Real Estate Study #2

In order to maintain their license, Arizona employing brokers must have ______.

A place of business

Municipality XYZ created a document that regulates the permitted land uses and zoning classifications within the town boundaries, and does so while staying within the parameters of the comprehensive plan. Municipality XYZ has created _______.

A zoning ordinance

What is the three-property rule as it relates to tax-deferred exchanges?

An investor can identify up to three replacement properties and not encounter a restriction regarding fair market value as long as debt load requirement is met.

For Arizona real estate licenses that have been cancelled, suspended, terminated, or revoked, regardless of the reason for inactivation or the state of resolution, licensees who ______ are ineligible for license reinstatement.

Are under investigation for alleged violations

Homeowners Annette and Jeff are suing contractor Daniel for breach of contract. Where might they be able to find an affidavit of suspended license to use as prima facie evidence in the court proceedings?

Arizona Registrar of Contractors

What are the step that the ADEQ takes to assess a potential WQARF site?

Assessing whether the site is already being cleaned up voluntarily Determining whether there's credible evidence of a needed cleanup Investigating whether another regulatory program has jurisdiction over the site

With a periodic estate lease, a landlord must remind tenants that their lease will ______.

Automatically renew

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."

Jason bought a home four years ago for $153,000. If his home appreciated at an annual rate of 3%, how much would his home be worth today (round to the nearest dollar)?

$172,203

When a hearing determines that a contractor is guilty of contracting without a license and it's a second offense, the Arizona Registrar of Contractors may assess penalties. Such penalties cannot exceed ______ per violation.

$2,500, plus an 83% surcharge

Arizona brokers must withdraw any interest earned on a trust account at least every ______.

12 months

The IRS ensures it receives capital gains taxes owed when a non-resident sells real property owned in the U.S. by withholding what percentage of the gross sales price of the property when it's sold?

15%

Contractors must be at least ______ years old to be licensed by the Arizona Registrar of Contractors.

18

ADRE has just asked Newman for his transactional records, which he stores these records online. How long does he have to produce them for ADRE's auditor?

24 hours

How many gallons per minute would a well have to draw to make it exempt outside of an AMA area?

35 gallons per minute

Which of the following statements is true about zoning classifications?

A home business would be considered an accessory use.

To whom would a 1031 tax exchange usually appeal?

investors

Sarah is the designated broker for Advanced Realty in Phoenix. Her company has tasked her with opening a new branch office for its expanding business. Sarah must apply for a ______ in order to open this new branch.

Branch office license

Becky's client asked, "Who contributes to the escrow account to maintain the proper funds for insurance payment?" How should she respond?

Buyer

The _______ category of appraiser licensure requires a minimum of 1,500 hours of applicable experience.

Certified residential real property appraiser

Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can't determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?

Citytown will apply to the CERCLA trust fund for cleanup costs.

Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

Civil Rights Act of 1968

The Equal Credit Opportunity Act is regulated by the ______.

Consumer Financial Protection Bureau

The ______ method converts a single year's expected income (or an annual average) into a market value.

Direct capitalization

Vlad the appraiser is going to appraise an apartment building that has consistent income and expenses year after year. He's most likely to use which of the following methods?

Direct capitalization

Once compensation for a transaction has been earned, when is it usually paid?

Either at closing or immediately upon client default

Which of the following is NOT a step that the ADEQ takes to assess a potential WQARF site?

Evaluating who will pay for the cleanup

One of Jackie's creditors sued her in civil court. As a result of the judgment against her, her house, car, and art collection were all subject to sale in order to pay the creditor. What type of lien is this?

General

Mike and his buddy Daryl own a business together. They are jointly and separately liable for any debts the business may incur. What type of partnership do Mike and Daryl have?

General partnership. A general partnership conveys personal liability to partnership debts that exceed the partnership assets.

In a mortgage, the property is used as collateral for the loan. What's the term for the process of pledging something as collateral?

Hypothecation

Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 and 2025?

Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separately.

What's the purpose of an attornment clause in a lease?

It notifies tenants that their lease is still in effect if the building ownership changes.

Manuel tells his associated licensees that they must cooperate with and compensate cooperating brokers. Is this true or false?

It's false, because compensation isn't always required for cooperating agents.

Which of the following is a true statement about transactional recordkeeping requirements in Arizona?

Licensees must produce records within 24 hours of an ADRE request.

Which type of listing service is most popular with sellers of For Sale by Owner properties?

Limited service/flat fee

Which of these is part of a judicial foreclosure in Arizona but won't happen in a non-judicial foreclosure?

Loan acceleration

Which type of legal description is this: "Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office"?

Lot and block

Residential property managers spend most of their time _________.

Managing tenants

Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions?

Marsha's second mortgage on the property, which was properly recorded in January. (Title insurance typically covers events or claims filed on the public record before the title insurance policy's effective date but excludes disclosed and undisclosed easements.)

Which legal description method uses compass headings and directions?

Metes and bounds

Which of the following is the basis for the Clear Cooperation policy?

NAR Code of Ethics

In Arizona, when a judgment lien is renewed, which of the following is true?

No lien exists until a copy of the renewal affidavit is certified and recorded.

Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?

Office of Fair Housing and Equal Opportunity

Reporting on local economic and other trends and activities will help you and the property owner plan and set goals. Which of the following trends would have the most negative impact on your property's vacancy rates?

One of your closest competitors has just finished a complete renovation of its property.

When a developer considers what to do with leftover pieces of land that remain after the subdivision is built, she is considering what to do with ______.

Outlots

All contractors who want to reserve their right to file liens in Arizona have to file a _______.

Preliminary 20-day notice

Leigh Ann is a licensee. Her cousin, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for her. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the agreement with Carly. What are Leigh Ann's options for accepting an agency relationship after the fact?

Prepare an agency agreement or continue to assist Carly with the purchase.

Tammy and Reginald bought a house with a gas line easement on the property. An easement like this one placed by the utility company is an example of a ______.

Private land control

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control

Which type of insurance can property managers carry to protect against wrongful evictions?

Professional liability coverage

With the exception of state liens or encumbrances, what type of lien takes priority over all others?

Property tax liens

In Arizona, a disclosure in all purchase or lease contracts for lots in a subdivision informs consumers they are entitled to a copy of what document?

Public report

Which of the following people is exempt from the licensing requirements for engaging in real estate activities in Arizona?

Rebecca is an attorney and member of the state bar association. She focuses on real estate and property law for her firm.

Violet purchased a house from Nick, and assumed the existing loan. Nick wants to make sure he isn't liable if Violet ever defaults. What can he do to remove his name from the loan agreement?

Request a novation

For farmers and others who live in rural communities, a ______ loan may be available. One benefit of these loans is the option for a longer payback period.

Rural development

Where can a party that's reviewing a title commitment find exceptions that aren't covered by the title insurance policy?

Schedule B-2

A developer, Howard, has purchased land with the expectation of constructing an apartment building. He explains to his lender that he'll need a construction loan as well, so the mortgage they sign includes what kind of clause to allow the construction loan's lien position to take priority?

Subordination

Stacy's lease agreement states that she's responsible for paying any tax increase over the base year's taxes, in addition to the base rent. What type of clause is this?

Tax

Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?

The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction.

In Arizona, if a property is outside of an active management area, one of two conditions must be met before a public report is issued. Which of the following is one of those conditions?

The director of water services certifies that there is an adequate water supply in the area.

What must happen for an easement to be terminated due to abandonment?

The dominant estate owner takes action that shows a clear intent to stop using the easement.

Which of the following may you omit from an exception submission for a contest or lottery in Arizona?

The licensee's professional website URL

Which of the following bits of data is crucial in a proration?

The number of days in the proration period

Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?

The parol evidence rule

Assuming no qualifying exceptions, who is responsible for handling real estate transaction negotiations in Arizona?

The principals' brokers or their brokers' representatives

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 personal, rather than real, property.

Finnegan pays $1,000 a year in HOA fees. The fees are due on a quarterly basis. He paid the HOA in January for the quarter, but sold his home and closed on March 1. How much will the buyer owe Finnegan for the prepaid HOA fees?

The quarterly HOA bill is: $1,000 ÷ 4 = $250. The seller paid $250, but only occupied the property for two of the three months in the quarter. The buyer needs to credit the seller at closing for that third month's HOA fee: $250 ÷ 3 = $83.33.

Carly has a house outside of an AMA. On her property is a well that draws about 20 gallons per minute. Which of the following is true about this well?

This is most likely an exempt well.

All of the following materials can be used to create an effective drainfield EXCEPT ______.

Trees and shrubs

What kind of lease clause is used when the landlord handles tenant improvements, providing tenant with "move-in ready" commercial space?

Turn-key project

Consumers must submit a claim for disbursement from the Arizona real estate recovery fund within ______ year(s) after the judgment was awarded.

Two

What. qualifies as an unwated intrusion call?

Unwanted intrusions include calls before 8 a.m. or after 9 p.m., anonymous calls, calls to cell phones, or "robo-calls."

Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached?

Against encumbrances

Under ______, landowners can be held responsible for the cleanup costs of hazardous waste, even if they did not cause the waste.

CERCLA

How long does a tenant have to remedy the situation if issued a Notice of Noncompliance Materially Affecting Health and Safety?

Five days

Joe has a property management agreement that outlines his obligations to the property owner. What type of agent is Joe?

General

Developer A has a project planned that does not conform to the community zoning regulations and wants to make a change request. Which local land use group would the developer ask, and for what?

The zoning board of appeals for a variance.

Joseph needed help with his daily activities, so his niece, Brenda, did his cooking, shopping, and cleaning. Joseph told her he would leave some money to her in his will. Brenda thanked him. But when her Uncle Joseph died, he only left Brenda his antique tea set. Why didn't Brenda get any money?

Their contract was verbal.