Unit Exam Flashcards
All of the following can be classified as real property EXCEPT?
A) condominium unit ownership.
B) ownership in severalty of a house.
C) a tenancy in common that includes the right to occupy one of three units in a residential building.
D) cooperative unit ownership.
D.
The answer is cooperative unit ownership. Because it involves receiving shares of stock and a leasehold—both of which are considered by common law to be personal property—cooperative ownership is personal, not real, property.
An estate in severalty is associated with which of the following?
A) Joint ownership with the right of survivorship
B) Multiple ownership with no right of survivorship
C) Ownership by a husband and wife
D) Sole and separate ownership
D.
The answer is sole and separate ownership. An estate in severalty is “severed” from other estates and is held by an individual owner.
A primary feature of property held in joint tenancy is that?
A) a maximum of two people can own the real estate.
B) there is right of survivorship.
C) additional owners may be added later.
D) the owners may hold unequal shares.
B.
The answer is there is right of survivorship. Right of survivorship is the distinctive feature of joint tenancy. Any number of persons can own a property in joint tenancy providing they all have equal shares and identical interests, come into ownership at the same moment and via the same granting document, and have equal rights of possession.
Real estate can be owned under a variety of trusts, including living or testamentary trusts and?
A) a real estate earnings trust (REET).
B) an investors’ real estate trust (IRET).
C) a real estate commercial trust (RECT).
D) land trusts.
D.
The answer is land trusts. Real estate can be owned under a variety of trusts, including living or testamentary trusts and land trusts.
Which statement applies to both joint tenancy and tenancy by the entirety?
A) A deed will not convey any interest unless signed by both spouses.
B) A deed signed by one owner will convey a fractional interest.
C) There is no right to file a partition suit.
D) The last survivor becomes a severalty owner.
D.
The answer is the last survivor becomes a severalty owner. Tenancy by the entirety is a type of joint tenancy recognized by some states that is reserved for married couples. In both, there is a right of survivorship. The last survivor becomes sole (severalty) owner.
Which of the following is TRUE regarding community property rights?
A) Income earned from a spouse’s second job is considered separate property.
B) Community property laws are based on the idea that spouses, rather than being equal partners, are considered one entity.
C) All of these.
D) Any property acquired during a marriage is considered to be obtained by mutual effort.
D.
The answer is any property acquired during a marriage is considered to be obtained by mutual effort. Community property laws are based on the idea that spouses, rather than merging into one entity, are equal partners in the marriage. Under community property laws, any property acquired during a marriage is considered to be obtained by mutual effort. Community property law varies among the states, but all recognize two kinds of property: separate property and community property.
A broker who is asked how a married couple should take title would advise them?
A) as joint tenancy.
B) to seek legal advice.
C) as tenants by the entirety.
D) as tenants in common.
B.
The answer is to seek legal advice. A broker or sales associate should never provide advice to prospective buyers on how they should take title to real estate.
The partition of property that is owned concurrently can be accomplished by
A) posting a notice of partition by any one of the owners.
B) court action.
C) agreement of the majority of the owners.
D) death of one of the co-owners.
B.
The answer is court action. If co-owners do not voluntarily agree to terminate their interests in the property, a court can be asked to determine whether the property can be divided into separate parcels without destroying its value or whether it must be sold and the proceeds distributed to the owners according to their fractional interests.
A parcel of property was purchased by two friends. The deed they received from the seller at closing transferred the property without stipulating a form of ownership. The two friends took title as which of the following?
A) Community property owners
B) Tenants by the entirety
C) Tenants in common
D) Joint tenants
C.
The answer is tenants in common. When joint tenancy is not clearly prescribed by the deed, grantees take title as tenants in common—to avoid accidental joint tenancy. Unmarried persons are unable to hold community property or be tenants by the entirety because both are reserved for married couples.
Title to a property is held by two or more individuals; this property is held in
A) severalty.
B) trust.
C) co-severalty.
D) co-ownership.
D.
The answer is co-ownership. When title to a property is held by two or more individuals, the property is being held in co-ownership.
A corporation is a legal entity, recognized as an artificial person. Property owned solely by the corporation is owned in
A) trust.
B) severalty.
C) survivorship tenancy.
D) partnership.
The answer is severalty. The term person does not always refer to a natural individual—a human; the law regards a corporation as an artificial person. Because this is so, a corporation can own real estate in severalty (alone).
Depending on the type of trust and its purpose, the trustor, trustee, and beneficiary
A) must be related.
B) can all be either people or legal entities.
C) must all be actual persons.
D) cannot be related.
The answer is can all be either people or legal entities. Depending on the type of trust and its purpose, the trustor, trustee, and beneficiary can all be natural persons or legal entities.
If a condominium unit owner has not paid homeowners association fees for the length of time required by state law, the HOA’s remedy may be to
A) place a lien on the property.
B) change the locks on the unit to keep out the unit owner until all amounts owed have been paid.
C) call the sheriff to serve notice of nonpayment on the unit owner.
D) enter the property and confiscate the personal possessions of the occupant.
The answer is place a lien on the property. When HOA fees are unpaid, the association’s remedies may include seeking a court-ordered judgment to have the delinquent owner’s unit sold to cover the outstanding amount or to place a lien on the property.
A trust is a device by which one person transfers ownership of property to someone else to hold or manage for
A) only a related party.
B) a governmental entity.
C) the benefit of a third party.
D) the benefit of a corporation.
The answer is the benefit of a third party. A trust is a device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
In a tenancy in common, if the fractions of ownership are NOT stated in the deed, how are they determined?
A) The tenants are presumed to hold equal shares.
B) The tenants need a judicial decision to determine the fractional shares.
C) The tenants settle the issue through binding arbitration.
D) The tenants must terminate the tenancy in common through partition.
The answer is the tenants are presumed to hold equal shares. The deed creating a tenancy in common may or may not state the fractional interest held by each co- owner; if no fractions are stated, the tenants are presumed to hold equal shares.
Ownership of property by two people is considered
A) concurrent ownership.
B) dual ownership.
C) tenancy by co-owners.
D) ownership in severalty.
The answer is concurrent ownership. Ownership in severalty is ownership by one individual. Two or more individuals can own property together in a form of concurrent ownership.
Which of the following is a legal entity that exists independently of its members?
A) Partnership
B) Corporation
C) Limited liability company
D) All of these
The answer is all of these. Business organizations such as limited liability companies, partnerships, and corporations, are legal entities that exist independently of their members. Ownership by a business organization makes it possible for many people to hold an interest in the same parcel of real estate.
Investors may be organized to finance a real estate project in various ways. Some provide for the real estate to be owned by the entity; others provide for direct ownership by the investors.
A man owns one of 20 units in fee simple, along with a 5% ownership share in the parking facilities, recreation center, and grounds. What kind of property does he own?
A) Cooperative
B) Condominium
C) Land trust
D) Time-share
The answer is condominium. When a person owns part of a development in fee and a percentage of the rest in common with the other unit owners, this is condominium ownership.
The forms of property ownership are controlled by
A) the local governments.
B) the title insurance customary practices.
C) the federal government.
D) the state.
The answer is the state. The forms of property ownership are controlled by the state.
The advantages of the limited liability company include all of the following EXCEPT
A) a streamlined method of formation provided by Congress.
B) a flexible management structure.
C) the limited liability offered by the corporate form of ownership.
D) the tax advantages of a partnership.
The answer is a streamlined method of formation provided by Congress. A limited liability company is established in compliance with state law, which varies from state to state. The LLC offers the tax advantages of a partnership in that income flows directly to members of the LLC and the LLC offers a flexible management structure without the complicated requirements of a corporation or the restrictions of a limited partnership.
An estate left the decedent’s farm to eight grandchildren. Because no form of ownership was specified in the decedent’s will, each of the grandchildren receives
A) a one-eighth interest in the property as a tenant in common.
B) a right of possession to one-eighth of the property.
C) a joint interest in the entire property.
D) a severalty interest in one-eighth of the property.
The answer is a one-eighth interest in the property as a tenant in common. If no other form of ownership is specified, each co-owner is a tenant in common with the other co-owners. While each owner in this case has a one-eighth ownership interest, each shares unity of possession, which means the right to use the entire property.
All of these unities are required for a joint tenancy EXCEPT
A) unity of title.
B) unity of time.
C) unity of ownership.
D) unity of possession.
The answer is unity of ownership. To create joint tenancy ownership, four unities are required: possession, interest, time, and title.
