Deck 18: real property and land use

Question 1

In the simplest type of ownership,property is owned by a partnership.

Answer 1

False

Question 2

The type of deed used by the seller determines the scope of the warranties the buyer is given.

Answer 2

True

Question 3

An outstanding mortgage balance in excess of the value of a house is referred to as negative equity.

Answer 3

True

Question 4

The Americans with Disabilities Act places requirements on employers regarding accommodating the disabled but does not address accessibility to commercial facilities.

Question 5

As opposed to a general partnership,property may not be held in a limited partnership.

Question 6

An environmental impact statement is not required from the government before actions are taken that will affect the environment,but such a statement is required from private developers.

Question 7

As a general rule,a real estate broker may act for more than one person in a real property transaction without the knowledge of all parties to the transaction.

Question 8

The person that conveys real property by deed is called the grantee.

Question 9

A trust is a form of co-ownership of property.

Question 10

A variance allows a landowner to construct something ordinarily not permitted under existing zoning regulations.

Question 11

Real estate law has its roots in both English common law and Spanish civil law.

Question 12

English common law created a type of co-ownership of real property between husband and wife called joint tenancy.

Question 13

Under a race recording statute,the first person to receive a valid deed will be deemed the owner of the property.

Question 14

A ground lease is a very long-term lease.

Question 15

All tenants in common have an equal right to possession of the property.

Question 16

The ownership interests of tenants in common are by definition equal.

Question 17

Sales of real property interests to nonresident aliens may be regulated by the state but are not regulated by the federal government.

Question 18

The rate at which major financial institutions offer to lend to their most creditworthy customers is called the prime rate.

Question 19

Inverse condemnation by the government constitutes a taking requiring just compensation.

Question 20

A sublease is legally the same thing as an assignment of a lease.

Question 21

In a(n)________ listing,the listing broker will receive a commission only if he or she procures a ready,willing,and able buyer.

A) exclusive
B) open
C) net listing
D) broker

Question 22

A title insurance policy does not insure against

A) defects in title.
B) undisclosed liens.
C) defects in warranties.
D) errors in the abstraction of the title.

Question 23

The conveyance of a ________ interest conveys absolute ownership of real property.

A) fee absolute
B) ownership unlimited
C) total ownership
D) fee simple

Question 24

Which of the following sell beneficial shares that are traded in the stock markets and thereby permit small investors to invest in a diversified portfolio of real estate?

A) Real estate investment trusts
B) Real estate mutual funds
C) Land diversification trusts
D) Investment land diversifications

Question 25

Title companies often hold purchase money in ______,meaning in a special account,until the conditions for the sale have all been met.

A) open account
B) dedication
C) escrow
D) closed account

Question 26

A(n)________ gives the mortgagor the right,after a foreclosure,to reacquire property within a statutory limited period.

A) interim statute
B) right of redemption
C) mortgagee relief statute
D) right of relief

Question 27

Which of the following are situations in which ownership rights are shared by two or more individuals?

A) Tenancy in common
B) Tenancy by the entirety
C) Both tenancy in common and tenancy by the entirety
D) Neither tenancy in common nor tenancy by the entirety

Question 28

In a(n)________ listing,the broker will receive any sales proceeds in excess of the net listing amount specified by the seller.

A) exclusive
B) open
C) net listing
D) broker

Question 29

In a ________ financing transaction,the second lender lends the owner the additional funds and agrees to take over the servicing of the first loan.

A) permanent
B) wraparound
C) mortgage
D) deed of trust

Question 30

Which of the following is not a type of recording statute?

A) race statute
B) notary statute
C) pure notice statute
D) race-notice statute

Question 31

Which of the following was the result on appeal in Strawn v.Canuso,the case in the text involving whether the defending developers of new homes and the real estate brokers marketing those homes had a duty to disclose to buyers that the homes were constructed near an abandoned hazardous waste dump?

A) That the defendants should have disclosed the existence of the landfill but that they could not be held liable for money damages based on the caveat emptor rule.
B) That the defendants and the plaintiffs shared responsibility resulting in the defendants being responsible for 50% of the damages suffered by the plaintiffs.
C) That the defendants did not violate any duty because the burden was on the buyers to determine the prior use of the land.
D) That the defendants violated their duty to disclose the existence of the landfill and were liable to the plaintiffs.

Question 32

A majority of states impose on commercial builders of houses a(n)_________.

A) express warranty of quality
B) implied warranty of merchantability
C) warranty of deed
D) implied warranty of habitability

Question 33

In a[n] _______,the transaction is treated as a conventional operating lease for accounting purposes and payments under the lease are treated as rent; but for tax purposes the lessee treats the transaction as though it had purchased the property and obtained a loan from the seller.

A) synthetic lease
B) sale and leaseback
C) operating lease
D) non-operating lease

Question 34

A one-point charge will generate a fee of ________ on a loan of $10,000.

A) $1,000
B) $100
C) $10
D) $1

Question 35

________ each own an undivided fractional interest in a parcel of real property.

A) Tenants in common
B) Joint tenants
C) Tenants by the entirety
D) Community property tenants

Question 36

Which of the following have been identified as valid uses of a state's police power?

A) Efforts to address threats to the public health and safety, such as fires and unsanitary conditions.
B) Rent control within constitutional limits and efforts to address threats to the public health and safety, such as fires and unsanitary conditions
C) Rent control within constitutional limits; efforts to address threats to the public health and safety, such as fires and unsanitary conditions; and restrictions on off-site advertising signs.
D) Only efforts involving legislation addressing the conduct of police officers both on and off the job because the state's police power is limited to supervision of law enforcement officers within the state's jurisdiction.

Question 37

Which of the following is true regarding the passing of community property upon the death of one of the owners?

A) The community-property interest of a spouse may be separately willed upon death; and in the absence of a will, community property passes to the other spouse.
B) The community-property interest of a spouse may be separately willed upon death; and in the absence of a will, passes to the surviving spouse and any surviving children in equal shares upon the death of one of the spouses.
C) The community-property interest of a spouse may not be separately willed upon death and passes to the other spouse automatically upon the death of one of the spouses.
D) The community-property interest of a spouse may not be separately willed upon death and passes to the surviving spouse and any surviving children in equal shares automatically upon the death of one of the spouses.

Question 38

Which of the following references the power of government to acquire private property needed for a public use?

A) Adverse possession
B) Area plan
C) Eminent domain
D) Call

Question 39

A(n)________ is an agreement by a lender to replace a construction loan with a permanent loan,usually after certain conditions,such as the timely completion of the project,have been met.

A) substitution agreement
B) interim agreement
C) development commitment
D) take-out commitment

Question 40

A warranty of _______ is applied in a minority of jurisdictions and involves a warranty at the inception of a commercial lease that there are no latent defects in the premises that will prevent the premises from being used for its intended purpose and that the premises will remain in a suitable condition.

A) habitability
B) merchantability
C) suitability
D) fitness for a particular purpose

Question 41

Lawrence owns several apartments in a large city. The city just enacted a rent control ordinance limiting the amount of rent that can be charged with apartments. Lawrence heard that Susan,a friend of his,just graduated from law school and passed the bar. Lawrence asks Susan if there is any way he can avoid the rent control measures. What should Susan tell him?

Question 42

A _______ permit allows uses that are not permitted as a matter of right under a zoning ordinance and imposes conditions to ensure that the use will be appropriate for the particular situation.

A) conditional-use
B) limited-access
C) nonconforming
D) division

Question 43

John owns a 20-acre parcel of land in Smallville.Bob is a developer that wants to build a subdivision in Smallville.He offers John $1,000 for a 30-day option to purchase the land for $1 million.John agrees.Clara is John's sister and has a valid right of first refusal on the same land.Bob has been told by his bank that the bank will provide a construction loan for the development.What rights did Bob legally obtain when he purchased his option? What effect will Clara's rights have on Bob's option? Explain the three types of loans-construction,gap,and take-financing-that could be involved to complete the development.Discuss fully.

Question 44

What is generally meant by a reference to a triple net industrial lease?

A) That the tenant pays all taxes, insurance, and operating maintenance expenses.
B) That the lessor pays all taxes, insurance, and operating maintenance expenses.
C) That the tenant pays insurance and operating maintenance expenses, but that the lessor pays taxes.
D) That the lessor pays insurance and operating maintenance expenses, but that the tenant pays taxes.

Question 45

Compare and contrast joint tenancy and tenancy by the entirety.

Question 46

In relation to notice in connection with a property interest,courts may find _______notice if a reasonable inquiry would have disclosed a prior interest.

A) actual
B) absolute
C) constructive
D) necessary

Question 47

What must a person do to acquire a parcel of land by adverse possession?

Question 48

Fact Pattern 18-1
Prudence wants to develop a shopping center in her town. She is very interested in developing the center at the location of an old dump. She can purchase the property cheaply, and it is near one of the fastest growing areas of the city. She is concerned, however, about being held liable for all cleanup costs. She has heard about federal and state funds that may be available; but she is concerned that if she purchases the property knowing that contamination is likely there, she will not be eligible to participate in government assistance programs for cleanup. She decides to discuss her problem with Bruce, a law student studying environmental law.
Refer to fact pattern 18-1. Which of the following is a term used for the dump in which Prudence is interested?

A) Black area
B) Brownfield
C) Red zone
D) Danger zone

Question 49

Susie has a great farm bordering on a river and plans to build a house on a cliff overlooking the water. She was also considering building a couple of guest cottages to rent to vacationers. One day a land conservatory came to Susie and asked her to designate the land as a pristine area whereby no development or building could take place. Susie told them to get lost. The next thing she knew,the jurisdiction in which she lived had passed a regulation permanently prohibiting riverfront owners in her area from building any structures within one half mile of the river. There had been no such restriction in her state or county previously,and Susie suspects that the regulation is part of a plot to force landowners to agree to the request of the land conservatory. Susie tells her builder to go ahead with plans to construct the home because the government cannot take land through excessive regulation. Is Susie correct that the government cannot take land through excessive regulation?

A) Susie is incorrect although if the government action constitutes a taking, compensation to the landowner must be provided.
B) Susie is incorrect, and no compensation to the landowner is required.
C) Susie is incorrect although she would only be entitled to compensation for any lost profits she can establish.
D) Susie is correct, and the regulation would be overturned by a federal court.

Question 50

Which of the following is not true regarding the legal requirements of a deed?

A) It must specifically describe the interest that is conveyed.
B) It must signed by the named grantee.
C) It must be delivered to the named grantee.
D) It must be accepted by the named grantee.

Question 51

In a(n)________,the potential buyer pays the seller for the right,but not the obligation,to purchase the property during a given time period.

A) right of first refusal
B) real estate investment trust
C) option contract
D) preliminary agreement

Question 52

A ________ is the right,conferred by a written contract,to purchase property on the same terms offered by or to a third party.

A) letter of agreement
B) letter of intent
C) right of first refusal
D) right of first negotiation

Question 53

A ________ gives a person the right to negotiate the purchase of the property before the seller enters negotiations with another party.

A) letter of agreement
B) letter of intent
C) right of first refusal
D) right of first negotiation

Question 54

Describe in detail the three basic types of deeds including any warranties or guarantees the deeds provide.

Question 55

In community property states,property acquired by inheritance during the marriage is

A) Community property.
B) Separate property.
C) A tenancy by the entirety.
D) A tenancy in common.

Question 56

Which of the following is not one of the three basic types of deeds?

A) A grant deed.
B) A specific deed.
C) A quitclaim deed.
D) A warranty deed.

Question 57

Fact Pattern 18-1
Prudence wants to develop a shopping center in her town. She is very interested in developing the center at the location of an old dump. She can purchase the property cheaply, and it is near one of the fastest growing areas of the city. She is concerned, however, about being held liable for all cleanup costs. She has heard about federal and state funds that may be available; but she is concerned that if she purchases the property knowing that contamination is likely there, she will not be eligible to participate in government assistance programs for cleanup. She decides to discuss her problem with Bruce, a law student studying environmental law.
Refer to fact pattern 18-1. What should Bruce advise Prudence regarding her plans?

A) That she should forget the project because she would be ineligible for any cleanup assistance and, as owner, would be individually liable for the entire project.
B) That she should buy the property without any investigation and deny knowledge of contamination if later questioned because under federal law she can only be held liable if she had full and informed knowledge of contaminants when she made the purchase.
C) That she should incorporate because while an individual is liable for the entire costs of cleanup, a corporation is not.
D) That by taking appropriate steps to become a bona fide prospective purchaser, she can avoid liability for legacy contamination.

Question 58

Blaire and Jimmy have been married for many years and own a home through tenancy by the entirety. Blaire has grown children from a previous marriage,Andy and Candy; and her will provides that her interest in the home should go to them upon her death. Blaire dies at age 90,and a few weeks later Jimmy finds a new girlfriend and moves her into the home. Andy and Candy object and tell Jimmy to get out because they have an ownership interest in the home,and they believe that Jimmy is being disrespectful to their mother. Which of the following is true regarding the ownership claim of Andy and Candy?

A) Blaire's children are correct; and each of them, along with Jimmy, have a 1/3 ownership interest in the home.
B) Blaire's children are correct, and they each have a 25% interest in the home with Jimmy owning the other 50% interest.
C) Blaire's children are correct, and they each have a 10% interest in the home with Jimmy owning the other 80%.
D) Blaire's children are incorrect, and Jimmy solely owns the home.

Question 59

A ________ sets forth the general terms and conditions of a proposed purchase until a formal acquisition agreement can be signed.

A) letter of agreement
B) letter of intent
C) form of contract
D) formal delineation

Question 60

Until a developer obtains a _______ right,meaning a fully guaranteed right,to develop a property,the regulation governing that property may be changed.

A) vested
B) acknowledged
C) known
D) discretionary

Question 61

Bob is selling his home.During the inspection with his broker,Bob discovered that some of the pipes in the walls had developed tiny leaks.The cost of fully repairing this condition would cost thousands of dollars and take approximately three months.Instead,Bob verbally represented to each and every buyer that the house was "in great shape" and "had no problems." Carl bought Bob's house; and six months after the deal closed,a pipe broke causing ten thousand dollars in damages.What remedies does Carl have against Bob regarding the sale of the house? Discuss fully.