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362 Cards in this Set

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A homeowner is building an enclosed front porch on his home. A truckload of lumber that the homeowner purchased has been left in the driveway for use in building the porch. At this point, the lumber is consideredA)a trade or chattel fixture.B)real property because it will be permanently affixed to the existing structure.C)a chattel that is real property.D)personal property.

PERSONAL PROPERTY. At the time of delivery, lumber is considered personal property; once it is used to construct the porch, the lumber is considered real property.

Pennsylvania law requires the seller to provide notice to a purchaser about whether a structure on the land is entitled to support from the underlying coal. This is known as theA)subsidence notice.B)coal notice.C)coal support.D)subsistence support.

COAL NOTICE. Because of the possibility of mine subsidence, Pennsylvania law requires the seller to provide notice to a purchaser about whether a structure on the land is entitled to support from the underlying coal. This is known as the coal notice.

Which of the following are considered real property and may not be removed by a tenant?A)EmblementsB)FixturesC)Trade fixturesD)Chattels

FIXTURES. Items that were once personal property are now affixed and have become part of the real property, and the tenant may remove them. However, tenants are permitted to remove emblements (the growing crops planted by the tenant), trade fixtures (necessary for the tenants' business), and chattels.

All of the following would be considered real estate EXCEPTA)growing trees.B)fences.C)buildings.D)farm equipment.

FARM EQUIPMENT. Farm equipment is an example of personal property. Fences, buildings, and growing trees are all included in the definition of real estate.

The right to control one's property does NOT include the right toA)erect No Trespassing signs.B)enjoy pride of ownership.C)exclude the utilities meter reader.D)invite people on the property for a political fundraiser.

EXCLUDE THE UTILITIES METER READER. Within the framework of the law, real estate owners may invite anyone onto their property, exclude others by means of No Trespassing signs, but they may not exclude those who have the right to legally enter the property, such as the utility meter reader or any party who has the easement rights.

The term nonhomogeneity refers toA)immobility.B)scarcity.C)uniqueness.D)indestructibility.

UNIQUENESS. Nonhomogeneity is another way of stating one of the physical characteristics of land, the characteristic that recognizes that land is unique.

Which term refers to anything that can be owned?A)ResidualsB)ChattelC)PropertyD)Underlying ownership

PROPERTY. The general term property refers to anything that can be owned. This includes a wide range of things such as stocks, bonds, trademarks, and patents. The common characteristic is that ownership of property provides certain rights, interests, or benefits to the owner.

Method of annexation, adaptation to real estate, and agreement between the parties are the legal tests for determining whether an item isA)a fixture or personal property.B)real property or real estate.C)an improvement.D)a trade fixture or personal property.

A FIXTURE OR PERSONAL PROPERTY. The tests used to determine whether an item is real or personal property include the intent of the parties, method of annexation, adaption to real estate, and the agreement between the parties.

Which of the following is considered to have the greatest impact on the value of a property?A)Area preferenceB)Permanence of investmentC)ScarcityD)Uniqueness

AREA PREFERENCE. Area preference, or situs, refers not only to geography but also to people's preference for a specific area; it is the unique quality of these preferences that results in the different price points for similar properties. Location is often considered the single most important economic characteristic of land.

Which of the following would NOT be a consideration when determining whether an item is real property?A)Cost of the item when purchasedB)Method of its attachment to other real propertyC)Manner in which the item is actually used with other real propertyD)Intended use of the item by its owner

COST OF THE ITEM WHEN PURCHASED. Tests used to determine whether an article is a fixture include intention, manner of annexation, adaptation to the real estate, and the existence of an agreement. The cost of an article is not a relevant issue.

The bundle of legal rights includes all of the following rights EXCEPTA)possess the property.B)sell or otherwise convey the property.C)enjoy the property within the framework of the law.D)use the property for any purpose, legal or otherwise.

USE THE PROPERTY FOR ANY PURPOSE, LEGAL OR OTHERWISE. The bundle of legal rights recognizes the right of an owner to use the property for a legal purpose. There is no legal right to use property for an illegal purpose.

Which of the following is considered to have the greatest impact on the value of a property?A)Area preferenceB)UniquenessC)ScarcityD)Permanence of investment

AREA PREFERENCE. Area preference, or situs, refers not only to geography but also to people's preference for a specific area; it is the unique quality of these preferences that results in the different price points for similar properties. Location is often considered the single most important economic characteristic of land.

The term nonhomogeneity refers toA)immobility.B)scarcity.C)uniqueness.D)indestructibility.

UNIQUENESS. Nonhomogeneity is another way of stating one of the physical characteristics of land, the characteristic that recognizes that land is unique.

What is the process that often produces sinkholes or troughs in some Pennsylvania regions?A)Subsurface activityB)Cave-insC)AccessionD)Mine subsidence

MINE SUBSIDENCE. Mine subsidence is the process of downward land shifts due to groundwater flows and the collapse of underground mine shafts, which usually result in sinkholes or troughs. Damage to structures may be functional, structural, or cosmetic.

After the construction of a building over a railroad right-of-way, the trains canA)no longer use the tracks under the building.B)operate as usual.C)use the tracks under the building only if they cause no problem for the building's occupants.D)use the tracks under the building as long as they first obtain the building owner's permission.

OPERATE AS USUAL. Air rights, the rights to use the space above the earth, may be sold or leased independently, provided the law has not preempted such rights; the trains may operate as usual on the ground level. To construct such a building, the developer must purchase not only the air rights but also numerous small portions of the land's surface for the building's foundation supports.

In Pennsylvania, a newly manufactured home is consideredA)a fixture.B)personal property.C)worthy of a deed.D)real property.

PERSONAL PROPERTY. In Pennsylvania, newly manufactured homes are defined as motor vehicles that may subsequently be considered real estate if the home is permanently attached to a foundation and the owner cancels the registration with the Pennsylvania Bureau of Motor Vehicles.

Which homes contain a red label indicating that the home has been built in compliance with U.S. Department of Housing and Urban Development (HUD) construction and safety standards?A)Modular homesB)Factory-built homesC)Manufactured homesD)Mobile homes

MANUFACTURED HOMES. Manufactured homes are built at the factory under these HUD specifications: constructed on a nonremoveable steel chassis, at least 8 feet wide and 40 feet long (320 square feet), can be lived in with or without a permanent foundation, and contain a red label.

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)Surface rightsB)Subsurface rightsC)Occupancy rightsD)Air rights

SUBSURFACE RIGHTS. Mineral rights are subsurface rights to the natural resources lying below the earth's surface.

A property owner sells the rights to minerals located in the ground to an exploration company. After selling the mineral rights, the owner no longer owns which of the following?A)Air rightsB)Surface rightsC)Air and subsurface rightsD)Subsurface rights

SUBSURFACE RIGHTS. Rights to the natural resources lying below the earth's surface are classified as subsurface rights, which are distinct from surface or air rights. As such, subsurface rights may be transferred without a transfer of surface rights.

Which of the following would NOT be a consideration when determining whether an item is real property?A)Cost of the item when purchasedB)Intended use of the item by its ownerC)Manner in which the item is actually used with other real propertyD)Method of its attachment to other real property

COST OF THE ITEM WHEN PURCHASED. Tests used to determine whether an article is a fixture include intention, manner of annexation, adaptation to the real estate, and the existence of an agreement. The cost of an article is not a relevant issue.

What BEST describes a building permit?A)The method of regulating the area and size of buildingsB)The evidence of compliance with municipal regulationsC)The municipal control over the volume of constructionD)The method for overriding or substantiating deed restrictions

THE EVIDENCE OF COMPLIANCE WITH MUNICIPAL REGULATIONS. Through the permit requirement, municipal officials are made aware of new construction or alterations and can verify compliance with building codes and zoning ordinances.

When a development increases the traffic flow on existing streets and highways, the municipality can fund the cost of transportation improvements that are needed because of this development throughA)subdivision filing fees.B)impact fees.C)fees for building permits.D)fees for variances.

IMPACT FEES. When development takes place in a municipality, the municipality is responsible for off-site improvements, such as highways, roads, and streets. The Pennsylvania Municipalities Planning Code permits the local governing body to charge impact fees to fund off-site public improvements.

n a new subdivision, what entity is usually responsible for providing streets, curbs, and sidewalks?A)The municipalityB)The developerC)The stateD)The property owners who benefit from the sidewalks and curbs

THE DEVELOPER. Generally, the developer is responsible for installing streets within a subdivision (known as on-site improvements), and the municipality is responsible for off-site improvements.

An individual is in the business of buying large tracts of land and then reselling them to consumers in small tracts. This person is aA)developer.B)subdivider.C)engineer.D)real estate broker.

SUBDIVIDER. A subdivider is a person who buys undeveloped acreage and divides it into smaller lots for sale to individuals or developers, or keeps the land for the subdivider's own use. A developer (who may also be a subdivider) improves the land by building streets and constructing homes or other buildings on the lots.

When a subdivision was developed, a deed restriction covering all the properties in the subdivision set aside the back six feet of each parcel as a combination green belt area and bicycle path. One homeowner plans to convert the back one-half of her yard into an organic garden. What, if anything, can her neighbors do?A)Force homeowner to sell her property.B)Share in the profits from her garden.C)Go to court in an attempt to obtain injunctive relief.D)Nothing, because individual homeowners have no authority in this matter.

GO TO COURT IN AN ATTEMPT TO OBTAIN INJUNCTIVE RELIEF. Private restrictions can be enforced in court when lot owners apply to the court for an injunction to prevent a neighboring lot owner from violating the recorded restrictions. The court injunction will direct the violator to stop or remove the violation. The court retains the power to punish the violator for failure to obey.

The goals of a municipal planning commission include all of the following EXCEPTA)formulation of policy.B)conservation of natural resources.C)determination of land uses.D)preventing variances from being issued.

PREVENTING VARIANCES FROM BEING ISSUED. Municipal planning commissions develop comprehensive plans to ensure that social and economic needs are balanced against environmental and aesthetic concerns. Land use, conservation, and policy issues are within the domain of the planning commission. Zoning issues, including variances, are handled by the municipality's zoning hearing board.

The police power allows regulation of all of the following EXCEPTA)the number of buildings.B)the size of the buildings.C)building occupancy.D)building ownership.

BUILDING OWNERSHIP. Police power refers to the inherent authority of the government to adopt regulations necessary to protect the public health, safety, and welfare. The government does not regulate ownership of real estate.

Deed restrictions that run with the landA)apply to and bind all successive owners of the property.B)can be removed by a court of competent jurisdiction.C)are no longer effective when the title is transferred.D)apply only until the developer has conveyed the title.

APPLY TO AND BIND ALL SUCCESSIVE OWNERS OF THE PROPERTY. Deed restrictions are limitations on the use of property imposed by a past owner or current owner and are binding on future grantees. They may include a restriction specifying the kind of structure that may be erected on the land, a requirement that the property be used for a specific purpose, or a prohibition of a specific use, but such restrictions may not be used for illegal purposes, such as the exclusion of members of certain races, nationalities, or religions.

To protect the public from fraudulent interstate land sales, a developer involved in interstate land sales of 25 or more lots mustA)provide preferential financing.B)include deed restrictions.C)pay the prospective buyers' expenses to see the property involved.D)provide each purchaser with a report of the details of the land, as registered with HUD.

PROVIDE EACH PURCHASER WITH A REPORT OF THE DETAILS OF THE LAND, AS REGISTERED WITH HUD. The interstate sale of unimproved lots, with land being sold without having been seen by the purchaser, may be subject to the federal Interstate Land Sales Full Disclosure Act. This law requires registration of the details of the land with HUD and also requires that the purchaser be provided with a detailed property report.

How might a restriction in a seller's deed be enforced?A)Zoning hearing boardB)Municipal building commissionC)Court injunctionD)State legislature

COURT INJUNCTION. When a deed restriction has been violated, the party affected by the violation has the right to go to court and seek a court order, or an injunction, that will direct the violator to stop or remove the violation.

After selling all the lots in a new community, the developer transfers ownership of the streets and park to the municipality byA)gifting.B)necessity.C)gross easement.D)dedication.

DEDICATION. Dedication is a voluntary transfer of private property by its owner to the public for some public use, such as for streets, schools, or parks.

Public land-use controls include all of the following EXCEPTA)deed restrictions.B)environmental protection laws.C)subdivision regulations.D)comprehensive plans.

DEED RESTRICTIONS. Deed restrictions are private restrictions created by property owners at the time they convey the ownership.

In a new subdivision, what entity is usually responsible for providing streets, curbs, and sidewalks?A)The municipalityB)The stateC)The property owners who benefit from the sidewalks and curbsD)The developer

THE DEVELOPER. Generally, the developer is responsible for installing streets within a subdivision (known as on-site improvements), and the municipality is responsible for off-site improvements.

The purpose of bulk zoning is toA)control density and avoid overcrowding.B)specify certain types of architecture for new buildings.C)set overall development goals for the community.D)ensure that certain kinds of uses are incorporated into developments.

CONTROL DENSITY AND AVOID OVERCROWDING. Bulk zoning is used to control density and avoid overcrowding by imposing restrictions such as setbacks, building heights, and percentage of open area—or by restricting new construction projects.

The purpose of a building permit is toA)provide evidence of compliance with municipal construction regulations.B)maintain municipal control over the volume of the building.C)override a deed restriction.D)show compliance with deed restrictions.

PROVIDE EVIDENCE OF COMPLIANCE WITH MUNICIPAL CONSTRUCTION REGULATIONS. Building permits allow municipal officials to verify compliance with building codes and other ordinances that apply to construction, renovation, or repair of buildings.

To protect the public from fraudulent interstate land sales, a developer involved in interstate land sales of 25 or more lots mustA)include deed restrictions.B)pay the prospective buyers' expenses to see the property involved.C)provide each purchaser with a report of the details of the land, as registered with HUD.D)provide preferential financing.

PROVIDE EACH PURCHASER WITH A REPORT OF THE DETAILS OF THE LAND, AS REGISTERED WITH HUD. The interstate sale of unimproved lots, with land being sold without having been seen by the purchaser, may be subject to the federal Interstate Land Sales Full Disclosure Act. This law requires registration of the details of the land with HUD and also requires that the purchaser be provided with a detailed property report.

The police power allows regulation of all of the following EXCEPTA)building occupancy.B)building ownership.C)the size of the buildings.D)the number of buildings.

BUILDING OWNERSHIP. Police power refers to the inherent authority of the government to adopt regulations necessary to protect the public health, safety, and welfare. The government does not regulate ownership of real estate.

Soil absorption and drainage are measured by aA)plat of subdivision.B)percolation test.C)density test.D)land survey.

PERCOLATION TEST. The purpose of a percolation test is to measure soil absorption or drainage capacity. Percolation tests are often used to determine whether the soil being tested will support a septic system.

Zoning hearing boards are established to hear complaints aboutA)the effects of a zoning ordinance.B)restrictive covenants.C)the effects of public ownership.D)building codes.

THE EFFECTS OF A ZONING ORDINANCE. Zoning hearing boards are municipal bodies for the specific purpose of hearing about the effects of zoning ordinances on specific parcels of property.

If a buyer of a vacant lot builds a house that violates the restrictions in the buyer's deed, the buyer mayA)be sued and required to alter the structure to conform with the restrictions.B)be sued and required to pay damages to the other residents in the neighborhood.C)forfeit the title to the property.D)do so without any fear of reprisal by the residents in the area.

BE SUED AND REQUIRED TO ALTER THE STRUCTURE TO CONFORM WITH THE RESTRICTIONS. Private restrictions can be enforced in court when lot owners apply to the court for an injunction to prevent a neighboring lot owner from violating the recorded restrictions. The court injunction will direct the violator to stop or remove the violation. The court retains the power to punish the violator for failure to obey.

A developer may establish which of the following to control and maintain the character and quality of a subdivision?A)EasementsB)Building codesC)Buffer zonesD)Restrictive covenants

RESTRICTIVE COVENANTS. Developers often use conditions, covenants, and restrictions (CC&Rs) to control and maintain the desirable quality and character of a property or subdivision.

When is a certificate of occupancy issued?A)When an application for a variance or conditional-use permit has been granted by the zoning boardB)At the time a property owner applies for a building permitC)When the owner of a multifamily residential property wishes to limit the number of individuals who may live in a single unitD)After a newly constructed building has been inspected and found satisfactory by the municipal inspector

AFTER A NEWLY CONSTRUCTED BUILDING HAS BEEN INSPECTED AND FOUND SATISFACTORY BY THE MUNICIPAL INSPECTOR. A certificate of occupancy is issued once a completed structure has been inspected and found satisfactory; the building is fit for occupancy and has no building code violations.

Under the Interstate Land Sales Full Disclosure Act, what is the outcome if the property report is not given to the prospective purchaser before the contract is signed?A)The subdivider or developer may not proceed to closing until the purchaser receives the report.B)The subdivider or developer may not start any construction on the property until seven working days after the purchaser receives the property report.C)The purchaser may not bring any action to revoke the contract after closing.D)The purchaser may revoke the contract, at the purchaser's option, up to midnight of the seventh calendar day following the signing of the contract.

THE PURCHASER MAY REVOKE THE CONTRACT, AT THE PURCHASER'S OPTION, UP TO MIDNIGHT OF THE SEVENTH CALENDAR DAY FOLLOWING THE SIGNING OF THE CONTRACT. Any contract to purchase a lot covered by the Interstate Land Sales Full Disclosure Act may be revoked at the purchaser's option until midnight of the seventh day following the signing of the contract. If a contract is signed for the purchase of a lot covered by the act and a property report is not given to the purchaser, the purchaser may bring an action to revoke the contract within two years.

Deed restrictions that run with the landA)are no longer effective when the title is transferred.B)apply to and bind all successive owners of the property.C)apply only until the developer has conveyed the title.D)can be removed by a court of competent jurisdiction.

APPLY TO AND BIND ALL SUCCESSIVE OWNERS OF THE PROPERTY. Deed restrictions are limitations on the use of property imposed by a past owner or current owner and are binding on future grantees. They may include a restriction specifying the kind of structure that may be erected on the land, a requirement that the property be used for a specific purpose, or a prohibition of a specific use, but such restrictions may not be used for illegal purposes, such as the exclusion of members of certain races, nationalities, or religions.

An owner constructed a building that is seven stories high. Several years later, the municipality changed the zoning ordinance, prohibiting buildings that exceed six stories. Which of the following is TRUE regarding the existing seven-story building?A)It is a conditional use.B)It is a nonconforming use.C)The owner must obtain a variance.D)The building must be demolished.

IT IS A NONCONFORMING USE. This structure is an example of a nonconforming use and may be allowed to continue legally as long as it complies with the regulations governing nonconformities in the local ordinance, until the improvements are destroyed or torn down, or until the current use is abandoned. If the nonconforming use is allowed to continue, it is considered to be grandfathered in to the new zoning ordinance.

The grantor of a deed may place effective restrictions onA)the right to sell the land.B)the use of the land.C)who the next purchaser will be.D)who may occupy the property.c

THE USE OF THE LAND. An owner may impose restrictions on the right to use property, but any attempt to restrict the right of free alienation (transfer) or occupancy of the property is considered to be against public policy and therefore unenforceable.

A provision in a subdivision declaration used as a means of forcing grantees to live up to the terms under which they hold title to the land is aA)conditional-use clause.B)reverter.C)restrictive covenant.D)laches.

RESTRICTIVE COVENANT. Restrictive covenants are created by subdividers or developers to affect the use of parcels within a particular subdivision. A purchaser of real estate in that subdivision holds title subject to the recorded covenants, conditions, and restrictions.

The primary intent of zoning regulations is toA)ensure the health, safety, and welfare of the community.B)demonstrate the police power of the state.C)protect residential neighborhoods from commercial encroachment.D)limit the amount and types of businesses in a given area.

ENSURE THE HEALTH, SAFETY, AND WELFARE OF THE COMMUNITY. Zoning ordinances are regulatory tools that help communities regulate and control how land is used for the protection of public health, safety, and welfare. They also help implement the comprehensive plan by regulating and controlling the use of land and structures within designated land-use districts, in part by separating conflicting land uses.

Public land-use controls include all of the following EXCEPTA)environmental protection laws.B)subdivision regulations.C)comprehensive plans.D)deed restrictions.

DEED RESTRICTIONS. Deed restrictions are private restrictions created by property owners at the time they convey the ownership.

Where are permitted land uses and set-asides, housing projections, transportation issues, and objectives for implementing future controlled development found?A)Enabling actsB)Comprehensive plansC)Land-control lawsD)Zoning ordinances

COMPREHENSIVE PLANS. A comprehensive plan sets forth the development goals and objectives for the community. Existing citizens and developers are aware of the permitted land uses, housing projections, transportation issues, and objectives for implementing future controlled development.

When a subdivision was developed, a deed restriction covering all the properties in the subdivision set aside the back six feet of each parcel as a combination green belt area and bicycle path. One homeowner plans to convert the back one-half of her yard into an organic garden. What, if anything, can her neighbors do?A)Share in the profits from her garden.B)Force homeowner to sell her property.C)Go to court in an attempt to obtain injunctive relief.D)Nothing, because individual homeowners have no authority in this matter.

GO TO COURT IN AN ATTEMPT TO OBTAIN INJUNCTIVE RELIEF. Private restrictions can be enforced in court when lot owners apply to the court for an injunction to prevent a neighboring lot owner from violating the recorded restrictions. The court injunction will direct the violator to stop or remove the violation. The court retains the power to punish the violator for failure to obey.

An individual is in the business of buying large tracts of land and then reselling them to consumers in small tracts. This person is aA)engineer.B)real estate broker.C)developer.D)subdivider.

SUBDIVIDER. A subdivider is a person who buys undeveloped acreage and divides it into smaller lots for sale to individuals or developers, or keeps the land for the subdivider's own use. A developer (who may also be a subdivider) improves the land by building streets and constructing homes or other buildings on the lots.

The construction of a family room, additional bedroom, and extra bath has been completed on an owner's home. Before the addition can be used, which of the following is TRUE?A)The homeowner's association must issue a conditional-use permit.B)The municipality must issue a building permit.C)The plumbing inspector must inspect the bath.D)The municipality must issue an occupancy permit.

THE MUNICIPALITY MUST ISSUE AN OCCUPANCY PERMIT. Before building a structure or altering or repairing an existing building, the owners usually must obtain a building permit. Once the completed structure has been inspected and found satisfactory, the municipal inspector issues a certificate of occupancy or occupancy permit.

The purpose of bulk zoning is toA)specify certain types of architecture for new buildings.B)ensure that certain kinds of uses are incorporated into developments.C)set overall development goals for the community.D)control density and avoid overcrowding.

CONTROL DENSITY AND AVOID OVERCROWDING. Bulk zoning is used to control density and avoid overcrowding by imposing restrictions such as setbacks, building heights, and percentage of open area—or by restricting new construction projects.

In a new subdivision, what entity is usually responsible for providing streets, curbs, and sidewalks?A)The stateB)The municipalityC)The developerD)The property owners who benefit from the sidewalks and curbs

THE DEVELOPER. Generally, the developer is responsible for installing streets within a subdivision (known as on-site improvements), and the municipality is responsible for off-site improvements.

A provision in a subdivision declaration used as a means of forcing grantees to live up to the terms under which they hold title to the land is aA)conditional-use clause.B)laches.C)reverter.D)restrictive covenant.

RESTRICTIVE COVENANT. Restrictive covenants are created by subdividers or developers to affect the use of parcels within a particular subdivision. A purchaser of real estate in that subdivision holds title subject to the recorded covenants, conditions, and restrictions.

Zoning hearing boards are established to hear complaints aboutA)the effects of public ownership.B)building codes.C)restrictive covenants.D)the effects of a zoning ordinance.

THE EFFECTS OF A ZONING ORDINANCE. Zoning hearing boards are municipal bodies for the specific purpose of hearing about the effects of zoning ordinances on specific parcels of property.

To protect the public from fraudulent interstate land sales, a developer involved in interstate land sales of 25 or more lots mustA)provide preferential financing.B)pay the prospective buyers' expenses to see the property involved.C)provide each purchaser with a report of the details of the land, as registered with HUD.D)include deed restrictions.

PROVIDE EACH PURCHASER WITH A REPORT OF THE DETAILS OF THE LAND, AS REGISTERED WITH HUD. The interstate sale of unimproved lots, with land being sold without having been seen by the purchaser, may be subject to the federal Interstate Land Sales Full Disclosure Act. This law requires registration of the details of the land with HUD and also requires that the purchaser be provided with a detailed property report.

A developer may establish which of the following to control and maintain the character and quality of a subdivision?A)Buffer zonesB)Restrictive covenantsC)EasementsD)Building codes

RESTRICTIVE COVENANTS. Developers often use conditions, covenants, and restrictions (CC&Rs) to control and maintain the desirable quality and character of a property or subdivision.

The primary intent of zoning regulations is toA)limit the amount and types of businesses in a given area.B)ensure the health, safety, and welfare of the community.C)protect residential neighborhoods from commercial encroachment.D)demonstrate the police power of the state.

ENSURE THE HEALTH, SAFETY, AND WELFARE OF THE COMMUNITY. Zoning ordinances are regulatory tools that help communities regulate and control how land is used for the protection of public health, safety, and welfare. They also help implement the comprehensive plan by regulating and controlling the use of land and structures within designated land-use districts, in part by separating conflicting land uses.

In regulations regarding lead-based paints, HUD requires thatA)homeowners test for the paint's presence.B)paint be removed from surfaces before selling.C)only licensed contractors deal with removal.D)known paint hazards be disclosed.

KNOWN PAINT HAZARDS BE DISCLOSED. Sellers have to disclose known information on lead-based paint and hazards prior to the execution of a contract for sale. However, no one has to test and no one has to remove any such paint.

What environmental hazard is found in old air conditioners, refrigerators, and freezers?A)RadonB)ChlorofluorocarbonsC)Carbon monoxideD)Lead

CHLOROFLUOROCARBONS. Chlorofluorocarbons (CFCs) used as refrigerants in air conditioners, refrigerators, and freezers, are safe in most applications and are inert in the lower atmosphere. Once CFC vapors rise to the upper atmosphere, where they may survive up to 150 years, they are broken down by ultraviolet light into chemicals that deplete the ozone layer.

What, if anything, is required of a federally funded project?A)Environmental site assessmentB)Environmental auditC)Environmental impact statementD)Seller property disclosure

ENVIRONMENTAL IMPACT STATEMENT. A federally funded project requires that an environmental impact statement (EIS) be performed that details the impact the project will have on the environment.

Under the federal Lead-Based Paint Hazard Reduction Act, which statement is TRUE?A)A disclosure statement must be attached to all sales contracts and leases involving properties built before 1978.B)Purchasers of housing built before 1978 must be given five days to test the property for the presence of lead-based paint.C)All residential housing built before 1978 must be tested for the presence of lead-based paint before being listed for sale or rent.D)A lead hazard pamphlet must be distributed to all prospective buyers, but not to tenants.

A DISCLOSURE STATEMENT MUST BE ATTACHED TO ALL SALES CONTRACTS AND LEASES INVOLVING PROPERTIES BUILT BEFORE 1978. The Federal Lead-Based Paint Hazard Reduction Act requires owners and landlords of target housing (built before January 1, 1978) to disclose what they know about lead-based paint or lead-based paint hazards to prospective buyers or renters in any sales contract or lease. The law does not require testing or removal of the lead-based paint or hazard.

The law that contains the broadest liabilities for environmental cleanup is theA)Resource Conservation and Recovery Act.B)CERCLA.C)Clean Air Act.D)Occupational Hazard Administration Act.

CERCLA. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was created in 1980 to address hazardous waste sites and provide a process for identifying parties responsible for cleanup actions.

One method of sealing off disintegrating asbestos is calledA)contamination closure.B)encapsulation.C)capping.D)containment.

ENCAPSULATION. Encapsulation, or the sealing off of disintegrating asbestos, is an alternate method of asbestos control that may be preferable to removal in certain circumstances. However, an owner must periodically monitor the condition of the encapsulated asbestos to make sure it is not disintegrating.

What environmental hazard may be a risk when using exterior insulation finish systems (EIFS), or synthetic stucco?A)RadonB)LeadC)Carbon monoxideD)Mold

MOLD. Exterior insulation finish systems (EIFS), also known as synthetic stucco, do not allow moisture to escape. If a moisture problem is not discovered or addressed, mold growth can gradually destroy the underlying structure.

Which people do NOT have liability under the environmental law?A)Real estate licensees selling propertyB)Real estate educatorsC)AppraisersD)Mortgage lenders

REAL ESTATE EDUCATORS. Parties involved in some way in the transaction process, including brokers, mortgage lenders, and appraisers, all have potential liability under current environmental laws.

The MOST important step involved in managing the risk of environmental hazards is toA)gather and disseminate authoritative information.B)have the seller sign a hold-harmless letter.C)cancel any listing with a potential environmental hazard.D)purchase an umbrella coverage insurance policy.

GATHER AND DISSEMINATE AUTHORITATIVE INFORMATION. Although sellers often carry the most exposure to environmental liability, real estate licensees could also be held liable. Therefore, licensees should be aware of possible hazards and where to see professional help.

At what level of radon, if any, does the EPA suggest that action be taken?A)10 pCi/LB)Any levelC)20 pCi/LD)4 pCi/L

4 PCI/L. Because neither the EPA nor current scientific consensus has been able to establish a threshold safe level of radon exposure, the EPA suggests an action level of 4 pCi/L, a level chosen because 95 percent of the time, current technology can bring the level below this amount, and 75 percent of the time, levels can be reduced to 2 pCi/L.

The method of describing land by degrees, feet and monuments is known as theA)rectangular survey system.B)lots-and-blocks system.C)metes-and-bounds system.D)angular system.

METES-AND-BOUNDS SYSTEM. The metes-and-bounds method relies on a property's physical features to determine the boundaries and measurements of the parcel, always beginning and ending at a designated place on the parcel, called the point of beginning (POB).

The point or surface from which elevations are measured is called aA)meridian.B)datum.C)monument.D)benchmark.

DATUM. A datum is a point, line, or surface from which elevations are measured or indicated; a datum can be used to determine the height of a structure or to establish the grade of a street.

At $800 per acre, a lot that is 264 feet wide and 660 feet long would costA)$1,584.B)$4,356.C)$3,200.D)$1,320.

$3,200. A lot measuring 264 feet by 660 feet is 174,240 square feet. If 43,560 square feet equals one acre, 174,240 square feet equals four acres (174,200 ÷ 43,560). At $800 per acre, four acres would cost $3,200 (800 × 4).

What does Pennsylvania require for condominium descriptions?A)Must cover an area larger than two acresB)May be used in areas not covered by the rectangular survey systemC)Must always use north as the basis for directions.D)Plat must show the elevations of floors and ceiling on a vertical plane

PLAT MUST SHOW THE ELEVATIONS OF FLOORS AND CEILING ON A VERTICAL PLANE. Pennsylvania's condominium property acts require that a registered land surveyor prepare a plat showing the elevations of floors and ceilings on a vertical plane and the boundaries of a condominium unit with reference to an official datum. Typically, a separate plat will be prepared for each floor in the condominium building.

How many lots, each measuring 72.5 feet wide by 100 feet deep, could be made from a two-acre parcel of land?A)6B)7C)12D)14

12. One lot is 72.5 × 100 = 7,250 sq ft. The entire parcel is 43,560 × 2 = 87,120 sq ft. Entire parcel divided by 7,250 = 12 lots.

The owner has a large parcel of land surveyed into lots and streets and files a subdivision plat. Each lot can be legally described by use of which of the following?A)Lots and blockB)Metes and boundsC)Street addressD)Government survey

LOT AND BLOCK. In describing a lot from a recorded subdivision plat, three identifiers are used: lot and block number, name or number of the subdivision plat, and the name of the county and state.

The LEAST acceptable method for identifying real property isA)lot and block.B)street address.C)metes and bounds.D)rectangular survey.

STREET ADDRESS. A street address is not precise or unique to a particular parcel, nor does it permit a surveyor to define the exact boundaries of the property.

A metes-and-bounds legal descriptionA)can be made only in areas excluded from the rectangular survey system.B)is used to complete areas omitted from recorded subdivision plats.C)must commence and finish at the same identifiable point.D)is not acceptable in court in most jurisdictions.

MUST COMMENCE AND FINISH AT THE SAME IDENTIFIABLE POINT. A metes-and-bounds description starts at a designated place on the parcel, called the point of beginning (POB) that is also the point of ending (POE), but often only the POB is used in describing the property.

A datum isA)all of these.B)a calendar method of measurement.C)used in the description of an air lot.D)measured in New York only.

USED IN THE DESCRIPTION OF AN AIR LOT. The term datum refers to a point, line, or surface from which elevations are measured. It is used for determining the height of buildings or the location of property lines in multistory condominium structures.

Your neighbors use your driveway to reach a garage located on their property. Your attorney explains that ownership of the neighbors' real estate includes an easement appurtenant, giving them the right to do this. Your property isA)the dominant tenement.B)a defeasible estate.C)a leasehold interest.D)the servient tenement.

THE SERVIENT TENEMENT. In an easement appurtenant, the parcel over which the easement runs is the servient tenement—meaning that it serves the other property. Your property is subject to the easement, which benefits the neighbor, who is the dominant tenement.

A neighbor has the legal right to pass over the land owned by his neighbor. This isA)an estate in land.B)an encroachment.C)police power.D)an easement.

AN EASEMENT. A legal right to cross over the land of a neighbor would be classified as an easement. Typically it would be an easement in gross, which benefits a person rather than the land.

Many states determine water use by allocating water to users who hold recorded beneficial use permits. This type of water use privilege is calledA)riparian rights.B)the doctrine of highest and best use.C)littoral rights.D)the doctrine of prior appropriation.

THE DOCTRINE OF PRIOR APPROPRIATION. In states that subscribe to the doctrine of prior appropriation, the right to use water is controlled by the state. To secure water rights in these states, a landowner must secure a permit to use a specified amount of water for a beneficial use.

An owner has fenced his property. By mistake, the fence extends one foot over his lot line onto the property of a neighbor. The fence is an example ofA)an easement by prescription.B)an easement by necessity.C)a license.D)an encroachment.

AN ENCROACHMENT. If all, or part, of an improvement, such as a fence, extends beyond the property line, the fence becomes an encroachment on the property of the neighbor.

A purchaser of real estate learned that the ownership rights will continue forever and that no other person claims to be the owner or has any ownership control over the property. This person owns aA)fee simple interest.B)determinable fee estate.C)life estate.D)fee simple on condition.

FEE SIMPLE INTEREST. The highest quality of interest in real estate is fee simple ownership. The owner is entitled to all rights of ownership, limited only by public or private restrictions. The owner's rights last for an unlimited duration.

A license is an example ofA)a restriction.B)an encroachment.C)an appurtenant easement.D)a personal privilege.

PERSONAL PRIVILEGE. A personal privilege or right to use land of another for a specific purpose is known as a license. It does not create an interest in the land for the license holder but provides a temporary right of use.

A person owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. The owner wishes to subdivide the parcel into salable lots while retaining control over the lake frontage. The owner wants to allow lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective purchaser?A)A licenseB)An easement by necessityC)An easement in grossD)An appurtenant easement

AN APPURTENANT EASEMENT. An appurtenant easement is attached to the ownership of one parcel of land and allows the owner the use of a neighbor's land. For an appurtenant easement to exist, two adjacent parcels of land must be owned by two different parties.

A portion of person A's building was inadvertently built on person B's land. This is called anA)encroachment.B)avulsion.C)easement.D)accretion.

ENCROACHMENT. An encroachment is the illegal extension of a building or fence that extends beyond the land of the owner and is usually disclosed by either a physical inspection of the property or a spot survey.

Which is a characteristic of an appurtenant easement?A)Is revocableB)Is a right-of-way for a utility companyC)Runs with the landD)Terminates with the sale of the property

RUNS WITH THE LAND. An appurtenant easement is said to "run with the land," in that it is binding not only on the current owner but also on future owners. The appurtenant easement can be terminated if one of the owners becomes the owner of both properties (merger) or if the servient tenement relinquishes the right.

The right of a governmental body to take ownership of real estate for public benefit is calledA)eminent domain.B)condemnation.C)police power.D)escheat.

EMINENT DOMAIN. Under our system of property law, the government retains the right to take ownership of privately owned real estate if the taking is for the public good and the owner receives just compensation. The right or power of the government is eminent domain; the method or process is condemnation.

If the owner of real estate does not take action against a trespasser before the statutory period has passed, the trespasser may acquireA)an easement by necessity.B)a license.C)a prescriptive easement.D)an easement by implication of law.

A PRESCRIPTIVE EASEMENT. If a party uses real estate owned by someone else, does so without the owner's consent, and continues to do so for the period established by state law, that using party may be able to successfully claim an easement by prescription.

Many states determine water use by allocating water to users who hold recorded beneficial use permits. This type of water use privilege is calledA)the doctrine of prior appropriation.B)the doctrine of highest and best use.C)riparian rights.D)littoral rights.

THE DOCTRINE OF PRIOR APPROPRIATION. In states that subscribe to the doctrine of prior appropriation, the right to use water is controlled by the state. To secure water rights in these states, a landowner must secure a permit to use a specified amount of water for a beneficial use.

Which is a characteristic of an appurtenant easement?A)Is a right-of-way for a utility companyB)Terminates with the sale of the propertyC)Is revocableD)Runs with the land

RUNS WITH THE LAND. An appurtenant easement is said to "run with the land," in that it is binding not only on the current owner but also on future owners. The appurtenant easement can be terminated if one of the owners becomes the owner of both properties (merger) or if the servient tenement relinquishes the right.

A license is an example ofA)an appurtenant easement.B)an encroachment.C)a personal privilege.D)a restriction.

A PERSONAL PRIVILEGE. A personal privilege or right to use land of another for a specific purpose is known as a license. It does not create an interest in the land for the license holder but provides a temporary right of use.

The local utility company dug up a person's garden to install a natural gas line. The company claimed it had a valid easement and proved it by the county records. The property owner claimed the easement was not valid because he did not know about it. The easement wasA)valid even though the owner did not know about it.B)not valid because it had not been used during the entire time that this person owned the property.C)not valid because the property owner was not informed of its existence when he purchased the property.D)an appurtenant easement owned by the utility company.

VALID EVEN THOUGH THE OWNER DID NOT KNOW ABOUT IT. A landowner cannot interfere with the rights of an easement holder. Rights-of-way of utility easements (such as for a pipeline or high-tension power line) are easements in gross and may be assigned, conveyed, and inherited.

A portion of person A's building was inadvertently built on person B's land. This is called anA)accretion.B)avulsion.C)easement.D)encroachment.

ENCROACHMENT. An encroachment is the illegal extension of a building or fence that extends beyond the land of the owner and is usually disclosed by either a physical inspection of the property or a spot survey.

All of the following are powers of the government EXCEPTA)eminent domain.B)taxation.C)police power.D)condemnation.

CONDEMNATION. Condemnation is the process by which the government acquires ownership of private property. Condemnation is not a right, but rather the method by which the government exercises its right of eminent domain.

For land to be taken by the government under its right of eminent domain, which of the following must apply?A)The taking must be for a public purpose.B)There must be constructive notice.C)There must be a statutory dedication.D)This must be an adverse action.

THE TAKING MUST BE FOR A PUBLIC PURPOSE. Eminent domain is the right of the government to acquire privately owned real estate for public use. Use considered to be in the public interest varies widely from state to state and region to region.

Property deeded to a school "for educational purposes only" conveys aA)fee simple on condition precedent.B)fee simple on condition subsequent.C)leasehold interest.D)fee simple absolute.

FEE SIMPLE ON CONDITION SUBSEQUENT. Property conveyed "for educational purposes only" or some other condition creates a fee simple estate qualified by a "condition subsequent." If the condition is broken, the former owner can initiate legal action to reclaim ownership.

A landowner has divided much of his land into smaller parcels and has recently sold a landlocked tract, which is near a nature preserve and cannot be entered except through one of the other tracts. What type of easement will likely be granted to the buyer of that property by court action?A)Easement by prescriptionB)Easement by necessityC)Easement in grossD)Easement by condemnation

EASEMENT BY NECESSITY. An easement by necessity is created by court order based on the principle that owners must have the right to enter and exit their land; they cannot be landlocked.

An individual owned two acres of land. When he sold one acre to a friend, he reserved for himself an appurtenant easement over the friend's land for ingress and egress. The friend's landA)can be cleared of the easement when the individual sells the withheld acre to a third party.B)is the servient tenement.C)is subject to an easement in gross.D)is the dominant tenement.

IS THE SERVIENT TENEMENT. The parcel over which the easement runs is known as the servient tenement; the neighboring parcel that benefits is known as the dominant tenement.

The acquisition of land through deposit of soil or sand washed up by water is calledA)accretion.B)condemnation.C)erosion.D)avulsion.

ACCRETION. The natural action of water can increase or diminish the amount of land owned. The increase, and hence the acquisition of land, by the water's action is accretion. The actual deposits of soil are known as alluvion or alluvium. Erosion diminishes the amount of land owned.

A lot is encumbered by a sewer easement that runs where the foundation of a building would be. How will this affect the owner, who wants to build a house?A)The municipality must move the sewer line prior to construction.B)The house must be constructed to avoid the easement.C)It will have no effect because the sewer line is deeper than the foundation would be.D)Any easement through the buildable part of the lot will prevent construction.

THE HOUSE MUST BE CONSTRUCTED TO AVOID THE EASEMENT. Easements can hinder the owner's use of the property. A landowner should be familiar with any easements, preferably before purchasing a property or making plans for using it.

A person wants to ensure that the ownership of real property can be willed to surviving children. Which of the following forms of ownership would the person want?A)A joint tenancyB)A fee estateC)A licenseD)A conventional life estate

A FEE ESTATE. Fee simple estate is ownership in which the owner is entitled to all rights to the property by law. This estate is intended to run forever; upon the death of its owner, it passes to the owner's heirs.

A purchaser of real estate learned that the ownership rights will continue forever and that no other person claims to be the owner or has any ownership control over the property. This person owns aA)determinable fee estate.B)fee simple interest.C)life estate.D)fee simple on condition.

FEE SIMPLE INTEREST. The highest quality of interest in real estate is fee simple ownership. The owner is entitled to all rights of ownership, limited only by public or private restrictions. The owner's rights last for an unlimited duration.

A tenant in an apartment holdsA)a leasehold interest.B)a freehold interest.C)a license.D)an easement.

A LEASEHOLD INTEREST. A tenant occupying an apartment under a lease acquires a leasehold interest in the property. A leasehold is less than an ownership or freehold interest.

The type of easement that is a right-of-way for a utility company's power lines is anA)easement by prescription.B)easement in gross.C)easement by necessity.D)easement appurtenant.

EASEMENT IN GROSS. Many utility companies hold easements in gross. Under an easement in gross, the company has the right to cross over many servient tenement properties; however, there is no dominant tenement.

A person who has complete control over a parcel of real estate is said to own aA)defeasible fee estate.B)fee simple estate.C)life estate.D)leasehold estate.

FEE SIMPLE ESTATE. An estate in fee simple (also called fee simple absolute) is the highest interest in real estate recognized by law, entitling its owner to all rights to the property by law. This estate is intended to run forever; upon the death of its owner, it passes to the owner's heirs.

The right of a governmental body to take ownership of real estate for public benefit is calledA)eminent domain.B)condemnation.C)police power.D)escheat.

EMINENT DOMAIN. Under our system of property law, the government retains the right to take ownership of privately owned real estate if the taking is for the public good and the owner receives just compensation. The right or power of the government is eminent domain; the method or process is condemnation.

A neighbor has the legal right to pass over the land owned by his neighbor. This isA)an encroachment.B)police power.C)an easement.D)an estate in land.

AN EASEMENT. A legal right to cross over the land of a neighbor would be classified as an easement. Typically it would be an easement in gross, which benefits a person rather than the land.

A daughter conveys the ownership of her apartment building to a nursing home, anticipating that the rental income will help pay for her father's care there. When her father dies, the daughter will recapture the ownership of the apartment building. This is an example of aA)remainder life estate.B)leasehold estate.C)life estate pur autre vie.D)legal life estate.

LIFE ESTATE PUR AUTRE VIE. A life estate pur autre vie (for the life of another) provides for inheritance by the life tenant's heirs only until the death of the third party. A life estate pur autre vie is often created for people who are physically or mentally incapacitated in the hope of providing incentive for someone to care for them.

A man conveys ownership of his residence to his daughter but reserves for himself a life estate in the residence. The interest the daughter owns during her father's lifetime isA)a future interest.B)pur autre vie.C)a current interest.D)a leasehold.

A FUTURE INTEREST. The man has conveyed a future interest to his daughter, known as a remainder interest. During his life, the man owns the life estate and is the life tenant. Upon his death, ownership passes to the daughter as the remainderman.

A lot is encumbered by a sewer easement that runs where the foundation of a building would be. How will this affect the owner, who wants to build a house?A)The house must be constructed to avoid the easement.B)The municipality must move the sewer line prior to construction.C)It will have no effect because the sewer line is deeper than the foundation would be.D)Any easement through the buildable part of the lot will prevent construction.

THE HOUSE MUST BE CONSTRUCTED TO AVOID THE EASEMENT. Easements can hinder the owner's use of the property. A landowner should be familiar with any easements, preferably before purchasing a property or making plans for using it.

An individual owned two acres of land. When he sold one acre to a friend, he reserved for himself an appurtenant easement over the friend's land for ingress and egress. The friend's landA)is the dominant tenement.B)can be cleared of the easement when the individual sells the withheld acre to a third party.C)is the servient tenement.D)is subject to an easement in gross.

IS THE SERVIENT TENEMENT. The parcel over which the easement runs is known as the servient tenement; the neighboring parcel that benefits is known as the dominant tenement.

The acquisition of land through deposit of soil or sand washed up by water is calledA)accretion.B)condemnation.C)avulsion.D)erosion.

ACCRETION. The natural action of water can increase or diminish the amount of land owned. The increase, and hence the acquisition of land, by the water's action is accretion. The actual deposits of soil are known as alluvion or alluvium. Erosion diminishes the amount of land owned.

Which of the following is classified as a life estate?A)An estate pur autre vieB)A fee simple estateC)An estate without conditionD)An estate held by lease

AN ESTATE PUR AUTRE VIE. While the duration of a life estate can be measured by the duration of the life tenant's life, it may also be measured against the life of someone other than the life tenant. Such an estate is known as an estate pur autre vie, meaning "for the lifetime of another."

A landowner has divided much of his land into smaller parcels and has recently sold a landlocked tract, which is near a nature preserve and cannot be entered except through one of the other tracts. What type of easement will likely be granted to the buyer of that property by court action?A)Easement by necessityB)Easement in grossC)Easement by condemnationD)Easement by prescription

EASEMENT BY NECESSITY. An easement by necessity is created by court order based on the principle that owners must have the right to enter and exit their land; they cannot be landlocked.

For land to be taken by the government under its right of eminent domain, which of the following must apply?A)This must be an adverse action.B)The taking must be for a public purpose.C)There must be constructive notice.D)There must be a statutory dedication.

THE TAKING MUST BE FOR A PUBLIC PURPOSE. Eminent domain is the right of the government to acquire privately owned real estate for public use. Use considered to be in the public interest varies widely from state to state and region to region.

The local utility company dug up a person's garden to install a natural gas line. The company claimed it had a valid easement and proved it by the county records. The property owner claimed the easement was not valid because he did not know about it. The easement wasA)an appurtenant easement owned by the utility company.B)valid even though the owner did not know about it.C)not valid because the property owner was not informed of its existence when he purchased the property.D)not valid because it had not been used during the entire time that this person owned the property.

VALID EVEN THOUGH THE OWNER DID NOT KNOW ABOUT IT. A landowner cannot interfere with the rights of an easement holder. Rights-of-way of utility easements (such as for a pipeline or high-tension power line) are easements in gross and may be assigned, conveyed, and inherited.

A person owned the fee simple title to a vacant lot adjacent to a hospital and was persuaded to make a gift of the lot. She wanted to have some control over its use, so her attorney prepared her deed to convey ownership of the lot to the hospital "so long as it is used for hospital purposes." After completion of the gift, the hospital will own aA)license.B)leasehold estate.C)fee simple absolute estate.D)fee simple determinable.

FEE SIMPLE DETERMINABLE. One ownership interest that is subject to a special limitation, such as a limitation on use for a specific purpose, is a fee simple determinable estate. The key phrase is "so long as." If the new owner fails to comply with the limitation, the former owner reacquires full ownership.

A landlord leased space in her shopping center to the owner of a dress store. However, the dress store failed and that owner sublet the space to a cigar store. Then the cigar store owner failed to make rental payments when they were due. The lease was breached. Therefore, theA)landlord has recourse against the cigar store owner only.B)landlord has recourse against the dress store owner only.C)landlord has recourse against both the dress store and the cigar store owners.D)cigar store owner has recourse against the dress store owner.

LANDLORD HAS RECOURSE AGAINST THE DRESS STORE OWNER ONLY. The original lessee, the owner of the dress store, remains primarily liable for payment of rent to the original lessor. The original lessor has recourse against the dress store owner only; the lessor has no contractual relationship with the cigar store owner.

A tenant signs a lease that includes a schedule of rent increases on specific dates over the course of the lease term. What kind of lease has this tenant signed?A)GraduatedB)IndexC)NetD)Percentage

GRADUATED. A graduated lease states specific rent increases at specific times.

Which of the following BEST describes a net lease?A)A lease in which the tenant pays the landlord a percentage of the monthly income derived from the propertyB)A lease in which the tenant pays rent in addition to some or all operating expensesC)An agreement in which the tenant pays a fixed rent and the landlord pays all taxes, insurance, and so forth on the propertyD)An agreement granting an individual a leasehold interest in fishing rights for shoreline properties

A LEASE IN WHICH THE TENANT PAYS RENT IN ADDITION TO SOME OR ALL OPERATING EXPENSES. Under the terms of a net lease, the tenant pays all or some of the operating expenses in addition to the rent. Operating expenses include such items as taxes, insurance premiums, maintenance costs, and assessments.

For a lease to be valid, it must contain aA)complete legal description of the premises.B)provision for a security deposit.C)statement of the retention of the reversionary interest by the lessor.D)statement of the specific length of time.

STATEMENT OF THE SPECIFIC LENGTH OF TIME. A valid lease must include an offer and acceptance and a statement as to the length of the lease. A valid lease is not required to include a security deposit or a complete legal description of the premises.

Which of the following would automatically terminate a residential lease?A)Sale of the propertyB)Failure of the tenant to pay rentC)Death of the tenantD)Total destruction of the property

TOTAL DESTRUCTION OF THE PROPERTY. A tenant who leases part of a building, such as a residential apartment, is released from the lease when the premises are destroyed. Sale of the property or death of the tenant does not terminate the lease.

When a tenant holds possession of a landlord's property without a current lease agreement and without the landlord's approval, theA)tenant has no obligation to pay rent.B)tenant is maintaining a gross lease.C)landlord can file suit for possession.D)landlord may be subject to a constructive eviction.

The answer is LANDLORD CAN FILE SUIT FOR POSSESSION. When a tenant remains in possession without a current lease and without the consent of the landlord, the tenant is a tenant at sufferance. The landlord may regain possession through a suit for possession.

The leasehold interest that automatically renews itself at each expiration is the tenancyA)for years.B)at will.C)at sufferance.D)from period to period.

FROM PERIOD TO PERIOD. The key feature of a tenancy from period to period is that it automatically renews itself under the original terms until one of the parties gives notice to terminate. This tenancy may run for an indefinite duration.

An individual rents an apartment for one year. The landlord sells the building during the one-year lease term. What effect does the sale have on the lease?A)The lease is terminated after 60 days' notice from the new owner.B)The sale does not affect the lease.C)The new landlord will decide whether to honor the existing lease.D)The lease is automatically terminated.

THE SALE DOES NOT AFFECT THE LEASE. In general, a tenant has the right to use the premises for the entire lease term. That right is unaffected by the original lessor's death or the sale of the property, unless the lease states otherwise.

The authority to carry out the eviction of a delinquent tenant from rented property is held by theA)court.B)property owner.C)landlord.D)sheriff.

SHERIFF. If the tenant fails to leave, the landlord can have the judgment enforced by a court officer (sheriff), who forcibly removes the tenant and the tenant's possessions. The landlord then has the right to reenter and regain possession of the property.

Which of the following transactions would BEST be described as involving a ground lease?A)A landowner agrees to let a tenant drill for oil on a property for 75 years.B)A landlord charges a commercial tenant separate amounts of rent for the land and the trade fixtures.C)With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner.D)A tenant pays a base amount for the property, plus a percentage of business-generated income.

WITH THE LANDOWNER'S PERMISSION, A TENANT BUILDS AND OWNS A SHOPPING CENTER ON VACANT LAND LEASED FROM THE LANDOWNER. In a ground lease, the landowner leases unimproved land to a tenant who agrees to construct a building, which the tenant then owns. A ground lease is generally a long-term net lease, which provides certain tax advantages to the lessee.

Which of the following BEST describes a net lease?A)An agreement in which the tenant pays a fixed rent and the landlord pays all taxes, insurance, and so forth on the propertyB)A lease in which the tenant pays the landlord a percentage of the monthly income derived from the propertyC)A lease in which the tenant pays rent in addition to some or all operating expensesD)An agreement granting an individual a leasehold interest in fishing rights for shoreline properties

A LEASE IN WHICH THE TENANT PAYS RENT IN ADDITION TO SOME OR ALL OPERATING EXPENSES. Under the terms of a net lease, the tenant pays all or some of the operating expenses in addition to the rent. Operating expenses include such items as taxes, insurance premiums, maintenance costs, and assessments.

A landlord leased space in her shopping center to the owner of a dress store. However, the dress store failed and that owner sublet the space to a cigar store. Then the cigar store owner failed to make rental payments when they were due. The lease was breached. Therefore, theA)landlord has recourse against the dress store owner only.B)landlord has recourse against both the dress store and the cigar store owners.C)cigar store owner has recourse against the dress store owner.D)landlord has recourse against the cigar store owner only.

LANDLORD HAS RECOURSE AGAINST THE DRESS STORE OWNER ONLY. The original lessee, the owner of the dress store, remains primarily liable for payment of rent to the original lessor. The original lessor has recourse against the dress store owner only; the lessor has no contractual relationship with the cigar store owner.

The authority to carry out the eviction of a delinquent tenant from rented property is held by theA)landlord.B)court.C)property owner.D)sheriff.

SHERIFF. If the tenant fails to leave, the landlord can have the judgment enforced by a court officer (sheriff), who forcibly removes the tenant and the tenant's possessions. The landlord then has the right to reenter and regain possession of the property.

Which of the following transactions would BEST be described as involving a ground lease?A)A landlord charges a commercial tenant separate amounts of rent for the land and the trade fixtures.B)A landowner agrees to let a tenant drill for oil on a property for 75 years.C)A tenant pays a base amount for the property, plus a percentage of business-generated income.D)With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner.

WITH THE LANDOWNER'S PERMISSION, A TENANT BUILDS AND OWNS A SHOPPING CENTER ON VACANT LAND LEASED FROM THE LANDOWNER. In a ground lease, the landowner leases unimproved land to a tenant who agrees to construct a building, which the tenant then owns. A ground lease is generally a long-term net lease, which provides certain tax advantages to the lessee.

A couple's apartment lease has expired, but their landlord has told them that they may remain on the premises until a sale of the building is closed. The tenants will be charged their normal monthly rental during this period. The tenancy held by the tenants is calledA)estate for term.B)estate at sufferance.C)estate at will.D)year-to-year holdover.

ESTATE AT WILL. An estate (tenancy) at will is a tenancy of indefinite duration and allows the tenant the right to possess property with the landlord's consent for an unspecified or uncertain term. It continues until it is terminated by either party giving proper notice.

A lease calls for a minimum rent of $1,200 per month plus 4 percent of the annual gross business over $150,000. If the total rent paid at the end of one year was $19,200, how much business did the tenant do during the year?A)$169,200B)$159,800C)$25,200D)$270,000

$270,000. The base rent paid for one year would be $14,400 ($1,200 × 12). If the total paid was $19,200, it means that $4,800 ($19,200 – $14,400) was the portion attributed to the terms of the net lease. If $4,800 equals 4 percent of the gross business over $150,000, then $120,000 (4,800 ÷ 4%) equals the amount over $150,000. The total volume therefore is $270,000 ($150,000 + $120,000).

A tenant's written five-year lease with monthly rental payments expired last month, but the tenant has remained in possession and the landlord has accepted his most recent rent payment without comment. At this point, theA)tenant's lease has been renewed for another five years.B)tenant is a holdover tenant.C)tenant's lease has been renewed for another month.D)tenant is a tenant at sufferance.

TENANT IS A HOLDOVER TENANT. When a tenant remains in possession, or holds over, after the lease term expires, a holdover tenancy is created. The landlord's acceptance of rent indicates consent to a periodic tenancy. A tenancy at sufferance would be created if the tenant remained in possession without the consent of the landlord.

Which of the following is the BEST definition of actual eviction?A)The enforcement of a court order to remove a lessorB)The landlord's reversionary right in the rental premisesC)The right of a landlord to use the rental premisesD)The enforcement of a court order to remove lessee

THE ENFORCEMENT OF A COURT ORDER TO REMOVE LESSEE. When a court issues a judgment for possession to a landlord, the tenant must vacate the property. If the tenant fails to leave, the landlord can have the judgment enforced by a court officer, who forcibly removes the tenant and the tenant's possessions. The landlord then has the right to reenter and regain possession of the property.

Although a tenant's lease does not terminate for five more years, the premises have become too small to accommodate the tenant's growing business. Another business owner is interested in leasing the premises from the tenant for three years. Which of the following would the parties use for the tenant to lease the space to the business owner?A)A subleaseB)A tenancy at sufferanceC)An assignmentD)A novation

A SUBLEASE. When a tenant transfers less than all the leasehold interests by leasing them to a new tenant, the original tenant has subleased (or sublet) the property. The original tenant remains responsible for rent being paid by the new tenant and for any damage done to the rental property during the lease term. The new tenant is responsible only to the original tenant to pay the rent due.

A young couple with a toddler and an infant want to lease an apartment in a complex occupied primarily by adults. The rental agent shows the couple only first-floor apartments. In this situation, the rental agentA)is protecting the other adults from the disruption of the children.B)should have suggested that the couple look elsewhere.C)should charge a higher security deposit for this family.D)should have showed the couple all available apartments.

SHOULD HAVE SHOWED THE COUPLE ALL AVAILABLE APARTMENTS. Withholding an apartment that is available for rent, segregating certain people in separate sections of an apartment complex or parts of a building, and charging people in the protected classes different amounts for rent or security deposits all constitute violations of the law.

Which of the following transactions would BEST be described as involving a ground lease?A)A tenant pays a base amount for the property, plus a percentage of business-generated income.B)With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner.C)A landlord charges a commercial tenant separate amounts of rent for the land and the trade fixtures.D)A landowner agrees to let a tenant drill for oil on a property for 75 years.

WITH THE LANDOWNER'S PERMISSION, A TENANT BUILDS AND OWNS A SHOPPING CENTER ON VACANT LAND LEASED FROM THE LANDOWNER. In a ground lease, the landowner leases unimproved land to a tenant who agrees to construct a building, which the tenant then owns. A ground lease is generally a long-term net lease, which provides certain tax advantages to the lessee.

The leasehold interest that automatically renews itself at each expiration is the tenancyA)at sufferance.B)from period to period.C)at will.D)for years.

FROM PERIOD TO PERIOD. The key feature of a tenancy from period to period is that it automatically renews itself under the original terms until one of the parties gives notice to terminate. This tenancy may run for an indefinite duration.

A company used its own cash to build a very large complex of buildings from which it operates worldwide. Now the company wants to use this money for other projects. How can the company continue to use the buildings while recovering its investments?A)Wait a few years and then sell to the highest bidderB)Sublease a portion to tenants at current market ratesC)Refinance and invest the funds in the stock marketD)Sale-and-leaseback

The answer is SALE-AND-LEASEBACK. Sale-and-leaseback arrangements are often used to finance large commercial or industrial properties enabling the business to free money tied up in real estate to be used as working capital. The land and buildings are sold to an investor who becomes the lessor/landlord while the seller continues to conduct business on the property as the lessee/tenant.

Which of the following would automatically terminate a residential lease?A)Sale of the propertyB)Death of the tenantC)Total destruction of the propertyD)Failure of the tenant to pay rent

TOTAL DESTRUCTION OF THE PROPERTY. A tenant who leases part of a building, such as a residential apartment, is released from the lease when the premises are destroyed. Sale of the property or death of the tenant does not terminate the lease.

A tenant's written five-year lease with monthly rental payments expired last month, but the tenant has remained in possession and the landlord has accepted his most recent rent payment without comment. At this point, theA)tenant's lease has been renewed for another five years.B)tenant is a holdover tenant.C)tenant's lease has been renewed for another month.D)tenant is a tenant at sufferance.

TENANT IS A HOLDOVER TENANT. When a tenant remains in possession, or holds over, after the lease term expires, a holdover tenancy is created. The landlord's acceptance of rent indicates consent to a periodic tenancy. A tenancy at sufferance would be created if the tenant remained in possession without the consent of the landlord.

Under the negotiated terms of a residential lease, the landlord is required to maintain the water heater. If a tenant is unable to get hot water because of a faulty water heater that the landlord has failed to repair after repeated notification, all of the following remedies would be available to the tenant EXCEPTA)terminating the lease agreement.B)abandoning the premises under constructive eviction.C)suing the landlord for breach of the covenant of seisin.D)suing the landlord for damages.

SUING THE LANDLORD FOR BREACH OF THE COVENANT OF SEISIN. If the landlord breaches the terms of the lease, the tenant may sue and recover damages. The tenant may also have the right to abandon the property and have the lease terminated under the theory of constructive eviction. The covenant of seisin refers to deeds, not leases.

A tenant moves a pet into an apartment community that has a no-pets policy. The landlord wishes to remove the tenant because of this breach. The legal process to remove a tenant is known asA)actual eviction.B)partial eviction.C)constructive eviction.D)eminent domain.

ACTUAL EVICTION. The landlord recovers possession of the property by filing for a court action called actual eviction.

The lessor and the lessee have agreed to a lease term of five years. How can the lessor ensure that the rental income during the term reflects the market conditions?A)Negotiate a new lease each yearB)Negotiate an index leaseC)Collect an additional security deposit each yearD)Negotiate a gross lease

NEGOTIATE AN INDEX LEASE. An index lease allows rent to be increased or decreased periodically based on changes in the consumer price index or some other index.

The owner of real estate who leases it to another is called theA)trustor.B)vendor.C)grantor.D)lessor.

LESSOR. A lease is a contract between an owner of real estate (the lessor) and a tenant (the lessee) and transfers the lessor's rights to exclusive possession and use of the property to the tenant for a specified period.

The landlord's lease prohibits tenants from altering the property in any way. A young woman who uses a wheelchair cannot maneuver over the doorstep into the apartment by herself. Nor can she use her wheelchair in the bathroom. Which of the following is TRUE?A)The landlord is responsible for making all apartments accessible to people with disabilities.B)The tenant is entitled to make the necessary alterations.C)The tenant cannot remedy these conditions because of the terms of the lease.D)The landlord should not have rented this apartment to the tenant.

THE TENANT IS ENTITLED TO MAKE THE NECESSARY ALTERATIONS. Tenants with disabilities must be permitted to make reasonable modifications to a property at their own expense; if the modifications would interfere with a future tenant's use, the landlord may require that the premises be restored to their original condition at the end of the lease term.

A company used its own cash to build a very large complex of buildings from which it operates worldwide. Now the company wants to use this money for other projects. How can the company continue to use the buildings while recovering its investments?A)Wait a few years and then sell to the highest bidderB)Sublease a portion to tenants at current market ratesC)Sale-and-leasebackD)Refinance and invest the funds in the stock market

The answer is SALE-AND-LEASEBACK. Sale-and-leaseback arrangements are often used to finance large commercial or industrial properties enabling the business to free money tied up in real estate to be used as working capital. The land and buildings are sold to an investor who becomes the lessor/landlord while the seller continues to conduct business on the property as the lessee/tenant.

The lessor and the lessee have agreed to a lease term of five years. How can the lessor ensure that the rental income during the term reflects the market conditions?A)Negotiate a gross leaseB)Collect an additional security deposit each yearC)Negotiate a new lease each yearD)Negotiate an index lease

NEGOTIATE AN INDEX LEASE. An index lease allows rent to be increased or decreased periodically based on changes in the consumer price index or some other index.

Which of the following transactions would BEST be described as involving a ground lease?A)With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner.B)A tenant pays a base amount for the property, plus a percentage of business-generated income.C)A landlord charges a commercial tenant separate amounts of rent for the land and the trade fixtures.D)A landowner agrees to let a tenant drill for oil on a property for 75 years.

WITH THE LANDOWNER'S PERMISSION, A TENANT BUILDS AND OWNS A SHOPPING CENTER ON VACANT LAND LEASED FROM THE LANDOWNER. In a ground lease, the landowner leases unimproved land to a tenant who agrees to construct a building, which the tenant then owns. A ground lease is generally a long-term net lease, which provides certain tax advantages to the lessee.

Which of the following BEST describes a net lease?A)A lease in which the tenant pays the landlord a percentage of the monthly income derived from the propertyB)An agreement granting an individual a leasehold interest in fishing rights for shoreline propertiesC)A lease in which the tenant pays rent in addition to some or all operating expensesD)An agreement in which the tenant pays a fixed rent and the landlord pays all taxes, insurance, and so forth on the property

A LEASE IN WHICH THE TENANT PAYS RENT IN ADDITION TO SOME OR ALL OPERATING EXPENSES. Under the terms of a net lease, the tenant pays all or some of the operating expenses in addition to the rent. Operating expenses include such items as taxes, insurance premiums, maintenance costs, and assessments.

A tenant signs a lease that includes a schedule of rent increases on specific dates over the course of the lease term. What kind of lease has this tenant signed?A)IndexB)NetC)GraduatedD)Percentage

GRADUATED. A graduated lease states specific rent increases at specific times.

A tenant's written five-year lease with monthly rental payments expired last month, but the tenant has remained in possession and the landlord has accepted his most recent rent payment without comment. At this point, theA)tenant is a tenant at sufferance.B)tenant's lease has been renewed for another five years.C)tenant's lease has been renewed for another month.D)tenant is a holdover tenant.

TENANT IS A HOLDOVER TENANT. When a tenant remains in possession, or holds over, after the lease term expires, a holdover tenancy is created. The landlord's acceptance of rent indicates consent to a periodic tenancy. A tenancy at sufferance would be created if the tenant remained in possession without the consent of the landlord.

A tenant who transfers all rights for the remaining term of the lease to a third party isA)a sublessor.B)assigning the lease.C)giving the third party a sandwich lease.D)automatically relieved of any further obligation under it.

ASSIGNING THE LEASE. A tenant who transfers all rights to a third party for the remainder of the lease term assigns the lease. An assignment does not automatically relieve the original lessee of obligations under the lease.

Although a tenant's lease does not terminate for five more years, the premises have become too small to accommodate the tenant's growing business. Another business owner is interested in leasing the premises from the tenant for three years. Which of the following would the parties use for the tenant to lease the space to the business owner?A)A novationB)An assignmentC)A subleaseD)A tenancy at sufferance

A SUBLEASE. When a tenant transfers less than all the leasehold interests by leasing them to a new tenant, the original tenant has subleased (or sublet) the property. The original tenant remains responsible for rent being paid by the new tenant and for any damage done to the rental property during the lease term. The new tenant is responsible only to the original tenant to pay the rent due.

A young couple with a toddler and an infant want to lease an apartment in a complex occupied primarily by adults. The rental agent shows the couple only first-floor apartments. In this situation, the rental agentA)should have suggested that the couple look elsewhere.B)is protecting the other adults from the disruption of the children.C)should have showed the couple all available apartments.D)should charge a higher security deposit for this family.

SHOULD HAVE SHOWED THE COUPLE ALL AVAILABLE APARTMENTS. Withholding an apartment that is available for rent, segregating certain people in separate sections of an apartment complex or parts of a building, and charging people in the protected classes different amounts for rent or security deposits all constitute violations of the law.

A couple's apartment lease has expired, but their landlord has told them that they may remain on the premises until a sale of the building is closed. The tenants will be charged their normal monthly rental during this period. The tenancy held by the tenants is calledA)year-to-year holdover.B)estate at sufferance.C)estate at will.D)estate for term.

ESTATE AT WILL. An estate (tenancy) at will is a tenancy of indefinite duration and allows the tenant the right to possess property with the landlord's consent for an unspecified or uncertain term. It continues until it is terminated by either party giving proper notice.

For a lease to be valid, it must contain aA)statement of the specific length of time.B)provision for a security deposit.C)statement of the retention of the reversionary interest by the lessor.D)complete legal description of the premises.

STATEMENT OF THE SPECIFIC LENGTH OF TIME. A valid lease must include an offer and acceptance and a statement as to the length of the lease. A valid lease is not required to include a security deposit or a complete legal description of the premises.

The leasehold interest that automatically renews itself at each expiration is the tenancyA)from period to period.B)for years.C)at will.D)at sufferance.

FROM PERIOD TO PERIOD. The key feature of a tenancy from period to period is that it automatically renews itself under the original terms until one of the parties gives notice to terminate. This tenancy may run for an indefinite duration.

A tenant is leasing a house while saving enough money for the down payment to perform on the sales contract. What type of an arrangement is this?A)Periodic tenancyB)Lease with an optionC)Lease purchase agreementD)Purchase money mortgage

LEASE PURCHASE AGREEMENT. A lease purchase is used when a tenant wants to purchase the property but is unable to do so. Part of the periodic rent is applied toward the purchase price of the property until it is reduced to an amount for which the tenant can obtain financing or purchase the property outright, depending on the terms of the lease purchase agreement.

The owner of real estate who leases it to another is called theA)vendor.B)grantor.C)lessor.D)trustor.

LESSOR. A lease is a contract between an owner of real estate (the lessor) and a tenant (the lessee) and transfers the lessor's rights to exclusive possession and use of the property to the tenant for a specified period.

Which of the following would automatically terminate a residential lease?A)Total destruction of the propertyB)Sale of the propertyC)Failure of the tenant to pay rentD)Death of the tenant

TOTAL DESTRUCTION OF THE PROPERTY. A tenant who leases part of a building, such as a residential apartment, is released from the lease when the premises are destroyed. Sale of the property or death of the tenant does not terminate the lease.

Which of the following transactions would BEST be described as involving a ground lease?A)A landowner agrees to let a tenant drill for oil on a property for 75 years.B)With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner.C)A landlord charges a commercial tenant separate amounts of rent for the land and the trade fixtures.D)A tenant pays a base amount for the property, plus a percentage of business-generated income.

WITH THE LANDOWNER'S PERMISSION, A TENANT BUILDS AND OWNS A SHOPPING CENTER ON VACANT LAND LEASED FROM THE LANDOWNER. In a ground lease, the landowner leases unimproved land to a tenant who agrees to construct a building, which the tenant then owns. A ground lease is generally a long-term net lease, which provides certain tax advantages to the lessee.

The lessor and the lessee have agreed to a lease term of five years. How can the lessor ensure that the rental income during the term reflects the market conditions?A)Negotiate a new lease each yearB)Negotiate a gross leaseC)Collect an additional security deposit each yearD)Negotiate an index lease

NEGOTIATE AN INDEX LEASE. An index lease allows rent to be increased or decreased periodically based on changes in the consumer price index or some other index.

A percentage lease is a lease that provides for aA)rental of a percentage of the value of a building.B)definite monthly rent plus a percentage of the tenant's gross receipts in excess of a certain amount.C)graduated amount due monthly and not exceeding a stated percentage.D)definite periodic rent not exceeding a stated percentage.

DEFINITE MONTHLY RENT PLUS A PERCENTAGE OF THE TENANT'S GROSS RECEIPTS IN EXCESS OF A CERTAIN AMOUNT. A common form of lease used in retail businesses is one that requires the tenant to pay rent based on a percentage of the gross or net income generated by the business. This is known as a percentage lease.

When the lease is signed, the landlord retainsA)the right to reenter at will.B)a security deposit.C)a reversionary right to possession.D)the right to exclude those with disabilities.

A REVERSIONARY RIGHT TO POSSESSION. The lessor grants the lessee the right to occupy the real estate and use it for purposes stated in the lease. In return, the landlord receives payment for use of the premises and retains a reversionary right to possession after the lease term expires.

A landlord leased space in her shopping center to the owner of a dress store. However, the dress store failed and that owner sublet the space to a cigar store. Then the cigar store owner failed to make rental payments when they were due. The lease was breached. Therefore, theA)landlord has recourse against the cigar store owner only.B)landlord has recourse against both the dress store and the cigar store owners.C)landlord has recourse against the dress store owner only.D)cigar store owner has recourse against the dress store owner.

LANDLORD HAS RECOURSE AGAINST THE DRESS STORE OWNER ONLY. The original lessee, the owner of the dress store, remains primarily liable for payment of rent to the original lessor. The original lessor has recourse against the dress store owner only; the lessor has no contractual relationship with the cigar store owner.

Three co-owners cannot agree on the use and disposition of the property that they own together. Two want to sell and the third wants to keep the property. What, if anything, can they do to solve their problem?A)They can declare bankruptcy.B)They can build fences and install walls to separate their ownership interests.C)They can file a partition suit.D)Nothing; they need all three signatures to sell.

The answer is THEY CAN FILE A PARTITION SUIT. Partition is a legal way to dissolve a co-ownership when the parties do not voluntarily agree to its termination.

Which statement applies to both joint tenancy and tenancy by the entirety?A)The last survivor becomes a severalty owner.B)A deed signed by one owner will convey a fractional interest.C)A deed will not convey any interest unless signed by both spouses.D)There is no right to file a partition suit.

THE LAST SURVIVOR BECOMES A SEVERALTY OWNER. Trusts may be created by agreement during a property owner's lifetime (a living trust) or established by the terms of a will (a testamentary trust).

Three people are joint tenants with rights of survivorship in a tract of land. One owner conveys her interest to a friend. Which of the following statements is TRUE?A)The new owner has severalty ownership.B)They all become tenants in common.C)They all become joint tenants.D)The first two owners remain joint tenants.

THE FIRST TWO OWNERS REMAIN JOINT TENANTS. While a joint tenant is free to convey interest in the property, doing so destroys the joint tenancy between the three people. While the two remaining people remain as joint tenants with regard to their two-thirds ownership interest, the friend becomes a tenant in common with regard to his one-third interest.

Two people are co-owners of a small office building with the right of survivorship. One of the co-owners dies without a will and leaves nothing to be distributed to his heirs. Which of the following would explain why the second co-owner acquired the deceased's interest?A)Joint tenancyB)Adverse possessionC)ForeclosureD)Reversionary interest

JOINT TENANCY. The co-owner was a joint tenant with right of survivorship. With or without a will, his interest passes to the remaining co-owner, and nothing goes to the deceased's heirs.

A parcel of real estate was purchased by two friends. The deed they received from the seller at the closing transferred the property with no further explanation. The two friends MOST likely took title asA)community property owners.B)joint tenants.C)tenants by the entirety.D)tenants in common.

TENANTS IN COMMON. If the deed of conveyance does not stipulate the tenancy being created, Pennsylvania law recognizes the concurrent owners as tenants in common.

Under what circumstances may the owner of a campground membership usually use the facilities?A)With permission of the camp directorB)With a vote of other membersC)Limited only by weather and accessD)Only during the contractual time purchased

LIMITED ONLY BY WEATHER AND ACCESS. Campground membership is similar to time-share use. Normally, the owner is not limited to a specific time for using the property; use is limited only by weather and access.

A woman lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan securing the entire property. Like the other residents, she owns stock in the corporation and has a lease to an apartment. What type of ownership is this?A)Cooperative unitB)Condominium unitC)LeaseholdD)Time-share

COOPERATIVE UNIT. The woman lives in a cooperative. She has a possessory interest as evidenced by a proprietary lease. A corporation holds title to the land and building, with tenants owning shares of stock (personal property) in the corporation. The tenant-shareholder occupies a unit under the terms of a proprietary (owner's) lease.

When a couple downsized and moved into a cooperative apartment building, theyA)became stockholders in a corporation.B)now own their individual apartment.C)entered a 20-year lease to their apartment.D)now own the common elements.

BECAME STOCKHOLDERS IN A CORPORATION. Co-op purchasers become shareholders in the corporation that owns the building by virtue of stock ownership and receive a proprietary (owner's) lease to the apartment for the life of the corporation.

In Pennsylvania, the buyers of a condominium unit did not receive a resale certificate at the time that they entered into a purchase agreement. What recourse, if any, do they have?A)They are permitted to withdraw from the agreement up to 48 hours prior to settlement.B)They may void the agreement within five days of receiving the information.C)They have no recourse and must complete the transaction.D)They may sue the seller for nondisclosure of relevant facts.

THEY MAY VOID THE AGREEMENT WITHIN FIVE DAYS OF RECEIVING THE INFORMATION. The unit owner must furnish the resale certificate along with the condominium documents for the prospective purchasers' review prior to the closing. Buyers who receive this information after they've signed an agreement of sale have the right to void the agreement within five days after receiving the information, if they so choose.

A man conveys a vineyard in trust to his sister, with the instruction that any income derived from the vineyard is to be used for his daughter's medical care. Which of the following statements MOST accurately describes the relationship of these parties?A)The man is the trustee, the sister is the trustor, and his daughter is the beneficiary.B)The man is the trustor, the sister is the beneficiary, and his daughter is the trustee.C)The man is the trustor, the sister is the trustee, and his daughter is the beneficiary.D)The man is the beneficiary, the sister is the trustor, and his daughter is the trustee.

THE MAN IS THE TRUSTOR, THE SISTER IS THE TRUSTEE, AND HIS DAUGHTER IS THE BENEFICIARY. The trustor (the man) is the party creating the trust. Title to the vineyard is held by the trustee (the sister) for the benefit of the beneficiary of the trust (the daughter).

Under what circumstances may the owner of a campground membership usually use the facilities?A)Only during the contractual time purchasedB)With permission of the camp directorC)With a vote of other membersD)Limited only by weather and access

LIMITED ONLY BY WEATHER AND ACCESS. Campground membership is similar to time-share use. Normally, the owner is not limited to a specific time for using the property; use is limited only by weather and access.

If a property is held by two or more owners as tenants in common, the interest of a deceased cotenant will pass to theA)surviving owner or owners.B)heirs of the deceased.C)state by the law of escheat.D)trust under which the property was owned.

HEIRS OF THE DECEASED. In a tenancy in common, each cotenant holds interest in severalty. When the cotenant dies, the undivided interest passes to heirs of the cotenant or is passed to a devisee under the terms of a will.

All of the following involve a freehold interest EXCEPTA)tenancy in common.B)tenancy by the entirety.C)time-share use.D)a condominium.

TIME-SHARE USE. Freehold interests are ownership interests. A time-share use interest refers to the contract right to use real estate owned by a developer for a specified time. It differs from a time-share estate, which creates an ownership interest in property.

How does a condominium obtain the funds necessary to cover ongoing operating expenses and mortgage payments?A)Charge rentB)Assess unit holdersC)Charge general assessmentsD)Sell common elements

ASSESS UNIT HOLDERS. The expenses of maintaining and operating the building are paid by the unit owners in the form of fees and assessments that are imposed and collected by the homeowners' association.

A man and his sister bought a store building and took title as joint tenants. The man died testate. His sister now owns the storeA)as a tenant in common with the brother's heirs.B)as a joint tenant with rights of survivorship.C)in severalty.D)in trust.

IN SEVERALTY. The disposition of the deceased tenant's ownership is governed by the joint tenancy with right of survivorship, rather than by the person's will or the state's inheritance laws. In this situation, the sister becomes the sole owner, in severalty.

A man owns one of 20 town houses in fee simple, along with a 5 percent ownership share in the parking facilities, recreation center, and grounds. What kind of property does he own?A)CondominiumB)Membership campingC)CooperativeD)Time-share

CONDOMINIUM. Real estate ownership that involves holding title to an individual unit and a specified share of the undivided interest in the common elements is a condominium.

Which of the following is a requirement of a property held as tenancy by the entirety?A)In the event of a dispute, the property must be partitioned.B)The co-tenants must be husband and wife.C)Upon the death of a co-tenant, the decedent's interest passes to his or her heirs.D)The property in question must be Torrens property.

THE CO-TENANTS MUST BE HUSBAND AND WIFE. Tenancy by the entirety is recognized in Pennsylvania. Each spouse has an equal, undivided interest in the property. Unless another form of co-ownership is specified, a tenancy by the entirety is automatically created, by virtue of a legally formed marriage, when the owners take title as husband and wife.

In Pennsylvania, the buyers of a condominium unit did not receive a resale certificate at the time that they entered into a purchase agreement. What recourse, if any, do they have?A)They may sue the seller for nondisclosure of relevant facts.B)They are permitted to withdraw from the agreement up to 48 hours prior to settlement.C)They may void the agreement within five days of receiving the information.D)They have no recourse and must complete the transaction.

THEY MAY VOID THE AGREEMENT WITHIN FIVE DAYS OF RECEIVING THE INFORMATION. The unit owner must furnish the resale certificate along with the condominium documents for the prospective purchasers' review prior to the closing. Buyers who receive this information after they've signed an agreement of sale have the right to void the agreement within five days after receiving the information, if they so choose.

An owner or developer of a newly built condominium building must provide each prospective unit purchaser with all of the following EXCEPTA)a resale certificate.B)a public offering statement.C)a property report.D)a two-year warranty against structural defects.

A RESALE CERTIFICATE. A resale certificate prepared by the owners' association and containing pertinent financial information must be provided to second and subsequent owners. First purchasers of newly constructed units must be provided with a public offering statement, a property report, and a two-year warranty against structural defects.

Which statement applies to both joint tenancy and tenancy by the entirety?A)There is no right to file a partition suit.B)A deed signed by one owner will convey a fractional interest.C)A deed will not convey any interest unless signed by both spouses.D)The last survivor becomes a severalty owner.

THE LAST SURVIVOR BECOMES A SEVERALTY OWNER. Trusts may be created by agreement during a property owner's lifetime (a living trust) or established by the terms of a will (a testamentary trust).

A man conveys a vineyard in trust to his sister, with the instruction that any income derived from the vineyard is to be used for his daughter's medical care. Which of the following statements MOST accurately describes the relationship of these parties?A)The man is the trustee, the sister is the trustor, and his daughter is the beneficiary.B)The man is the trustor, the sister is the beneficiary, and his daughter is the trustee.C)The man is the beneficiary, the sister is the trustor, and his daughter is the trustee.D)The man is the trustor, the sister is the trustee, and his daughter is the beneficiary.

THE MAN IS THE TRUSTOR, THE SISTER IS THE TRUSTEE, AND HIS DAUGHTER IS THE BENEFICIARY. The trustor (the man) is the party creating the trust. Title to the vineyard is held by the trustee (the sister) for the benefit of the beneficiary of the trust (the daughter).

A parcel of real estate was purchased by two friends. The deed they received from the seller at the closing transferred the property with no further explanation. The two friends MOST likely took title asA)joint tenants.B)tenants in common.C)tenants by the entirety.D)community property owners.

TENANTS IN COMMON. If the deed of conveyance does not stipulate the tenancy being created, Pennsylvania law recognizes the concurrent owners as tenants in common.

Which of the following is a requirement of a property held as tenancy by the entirety?A)The co-tenants must be husband and wife.B)Upon the death of a co-tenant, the decedent's interest passes to his or her heirs.C)The property in question must be Torrens property.D)In the event of a dispute, the property must be partitioned.

THE CO-TENANTS MUST BE HUSBAND AND WIFE. Tenancy by the entirety is recognized in Pennsylvania. Each spouse has an equal, undivided interest in the property. Unless another form of co-ownership is specified, a tenancy by the entirety is automatically created, by virtue of a legally formed marriage, when the owners take title as husband and wife.

Many cooperatives require that a prospective buyerA)meet certain racial and religious requirements.B)prepay at least five years of annual assessments.C)be approved by the board of directors.D)take title in severalty.

BE APPROVED BY THE BOARD OF DIRECTORS. Many co-op bylaws require that the board of directors approve any prospective shareholders. However, state and federal fair housing laws prohibit such decisions based on racial or religious criteria.

36. All of the following may terminate a tenancy by the entirety EXCEPTA)death of a spouse.B)a declaration by one spouse.C)divorce.D)a court-ordered sale of the property.

A DECLARATION BY ONE SPOUSE. In addition to the death of one spouse, a tenancy by the entirety may be terminated by an agreement between both parties (through the execution of a new deed), a divorce (which leaves the parties as tenants in common), and a court-ordered sale of the property to satisfy a judgment against the husband and wife as joint debtors (the tenancy is dissolved so that the property can be sold to pay the judgment).

Under what circumstances may the owner of a campground membership usually use the facilities?A)With a vote of other membersB)With permission of the camp directorC)Limited only by weather and accessD)Only during the contractual time purchased

LIMITED ONLY BY WEATHER AND ACCESS. Campground membership is similar to time-share use. Normally, the owner is not limited to a specific time for using the property; use is limited only by weather and access.

A man and his sister bought a store building and took title as joint tenants. The man died testate. His sister now owns the storeA)in trust.B)as a tenant in common with the brother's heirs.C)in severalty.D)as a joint tenant with rights of survivorship.

IN SEVERALTY. The disposition of the deceased tenant's ownership is governed by the joint tenancy with right of survivorship, rather than by the person's will or the state's inheritance laws. In this situation, the sister becomes the sole owner, in severalty.

The owner of a condominium is responsible for paying a monthly maintenance fee. If the owner fails to make this payment, which of the following is TRUE?A)The debt is collected from other owners.B)The debt becomes a lien against the unit.C)The debt is added to the mortgage payment.D)The owner is evicted.

THE DEBT BECOMES A LIEN AGAINST THE UNIT. If the condo fees are not paid, the homeowners' association may seek a court-ordered judgment to have the delinquent owner's unit sold to cover the outstanding amount or place a lien on the property.

In Pennsylvania, a conveyance made "to Arnold and Julia Haber, Husband and Wife," without further elaboration, creates aA)partnership.B)joint tenancy.C)tenancy in common.D)tenancy by the entirety.

TENANCY BY THE ENTIRETY. When property is conveyed to grantees or devisees who are clearly identified as husband and wife, Pennsylvania law recognizes the estate created as a tenancy by the entirety.

All of the following involve a freehold interest EXCEPTA)a condominium.B)tenancy by the entirety.C)tenancy in common.D)time-share use.

TIME-SHARE USE. Freehold interests are ownership interests. A time-share use interest refers to the contract right to use real estate owned by a developer for a specified time. It differs from a time-share estate, which creates an ownership interest in property.

Which of the following BEST refers to the type of lien that affects all real and personal property of a debtor?A)Involuntary lienB)Specific lienC)General lienD)Voluntary lien

GENERAL LIEN. The terms voluntary and involuntary refer to the manner in which a lien is created, not what property the lien affects. Specific liens affect only one particular property. A general lien affects all property, real and personal, owned by a debtor.

A lien on real estate made to secure payment for specific municipal improvements to a parcel of real estate isA)a mechanic's lien.B)an ad valorem tax.C)a special assessment.D)a utility lien.

A SPECIAL ASSESSMENT. Municipal improvements that benefit particular parcels of property are funded by special assessments levied against those properties.

In disbursing funds from a foreclosure sale, the highest priority would usually be given toA)a mechanic's lien for work started before the mortgage was made.B)a mortgage dated last year.C)real estate taxes due.D)a judgment rendered the day before foreclosure.

REAL ESTATE TAXES DUE. If a property is sold at a foreclosure proceeding, outstanding real estate taxes and special assessments will be paid first. Tax liens take priority over other liens.

A mechanic's lien claim arises when a general contractor has performed work or provided material to improve a parcel of real estate on the owner's order and the work has not been paid for. Such a contractor has a right toA)tear out the work.B)record a notice of the lien.C)record a notice of the lien and file a court suit within the time required by state law.D)have personal property of the owner sold to satisfy the lien.

RECORD A NOTICE OF THE LIEN AND FILE A COURT SUIT WITHIN THE TIME REQUIRED BY STATE LAW. In Pennsylvania, a contractor can record a notice of the lien and enforce the lien by court action (a foreclosure) to collect the debt from the sale of the real estate.

Which of the following is a lien on real estate?A)An encroachmentB)An easement running with the landC)An unpaid mortgage loanD)A license

AN UNPAID MORTGAGE LOAN. All liens are encumbrances, but not all encumbrances are liens. Easements and encroachments are encumbrances, not liens. Liens are financial claims to enforce payment of a debt. An unpaid mortgage loan creates a specific, voluntary lien against the property.

When a lien against a parcel of real estate may result from a lawsuit currently before the court, a person examining the public records would look forA)a judgment lien.B)the chain of title.C)a lis pendens.D)a suit to quiet title.

A LIS PENDENS. When any suit is filed that affects title to real estate, a special notice, known as a lis pendens (Latin for litigation pending ) is recorded. A lis pendens is not itself a lien, but rather a notice of a possible future lien.

Which statement MOST accurately describes special assessment liens?A)They take priority over mechanics' liens.B)They are paid on a monthly basis.C)They cannot be prepaid in full without penalty.D)They are general liens.

THEY TAKE PRIORITY OVER MECHANICS' LIENS. Special assessments are tax liens affecting a particular property. They take priority over other types of liens, including mechanics' liens.

A court orders real estate to be sold to satisfy an unpaid lien in an action known asA)encumbrance.B)foreclosure.C)attachment.D)seizure.

FORECLOSURE. A lien can be used to force the payment of an assessment or other special charge. If a lien is not paid in the allotted time, the lienholder may foreclose on the lien, potentially forcing the sale of the property.

A seller sold a buyer a parcel of real estate. Title has passed, but to date the buyer has not paid the purchase price in full, as originally agreed. To force payment, the seller should seekA)a mechanic's lien.B)an attachment.C)a judgment.D)a lis pendens.

A JUDGMENT. The seller of the real estate can sue the purchaser in court. If the suit is successful, the court issues a decree establishing the amount the debtor owes and provides for money to be awarded. This decree is known as a money judgment.

The current market value of a property is $255,000, and it is assessed at 35 percent of its current market value with an equalization factor of 1.25. What is the amount of real estate tax due if the tax rate is $3.50 per $100 of assessed value?A)$3,904.69B)$2,756.25C)$3,445.31D)$4,880.26

$3,904.69. $255,000 × 35 percent × 1.5 ÷ 100 × $3.50 = $3,904.69.

A seller sold a buyer a parcel of real estate. Title has passed, but to date the buyer has not paid the purchase price in full, as originally agreed. To force payment, the seller should seekA)a lis pendens.B)an attachment.C)a judgment.D)a mechanic's lien.

A JUDGMENT. The seller of the real estate can sue the purchaser in court. If the suit is successful, the court issues a decree establishing the amount the debtor owes and provides for money to be awarded. This decree is known as a money judgment.

What is the difference between a general and a specific lien?A)A general lien cannot be enforced in court, while a specific lien can be enforced.B)A general lien covers all of the debtor's property, while a specific lien is covers only a certain piece of real property.C)One person holds a specific lien, while a general lien is held by at least two persons.D)A specific lien covers real estate, while a general lien covers personal property.

A GENERAL LIEN COVERS ALL OF THE DEBTOR'S PROPERTY, WHILE A SPECIFIC LIEN IS COVERS ONLY A CERTAIN PIECE OF REAL PROPERTY. General liens affect all property, both real and personal, of a debtor while specific liens are secured by a specific parcel of real estate and affect only that particular property.

Both a mortgage lien and a judgment lienA)must be entered by the court.B)are general liens.C)involve a debt.D)are involuntary liens.

INVOLVE A DEBT. A mortgage lien is a specific voluntary lien. A judgment is a general involuntary lien that results from a court decree. Both involve a debt incurred by the property owner.

A lumber company that furnished materials ordered by the property owner was not paid for the materials. What recourse is available to the lumber company in Pennsylvania?A)File a lis pendens as soon as the material is deliveredB)File a mechanic's lien within one year of date of deliveryC)No recourseD)File a mechanic's lien within six months after the work was completed

FILE A MECHANIC'S LIEN WITHIN SIX MONTHS AFTER THE WORK WAS COMPLETED. Under the Pennsylvania Mechanic's Lien Law, a contractor or subcontractor can file a claim with the court of common pleas in the county in which the property is located within six months after the work is completed (entitlement to a lien is subject to certain exceptions and compliance with procedures for serving notice on the property owner).

Taxes levied for the operation of the government are calledA)improvement taxes.B)ad valorem taxes.C)assessment taxes.D)special assessments.

AD VALOREM TAXES. General real estate taxes are levied and assessed according to the value of the property subject to taxation. Ad valorem is the Latin term foraccording to value .

What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250 with an equalization factor of 125 percent, when the tax rate is 25 mills?A)$945B)$1,181C)$1,477D)$1,418

$1,477. Equalization factors are applied to achieve uniformity by raising or lowering assessments. The assessed value of the property is multiplied by the equalization factor, and then the tax rate is applied to the equalized assessment. A property assessed at $47,250 with an equalization factor of 125 percent would be taxed at a value of $59,062.50 ($47,250 × 125%). With a tax rate of 25 mills (0.025), the tax would be $1,477 ($59,062.50 × 0.025).

For tax purposes, which Pennsylvania county is a first class county, based on population?A)DauphinB)PhiladelphiaC)LackawanaD)Allegheny

PHILADELPHIA. Pennsylvania counties are divided into nine different classes, depending on population. Philadelphia, whose population is more than 1,500,000, is the only first class county.

In what time frame, if any, is a Pennsylvania contractor permitted to file a mechanic's lien?A)Within six months of completing the workB)Anytime before the transfer of titleC)Within six months of starting the workD)Up to one year after beginning the work

WITHIN SIX MONTHS OF COMPLETING THE WORK. Under the Pennsylvania Mechanic's Lien Law, a contractor or subcontractor can file a claim with the court of common pleas in the county in which the property is located within six months after the work is completed.

All of the following would probably be exempt from real estate taxes EXCEPTA)an apartment building.B)a public golf course.C)a community church.D)a medical research facility.

AN APARTMENT BUILDING. In Pennsylvania, the general theory is that property used for certain public purposes is tax exempt. Apartment buildings owned by private individuals or entities are generally not exempt from real estate taxes.

In disbursing funds from a foreclosure sale, the highest priority would usually be given toA)a judgment rendered the day before foreclosure.B)a mechanic's lien for work started before the mortgage was made.C)real estate taxes due.D)a mortgage dated last year.

REAL ESTATE TAXES DUE. If a property is sold at a foreclosure proceeding, outstanding real estate taxes and special assessments will be paid first. Tax liens take priority over other liens.

What is the difference between a general and a specific lien?A)A general lien covers all of the debtor's property, while a specific lien is covers only a certain piece of real property.B)A specific lien covers real estate, while a general lien covers personal property.C)One person holds a specific lien, while a general lien is held by at least two persons.D)A general lien cannot be enforced in court, while a specific lien can be enforced.

A GENERAL LIEN COVERS ALL OF THE DEBTOR'S PROPERTY, WHILE A SPECIFIC LIEN IS COVERS ONLY A CERTAIN PIECE OF REAL PROPERTY. General liens affect all property, both real and personal, of a debtor while specific liens are secured by a specific parcel of real estate and affect only that particular property.

A mechanic's lien claim arises when a general contractor has performed work or provided material to improve a parcel of real estate on the owner's order and the work has not been paid for. Such a contractor has a right toA)tear out the work.B)have personal property of the owner sold to satisfy the lien.C)record a notice of the lien and file a court suit within the time required by state law.D)record a notice of the lien.

RECORD A NOTICE OF THE LIEN AND FILE A COURT SUIT WITHIN THE TIME REQUIRED BY STATE LAW. In Pennsylvania, a contractor can record a notice of the lien and enforce the lien by court action (a foreclosure) to collect the debt from the sale of the real estate.

A person has defaulted in the payment of several debts, and the court has ordered the person's property sold to satisfy the outstanding debts. A title search revealed several outstanding liens against the property. Which of the following liens has first priority?A)The judgment lien rendered and recorded last monthB)The outstanding first mortgage lien dated and recorded one year agoC)The mechanic's lien for work started two months before the mortgage was recordedD)The current year's real estate tax lien

THE CURRENT YEAR'S REAL ESTATE TAX LIEN. In general, the rule for priority of liens is first to record, first in right (priority); however, real estate taxes and special assessments generally take priority over all other liens, regardless of the order in which the liens are recorded.

The current market value of a property is $255,000, and it is assessed at 35 percent of its current market value with an equalization factor of 1.25. What is the amount of real estate tax due if the tax rate is $3.50 per $100 of assessed value?A)$3,904.69B)$4,880.26C)$3,445.31D)$2,756.25

$3,904.69. $255,000 × 35 percent × 1.5 ÷ 100 × $3.50 = $3,904.69.

Both a mortgage lien and a judgment lienA)are general liens.B)must be entered by the court.C)are involuntary liens.D)involve a debt.

INVOLVE A DEBT. A mortgage lien is a specific voluntary lien. A judgment is a general involuntary lien that results from a court decree. Both involve a debt incurred by the property owner.

A specific parcel of real estate has a market value of $180,000 and is assessed for tax purposes at 25 percent of market value. The tax rate for the county in which the property is located is 30 mills. The tax bill will beA)$900.B)$1,350.C)$450.D)$650.

$1,350. Market value ($180,000) times the tax ratio (25%) equals the assessed value ($45,000). A tax rate of 30 mills is expressed as 0.030. Therefore, $45,000 × 0.030 equals a tax bill of $1,350.

For tax purposes, which Pennsylvania county is a first class county, based on population?A)LackawanaB)PhiladelphiaC)AlleghenyD)Dauphin

PHILADELPHIA. Pennsylvania counties are divided into nine different classes, depending on population. Philadelphia, whose population is more than 1,500,000, is the only first class county.

If the market value of a property is $84,500 and the assessment ratio is 35 percent, what are the monthly taxes if the tax rate is 30 mills?A)$942.50B)$73.94C)$87.72D)$887.25

73.94. $84,500 × 35% = $29,575 (assessed value) × 0.03 = $887.25 (annual tax) ÷ 12 = $73.94 monthly tax.

Taxes levied on a property owner to pay to install sidewalks or sewers are calledA)general assessments.B)value added assessments.C)special assessments.D)ad valorem taxes.

SPECIAL ASSESSMENTS. Special assessments are special taxes on real estate to fund public improvements to the property. Property owners in the improvement area are required to pay for them because their properties benefit directly from the improvements.

A general contractor will soon file a suit against a homeowner for nonpayment. The contractor just learned that the homeowner has listed the property for sale with a real estate broker. In this situation, to protect the contractor's interest, the contractor's attorney will useA)a buyer's lien.B)a lis pendens.C)an assessment.D)a seller's lien.

A LIS PENDENS. The general contractor would protect his interest or claim by recording a notice of lis pendens (litigation pending). This serves as notice of a possible future lien against the property.

The deed that grants and releases and implies that the grantor has title is aA)trust deed.B)bargain and sale deed.C)special warranty deed.D)quitclaim deed.

The answer is BARGAIN AND SALE DEED. Although a bargain and sale deed contains no express warranties against encumbrances, it does imply that the grantor holds title and possession of the property.
Title to real estate may be transferred during a person's lifetime byA)involuntary alienation.B)descent.C)devise.D)escheat.
The answer is INVOLUNTARY ALIENATION. Devise, descent, and escheat all refer to transfer of title subsequent to the death of the titleholder. Involuntary alienation occurs by operation of law, as in a foreclosure or condemnation action.
It is essential that every deed be signed by theA)grantee.B)devisee.C)grantor.D)grantor and grantee.
The answer is GRANTOR. Only a grantor executes (signs) the deed. Title passes when the deed is delivered and accepted by the grantee.

What is required for a valid deed in Pennsylvania?A)Grantor's sealB)Grantee's signatureC)Grantee's sealD)Grantor's signature

The answer is GRANTOR'S SIGNATURE. Pennsylvania, unlike some other states, does not require a seal or the word seal to be written or printed after the grantor's signature. Only the grantor is required to sign the deed, not the grantee.
The grantee receives greatest protection with what type of deed?A)General warrantyB)Bargain and saleC)QuitclaimD)Executor's

The answer is GENERAL WARRANTY. A general warranty deed binds the grantor to covenants or warranties that provide a grantee with the greatest protection of any type of deed.

A declaration before a notary or other official providing evidence that a signature is genuine is anA)affidavit.B)affirmation.C)estoppel.D)acknowledgment.
The answer is ACKNOWLEDGMENT. A formal declaration made before a notary public or authorized public officer that verifies that the person is voluntarily signing a document and that the person's signature is genuine is an acknowledgement.
Normally a deed will be considered valid even ifA)the grantor is a minor.B)the grantor did not deliver the deed.C)the grantor is not a legal entity.D)it is signed by an attorney-in-fact rather than the seller.
The answer is IT IS SIGNED BY AN ATTORNEY-IN-FACT RATHER THAN THE SELLER. Most states, including Pennsylvania, permit an attorney-in-fact holding a power of attorney to sign for a grantor. An attorney-in-fact is the person designated by a power of attorney to act on behalf of the principal, who in the case of a deed is the grantor.
A city dweller bought acreage in a distant county, never went to see it, and did not use it, although he regularly paid the real estate taxes on it. A farmer moved his mobile home onto the city dweller's property, drilled a well for water, and lived there for many years. The farmer may have become the owner of the acreage if he has complied with the state laws regardingA)the statute of frauds.B)intestate succession.C)the statute of limitations.D)adverse possession.
The answer is ADVERSE POSSESSION. An individual who makes a claim to a property, takes possession of it and, most important, uses it may take title away from an owner who fails to use or inspect the property for a period of years by adverse possession. The law recognizes that the use of land is an important function of its ownership.
Which of the following is an involuntary alienation of property?A)InheritanceB)Adverse possessionC)GiftD)Quitclaim
The answer is ADVERSE POSSESSION. Adverse possession is another means of involuntary transfer, in which the owner failed to use or inspect the property for a number of years; the law recognizes that the use of land is an important function of its ownership.
A property sold for $225,000, and the buyer put down 20 percent. If the state transfer tax is 1 percent, what amount was paid to the state?A)$450B)$2,250C)Not enough information providedD)$1,800
The answer is $2,250. In Pennsylvania, a state transfer tax, currently 1 percent, is imposed on the full consideration paid for the real estate. $225,000 × .01 = $2,250.
The deed that grants and releases and implies that the grantor has title is aA)trust deed.B)bargain and sale deed.C)special warranty deed.D)quitclaim deed.
The answer is BARGAIN AND SALE DEED. Although a bargain and sale deed contains no express warranties against encumbrances, it does imply that the grantor holds title and possession of the property.
Title to property transfers at the moment a deed isA)delivered and accepted.B)recorded.C)signed.D)acknowledged.
The answer is DELIVERED AND ACCEPTED. Title to real estate is transferred when the deed is delivered and accepted by the grantee. The grantor's signature, in and of itself, does not transfer title.
An instrument authorizing one person to act for another is calledA)a power of attorney.B)a quitclaim deed.C)an acknowledgment.D)a release deed.
The answer is A POWER OF ATTORNEY. Most states, including Pennsylvania, permit documents to be signed by an attorney-in-fact, the person designated by a power of attorney to act on behalf of the principal. The term power of attorney refers to the specific written authorization to act in that capacity.
Generally, where does a probate proceeding involving real property take place?A)Only in the county in which the property is locatedB)In both the county where the decedent resided and the county in which the property is locatedC)Only in the county win which the decedent residedD)In the county in which the executor or the beneficiary resides
The answer is IN BOTH THE COUNTY WHERE THE DECEDENT RESIDED AND THE COUNTY IN WHICH THE PROPERTY IS LOCATED. Probate proceedings take place in the county in which the decedent resided; if the decedent owned real estate in another county, probate would occur in that county as well.
What will happen to the real estate if the deceased owner did not write a will and has no heirs?A)The ownership will escheat.B)The ownership will revert to the previous owner.C)The courts will seize the ownership.D)The ownership will pass by devise.
The answer is THE OWNERSHIP WILL ESCHEAT. When a person dies intestate (with no will) and no heirs, the title to the estate passes to the state by the state's power of escheat.
A declaration before a notary or other official providing evidence that a signature is genuine is anA)estoppel.B)affirmation.C)affidavit.D)acknowledgment.
The answer is ACKNOWLEDGMENT. A formal declaration made before a notary public or authorized public officer that verifies that the person is voluntarily signing a document and that the person's signature is genuine is an acknowledgement.
A grantor does not wish to be responsible for defects in the title that arise from previous owners, but will guarantee the title for the time the grantor has the ownership. What type of deed would the grantor convey?A)Bargain and sale deedB)Reconveyance deedC)Special warranty deedD)Quitclaim deed
The answer is SPECIAL WARRANTY DEED. A special warranty deed contains two basic warranties: that the grantor received title and that the property was not encumbered during the time the grantor held title, except as noted in the deed.
The basic requirements for a valid conveyance are governed byA)local custom.B)state law.C)law of descent.D)national law.
The answer is STATE LAW. Conveyance of title to real estate is governed by the laws of the state in which the property is located, regardless of whether title transfers by voluntary or involuntary alienation, will, or descent.
Which deed would be MOST likely to recite the full, actual consideration paid for the property?A)Deed executed pursuant to court orderB)Trustee's deedC)Gift deedD)Deed in trust
The answer is DEED EXECUTED PURSUANT TO COURT ORDER. Deeds executed pursuant to court order recite the full, actual consideration paid for the property. When a court authorizes the sale of a property for a specific amount of consideration, this amount must be exactly stated in the document.
The law that requires transfers of real property ownership to be in writing is theA)parol evidence rule.B)statute of frauds.C)rule of civil procedure.D)statute of limitations.
The answer is STATUTE OF FRAUDS. A deed is a written instrument by which an owner of real estate intentionally conveys the owner's right, title, or interest in a parcel of real estate to another. The statute of frauds requires all deeds to be in writing.
In a voluntary transfer, the owner of the real estate must sign aA)gift deed.B)trustee's deed.C)tax deed.D)reconveyance deed.
The answer is GIFT DEED. In a voluntary transfer, such as a gift deed, the owner of the real estate signs the deed.
Which deed would be MOST likely to recite the full, actual consideration paid for the property?A)Gift deedB)Deed executed pursuant to court orderC)Trustee's deedD)Deed in trust
The answer is DEED EXECUTED PURSUANT TO COURT ORDER. Deeds executed pursuant to court order recite the full, actual consideration paid for the property. When a court authorizes the sale of a property for a specific amount of consideration, this amount must be exactly stated in the document.
Which of the following BEST describes the covenant of quiet enjoyment?A)The grantor warrants that no mortgages, mechanics' liens, or easements affect title to the property being conveyed.B)The grantor guarantees that the title will be good against the title claims of third parties.C)The grantor promises to obtain and deliver any instrument needed to make the title good.D)The gra

The answer is THE GRANTOR GUARANTEES THAT THE TITLE WILL BE GOOD AGAINST THE TITLE CLAIMS OF THIRD PARTIES. Of the five covenants in a general warranty deed, the covenant of quiet enjoyment establishes that the grantee's claim to title will be defended against third parties who bring court action in an attempt to establish superior title to the property.

It is essential that every deed be signed by theA)grantor and grantee.B)grantee.C)grantor.D)devisee.

The answer is GRANTOR. Only a grantor executes (signs) the deed. Title passes when the deed is delivered and accepted by the grantee.

Title to real estate may be transferred during a person's lifetime byA)devise.B)involuntary alienation.C)escheat.D)descent.

The answer is INVOLUNTARY ALIENATION. Devise, descent, and escheat all refer to transfer of title subsequent to the death of the titleholder. Involuntary alienation occurs by operation of law, as in a foreclosure or condemnation action.

The law that requires transfers of real property ownership to be in writing is theA)statute of limitations.B)statute of frauds.C)parol evidence rule.D)rule of civil procedure.

The answer is STATUTE OF FRAUDS. A deed is a written instrument by which an owner of real estate intentionally conveys the owner's right, title, or interest in a parcel of real estate to another. The statute of frauds requires all deeds to be in writing.

A person who has died leaving a valid will is calledA)intestate.B)an escrow agent.C)a devisee.D)a testator.

The answer is A TESTATOR. From a legal perspective, a person dies either testate (with a will) or intestate (without a will.) The person who dies leaving a will is known as the testator.

Which deed merely implies but does NOT specifically warrant that the grantor holds good title to the property?A)Special warranty deedB)Quitclaim deedC)Trustee's deedD)Bargain and sale deed

The answer is BARGAIN AND SALE DEED. A bargain and sale deed contains no expressed warranties against encumbrances. It does, however, imply that the grantor holds title to the property.

A city dweller bought acreage in a distant county, never went to see it, and did not use it, although he regularly paid the real estate taxes on it. A farmer moved his mobile home onto the city dweller's property, drilled a well for water, and lived there for many years. The farmer may have become the owner of the acreage if he has complied with the state laws regardingA)intestate succession.B)adverse possession.C)the statute of frauds.D)the statute of limitations.

The answer is ADVERSE POSSESSION. An individual who makes a claim to a property, takes possession of it and, most important, uses it may take title away from an owner who fails to use or inspect the property for a period of years by adverse possession. The law recognizes that the use of land is an important function of its ownership.

A man owns a one-quarter undivided interest in a parcel of land, and he wants his interest transferred to his sister. As a rule, which of the following actions will transfer the man's undivided interest out of his name?A)The delivery of the deedB)The acceptance by signature of an offer to purchaseC)The making and the signing of a willD)The redemption from a foreclosure sale

The answer is THE DELIVERY OF THE DEED. A title is not considered transferred until the deed is actually delivered to and accepted by the grantee. The grantor may deliver the deed to the grantee either personally or through a third party.

The BEST reason for a buyer to obtain title insurance isA)that the mortgage lender requires it.B)to ensure that the seller can deliver marketable title.C)to ensure that the abstractor has prepared a complete summary of title.D)to pay future liens that may be filed.

The answer is TO ENSURE THAT THE SELLER CAN DELIVER MARKETABLE TITLE. Title insurance is considered the best defense of title; the title insurance company will defend any lawsuit based on an insurable defect and pay claims if the title proves to be defective

A sales contract requires the seller to deliver marketable title. Which of the following is TRUE?A)The seller will remove all encumbrances.B)A search of the public records will prove that the title is marketable.C)The delivery of a general warranty deed will provide this assurance.D)The seller will pay all liens that are pending.

The answer is A SEARCH OF THE PUBLIC RECORDS WILL PROVE THAT THE TITLE IS MARKETABLE. Public records contain detailed information about each parcel of real estate and are crucial in establishing ownership, giving notice of encumbrances, and establishing priority of liens. They protect the interests of real estate owners, taxing bodies, creditors, and the public.

The mortgagee purchases a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE?A)The amount of coverage increases as the borrower's equity increases.B)The amount of coverage is commensurate with the loan amount.C)The policy is issued for the benefit of the buyer.D)The policy guarantees that the buyer's equity will be protected.

The answer is THE AMOUNT OF COVERAGE IS COMMENSURATE WITH THE LOAN AMOUNT. A lender's policy is issued for the benefit of the mortgagee. The amount of the coverage depends on the amount of the mortgage loan.

Which of the following would be used to clear a defect from the title records?A)An estoppel certificateB)A suit to quiet titleC)A writ of attachmentD)A lis pendens

The answer is A SUIT TO QUIET TITLE. If ownership cannot be traced through an unbroken chain, a gap or cloud in the chain of title is said to exist. In these cases, the cloud on the title makes it necessary to establish ownership by a court action called a suit to quiet title.

To give notice of a security interest in personal property items, a lienholder must record which of the following?A)Chattel agreementB)Financing statementC)Security agreementD)Quitclaim deed

The answer is FINANCING STATEMENT. For a lender to create a security interest in personal property, the Uniform Commercial Code (UCC) requires the borrower to sign a security agreement. A short notice of this agreement, called a financing statement or UCC-1, must be filed with the recorder of deeds.

Chain of title is MOST accurately defined asA)an instrument or document that protects the insured parties (subject to specific exceptions) against defects in the examination of the record and hidden risks such as forgeries, undisclosed heirs, errors in the public records, and so forth.B)a record of the property's ownership.C)a summary or history of all instruments and legal proceedings affecting a specific parcel of land.D)a report of the contents of the public record regarding a particular property.

The answer is A RECORD OF THE PROPERTY'S OWNERSHIP. The term chain of title refers to the record of a property's ownership over a period of time. Each owner is linked to the next, and then to the next, and so on, so that a "chain" is formed.

When the title insurance company settles a claim, the company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is known asA)surety bonding.B)subordination.C)caveat emptor.D)subrogation.

The answer is SUBROGATION. When a title company makes a payment to settle a claim covered by a policy, the company generally acquires the right to any remedy or damages available to the insured. This right is called subrogation.

What is the effect of recording a warranty deed?A)Guarantees ownershipB)Protects the interests of the granteeC)Allows claims of parties in possessionD)Provides defense against adverse possession

The answer is PROTECTS THE INTERESTS OF THE GRANTEE. Properly recording documents in the public record serves as constructive notice to the world of an individual's rights or interest, as does taking physical possession of a property.

Which of the following are traditionally covered by a standard title insurance?A)Unrecorded liens not known to the policyholderB)Changes in land use due to zoning ordinancesC)Improperly delivered deedsD)Unrecorded rights of parties in possession

The answer is IMPROPERLY DELIVERED DEEDS. A standard title insurance policy usually covers improperly delivered deeds, defects found in public records, forged documents, incompetent grantors, and incorrect marital statements.

A title search of the public records may be conducted byA)anyone who obtains a court order under the Freedom of Information Act.B)attorneys and abstractors only.C)attorneys, abstractors, and real estate licensees only.D)anyone.

The answer is ANYONE. By entering documents into the public record, the information becomes available to anyone who may be interested in researching the title to a parcel of real estate. Access to public records in unlimited.

The body of law that covers topics such as security agreements, financing statements, and bulk transfers is theA)American Land Title Association.B)Uniform Commercial Code.C)Parol Evidence Rule.D)Statute of Limitations.

The answer is UNIFORM COMMERCIAL CODE. The Uniform Commercial Code (UCC) is a commercial law statute that applies to personal property transactions; it does not apply to real estate. The UCC governs the documents when personal property is used as security for a loan.

What office maintains MOST of the public records that affect title to real property in Pennsylvania?A)County treasurerB)Clerks of courtC)Assessor's officeD)County recorder of deeds

The answer is COUNTY RECORDER OF DEEDS. In Pennsylvania, the county recorder of deeds maintains most of the public records that affect title to real property. The county treasurer and clerks of courts and other county and municipal offices maintain other important records as well.

To be eligible for recording in Pennsylvania, a document must be in writing, properly executed andA)witnessed.B)countersigned.C)the signature verified.D)acknowledged.

The answer is ACKNOWLEDGED. To be eligible for recording in Pennsylvania, a document must be in writing, properly executed (signed), and acknowledged before a notary public.

The BEST reason for a buyer to obtain title insurance isA)to ensure that the seller can deliver marketable title.B)to ensure that the abstractor has prepared a complete summary of title.C)that the mortgage lender requires it.D)to pay future liens that may be filed.

The answer is TO ENSURE THAT THE SELLER CAN DELIVER MARKETABLE TITLE. Title insurance is considered the best defense of title; the title insurance company will defend any lawsuit based on an insurable defect and pay claims if the title proves to be defective.

A buyer took delivery of the deed to his new house, but forgot to record the deed. Under these circumstances, theA)deed in invalid after six months.B)transfer of the property from the seller is ineffective.C)buyer's interest is not fully protected against third parties.D)deed is invalid after 90 days.

The answer is BUYER'S INTEREST IS NOT FULLY PROTECTED AGAINST THIRD PARTIES. Recording acts also generally give legal priority to those interests recorded first—the first in time, first in right, or first come-first served principle; such protection is not available until the deed is recorded.

When the title insurance company settles a claim, the company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is known asA)subordination.B)surety bonding.C)caveat emptor.D)subrogation.

The answer is SUBROGATION. When a title company makes a payment to settle a claim covered by a policy, the company generally acquires the right to any remedy or damages available to the insured. This right is called subrogation.

A title insurance policy with standard coverage generally covers all of the following EXCEPTA)incompetent grantors.B)forged documents.C)rights of parties in possession.D)incorrect marital statements.

The answer is RIGHTS OF PARTIES IN POSSESSION. A standard coverage title insurance policy normally insures the title as it is known from public records. This coverage does not include the rights of the parties in possession, but it does include such defects as forged documents, conveyances by incompetent grantors, incorrect marital statements, and improperly delivered deeds.

The document(s) called title evidence includeA)title insurance.B)warranty deeds.C)security agreements.D)abstract of title.

The answer is TITLE INSURANCE. Title evidence establishes proof of ownership. In Pennsylvania, a certificate of title or title insurance is used as proof of ownership.

The part of the title insurance policy that sets forth all the encumbrances and defects that will not be insured against is calledA)citation clause.B)schedule of defects.C)exclusions.D)nonexclusionary clause.

The answer is EXCLUSIONS. The policy generally names certain uninsurable losses, called exclusions. These include zoning ordinances, restrictive covenants, easements, certain water rights, current taxes, and special assessments.

The person who prepares an abstract of title for a parcel of real estateA)issues a certificate of title.B)inspects the property.C)writes a brief history of the title after inspecting the county records for documents affecting the title.D)insures the condition of the title.

The answer is WRITES A BRIEF HISTORY OF THE TITLE AFTER INSPECTING THE COUNTY RECORDS FOR DOCUMENTS AFFECTING THE TITLE. An abstractor examines public records in the recorder of deeds and other government offices. Following the search, the abstractor prepares a summary report of events and proceedings throughout the title's history. This report is an abstract of title.

Which of the following are traditionally covered by a standard title insurance?A)Improperly delivered deedsB)Unrecorded liens not known to the policyholderC)Changes in land use due to zoning ordinancesD)Unrecorded rights of parties in possession

The answer is IMPROPERLY DELIVERED DEEDS. A standard title insurance policy usually covers improperly delivered deeds, defects found in public records, forged documents, incompetent grantors, and incorrect marital statements.

A buyer bought a house, received a deed, and moved into the residence but neglected to record the document. One week later, the seller died, and the heirs in another city, unaware that the property had been sold, conveyed title to a relative, who recorded the deed. Who owns the property?A)Both the buyer and the relativeB)The relativeC)The seller's heirsD)The buyer

The answer is THE BUYER. By taking physical, actual possession of the property, the buyer has given constructive notice of the buyer's interest. Even though the buyer did not record the deed, the buyer's interest would be superior to that of future purchaser.

A buyer took delivery of the deed to his new house, but forgot to record the deed. Under these circumstances, theA)transfer of the property from the seller is ineffective.B)deed in invalid after six months.C)buyer's interest is not fully protected against third parties.D)deed is invalid after 90 days.

The answer is BUYER'S INTEREST IS NOT FULLY PROTECTED AGAINST THIRD PARTIES. Recording acts also generally give legal priority to those interests recorded first—the first in time, first in right, or first come-first served principle; such protection is not available until the deed is recorded.

Chain of title is MOST accurately defined asA)a summary or history of all instruments and legal proceedings affecting a specific parcel of land.B)a record of the property's ownership.C)a report of the contents of the public record regarding a particular property.D)an instrument or document that protects the insured parties (subject to specific exceptions) against defects in the examination of the record and hidden risks such as forgeries, undisclosed heirs, errors in the public records, and so forth.

The answer is A RECORD OF THE PROPERTY'S OWNERSHIP. The term chain of title refers to the record of a property's ownership over a period of time. Each owner is linked to the next, and then to the next, and so on, so that a "chain" is formed.

A title search of the public records may be conducted byA)anyone.B)attorneys and abstractors only.C)anyone who obtains a court order under the Freedom of Information Act.D)attorneys, abstractors, and real estate licensees only.

The answer is ANYONE. By entering documents into the public record, the information becomes available to anyone who may be interested in researching the title to a parcel of real estate. Access to public records in unlimited.

The person who prepares an abstract of title for a parcel of real estateA)issues a certificate of title.B)insures the condition of the title.C)inspects the property.D)writes a brief history of the title after inspecting the county records for documents affecting the title.

The answer is WRITES A BRIEF HISTORY OF THE TITLE AFTER INSPECTING THE COUNTY RECORDS FOR DOCUMENTS AFFECTING THE TITLE. An abstractor examines public records in the recorder of deeds and other government offices. Following the search, the abstractor prepares a summary report of events and proceedings throughout the title's history. This report is an abstract of title.

Documents affecting real estate are recorded or filed with the county in which the property is located in order toA)comply with the terms of the statute of frauds.B)satisfy the legal requirements for recording.C)prove the execution of the document.D)give constructive notice of the real estate interest.

The answer is GIVE CONSTRUCTIVE NOTICE OF THE REAL ESTATE INTEREST. Constructive notice is the legal presumption that information is available and can be obtained by an individual through diligent inquiry.

Which of the following would be used to clear a defect from the title records?A)A suit to quiet titleB)A writ of attachmentC)A lis pendensD)An estoppel certificate

The answer is A SUIT TO QUIET TITLE. If ownership cannot be traced through an unbroken chain, a gap or cloud in the chain of title is said to exist. In these cases, the cloud on the title makes it necessary to establish ownership by a court action called a suit to quiet title.

A sales contract requires the seller to deliver marketable title. Which of the following is TRUE?A)The seller will remove all encumbrances.B)The delivery of a general warranty deed will provide this assurance.C)The seller will pay all liens that are pending.D)A search of the public records will prove that the title is marketable.

The answer is A SEARCH OF THE PUBLIC RECORDS WILL PROVE THAT THE TITLE IS MARKETABLE. Public records contain detailed information about each parcel of real estate and are crucial in establishing ownership, giving notice of encumbrances, and establishing priority of liens. They protect the interests of real estate owners, taxing bodies, creditors, and the public.

Evidence of the kind of estate and all liens against a parcel of real estate can usually be proven byA)a foreclosure suit.B)one of the forms of proof of ownership.C)a recorded deed.D)a court suit for specific performance.

The answer is ONE OF THE FORMS OF PROOF OF OWNERSHIP. Proof of ownership is evidence that title to the property is marketable. The grantor's interest in the property, as well as proof of the condition of the grantor's interest at the time of conveyance, can be ascertained by a certificate of title or title insurance. Both are used as proof of ownership.

Which of the following are traditionally covered by a standard title insurance?A)Changes in land use due to zoning ordinancesB)Improperly delivered deedsC)Unrecorded liens not known to the policyholderD)Unrecorded rights of parties in possession

The answer is IMPROPERLY DELIVERED DEEDS. A standard title insurance policy usually covers improperly delivered deeds, defects found in public records, forged documents, incompetent grantors, and incorrect marital statements.

The mortgagee purchases a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE?A)The amount of coverage increases as the borrower's equity increases.B)The policy is issued for the benefit of the buyer.C)The policy guarantees that the buyer's equity will be protected.D)The amount of coverage is commensurate with the loan amount.

The answer is THE AMOUNT OF COVERAGE IS COMMENSURATE WITH THE LOAN AMOUNT. A lender's policy is issued for the benefit of the mortgagee. The amount of the coverage depends on the amount of the mortgage loan.

The mortgagee received a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE?A)The policy guarantees that the buyer's equity will be protected.B)The amount of coverage increases as the borrower's equity increases.C)The policy is issued for the benefit of the buyer.D)The amount of coverage is commensurate with the loan amount.

The answer is THE AMOUNT OF COVERAGE IS COMMENSURATE WITH THE LOAN AMOUNT. The lender's title insurance policy is issued for the benefit of the mortgage company, and the amount of coverage depends on the amount of the mortgage loan.

What is the effect of recording a warranty deed?A)Provides defense against adverse possessionB)Guarantees ownershipC)Protects the interests of the granteeD)Allows claims of parties in possession

The answer is PROTECTS THE INTERESTS OF THE GRANTEE. Properly recording documents in the public record serves as constructive notice to the world of an individual's rights or interest, as does taking physical possession of a property.

Which statement BEST explains why instruments affecting real estate are recorded?A)The law requires that such instruments be recorded.B)Recording gives constructive notice to the world of the rights and interests in a particular parcel of real estate.C)Recording proves the execution of the instrument.D)The instruments must be recorded to comply with the terms of the statute of frauds.

The answer is RECORDING GIVES CONSTRUCTIVE NOTICE TO THE WORLD OF THE RIGHTS AND INTERESTS IN A PARTICULAR PARCEL OF REAL ESTATE. Properly recording documents in the public record serves as constructive notice to the world of a party's right, claim, or interest in real estate. The information is available to and can be obtained by anyone through diligent inquiry.

The body of law that covers topics such as security agreements, financing statements, and bulk transfers is theA)Statute of Limitations.B)Uniform Commercial Code.C)Parol Evidence Rule.D)American Land Title Association.

The answer is UNIFORM COMMERCIAL CODE. The Uniform Commercial Code (UCC) is a commercial law statute that applies to personal property transactions; it does not apply to real estate. The UCC governs the documents when personal property is used as security for a loan.

If a property has encumbrances, itA)can be sold if a buyer agrees to take it, subject to the encumbrances.B)can be sold only if title insurance is provided.C)cannot have a deed recorded without a survey.D)cannot be sold.

The answer is CAN BE SOLD IF A BUYER AGREES TO TAKE IT, SUBJECT TO THE ENCUMBRANCES. An encumbrance is a right, claim, or interest held by someone other than the landowner. The fact that title is encumbered does not prevent that title from being transferred, but the new owner's title would be subject to those existing encumbrances.

A sales contract requires the seller to deliver marketable title. Which of the following is TRUE?A)The seller will pay all liens that are pending.B)The delivery of a general warranty deed will provide this assurance.C)The seller will remove all encumbrances.D)A search of the public records will prove that the title is marketable.

The answer is A SEARCH OF THE PUBLIC RECORDS WILL PROVE THAT THE TITLE IS MARKETABLE. Public records contain detailed information about each parcel of real estate and are crucial in establishing ownership, giving notice of encumbrances, and establishing priority of liens. They protect the interests of real estate owners, taxing bodies, creditors, and the public.

A legally enforceable agreement under which two parties agree to do something for each other is known asA)an option agreement.B)a valid contract.C)a legal promise.D)an escrow agreement.

The answer is A VALID CONTRACT. A contract is a voluntary agreement or promise between legally competent parties to do or refrain from doing certain things. A contract is valid if it meets the essential requirements of contract law that make it legally sufficient to be enforceable in court.

A written real estate contract is assumed to be the complete agreement of the parties because of theA)rule of contracts.B)statute of frauds.C)parol evidence rule.D)statute of limitations.

The answer is PAROL EVIDENCE RULE. Under the parol evidence rule, a written contract takes precedence over oral agreements or promises.

Which of the following keeps an offer open?A)An offer from a third partyB)Revocation of the offer before acceptanceC)A counteroffer by the offereeD)Death of the offeror before acceptance

The answer is AN OFFER FROM A THIRD PARTY. An offer from another party does not terminate an offer on the table; however, offers are terminated by revocation before acceptance, the death of the offeror before acceptance, and a counteroffer by the offeree.

A contractor has finished a home except for a few small details. The homebuyer and the contractor agree that the work is complete enough to consider the contract discharged. In this situation, the contractor is entitled to final payment based onA)specific performance.B)forfeiture.C)partial performance.D)operation of law.

The answer is PARTIAL PERFORMANCE. Partial performance of the terms, along with a written acceptance by the other party for whom acts have not been done or to whom money is owed. For instance, if the parties agree that performance is close enough to completion, they can agree that the contract is discharged even if some minor elements remain unperformed.

The statute of frauds, which requires that a contract be in writing to be enforceable, applies toA)bilateral contracts only.B)all real estate sales agreements.C)all contracts.D)all real estate contracts of any sort.

The answer is ALL REAL ESTATE SALES AGEREMENTS. The statute of frauds requires certain types of contracts to be in writing to be enforceable. By statute, agreements of sale for real estate and certain lease agreements must be written.

A licensee has found a buyer for the seller's home. The buyer has indicated in writing his willingness to buy the property for $1,000 less than the asking price and has deposited $5,000 earnest money with the broker. The seller is out of town for the weekend, and the licensee has been unable to inform the seller of the signed document. At this point, the buyer has signedA)a voidable contract.B)an implied contract.C)an executory agreement.D)an offer

The answer is AN OFFER. Offer and acceptance is essential for a valid contract. The seller has not accepted the terms of the offer made by the buyer. Therefore, the buyer has only signed and made an offer to purchase, but the document has no legal standing as a contract.

In Pennsylvania, under what conditions may real estate licensees fill in the blanks on certain preprinted documents, such as agreements of sale?A)Only if the forms are subsequently reviewed by an attorney at lawB)As long as they charge only a minimal feeC)As long as they do not charge a fee for this serviceD)With written permission from the consumer

The answer is AS LONG AS THEY DO NOT CHARGE A FEE FOR THIS SERVICE. In Pennsylvania, licensees are permitted to fill in the blanks on certain preprinted documents such as agreements of sale and leases as long as they do not charge a separate fee for completing the forms.

The Plain Language Consumer Contract Act in Pennsylvania applies toA)deeds.B)mortgage documents.C)agreements of sale and leases.D)title insurance contracts.

The answer is AGREEMENTS OF SALE AND LEASES. The Plain Language Consumer Contract Act in Pennsylvania promotes the use of plain language to protect consumers from making contracts they do not understand, such as loan documents and agreements of sale and leases; exempt documents include deeds, mortgages, certificates of title and title insurance contracts, documents used by state or federal financial institutions, contracts to buy securities, insurance policies, and commercial leases.

A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure," and they agree to a price. What kind of contract is this?A)BilateralB)ExpressC)ImpliedD)Unenforceable

The answer is UNENFORCEABLE. An oral agreement is valid between the parties, but not enforceable in a court of law.

Which of the following is NOT one of the essentials of a valid contract?A)Earnest moneyB)Offer and acceptanceC)ConsiderationD)Legality of object

The answer is EARNEST MONEY. The requirements of a valid contract include offer and acceptance, consideration, and legality of object. An earnest money deposit is not necessary for a contract to exist.

If a real estate sales contract states that time is of the essence and the stipulated date of transfer comes and goes without a closing, the contract isA)novated.B)breached.C)still valid.D)binding for only 30 more days.

The answer is BREACHED. "Time is of the essence" means that the contract obligations must be performed within the specific time frames stated in the contract. A party who fails to perform on time is liable for breach of contract.

A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure," and they agree to a price. What kind of contract is this?A)ImpliedB)ExpressC)BilateralD)Unenforceable

The answer is UNENFORCEABLE. An oral agreement is valid between the parties, but not enforceable in a court of law.

Which of the following keeps an offer open?A)An offer from a third partyB)A counteroffer by the offereeC)Revocation of the offer before acceptanceD)Death of the offeror before acceptance

The answer is AN OFFER FROM A THIRD PARTY. An offer from another party does not terminate an offer on the table; however, offers are terminated by revocation before acceptance, the death of the offeror before acceptance, and a counteroffer by the offeree.

At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of a building when, in fact, the seller knew it was not. This contract isA)voidable by the buyer because of fraud.B)voidable by neither party because no harm was done yet.C)voidable by the seller because of the mistake.D)void.

The answer is VOIDABLE BY THE BUYER BECAUSE OF FRAUD. A voidable contract appears on the surface to be valid, but may be rescinded or disaffirmed by one or both parties based on some legal principle. In this situation, the buyer, but not the seller, is permitted to void the contract if so desired.

A contract is said to be bilateral ifA)one of the parties is a minor.B)only one party to the agreement is bound to act.C)the contract has yet to be fully performed.D)all parties to the contract are bound to act.

The answer is ALL PARTIES TO THE CONTRACT ARE BOUND TO ACT. A bilateral contract is one in which all parties (both sides of the contract) promise to do something. The basis of the contractual relationship is an exchange of promises: "I will do this, and in return you will do that."

A contract for the sale of real estate that does not state the consideration to be paid for the property and is not signed by the parties is consideredA)executory.B)voidable.C)void.D)enforceable.

The answer is VOID. A definite statement of consideration must be included in a contract as evidence that something of value was given in exchange for the promises made. If there is no consideration, the contract is void.

A void contract isA)not legally enforceable.B)voidable by only one of the parties.C)not in writing.D)rescindable by agreement.

The answer is NOT LEGALLY ENFORCEABLE. A void contract has no legal force or effect because it lacks some or all of the essential elements of a contract. A void contract was never a legal contract.

A legally enforceable agreement under which two parties agree to do something for each other is known asA)an option agreement.B)an escrow agreement.C)a legal promise.D)a valid contract.

The answer is A VALID CONTRACT. A contract is a voluntary agreement or promise between legally competent parties to do or refrain from doing certain things. A contract is valid if it meets the essential requirements of contract law that make it legally sufficient to be enforceable in court.

The Plain Language Consumer Contract Act in Pennsylvania applies toA)deeds.B)mortgage documents.C)title insurance contracts.D)agreements of sale and leases.

The answer is AGREEMENTS OF SALE AND LEASES. The Plain Language Consumer Contract Act in Pennsylvania promotes the use of plain language to protect consumers from making contracts they do not understand, such as loan documents and agreements of sale and leases; exempt documents include deeds, mortgages, certificates of title and title insurance contracts, documents used by state or federal financial institutions, contracts to buy securities, insurance policies, and commercial leases.

In Pennsylvania, an electronic signature isA)void.B)valid.C)unenforceable.D)voidable.

The answer is VALID. Pennsylvania's Electronic Transaction Act facilitates e-commerce and protects the rights of consumers in electronic transactions. The law generally provides that, with the consumer's consent, electronic records or signatures meet the requirement for a record to be in writing, and that an electronic signature is recognized as valid.

The borrower under a deed of trust is known as theA)vendee.B)beneficiary.C)trustee.D)trustor.

The answer is TRUSTOR. In financing arrangements in which a deed of trust rather than a mortgage is used, the borrower transfers title to the property to a trustee, who then holds title for the lender as the beneficiary. The borrower is the trustor.

A borrower obtains a $76,000 mortgage loan at 7½ percent interest. If the monthly payments of $531.24 are credited first to interest and then to principal, what will the balance of the principal be after the borrower makes the first payment?A)$75,468.76B)$70,300.00C)$75,525.00D)$75,943.76

The answer is $75,943.76. At a 7½ percent interest rate, a $76,000 loan would result in $5,700 interest per year ($76,000 × 7.5% or 0.075). Interest for one month would equal $475 ($5,700 ÷ 12). If the principal and interest payment was $531.24, the amount attributed to principal is $56.24 ($531.24 – $475). After that payment, the remaining principal balance would be $75,943.76.

A friendly foreclosure enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished byA)assumption.B)a reconveyance deed.C)an escrow deed.D)a deed in lieu of foreclosure.

The answer is DEED IN LIEU OF FORECLOSURE. As an alternative to foreclosure, the lender may accept a deed in lieu of foreclosure from the borrower by mutual agreement rather than by lawsuit. The lender loses rights pertaining to mortgage insurance claims and junior liens are not eliminated.

What is the purpose of a mortgage?A)To provide security for the loanB)To convey title of the property to the lenderC)To create a lien on the propertyD)To restrict the borrower's use of the property

The answer is TO PROVIDE SECURITY FOR THE LOAN. A mortgage is a lien on the real property of a debtor to provide security for the loan. If a borrower defaults on the payments or fails to fulfill any of the other obligations set forth in the mortgage or deed of trust, the lender's rights can be enforced through foreclosure

Which of the following is NOT a participant in the secondary market?A)Fannie MaeB)Ginnie MaeC)Freddie MacD)Local credit union

The answer is LOCAL CREDIT UNION. A local credit union participates in the primary market. The secondary market consists of Fannie Mae, Freddie Mac, and Ginnie Mae.

With a fully amortized mortgage loan,A)interest may be charged in arrears, meaning at the end of each period for which interest is due.B)interest only is paid each period.C)a portion of the principal will still be owed at the end of the term of the loan.D)the interest portion of each payment remains the same throughout the entire term of the loan.

The answer is INTEREST MAY BE CHARGED IN ARREARS, MEANING AT THE END OF EACH PERIOD FOR WHICH INTEREST IS DUE. A fully amortized mortgage loan requires fixed payments at regular intervals, usually monthly. Interest is paid in arrears and is calculated on the principal owed for that period. The amount attributed to principal and interest changes with each payment, with the entire debt and all interest having been paid in full at the end of the loan term.

The pledging of property as security for payment of a loan without giving up possession is calledA)hypothecation.B)equity.C)subordination.D)disintermediation.

The answer is HYPOTHECATION. When a borrower is required to pledge specific real property as security (collateral) for the loan, and the debtor retains the right of possession and control, the creditor receives an underlying equitable right in the pledged property. This type of pledging is termed hypothecation.

A borrower is charged 4.5 percent interest rate, one discount point, and one point for loan origination. Which one increases the lender's yield (rate of return) on its investment?A)Interest rateB)Loan origination feeC)Discount pointD)All of these

The answer is DISCOUNT POINT. Discount points are used to increase the lender's yield (rate of return) on its investment, especially when the interest rate that a lender charges for a loan might be less than the yield an investor demands. To make up the difference, the lender charges the borrower discount points.

The clause in a note that gives the lender the right to have all future installments become due upon default is theA)escalation clause.B)alienation clause.C)acceleration clause.D)defeasance clause.

The answer is ACCELERATION CLAUSE. When a borrower is delinquent in making payments or breaches other conditions of the mortgage, the lender may declare the entire debt due and payable immediately. This right is provided in the acceleration clause.

The original lender may sell the mortgage note to a third party, such as an investor or another mortgage company, byA)acceleration.B)acceleration of payments.C)implementing lien theories.D)assignment of mortgage.

The answer is ASSIGNMENT OF MORTGAGE. Without changing the provisions of a contract, the original mortgagee can sell the mortgage note by endorsing the note to the third party and executing an assignment of mortgage.

The clause in a note that gives the lender the right to have all future installments become due upon default is theA)alienation clause.B)escalation clause.C)acceleration clause.D)defeasance clause.

The answer is ACCELERATION CLAUSE. When a borrower is delinquent in making payments or breaches other conditions of the mortgage, the lender may declare the entire debt due and payable immediately. This right is provided in the acceleration clause.

Before a foreclosure sale, the borrower who has defaulted on the loan may seek to pay off the debt plus any accrued interest and costs under the right ofA)usury.B)equitable redemption.C)statutory redemption.D)defeasance.

The answer is EQUITABLE REDEMPTION. Certain states, though not Pennsylvania, allow defaulted borrowers a period during which they can redeem their real estate after the foreclosure sale. This period is known as a statutory redemption period.

The buyer borrowed $85,000 to be repaid in monthly installments of $530.20 at 7 percent annual interest. How much of the buyer's first month's payment was applied to reducing the principal amount of the loan?A)$40.00B)$530.20C)$495.83D)$34.37

The answer is $34.37. $85,000 × .07 = $495.83 interest due for first month. $530.20 – $495.83 = $34.37 applied to principal. After the first month's payment, the borrower owes $84,966.63.

What clause in a mortgage permits the lender to declare the entire unpaid balance due immediately upon default?A)Judgment clauseB)Acceleration clauseC)Escalator clauseD)Forfeiture clause

The answer is ACCELERATION CLAUSE. An acceleration clause permits the lender to declare the entire debt due and payable immediately. Without the acceleration clause, the lender would have to sue the borrower every time a payment was overdue.

What clause in many loans prevents the loan from being assumed by a future borrower?A)Foreclosure clauseB)Defeasance clauseC)Alienation clauseD)Acceleration clause

The answer is ALIENATION CLAUSE. An alienation clause, also known as a due-on-sale or resale clause, permits the lender to declare the entire loan balance due immediately upon the sale of the property. Lenders include this clause to prevent a second borrower from assuming a loan that has a current lower interest rate.

A borrower obtains a $100,000 mortgage loan for 30 years at 6 percent interest. If the monthly payments of $575 are credited first to interest and then to principal, what will be the balance of the principal after the borrower makes the first payment?A)$99,425B)$99,500C)$100,000D)$99,925

The answer is $99,925. $100,000 × .06 ÷ 12 = $500 first month's interest payment. $575 – $500 = $75; the $75 reduces the principal. After the first payment, the borrower owes $99,925.

With a fully amortized mortgage loan,A)interest may be charged in arrears, meaning at the end of each period for which interest is due.B)a portion of the principal will still be owed at the end of the term of the loan.C)the interest portion of each payment remains the same throughout the entire term of the loan.D)interest only is paid each period.

The answer is INTEREST MAY BE CHARGED IN ARREARS, MEANING AT THE END OF EACH PERIOD FOR WHICH INTEREST IS DUE. A fully amortized mortgage loan requires fixed payments at regular intervals, usually monthly. Interest is paid in arrears and is calculated on the principal owed for that period. The amount attributed to principal and interest changes with each payment, with the entire debt and all interest having been paid in full at the end of the loan term.

What is the process known as friendly foreclosure, whereby a delinquent borrower can avoid foreclosure?A)Voluntary alienationB)Deed in lieu of foreclosureC)Nonjudicial alienationD)Assignment of the mortgage

The answer is DEED IN LIEU OF FORECLOSURE. As an alternative to foreclosure, the lender may accept a deed in lieu of foreclosure from the borrower. This is sometimes known as a friendly foreclosure because it is carried out by mutual agreement rather than by lawsuit.

The finance fee charged by the lender to make the loan isA)a loan origination fee.B)an advance interest payment.C)a prepayment penalty.D)a prepayment of mortgage insurance.

The answer is A LOAN ORIGINATION FEE. Most lenders charge a loan origination fee to cover the expenses involved in generating the loan; such expenses include the loan officer's salary, paperwork, and the lender's other costs of doing business.

In which type of loan is the loan amount divided into two parts, to be paid off separately by periodic interest payments followed by payment of the principal in full at the end of the term?A)AmortizedB)BalloonC)ARMD)Straight

The answer is STRAIGHT. Under a straight, or term, loan, the borrower makes interest-only payments for the term and then pays the principal in one payment at the end of the term.

Which of the following is TRUE regarding the Real Estate Recovery Fund?A)The aggrieved person may sue the licensee for further damages if the amount paid is insufficient.B)The maximum amount that may be paid to the aggrieved person is $30,000.C)The licensee's license is automatically revoked.D)The licensee's license is suspended until the full amount recovered out of the fund, plus interest, is repaid.

The answer is THE LICENSEE'S LICENSE IS SUSPENDED UNTIL THE FULL AMOUNT RECOVERED OUT OF THE FUND, PLUS INTEREST, IS REPAID. Chapter 8 of the RELRA addresses the Real Estate Recovery Fund, including the fact that a license is suspended until the amount paid from the fund is restored in full plus interest at the rate of 10 percent per year.

A broker of recordA)oversees the activities of a cemetery broker.B)is a broker who is permitted to sell dwellings only for the builder-owner.C)is the licensee responsible for the activities in a real estate corporation.D)is employed by another broker.

The answer is IS THE LICENSEE RESPONSIBLE FOR THE ACTIVITIES IN A REAL ESTATE CORPORATION. The broker of record is the individual broker responsible for the licensed real estate activities of a partnership, association, or corporation licensed as broker.

A real estate licensee may be disciplined forA)placing a For Sale sign on a property with the written consent of the owner.B)accepting a commission or other valuable consideration from a person other than the employing broker.C)preserving the records relating to any real estate transaction for five years.D)acting for more than one party in a transaction with the knowledge of and consent in writing from all parties.

The answer is ACCEPTING A COMMISSION OR OTHER VALUABLE CONSIDERATION FROM A PERSON OTHER THAN THE EMPLOYING BROKER. Section 604 of the RELRA lists more than 24 specifically prohibited acts, among which is accepting a commission from anyone other than the employing broker. Licensees who engage in a prohibited act may be fined or have their licenses suspended or revoked.

An 18-year-old woman has just received her salesperson real estate license. For how long must she be engaged as a real estate licensee before she can apply for a broker's license?A)At least one year of active licensure; up to two years on inactive statusB)One year of active licensureC)Two years of active licensure within the past five yearsD)Three years of active licensure

The answer is THREE YEARS OF ACTIVE LICENSURE. A broker candidate must be at least 21 years of age and have been engaged as a licensed real estate salesperson for at least three years or have experience and/or education that the Commission considers equivalent.

The Real Estate Commission may take disciplinary action against a licensee for all of the followingEXCEPTA)violating the Rules and Regulations.B)violating the Pennsylvania Human Relations Act.C)violating the Real Estate Licensing and Registration Act.D)violating blue-sky laws.

The answer is VIOLATING BLUE-SKY LAWS. Violation of the blue sky laws would result in prosecution by federal and state authorities, but not the State Real Estate Commission (SREC). The SREC has jurisdiction over violations of the RELRA and its Rules and Regulations, which includes Section 604 (22) of the rules for violations of the Pennsylvania Human Relations Act.

A salesperson wants to change offices. The salesperson returns her current license along with the required fee and the change of employment notification. At which time may the salesperson be involved in real estate activities on behalf of the second broker?A)Within ten days after the application for change has been mailedB)Only when the second broker receives the new licenseC)Immediately upon mailing the change of employment notificationD)At the time the salesperson agrees to change to the second broker

The answer is IMMEDIATELY UPON MAILING THE CHANGE OF EMPLOYMENT NOTIFICATION. The change of employment notification serves as temporary license. A current license will be issued at the new location (as long as it is an approved office) for the unexpired license period.

Which statement regarding the Pennsylvania Real Estate Commission is FALSE?A)Examinations that must be taken by applicants for real estate licensing are administered by an independent testing company rather than by the Commission.B)The Commission must submit annual reports to legislative committees in the state senate and house of representatives.C)The Commission makes and enforces the rules by which real estate licensees must abide.D)Members of the Commission are selected by the state association of REALTORS®.

The answer is MEMBERS OF THE COMMISSION ARE SELECTED BY THE STATE ASSOCIATION OF REALTORS ®. Members of the Real Estate Commission are appointed by the governor (202(a)), not the state association of REALTORS ®. The Commission prescribes subjects for testing, but the department contracts with a professional testing service to write and administer exams (403). The Commission also promulgates the Rules and Regulations (404) and reports to legislative committees (408).

What is the purpose of the Real Estate Recovery Fund?A)Protect the public from dishonest salespeopleB)Pool monies from broker's escrow accountsC)Provide a means by which an injured party can collect a judgment awardD)Provide a source from which to collect unpaid commissions

The answer is PROVIDE A MEANS BY WHICH AN INJURED PARTY CAN COLLECT A JUDGMENT AWARD. The Real Estate Recovery Fund was established to provide a means for aggrieved persons to collect judgments awarded in civil court. These judgments must result from civil suits against real estate licensees for fraud, deceit, or misrepresentations in a real estate transaction.

Generally, anyone who acts for another person in matters concerning the sale or lease of real estate must be licensed EXCEPTA)a relative of the party.B)anyone acting under a power of attorney.C)one who is personally representing a dealer in real estate.D)a next-door neighbor.

The answer is ANYONE ACTING UNDER A POWER OF ATTORNEY. Sections 304 of the RELRA and 35.202 of the Regulations establish 11 exclusions from requirements for licensure, including owners who sell or rent their own property, those acting under a recorded power of attorney from the owner or lessor of real estate, and attorneys-at-law who receive a fee but do not represent themselves as brokers.

Which of the following is TRUE regarding the laws for escrow accounts?A)The buyer and the seller can agree in writing that the escrow money will not be deposited until the agreement of sale is accepted.B)Escrow funds must be deposited in an interest-bearing account.C)The salesperson must deposit escrow funds as soon as they are received.D)Rents the broker collects must be deposited into the broker's escrow account.

The answer is THE BUYER AND THE SELLER CAN AGREE IN WRITING THAT THE ESCROW MONEY WILL NOT BE DEPOSITED UNTIL THE AGREEMENT OF SALE IS ACCEPTED. The Commission's Rules and Regulations provide that a broker negotiating an agreement of sale may, with the written consent of both the buyer and seller, refrain from depositing earnest money into the escrow account until the agreement is signed by both parties.

What is the purpose of the Real Estate Recovery Fund?A)Provide a means by which an injured party can collect a judgment awardB)Provide a source from which to collect unpaid commissionsC)Pool monies from broker's escrow accountsD)Protect the public from dishonest salespeople

The answer is PROVIDE A MEANS BY WHICH AN INJURED PARTY CAN COLLECT A JUDGMENT AWARD. The Real Estate Recovery Fund was established to provide a means for aggrieved persons to collect judgments awarded in civil court. These judgments must result from civil suits against real estate licensees for fraud, deceit, or misrepresentations in a real estate transaction.

What activity may an unlicensed assistant carry out?A)Telemarketing for buyer prospects under the direction of the licenseeB)Independently hold an open house for other licenseesC)Show properties to an out of town buyerD)Independently hold an open house for the public only if the licensee is not available

The answer is INDEPENDENTLY HOLD AN OPEN HOUSE FOR OTHER LICENSEES. Unlicensed people (including unlicensed personal assistants) may not perform activities for which a license is required, including telemarketing. They may, however, host open houses that are not conducted for the public (such as open house tours for licensees) and communicate, but not interpret or explain, property information to the licensees.

When advertising a property for sale, the broker must include which of the following in the advertisement?A)Broker's addressB)Legal description of propertyC)Broker's business nameD)Listing price

The answer is BROKER'S BUSINESS NAME. The Commission's Rules and Regulations require the broker's business name to be included exactly as it appears on the license. Blind ads are expressly prohibited.

A salesperson wants to change offices. The salesperson returns her current license along with the required fee and the change of employment notification. At which time may the salesperson be involved in real estate activities on behalf of the second broker?A)Only when the second broker receives the new licenseB)Within ten days after the application for change has been mailedC)Immediately upon mailing the change of employment notificationD)At the time the salesperson agrees to change to the second broker

The answer is IMMEDIATELY UPON MAILING THE CHANGE OF EMPLOYMENT NOTIFICATION. The change of employment notification serves as temporary license. A current license will be issued at the new location (as long as it is an approved office) for the unexpired license period.

A buyer submitted an earnest money check along with the offer to purchase. However, the seller refused the offer. At which time may the buyer receive the earnest money check?A)Upon buyer's written requestB)ImmediatelyC)As soon as the funds are clearedD)Upon permission of the seller

The answer is IMMEDIATELY. Although the broker must deposit these funds by the end of the business day following their receipt, if the funds are in the form of a check in connection with an offer to buy or lease real estate, the broker may hold the check until the offer is accepted, at which time the check must be deposited into the trust account by the end of the next banking day. If the offer is not accepted, then the broker (salesperson or associate broker) can return the uncashed check to the buyer or lessee.

Generally, anyone who acts for another person in matters concerning the sale or lease of real estate must be licensed EXCEPTA)one who is personally representing a dealer in real estate.B)anyone acting under a power of attorney.C)a next-door neighbor.D)a relative of the party.

The answer is ANYONE ACTING UNDER A POWER OF ATTORNEY. Sections 304 of the RELRA and 35.202 of the Regulations establish 11 exclusions from requirements for licensure, including owners who sell or rent their own property, those acting under a recorded power of attorney from the owner or lessor of real estate, and attorneys-at-law who receive a fee but do not represent themselves as brokers.

A salesperson receives an earnest money check from the buyer along with the buyer's offer. The buyer's check must beA)deposited into the salesperson's trust account.B)deposited into the broker's trust account by the end of the next business day.C)turned over to the broker.D)held until the offer is accepted or not.

The answer is TURNED OVER TO THE BROKER. A salesperson or associate broker who receives deposits or any escrow moneys must immediately turn the funds over to the employing broker. If the offer is not accepted, then the broker (salesperson or associate broker) can return the uncashed check to the buyer or the lessee. Otherwise, it must be deposited into the broker's trust account by the end of the next business day.

A person holding a salesperson's license is hired to assist an associate broker. Who is responsible for the assistant's real estate activities?A)Associate broker for whom the salesperson is associated as assistantB)All three are equally responsibleC)Individual salespersonD)Broker of record

The answer is BROKER OF RECORD. The activities for which a salesperson is licensed are performed under the supervision and ultimate responsibility of the employing broker.

All of the following must satisfy an education requirement prior to licensure EXCEPTA)time-share salespersons.B)rental listing referral agents.C)cemetery salespersons.D)campground membership salespersons.

The answer is CEMETERY SALESPERSONS. A cemetery salesperson is employed by a broker or a cemetery broker for the exclusive purpose of the cemetery lot sales. No education or examination is required for this license.

What continuing education is required, if any, for a residential salesperson licensed after December 1, 2007?A)One 7-hour course called a general moduleB)No special requirement; any 14 hours will sufficeC)Three 7-hour modules, consisting of general, residential, and commercialD)One 7-hour general module and one 7-hour residential module

The answer is ONE 7-HOUR GENERAL MODULE AND ONE 7-HOUR RESIDENTIAL MODULE. All new salespersons licensed after December 1, 2007, must complete the mandated 7-hour general module and an additional 7 hours of either the residential module or the commercial module.

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