Real Estate Missed Questions
Alana and Michael want to build a 5,000-square-foot ranch home on two acres of land they just bought. Once the house is built, how many acres of land will remain unbuilt?
1.89 acres One acre is equal to 43,560 square feet, so their parcel is 87,120 square feet (43,560 x 2). Subtract the house's 5,000 square feet from that, and you get 82,120 square feet. Divide that by 43,560, and you end up with approximately 1.89 acres.
TREC will issue a notice of violation to anyone it feels has violated the law by performing a prohibited activity. If an accused violator completely disagrees with TREC, that person has the right to request a hearing within how many days?
20 days. The accused violator has a right to request a hearing no later than the 20th day after the violation notice is received.
Rex needs to handle some money he acquired during an ... ahem ... unsavory business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business dealing. What kind of contract do Rex and Ben have?
A contract for an illegal purpose is void!
What type of involuntary lien is placed on a person's estate after their death if there are unpaid debts to creditors?
A deceased person's debt lien is placed on a person's estate if there are unpaid debts to creditors.
Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______
A license is permission to do something on another's land without actually possessing any interest or ownership in the land.
Which of the following fiduciary duties is owed to both clients and customers?
A licensee owes the fiduciary duty of promptly presenting all written offers and counter-offers to both clients and customers
Which of the following best describes what a listing agreement is?
A listing agreement is a binding, written contract entered into by a property seller and the listing agent (on behalf of that agent's broker).
What's a monument?
A permanent land marker sometimes used in legal descriptions
Melissa signed a six-month listing agreement with Greg on February 12. Her property is very specialized, and Melisa was adamant about the sales price. By September, the property still hadn't sold. Melissa expressed her displeasure with Greg for his inability to sell the property. What's the status of the listing agreement?
A six-month agreement signed on February 12 would expire in August
Absent a legal description, what are other ways to identify a property?
A street address can be a valid legal description in some cases, but it is best used as an additional way, and not the only way to identify a property. It is best used for informational purposes only. Personal identification numbers on tax maps are yet another way. However, tax maps are notorious for errors, and they are subject to change.
A ______ is a piece of real estate owned by multiple, unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit based on the specific terms of a time-sharing agreement, usually in one- to two-week intervals during the year.
A timeshare estate is a piece of real estate owned by multiple, unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in one- to two-week intervals during the year.
Ellen and Isaac have a timeshare near the Grand Canyon. They'll be able to use it for two weeks every September, for the next eight years. What type of timeshare is this?
A timeshare use, also known as a right-to-use timeshare, grants the right to possession for some specified number of years.
A fair housing specialist is reviewing fair housing complaints. Which of these contains an action that is prohibited?
A transgender woman is evicted from a rental property because she makes the neighbors uncomfortable
Elizabeth's property is encumbered by an easement in gross with which of these entities?
An easement in gross benefits an individual or entity rather than another property, and is typically used by utility companies. Permission to use another's property doesn't always require an easement, and the fence is an encroachment, not an easement.
_____ is an estate for an unknown period of time in which either party may terminate the lease by giving notice to the other.
An estate at will is an estate for an unknown period of time in which either party may terminate the lease by giving notice to the other.
Which of the following statements about a Texas broker's office is true?
Any broker who maintains more than one place of business in Texas must submit an application for a branch license for each, with the appropriate fee, to TREC. The license certificate for each branch office must state the address.
When one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms, it's called ______ of contract.
Assignment. Parties to a contract can assign their rights and obligations under the contract to a new party. This technique is most often used by wholesalers, and is generally allowable only if specifically agreed to in the contract.
Which duty requires a client to take an active and present role in a real estate transaction?
Availability
Which of the following forms is the listing agent responsible for having sellers complete and sign or initial before uploading the property information to the Internet?
Before the listing agent can upload the property information to the MLS, the agent needs to have the sellers complete and sign or initial the MLS Profile Sheet.
Which of the following statements about real estate licenses is true?
Before you can legally perform any of the same activities that licensed real estate professionals perform, you must have your real estate license.
Which of these is usually a brass marker that is used to mark a datum?
Benchmarks are permanent markers used for marking datums.
Which of the following is/are illegal?
Both disparate impact and disparate treatment. Both disparate treatment and disparate impact are illegal. That's why it's wise to consider the impact of any policies before creating them.
Carl is a sales agent who works under the supervision of a broker. Which of the following is true?
Carl can be either an employee or an independent contractor. Sales agents must work under the supervision of a broker, but they can be employees or independent contractors
Texas sales agent Carl just received his license. Which of the following is a true statement?
Carl must complete a total of 98 hours in SAE and legal update courses by the end of his initial two-year licensing period. A sales agent must complete an additional 98 hours in qualifying courses by the expiration date of their initial two-year licensing period; 90 of those hours must be the SAE courses and 8 hours must be the Legal 1 and Legal 2 courses.
Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?
Civil Rights Act of 1866
The process in which the government actually takes someone's property through the power of eminent domain is called __________
Condemnation. When the government actually takes someone's property and offers the owner just compensation for the property's value, it's called condemnation.
In a real estate transaction, which of the following is established when parties enter into an agreement voluntarily with full understanding of the contract terms?
Consent
Which option best defines an equitable lien?
Created by a court of common law; doesn't give the right to possession of the property. An equitable lien is created by a court of common law and doesn't give the right to possession of the property.
The _________________ affects a property's income tax basis.
Depreciated value. The depreciated value affects a property's tax basis.
In a purchase offer, is earnest money required to have a binding contract?
Earnest money isn't required to have a binding sales contract (although it's usually required by the seller!). If no earnest money is provided, the prospective buyer's only consideration is the promise to pay the purchase price.
Which real property ownership right protects the owner from harassment or interference?
Enjoyment. The right of enjoyment provides the right to possess the land without harassment or interference.
Tina has fee simple ownership of her timeshare unit. Which of these is NOT an example of the type of ownership she may have?
Fee simple ownership of a timeshare (aka timeshare estate) unit means that the owner may share tenancy in common with other timeshare owners or may have an interval ownership. A right-to- use time share is a lease agreement, not an ownership interest
For tax years 2018 to 2025, a borrower can write off the interest on a home equity loan only if ______.
For tax years 2018 to 2025, the funds must be used to improve the home that secures the loan. Other restrictions also apply.
Which one of Gerry's statements to a client crosses the line into unauthorized practice of law?
Gerry crossed the line when he tried to interpret the impact of his clients' decision about how to take ownership.
Good consideration differs from valuable consideration in that good consideration is ______.
Good consideration is a gift. For example, it could be a gift of a car from one family member to another
Homestead exemptions ______ property taxes for all homeowners by protecting a certain amount of a Texas home's value from tax.
Homestead exemptions remove part of the home's assessed value from taxation, which decreases property taxes for all homeowners.
Darnell is disappointed when he receives written notification from TREC that his broker license application has been rejected. He plans to file a notice for a hearing, but he misses the deadline by two days. Which of the following is true of this situation?
If TREC denies a license application, the applicant can either accept that denial or file a notice for a hearing within 30 days. If notice isn't provided by the 30th day, TREC's decision to deny licensure is final.
If Drake, an alleged violator, wishes to have a hearing, he must submit a written request for a hearing regarding the occurrence of the alleged violation and/or the penalty amount. He must submit this written notification ______.
If the alleged violator wishes to have a hearing, he must-no later than the 20th day after the date he receives the violation notice-submit a written request for a hearing. Otherwise, the alleged violator can simply accept the Standards and Enforcement Di
Your neighbor hires a middle school student who lives down the street to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student's mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?
If the neighbor and the student are content to uphold their agreement, the fact that it's not legally binding doesn't matter. Because a minor can't enter into a contract, this contract is technically invalid, voidable, and unenforceable. However, if the neighbor and the student are content to uphold their agreement, the fact that it's not legally binding doesn't matter.
What are improvements with regard to property?
Improvements are artificial attachments to land that include items such as fencing, buildings, and walkways.
Robert and Sarah enter into a contract for Sarah to purchase Robert's home. Robert decides he doesn't want to sell, and is elated when he finds out that Sarah's only 17 years old. Can Sarah force Robert to sell?
In the same way that a legally incompetent party can void a contract while the competent party cannot, a legally incompetent party can enforce a contract should the competent party wish to terminate
The Johnsons have owned a small restaurant for more than 20 years. It's open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons' restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.
Inverse condemnation Inverse condemnation occurs when a property's value is negatively affected by government regulation, but the owner is not offered just compensation according to the requirements of the Takings Clause.
Applying a capitalization rate to the net operating income is one way to determine a property's ___________ value.
Investment. Applying a cap rate to the net operating income is one way to determine a property's investment value.
Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?
Joint tenancy provides equal ownership shares with undivided possession rights and requires four ownership unities: time, title, interest, and possession. Joint tenancy includes the right of survivorship.
Texas land which abuts a river or stream and was acquired after 1895 is subject to which of the following?
Land acquired after 1895 is subject to the Doctrine of Appropriation which means that the state has the right to control the right to use any water, except for water used for certain domestic purposes. Land acquired before 1895 carries riparian rights.
This federal disclosure required under Title X requires the sellers of residential dwellings built before 1978 to disclose any known information about the existence of lead-based paint (LBP) on their property.
Lead-Based Paint and Lead-Based Hazards Disclosure of Information.
Which of the following, when done for others and for compensation in Texas, may be done by someone who does not hold a real estate license?
Licensure is nearly always required when performing real estate activities for others for compensation, but exceptions are made in specific circumstances within the state of Texas.
Which of the following statements is true regarding timeshare estates?
Like other forms of fee simple ownership, timeshare estates can be sold or passed down to heirs.
What is the value a buyer and a seller agree upon?
Market Value
In order for a lease for real estate to be enforceable, it must be in writing and signed by the person to be charged with the promise/agreement, or by someone who is legally authorized to sign for that person. This requirement applies to a lease with a term of ______.
More than one year. Per the Texas statute of frauds, a lease for real estate for a term of more than one year is only enforceable if it is in writing and signed by the person to be charged with the promise/agreement, or by someone who is legally authorized to sign for that person.
Sheldon and Jean retired and bought a townhome in a community about 30 minutes from their children and grandchildren. They're excited about their new living situation because Sheldon's arthritis is getting worse and he'll no longer have to handle ________.
Most townhome communities perform landscaping and exterior services such as snow removal since these are paid for through association dues.
Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed?
Nate owes Timothy the duty of disclosure. A licensee owes all parties the duty of disclosing material facts, as well as honesty, fairness, and accounting. Only a client would be owed obedience, loyalty, and confidentiality.
Five competing licensees in the same area agreed to cooperate in setting a standard commission for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?
One in which no intent needs to be proven to establish a violation has occurred. With a per se violation of antitrust law, such as price fixing, guilt is determined on the face of the evidence. No intent needs to be established.
The National Fair Housing Alliance has concerns about whether or not programs meant to address the financial and mortgage crisis are ______.
One of the NFHA's recommendations for the future of fair housing is to consider whether or not programs designed to address the financial crisis are racially fair and don't promote further segregation
Someone whose license has been expired for 90 days or fewer may renew their license by paying TREC a fee. How much is the renewal fee in these instances?
One-and-a-half times the regular required renewal fee
Who can request a CLUE report?
Only the property owner or an insurer can order the report.
Eileen enters into a contract to buy Peter's home. The contract specifies that Peter must leave the refrigerator with the home and he must replace the roof before closing. During the pre-closing walk-through, Eileen discovers the nice new roof, but Peter took the refrigerator with him. If Eileen decides she didn't want the refrigerator that much anyway so doesn't make a fuss, this would be an example of ______ of the contract.
Partial performance occurs when one of the contract's parties does some, but not all, of what the party has agreed to do.
Jacob is a developer who purchased 78 acres and had it subdivided into halfacre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?
Permanence of investment means that some improvements will remain stable long term, with stable returns over time.
According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to set contract terms for a certain length of time?
Price fixing. Besides commissions and discounts, price fixing may also apply to contract terms.
Texas sales agent applicant Drew has already taken 30 hours each of Principles of Real Estate I and II, Law of Contracts, and Law of Agency. Which two additional 30-hour courses must he take to complete his prelicense education requirements?
Promulgated Contract Forms and Real Estate Finance. These six 30-hour courses include Principles of Real Estate I, Principles of Real Estate II, Law of Contracts, Law of Agency, Real Estate Finance, and Promulgated Contract Forms.
Which of these is the best definition of real estate?
Real estate includes land, plus all things permanently attached to it naturally or artificially.
What's the best definition of real property?
Real property includes real estate, plus all of the interest, benefits, and rights included in ownership.
George is a member of the Texas Education Standards Advisory Committee (ESAC) and is currently reviewing a real estate program that administers courses of study to post-licensing students. The committee has received several complaints that these courses are of poor quality. What authority does the review committee have in these cases?
Recommend that TREC suspend the program and those that administer the courses of study. ESAC does not have the authority to revoke the accreditation of the real estate program. It can, however, recommend that TREC suspend the program and those that administer the courses while the courses are reviewed and evaluated.
What is the name of the set of regulations used to enforce the Equal Credit Opportunity Act?
Regulation B makes specific requirements for credit rejection and termination notifications, and disclosure of borrowers' rights under the ECOA.
In which of these situations is Ronna's fiduciary duty of reasonable skill and care at odds with her duty of obedience?
Ronna's duty of reasonable skill and care prohibits her from providing legal advice and supersedes her duty of obedience to Jefferson, her client.
How long is a member of TREC's term?
Six years
Billie Silva was just licensed as a broker, and she plans to hang out a shingle and go into business for herself. As a sole proprietor, which of the following business names can she NOT use?
Sole proprietors can use their names or their names in some combination with a business name
Lewis and Elliot started a real estate investment business together. After much discussion with their attorney, they decided to incorporate, but in such a way that they are treated like a partnership and don't have to pay corporate taxes. What form of business do they have?
Subchapter S corporation S corporations are corporations that are taxed as partnerships. They don't pay corporate income taxes, and shareholders may deduct losses on their taxes that represent their share of the corporation's losses.
Calvin is talking with his study group about their upcoming licensing exam. They are discussing how far in advance they need to make a reservation. Which member of the group is correct in their understanding?
Sylvia is correct. Walk-in examinations are not available. Candidates must make a reservation online or by phone at least 24 hours prior to the examination date.
The Recovery Trust Account should maintain a balance of at least what amount?
TREC can regulate the fees per the rules of TRELA in order to obtain a balance in the trust account of $1.7 million. If the balance dips below $1 million, the commission can impose an additional $10 fee on each license holder upon the renewal of their license.
Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?
Termination of tenancy in common by partition allows each tenant to have a specific, divided portion of the property exclusively. If the property can't be divided, the court may rule that the property be sold and the proceeds divided by the tenants.
Sellers of property outside a municipality's jurisdiction are required to provide this statutory notice to a purchaser of unimproved real property.
The Addendum for Unimproved Property Located in a Certified Service Area of a Utility Service Provider must disclose that the extension of water and/or sewer services may cost the buyer additional money, and that there could be a delay before a utility can provide its services.
Which of these statements accurately describes finance- and housing-related legislation?
The Civil Rights Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin. Title VIII of the Civil Rights Act of 1968 made race, color, national origin, and religion protected classes and prohibits housing and housing financing discrimination. The ECOA prohibits discrimination based on any protected class.
What act was introduced to combat discriminatory lending practices against individuals and businesses in low- and moderate-income neighborhoods?
The Community Reinvestment Act (CRA) was introduced to combat discriminatory lending practices against individuals and business in these neighborhoods. It requires that lenders post their lending policies, inform customers of their rights under the CRA, and prepare an annual statement showing their compliance.
How does the Office of Fair Housing and Equal Opportunity (FHEO) support real estate consumers?
The FHEO provides support for protected classes through the fair housing complaint process. The FHEO guides consumers through the complaint process as well as conducting an investigation.
Which agency enforces fair housing law?
The Office of Fair Housing and Equal Opportunity provides administration and enforcement of federal fair housing laws.
Which fair housing case tested discrimination in a private sale?
The U.S. Supreme Court decision in Jones vs. Mayer stated definitively that racial discrimination is not allowed in any sale of property within the U.S.
The Canons of Professional Ethics and Conduct are divided into five sections: fidelity, integrity, competency, consumer information, and ______.
The code is divided into fidelity, integrity, competency, consumer information, and discriminatory practices
Office space in a downtown high rise rents annually at $33.40 per square foot. Max's tenant client is interested in renting two adjacent suites: one is 7,152 s.f., and the second is 3,560 s.f. What's the monthly rental rate?
The combined monthly rental rate for the two suites is $29,815.07. The total square footage is 10,712 (7,152 + 3,560), so the annual rental amount is $357,780.80 (10,712 x $33.40). Divide that amount by 12 to get the monthly rental rate.
Which entity decides the matter when two different legal descriptions conflict?
The courts. The best legal description is an accurate one, and sometimes the legal descriptions will conflict. In such a case, it will be up to the courts to decide the matter.
Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?
The doctrine of prior appropriation grants water rights based on need, not adjacency. Hal and Sara likely live in the western part of the U.S. where many states subscribe to this doctrine.
The governor appoints how many lawyers to the Broker-Lawyer Committee?
The governor appoints one member, and that person is a member of the public. The lawyers are appointed by the president of the Texas Bar Association.
How is the grid that's used in the rectangular government survey system laid out?
The numbers on the grid start in the northeastern corner and follow a zigzag pattern.
Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. "No," his attorney explains. "It's not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction.
The right of control allows owner Philip to manage the property in any way he sees fit-as long as the enterprise is legal in the given jurisdiction. Other regulations, such as HOA regulations, may also apply.
In order to qualify as one of the ______ real estate professional members of the ESAC, you must have been actively engaged in the practice of real estate for five years prior to appointment.
The seven members of the committee who are real estate professionals must have been actively engaged in the practice of real estate for at least five years before appointment
Your client, a builder, is considering buying three adjacent lots. They each have the same depth, 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have?
The total street frontage is 446 feet. Add up the square footages of the three lots and divide by the lot depth (275) to get the total street frontage. (35,750 + 53,900 + 33,000) ÷ 275 = 446
In Texas, when HUD receives a discrimination complaint, it forwards this complaint to what organization?
These complaints are forwarded to the Texas Workforce Commission Civil Rights Division, which enforces fair housing laws.
Limited liability companies and limited liability partnerships are favorable forms of business because ______.
They don't require a general partner.
What's the name of a discriminatory lending practice whereby lenders limit the scope of their loans to exclude neighborhoods with certain ethnic or economic characteristics?
This describes redlining, a discriminatory lending practice whereby loans are not made for homes in certain neighborhoods, as though a red line is drawn around them
Which type of legal description is this: "Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office"?
This is an example of a lot and block legal description, which is also called a plat reference system.
Mary has a contract to buy her mother's house when her mother is finally ready to move to a senior living community. This way, the house stays in the family. After her mother finds a suitable senior apartment and moves, Mary writes a check for the agreed-upon amount, and her mother transfers the deed to Mary. What is happening in this scenario?
This is an example of contract performance. Performance means that the two parties have met the terms of the contract.
You're talking to a co-worker at lunch and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?
This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.
When a real estate licensee receives compensation for referring a client to a real estate licensee in a proposed real estate transaction, this is known as ______.
This type of compensation is known as "valuable consideration" and can include money, gifts, or merchandise worth more than $50 (retail), rent bonuses, or discounts.
When members of the Education Standards Advisory Committee are appointed, how many years do they serve?
Two. Committee members serve staggered two-year terms. ESAC does not offer education or provide tutors, but real estate professionals are directly impacted by the work of ESAC.
In Texas, a party to a contract has ______ from a contract breach to sue the other party.
Under Texas's statute of limitations law, the party filing suit must do so within four years of the contract breach.
Norman buys Connie's Texas home, and in the sales contract, he specifies that the outdoor grill must stay with the home. Connie ends up taking the grill when she moves out. If Norman wants to sue Connie for taking the grill, he must do so within ______.
Under Texas's statute of limitations law, the party filing suit must do so within four years of the contract breach.
Hank leases 150 acres from Sara and Jesse. He has an option contract attached to his lease, with an option to purchase that can be exercised within the next two years. What type of contract is this?
Unilateral. With an option contract, before the option is exercised, only the optionor (seller) is bound by the contractual obligations. It's essentially a unilateral contract.
Which source of law establishes legal precedent?
When judges rule on the facts of a particular case, they create case laws, which clarify and interpret other sources of law. In case law, lower courts are bound by decisions made by higher courts in the same jurisdiction.
Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?
When legal descriptions conflict, it will be up to the courts to decide the matter
Which of the following is the duty of the State Office of Administrative Hearings at a hearing of an alleged violator?
While the State Office of Administrative Hearings makes findings of fact and legal conclusions and may make proposal recommendations about the decision, it's actually TREC that, by order, determines whether or not a violation occurred and imposes the administrative penalty.