UNIT 2

Question 1

Which of the following is generally considered real property?
a.	Emblements
b.	Annual crops
c.	A shrub planted in a decorative pot
d.	A perennial shrub planted in 
the backyard

Answer 1

d. A perennial shrub planted in

the backyard

Question 2

The phrase, bundle of legal rights

a. is part of the definition of real property.
b. is another name for legal description.
c. refers to the legal documents used in real estate transactions.
d. refers to the tenant’s rights in a lease.

Answer 2

a. is part of the definition of real property.

Question 3

A trade fixture is considered

a. a fixture.
b. an easement.
c. personalty.
d. a license.

Answer 3

c. personalty.

Question 4

Which of the following is considered personal property?

a. Masonry fireplace
b. Porch and window awnings
c. Bathtubs
d. Patio furniture

Answer 4

d. Patio furniture

Question 5

Real property can become personal property by

a. severance.
b. purchase.
c. hypothecation.
d. attachment.

Answer 5

a. severance.

Question 6

A seller is under contract to sell a property using the NCBA/NCAR 2-T Offer to Purchase and Contract. The elegantly decorated master bedroom has vertical window blinds, hand-painted light switches and electrical outlet covers, and draperies fashioned from fabric coordinated with the wallpaper. Which of the following items may the seller legally remove before the close of the transaction?

a. None of the items
b. The draperies and blinds
c. The hand-painted items
d. The draperies

Answer 6

d. The draperies

Question 7

A rancher owns a parcel of land with all subsurface, air, and water rights intact. If oil is discovered on the parcel of land, who owns the oil?

a. The rancher
b. The tenant farmer to whom the property has been leased
c. The state government
d. The federal government

Answer 7

a. The rancher

Question 8

A commercial tenant attaches several items to the rental property during the term of the lease. Those items are considered

a. fixtures and become part of the landlord’s real property.
b. emblements and are treated as personal property of the tenant.
c. trade fixtures and may be removed by the tenant by the end of the lease.
d. easements and increase the value of the property.

Answer 8

c. trade fixtures and may be removed by the tenant by the end of the lease.

Question 9

Personal property includes all of the following EXCEPT

a. chattels.
b. trade fixtures.
c. emblements.
d. fixtures.

Answer 9

d. fixtures.

Question 10

Fixtures are

a. real property.
b. chattels.
c. removable by a tenant before the expiration of the lease.
d. removable by a tenant after the expiration of the lease.

Answer 10

a. real property.

Question 11

After construction of a building over a railroad right-of-way, the trains may

a. operate as usual.
b. no longer use the tracks under the building.
c. use the tracks under the building only if they cause no problem for the building’s occupants.
d. use the tracks under the building as long as they first obtain the building owner’s permission.

Answer 11

a. operate as usual.

Question 12

Generally, personal property can be distinguished from real property by its

a. size.
b. mobility.
c. value.
d. multiplicity of use.

Answer 12

b. mobility.

Question 13

A business owner rents an empty building to use as an ice cream parlor. The tenant subsequently installs large freezer units and several service counters. These additions

a. are considered permanent improvements to the property.
b. became the landlord’s property once attached to the building.
c. can be legally removed by the tenant at the termination of the lease.
d. can only be removed by the tenant with the landlord’s permission.

Answer 13

c. can be legally removed by the tenant at the termination of the lease.

Question 14

All of the following are tests for determining a fixture EXCEPT

a. intent of the parties.
b. size of the item.
c. method of attachment of the item.
d. adaptation of the item to the real estate.

Answer 14

b. size of the item.

Question 15

The owner of a house wants to fence the yard for a dog. When the fence is erected, the fencing materials are converted to real estate by

a. severance.
b. annexation.
c. immobility.
d. indestructibility.

Answer 15

b. annexation.

Question 16

The rights of ownership of real property include all of the following EXCEPT

a. disposition.
b. exclusivity.
c. control.
d. compatibility.

Answer 16

d. compatibility.

Question 17

A person who has complete control over a parcel of real estate is said to own a

a. leasehold estate.
b. fee simple estate.
c. life estate.
d. defeasible fee estate.

Answer 17

b. fee simple estate.

Question 18

A North Carolina beachfront property owner owns the land on the ocean side of the property to the

a. average high tide line.
b. average low tide line.
c. international waters line.
d. middle of the foreshore.

Answer 18

a. average high tide line.

Question 19

Which of the following has an indefinite ownership period?

a. Freehold estate
b. Nonfreehold estate
c. Estate for years
d. Estate at will

Answer 19

a. Freehold estate

Question 20

A homeowner acquired the ownership of land that was deposited by a river running through her property by

a. reliction.
b. succession.
c. avulsion.
d. accretion.

Answer 20

d. accretion.

Question 21

A woman wishes to donate a vacant lot that she owns in fee simple absolute to a hospital that is located next to her lot. An attorney prepares a deed that conveys the ownership of the lot to the hospital “as long as it is used for medical purposes.” After the completion of the gift, the hospital will hold a

a. pur autre vie estate.
b. fee simple absolute estate.
c. fee simple determinable estate.
d. fee simple to a condition subsequent estate.

Answer 21

c. fee simple determinable estate.

Question 22

The most all-inclusive type of real property ownership is a

a. fee simple estate.  b. conventional life estate. c. qualified fee estate. d. reversionary interest.

Answer 22

a. fee simple estate.

Question 23

The rights of the owner of property located along the banks of a small stream are called

a. littoral rights.
b. subjacent rights.
c. riparian rights.
d. hereditaments.

Answer 23

c. riparian rights.

Question 24

The ownership rights to real estate include all of the following EXCEPT

a. buildings located on the property.
b. air space above the property.
c. easements running with the land.
d. navigable rivers running through the property.

Answer 24

d. navigable rivers running through the property.

Question 25

A deed that conveys ownership to the grantee as long as the existing building is NOT destroyed creates a

a. life estate.
b. non-destructible estate.
c. fee simple estate.
d. defeasible fee estate.

Answer 25

d. defeasible fee estate.

Question 26

The North Carolina owner of a secluded area adjacent to the Atlantic Ocean noticed that people from town walked along the shore in front of this property. The owner learned that the local citizens had been walking along this beach for years. The owner went to court to try to stop people from walking along the water’s edge in front of the property. The owner is likely to be

a. unsuccessful, because the local citizens have been doing this for years and thus have an easement.
b. unsuccessful, because the owner’s property extends only to the high-water mark and the public can use the land beyond this point.
c. successful, because the owner’s property extends to the middle of the water bed.
d. successful, because the owner can control access to his own property.

Answer 26

b. unsuccessful, because the owner’s property extends only to the high-water mark and the public can use the land beyond this point.

Question 27

A woman conveys a life estate to her son-in-law and stipulates that upon his death the estate will pass to her grandson. The grandson has an

a. estate in reversion.
b. estate in remainder.
c. estate pur autre vie.
d. estate for the life of another.

Answer 27

b. estate in remainder.

Question 28

A life estate conveys to the life tenant

a. a leasehold for life.
b. a reversionary interest.
c. an estate pur autre vie.
d. ownership for life.

Answer 28

d. ownership for life.

Question 29

A property owner conveys the ownership of his apartment building to a nursing home, anticipating that the rental income will help pay for his father’s care at the home. When his father dies, the original owner will recapture the ownership of the apartment building. This is an example of a

a. remainder life estate.
b. conventional life estate.
c. life estate pur autre vie.
d. leasehold estate.

Answer 29

c. life estate pur autre vie.

Question 30

A buyer contracts to purchase real property with the intention of having title transfer to her children upon her death. Which of the following is the best way for the buyer to take title to the purchased property?

a. A conventional life estate
b. A fee estate
c. A joint tenancy
d. An estate with reversionary interest

Answer 30

b. A fee estate

Question 31

A person who acquired ownership that can be inherited, with the provision that the land must always be used for recreational purposes, has

a. a fee simple absolute estate.
b. a fee simple determinable estate.
c. a fee simple to a condition subsequent estate.
d. an estate that cannot be sold.

Answer 31

b. a fee simple determinable estate.

Question 32

A brother and sister bought a commercial building and took title as joint tenants with right of survivorship. The brother died testate. The sister now owns the building

a. as a joint tenant with right of survivorship with her brother’s heirs.
b. in severalty.
c. as a tenant in common with her brother’s heirs.
d. as a life tenant with her brother’s heirs having remainder interest.

Answer 32

b. in severalty.

Question 33

An owner of a fee simple estate sells the property with the condition that he will continue to own the entire property until his death. The seller has a

a. conventional life estate.
b. dower interest.
c. reversionary interest.
d. remainder interest.

Answer 33

a. conventional life estate.

Question 34

A person currently has the legal right to occupy and use a certain residential structure. The interest in the property could be all of the following EXCEPT

a. fee simple.
b. remainder.
c. leasehold.
d. life estate.

Answer 34

b. remainder.

Question 35

A brother and a sister can NOT concurrently own real estate in North Carolina as

a. remainder devisees.
b. tenants by entireties.
c. joint tenants.
d. tenants in common.

Answer 35

b. tenants by entireties.

Question 36

A man lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, the man owns stock in the corporation and has a lease to his apartment. This type of ownership is called a

a. condominium.
b. planned unit development.
c. time-share.
d. cooperative.

Answer 36

d. cooperative.

Question 37

Co-owners of a fee simple interest in a small office building are neither related to nor a creditor to each other. One owner dies intestate. The surviving owner would become the sole owner of the property under which of the following rights?

a. Adverse possession
b. Reversionary interest
c. Survivorship
d. Foreclosure

Answer 37

c. Survivorship

Question 38

Three joint tenants own a parcel of land. One owner sells his interest to a long-time friend. After the conveyance, the remaining original owners

a. become tenants in common with each other.
b. become tenants in common with each other and the newest owner.
c. become joint tenants with the newest owner.
d. remain joint tenants with each other.

Answer 38

d. remain joint tenants with each other.

Question 39

An ownership interest that is based on pre-set occupancy periods occurring over five years or more is called

a. leasehold interest.
b. time-share ownership.
c. condominium ownership.
d. cooperative membership.

Answer 39

b. time-share ownership.

Question 40

One of two owners holds an undivided 60% interest and the other holds an undivided 40% interest. The two owners probably hold their interests as

a. cooperative owners.
b. joint tenants.
c. community property owners.
d. tenants in common.

Answer 40

d. tenants in common.

Question 41

A person who owns one unit in a multi-unit structure together with a specified undivided interest in the common elements would own a

a. cooperative.
b. share in a real estate investment trust.
c. condominium.
d. time-share interest.

Answer 41

c. condominium.

Question 42

The owner of a condominium unit learns that a neighbor has failed to pay his real estate taxes. If the neighbor does NOT pay the taxes

a. a lien can be filed against the condominium complex.
b. a lien can be filed against the neighbor’s unit.
c. a lien can be filed only against the common areas of the condominium.
d. the taxing authority can order the condominium be dissolved.

Answer 42

b. a lien can be filed against the neighbor’s unit.

Question 43

All of the following are true statements about a condominium EXCEPT

a. a declaration must be filed before any units may be sold.
b. each unit owner has a fractional undivided interest in the common elements.
c. each owner receives a separate real estate tax statement.
d. each owner has a proprietary lease with the owners’ association for the unit.

Answer 43

d. each owner has a proprietary lease with the owners’ association for the unit.

Question 44

In order to create a joint tenancy relationship in the ownership of real estate, there must be unities of

a. grantees, ownership, claim of right, and possession.
b. title, interest, encumbrance, and survivorship.
c. possession, time, interest, and title.
d. ownership, possession, heirs, and title.

Answer 44

c. possession, time, interest, and title.

Question 45

A property held as tenancy by the entirety in North Carolina requires that

a. the co-owners must be husband and wife.
b. the property in question must be residential property.
c. upon the death of a co-tenant, the decedent’s interest passes to the heirs.
d. in the event of a divorce, the property will escheat.

Answer 45

a. the co-owners must be husband and wife.

Question 46

An elderly couple no longer need their large house, so they decide to sell the house and move into a cooperative apartment building. In a cooperative, they will

a. become stockholders in a corporation.
b. own their individual apartment unit.
c. own a portion of the common elements.
d. receive a lifetime lease to their apartment.

Answer 46

a. become stockholders in a corporation.

Question 47

Under the condominium form of ownership, the owner’s interest in their individual unit would normally be

a. a life estate.
b. a fee simple estate.
c. a reversionary estate.
d. a proprietary leasehold.

Answer 47

b. a fee simple estate.

Question 48

Which of the following is NOT true about condominium ownership?

a. It can be mortgaged.
b. All the land is owned as part of the common elements.
c. The ownership can be left to someone through a valid will.
d. The limited common elements can be sold separately.

Answer 48

d. The limited common elements can be sold separately.

Question 49

A buyer purchases a fee simple estate and has an undivided interest in common elements associated with the property that includes all the land. What form of ownership interest does the buyer hold?

a. Planned unit development
b. Cooperative
c. Condominium
d. Timeshare

Answer 49

c. Condominium

Question 50

A joint tenant sells her interest to a third party. If the original ownership interests were equal, what is the relationship of the new owner with the remaining original owner?

a. They are joint tenants.
b. They are tenants in common.
c. There is no relationship because a joint tenant cannot sell to a third party.
d. The original owner owns a ⅔ interest and the buyer owns a ⅓ interest.

Answer 50

b. They are tenants in common.

Question 51

Condominium owners are responsible for paying a monthly common area maintenance fee. If an owner fails to make this payment,

a. that owner is evicted.
b. the debt is collected from other owners.
c. a lien is filed against that owner’s unit.
d. the debt is added to that owner’s mortgage payment.

Answer 51

c. a lien is filed against that owner’s unit.

Question 52

All of the following statements about manufactured housing in North Carolina are true EXCEPT

a. a manufactured home is constructed per HUD construction standards.
b. it has a vehicle identification number while mobile.
c. an attached HUD label is required for transfer of title.
d. removal of the wheels and axles converts a manufactured home to real property.

Answer 52

d. removal of the wheels and axles converts a manufactured home to real property.