Unit 4: National Brokerage: Sale & Lease Contracts:Quiz

Which of the following best defines a marketable title? A title that has been recorded at the county court house A title to a property that is free from encumbrances, litigation, and other defects and that can be readily be sold or mortgaged A title that has been reviewed by an attorney A title that has at least one lien attached to the property

A title to a property that is free from encumbrances, litigation, and other defects and that can be readily be sold or mortgaged

Which contract provision allows for the transfer of the contract to another person? Assignment of a Contract Operation of Law Transfer Clause Execute Clause

Assignment of a Contract

According to contract law, every valid contract is also what? Void Enforceable Enforceable or uneforceable Voidable

Enforceable

What is one important difference between a sublease and a lease assignment? In an assignment, responsibility for the original lease is transferred completely to the assignee. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract. A sublease does not convey any of the leasehold interest. A sublease conveys the entire leasehold interest.

In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.

Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of lease does Jim have? Revolving Lease Wholesale Lease Index Lease Leading Indicator Lease

Index Lease

Which contract element indicates a mutual agreement? Description and Order Terms Dissolution Offer and Acceptance

Offer and Acceptance

What does a rescission contract do? Releases all parties from any present and future liability. Makes the buyers liable for damages if they default for no good reason. Specifies the terms under which either party may sue the other in a default. Releases the sellers from any responsibility for returning the buyers' earnest money deposit.

Releases all parties from any present and future liability.

Landlord Frank terminated Jerry's lease because gross sales did not meet expectations. Jerry agreed to what type of lease? Retail Level Lease Percentage Lease Reorder Lease Market Level Lease

Retail Level Lease

What is an important legal characteristic of an option to buy agreement? The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed. The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. The contract can be executed at no cost to the optionee. It is a bilateral agreement.

The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.

In which provision would a landlord describe what activities can take place on the property? Use of the Premises Property Order Location Use Property Regulations

Use of the Premises

A lease is both an instrument of conveyance and a contract. neither an instrument of conveyance nor contract. a promise note. a document that conveys legal title.

both an instrument of conveyance and a contract.

For a contract to convey an interest in real estate, it must: include a title closing entity. contain default penalties. include all outstanding liens against the property. contain a legal description of the property.

contain a legal description of the property.

Most home sales are not contingent on financing. covered by FDIC insurance. contingent on financing. based on a cash sale.

contingent on financing.

The best practice is to have the buyers take possession on the day of the transaction close. have the buyers take possession at least 2 days after the day of the transaction close. have the seller remain on the property at least 2 days after the closing date. have the sellers move from the property at least 5 business days before the close date.

have the buyers take possession on the day of the transaction close.

Issues that are not covered in the purchase and sale agreement itself are usually dealt through verbal agreements. via handwritten notes. using preprinted riders. using a schedule of changes.

using preprinted riders.