Module 7 Quiz

Question 1

What are the 5 requirements for an adverse possession land transfer?

Answer 1

• Open (the possession and use is obvious to everyone)
• Notorious (others know about it)
• Continuous (possession and occupation)
• Hostile (without the consent of the true land owner)
• Adverse (to the true owner’s right of possession)

Question 2

The Federal government receives a portion of the real estate taxes paid by the property owner.

True
False

Answer 2

False

Question 3

When real property is purchased in an agreement between two parties, what best identifies the purpose of a sales contract that is written?

A) It serves as a receipt for the earnest money paid, and it provides written evidence of the agreement the parties are bound to honor.

B) It provides written evidence identifying the parties to the agreement.

C) It serves as a receipt for the earnest money paid only.

D) It conveys the rights of the property from one party to another.

Answer 3

A) It serves as a receipt for the earnest money paid, and it provides written evidence of the agreement the parties are bound to honor.

Question 4

An agreement that is presumed to exist because of the parties’ actions is called an implied contract. In contrast, an agreement that is put into words (spoken or written) is what type of contract?

A) forbearance contract
B) unilateral contract
C) legal purpose contract
D) express contract

Answer 4

D) express contract

Question 5

A tenant has an ice cream shop in a shopping mall and pays $2,000 per month plus 4% in overage rent based on gross sales after the first $100,000. This is an example of a(n) ________________ lease.

A) overage
B) index
C) revaluation
D) percentage

Answer 5

D) Percentage lease

Question 6

Which deed form is often used to clear a title defect?

A) bargain and sale deed
B) quitclaim deed
C) general warranty deed
D) special warranty deed

Answer 6

B) quitclaim deed

Question 7

Which of the following types of deed would most likely be used in a tax forfeiture sale?

A) bargain and sale deed
B) quitclaim deed
C) warranty deed
D) special warranty deed

Answer 7

A) bargain and sale deed

Question 8

Some years ago, Jill and her sister Joanna owned land together. The sister gave her rights to Joanna who then married and took possession of the property. Joanna and her husband later sold the property, and Jill was
required to provide a deed conveying her interest in the property. What type of deed would Jill provide in this situation?

A) special warranty deed
B) general warranty deed
C) bargain and sale deed
D) quitclaim deed

Answer 8

D) quitclaim deed

Question 9

Jensen has a sales contract on a property, but it does not state the legal description and it’s not signed by the seller. The contract is:

A) void.
B) implied.
C) unilateral.
D) valid.

Answer 9

A) void.

a contract must have all 5 elements, otherwise, it’s considered void

Question 10

An appraiser was hired to assist a tenant and landlord in deciding the rent adjustment for an existing lease that stipulates that the rent be periodically adjusted to prevailing market conditions. What best describes this type of lease?

A) This is a stepup lease.
B) This is an index lease.
C) This is a percentage lease.
D) This is a revaluation lease.

Answer 10

D) This is a revaluation lease.

Question 11

When a party conveys whatever interest he or she has with no warranties, the type of conveyance used is called a:

A) special warranty deed.
B) quitclaim deed.
C) bargain and sale deed.
D) general warranty deed.

Answer 11

B) quitclaim deed.

Question 12

An option agreement is a _____ type of contract

Answer 12

unilateral

Question 13

The initial payment to bind a sales contract is called ___ money.

Answer 13

earnest

Question 14

Parties to a valid contract must enter the agreement voluntarily to satisfy the element of _____

Answer 14

consent

Question 15

A contract where the seller acts in the role of a lender is called a ______

Answer 15

land contract (aka contract for deed or insallment (sale) contract)

Question 16

In a _____ lease, the tenant pays a fixed rent and the landlord pays the property’s operating expenses.

Answer 16

gross

Question 17

In a leased property, the landlord has a _____ interest

Answer 17

leased fee

Question 18

The involuntary transfer process by which a party takes possession and use of another’s land over a period of years is known as ____

Answer 18

adverse possession

Question 19

The type of deed that provides all of the covenants to warrant title is known as a _______.

Answer 19

general warranty deed

Question 20

A tenant has an ice cream shop in a shopping mall and pays $2,000 per month plus 4% in overage rent based on gross sales after the first $100,000. This is an example of a ______ lease.

Answer 20

percentage

Question 21

What are the 5 elements of a valid contract?

Answer 21

1) voluntary (consent)
2) an agreement or promise (offer & acceptance /meeting of the minds)
3) legally competent parties
4) legal consideration given
5) legal act

Question 22

The grantor provides two covenants: 1) The grantor
received title to the property; 2) The grantor and his heirs will defend title to the lands against legal claims created by the actions or omissions of the grantor or his heirs. What type of deed is this?

Answer 22

special warranty deed

Question 23

A covenant of warranty inserted in a deed that binds
the grantor and heirs to defend the title conveyed to the grantee and his or her heirs against the lawful claims of all persons.

Answer 23

general warranty deed

Question 24

The grantor conveys any interest held in the property to the grantee without warranty of title. Offers the least protection to the buyer. It is often used to clear a defect in the title when someone is thought to have an interest or right in a particular property

Answer 24

quitclaim deed

Question 25

The grantor conveys the property but does not
guarantee clear title; this is used by court officials and fiduciaries to convey property they hold by force of law but to which they do not hold title. It is also used in foreclosure and tax sales. Title insurance is recommended.

Answer 25

bargain and sale deed