Property

Question 1

Define Real Property

Answer 1

Land, items firmly attached to land, things under the land, and air above the land

Question 2

Personal Property can be either _____ or ______

Answer 2

Tangible or Intangible

Question 3

This property is items that you can physically hold

Answer 3

Tangible Property

Question 4

This property is interests or rights that are not capable of physical possession

Answer 4

Intangible Property

Question 5

These are personal property that is so attached to real estate that it becomes real estate as a matter of law

Answer 5

Fixtures

Question 6

Whether or not an item is a fixture depends on what three things?

Answer 6

1) Intention of the party who attached it
2) How it is attached to the real estate
3) If removal would cause damage to the real estate

Question 7

T/F

Trade fixtures (items used in a trade or business) are usually considered real property

Answer 7

FALSE

They are considered personal property

Question 8

What are the three ways of acquiring personal property?

Answer 8

1) By Gift
2) By Inheritance
3) By Finding Property

Question 9

This is a present, voluntary transfer of property without consideration

Answer 9

a gift

Question 10

What three elements does a gift have?

Answer 10

1) Donative Intent
2) Delivery
3) Acceptance

Question 11

T/F

A promise of a gift is enforceable

Answer 11

FALSE

It is unenforceable because there is no delivery, which is one of the elements of a gift

Question 12

This is a gift that is made while the donor is still living, once made it is irrevocable

Answer 12

Inter Vivos Gift

Question 13

This is a gift that is made while the donor is still living, however it is automatically revoked if the donor doesn’t die

Answer 13

Gift Causa Mortis aka “Deathbed Gift”

Question 14

What are the two ways that an individual can acquire personal property by inheritance?

Answer 14

Either by will or by intestate succession if there is no will

Question 15

What is intestate succession?

Answer 15

These are state laws that dictate how an individual’s assets will be divided (for instance, wife gets x%)

Question 16

What is the downside of intestate succession?

Answer 16

People are given your inheritance in a way that you may not have wanted/intended

Question 17

T/F

With lost or mislaid property, the finder gets good title against everyone

Answer 17

FALSE

The finder gets good title against all but the true owner

Question 18

T/F

With abandoned property, the finder gets good title against everyone, including against the true owner

Answer 18

TRUE

Question 19

What are the four elements of a deed?

Answer 19

1) must be in writing
2) must be signed by grantor
3) must contain a description of the property
4) must be delivered

Question 20

This is the type of deed that gives the best protection

Answer 20

A general warranty deed

Question 21

This type of deed has good title, the right to convey (ownership), no unstated encumbrances (liens), and thus the buyer’s title will be undisturbed by any adverse claims of ownership from others

Answer 21

a general warranty deed

Question 22

This is a deed that only guarantees ownership for the time the seller owned the property

Answer 22

a special warranty deed

Question 23

This is the type of deed that gives the least protection

Answer 23

a quitclaim deed

Question 24

With this type of deed, the grantor gives whatever title or interest they have, but they don’t guarantee that they have anything

Answer 24

a quitclaim deed

Question 25

T/F A General Warranty Deed is the only type of deed that promises an implied warranty of marketability (a deed free from reasonable doubt)

Answer 25

FALSE All deeds promise an implied warranty of marketability (a deed free from reasonable doubt)

Question 26

T/F A General Warranty Deed is the only type of deed that promises there are no unstated encumbrances (no unstated mortgages, liens, easements, etc.)

Answer 26

FALSE All deeds promise there are no unstated encumbrances (no unstated mortgages, liens, easements, etc.)

Question 27

This protects the owner against losses due to defects of record in their title

Answer 27

Title Insurance

Question 28

T/F Title Insurance Policies may make exceptions to the title coverage

Answer 28

TRUE

Question 29

T/F Title Insurance Policies can be assigned to a 3rd party in certain circumstances

Answer 29

FALSE Title Insurance Policies cannot be assigned to a 3rd party

Question 30

T/F Title Insurance Policies only insure that there are no defects of record and only up to the date of policy

Answer 30

TRUE

Question 31

This gives constructive notice to all subsequent 3rd parties of your interest

Answer 31

Recording of Deeds and Mortgages

Question 32

T/F You do not need to record deeds or mortgages to give sellers or mortgagors notice

Answer 32

TRUE Sellers and/or Mortgagors should already know based on their involvement with the transaction

Question 33

Why is it important to record deeds and mortgages?

Answer 33

If deeds or mortgages are unrecorded, a subsequent party may obtain a superior interest in the property

Question 34

What are the 3 different types of recording deeds and mortgages?

Answer 34

1) Notice Jurisdiction 2) Race Jurisdiction 3) Notice-Race / Race-Notice Jurisdiction

Question 35

This is when failure to record a deed/mortgage means you lose to subsequent parties without notice of your interest, whether or not they recorded

Answer 35

Notice Jurisdiction

Question 36

This is when the first to record a deed/mortgage wins, whether or not they have notice of the other parties interest

Answer 36

Race Jurisdiction

Question 37

This is when failure to record a deed/mortgage means that you lose to subsequent recording parties without notice of your interest

Answer 37

Notice-Race / Race-Notice Jurisdiction

Question 38

What happens when an owner dies for tenants in common?

Answer 38

The interest is inherited by the heir of the owner who dies

Question 39

What happens when an owner dies for joint tenants?

Answer 39

The interest goes to surviving owners

Question 40

T/F In a tenants in common relationship, an owner can transfer their interest without the other co-owner's permission

Answer 40

TRUE

Question 41

T/F In a joint tenants relationship, an owner cannot transfer their interest without the other co-owner's permission

Answer 41

FALSE An owner can transfer their interest without the other co-owner's permission; however, the buyer has to become a tenant in common

Question 42

Joint Tenancies have what 4 elements? (PITT)

Answer 42

Possession - each has an undivided right to use the whole property Interest - each joint tenant's interest is of the same type and duration Time - each joint tenant's interest arose at the same time Title - each acquired their title by the same instrument

Question 43

This is a joint tenancy that is solely between a husband and wife

Answer 43

Tenants by the Entirety

Question 44

T/F In a Tenants by the Entirety relationship, neither owner may transfer their interest without their co-owner's permission

Answer 44

TRUE

Question 45

If the type of co-ownership is unclear, the law counts it as what type of ownership?

Answer 45

A Tenancy in Common

Question 46

This is a lien on land to secure payment of a debt

Answer 46

A mortgage

Question 47

T/F A mortgagee may assign a mortgage even if prohibited by the contract

Answer 47

TRUE

Question 48

What act regulates mortgages?

Answer 48

the Real Estate Settlement Procedures Act (RESPA)

Question 49

What are the four elements of a mortgage?

Answer 49

1) Must be in writing 2) Must be signed by the mortgagor 3) Contains a description of the property 4) Must be delivered

Question 50

What is the right of redemption in regards to a mortgage?

Answer 50

This is the mortgagor's rights to redeem the property after they've defaulted, but prior to a judicial sale. This is done by paying all mortgages in full. It is a highly unlikely scenario

Question 51

This is when the buyer agrees to be liable and the seller is still liable

Answer 51

Assuming of a Mortgage

Question 52

This is when the buyer agrees to be liable and the mortgagee releases the original mortgagor

Answer 52

Novation

Question 53

This is when a buyer is not liable, only the seller (original mortgagor) is liable. This means that the buyer runs the risk of foreclosure if the seller doesn't pay

Answer 53

Buying Subject To

Question 54

T/F Leases do not require a writing unless the lease is for MORE than 1 year

Answer 54

TRUE

Question 55

T/F A written lease requires a description of the lease premises

Answer 55

TRUE

Question 56

T/F A due date for rent payment is not required in a lease writing

Answer 56

TRUE

Question 57

What is the difference between assigning a lease and subletting a lease?

Answer 57

In an assignment, the new tenant pays the landlord In a sublet, the new tenant pays the old tenant and the old tenant pays the landlord

Question 58

T/F In an assignment, the assignor is no longer liable for rent if the assignee defaults

Answer 58

FALSE The assignor is still liable for rent if not paid

Question 59

T/F In a sublet, the sublessor is still liable for rent if not paid

Answer 59

TRUE

Question 60

T/F Death or sale of the property ends a lease

Answer 60

FALSE It does not end a lease. This should be stated in a lease.

Question 61

This is a temporary transfer of possession, but not title, of personal property by a rightful owner (Bailor) to another (Bailee)

Answer 61

Bailement

Question 62

What are the three elements of bailments?

Answer 62

1) Delivery of personal property (not real estate) by a bailor to a bailee 2) Transfer of possession of the personal property but not ownership. 3) Imposes absolute duty on bailee to return or send the item as bailor directs

Question 63

In a bailment, who is presumed to be negligent/liable if the goods are lost or destroyed?

Answer 63

The bailee

Question 64

T/F If the bailee can prove that the goods were lost or damaged through no fault of the bailee, then the bailee is not liable

Answer 64

TRUE

Question 65

When does a bailee have absolute liability, without regard to fault?

Answer 65

1) The bailee is strictly liable for unauthorized use of the property 2) The bailee is strictly liable for misdelivery (this is because of the element of absolute duty to return the goods to the right person)

Question 66

Those in the business of transporting the public's goods are also known as...?

Answer 66

Common Carriers or Extraordinary Bailees

Question 67

T/F Common carriers are strictly liable for any loss/damage to the goods regardless of fault.

Answer 67

FALSE There are two exceptions to this statement: 1) Carriers are not liable for loss due to goods improperly packed by the party shipping them. 2) Carriers are not liable for Acts of God (floods, tornadoes, etc.)

Question 68

T/F Bailees and common carriers may limit their liability by contract

Answer 68

TRUE

Question 69

T/F Patent law is largely based on state law

Answer 69

FALSE Patent law is exclusively federal law

Question 70

T/F Accessing a digital work is protected by the fair use doctrine

Answer 70

FALSE

Question 71

T/F Financial and business models used over the internet can be patented

Answer 71

TRUE

Question 72

T/F Both the purchase price and the description of the land must be contained in a valid deed

Answer 72

FALSE Only a description of the land is to be contained in a valid deed. The purchase price will fluctuate and is part of individual real estate contracts, not the original deed

Question 73

T/F For a deed to be effective between the purchaser and the seller of real estate, the deed must contain the signatures of both the purchaser and the seller

Answer 73

FALSE The deed need only be signed by the seller to be effective

Question 74

T/F For a deed to be effective between the purchaser and the seller of real estate, the deed must contain the actual sales price

Answer 74

FALSE Only a description of the land is to be contained in a valid deed. The purchase price will fluctuate and is part of individual real estate contracts, not the original deed

Question 75

T/F For a deed to be effective between the purchaser and the seller of real estate, the deed must be delivered by the seller with an intent to transfer title

Answer 75

TRUE

Question 76

T/F For a deed to be effective between the purchaser and the seller of real estate, the deed must be recorded within the permissible statutory time limits

Answer 76

FALSE The deed need not be recorded to be valid. Recording is important because it gives constructive notice to all third parties of the ownership, however it does not affect the agreement between the seller & purchaser

Question 77

T/F Real estate title insurance gives coverage for the title exceptions listed in the policy

Answer 77

FALSE Title exceptions are not insured against

Question 78

T/F Real estate title insurance gives insurance against all defects of record other than those excepted in the policy

Answer 78

TRUE

Question 79

T/F Real estate title insurance gives coverage for title defects that result from events that happen after the effective date of the policy

Answer 79

FALSE Title insurance covers only defects of record

Question 80

T/F Real estate title insurance gives the purchaser the right to transfer the policy to subsequent owners

Answer 80

FALSE Insurance is not transferable as it is generally based on the risk of an individual

Question 81

T/F The Real Estate Settlement Procedures Act (RESPA) & the Federal Trade Commission Act both regulate mortgage lenders

Answer 81

FALSE Only the RESPA regulates mortgage lenders, not the Federal Trade Commission Act

Question 82

T/F For a mortgage to be enforceable there must be an accurate description of the property included in the mortgage

Answer 82

TRUE The mortgage must be in writing and include a description of the property and debt to be incurred

Question 83

T/F For a mortgage to be enforceable there must be a negotiable promissory note accompanying the mortgage

Answer 83

FALSE Although debt is usually evidenced by a promissory note this is not required

Question 84

T/F For a mortgage to be enforceable there must be present consideration given in exchange for the mortgage

Answer 84

FALSE The promise to pay is adequate consideration

Question 85

T/F For a mortgage to be enforceable the amount of the debt and the interest rate must be stated in the mortgage

Answer 85

FALSE

Question 86

T/F By recording a mortgage, the lender protects their rights against the borrower under the promissory note

Answer 86

FALSE

Question 87

T/F By recording a mortgage, the lender protects their rights against the claims of subsequent bona fide purchasers for value

Answer 87

TRUE

Question 88

T/F By recording a mortgage, the lender protects their priority against a previously filed real estate tax lien on the property

Answer 88

FALSE

Question 89

T/F By recording a mortgage, the lender protects their priority against all parties having earlier claims to the property

Answer 89

FALSE

Question 90

T/F For a written residential lease to be enforceable it must have a description of the leased premises and a due date for the payment of rent

Answer 90

FALSE Only the description of the leased premises is required. A due date for the payment of rent is not required.

Question 91

T/F Obtaining personal property through a lease and through finding abandoned property are both valid ways for a recipient to obtain ownership of the property

Answer 91

FALSE Obtaining property through a lease does not give an individual ownership of the property. However, finding abandoned property does give the individual ownership of the property