Property Ownership

Question 1

What is a freehold estate?

Answer 1

Estate (Ownership interest) in land where someone has both possession and ownership rights (indefinite) in real property.

Question 2

Which of the following choices is NOT a freehold estate?
A. a present interest in land
B. a lease that does not require rent payments
C. a life estate
D. all of the above

Answer 2

D. All of the above

Question 3

All of the following terms are physical characteristics of land except:
A. situs
B. immobility
C. heterogeneity
D. indestructibility

Answer 3

A. Situs

Situs is area preference (location, location, location) and it is considered an Economic Land characteristic.

Physical Characteristics include:
Immobility- means property can not be moved
Heterogeneity- Uniqueness. Real property is distinct
Indestructibility- Land can not be destroyed

Question 4

The unity that exists in both a tenancy in common and a joint tenancy is:
A. time
B. title
C. possession
D. none of the above

Answer 4

C. Possession

Question 5

An appurtenant easement may be terminated by:
A. merger of the dominant and servient estates
B. condemnation of the servient estate through eminent domain
C. abandonment by the servient estate
D. all of the above

Answer 5

A. Merger of the dominant and servient estates

Question 6

Mrs. Heckler bought a unit in a condominium apartment complex directly from the developer. She most likely received a:

A. proprietary interest in the complex
B. fee simple absolute interest in her unit
C. divisible fee simple interest in the common elements
D. all of the above

Answer 6

B. Fee Simple Absolute interest in her unit.

Question 7

Which of the following statements is NOT true about title insurance?
A. the policy will include a list of exclusions
B. it serves many of the same functions as homeowner’s insurance
C. it will insure the owner against losses arising from title
defects
D. it will generally include exclusions for unrecorded easements

Answer 7

B. It serves many of the same functions as homeowner’s insurance

Question 8

Deed restrictions apply to:
A. current owners
B. subsequent owners
C. all property owners in a neighborhood
D. both A and B

Answer 8

B. Subsequent Owners

Question 9

What should Sally Salesperson do with an earnest money check she received from Billy Buyer?
A. deposit it in her escrow account
B. give it to her broker
C. attach the check to the contract and file it
D. give it to the seller

Answer 9

B. Give it to her Broker

Question 10

Bill and Sue want to purchase the home that is occupied by their grandparents. However, they want to take title in such a way that will result in the least amount of income tax liability for themselves. How should a real estate sales agent advise them?

A. take title as tenants-in-common with their grandparents
B. acquire title as joint tenants with each other
C. take title as tenants-in-common, but each with an equal
interest
D. refer Bill and Sue to an attorney or tax advisor

Answer 10

D. Refer Bill and Sue to an attorney or tax advisor.

Question 11

If a seller deposits the deed with an escrow agent, but dies before it is delivered to the purchaser, the transfer of title becomes effective on the date the deed was deposited into escrow due to the:
A. party’s consent
B. law of contracts
C. parole evidence rule
D. doctrine of relation-back

Answer 11

A. Law of contracts

Question 12

The right to ___________________ property and use it legally

The right to ___________________ property

The right to ___________________ property within legal limits

The right to ___________________ of property by sale, will, or other transfer

The right to ___________________ property by lessening one’s rights of ownership in any way

The right to ___________________ others from property

a. Possess b. Control c. Enjoy d. Exclude
e. Encumber f. Dispose

Answer 12

The right to __ENJOY__ property and use it legally

The right to ____POSSESS____ property

The right to ____CONTROL____ property within legal limits

The right to __DISPOSE___ of property by sale, will, or other transfer

The right to ____ENCUMBER___ property by lessening one’s rights of ownership in any way

The right to ____EXCLUDE____ others from property

Question 13

Categorize the following items as “Real Property” or “Personal Property”.

Camper Trailer = __________________________

Tractor = ________________________________

Crops/Corn= _____________________________

Home Additions = _________________________

Fence = __________________________________

Garage = _________________________________

Answer 13

Real Property includes land, improvements, real estate, and fructus naturales (flowers, grass, trees, bushes)
Personal Property includes intellectual property ( protected by patent or copyright), business reputation, leases, and partnership interests.

Camper Trailer = ___Personal Property___

Tractor = ___Personal Property____

Crops/Corn= ___Personal Property____

Home Additions = ____Real Property____

Fence = __Real Property___

Garage = __Real Property___

Question 14

How do you classify property as being a trade fixture or regular fixture?

Answer 14

Trade fixtures are needed for a tenants trade or fixture.

Regular fixtures are items that were once moveable (personal property) but has been affixed to real estate.

Question 15

Former personal property that automatically conveys is most likely to:

A. Occur only by agreement
B. Be a chattel
C. Be a trade fixture
D. Be a fixture

Answer 15

D. Be a fixture

Question 16

Mr. and Mrs. Jones sold their home to a church, but retained the right to occupy the property as long as they lived. The interest of the church is that of a:

A. Remainder Estate
B. Life Estate
C. Reversion Estate
D. Trustee

Answer 16

A. Remainder Estate

Reversion estate is created when the seller (grantor) conveys less than a fee simple estate and retains a future estate for themself.
Life Estate is a freehold estate conveyed to a person for the duration of someone’s life.
Trustee is a party to a deed of trust or a fiduciary who operates a trust.

Question 17

A condensed history of the documents affecting real property is known as:

A. The chain of title
B. An abstract of title
C. An abstract of judgements
D. An affidavit of title

Answer 17

B. An abstract of title

The condensed history is an abstract. A chain of title is similar, but not as complete. An affidavit of title is the swearing that there have been no encumbrances incurred since the title search.

Question 18

Which of the following deeds imposes the most liability on sellers?

A. Universal warranty deed
B. Special warranty deed
C. Quitclaim deed
D. General warranty deed

Answer 18

D. General warranty deed

The general warranty deed is the most complete of all deeds. It carries all the warranties (promises) of title from the seller to buyer.
A quitclaim deed is the least complete in that is warrants nothing. A special warranty deed warrants only against defects arising during the tenure of the grantor’s ownership and not against previous defects in title.

Question 19

A house sold for 109,000 with the buyer making a 20% down payment. The grantor’s tax is based on the:

A. Down payment
B. Loan amount
C. Selling price
D. None of the above

Answer 19

C. Selling price

Question 20

The state decided to widen a highway.It will be necessary to use six feet of private property on each side. The state’s power to take this property is derived from:

A. The police power
B. Zoning power
C. Condemnation proceedings
D. None of the above

Answer 20

D. None of the above

When the state take property fro the good of the public, it does so through the POWER of EMINENT DOMAIN derived from the Constitution.

Question 21

An owner has deen using a parcel of land for heavy industry since 1973. Subsequently, the property is zoned commercial, excluding the industrial uses. The owner’s continued industrial use of the property is a(n):

A.Violation of the existing zoning
B. Deviation from the master plan
C. Example of a zoning variance
D. Illegal non-conforming use

Answer 21

A, Violation of the existing zoning

This is an example of non-conforming use. The use of property at one time conformed to the zoning code.

Question 22

A property management contract is between the property manager and:

A. His or her employees
B. The owner of the property
C. The tenants
D. All of the above

Answer 22

B. The owner of the property

Question 23

Assemblage most often occurs where:

A. Demand in high
B. Demand is low
C. The whole is more valuable than the parts
D. Both A and C

Answer 23

C. The whole is more valuable than the parts

Question 24

All of the following circumstances are examples of insurable title defects, except:

Answer 24

a. Unrecorded easements
b. Forged documents
c. Mental incompetence
d. Undisclosed heirs

Unrecorded easements and other rights of parties in possession are generally excluded.

Question 25

Gill had a bad year. In September 2014, Gill’s vacation home had a 1st mortgage, a mechanic’s lien, and a special assessment filed against it. Later, in May 2015, a second mechanic’s lien was filed against the property. Which lien has priority?

Answer 25

a. 2nd mechanic’s lien
b. Mortgage
c. 1st mechanic’s lien
d. Special assessment

Because special assessments are a form of real property tax, it would have priority over all the other liens. Real estate property taxes take priority over other types of liens, regardless of their date of recording.

Question 26

Prior to closing a buyer can request a document that details any existing loans, what type of document should they request?

Answer 26

a. Fiduciary certificate
b. Reduction certificate
c. Estoppel certificate
d. Either B or C

Prior to closing a buyer may request a “reduction certificate” or “estoppel certificate,” which documents the status of any existing loans.