Unit 1: Texas Contract Law Questions
An agent represents a buyer. Which of the following forms of advice can the agent give to an unrepresented buyer?
Advice on having the abstract examined by an attorney
According to the Texas Real Estate License Act, which of the following requires that a licensee be a practicing attorney?
Advising a person regarding the validity of title to real property
Which of the following is an exception to using a TREC-promulgated contract form?
Transactions in which a United States government agency requires a different form to be used
Which of the following laws in Texas govern condominiums?
Uniform Condominium Act
A person lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan securing the entire property. Like the other residents, this person owns stock in the corporation and has a lease to the apartment. This type of ownership is called a
cooperative
A seller under a standard purchase agreement promulgated by the Texas Real Estate Commission (TREC) did not provide a seller's disclosure notice when required by the Texas Property Code (TPC). The buyer
could terminate the contract
A buyer wanted to move in early before closing. Which TREC-promulgated addendum should be used?
Buyer's Temporary Residential Lease
John owns a manufactured home and has elected to have it classified as real property. Which of the following would NOT support the home's classification as real property?
He intends to move it every six months
If an agent is preparing an offer for a buyer but has not been able to get a completed seller's disclosure from the listing agent, the buyer
can make an offer and ask the seller to provide the notice within a certain number of days.
What sets forth the powers of a corporation? The
charter
Another term for personal property is
chattels
A married couple could hold title by which of the following means?
community property
Which of the following is NOT a physical characteristic of land?
cost
A couple just built a 3,000 square foot home in a brand new subdivision. They have recently found out that a toxic waste dump is being built half a mile away. Typically this will
decrease their homes value
The death of one of the directors of a corporation
does not affect title to property owned by the corporation.
A seller's disclosure notice is required
in a transaction involving residential property comprising not more than one dwelling unit.
Under the DTPA, to get triple damages, a plaintiff must prove
that the defendant knew the misleading statement was false.
A licensee is NOT required to disclose in a written seller's disclosure notice
that the seller's son had AIDS and died.
The bundle of legal rights includes all of the following EXCEPT
the right to cultivate any plant
Which of the following groups of real estate professionals subscribes to a code of ethics?
National Association of REALTORS
Which of the following is TRUE about community property?
The married couple are equal partners in the marriage
Who promulgates contracts for mandatory use by licensees?
Texas Real Estate Commission
For which of the following actions may the Texas Real Estate Commission NOT suspend a licensee's licensee?
The licensee explains to the principals the meaning of the factual statements or business details contained in the contracts.
A licensee is purchasing property for himself. A TREC-promulgated contract is appropriate for this purchase, but the licensee decides to be creative and draft his own contract from what he has learned in his real estate classes. Which of the following is most likely to be TRUE?
The licensee has the right to draft his own contract.
A husband and wife divorce, and the wife receives the real estate in the decree. Which of the following statements is TRUE when referring to the seller's disclosure notice?
This is an exception and no notice is required.
With community property, which of the following is FALSE?
Title can be conveyed by one party without the approval of the other party.
An example of an appurtenance is
an easement
Real estate generally includes all of the following EXCEPT
annual crops
Real estate brokers who are members of the Broker-Lawyer Committee become members by being
appointed by the TREC
Which of the following should a listing agent NOT do in relation to the seller's disclosure notice?
be accessible when the seller is filling out the notice to help answer questions and aid the seller in filling it out
Personal property is conveyed by
bill of sale
The ownership rights of real property are described as the
bundle of legal rights
What is the primary difference between a lawsuit brought under the Deceptive Trade Practices Act (DTPA) and any other type of civil action?
Treble damages are available under the DTPA.
Which of the following is an exception to using TREC-promulgated contract forms?
When the licensee is acting as a principal and not as an agent
A married couple co-owns a farm. This arrangement is MOST likely
community property
If no standard form has been promulgated by the Texas Real Estate Commission, a real estate broker or salesperson may do any of the following EXCEPT
draft an instrument that transfers an interest in real property.
Which of the following is personal property?
emblements
Who appoints the TREC commissioners?
governor
Real estate is defined as
land at, above, and below the earth's surface.
What type of business association allows some members to participate in decision making while others are prohibited?
limited partnership
As compared to any other type of civil action, in a Deceptive Trade Practices Act (DTPA) action, a plaintiff
may be awarded treble damages
A woman owns and resides in a condominium. Title to her unit is
ownership in severalty
Which of the following is not a form of co-ownership?
ownership in severalty
Which of the following would be regarded as personal property?
portable BBQ
Which of the following is an exception to the TREC rules on contract use?
when the buyer requires another form to be used
A licensee representing a seller is asked by that seller, "What does paragraph 5 of this TREC-promulgated contract mean to me?" What is the best answer by that agent?
"I'm not an attorney, but here is what it means..
Which of these statements about community property is FALSE?
In Texas, if a spouse dies without a will and two common heirs, the property will go to the heirs in a trust.
Which of the following forms is approved by TREC for a written seller's disclosure notice?
OP-H
What law specifically prohibits licensees from practicing law?
TRELA
In condominium ownership, the owner of each unit holds
fee simple title
What type of association allows all the partners the ability to participate in the operation and management of the business?
general partnership
Which of the following is NOT an economic characteristic of real estate?
immobility
Which of the following can reduce land's value?
improvements on the land
Which of the following is most likely evidence of ownership in a cooperative?
shareholders stock
Trade fixtures are usually installed by
the tenant of the property
A legal arrangement under which the title to real property is held to protect the interests of a beneficiary is a
trust
land is considered
unique
Which of the following is NOT a promulgated TREC form?
Bill of Sale
A seller has sold his property and is now transferring title to the new owner. The instrument he will use is
a deed
Which of the following real estate-related entities has rule-making authority in the state of Texas?
the commission
What effect do the rules made by the commission have on licensees?
The rules have full force and effect of law.
If a buyer receives TREC OP-H, and the Seller's Disclosure of Property Condition after the sales contract has been signed by all parties, how many days does the buyer have to terminate the contract?
7 days
How many commissioners are on the Texas Real Estate Commission?
9
Which of the following is NOT required to provide a written seller's disclosure notice?
A beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale
Which of the following statements about separate property is TRUE?
A house gifted by parents to one spouse as a wedding gift could be held separately.
Which of the following is TRUE about community property in Texas?
A surviving spouse owns at least one half of the property upon death of the spouse.
Which of the following is a TREC-promulgated form?
Addendum for Sale of Other Property by Buyer
Which of the following is NOT a TREC-promulgated addendum?
Addendum for Seller's Right to Terminate
What type of committee is the Broker-Lawyer Committee?
Advisory
Which of the following addenda are promulgated by TREC?
All of these
Which of these is a consumer protection act that protects the public from false and misleading acts?
Deceptive Trade Practices Act
A property sells for $25,000, and the dwelling built thereon is only valued at $2,500. What does Section 5.008 of the Texas Property Code say about this situation?
It does not require the seller to provide a written notice of the property's condition.
One co-owner conveys interest to another co-owner. What does Section 5.008 of the Texas Property Code say about this situation?
It does not require the selling co-owner to provide a written notice of the property's condition.
Which of the following could not be held as separate property after marriage?
Personal property acquired by a spouse after marriage
A corporation is a legal entity (an artificial person), according to state law. Property owned by the corporation is owned in
Severalty
What is the make-up of the Broker-Lawyer Committee?
Six brokers, six lawyers, and one member of the general public
What must a plaintiff prove about a misleading statement in order to get triple damages under the DTPA?
That the defendant acted knowingly
A buyer found a contract form on the internet and wants her agent to help her fill out and adapt it for Texas law. Which of the following is TRUE regarding an agent's ability to help the buyer complete the form?
The agent is prohibited from helping her adapt and fill out the form.
A real estate broker modifies a 1992 TREC-promulgated contract form and updates it to fit a particular transaction. Which of the following could happen?
The broker could have his license suspended or revoked for practicing law.
Three people are joint tenants with rights of survivorship in a tract of land. One owner conveys interest to a friend. Which statement is TRUE?
The first two owners remain joint tenants.
What is the possible result for an owner not providing a seller's disclosure notice when required by the Texas Property Code (TPC), according to the standard purchase agreement promulgated by the Texas Real Estate Commission (TREC)?
The seller would be in violation of failing to disclose, and the buyer could terminate the contract.
An owner of a property is selling the land to another. The land has a house on it, but the house is insignificant to the buyer. Which of the following is TRUE?
The seller's disclosure notice is required unless the value of any dwelling does not exceed 5% of the value of the property.
Which of the following may be leased?
air rights
Why would a seller want to fill out a seller's disclosure notice?
all of these
Three people were concurrent owners of a parcel of real estate. When one owner died, her interest, according to her will, became part of her estate. The deceased was a
tenancy in common
A real estate broker, acting only as a principal to a transaction (i.e., as a buyer or seller),
is exempt from mandatory use of a TREC-promulgated form.
The unities of possession, interest, time, and title are associated with which of the following?
joint tenancy
Which of the following would be considered a fixture?
kitchen cabinets
A man dies and his property transfers to his heirs through probate. Who is required to provide the seller's disclosure notice?
no one
A homeowner is building a new enclosed front porch on his home. A truck load of timber that the homeowner purchased has been left in the driveway for use in building the porch. At this point, the lumber is considered
personal property
In a tenant-occupied and -furnished property being used as a produce shop, a free-standing refrigerator would be considered
personal property
When should a buyer review the written seller's disclosure notice?
prior to writing an offer
What is the main purpose of the Texas Real Estate Commission?
protect the public
A seller's disclosure notice is NOT required in the sale of real property
pursuant to a court order
How many promulgated contracts does TREC issue?
six
What is the term for a TREC commissioner?
staggered six-year terms
Air and solar rights are regulated by
state and local laws and ordinances
A buyer purchased a parcel of land and immediately sold the mineral rights to an oil company. The buyer gave up which of the following?
subsurface rights
A landowner sells his property but retains the rights to any oil and gas found beneath the property. These rights are called
subsurface rights
If property is owned by two or more owners as joint tenants, the interest of the deceased co-owners will be passed to the
surviving owner or owners