Questions - Chapter 15

Question 1

In the creation of a nonfreehold estate:

A. the landlord retains a freehold estate.
B. a freehold and nonfreehold estate exist
at the same time.
C. the tenant has a nonfreehold estate.
D. all of the above.

Answer 1

15-1 D

Question 2

If the landlord fails to perform her duty, the tenant can do all of the following EXCEPT:

A. abandon the premises.
B. decide by himself to refuse to pay rent.
C. terminate the lease.
D. sue for damages.

Answer 2

15-2 B

Question 3

All of the following are duties of the landlord EXCEPT:

A. complying with building codes.
B. being responsible for destruction or defacement caused by the tenant.
C. repairing utilities and appliances.
D. maintaining the common areas.

Answer 3

15-3 B

Question 4

Jane Smith signed a lease for one year at a rent of $200 per month. She wanted to keep a small kitten in the apartment, the landlord automatically assumed there would be some degree of damage by the pet for which he wanted to assess an additional fee of $100. What is the maximum security deposit he could collect from Jane?

A. $200
B. $300
C. $400
D. $500

Answer 4

15-4 C

Question 5

Larry Landlord is a private citizen, non-real estate agent renting his own apartments without the help of a broker. He has received $1,000 in security deposits from his tenants. Which of the following is true?

A. He must deposit these funds in a trust account.
B. He could spend $200 of the funds on a personal vacation after guaranteeing return of the money with a performance bond.
C. He can deposit these funds in his personal account without a bond.
D. He must provide a bond no matter where he deposits the money or what he does with it.

Answer 5

15-5 B

Question 6

A tenant has a fixed term lease for a 1-year period. What is the minimum period of time that he must be given notice to vacate by the landlord if it is not stipulated in the lease terms?

A. one week
B. one month
C. one and a half months
D. two months

Answer 6

15-6 B

Question 7

All of the following statements regarding an estate for years are correct EXCEPT:

A. The duration of the estate must be definite.
B. The duration of the estate must be at least one year.
C. The estate automatically terminates without notice.
D. The contract creating an estate for years is, in some cases, required to be in writing in order to be valid.

Answer 7

15-7 B

Question 8

Which is an estate that automatically renews itself for consecutive periods?

A. estate at will
B. life estate
C. estate from year to year
D. estate for years

Answer 8

15-8 C

Question 9

After the termination of a lease, a tenant continued in possession of the property without permission of the property owner. The tenant’s status is:

A. tenant at will.
B. lessee.
C. trespasser.
D. tenant at sufferance.

Answer 9

15-9 D

Question 10

All of the following are essential elements of a valid lease EXCEPT:

A. the parties must have the legal capacity to contract.
B. the property must be clearly identified.
C. provision must be made for automatic renewal.
D. all essential aspects of the agreement (rent, occupancy dates, and so on) must be set forth.

Answer 10

15-10 C

Question 11

In which type of lease does the lessee agree to pay an increasing rental fee as sales in the demised property increase?

A. escalated
B. percentage
C. ground
D. none of the above

Answer 11

15-11 B

Question 12

A lease contract provides for which of the following?

A. a freehold estate for the lessee
B. a nonfreehold estate for the lessor
C. a freehold estate for the tenant
D. a leasehold estate for the lessee

Answer 12

15-12 D

Question 13

Which of the following is NOT a correct statement regarding the real property and contractual rights of the lessor and lessee as created by a residential lease contract?

A. The lessee has the exclusive right to possession and control of the leased premises during the term of the lease.
B. The lessor retains the title to the leased premises during the term of the lease and has the right to regain possession upon the termination of the lease.
C. The lessor has the right to enter the property at any time during the term of the lease.
D. The landlord must provide premises fit for human habitation.

Answer 13

15-13 C

Question 14

All of the following are typical provisions of lease contracts for an estate for years EXCEPT:

A. provision for a term of indefinite duration.
B. right of first refusal.
C. right to make alterations.
D. option to renew.

Answer 14

15-14 A

Question 15

Which of the following is a lease in which the rental amount is changed a specified percentage of the change in the Consumer Price Index?

A. percentage
B. index
e. escalated
D. graduated

Answer 15

15-15 B

Question 16

A transaction in which a property owner sells the property and leases it from the purchaser is described as which of the following?

A. option to renew
B. sale and leaseback
C. ground lease
D. sublease

Answer 16

15-16 B

Question 17

A lease is terminated by each of the following EXCEPT:

A. constructive eviction.
B. condemnation.
C. breach of condition.
D. right of first refusal.

Answer 17

15-17 D

Question 18

Tina Tenant rents an apartment from Larry Landlord. Larry refuses to repair the heating and plumbing; therefore, Tina has no heat or water. Tina can legally:

A. remain in the apartment and refuse to pay rent.
B. move out of the apartment and refuse to pay rent.
C. hire a contractor to make repairs and automatically deduct the amount from the following month’s rent.
D. remain in the unit for the remainder of the lease term and with no rent due.

Answer 18

15-18 B

Question 19

If a tenant pays rent as well as maintenance, utilities, taxes, and insurance, the lease is a:

A. net lease.
B. gross lease.
C. ground lease.
D. flat lease.

Answer 19

15-19 A

Question 20

Randy Renter starts a tenants’ union to try to improve the maintenance of the apartment complex where he lives. Oscar Owner immediately gives Randy notice to move out. Randy has protection from eviction for one year under the statutory provision of:

A. self-help.
B. retaliatory eviction.
C. constructive eviction.
D. negligence.

Answer 20

15-20 B

Question 21

_____________ is considered to have occurred if the landlord breaches his duty to provide fit and habitable premises and fails to remedy the problem within a reasonable period of time after being properly notified of the problem by the tenant.

A. Retaliatory eviction
B. Judicial eviction
C. Constructive eviction
D. Expedited eviction

Answer 21

15-21 C

Question 22

The Vacation Rental Act allows “acceptance” of the rental agreement to occur in all of the following ways EXCEPT:

A. signing the agreement.
B. paying the landlord part of the consideration or security deposit AFTER tenant receives copy of the written agreement.
C. by taking possession AFTER receiving a copy of the agreement.
D. by oral agreement.

Answer 22

15-22 D

Question 23

Which estate affords the tenant the most security?

A. estate at will
B. estate from year to year
C. estate at sufferance
D. freehold estate

Answer 23

15-23 B

Question 24

The concept of “constructive eviction” requires the lessor to keep the property in a “fit and habitable” condition. Which of the following areas of the property would apply under this doctrine? l. Common hallway leading to the apartment units ll. Parking lot

A. l only
B. ll only
C. Both l and ll
D. Neither l nor ll

Answer 24

T15-1 C

A landlord has a mandatory obligation to keep both the unit and the common area in a fit and habitable condition. This is an obligation that the landlord may not disclaim or avoid by leasing a property “as is.”

Question 25

Which of the following statements is/are correct regarding a ground lease? l. The tenant may erect a building on the property. ll. The tenant may extract minerals from the ground.

A. l only
B. ll only
C. Both l and ll
D. Neither l nor ll

Answer 25

T15-2 A

Typcially most ground leases allow a tenant to erect structures on the property, but the tenant may not extract minerals from the ground. If the tenant erects buildings on property subject to a ground lease, at the end of the lease those buildings become the property of the lessor.

Question 26

Rent would best be defined as:

A. the contractual consideration to a third party
B. the consideration for the use of the real property
C. all monies paid by the lessor to the lessee
D. the total amount owed under the terms of the lease

Answer 26

T15-3 B

Rent is the consideration for use of the property. There may be other amounts due under various leases for additional items such as late fees, deposits, etc.

Question 27

A tenant’s apartment lease has expired. She and her landlord have agreed that she may remain on the premises until a sale of the building is finalized or until the tenant locates another suitable rental, whichever occurs first. The tenant will continue to pay her normal monthly rent. She and the landlord made a commitment to inform each other two weeks prior to ending this agreement. This tenancy is described as:

A. estate at will
B. estate sale
C. estate at sufferance
D. periodic tenancy

Answer 27

T15-4 D

This is a periodic tenancy or a tenancy from period to period because it does not contain a specific expiration date and requires notice for termination.

Question 28

The tenant leases a heated apartment, but the landlord fails to provide heat because of a defective central heating part malfunction. After numerous written requests for the landlord to fix the heating problem, the tenant vacates the premises and refuses to pay any more rent. This is an example of:

A. abandonment
B. actual eviction
C. constructive eviction
D. lessor negligence

Answer 28

T15-5 C

In NC a tenant never has the right to make repairs, withold rent or pay for items and deduct them from the rent. The tenant’s only option is to proceed with a constructive eviction (breach of the lease by the landlord) and be permitted to move out and terminate their obligations under the lease.

Question 29

A residential tenant is unhappy with the habitability of an apartment because the toilet will not flush. Under the North Carolina Rental Agreements Act, the tenant may:

A. hire a plumber and charge it to the landlord
B. pay a plumber and deduct it from his next month’s rent
C. withhold rent until the problem is fixed by the landlord
D. wait for the landlord to make the repair or utilize the doctrine of constructive eviction

Answer 29

T15-6 D

In NC a tenant never has the right to make repairs, withold rent or pay for items and deduct them from the rent. The tenant’s only option is to proceed with a constructive eviction (breach of the lease by the landlord) and be permitted to move out and terminate their obligations under the lease.

Question 30

A businessman agrees to lease a barber shop from a landlord. The party responsible for the expense of making repairs to the interior of the building would most likely be:

A. shared equally by the landlord and the tenant
B. determined by negotiation of the parties per the lease agreement
C. the landlord under the NC Residential Rental Agreements Act
D. the tenant

Answer 30

T15-7 B

The NC Residential Rental Agreements Act has no application to commercial properties. The parties would have to address these issues in their lease agreement.

Question 31

A residential lease prohibits tenants from altering the property in any way without the landlord’s written permission. A tenant who uses a wheelchair cannot maneuver over the doorstep into the apartment by herself nor can she use the bathroom facilities in her wheelchair. Which of the following is TRUE?

A. The landlord must pay for alterations that make a unit accessible and livable for tenants with disabilities.
B. The tenant cannot remedy these challenges because of the lease terms.
C. The landlord should not have rented this apartment to the tenant.
D. The tenant is entitled to make and pay for reasonable necessary alterations.

Answer 31

T15-8 D

This topic is covered more fully in Chapter 20 dealing with fair housing and issues of disability. A landlord must permit the tenant to make modifications for disabilities, the tenant pays for the modificiations and can be required to restore them at the end of the tenancy.

Question 32

A tenant is in possession of property for an automatically renewable period of time. The tenancy is terminable with proper notice by either party. This is an example of:

A. estate for years
B. periodic tenancy
C. determinable estate
D. estate at sufferance

Answer 32

T15-9 B

This is a periodic tenancy because the lease has no definite termination date and requires notice for termination.

Question 33

Tenants living in foreclosed residential properties:

A. must vacate the property within 48 hours of the foreclosure
B. must vacate the property within 30 days if the new owner wishes to occupy the property
C. can always occupy the unit until the end of their lease period
D. have at least a 90-day notice to vacate the property per federal law

Answer 33

T15-10 D

The general rule is that leases travel with a property when it is sold and the new owner has no right to terminate the leases. This is an exception dealing with the sale of foreclosed property if the the new owner intends to occupy the property they may terminate the lease with a 90 day notice.

Question 34

In North Carolina, a tenant’s security deposit held by a licensee:

A. must be safely held in a trust account
B. can be used by the landlord to pay the filing fees to commence an eviction process against the tenant for alleged breach of the lease terms
C. must be accounted for and/or returned to the tenant no later than 15 days after the end of the tenancy
D. cannot be placed in an interest-bearing trust account unless the tenant receives the interest income

Answer 34

T15-11 A

In NC all security deposits must be held in a trust account. If the owner is not using a licensed property manager they must still hold the monies in a trust account or obtain a bond.

Question 35

A commercial tenant is leasing a retail space. The landlord has required them to pay a base amount plus the real estate taxes, insurance and maintenance on the property. This type of a lease is a:

A. gross lease
B. net lease
C. graduated lease
D. compounded lease

Answer 35

T15-12 B

In a net lease the tenant pays the expenses on the property. These usually include the taxes, insurance and maintenance, but include any items to which the parties agree.

Question 36

A lease that contains regular and predictable changes in the amount of the lease rental payments would be considered what type of lease?

A. index lease
B. escalator lease
C. graduated lease
D. percentage lease

Answer 36

T15-13 C

Both graduated leases and index leases can change. The difference is that in a graduated lease the change is certain to occur at specific intervals.

Question 37

A commercial tenant leased a warehouse space and later experienced some difficulties with their business. In order to not default on the lease, the commercial tenant located another business and rented the space to them under a subleasing assignment. Under these circumstances, who owes obligations to the landlord in the event of a breach?

A. The original tenant is in violation of the lease and the landlord may terminate the lease due to a material breach.
B. Only the original tenant is obligated to the landlord.
C. Both the current tenant and the original tenant are obligated under the lease.
D. There is no longer an obligated party once the landlord has accepted rent from the new tenant.

Answer 37

T15-14 B

When subleasing occurs the original tenant remains primarily liable on the lease.

Question 38

All of the following would terminate a residential lease, EXCEPT:

A. completion of the lease term
B. mutual cancellation
C. sale of the property
D. failure by the landlord to maintain the property

Answer 38

T15-15 C

Sale of a property does not end a lease. The lease continues and the new owner is obligated to honor the lease. At closing both pro-rated rents and earnest money deposits will get transferred to the buyer.

Question 39

Frank is not a licensee. He owns several residential investment properties. He is renting one of his houses out for $1,500 per month. What is the maximum security deposit that Frank may charge the tenant if the lease is for a one year term?

A. $1,500
B. Whatever Frank would like because he is not a licensee or a licensed property manager.
C. $2,250
D. $3,000

Answer 39

T15-16 D

The Residential Rental Agreements Act and the Tenant Security Deposit Act apply to all lessors, not just licensees and property managers. The maximum security deposit on a one year lease is 2 months of the amount of the rent.