Week 2
Which of the following actions performed by these licensed salespersons is a common real estate violation?
Benjamin places a lock box in an inconspicuous location on the sellers' property without their permission.
Licensees are held accountable for things their clients say in some situations. Let's watch Curtis, a licensee, as he works with his seller client, Blanch. In which of these situations can Curtis be held liable for misrepresentation?
Blanch tells a potential buyer that her house has no water damage. Curtis hears this. He's seen signs of water damage himself but says nothing. Blanch tells a potential buyer that her house has three finished rooms in the attic. Curtis agrees, but he hasn't seen the attic himself.
Salesperson Brandon bought a small fishing camp with three college friends about nine years ago. They are all busy with careers and growing families, so they've decided to sell it. Brandon's friends have asked him to list the property through his brokerage. What does Brandon have to do to comply with personal disclosure requirements?
Brandon must make written disclosure of his licensee status to any interested buyers and all parties in the transaction.
Taking your imagination one step further, the feud between Jack and Joe has boiled over. With no reconciliation in sight, the brothers decide they can no longer be tenants together, and in fact, none of the brothers want anything further to do with a tenancy in common situation at all. John calls a meeting to discuss a possible solution. Based on the termination of tenancy options, which of the following solutions might John suggest to his brothers in order to terminate their tenancy in common?
Bring legal action to have the property partitioned.
What is the relationship between a policies and procedures manual and the broker's obligation to supervise agents?
Brokers who enforce policies and procedures outlined in an effective PPM have proof of efforts to properly train and supervise agents.
Charles is an experienced salesperson with ABC Realty. He received a complaint from previous buyer clients saying that Charles never told them to have a home inspection performed. They're upset about a foundation issue that resulted in some flooding in their home. Charles very clearly remembers discussing the importance of home inspections and telling them that bypassing this inspection to save on closing costs could end up costing them in the future. Which one of these preventive measures will best aid Charles' defense of his actions?
Charles documents every conversation he has with clients.
Surveys are often part of real estate transactions. What two things does obtaining a survey do?
Clearly defines the property Reveals potential concerns about property boundaries
It's not enough to just announce that your firm has a code of ethics. To be meaningful, the code must be institutionalized. What are five things brokerages can do to integrate the code of ethics into the organization?
Commit it to writing Spread the word Walk the walk NO _ Chastise violators at sales meetings Enforce it Reinforce it
Meet George, a real estate licensee who was fairly new to the industry. In an attempt to build his business, he drove through neighborhoods, looking for homes listed for sale. After identifying a few, doing some research, and preparing comparative market analyses (CMAs), he contacted several sellers. He told the sellers he'd appraised their property at a higher value than their current listing agent. He offered the sellers a discount on the commission if they terminated their listing with their current agent and signed a contract with him. What three things did George do wrong?
Contacted sellers who were working with other agents. Contacted sellers for the purpose of asking them to break their contracts with their agents. Told sellers that he appraised their property.
Which of the following documents are Alabama brokerages required to retain for three years, according to Alabama law?
Copies of contracts and receipts for escrow moneys received
Which of the following is NOT a characteristic of a corporation?
Corporations are tangible and nontaxable.
Understanding the actions you can and cannot take is one key to practicing within your area of expertise and avoiding unauthorized practice of law. Let's start by reviewing some of these actions, and determining which of these practices are dos, and which are don'ts. Use existing forms an attorney has reviewed. Explain clauses to your clients.
DO
You're a real estate broker supervising 24 licensees. What's the most effective way for you to protect your firm from lawsuits?
Develop, implement, and train firm members on policies and procedures.
Daniel has several properties listed around town. He receives a call from a prospective buyer who is very interested in one of the properties and wants to schedule a showing. What should Daniel do?
Disclose his agency relationship with the seller to the prospective buyer.
protection from fraud includes
Document everything. Disclose everything to the appropriate parties. Verify the accuracy of closing statements. Bring the situation to the attention of your broker. Withdraw from the transaction if it seems to be fraudulent.
Dower and curtesy are two types of life estates rarely recognized, at least in their original form, in the U.S. But suppose Carolyn and Cooper have a life estate in place for their dairy farm and live in a state in which dower and curtesy are recognized. Identify which is an example of dower, and which is curtesy. We've included a set of flashcards in your resources to help you study these terms. Upon Cooper's death, Carolyn will take full ownership of the farm.
Dower
Granted to a specific parcel of land and transfers with the land
Easement appurtenant
Granted to a specific individual or business entity
Easement in gross
An easement is one type of encumbrance that can affect a property. Which of these statements about easements is true?
Easements are often established by a written agreement between the parties.
As you know, the definition of real property includes interests, benefits, and rights. Can you identify what the rights are? Which five of these illustrate rights associated with real property?
Enjoyment Disposition Possession tControl Exclusion
Non-lawful possession after the expiration of a lease is called ______.
Estate at sufferance
Written documents that typically outline the easement's terms, location, and purpose
Express easement
Created an agency to investigate and stop unfair competitive practices.
FTC act
Which of these statements about handling documents in Alabama is NOT true?
Failure to meet document-handling requirements always results in a $550 fine.
Enforcement of antitrust law occurs at various levels. Which three of these parties are involved in the enforcement of antitrust law?
Federal Trade Commission Department of Justice State attorney general
While working with a buyer client, Jeffrey filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum, and then invoiced her for a nominal $15 fee to prepare transaction documents. Which of the following tasks was Jeffrey legally permitted to do?
Fill in the contract blanks
Which of these actions is allowed and helps the licensee to avoid illegally practicing law?
Filling in blanks on an association-approved purchase contract
Licensees may be disciplined for violating Alabama compensation laws. Which of the following are possible penalties for doing so?
Fines, license suspension, license revocation
The resource for this lesson provides details on the lot and block system, including the measurement process. A lot and block system survey is a two-step process. What happens?
First -Either a rectangular or metes and bounds description is referenced. SEcond -The land is divided into lots with numerical designations of the parcel.
Victoria had the interior of her condo painted before the first mortgage was recorded. She was highly dissatisfied with the work and refused to pay the painter. Since then, Victoria hasn't been able to pay the mortgage or property taxes for almost a year. Now the home is being foreclosed. What's the lien priority in this situation? First: Second: Third:
First: Property taxes Second: Mechanic's lien Third: First mortgage
Where's the easement in gross in this image?
Great job! You identified the easement in gross.The driveway is an easement of necessity for the McKinleys to get in and out of their property, a type of easement appurtenant, and it's also an easement appurtenant for the Rudolphs to access the river.
They're guilty, so what do we need to prove? It's all a matter of per se. What does per se mean?
Guilt is established on the face of the circumstances.
Mark has been openly using a property without the owner's permission for the last 30 years. What else must he do to meet the adverse possession requirements?
Have a reasonable belief in his right to possess the property.
Chester is moving on up! He and his wife are ready to sell their condo and purchase a new place. Chester is a real estate licensee and will list the property himself. What must Chester disclose to prospective buyers?
He owns the property.
Why is it important that all liens be paid in full before a property conveys to a new owner?
If the property transfers to the new owner and liens remain unpaid, the unpaid liens can trigger a foreclosure.
Which of the following describes community property rights?
In some states, it's a form of property ownership for married couples with equal ownership and possession of any property acquired during the marriage.
You're walking through a property with a new seller client. The seller tells you that the property is serviced by the public sewer system, but when walking up the drive you noticed the access hatch for a septic system. What should you do?
Inquire about the homeowner's claim to ensure the property really is on public sewer.
A property is listed as having four bedrooms and two-and-a-half bathrooms. However, when showing your buyer clients the property, you only count three bedrooms. As their agent, what should you do as part of your due diligence?
Investigate this discrepancy.
Which of the following is a key fact to remember about E&O insurance?
It doesn't cover all situations encountered in real estate.
What are the effects on a property if it includes an encumbrance?
It restricts the owner's use or decreases the value.
Avery, who holds a life estate with remainder interests, dies without heirs. When this happens, what happens to the property?
It reverts automatically to the person holding the remainder interest.
Huntsville licensee Caden gave his buyer client a cash rebate as part of a recent real estate transaction. Which of the following statements about the cash rebate is true?
It's illegal for licensees to give cash rebates as part of a real estate transaction.
When it comes to contracts for sale or lease in Alabama, which of the following statements is true?
It's illegal for real estate licensees to interfere with contracts for sale or lease.
Which one of the following statements is true about land trusts?
Land trusts generally continue for a specified term, such as 10, 20, or 30 years.
Which two of these Alabama licensees just accepted a rebate?
Licensee Annabel just accepted a "thank you" cash gift from Integrity Title. Barbara, an associate broker, received a cash donation from Mobile Electric, thanking her for sending business its way.
Regarding licensee compensation, which of the following statements is true?
Licensees may only receive compensation for real estate services through their broker.
Your resource outlines the most common legal description systems used to describe land in the U.S. Which of these are the three most common?
Lot and block Metes and bounds Rectangular government survey system
what is it called when When a brokerage firm and its agents agree not to compete for business with another firm or firms and the associated agents in specific markets and divide the markets accordingly
MARKET ALLOCATION
According to the NAR Code of Ethics, what responsibility do licensees have related to material facts?
Make a reasonable effort to ascertain all material facts concerning each property for which an agency is accepted.
Of the following, which one could be considered a real estate violation?
Mandy didn't disclose to potential buyers that she was showing her own listing, or that she represents the sellers.
Marcus is a real estate licensee who works with landlords and tenants. What should Marcus do to ensure he doesn't overstep into the unauthorized practice of law?
Marcus should know and understand tenant/landlord legal rights.
Regarding information that licensees must disclose, what does the pneumonic MAAP stand for?
Material, Adverse, Actual, Physical
Roger is an unlicensed assistant in Dave's office. He performs tasks for several of the firm's licensees. Katherine is a licensed assistant, and she performs tasks for three of the firm's independent contractor licensees. The firm's broker, Michaela, has her own licensed assistant. Which of these statements best represents Michaela's liability for the acts of all these assistants?
Michaela is responsible for all licensees and employees associated with the firm.
Do you recall which of the following may result in the real estate commission imposing disciplinary sanctions? Choose all that apply.
Misrepresentation Violating a commission rule Disclosed dual agency Negligence Incompetency Dishonesty ALL BUT diclosed dual agency that is legal
Which two of the following are distinguishing characteristics of PUD living?
Mix of residential and commercial Ownership profile varies, depending on type of housing
Uh oh! Now imagine the once-friendly feud that surfaces between Jack and Joe during football season has reached a new level. Now Jack is forbidding Joe from entering certain rooms in the family home the brothers inherited. can jack do this?
NO
Which of the following is NOT a listing agreement violation in Alabama?
Neglecting to stage the house effectively for open houses.
Which one of the following statements about community property rights is true?
Nine states have community property rights.
Which of the following actions poses the greatest risk for your brokerage?
Not penalizing staff who don't follow policies or procedures
Patty is writing an online ad for several condos she's selling. "More than 3,000 square feet!" she writes. She's pretty sure that this is the average size of the condos. She included her brokerage firm and her license status on the advertisement, as well. How did Patty do?
Patty could be held responsible for misrepresentation if her estimate is incorrect.
What are the possible penalties that may be imposed on antitrust law violators?
Prison time Restitution to the victims Fines Monetary damages
As monopolies began taking over entire industries, antitrust laws were enacted. Which two of these were goals of these laws?
Protect consumers by promoting competition in the marketplace. Outlaw unfair methods of competition.
The Golden Rule ______.
Provides a guideline for all personal and professional ethical situations
Your resource describes tie-in arrangements that may be seen in the real estate industry. What is a tie-in arrangement?
Providing service only if the client agrees to use a service offered by another company
Jess has permission to live on his father's property as long as Jess' grandmother is alive. This is an example of which type of life estate?
Pur autre vie
Which legal description method is regulated by the U.S. Department of the Interior's Bureau of Land Management?
Rectangular government survey
Margaret is meeting with James and Cindy, potential buyers of a property listed by one of Margaret's colleagues. They're in Margaret's office preparing their offer when James says, "The only thing that bothers me are those black spots on the bathroom ceiling. Do you think that could be the bad kind of mold? It's not dangerous, is it?" What should Margaret do?
Refer James and Cindy to a qualified mold professional.
Which one of the following actions if performed by a licensed salesperson is a real estate violation?
Refusing to show a property because the prospective buyers are minorities
Which of these is an example of practicing within your area of competence?
Researching the property tax amount that a client will pay on the home he's purchasing.
Any agreement between competing firms that restricts trade or discourages competition is a violation of antitrust law. An agreement between competitors to do which of the following is also an antitrust violation?
Restrict choices for consumers
A check used to pay a fee to the real estate commission was returned by the bank for insufficient funds. This is definitely poor financial practice, but is it also a license law violation?
Right! Writing a bad check to the commission violates licensing law.
Beverly is a new licensee. She's at a listing appointment and notices some stains on the ceiling and cracks in the basement walls. What should she do related to these items?
She should ask the sellers about these issues and ensure that they are disclosed to buyers.
Sheila was a defendant in a case in which a former client charged her with fraud. Her lawyer just informed her that the case was dismissed. Which of the following is true about this situation?
Sheila must notify AREC of this news within 10 days.
Which of these is a document-related task that's required of licensees?
Surrender a document to its rightful owner after the licensee has possessed it.
Which type of organization best describes Tito's scenario? buying a strip mall that is
Syndicate- Right! Syndicates are organizations with many participants with the common purpose of making a profit from a real estate investment.
In a metes and bounds description, the point of beginning is extremely important. What's the importance of the point of beginning?
THe entire thig is based of the point in the beginning You got it! The point of beginning is where the survey begins. From this point, you would follow the legal description information to uncover the property boundaries.
A land trust is formed specifically to hold real estate. Real property is the only asset within the trust.
TRUE
Ethics are dependent on a person's conscience and values.
TRUE
Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. Though not recognized in all states, the most likely form of co-ownership under which they would make this purchase is ______.
Tenancy by the entirety
Which type of ownership includes unity of time, title, interest, possession, and marriage?
Tenancy by the entirety
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 co-ownership by partition
Which of these statements most accurately represents existing federal antitrust legislation?
The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.
When faced with an ethical dilemma, which of the following is true?
The Golden Rule always points the way to the most ethical action.
You defined group boycotting in the last question. Which two of these situations are examples of group boycotting?
The agents with Maize Realty and Sparta Homes agree to refuse to show their clients any properties listed with Scarlet Group. Local agents agree not to show listings of a new limited service firm.
Two large local brokerage firms agreed to lower their commission rates to the same amount—approximately 1% less than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation?
The agreement between the two firms
Which two of the following are distinguishing characteristics of townhome living?
The dwelling is an attached residential building. The owner owns both the structure and the land.
What's the best definition of land?
The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
What happens after a foreclosure if there isn't enough money from the sale to pay off all of the lien holders against a property?
The former owner may owe a debt to lien holders who aren't fully paid.
If property is held by two or more owners as tenants in common, the interest of a deceased co-owner will pass to ______.
The heirs of the deceased
What does the term appurtenance mean when applied to real property?
The inherent or automatic ownership rights that are the natural consequences of property ownership
Joint ventures are a unique organization. Which of the following scenarios best describes a joint venture?
The once thriving Sunny Springs neighborhood has fallen on some hard times, but that won't get the residents down. In an effort to restore the neighborhood to its former glory, the residents are joining together to buy abandoned properties, rehab them into livable houses, and sell them to new owners.
Which one of the following is a distinguishing characteristic of condominium ownership?
The owner owns a unit within the structure, but not the land.
Which of the following is a distinguishing characteristic of co-op living?
The owner owns no real estate, but instead owns shares.
Which of the following is true about adverse possession?
The possessor must take legal action to obtain title.
In the consideration of real property and personal property, severance is ______.
The process of removing a fixture before agreement or after negotiation, to designate it as personal, rather than real, property.
Which of the following scenarios describes information that a licensee must disclose?
The seller didn't disclose any leaks, but the licensee sees moisture on the basement floor.
Grant and Amy live very happily in a PUD townhome. They both work and enjoy living in a community that has everything their family needs in a relatively small area. Which three of the following are included in Grant and Amy's PUD ownership?
Their home The property on which their home is built Shared common area
Which of the following statements about enforcing a firm's code of ethics is true?
There should be consequences for violating the firm's code of ethics, and these consequences should be communicated and documented.
Which of the following is a benefit of legal counsel as a preventive measure?
They can review policies, procedures, practices, documents, etc., and identify risk areas.
Which of the following is true about net listings in Alabama?
They often involve a conflict of interest.
Which of the following is true about right-of-way easements?
They provide a pass-through route.
With tenancy in common, only the unity of possession is required. Joint tenancy requires several unities. Which of these unities are required for joint tenancy? Choose all that apply.
Time Title Possession Interest
what is not needed to be disclosed
To a seller, that you're married
What are three of the reasons that it's important for brokerage firms to have a code of ethics?
To decrease legal liability and avoid costly penalties To help foster a collaborative and professional working environment To create a standard of behavior and practices that will establish and reinforce the firm's reputation within its market
Why might a brokerage firm choose to create its own set of ethical guidelines?
To impose stricter guidelines than a national or state code
what are things to disclose?
To prospective buyers at an open house, that you represent the sellers To a prospective buyer calling about your listing, that you represent the sellers To a prospective buyer, that you represent the seller, who is also your aunt To a seller customer, that you represent the buyer
Harriet, an out-of-state licensee, is friends with Tonya, a licensee who works with Perfectly at Home. Harriet referred one of her buyer friends to Tonya, so Tonya plans to pay Harriet a referral fee. Which one of the following statements about this fee is true?
Tonya must pay the referral fee through her brokerage firm to Harriet's brokerage firm.
What might the commission do if it believes the license law is about to be violated? Well, it may take action without having to allege or prove that the continued violation would cause significant damage.
True. You got it. If the commission has reason to suspect that license law is about to be violated, it can take action without having to first prove that the violation may cause significant damage. This is one more reason to stay compliant!
An associate broker received an earnest money check from his buyer. Which of the following actions is appropriate and complies with real estate license law?
Turn the check over to his broker for deposit into the firm's escrow account.
Which of the following is an example of price fixing?
Two brokerages determine a standard commission rate.
There are many benefits to establishing a living trust. Can you identify two of them?
Upon your death, a trust can be settled very quickly.The trust remains a private document.
Alison told Sheldon that the furnace condition must be disclosed to future prospective buyers. Sheldon disagreed and told Alison to lie about the condition. However, Alison stated she couldn't do this, and the contract was terminated. A short time later, Alison noticed that Sheldon's property was back on the market. Curious, Alison contacted the new listing agent to find out if a new furnace was installed. It wasn't, and now Sheldon is upset that Alison is inquiring about the condition of the property and broke confidentiality. What do you think?
While it's true that Alison's duty of confidentiality to Sheldon lives on forever, a property's material defects aren't considered "confidential information." Alison behaved ethically.
Jenna owes the commission some money. She doesn't have enough money in her account right now to cover the fee, but she'll get paid in a week. However, if she waits until then to pay, she'll have to pay a late fee, as well. Jenna has some options. Which one violates license law?
Write a check now. When it bounces and gets returned to her in a week, she'll have the money.
Michael's had quite a day. He forgot to get his client's signature on a contract, so he had to hunt her down and have her sign it. Then, he chatted with Sue, who wants him to represent her. He told her to come see him when her current agency agreement expires. Next, he realized he needed to pay some fees to the commission, so he put a check in the mail, crossing his fingers that there would be enough money in his checking account. Which of these actions, if any, could violate license law?
Writing a possibly bad check to the commission Continue to Unit 4: Other License Law Violations and Disciplinary Guidelines in Alabama Return to Unit 3: Contract, Compensation, and Monetary Violations in Alabama View Exam Results
Brandon's home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending for a loan taken out in 2009. There's also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he'd used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?
XYZ Lending will receive $145,000, the HELOC lender will receive $5,000, and the lien holder for his student loan will not be repaid.
Chris represents the Ballars, who want to purchase a vacation home. He knows what they're looking for and has spent some time identifying properties to show them. He's just about to call the Ballars to finalize their plans for the next day when he receives an email from them asking to see a specific property that's outside the target area they initially discussed. The property happens to be one of Chris's listings. Neither party has consented to dual agency. Chris calls the Ballars and tells them he has all of the showings for tomorrow scheduled, including the one they just sent. They all agree on a time and place to meet, then hang up the phone. Did Chris do anythign wrong>
Yes, Chris should have told the Ballars he represents the sellers of the property they requested to see and informed them of the effects of a dual agency relationship. Yes, Chris should have called the sellers for his listing to discuss the dual agency situation.
Chris, a real estate broker, represents Beverly, a seller. Beverly tells Chris, "If you can get my house sold within 30 days, I'll pay you and the buyer's agent a $1,000 bonus." Is this legal? Hint: there may be more than one correct answer in this scenario.
Yes, but it must be disclosed to all parties. Yes, but the fee must go through the brokers.
Which of the following is an example of a fee simple freehold estate?
Your ownership can be passed on to your children.
what is this an example of A conspiracy between competitors to set prices
Your resource defines and provides a few examples of price fixing. Which one of the following is a description of this antitrust violation?
Zach wants to purchase a property that's subject to an existing lease agreement, which includes the tenant's right to renew the lease. What is Zach's obligation, if any, to uphold the terms of the lease agreement?
Zach must honor that right and allow the tenant to renew at the end of the term.
Of the following, which is most likely to be considered a fixture?
a fence aaround a field
A professional, on-site measurement of the lot lines and dimensions of a property is known as ______.
a survey
is a professional on-site measurement of the lot lines and dimensions of a property, including the location of any improvements (such as a house) on the lot, any encroachments that may exist, and any easements of public record.
a survey
Is the item being used as personal property or real property—has it been adapted or customized?
ability of use
This process has carried rock, sand, and soil and caused land build-up on Kim's land.
accertion
he increase of land or property due to natural or man-made causes
accession
he process in which water carries rocks, sand, and soil and causes land build-up
accretion
Sarah inherited Hank's estate but failed to pay property taxes on the condominium, causing her eventual loss of the condo.
act of waste
means the information is known to the licensee regarding the physical condition of a property or could be plainly noticed by the licensee, regardless of whether it is disclosed by the owner/seller.
actual knowlege
Convenience and security of having neighbors, shops, medical facilities, and mass transit nearby
advantage
Let's say you have clients who've saved up enough money to purchase a house. They don't want the responsibility or cost of owning a single-family detached home, so they think a townhome might be just the ticket. What are some of the advantages and disadvantages of owning a townhome? Review each statement about townhomes and townhouses and determine if the statement is an advantage or disadvantage of this type of housing. Attached garage HOA maintains the yard Homeowners association may cover roof repair and replacement and exterior and common area maintenance
advantage
Residential and commercial use in the same building or group of buildings
advantage
means the information is negative information about the property and is usually something that would reduce the property's value.
adverse
Lucy inherited some land. When she made the drive to check on it about two years later, she found that, to her surprise, someone was living in a small cottage on that property. What's this an example of?
adverse possession
One factor must exist for an action to become a violation. Which of the following must take place for a violation to occur?
agreement
Have the parties agreed (in writing) on whether an item will stay or go?
agreement of parties
In Alabama, what prevents one real estate broker from trying to encourage another broker's client to terminate a sales contract in order to get business?
alabama law clearly prohibits this practice
What are some of the ways in which a brokerage firm can introduce a code of ethics into the organization? Review each statement and determine if it's true or false. Adopt a code of ethics offered by the industry. Build on an existing code of ethics available in the industry. Create its own set of ethical guidelines.
all true
Cheryl marvels at this new deposit of land near the river, which is the result of accretion.
alluvation
New deposits of land that are the result of accretion (common at the mouth of large rivers)
alluvion
Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______.
an act of waste
Which of the following is NOT a type of encumbrance?
appreciation
There are many advantages to holding property within a trust. One of the most important advantages is that some trusts ______.
avoid probate
Rapid loss of land
avulsion
The east-west line that runs through the initial point
baseline
Person benefitting from the trust
beneficee
What are some benefits an LLC offers Jeb? Shields personal assets from liability Flexibility to establish specific management rights in the operating agreement May not have to file a separate tax return
benefits
Being responsible for licensees' actions
both
Supervising a personal assistant
both
Beginning at the heart-shaped boulder in the middle of Fantame Creek The direct center of the three trees forming a triangle
bounds
Physical features that define the boundaries of the land
bounds
Reviewing transactional paperwork and advertising
broker
Supervising a licensee
broker
The owner buys the right to use the developer's facilities and may use the designated area at any time during the year.
campground membership
You are hiring a personal assistant. You've narrowed the candidates down to two people. Candidate A is an unlicensed individual with two years' real estate industry experience. Candidate B also has two years' experience but has a license. You'd like the assistant to perform actions such as completing real estate forms and discussing terms with clients or prospects. Which candidate can perform these tasks?
canidate B because you need them to perfomer liscened required assignments
Randall's clients, Carma and Trent, are looking for a mountain cabin. They tell Randall they'll pay him a $2,000 finder's fee if he finds the cabin that checks all of their boxes, and they close on it. Randall finds a likely candidate that's an FSBO, and negotiations begin. What circumstance is required for Randall to receive the finder's fee?
carma and Trent must pay the finder's fee to Randall's broker.
Business can be conducted and title to property held using your name in combination with the business name.
characteristic
Business can be conducted and title to property held using your own name.
characteristic
Let's pick up with corporations. Remember that corporations hold property in severalty. What are some characteristics of this type of business? -Exists only in law and is intangible -Can receive, hold, and transfer title to real property, and may give, or hold a mortgage to secure a debt owed to the corporation -Can exist as a subchapter S corporation or C corporation
characteristic
Ownership of property is owned in severalty.
characteristic
Residents own a share in the cooperative's corporation.
characteristic
Personal property typically includes things like furniture, fixtures, machinery, or tools.
chattel
Furthered the scope of other acts by prohibiting mergers that create monopolies or reduce competition.
clayton act
Property with ownership by more than one person is known as ______.
co-ownership
Mixing trust funds with the broker's own money or other brokerage business accounts
commingling
Demonstrating untrustworthiness or incompetency
common violation
Failing to disclose personal interest
common violation
Failing to disclose whom you represent
common violation
Lying
common violation
Practicing law without a license
common violation
Which one of the following says that real estate acquired by either spouse during a marriage (in most cases) is considered community property?
community property rights
You have a client who travels a lot and wants to feel safe and secure at home. Maintaining a house and yard isn't her idea of fun, and neither is fending off door-to-door solicitors. What type of homeownership would most likely fit her lifestyle?
condo
What's an antitrust violation's central element?
conspiracy
Real estate licensee William is preparing a sale agreement that will include an unusual circumstance. What's his best course of action?
consult an attorny
Allows the owner to control the use of the property, including how others may use the property.
control
Using client trust funds without the client's permission
conversion
Under a land trust, the owner directs a ______ to hold title to the real estate.
cooperate fiduiciary
In Alabama, a ___ is grounds for a real estate license suspension.
criminal conviction
Dower and curtesy are two types of life estates rarely recognized, at least in their original form, in the U.S. But suppose Carolyn and Cooper have a life estate in place for their dairy farm and live in a state in which dower and curtesy are recognized. Identify which is an example of dower, and which is curtesy. We've included a set of flashcards in your resources to help you study these terms. Upon Carolyn's death, Cooper will take full ownership of the farm.
curtesy
Which of the following is a life estate in a property held by a widower?
curtesy
The devisee or heir at law takes title to the property subject to existing liens or encumbrances and to rights of creditors of the estate
decendants debta
Buyers Tony and Sylvia know the postal address of the property they're purchasing but are wondering about the legal description of the property. Where is the most likely place to find the legal description?
deed
Higher density of people, homes, shops, and traffic
disadvantage
Let's say you have clients who've saved up enough money to purchase a house. They don't want the responsibility or cost of owning a single-family detached home, so they think a townhome might be just the ticket. What are some of the advantages and disadvantages of owning a townhome? Review each statement about townhomes and townhouses and determine if the statement is an advantage or disadvantage of this type of housing. Homeowners association dues Share one or more walls with neighbors
disadvantage
Gerald is buying an investment property listed by his own broker.
discloser re
Gerald is buying an investment property listed by a competing brokerage.
discloser req
Gerald is selling his lakeside cottage as For Sale by Owner rather than listing it through his broker.
discloser req
Gerald is selling his lakeside cottage through his broker.
discloser req
Gives the owner the right to sell or convey the property.
disposition
Which of the following is NOT a type of real property lien?
disposition
A house was built in 1917. You provide a lead-based paint disclosure to all prospective buyers.
do
A seller discloses her house is on the public sewer line, but you know other houses in this area are septic. You investigate the seller's claim.
do
Encourage clients to have an attorney draft non-standard forms.
do
Know your state's definition of unauthorized practice of law.
do
A house was built in 1917. You provide a lead-based paint disclosure form only when requested.
dont
A house you have listed is on the market because the previous owner recently passed away. You disclose that she had HIV.
dont
Charge a fee for preparing transaction documents.
dont
Freely make changes to existing forms by striking provisions and writing new provisions.
dont
Understanding the actions you can and cannot take is one key to practicing within your area of expertise and avoiding unauthorized practice of law. Let's start by reviewing some of these actions, and determining which of these practices are dos, and which are don'ts. Interpret legal consequences of specific actions. Create your own real estate forms.
dont do
Howard passed away last year. His estate included investments and two apartment buildings. What type of estate does his wife Julia hold relative to the apartment buildings?
dower
Money the buyer gives for the seller's benefit when making an offer to purchase
earnest money
An authorized physical restriction on a property's use
easement
The Rudolphs and the McKinleys are neighbors and have been for years. The neighbors' properties are situated back to back, separated by a lot line. The Rudolphs live on the side of the property that has access to Main Street, while the McKinleys live on the side of the property that has access to the river, aptly named Encumbrance River. There is a path that allows Fred and Gladys Rudolph access across the McKinleys' property so that they can use the river. This path is an example of an ____________________, which is attached to a specific parcel of land and grants the right to use adjoining property. The utility line spanning Main Street is an __________________, which is a right granted to a specific individual or business entity to use the land. The McKinleys use the Rudolphs' driveway to get to Main Street. The use of the driveway is a kind of easement appurtenant called ç______________________, which is for the purpose of entering and exiting the property; without such an easement, the McKinleys would have no way to get to the main road and into town. Although good neighbors and friends, the Rudolphs and the McKinleys documented their easement agreements in writing just so that everyone knew the "rules."
easement appurtenant, easement in gross, easement in gross
A part of your property is used by the local utility company to maintain its power lines. What's this an example of?
easment
Susan lives next to a beach. In order for her neighbors to reach the beach, they must cross through her property.
easment
Typically created for the purpose of ingress and egress
easment by way of necessity
Bill and Ted are neighbors. Bill owns the property that their joint driveway runs through. The driveway is example of an _________ to which Bill has --------- rights and Ted has---------- rights.
easment, posessory, non-posessory
Without this easement—usually involving access to a road—the owner requiring the right of passage would be landlocked.
easmetn by necessity
Scarcity
economic characteristic of a real property
permanance of investment and improvements
economic chatacteristic of real propery
Broker withholds income and Social Security taxes
employee
I'll pay federal and state unemployment taxes, and withhold appropriate income taxes from your paycheck.
employee
I'll set your work hours for you, and you'll be compensated for hours worked.
employee
Paid for time worked on salary
employee
An unpaid property tax lien
encumberance
Gives the owner the ability to use the property in any legal manner.
enjoyment
Which of the following is included with real property rights?
enjoyment
An unauthorized, affixed intrusion into another's property
enroachment
Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?
enroachment
Jeffery built a swimming pool behind his house. Turns out, the swimming pool is two feet inside his neighbor's property.
enroachment
Which of the following is NOT a financial claim against a property?
enroachment
These REITs buy properties.
equity REIT
These REITs primarily make money from their properties' rents.
equity REIT
These REITs tend to specialize in owning certain building types, such as apartments, regional malls, self-storage, office buildings, or hotels.
equity REIT
An investor receives title to a property— often by using a straw buyer—doesn't make the mortgage payments, and usually rents out the home until foreclosure occurs.
equity skimmer
Joanie is a homeowner on the brink of default. Silas, an investor, offers to buy Joanie's home before it's foreclosed in exchange for Joanie paying him rent. He promises to reconvey the title to her at a later date. What Joanie doesn't know is that Silas, although he's refinanced the home, has no intention of making the mortgage payments. He plans to remove all of the equity and pocket the rent. This is an example of
equity skimming.
Gradual loss of land due to natural force
erosion
Jordan bought 25 acres along a navigable river. Several years later, Jordan calculates that the river has slowly carried away almost two acres of land. What process caused this?
erosion
The water has worn away the land near Alycea's seaside cottage.
erosion
Legal interest or one's right to land
estate
At the end of all this, she could just refuse to leave the property when her lease terminates, creating a(n)
estate at sufferance.
Or she could establish a(n) ____________ by signing a lease for an unspecified period of time, with the stipulation that either she or the landlord may terminate the lease by giving notice to the other.
estate at will
Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?
estate at will
She could sign a lease for a period of 12 months, establishing a(n)
estate for years.
Sergei has just purchased his first house. He owns it; no one else does! No one else can tell him what he can do with the house. No one shares his house with him or holds any interest in the house (except his lender, of course). What ownership type describes Sergei's situation?
estate in serverality
Basis for laws
ethics
What can be defined as the principles that govern a group's behavior?
ethics
What's the best definition of personal property?
everything that is not real property
Easements remain attached to property permanently, unless there is an agreement between both parties to remove them, or certain actions are taken. In the case of _________ agreement, both parties agree, in writing, to remove the easement. If an easement is no longer needed, the easement can be terminated due to lack of ______________. Another way to terminate an easement is through a __________ of the dominant and servient estates. Yet another way an easement can terminate is through _____________ , which is when the dominant estate owner takes action that shows a clear intent to stop using the easement.
express, necessity, merger, abandonment
A procedure regulates and controls actions.
false
A salesperson's compensation comes directly from the client or customer.
false
All E&O policies cover regulatory complaints.
false
An encumbrance is a claim on a property that increases the value of the property.
false
Beneficiaries are not responsible for the cost of administering a testamentary trust.
false
Buyers of vacation timeshares aren't allowed to rent, give, or sell their time to others.
false
E&O policies will always cover property damage and/or bodily injury claims.
false
Ethics are legally enforced.
false
Gene has owned his home in New Mexico for six years. Four years ago, he married Jade. New Mexico is a community property state, therefore, upon their marriage, Jade is entitled to community property rights.
false
If one spouse dies, that spouse's share is passed according to the will.
false
If the spouses divorce, they must sell the property.
false
Land trusts generally don't have a specified term.
false
Land trusts must be created at the time the real estate is purchased, not after it has been acquired.
false
Licensees should instruct their seller clients never to talk to potential buyers.
false
One spouse may pledge the property without permission from the other spouse.
false
Personal ethics have no impact on professional behavior.
false
Real estate can't be transferred with any kind of encumbrance.
false
Sandy and John are married. Before they married, Sandy purchased an apartment in New York in her name only. John has property rights.
false
The PLSS is used throughout the U.S.
false
The industry has a "standard" compensation fee.
false
The lot and block system doesn't include lot measurements or distances.
false
The role of the trustor and trustee can't be performed by the same person.
false
The use can be interrupted when it transfers from one individual to another.
false
There are no costs associated with maintaining a trust.
false
To avoid the trust income tax, the trust must distribute 75% of the ordinarily taxable income to the trust beneficiaries, then the beneficiaries report the income for tax purposes.
false
Unlicensed assistants can be paid a portion of the commission from a completed transaction.
false
Unlike non-listed REITs, public mortgage and equity REITs are registered with the SEC.
false
Unlike other forms of owned real estate, timeshare estates cannot be sold or passed down to heirs.
false
With a land trust, the person who establishes the trust (the trustor) can't also be the beneficiary.
false
Borrowers may use a stolen or fictitious identity to obtain a home loan.
false identity
A survey doesn't include any improvements (such as a house) on the property or any encroachments or easements.v
false it does
Minimize risk by only meeting with your attorney when a problem arises.
false`
Attaches to real property due to federal income tax law violation, non-payment of gift taxes, or transfer after the owner's death
federal tax lien
Which act created an agency to investigate antitrust practices?
federal trade commision act
Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally?
federal trade commission
Tom Jr. can own the property his parents transferred, but if he develops the land, his ownership will end.
fee on condition
Form of real property ownership
fee simple absolute
Tom Jr. can keep the property his parents transferred to him as long as he remains unmarried.
fee simple determinable
You purchased a Colonial home eight years ago using a traditional 30-year-fixed conventional loan.
freehold estate
Douglas is the buyer's agent for a transaction in which May (from a different brokerage) listed her seller client George's property. From whom will Douglas receive his compensation?
from his own broker
Participates in the management of the partnership
general partnership
Personally liable (both jointly and separately) if partnership debts exceed partnership assets
general partnership
Receives return on investment before other partners
general partnership
Ashton and his management team established their own written code of ethics, which they believe reflects the organization's values and commitment to the ethical practice of real estate. The firm's management regularly reinforces the importance of the code and reminds affiliates to report suspected violations per their firm's documented process.
good
Avery, the broker-owner of her own firm, adopted a code of ethics from one of the industry leaders but put her own stamp on the code by imposing higher standards of conduct. Through consistent messaging, training, and example, she continues to reinforce the importance of the code for the organization.
good
Wesley's firm recently transferred the hard copy of its code of ethics to its intranet. In a few days' time, the management team will facilitate a series of training events focused on the code and the importance of applying the firm's values to all real estate transactions. The firm has had no issues with code violations, which management attributes to regular and consistent communication and training of the code of ethics as well as clearly stating the consequences for violating the code.
good
Next, Adrian heads to the backyard to check out the garage. But wait! There's no garage! Adrian is disappointed and frustrated that he'll never find a home that meets his needs. You pitch the idea of looking at having a home built to his specifications.
good example
You're feeling optimistic about this showing. You're standing with Adrian in front of the house, and he asks if the empty lot next to it is part of the property. The listing doesn't mention it. You tell Adrian you're happy to call the seller's agent to find out.
good example
Billie (Wilhelmina) 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?
happy homes reality
Stephanie, a real estate licensee, received a referral from Gloria, another licensee who's in her office and will be out of town at the time that her buyer wants to go house hunting. Under what two circumstances may Stephanie pay Gloria a referral fee?
if she disclosed it to all parties If it were paid through Stephanie's and Gloria's broker
The geographic location of a piece of land is fixed; it can never be changed.
immobility
"I bank with Bubba Gump Savings and Loan—it's a small mom-and-pop bank, but it gives me good rates."
improper handling
"I took the kids to the U.S. Space and Rocket Center and haven't had a chance to deposit the buyer's check. I'll get to it next week."
improper handling of funds
"I'll deposit the funds into my account to help expedite the process."
improper handling of funds
Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn't one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?
improvements
Permanent, man-made attachments that include things such as fencing, buildings, and walkways
improvements
Broker doesn't withhold income or Social Security taxes
independant contractor
Melissa loves her job as a real estate professional. Her broker supervises her as far as licensing law, but she sets her own hours and is paid based on results, not the time she puts in. Sure, she pays her own expenses, but she's cool with that. Which of the following best describes Melissa?
independant contractor
You're compensated based on performance. Close a sale, and you'll earn a commission. You'll set your own hours and how you'll work, but I'll provide instructions, training, and supervision to help you.
independant contractor
Paid for results, not time worked
independent contractor
Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property?
indestructability
Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?
indestructability
While improvements may deteriorate over time, the land itself can't be destroyed.
indestructability
The Wilsons are selling their home and have asked that an appraiser they know perform the appraisal on the property. Sidney, the buyer's agent, is surprised when the appraised value comes in considerably higher than the competitive market analysis she prepared. Sidney is concerned that this might be an example of which type of mortgage fraud scheme?
infated appraisal
An appraiser intentionally submits a misleading report to a lender that indicates an inflated property value.
inflated appraisal s
Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?
inseveralty
Was the item intended to be temporary or permanent?
intention of placement
A person's right or claim to property
interest
Bear, who represents buyer Crimson, approaches Rachel's seller client, Aubie, with a to-die-for offer because Crimson must have Aubie's house at any cost. It's her dream home. Rachel explains that Aubie's house is already under contract, but Bear tells Aubie directly that there's big money in it for him if only he'll terminate the existing contract and agree to enter into a contract with Crimson.
interference
Mechanic's lien,Judgment lien,Federal tax lien
involuntart
A land's value can be affected by the changes that are made to it.
iprovements
Licensee Kenneth noticed that his new listing (in a full seller disclosure state) has a leaky roof. It was quite evident from the stains on the ceiling.
it Is material, adverse, actual knowlege, and phsycial he mist disclose it
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn't allow him to do so. What type of ownership do they have?
joint tenancy
Thelma, Sidney, and Shirley meet at the Crusty Acres Retirement Center. Tired of unsalted oatmeal and an 8:30 p.m. curfew, they decide to ditch the joint, pool their resources, and buy a happenin' little condo uptown. Because they want to ensure that no one is displaced from the condo in the event of one owner's death, they decide to hold title in such a way that if any of them dies, the others own the deceased person's shares. How should they hold title?
joint tenancy
A general, involuntary lien against a property due to a court decree resulting from a lawsuit
judgment lien
The earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
land
Who can verify the boundaries of a legal description for a given property?
land surveyor
Specify accepted ethical behaviors to safeguard citizens
laws
You signed a two-year agreement to rent office space in a local commercial building.
leasehold estate
Which of the following is NOT one of the five basics tests that courts use to determine whether an item is a fixture or personal property?
legally permissable use
May be revoked by the owner at any time unless a termination date has been specified by contractual agreement
license
Developing a licensee's business
licensee
A debt against a property
lien
Property possessed for someone's lifetime
life estate
Not liable if partnership debts exceed partnership assets
limited partnership
Silent partner
limited partnerships
Host open houses.
liscense
Permission to do something on another's land without actually possessing any interest or ownership in the land
liscense
Sue, a new licensee at Alabama Black Bear Homes Real Estate, is drafting her first advertisement. She wants to make sure it complies with advertising guidelines. Which two of these items are required under Alabama's license law?
liscense status and broker name
Host open houses.
liscensee
Negotiate a transaction.
liscensee
Receive commission payments.
liscnsee
Licensees and brokerages are required to keep which of these documents in their files?
listing agreements leases contracts NOT newspaper ads
There's no better way to spend a morning than sitting on the edge of your pier, sipping coffee and throwing a ball into the lake for your yellow lab to fetch.
littoral
are granted to landowners whose land borders closed bodies of water, such as lakes and oceans
littoral rights
Martin placed all of his real estate investments in a trust, and the proceeds are distributed through the trust to his son Nathan. Martin still manages the properties indirectly, and Nathan currently benefits, as he's past the required beneficiary age of 18. What type of trust is this?
living trust
A property's value is impacted by where it's situated and how interested people are in buying or living in the area.
location of area or preference
Mainly used in urban and suburban areas
lot and block
Which type of legal description do courts prefer?
lot and block
Jim, a licensee in Montgomery, owns a luxury home that he hasn't been able to sell through conventional means. He's decided to offer the property as a promotional prize. He'll charge an entry fee to help ensure he recoups his investment in the property, and the winner will receive title to the property at far below the property's market value. It's a win for everyone, right? Wrong. What promo is Jim running?
lottery
Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?
lucas an tom
Instead of competing in each other's territories, agents in two brokerage firms agree to segment the marketplace and refer clients to one another who are outside of their assigned market area.
market allocation
means the information is considered important in deciding what course of action a buyer takes regarding the real estate transaction.
material
A specific, involuntary lien placed by contractors or subcontractors against a non-paying client's property
mechanic lien
Oscar bought an older home and hired a contractor to replace the old knob and tube wiring throughout the house. He was invoiced for the work, but 60 days have passed, and Oscar has yet to pay the bill. The electrician filed a lien against Oscar's house. What type of lien is this?
mechanics
Direction and distance of a line forming the boundary of a property
metes
"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Henry Nelson ..." is an example of what type of legal description?
metes and bounds
Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?
metes and bounds
37 degrees north for 78 meters 90 feet due north, turn 12 degrees west for 15 feet, turn due north for 5 feet
metes ex
Uses monuments, compass headings, and directions
metesand bounds
Can the item be removed without damaging what it's attached to?
method of annexation
Varies from person to person (religious or cultural beliefs)
morality
Many of these REITs focus on buying mortgage securities backed by Freddie Mac and Fannie Mae.
mortgage REIT
These REITs invest in real estate debt instead of buying properties.
mortgage REIT
These REITs make money by incurring short-term debt to acquire longer-term mortgage securities, earning the spread between the two rates.
mortgage REIT
There are two categories of REITs, and their names reflect an investment choice. What are they?
mortgage REIT and Equity Reit
A specific, voluntary lien against a single property that uses the property as collateral for loan repayment
mortgage lien
Imagine you own a brokerage and have several associate brokers and salespersons within your agency. A couple of them have come to you with problems when working with buyers who have obtained pre-approval through BuyNow Mortgage. Buyer financing through this company ends up falling through nine times out of 10. You tell your agents not to accept pre-approvals through BuyNow Mortgage, and you provide a list of reputable mortgage brokers the agents can provide to buyer clients if needed. Are you violating antitrust law?
no
You and your licensees are having issues with BuyNow Mortgage, so you decided you'd no longer accept pre-approvals from this company. Is this an example of a tie-in arrangement?
no
Imagine you're the sponsoring broker for a new licensee. She's preparing for her first listing appointment and is a bit nervous. You help her prepare by pretending to be the seller as she goes through her listing presentation. She's at a point where she discusses commission. Because this often happens working with sellers, you interrupt her, and state that the commission she quoted is way too high. She replies that the rate is fairly standard in the industry. Is this a good response?
no because she is addresssing the indusry as a while not specifically her fimr
Concealing a buyer's identity by using another person's name and credit information to obtain a loan.
nominee loans/straw buyre
Dale, a real estate licensee, received a referral from Katherine, a mortgage broker. Dale pays Katherine a $100 finder's fee. What circumstances would make this legal? Match each option to the correct answer to indicate if the circumstance helps with the legality or if the circumstance wouldn't help make it legal. Dale disclosed it to all parties. It's paid through Dale's broker. It's declared on Dale's taxes. It's not paid in cash, but in another form of compensation.
none of this helps make it legal
One of the things you enjoy about being a sponsoring broker is watching the licensees associated with your firm learn, grow, and become successful in the industry. After mentoring a licensee for many years, you learn he's ready to spread his wings and open his own brokerage. However, not wanting to "step on your toes," he decides to locate his brokerage in a neighboring town so he won't compete directly with you on as many properties. Is this an antitrust violation?
not
What are some not some of the benefits an LLC offers Jeb? -Sets specific management structure for operating the company -Commingles personal and company assets in terms of liability
not a benefit
Business can be conducted and title to property held in your business name.
not a characteristic
Let's pick up with corporations. Remember that corporations hold property in severalty. What are some characteristics of this type of business? -C corporations - taxed using individual income tax rates - S corporations - taxed at rates separate from individual income tax rates -Physical brick-and-mortar establishment
not a characteristic
Ownership of property can be in the form of tenancy in common.
not a characteristic
People who live in a co-op own the real estate.
not a characteristic
Offering a property for sale with the owner's permission
not a common violaaiton
Quiet and closed possession
not a requirement
An agent tells a buyer that his commission rate is 2%, but the buyer won't have to pay this out of pocket if the seller's agent pays a commission to cooperating agents.
not a tie in
An agent tells a prospective buyer that she'll only negotiate on her behalf if she signs an agency agreement to be a client.
not a tie in
Ryanne is a salesperson with Arc Realty. She is switching to work for Baker Brokerage at the beginning of next month. Upon leaving Arc, she hands over all her listing documentation to her former sponsoring brokerage.
not a violation
Which of these are federal antitrust violations?Individual boycotts
not a violation
Overgrown weeds in the yard
not an encumberance
Kevin and his management team adopted NAR's Code of Ethics for their firm and emailed everyone in the organization to let them know. Because NAR's Code of Ethics is so well known, the management team has no plans to provide training or reinforce the code in other ways.
not good
Molly announced that the firm was adopting NAR's Code of Ethics, and that members were responsible for reviewing the code on their own time. She also announced that the management team was actively working on a process for reporting and investigating violations. Her firm had a reputation to uphold and because of that, there would be severe consequences for violating the code.
not good
The property that Harper's buyer client wants to make an offer on is already under contract. Harper has written a back-up offer for her buyer and submitted that to the seller for consideration.
not interferance
After seeing the results of the home inspection, Tom's buyer client Tallulah has decided to terminate her contract with the seller. Licensee Cody and his buyer client immediately submit their offer, and it's accepted.
not interference
An agent has a client who would like to purchase a home in a neighboring county. Unfamiliar with the area, the agent refers the buyer to another agent with the firm who is more knowledgeable.
not market allocaiton
A local realty firm is seeking to bring on an agent who will focus only on properties priced above one million dollars.
not marketallocation
All agents with MaxRealty charge a 4% commission split evenly with the cooperating agent.
not price fixing
Maize Realty offers most cooperating agents a commission of 2.5%. However, they only offer a commission of 2% to Scarlet Agents.
not price fixing
Yankee Group and Met Realty both charge commissions of 5%.
not price fixing
Alan, a buyer, pays Mary Grace's commission.
not prohibited
Kendall's client, Lawrence, is looking for a house on the beach. Lawrence tells Kendall he'll pay him a $2,500 finder's fee if he finds him exactly what he's looking for before the property hits the market. Kendall meets Margot at a neighborhood BBQ and learns that she's thinking of putting her house on the market. He realizes it ideally suits Lawrence's needs. "I can save you a lot of hassle," he tells Margot. "You won't even have to list it. I have a buyer at the ready." What circumstances are required for Kendall to receive the finder's fee? Identify whether the circumstance is required or not required in order for Kendall to receive the finder's fee. -Both parties would have to agree to dual representation. RequiredNot Required -Lawrence must pay the finder's fee to Kendall's broker. RequiredNot Required -Margot must be represented by another licensee. RequiredNot Required -Margot must list her house on the open market, and then if no other buyers are willing to pay more, she can sell to Lawrence at the price Kendall suggests. RequiredNot Required
not req req not req not req
"The buyer brought all the paperwork and trust fund money to me."
not.a violation
Rylee's proud to say that her firm has its own code of ethics, which she helped to establish. Although she hasn't had a chance to put the code in writing, she's confident that the members of her organization understand the importance of adhering to the code. She's told them on more than one occasion how costly the penalties are for unethical behavior, as she herself knows from personal experience.
notgood
Keira's father leaves her some property in a tiny town. When she goes to see it a year or so later, she's surprised to see that a family lives in one of the property's outbuildings. All of the neighbors know that this family had been there for the past two years. This is an example of ______.
open and notorious possession
Perform appraisals to determine the value of a home.
outside expertise
Perform property inspections.
outside expertise
Give advice on how to finance a home purchase.
outside expertisee
Of the three highlighted items, select the two that are personal property.
patio furniture and dog house
Advertising a property with the seller's permission
peremitted advertising
She could sign a lease for a period of 12 months, at the end of which the lease is renewed. This is a(n)
periodic estate.
Involves improvements, such as sewer, roads, and utilities, that are long-term, stable investments with relatively stable returns over time.
permanance of investment
Created through one party's continued, uninterrupted, exclusive, and adverse use of another's property for a specified period of time
perscriptive easment
Everything that's not real property
personal property
Indestructability and uniqueness
physcial characteristic of real property
means any problematic property condition that may not necessarily be immediately apparent.
physical
what are two cahracteristics of real property
physical and economical
immobility
physical characteristics of real propeoryu
When Emma turned 70, she sold her ranch home and moved to a senior living community. Her one-bedroom apartment is on the third floor of a building that houses a fitness center, convenience store, music room, and café on the first floor. What type of facility is this?
planned unit development
Given that a broker has many options to reduce risk, which one of these is the most crucial, according to your resource?
policy and procedure manual
Adrian asks to take a look inside before you make any calls. He wishes the main level were a little more open and asks if you think he could remove the wall separating the kitchen and living room. You tell him that it's probably not a load-bearing wall and that removing it would really open up the space.
poor exMPLE
Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight's property. What kind of ownership rights does Dwight have of the driveway?
possessory
Advertising a property without your broker's name
prhibited advertising it must include
Met Realty and Sox Properties agree to charge commissions of 6%.
price ficing
While networking at a real estate industry event, agents from several firms agree to start writing listing contracts for terms of three months.
price ficing
A consumer is moving to a new area and uses social media to try to line up a real estate professional to help him find a new home. He asks how much he'll need to pay his licensee. One firm he contacts tells him that all licensees in the area charge at least 2%. What antitrust violation does this imply?
price fixing
Making false promises
prihibbedted aadvertising
The north-south line that runs through the initial point
principal meridian
Who knew the small creek flowing along the edge or your backyard would be the prime setting for many hours of father-son bonding and friendly competitions to see who could catch the most fish?
prior appropriation
Legal term that means the right to take products out of the soil
profit
Which of the following is a legal term that can mean the right to take products out of the soil?
profit
Both Tripp, the buyer, and Sutton, the seller, pay a fee to the broker, but they're unaware of the other's payment.
prohibited
Unbeknownst to the managing broker, a local appraisal company paid a referral fee to Reese, an affiliated licensee.
prohibited
Stretching the truth to make advertisements more impactful
prohitbitted advertising
Illegal when a home is bought, appraised for more than it's worth, and sold within a short time frame. Kickbacks to the parties are commonplace.
property flipping
The Kents' property appraised for more than it was worth, and sold within a very short time frame. Rumor has it the parties got a nice kickback from the sale. This may be an example of illegal
property flipping.
To claim adverse possession, a possessor must file an action to ______.
quiet title
North-south lines that don't run through the initial point
range lines
Land, plus all things permanently attached to it naturally or artificially
real estate
What type of asset is held in a land trust?
real estate
Real estate, plus the interests, benefits, and rights automatically included with real estate ownership
real property
A specific, involuntary lien against property owners who have not paid property taxes
real property tac lien
Real estate, plus the interests, benefits, and rights automatically included with real estate ownership
real proprty
Divides land into six-mile-square townships, which can then be further divided
rectangle governemnt survery
When a dispute occurs, courts tend to favor tenants and buyers over landlords and sellers.
relationships of the parties q
Gradual receding of water, which uncovers new land
reliction
Jamie owns a lakeside home. Over a period of years, the water has receded quite a bit, doubling the size of the sand beach on his property. What's the name of this process?
reliction
The water has receded near Trevor's beachfront cottage, uncovering new land.
reliction
An elementary school will receive title to 20 acres of land upon the death of the life tenant, Teddy Jr. The elementary school is the ______.
remainderman
Actual possession
requirement
Open and notorious possession
requirement
A buyer provided you with an earnest money check. You account for all monies placed in your trust.
respnsibility
An MLS listing says a property is much bigger than it appears. You investigate.
responsibility
You ensure that all parties have a signed copy of any transactional paperwork, and you retain these for the statutory period.
responsibility
You receive a call from a buyer interested in your listing. You disclose your agency relationship with the seller to the buyer.
responsibility
Bridget has an investment portfolio that includes an equity REIT. Which of these is most likely to be part of the REIT's investment?
retail shopping center
Papa conveyed 20 acres of land to Teddy Jr. for life. Upon Teddy Jr.'s death, the land will go back to Papa.
revisernairy interest
The right to access non-navigable rivers, streams, and other flowing bodies of water adjacent to a property is called ______ rights.
riparian
Who knew the small creek flowing along the edge or your backyard would be the prime setting for many hours of father-son bonding and friendly competitions to see who could catch the most fish?
riparian
A river runs adjacent to a rancher's property. The rancher's ability to use the water from the river is based on ______.
riparian rights
are granted to landowners whose land abuts a river or stream.
riparian rights
A policy and procedures manual is a crucial measure in reducing ______.
risk
Consists of 640 acres
section
Your client, Jorge, is considering purchasing a rental property subject to an existing lease. Which one of the following terms would NOT be something you and Jorge should look for when reviewing the existing lease agreement?
security deposit amount
Prohibited monopolies and actions that cause an unreasonable restraint of trade.
shereman act
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 ______.
shoveling snow
A property buyer accepts a second mortgage without disclosing it to the original lender. Often used when a buyer can't afford the down payment on a home.
silent second
You're not an inspector, and you're not expected to be. However, you should be familiar with common defects. Which of these are some signs that could indicate property defects?
smell of mold, crack in the concrete, water stain on the ceiling, NOT poor paint color choice
Attaches to a taxpayer's real property for not paying state income taxes
state tax lien
Which of the following is the least specific method for describing a property?
street address
The process of determining the location, size, and boundaries of a parcel of property is called ______.
surveying
Right to possession, but not ownership, of a property
tenancy
Where permitted, married couples usually hold property as ______.
tenancy by entirety
______ is the form of ownership used by married couples in certain states. It includes automatic survivorship rights.
tenancy by entirety
Madge and Steve are married when they purchase a townhouse. They take ownership under this type of tenancy, which has the right of survivorship. That means if Steve dies, Madge becomes the sole owner of the townhouse. Likewise, if Madge dies, Steve becomes the sole owner. Neither may pledge his or her interest in the property to another without the other spouse joining in the deed. If Madge and Steve divorce, their tenancy would end automatically by divorce decree, and they would become tenants in common. What type of ownership do Madge and Steve have?
tenancy by the entirety
Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?
tenancy by the entirety
Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Lynn shared the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
tenancy in common
Jack, John, and Joe are brothers. Their parents died, leaving them the family home. Each holds an undivided interest in the entire property, and there is no right of survivorship. If one of them dies, that brother's share will go to whomever he's stipulated in his will. What ownership type describes Jack, John, and Joe's situation?
tenancy in common
A pair of siblings holds title to a property. What is the most likely form of ownership they hold, unless otherwise specified?
tenants in common
Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?
the condo owners
Thelma, a joint tenant, lived every last minute to the fullest, but sadly her time has come to an end. Who receives Thelma's share of the property?
the remaining tennants since it was joint tenancy
Upon the death of a joint tenant, to whom will that person's interest in the joint tenancy pass?
the surviving joint tennants
Why would additional documentation and disclosures be required for the purchase of a condo?
the unit is governed by a home owners association
Joint tenancy and tenancy by the entirety are very similar. One factor makes Madge and Steve tenants by the entirety instead of joint tenants. What is it?
their marrried
According to the commission, licensees may receive compensation from which of the following?
theri qualfying broker ony
Tamron is the listing agent for Anthony's 25 acres of land. Carter would like to purchase the land and makes a full-price offer on the land. But now seller Anthony thinks he might get more for his property because the first offer has come in at full price, so he asks Tamron to counter-offer for a higher price. Carter, upset that they've countered his full-price offer, mentions possibly contacting his lawyer to force the sale at the list price. Tamron persuades Carter otherwise by telling him that it would be a lengthy process, cost more money, and, in her opinion, would not go in Carter's favor. Based on what Tamron told him, Carter agrees to the counter-offer, and the sale is completed. Afterward, Carter files a complaint. What do you think? Does Carter have a valid complaint against Tamron?
thi is violation of the law
For how long must an Alabama licensee retain transaction file records after the date of the transaction?
three years
Let's see what you remember. Alabama's commission requires that brokers keep all transactional records for a certain length of time. How long is the required retention period?
three years
An agent agrees to work with a client, but only if the client agrees to not do business with Peak Mortgage.
tie in
An agent tells a client that if the client chooses to finance his mortgage through Alamo Bank & Trust, she will take 1% off of her commission rate.
tie in
Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half.
tie- in arrangements
What type of estate involves a piece of real estate that's 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?
timeshare
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 timeshare agreement, usually in one- to two-week intervals during the year.
timeshare estate
Pieces of real estate owned by multiple unrelated individuals who occupy the dwelling unit in one- to two-week intervals during the year.
timeshare estate
A group of 26 different families have shared ownership of a vacation condominium. Each family spends two weeks annually at the condominium. Legally, the condominium is considered a ______.
timeshare property
Gives the purchaser the right to possess the property at given times for a given duration, but does not convey ownership.
timeshare use
Which of the following statements is true regarding timeshare estates?
timeshares can be sold and passed down to their heirs
Evidence of ownership of a property
title
Consists of 36 one-square-mile sections
township
East-west lines that don't run through the initial point
township liines
What's the relationship between townships and sections in the rectangular survey system?
townships are divided into section
A license is permission to do something on another's land without actually possessing any interest or ownership in the land.
true
A license isn't assignable or inheritable, and it's a temporary privilege.
true
A licensee isn't held liable if their client provides false information, if it's information that the licensee couldn't have verified.
true
A licensee's personal ethical standards interact with laws and morals every day.
true
A living trust is created during a person's lifetime and is established to convey property.
true
A procedure tells the "who, how, and when" something is done to implement that policy.
true
A survey may be required to verify, clarify, correct, or create a legal description.
true
A testamentary trust is one created according to the terms of the will of a deceased person.
true
An easement is a right to cross over or otherwise use another's land for a specified purpose.
true
An encroachment is an intrusion of a structure or object on another's land.
true
An encumbrance is a claim on a property held by another person or entity that limits the owner's use or rights.
true
As a licensee, the Golden Rule can help you behave ethically no matter the situation.
true
Because morality differs from person to person, laws are made with generally accepted ethics as their guiding principle.
true
Because they limit the use or a appearance of a property, deed restrictions are a form of encumbrance.
true
Both ethics and laws are rules of conduct.
true
Brokerage compensation options include a flat fee, fee for service, or percentage of sale.
true
Consumers compensate brokers for their services, generally in the form of a percentage of the sales price of the property involved in the transaction.
true
E&O insurance is mandated as a condition of licensing in many states.
true
Effective training is both relevant and ongoing.
true
Either a metes and bounds or a rectangular survey description is always the starting point for a lot and block survey.
true
Encumbrances can be physical or monetary.
true
Establishing policies and procedures sets expectations for how the company will conduct business and meet consumer needs.
true
Fee simple ownership for a vacation timeshare works in the same way as other types of real estate: Ownership can be enjoyed, sold, or passed down to heirs.
true
Have an attorney review your firm's practices and policies.
true
If a licensee is the procuring cause for a sale, that licensee may still earn compensation.
true
If one spouse dies, the other automatically becomes the sole owner.
true
If the spouses divorce, the tenancy by the entirety automatically ends, and the former spouses become tenants in common.
true
In the case of a married couple, after the death of the second spouse, the estate is distributed to the beneficiary or beneficiaries named in the trust.
true
Laws are legally enforced.
true
Licensees are held liable if they misrepresent the terms of a real estate sale.
true
Madge and Steve are married. They decide to purchase a home in Arizona, with Steve as the sole owner, yet Madge still has property rights.
true
Making a material misrepresentation during a real estate transaction is a punishable offense.
true
Providing guidelines for employees and independent contractors will clarify direction, reduce confusion, and provide specific parameters for everyone to follow reduces risk.
true
REITs were originally created to take advantage of changes in tax laws that prevented double taxation on trust income.
true
Resale timeshares often don't recoup the buyers' initial investment.
true
Spouses may transfer real and personal property into a trust and then name themselves as joint trustees with rights of survivorship.
true
Tax laws allow trusts to earn income from real estate investments without having to pay trust income tax.
true
The "right thing" is always ethical.
true
The CC&Rs put in place by a Homeowner's Association are a form of encumbrance.
true
The U.S. Department of the Interior, Bureau of Land Management regulates the system.
true
The amount a salesperson is compensated is dependent upon the agreement with the broker.
true
The creation of a trust is a legal process that is best handled by attorneys.
true
The easiest course of action isn't always the most ethical.
true
The government makes laws to safeguard the welfare of its citizens.
true
The lot and block system includes numbered or lettered blocks and lots.
true
The main difference between public and non-listed REITs is that the non-listed REITs are sold by brokerage firms directly to investors and are not traded on any exchange.
true
The owner may revoke a license at any time, unless a termination date has been specified by contractual agreement.
true
The system divides land into townships and further into sections and fractions of sections from there.
true
To create a trust, the trustor conveys property to the trustee with instructions for how the trustee is to hold and manage it on behalf of the beneficiary.
true
Training should focus on real estate law, practice, and areas where most complaints occur.
true
Under a land trust, the owner directs a corporate fiduciary to hold title to the real estate and provides instructions for the management, control, and disposition upon the owner's death.
true
Unlicensed assistants can be paid on an hourly or salaried basis.
true
When the land trust term expires, the trustee must either extend the term or sell the real estate and provide the proceeds to the beneficiary.
true
You can add the years of another possessor's claim to your own to accumulate the number of years required for adverse possession.
true
Your E&O policy provides coverage in many situations, but not in all.
true
feehold estate It offers the most complete form of ownership and the entire bundle of rights.
true
feehold estate The owner's heirs may inherit the property.
true
If a transaction you're involved in seems fraudulent, you should withdraw from it.
true`
An escrow account the seller's brokerage establishes to hold money belonging to others until closing or another specified date
trust fund
Person carrying out the trustor's wishes
trustee
Person conveying title to a trustee
trustor
When everyone is trained to follow established policies and procedures and the broker shows her commitment to enforcing them, this can provide evidence of the broker's dedication to consumer protection and shifts liability to those who may rebel and act unethically without the broker's knowledge.``
ture
The seller or another party provides funds that aren't included in the settlement statement. In order to be legal, rebates must be disclosed to the lender and must appear on the settlement statement.
undisclosed buyer rebates
Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the condominium declaration, he saw how ownership of the common areas is shared among the ______.
unit owners
Submit listings and make changes to an MLS.
unlicensed asistant I
Place signs on a property.
unliscense assistant
Buyers agree to a one-time purchase price and an annual maintenance fee.
vacation ownership
Another buyer submits a more realistic offer on Dixie's home, and Jem wants to get started on the paperwork right away. He expects the lender will speak to both parties about closing costs.
violaiton
Nathan and Cassie are friends. Cassie, a real estate licensee, recently provided some real estate services to Nathan's company. Now, Nathan is preparing to do some work-related travel overseas and wants to give his wife power of attorney (POA) in case anything comes up while he's gone. He asked Cassie to prepare the POA for him, and she agreed. Did Cassie violate her responsibilities as a real estate licensee?
violates the law she cannot draft a form
Braxton just secured an exclusive listing with the Meyers. They have already moved to a new home across state but don't want to broadcast that their old home is empty, so they ask Braxton not to place a sign in their yard. Braxton, wanting to market the home (and himself) better, decides to put a sign in the yard.
violation
Carol Ann's Meemaw and Pop Pop are on a fixed income and want to downgrade to a smaller home. Meemaw tells Carol Ann, who's about to take her licensing exam, that their licensee, Scooter, asked her, "What do you need to get out of the sale? How about we list it at that price and if it sells, I'll keep anything above the amount as my portion. Sound good?"
violation
Caroline is a pre-licensing student, eager to get after her goals as a real estate salesperson and she is aligned to affiliate with a great broker. One month before taking her exam, she begins networking with potential clientele, assuring them that due to her competitive nature and tenacity, she is the best salesperson for the job. She quickly begins the negotiation of her sales commission on her first transaction.
violation
Jem has been engaged to sell a friend from Bama's home, a gorgeous showstopper in downtown Fairhope. Dixie's taste is impeccable, and the house also has a front porch and balcony perfect for catching Moon Pies at the Mardi Gras parades. A prospective buyer has submitted a written offer that's way below Dixie's asking price. "No need to bother her with that piddly offer," Jem thinks as he tosses it in the trash.
violation
Jordan's brokerage firm is a little short on cash. To pay the rent, he decides to borrow money from a client's trust account, since it won't be needed for the closing for several weeks. By that time, he will have received a big commission check and will be able to return the funds to the trust account.
violation
Maurice has a buyer client lined up for a property. During negotiations with the seller, Maurice tells the seller he can get the buyer to come in at the listing price, but the seller needs to cancel his listing with his agent and re-list with Maurice.
violation
Rochelle receives an earnest money check for $5,000. She deposits the check into her brokerage's general business account.
violation
Which of these are federal antitrust violations? group boycots
violation
Which of these are federal antitrust violations? price fixing
violation
Which of these are federal antitrust violations?Market allocation agreements
violation
Which of these are federal antitrust violations?Tie-in arrangements
violation
Ellen won a listing for a renovated historic home in Eufaula. Due to its price point, she knew it might take a bit longer to sell, so she included an automatic renewal provision in her listing agreement.
violation - yoyu must include an expirration date
mortgage lien
volentary
Land would be worthless to a farmer without what specific stick in the bundle of rights?
water rights
When can an ethical violation result in jail time?
when it also breaks the lae
Review the resource to learn what exactly group boycotting is. Then decide which one of these is an example of group boycotting.
when two or more agents or brokerages refuse to cooperate and split commissions with another
The rivalry between Jack and Joe seems so petty in light of Joe's recent passing (not at Jack's hands, thank goodness). Who receives Joe's share?
whoever was stipulated in the will
Market listings through flyers.
within expertise
Search for properties on the MLS.
within expertise
Perform a market analysis to determine a market value range for a property.
within exprtise
Can licensees convicted of a felony face both the commission's and the court's disciplinary actions in Alabama?
yes
The happenin' condo is too much for Sidney. She's looking for something a bit more serene and decides to sell her share of ownership to Rita, who's now ditching the confines of Crusty Acres Retirement Center. Assuming Thelma and Shirley approve the sale, can Sidney do this?
yes
Your problems with BuyNow Mortgage continue. As a brokerage owner, you make sure that your associate brokers and salespersons continue not to use the company, but now the BuyNow owner is angry. So you call up the other brokerage owners in your area, and all seven of you decide that you won't use BuyNow Mortgage's services. Are you violating antitrust law?
yes
Julian and Clara want to leave their real estate holdings to their children. If at all possible, they'd like those holdings to avoid the probate process after they're deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?
yes a living trust would avoid probate
A sole proprietor is a familiar business model. If you practice real estate as a sole proprietor, which of the following is a true statement?
your an independant contractor
Tim, an Alabama licensee, is affiliated with principal broker Ashton. After a team meeting, Tim asked him, "Why do we need to keep purchase documents and closing statements?" How should Ashton respond?
"Alabama law requires us to keep transaction-related records or else risk penalties."
Which one of Gerry's statements to a client crosses the line into unauthorized practice of law?
"Most couples take ownership of property as joint tenants, so that's what I'd advise."
You're at the office supply store. You have three items in your cart: a ream of paper, a toner cartridge, and a package of pens. The clerk forgets to ring up your package of pens, which costs $2.79. You're already on your way to the car when you glance at the receipt and notice the error. You stop and think for a moment. It's only $2.79, and no one will ever know—after all, you aren't shoplifting or anything. There's quite a long line at the checkout, and the customer service desk is vacant. No chance of a short-cut there. Drat! What should you do?
"it was their error" "I spend so much money they owe me a freebe" "Wait in line, notify the clerk of the error, and pay for it."
What are four of the benefits associated with a land trust?
-A beneficiary interest in the land can be conveyed without having to go through the formality of a deed. -A land trust is a grantor trust that is revocable. -Asset transfers into trusts are protected by the Garn-St. Germain Depository Institutions Act. -The identity of the trust owner is not made public.
Brokerage firms (and you) usually get paid based on a percentage of a property's sales price. The terms "procuring cause" and "protection clause" impact your compensation. Which two of these statements about these terms are correct?
-Rowena's exclusive-right-to-sell agreement with her seller client Connie guarantees that Connie will pay the brokerage firm's fee no matter who sells the property. -Morey's listing agreement includes a 45-day protection clause. Three days after the agreement ends, Morey sells his house to a buyer whom his agent originally brought to the property. Morey may owe this agent a commission.
Dee needs to inform the commission within _______ days of the fact that she's just pled guilty to a felony.
10
We mentioned earlier that one section is a square mile or 640 acres. Using the same parcel of land as the previous question (NW ¼ SE ¼ NE ¼ Section 1, Kennedy Township), determine how many acres it is.
10
Licensee Audrey was convicted of an antitrust violation. What is the maximum prison sentence she can serve?
10 years
Which of the following is an example of a metes and bounds description?
1600 Pennsylvania Ave., Washington, DC 20500\ Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds Beginning at the southwesterly corner of Lot 14 as shown on said Map 1452 then by said line South 30 degrees East 50 poles to a pine then E 320 poles to a pine then N 220 poles to a pine then by Crisp's line west 80 poles to a pine then down the creek to the first station ... **
What is a township?
A 36-square-mile square formed when using the rectangular survey system
Which of the following is the best example of a tie-in arrangement?
A business requires its clients to also purchase services from another business.
What is a REIT?
A company that owns and usually operates income-producing real estate and provides investment opportunities to shareholders in those properties.
What is a plat map?
A detailed map of a subdivision that includes boundaries, measurements, and distances between points
Which one of the following scenarios describes an adverse condition that would need to be disclosed?
A hail storm damaged some shingles last year.
When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics?
A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.
Which of the following statements about material facts is true?
A material fact may have more or less effect on a buyer based on the buyer's needs and values.
What is a principal meridian?
A north-south line used as a reference point in the rectangular survey system
Your resource mentions the term "monument" as it relates to the metes and bounds method of land description. What is a monument?
A permanent physical marker that is either man-made or natural
Which of the following is an example of illegal market allocation?
Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half.
First-time buyer Frannie signed a representation agreement with new licensee Marcus. The market was hot, so Frannie wanted the seller to know that she'd beat any offer he received by $10,000. She asked Marcus to include this clause in the contract, so he wrote it in as an additional provision on the standard contract form. The seller had received three offers, all over list price. He then accepted Frannie's offer for $10,000 over the highest list price, which ended up being more than Frannie could comfortably afford. To protect his client, what action should Marcus have taken?
Advise Frannie to consult with an attorney to draft the clause.
So, did you find MARIA helpful? What are the five tests to determine if an item is a fixture and part of the real estate?
Agreement of the parties Method of annexation Intention of the person placing the item Relationship of the parties Adaptability of item for land's use
Let's say you own a two-story commercial building in the heart of the city. A large balloon payment is coming due, you have no money, and you're about to lose your building. Across the street from you is a brand new luxury condominium complex in an early phase of completion. You know that once that building is complete, property values will increase. But you can't hold out for long. You may have to sell out to another developer to pay off that loan. It's just not fair. If only you could find a way to raise some cash. Can you think of anything? Select the opportunity right before your eyes!
Air Rights Yes! You could consider selling your air rights. These rights may be especially appealing to a developer who could build more floors of commercial space (if zoning ordinances and other laws permit). These rights may also be appealing to the luxury condominium builder or residents who may be interested in preserving any views from the complex.
A fence that's placed two feet onto a neighbor's property line meets the legal definition of _______.
An encroachment
Which of the following describes an attachment?
An encumbrance on the property of a defendant in a pending lawsuit for money damages under special circumstances, such as when the defendant goes into hiding
What information about a property is the licensee required to disclose to potential buyers?
Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property
Amber is a new licensee in Alabama. She's having trouble getting her sales off the ground, so she's considering offering commission rebates or holding a lottery. Which of the following is a true statement?
Any type of rebate or lottery related to a real estate transaction is always illegal.
Whew! You met all of the requirements for a claim of adverse possession, and now you can just kick back and relax in your new million-dollar home, right? Not quite. What two things do you need to do to acquire ownership of your new abode?
Appear in court and move to quiet title. Prove you've met all requirements for the statutory period of time.
What are improvements with regard to property?
Artificial attachments to land that include items such as fencing, buildings, and walkways
Your client, Dana, is interested in buying a rental property that currently has tenants. She'd like to rent the property to her relatives a month after she buys it. Which one of the following statements is true and could affect Dana's decision to buy the property?
As the new owner, Dana would become the tenants' new landlord with all the benefits and responsibilities that come with that role.
Belinda's client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______.
Avoid unauthorized practice of law
