Unit 2 Quiz Questions

Question 1

Land, mineral, and air rights in the land are included in the definition of

a. attachments.
b. real property.
c. subsurface rights.
d. improvements.

Answer 1

Real Property

Subsurface rights and improvements are included in the definition of real estate. Real
property also includes rights and privileges.

Question 2

Which of these is an example of an economic characteristic of land?

a. Immobility
b. Indestructibility
c. Uniqueness
d. Scarcity

Answer 2

Scarcity

Immobility, indestructibility, and uniqueness are physical characteristics, while scarcity is an
economic characteristic.

Question 3

Another word for uniqueness is

a. scarcity.
b. nonhomogeneity.
c. fructus industrials.
d. immobility.

Answer 3

Nonhomegeneity

Uniqueness, or nonhomogeneity, indicates that no two parcels of land are alike.

Question 4

The bundle of rights includes

a. taxation.
b. transportation.
c. expansion.
d. exclusion.

Answer 4

Exclusion

The bundle of rights includes possession, control, exclusion, enjoyment, and disposition. There
is no right to expansion, except by acquiring another parcel.

Question 5

Owners with littoral rights enjoy

a. unrestricted use of available waters, but they own the land adjacent to the water only as far as the average high-water mark.
b. the right of disposition.
c. unrestricted use of the surface of the earth.
d. unrestricted rights to the use of fixtures.

Answer 5

Unrestricted use of available waters, but they own the land adjacent to the water only as far as the average high-water mark.

Owners of littoral rights enjoy unrestricted use of available waters, but own the land adjacent
to the water only as far as the average high-water mark.

Question 6

Growing trees, fences, and buildings are all considered

a. chattels.
b. land.
c. fixtures.
d. real estate.

Answer 6

Real Estate

The definition of real estate includes fences, buildings, and growing trees. Chattels are personal property. The definition of land would not include fences and buildings.

Question 7

The most important economic characteristic of land is

a. permanence.
b. location.
c. uniqueness.
d. possession.

Answer 7

Location

Location is sometimes called area preference or situs.

Question 8

A tenant farmer built a chicken coop and a tool shed. These buildings belong to the

a. tenant.
b. owner of real estate.
c. owner, but the owner must reimburse the tenant.
d. tenant, but the tenant must pay additional rent for them.

Answer 8

Tenant

The coop and tool shed would be considered trade fixtures, and the tenant has the right to
remove them up to the end of the lease.

Question 9

The developer added sewer lines and utilities and built two streets. What are these items called?

a. Fixtures
b. Additions
c. Improvements
d. Permanence of investment

Answer 9

Improvements

Human-made permanent attachments are called improvements.

Question 10

A new owner of a condominium received the right to use a parking space in the multi-unit building. This right is an example of

a. an improvement.
b. a fixture.
c. an appurtenance.
d. a chattel.

Answer 10

Appurtenance

An appurtenance is a right or privilege associated with the property, although not necessarily
a part of it; typical appurtenances include parking spaces in multiunit buildings, easements,
water rights, and other improvements.

Question 11

Method of annexation, adaptation, and agreement of the parties are legal tests for determining whether an item is

a. a chattel or an emblement.
b. real property or personal property.
c. land or real estate.
d. fructus naturales or fructus industriales.

Answer 11

Real Property or Personal Property

Whether an item is a fixture or personal property may be determined by method of
annexation, adaptation to real estate, and agreement of the parties.

Question 12

After suffering through a tornado and then flooding from the river, the buildings were gone. The land was still there. This is an example of

a. uniqueness.
b. scarcity.
c. location.
d. indestructibility.

Answer 12

Indestructibility

Land cannot be destroyed, although the improvements might be removed, as they are in this case

Question 13

A seller asked a real estate professional to draw up several documents relating to seller financing. Under these circumstances, the real estate professional should

a. ask the broker for assistance.
b. draw up the documents.
c. ignore the instructions.
d. refer the seller to an attorney.

Answer 13

Refer the seller to an attorney

A real estate professional should be careful not to practice law unless the real estate professional is, in fact, a licensed attorney and is hired to act in that capacity.

Question 14

A buyer particularly liked the ornate brass lighting fixtures in a house and immediately made an offer, which the seller accepted. On moving day, the buyer discovered that the seller had replaced all the ornate brass lighting fixtures with plain steel ones. Which of these is MOST
likely a correct assumption?

a. Seller: “As long as I replaced them with something of comparable value, I can take them with me.”
b. Buyer: “Lighting fixtures are normally considered to be real property.”
c. Seller: “The lighting fixtures were personal property when I bought them at the store, so they’re personal property forever.”
d. Seller: “The lighting fixtures belong to me because I installed them.”

Answer 14

Buyer: “Lighting fixtures are normally considered to be real property.”

The buyer is correct in assuming that lighting fixtures are normally part of the real property.
If the seller had wanted to remove the fixtures, the seller should have done so before putting the house on the market, or the seller should have written the intention to remove them into
the agreement of sale.

Question 15

A farmer has posted a number of “No Trespassing” and “No Hunting” signs on the property.
Which “stick” in the bundle of rights gives the farmer this authority?

a. Exclusion
b. Enjoyment
c. Control
d. Disposition

Answer 15

Exclusion

A real estate owner has the inherent right to exclude others from the property, although this right is not absolute. An adjacent property owner may have an easement right to use the
property.

Question 16

A right or privilege tied to real property, although not necessarily part of the property, is called a(n)

a. emblement.
b. trade fixture.
c. appurtenance.
d. deed

Answer 16

Appurtenance

An appurtenance is a right or privilege association with a property, although not necessarily
a part of it. An emblement or trade fixture is a tangible item on the property. The deed is a
document that transfers title.

Question 17

An important characteristic of personal property is that it is
a. small enough to be carried by a person.
b. movable.
c. alive.
d. less than 100 years old.

Answer 17

Movable

Personal property is all the property than can be owned and that does not fit the definition of real property; the most important distinction between real and personal property is that
personal property is moveable.

Question 18

The Law of the Sea identifies a country’s

a. territorial waters.
b. inland lakes.
c. navigable rivers.
d. water table

Answer 18

Territorial Waters

The United Nations Convention on the Law of the Sea identifies a country’s territorial waters as those extending up to 12 nautical miles from a baseline that is the mean low-water line of the
country’s coastline.

Question 19

To determine whether an item is a fixture, the MOST important test is whether the

a. effort needed to remove the item is significant.
b. item must be dismantled for removal.
c. value of the item is high.
d. person who installed it intended for it to be permanent.

Answer 19

Person who installed it intended for it to be permanent

The intent of the person who installed the item is the most important test of whether the item is a fixture.

Question 20

A homeowner planted a rose bush on the property and plans to remove it when the house is sold. The sales contract explicitly excludes the rose bush from the sale. This provision is necessary because the rose bush ordinarily is considered to be

a. a trade fixture.
b. personal property.
c. an emblement.
d. real estate.

Answer 20

Real Estate

Because the rose bush is a perennial shrub, it is considered real estate

Question 21

Personal property generally includes

A. trees.
B. air rights.
C. annual crops.
D. mineral rights.

Answer 21

Annual Crops

The answer is annual crops. Common law treats annual crops, those that must be planted each year, as the personal property of the person who planted and tended them. When a farm is sold, trees, air rights, and mineral rights may all convey, but the annual crops (fructus industriales or emblements)— lacking effective contractual agreement to the contrary—are still the personal property of the tenant farmer or other person who planted them. The farmer may return and harvest them in season

Question 22

A bookstore rents space in a commercial building. The bookstore has large reading tables fastened to the walls and bookshelves bolted to both the ceiling and the floor that create aisles from the front of the store to the back. These were all installed by the bookstore owner. Which of the following BEST characterizes the contents of the bookstore?

A. The shelves and tables are trade fixtures and will transfer when the property owner sells the building.
B. The shelves and tables are trade fixtures and may properly be removed by the bookstore’s owner before the lease expires, with the tenant responsible to the landlord for any damage that the removal causes to the premises
C. Because the business is a tenant, the shelves and tables are fixtures and may not be removed except with the building owner’s permission
D. Because the shelves and tables are attached to the building, they are treated the same as other fixtures.

Answer 22

The shelves and tables are trade fixtures and may properly be removed by the bookstore’s owner before the lease expires, with the tenant responsible to the landlord for any damage that the removal causes to the premises.

The answer is the shelves and tables are trade fixtures and may be properly removed by the tenant before the lease expires, and the tenant would be responsible to the landlord for any damage that the removal causes to the premises. Common law protects business tenants who install fixtures for their business by treating these trade fixtures as tenants’ personal property and giving tenants the right to remove the fixtures before the end of the lease. Any damage to the building due to removal of the fixtures must be repaired by the departing tenant. A real estate professional who participates in the sale of business properties should make known to purchasers what, if any, trade fixtures will not convey with the building.

Question 23

The term nonhomogeneity refers to

A. scarcity.
B. immobility.
C. uniqueness.
D. indestructibility

Answer 23

Uniqueness

The answer is uniqueness. The characteristics of each property differ from one another; this is also called heterogeneity.

Question 24

Another term for personal property is

A. realty.
B. fixtures.
C. chattels.
D. fructus naturales

Answer 24

Chattels

The answer is chattels. Fixtures, fructus naturales, and realty are all real property

Question 25

A property owner wants to use water from a river that runs through the property to irrigate a potato field. To do so, the owner is required by state law to submit an application to the Department of Water Resources describing in detail the plan for beneficial use of the water. If the department approves the owner’s application, it will issue a permit allowing a limited amount of river water to be diverted onto the property. Based on these facts, it can be assumed that this property owner’s state relies on which rule of law?

A. Riparian rights
B. Littoral rights
C. Doctrine of prior appropriation
D. Doctrine of highest and best use

Answer 25

Doctrine of Prior Appropriation

The answer is doctrine of prior appropriation. Many states whose water is in relatively short supply have passed statutes authorizing a system of prior appropriation in which owners downstream do not necessarily have to wait for “what’s left” after those upstream have drawn their fill. Priority—who is allowed to appropriate water first—is established, instead, by the date of approved filing and continued conformity with any rules and limitations on use imposed by the jurisdiction.

Question 26

The owner of a piece of vacant land removed and sold all the topsoil, limestone, and gravel. At the owner’s death, which is TRUE?

A. The property no longer exists.
B. The heir of the deceased inherits the property as is.
C. The heir of the deceased owns the gravel, limestone, and topsoil, no matter where it is.
D.The estate of the deceased must restore the property to its original condition.

Answer 26

The heir of the deceased inherits the property as is.

The answer is the heir of the deceased inherits the property as is. The daughter inherits exactly what the man owned just before his death: a location on the earth’s surface, everything below it to the center of the earth, and the space above it toward infinity.

Question 27

In determining whether an item is real or personal property, a court would consider which of the following?

A. Any relevant agreement of the parties in their contract of sale
B. The current value of the item
C. Whether the item can be resold
D. The cost of the item when it was purchased

Answer 27

Any relevant agreement of the parties in their contract of sale.

The answer is any relevant agreement of the parties in their contract of sale. The overall test in determining whether an item is a fixture or real property is the intention of the person installing it, how uniquely adapted the item is to the property in which it is installed, how the item was installed and the damage its removal would cause, and what the parties have agreed to. The original cost of the installation and its current value, although important to one or the other of the parties, are not considered in this decision.

Question 28

Which of the following is a physical characteristic of land?

A. Indestructibility
B. Improvements
C. Area preference
D. Scarcity

Answer 28

Indestructibility

The answer is indestructibility. The ability to make improvements, preference for the area, and relative scarcity of similar property are all economic matters. The land’s indestructibility is a physical matter, even though it is subject to both natural and human forces

Question 29

Which of the following describes the act by which real property can be converted into personal property?

A. Severance
B. Accession
C. Conversion
D. Attachment

Answer 29

Severance

The answer is severance. When we sever something, we cut it loose. Severing (felling) a tree from its roots converts it from realty—real(proper)ty—to personalty—personal(proper)ty. The process is called severance

Question 30

While moving into a newly purchased home, the buyer discovered that the seller had taken the ceiling fan that hung over the dining room table. The seller had not indicated that the ceiling fan would be removed, and the contract did not address this issue. Which statement is TRUE?

A. Ceiling fans are usually considered real estate.
B. The ceiling fan belongs to the seller.
C. Ceiling fans are considered trade fixtures.
D. Ceiling fans are considered personal property.

Answer 30

Ceiling fans are usually considered real estate

The answer is ceiling fans are usually considered real estate. Whatever fixtures are present in the structure at the time of contract, and not mentioned in the contract, convey with the property (pass to the purchaser). Replacement fixtures are not personal property of the resident; they became real estate when annexed (attached) to the building.

Question 31

A buyer purchased a parcel of land and immediately sold the mineral rights to an oil company. The buyer gave up which of the following?

A. Air rights
B. Surface rights
C. Subsurface rights
D. Vertical rights

Answer 31

Subsurface Rights

The answer is subsurface rights. Sub means under or beneath. Subsurface then, is below the surface—the place where most minerals are found.

Question 32

A truckload of lumber that a homeowner purchased has been left in the driveway for use in building a porch. The lumber is considered

A. real property.
B. personal property.
C. a chattel that is real property.
D. a trade or chattel fixture.

Answer 32

Personal Property

The answer is personal property. The lumber will become realty if and when it is later affixed in the course of construction. Until then, it is personal property—a chattel—of the landowner.

Question 33

Method of attachment, adaptation to real estate, and agreement between the parties are the legal tests for determining whether an item is

A. a trade fixture or personal property.
B. real property or real estate.
C. a fixture or personal property.
D. an improvement.

Answer 33

A fixture or personal property

The answer is a fixture or personal property. The overall test in determining whether an item is a fixture (real property) is the intention of the person installing it, how uniquely adapted the item is to the property in which it is installed, how the item was installed and the damage its removal would cause, the relationship of the parties, and what the parties have agreed to.

Question 34

Parking spaces in multiunit buildings, water rights, and similar things of value that convey with property are classified as

A. covenants.
B. emblements.
C. chattels.
D. appurtenances.

Answer 34

Appurtenances

The answer is appurtenances. Appurtenances are rights or privileges associated with the property, although not necessarily part of the property

Question 35

A resort purchases a large tract of scenic forest land and puts several prefabricated steel buildings there to store landscaping equipment, fuel oil, and propane canisters. Which statement is TRUE regarding this situation?

A. The resort’s action constitutes improvement of the property
B. The chemicals are considered appurtenances.
C. The buildings are considered trade fixtures.
D. Storing fuel oil, which is highly flammable, is not included in the bundle of legal rights.

Answer 35

The resort’s action constitutes improvement of the property.

The answer is the company’s action constitutes improvement of the property. The technical term improvement refers to any permanent structure— building, fence, shed, or prefabricated structure— erected on a property, despite the inherent value of the structure or what is stored in it.

Question 36

A property owner’s land is located along the banks of a river. This owner’s water rights are called

A. littoral rights.
B. prior appropriation rights.
C. riparian rights.
D. hereditaments.

Answer 36

Riparian Rights

The answer is riparian rights. Riparian rights are common law rights granted owners of land along the course of a river

Question 37

A property owner’s bundle of legal rights entitles the owner to

A. exclude utility meter readers.
B. sell the property to a neighbor.
C. erect improvements in the middle of the road.
D. sell the neighbor’s property.

Answer 37

Sell the property to a neighbor

The answer is sell the property to a neighbor. The right of exclusion generally allows an owner to exclude someone else from entering the property, but this does not include the right to exclude the utility meter reader. The property does not include ownership of the public road or the right to sell the neighbor’s property.

Question 38

According to law, a trade fixture is usually treated as

A. realty.
B. an easement.
C. personalty.
D. a license.

Answer 38

Personalty

The answer is personalty. An item used in conducting business is considered a trade fixture and can be removed by the tenant. It is considered personal property (personalty) even though it may be attached to a building.

Question 39

A buyer is interested in a house that is well designed, but is located in a busy area that is problematic for the buyer. The buyer’s concern about the property’s location is called

A. physical deterioration.
B. area preference.
C. permanence of investment.
D. immobility.

Answer 39

Area Preference.

The answer is area preference. Area preference, or location, is also known as situs and is the single most important economic characteristic of land.

Question 40

Which of the following is considered personal property?

A. Wood-burning fireplace
B. Built-in microwave
C. Bathtub
D. Patio furniture

Answer 40

Patio Furniture

The answer is patio furniture. Personal property, such as patio furniture, is movable. A fireplace, bathtubs, and awnings are all attached to the property and considered real property