affixed to or associated with the land. An article owned by a tenant and attached to a rented space or building or used in conducting a business is a trade fixture (or chattel fixture), which is removable.
Which of these BEST describes the economic characteristics of real estate?
A) Attachment, location, and improvements
B) Location, uniqueness, and indestructibility
C) Scarcity, immobility, and improvements
D) Scarcity, improvements, and location
Explanation
The answer is scarcity, improvements, and location. The economic characteristics of land affect its investment value. These four characteristics are scarcity, improvements, permanence of investment, and location (situs).
Another term for personal property is
A) fructus naturales.
B) chattels.
C) realty.
D) fixtures.
Explanation
The answer is chattels. Chattels are items of personal property, including such tangibles as chairs, tables, clothing, money, bonds, and bank accounts. Trade fixtures are included in this category.
An owner decides to sell her house and takes the antique front door with her when she moves. In the absence of any provision in the contract, is the owner allowed to remove the door?
A) Yes, the owner can remove the door, and the act is called accession.
B) No, this act of severance is not allowed at time of selling because the door is a fixture.
C) Yes, the owner can remove the door, and the act is called separation.
D) No, this is conversion.
Explanation
The answer is no, this act of severance is not allowed at time of selling because the door is a fixture. A fixture is personal property that has been so affixed to land or a building that, by law, it becomes part of the real property. Examples of fixtures are heating systems, elevator equipment in highrise buildings, radiators, kitchen cabinets, attached bookcases, light fixtures, doors, and plumbing fixtures.
One defining difference between real estate (real property) and personal property is that real estate includes
A) annual crops, while personal property includes mineral rights.
B) the trees and air rights, while personal property includes the house and its contents.
C) land and the rights and interests inherent in the ownership of land, while personal property includes only air and mineral rights.
D) land and all things permanently attached, while personal property includes property that is movable.
Explanation
The answer is land and all things permanently attached, while personal property includes property that is movable. Property may be classified as either real or personal. Real property is the interests, benefits, and rights that are automatically included in the ownership of land and real estate. Personal property (or personalty) is property that is movable and not affixed to or associated with the land. Basically, personal property includes all property except real property.
