Real Estate Principle (Chpt. 2 Quiz)

What type of ownership has definite rights of survivorship? a. Joint tenancy. b. Tenancy in common. c. Severalty. d. All of the above.

a. Joint tenancy ** JOINT TENANCY (Right of Survivorship) Joint Tenancy: occurs when two or more people have identical interest in the whole property with he same right of possession and the right of survivorship. If one of the joint tenancy owners should die, his or her interest is then split evenly with the surviving owners. ***Joint tenancy can NEVER be willed. (pg. 36)

A property owner living on a river bank acquires land due to the shifting of the river. This process is called: a. Succession. b. Accretion c. Encroachment. d. None of the above.

b. Accretion **Accession occurs when an owner acquires title to additional land by natural causes; that is, additions to the property by natural growth. The addition to land from natural causes, such as earthquakes, volcanoes, or the action of moving water is known as ACCRETION. (pg. 33)

A written instrument that conveys and evidences title is called a(n): a. Will. b. Deed. c. Transfer. d. Implied warranty.

b. Deed ** A DEED is a written instrument that conveys and evidences title. (pg. 28)

A deed does NOT take effect until it is: a. Signed. b. Delivered and accepted. c. Notarized. d. All of the above.

b. Delivered and accepted ** A deed does not take effect until it is delivered and accepted. In order for title to be transferred, the grantor must sign the deed and deliver it with the intention of passing title immediately. (pg. 29)

Time, title, interest, and possession are the four essential unities of a: a. Tenancy in common. b. Joint tenancy. c. Partnership. d. Corporation.

b. Joint tenancy **When a joint tenancy is established, there are four necessary unities (T-TIP): T 1. Title - All owners are granted title by the same instrument. T 2. Time - All owners obtain title at the same time.. I 3. Interest - All owners share an equal interest. P 4. Possession - All owners have an equal right to possess the property. (pg. 37)

"The right to use a property for a specific period of time" describes a: a. Life estate. b. Less-than-freehold estate. c. Freehold estate. d. All of the above.

b. Less-than-freehold estate **LESS-THAN-FREEHOLD ESTATES are personal rights to the use of real property for a period of time. They are commonly referred to as leases or rental agreements, which give tenants various rights to use real property for a specified period. (pg. 26)

Which of the following is needed to transfer property deeded "Mary Smith, a married woman"? a. Husband's signature only. b. Wife's signature only. c. Both husband and wife's signature. d. Husband's signature only, if the wife gives verbal consent.

c. Both husband and wife's signature. **COMMUNITY PROPERTY: refers to all the property acquired by a husband or wife during their marriage other than separate property. Both husband and wife's signature are needed to transfer property deeded "Mary Smith, a married woman". (pg. 38)

With a life estate, the ownership interest is limited to the: a. Economic life of the property. b. Life of the grantor. c. Life of any designated person or persons. d. Any of the above.

c. Life of any designated person or persons. **A LIFE ESTATE is an ownership interest in real property that only exists for the life of any designated person or persons (often the grantee). (pg. 25)

Through the process of escheat, the deceased's property passes to: a. His or her heirs. b. His or her creditors. c. The state. d. The local county.

c. The state **"ESCHEAT" is the term used if there is no will and there are no heirs; the property will go to the state of California. Escheat is not automatic. There is a 5 year period during which heirs can make claims to the state for the property. If a person dies intestate leaving no heirs, the estate goes to the state of California. Individuals do NOT acquire property by escheat. (pg. 32)

In California, a notice to vacate an "estate at will" (rental agreement) requires how many days notice? a. 15 b. 1 c. 29 d. 30

d. 30 **An ESTATE AT WILL is a rental agreement that can be terminated by either party (lessor or lessee) at any time, although by California law, there must be at least a 30-day notice to vacate. (pg. 27)

The owner of property adjacent to the water flow can acquire title to additional land by: a. avulsion b. alluvium c. percolation d. accession

d. accession **ACCESSION occurs when an owner acquires title to additional land by natural causes; that is, additions to the property by natural growth. ______________________________________________________________________ Avulsion: is the sudden, violent tearing away of land by, for example, a river. Alluvium: are deposits of earth made through the natural action of water. Percolating water: refers to underground water not found in a defined channel (natural water course).

A seven-year lease would be considered: a. an estate for years b. personal property c. chattel real d. all of the above

d. all of the above **An ESTATE FOR YEARS is a lease for a fixed period of time, agreed to in advance. This period can be from a few days up to 99 years. No notice to terminate is necessary. Whether a lease is for two months or seven years, it is considered an "estate for years," personal property, and chattel real. (pg 27)

If a real estate agent advises a buyer how to take title to real property, he/she may be liable for: a. practicing law b. giving tax advice c. discrimination d. all of the above

d. all of the above *A real estate salesperson or broker may not give legal advice, because the law is a highly complex and specialized profession that requires years of preparation and training. In the state of California, only a licensed attorney who is a member of the State Bar is allowed to practice law. A broker cannot give legal advice, unless he or she is also an attorney. (pg. 41)

Which of the following statements is false? a. A trust deed is an instrument used to transfer personal property. b. A gift deed is an instrument granting a gift out of love and affection. c. A tax deed is the deed given to the buyer when a property is sold for past due property taxes. d. A sheriff's deed is the deed given to the purchaser at a court required sale.

a. A trust deed is an instrument used to transfer personal property. *A "trust deed" is NOT a deed, but rather a conveyance; it gives bare (or naked) legal title to a trustee with the power to sell. ______________________________________________________________________ GIFT DEED: granted as a gift of love and affection. No other consideration is necessary, but is void if given to defraud creditors. TAX DEED: given if property is sold as payment of past-due property taxes. SHERIFF'S DEED: granted to the purchaser at a court-ordered sale. (pg. 31)

Which of the following is an example of a freehold estate? a. The interest created by a trust deed b. An estate at will c. A life estate d. A leasehold estate

c. A life estate **There are 2 types of freehold estates, an ESTATE IN FEE & a LIFE ESTATE (pg. 23)

A woman CANNOT receive title to real property by: a. A gift deed. b. A patent. c. Adverse possession. d. Escheat.

d. Escheat **Escheat is the term used if there is no will and there are no heirs; the property will go tot he state of California. ***IndivIduals do NOT acquire property by escheat. (pg. 32)

Property acquired by a husband and wife during marriage and is split 50/50 is called: a. Community property. b. Joint tenancy property. c. Tenancy in common. d. All of the above.

a. Community property **COMMUNITY PROPERTY refers to all the property acquired by a husband or wife during their marriage other than separate property. California is a community property state which means that any property acquired during a marriage is shared equally. (pg. 38)

. Of the following, which is NOT true of a grant deed? a. It is used primarily to clear a "cloud on title" from the records. b. It warranties that the owner has not conveyed title to any other person. c. It warranties that the property being conveyed is free from any undisclosed encumbrances. d. It conveys any "after-acquired" title.

a. It is used primarily to clear a "cloud on title" from the records. **A GRANT DEED is a document that transfers title (evidence of property ownership), with the key word being "grant". The grant (or warranty) aspect of the deed is a promise that: a. The owner (grantor) has not conveyed title to the property to any other person (grantee). b. The property is free of any encumbrances (liens or other restrictions) other than those already disclosed to the grantee. A grant deed also transfers any "after-aquired title", meaning that rights obtained after the sale has been completed are also conveyed. ___________________________________________________________________ (A QUITCLAIM deed is used primarily to clear a cloud on title from the records. A "Cloud on Title" is a claim, encumbrance, or condition that impairs the title). (pg. 28)

Duke sold his property to Jane with the condition that Jane must never use it for the purpose other than as a private residence. However, after owning the property for several years, Jane decided to start a board and care facility for handicapped adult. What is the status of the estate? a. It may revert to Duke because it is a fee simple defeasible estate. b. It may revert to Duke because it is a fee simple absolute estate. c. Duke has no claim because his condition is unlawful. d. Duke has no claim because the statute of limitations ran out on the condition.

a. It may revert to Duke because it is a fee simple defeasible estate. A FEE SIMPLE DEFEASIBLE ESTATE (or qualified fee estate) is a fee estate that is subject to particular limitations imposed by the grantor of the estate. Breaking any condition of the transfer may be grounds for terminating or revoking the property transfer. (pg. 25)

What differentiates an estate for years from an estate from period-to-period is that an estate for years: a. Is a renewable agreement. b. Is for a fixed period of time. c. Can be terminated at any time. d. Is from year-to-year.

b. Is for a fixed period of time. **Estate For Years (Tenancy for a Fixed Term) An ESTATE FOR YEARS is a lease for a fixed period of time, agreed to in advance. This period can be from a few days up to 99 years. No notice of termination is necessary. (Whether a lease is for two months or seven years, it is considered an "estate for years," personal property, and chattel real). ______________________________________________________________________ **Estate From Period-To-Period (Periodic Tenancy) An ESTATE FROM PERIOD-TO-PERIOD is a renewable agreement to rent or lease a property for a period of time, where the rental or lease amount is fixed at an agreed to sum per week, month, or year. A notice to terminate must be given (usually 30 days). (pg. 27)

When selling his home to John, Bert negotiated a leaseback arrangement in order to continue renting and occupying the property for the next two years. John immediately places the unrecorded grant deeding a safe deposit box for ultimate security. Two days later, Bert "sold" the home and a second time to Julie who promptly recorded her deed. Which of the following is most correct? a. John is the rightful owner of the home provided he can produce this first deed to the property. b. Julie is the likely owner of the property because she recorded her deed first. c. Bert still owns the home until he vacates. d. The title company will decide who is the rightful owner of the property.

b. Julie is the likely owner of the property because she recorded her deed first. **CONSTRUCTIVE NOTICE is notice of documents presumed by law to have been acquired by a person whether or not they have actually examined them. It can be accomplished by recording a deed or taking possession of the property. Any recorded notice that can be obtained from the county recorders office can be considered constructive notice (and therefore public knowledge). If the same property is sold to more that one party, the individual who has given constructive notice first (by possession or recordation) will usually be recognized as the rightful owner. (pg. 39)

Someone using another person's land continuously, without paying any property taxes, might qualify to obtain an easement, or legal right to use the land, according to: a. Accession. b. Prescription. c. Adverse possession. d. Murphy's Law.

b. Prescription **PRESCRIPTION: is an easement or the right to use another's land, which can be obtained through five years of continuous use. (pg. 34)

Which of the following is a document conveying title with NO warranties, expressed or implied? a. Grant deed. b. Quitclaim deed. c. Holographic will. d. All of the above.

b. Quitclaim deed **QUITCLAIM DEED is a deed that conveys all the present rights or interest that a person may have in a property, without any warranty, title, or interest. Quitclaim deeds make NO "covenants" (promises"; they guarantee nothing. They only convey any rights the grantor may have. (pg. 29)

In a real estate transaction, the grantor is the: a. Buyer. b. Seller. c. Renter. d. Lender.

b. Seller **GRANTOR: is the person who grants property or property right (seller). (pg. 28)

A tenant at sufferance would occur when: a. a tenant remains in the property after the end of an estate for years and continues to pay rent. b. a tenant remains in the property after expiration of a lease without the owner's consent. c. a landlord who delivers a 30-day notice to vacate the premises cannot find the tenant. d. a landlord cannot obtain a writ of execution from the courts.

b. a tenant remains in the property after expiration of a lease without the owner's consent. ** A TENANCY AT SUFFERANCE occurs when a tenant remains in the property after expiration of a lease without the owner's consent. (pg 27)

Which of the following is a type of freehold estate? a. Probate estate b. Leasehold estate c. Estate in fee d. Estate in sufferance

c. Estate in fee **There are 2 types of freehold estates (real property), they are: (1) Estate in Fee (a) Fee simple estates (Estate in fee) A fee simple estate is the most complete and common form of ownership. This can be referred to as fee, fee ownership, or fee simple. FEE SIMPLE means an owner has transferred all rights of property to a new owner for an indefinite duration of time (perpetual). (2) Life Estate (Indefinite Period) A LIFE ESTATE is an ownership interest in real property that only exists for the life of any designated person or persons (often the grantee). (pgs. 23 & 25)

Which type of will, unless signed with an "X," requires NO witnesses? a. Living trust. b. Statutory. c. Holographic. d. All of the above.

c. Holographic ** A HOLOGRAPHIC WIL is entirely handwritten by the owner, dated, and signed. Since it is in the owner's handwriting, no other formalities and no witnesses are required, unless the will is signed with an "X," in which case it must be witnessed. (pg. 31)

What distinguishes a "will" from other types of property transfers? a. It allows for the transfer of more property. b. It creates a present interest in property. c. It only becomes effective at death. d. None of the above.

c. It only becomes effective at death. **A WILL is a document, created by a person, stating how that person's property is to be conveyed or distributed upon his or her death. (pg. 31)

Grantor C conveys a large house and land to his daughter and son-in-law to be theirs as long as they are married. One year later they are divorced. What happens to the property? a. The daughter acquires it. b. The son-in-law acquires it. c. It reverts back to C. d. The couple must sell it.

c. It reverts back to C **This is an example of a FEE SIMPLE DEFEASIBLE ESTATE A FEE SIMPLE DEFEASIBLE ESTATE (or qualified fee estate) is a fee state that is subject to particular limitations imposed by the grantor of the estate. -Breaking any condition of the transfer may be grounds for terminating or revoking the property term. Example: Duke sold his property to Jane with the condition Jane must never use it for any purpose other than a private residence. However, after owning the property for several years, Jane decided to start a board and care facility for handicapped adults. The estate may revert to Duke because it is a fee simple defeasible estate. (pg. 25)

Dick and Jane, brother and sister, own an apartment building in joint tenancy, Dick needs $10,000 to cover unexpected medical expenses, so he borrows the money from a lender and signs a trust deed on the property that was soon recorded in the public records. Forty-five days later, Dick dies. Which of the following is most correct? a. Jane is now responsible for the entire $10,000. b. Jane is now responsible for $5,000. c. Jane now owns the apartment building free and clear of her brothers $10,000 debt. d. If the loan is not repaid, the lender can foreclose only on Dick's 1/2 interest in the property.

c. Jane now owns the apartment building free and clear of her brothers $10,000 debt. **JOINT TENANCY (Right of Survivorship) Joint Tenancy: occurs when two or more people have identical interest in the whole property with the same right of possession and the right of survivorship. If one of the joint tenancy owners should die, his or her interest is then split evenly with the surviving owners. Joint tenancy can never be willed. (pg. 36)