Unit 6 Quiz Questions

Question 1

A grantor is conveying an interest that is less than fee simple absolute. This explanation of the
extent of ownership will be found in the

a. seisin clause.
b. granting clause.
c. habendum clause.
d. exceptions and reservations.

Answer 1

Habendum Clause

The habendum clause is the “to have and to hold” clause that defines the extent of ownership that is being conveyed.

Question 2

A seller conveys property to a buyer by a written document that contains five covenants protecting the buyer’s title. What is the seller’s role in this transaction?

a. Grantee
b. Grantor
c. Devisor
d. Devisee

Answer 2

Grantor

Because the seller is conveying the interest, the seller is the grantor. The person who receives the interest is the grantee.

Question 3

The verification that the grantor’s signature is both genuine and voluntary is

a. a judgment.
b. an attachment.
c. a consideration.
d. an acknowledgment.

Answer 3

An acknowledgement

An acknowledgment is a formal declaration under oath that the person who signs a written document does so voluntarily, and that the signature is genuine.

Question 4

Which of these is an example of involuntary alienation?

a. Sale
b. Gift
c. Escheat
d. Will

Answer 4

Escheat

When a person dies intestate and leaves no heirs, the person’s estate will escheat to the state. Escheat is an example of involuntary alienation.

Question 5

The transfer of any interest in a parcel of real estate is typically in a document called the

a. title.
b. deed.
c. attachment.
d. mortgage.

Answer 5

Deed

A deed is the written document that transfers a real estate interest. Evidence of ownership (title) is written in the deed. An attachment is the process of taking a person’s property into
legal custody by a court order. A mortgage provides the security for a loan.

Question 6

A valid deed requires

a. adequate consideration.
b. a photo of the property conveyed.
c. the grantee’s acceptance.
d. recording.

Answer 6

The grantee’s acceptance

The deed needs to be delivered to the grantee and accepted by the grantee. As long as consideration is stated, there is no question of its adequacy.

Question 7

“I do hereby convey to my nearest relative all my interest in the property called 123 Main Street, Bismarck, North Dakota, to have and to hold, in consideration of receipt of the amount of $10 and other good and valuable consideration.” When signed, this document is

a. a valid conveyance by deed.
b. an invalid conveyance by deed, because the property conveyed is inadequately described.
c. an invalid conveyance by deed, because there is no recital of exceptions and reservations.
d. an invalid conveyance by deed, because the grantee is inadequately identified

Answer 7

An invalid conveyance by deed, because the grantee is inadequately identified

Although the property may be adequately described, the grantee is not sufficiently identified. There is no transfer.

Question 8

The type of deed that imposes the least liability on the grantor is a

a. special warranty deed.
b. bargain and sale deed.
c. quitclaim deed.
d. general warranty deed.

Answer 8

Quitclaim deed

A quitclaim deed carries no covenants or warranties and generally only conveys whatever interest the grantor has, if any, when the deed is delivered.

Question 9

Title is NOT considered transferred until the deed is

a. signed by the grantor.
b. delivered to and accepted by the grantee.
c. delivered to the grantee.
d. released from escrow.

Answer 9

Delivered to and accepted by the grantee

The most complete answer is delivered to and accepted by the grantee during the grantor’s lifetime.

Question 10

Which of these is a guarantee that the grantor has the right to convey the property?

a. Covenant against encumbrances
b. Covenant of seisin
c. Covenant of further assurance
d. Covenant of quiet enjoyment

Answer 10

Convenant of seisin

The covenant against encumbrances is a warranty that the property is free from encumbrances, except as noted. The grantor further assures that everything will be done to
make the title good. Quiet enjoyment guarantees that the title will be good against third parties who might try to bring legal action to gain the property.

Question 11

A bargain and sale deed contains how many express warranties?

a. 0
b. 2
c. 3
d. 5

Answer 11

0

A bargain and sale deed contains no express warranties against encumbrances; however, it does imply that the grantor holds title and possession of the property.

Question 12

Which type of deed is used by a grantor whose interest in the real estate may be unknown?

a. Bargain-and-sale deed
b. Special warranty deed
c. General warranty deed
d. Quitclaim deed

Answer 12

Quitclaim Deed

If the grantor has no interest, the grantee will acquire nothing and have no right of warranty claim against the grantor.

Question 13

Under state law, one-half of an intestate decedent’s property goes to the decedent’s spouse, one-fourth is divided equally among the decedent’s children, and one-fourth goes to the state. If there is no spouse, the children divide three-fourths equally. A citizen of this state dies intestate, survived by an ex-spouse and seven adult children. If the estate is $865,550, how
much will each child receive under state law?
a. $0
b. $61,825.25
c. $92,737.50
d. $123,650.00

Answer 13

$92,737.50

The ex-spouse gets nothing. The state gets one-fourth and the remaining three-fourths will be divided equally among the seven children: $865,550 ÷ 4 = $216,387.50 to the state. The remaining amount, $649,162.50, is divided seven ways, leaving $92,737.50 per child.

Question 14

In one state, transfer tax is $1.20 for each $300 (or fraction of $300) of the sales price of any parcel of real estate. If a seller’s property sold for $250,000, what will be the amount of the transfer tax due?

a. $97.00
b. $999.99
c. $1,000.80
d. $1,250.50

Answer 14

$1,000.80

The transfer tax due is $1,000.80:
$250,000 ÷ $300 = 833.33, rounded up to 834
834 × $1.20 = $1,000.80.

Question 15

In front of witnesses, P says to Q, “I never made a will, but I want you to have my property when I die.” If Q becomes the owner of the property on P’s death, it is because the state
recognizes what kind of will?

a. Holographic
b. Testamentary
c. Nuncupative
d. Probated

Answer 15

Nuncupative

A holographic will is completely handwritten. A testamentary trust is established by will after the owner’s death. Probate is the process of determining the validity of the will and distributing the assets of the estate.

Question 16

In one state, the transfer tax is $0.80 per $500 or fraction thereof. There is no tax charged on the first $500 of the price. What tax must the seller pay if the property sells for $329,650?

a. $525.60
b. $526.40
c. $527.20
d. $528.00

Answer 16

$527.20

The seller must pay $527.20:
$329,650 – the first $500 = $329,150
$329,150 ÷ $500 = 658.3, rounded up to 659
659 × $0.80 = $527.20.

Question 17

A modification to a will is called

a. an addendum.
b. an amendment.
c. a probate.
d. a codicil.

Answer 17

A Codicil

Any modification to a previously executed will is contained in a separate document called a codicil. Additional agreements attached to an agreement of sale are addenda. An amendment is a change to the existing content of a contract. Probate is the process of determining the validity of a will.

Question 18

The first goal of a probate proceeding when there is a will is

a. to ensure that the heirs do not fight among themselves.
b. to confirm that the will is valid.
c. to determine the exact assets of the deceased person.
d. to identify how the estate will be disbursed.

Answer 18

To confirm that the will is valid.

Preventing fights among heirs is not the reason for probate. Before anything else is determined, the court must confirm that the will is valid

Question 19

When a corporation transfers ownership of real property, the deed to the property must be signed by

a. an authorized officer.
b. a shareholder.
c. a broker.
d. a grantee.

Answer 19

An authorized officer

Proper authority for the sale must be given by bylaws or by a resolution passed by the board of directors. Shareholders are not necessarily officers, nor are brokers. A grantee does not sign a deed.

Question 20

The granting clause in a special warranty deed generally contains the words

a. “grantor conveys and warrants.”
b. “grantor grants, bargains, and sells.”
c. “grantor remises, releases, and quitclaims.”
d. “grantor remises, releases, alienates, and conveys.”

Answer 20

Grantor remises, releases, alienates, and conveys

The granting clause in a special warranty deed generally contains the words grantor remises, releases, alienates, and conveys.

Question 21

A general power of attorney

a. is illegal in most states.
b. requires delivery and acceptance by the grantee.
c. provides general legal authority for intestate succession.
d. provides authority to carry out all business dealings of the person giving it

Answer 21

Provides authority to carry out all business dealings of the person giving it

A general power of attorney provides authority to carry out all business dealings of the person giving it. A special power of attorney permits the execution of only certain acts.

Question 22

The basic requirements for a valid conveyance are governed by

A. state law.
B. local custom.
C. national law.
D. the law of descent.

Answer 22

State Law

The answer is state law. Although all the listed items influence it somewhat, state law has the greatest influence on requirements for a valid real property conveyance

Question 23

Every deed must be signed by

A. the grantor.
B. the grantee.
C. the grantor and grantee.
D. the devisee

Answer 23

The grantor

The answer is the grantor. Either the grantor, or someone acting under the grantor’s authority, must execute (sign) every deed, and the grantor must have legal capacity to do so

Question 24

A 15-year-old recently inherited a parcel of real estate and has decided to sell it. If the 15-year-old executes a deed conveying the property to a purchaser, such a conveyance would be

A. valid.
B. void.
C. invalid.
D. voidable.

Answer 24

Voidable

The answer is voidable. Real estate contracts entered into by minors are generally voidable by the minor until the minor reaches the age of majority—18 in most states—or shortly thereafter.

Question 25

A form authorizing one person to execute documents for another is called

A. a power of attorney.
B. a release deed.
C. a quitclaim deed.
D. a power to represent.

Answer 25

Power of Attorney

The answer is a power of attorney. That document is a power of attorney; the person named in it is an attorney-in-fact. Deeds do not authorize one person to act for another.

Question 26

The grantee receives greatest protection with what type of deed?

A. Quitclaim
B. General warranty
C. Bargain and sale with covenant
D. Executor’s

Answer 26

General Warranty

The answer is general warranty. In the general warranty—often just called warranty—deed, the grantor makes more promises and gives the grantee more covenants than in any other deed.

Question 27

Party Y receives a deed from party X. The granting clause of the deed states, “I hereby remise, release, alienate, and convey to Y the following real property.” What type of deed has Y received?

A. Special warranty
B. Quitclaim
C. General warranty
D. Bargain and sale

Answer 27

Special Warranty

The answer is special warranty. The quoted granting clause does not use the word quitclaim but does use the word convey, so it is not a quitclaim deed. It does not use the words warrant generally, so it is not a general warranty deed, and it does not use the phrase bargain and sell. A special warranty deed uses such words as remise, alienate, and convey.

Question 28

Under the covenant of quiet enjoyment, a grantor

A. promises to obtain and deliver any instrument needed to make the title good.
B. warrants that the property is free from liens and encumbrances.
C. warrants that he or she is the owner and has the right to convey title to the property.
D. ensures that the title will be good against the title claims of third parties.

Answer 28

Ensures that the title will be good against the title claims of third parties

The answer is ensures that the title will be good against the title claims of third parties. Quiet enjoyment means freedom from claims of third parties—persons other than grantor and grantee.

Question 29

Which type of deed merely implies but does NOT specifically warrant that the grantor holds good title to the property?

A. Special warranty
B. Bargain and sale
C. Quitclaim
D. Trust deed

Answer 29

Bargain and sale

The answer is bargain and sale. By giving a bargain and sale deed, the grantor implies ownership and possession of the property, but there are no express warranties against encumbrances

Question 30

At which of the following steps did title to the house actually transfer or pass to B?

Step 1: A decided to convey a house to B.
Step 2: A signed a deed transferring title to B.
Step 3: A gave the signed deed to B, who accepted it.
Step 4: B took the deed to the county recorder’s office and had it recorded.

Answer 30

Step 3

The answer is Step 3. Title in this case was transferred upon delivery and acceptance of the deed. At that moment, the deed was binding between the parties. The purchaser, when later recording the deed, was then also protected against third parties

Question 31

P signed a deed transferring ownership of P’s house to Q. To provide evidence that P’s signature was genuine, P executed a declaration before a notary. This declaration is known as

A. an affidavit.
B. an acknowledgment.
C. an affirmation.
D. an estoppel.

Answer 31

An acknowledgment

The answer is an acknowledgment. P gave this acknowledgment as to the validity and voluntary nature of P’s signature to a notary. The notary took P’s acknowledgment and attached a seal.

Question 32

Title to real estate may be transferred during a person’s lifetime by

A. devise.
B. descent.
C. involuntary alienation.
D. escheat.

Answer 32

Involuntary Alienation

The answer is involuntary alienation. Transfer of title by devise (will), descent (death intestate), or escheat (for lack of a will and lack of heirs) all occur after death. Involuntary alienation, such as condemnation, foreclosure sale, or tax sale, can occur during a person’s lifetime.

Question 33

A resident of Denver bought acreage in a distant county, never went to see the acreage, and did not use the ground. An artist moved a mobile home onto the land, had a water well drilled, and lived there for 22 years. The artist may become the owner of the land if the artist is in compliance with the state law regarding

A. requirements for a valid conveyance.
B. adverse possession.
C. avulsion.
D. voluntary alienation.

Answer 33

Adverse Possession

The answer is adverse possession. Adverse possession is (hostile) possession of real estate without the permission of the owner and contrary to the owner’s best interests. If it continues in an open, conspicuous (notorious) way for the time set by statute (the statutory period), the adverse possessor may take legal action to be declared the owner on the basis of all these facts.

Question 34

Eminent domain and escheat are two examples of

A. voluntary alienation.
B. adverse possession.
C. transfers of title by descent.
D. involuntary alienation.

Answer 34

Involuntary Alienation

The answer is involuntary alienation. The right of eminent domain allows a government entity to compel the transfer of a property to that entity for a price set by court process—condemnation. This transfer of title (alienation) is forced and so is involuntary. When a person dies without a will (intestate) and without heirs, the property passes (escheats) to the state. This process was neither planned nor initiated by the owner before death and so is classified as involuntary.

Question 35

A deed contains a promise that the title conveyed is good and a promise to obtain and deliver any documents necessary to ensure good title. This deed contains an example of which covenant?

A. Further assurances
B. Seisin
C. Quiet enjoyment
D. Warranty forever

Answer 35

Further Assurances

The answer is further assurances. Any promise to obtain documents to make the title good is the covenant of further assurance. The covenants of quiet enjoyment, seisin, and warranty forever are not addressed

Question 36

A deed contains a guarantee that the grantor will compensate the grantee for any loss resulting from the title’s failure in the future. This is an example of which covenant?

A. Warranty forever
B. Further assurance
C. Quiet enjoyment
D. Seisin

Answer 36

Warranty forever

The answer is warranty forever. The grantor promises to compensate the grantee for the loss sustained if the title fails at any time in the future in the covenant of warranty forever.

Question 37

A person who has died without a will has died

A. testate.
B. in valid conveyance.
C. intestate.
D. under the acknowledgment clause.

Answer 37

Intestate

The answer is intestate. When a property owner dies intestate, title to the property will pass to thedecedent’s heirs, as provided in the state laws of descent.

Question 38

Title to real estate can be transferred upon death by what type of document?

A. Warranty deed
B. Special warranty deed
C. Quitclaim deed
D. Will

Answer 38

Will

The answer is will. A will transfers title to real estate upon the death of the testator. Deeds must
be delivered and accepted during the lifetime of the grantor to transfer title.

Question 39

An owner of real estate was declared legally incompetent and was committed to a state mental institution. While institutionalized, the owner wrote and executed a will. The owner died while still institutionalized and was survived by a spouse and three children. The real estate will pass

A. to the owner’s spouse.
B. to the heirs mentioned in the owner’s will.
C. according to the state laws of descent.
D. to the state.

Answer 39

According to the state laws of descent

The answer is according to the state laws of descent. A requirement for a valid will is mental competency
of the testator at the time of writing the will. Because of mental incompetence, the owner in question died without a valid will. Consequently, the property will pass to people chosen by state law (statute) to receive property when a decedent has no will (dies intestate).

Question 40

Generally, where does a probate proceeding involving real property take place?

A. Only in the county in which the property is located
B. Only in the county in which the decedent resided
C. In both the county where the decedent resided and the county in which the property is located
D. In the county in which the executor or the beneficiary resides

Answer 40

In both the county where the decedent resided and the county in which the property is located

The answer is in both the county where the decedent resided and the county in which the property is
located. There will be two probates conducted: one in the county where the decedent resided
and another in the county where the real estate is located.

Question 41

A deed states that the grantors are conveying all their rights and interests to the grantees to have and to hold. This is communicated in

A. the acknowledgment clause.
B. the restriction clause.
C. the covenant of seisin.
D. the habendum clause.

Answer 41

The habendum clause

The answer is the habendum clause. The habendum clause defines or explains the ownership to be
enjoyed by the grantee, and its provisions must agree with those stated in the granting clause. The
habendum clause begins with the words to have and to hold.