California real estate. Principals

1 The difference between an easement and a license to use property is: a license may be canceled. an easement conveys ownership. consideration is paid for an easement. consideration is paid for a license.

A license may be canceled Hint: A license is permission to use property. However, a license to use may be revoked at any time.

All of the following are non-financial encumbrances except: Points: 1 an easement. a building restriction. a lien. an encroachment.p

A lien Encumbrances fall into two categories: those that affect the title, known as financial encumbrances, and those that affect the use of the property, known as non-financial encumbrances. Common types of financial encumbrances are trust deeds and mortgages, mechanic's liens, tax liens, special assessments, attachments, and recorded abstracts of judgment.

Regarding liens which statement is incorrect? All encumbrances are liens. A lien uses real property as security for the payment of a debt. A lien may be specific or general. A lien may be voluntary or involuntary.

All encumbrances are liens is incorrect Hint: All liens are encumbrances but not all encumbrances are liens. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property.

What is created when a garage driveway or fans extends beyond the property line and into the adjoining property? An encumbrance An encroachment A community property Condition precedent

An encroachment Hint: Placing a permanent improvement, such as a fence, wall, driveway or roof, so that it extends over the lot line into adjacent property owned by another, is known as an encroachment. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3A: identify types of encumbrances. QID:TB- # 54

13 What type of easement is created when a parcel is completely land locked and has no access? Points: 0 Easement by necessity Easement by express reservation Easement by prescription Easement by implied grant

By necessity 13 What type of easement is created when a parcel is completely land locked and has no access? Hint: An easement by necessity is created when a parcel is completely land locked and has no access. It is automatically terminated when another way to enter and leave the property becomes available.

. 10 Encumbrances fall into two categories: Points: 1 financial and non-financial encumbrances. conventional and non-conventional encumbrances. typical and atypical encumbrances. real and personal encumbrances.

Financial and non financial Hint: Encumbrances fall into two categories: those that affect the title, known as financial encumbrances, and those that affect the use of the property, known as non-financial encumbrances.

4 Which statement is correct regarding encumbrances? Points: 1 Financial encumbrances affect the title. Non-financial encumbrances affect the title. Liens are types of non-financial encumbrances. There are three categories of encumbrances

Financial encumbrances affect the title Hint: Encumbrances fall into two categories: those that affect the title, known as financial encumbrances, and those that affect the use of the property, known as non-financial encumbrances. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3A: identify types of encumbrances. QID:TB- # 45

10 A person who has been harmed by another person's breach of contract has all of the following remedies, except: Points: 1 unilaterally rescinding the contract. filing a lawsuit for money damages. filing a lawsuit for specific performance. attaching the breaching party's bank

Hint: A breach of contract is a failure to perform on part or all of the terms and conditions of a contract. A person harmed by non-performance can accept the failure to perform or has a choice of three remedies: (1) unilateral rescission, (2) lawsuit for money damages, or (3) lawsuit for specific performance. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions

3 A contract in which the parties declare the terms and put their intentions in words, either oral or written is known as a(n): Points: 1 bilateral contract. executed contract. unenforceable contract. express contract.

Hint: A contract may be an express contract, in which the parties declare the terms and put their intentions in words, either oral or written. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5A: recall classifications of contracts. QID:TB- # 64

In order for a grant deed to be effective: the deed must be delivered to and accepted by the grantee. the grantee must record the deed. the grantor must record the deed. the grantor must acknowledge its existence.

Hint: A grant deed is not effective until it is delivered. It must be the intention of the grantor that the deed is delivered and title be transferred during his or her lifetime. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3B: determine how title to real estate is acquired or conveyed. QID:TB- # 58

2 Which of the following could not enter into a contract? Points: 1 17 year old veteran Emancipated minor 6 year old child Non-citizen of the U.S.

Hint: A minor is not capable of appointing an agent, or entering into an agency agreement with a broker to buy or sell. Brokers dealing with minors should proceed cautiously and should seek an attorney's advice. A contract with a minor is considered voidable by the minor. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5B: identify the elements needed to create legally binding contracts. QID:TB- # 70

15 As part of the mechanic's lien process, what notice must be given to the owner within 20 days of first furnishing labor or materials for a job by anyone eligible to file a mechanic's lien. Points: 0 Preliminary notice Notice of non-responsibility Notice of completion Foreclosure notice

Hint: A preliminary notice is a written notice that must be given to the owner within 20 days of first furnishing labor or materials for a job by anyone eligible to file a mechanic's lien. This document gives owners notice that their property may have a lien placed on it if they do not pay for work completed.

A contract in which a party promises to perform without expectation of performance by the other party is called a(n): Points: 1 unilateral contract. bilateral contract. executory contract. valid contract.

Hint: A unilateral contract is a contract in which a party promises to perform without expectation of performance by the other party. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5A: recall classifications of contracts. QID:TB- # 65

7 What is the most common way to discharge a contract? Points: 1 Full performance Novation Breach Assignment

Hint: Commonly the discharge of a contract occurs when the contract has been fully performed. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5C: choose the ways to discharge contracts. QID:TB- # 80

What is the commonality of full performance, release, assignment, novation, and breach? Points: 1 Ways to discharge a contract Ways to resolve conflicts in contracts Parol evidence rule Requirements under the statute of limitations

Hint: Discharge of contract refers to the cancellation or termination of a contract. Contracts are discharged by performance, release, assignment, novation, and breach CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5C: choose the ways to discharge contracts.

9 In California, the __________ requires that certain contracts be in writing to prevent fraud in the sale of land or an interest in land. Points: 1 statute of frauds statute of limitations statute of repose statute of non claims

Hint: In California, the statute of frauds requires that certain contracts be in writing to prevent fraud in the sale of land or an interest in land. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5D: specify the purpose of the statute of frauds, the parole evidence rule, and the statute of limitations.

13 A contract in which all the parties have performed completely is called a(n): Points: 1 executed contract. executory contract. void contract. unilateral contract.

Hint: In an executed contract, all parties have performed completely. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5A: recall classifications of contracts. QID:TB- # 66

14 Why is it important to determine the starting date for a mechanic's lien? Points: 1 Mechanic's liens have priority as of the date work began or materials were first furnished for the job. Once the start date is determined, sub-contractors must complete their part of the project within 60 days, unless a Notice of Continuance is filed. Mechanic's liens do not have any special priority, but must be filed in order to be paid. The start date is important to the general contractor for scheduling purposes.

Hint: Mechanic's liens have priority as of the date work began or materials were first furnished for the job. A mechanic's lien has priority over any other liens filed after the commencement of labor or delivery of materials with th

14 Which of the following is not one of the four requirements needed for a contract to be legally binding and enforceable? Points: 1 Written agreement Legally competent parties Mutual consent between the parties Sufficient consideration

Hint: Most real estate contracts must be in writing. However, in order for a contract to be legally binding and enforceable, there are four requirements: (1) legally competent parties, (2) mutual consent between the parties, (3) lawful objective, and (4) sufficient consideration. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5B: identify the elements needed to create legally binding contracts. QID:TB- # 68

Terry and Ben were released from their original offer by the seller's counteroffer. Terry and Ben must honor their first offer to purchase the duplex. Terry and Ben must accept the counteroffer to their offer to purchase the duplex. Terry and Ben must notify the seller of the duplex of their desire to cancel their offer

Hint: One party must offer and another must accept, without condition. An acceptance is an unqualified agreement to the terms of an offer. The offeree must agree to every item of the offer for the acceptance to be complete. If the original terms change in any way in the acceptance, the offer becomes a counteroffer, and the first offer terminates. The person making the original offer is no longer bound by that offer, and may accept the counteroffer or not. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions

6 The Statute of Frauds requires that leases for longer than _____ must be in writing. Points: 0 one year two years six months five years

Hint: Trust deeds, promissory notes, and leases for more than one year also must be in writing to be enforceable. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5D: specify the purpose of the statute of frauds, the parole evidence rule, and the statute of limitations. QID:TB- # 76

5 Under California law, any person seeking relief for a breach of contract must do so within the time limits of the: Points: 0 Statute of Limited Frauds Statute of Frauds and Limitations Statute of Frauds Statute of Limitations

Hint: Under California law, any person filing a lawsuit must follow the time limits in the statute of limitations. The statute of limitations places a limit on the length of time a plaintiff has to file a lawsuit. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5D: specify the purpose of the statute of frauds, the parole evidence rule, and the statute of limitations. QID:TB- # 83

11 When force is used to get agreement in accepting a contract, it is called: Points: 1 fraud. duress. tort. negligence.

Hint: Use of force, known as duress or menace, which is the threat of violence, cannot be used to get agreement. CO5: Specify basic characteristics of contracts and identify the types of contracts used in real estate transactions. LO5B: identify the elements needed to create legally binding contracts. QID:TB- # 74

5 When someone dies, without leaving a will, he or she is known to have died: Points: 1 by eminent domain. testate. intestate. in probate.

Intestate Hint: If a person died intestate it means the person did not leave a will. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3B: determine how title to real estate is acquired or conveyed. QID:TB- # 57

8 A court action to divide a property held by co-owners is called: Points: 1 partition action. a lis pendens. writ of execution. an abstract of title.

Partition action Hint: Partition action is a court proceeding to settle a dispute between co-owners (joint tenants or tenants in common) about dividing their interests in real property. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3B: determine how title to real estate is acquired or conveyed. QID:TB- # 63

6 Real property can be transferred by __________ grant, which is the transfer of title by the government to a private individual. Points: 0 title government public private

Public Hint: Real property can be transferred by public grant, which is the transfer of title by the government to a private individual. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3B: determine how title to real estate is acquired or conveyed. QID:TB- # 60

7 What is the court proceeding that clears a cloud on the title of real property. Points: 0 Partition action Escheat Quiet title action Condemnation

Quiet title action Hint: Quiet title action is a court proceeding to clear a cloud on the title of real property. CO3: Recall the types of encumbrances and the ways to acquire or convey title to real property. LO3B: determine how title to real estate is acquired or conveyed. QID:TB- # 61

A (n) __________ is a person who makes a will. Points: 1 testator. intestator. probator. administrator.

Testor

1 Which contract is binding and enforceable has all the basic elements required by law? Points: 1 Valid contract Unenforceable contract Voidable contract Void contract

Valid contract