Chapter 6

Question 1

Community Property

Answer 1

is a statutory estate in Texas. All property acquired after marriage,
whether purchased or earned, is jointly owned by the husband and wife. Income on separate property
is considered community property. An increase in value of separate property is not community
property. For example, if a spouse has a house worth $150,000 at the time of marriage and its value
rises to $300,000, the increase is not community property. However, once community efforts, credit,
or funds are used to increase the value or improve the property, community property rights accrue.

Question 2

A SPOUSE CAN WAIVE

Answer 2

community property rights by written agreement

Question 3

Property acquired prior to marriage, or during marriage by inheritance (devise or descent), or gift

Answer 3

may remain separate property

Question 4

HOMESTEAD is also a

Answer 4

statutory estate in Texas

Question 5

Homestead protection is

Answer 5

automatic and cannot be waived.

Question 6

The homestead of a family is

Answer 6

protected from forced sale by all creditors except: mortgage, property
taxes( ad valorem taxes), mechanics and materialmen’s liens, and homeowner/property owner
associations.

Question 7

When a homestead is foreclosed on for unpaid property taxes

Answer 7

the owner has 2 years to redeem the

property.

Question 8

When a homestead is foreclosed on for unpaid homeowner/property owner association fees

Answer 8

the

owner has 6 months to redeem the property.

Question 9

An urban homestead has a maximum size of

Answer 9

10 connected acres

Question 10

A rural homestead has a maximum

size of

Answer 10

200 ACRES

Question 11

On a property greater than 200 acres

Answer 11

the owners have the right to designate

which land will be considered the homestead. The 200 acres do not have to be connected.

Question 12

ONE HOMESTEAD PER

Answer 12

PERSON OR FAMILY

Question 13

The homestead exemption

Answer 13

a tax benefit, should not be confused with the homestead protection.
Homeowners must apply for the exemption and must own and occupy the home on January 1st to
qualify. You can back file for up to two years if you have failed to claim this exemption.

Question 14

The Deceptive Trade Practices Act (DTPA) allows for

Answer 14

the recovery of triple damages. An individual

has 2 years from the discovery of the deception to file a complaint.

Question 15

An example of a license holder in violation of DTPA would be

Answer 15

negligent misrepresentation of

material fact.

Question 16

Intestate Succession refers to

Answer 16

how property passes when a person dies without a will (intestate) or
with a will that makes only a partial distribution of his/her property. In the event that a person dies
intestate, the courts will appoint an administrator to settle the estate. Property will be distributed
according to the Laws of Descent and Distribution. Heirs to any real property will have Title by
Descent. Property goes to kindred – male and female. Spouse and children have priority under the
laws of descent. If a married couple has all adult children, and one spouse dies intestate, the surviving
spouse can sell his/her real property with only that spouse’s signature. Title transfers to heirs at
probate.

Question 17

If a party dies with a will, testate, the executor appointed in the will distributes the property and
the heirs are said to have

Answer 17

Title by Devise. As with intestate succession, title transfers at probate.

Question 18

PROBATE IS

Answer 18

judicial process to prove or confirm a will, or to settle the estate of someone who dies
intestate. Probate must begin within 4 years of death. A district court judge transfers title to real
property at a probate hearing. That transfer of title is final after 30 days. See chart in Chapter 2.

Question 19

Landlord-Tenant Issues

Answer 19

• Tenants may sign an agreement waiving a right to interest on the security deposit. Landlords
must account for security deposits within 30 days after tenants leave.
• Landlords must provide new locks on rental property no later than seven days after a new
occupant takes possession of a leasehold premise. Smoke detectors must be operational at the
time the tenant is granted possession. Keyless deadbolts are required but not double cylinder
locks.

Question 20

Foreclosure sales in Texas are held on

Answer 20

the first Tuesday of the month

Question 21

A majority of foreclosures in Texas are

Answer 21

non-judicial due to the use of the Deed of Trust. The exception
is foreclosure for home equity loans which is judicial in Texas

Question 22

All states have recording acts for documents by which an estate, interest or right in land is created,
transferred, or encumbered.

Answer 22

Recording places a document in the public records – providing legal
notice to the world. Property rights to land must be recorded in the county where the property is
located.

Question 23

Texas law states that a deed, mortgage or other instrument affecting real estate is not effective

Answer 23

as far

as subsequent purchasers and lenders are concerned if it is not recorded.

Question 24

A mechanics lien is for

Answer 24

labor or materials for the improvement of property. It is one of the foreclosable
liens on a Texas homestead.

Question 25

The Texas Veterans Land Board has two programs for Texas veterans

Answer 25

• The housing assistance program allows an eligible Texas veteran to have his/her mortgage
loan sold to the TVLB instead of to the secondary market. The benefit to the borrower is an
interest rate significantly lower than prevailing market rates
• The TVLB loan program allows eligible Texas veterans to borrow up to $150,000 from the
TVLB to purchase unimproved property. The buyer must obtain a survey and pay 5% down
for a 30-year loan. The minimum tract size is one acre.
Both of these programs are available to all honorably discharged Texas veterans. Disability is not a
requirement.
Neither program is available to any dishonorably discharged veteran.
Both programs are available for the surviving spouse of a veteran listed as Missing In Action or
whose death was service connected.

Question 26

HOAs in Texas are permitted to

Answer 26

regulate, but not ban: flying the flags of the US, the State of Texas,
or any branch of the US armed forces. They can also regulate, but not ban roof solar panels, the display
of religious symbols, or political signs. HOAs can ban privacy fences.

Question 27

NOTE TO STUDENTS

Answer 27

it is recommended that you visit the TREC website and review the
FAQ’s under Consumer Information on the bottom left side of the home page. These questions and
answers can be very helpful in preparing for the state portion of the license exam