Section 10.

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Affidavit of Value

1. Arizona law requires that an affidavit of value accompany a deed for the deed to be recorded. 2. It must be signed by both parties (grantor and grantee) and notarized. 3. States the sales price of the property (consideration). 4. Must have the property's legal description. 5. Used to inform the county assessor of the sales price. 6. Used instead of transfer tax stamps.

Limited Liability Company (LLC)

A business entity that has combined characteristics of limited partnerships and certain types of corporations. 1. They are created by filing articles of organization with the Arizona Corporation Commission 2. Owners are called members 3. They are managed by members or by a non-member manager. 4. They are legal entities separate from the members. The members are not personally liable for the debts. 5. Take title in severalty and may be a tenant in common with other persons or entities. 6. They cannot take title in JTWRS. 7. They are commonly used to buy, sell, or hold real estate.

Corporation

A business entity, made up of one or more persons, that is treated as a separate entity. Owned by shareholders; their share are personal property. A board of directors manages it. Legal entities separate from the individual shareholders. The shareholders are not personally liable for the debts. Take title to their interest in severalty and may be a tenant in common with other persons or entities. Does not die, and so it cannot take title in joint tenancy with right of survivorship (JTWRS).

Cooperative

A buyer buys shares in a corporation that owns an apartment building. In exchange, the buyer receives the right to live in a specific unit. The buyer does not acquire and own a specific unit. The buyer simply becomes a shareholder in the corporation.

Real Estate Investment Trust (REIT)

A company with at least 100 investors (beneficiaries) that owns income-producing real estate and provides favored tax treatment to the investors. A. Must invest at least 75% of its assets in real estate and must pay out at least 90% of its taxable income to its shareholders. B. Shares are sold like stock or mutual funds on major stock exchanges.

Probate

A court proceeding that validates a person's will, totals the assets of the deceased, and distributes them to the heirs.

Beneficiary Deed

A deed that specifies who will receive title to real estate when the grantor dies. A beneficiary deed is recorded by the grantor and may be rescinded or changed at any time before the grantor's death. 1. Only takes effect upon the grantor's death. 2. Transfer of title under a beneficiary deed supersedes the grantor's will. 3. If the grantor agreed to sell the property and then died, the contract to sell remains valid and enforceable after the grantor's death.

Condominium

A development in which the owners have individual fee simple ownership of a unit and shared ownership (tenants in common) of the common areas. The owner owns the interior space (air space) in the unit. The other parts of the property—the buildings, land, parking lot, stairways, elevators, pool, etc.—are owned collectively by all of the owners as tenants in common.

Acknowledgement/Notarization

A formal declaration made before an authorized official such as a notary public

Administrator/Administratrix

A person appointed by the court when no executor was named.

Executor/Executrix

A person named in a will to carry out its provisions.

Dedication

A transfer of private property for public use; for example, a developer dedicates land for streets within a new subdivision.

Gift

A transfer of title without consideration; for example, a father deeds part of the family farm to his child.

Devise

A transfer to heirs according to the terms of a will.

Deed

A written instrument that transfers an interest in real property.

Planned unit of Development

A. A community of homes that could be single-family residences, townhouses, or condominiums, and can include both residential and commercial units. B. Includes ownership of a specific lot or unit with common areas either owned by a homeowners' association or collectively by all invested parties.

What is the purpose of an affidavit of value? A. Assist the county assessor in determining property values B.Meet IRS requirements C. Assist in determining capital gains tax D. Assist the State Treasurer in sales tax revenue

A. Assist the county assessor in determining property values

Which is an example of involuntary alienation? A. Condemning a strip of land to build a highway B. Dedicating an acre of land to the county C. Gifting a parcel of land to a family member D. Signing a warranty deed at closing

A. Condemning a strip of land to build a highway

At what point does recordation take place? A. Docket and page number are assigned B. At close of escrow date C. The date the document was signed D. The date the document was notarized

A. Docket and page number are assigned

A condominium homeowners' association purchased an insurance policy insuring the carpeting throughout the buildings. Which area of the building would the insurance be LEAST likely to cover? A. Individual units B. Hallways C. Recreational facilities D. Elevators

A. Individual units

The grantor signed a deed, but it was never received by the grantee nor recorded. Which of the following statements is true? A. The deed was not delivered B. The deed was delivered when it was signed C. The deed was delivered if the grantor's signature was notarized D. The deed was delivered if the grantee was of legal age

A. The deed was not delivered

A patent deed comes from: A. a sovereign power B. the U.S. Patent Office C. municipalities D. county government

A. a sovereign power

The property of an owner who dies intestate will have their property: A. escheat to the state B. transfer by descent to heirs C. devised by will D. sold at auction

A. escheat to the state

The process of validating a will, totaling the assets of an estate, and transferring the property to the heirs of the deceased is known as: A. probate B. intestate C. devise D. bequest

A. probate

The type of deed in which the grantor limits the grantor's liability to the grantee to anyone making claims due to the grantor's actions is a: A. special warranty deed B. quit claim deed C. general warranty deed D. sheriff's deed

A. special warranty deed

Deeds are recorded: A. to provide constructive notice of their existence B. because the law requires it C. to guarantee ownership D. to eliminate all other claims on title

A. to provide constructive notice of their existence

If a person owns a condominium, they own a(an): A. undivided interest in common areas and a separate interest in the unit B. undivided interest in the whole, separate interest in the unit, and ownership of the land under the unit C. separate interest in the whole D. divided interest in common areas and undivided interest in the unit

A. undivided interest in common areas and a separate interest in the unit

In Arizona, the sale of securities is regulated by the

AZ Corporation Commission

Notice obtained from an inspection of the property or by being given knowledge of a fact is known as

Actual Notice

In Arizona, the document that must accompany a deed in order for the deed to be recorded is a(an) .

Affidavit of Value

Individuals who own a condominium purchase a(n)

Air Lot

Trust

An arrangement under which legal title to real and/or personal property is transferred to and managed by a trustee, for the benefit of a beneficiary.

Patent

An instrument that conveys real property from the state or federal government to an individual.

In Arizona, the board of directors of a condominium must meet at least .

Annually

Townhouse

Are different from condominiums, where persons own the airspace of the unit, but all the buildings and common areas are owned jointly with the other owners in the development. A type of ownership where individuals own the building or unit they live in and the land beneath the buildings, with common areas owned by the homeowners' association (HOA)

When a document is recorded, what type of notice is given? A. Actual B. Constructive C. Implied D. Universal

B. Constructive

When purchasing a piece of property in which your spouse is not to have any interest, which deed would be used to relinquish any rights to the property? A. Quit claim deed B. Disclaimer deed C. Gift deed D. Deed of surrender

B. Disclaimer deed

Which of the following warrants title only for the period during which the seller owned the property? A. General warranty deed B. Special warranty deed C. Quit claim deed D. Disclaimer deed

B. Special warranty deed

A property is sold with a quit claim deed. Several years later, it was realized that the party signing the deed only had a 50% interest. The ownerof the other 50% now appears. Which of the following is true? A. The buyer should now buy title insurance B. The second 50% owner must be recognized as legitimate C. The second 50% owner has no rights D. The entire sale is void

B. The second 50% owner must be recognized as legitimate

An owner's interest in the condominium's common areas is best described as: A. sole and separate B. an undivided interest C. joint tenancy D. in severalty

B. an undivided interest

An example of voluntary alienation is: A. acquisition under eminent domain B. assignment by an attorney-in-fact C. loss of property through avulsion D. escheat of a property after a person dies intestate

B. assignment by an attorney-in-fact

Title to real estate passes to the grantee at the time the deed is: A. written B. delivered and accepted C. notarized D. signed

B. delivered and accepted

In a co-op: A. each owner has a deed B. each owner holds stock C. all owners are on one deed D. the owners are tenants in common

B. each owner holds stock

If a partnership does not pay its debts, the creditors may collect from the personal assets of: A. limited partners B. general partners C. stockholders of an incorporated company D. real estate investment trust

B. general partners

A quit claim deed is commonly used to: A. convey title B. release an interest in title C. secure a loan D. cloud the title to real property

B. release an interest in title

A man in Phoenix who had executed a beneficiary deed to his son enters into a contract to sell the property. If, prior to closing, the man dies intestate, the: A. sales contract is cancelled B. sales contract is binding on the son C. beneficiary deed is void D. man's will must be followed

B. sales contract is binding on the son

All of the following are required to be in a deed of conveyance EXCEPT: A. acknowledgement B. sales price C. legal description D. consideration

B. sales price

If a deed is not recorded in Arizona, it is: A. not valid if the property owner lives out of state B. valid but can be voided by subsequent recorded deeds C. void if not recorded within 30 days D. void if not recorded within 7 business days

B. valid but can be voided by subsequent recorded deeds

The deed that contains no expressed warranty but has the implied warranty that the grantor has the authority to convey title is the ____________________________ ________________________.

Bargain and sale deed

A deed that specifies who will receive ownership of the property when the grantor dies is a _____________________________________.

Beneficiary Deed

The rules governing a condominium are found in the .

Bylaws

Which is a method of acquiring title? A. Joint tenancy B. Community property C. Adverse possession D. Tenancy at will

C. Adverse possession

Who can search the records of the county recorder's office? A. Only an employee of the county recorder B. Only the county assessor C. Any individual D. Only a person who has recorded a document

C. Any individual

Which state agency regulates the sale of real estate securities? A. Securities and Exchange Commission B. Arizona Department of Financial Institutions C. Arizona Corporation Commission D. Arizona Department of Real Estate

C. Arizona Corporation Commission

Which is an example of involuntary alienation? A. Mortgage B. Deed of trust C. Deed through foreclosure D. Deed in lieu of foreclosure

C. Deed through foreclosure

Who is responsible for recordation of a deed? A. Broker B. Grantor C. Grantee D. Lender

C. Grantee

What document does the government use to convey ownership of public land to an individual? A. Abstract B. Affidavit of title C. Patent title D. Title policy

C. Patent title

Which type of business entity pays a share of the profits to its beneficiaries? A. Corporation B. Joint venture C. REIT D. Syndicate

C. REIT

In order to record a deed, which of the following would be required? A. Signed by grantee B. Signed and delivered C. Signed and acknowledged D. Signed and dated

C. Signed and acknowledged

When a person dies with a will, which of the following statements would be FALSE? A. An executor would oversee the probate process B. An heir may contest the will C. The estate would not be subject to probate because the party died with a will D. The estate could be subject to taxes before any property is transferred

C. The estate would not be subject to probate because the party died with a will

A property governed by a homeowners' association of 50 or more units has a patio cover that was built in violation of the association declaration (CC&R's). Prior to closing, the association gave notice to the buyer regarding the violation. After the close of escrow, which of the following statements is correct? A. The patio cover may remain as is B. If the association did not inspect the property prior to closing, the patio cover can remain C. The patio cover is in violation of the association's rules, and the buyer can be forced to remove it D. The buyer can hold the association liable for the cost of removal

C. The patio cover is in violation of the association's rules, and the buyer can be forced to remove it

Each of these is an example of involuntary alienation EXCEPT: A. a bank forecloses on a property for nonpayment of a loan B. someone claims title to property through adverse possession C. a farmer dedicates property to the city for a park D. the state takes property through eminent domain to build a freeway

C. a farmer dedicates property to the city for a park

To be valid, a deed must contain a(an): A. monetary consideration B. date C. acknowledgement D. grantee's signature

C. acknowledgement

A condominium and cooperative would be the same in that: A. both own fee simple absolute interest B. both own stock interest in the units C. both pay annual assessments D. both are leasehold estates

C. both pay annual assessments

Arizona law requires that a document accompany every deed before the deed can be recorded. This document is signed by the: A. buyer B.seller C. buyer and seller D. buyer, seller, and broker

C. buyer and seller

A quit claim deed is normally used to: A. release an interest of the grantee B. release an interest to the grantor C. clear title defects D. encumber property

C. clear title defects

A deed must: A. contain the street address B. state the nature of the improvement C. contain an adequate description to identify the premises D. state the total area in the tract

C. contain an adequate description to identify the premises

J granted a deed to the local school district for 10 feet of land for a walkway easement beside his house to the elementary school. This property was transferred by: A. adverse possession B. condemnation C. dedication D. eminent domain

C. dedication

Ownership is transferred when the: A. title is recorded B. deed is signed by the seller C. deed is delivered to and accepted by the buyer D. title insurance policy is issued

C. deed is delivered to and accepted by the buyer

An agent would need a securities license in order to sell: A. cooperatives or condominiums B. apartment buildings C. real estate limited partnerships D. commercial property

C. real estate limited partnerships ???

A warranty deed would NOT protect the grantee against: A. clouds on title B. marketable title C. rights of the government D. quiet enjoyment

C. rights of the government

Blue Sky Laws regulate: A. salesperson and broker commissions B. broker licensing C. sales of securities and security brokers D. out-of-state resorts

C. sales of securities and security brokers

Ownership where individuals own the building or unit they live in and the land beneath the buildings, but common areas are jointly owned with the other owners is a(an): A. condominium B. cooperative C. townhome D. apartment building

C. townhome

Limited Partnership

Composed of general and limited partners. The General Partners: A. Have full liability for debts B. Actively manage the partnership investments The Limited Partners: A. Must be passive investors and take no active role in management of the investment. B. Are not responsible for any losses the partnership may have. Their liability is limited to the amount of their original investment.

In a _______, the owner has individual fee simple ownership of a unit plus shared ownership of common areas.

Condominium

In a ________, the owner pays property taxes on his or her unit.

Condominium

Recording a document gives _____________________________________________ to the world.

Constructive Notice

Warranty Deed

Conveys the grantor's interest and expressly warrants the title against all claims. Gives the greatest protection for the grantee and creates the greatest liability for the grantor. Sellers usually deliver these

Special Warranty Deed

Conveys the grantor's interest and expressly warrants the title against claims arising only from the grantor's actions.

Bargain and Sale Deed

Conveys the grantor's interest but has no expressed (written) warranty. A. Contains an implied warranty that the grantor has the legal right to sign the deed and convey title. B. Guardian's deeds, executor's deeds, and deeds given in foreclosure (trustee's deeds, sheriff's deeds, treasurer's deeds) usually are bargain and sale deeds.

In a ________, the owner owns shares in the entity that owns the real estate and ________ the living unit from the entity.

Cooperative Leases

The purpose of an Affidavit of Value is to inform the ___________________________ as to the ____________________________.

County Assessor Sales Price

Where do condominium owners' rights and limitations come from regarding the property usage? A. State law B. Common law C. Title insurance policy D. Declarations and bylaws

D. Declarations and bylaws

If a man dies and the will authorizes his son to sell the deceased's home, what type of deed would the son use? A.Guardian's deed B. Trustee's deed C. Administrator's deed D. Executor's deed

D. Executor's deed

Which type of deed creates the GREATEST liability for the grantor? A. Quit claim deed B. Bargain and sale deed C. Special warranty deed D. General warranty deed

D. General warranty deed

After J bought real estate from P, both parties decided to cancel the recorded sale. What must be done? A. J should return the deed to property B. Record a rescission notice C. Mark the deed void D. J should prepare a new deed and deliver it to P

D. J should prepare a new deed and deliver it to P

Which of these must have at least 100 investors? A. Limited partnership B. Limited liability company C. Trust D. Real estate investment trust

D. Real estate investment trust

A man owned some farmland and sold a life estate to a buyer who recorded the deed. The original owner then sold a fee simple interest in the property to a third party who recorded his deed without searching the title. Upon discovering the sale of the life estate, the third party demanded possession. Which of the following statements is correct? A. The original owner and third party must share possession equally B. The third party holds a life estate C. The third party is entitled to possession because he was the last to record the deed D. The first buyer is entitled to possession because his deed was recorded first

D. The first buyer is entitled to possession because his deed was recorded first

What is the maximum number of grantees in a warranty deed? A. One B. Three C. Four D. Unlimited

D. Unlimited

A person buying real estate from an executor will NOT get a general warranty deed because: A. the executor does not own the property and is carrying out the instructions of a living trust B. the seller can only give a warranty deed C. a court-appointed administrator would not want the liability D. an executor will want to limit the estate's liability

D. an executor will want to limit the estate's liability

An example of voluntary alienation is: A. claiming title through adverse possession B. taking of property by eminent domain C. foreclosure of a mortgage D. an uncoerced transfer of ownership by deed

D. an uncoerced transfer of ownership by deed

A couple owns a condo in a community development. The development has an exercise facility that is funded by dues that all the homeowners pay. The couple does not use the exercise facility. The couple can: A. reduce their dues payment B. sell their rights to the exercise facility C. deduct the dues from their mortgage payment D. do nothing; they have to pay their dues

D. do nothing; they have to pay their dues

A man and his brother purchase a condominium taking title as joint tenants. Their interest in the common areas would be held: A. as community property B. as joint tenants C. as tenants in common D. in severalty

D. in severalty

When co-op members sell their interest, they're selling their: A. fee simple interest B. life estate C. reversionary interest D. leasehold interest

D. leasehold interest

A co-op charges taxes based on: A. square footage B. price of property sold C. appraisal D. pro rata share

D. pro rata share

A deed that transfers (conveys) a person's interest, if any, in the property is a: A. general warranty deed B. special warranty deed C. bargain and sale deed D. quit claim deed

D. quit claim deed

A warranty deed must contain all of the following EXCEPT: A. consideration B. signature of grantor C. legal description D. signature of grantee

D. signature of grantee

R dies intestate. In order to dispose of her estate: A. her heirs must appoint an executor B. her will must go through probate court to prove its validity C. the estate must first escheat to the county D. the estate must be probated

D. the estate must be probated

According to the Arizona Revised Statutes, when a deed is NOT recorded it is: A. invalid B. valid only if recorded within 30 days of execution C. voidable if holder of deed does not hold title insurance D. valid, but potentially invalid against subsequently recorded interests

D. valid, but potentially invalid against subsequently recorded interests

The document that transfers ownership of real property is a .

Deed

One spouse of a married couple would sign a ______________________________ deed if the other spouse wanted to purchase real property as sole and separate property.

Disclaimer

Disclaimer (Disclaimer Deed)

Document signed by one spouse prior to the other spouse acquiring property in order to prevent it from becoming community property.

General Partnership

Each partner is considered to be a general partner, which means they all have full liability for the debts of the partnership. The liability of the partners is not limited as it is in a limited partnership, a corporation, or limited liability company.

Common Areas

Elements of a property available for use for all tenants or owners

Three ways in which a property may be transferred involuntarily are:

Eminent Domain Lien Enforcement (Foreclosure) Adverse Possestion

The differences in the types of deeds are in the _______________________________ _________________ given by the grantor to the grantee.

Extent of warranties

In a ____, all partners have full liability.

General Partnership

The four types of deeds of conveyance used in Arizona are:

General Warranty Deed Special Warranty Deed Bargain and Sale Deed Quit Claim Deed

The deed that warrants the title against all claims is the _______________________ ___________________________.

General warranty deed

The parties to a deed are the ___________ and __________.

Grantor Grantee

An Affidavit of Value must be signed by the .

Grantor and Grantee

A beneficiary deed takes effect when the ______________________________.

Grantor dies

In Arizona, a deed __________ required to be recorded.

IS NOT

The three ways in which property ownership is transferred are:

Inheritance Involuntary Alienation Voluntary Alienation

An individual who dies without a will dies .

Intestate

The forced transfer of real property is defined as

Involuntary Alienation

Voluntary Alienation

Is a willing, uncoerced transfer of ownership. This may be accomplished through: Sale Devise Dedication Gift

Involuntary Alienation

Is the transfer of title without the owner's consent or control. Could be through eminent domain or foreclosure proceedings.

If someone dies with heirs but no will, property is disbursed according to the .

Law of descent

In a ____ only general partners have full liability.

Limited Partnership

An acknowledgement is also called a .

Notarization

Constructive Notice

Notice given when a document is recorded in the county in which the property exists.

Actual Notice

Notice obtained by an inspection of the property, other records or by actual knowledge of a fact.

Living Trust

Often formed by spouses or other family members for estate planning purposes. When one beneficiary of a trust dies, that beneficiary's portion of the trust assets is distributed according to the terms of the trust. Since the trust doesn't die, there is no probate of the trust assets.

Define: Offeror Offer Offeree

One who makes an offer A proposal to sell, buy or lease party to whom an offer is made

Define Optionor Option Optionee

Owner, prospective grantor A contract to purchase or lease or exchange right prospective grantee, vendee, or lessee

The instrument that originally conveys title from government ownership to private ownership is a ________________________________________________.

Patent or land grant

The court that oversees the distribution of a deceased person's property is .

Probate

Individuals who live in a cooperative occupy their particular unit with a .

Proprietary Lease

Define Condemnor Condemnation Condemee

Public Agency an exercise of the right of eminent domain property owner

The deed that provides no warranties whatsoever is the _______________________ _______________.

Quit Claim Deed

A _____ must have at least 100 investors and receives favored tax treatment.

Real Estate Investment Trust (REIT)

Quit Claim Deed

Releases all of the grantor's interest, if any. A. Contains no warranties either expressed or implied. B. Commonly used to clear title defects.

If a real estate agent wants to sell interests in limited partnerships or limited liability companies, the agent would probably need a

Securities License

The federal agency that regulates securities sales is the

Securities and Exchange Commission (SEC)

Owners of a corporation are ______ while owners of an LLC are ______

Shareholders Members

The three requirements for a deed to be valid are:

Signed by the grantor Acknowledgement by the Grantor Delivered to and accepted by the grantee

The deed that protects the grantee against all claims arising out of the grantor's acts is the _________________________________________________.

Special warranty deed

Define: LICENSOR: LICENSE: LICENSEE:

State Real Estate Agency The action or thing Broker or salesperson

Condominium Termination Act

Statute allows investors who acquire 80% of the condominiums in a property to force the owners of the remaining 20% to sell their properties.

The owners of condominiums are co-owners in the common areas as .

Tenants in Common

When someone dies with a will, they are said to have died .

Testate

Inheritance

The assets that an individual bequeaths to their loved ones after they pass away. May contain cash, investments such as stocks or bonds, and other assets such as jewelry, automobiles, art, antiques, and real estate.

Delivery and Acceptance

The final step necessary to transfer title. Recording the deed implies (the term) but Arizona law does not require a deed to be recorded to be valid.

Sale

The owner transfers title in exchange for some consideration.

Grantor

The person who gives the deed and gives up ownership.

Testator

The person who made the will.

Grantee

The person who receives the deed and acquires ownership. There are no limits on the number of these on one deed

Blue Sky Laws

The sale of interests in any of these entities (partnerships, LLCS, etc.) may be considered a security. Securities are regulated by Blue Sky Laws and enforced by the Securities and Exchange Commission (SEC) on a federal level and by the Arizona Corporation Commission in Arizona. Real estate agents may need a securities license to sell interests in these entities.

Testate

The term that indicates the decedent died with a will. The testator is the person who made the will. A. The probate court validates the will. B. The property passes to the heirs named in the will.

Intestate

The term that indicates the decedent died without a will. Through probate, the property passes to the decedent's heirs according to the laws of descent. If there are no heirs, the property transfers to the state through escheat.

Intestate Succession

Through probate, the property passes to the decedent's heirs according to the laws of descent.

An arrangement under which legal title is transferred to a trustee for the benefit of a beneficiary is a .

Trust

A person appointed by the court to oversee the distribution of a deceased person's estate is an .

administrator/administratrix

Define Trustor Deed of Trust Trustee

borrower creating a trust a security agreement conveying naked title to trustee neutral third party who holds naked title

Define Mortgagor Mortgage Mortgagee

borrower/giver of the document a security agreement lender/one receiving the mortgage

Define Lienor Lien Lienee

claimant or creditor a money claim debt debtor

The person named in a will to carry out the decedent's wishes is an

executor/executrix

Recording

gives constructive notice to the general public

Define Insurer Insurance Insuree

insurance company a policy of insurance party being insured

Define Lessor Property Rental Lessee

landlord/owner a rental contract/lease tenant/renter

Define Testator Will Testatee

maker of a will a document stating desires of the testator receiver of real property interest by will

Define Grantor Deed Grantee

owner/seller who is transferring title an ownership conveyance buyer/purchaser who is receiving title

Define Assignor Assignment Assignee

party making an assignment an agreement to assign an interest receiver of an assignment

Define: Vendor Property sale Vendee

seller land contract/purchase contract buyer

An uncoerced transfer of real estate is defined as

voluntary alienation


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