unit 11

Question 1

If a corporation has a property listed with a sales agent but the CEO or chairman of the board dies suddenly, what happens to the listing?

Answer 1

Nothing happens; because the corporation is an entity that survives the death of it executives or board members, the listing would continue as originally conceived.

Question 2

With what official government bodies must a real estate brokerage file paperwork regarding the brokerage’s use of an assumed name?

Answer 2

The Texas Real Estate Commission and the county clerk in every county where the brokerage does business

Question 3

In a limited partnership,

Answer 3

the title may be held either in the names of the individual partners as tenants in common or in the name of the partnership as owners in severalty.

Question 4

Who pays income tax on corporate profits?

Answer 4

Both the corporation and the shareholders

Question 5

A sales agent working with a buyer who is interested in condominiums should make sure the buyer has

Answer 5

the condominium declaration that sets out the rights and obligations of each unit owner.

Question 6

Under community property law in Texas, income from separate property is generally considered what kind of property?

Answer 6

Community

Question 7

In a land trust, title to property is held by

Answer 7

the trustee.

Question 8

What are some of the drawbacks of being a sole proprietor of a real estate brokerage?

Answer 8

You accept all the risk of the enterprise and responsibility for all the debt.

Question 9

If a real estate broker operates a business as a sole proprietorship,

Answer 9

he must inform TREC within 30 days if he adopts an assumed name and the Assumed Name Certificate must be filed with the county clerk.

Question 10

If a deed to real estate shows co-ownership but doesNOTstate what type of co-ownership is being created, the law assumes

Answer 10

tenancy in common.

Question 11

Under community property law in Texas, if one spouse dies, the other spouse automatically owns what amount of the community property?

Answer 11

One-half

Question 12

If a tenant in common dies, that person’s ownership interest goes to

Answer 12

the decedent’s heirs.

Question 13

If a business is organized as a general partnership, which would a partnerNOTexpect?

Answer 13

The partnership will be dissolved after the death, withdrawal, or bankruptcy of one of the partners.

Question 14

Creating a joint tenancy requires four unities:

Answer 14

time, title, interest, and possession.

Question 15

If a purchaser doesNOTreceive a copy of the contract when it is signed, when may a purchaser of a time-share cancel the contract?

Answer 15

Before the 6th day after a signed copy of the contract or required time-share disclosure is received

Question 16

The shares owned by tenants in a cooperative give them what kind of long-term lease to a unit in the building?

Answer 16

Proprietary

Question 17

Franchise operations, with revenues in excess of $1 million, are obligated to pay a franchise tax while doing business in Texas. What kind of corporate structures must pay the tax?

Answer 17

Professional associations and business trusts
Limited liability companies and partnerships
Corporations and Chapter S corporations

Question 18

Real estate brokers hoping to list properties being sold by a corporation should secure what document before beginning work?

Answer 18

A copy of the corporate resolution authorizing the sale

Question 19

Real estate brokers working with budding entrepreneurs to set up Texas property companies are reminded that

Answer 19

legal and tax advice should be sought from professionals to determine the best form of business ownership for a particular situation.

Question 20

When a corporation is formed, its directors may pass a resolution allowing it to buy and own property as a business entity unto itself. Is the corporation limited to what kind of real estate it can buy?

Answer 20

Maybe, if the directors pass a resolution restricting the kind of property the corporation can own, only that kind of property can be held.

Question 21

Time-share ownership is usually used for what kind of properties?

Answer 21

Resort

Question 22

If the owner of a condo in a large building defaults on his mortgage, the bank

Answer 22

may foreclose only on the owner of the unit.

Question 23

Sales agents assisting condo buyers may want to introduce their buyer to

Answer 23

a member of the building association board of directors to make sure rules are clear about assessments and expectations of fellow condo owners.

Question 24

Who is required to sign a listing agreement or sales contract for the proposed sale of homestead community property in Texas?

Answer 24

Both spouses

Question 25

Which controls and maintains the common elements of a condominium and enforces the condominium bylaws?

Answer 25

Owners association

Question 26

What is one of the chief drawbacks of corporate ownership of income property?

Answer 26

Profits are subject to double taxation unless organized as an S corporation.

Question 27

Who may hold different percentages of ownership in the property?

Answer 27

Tenants in common

Question 28

The shareholders’ liability for the debts of a corporation is

Answer 28

limited to the amount of their investment.

Question 29

DBA in a business name stands for

Answer 29

doing business as.

Question 30

For entrepreneurs to set up a real estate brokerage as a sole proprietorship, they must

Answer 30

first have a valid broker’s license.

Question 31

Under which circumstance does a spouseNOTacquire an equitable interest in separate property owned by the other spouse?

Answer 31

There was an enhancement in the value of separate property from funds given to the owning spouse by her parents during the marriage.

Question 32

If one spouse dies, the separate property of the deceased spouse and the deceased spouse’s half of the community property are distributed according to the deceased’s

Answer 32

will.