NC Land Use Controls

Question 1

A residential homebuilder is selling lots in a to-be-built subdivision. It is not yet approved by the city or the county. A real estate broker

A)
can show lots but cannot be paid commissions.
B)
cannot present offers until the subdivision is approved.
C)
cannot not show the lots.
D)
can bring buyers present offers and collect a commission.

Answer 1

B)
cannot present offers until the subdivision is approved.

Explanation
Per NC G.S. 153A-330, lots in unapproved subdivisions cannot be sold, which includes having a binding contract on unapproved lots.

Reference: Land Use Controls

Question 2

A landowner has a parcel of 125 acres. He decides he could make more money by breaking it into acre lots and selling those lots individually. Which law, regulation or ordinance will likely impact this landowner’s plans?

A)
Subdivision ordinance
B)
None of these, unless the landowner is a real estate licensee
C)
North Carolina Residential Rental Agreements Act
D)
Building code

Answer 2

A)
Subdivision ordinance

Explanation
When parcels are broken into separate lots, the developer-owner must get approval from the city or the county, based upon the plan.

Reference: Land Use Controls

Question 3

Which of the following are TRUE regarding the streets in a subdivision?

A)
The tax maps are the best source to determine the status of streets.
B)
If there is a street sign, the licensee can assume it is a public street.
C)
None of these.
D)
The streets have to be public or the subdivision could not be approved.

Answer 3

C)
None of these.

Explanation
Real estate licensees are expected to verify whether subdivision streets are public or private. The best source is the Department of Transportation. Some new construction will require a residential subdivision streets disclosure form.

Reference: Land Use Controls

Question 4

All of the following restrictions are government rights EXCEPT

A)
covenant.
B)
escheat.
C)
eminent domain.
D)
police power.

Answer 4

A)
covenant.

Explanation
Covenants (promises) involve private restrictions. Police power is the general governmental power to pass rules to protect the health, welfare, and safety of the community—for example, zoning, licensing laws, and building codes.

Reference: Land Use Controls

Question 5

A broker’s client wants to make an offer on a new lot in a subdivision under development. The broker must first

A)
present all offers the buyer wishes to make.
B)
do a CMA to determine the price the buyer should offer.
C)
get a commission agreement with the builder.
D)
discover if the subdivision has been approved by the city or the county.

Answer 5

D)
discover if the subdivision has been approved by the city or the county.

Explanation
It is illegal to sell lots in an unapproved subdivision, so the broker must discover the status of this subdivision before it is shown or before presenting offers.

Reference: Land Use Controls

Question 6

An older home has a septic system that is failing. The listing broker should

A)
advise the seller to quit using the dishwasher until the property is sold.
B)
do none of these.
C)
advise the seller to make repairs to the system before listing the property.
D)
make a deal with the neighbor next door for a new repair field.

Answer 6

C)
advise the seller to make repairs to the system before listing the property.

Explanation
A problem with the septic system is a material fact and would have to be disclosed to potential buyers. Further, it is unlikely that a lender would provide financing for a home with a faulty septic system.

Reference: Land Use Controls

Question 7

When listing a home served by a septic system, a broker must

A)
investigate whether the system can be converted to public sewer.
B)
personally test the system.
C)
disclose the number of bedrooms the septic system is allowed per the permit.
D)
all of these.

Answer 7

C)
disclose the number of bedrooms the septic system is allowed per the permit.

Explanation
That information is available from the county health department.

Reference: Land Use Controls

Question 8

All of the following are used in city/county planning EXCEPT

A)
building codes.
B)
housing codes.
C)
subdivision regulations.
D)
subdivision covenants.

Answer 8

D)
subdivision covenants.

Explanation
Subdivision covenants are private, not public, restrictions.

Reference: Land Use Controls

Question 9

When a zoning regulation permits a specific use of a property, but a private restriction contained in the deed limits that use of the property, the restriction that would prevail is the

A)
zoning law.
B)
deed restriction.
C)
building restriction.
D)
master plan.

Answer 9

B)
deed restriction.

Explanation
Whichever rule is stricter (further limits on the use of the property)—a government regulation or a private restriction—will prevail.

Reference: Land Use Controls

Question 10

In North Carolina, when must a developer disclose if the streets are publicly or privately owned?

A)
Anytime a property is sold, as required in all sales transactions
B)
When selling lots in a new subdivision for the first time
C)
When requested from the buyer
D)
When the property is financed

Answer 10

B)
When selling lots in a new subdivision for the first time

Explanation
The subdivision streets disclosure is required in North Carolina from the seller on the first sale of a property. From then on, the real estate agents should check the status of the street(s) to determine whether they are publically or privately maintained.

Reference: Land Use Controls

Question 11

When developing a subdivision, the developer must

A)
allow all lots to be shown by all licensees.
B)
allow buyers three days to change their mind as to the sale.
C)
pay the same commission for each lot.
D)
disclose whether the streets are public or private.

Answer 11

D)
disclose whether the streets are public or private.

Explanation
This must be done in writing.

Reference: Land Use Controls