Chapter 7 Quiz

Question 1

Which contract is used when one party agrees to use the real estate of another in exchange for periodic payments?

A. An offer to purchase

B. An option

C. A lease

D. A land contract

Answer 1

C. A lease is an agreement between parties permitting a party to use another party’s real estate, usually in exchange for periodic payments in the form of rent. An offer to purchase is an agreement to purchase real estate and and option is an agreement by the seller to sell if the buyer chooses to purchase. A land contract is a form of seller financing.

Question 2

An owner of a condominium hold the unit as a:

A. Leaseholder

B. Percentage interest of the entire building depending on the size of the unit.

C. Tenant in common with other condominium owners.

D. Fee simple absolute

Answer 2

D. Condominium ownership is total ownership and the interest is held in fee simple absolute.

Question 3

George and Bill own a parcel of real estate. George owns an undivided two-third interest in the property and Bill owns one-third. What kind of tenancy do George and Bill have?

A. Tenancy in severalty

B. Joint tenancy

C. Tenancy marital property

D. Tenancy in common

Answer 3

D. George and Bill have a tenancy in common. To own property as joint tenants or as marital property, the parties must own equal shares. Severalty refers to a single owner’s separate ownership interest.

Question 4

George and Barbara are a married couple who moved to Wisconsin in June of 2010. They purchased a house in Wisconsin in July 2010. The house is classified as:

A. Mixed property

B. Predetermination date property

C. Individual property

D. Marital property

Answer 4

D. Because they purchased the property after their determination date, it is marital property.

Question 5

The Kimpel’s contracted to purchase the Byrnes’ home. Which feature may the Byrnes remove from the home?

A. A refrigerator

B. Wall-to-wall carpeting

C. A built-in-dishwasher

D. Drapery rods

Answer 5

A. Unless the parties have an agreement stating differently, the Byrne’s can remove the refrigerator because it is personal property. All other items are fixtures and cannot be removed unless excluded in the offer to purchase.

Question 6

The definition of real estate included many elements. Which of the following items would NOT be a part of real estate?

A. A furnace

B. Built-in appliances

C. Furniture

D. A chandelier

Answer 6

C. Furniture is personal property and is not a part of the real estate.

Question 7

What estate in land offers the maximum ownership?

A. Life estate

B. Leasehold estate

C. Fee simple absolute

D. Fee simple defeasible

Answer 7

C. A fee simple absolute estate offers an owner the maximum ownership rights to a property. A fee simple absolute is of unlimited duration and the rights to the property are limited only by certain government powers.

Question 8

What are valuable additions made to a property?

A. Trade fixtures

B. Improvements

C. Chattels

D. Parcels

Answer 8

B. Improvements are valuable additions made to property that amount to more than repairs, costing labor and capital, and are intended to enhance the value of the property.

Question 9

What is the right to posses property free from claims of former owners or other third parties?

A. An encumbrance

B. Control

C. Quiet enjoyment

D. Disposition

Answer 9

C. Quiet enjoyment is the right of a property owner or tenant to use a property uninterrupted by claims of former owners or third parties.

Question 10

Three people own a farm and all three and sell their individual interests without the consent of the other owners. How does each owner hold title?

A. In severalty

B. As an individual tenancy

C. In trust

D. As a condominium

Answer 10

A. When a person owns interests in property that is separate or distinct from the other owners, the owners own their individual interests in severalty.

Question 11

Which of the following is NOT individual property under Wisconsin’s Marital Property Act?

A. Gifts to an individual spouse.

B. The appreciated value of individual property.

C. Property classified as individual property under a marital property agreement.

D. Predetermination date property.

Answer 11

D. The Marital Property Act does not re-classify property that spouses acquired before their determination date as marital property. The is called predetermination date propter and remains owned as it was at the time it was acquired. At the death of a spouse domiciled in this state, all predetermination date property that would have been marital property if acquired after a couple’s determination date is subject to the Marital Property Act.

Question 12

What constitutes a homestead?

A. The dwelling and the land surrounding it not exceeding 40 acres.

B. The dwelling and the land surrounding it but not less than 1/4 acre, if available, and not exceeding 40 acres.

C. The dwelling and the land surrounding it but not less than 1/2 acre, if available, and not exceeding 40 acres.

D. The dwelling and the land surrounding it only if the couple lived there for more than 12 months.

Answer 12

B. See Homestead Wis. Stat 706.01(7) Homestead as used in this chapter, means the dwelling, and so much of the land surrounding it as is reasonably necessary for use of the dwelling as a home, but not less than one-fourth acre, if available, and not exceeding 40 acres.

Question 13

Vivian Jacobs and Caleb Chance purchase a property. The seller’s deed at closing conveyed the property to “Vivian Jacobs and Caleb Chance,” without further explanation. How do Vivian and Caleb hold title to the property?

A. As tenants in common

B. As joint tenants

C. With rights of survivorship

D. Each owns the percentage amount that corresponds to the amount each contributed to the down payment.

Answer 13

A. If nothing to the contrary is expressed in the deed, the law will assume co-owners to hold title as tenants in common and that each will own equal amounts.

Question 14

What are trade fixtures?

A. Personal property of a lessee.

B. Real property of a lessee.

C. Personal property of a lessor.

D. Real property of a lessor.

Answer 14

A. Trade fixtures are the personal property of the tenant. They are permanently attached to rented property for running the tenant’s business.

Question 15

Tiffany and Brad bought Sarah and Brian’s house. Tiffany and Brad considered the living room bookshelves to be a fixture and Sarah and Brian considered the bookshelves personal property. Which of the following is NOT a factor in a court’s determination of whether an item is a fixture?

A. Have the bookshelves already been removed?

B. What was the intent?

C. How were the bookshelves adapted?

D. How were the bookshelves attached?

Answer 15

A. In a dispute over whether an item is a fixture, a court will consider how the item was attached, how it was adapted, the intent of the party who put it in the propter, and whether the parties had an agreement about the item.

Question 16

Which of the following statements best describes a cooperative?

A. A cooperative owner owns a real property interest.

B. A cooperative owner owns a deed right to a unit.

C. A cooperative owner owns a unit and an interest in common areas.

D. A cooperative owner owns a personal property interest.

Answer 16

D. A cooperative owner owns personal property in the form of stock issued by a corporation and receives a proprietary lease to the occupied unit. The corporation owns the building and issues leases to the occupants. Both the stock in the corporation and the lease are personal property interests.

Question 17

Because survivorship property transfers at death without passing through probate, licensees should:

A. Educate their clients about how different forms of ownership pass at the death of the owners.

B. Educate their clients about the benefits of holding property as survivorship property.

C. Never offer advice on how to title property.

D. Only offer advice on how to hold property when their clients have requested this information.

Answer 17

C. Deciding how to title property often has tax, transfer of ownership, and income implications and providing advice on how to title property is beyond the scope of the agency agreement between a principal and a licensee.

Question 18

Which of the following is NOT a government power?

A. Taxation

B. Foreclosure

C. Condemnation

D. Zoning

Answer 18

B. The government powers consist of police power, eminent domain, taxation, and escheat. Foreclosure is an action brought by a private entity, usually a lender, to recover title to a private property.

Question 19

When is a mobile home real property?

A It is on a permanent foundation, hooked up to utilities, and owned by the landowner.

B. It is owned and not rented.

C. It is rented and hooked up to utilities.

D. It is on a permanent foundation.

Answer 19

A. A mobile home, according to state law, is an improvement to real property if it is set on a foundation on land that is owned by the mobile home owner; and attached to utilities. If not all three of those elements exist, the mobile home is personal property.

Question 20

Christopher and Monica are getting married. Under Wisconsin law, any real estate that either owns at the time of their marriage will remain that spouse’s individual property. Property acquired by either after the wedding, except by gift or inheritance, will belong to both of them equally. What determines the ownership of property for married people in Wisconsin?

A. The General Partnership Property Act.

B. The Joint Tenancy Act.

C. The Tenancy in Common Act.

D. The Marital Property Act.

Answer 20

D. The Wisconsin Marital Property Act classifies all property of married people in Wisconsin. Generally, all personal property, real property, and salaries of married couples are marital property.

Question 21

What is survivorship marital property?

A. Real property that will pass to a surviving spouse without probate.

B. A classification under the Marital Property Act that permits a deceased spouse to will real estate to a third party.

C. Property in which no individual owns more than a 50% interest.

D. Presumptive marital property.

Answer 21

A. Property that is titled as “survivorship marital property” permits a surviving spouse to automatically receive the deceased spouse’s interest without going through probate. If a couple titles property as “survivorship marital property” instead of “marital property” when recording an interest, the interest of the deceased spouse vests automatically in the surviving spouse.

Question 22

What is a benefit for a married couple that holds property as survivorship marital property?

A. The property passes to the surviving spouse without probate.

B. The property receives a $40,000 exemption from unsecured credit.

C. The children of the deceased will receive the property without probate.

D. The heirs who receive the property will owe estate taxes.

Answer 22

A. Wisconsin’s Marital Property Act states that upon death of a spouse, the ownership rights of that spouse in the property vest solely in the surviving spouse by nontestamentary disposition at death.

Question 23

What is a lessor’s future interest in a property called?

A. A remainder interest.

B. A survivorship interest.

C. A testamentary interest.

D. A reversionary interest.

Answer 23

D. A property owner retains a reversionary interest, which is a future interest retained by the property owner when executing a lease. It is the right to have the property interest revert to the lessor.

Question 24

How many days from the beginning of a lease period does a tenant have to inspect a property for the prior tenant’s damages?

A. Ten.

B. Five.

C. Three.

D. Seven.

Answer 24

D. Wis. Admin. Code § ATCP 134.06 Residential Rental Practices: Before a property owner accepts a security deposit, or converts an earnest money deposit to a security deposit, the property owner shall notify the tenant in writing that the tenant may do any of the following by a specified deadline date which is not less than seven days after the start of tenancy: Inspect the dwelling unit and notify the property owner of any pre-existing damages or defects.

Question 25

What interest do parties transfer when executing a lease?

A. A real property interest from lessee to lessor.

B. A real property interest from lessor to lessee.

C. A personal property interest from lessor to lessee.

D. A personal property interest from lessee to lessor.

Answer 25

C. A leasehold estate is a personal property interest for a limited duration. Executing a lease transfers a personal property interest from a property owner, the lessor, to a tenant, the lessee. At the end of the tenancy, the leasehold estate will automatically revert back to the property owner.