Module 6 Controls on Ownership Flashcards
Identify four powers of government that can control property ownership
Taxation
Eminent Domain
Police Power
Escheat
Recognize the purpose for which government levies special assessments
an assessment against real estate to pay for public improvements such as side walks, street improvements or sewers that will benefit the property being taxed.
Recognize property features that can be regulated by zoning ordinances
Building type Building height Building style/appearance Natural resources protection Permitted uses Setbacks Lot size Density
Identify six types of lien encumbrances that can limit ownership in real property
Property Tax First Mortgage Equity Loans Mechanics Liens Judgements Attachments
Lien
A charge agains property in which the property is the security for payment of the debt
When a financial institution puts together a loan for a proerty owner, the lender is referred to as the A) grantee B) mortgagee C) motgagor D) Trustor
B) Mortgagor
Which of the following limitations on ownership is not an excercise of goverment power? A) Covenants B) escheat C) special assessment lien D) zoning ordinance
A) Covenants
A claim against real property to secure repayment of a debt is A) a deed restriction B) a lien C) an easement D) an encroachment
B) Lien
The process used by the government to acquire land for public benefit is known as A) Condemnation B) eminent domain C) escheat D) forclosure
A) Condemnation
kenny and cindy recently attended an open house for a new construction in on of the Ottawas better subdivisions. The house was everything they were looking for with many upgrades and a floor plan that exactly suited their needs. They were contemplating their offer until they stepped onto the back porch and saw a backyard view of a sanitation company that specialized in renting portable toilets. Several freshly cleaned outhouses were lined up along one end of the property and large truck were busy moving items back and forth across the lot. The realtor claimed that the subdivision contractor planned to provide a fence along the edge of the indutrial park, but Kenny and Cindy weren't swayed. Perhaps the city should have planned for a: A) Buffer strip B) Barrier zone C) Gross encumbrance change D) Zoning variance
A) Buffer strip
A buffer strip is an open space between two land uses. In this case having some distance between the commercial and residential zonings probably would have made the house more marketable. The community should have better planned for its expansion
The residents of Torrenceville have been suffering from seasonal flooding from the Lavely River for the past ten years. The state has decided to build a dam upstream to help alleviate the costly damages done each year. A few of the farms upstream will have portions of their land permanently submerged as a result of the man-made lake created by the dam. The state hired an appraiser to determine the value of this farmland, which it is able to purchase:
A) Due to its power of eminent domain.
B) After computing the mill rate.
C) Due to government liens on the land.
D) Because an easement appurtenant exists along all
state rivers
A) Due to its power of eminent domain.
Feedback: Correct Response. Government agencies have the right to purchase private land for the good of the general public. In this case, the farmland that will be submerged due to the lake will be purchased so that the properties downstream will no longer be flooded. In the long run, the public will save tax money spent in flood damages that will far outweigh the costs of the land purchase and dam costs.
Mr. Williams left his fee simple estate intestate. There are no liens or other outstanding debts left to settle. The estate will:
A) Continue to belong to Mr. Williams until he settles
the zoning discrepancy.
B) Revert to the government by escheat.
C) Revert to the government to settle the judgment.
D) Relapse to testate if no claim is made.
B) Revert to the government by escheat.
Feedback: Correct Response. Mr. Williams has passed away without leaving a valid will or heir. Because the property is intestate, the government has the right to the estate due to the fact that a property cannot remain without a legal owner.
Brian is getting some renovations done on his house. He hired McFarland & Co. to function as the general contractor. Approximately one week before construction was set to begin, Brian received a notice in the mail from McFarland & Co. informing him that, if he failed to pay after the work was completed, a lien could be placed on his property. This type of lien is a:
A) Mechanics lien.
B) General lien.
C) Police power.
D) Mortgage lien.
A) Mechanics lien.
Feedback: Correct Response. When a contractor or builder works on a property, they are required to inform the person they are performing the work for that his or her failure to pay could result in a monetary claim, or lien, being placed against the property. In the case of contractors or builders, it is specifically referred to as a mechanics lien.
Mike recently made plans to knock down his dilapidated one-car garage and build a new two-car with a large attic for storage in its place. He went to the city to get a building permit and was turned down because his garage was too close to the property line. When it was originally constructed approximately fifty years ago, there was not a setback in place. He was told he could add onto the garage, but if he knocked it down he would have to move it twenty feet into his yard. Mikes garage is currently:
A) Illegally conforming because it is grandfathered in.
B) A zoning variance because the previous owner and
builder of the garage obtained a waiver of the rules.
C) Legally nonconforming because it conformed to the zoning at one time.
D) Legally conforming to the current easement in gross.
C) Legally nonconforming because it conformed to the zoning at one time.
Feedback: Correct Response. Legally conforming means that, while the garage currently does not comply with zoning, it did at one time. In this case, the zoning changed after the garage was built. Although Mike is not required to tear down the garage to comply, he cannot rebuild it on the same site. He must comply with the zoning setback once the garage is torn down.
Jillian is appraising Mark and Sarahs soon-to-be purchased home so that they can finance through Action Mortgage. Mr. Fergison the seller, is still occupying the home and agreed to show Jillian around on the agreed upon inspection date.
Mr. Fergison was more than eager to inform Jillian of everything he knew about the home from the oak flooring to the diameter and number of the trees in the established landscaping. He also told her about the new sidewalk which is scheduled to be constructed down the entire street a month after Mark and Sarah are to take possession of the home. He told her that the new buyers have to pay for the cost of the concrete and the labor but that the results would definitely add value to the final appraisal. The city is currently bidding out estimates for the labor to reduce the costs. When appraising this dwelling Jillian must:
A) Take into account the quality of flooring and the mature landscaping when looking for comparables, but the sidewalk need not be addressed as it is not yet in existence.
B) Estimate the cost of the sidewalk and labor herself by contacting local businesses and deduct this number from the appraised value.
C) Report the ad valorem tax on the addendum since the buyers will be paying for it themselves and use comparables with similar sidewalks to the one that is projected.
D) Take the pending special assessment into account as it could negatively impact the appraised value.
D) Take the pending special assessment into account as it could negatively impact the appraised value.
Feedback: Correct Response. Local governments sometimes use special assessments to cover the costs of community improvements. The residents that benefit from the specific improvement, in this case, the houses gaining a sidewalk, are responsible for funding it. An appraiser must take into account all pending assessments because some of them may have an impact on the value.
