National Exam Practice Retake 4

A buyer with a $242,000 loan has a monthly principal and interest payment of $1,317.66. If $1,033.54 is interest, what's the new principal balance after the first payment is applied?

-$241,715.88 If $1,033.54 of the $1,317.66 is interest, that leaves $284.12 for principal. Subtract $284.12 from $242,000 for a new principal balance of $241,715.88.

Recording a document provides ___________; recording the deed provides _______________ of property ownership.

-Constructive Notice -Constructive Notice

Special use permit

A permit that allows for a specific exemption to zoning regulations for a particular piece of land in a location that has a particular zoning characteristic. Local zoning authorities grant special-use permits.

Simon is looking for a facility for a large grocery distribution operation. He found two options, one of which is offering him a triple net lease and the other an absolute net lease. Why is his attorney arguing against the latter?

An absolute net lease has no legal defenses if Simon fails to pay. Simon has absolutely no legal recourse with an absolute net lease. With an absolute lease, Simon is still on the line for payment, even if the building is damaged or destroyed through no fault of his own.

Who is most likely to select a conventional mortgage?

Borrowers with larger down payments and higher credit scores

Chrissy lives in Lake Ridge Estates, a neighborhood in which no one is allowed to put up vinyl siding on their homes. This HOA regulation is what kind of private land control?

CC&R

Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can't determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?

CERCLA established a trust fund to finance both cleanup and enforcement actions. This fund is sometimes called the Superfund.

Cambridge Apartments provides an open parking lot for their residents. There is adequate parking and all spaces are available on a "first-come, first-served" basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?

Cambridge must allow an exception to the first-come, first-served policy for Alton.

CC&R Restriction?

Conditions, covenants, and restrictions apply to an entire subdivision, while deed restrictions apply to a specifically named property.

____________________ to the public of real property ownership occurs when the deed is recorded.

Constructive Notice

Method of annexation

How permanent is the method of attachment? Can the item be removed without causing damage to the surrounding property, or can any damage caused by the removal be easily repaired?

Related to reasonable accommodation of being allowed to have an assistance animal, What is true?

If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed. Housing providers may inquire as to the nature of the disability if it's not apparent, and they must permit assistance animals for tenants with documented disabilities without charging an additional pet deposit.

Joint Liability

In the event of a lawsuit, all the partners must be sued together

What is the cost of replacing a building in the case of total loss?

Insured Value Insured value should be the cost of replacement in the event the property's destroyed.

Example of puffery

Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay."

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?

Lenders use the lesser of the sales price or appraised value. This results in an LTVR of 75% ($300,000 ÷ $400,000).

Retroactive Liability

Liability is not limited to the current owner, but includes people who have owned the site in the past.

Lawrence is a buyer closing on a home for which he's obtaining financing. Which document will give Lawrence an estimate of the costs he'll likely pay at closing?

Loan Estimate The Loan Estimate, required by the Dodd-Frank Act, provides buyers with the costs they're likely to pay at settlement and discloses the mortgage loan specifics, such as its key features, costs, and risks.

Example of a licensee compromising the duties of loyalty and disclosure?

Nate didn't tell his client about a conflict of interest related to the sale of the client's property. Nate should have disclosed his conflict of interest. He compromises his duty of loyalty to his client by not doing so. Licensees must disclose all material facts to customers and other parties, and all offers must be presented to a seller client. Josie doesn't need to disclose to Rob that he's representing the seller since Rob IS the seller.

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control Subdivision regulations, such as deed restrictions imposed by developers, are private land controls.

Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn't perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?

Strict Liability

Do most states require an abstract of title?

The abstract of title process is costly and lengthy; only a few states require this process when conveying property.

Tim and Tina Wells bought a home with absolutely beautiful perennial gardens in the back. The plantings were designed to bring birds, bees, and butterflies and to provide color for most of the year. When they did the final walkthrough, they were dismayed to see that many of the shrubs and flowering plants had been removed. They expected these plantings to be considered part of the real property because of the ________.

The method of annexation—planting in the ground—implies that the plantings were expected to stay with the land.

Principle of Contribution

The principle of contribution says that a change to a portion of a property impacts the overall value. For example, adding a swimming pool could add to the value for some buyers and detract from the value for others.

Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have?

They should have a loan-to-value ratio of 80% or less.

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

This is a use variance.

What happens as a result of violation of Cease & Desist orders?

Violations of a cease and desist order may result in penalties of more than $41,484 for each day a deceptive ad runs; civil penalties may be in the millions, depending on the violation. Violators may be required to run corrective or informational ads.

Sylvia, 15, and her neighbor, Marge, 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Voidable A voidable contract appears to be valid but because of legal principal, one or both parties have the right to rescind the contract. In this case Sylvia can enforce the contract against Marge but Marge cannot enforce against Sylvia.

Hope's mortgage created a lien against the property she purchased with the mortgage. What kind of lien is this?

Voluntary A mortgage is a voluntary lien. With voluntary liens, people agree to have the lien placed against their real or personal property.

What's usury?

When a loan's interest rate is higher than the maximum allowable rate

Jason purchased his dream home six months ago. After Jason received an inheritance from his uncle, he decided he would pay off his mortgage. What might he consider before doing this?

Whether he will incur a prepayment penalty Some loan agreements call for a prepayment penalty to compensate the lender for interest not received when the buyer pays off the loan earlier than expected.

Difference between a general warranty deed and a special warranty deed?

With a general warranty deed, the seller will defend against all claims on title; with a special warranty deed, the seller warrants only those claims that stem from when he owned the property.`

Unauthorized practice of law and acting outside the scope of your expertise are similar issues. Example of a circumstance specifically relating to unauthorized practice of law?

Writing contract addenda or additional provisions that cover unfamiliar circumstances Writing contract addenda or additional provisions that cover unusual circumstances falls into the category of unauthorized practice of law, since a licensed attorney should do that.

John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property?

You can calculate the area of a triangle in several ways. One way is to multiply the triangle's base measurement by .5, then multiply that answer by the triangle's height [(185 × .5) x 225].

Steve is preparing a market analysis for the Joneses and has selected three comparable (competitive) properties. What's the maximum number of adjustments Steve should make to the Joneses' property?

Zero Steve won't adjust the subject property. Only the comparable sales price is adjusted. If it is inferior, adjust upward. If it's superior, adjust downward.

A _________________ conveys legal property title to a third-party trustee, who holds it for the beneficiary.

deed of trust

Several Liability

plaintiff's recovery against a defendant is limited to the percentage of fault assigned to that defendant

Equal Credit Opportunity Act

prohibits lender discrimination on the basis of an applicant's protected class status, such as dependence on public assistance. Its intent is to make credit equally available to all credit-worthy applicants.

Strict Liability

the owner is responsible for cleanup, regardless of who created the initial problem.

Surface rights

the rights to use the surface of the earth

Subsurface Rights

those that are underground and include natural gas and minerals. Property owners sometimes sell the subsurface rights, which can also be referred to as mineral rights.