Chapter 5

A situation in which a seller is retaining title to the property until full payment is made by the buyer is

The answer is a land contract.

An employment contract that establishes the rights and obligations of the broker as agent and the seller as principal is

The answer is a listing agreement.

A provision in the listing agreement that is not in the buyer representation agreement that requires the broker to distribute the listing to other brokers is

The answer is a multiple listing clause.

A listing under which a broker's commission is the difference between the sales proceeds and an amounted desired by the seller is

The answer is a net listing.

All of the following information is needed for a listing agreement and for the agent to provide information for other brokers through the MLS EXCEPT

The answer is a plat diagram of the property.

The listing contract should contain

The answer is all of these. Generally, the listing contract should contain the seller's authorization to place a sign on the property, the desired sales price, and a legal description.

In which of the following does the seller retain legal title?

The answer is all of these. Real estate can be sold under a land contract, also called a contract for deed, an installment contract, a land sales contract, or articles of agreement for warranty deed. Under a typical land contract, the seller (also called the vendor) retains legal title.

By executing a listing or buyer agency agreement with a client, a real estate broker becomes

The answer is an agent of the client.

A tenant transfers all leasehold interest to another person who is legally obligated for all the promises the original tenant made in the lease. This is an example of

The answer is an assignment.

An agreement where the seller gives the exclusive right of representation to a broker-agent to market the seller's property but reserves the right to sell the property, without obligation to pay the broker a commission, is called

The answer is an exclusive-agency listing.

A buyer obtains possession of a property under a contract, and the seller is not obligated to execute and deliver a deed to the buyer until the terms of the contract have been satisfied. This is

The answer is an installment contract.

A retail developer wants to build a strip center in town and has found the best site available for it. The developer negotiates a contract with the landowner but needs a favorable zoning change for the property. The developer decides to have the current owners get the zoning change and executes a contract that allows the developer the right to purchase the property for a set amount and for a fixed period of time that is only enforceable if the landowner is successful in getting the needed zoning changes. This is

The answer is an option contract.

A tenant is interested in leasing at least 85,000 square feet of space over a 10-year lease. A landlord has enough space in a high rise office building that he feels will accommodate their needs. However, the tenant will need extensive tenant finish-out, including some special needs which require a special building permit. As this will take some time and investment from both parties, the parties agree to a contract that will allow the tenant to lease the property at a set rate for certain period of time with the right to terminate the contract if the lessee cannot get an acceptable building permit. This is

The answer is an option contract.

A tenant is interested in leasing at least 85,000 square feet of space over a 10-year lease. A landlord has enough space in a high rise office building that he feels will accommodate their needs. However, the tenant will need extensive tenant finish-out, including some special needs which require a special building permit. As this will take some time and investment from both parties, the parties agree to a contract that will allow the tenant to lease the property at a set rate for certain period of time with the right to terminate the contract if the lessee cannot get an acceptable building permit. This is

The answer is an option contract. The optionee (tenant) will pay the optionor (landlord) for this right. The optionee may be obligated to exercise the option if the conditions are met.

A retail developer wants to build a strip center in town and has found the best site available for it. The developer negotiates a contract with the landowner but needs a favorable zoning change for the property. The developer decides to have the current owners get the zoning change and executes a contract that allows the developer the right to purchase the property for a set amount and for a fixed period of time that is only enforceable if the landowner is successful in getting the needed zoning changes. This is

The answer is an option contract. This contract by which the optionor (owner) gives the optionee (buyer) the right to buy the owner's property at a fixed price, within a certain period which would be a reasonable time to allow for the zoning change. The optionee pays a fee for this option right.

A buyer signs a contract under which he is given the right to purchase a property for $30,000 any time in the next three months. The buyer pays the current owner $500 at the time the contract is signed. Which of the following BEST describes this agreement? It is

The answer is an option.

A buyer's agent may be compensated in which of the following ways?

The answer is any of these. Buyer's agents may be compensated in the form of a flat fee for services, an hourly rate, a percentage of the purchase price, or by sharing the commission paid by the seller to the listing broker. The agent may require a retainer fee at the time the agreement is signed to cover initial expenses to be applied as a credit toward any fees due at the closing.

Which of the following transfers the rights or duties under a contract?

The answer is assignment.

A listing or buyer agency agreement is technically an employment agreement between a client (buyer or seller) and a

The answer is broker.

All of the following are written agreements used by license holders EXCEPT

The answer is business opportunity contracts.

Which of the following statements is TRUE?

The answer is compensation does not determine an agency relationship.

A property owner is interested in providing financing on a residential property for a buyer. A contract is written where the property owner will retain title to the property until the buyer has paid the owner in full. Once paid, the owner will deliver title to the buyers. This type of sales contract is called a

The answer is contract for deed.

The right the lessee has to occupy the premises without interference from the owner or anyone else is the

The answer is covenant of quiet enjoyment.

All of the following information is needed for a listing agreement and for the agent to provide information for other brokers through the MLS EXCEPT

The answer is department of transportation statement of right of way (access and egress).

A tenant's estate for years will expire in two weeks. The tenant plans to move to a larger apartment across town when the current tenancy expires. In order to terminate this agreement, the tenant must

The answer is do nothing because the agreement will terminate automatically at the end of the current term.

What type of title does the buyer get in a land sales contract?

The answer is equitable title.

A tenant's right to possess real estate for a definite period with a specific starting and ending date is an

The answer is estate for years.

Which type of leasehold estate lasts for a definite period of time and then ends?

The answer is estate for years.

A person has a one-year leasehold interest in a house. The interest automatically renews itself at the end of each year. The person's interest is called an estate

The answer is from period to period.

A tenant pays a fixed rent and the landlord pays all taxes, insurance, repairs, utilities, and maintenance connected with the property. This type of lease is called a

The answer is gross lease. Residential and commercial office leases are most often gross leases.

A seller who fails to deliver title to the buyer is

The answer is in breach of the sales contract.

A man is interested in purchasing a home but has credit issues that prevent him from getting a mortgage. A seller decides to provide owner's financing to allow the buyers to purchase the home now while the man cleans up his credit. Under the terms in the contract, the seller will deliver title to the man once the contract has been paid in full. This is a

The answer is land contract.

A buyer and a seller enter into a real estate sales contract. Under the contract's terms, the buyer will pay the seller $500 per month for ten years. The seller will continue to hold legal title while the buyer will live in the home and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract do the buyer and the seller have?

The answer is land or installment contract.

All of the following are requirements of a valid lease EXCEPT

The answer is legal conjecture.

Which of the following does NOT have legal title to real property?

The answer is lessee. A lessee is a tenant. Tenants are granted the right of possession, not ownership of the property.

A tenant pays all or most of the property charges (i.e., property taxes, insurance, etc.) in addition to the rent. This type of lease is called a

The answer is net lease. This lease is most often associated with large commercial and industrial leases.

Which of the following refers to the substitution of a new contract for an existing contract?

The answer is novation. Novation is the substitution of a new obligation for an old one or substituting new parties to an existing obligation.

Which of the following would automatically terminate a residential lease?

The answer is operation of law.

A lease where the rent is based on a minimum fixed rental fee plus a percentage of the gross income received by the tenant doing business on the leased property is called a

The answer is percentage lease. This type of lease is generally used for retail business leases.

Which of the five rights to real property does the landlord sell to the tenant in a lease?

The answer is possession.

One party cancelling or terminating a contract as though it had never been made is

The answer is rescission.

A clause in the lease that allows a tenant the right to purchase the leased property before the owner accepts an offer from another party is the

The answer is right of first refusal.

A restaurant owner has selected a new site to open a restaurant. He has signed a long-term ground lease and contracted with a builder to build the restaurant. The construction of the site is complete and has the restaurant for business. The restaurant owner sells the restaurant to an investor and leases back the restaurant. This type of lease is a

The answer is sale-and-leaseback.

An option to purchase binds which of the following parties?

The answer is seller only.

Listing agreements address all of the following EXCEPT

The answer is the actual day of closing.

Which of the following is TRUE with a contract for deed?

The answer is the buyer generally could get a new mortgage loan and pay off the contract.

Who pays the buyer's agent in a buyer agency contract?

The answer is the buyer or seller.

The following statements about improvements to a leased space are true EXCEPT

The answer is trade fixtures can be removed by the tenant after the lease expires.

A person with a disability has signed a lease and wants to remodel the space to make it more accessible. Regarding this situation, which of the following statements is FALSE?T

he answer is the landlord has the right to refuse any modifications if this is the landlord's standard policy.