Kaplan CH 10 "Land and Building Design"

Question 1

Which form of real estate ownership exists for a limited period of time?
A. Leasehold
B. Fee simple
C. Fee absolute
D. Cooperative

Answer 1

A. Leasehold

Question 2

Select the INCORRECT statement regarding mortgages.
A. The security for a mortgage loan is real property.
B. Mortgages are always provided by lending institutions.
C. Second mortgages generally carry greater risk than first mortgages.
D. When a mortgage loan is repaid, the mortgage is cancelled.

Answer 2

B. Mortgages are always provided by lending institutions.

Question 3

An owner wishes to construct a building that will provide substantial tax benefits while avoiding a long-term capital investment. Under these circumstances, the owner would probably choose to
A. maximize the mortgage.
B. arrange a sale-and-leaseback agreement.
C. arrange a leasehold ownership.
D. sell the trust deed to another party.

Answer 3

B. arrange a sale-and-leaseback agreement.

Question 4

All of the following may require condemnation proceedings, EXCEPT the acquisition of a(n)
A. access easement over one property to reach another.
B. strip of land for road widening.
C. permanent site for an elementary school.
D. right-of-way for a rapid transit line.

Answer 4

A. access easement over one property to reach another.
The distinction here is that an access easement (A) merely permits passage over a piece of property, without any change of ownership of the property. Incorrect choices B, C, and Dall require appropriating property for public use, and therefore, they may require condemnation proceedings. See page 182.