Property Ownership Flashcards
Define Condminium
A multi-unit building where the occupants each own their individual units and receive a deed granting ownership of the property.
Condominium ownership would NOT be used on which of the following?
A. An apartment building
B. A cooperative apartment
C. Townhouses
D. An office park
B. A cooperative apartment
Define Cooperative
A multi-unit building where the people who occupy the units own stock in a corporation, thereby receiving a right to lease the unit from the cooperative itself.
The main difference between a cooperative and condominium is that:
A a cooperative owner obtains fee simple title to the unit
B a cooperative owner pays their own taxes and mortgage on the unit
C a condominium owner owns and finances their own unit
D a condominium owner receives a proprietary lease
C. A condominium owner owns and finances their own unit
Notes: A cooperative owner does not receive fee simple title or pay their own taxes and mortgage. A condominium owner does not receive a proprietary lease.
Time share ownership would be most evidenced by: A joint tenancy B tenancy in common C tenancy in the entireties D cooperative ownership
B. Tenancy in Common
Define Joint Tenancy
A form of ownership where two or more parties own property together; carries the right of survivorship (when an owner dies, the ownership interest goes to the surviving owners, not the heirs of the deceased)
Define Tenancy in Common
An individual interest in group ownership; the ownership interest can be unequal, the parties all share possession, and the heirs of the deceased receive the property upon the death of one of the owners (ownership does NOT transfer to the other co-owners)
Define Tenancy in the Entireties
Signifies ownership by married couples only.
A person that has stock ownership in an apartment and a proprietary right to lease that space would be participating in a : A condominium B cooperative C time share D alienation
B. Cooperative
Define Alienation
In a real estate context, this relates to the word transfer; e.g., in a mortgage, an alienation clause allows the lender to call the loan due and payable if a property is sold or transferred, in other words, making the loan non-assumable
The main difference a manager would need to realize between managing a condominium and an apartment complex is that in a condominium:
A the manager would not have to maintain the common areas
B the need for swimming pool regulations would not be as great
C the people who reside there are unit owners
D the residents are still considered to be tenants
C. the people who reside there are unit owners
Define Regulations
Government regulations relating to subdivisions; e.g., most cities require streets, sewers, easements, etc.
The common areas in a condominium are owned by the unit owners under: A joint tenancy B severalty C tenancy in the entireties D tenancy in common
D. tenancy in common
Define Severalty
A situation where one person only owns the property; also, how corporations take title
Which of the following statements is true regarding a condominium?
A Stock is used to transfer ownership
B The owners have a proprietary lease
C Ownership must be done under joint tenancy
D The owners have an undivided interest in the common areas
D The owners have an undivided interest in the common areas
Define Interest
Rental charge for using someone else`s money
When ownership is conveyed through the transfer of shares of stock, this is: A joint tenancy B tenants in common C condominium D cooperative
D cooperative
A condominium development with a long standing established homes association would be governed by the: A long established tenants B association of unit owners C developer of the condominium D state licensing agency
B association of unit owners
Define Developer
Improves the lots
What is the greatest type of interest an owner can receive in a condominium? A Fee simple B Leasehold C Right of free use D Stock
A. Fee simple
What interest does a condominium owner have in common with other condominium owners?
A Divided interest in the common properties
B Undivided interest in the limited common properties
C Undivided interest in the common areas
D Undivided interest in the master deed plan
C Undivided interest in the common areas
Which of the following items would automatically transfer with the sale of property? A Trade fixtures B Plumbing fixtures C A free standing appliance D Emblements
B. Plumbing fixtures
Define Emblements
Growing crops in the field; allows the seller to come back and harvest after the sale. Considered to be personal property.
Define Trade Fixtures
Items installed by a commercial tenant for business use and are considered personal property.
Harvesting of crops that require annual planting means that the crops are considered to be: A real property B personal property C fixtures D trade fixtures
B personal property
Define Real Property
Land plus all appurtenances.
Define Chattel
Another word for personal property; comes from the word “cattle”
Define FIxture
Going from personal to real property; item that was once personal property but is now attached
Define Estate
The degree, quantity, nature and extent of ownership interest in real property.
Converting real property into personal property would be called a(n): A chattel B annexation C severance D fixture
C severance
Define Severance
Going from real to personal property; e.g., cutting down a tree
Define Personal Property
Anything that is easily movable; e.g., camera, grill, etc.
Define Personal Property
Anything that is easily movable; e.g., camera, grill, etc.
A fixture would be defined as:
A » chattel
B » an item that is attached to a building
C » personal property
D » covenants that run with the land
B » an item that is attached to a building
Define Land
A spot on the earth that goes down to the center of the earth and up to infinity
A buyer made an offer on a house and the seller accepted the offer as written. The buyer wanted some of the seller’s personal property to remain with the house. The personal property would transfer to the buyer under which of the following conditions?
A » If it fit into a particular spot in the house
B » If it was included in the contract
C » If it was verbally stated by the listing broker
D » If it was verbally agreed to between the seller and buyer
B » If it was included in the contract
Two persons own a property under tenancy in common. Which statement would be correct assuming one of the owners dies?
A » The probate court would have to make the final determination
B » The other owner would receive ownership under right of survivorship
C » The heirs of the deceased would inherit the property
D » The administrator would determine the rightful owner
C » The heirs of the deceased would inherit the property
Define Probate Court
A special court for handling estates upon one`s death. Court determines who gets what property and in what amounts if the deceased died intestate (without a valid will)
Define Right of Survivorship
Found in joint tenancy, when one owner dies, the ownership interest passes to the surviving owners
Define Administrator
Court appointed person to oversee estate distribution of deceased; only applies when one dies intestate (without a valid will)
The main difference between joint tenancy and tenancy in common is that joint tenancy: A » is inheritable to the heirs B » has a right of transfer C » carries the right of survivorship D » has a unity of possession
C » carries the right of survivorship
An appurtenant easement can be terminated by:
A » the death of the dominant tenement
B » the death of the servient tenement
C » merger of the properties
D » destruction of property
C » merger of the properties
Define Dominant Tenement
Land benefited or in favor of the easement
Which of the following scenarios would require an easement by necessity?
A » A railroad has to reroute tracks around a piece of land if not allowed to go straight through.
B » A gas company having to run gas lines around a property
C » An owner was landlocked and could not gain access to his property
D » A utility company had no access to a subdivision
C » An owner was landlocked and could not gain access to his property
Define Utility
An element of value; must be useful
Which of the following would NOT be an appurtenance?
A » Garage apartment
B » Easement on an adjacent property
C » Mortgage lien
D » Pipeline on a property
C » Mortgage lien
Note: a mortgage lien is an encumbrance, not a appurtenance
Define Appurtenance
A right, privilege or improvement that is permanently attached to the land
Define Mortgage
A document where property is used as security for the debt
Define Easement
Gives someone else the right to use a part of your property while you still retain the ownership rights
One main difference between an easement and a lien is that:
A » an easement makes a property unmarketable
B » an easement can only be granted by the government
C » a lien requires money to be set aside in escrow
D » an easement gives the right to cross over another’s property to the holder of the easement
D » an easement gives the right to cross over another’s property to the holder of the easement
A right or privilege one has to use the land of another is best referred to as a(n): A » lien B » encroachment C » servitude D » condominium
C » servitude
Define Encroachment
Trespassing; an improvement or appurtenance that extends across the property line; e.g., fences, tree limbs, etc.
Which of the following would transfer legal use but not ownership of a property? A » A deed restriction B » An encroachment C » An easement D » A lien
C » An easement
A trespass of an improvement is which of the following? A » Encroachment B » Easement C » License D » Lien
A » Encroachment
Define License
Personal permission to use someone else`s property; does not encumber title as an easement does
A neighbor had encroached on a property but the owner did not complain within the legally specified time period. The neighbor would obtain rights to the land by: A » license B » easement by necessity C » easement by prescription D » easement in gross
C » easement by prescription
Define Easement by Prescription
Using someone else`s property continuously, openly and notoriously for a certain period of time - the adverse user then gains an easement to use that land
Define Easement in Gross
A type of easement not tied to any land but instead that is owned by a person or company, e.g., utilities, railroads
A property that has added value making it a better buy due to the benefit of an easement is called: A » appurtenant tenement B » servient tenement C » dominant tenement D » gross easement
C » dominant tenement
An improvement which crosses over the property line without permission is: A » easement B » encroachment C » license D » right-of-way
B » encroachment
An easement giving a person the right of ingress and egress would be BEST classified as an: A » appurtenance B » emblements C » license D » encroachment
A » appurtenance
T. gave a neighbor the right to cross over his property. T's property would be referred to as: A » a licensed property B » an encroached upon property C » the servient tenement D » the dominant tenement
C » the servient tenement
Which of the following items would be considered an encroachment?
A » A note of estoppel
B » A fence that crosses over the property line between two different owners
C » An easement between 2 properties
D » Verbal permission for one party to cross over another’s property
B » A fence that crosses over the property line between two different owners
A builder owns a large piece of property. The builder decides to turn the property into a subdivision of homes but decides to keep the lake frontage on all the lots for himself. What would a buyer of one of the lots prefer to have? A » Easement appurtenance B » Easement in gross C » Easement by prescription D » License
A » Easement appurtenance
Note: An appurtenant easement would give the buyer access to the lake, thereby making the property more valuable.
A property that has an easement crossing it is called: A » appurtenant tenement B » servient tenement C » dominant tenement D » gross easement
B » servient tenement
The highest quality of ownership for a person to obtain in real property is: A » a life estate B » fee simple C » a leasehold estate D » a conditional fee estate
B » fee simple
Define Fee Simple
The maximum rights one can have in owning real estate; also called fee simple absolute.
In a life estate situation, what happens to ownership of the property when the life tenant dies?
A » The life tenant’s heirs would get the property
B » The current title holder or heirs would get the property
C » The state government would get the property
D » Whoever had the mortgage on the property would get the property
B » The current title holder or heirs would get the property
Note: When a life tenant dies, the property goes to the current title holder; either back to the original grantor or a third party remainderman. If the original grantor or remainderman are no longer living, then the heirs would get the property.
A child owns a life estate and sells the property to a friend. Which of the following statements is true regarding the friend’s estate?
A » It ends when the friend dies
B » It ends when the child dies
C » It becomes a fee absolute when the child dies
D » It becomes a fee absolute when the friend dies
B » It ends when the child dies
Note: A life estate can be sold; however, the person who bought the property will eventually lose it when the life tenant dies (in this case, the child).
Which of the following items would NOT be an appurtenance? A » Right B » Privilege C » Improvement D » Reversion
D » Reversion
Define Reversion
Upon expiration of a lease, the property goes back to original lessor (landlord); also, a life estate in reversion is where once a grantee (life tenant) dies, the property goes back to original grantor
A contractor failed to pay subcontractors for work performed on a property. What could the subcontractors do?
A » Sue the contractor for fraud
B » Remove the materials from the improved property
C » File a mechanic’s lien on the improved property
D » Petition the attorney general for the money
C » File a mechanic’s lien on the improved property
Define Mechanic’s Lien
Lien sub-contractors can file if property was improved but they were not paid.
Which is a voluntary lien against a person's property? A » Mortgage lien B » Mechanic's lien C » Judgment lien D » Property tax lien
A » Mortgage lien
On July 1, a contractor started work. On August 15, the work was completed. The general contractor was paid but the material vendor was not. On Oct. 1, the material vendor filed a mechanic’s lien. What is the effective date for the mechanic’s lien?
A » July 1
B » Aug. 15
C » Oct. 1
D » A material vendor cannot file a mechanic’s lien
A » July 1
Note: A mechanic’s lien takes priority based on the date the work was started. Mechanic’s liens can be filed for either work OR materials that are unpaid.
A corporation who purchased a piece of real estate as a co-owner with an individual would usually take title in which of the following manners? A » Joint tenancy B » Tenancy in common C » Tenancy by the entirety D » Community property
B » Tenancy in common
Note: (B) A corporation owns property individually in “severalty.” However, when buying along with an individual, they would be tenants in common. (A) They cannot be joint tenants or (C) tenants by the entirety as both have right of survivorship and corporations do not die.
Which of the following transactions would be governed by securities laws?
A » An adjustable rate mortgage with the interest rate tied to the one-year treasury bills
B » A broker selling shares in a Real Estate Investment Trust (REIT)
C » The Federal Housing Administration in insuring loans for lenders
D » A lending institution selling mortgages to Freddie Mac
B » A broker selling shares in a Real Estate Investment Trust (REIT)
Notes: (B) A security is an investment in the ownership of paper (as opposed to the ownership of the property itself). A Real Estate Investment Trust sells shares of paper. Then the REIT buys the property itself. Selling shares in the REIT then requires a securities license because a person is buying part of the REIT, not the real estate itself. Securities laws do NOT deal with (A) an adjustable rate mortgage, (C) the Federal Housing Administration (FHA insures home loans for lenders) or (D) a lender simply selling loans to Freddie Mac.
Define Real Estate Investment Trust (REIT)
(REIT) A type of syndication that is basically a giant mutual fund for real estate investments
Define Federal Housing Administration
FHA; Established by the government in the early 1930`s, FHA insures loans made by lenders in case of default by the buyers
An owner of a property built a free standing bookshelf to fit in an alcove in the basement. If the owner were to sell the property, the bookshelf would be considered: A » personal property B » real property C » a trade fixture D » emblements
A » personal property
Which of the following statements BEST describes the effect on mineral rights when the land is sold?
A » They always pass with the sale of the land
B » Mineral rights cannot be sold separately from the land
C » They pass to the grantee unless specifically noted
D » They must be specified in the deed
C » They pass to the grantee unless specifically noted
A seller sold a property to a buyer with the seller also transferring the refrigerator to the buyer as a personal property item. The document needed for the transfer of the refrigerator would be a: A » bill of sale B » assignment agreement C » transfer by deed D » contract for deed
A » bill of sale
Note: A bill of sale is the document used for the transfer of personal property.
Define Contract For Deed
Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as an installment contract or land contract.
Define Assignment
A transfer of rights in contract to another party
Which document would be used to transfer ownership of a free standing appliance? A » Deed B » Bill Of Sale C » Statement of special conditions D » Title
B » Bill Of Sale
A legal description that uses directions, distances and monuments is called: A » the rectangular survey system B » the geodetic survey system C » a metes and bounds description D » a lot and block description
C » a metes and bounds description
Define. Metes And Bounds
A form of legal description that gives a physical description of the property
Define Rectangular Survey System
A form of legal description that describes land in America using meridians (north and south) and base (east and west) lines; every six miles range and tier lines are drawn to form townships; also referred to as the government survey system
Define Geodetic Survey System
A form of legal description that uses benchmarks to identify land
In doing a survey, monuments are sometimes used:
A » to establish an address for historical properties
B » to legally describe a piece of real estate
C » in a lot and block description
D » in the geodetic survey system
B » to legally describe a piece of real estate
Which legal description would use the following verbiage; "Starting at the southernly side of Victoria Street, proceed 100 feet Easterly from the corner that was formed by the stone and tree stump...? A » Rectangular survey system B » Geodetic survey system C » Metes and Bounds D » Lot and Block
C » Metes and Bounds
A legal description included Range 2 East and Tier 1 North of a principal meridian. This is an example of a:
A » metes and bounds description
B » rectangular survey system description
C » lot and block description
D » geodetic survey system description
B » rectangular survey system description
