Real Estate - Ch. 1-3
All of the following factors would affect supply EXCEPT? A. Population B. Construction Costs C. Government Controls D. The labor force
A. population
The point at which 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
Which of the following statements about real estate brokerage in NC is True? A. a provisional broker must be supervised by a broker-in-charge while performing brokerage services for compensation B. homeowners must be active real estate brokers to sell their own property. C. Brokerage compensation is always a percentage of the gross sales price. D. A real estate licensee may perform an appraisal on a parcel of land.
A. A provisional broker must be supervised by a broker-in-charge while performing brokerage services for compensation.
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 D. 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 if 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 liscence
A. an easement in gross
Which of the following is considered to have the greatest impact on the value of a property? A. area preference B. permanence of investment C. scarcity D. uniqueness
A. area preference
A NC beachfront property owner owns the land on the ocean side of the property to the A. average high tide line B. average low tide ling 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, hey 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
In NC, a modular home A. becomes part of the real estate as soon as it is assembled on site B. has a steel chassis with wheels and axles C. has a HUD label that is required for the transfer of title D. is constructed per HUD construction standars
A. becomes part of the real estate as soon as it is assembled on site
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 most all-inclusive type of real property ownership is a A. fee simple estate B. conventional life estate C. qualifies fee estate D. reversionary estate
A. fee simple estate
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
Debts that are incurred by an individual and become liens against any real or personal property owned by that person are A. general liens B. specific liens C. fiduciary encumbrances D. special assessments
A. general liens
The phrase, a 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 part of the definition of real property
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
Land A. is indestructible B. is a depreciating asset C. does not react to the forces of supply and demand D. has a highest and best use that remains constant
A. is undestructible
Which of the following is a voluntary lien? A. Mortgage lien B. estate tax lien C. Real estate tax lien D. judgement lien
A. mortgage lien
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
A homestead estate is one that A. protects land that includes the family home from creditors B. has remained in a family's ownership for more than five generations C. was obtained through adverse possession D. exists in all American States and some foreign countries
A. protects land that includes the family home from creditors
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
The severalty owner of a parcel of land sells it. The buyer insists that the owner's wife also sign the deed. The purpose of obtaining the wife's signature is to A. terminate any rights the wife may have in the property B. defeat any curtsey rights C. provide evidence that the owner is married D. subordinate the wife's signature to the buyer
A. terminate any rights the wife may have in the property
A property held as tenancy by the entirety in NC 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
Which of the following liens are NOT required to be recorded in order to be valid? A. mortgage lien B. Ad valorem tax lien C. judgement lien D. Mechanic's lien
B. Ad Valorem Tax Lien
A brother and a sister can NOT concurrently own real estate in NC as A. remainder devisees B. tenants by entireties C. joint tenants D. tenants in common
B. Tenants by entireties
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 estate
The developer grants the power company the right to install transmission lines through 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
An important characteristic of land is that it may be modified or improved at any given time. Depending on its type, an improvement may increase the value of real estate greatly. All of the following would be considered improvements to land EXCEPT A. sewers B. buildings C. sidewalks D. roads
B. buildings
Which of the following real property use catagories would include shopping centers? A. residential B. commercial C. Agricultural D. Industrail
B. commercial
A decedent left a will giving a neighbor the right to use a well on the decedent's land as long as the neighbor was alive. The neighbor's interest in the property is properly called a A. leasehold estate B. easement in gross C. easement appurtenant D. life estate
B. easement in gross
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 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
A brother and sister bought a commercial building and took title as joint tenants with right of survivor ship. 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
An example of a limited common element in a condominium project is a A. community swimming pool and cabanas B. locked storage unit C. picnic area with playground D. trash disposal and recycling center
B. locked storage unit
Generally, personal property can be distinguished from real property by its A. size B. mobility C. value D. multiplicity of use
B. mobility
The geographic location of any parcel of land can A. be changed as some substances are removable from the land. B. never be changed C. be changed because the topography can be changed D. be changed only under certain legal circumstances
B. never be changed
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
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 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 easements through the lot will prevent constructions
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 ownership
B. time-share ownership
The NC owner of a secluded area adjacent to the Atlantic Ocean noticed that people from town walked along the shore in front of his 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 he owner's property extends 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 property.
B. unsuccessful, because he owner's property extends to the high-water mark and the public can use the land beyond this point.
The current market value of a property is $135,000. For tax purposes, it is assessed at 60 percent of market value. The tax rate is $2.45 pero $100 of assessed value. What is the annual tax liability? A. $1190 B. $1323 C. $1984 D. $3307
C. $1984
Which of the following liens hold 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
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 statements about the NC Timeshare Act are FALSE? A. use of a two-bedroom unit for one week every other year for a 10 year period would meet the definition of a timeshare. B. a timeshare developer can be fined by the NCREC for violations of the Act. C. a purchaser of a new timeshare ownership must be given a 10-day rescission period D. an active NC real estate licensee is required to sell timeshares to the public
C. a purchaser of a new timeshare ownership must be given a 10-day rescission period
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
The NC Commercial Real Estate Broker Lien A. allows a commercial client to sue a broker for breaching fiduciary duties B. gives a buyer's agent the right to sue the commercial listing agent for compensation C. allows a lien to be placed on the commercial property to secure the broker's commission D. requires a commercial broker to place a lien on the listed property at the time of the listing
C. allows a lien to be placed on the commercial property to secure the broker's commission
When a oersonal judgement 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 unites and several service counters. These additions A. are considered permanent improvements to the property B. become 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 be legally 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
The North Carolina Mechanic Lien Law A. applies to all residential construction projects over $30000 B. only applies to commercial construction projects over $30000 C. does not apply to construction projects costing over $30000 on owner-occupied dwellings D. applies to commercial and residential construction projects under $30000
C. does not apply to construction projects costing over $30000 on owner-occupied dwellings
A portion of a building was built on the neighbor's land. This is called an A. accretion B. avulsion C. encroachment D. easement
C. encroachment
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
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 estate
If the owner of the dominant tenement becomes the owner of te servient tenement and merges the two properties, the easement A. becomes dormant B. is unaffected C. is terminated D. is not held by the owner of the merged properties
C. is terminated
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. Judgement lien D. assessment lien
C. judgement lien
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 trade fixture is considered A. a fixture B. an easement C. personalty D. A license
C. personalty
The excise tax to be paid on a NC property selling for $175,000, with $25,500 down and the buyer assuming an existing mortgage of $149,500 is A. $51 B. $175 C. $299 D. $350
D. $350
What will be the amount of tax payable where the property's assessed value is $185,000 and the tax rate is 40 mills in a community in which an equalization factor of 110 percent is used? A. $4,625 B. $5,087 C. $7,400 D. $8,140
D. $8,140
Which of the following is considered personal property? A. masonry fireplace B. porch and window awnings C. bathtubs D. patio furniture
D. Patio furniture
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 the blinds C. the hand pained items D. the draperies
D. The draperies
A state income tax lien would be properly classified as A. an equitable lien B. a Specific lien C. a mechanics lien D. a general lien
D. a general lien
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 mechanics lien
D. a mechanics lien
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
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
Zoning ordinances generally regulate such things as the A. height of the buildings B. placement of buildings on property C. bulk and density of buildings D. all of the above
D. all of the above
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
Real property can become personal property by A. severance B. purchase C. hypothecation D. attachment
D. attachment
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 apartments. This type of ownership is called a A. condominium B. planned unit development C. time-share D. cooperative
D. cooperative
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 estate
All of the following are true statements about a condominium EXCEPT A. a deceleration 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 owner's association for the unit
D. each owner has a proprietary lease with the owner's association for the unit
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 an A. easement appurtenant B. easement by necessity C. easement by prescription D. easement in gross
D. easement in gross
The point at which supply and demand are balanced is known as A. the highest and best use B. balance C. conformity D. equilibrium
D. equilibrium
All of the following would affect demand EXCEPT? A. population B. demographics C. wage levels D. Fiscal Policy
D. fiscal policy
Personal property includes all of the following EXCEPT A. chattels B. trade fixtures C. emblements D. fixtures
D. fixtures
The land of a common interest community A. is always owned by the owner's association B. cannot be owned by individual unit owners C. is automatically considered to be part of the common area D. may be maintained by the owner's association
D. may be maintained by the owner's association
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
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
A NC seller has signed a security agreement to finance a new heat pump prior to listing his house. Since the seller has only ten more payments left, A. the heat pump is a part of the real estate that conveys at settlement B. the creditor could not repossess the heat pump after closing if the seller did not finish paying all the payments C. the buyer must take over the payments on the heat pump after closing D. the heat pump remains personalty that can be removed prior to closing
D. the heat pump remains personalty that can be removed prior to closing
Which of the following is NOT true about condominium ownership? A. it can be mortgaged B. all of 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 seperately
D. the limited common elements can be sold seperately
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 permissiong
A. operate as usual
A mechanic's lien could be filed in all of the following scenarios EXCEPT A. the hardwood flooring company was not paid after installation was completed five months ago. B. a family friend lent the buyer money for the down payment C. the architect has not received final payment for the blueprints D. the general contractor did not pay the subcontractors after closing
A. the hardwood flooring company was not paid after installation was completed five months ago.
A rancher owns a parcel of land with all the 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
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
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
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. liscensing property
C. servient tenement
Co-owners of a fee simple interest in a small office building are either 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
Emblements are A. part of the real estate as soon as it is planted B. naturally occurring vegetation that does not require cultivation C. the same thing as fructus industrailes D. not allowed to be severed from the land
C. the same thing as fructus industrailes
A commercial tenant attaches several items to the rental property during the term of the lease. Those items are considered A. fixtures and become part of the landlord's real property B. emblements and are treated as person 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
Improvements on the land would refer to all of the following EXCEPT A. houses B. outbuildings C. underground utilities D. decorative fencing
C. underground utilities
All of the following are economic characteristics of land EXCEPT A. scarcity B. permanence of investment C. uniqueness D. area preferance
C. uniqueness
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 NC are true EXCEPT A. a manufactured home is constructed per HUD construction standars B. it has a VIN # while mobile C. an attached HUD label is required for the 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
All of the following are physical characteristics of land EXCEPT A. indestructibility B. uniqueness C. immobility D. scarcity
D. scarcity
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 assessment
D. special assessment
One of two owners hold an undivided 60 percent interest and the other holds an undivided 40 percent 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