Section 2 Test Questions

Question 1

A real estate tax lien, a federal income tax lien, a judgment lien, and a mortgage lien are recorded against a property. Which lien will be paid first when the property is sold?

Answer 1

Real estate tax lien.

Question 2

The type of deed that offers the grantee the fullest protection against claims to the title is the

Answer 2

general warranty deed.

Question 3

A break in the chain of title to a property results in

Answer 3

a clouded title.

Question 4

In accordance with the statute of frauds,

Answer 4

a five-year lease must be in writing to be enforceable.

Question 5

A municipality wants to build a sewage treatment facility which will require the acquisition of several parcels of privately owned land. What legal power enables the municipality to buy the necessary properties, even against the ownersG?? wishes?

Answer 5

Eminent domain.

Question 6

Which of the following accurately describes the act of foreclosure?

Answer 6

A proceeding to enforce a lien by forcing the sale or transfer of a secured property.

Question 7

Melinda purchases a house and finances it. The lender in turn places a lien on MelindaG??s title. The lien in this mortgage transaction is

Answer 7

the creditor’s claim against the property as collateral security for the loan.

Question 8

A property owner gives Deanna permission to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Deanna granted originally, and will it survive the ownerG??s death?

Answer 8

A license, which terminates upon the owner’s death.

Question 9

To be marketable, title must be

Answer 9

free of undisclosed defects and encumbrances.

Question 10

An adverse possessor must be able to successfully demonstrate that he or she has been

Answer 10

openly possessing and claiming the property without the owner’s consent.

Question 11

A tenant transfers a portion of the leasehold interest to another party. The instrument that accomplishes this transfer is a(n)

Answer 11

sublease.

Question 12

Which of the following best describes the documentary stamp tax?

Answer 12

A transfer tax based on the price of the property being conveyed.

Question 13

What is one of the purposes of a lawsuit to “quiet title”?

Answer 13

To have an encumbrance removed if the lienholder cannot prove its validity.

Question 14

A court might grant an easement by prescription if

Answer 14

a trespasser has been using an owner’s property for a certain period with the owner’s knowledge but without permission.

Question 15

Wayne and Leota obtain an insurance policy that protects them from liabilities and losses resulting from title defects. The kind of policy they bought is a

Answer 15

standard owner’s title insurance policy.

Question 16

Which of the following is true of easements in general?

Answer 16

They involve the property that contains the easement and a non-owning party.

Question 17

When an owner leases her property, she temporarily relinquishes the right to

Answer 17

occupy the property.

Question 18

In executing a condominium lease, a tenant has acquired

Answer 18

a temporary possessory interest.

Question 19

Under landlord-tenant laws, landlords must treat tenants fairly and honestly. In a residential leasehold, this requirement would include

Answer 19

providing required building support and services.

Question 20

If a lease does not state a specific ending date, when does it terminate?

Answer 20

When either party gives proper notice.

Question 21

A homeowner defaults on his mortgage loan. In the subsequent foreclosure action, the lender takes title to the liened property directly instead of initiating a court-ordered public sale. This is an example of

Answer 21

strict foreclosure.

Question 22

Which of the following defines constructive notice?

Answer 22

It is knowledge one could have or should have obtained.

Question 23

While a one-year lease is in effect, the tenant dies of a sudden illness. In this situation,

Answer 23

the tenant’s estate is still obligated under the lease.

Question 24

On two adjacent properties, there is an easement that allows property A to use the driveway that belongs to property B. Here, property A is said to be which of the following in relation to property B?

Answer 24

Dominant tenement.

Question 25

The purpose of a deed restriction is to enable an owner to specify

Answer 25

how a property may be used and what improvements may be built on it.

Question 26

Jennifer owns a one-half interest in a condominium as a tenant in common with her business partner. If Jennifer has several heirs and dies without a will, the property will

Answer 26

pass to the heirs by the laws of descent and distribution.

Question 27

A buyer has signed a contract to purchase a property, but is uncertain of the condition of the title. Which of the following parties is legally responsible for knowing the condition of the title?

Answer 27

The buyer.

Question 28

Three students rent a house together, and all three sign a one-year lease. Six months later, two students move out. Which of the following is true of the remaining rent obligation?

Answer 28

The remaining tenant is responsible for the full rent obligation.

Question 29

A tenant obtains a full-service lease where the landlord agrees to pay all operating expenses in exchange for an additional $5.00 rent per square foot. Another term for this lease is a(n)

Answer 29

gross lease.

Question 30

The Uniform Residential Landlord and Tenant Act generally does not apply to

Answer 30

hotel

Question 31

A landlord generally has the right to enter the leased premises

Answer 31

for specified reasonable purposes.

Question 32

When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?

Answer 32

A leased fee estate.

Question 33

Which of the following is true of a sublease?

Answer 33

The original tenant retains primary responsibility for performance of the original lease contract.

Question 34

How is a lien terminated?

Answer 34

Payment of the debt that is the subject of the lien and recording of the satisfaction.

Question 35

A drifter secretly lives in an abandoned shack on a large ranch property. After twenty years, the person makes a claim of ownership to the shack and the land immediately surrounding it that he had cleared. This claim will likely be

Answer 35

declined because possession was secretive.

Question 36

Which of the following happens when a leased property is sold?

Answer 36

The buyer acquires title subject to the lease, which remains in effect.

Question 37

In a lien-theory state, what kind of interest does a mortgage lender have in the liened property?

Answer 37

An equitable interest.

Question 38

A lien holder can change the lien priority of a junior lien by agreeing to

Answer 38

subordinate the lien.

Question 39

Ownership of real estate can be transferred voluntarily or involuntarily. The three ways title can be transferred voluntarily are by

Answer 39

grant, deed, and will.

Question 40

A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of

Answer 40

a deed restriction.

Question 41

The court proceeding that generally settles a decedent’s estate is called

Answer 41

probate.

Question 42

An encroachment is

Answer 42

an unauthorized physical intrusion of one property into another.

Question 43

An owner transfers title to a property to a buyer in exchange for a motorcycle. This is an example of

Answer 43

voluntary alienation.

Question 44

What distinguishes a lien from other types of encumbrance?

Answer 44

It involves a monetary claim against the value of a property.

Question 45

What is the function of recording a deed?

Answer 45

It gives constructive notice of ownership.

Question 46

Which of the following defines actual notice?

Answer 46

It is knowledge received or imparted through direct experience.

Question 47

A property is secured by a mortgage that does not contain a “power of sale” clause. To foreclose, the lien holder will have to

Answer 47

file a foreclosure suit.

Question 48

A person wishes to convey any and all interests in a property to another without assurance of the propertyG??s marketability. This party would most likely use which of the following types of deed?

Answer 48

A quitclaim deed.

Question 49

The only clause that is actually required in a deed is the

Answer 49

granting clause.

Question 50

Which of the following circumstances is the most likely scenario for a ground lease?

Answer 50

An owner-developer wants to retain ownership of the land portion of the improved real property.

Question 51

Vijay enters into a lease for his new store. The provisions of the lease require Vijay to pay the operating expenses of the premises such as janitorial and repair expenses. This is an example of a

Answer 51

net lease.

Question 52

Which of the following describes an encumbrance?

Answer 52

A third party’s interest in a real property that limits the interests of the freehold property owner.

Question 53

Under the Uniform Residential Landlord and Tenant Act, if a lease does not state a clear expiration date, the lease is regarded as

Answer 53

tenancy from period-to-period.

Question 54

Which of the following types of leasehold estate lacks a specific term?

Answer 54

Estate at will.

Question 55

Mr. King wants to offer 100 acres of his property for sale. Since the property is landlocked, he will have to put in a driveway to the road that will run across his remaining property. What kind of easement will he have to grant?

Answer 55

An easement appurtenant.

Question 56

If property Alpha has a court-ordered easement across property Beta in order for Alpha to have access to a public road, the easement is a(n)

Answer 56

easement by necessity.

Question 57

When a tenant rents an apartment, he or she is usually responsible for

Answer 57

compliance with the rules and regulations of the building.

Question 58

A judge rules in favor of the creditor in a court proceeding and places a judgment lien against all the debtor’s assets, including his real property. This is an example of a(n)

Answer 58

involuntary general lien.

Question 59

If an owner of real property dies intestate and has no legal heirs, what will happen to the property?

Answer 59

It will escheat to the state or county.

Question 60

A tenancy at will can usually be terminated by

Answer 60

either party giving proper notice.