Deck 19: real property and land use

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

A real estate investment trust sells beneficial shares that permit small investors to own a diversified portfolio of real estate,similar to a mutual fund.

Answer 3

True

Question 4

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

Question 5

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

Question 6

A warranty of habitability applies to subsequent sellers as well as to the original builder.

Question 7

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

Question 8

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 9

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

Question 10

Title insurance protects the buyer of property against undisclosed liens.

Question 11

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

Question 12

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

Question 13

A right of first refusal gives the seller the right to modify a buyer's offer if a third party offers to purchase the property on the same terms.

Question 14

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

Question 15

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

Question 16

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

Question 17

The ownership interests of tenants in common are always equal.

Question 18

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

Question 19

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

Question 20

Nations do not have the right to expropriate foreign property under the power of eminent domain.

Question 21

Separate property is converted into community property when

A)one spouse gifts separate property to the other spouse.
B)the separate and community property have been commingled.
C)the parties treat the separate property in such a manner that a presumption of a gift arises.
D)all of the responses are correct

Question 22

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 23

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 24

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 25

Which type of deed contains no express or implied warranties?

A)Quitclaim
B)Warranty
C)Grant
D)Absolute

Question 26

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 27

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 28

In a(n)________ listing,the broker has the right to sell the property,and any sale of the property during the term of the listing will entitle the broker to a commission.

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

The key characteristic of a joint tenancy is the right of

A)possession
B)equal ownership
C)survivorship
D)severance

Question 31

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 32

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 33

________ recording statutes protect subsequent good faith purchasers who record their deed before the prior purchaser records its deed.

A)Pure-notice
B)Race
C)Race-notice
D)Partial notice

Question 34

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

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

Question 35

________ each own a specific 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

The person conveying real property is the _______,and the person to whom the property is conveyed is the ________.

A)owner,ownee
B)ownee,owner
C)grantor,grantee
D)grantee,grantor

Question 37

An alternative to acquiring real property for cash is a _________,whereby the seller exchanges its property for another piece of property.

A)Rule 401 exchange
B)tax-deferred exchange
C)registration-exchange
D)exemption-trade

Question 38

Which of the following is not true of a joint tenancy?

A)Ownership is joint and equal.
B)There is a right of survivorship.
C)The right of joint tenancy cannot be destroyed.
D)The right of possession is equal.

Question 39

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 40

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 41

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

Question 42

_________ occurs when a person acquires ownership on a piece of property by adversely possessing a parcel of land for the period of time specified by a state statute.

A)Adverse possession
B)Independent possession
C)Quitclaim possession
D)Res ipsa possession.

Question 43

Fact pattern 19-1
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 19-1.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 44

Compare and contrast joint tenancy and tenancy by the entirety.

Question 45

Fact pattern 19-1
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 19-1.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 46

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 47

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 48

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

A)It must specifically describes 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 49

Wallace loved vacationing in Mexico.He found a great beach front home that he wants to purchase near Cancun.The owners of the home have agreed to sell it to him for a great price because they are relocating to Europe.What advice would you give Wallace?

A)To refuse the deal because foreigners cannot own beachfront property in Mexico.
B)To refuse the deal unless the owners acquire permission from the local authorities for the sale.
C)To refuse the deal unless he plans to rent the property at least three months out of the year because that is required in Mexico.
D)To complete the deal quickly before the owners change their minds.

Question 50

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 51

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 52

Explain the concept of wraparound financing and how it can benefit a borrower and lender.

Question 53

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

Question 54

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 55

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 56

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 57

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 58

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 59

In a(n)________,the buyer purchases real property from a seller and simultaneously the property is leased back to the seller.

A)sale and leaseback
B)wraparound lease
C)tax-deferred exchange
D)synthetic lease

Question 60

A loan is usually secured by a lien on property known as a(n)________.

A)obligation of trust
B)debtor's liability form
C)mortgage or deed of trust
D)lien recordation form

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 and caused three thousand dollars in damage.What remedies does Carl have against Bob regarding the sale of the house? Discuss fully.