Fund. RE Final--
Given the following information regarding an income producing property, determine the NPV using levered cash flows in your analysis. Required equity investment: $270,000; Expected NOI for each of the next five years: $150,000; Debt Service for each of the next five years: $125,000; Expected Holding Period: 5 years; Required yield on levered cash flows: 15%; Expected Sale Price at end of Year 5: $2,000,000; Expected Cost of Sale: $125,000; Expected Mortgage Balance at time of sale: $1,500,000 A. $245.15 B. $270,245.15 C. $419,264.54 D. $1,435,029.64
A
In an analogy to the stock market, the net operating income of a property can be viewed as which of the following? A. Annual dividend expected to be produced by the property B. Annual return on the value of the property C. Market value of the property D. Price-earnings ratio of the property
A
It is common for investors in real estate to use mortgage debt to help finance capital investment. The use of debt can have a profound impact on the expected cash flows for a particular property. Which of the following terms refers to cash flows that represent the property's income after subtracting any payments due to the lender? A. Levered cash flows B. Unlevered cash flows C. Discounted cash flows D. Compounded cash flows
A
Net present value (NPV) is interpreted using the following decision rule: The investor will purchase the property as long as the NPV is: A. greater than zero B. equal to zero C. less than zero D. equal to the opportunity cost of investment
A
Prior to determining the treatment of capital expenditures in the calculation of NOI, it is important to distinguish these costs from operating expenses. In contrast to operating expenses, capital expenditures: A. add to the market value of the property. B. are deductible for tax purposes in the year in which they are paid. C. are necessary to keep the property operating and competitive in its local market. D. may include minor repairs that do not add to the property's useful life.
A
Profitability ratios, income multipliers, and financial risk ratios can be used to provide a quick assessment of a property's relative value. Which of the following ratios measures the overall income-producing ability of the property? A. Capitalization rate B. Equity dividend rate C. Debt coverage ratio D. Operating expense ratio
A
The use of financial leverage in purchasing an income-producing property can affect the amount of cash required at acquisition, the net cash flows from rental operations, the net cash flows from the eventual sale of the property, and the ultimate return on invested equity. Assuming the going-in IRR is greater than the effective borrowing cost, if an investor increases his leverage rate, say from 75% to 80%, we would expect which of the following to occur? A. Both NPV and going-in IRR increase B. NPV decreases, while going-in IRR increases C. NPV increases, while going-in IRR decreases D. Both NPV and going-in IRR decrease
A
While the general concepts of investment value and market value are very similar, there is an important distinction between the two. All of the following statements regarding investment value are true EXCEPT: A. Investment value is based on the expectations of a typical, or average, investor. B. Investment value is a function of estimated cash flows from annual operations C. Investment value takes into consideration estimated proceeds from the sale of the property D. Investment value applies a discount rate to future cash flows.
A
_________________ exist when rights of possession transfer with oral instead of written agreements a. tenancies at will b. periodic tenancies c. estate for years d. joint tenancies
A
the future interest in an ordinary life estate is called the: a. remainder b. legal life estate, conditional c. revertor d. contingent estate
A
the right of government to enforce zoning and growth control measures come under the government's authority known as: a. police power b. taxation c. eminent domain d. escheat
A
Suppose the operating agreement of an LLC insists that all investors receive their pro rata share of all cash flows when a property is liquidated from the portfolio. If all 15 investors contributed an equal amount of equity in establishing the LLC, each investor should receive how much from the liquidation of a property valued at $3,500,000.
$233,333
Given the following information, calculate the after tax-cash flow for this property. Debt Service: $45,000; First-year NOI: $91,750; Tax liability: 25% of Before Tax Cash Flow.
$35,062.50
If the lender has agreed to offer you a loan with a loan-to-value ratio of 85%, what is the size of the loan if the purchase price of the home is $500,000?
$425,000
Suppose you plan to put a 20% down payment on a house and obtain a mortgage loan that is less than the size limit on conforming loans ($417,000) to finance the remainder of the purchase. Based on your understanding of the loan-to-value ratio, what is the maximum price that you could pay for a home with these restrictions in mind?
$521,250
physical rights
- surface rights - subsurface rights - air rights - public fly-over rights
tenancy in common
-a co-ownership estate without survivorship rights Ownership goes to heir not other owner when one owner dies
for joint ownership there must be
-unity of time -unity of title -unity of possession -unity of interest
2 types of estates
1. estates in severalty 2. freehold estates
4 primary tests used to determine whether an item is a fixture:
1. intent test 2. adaption test 3. annexation test 4. relationship-of-the parties test
4 government roles in determining property rights
1. police power 2. taxation 3. eminent domain 4. escheat
3 legal rights of real estate ownership
1. right of exclusive possession and control 2. right of quiet enjoyment 3. right of disposition
4 physical real property rights
1. surface rights 2. subsurface rights 3. air rights 4. public fly-over rights
for joint ownership to exist there must be:
1. unity of time 2. unity of title 3. unity of possession 4. unity of interest
Unlike the debt coverage ratio, the debt yield ratio (DYR) is not affected by the interest rate or amortization period of the loan; the DYR is simply a measure of how large the NOI is relative to the loan amount. Lenders who rely on this ratio are typically willing to accept a minimum DYR of
10%
Given the following information, calculate the capitalization rate for the following apartment complex. Number of apartments: 15; Market Rent (per month): $1,000; Vacancy and Collection Loss: 10% of potential gross income; Operating Expenses: 5% of effective gross income; Capital Expenditures: 10% of effective gross income; Acquisition Price: $1,710,000.
8.1%
Changes in the discount rate used to complete net present value analysis can have a significant impact on the estimated value of the investment and therefore affect the overall investment decision. As the required internal rate of return (IRR) increases, the net present value will: A. decline B. increase C. remain the same D. become zero
A
Given the following expected cash flow stream, determine the NPV of the proposed investment in an income producing property and determine whether or not the investment should be pursued. Investment Horizon: 5 years; Expected Yearly Cash Flow in each of the next five years: $127,628. Expected Sale Price at end of 5 years: $1,595,350; Opportunity Cost of Investment 6%; Current Market Price of Property: $1,750,000 A. NPV is -$20,246; Decision is to invest B. NPV is -$20,246; Decision is not to invest C. NPV is $249,967; Decision is to invest D. NPV is $249,967; Decision is to not invest
B
Given the following information regarding an income producing property, determine the unlevered internal rate of return (IRR). Expected Holding Period: 5 years; 1st year Expected NOI: $89,100; 2nd year Expected NOI: $91,773; 3rd year Expected NOI: $94,526; 4th year Expected NOI: $97,362; 5th year Expected NOI: $100,283; Debt Service in each of the next five years: $58,444; Current Market Value: $885,000; Required equity investment: $221,250; Net Sale Proceeds of Property at end of year 5: $974,700; Remaining Mortgage Balance at end of year 5: $631,026. A. 10.6% B. 12.2% C. 22.9% D. 33.4%
B
Given the following information, calculate the NPV for this property. Initial cash outflow: $200,000, Discount rate: 15%, CF for year 1: $25,876, CF for year 2: $23,998, CF for year 3: $23,013, CF for year 4: $22,105, CF for year 5: $144,670. A. -$51,875 B. -$59,657 C. $140,343 D. $295,951
B
Given the following information, calculate the before-tax equity reversion (BTER). NOI: $89,100, Annual Debt Service: $58,444, Net Sale Proceeds: $974,700, Remaining Mortgage Balance: $631,026. A. $30,656 B. $343,674 C. $572,582 D. $885,600
B
Given the following information, calculate the cash down payment required to purchase the specific property. Purchase Price: $500,000, Loan Amount: 80% of purchase price, Up-front financing costs: 2.5% of loan amount. A. $90,000 B. $110,000 C. $136,250 D. $200,000
B
Given the following information, calculate the debt coverage ratio for this investment. Potential gross income: $120,000, Vacancy rate: 9%, Net operating income: $57,900, Operating expenses: $51,300, Acquisition Price: $520,000, Debt service: $40,000. A. 0.69 B. 1.45 C. 2.73 D. 8.29
B
Given the following information, calculate the going-in capitalization rate for the specific property. First-year NOI: $18,750, Acquisition price: $150,000, Equity Investment: 20%. A. 2.5% B. 12.5% C. 15.6% D. 62.5%
B
Given the following information, calculate the loan-to-value ratio for this property. Loan amount: $450,000, Interest rate: 7.5%, Acquisition price: $550,000 A. 0.18 B. 0.82 C. 0.99 D. 1.22
B
Given the following information, calculate the total amount of annual operating expenses for this income-producing property. Lawn care: $10,000, Property taxes: $24,000, Maintenance: $35,000, Janitorial: $25,000, Security: $32,000, Debt service: $145,000. A. $102,000 B. $126,000 C. $247,000 D. $271,000
B
In calculating the net operating income (NOI) of a property, the "above-line" treatment of capital expenditures implies: A. capital expenditures are excluded from the calculation of NOI. B. capital expenditures are included in the calculation of NOI. C. capital expenditures are set equal to NOI. D. capital expenditures are divided by NOI.
B
In discounted cash flow (DCF) analysis, the sale price of the property must be estimated at the end of the expected holding period. The most common method for determining the terminal value of the property is the: A. yield capitalization method B. direct capitalization method C. repeat-sales approach D. cost approach
B
Just as it is important for an investor to consider the impact of financial leverage on her return, it is also necessary to account for the effect of income taxes. How would the presence of income taxes impact the levered going-in IRR? A. Income taxes increase the levered going-in-IRR B. Income taxes reduce the levered going-in-IRR C. Income taxes do not affect the going-in-IRR D. Income taxes cause the levered going-in-IRR to become invalid as a measure of return.
B
The internal rate of return (IRR) on a proposed investment is the discount rate that makes the net present value of the investment: A. greater than zero B. equal to zero C. less than zero D. greater than the opportunity cost of not investing
B
The key to meaningful valuations in real estate is to use defensible cash flow estimates. All of the following statements are true in regards to generating accurate cash flow estimates EXCEPT: A. Investors should include only those sources of income and expenses that relate directly to the income producing ability of the property. B. Investors should only consider recent events, rather than long-term trends when evaluating revenue and expense items. C. Investors should obtain information about comparable properties whenever possible. D. Investors should take into consideration local zoning, land use, and environmental controls that may impact the future flow of funds.
B
The use of financial leverage when investing in real estate is a double-edged sword. While increased leverage may allow the investor to "purchase" higher expected returns, the "price" of doing so is an increase in which of the following risks? A. Liquidity risk B. Default risk C. Interest rate risk D. Pipeline risk
B
Which of the following terms refers to the present value of the right to receive a lump sum payment of $1 at the end of a particular year, given a specified discount rate? A. Net present value B. Present value factor C. Future value D. Net operating income
B
a form of ownership of real estate with fee simple estate ownership of individual units, and ownership as tenants in common areas is termed: a. a cooperative b. a condominium c. a conjoint estate d. a townhouse estate
B
an estate having a duration set by private contract is known as a: a. freehold estate b. non-freehold estate c. fee simple estate d. determinable fee estate
B
An important piece of criteria for investors to consider when deciding between real estate investment opportunities and investing in stocks or bonds is the effect of income taxes on their return. For most investors, the effective tax rate on commercial real estate is: A. greater than the effective tax rate on a stock or bond investment B. equal to the effective tax rate on a stock or bond investment C. less than the effective tax rate on a stock or bond investment D. cannot be compared across asset classes.
C
An owner's legal right to control entry to real estate property and to use of the property as collateral for loans is a part of the owner's right of: a. dispostion b. quiet enjoyment c. exclusive possession d. redemption
C
Given the following information regarding an income producing property, determine the after tax internal rate of return (IRR). Expected Holding Period: 5 years; 1st year Expected BTCF: $30,656; 2nd year Expected BTCF: $33,329; 3rd year Expected BTCF: $36,082; 4th year Expected BTCF: $38,918; 5th year Expected BTCF: $41,839; 1st year Expected Tax Liability: $7,645; 2nd year Expected Tax Liability: $8,658; 3rd year Expected Tax Liability: $9,708; 4th year Expected Tax Liability: $10,798; 5th year Expected Tax Liability: $6,951; Estimated Before Tax Equity Reversion at end of year 5: $343,674; Expected Taxes Due on Sale at end of year 5: $32,032; Required equity investment: $241,163 A. 11.2% B. 13.3% C. 15.4% D. 20.3%
C
Single year return measures and ratios can be categorized into three groups: profitability ratios, multipliers, and financial ratios. All of the following are considered financial ratios EXCEPT:
Capitalization ratio
A client has requested advice on a potential investment opportunity involving an income producing property. She would like you to determine the internal rate of return of the investment opportunity based on the following information. Expected Holding Period: 5 years; End of first year NOI estimate: $113,900; NOI estimates in subsequent years will grow by 5% per year; Price at which the property is expected to be sold at the end of year 5: $1,615,205.22; Current market price of the property: $1,475,667.71. A. -15.30% B. 8.60% C. 9.86% D. 10.00%
D
Given the following information, calculate the appropriate after-tax discount rate. Tax rate on comparable risk investment: 35%, Investor's before-tax opportunity cost: 12%, Capitalization rate: 8%. A. 2.8% B. 4.2% C. 5.2% D. 7.8%
D
Suppose you purchased an income producing property for $95,000 five years ago. In Year 1, you were able to negotiate a lease that paid $10,000 per year at the end of each year. If you are able to sell the property at the end of year 5 for $100,000 (after receiving our final lease payment), what was the internal rate of return (IRR) on this investment? A. -18.18% B. 1.03% C. 9.57% D. 11.37%
D
The measure of cash flow most relevant to investors in income-producing real estate is the after-tax cash flow (ATCF) from property operations. Therefore, it is important to know that the maximum federal income tax rate on individuals is currently: A. 25% B. 30% C. 33% D. 35%
D
To overcome the potential shortcomings of single-year decision making metrics, many investors in real estate also perform multiyear discounted cash flow (DCF) valuation. DCF valuation differs from the single-year ratio analysis in all of the following ways EXCEPT: A. Only with DCF must the investor estimate an appropriate investment horizon accounting for how long she will hold the property. B. Only with DCF must the investor select the appropriate yield at which to discount all expected future cash flows. C. Only with DCF must the investor make explicit forecasts of the property's net operating income for each year in the expected holding period. D. Only with DCF must the investor use a defensible cash flow estimates that incorporates appropriate measures of income and expenses.
D
if one co-owner dies that owner's rights become divided among the surviving partners, rather than passed to the heirs of the deceased, the ownership interest: a. has adverse possession b. does not have adverse possession c. does not have a right of survivorship d. has a right of survivorship
D
the physical rights to real estate generally include all of the following, except a. air rights b. mineral rights c. surface rights d. easement rights
D
which of the following is NOT a test of the court used to resolving disputes about fixtures? a. the annexation test b. the intent test c. the test of expectation d. the adaption test
C
which of the following is not a test of the court used to resolving disputes about fixtures? a. The Annexation Test b. The Intent Test c. The Test of Expectation d. The Adaption Test
C
most common indirect co-ownership form
C, S-, and limited liability corporations
most common vendors
C-, S- and limited liability corps
have a duration set by private contract (apartment rental)
non-freehold estates
estates in severalty
occur when only one party owns real estate
REITS
one party (the REIT) holds property for the benefit of others (REIT shareholders)
right of quiet enjoyment
owners have a legal claim to their property without unfounded disturbances from those claiming defects in the title - no one has better title
right of exclusive possession and control
owners have the legal right to control entry to their property, to collect damages in the event of trespass, and to use the property as collateral for a loan
restrictive covenants
owners may impose limitations on the use of property by future owners
refers to all other tangible property
personal property
rights above private air rights (trespassing)
public fly over rights
refers to land and anything permanently affixed to the land
real property
personal property
refers to all other tangible property
allows owners to transfer ownership to others
right of disposition
means that owners have the legal right to control entry their property, to collect damages in the event of trespass, and to the use of the property as collateral for a loan
right of exclusive possession and control
escheat
right of govt to claim ownership to property for which the owner died and there are no heirs
means that owners have a legal claim to their property without unfounded disturbances from those claiming defects in the title
right of quiet enjoyment
joint tendency includes ____________
right of survivorship
who started the creation of condominiums
romans
community property
some states recognize husband and wife as equal partners -each have 1/2 interest in property
fixtures
something that was once personal property, but has become part of some real property
rights to minerals, oils, and gas
subsurface rights
rights to improvements "on" and "to" the land
surface rights
the power of local governments to levy ad valorem real estate taxes represents a limitation of real property rights
taxation
____________ exists when rights of possession transfer with oral instead of written agreements
tenancies at will
states which follow the traditional ownership-in-place recognize:
the ownership of oil and gas as part of land ownership
A party with a determinable fee estate receives, for example, through sale, gift, or will, an interest in real property that lasts for as long as some stipulation remains satisfied TF
true
Joint tenancy does not include the right of survivorship TF
true
Riparian land describes land adjacent to non navigable bodies of water, and the landowner's rights to use the water constitute their riparian rights TF
true
Some states hold that the first party to use a body of water for some beneficial economic purpose obtains a superior rights to the water use TF
true
T/F: C-S-, and limited liability corporations own and operate real estate as an independent entity
true
T/F: if Bill verbally gives Eddie the right to fish in Bill's pond. this right is termed a license
true
The physical rights of real estate owners theoretically extend to the center of the earth in the shape of an inverted pyramid TF
true
riparian land describes land adjacent to nonnavigable bodies of water, and the landowners' rights to use the water constitute their riparian rights TF
true
the physical rights of real estate owners theoretically extend to the center of the earth in the shape of an inverted pyramid
true
all owners must have an equal ability to use the property
unity of interest
the ownership rights must begin at the same time
unity of time
the ownership rights must be transferred under the same title
unity of title
what year and when did romans tart condominiums
year 300 in France
Given the following information regarding an income producing property, determine the after tax net present value (NPV). Expected Holding Period: 5 years; 1st year Expected BTCF: $30,656; 2nd year Expected BTCF: $33,329; 3rd year Expected BTCF: $36,082; 4th year Expected BTCF: $38,918; 5th year Expected BTCF: $41,839; 1st year Expected Tax Liability: $7,645; 2nd year Expected Tax Liability: $8,658; 3rd year Expected Tax Liability: $9,708; 4th year Expected Tax Liability: $10,798; 5th year Expected Tax Liability: $6,951; Estimated Before Tax Equity Reversion at end of year 5: $343,674; Expected Taxes Due on Sale at end of year 5: $32,032; Required equity investment: $241,163; After Tax Opportunity Cost: 11.2% A. -$40,858 B. -$91,785 C. $40,858 D. $91,785
C
Given the following information regarding an income producing property, determine the internal rate of return (IRR) using levered cash flows. Expected Holding Period: 5 years; 1st year Expected NOI: $89,100; 2nd year Expected NOI: $91,773; 3rd year Expected NOI: $94,526; 4th year Expected NOI: $97,362; 5th year Expected NOI: $100,283; Debt Service in each of the next five years: $58,444; Current Market Value: $885,000; Required equity investment: $221,250; Net Sale Proceeds of Property at end of year 5: $974,700; Remaining Mortgage Balance at end of year 5: $631,026. A. 10.6% B. 12.2% C. 22.9% D. 33.4%
C
Given the following information, calculate the effective gross income multiplier for the specific investment. Effective gross income: $49,500, First-year NOI: $18,750, Acquisition price: $520,000, Equity Investment: 20%. A. 0.036 B. 0.095 C. 10.5 D. 27.7
C
Given the following information, calculate the equity dividend rate for this investment. First-year NOI: $18,750, Before-tax cash flow: $11,440, Acquisition price: $520,000, Equity Investment: 20%. A. 2.2% B. 3.6% C. 11.0% D. 18.02%
C
Given the following information, calculate the estimated terminal value of the property at the end of its holding period. Going-out cap rate: 9%, Estimated holding period: 5 years, NOI for year 5: $100,500, NOI for year 6: $102,000. A. $1,113,333 B. $1,116,667 C. $1,133,333 D. $1,166,667
C
Given the following information, calculate the going-out cap rate. Estimated holding period: 5 years, NOI for year 1: $120,000, NOI for year 5: $150,000, NOI for year 6: $155,250, Expected sale price at end of year 5: $1,350,000. A. 8.9% B. 11.1% C. 11.5% D. 11.9%
C
Given the following information, calculate the net income multiplier for this property. First-year NOI: $18,750, Acquisition price: $150,000, Equity Investment: 20%. A. 0.1 B. 1.6 C. 8.0 D. 12.5
C
Given the following information, calculate the operating expense ratio for this property. Potential gross income: $120,000, Vacancy rate: 9%, Net operating income: $57,900, Operating expenses: $51,300. A. 34% B. 43% C. 47% D. 53%
C
Helpful in assessing the risk of lending to investors for particular projects, which of the following calculations measures the income-producing ability of the property to meet operating and financial obligations? A. Profitability ratios B. Income multipliers C. Financial risk ratios D. Income tax multipliers
C
In determining a property's before-tax cash flow from operations (BTCF) and net operating income (NOI), it is important to understand how each accounts for the use of financial leverage in its calculation. Which of the following statements is true in regards to how these two measures account for the use of financial leverage? A. BTCF and NOI are both levered cash flows B. BTCF is an unlevered cash flow, while NOI is a levered cash flow C. BTCF is a levered cash flow, while NOI is an unlevered cash flow D. BTCF and NOI are both unlevered cash flows
C
In discounted cash flow analysis, the industry standard for pro forma cash flow projections of investment properties is typically: A. 3 years B. 5 years C. 10 years D. 15 years
C
In making single-asset real estate investment decisions, the first pass often involves calculating a series of returns, ratios, and multipliers. Which of the following is often cited as a limitation associated with this type of analysis? A. They are difficult to calculate B. They are complex to understand C. They fail to incorporate cash flows beyond the first year of the analysis D. They are rarely used by industry professionals
C
Many investors use mortgage debt to help finance capital investment for income-producing real estate. In doing so, the owner will receive income as long as the property produces enough income to cover all operating and capital expenditures, the mortgage payment, and all state and federal income taxes. Therefore, the owner's claim is commonly referred to as a: A. primary claim B. joint claim C. residual claim D. superior claim
C
The going-in capitalization rate can vary significantly by property quality. Which of the following classes of properties within a particular property type would be expected to have the highest cap rates? A. Class A properties B. Class B properties C. Class C properties D. Cap rates would be equal across all classes within the same property type
C
The loan-to-value ratio measures the percentage of the acquisition price (or current market value) encumbered by debt. To protect their invested capital in the event that property values do fall, commercial mortgage lenders generally require that the senior mortgage not exceed approximately what percentage of the acquisition costs? A. 60% B. 70% C. 80% D. 90%
C
While net present value (NPV) and internal rate of return (IRR) analysis both may be used as investment decision criteria, there are some limitations to the IRR method that make its use as an investment criterion problematic in certain situations. All of the following are limitations of the IRR method EXCEPT: A. IRR calculations assume that cash flows are reinvested at the IRR, rather than at the actual rate that investors expected to earn on reinvested cash flows. B. With the IRR decision criterion multiple solutions may exist for investments where the sign of the cash flows changes more than once over the expected holding period. C. The IRR methodology cannot be used to make comparisons across different investment opportunities. D. The use of IRR as a decision criterion will not necessarily result in wealth maximization for the investor.
C
states which follow the traditional ownership-in-place concept: a. recognize the ownership of oil and gas as part of personal property b. recognize the use of water as controlled by those having prior use c. recognize the ownership of oil and gas as a part of land ownership d. do not recognize the right of a property owner to sell a property's air rights
C
concurrent estates
involve real property by more than one owner
eminent domain
Govt. has right to acquire private property for public use. Owner entitled to just compensation 5th Amendment
Investment
Most RE decisions are made with an ______ theme
easement by prescription
acquiring use to property by past, long-continued use
rights to air space to the height of the tallest man-made improvements
air rights
right of disposition
allows owners to transfer ownership to others
liens
involves the right of a creditor to petition the court to force repayment of a debt through foreclosure and sale of property
two or more parties owning property together
joint tendency
real property
land and anything permanently affixed to land
condominiums
co-ownership of real estate with fee simple ownership and ownerships as tenants in common -idea by romans in year 300 -started in France
involve real property ownership by more than one owner
concurrent estates
an ownership form where individuals own shares of a corporation which in turn owns real estate
cooperative
the physical rights to real estate generally include all of the following except: a. air rights b. mineral rights c. surface rights d. easement rights
d
estate
degree of legal interest a party has in real property
fee simple absolute
dont setting for anything else - general warranty -complete set of legal rights
access to roadways, utility lines, drainage and flood plains, and even solar access
easement
the right to use the land of another
easement
involves rights that "run" with the land
easement appurtenant
what type of easement is road access
easement appurtenant
creates rights that "run" with the user because the party granted the right must use the land for a specific purpose
easement in gross
most common form of easement
easement in gross
what type of easement is a utility line an example of
easement in gross
easement where the purchaser reasonably believed that an easement would be conveyed with the sale
easements by implication
easement that states rights to access landlocked property
easements by necessity
easements that states a means of acquiring use to property by past, long-continued use
easements by prescription
when governments and their agencies have the right to acquire private property for a public use. the property owner is entitled to JUST COMPENSATION for the property
eminent domain
the right of government to claim ownership to property for which the owner died intestate and there are no known heirs
escheat
refers to the degree of legal interest a party has in real property
estate
occur when only one party owns real estate-the owner's interest is severed from other owners interests.
estates in severity
Trade fixtures, such as store display counters, mobile partitions, and cabinets used by tenants in a shopping center are fixtures, and therefore deemed to be part of the real estate TF
false -NOT deemed
The rights of the utility company to use a particular part of an individual's property for the installation of their utility lines is an example of an EASEMENT APPURTENANT TF
false- an example of EASEMENT IN GROSS
ALL states recognize that oil and gas are personal business property and cannot be transferred with land ownership transfers TF
false-SOME states recognize the ownership of oil and gas as part of land ownership
If a 2-foot wide easement crosses another property allowing the Smiths to gain access to their otherwise landlocked property, the Smith's have what is termed a SERVIENT ESTATE TF
false-they have a DOMINANT ESTATE, the land CROSSED has a SERVIENT ESTATE
trade fixtures, such as store display counters, mobile partitions, and cabinets used by tenants in a shopping center ARE FIXTURES, and therefore deemed to be part of the real estate TF
false-trade fixtures are NOT fixtures in the legal sense and NOT real estate
refer to something that was once PERSONAL PROPERTY but has become a part of some REAL PROPERTY
fixtures
held for an indefinite duration (home ownership)
freehold estates
non-freehold estates
have a duration set by private contract - apartment rental
freehold estates
indefinite duration - home ownership
