Chapter 6-9 Principals of Real Estate Part 2

A holdover tenancy cannot extend beyond how many months...?

12 months

If an insurance claim is repaid based on the depreciated value of the property, the owner will be reimbursed based on the...?

Actual cash value

A written document by which ownership of land is transferred from one party to another is known as a...?

Deed

A written document by which ownership of land is transferred from one party to another.

Deed

The final and absolute transfer of a deed from a seller to a buyer in such a manner that it cannot be recalled by the seller.

Delivery

The actual cash value is also known as the...?

Depreciated value

The amount of decrease in value of an asset that is allowed in computing the value of the property for tax purposes.

Depreciation

The CAN-SPAM Act applies to solicitation involving...?

Emails

Which of the following is an example of a specialty insurance that can be obtained by owners...?

Errors and Omissions Insurance, Lead Liability Insurance, Employment Practices Liability

An interest in land by virtue of a contract for the possession of them for a definite and limited period of time is known as a/an...?

Estate for Years

An interest in land by virtue of a contract for the possession of them for a definite and limited period of time. May be for a year or less. A lease may be said to be an estate for years.

Estate for Years

The "to have and to hold" clause which may be found in a deed.

Habendum Clause

The "to have and to hold" clause found in a deed is referred to as the...?

Habendum clause

The use of a mortgage when buying an investment property is an example of...?

Leverage

In most real estate contracts, what is used as consideration...?

Money

An annual budget that includes only the items of income and expense expected for week-to-week operation.

Operating Budget

An instrument authorizing an another to act on one's behalf as his/her agent or attorney.

Power of Attorney

A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.

Quitclaim Deed

Which of the following is a type of maintenance performed by a property manager...?

Routine maintenance, Preventative maintenance, Corrective maintenance

A deed in which the seller warrants or guarantees the title only against defects arising during the period of his or her tenure or ownership of the property.

Special Warranty Deed

A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement is known as...?

Straight line depreciation

Who is primarily responsible for preparing the operating budget...?

The property manager

The evidence of right which a person has to the ownership and possession of land, commonly considered as a history of rights.

Title

n examination of public records, laws, and court decisions to disclose the current facts regarding the ownership of real estate.

Title Search

This is a promise by the grantor of real property that they are the owner and will be responsible to the buyer if title is other than what they represent...?

Warranty

When is a property manager required to have a real estate license...?

When the property manager leases vacant apartments

According to HUD, what is a reasonable occupancy standard per bedroom...?

2 occupants

Using the straight line depreciation method, residential property can be depreciated over how many years...?

27.5

The Texas Property Code sets the maximum number of adults occupying an apartment at ........ the number of bedrooms in the apartment?

3x

A REIT is not subject to a corporate income tax if at least ......... of its income is distributed to shareholders?

90% (percent)

Which of the following is an acronym used to describe alternative risk management techniques...?

ACTR

The cost to acquire a property, plus the cost of the physical improvements, minus the depreciation claimed as a tax deduction is equal to the...?

Adjusted basis

Any deed that recites a consideration and purports to convey the real estate; a bargain and sale deed with a covenant against the grantor's act is one in which the grantor warrants that grantor has done nothing to harm or cloud the title.

Bargain and Sale Deed

Cash received in a tax-deferred exchange.

Boot

Which of the following applies when conducting a marketing campaign...?

CAN-SPAM Act, Federal and State Do-Not-Call list, Junk Fax Prevention Act

The profit realized from the sale of real estate or other investment. Capital loss occurs when an investment property or another type of investment is sold at a loss.

Capital gain

The profit realized from the sale of real estate or other investments is known as...?

Capital gains

A term applied to the past series of transactions and documents affecting the title to a given parcel of land.

Chain of Title

Title which is not encumbered or burdened with defects.

Clear Title

Title that is encumbered or burdened with defects.

Clouded Title

Tenant improvements are commonly found in which type of buildings...?

Commercial

A provision in a deed that upon happening, or failure to happen, of a certain event, limits, enlarges, changes, or terminates the title of the purchaser.

Conditions in Title

Anything given or promised by a party to include another to enter into a contract is referred to as...?

Consideration

Anything given or promised by a party to include another to enter into a contract, e.g., personal services or even love and affection. It may be a benefit conferred upon one party or a detriment suffered by the other.

Consideration

A maintenance task performed to identify, isolate, and rectify a fault so that the failed equipment, machine, or system can be restored to an operational condition within the tolerances or limits established for in-service operations.

Corrective Maintenance

The Junk Fax Prevention Act applies to solicitation involving...?

Fax machines

What duties do property managers owe to a property owner...?

Fiduciary duties

Which of the following types of insurance are available for owners and property management companies...?

Fire and Extended Coverage Insurance, Business Interruption Insurance, Liability Insurance

provision in a deed creating a condition which will cause the title to be passed to another should certain circumstances occur.

Forfeiture of Title

A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the lawful claims of third persons is known as a...?

General Warranty Deed

A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the lawful claims of third persons.

General Warranty Deed

Lease which provides for a varying rental rate, often based upon future determination; sometimes rent is based upon result of periodical appraisals; used largely in long-term leases.

Graduated Lease

A person who acquires an interest in land by deed, grant, or other written instrument is known as the...?

Grantee

A person who acquires an interest in land by deed, grant, or other written instrument.

Grantee

A person, who by a written instrument, transfers to another the interest in land.

Grantor

A gross lease is a type of commercial lease where the landlord pays for the building's property taxes, insurance and maintenance.

Gross Lease

A lease in which the lessor pays all costs of operating and maintaining the property and real property taxes is known as a...?

Gross lease

An agreement for the use of land only, sometimes secured by improvements placed on the land by the user.

Ground Lease

An agreement for the use of land only, sometimes secured by improvements placed on the land by the user is known as a...?

Ground lease

A property manager's privacy policy must include which of the following...?

How information from the prospective tenant is collected, How information collected from a prospective tenant is used, How information collected from a prospective tenant is secured

A contract between owner and tenant, setting forth conditions upon which tenant may occupy and use the property and the term of the occupancy. Sometimes used as an alternative to purchasing property outright, as a method of financing right to occupy and use real property.

Lease

A tenant's right to occupy real estate during the term of the lease is known as a...?

Leasehold Estate

A tenant's right to occupy real estate during the term of the lease. This is a personal property interest.

Leasehold Estate

One who contracts to rent, occupy, and use property under a lease agreement; a tenant.

Lessee

An owner who enters into a lease agreement with a tenant; a landlord.

Lessor

Renting a property, rather than owning a property, may benefit an individual who is...?

Looking for more flexibility in where they live

A age at which a person is entitled to handle his/her own affairs.

Majority

Which of the following contracts is signed between the property manager and the owner...?

Management Agreement

Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept.

Marketable Title

A mortgage REIT's primarily source of income are from mortgage interest and...?

Mortgage origination fees

A lease requiring a lessee to pay charges against the property such as taxes, insurance and maintenance costs in addition to rental payments.

Net Lease

Lease on the property, the rental for which is determined by amount of business done by the lessee; usually a percentage of gross receipts from the business with provisions for a minimum rental.

Percentage Lease

A lease on a property, the rental for which is determined by amount of business done by the lessee is referred to as a....?

Percentage lease

A lease that automatically renews for successive periods unless terminated by either party is known as a...?

Periodic Tenancy

A lease that automatically renews for successive periods unless terminated by either party; also called estate from year to year.

Periodic Tenancy

Requires a periodic check of mechanical equipment on the premises to minimize wear and tear; for example, changing air filters on air conditioners and furnaces.

Preventative Maintenance

This type of maintenance requires a periodic check of mechanical equipment on the premises to minimize wear and tear...?

Preventative maintenance

A branch of real estate business involving the marketing, operation, maintenance and day-to-day financing of rental properties.

Property Management

A person who manages properties for an owner as the owner's agent.

Property Manager

A branch of real estate business involving the marketing, operation, maintenance and day-to-day financing of rental properties is known as...?

Property management

A person who manages properties for an owner, as the owner's agent, is referred to as a...?

Property manager

A business trust which deals principally with interest in land, generally organized to conform to the Internal Revenue Code.

Real Estate Investment Trust (REIT

An organization of investors usually in the form of a limited partnership who have joined together for the purpose of pooling capital for the acquisition of real property interests

Real Estate Syndicate

An insurance claim can be repaid based on the actual cash value or the...?

Replacement cost

The new property in a 1031 exchange is referred to as the...?

Replacement property

A capital expenditure can include which of the following...?

Replacing the roof

A lease is found in which of the following types of real property...?

Residential properties, Industrial properties, Commercial properties

A section of the internal U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.

Section 1031 Exchange

This is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes...?

Section 1031 Exchange

Which of the following is used as a means of security by the landlord for any physical damage done by the tenant to the property...?

Security deposit

Which of the following is an example of preventative maintenance...?

Servicing the hot water heater

A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement.

Straight Line Depreciation

A syndicate real estate investor enjoys the same tax benefits as a direct ownership investor...?

T (True)

An insurance claim that is paid using the replacement cost is typically more expensive than the actual cash value...?

T (True)

A property tenure that can be terminated at any time by either the tenant or the owner (landlord). It exists without a contract or lease, and is unspecific in duration or the exchange of payment.

Tenancy at Will

If a property manager denies an application on the basis of the prospective tenant's credit score, which of the following must be disclosed to the prospective tenant...?

The credit score used by the property manager in making their decision, The range of possible credit scores under the model used to generate the score, The top 4 key factors that impacted the prospective tenant's credit score

A valid deed must be signed by...?

The grantor

Any legal right held by others to claim property or to make demands upon the owner.

Title Defect

A promise by the grantor of real property that they are the owner and will be responsible to the buyer if title is other than what they represent.

Warranty