Real Estate Law Exam 2

Sonny and Cher's total amount of community property?

$3 million

A fee simple absolute:

All

A real estate contract can successfully be avoided when

All

A tenancy by entirety:

All

General times should be established in the real estate contract for which?

All

June 5, Will mailed Sidney an offer to buy Sid's lot for $35,000. June 7, Sid mailed a counteroffer in which he offered the lot to Will in exchange for $35,000 and Will's 1988 Sports Coupe. Later on June 7, Will mailed Sidney a revocation on his offer. Which of the following correctly describes the situation?

All

Broker A has a listing agreement with the seller. Broker B has found a buyer for the property, but is not the buyer's broker. Assuming that both brokers are subject to an MLS agreement

All of the above

The 1968 Fair Housing Act prohibits discrimination in the following situations:

All of the above

Amy negotiated the sale of her property to Carrie. After the contract was signed, Amy and Carrie also orally agree that Amy would pay to clear a large tree from the front yard. Later, Amy refuses to remove the tree and Carrie sues her. Under the parol evidence rule:

Amy's oral promise would be admissible in court since it was made after the contract was signed

Amy conveyed a deed to Carrie that created the following estates: "To Carrie provided that if the property is used for any uses other than recreation, grantor shall have the right to reenter the property and cause the grantee to forfeit the estate." Amy owns a _______ and Carrie owns a _________

Amy: right of entry Carrie: fee simple subject to a condition subsequent

Jeff, a real estate agent, sells a home to a black couple in a predominately white community. After the sale, he goes to the neighbors and encourages them to sell their homes. He tells them that if they do not, their home values will go down substantially because of the area's imminent transition into a black neighborhood. Jeff is engaged in what illegal practice?

Blockbusting

Which of the following is double taxation?

C Corporation

Tinkers, Evers, and Chance purchased a tract of real estate as joint tenants. Evers sold his interest to Cobb and later Tinkers died leaving his interest by will to his only child Babe. Describe the present ownership of the real estate, including the fractional interest of Cobb, Babe, and Chance.

Cobb owns 1/3 and Chance owns 2/3 as tenants in common. When Cobb acquired his 1/3 interest from Evers, this interest was severed from other 2/3 interest, which was still held in joint tenancy. When Tinkers died, his interest passed on the the survivor Chance, thus giving him 2/3 ownership

Gunter agrees to sell his home to Daniel and they sign a real estate contract on August 1. The closing is scheduled for Sept 1. Gunter cancels his homeowner's insurance on August 2. On August 6, the house burns down. Daniel did not buy homeowner's insurance. under the doctrine of equitable conversion:

Daniel bears the risk and must pay to rebuild the house

Certain restrictions and/or liens will cause a real estate title to become unmarketable. Which of the following, as a general rule, will make the title unmarketable?

Easements and mortgages

A contract may be rescinded for misrepresentation when a party deliberately lies about a material fact, even though the face could easily have been verified

False

A contract required to be in writing under the Statute of Frauds must have the signatures of both parties to the contract before it can be enforceable against any of the parties

False

A letter of intent is an instrument that generally is mean to convey an offer

False

A life estate put autre vie is a future interesst

False

A life tent who makes improvements on leased property which are considered fixtures has an absolute right to remove them within a reasonable time after terminating the life estate

False

A limited liability company can, as an entity, never be pierced by those seeking to hold its members personally liability

False

A owns a fee simple absolute estate. A later grants a life estate to B and when B dies to C. A now owns a reversionary interest

False

A seller of real estate may cancel at any time a listing agreement that is to be in effect for a specified time if the broker has given consideration

False

A tenancy in common, like a joint tenancy or tenancy by the entirety, can be created only will or deed

False

As a general rule, an agent will be held personal liable for contracts negotiated on behalf of a principle

False

Cassidy sells her home to Sara "AS IS". Cassidy however, purposely fails to reveal a serious toxic mold problem that is hidden from anyone's view. Since Sara bought the home as it, she has no legal recourse against Cassidy

False

Estates generally fall into two categories: fee hold and freehold estates

False

Generally, a broker has implied authority to both advertise the house and to accept money from the buyer

False

If a closing date is not specified in a real estate contract, the contract will be unenforceable

False

If a vendor dies after signing a real estate contract but before the closing, the purchase price will pass the vendor's estate as real property, while the interest of a deceased vendee would pass as personal property

False

In most states, licensed real estate brokers and salespersons must also be members of the NAR

False

In most states, licensed real estate brokers and salespersons must also be members of the National Association of Realtors

False

Language such a "a commission is to be paid to the broker whether the purchaser is secured by the broker or by any person other than the seller" creates an exclusive right to sell listing agreement

False

Only licensed real estate brokers can advertise homes on the Web

False

Property classified as community property may not be partitioned

False

The Civil Rights Act of 1866 is the most comprehensive legislation in terms of types of discrimination prohibited in selling or leasing real estate

False

The fee simple defeasible corresponds to what the average person thinks of today as ownership of real property

False

The general rule for real estate contracts is that when the contract is silent on marketable title, the vendor does not have to convey a marketable title

False

The general rule today is that anything that changes the nature of real estate, even an improvement, will be considered waste

False

The parol evidence rules provides that if the parties have put their contract in writing and intend the writing to be their final agreement, evidence of prior or future agreements may not be used in court to vary or contradict the written agreement

False

The writing requirement of the Statute of Frauds is strictly enforced and allows no exceptions

False

Under the supreme court, Meyer v. Holley, brokers are still strictly and personally liable when their agents violate FHA

False

The 1968 Fair Housing Act and its 1988 amendments prohibit discrimination based on all the following except:

Family income

Which is not one of the essential terms in a real estate contract?

Fixtures to be retained by seller

Florian owns a life estate in Blackacre and Walter owns a remainder interest.

Florian would have to pay for ordinary repairs, such as painting or window replacements and Walter would have to pay for extraordinary repairs such as replacing a furnace

Which form of ownership is the least desirable for person seeking to protect her personal assets?

General Partnership

Waldo transferred his farm and all the buildings thereon to his son Junior for life, with remainder to Junior's son Gripper. The property was subject to a mortgage note having twenty years to run with 8% interest payable annually. How would you describe Junior's interest in the farm. May he sell his interest?

Junior has a life estate. Me may sell his interest to a third party. The interest of the purchaser however, is still measured by Junior's life.

Lucy and Sam own a house together as join tenants, but not as spouses. Sam becomes quite ill, so the two board board a plane to see a special doctor across the county even though ....

Lucy's heirs get half and Sam's heir gets half

Certain transactions are exempt from the ILSFDA. which is an exempt transacting under this act

None

Certain transactions are exempt from the Interstate Land Sales Full Disclosure Act. Which of the following is an exempt transaction under this act:

None of the above

Kelsey signs two open listing agreements with two brokers, Ryan and Nicole. Ryan is the first to find a potential buyer, Marissa, who agrees to buy the property if a suitable closing date can be worked out. Without Ryan's knowledge, Nicole later strikes a deal with Marissa to close earlier and persuades her to sign the contract to buy Kelsey's home. In this situation the commission would go to:

Ryan

Which agent can be held personally liable to third parties for contracts negotiated on behalf of an undisclosed principal

Secret Agents

Darth and Obie were good friends. They formed a partnership and, as partners, purchased an acre of land near a scenic wilderness. They hoped to build a combination fast food restaurant and muffler repair shop on the acre. How would you describe the ownership of the acre of land? Who will own the acre on Obie's death?

The acre of land is specific property held under a tenancy in partnership. On Obie's death, his interest in specific property passes to Darth.

Billy entered into an oral agreement to sell a parcel of real estate to Reggie for $20,00. Reggie paid Billy $500 as earnest money and Billy signed and gave Reggie the following receipt: "For $20,000. I agree to sell the property at 120 Oak Lane. Received as earnest money $500 to Billy Jones". A month later, Reggie offered the remaining $19,500 to Billy but refused to convey the property. What arguments, if any should Billy raise in claiming the contract is not enforceable?

The agreement is not enforceable under the Statute of Frauds for two reasons. First, the buyer is not named in the contract. Second, the property description is not sufficient.

Tom and Mary owned a seventy acre farm as tenants by the entirety. After negotiations with a broker, they signed a contract which they agreed to sell their farm to Jane's name on the contract and added Susan's name instead. Tom initialed the contract after the name change. Later Tom and Mary refused to execute a deed to Susan. Is the contract enforceable by Susan? Why?

The contract is not enforceable. Tom and Mary originally offered to sell their farm to Jane and an offer made to one person (Jane) cannot be accepted by another person without the offeror's permission. here only one the the offerors, Tome, gave his permission for the change by initialing the document

Minnie owned shares of stock valued at $45,000. When Minnie was 81 years old she transferred the stock to herself and her niece, Jane, "as joint tenants with right of survivorship and not as tenants in common". After Minnie's death, a dispute arose between Jane and her sister over ownership of the stock. Did Minnie's conveyance to Jane create a joint tenancy? Why?

The conveyance created a valid joint tenancy under the modem approach, where a conveyance to a third person is not required. Consequently Jane is entitled to the stock.

Joseph hires a builder to build him a home according to certain specifications. Shortly after moving in, he discovers serious problems with the plumbing that cause his basement to flood. Neither the builder nor Joseph was aware of the plumbing problem before he moved in. Which legal action might enable Jo to recover damages?

The implied warranty of habitability

Mr. and Mrs. Goodbar settled in California, a community property state. A few years later, Mrs. Goodbar inherited a restaurant from her aunt and Mrs. Goodbar decided to operate it for a few years, without any help from Mr. Goodbar. At Mrs. Goodbar's death, her will left the restaurant and all profits which she earned to her paramour, Mork. Who is entitled to the restaurant and the profits-- Mork or Mr. Goodbar. Why?

The restaurant was acquired by inheritance and therefore is separate property which passes under Mrs. Goodbar's will to Mork. The profits resulted from Mrs. Goodbar's efforts during the marriage are community property. Mr. Goodbar is entitled to one-half the profits, and Mork receives the other half.

Smith offered to sell his farm to Brown free and clear of all encumbrances. Brown accepted the offer, although he stated in the acceptance that "oil lease has to be cancelled". Assuming that the agreement complies with the Statute of Frauds, is this a binding contract? Why?

This is a binding contract. This issue here is whether the acceptance violates the "mirror image" rule discussed in the text on page 191. The court in Karas v Brogan, held that the acceptance was not a counter offer because it did not significantly modify the offer

A and B are joint tenants. A conveys his interest to C. B and C are now tenants in common

True

A buyer of real property who wishes to receive the best interest possible would prefer a fee simple absolute over a fee simple defeasible

True

A life estate cannot be inherited

True

A restraint on alienation is in direct conflict with certain social policies and might be invalid depending on the extent of the restriction

True

Assume that State A's marketable record title act provides that any legal claims against property that are older than 30 years are invalid. Sam, his father and grandfather have been using a road to cross Peter's land for 50 years. Sam's claim will stand despite the Act

True

Competing brokers A and B meet for lunch and decide to set commissions at 6 percent for a two month period. This activity would be illegal per se under antitrust law

True

If a broker is expressly authorized to convey real estate, he is implitcity authorized to receive the full purchase on behalf of the seller

True

If the seller cannot perform a real estate contract b/c title is not marketable, the purchase is entitled to a return of the earnest money

True

In an option contract for the sale of real estate the purchaser is not required to purchase the property

True

In some states a person may broker a sale of property not as an agent with fiduciary duties, but as a transactional broker who simply "assists" a particularly party and is not a fiduciary to that party

True

The electronic signatures in global and national commerce act (e sign) is a federal law that legalizes the use of electronic signatures even if they might violate a state's SofF law

True

The essential terms that much be included in a real estate contract may be written on almost any type of document

True

The key factor necessary to establish a partnership is the existence of a business

True

The most important characteristic of the joint tenancy is the right to survivorship.

True

Traditionally the broker whose client bought property listen by another broker, was considered a subagent of the seller, not the agent of the buyer

True

Under a buyer broker arrangement, a buyer may not leave her agent for another buyer if she signs an exclusive agency contract w/o being liable for a commission if the broker finds her a property to buy

True

Under the "mailbox rule" the offer is accepted once the acceptance is mailed even through the offeror has no knowledge of it

True

Under the traditional rule, a broker earns a commission under a listing agreement whenever he procures a buyer who is ready willing and able, to purchase real estate, even if seller refused to sign contract with buyer

True

Which are incidents of tenancy in partnership?

Two of the above: B & D partner's right in specific property is not subject to attachment or execution and a partner's right in specific property is not subject to dower

Jimbo signs a real estate contract with Nelson in which he promises to provide evidence of a marketable title at the closing. At the closing, Jimbo fails to provide it, but Nelson, anxious to move into his new home, completes the transaction anyway. The deed did not mention any duties or covenants, including a duty to provide evidence of marketable title. Later, it is discovered that Nelson's land is subject to an unrecorded easement that seriously diminishes the property's value. In this situation:

Under the "merger rule", Jimbo's promise merged with the deed and so now only the provisions contained in the deed are binding on the parties

Which is not a future estates?

defeasible fee

Rick signed a listing agreement with Paul, a real estate agent. The agreement stated that if Rick of anyone acting on his behalf should sell his property, Paul would still be entitled to his commission. This type of an agreement is a:

exclusive right to sell

What is considered a freehold estate?

fee simple absolute, defeasible and life estate

Rob and Kim entered into an oral agreement whereby Rob promises to pay Kim a commission if Kim produces a ready, willing and able purchaser of Rob's property. Before any performance by Kim, the agreement is:

not an enforceable contract

A real estate contract should provide proration of:

prepaid taxes and prepaid insurance

A joint tenancy requires all of the following unities except the unity of

severance

A listing agreement providing a real estate agent with an exclusive right to sell property also contain a "no deal, no commission clause". If a potential purchaser is unable to obtain financing to complete the purchase after signing a contract:

the agent is not entitled to a commission from the seller