Section 2 Practice Test - Mod 4-6

Question 1

When a financial institution puts together a loan for a property owner, the lender is
referred to as the
A. grantee.
B. mortgagee.
C. mortgagor.
D. trustor.

Answer 1

B. mortgagee.

Question 2

Which of the following limitations on ownership is not an exercise of government power?
A. covenants
B. escheat
C. special assessment lien
D. zoning ordinance

Answer 2

A. covenants

Question 3

The Hawthorns bought a condominium unit in a resort area for $500,000. They use the condo for one month out of every year, and during the remaining months, they rent it out through an agreement with the property management. What type of ownership do the Hawthorns have?
A. condominium
B. cooperative
C. leasehold
D. timeshare

Answer 3

A. condominium

Question 4

The form of legal description most often used west of the Mississippi River is
A. bearing and azimuth.
B. metes and bounds.
C. recorded plat.
D. rectangular survey.

Answer 4

D. rectangular survey.

Question 5

5. A claim against real property to secure repayment of a debt is
A. a deed restriction.
B. a lien.
C. an easement.
D. an encroachment.

Answer 5

B. a lien.

Question 6

Sam Gates wants to buy a summer home with his sister Jean. Because they are both retired and have no heirs, they want to be sure that if one of them dies, the interest of the deceased will pass to the other sibling. Which form of ownership should they use to acquire title?
A. joint tenancy
B. tenancy by the entirety
C. tenancy in common
D. tenancy in severalty

Answer 6

A. joint tenancy

Question 7

When a corporation purchases real estate, it conducts this business as
A. a limited partnership.
B. a real estate investment trust.
C. a syndicate.
D. if it were a single person.

Answer 7

D. if it were a single person.

Question 8

Rick and Alice set up a living trust for their children involving a rental property they own. In this type of agreement, the children are legally referred to as the
A. beneficiaries.
B. fiduciaries.
C. trustees.
D. trustors.

Answer 8

A. beneficiaries.

Question 9

Common elements in condominium ownership include all of the following except the
A. elevator.
B. land.
C. shareholder stock.
D. swimming pool

Answer 9

C. shareholder stock.

Question 10

Justin owns a property with three other people. When Justin dies, his interest will
be passed according to his will and be part of his estate. In this property, Justin is a
A. joint tenant.
B. tenant by the entirety.
C. tenant in common.
D. tenant in severalty.

Answer 10

C. tenant in common.

Question 11

McKibbin has been approved to have a possessory interest in a property and is given a proprietary lease. What kind of ownership does McKibbin have?
A. condominium ownership
B. cooperative ownership
C. leasehold ownership
D. timeshare ownership

Answer 11

B. cooperative ownership

Note: in a co-op, the purchaser of the stock obtains a proprietory lease to the apartment for the life of the corporation.

Question 12

A buyer purchased a quarter acre of land for $5.00 per square foot. What was the price of the parcel?
A. $54,450 
B. $108,900
C. $125,000
D. $217,800

Answer 12

A. $54,450 (43,560 sq. ft. / 4 = 10,890 x $5.00 = $54,450)

Question 13

The process used by the government to acquire land for public benefit is known as
A. condemnation.
B. eminent domain.
C. escheat.
D. foreclosure.

Answer 13

A. condemnation.

Question 14

Digging Deeper (Bonus Question): 
How many acres are contained in the tract described as beginning at the NE corner of the NW ¼, then south along the east line to the SE corner of said quarter section, then west 2,640 feet, more or less, to the SW corner of the said NW ¼, then in a straight line to the P.O.B.?
A. 40 acres
B. 80 acres
C. 120 acres
D. 160 acres

Answer 14

B. 80 acres