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Final Exam Prep > Chapter 1 Principles I Quiz > Flashcards

Chapter 1 Principles I Quiz Flashcards

1
Q 
1. The listing is always taken in the name of the \_\_\_\_\_\_\_\_\_ and becomes the property of the
\_\_\_\_\_\_\_\_\_\_\_.
A. Broker—salesperson
B. Salesperson—seller
C. Broker—broker
D. Broker—seller
A

The correct answer is C.

The listing belongs to the sponsoring broker and is in the sponsoring broker’s name. One of the listing broker’s sponsored agents may have taken the listing, but the listing belongs to the broker and not the salesperson.

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2
Q 
2. A deed is used to transfer ownership of real estate. A bill of sale would be used to transfer ownership
of:
A. A mortgage
B. Personal property
C. A deed of trust
D. A house and 2 acres of land
A

The correct answer is B.

A bill of sale is used to convey personal property. A deed is used to convey real estate. A contract for deed and a deed of trust are both mortgage documents.

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3
Q
  1. The life tenant in a life estate is not allowed to:
    A. Pay the property tax on the property
    B. Commit waste by destroying or harming the property
    C. Lease the property and keep the rent
    D. Improve the property
A

The correct answer is B.

The life tenant only owns the property while they are alive and cannot control who will own the property after their death. Therefore, they may not waste the property.

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4
Q 
4. The Education Standards Advisory Committee is made up of:
A. 12 members
B. 13 members
C. 9 members
D. 14 members
A

The correct answer is A.

The Education Standards Advisory Committee has 12 members. The Broker Lawyer Committee has 13 members and TREC has 9 members.

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5
Q 
5. The government receives the authority to take the property of one who dies without a will and without
heirs by virtue of:
A. Laws of agency
B. Eminent domain
C. Police power
D. Escheat
A

The correct answer is D.

All property within Texas originally belonged to Texas. If property becomes ownerless, it goes back to the state. This is called escheat.

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6
Q 
6. Which of the following land description methods identifies a parcel of land by specifying its shape and
boundaries?
A. Metes and bounds
B. Government survey
C. Recorded plat
D. Assessor's parcel number
A

The correct answer is A.

Metes and bounds identifies a parcel of land by specifying its shape and boundaries. The government survey system uses townships and sections in the land description.

The recorded subdivision plat has lot and block. The assessor’s parcel number is the number assigned to the property by the tax assessor and is not a legal description.

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7
Q 
7. When someone owns property to the exclusion of all other persons, this person is said to hold the
property in:
A. Personality
B. Severalty
C. Common
D. Secret
A

The correct answer is B.

Severalty means sole owner. In other words, severed from all other owners.

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8
Q 
8. One who is given a power-of-attorney that allows them to sign the name of a principal to a contract of
sale is a(n):
A. Attorney-in-fact
B. Broker with a listing
C. Special agent
D. Attorney at law
A

The correct answer is A.

A power-of-attorney is a legal document drawn up by an attorney. It gives a person called the attorney-in-fact the right to sign another person’s name to a document.

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9
Q
  1. TRELA does not apply to:
    A. An attorney licensed in this state
    B. An on-site manager of an apartment complex
    C. A public official while engaged in official duties
    D. All of the above
A

The correct answer is D.

TRELA does not apply to any of these. An attorney licensed in this state, an onsite manager of an apartment complex, and a public official engaged in real estate transactions as part of
their official duties are not required to have a real estate license.

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10
Q 
10. The most widely recognized aspect of joint tenancy is the:
A. Right of equal interest
B. Right of equal use
C. Right of survivorship
D. Simultaneous creation of ownership
A

The correct answer is C.

Joint tenancy with the right of survivorship means the last owner to survive owns
the entire property. This owner takes ownership in severalty

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11
Q
  1. An applicant who fails an examination:
    A. May apply for reexamination but must wait 7 days before retaking the national portion of the test.
    B. Must retake and pass a 30-hour principles class before applying for reexamination.
    C. Will only be allowed to retest after a six-month wait.
    D. May apply for reexamination by filing a request accompanied by the proper fee.
A

The correct answer is D. An applicant who fails an examination may retake the examination by filing a
request with the proper fee. The applicant has one year from the time of application in which to pass the
examination.

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12
Q 
13. The listing agreement that most brokers prefer is the:
A. Exclusive agency listing
B. Net listing
C. Exclusive right to sell listing
D. Open listing
A

The correct answer is C. The exclusive right to sell listing gives the broker the right to collect a commission no matter who brings the buyer. This guarantee is why brokers prefer this type of listing.

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13
Q 
14. The greatest estate or ownership in real property is:
A. A qualified fee estate
B. An estate at sufferance
C. A fee simple estate
D. Annexation
A

The correct answer is C.

The fee simple estate, also called fee simple absolute or fee simple, is the highest form of ownership. A lesser estate would be a life estate.

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14
Q
  1. A person may not sell, lease, or transfer an easement or right-of-way used for utility, railroad, or
    pipeline service for another for compensation unless the person:
    A. Holds a real estate license issued by TREC
    B. Holds a certificate of registration issued by TREC
    C. Either A or B
    D. Neither A or B
A

The correct answer is C. This person would be called a right of way agent and TREC requires they have
a real estate license or a certificate issued by TREC.

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15
Q
  1. A square-mile section contains _________ acres and each acre contains _________ square feet.
    A. 640—–43,560
    B. Square-mile sections are not used in Texas.
    C. 43,560—–640
    D. 722—–20060
A

The correct answer is A.

A square-mile section contains 640 acres, with each acre having 43,560 square feet. Sections are used in the Rectangular Survey System. Texas uses metes and bounds but we also use sections.

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16
Q
  1. ________________ means a broker who is employed to negotiate a transaction between the parties
    to a transaction and for that purpose may act as an agent of the parties.
    A. A seller’s agent
    B. A buyer’s agent
    C. A subagent
    D. An intermediary
A

The correct answer is D. A seller’s broker represents only the seller in a transaction and the buyer’s broker represents only a buyer in a transaction, but the broker acting as an intermediary in a transaction
represents both the seller and the buyer.

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17
Q 
19. DTPA holds licensees liable if they:
A. Commit an unconscionable act
B. Misrepresent a material fact
C. Fail to disclose information with the intention of inducing a consumer into a transaction
D. All of the above
A

The correct answer is D. DTPA is the Deceptive Trade Practices Act and liability exists for all of the listed transgressions

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18
Q
  1. All listing agreements are required to:
    A. Have an expiration date
    B. Expire if the property has not been sold by the expiration date
    C. Not be relisted by the listing broker
    D. Both A and B
A

The correct answer is D. All listing agreements must expire but the listing agent may relist the property if the owner agrees.

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19
Q 
21. A contract in which all the parties make promises and are bound to act is:
A. Bilateral
B. Not acceptable
C. Unilateral
D. An option agreement
A

The correct answer is A. In a bilateral contract, the seller promises to sell, and the buyer promises to buy. In a unilateral contract, only one person makes a promise and the other person acts on that promise.

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20
Q 
22. Discrimination in housing on the basis of race is prohibited by:
A. The Civil Rights Act of 1957
B. The Civil Rights Law of 1855
C. An 1815 law
D. The Civil Rights Act of 1866
A

The correct answer is D. Race is the only protected class in the Civil Rights Act of 1866. It is a federal law.

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21
Q 
23. Examples of \_\_\_\_\_\_\_\_\_ are zoning laws, building codes, rent controls, and fire codes.
A. Property tax
B. Eminent domain
C. Police power
D. Escheat
A

The correct answer is C. Police power is one of the governments rights to privately owned land. Examples of police power include zoning laws, building codes, rent controls, and fire codes.

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22
Q
  1. The handicapped amendment to fair housing defines handicapped as:
    A. Having a physical or mental impairment that limits major life activities
    B. Having a record of having such an impairment
    C. Both A and B
    D. Neither A or B
A

The correct answer is C. Handicap became a protected class in 1988 and its definition includes having a physical or mental impairment that limits major life activities as well as having a record of such impairment

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23
Q 
25. A real estate broker or salesperson, while acting as an agent for another, is:
A. A fiduciary
B. Incompetent
C. Discriminating
D. Unlicensed
A

The correct answer is A. Fiduciary duty includes obedience, loyalty, disclosure, confidentially, accounting, and reasonable care

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24
Q 
26. If the servient estate is said to be burdened by an easement appurtenant, what is the effect on the
dominant estate?
A. It is not affected by the easement.
B. It benefits from the easement.
C. It is totally inaccessible.
D. It depends on the zoning.
A

The correct answer is B. The dominant estate benefits from the easement. The easement runs across the servient estate and the dominant estate is allowed to use the easement.

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25
Q
  1. A broker’s license is suspended for one year. His salespeople:
    A. May operate the broker’s business for the balance of the license year
    B. Have ninety days to obtain another broker’s sponsorship or lose their licenses
    C. Cannot perform any of the duties of a salesperson until their licenses are transferred to a
    new sponsoring broker
    D. Must transfer their licenses to the Real Estate Commission and wait for the broker’s license to be
    reinstated
A

The correct answer is C. When a broker’s license is suspended, all of his sponsored agents’ licenses become inactive and they cannot perform any of the duties of a salesperson until their licenses are transferred to a new sponsoring broker.

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26
Q
  1. The Equal Credit Opportunity Act applies to:
    A. A person that makes loans on a regular basis
    B. A lending institution that makes loans on a regular basis
    C. Seller financing
    D. Both A and B
A

The correct answer is D. ECOA does not apply to seller financing. It would apply to someone who makes loans on a regular basis and it applies to lending institutions.

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27
Q
  1. The size of a homestead in Texas is:
    A. Not limited. A person may homestead all property that the person owns.
    B. Limited to 200 acres for a married couple, and 100 acres for a single person if it is a rural
    homestead.
    C. Limited to no more than 10 acres of land if it is an urban homestead.
    D. Both B and C
A

The correct answer is D. A homestead is limited in size in Texas. A homestead is a constitutional right but
if a person wants a homestead tax exemption the person must file with the tax assessor.

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28
Q 
31. The right of the government to take ownership of privately held real estate for public use is:
A. Property tax
B. Escheat
C. Homestead
D. Eminent domain
A

The correct answer is D. Eminent domain is one of the governments rights to privately owned land. The
government must pay the owner of the land fair market value for the land that is taken.

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29
Q
  1. The owner of a property that is sold at a tax sale has the right to redeem the property after the tax
    sale. This is:
    A. Statutory redemption
    B. Equitable redemption
    C. Discount redemption
    D. Public redemption
A

The correct answer is A. If the property was homestead or agricultural property, the owner has 2 years to redeem the property. If the property was not homestead or agricultural, the owner only has 6 months in which to redeem the property.

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30
Q
  1. If a complaint is filed against a licensee through the Texas Real Estate Commission and the
    Commission finds the licensee guilty of a violation of the Texas Real Estate Licensee Act, the
    licensee can appeal to the:
    A. Attorney General’s office
    B. Texas governor
    C. District court
    D. Local board of REALTORS®
A

The correct answer is C. If the licensee is found guilty by TREC, the licensee may appeal in the district
court in the county in which the hearing was held.

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31
Q
  1. An applicant for a salesperson license must complete at least ________ semester hours, or
    equivalent classroom hours, of postsecondary education.
    A. 8
    B. 10
    C. 12
    D. 14
A

The correct answer is C. 12 semester hours is another way of saying 180 classroom hours.

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32
Q 
36. A report of all the insurance claims made on a property is called a:
A. FEMA report
B. Not available
C. CLUE® report
D. OWN® report
A

The correct answer is C. CLUE® stands for Comprehensive Loss Underwriting Exchange.

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33
Q
  1. The Texas Real Estate Commission is composed of:
    A. 3 broker members and 6 public members
    B. 6 brokers and 6 lawyers
    C. 6 broker members and 3 public members
    D. All commission members must be licensed brokers for 5 years.
A

The correct answer is C. The governor appoints the 9 members (6 broker members and 3 public
members).

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34
Q 
38. When a contract appears to be good and binding but, in fact, one of the parties may legally reject it,
the contract is said to be:
A. Valid
B. Voidable
C. Void
D. Unenforceable
A

The correct answer is B. A voidable contract binds only one party to the contract. The other party is not
bound to the contract. Example: A contract with a minor. The minor is not bound to the contract.
Therefore, the contract is voidable.

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35
Q
  1. Legal action to force the breaching party to carry out the remainder of a contract is called a suit:
    A. For liquidated damages
    B. For specific performance
    C. Equal to the agent’s commission
    D. For the minimum required to make the contract valid
A

The correct answer is B. A suite for specific performance is only used to enforce a contract. It cannot be
used to enforce an offer. An offer can be withdrawn at any time before it is accepted.

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36
Q
  1. The primary duty of a real estate agent is:
    A. To represent the interests of the client
    B. To protect the broker in any potential lawsuit
    C. To meet the needs of the customer
    D. To be flexible in working with buyers
A

The correct answer is A. An agent works for the interests of the client and with the customer

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37
Q 
42. Most real estate licensees make their living from:
A. Residential brokerage
B. Commercial brokerage
C. Property management
D. Apartment locating
A

The correct answer is A. A real estate license allows a licensee to do any type of transaction, but there
are more residential transactions. Therefore, more agents do residential real estate.

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38
Q 
43. A license to use land is:
A. An estate in land
B. A personal privilege given to someone to use land
C. A type of lease
D. Limited to 500 acres
A

The correct answer is B. A license to use land is a personal privilege given to someone to use land. It is
not ownership in land. An example of a license to use land could be a ticket to a sporting event or a movie
theater.

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39
Q
  1. “Protect Your Family from Lead in Your Home” is a booklet that must be given to the buyer if the
    buyer is making an offer on a property that was built prior to:
    A. 1908
    B. 1978
    C. 1979
    D. 1966
A

The correct answer is B. The seller of a property built before 1978 must disclose to the buyer that the
property could contain lead-based paint. The pamphlet about lead is given by the seller to the buyer.

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40
Q
  1. A real estate license issued by the Texas Real Estate Commission must:
    A. Be prominently displayed by all licensees
    B. Be displayed by all brokers
    C. Be prominently displayed by a residential rental locator
    D. Be displayed by all salespersons
A

The correct answer is C. The agents in an apartment locator office must display their licenses. The agents
in a sales office do not have to display their license.

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41
Q 
46. The act of refusing home loans to areas or neighborhoods deemed poor financial risk is:
A. Steering
B. Redlining
C. Legal
D. Blockbusting
A

The correct answer is B. Redlining always to an area or a neighborhood. It is as if the lender has drawn a
red line around the neighborhood and is refusing to make loans to everyone in that neighborhood. The
lender must qualify each applicant for a loan and base their decision to make the loan on the applicant’s
qualifications

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42
Q
  1. The responsibilities of the Texas Real Estate Commission include all the following except:
    A. Granting licenses to applicants
    B. Regulating brokerage fees
    C. Protecting the public interest
    D. Regulating the activities of licensees
A

The correct answer is B. TREC does not set the amount of commissions charged for brokerage services.

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43
Q 
48. A claim that limits fee simple title to property is referred to as:
A. An encroachment
B. An easement
C. Escheat
D. An encumbrance
A

The correct answer is D. An encumbrance is a claim on the property that limits the fee simple estate. An
encroachment and an easement are examples of an encumbrance.

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44
Q
  1. No two parcels of land are exactly alike because no two parcels can occupy the same position on the
    globe. This is known as:
    A. Township
    B. Section
    C. Scarcity
    D. Nonhomogeneity
A

The correct answer is D. Each parcel of land has its own legal description and it is not like any other legal
description in the world.

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45
Q 
50. The Texas Real Estate Broker-Lawyer Committee consists of how many members?
A. 13
B. 9
C. 62
D. 18
A

The correct answer is A. The Broker-Lawyer Committee is made up of 13 members. The six brokers are
appointed by TREC and the six lawyers are appointed by the president of the state bar. The governor
appoints the one public member.

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46
Q
  1. Johnson grants an estate in land to Jones with the stipulation that ownership reverts to Johnson on
    Jones’ death. In this situation, Jones owns a(n):
    A. Life estate
    B. Qualified fee estate
    C. Fee simple estate
    D. Estate less than freehold
A

The correct answer is A. Jones owns the property as long as he is alive. He cannot leave the property to
his heir because Johnson holds a reversionary estate in the property.

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47
Q
  1. Effective September 1, 2012, a broker who sponsors a salesperson:
    A. May not operate a real estate company from a home office
    B. Must attend at least 6 classroom hours of broker responsibility education during the term
    of the current license
    C. May not sponsor more than 100 people
    D. Must also be licensed in another state
A

The correct answer is B. A sponsoring broker as well as an agent who is in charge of other agents must
take the 6-hour broker responsibility class.

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48
Q
  1. A consumer may file a lawsuit against a broker for a false, misleading, or deceptive act. This lawsuit
    would be filed under:
    A. IABS
    B. DTPA
    C. IREM
    D. Consumers are not allowed to sue brokers.
A

The correct answer is B. The Deceptive Trade Practices Act requires the lawsuit be filed within 2 years.

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49
Q
  1. A law that requires all contracts for the sale of real estate be in writing and signed in order to be
    enforceable in a court of law is known as:
    A. Statute of frauds
    B. Law of agency
    C. Law of contracts
    D. Lawful objective
A

The correct answer is A. The first statute of frauds law was passed by the English Parliament in 1677.

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50
Q 
55. Telephone, electric, and gas line easements are examples of:
A. Easements by necessity
B. Easements by prescription
C. Easements in gross
D. Easements appurtenant
A

The correct answer is C. An easement appurtenant is an easement that is used between two lots to allow
the owner of one lot to cross the other’s property. An easement by necessity is created when a property
has become landlocked. An easement by prescription is an easement granted after the dominant estate
has used the property for 10 years

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51
Q 
56. A right or privilege one party has to the use of the land of another for a special purpose consistent
with the general use of the land is:
A. An easement
B. A deed restriction
C. A mortgage
D. A covenant
A

The correct answer is A. The party will never own the land. The easement only gives them the right to use
the land.

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52
Q 
57. An agency relationship is always created at the:
A. Broker level
B. Customer level
C. Salesperson level
D. None of the above
A

The correct answer is A. Agency is created at the broker level. The broker owes a fiduciary duty the client.

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53
Q 
58. Demand for property can be affected by:
A. Population growth and wage levels
B. Price of housing and unemployment
C. None of the above
D. Both A and B
A

The correct answer is D. Demand is the number of buyers in the market. Any of the items in A and B will
affect the number of buyers in the market.

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54
Q
  1. The four unities of time, title, interest, and possession are used in:
    A. Tenancy in common
    B. Joint tenancy with the right of survivorship
    C. Estate in severalty
    D. All properties
A

The correct answer is B. Joint tenancy with the right of survivorship is a form of ownership of a property
by more than one person. All the owners must take ownership of the property at the same time, with the
same title, have the same interest, and have the same right of possession.

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55
Q
  1. The determination of what constitutes a fixture primarily revolves around:
    A. The method of annexation
    B. The fitness or adaptation to a particular use of the premises
    C. The intention of the parties
    D. All of the above
A

The correct answer is D. The intention of the parties is the most important test of a fixture. A ceiling fan is
an example of a fixture.

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56
Q
  1. An unlicensed person owns 2 rental homes. He advertises the homes for sale and finds a tenant for
    one of the homes. Is he required to have a real estate license?
    A. No, because he is the owner of the home.
    B. Yes, because he owns more than one home.
    C. Yes, because he advertised the property for rent.
    D. No, because he had a license that expired 6 years ago.
A

The correct answer is A. A license is never required when the person is buying or selling property that
belongs to them

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57
Q
  1. The largest number of real estate transactions closed in Texas are from:
    A. The sale of business buildings
    B. The sale of residential homes
    C. The sale of farms and ranches
    D. The sale of individual vacant lots in a city
A

The correct answer is B. More license holders specialize in residential real estate because there are more
transactions in residential.

58
Q
  1. The Commission issues a license to a salesperson after:
    A. The person has at least 6 years sales experience.
    B. The person is 25 years old.
    C. The person has finished 3 classes.
    D. The person has met all of the requirements for a license.
A

The correct answer is D. In order to receive a real estate license, the person must be at least 18 years
old, be a resident of Texas, and complete all of the required education.

59
Q 
64. To become a salesperson in Texas, a person must complete at least \_\_\_\_ semester hours in
principles of real estate.
A. 12
B. 2
C. 4
D. 30
A

The correct answer is C. The person must also have 2 semester hours in law of agency, law of contracts,
finance, and promulgated contract forms.

60
Q
  1. For a person to be a member of the Texas Real Estate Commission the person must be:
    A. A qualified voter
    B. Over 62
    C. A resident of Texas for at least 20 years
A

D. A member of the Broker-Lawyer Committee
The correct answer is A. There are nine members of the Texas Real Estate Commission. The governor
appoints them and they must be qualified voters.

61
Q 
66. Agency that is created by actions and custom is:
A. Expressed agency
B. Real agency
C. Broker’s agency
D. Implied agency
A

The correct answer is D. Expressed agency is created by specific agreement of the principal and agent. It
can be written or oral.

62
Q 
17. Price-fixing, boycotting, and allocation of customers or markets are violations of:
A. Fair housing laws
B. Real estate codes
C. Common law
D. Antitrust acts
A

The correct answer is D. The Sherman Antitrust Act of 1890 does not allow price-fixing by real estate
companies, boycotting other real estate companies, and allocating customers or markets.

63
Q
  1. To be eligible to receive a broker’s license, what must a person be at the time of application?
    A. Be at least 18 years old
    B. Be a citizen of the U.S. or a lawfully admitted alien
    C. Be a resident of this state
    D. All of the above
A

The correct answer is D. In addition to the above, a person must be a salesperson for at least 4 years and
have 3600 points to become a broker.

64
Q
  1. Upon returning to active status from inactive status, a salesperson who is not required to complete 3
    more classes must provide to the commission proof of attending:
    A. At least 18 hours of continuing education
    B. At least 12 hours of continuing education
    C. Is not required to do continuing education
    D. At least 30 hours of continuing education
A

The correct answer is A. Eight of those 18 hours must be in Legal Update 1 and 2

65
Q
  1. A residential rental locator must prominently display in a place accessible to clients and prospective
    clients:
    A. The locator’s license
    B. A statement that the Commission licenses the locator
    C. The name, mailing address, and the telephone number of the commission
    D. All of the above
A

The correct answer is D. An office that does not do apartment locating is not required to display license

66
Q
  1. If a sponsoring broker’s license is suspended or revoked:
    A. It will do nothing to the salesperson’s license.
    B. The salespersons will be required to wait one year before they can receive a new license.
    C. All of the sponsored salespersons would become inactive.
    D. One of the salespersons could become a sponsoring salesperson for all of the salespersons.
A

The correct answer is C. The sponsored salespersons would be required to find a new sponsoring broker
or to become brokers themselves before they could do real estate transactions.

67
Q
  1. What is the Consumer Information form?
    A. It is a form that must be displayed in the broker’s office and explains to the consumer how
    they can file a complaint with TREC.
    B. It is a disclosure that must be included in each residential contract.
    C. It is an addendum to the IABS (Information About Brokerage Services) form.
    D. It is a promulgated form used by TREC as an amendment to all statutes.
A

The correct answer is A. The form gives contact information for TREC. The form gives information about
a complaint against a real estate agent, inspector, home warranty companies, easement and right-of-way
agents, and timeshare interest providers

68
Q 
72. The Civil Rights Act of 1866 was passed in 1866. It is a:
A. State law
B. City law
C. Federal law
D. County law
A

The correct answer is C. The one protected class under this law is race. Since it is a federal law, discrimination against race will always be handles by a federal court.

69
Q
  1. Under handicapped laws a physical or mental disability includes:
    A. Hearing, mobility, and visual impairment
    B. Chronic mental illness
    C. AIDS
    D. All of the above
A

The correct answer is D. Handicapped was added to the fair housing laws as a protected class in 1988.

Handicapped persons are also protected under The Americans with Disabilities Act. This Act is known as
ADA

70
Q
  1. Communities for the elderly are allowed to require that:
    A. Everyone living in the community is at least 62 years of age.
    B. 80 percent of the occupied units has an occupant who is at least 55 years of age or older.
    C. Both A and B
    D. Neither A or B
A

The correct answer is C. The retirement communities use these exceptions to the familial status fair
housing law. These exceptions will be in the deed restrictions for the community.

71
Q
  1. Agent Jane is showing Buyer Bob a property. Agent Jane wants to make sure Buyer Bob will like the
    neighborhood. She has selected the location of the property based on the national origin of the
    people living in the neighborhood. Agent Jane is:
    A. Blockbusting
    B. Redlining
    C. Steering
    D. Going to make a lot of money
A

The correct answer is C. Steering is sometimes called channeling. Blockbusting is also called panic peddling

72
Q 
76. The Americans with Disabilities Act deals with:
A. Commercial property
B. Residential property
C. Farms
D. Trailer parks
A

The correct answer is A. The Americans with Disabilities Act (ADA) was passed in 1990. The ADA is a
civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life.

73
Q 
77. ABC Lending is a loan company in Texas. It makes many residential loans. The loan company is
covered by \_\_\_\_\_\_\_\_\_\_\_\_\_.
A. Blockbusting
B. The Equal Credit Opportunity Act
C. Steering
D. The 1990 Real Estate Law
A

The correct answer is B. ECOA is not allowed to discriminate basis of race, color, religion, sex, national origin, age, marital status, or receipt of public assistance.

74
Q 
78. Annual plants are called fructus industriales or emblements and are:
A. Real estate
B. Personal property
C. Taxed
D. Leases
A

The correct answer is B. An annual plant is a plant that produces only one crop. Tomatoes, peas, beans, carrots, lettuce, onions, peppers, squash, and wheat are all annual plants.

75
Q
  1. An appurtenance:
    A. Is a right or privilege attached to land
    B. Goes with the land when ownership of the land changes
    C. Both A and B
    D. Neither A or B
A

The correct answer is C. Examples of appurtenance would be rights-of-way, easements, and water rights.

76
Q
  1. The bedroom of the home has a ceiling fan. The ceiling fan hangs from a metal box in the attic. It is
    attached to an electrical wire and to an electrical switch. What is this?
    A. An adaptation to the property
    B. A method of annexation to the property
    C. The intention of the owners
    D. This must be removed from the home when the owners move.
A

The correct answer is B. If the ceiling fan was added to the property by a tenant, the fan will become the property of the landlord when the lease is up.

77
Q 
81. Indestructibility is:
A. An economic characteristic of land
B. An area preference of land
C. A physical characteristic of land
D. A permanence of investment in land
A

The correct answer is C. The physical characteristics of land are immobility, indestructibility, and nonhomogeneity.

78
Q
  1. Lot 45 and Lot 46 are both on Main Street. They look the same, but the each occupies a different
    location on the earth. This is an example of:
    A. Modification of the lots
    B. Nonhomogeneity
    C. Area preference
    D. Supply and demand
    The correct answer is B. Nonhomogeneity means no two parcels are the same because they each
    occupy a different location on the earth.
A

The correct answer is B. Nonhomogeneity means no two parcels are the same because they each occupy a different location on the earth.

79
Q 
83. The preference people have for one location over another even though the locations may appear to
be similar is:
A. Situs
B. Scarcity
C. Supply
D. Survey
The correct answer is A. The persons preference for one location over another is not necessarily based
on objective facts and knowledge.
A

The correct answer is A. The persons preference for one location over another is not necessarily based on objective facts and knowledge.

80
Q
  1. The river has changed its course and is no longer covering part of John’s property. Dry land is the
    results of the change. This is referred to as:
    A. Accretion
    B. Avulsion
    C. Erosion
    D. Reliction
A

The correct answer is D. Accretion is the increase of land by the deposit of sand or soil washed by naturally from a river. Erosion is the wearing away of the soil by a river. Avulsion is the cutting away of land

81
Q
  1. The city needs to build a new school. The land where they want to build the school is privately owned.
    The city may take the privately owned real estate using:
    A. Taxation
    B. Police power
    C. Eminent domain
    D. Homestead
A

The correct answer is C. Eminent domain is one of the governments right to privately owned property. These rights also include taxation, police power, and escheat.

82
Q
  1. Sam has never made a will and he has no heirs. When he dies his property will become ownerless
    and will go back to the state. This is called:
    A. Escheat
    B. Recorded information
    C. Continuation
    D. Survey
A

The correct answer is A. All property in Texas came into private ownership from Texas. When it becomes ownerless it goes back to Texas through escheat.

83
Q 
87. The highest and greatest type of ownership that can be held in real property is called:
A. Fee simple absolute
B. Fee simple
C. Fee simple estate
D. All of the above
A

The correct answer is A

84
Q
  1. Kim lives in a home that has underground utility lines buried in the back yard. This is an example of a
    utility easement. A utility easement is also called:
    A. A fee simple estate
    B. An easement in gross
    C. A deed restriction easement
    D. A renewal easement
A

The correct answer is B. The easement in gross allows the utility company to erect and maintain utility equipment on or under the homeowners’ land. The owner of the land is allowed reasonable use of the land over which the easement runs.

85
Q
  1. An easement can be granted when a person uses the property for a constant, hostile, continuous,
    and open manner for a prescribed number of years. This easement would be called:
    A. Easement by necessity
    B. Easement by prescription
    C. Easement appurtenant
    D. Easement in gross
A

The correct answer is B. The prescriptive period is ten years. The person applying for the easement must use the proper for this number of years before they can apply for the easement

86
Q 
90. A lien that is placed on the property by someone who furnished labor or materials for the property and
has not been paid is called a:
A. Mechanics lien
B. Tax lien
C. Deed of trust lien
D. Mortgage lien
A

The correct answer is A. A mechanics lien must be filed in the county in which the property is located.

87
Q
  1. A person who owns a property in severalty:
    A. Is a tenant in common with other people
    B. Is the sole owner of the property
    C. Holds the property as community property
    D. Has unity of title
A

The correct answer is B. The root word of severalty is severed not several. Severed means the ownership is cut away from all other owners. The person owning the property is the only owner.

88
Q 
92. John, Joe, and Paul have invested in a property. John owns 50% of the property. Joe and Paul own
25% each. They own the property as:
A. Sole owners
B. Tenants in common
C. Joint tenants
D. None of the above
A

The correct answer is B. As tenants in common. the owners have unequal shares in the property, but they have an undivided right to use the property.

89
Q 
93. The right of survivorship sets \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ apart from other forms of ownership.
A. Community property
B. Tenancy by the entirety
C. Joint tenancy
D. Tenants in common
A

The correct answer is C. In joint tenancy with the right of survivorship, the last owner living receives the
entire property. In other words, as each owner dies the remaining living owners own the property.

90
Q
  1. The four unities of joint tenancy are:
    A. Tenancy, ownership, loans, and possession
    B. Interest, ownership, title, and possession
    C. Interest, time, loans, and possession
    D. Time, title, interest, and possession
A

The correct answer is D. The owners must have taken ownership at the same time and have the same right of possession. They must have equal property title and have the same interest in the property.

91
Q
  1. In Texas, an urban homestead is limited to 10 acres and the acres must:
    A. Be contiguous
    B. Be separated by 1 block
    C. A married couple may have a larger urban homestead than a single person.
    D. Be all on the same street
A

The correct answer is A. Contiguous means the properties must have a common border. Properties in an urban homestead must all touch each other.

92
Q
  1. In a partnership, the general partners:
    A. Work in and manage the business
    B. Contribute money to the business
    C. Are financially liable for the business
    D. All of the above
A

The correct answer is D. Any action taken by one of the general partners is binding on all of the general partners.

93
Q 
97. The managers who run the corporation are hired by:
A. The stockholders
B. The board of directors
C. The “legal being”
D. Owners
A

The correct answer is B. The board of directors is usually made up of the senior-most-executives of the company as well as experts chosen for their knowledge of the company.

94
Q 
98. In a REIT, income tax is paid at \_\_\_\_\_\_\_\_\_\_\_\_ level.
A. Managers
B. Trust
C. Beneficiaries
D. No income tax is paid.
A

The correct answer is C. The investors in the REIT are the beneficiaries. They receive income from the REIT by buying shares in the REIT.

95
Q 
99. An executory contract is a contract that has not been closed but has been signed by:
A. The seller
B. The buyer
C. The real estate agent
D. Both the seller and the buyer
A

The correct answer is D. When an offer is made on a property, it becomes a contract when all parties (the seller and the buyer) have initialed and signed the contract.

96
Q 
100. A contract that binds an adult to the contract, but does not bind a minor to the contract is:
A. A voidable contract
B. Illegal
C. An oral contract
D. An offer contract
t.
A

The correct answer is A. A voidable contract always binds one party to the contract but not the other party to the contract.

97
Q 
101. A real estate sales contract must:
A. Be written by an attorney in fact
B. Contain a legal description
C. Have incompetent parties
D. Be oral
A

The correct answer is B. Most real estate contracts will have a legal description as well as an informal reference. The informal reference is often the street address.

98
Q
  1. John has put his property up for sale, and Joe has agreed to buy the property. John and Joe have
    entered into a sales contract. Joe has decided not to buy the property. John has asked the court to
    force Joe to buy the property. John has sued for:
    A. Partial performance
    B. Substantial performance
    C. Specific performance
    D. Mediation performance
A

The correct answer is C. Courts will enforce specific performance only if the underlying contract was fair and equitable.

99
Q
  1. The offer would become a contract when:
    A. The offer is in writing.
    B. The amount of the earnest money is agreed to.
    C. All parties have signed and initialed all changes.
    D. All of the above
A

The correct answer is D. There are five elements to make a valid contract. These include: 1. Competent parties; 2. Legal purpose; 3. Consideration; 4. Offer and acceptance; and 5. Must be in writing and signed

100
Q 
104. All parties to the contract must perform within the time limits set in the contract, or the contract will
become voidable. This is called:
A. Time is of the essence.
B. Due on sale clause
C. First in time is first in line.
D. Arbitration
A

The correct answer is A. Time is of the essence means everything in the contract must be done within the timeframe set in the contract.

101
Q 
105. A contract for deed is a type of:
A. Deed
B. Seller financing
C. Loan only for people over 65
D. Buyer family financing
A

The correct answer is B. A contract for deed is a type of seller financing.

102
Q
  1. With a contract for deed, the buyer receives the deed:
    A. When the contract is written
    B. When the loan is made
    C. When the buyer moves into the home
    D. When the buyer has paid for the property
A

The correct answer is D. The buyer does not receive a deed until they have paid part or all of the purchase price of the property.

103
Q 
107. While the buyer is paying for a property under a contract for deed, the buyer holds:
A. Legal title
B. A lease
C. Equitable title
D. A deed
A

The correct answer is C. With equitable title, the person has the right to obtain legal title to the property at some time in the future.

104
Q 
108. If the property was built before 1978, the seller must disclose that the property may contain leadbased paint. This is a:
A. Federal law
B. State law
C. City law
D. County law
A

The correct answer is A. The property does not have to inspected for lead-based paint, but by Federal law the seller must disclose that the property could contain lead-based paint.

105
Q 
109. When a listing is taken on a property, the listing becomes the property of the:
A. Broker
B. Seller
C. Buyer
D. Salesperson
A

The correct answer is A. A listing is an employment agreement between the broker and the seller. All employment agreements belong to the broker

106
Q
  1. The death of the __________ will not terminate the listing, but the death of the ___________ or the
    ____________ will terminate the listing.
    A. Listing salesperson —– broker —– seller
    B. Broker —– salesperson —– seller
    C. Seller —– broker —– salesperson
    D. None of the above
A

The correct answer is A. The listing is an employment agreement between the broker and the seller. If either one dies, then the contract is no longer enforceable.

107
Q 
111. The seller should give a “Seller’s Disclosure Notice” to the buyer when the seller is selling:
A. A commercial building
B. A condo
C. A single-family home
D. A law office
A

The correct answer is C. The Seller’s Disclosure Notice is only used with a single-family home.

108
Q
  1. Jim is the sponsoring broker for Jack, a salesperson. Jack has just finished taking a listing on a
    condo. Bob, the owner of the condo, has become a client. The agency relationship is created at
    what level?
    A. Jim, the sponsoring broker
    B. Jack, the salesperson
    C. Bob, the seller
    D. TREC
    vel.
A

The correct answer is A. A listing is an employment agreement between the broker and the seller. All employment agreements belong to the broker and the relationship is created at the broker level.

109
Q 
113. The listing agreement and the Buyer’s Representation Agreement are examples of:
A. Real agency
B. Special agency
C. General agency
D. Universal agency
.
A

The correct answer is B. These are examples of special agency. The property management agreement and the independent contractor agreement are examples of general agency.

110
Q 
114. The broker has a fiduciary relationship with his client. The broker owes his client:
A. Obedience, loyalty, and accounting
B. Disclosure and confidentially
C. Reasonable care and diligence
D. All of the above
A

The correct answer is D. In additional to all of the above, the broker owes honesty to their customer and they must treat everyone fairly.

111
Q 
115. A broker is not allowed to commingle the money that belongs to the client or customer with the
broker’s:
A. Company’s working account
B. Personal account
C. Both A and B
D. None of the above
A

The correct answer is C. Commingle means to mix the client or customers money with the broker or salesperson’s money.

112
Q
  1. The agent is describing the property and making it sound much better than it is. The agent is
    exaggerating. This is called:
    A. Puffing
    B. Boycotting
    C. Antitrust
    D. Fraud
A

The correct answer is A. Puffing is exaggerated comments or opinions not made as representations of fact. It is not grounds for misrepresentation.

113
Q 
117. Errors and Omissions Insurance (E and O) is a form of \_\_\_\_\_\_\_\_\_\_.
A. Life insurance
B. Hazard insurance
C. Malpractice insurance
D. Homeowners insurance
A

The correct answer is C. E and O is a form of malpractice insurance. It is not required by TREC to be
carried by the broker unless the broker owns less than 10% of the company.

114
Q 
118. When the broker represents both the seller and buyer in the same transaction, the broker is acting
as:
A. Buyer’s agent only
B. Seller’s agent only
C. Intermediary
D. Subagent
A

The correct answer is C. Intermediary is statutory law and is required by the Texas Real Estate Licensing
Act.

115
Q 
119. A DTPA lawsuit must be filed within \_\_\_\_\_\_\_\_\_\_\_ after the date on which the false, misleading, or
deceptive act occurred.
A. 1 year
B. 4 years
C. 6 months
D. 2 years
A

The correct answer is D. A DTPA lawsuit must be filed within 2 years. A complaint to TREC must also be
filed within two years if money is to be paid from the Real Estate Recovery Fund.

116
Q
  1. Jim has given a life estate to Joe. Joe is the life tenant. He must keep the property maintained. He
    is not allowed to waste the property because:
    A. It’s very pretty.
    B. He does not own the property forever.
    C. He can leave it to his heirs.
    D. It would upset the neighbors.
A

The correct answer is B. Joe cannot waste the property because he does not own the property forever.
He only owns the property as long as he is alive

117
Q

What are the two types of chattel

A Tangible and Intangible
B Air & Mineral
C Convey and Control
D All of the above

A

A Tangible and Intangible

118
Q

What is considered Intangible Chattel or personal property.

A Promissory Note
B A Lease
C Mortgage
D A & B

A

D A & B

119
Q

Real Property is defined as: Land, all man made improvements plus your bundle of rights

True
False

A

True

120
Q

Which of the following make up your bundle of rights as an owner of real property?

A Disposition
B Enjoyment and Exclusion
C Possession
D Control and right to convey 
E All the above
A

E All the above

The acronym that represents your bundle of rights i DEEPC

121
Q

Subsurface ownership of land only creates what type of estate?

Leasehold Estate
Mineral Estate
Dominant Estate
Servient estate

A

Dominant Estate

122
Q

Surface and Air ownership of land only creates what type of estate?

Leasehold Estate
Life Estate
Dominant Estate
Servient estate

A

Servient estate

123
Q

What document would you create to convey tangible personal property?

A Listing Agreement
B Bill of Sale
C Promissory Note
D None of the above

A

B Bill of Sale

124
Q

Real Estate is defined as

A Any land
B Land and all the improvements
C Greenfield
D Non of the above

A

B Land and all the improvements

125
Q

Intangible personal property comes is defined as

A Deed
B Promissory Note & Lease
C Power to evict someone
D. All of the above

A

B Promissory Note & Lease

126
Q

Tangible personal property is conveyed via bill of sale and should never be on the one to four family contract

A. True
B. False

A

A. True

127
Q

A fixture is personal property which has been converted to real property by method of annexation

A. True
B. False

A

A. True

128
Q

Name two types of fixtures

A Residential
B Trade Fixture
C Mechanic Fixture
D A and B

A

D A and B

129
Q

What is a commercial fixture called

A Trade fixture
Stand alone fixture
Attached Fixture
None of the above

A

Trade fixture

130
Q

What are the three test of trade fixture

A Fit, Intent, anneXation
B Electricity, Lighting and Switches
C Neither
D Both

A

A Fit, Intent, annExation

FIX

131
Q

Annual plants are fructous industriales and are considered personal property

Yes
No

A

Yes

132
Q

Personal property which has been converted to real property by method of attachment is

A Fixture
B A trade fixture
C Emblements
D None of the above

A

A Fixture

133
Q

Emblements are annual crops that have been planted for harvest and are considered personal property.

Yes
No

A

Yes

134
Q

A trade fixture is installed by a tenant and is removeable by a commercial tenant before the lease expires.

Yes
No

A

Yes

135
Q

Which of the following is always considered to be personal property?

A Lease
B A freehold
C. Fixture
D A city lot

A

A Lease

136
Q

Severance is the detaching of personal property

Yes or NO

A

Yes

137
Q

Economic characteristics are defined as Scarcity, Investment/Improvement, Permanence of investments, and Situs

Yes
No

A

Yes

138
Q

Which of the following instruments dos NOT transfer an interest in real estate?

A Option
B Lease
C Bill of Sale
D Agreement of Sale

A

C Bill of Sale

139
Q

The determination of what constitutes a fixture primarily revolves around:

A Method of annexation
B Fitness or adaption to a particular use of the premise
C The intention of the parties
D all of the above

A

D all of the above

A, B & C are three considerations whether a fixture is a fixture or personal property

140
Q

Which of these is NOT a physical characteristic of real estaTe

A Immobile
B Industructable
C Nonhomogeniety
D Fungiblity

A

D Fungiblity

141
Q

When all things look alike yet each has has a specific location this is called

A Adresss
B Meets & Bounds
C Nonhomogeniety
D Plottage

A

C Nonhomogeniety

142
Q

Area preference is the most important economic characteristic of land it is described as

A Fixity
B Situs
C Sunk costs
D Surface rights

A

B Situs

Fancy work for Land or area preference

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