NC Real Estate Practice Quiz (Unit 1 - 6)
The current market value of a property is $135,000. For tax purposes, it is assessed at 60% of market value. The tax rate is $2.45 per $100 of assessed value. What is the annual tax liability? a. $1,190 b. $1,323 c. $1,985 d. $3,307
C. $1,985 $135,000*.60 = $81,000 $81,000/$100 = $810 $810*$2.45 = $1,985
How many lots, each measuring 72.5 feet wide by 100 feet deep, could be made from a 2-acre parcel of land? a. 6 b. 7 c. 12 d. 14
C. 12 72.5' x 100' = 7,250 SF per lot 2 acres x 43,560 = 87,120 SF 87,120 SF/7,250 = 12 lots
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.
C. A lien is filed against that owner's unit
Which of the following liens holds first priority regardless of when it was recorded? a. Mortgage lien b. Purchase money lien c. Ad valorem tax lien d. Federal income tax lien
C. Ad valorem tax lien
Which of the following has an indefinite ownership period? a. Freehold estate b. Nonfreehold estate c. Estate for years d. Estate at will
A. Freehold estate
A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price? a. $21,000 b. $28,000 c. $31,800 d. $35,000
A. $21,000 $4,800 SF / 80 ft deep = 60 front foot x $350 = $21,000 or $4,800 SF x $350 = $1,680,000 / 80 ft deep = $21,000
Which of the following documents is signed by the owner of the real estate? a. A gift deed b. A trustee's deed c. A reconveyance deed d. A tax deed
A. A gift deed
A homeowner objected when a local utility company dug up his garden to install a natural gas line. The company claimed it had a valid easement supported by the county records. The homeowner claimed the easement was not valid because he was unaware of its existence. The easement was a. a valid easement in gross even though the owner did not know about it. b. a valid appurtenant easement owned by the utility company. c. not valid because the owner did not authorize the easement. not valid because the owner was not informed of its existence when he purchased the property.
A. A valid easement in gross even though the owner did not know about it
A developer owns 50 acres of land that she wishes to subdivide into individual residential lots. The developer grants access to the individual parcels so that utility companies can install their lines and pipes. Each utility company has been granted a. an easement in gross. b. an appurtenant easement. c. an easement by necessity. d. a license.
A. An easement in gross
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.
A. Average high tide line
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.
A. Become stockholders in a corporation
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.
A. Fee simple estate
The owner of two acres of land sold one acre but retained an appurtenant easement over that land for ingress and egress to his retained lot. The retained lot a. is the dominant tenement. b. serves as the servient tenement. c. can be cleared of the easement when it is sold to a third party. d. is subject to an easement in gross.
A. Is the dominant tenement
Which of the following is a voluntary lien? a. Mortgage lien b. Estate tax lien c. Real estate tax lien d. Judgment lien
A. Mortgage lien
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.
A. Operate as usual
Typically, the priority of general liens is determined by the a. order in which they are filed or recorded. b. order in which the cause of action arose. c. size of the claim. d. court.
A. Order in which they are filed or recorded
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.
A. Real property
Real property can become personal property by a. severance. b. purchase. c. hypothecation. d. attachment.
A. Severence
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.
A. The co-owners must be husband and wife
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
A. The rancher
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.
A. conventional life estate
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.
A. is a part of the definition of real property
All the following are true about a metes-and-bounds legal description EXCEPT a. it is only used in states west of the Mississippi River. b. the point of beginning must be an identifiable landmark or monument. c. it will have a series of calls in relationship to monuments. d. the final call must return to the point of beginning.
A. it is only used in states west of the Mississippi River
All of the following factors would affect supply EXCEPT a. population. b. construction costs. c. government controls. d. the labor force.
A. population
When the supply of a commodity decreases a. prices tend to rise. b. prices tend to drop. c. demand tends to rise. d. demand tends to drop.
A. prices tend to rise
A brother and sister bought a commercial building and took title as joint tenant 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.
B. In severalty
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
B. A fee estate
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.
B. A fee simple determinable
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.
B. A fee simple estate
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.
B. A lien can be filed against the neighbor's unit
Which of the following is a lien on real estate? a. An easement b. A recorded deed of trust c. An encroachment d. A restrictive covenant
B. A recorded deed of trust
Which of the following liens is NOT required to be recorded in order to be valid? a. Mortgage lien b. Ad valorem tax lien c. Judgment lien d. Mechanic's lien
B. Ad valorem tax lien
An investor bought acreage in a distant county, never went to see it, and did not personally use it, although he regularly paid the real estate taxes on it. A woman moved her mobile home onto the investor's property, drilled a well for water, and lived there for many years. The woman may have become the owner of the acreage if she has met the requirements regarding a. intestate succession. b. adverse possession. c. the covenant of quiet enjoyment. d. the statute of limitations.
B. Adverse possession
The developer grants the power company the right to install transmission lines throughout the subdivision. This right is called a. a license. b. an easement in gross. c. an easement by prescription. d. a conditional use permit.
B. An easement in gross
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.
B. Annexation
Which of the following real property use categories would include shopping centers? a. Residential b. Commercial c. Agricultural d. Industrial
B. Commercial
The title to real estate passes when a valid deed is a. signed and recorded. b. delivered and accepted. c. filed and microfilmed. d. executed and mailed.
B. Delivered and accepted
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.
B. Fee simple estate
The method of describing land by degrees, feet, and monuments is known as the a. angular system. b. metes-and-bounds system. c. rectangular survey system. d. lots and blocks system.
B. Metes-and-bounds system
Generally, personal property can be distinguished from real property by its a. size. b. mobility. c. value. d. multiplicity of use.
B. Mobility
Which of the following deeds contains no expressed or implied warranties? a. Timber deed b. Quitclaim deed c. Warranty deed d. Grant deed
B. Quitclaim deed
In a real estate transaction, excise taxes are the responsibility of the a. buyer. b. seller. c. escrow agent. d. broker.
B. Seller
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.
B. Size of the item
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.
B. Tenants by entireties
A lot is encumbered by a sewer easement that runs where the property owner wishes to put the foundation of a house. How will this placement affect construction? a. It will have no effect because the sewer line is deeper than the foundation would be. b. The house must be constructed to avoid the easement. c. The municipality must move the sewer line prior to construction. d. Any easement through the lot will prevent construction.
B. The house must be constructed to avoid the easement
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 2⁄3 interest and the buyer owns a 1⁄3 interest.
B. They are tenants in common
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.
B. Time-share ownership
The primary purpose of a deed is to a. prove ownership. b. transfer title rights. c. give constructive notice. d. prevent adverse possession.
B. Transfer title rights
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.
B. Unsuccessful, because the owner's property extends only to the high-water mark and the public can use the land beyond this point
Grantee is to a deed as devisee is to a a. trust. b. will. c. estate. d. sales contract.
B. Will
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.
B. estate in remainder
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.
B.Remainder
When a personal judgment is properly recorded in the county in which the defendant resides and owns real property, the judgment becomes a. a voluntary lien. b. a specific lien. c. an involuntary lien. d. an equitable lien.
C. An involuntary lien
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.
C. Can legally be removed by the tenant at the termination of the lease
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
C. Condominium
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.
C. Condominium
Title to real estate inherited from a person who died testate is referred to as a a. legacy. b. bequest. c. devise. d. demise.
C. Devise
A recent patio addition extends one foot over the property line onto the lot next door. This best describes an a. easement. b. encumbrance. c. encroachment. d. entitlement.
C. Encroachment
When the grantor does NOT wish to convey certain property rights a. exceptions must be noted in a separate document. b. the deed must convey the property with all rights intact. c. exceptions may be noted in the deed of conveyance. d. the grantor must convey the entire premises and have the grantee reconvey the rights to be retained by the grantor.
C. Exceptions may be noted in the deed of conveyance
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.
C. Fee simple determinable
Under which of the following liens can both the real property and the personal property of the debtor be sold to pay the debt? a. Real estate tax lien b. Mechanic's lien c. Judgment lien d. Assessment lien
C. Judgment lien
All of the following are true about adverse possession EXCEPT a. possession of the property occurs without the owner's consent. b. continuous occupancy of the property occurs over a minimum time period. c. just compensation is given to the owner upon passing of the required period of possession. d. the person taking possession possibly becomes the owner of the property.
C. Just compensation is given to the owner upon passing of the required period of possession
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.
C. Life estate pur autre vie
A metes-and-bounds legal description a. can be made only in areas excluded from the rectangular survey system. b. is not acceptable in court in most jurisdictions. c. must commence and finish at the same identifiable point. d. is used to define areas omitted from recorded subdivision plats.
C. Must commence and finish at the same identifiable point
A trade fixture is considered a. a fixture. b. an easement. c. personalty. d. a license.
C. Personalty
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.
C. Possession, time, interest, and title
A trespasser built a log cabin in a remote area of a national park and occupied the structure for more than 25 years. That person will never be able to claim the property under adverse possession statutes, because the a. possession was not notorious. b. possession was not open. c. property was not privately owned. d. property was not properly fenced.
C. Property was not privately owned
In which of the following situations would a quitclaim deed be the most appropriate type of deed to use? a. Conveyance of a marketable title b. Transfer of a nominal real estate interest c. Removal of a cloud on a title d. Warranting validity of a title
C. Removal of a cloud on a title
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.
C. Riparian rights
In order to reach the garage on their property, the property owner utilizes an easement appurtenant that gives the right to use the neighboring property's driveway. The neighboring property is the a. leasehold interest. b. dominant tenement. c. servient tenement. d. licensing property.
C. Servient tenement
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
C. Survivorship
All the following are non-essential elements of valid North Carolina deed EXCEPT a. exact sales price. b. recordation. c. the names of the grantor and the grantee. d. signatures given under seal.
C. The names of the grantor and the grantee
A commercial tenant attaches several items to the rental property during the term of 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.
C. Trade fixtures and may be removed by the tenant by the end of the lease
The word improvement refers to all of the following EXCEPT a. a street. b. a sewage system. c. a trade fixture. d. a foundation wall.
C. a trade fixture
A property is under contract for a sales price of $357,800. The buyer will assume the seller's outstanding loan balance of $225,000, secure a second mortgage for $100,000, and pay the remainder in certified funds at settlement. On the settlement statement, the seller will be charged excise tax in the amount of a. $265.60. b. $358.00. c. $715.60. d. $716.00.
D. $716.00 $357,800 / 500 = $715.60 *Always round up
A state income tax lien would be properly classified as a. an equitable lien. b. a specific lien. c. a mechanic's lien. d. a general lien.
D. A general lien
A homeowner tells her neighbor that he can park his camper in the corner of her backyard. No rent is charged for the use of her yard. This is an example of a. an easement in gross. b. an easement by necessity. c. an easement by prescription. d. a license.
D. A license
When a company furnishes building materials for a house and is subsequently NOT paid, the company may file a. a deficiency judgment. b. a lis pendens. c. an estoppel certificate. d. a mechanic's lien.
D. A mechanic's lien
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.
D. Accretion
The rights of ownership of real property include all of the following EXCEPT a. disposition. b. exclusivity. c. control. d. compatibility.
D. Compatibility
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.
D. Cooperative
A valid will devises the decedent's real estate after the payment of all debts, claims, inheritance taxes, and expenses through the a. administrator of the estate. b. law of intestate succession. c. granting clause established in the will. d. court action known as probate.
D. Court action known as probate
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.
D. Defeasible fee estate
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.
D. Each owner has a proprietary lease with the owners' association for the unit
All of the following would affect demand EXCEPT a. population. b. demographics. c. wage levels. d. fiscal policy.
D. Fiscal Policy
The system of legal description that defines a parcel of land by its perimeter is the a. geodetic survey. b. rectangular survey. c. lot and block system. d. metes-and-bounds system.
D. Metes-and-bounds system
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.
D. Navigable rivers running through the property
Which of the following is considered personal property? a. Masonry fireplace b. Porch and window awnings c. Bathtubs d. Patio furniture
D. Patio furniture
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.
D. Remain joint tenants with each other
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.
D. Removal of the wheels and axles converts a manufactured home to real property
Charges levied on a property owner to pay for the installation of sewer and water lines are a. ad valorem taxes. b. general property taxes. c. special excise taxes. d. special assessments.
D. Special assesments
A seller is under contract to sell a property using the standard 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
D. The draperies
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.
D. The limited common elements can be sold seperately
Which of the following is an essential element of a valid North Carolina deed? a. A seal b. Recordation c. The signature of the grantee d. Words of conveyance
D. Words of conveyance
A small parcel of land is completely surrounded by other lots and has no street access. Which of the following is TRUE? a. The municipality must construct a street to create access. b. The owner must create an easement by condemnation to provide access. c. An easement by prescription should be granted. d. An easement by necessity should be created for the land-locked parcel.
D. an easement by necessity should be created for the land-locked parcel
The point at which supply and demand are balanced is known as a. highest and best use. b. balance. c. conformity. d. equilibrium.
D. equilibrium
Personal property includes all of the following EXCEPT a. chattels. b. trade fixtures. c. emblements. d. fixtures.
D. fixtures
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.
D. ownership for life
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.
D. tenants in common
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
d. A perennial shrub planted in the backyard