National Property Ownership

Question 1

The buyer has been informed in the title work that there is an easement on the property he has under contract. At closing, what will happen with the easement?

A)
The easement will transfer with the title, with the buyer’s only choice being to terminate the purchase contract if the easement is an issue.
B)
The easement will transfer with the deed but can be revoked once the buyer is in title.
C)
If the buyer’s attorney sends a lis pendens with a notice of revocation, the easement will terminate upon transfer of the title.
D)
The buyer needs to send the seller notice to terminate the easement before closing in order to have it removed.

Answer 1

A)
The easement will transfer with the title, with the buyer’s only choice being to terminate the purchase contract if the easement is an issue.

Explanation
Easements are nonrevocable rights, so the seller or buyer cannot terminate or revoke the easement. The buyer’s only choice is to take the property with the easement or terminate the purchase contract.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 2

A landowner sells one acre of his two-acre property to a friend. He reserves for himself an appurtenant easement over the friend’s land for ingress and egress. The landowner’s property is

A)
is subject to an easement in gross.
B)
the servient tenement.
C)
cleared of the easement when the landowner sells the remaining acre to a third party.
D)
the dominant tenement.

Answer 2

D)
the dominant tenement.

Explanation
The landowner’s parcel benefits from the easement and is the dominant tenement. The neighbor’s tract, over which the easement runs, is the servient tenement. The landowner’s easement remains with the property when it is sold. An easement in gross is a company’s right to use another’s property, such as an easement for a utility company to run power lines over another’s property.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 3

Legal descriptions are used in purchase contracts and deeds and must be accurate. All of these would be considered good and accurate legal descriptions EXCEPT

A)
a description using the rectangular survey method.

B)
the property address with full zip code.

C)
a description using the lot and block method.

D)
a description using the metes and bounds method.

Answer 3

B)
the property address with full zip code.

Explanation
Addresses, which change, are not used as legal descriptions but are often included as a property reference. Lot and block, metes and bounds, and the government rectangular survey are all acceptable legal descriptions.

Reference: Property Ownership > Legal Descriptions

Question 4

Which of these statements is true regarding subsurface rights?

A)
An owner may transfer surface rights without transferring the subsurface rights.
B)
Subsurface rights must always be transferred with surface rights.
C)
Subsurface rights are always included in the conveyance of real estate.
D)
An owner must convey subsurface rights and air rights to the same individual.

Answer 4

A)
An owner may transfer surface rights without transferring the subsurface rights.

Question 5

Which of these is a lien on real estate?

A)
An encroachment
B)
A restrictive covenant
C)
A recorded mortgage
D)
An easement

Answer 5

C)
A recorded mortgage

Explanation
A recorded mortgage is a voluntary, specific lien on real estate. Easements, encroachments, and restrictive covenants are all encumbrances and not liens. An encroachment is an intrusion of an improvement or other real property onto another’s property. An easement is a right of use in another’s property. A restrictive covenant is a limitation on the use of property imposed on a past or current owner and binding on a future owner of the property.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 6

Which lien affects all real and personal property of a debtor?

A)
Specific
B)
Involuntary
C)
Voluntary
D)
General

Answer 6

D)
General

Question 7

All of these would be considered fixtures EXCEPT

A)
rose bushes and grape vines.
B)
a microwave that is plugged into the wall.
C)
wall ovens and a farm sink.
D)
a refrigerator that has been installed into the cupboards.

Answer 7

B)
a microwave that is plugged into the wall.

Question 8

A tax lien on a property can hinder the sale of the property because it is

A)
an encroachment.
B)
an encumbrance.
C)
a monetary charge that the purchaser must satisfy.
D)
a general lien and will attach to the real and personal property.

Answer 8

B)
an encumbrance.

Question 9

The BEST way to ensure that there are no encroachments to a property and to properly verify the boundaries of a parcel of land is to

A)
write a legal description.
B)
get a survey.
C)
find the monuments.
D)
verify the benchmarks.

Answer 9

B)
get a survey.

Question 10

When a landowner takes an easy route to his own property over a neighbor’s land without the neighbor’s knowledge for an extended period, the landowner may have acquired

A)
a license.
B)
a title by eminent domain.
C)
an easement by necessity.
D)
an easement by prescription.

Answer 10

D)
an easement by prescription.

Question 11

Personal property includes all of these EXCEPT

A)
a custom built-in bookcase.
B)
a chair or sofa.
C)
emblements.
D)
trade fixtures.

Answer 11

A)
a custom built-in bookcase.

Question 12

Which statement about encumbrances on real estate is TRUE?

A)
Easements and encroachments are always encumbrances on real property.
B)
All encumbrances must be removed before the title can be transferred.
C)
An encumbrance is of no monetary value to its owner.
D)
An encumbrance on a property makes it impossible to sell the property.

Answer 12

A)
Easements and encroachments are always encumbrances on real property.

Question 13

Which of these is a specific, involuntary lien?

A)
A judgment lien
B)
An income tax lien
C)
A real estate property tax lien
D)
An estate tax lien

Answer 13

C)
A real estate property tax lien

Question 14

A property owner contracted to have a swimming pool installed on her property. When the pool was completed, she refused to pay for the improvement, and the contractor filed a lien for nonpayment. This lien was MOST likely

A)
a special lien.
B)
a voluntary lien.
C)
a general lien.
D)
a mechanic’s lien.

Answer 14

D)
a mechanic’s lien.

Question 15

Which of these liens usually would be given highest priority in disbursing funds from a foreclosure sale?

A)
A mechanic’s lien for work started before the mortgage was made
B)
A mortgage dated last year
C)
Unpaid real estate property taxes
D)
A judgment rendered the day before foreclosure

Answer 15

C)
Unpaid real estate property taxes

Question 16

If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties,

A)
the properties retain their former status.
B)
the easement is unaffected.
C)
the easement is terminated.
D)
the easement becomes dormant.

Answer 16

C)
the easement is terminated.

Question 17

Which tax targets homeowners in particular?

A)
Luxury tax
B)
Sales tax
C)
Real property tax
D)
Personal property tax

Answer 17

C)
Real property tax

Question 18

Which of these is a voluntary, specific lien?

A)
Mechanic’s lien
B)
IRS tax lien
C)
Mortgage lien
D)
Property tax lien

Answer 18

C)
Mortgage lien

Question 19

In determining the height of a structure, a surveyor would MOST likely use

A)
a point of beginning.
B)
a datum.
C)
a benchmark.
D)
a survey.

Answer 19

In determining the height of a structure, a surveyor would MOST likely use

A)
a point of beginning.
Incorrect Answer
B)
a datum.
Correct Answer
C)
a benchmark.
Incorrect Answer
D)
a survey.
Incorrect Answer
Explanation
The datum is used to measure horizontal planes from which heights and depths are measured. The benchmark is the permanent reference mark.

Reference: Property Ownership > Legal Descriptions

Question 20

A property owner who has the legal right to cross over a neighbor’s land holds

A)
an encroachment.
B)
an easement.
C)
an estate in land.
D)
a police power.

Answer 20

A property owner who has the legal right to cross over a neighbor’s land holds

A)
an encroachment.
Incorrect Answer
B)
an easement.
Correct Answer
C)
an estate in land.
Incorrect Answer
D)
a police power.
Incorrect Answer
Explanation
An easement is a right of use or passage. An easement is not an estate in land because it does not create any right of ownership. An easement is not an exercise of the police power of the state. An easement is not an encroachment, which is an illegal extension of a structure onto another’s property

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 21

A township contains

A)
36 sections.
B)
23,040 square ft.
C)
640 acres.
D)
6 sq. mi.

Answer 21

A township contains

A)
36 sections.
Correct Answer
B)
23,040 square ft.
Incorrect Answer
C)
640 acres.
Incorrect Answer
D)
6 sq. mi.
Incorrect Answer
Explanation
Each section is 1 square mile. Each township is 6 miles square and contains 36 sq. mi, so a township contains 36 sections. Each section is 1 sq. mi., or 640 acres. The 36 sq. mi. of a township are 23,040 acres.

Reference: Property Ownership > Legal Descriptions

Question 22

The owner has a large parcel of land surveyed into lots and streets and files a subdivision plat. Each lot can be legally described by use of which of these?

A)
Lot and block system
B)
Metes-and-bounds system
C)
Street address
D)
Government survey

Answer 22

The owner has a large parcel of land surveyed into lots and streets and files a subdivision plat. Each lot can be legally described by use of which of these?

A)
Lot and block system
Correct Answer
B)
Metes-and-bounds system
Incorrect Answer
C)
Street address
Incorrect Answer
D)
Government survey
Incorrect Answer
Explanation
The lot and block system is often used to describe property in subdivisions. The rectangular government survey system divides land into rectangles and describes those rectangles with principal meridians and base lines. The metes-and-bounds system outlines the perimeter of a parcel by starting at one point and ending at the same point. A street address is not a legal property description.

Reference: Property Ownership > Legal Descriptions

Question 23

If there is a discrepancy between a residential lot size quoted in a listing contract and the actual lot size, the actual lot size that will prevail in a sales transaction will be found in

A)
the multiple listing service (MLS) listing.
B)
the deed.
C)
the listing contract.
D)
the survey.

Answer 23

If there is a discrepancy between a residential lot size quoted in a listing contract and the actual lot size, the actual lot size that will prevail in a sales transaction will be found in

A)
the multiple listing service (MLS) listing.
Incorrect Answer
B)
the deed.
Incorrect Answer
C)
the listing contract.
Incorrect Answer
D)
the survey.
Correct Answer
Explanation
The accuracy of the lot size is essential for both residential and commercial properties. If there is a discrepancy between the lot size quoted in a listing contract or deed and the actual lot size, the actual lot size found by a survey will prevail. Most MLS services will note that any square footage listed is only an estimate.

Reference: Property Ownership > Legal Descriptions

Question 24

All of these will terminate an easement EXCEPT

A)
the abandonment of an easement.
B)
the release of the right of easement from the servient tenant to the dominant tenement.
C)
the nonuse of a prescriptive easement.
D)
when the need for the easement no longer exists.

Answer 24

All of these will terminate an easement EXCEPT

A)
the abandonment of an easement.
Incorrect Answer
B)
the release of the right of easement from the servient tenant to the dominant tenement.
Correct Answer
C)
the nonuse of a prescriptive easement.
Incorrect Answer
D)
when the need for the easement no longer exists.
Incorrect Answer
Explanation
An easement is terminated when the owner of the dominant tenement who benefits from the easement releases that right to the owner of the servient tenement. All the other events shown will terminate an easement.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 25

The priority of liens refers to which of these?

A)
The dates liens are recorded
B)
The order in which a debtor assumes responsibility for payment of obligations
C)
The order in which liens will be paid if property is sold to satisfy a debt
D)
The fact that specific liens have greater priority than general liens

Answer 25

The priority of liens refers to which of these?

A)
The dates liens are recorded
Incorrect Answer
B)
The order in which a debtor assumes responsibility for payment of obligations
Incorrect Answer
C)
The order in which liens will be paid if property is sold to satisfy a debt
Correct Answer
D)
The fact that specific liens have greater priority than general liens
Incorrect Answer
Explanation
The priority of liens refers to the order in which claims against the property will be paid off. In general, the rule for priority of liens is “first to record, first in right.” The priority is created by the recording date, but property taxes and special assessments are exceptions to the rule because they take priority over all other liens, regardless of when the liens were recorded.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 26

After real estate has been sold by the state or the county to satisfy a delinquent property tax lien, if state law permits, the defaulted owner has a right to

A)
redeem the property within the time specified by the law.
B)
have the sale canceled by paying the back taxes and penalties.
C)
pay the creditors directly and have their liens removed.
D)
record a notice of nonresponsibility for the unpaid taxes.

Answer 26

After real estate has been sold by the state or the county to satisfy a delinquent property tax lien, if state law permits, the defaulted owner has a right to

A)
redeem the property within the time specified by the law.
Correct Answer
B)
have the sale canceled by paying the back taxes and penalties.
Incorrect Answer
C)
pay the creditors directly and have their liens removed.
Incorrect Answer
D)
record a notice of nonresponsibility for the unpaid taxes.
Incorrect Answer
Explanation
Generally, a delinquent taxpayer can redeem the property before the tax sale by paying the delinquent taxes plus interest and charges (court costs and attorney fees). This right is known as the equitable right of redemption. After the real estate has been sold, the defaulted owner may redeem the property by paying the amount collected at the tax sale plus interest, charges, and any taxes levied since the sale. This right is known as the statutory right of redemption. These terms are also used in the foreclosure process with mortgages or deeds of trust.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 27

An owner of a property with a lake has given the neighbor verbal permission to fish in the lake. The neighbor’s right of use is MOST likely

A)
an easement appurtenant.
B)
an easement in gross.
C)
an encumbrance.
D)
a license.

Answer 27

An owner of a property with a lake has given the neighbor verbal permission to fish in the lake. The neighbor’s right of use is MOST likely

A)
an easement appurtenant.
Incorrect Answer
B)
an easement in gross.
Incorrect Answer
C)
an encumbrance.
Incorrect Answer
D)
a license.
Correct Answer
Explanation
A license is a personal right to enter the land of another for a specific purpose and can be terminated or revoked at any time. Typically, these are not in writing and are not considered to be encumbrances because the owner may take the license. Easements are nonrevocable written, usually in a deed, rights of use in another property.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 28

Property taxes levied on a property owner to pay for installation of sidewalks or sewers are called

A)
ad valorem taxes.
B)
special excise taxes.
C)
special assessments.
D)
general property taxes.

Answer 28

Property taxes levied on a property owner to pay for installation of sidewalks or sewers are called

A)
ad valorem taxes.
Incorrect Answer
B)
special excise taxes.
Incorrect Answer
C)
special assessments.
Correct Answer
D)
general property taxes.
Incorrect Answer
Explanation
Special assessments are taxes levied on real estate to fund public improvements. General property taxes are taxes on real or personal property levied by a government taxing authority. Special excise taxes are direct taxes on services performed or income received, such as license fees and sales taxes. Real estate taxes are also known as ad valorem taxes, taxes based on the value of the specific property being taxed.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 29

A recorded subdivision plat is used in

A)
the geodetic survey system.
B)
the rectangular survey system.
C)
the metes-and-bounds system.
D)
the lot and block system.

Answer 29

A recorded subdivision plat is used in

A)
the geodetic survey system.
Incorrect Answer
B)
the rectangular survey system.
Incorrect Answer
C)
the metes-and-bounds system.
Incorrect Answer
D)
the lot and block system.
Correct Answer
Explanation
A recorded subdivision plat, which becomes part of the legal description, uses the lot and block system. The rectangular survey system divides land into rectangles and describes those rectangles with principal meridians and base lines. The geodetic survey system refers to the government system that identifies property through a network of benchmarks, each one identified by its longitude and latitude. The metes-and-bounds system outlines the perimeter of a parcel by starting at one point and ending at the same point.

Reference: Property Ownership > Legal Descriptions

Question 30

A title search for a property under contract has revealed several outstanding liens against the property. Which of these liens has highest priority?

A)
A property tax lien for the current year
B)
A special assessment for the current year
C)
An outstanding first mortgage lien dated and recorded one year ago
D)
A judgment lien rendered and recorded last month

Answer 30

A title search for a property under contract has revealed several outstanding liens against the property. Which of these liens has highest priority?

A)
A property tax lien for the current year
Correct Answer
B)
A special assessment for the current year
Incorrect Answer
C)
An outstanding first mortgage lien dated and recorded one year ago
Incorrect Answer
D)
A judgment lien rendered and recorded last month
Incorrect Answer
Explanation
Tax liens have priority over previously recorded liens and over a special assessment, which will also take priority over previously recorded liens. The priority of the other liens will be based on the dates they were recorded. Liens recorded first will have a first right to payment or priority.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 31

In an offer, a buyer requested the freestanding bookcase and the installed hot tub with the property. Negotiations went back and forth, and the buyer’s agent finally wrote a new offer that failed to mention either item. At closing, the buyer should expect to have

A)
the bookcase left and the hot tub removed by the seller.
B)
both items left with the property because they were mentioned in the first offer.
C)
the hot tub remain and the bookcase removed by the seller.
D)
the seller remove both items because they were not in the final contract.

Answer 31

In an offer, a buyer requested the freestanding bookcase and the installed hot tub with the property. Negotiations went back and forth, and the buyer’s agent finally wrote a new offer that failed to mention either item. At closing, the buyer should expect to have

A)
the bookcase left and the hot tub removed by the seller.
Incorrect Answer
B)
both items left with the property because they were mentioned in the first offer.
Incorrect Answer
C)
the hot tub remain and the bookcase removed by the seller.
Correct Answer
D)
the seller remove both items because they were not in the final contract.
Incorrect Answer
Explanation
The hot tub, which is a fixture, would have to be excluded from the contract if the seller was going to keep it. However, the bookcase is personal property and can be removed by the seller because it was not included in the contract.

Reference: Property Ownership > Real Versus Personal Property

Question 32

A section in the rectangular survey system contains

A)
160 government lots.
B)
160 acres per section.
C)
640 acres per section.
D)
36 townships.

Answer 32

A section in the rectangular survey system contains

A)
160 government lots.
Incorrect Answer
B)
160 acres per section.
Incorrect Answer
C)
640 acres per section.
Correct Answer
D)
36 townships.
Incorrect Answer
Explanation
Each township contains 36 sections, and each section is 1 square mile, or 640 acres per section.

Reference: Property Ownership > Legal Descriptions

Question 33

The date and time a document was recorded in the public records helps to establish

A)
the marketable title.
B)
the alienation clause.
C)
the abstract of title.
D)
the priority of mortgages and liens.

Answer 33

The date and time a document was recorded in the public records helps to establish

A)
the marketable title.
Incorrect Answer
B)
the alienation clause.
Incorrect Answer
C)
the abstract of title.
Incorrect Answer
D)
the priority of mortgages and liens.
Correct Answer
Explanation
The priority of mortgages and other liens normally is determined by the order in which they were recorded. Time of recordation is an important consideration in establishing the priority of claims in the event of a sale. An abstract of title is a document prepared to report the results of a title search. An alienation clause is used in a mortgage or deed of trust to allow the full amount due to be called if the buyer is in default. Marketable title is established with an abstract or title commitment.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 34

The primary survey line running east and west in the rectangular survey system is

A)
the base line.
B)
the range line.
C)
the township line.
D)
the principal meridian.

Answer 34

The primary survey line running east and west in the rectangular survey system is

A)
the base line.
Correct Answer
B)
the range line.
Incorrect Answer
C)
the township line.
Incorrect Answer
D)
the principal meridian.
Incorrect Answer
Explanation
The base lines run east and west in a rectangular survey system, while the principal meridians run north and south. Township lines run east and west; range lines run north and south. Sections are created through the intersection of these lines.

Reference: Property Ownership > Legal Descriptions

Question 35

Neighbor A uses Neighbor B’s driveway to reach Neighbor A’s garage, which is on Neighbor A’s property. Neighbor B’s attorney explains that ownership rights of Neighbor A’s real estate include an easement appurtenant giving Neighbor A the right to use Neighbor B’s driveway. In this case, Neighbor B’s property is

A)
the dominant tenement.
B)
the servient tenement.
C)
the leasehold interest.
D)
the licensed property.

Answer 35

Neighbor A uses Neighbor B’s driveway to reach Neighbor A’s garage, which is on Neighbor A’s property. Neighbor B’s attorney explains that ownership rights of Neighbor A’s real estate include an easement appurtenant giving Neighbor A the right to use Neighbor B’s driveway. In this case, Neighbor B’s property is

A)
the dominant tenement.
Incorrect Answer
B)
the servient tenement.
Correct Answer
C)
the leasehold interest.
Incorrect Answer
D)
the licensed property.
Incorrect Answer
Explanation
In an appurtenant easement, the parcel over which the easement runs is known as the servient tenement, and the neighboring parcel that benefits from the easement is known as the dominant tenement. Neighbor B’s property is the servient tenement, and Neighbor A’s is the dominant tenement. The easement does not create a leasehold estate. A license is a personal privilege with permission from a landowner to enter the land for a specific purpose.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 36

A property description states, “Starting at the corner of Ash Street so many feet to 2nd Street,” and so forth. This description is MOST likely

A)
a government survey.
B)
a rectangular survey.
C)
a metes-and-bounds description.
D)
a lot and block system.

Answer 36

A property description states, “Starting at the corner of Ash Street so many feet to 2nd Street,” and so forth. This description is MOST likely

A)
a government survey.
Incorrect Answer
B)
a rectangular survey.
Incorrect Answer
C)
a metes-and-bounds description.
Correct Answer
D)
a lot and block system.
Incorrect Answer
Explanation
This is the only legal description that uses a starting point. The rectangular survey system or government survey system divides land into rectangles and describes those rectangles with principal meridians and base lines. The lot and block system uses lot and block numbers referred to in a plat map and is often used in subdivisions.

Reference: Property Ownership > Legal Descriptions

Question 37

Under which type of lien are both the real property and the personal property of the debtor sold to pay the debt?

A)
Assessment lien
B)
Judgment lien
C)
Mechanic’s lien
D)
Real estate tax lien

Answer 37

Under which type of lien are both the real property and the personal property of the debtor sold to pay the debt?

A)
Assessment lien
Incorrect Answer
B)
Judgment lien
Correct Answer
C)
Mechanic’s lien
Incorrect Answer
D)
Real estate tax lien
Incorrect Answer
Explanation
A judgment is a general, involuntary, equitable lien on both real and personal property owned by the debtor. A mechanic’s lien is a specific lien against real property filed by a contractor, a subcontractor, or a supplier when an owner or a contractor has not paid for work or supplies for improvements on a property. A real estate tax lien is a statutory lien against real property for nonpayment of taxes. An assessment lien is a special assessment levied on real property to fund public improvements to property.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 38

What is the difference between a general lien and a specific lien?

A)
A specific lien is held by one person, while a general lien is held by at least two people.
B)
A general lien cannot be enforced in court, while a specific lien can be enforced.
C)
A general lien affects all of a debtor’s property, while a specific lien affects only a certain piece of property.
D)
A specific lien covers real estate, while a general lien covers personal property.

Answer 38

What is the difference between a general lien and a specific lien?

A)
A specific lien is held by one person, while a general lien is held by at least two people.
Incorrect Answer
B)
A general lien cannot be enforced in court, while a specific lien can be enforced.
Incorrect Answer
C)
A general lien affects all of a debtor’s property, while a specific lien affects only a certain piece of property.
Correct Answer
D)
A specific lien covers real estate, while a general lien covers personal property.
Incorrect Answer
Explanation
A general lien affects all of a debtor’s property, both real and personal. A specific lien affects only a particular piece of real or personal property. Both general and specific liens may be enforced in court.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 39

Which of these would be classified as a general lien?

A)
Mechanic’s lien
B)
Real estate property tax lien
C)
Judgment
D)
Property tax lien

Answer 39

Which of these would be classified as a general lien?

A)
Mechanic’s lien
Incorrect Answer
B)
Real estate property tax lien
Incorrect Answer
C)
Judgment
Correct Answer
D)
Property tax lien
Incorrect Answer
Explanation
A judgment lien is not a lien on specific assets but on the assets of the debtor in general. A judgment applies to both the personal and real property of the debtor. Property tax liens are specific liens that have priority over other liens. A mechanic’s lien may be filed against real property by a contractor or supplier for nonpayment of work or supplies. A property tax lien may be filed by a government for the nonpayment of real estate property taxes.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 40

A woman has permission from her friend to hike on his property during the autumn months. Her friend has granted her

A)
riparian rights.
B)
a conditional use permit.
C)
an easement by necessity.
D)
a license.

Answer 40

A woman has permission from her friend to hike on his property during the autumn months. Her friend has granted her

A)
riparian rights.
Incorrect Answer
B)
a conditional use permit.
Incorrect Answer
C)
an easement by necessity.
Incorrect Answer
D)
a license.
Correct Answer
Explanation
A license is a personal revocable right to use another’s property with permission of the owner. The permission is personal, nontransferable, and can be revoked at any time. A conditional use permit is granted by a city or municipality to a property owner to allow a special nonconforming use of property in a residential district. Riparian rights give to owners of land along the course of a river, stream, or similar body of water the rights to use the water according to state or local laws. An easement by necessity is created by a court when an owner sells a parcel of land that has no access to a public way except over the seller’s remaining land.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 41

Which of these would create a lien on real estate?

A)
Unpaid mortgage loan
B)
Encroachment
C)
Easement running with the land
D)
License

Answer 41

Which of these would create a lien on real estate?

A)
Unpaid mortgage loan
Correct Answer
B)
Encroachment
Incorrect Answer
C)
Easement running with the land
Incorrect Answer
D)
License
Incorrect Answer
Explanation
A mortgage agreement creates a voluntary, specific lien and is an encumbrance on the property. However, encumbrances such as easements and encroachments do not involve liens. An encroachment is an intrusion of an improvement or other real property onto another’s property. An easement is a right of use in another’s property. A license is a personal, revocable privilege.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 42

The priority of liens refers to which of these?

A)
The order in which liens will be paid if property is sold to satisfy a debt
B)
The fact that specific liens have greater priority than general liens
C)
The order in which a debtor assumes responsibility for payment of obligations
D)
The dates liens are recorded

Answer 42

The priority of liens refers to which of these?

A)
The order in which liens will be paid if property is sold to satisfy a debt
Correct Answer
B)
The fact that specific liens have greater priority than general liens
Incorrect Answer
C)
The order in which a debtor assumes responsibility for payment of obligations
Incorrect Answer
D)
The dates liens are recorded
Incorrect Answer
Explanation
The priority of liens refers to the order in which claims against the property will be paid off. In general, the rule for priority of liens is “first to record, first in right.” The priority is created by the recording date, but property taxes and special assessments are exceptions to the rule, as they take priority over all other liens, regardless of when the liens were recorded.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 43

Because a homeowner failed to pay her real estate property taxes on time, the taxing authority imposed a claim against her property. This claim is known as

A)
an easement.
B)
a lien.
C)
a reversionary interest.
D)
a deed restriction.

Answer 43

Because a homeowner failed to pay her real estate property taxes on time, the taxing authority imposed a claim against her property. This claim is known as

A)
an easement.
Incorrect Answer
B)
a lien.
Correct Answer
C)
a reversionary interest.
Incorrect Answer
D)
a deed restriction.
Incorrect Answer
Explanation
Unpaid real estate property taxes are a lien on the property because they are a charge against the property that provides security for a debt or an obligation for payment by the property owner. A deed restriction creates a limitation on the use of a property. An easement is the right of one party to use the real property of another for a specific use. A reversionary interest is the ownership interest belonging to the creator of a life estate when the ownership reverts to the original owner upon the end of the life estate.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 44

When a company furnishes materials for the construction of a house and the company is NOT paid, it may file

A)
a mechanic’s lien.
B)
a lis pendens.
C)
a default judgment.
D)
a deficiency judgment.

Answer 44

When a company furnishes materials for the construction of a house and the company is NOT paid, it may file

A)
a mechanic’s lien.
Correct Answer
B)
a lis pendens.
Incorrect Answer
C)
a default judgment.
Incorrect Answer
D)
a deficiency judgment.
Incorrect Answer
Explanation
A mechanic’s lien gives security to persons or companies that perform labor or furnish material to improve real property and can be filed when the owner has not fully paid for the work. Lis pendens is a recorded notice of a suit that may affect title to real property. A default judgment is granted when a creditor files for unpaid bills and wins the right to place a general lien on all the debtors’ property to collect payment. A deficiency judgment is a personal judgment a lender may file against a borrower for the unpaid balance on a mortgage loan when a foreclosure sale has not produced enough cash to pay the loan balance.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 45

General real estate property taxes are also known as

A)
ad valorem taxes.
B)
voluntary liens.
C)
special assessments.
D)
appropriation funds.

Answer 45

General real estate property taxes are also known as

A)
ad valorem taxes.
Correct Answer
B)
voluntary liens.
Incorrect Answer
C)
special assessments.
Incorrect Answer
D)
appropriation funds.
Incorrect Answer
Explanation
General real estate property taxes are based on the value of the property being taxed and are known as ad valorem taxes. They are specific, involuntary liens. Special assessments are taxes levied on real estate to fund public improvements beneficial to the property. Real estate property taxes are not appropriation funds taken from local or state revenues. Real estate property taxes are specific, involuntary liens. Voluntary liens, such as mortgages, are placed on real property with the consent of the owner.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 46

Which of these is a voluntary lien?

A)
Real estate tax lien
B)
Mortgage lien
C)
Judgment lien
D)
Estate tax lien

Answer 46

Which of these is a voluntary lien?

A)
Real estate tax lien
Incorrect Answer
B)
Mortgage lien
Correct Answer
C)
Judgment lien
Incorrect Answer
D)
Estate tax lien
Incorrect Answer
Explanation
A mortgage loan is created intentionally by the owner’s action in acquiring a mortgage. It is a voluntary lien. Estate tax liens, real estate tax liens, and judgment liens are all involuntary liens imposed without the owner’s consent.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 47

The type of easement granting a right-of-way for a utility company’s power lines is

A)
an easement by prescription.
B)
an easement in gross.
C)
an appurtenant easement.
D)
an easement by necessity.

Answer 47

The type of easement granting a right-of-way for a utility company’s power lines is

A)
an easement by prescription.
Incorrect Answer
B)
an easement in gross.
Correct Answer
C)
an appurtenant easement.
Incorrect Answer
D)
an easement by necessity.
Incorrect Answer
Explanation
Easements in gross are individual rights to use someone’s land, as in the case of the utility company. An easement in gross can be assigned, conveyed, and inherited. An easement by necessity is created by a court when an owner sells a parcel of land that has no access to a public way except over the seller’s remaining land. An easement by prescription is acquired when a person makes continuous and visible use of another’s land for a certain period of time without the owner’s permission. An appurtenant easement has two parties; an example would be a right to drive across a neighbors land.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 48

A general contractor recently filed suit against a homeowner for nonpayment. The contractor now learns that the homeowner has listed the property for sale with a real estate broker. In this situation, which of these will the contractor’s attorney use to protect the contractor’s interest?

A)
Lis pendens
B)
Assessment
C)
Mortgage lien
D)
Buyer’s lien

Answer 48

A general contractor recently filed suit against a homeowner for nonpayment. The contractor now learns that the homeowner has listed the property for sale with a real estate broker. In this situation, which of these will the contractor’s attorney use to protect the contractor’s interest?

A)
Lis pendens
Correct Answer
B)
Assessment
Incorrect Answer
C)
Mortgage lien
Incorrect Answer
D)
Buyer’s lien
Incorrect Answer
Explanation
A recorded lis pendens (a notice of action pending) warns any potential purchaser that a property is subject to a pending legal action. This notice would prompt a buyer to consider very carefully whether to proceed, but it would not absolutely prevent it. The contractor may also have the right to use a mechanic’s lien to obtain payment. The lis pendens would give notice until the mechanic’s lien was in place. An assessment is a special levy for a definite purpose, such as adding curbs or sewers in a neighborhood. A mortgage lien is a voluntary specific lien the borrower signs.

Question 49

A lien against specific properties that benefit from public improvement is known as

A)
an ad valorem tax.
B)
a mortgage lien.
C)
a mechanic’s lien.
D)
a special assessment.

Answer 49

A lien against specific properties that benefit from public improvement is known as

A)
an ad valorem tax.
Incorrect Answer
B)
a mortgage lien.
Incorrect Answer
C)
a mechanic’s lien.
Incorrect Answer
D)
a special assessment.
Correct Answer
Explanation
Special assessments are taxes levied on real estate to fund improvements beneficial to the property. The specific improvements are paid for by the special assessments. A mechanic’s lien is a specific lien against real property filed by a contractor, subcontractor, or supplier when an owner or a contractor has not paid for work or supplies for improvements on a property. An ad valorem tax is a real estate property tax levied by a government entity and based on the assessed value of the specific property being taxed. A mortgage lien is a specific voluntary lien created as collateral for debt.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 50

Which of these statements is true regarding air lots?

A)
Air lots are located below a parcel of land.
B)
An owner may subdivide the air above the land into air lots.
C)
An owner may not subdivide the air above the land.
D)
Air lots are located parallel to the property.

Answer 50

Which of these statements is true regarding air lots?

A)
Air lots are located below a parcel of land.
Incorrect Answer
B)
An owner may subdivide the air above the land into air lots.
Correct Answer
C)
An owner may not subdivide the air above the land.
Incorrect Answer
D)
Air lots are located parallel to the property.
Incorrect Answer
Explanation
The space above a parcel of land is called air space and can be subdivided into air lots.

Reference: Property Ownership > Real Versus Personal Property

Question 51

A license is an example of

A)
an appurtenant easement.
B)
a temporary right.
C)
an encroachment.
D)
a restriction.

Answer 51

A license is an example of

A)
an appurtenant easement.
Incorrect Answer
B)
a temporary right.
Correct Answer
C)
an encroachment.
Incorrect Answer
D)
a restriction.
Incorrect Answer
Explanation
A license is a personal and temporary right to use another’s property. A license can be canceled or revoked at any time. An encroachment occurs when a building or part of a structure extends illegally onto another’s property. An appurtenant easement permits the owner of one parcel to use an adjoining neighbor’s parcel. A restriction limits the ways property owners may use their property.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 52

A judgment lien filed in a county usually covers

A)
the debtor’s real and personal property in the state in which it was recorded.
B)
only the debtor’s real property located in that county.
C)
the debtor’s real and personal property located in that county.
D)
only the debtor’s personal property located in that county.

Answer 52

A judgment lien filed in a county usually covers

A)
the debtor’s real and personal property in the state in which it was recorded.
Incorrect Answer
B)
only the debtor’s real property located in that county.
Incorrect Answer
C)
the debtor’s real and personal property located in that county.
Correct Answer
D)
only the debtor’s personal property located in that county.
Incorrect Answer
Explanation
A judgment is a general, involuntary, equitable lien on both the real and personal property owned by the debtor. Usually the lien covers only property located in the county in which the lien was recorded. Notices of the lien must be filed in another county if a creditor wishes to extend the coverage to that county.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 53

A portion of a homeowner’s building was inadvertently built on his neighbor’s land causing

A)
an easement.
B)
a license.
C)
a lien.
D)
an encroachment.

Answer 53

A portion of a homeowner’s building was inadvertently built on his neighbor’s land causing

A)
an easement.
Incorrect Answer
B)
a license.
Incorrect Answer
C)
a lien.
Incorrect Answer
D)
an encroachment.
Correct Answer
Explanation
When all or part of a structure illegally extends beyond the land of its owner, an encroachment occurs. A license is a revocable right to use a property. A lien is an obligation to pay a debt. An easement is the right to use the land of another for a specific purpose.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 54

The system of legal description that defines a parcel of land by tracing its perimeter is known as

A)
street address.
B)
rectangular survey.
C)
metes and bounds.
D)
lot and block system.

Answer 54

The system of legal description that defines a parcel of land by tracing its perimeter is known as

A)
street address.
Incorrect Answer
B)
rectangular survey.
Incorrect Answer
C)
metes and bounds.
Correct Answer
D)
lot and block system.
Incorrect Answer
Explanation
A metes-and-bounds description traces a parcel’s perimeter by starting at a point of beginning (POB) and always ending back at the POB, so the described tract is completely enclosed. The rectangular survey system divides land into rectangles and describes those rectangles with principal meridians and base lines. The lot and block system uses lot and block numbers in a plat map to describe property and is often used in urban areas. A street address is not a legal description.

Reference: Property Ownership > Legal Descriptions

Question 55

When a lien against a parcel of real estate may result from a lawsuit currently before the court, someone examining the public records would look for

A)
a judgment lien.
B)
the chain of title.
C)
a lis pendens.
D)
a suit to quiet title.

Answer 55

When a lien against a parcel of real estate may result from a lawsuit currently before the court, someone examining the public records would look for

A)
a judgment lien.
Incorrect Answer
B)
the chain of title.
Incorrect Answer
C)
a lis pendens.
Correct Answer
D)
a suit to quiet title.
Incorrect Answer
Explanation
A lis pendens is a notice of a possible future lien and is filed because there is often considerable delay between the time a lawsuit is filed and the time final judgment is rendered. The chain of title is the record of a property’s ownership and would not indicate a pending action on the property. A suit to quiet title is a court action to establish ownership of a property when a gap or cloud exists in the chain of title. A judgment lien is already recorded in the county in which the property is located and does not indicate any other pending liens.

Reference: Property Ownership > Encumbrances and Effects on Property

Question 56

A mechanic’s lien would be properly classified as

A)
a general lien.
B)
a specific lien.
C)
a voluntary lien.
D)
an equitable lien.

Answer 56

A mechanic’s lien would be properly classified as

A)
a general lien.
Incorrect Answer
B)
a specific lien.
Correct Answer
C)
a voluntary lien.
Incorrect Answer
D)
an equitable lien.
Incorrect Answer
Explanation
A mechanic’s lien is a specific lien because it affects a specific property and only that particular property. It is an involuntary lien placed on a property without the owner’s consent. A general lien is the right of a creditor to have all of an owner’s property, real and personal, sold to satisfy a debt. An equitable lien arises out of a written contract that shows the intention of the parties to charge a particular property as a security for a debt or obligation.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 57

The LEAST specific method for identifying a legal description of real property is

A)
rectangular survey.
B)
street address.
C)
metes and bounds.
D)
lot and block.

Answer 57

The LEAST specific method for identifying a legal description of real property is

A)
rectangular survey.
Incorrect Answer
B)
street address.
Correct Answer
C)
metes and bounds.
Incorrect Answer
D)
lot and block.
Incorrect Answer
Explanation
A legal description is a precise method of identifying a parcel of land and uses metes and bounds, rectangular survey, or lot and block as methods that can be used for identification. A street address is not a legal description and, therefore, not as precise.

Reference: Property Ownership > Legal Descriptions

Question 58

A pizza parlor rents space in a retail shopping center. Its owner bolts a large iron pizza oven to the floor to cook the pizzas. The oven is

A)
a fixture.
B)
a rental fixture.
C)
real property.
D)
a trade fixture.

Answer 58

A pizza parlor rents space in a retail shopping center. Its owner bolts a large iron pizza oven to the floor to cook the pizzas. The oven is

A)
a fixture.
Incorrect Answer
B)
a rental fixture.
Incorrect Answer
C)
real property.
Incorrect Answer
D)
a trade fixture.
Correct Answer
Explanation
The iron oven is a trade fixture used for a specific business purpose. It is personal property, even though it is attached to the rented space. The owner must remove the oven on or before the last day of the lease. A fixture is an item permanently attached to the property and is considered real property. If the restaurant owner assembles and builds an oven in the space that cannot easily be removed, its removal may cause severe damage to the space. If not removed, the oven becomes a permanent fixture, real property belonging to the landlord.

Reference: Property Ownership > Real Versus Personal Property

Question 59

Normally, the priority of general liens is determined by

A)
the court.
B)
the size of the claim.
C)
the order in which they are filed or recorded.
D)
the order in which the cause of action arose.

Answer 59

Normally, the priority of general liens is determined by

A)
the court.
Incorrect Answer
B)
the size of the claim.
Incorrect Answer
C)
the order in which they are filed or recorded.
Correct Answer
D)
the order in which the cause of action arose.
Incorrect Answer
Explanation
The general rule for priority of liens is “first come, first served.” Property taxes and special assessments are exceptions to the general rule because they usually take priority over other liens. The priority of liens does not arise out of the size of a claim. Courts do not determine the priority of liens.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 60

A purchaser buys a home using a mortgage loan from a local lender. The lender promptly recorded the mortgage. Three years later, the homeowner needs additional cash, so he places a second mortgage with a different lender. Based on these facts, which statement is TRUE?

A)
The new lender cannot hold a security interest in the property already held as collateral by the original lender.
B)
The loan from the original lender has priority over the loan made three years later with the new lender.
C)
The loan from the original lender is a subordination loan.
D)
Because it is older, the loan from the original lender is subject to the loan from the new lender, which assumes priority in time.

Answer 60

A purchaser buys a home using a mortgage loan from a local lender. The lender promptly recorded the mortgage. Three years later, the homeowner needs additional cash, so he places a second mortgage with a different lender. Based on these facts, which statement is TRUE?

A)
The new lender cannot hold a security interest in the property already held as collateral by the original lender.
Incorrect Answer
B)
The loan from the original lender has priority over the loan made three years later with the new lender.
Correct Answer
C)
The loan from the original lender is a subordination loan.
Incorrect Answer
D)
Because it is older, the loan from the original lender is subject to the loan from the new lender, which assumes priority in time.
Incorrect Answer
Explanation
The dates of the recording of the liens establish their priority. The loan from the new lender is made and recorded more recently and is subject to (second in line behind) the loan from the original lender. If a second mortgage has a higher amount than a first mortgage, the second lender may require a subordination agreement in which the first lender lowers its lien position to that of the second lender; both lenders must sign the agreement.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 61

After real estate has been sold by the state or the county to satisfy a delinquent property tax lien, if state law permits, the defaulted owner has a right to

A)
redeem the property within the time specified by the law.
B)
pay the creditors directly and have their liens removed.
C)
have the sale canceled by paying the back taxes and penalties.
D)
record a notice of nonresponsibility for the unpaid taxes.

Answer 61

After real estate has been sold by the state or the county to satisfy a delinquent property tax lien, if state law permits, the defaulted owner has a right to

A)
redeem the property within the time specified by the law.
Correct Answer
B)
pay the creditors directly and have their liens removed.
Incorrect Answer
C)
have the sale canceled by paying the back taxes and penalties.
Incorrect Answer
D)
record a notice of nonresponsibility for the unpaid taxes.
Incorrect Answer
Explanation
Generally, a delinquent taxpayer can redeem the property before the tax sale by paying the delinquent taxes plus interest and charges (court costs and attorney fees). This right is known as the equitable right of redemption. After the real estate has been sold, the defaulted owner may redeem the property by paying the amount collected at the tax sale plus interest, charges, and any taxes levied since the sale. This right is known as the statutory right of redemption.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 62

The seller has a number of custom-built, freestanding bookcases and media centers he has agreed to include in the sale to the buyer. How will these items be conveyed to the buyer?

A)
With a deed of trust
B)
As part of the real property
C)
By a bill of sale
D)
Within the deed

Answer 62

The seller has a number of custom-built, freestanding bookcases and media centers he has agreed to include in the sale to the buyer. How will these items be conveyed to the buyer?

A)
With a deed of trust
Incorrect Answer
B)
As part of the real property
Incorrect Answer
C)
By a bill of sale
Correct Answer
D)
Within the deed
Incorrect Answer
Explanation
Because the items are personal property (freestanding), they convey via a bill of sale.

Reference: Property Ownership > Real Versus Personal Property

Question 63

A junior lien may become first in priority if the original lender agrees to execute

A)
a subordination agreement.
B)
a second mortgage agreement.
C)
an alienation clause.
D)
deed of trust.

Answer 63

A junior lien may become first in priority if the original lender agrees to execute

A)
a subordination agreement.
Correct Answer
B)
a second mortgage agreement.
Incorrect Answer
C)
an alienation clause.
Incorrect Answer
D)
deed of trust.
Incorrect Answer
Explanation
If the original (first mortgage) lender signs a subordination agreement, another loan made more recently (later) may be allowed to take first place and the original one drop to second place. A deed of trust is a third-party instrument in which the deed is given as security for the loan to a third party, the trustee. A second mortgage agreement binds a borrower to repay a loan taken on a property on which the borrower already has a first mortgage. An alienation clause provides that when a property is sold, a lender may declare the entire debt due immediately.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 64

A homeowner recently fenced his property. By mistake, the fence extends 1 foot over his own lot line onto a neighbor’s property. The fence has created

A)
a license.
B)
an encroachment.
C)
an easement by necessity.
D)
an easement by prescription.

Answer 64

A homeowner recently fenced his property. By mistake, the fence extends 1 foot over his own lot line onto a neighbor’s property. The fence has created

A)
a license.
Incorrect Answer
B)
an encroachment.
Correct Answer
C)
an easement by necessity.
Incorrect Answer
D)
an easement by prescription.
Incorrect Answer
Explanation
An encroachment occurs when a building or a structure illegally extends onto or over another’s property. A license is a personal revocable right to use another’s property with permission. An easement by necessity is created by a court when an owner sells a parcel of land that has no access to a street except over the seller’s remaining land. An easement by prescription is created when a person openly, continuously, exclusively, actually and notoriously (hostile) uses land of another without the owner’s permission. Remember: OCEAN.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 65

A property owner tells his next-door neighbor that she can store her camper in his yard for a few weeks until he needs the space. The property owner does not charge the neighbor any rent for the use of his yard. The owner has given his neighbor

A)
a license.
B)
an easement by necessity.
C)
an easement appurtenant.
D)
an estate in land.

Answer 65

A property owner tells his next-door neighbor that she can store her camper in his yard for a few weeks until he needs the space. The property owner does not charge the neighbor any rent for the use of his yard. The owner has given his neighbor

A)
a license.
Correct Answer
B)
an easement by necessity.
Incorrect Answer
C)
an easement appurtenant.
Incorrect Answer
D)
an estate in land.
Incorrect Answer
Explanation
A license is a revocable personal privilege to use the land of another for a specific purpose, and the right is given orally or informally. The property owner’s permission does not grant the neighbor an easement or an estate in the land.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 66

Which of these liens usually would be given highest priority in disbursing funds from a foreclosure sale?

A)
A mortgage dated last year
B)
A judgment rendered the day before foreclosure
C)
A mechanic’s lien for work started before the mortgage was made
D)
Unpaid real estate property taxes

Answer 66

Which of these liens usually would be given highest priority in disbursing funds from a foreclosure sale?

A)
A mortgage dated last year
Incorrect Answer
B)
A judgment rendered the day before foreclosure
Incorrect Answer
C)
A mechanic’s lien for work started before the mortgage was made
Incorrect Answer
D)
Unpaid real estate property taxes
Correct Answer
Explanation
Unpaid real estate property taxes have first priority and “move to the head of the line” when property is liquidated at a foreclosure sale. They are a statutory lien with priority over liens created by contract, such as mortgages. Unpaid real estate property taxes take priority over mechanics’ liens and judgments, no matter when those liens were recorded.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 67

A seller lists her property with a local broker, and in the listing agreement, the seller excludes her prize iris plants. The broker lists the exclusion in the MLS and notes it on the property brochure. A buyer makes an offer on the property that does not mention the plants. The seller accepts the offer. At closing, who will have possession of the iris plants?

A)
The buyer, because they are personal property that transfers with the title
B)
The seller, because personal property must be included to convey
C)
The seller, because they were excluded in the listing and MLS
D)
The buyer, because they are improvements to the land

Answer 67

A seller lists her property with a local broker, and in the listing agreement, the seller excludes her prize iris plants. The broker lists the exclusion in the MLS and notes it on the property brochure. A buyer makes an offer on the property that does not mention the plants. The seller accepts the offer. At closing, who will have possession of the iris plants?

A)
The buyer, because they are personal property that transfers with the title
Incorrect Answer
B)
The seller, because personal property must be included to convey
Incorrect Answer
C)
The seller, because they were excluded in the listing and MLS
Incorrect Answer
D)
The buyer, because they are improvements to the land
Correct Answer
Explanation
Landscaping is considered an improvement and, once attached, is an appurtenance that transfers with the land via the deed. Only if the plants had been excluded in the contract would the seller have the rights to them. Remember: Exclude fixtures/improvements and include personal property.

Reference: Property Ownership > Real Versus Personal Property

Question 68

A landowner divided much of her land into smaller parcels and has recently sold a tract adjacent to a nature preserve. The preserve and the tract that was sold are landlocked and cannot be entered except through one of the other tracts still belonging to the landowner. The buyer of the tract will probably be granted what type of easement by a court action?

A)
Easement in gross

B)
Easement by necessity

C)
Easement by prescription
Incorrect Answer
D)
Conditional use permit

Answer 68

A landowner divided much of her land into smaller parcels and has recently sold a tract adjacent to a nature preserve. The preserve and the tract that was sold are landlocked and cannot be entered except through one of the other tracts still belonging to the landowner. The buyer of the tract will probably be granted what type of easement by a court action?

A)
Easement in gross
Incorrect Answer
B)
Easement by necessity
Correct Answer
C)
Easement by prescription
Incorrect Answer
D)
Conditional use permit
Incorrect Answer
Explanation
An easement by necessity arises when there is no ingress or egress (entry or exit) from one piece of property without crossing over a parcel of land owned by another. An easement in gross permits a right-of-way for an individual or company to use another’s property. An easement by prescription is acquired when a person makes continuous and visible use of another’s land for a certain period of time without the owner’s permission. A conditional use permit is granted by a municipality to a property owner to allow a special nonconforming use of property in a residential district.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 69

A developer grants a local power company the right to install necessary transmission lines. The developer has granted the power company

A)
a conditional use permit.
B)
an easement by prescription.
C)
a license.
D)
an easement in gross.

Answer 69

A developer grants a local power company the right to install necessary transmission lines. The developer has granted the power company

A)
a conditional use permit.
Incorrect Answer
B)
an easement by prescription.
Incorrect Answer
C)
a license.
Incorrect Answer
D)
an easement in gross.
Correct Answer
Explanation
An easement in gross is a company’s right to use another’s land. A license is a personal privilege to enter the land of another for a specific purpose. A license can be terminated or canceled. An easement by prescription is acquired when a person makes continuous and visible use of another’s land for a certain period of time without the owner’s permission. A conditional use permit is granted by a municipality to a property owner to allow a special nonconforming use of property in a residential district.

Reference: Property Ownership > Encumbrances and Effects on Property Ownership

Question 70

The method of describing land that uses compass degrees, feet, and monuments is known as

A)
the metes-and-bounds system.
B)
the informal system.
C)
the rectangular survey system.
D)
the lot and block system.

Answer 70

The method of describing land that uses compass degrees, feet, and monuments is known as

A)
the metes-and-bounds system.
Correct Answer
B)
the informal system.
Incorrect Answer
C)
the rectangular survey system.
Incorrect Answer
D)
the lot and block system.
Incorrect Answer
Explanation
A metes-and-bounds system starts at a point of beginning (POB) and proceeds around the property’s boundaries by referring to linear measurements, monuments, and directions. An informal system would be a street address. The rectangular survey system divides land into rectangles and describes those rectangles with principal meridians and base lines. The lot and block system uses lot and block numbers referred to in a plat map and is often used in urban areas.

Reference: Property Ownership > Legal Descriptions

Question 71

An annual crop that is considered personal property is called

A)
a fixture.
B)
an emblement.
C)
an appurtenance.
D)
intangible property.

Answer 71

An annual crop that is considered personal property is called

A)
a fixture.
Incorrect Answer
B)
an emblement.
Correct Answer
C)
an appurtenance.
Incorrect Answer
D)
intangible property.
Incorrect Answer
Explanation
Annually cultivated crops such as fruit, vegetables, and grains are known as emblements and are considered personal property. A fixture is an item that was once personal property but has been attached or affixed to real estate and has become real property. A fixture is tangible and transfers with the property unless detached from the property before its sale. An appurtenance is anything that attaches to and runs with the land, such as improvements, rights, and fixtures.

Reference: Property Ownership > Real Versus Personal Property

Question 72

A metes-and-bounds legal description

A)
can be made only in areas excluded from the rectangular survey system.
B)
is used to complete areas omitted from recorded subdivision plats.
C)
is not acceptable in court in most jurisdictions.
D)
uses descriptions moving in a set direction.

Answer 72

A metes-and-bounds legal description

A)
can be made only in areas excluded from the rectangular survey system.
Incorrect Answer
B)
is used to complete areas omitted from recorded subdivision plats.
Incorrect Answer
C)
is not acceptable in court in most jurisdictions.
Incorrect Answer
D)
uses descriptions moving in a set direction.
Correct Answer
Explanation
A metes-and-bounds description starts at a point of beginning (POB) and moves clockwise around the boundaries, always ending back at the POB so that the described tract is completely enclosed. The metes-and-bounds, government survey, and lot and block are all accepted in courts. The method may be used in areas included in the rectangular survey system. The metes-and-bounds method is often used to survey large parcels of land before the parcels are broken into subdivision plats.

Reference: Property Ownership > Legal Descriptions