Encumbrances

Question 1

What lien has priority?

A: Ad Valorem liens
B: Assessments
C: Mechanics lien
D: Mortgage

Answer 1

A: Ad Valorem liens

Question 2

When a loan is created using real estate as security, what would the primary lender least consider?

A: Recording the deed of trust
B: Signing the deed of trust
C: Preparing the estoppel certificate
D: Signing the note

Answer 2

C: Preparing the estoppel certificate

Question 3

An owner hires a general contractor to add a room and sells the property before paying for the work. The buyer receives a warranty deed and a standard title owner’s policy from the seller. When the contractor files a lien, what is true?

A: The mechanics lien is valid against the property
B: The mechanics lien is not valid
C: The warranty deed will not permit a mechanics lien after the sale
D: The owners policy would cover the mechanics lien

Answer 3

A: The mechanics lien is valid against the property

Question 4

What is NOT an encumbrance?

A: Mortgage
B: Agreement For Sale
C: Warranty Deed
D: Trust Deed

Answer 4

C: Warranty Deed

Question 5

What would be considered a general lien?

A: Mechanics Lien
B: Judgments
C: Special Assessments
D: Arizona Property Tax

Answer 5

B: Judgments

Question 6

If a property owner would like to eliminate a nuisance, which of the following actions would apply?

A: License
B: Abatement
C: Easement
D: Garnishment

Answer 6

B: Abatement

Question 7

The area owned together by all owners of a condominium project and available for all owners’ use is termed:

A: Limited common element
B: Cooperative element
C: Common area
D: Community Property

Answer 7

C: Common area

Question 8

Which of the following would be considered an encumbrance but not a lien?

A: Mortgage
B: Easement
C: IRS taxes
D: Mechanics Lien

Answer 8

B: Easement

Question 9

Buyer purchases property with a first mortgage. The first mortgage will be paid off and the seller agrees to take a small carryback. What is the order of recordation?

A: Record carryback, release 1st loan, record deed of conveyance
B: Record carryback, release 1st loan, record carryback
C: Release 1st loan, record conveyance deed, record carryback
D: Release 1st loan, record carryback, record deed of conveyance

Answer 9

C: Release 1st loan, record conveyance deed, record carryback

Question 10

Deed restrictions may prohibit:

A: Standard for sale signs in the windows
B: Standard for sale signs in the yard
C: Discriminatory for sale signs
D: Solar energy devices on rooms

Answer 10

C: Discriminatory for sale signs