Section 5 - Transfer of Property
a A compilation of documents relating to the history of the Title to the property
a A compilation of documents relating to the history of the Title to the property
Blue owns a four-unit apartment building with a market value of $520,000. Black owns a four-unit apartment building plus a storefront with a market value of $546,000. The two men agree to exchange their respective free and clear properties with Blue giving Black $26,000 in cash to cover the difference. When both men individually file their annual federal income taxes a Black will have a recognized gain b On an exchange, no gain need be reported c Black and Blue will split the amount of the gain d Blue can claim a full loss of the market value of his property since its value is lower than the market value of Black's property
a Black will have a recognized gain
White purchased Grey's home assuming the existing Deed of Trust. White's Closing Statement would show Grey's old loan as a a Credit to Buyer b Credit to Seller c Debit to Buyer d Debit to Seller
a Credit to Buyer
All Real Estate sales transactions must be reported to the IRS. This action is usually accomplished by the a Escrow Officer b Broker or Agent of the sale c Buyer when income taxes are filed d Lender.
a Escrow Officer
A Quit Claim Deed is executed by which party? a Grantor b Warrantor c Local court d Claimee
a Grantor
A party to a real property transaction that is under the age of 18 may be deemed a competent party if they are a In the military b Employed c A Parent d All of the above
a In the military
Regarding the transferring of Title of personal property, all of the following are correct except a Investigation of public records can generally offer the same determination of the condition of Title for both real and personal property b Title to personal property can be transferred by the delivery or exchange of possession c A Bill of Sale can accompany the transfer of personal property, but such an instrument is not usually needed to accomplish a valid transfer d Personal property is legally considered to be in or part of the owner's residence, regardless of the actual location of the property and is covered by the same laws that cover the owner's residence
a Investigation of public records can generally offer the same determination of the condition of Title for both real and personal property
The term "Boot" relates to the a Taxable gain in a 1031 Exchange of real property b Amount left over after taxes are paid c Amount that can be deferred of taxes in an exchange of real property d Tax penalty the seller must pay in an exchange of real property
a Taxable gain in a 1031 Exchange of real property
A Mortgage lender can hold a cushion in an amount of property tax in a borrower's impound account not to exceed a Two months. b Six months. c Nine months. d One year.
a Two months.
A loss resulting from which of the following would not be permitted as a deduction when filing yearly Federal Income Taxes? a Wear, tear and obsolescence b A rental property c The sale of an owner-occupied residence d An exhausted orchard of fruit trees
a Wear, tear and obsolescence
No form of Title Insurance will offer protection against which of the following? a Zoning regulations b Forgery and fraud c Un-marketability of Title d Restrictive covenants
a Zoning regulations
An IRS Section 1031 Exchange would not be permissible on which of the following types of property? a One parcel of property is located in California, the other is located in Nevada b One property is an owner-occupied residence that will remain owner-occupied, the other is a duplex rental property c The properties being exchanged are both undeveloped lots d One of the two rental properties is a leasehold for 20 years
b One property is an owner-occupied residence that will remain owner-occupied, the other is a duplex rental property
When acting as an Escrow Officer for a principal, Broker Brown is exempt from certain provisions of the Escrow Laws. However, there are certain acts which are prohibited and if performed, would probably result in a disciplinary action by the Commissioner of Real Estate. Of the following, which is the only action Broker Brown is allowed perform without violating Real Estate Rules and Regulations? a Suggesting a blank Escrow Instruction to be filled in after signing b Recommending the principal to alter Escrow Instructions, although the instructions to be altered have already been initialed by all persons who signed the original instructions c Withholding copies of the escrow instructions from the parties signing them at the time when they are signed d Failure to provide, to each principal at the time of closing, a written statement summarizing the funds handled by escrow
b Recommending the principal to alter Escrow Instructions, although the instructions to be altered have already been initialed by all persons who signed the original instructions
By law, to execute a Grant Deed is to a Record the Deed b Sign the Deed c Deliver the Deed to the Grantee d Place the Deed in Escrow
b Sign the Deed
Which of the following protective coverage items are not included in a California Land Title Association Policy, but is included in an American Land Title Association Policy? a Defective recording of documents b Survey Claims c Forgery d Additional recorded interest
b Survey Claims
John, a 14-year old minor child, received Title to some property through his grandfather's Will. He then decided to sell the property and gave his father permission to negotiate the sale through a Broker and see the sale through the Escrow process. While the sale was in Escrow, John changed his mind and decided not to sell the property. Which of the following is true? a The buyer can sue for specific performance since the father who is not a minor was acting as the trustee of his minor son's property b The Contract of Sale is invalid without a court order allowing the father to negotiate the sale c The original sale is voidable d The minor child cannot sell or transfer the property until he is 18 years of age
b The Contract of Sale is invalid without a court order allowing the father to negotiate the sale
In accordance with RESPA, certain settlement related service costs can be charged to either the Buyer or the Seller, except for the a Credit reports. b Appraisals. c Closing Disclosure d Loan documents.
c Closing Disclosure
Deed restrictions, leases, mortgages, and easements would all be regarded as a Involuntary limitations on ownership. b Voluntary limitations on ownership. c Contractual limitations on ownership. d None of the above
c Contractual limitations on ownership.
A constructive notice of a lien is given when which instrument is recorded? a Gift Deed b Notice of Non-responsibility c Deed of Trust d Grant Deed containing restrictions
c Deed of Trust
When John purchased his new home, he received a standard Title insurance policy that will protect him against everything listed below, except a Prior Deed delivered by a party other than the Grantor b Mentally deranged Grantor c Easements and liens not available by searching the public records d Grantor's son signing the Deed with his father's name
c Easements and liens not available by searching the public records
A valid escrow would not require a Neutral third party. b Signed documentation of instructions. c Escrow Officer licensed by the Department of Real Estate. d Conditional delivery.
c Escrow Officer licensed by the Department of Real Estate.
Green, the Seller, executes and records a Deed to his property to White, the Buyer. A week later, Green has remorse and wants to set aside the conveyance, claiming the deed was never delivered to White. Why will his claim probably be deemed invalid? a Green recorded the deed, delivery is presumed b White has taken possession of the property c Execution of the Deed transferred the property d Green's signature validates the deed
c Execution of the Deed transferred the property
A Standard Title Insurance Policy would not cover which of the following possible risks when purchasing a parcel of real property? a Unpaid property tax not listed in the policy b Mental incompetence of a former owner/seller c Government regulations and ordinances d Only one spousal signature on a previous Deed on community
c Government regulations and ordinances
A Grant Deed would be considered invalid as of origination if the a Grantor's signature is not notarized b Delivered by a third party c Grantor has been deemed incompetent d Warranties are implied rather than actual
c Grantor has been deemed incompetent
The Buyer's Closing Statement would probably not show which of the following as a debit? a Insurance premiums b Proration of property taxes c Interest on an assumed loan d Discount points
c Interest on an assumed loan
Blue owns a tenant-occupied rental property. Grey owns a single family property which is owner-occupied. Grey wants to trade properties with the intension that both he and Blue use their traded properties for rental income. For tax purposes, which of the following will apply? a Blue can negotiate a tax-free exchange b Grey can negotiate a tax-free exchange c Neither party can negotiate a tax-free exchange d Both parties can negotiate a tax-free exchange
c Neither party can negotiate a tax-free exchange
When a transaction includes an "Alienation Clause", it a Creates an easement. b Clouds the Title. c Restricts conveyance. d Terminates a Homestead.
c Restricts conveyance.
John agreed to purchase Sam's home on September 1, 2014 and that the property taxes would be prorated as of the date of possession. John took possession of the property on October 30, 2014. Sam had paid the property taxes for the tax year of 2014-2015 on November 1, 2014. The Closing Statement will show a John paid Sam for four months of taxes b John paid Sam for eight months of taxes c Sam paid John for four months of taxes d Sam paid John for eight months of taxes
c Sam paid John for four months of taxes
Mortgages and Trust Deeds are dissimilar in all of the following ways, except the a Statutes of limitation which apply b Number of parties involved c Security devices d Manner in which Title is held
c Security devices
Andrews owned a warehouse with a cost basis of $87,000 and a fair market value of $140,000. He exchanged his property for 30 acres of land with a fair market value of $95,000. As "boot", he received $15,000 in cash and a note secured by a Deed of Trust for the balance. What portion of the transaction would need to be declared for tax purposes? a The entire transaction is tax deferred because of the exchange b The capital gain of $53,000 on the warehouse c The $45,000 amount of "boot" d The combined amounts of capital gain and "boot"
c The $45,000 amount of "boot"
When selling a parcel of real property encumbered by a Deed of Trust, which of the following actions would always be deemed necessary in order to transfer Title? a The grantor must deliver the Deed b The beneficiary must give consent c The Deed of Trust must be paid in full d The grantor must "take back" the loan
c The Deed of Trust must be paid in full
A Land Contract that a Seller would use to give equitable Title to the Buyer may also be known as a/an a Agreement of Sale. b Installment Sales Contract. c Agreement to Purchase. d All of the above
d All of the above
When applying for a VA loan, the veteran must provide a a Certificate of Eligibility b Discharge papers if not on active duty c Photo ID d All of the above
d All of the above
When asked to create a Preliminary Title Report, a Title Company will search the records of which of the following? a County and Federal Court Clerks b County Recorder's Office c County Clerk d All of the above
d All of the above
When calculating the Cost Basis for Capital Gains, which of the following should be included? a Purchase Price b Selling Costs c Improvements d All of the above
d All of the above
When one thinks of the benefits provided by insurance, which of the following would describe that protection? a The substitution of security for vulnerability. b A documentation protecting against a set amount of loss for a set period of time. c The conveyance of a risk of loss to another party other than oneself. d All of the above
d All of the above
When property is owned as Joint Tenants, the owners a Share unity of time b Have the Right of Survivorship c Cannot Will their interest d All of the above
d All of the above
The Title to chattel is transferred by which of the following instruments? a Security device b Chattel mortgage c Bulk sale transfer d Bill of sale
d Bill of sale
When a "Cloud on Title" exists, it is usually the result of a an unrecorded release of a mortgage pay-off. b a disputed easement. c one of the parties of a Joint Tenancy selling his/her share of the property. d Both a and b
d Both a and b
Which of the following would be cause for a reassessment of a parcel of real property? a Remodeling, improvements, or new construction are done on the property b In accordance with the projected tax cycle of the particular city or county c Sale of the property d Both a and c
d Both a and c
Who, of the following, would execute Escrow Instructions? a Agent b Buyer c Seller d Both b and c
d Both b and c
A Sales Escrow can be terminated by which of the following actions? a When either party to the transaction chooses to cancel escrow b The death of either party to the transaction c When the broker of the seller rescinds the escrow instructions d By mutual consent of the parties to the transaction
d By mutual consent of the parties to the transaction
Of the following types of Title Insurance coverage, which would not require nor include an on-site inspection or survey of the property? a American Land Title Association policy on a residence b Extended policy on rural property c Extended policy on a residence d California Land Title Association policy on a residence
d California Land Title Association policy on a residence
When property taxes become delinquent and the property is sold to the state by operation of law, the owner a Must pay a determined rent to the state in order to retain occupancy during which time the delinquent taxes and penalties are paid b Must vacate the property since the state will immediately sell the property c Must arrange installment payments to clear back taxes in order to retain possession of the property d Can remain in undisturbed possession for a redemption period of five years
d Can remain in undisturbed possession for a redemption period of five years
A duly conveyed and recorded Gift Deed can, under certain circumstances, be voided by which of the following parties? a The wife of the grantor b A relative of the grantor c A creditor of the grantor d None of the above
d None of the above
Brown resides in the condominium he purchased. Since he pays the bill on all of the following, which are deductible on his federal income taxes? a Mortgage interest on his share of the common area b Repairs on his unit c Shared cost of upkeep of recreational grounds and buildings d None of the above
d None of the above
Which of the following would normally appear as a credit to the Seller on the Seller's Closing Statement? a The proration of prepaid rent b The amount of commission paid to the Listing Agent c The pay-off and penalties on an existing Deed of Trust d Proration of prepaid property tax
d Proration of prepaid property tax
When purchasing a parcel of income property, the Federal Cost Basis for Federal Income Taxes is based on a Appraised Value b Loan Amount c Income Value d Purchase Price
d Purchase Price
The primary benefit of holding Title as Joint Tenants is the a Commonality b Bundle of Right c Spousal Rights of Inheritance d Right of Survivorship
d Right of Survivorship
Property taxes would be least affected by which of the following? a Increase in population density b A homestead that is recorded c New construction starts d Tax deferred exchange
d Tax deferred exchange
Brown received a Grant Deed and a standard policy of Title Insurance when he purchased a parcel of land from Grey. Which of the following would be warranted by Grey, but not covered by the policy of Title insurance? a No presence of any undisclosed or unrecorded liens against the property b That no forged Deeds exist in the Chain of Title c That Grey is competent to convey the property to another d That Grey is in fact the true owner of the property being conveyed
d That Grey is in fact the true owner of the property being conveyed
When the Escrow Officer prepares the Closing Statement, the total balance of the debit and credit columns for Buyer and Seller a can be adjusted at the Escrow Officer's discretion. b can be the same but it usually varies. c must be different. d must be the same.
d must be the same.
When describing Escrow procedure, which of the following would be considered correct? a A valid Escrow is bound to one party, either the Buyer or the Seller, the second part being the Agent b An Escrow is only valid when used in the transference of real property c Probate sales are court ordered transfers which do not require escrow d At close of escrow, the representation of Buyer and Seller changes from Dual Agency to Single Agency, handling each party's requirements individually
d At close of escrow, the representation of Buyer and Seller changes from Dual Agency to Single Agency, handling each party's requirements individually
A licensed Real Estate professional may provide legal and tax guidance when asked by a client by a Providing as much information as they are capable of on the subject b Providing a list of no less than five professionals they may consult c Real Estate Licensees must never provide legal or tax advise unless they are also licensed an qualified in those fields d Both b and c
d Both b and c
When Escrow opens on a parcel of real property, the Escrow Officer may do which of the following? a Counsel a dispute between Buyer and Seller b Cancel Escrow for non-compliance of either party c Refuse to open Escrow because they were recommended by the Seller's Real Estate Agent d Change terms and prices upon written instruction from both Buyer and Seller, without Agent approval
d Change terms and prices upon written instruction from both Buyer and Seller, without Agent approval
Who usually pays the Title Insurance fees? a Buyer b Seller c Both Buyer and Seller equally d Either Buyer or Seller according to local custom and needs
d Either Buyer or Seller according to local custom and needs
When calculating property tax, the County will use which of the following? a Appraised Value b Recent purchase price of the subject property c Assessed Value d Either b or c
d Either b or c
In California, the second installment of real property taxes is due on and delinquent on which of the following sets of dates? a July 1 and August 10 b November 1 and December 10 c January 1 and June 30 d February 1 and April 10
d February 1 and April 10
Blue, an apartment owner, is calculating his net income for income tax purposes. In order to ascertain his gross income, which of the following expenses can he not deduct? a Interest on the existing loan utilized to purchase the property b Cost of replacement brickwork c Depreciation d He can deduct all of the expenses
d He can deduct all of the expenses
Which of the following usually transfers possession, but not necessarily the ownership in real property? a Administrator's Deed b Tax Deed c Trust Deed d None of the above
d None of the above
When federal income taxes are filed by the owner of a single-family owner-occupied home, which of the following costs are tax deductible? a Mortgage interest b Property taxes, Hazard insurance, and Mortgage insurance c Hazard insurance and Mortgage interest d Property taxes and Mortgage interest
d Property taxes and Mortgage interest
On November 21, 2012 White offered to buy Green's farm. Green accepted the offer and escrow opened. Green had purchased the farm in 2006 by financing his purchase with a secured Deed of Trust, which still had four years left on its term. A Preliminary Title Report dated November 21, 2012 would a Include information that Green was a minor when he purchased the farm b Include the transfer of the farm to Snyder c Include the same information as which would appear at the close of escrow d Show a description of a Trust Deed
d Show a description of a Trust Deed
When transferring Title involves a Real Estate Broker or Agent a section of the California Civil Code requires that a Transfer Disclosure Statement be delivered by the a Trustee in a Trustee Sale b One spouse to another when the property is part of a divorce settlement c Court clerk as part of a Probate Sale d Transferor and their Real Estate Agent
d Transferor and their Real Estate Agent
Mary purchased a Title Insurance Policy as part of the process of buying her home. She passed away shortly after the purchase transaction and the Title to the property transferred to her daughter. Under these circumstances a A new Title Policy needs to be issued since the ownership of the property transferred b The title policy remains effective as is c The policy must be rewritten within 30 days of the property transfer d The Title Policy remains effective only if the daughter has her name added to the policy
a A new Title Policy needs to be issued since the ownership of the property transferred
The laws of RESPA are designed to protect those that purchase a A one-to-four unit residential owner-occupied homes. b All undeveloped out-of-state property. c Commercial properties exceeding five units. d Subdivided properties located in geological hazard zones.
a A one-to-four unit residential owner-occupied homes.
The Escrow Officer or Closer will select which type of Title Insurance Policy for the benefit of the Buyer? a ALTA policy b CLTA policy c Extended Group Policy d Extended ALTA Policy
a ALTA policy
The annual property tax on White's property is $2,952. When White sold his property on the 1st of January, he had paid all of the current year's property taxes. Since White and the Buyer have agreed to prorate the property taxes, the Buyer will be obligated to pay what amount at the Close of Escrow? a An amount based on the actual days in a month b An amount based on 31 days in a month c An amount based on 30 days in a month d The buyer will not need to pay any of the property taxes
a An amount based on the actual days in a month
The determination factor of how much annual property tax a homeowner must pay is done by a Assessing the value of the land and improvements then multiplying by the tax rate b Assessing the land and improvements and multiplying them by the state tax rate only c Assessing the land and improvements separately, then multiplying each one by a different tax rate before combining both to form a total d Assessing only the improvement with a single tax rate and using a common fixed rate to adjust for the land
a Assessing the value of the land and improvements then multiplying by the tax rate
A Deed can be a Legally signed by a witnessed mark. b Foreclosed upon. c revoked. d Title of the property.
a Legally signed by a witnessed mark.
The primary function of a Deed is to a Provide evidence of a change in Title or a Transfer of Interest in Real Property b Provide a detailed physical description of the transferred real property c Offer an explanation of the terms of a transaction of sale on real property d Give a legal description of the parties to the transaction
a Provide evidence of a change in Title or a Transfer of Interest in Real Property
Franklin bought a single-family residential property as his own residence. The purchase price of the home was $542,000. He assumed a $210,000 loan, made an $80,000 down payment and secured the balance with a Second Deed of Trust. In addition, as part of the purchase, he assumed a Mello-Roos lien against the property in the amount of $3,100. What was the amount of the Second Trust Deed? a Purchase price less First Trust Deed and Down Payment b Purchase price less First Trust Deed, down payment and Mello-Roos c Purchase price plus Mello-Roos less First Trust Deed and Down Payment d None of the above
a Purchase price less First Trust Deed and Down Payment
When a tract house sold for $305,000 with an existing $90,000 First Trust Deed, the Buyer assumed the First Trust Deed with no other liens or encumbrances on the property. According to state law, the property was subject to county documentary transfer tax at the rate of $1.10 per $1,000. Who would have to pay the tax? a Seller b Borrower c Split 50/50 d Split 60/40
a Seller
Mary owns two homes. She uses both of them as her personal residence. If she sells one and buys another in compliance with the Capitol Gains Deferral Rules, which of the following is true? a The Capitol Gains Deferral Rules can only apply to her one principal residence, not both b She can only defer 50% of her profit, since she owns more than one personal residence c Full deferral can be taken on either property without limitations d She must first turn one of the properties into income property
a The Capitol Gains Deferral Rules can only apply to her one principal residence, not both
Green gave his mother a Life Estate in a property for her lifetime with his wife Jane as the Remainderman. Green passed away shortly later leaving his estate to his wife, Jane. Jane was unable to sell the property that Green's mother lived in even though Green had passed away because a The Life Estate was based on the mother's life b The mother refused to vacate the premises c Green's mother filed an Adverse Possession action d Green's mother could not be evicted as long as she paid the taxes
a The Life Estate was based on the mother's life
What would not be subject to property taxes? a The leased mineral rights on tax-exempt public property b Indiscernible personal property c A permanently affixed mobilehome d An undeveloped parcel of land in a rural area
a The leased mineral rights on tax-exempt public property
Black is willing to donate a vacant five-story building to the city with the stipulation that the city use the building for much needed additional parking. As a condition of the donation, the Deed specifies that conversion of the building must commence within six months of the transfer of the property to the city. What will occur if the stipulations of the Deed are not satisfied? a The property will revert back to Black per the condition subsequent term of transfer b The property will revert back to Black per the condition precedent term of transfer c Black can sue the city for breach of condition forcing action on the stipulated condition, however, the city will retain Title to the property d The city will retain the property with an extended promise to comply with the condition
a The property will revert back to Black per the condition subsequent term of transfer
Upon transferring Title, the Grantee of the Deed may insure Title by which of the following means? a Title Insurance Policy b Notification of Intended Title c Certificate of Title d Abstract of Title
a Title Insurance Policy
In regards to a Fee Simple Absolute Interest, which of the following would be applicable? a Transfers of all rights of a property to a new owner for an indefinite length of time b Bears less value due to its conditional limitations c Possible forfeiture as per subsequent events d Conditions and limitations may apply to the use of the property
a Transfers of all rights of a property to a new owner for an indefinite length of time
An ALTA policy of Title Insurance as opposed to a CLTA policy, will offer additional protection in the event of a Unknown encroachments b Publicly disclosed encumbrances and liens c Deed delivered by an incompetent or minor grantor d Priority defect of existing liens
a Unknown encroachments
Division 6 of the Uniform Commercial Code establishes the requirement of "Fair Notice" in regards to any pending bulk transfer of property for the protection of the a Vendor's creditors. b Vendee's creditors. c Vendor. d Vendee
a Vendor's creditors.
Jane has agreed to purchase a property at a market value of $355,000. She has deposited $30,000 into Escrow. The local bank has agreed to lend her 75% of the purchase price of the home. She has been advised she will be charged closing costs amounting to 3% of the loan amount. Based on this information, what additional monies must Jane be prepared to deposit into Escrow upon closing? a Purchase Price less New Loan b Purchase Price plus Closing Costs less New Loan and Escrow Deposit c Purchase Price plus Closing Costs less New Loan d No additional monies will be needed at the close of escrow
b Purchase Price plus Closing Costs less New Loan and Escrow Deposit
Which of the following types of deeds would not contain warranties either expressed or implied? a Guardian's Deed b Quit Claim Deed c Inheritance Deed d Grant Deed
b Quit Claim Deed
When a Trust Deed is paid-off, which recorded instrument would remove the lien from record? a Bill of sale b Reconveyance deed c Writ of satisfaction d Receipt of payment
b Reconveyance deed
The Documentary Transfer Tax charged by the county in which the property is located is normally paid by the a Buyer. b Seller. c Buyer and the Seller equally. d City in which the property is located.
b Seller.
Green leased a unit in his apartment complex to White on March 1, 2012 for a term of two years. As part of the lease, White was required to pay first month rent and last month rent when he signed the Lease Agreement. When will the amount of the prepaid last month rent be considered as income for Green? a March 2012 b March 2014 c At the end of the 2012 tax year d When the deposit is returned
b March 2014
Green failed to pay the property taxes on his property. Because he remained delinquent on the taxes, the following fiscal year the property was, by right of law, sold to the State of California. As a result of this action, Green a Must turn the property over to the state and vacate the premises b May remain in undisturbed possession of the property but needs to redeem the property by paying off any delinquent taxes and penalties within five years c Will be charged a monthly rental fee by the state d Is no longer liable for taxes once the property has been sold
b May remain in undisturbed possession of the property but needs to redeem the property by paying off any delinquent taxes and penalties within five years
Of the many forms of transferring property, which of the following would not be a method of transfer? a Charitable gift b Moratorium c Court judgment d Intestate succession
b Moratorium
When one co-owner wants to sell a property and the other(s) refuse and disagree on the disposal of interest in the property, one or all of the parties may resolve the issue by filing a a Notice to Perform b Partition Action c Mechanic's Lien d Quit Claim Action
b Partition Action
The written summary which indicates the Chain of Title established by examination of public records is known as a/an a Certificate of Public Title b Preliminary Title Report c Extended Title Coverage d Evaluation of Title
b Preliminary Title Report
On ordinary taxable income, federal income tax rates are implemented by which of the following methods? a Regressive b Progressive c Uniform d Fixed
b Progressive
When filing income taxes, a property owner may defer an amount of their capital gains on the sale of residential property if the a Owner has lived in the home for at least two of the most recent five years b Property was purchased for and used as a non-residential rental property c Profit does not exceed 25% of the original purchase price of the property d Building was used for both residential and business
b Property was purchased for and used as a non-residential rental property
When a property has been sold to the state for delinquent property taxes and the homeowner has paid the delinquent taxes plus the penalties and accrued interest, the owner will be a Allowed to resume occupancy of the property b Provided a Certificate of Redemption c Reimbursed the profits from the Tax Sale d Provided a Tax Deed
b Provided a Certificate of Redemption
The rate by which Federal Income Tax is calculated is based on a A set standard for everyone which remains fixed. b The fluctuation of income, increasing with more income, decreasing with less income. c A declining index as income increases. d A declining index depending on the amount of additional income declared under capital gains.
b The fluctuation of income, increasing with more income, decreasing with less income.
For federal income tax purposes, an installment Sales Contract offers which major advantage? a Gain from the sale will be recognized in the year of the sale b The gain may be divided over a number of years with taxes paid according to yearly amount received c Amounts earned in the year of the sale preclude taxes being paid d Interest will always be greater than gain
b The gain may be divided over a number of years with taxes paid according to yearly amount received
A Deed is considered effectively delivered by law upon which of the following actions? a When the deed is recorded b The intentional acts of the Grantor to deliver and Grantee to accept c The Deed describes the Grantor and the Grantee d When the Grantor's signature is notarized
b The intentional acts of the Grantor to deliver and Grantee to accept
When Green sold his home, Escrow was scheduled to close on the 1st of April. Green paid the first installment of the property taxes leaving the second installment to be prorated at the close of Escrow. The Buyer of Green's house will be charged what amount of the property taxes? a Six months property taxes b Three months property taxes c One month property tax d Four months property taxes
b Three months property taxes
In California, the use of which of the following has replaced the use of an Abstract of Title? a Title Guarantee b Title Insurance c Certificate of Title d Memorandum of Title
b Title Insurance
Although common in some areas of the country, Warranty Deeds are seldom used in California because a A Grant Deed with implied covenants offers the Grantee the same protection as a Warranty Deed b Title Insurance with its capabilities of recourse against the Title Company offers more protection and assurance of validity than a promise of validity by the Grantor c With Grant Deeds, the implied covenants "run with the land" with a Warranty Deed, the promise of truth is personal d A Grant Deed offers more liberal protection against possible error or fraud than a Warranty Deed
b Title Insurance with its capabilities of recourse against the Title Company offers more protection and assurance of validity than a promise of validity by the Grantor
The transfer of ownership to a successful bidder at a Foreclosure Sale is accomplished through the use of a a Reconveyance Deed b Trustee's Deed c Trust Deed d Sheriff's Deed
b Trustee's Deed
A valid Deed would not need to a have an accurate description of the property. b be signed by the Grantee. c be delivered. d have a Granting Clause.
b be signed by the Grantee.
Green sold his orchard, "Lemon Grove" to Blue on April 28, 2012. The property taxes for the tax year of 2012-2013 a are a lien on the property. b must be paid in full through Escrow by Blue if records show paid by Green. c will need to be pro-rated by escrow. d Both a and c
b must be paid in full through Escrow by Blue if records show paid by Green.
An escrow company uses what monthly basis for proration? a 14 days b 28 days c 30 days d The actual number of days in the particular month
c 30 days
Deeds may be recorded. Which of the following applies to the recording of a deed? a All who record a deed on the same property have rightful ownership. b The warranties of a quitclaim deed are not valid until it is recorded. c A deed need not be recorded to transfer title. d For a deed to give actual notice, it must be recorded.
c A deed need not be recorded to transfer title.
Property gained through accession by an act of nature is known as a Erosion b Avulsion c Accretion d Reliction
c Accretion
Thomas is the new owner of a single family home. He purchased the property on August 1st at a much higher market value than the property's previously assessed value. As the new owner, Thomas will be obligated to pay the a Existing tax amount for the remainder of the present fiscal year and the newly assessed value in the next fiscal year b Existing payment due November 1st, plus three month's additional taxes based on the March 1st assessed value c Additional property taxes for the remaining months of the fiscal year, based on the difference between the old assessed value and the new assessed value d Prorated amount based on the assessed value as of March 1st
c Additional property taxes for the remaining months of the fiscal year, based on the difference between the old assessed value and the new assessed value
On a yearly basis, the county tax rate is set by the a County assessor b County Tax Collector c Board of Supervisors d State Assessment Advisory Commission
c Board of Supervisor
Jane is the owner of a flower shop and the land on which it is located. She wants to sell the property to Bill and subsequently lease it back for a long term. For income tax purposes, what action can Jane still take? a Retain title to the property b Take depreciation on the building c Deduct all subsequent rent payments d None of the above
c Deduct all subsequent rent payments
The Closing Statement on the purchase of a home usually indicates that the Seller has paid certain items in advance or in arrears as part of the ownership of the property. These items are usually prorated on the Closing Statement. When Escrow closes, all of the following would be included as prorated items, except a Property taxes b Seller's hazard and flood insurance c Delinquent payments on an unsecured home improvement loan d Interest due and impound fund
c Delinquent payments on an unsecured home improvement loan
For Title to pass via a valid Grant Deed, the Deed must be a Signed. b Recorded. c Delivered. d Warranted.
c Delivered.
An implied covenant would probably not be found in which of the following types of Deeds? a Gift deed b Grant deed c Quit Claim Deed d Any of the above
c Quit Claim Deed
The acknowledgement by a Notary Public of a signature on a Deed would be necessary in regards to a Notifying others with probable rights in the property b Title passing legally to the Grantee c Recording of the Deed d Verifying the identity of the parties to the transaction
c Recording of the Deed
If a Quit Claim Deed is given on a parcel of real property and the Grantee does not record the Deed, which of the following situations can occur? a The Deed is valid, but may be subsequent to future recorded interests b The Deed is invalid, but valid in the event of subsequent interests c The Deed is valid, but may affect subsequent transfer of interest without proper constructive notice d The Deed would be considered invalid
c The Deed is valid, but may affect subsequent transfer of interest without proper constructive notice
The maximum property tax rates in individual counties within the State of California is determined by the a State Board of Equalization. b County tax assessor. c Vote through proposition. d County Board of Supervisors.
c Vote through proposition.
Which of the following statements regarding Deed Restrictions would be considered correct? a A private restriction is only for the benefit of the future Grantee. b A violation of a covenant bears the greatest penalty to the Grantee. c When a condition is broken, Title to the real property can legally revert back to the Grantor d All public restrictions must be voted upon before they are considered to be valid.
c When a condition is broken, Title to the real property can legally revert back to the Grantor
Within normal circumstances, a Deed held in Escrow would be delivered to the Grantee a Upon demand of the Grantee b Immediately as requested by the Real Estate Broker c When all conditions of the Escrow are satisfied d When payment of the equity is given to the Seller
c When all conditions of the Escrow are satisfied
Any of the following can adequately convey an interest in real property, except a a deed. b an agreement of sale. c a bill of sale. d a lease.
c a bill of sale.
In regards to procedures concerning deeds on Real Property, which of the following is not true? a A Grant Deed conveys certain implied warranties even when they are not expressed in writing b Fee Simple Title can be conveyed by a Quit Claim Deed c Delivery of the Deed is essential to transfer Title d A Reconveyance is required to transfer title on a Trust Deed
d A Reconveyance is required to transfer title on a Trust Deed
Of the following, which action would be least likely to cause an unmarketable Title of real property? a A bankruptcy filed by the owner of the property b Public restrictions such as Zoning Ordinances and Building Codes c Private restrictions noted within the Deed d A defect in the Chain of Title caused by Adverse Possession of a prior owner
d A defect in the Chain of Title caused by Adverse Possession of a prior owner
Escrow Officer Mary received two different structural pest control reports for the same sales escrow proceeding. Mary would now be obliged to a Present both reports to the buyer, allowing him to decide on which one meets with his approval b Request the Brokers to obtain written instructions from both Buyer and Seller regarding the reports c Determine which inspection took place first and use only that report d Advise the Seller that he may choose the report requiring the least amount of repairs
d Advise the Seller that he may choose the report requiring the least amount of repairs
The essentials of a Grant The essentials of a Grant Deed when compared with an Installment Sales Contract differ in what respect? a Implied warranties b Number of signatures required c Designation of purchase price d All of the above
d All of the above
The seller's closing statement would include which of the following items as a debit? a Prepaid property tax b The sales price of the property c Any prepaid rent held by the seller d All of the above
d All of the above
Which of the following would account for a property to be tax exempt? a A non-profit organization using the property exclusively for religious, medical, educational or charitable purposes b Federal, state, county and city owned land c Property containing immature orchard trees, timber trees or young grapevines d All of the above
d All of the above
In order for a Deed to be a valid instrument, the Grantee must not be a Incompetent. b A minor c Deceased. d Any of the above
d Any of the above
Real property can become personal property when a An improvement is dismantled. b The fruit of an orchard is picked. c Oil is pumped out of the ground. d Any of the above
d Any of the above
To act as an Escrow Officer, one can be a/an a Unlicensed person employed by a licensed Escrow company b Lawyer c Licensed Real Estate Broker d Any of the above
d Any of the above
When filing federal income taxes, an advantage can be gained by a A tax free exchange. b Deducting depreciation on income property. c An installment sale. d Any of the above
d Any of the above
On which of the following dates does the second installment of real estate property tax become delinquent? a July 1 b November 1 c June 15 d April 10
d April 10
Of the following closing costs, which would be regarded as a recurring cost? a Escrow fees b Items which will be included in an impound account c Recording fees d Title insurance premium
b Items which will be included in an impound account
Property tax bills for the tax year 2012/2013 become a lien on a December 10, 2004 b January 1, 2012 c January 1, 2013 d April 10, 2005
b January 1, 2012
The English translation of the Latin term "ad valorem" is a Advertising costs. b According to value. c Additional tax payments required. d Adjusted value.
b According to value.
The primary purpose of a Deed is to a Secure a lien against the property b Act as a conveyance of Title c Act as a descriptive documentation of the land d Offer access to the land
b Act as a conveyance of Title
A party to obtain Title to a parcel of Real Estate by claiming the right of Title based on their belief of ownership by occupying the property openly and notoriously without the permission of the true owner for a continuous period of five years and pay the property taxes during that time through a legal process known as a Inverse Condemnation b Adverse Possession c Prescriptive Easement d Effective Deed
b Adverse Possession
The authority of an Escrow Officer allows which of the following? a Offering of hazard insurance b Arranging the financing process c Calling for the funds to close escrow d Securing pest control reports
b Arranging the financing process
Sam thinks that his home has been over-assessed by the County Tax Assessor. To try and remedy this situation, he would contact which of the following? a City Board of Supervisors b Assessment Appeals Board c County Tax Collector d The State Department of Disputed Evaluations
b Assessment Appeals Board
Grey, the Buyer, defaulted on a real property Sales Contract that had been recorded by the Seller, Blue. In order to clear the Cloud on Title, which party would need to execute a Quit Claim Deed? a Seller b Buyer c Both Buyer and Seller d Neither must do a court action
b Buyer
Before issuing a Title Policy, the Title Insurance Company's primary concern would be the documents found within the a Title plant comparison b Chain of Title c Title Report d Public Condition Report
b Chain of Title
Buyers and Sellers often agree to proration of which of the following at the close of a property sale Escrow? a Termite inspection and corrective repairs b Collected rent c Warranty insurance d Documentary transfer tax
b Collected rent
The County Assessor's listing of all taxable properties and their assigned assessed values within his jurisdiction is known as an Assessment Roll. What purpose does the Assessment Roll serve? a Set the tax rate b Establish the tax base c Keep track of those who do not pay their property taxes d Set the actual amount of property taxes on each listed property
b Establish the tax base
When conditions are detailed within a Deed, the Deed will also include a/an a Condition-acknowledgement. b Explanation of forfeiture. c Penalty clause. d Provision clause.
b Explanation of forfeiture.
When a standard California Title Insurance Policy is issued by a Title Company, the policyholder is insured against loss due to a Known defect in the Chain of Title prior to the issuance of insurance b Forgery and fraud within the Chain of Title c Unrecorded lien or encumbrance d Assumed rights and privileges that run with the land
b Forgery and fraud within the Chain of Title
Black sells his property to Green, using a recorded Land Sales Contract. After six months, Green defaults on the contract. In order for the Title to be cleared, which of the following parties needs to sign a Quit Claim Deed? a Black b Green c County Sheriff d County Recorder
b Green
Green purchased Brown's home on July 21, 2012. When escrow closed on August 28, 2012, Brown had paid the property taxes for the tax year of 2011-2012. How would the taxes for the tax year of 2011-2012 be prorated? a Brown owes Green two months of taxes b Green will reimburse Brown for two months of taxes c Green owes Brown ten months of taxes d Brown will reimburse Green for ten months of taxes
b Green will reimburse Brown for two months of taxes
When Blue sold his home to Grey, he moved in right away but failed to record the Deed to the property. Blue then offered the same property to Black who inspected the County Recorder's records then purchased the property and promptly recorded the Deed. Due to the circumstances, who legally holds Title to the property? a Grey can sue Blue for full Title b Grey's Deed would have an earlier date and he secured Title by "constructive notice" when he took occupancy of the property c Black secured full Title when he recorded the Deed d Grey and Black hold joint Title
b Grey's Deed would have an earlier date and he secured Title by "constructive notice" when he took occupancy of the property
When a 1031 Exchange is used to purchase real property, the outcome is that a Properties become a joint interest. b Income taxes are deferred. c Property taxes are assessed at a lower rate. d The two properties will show the same selling price.
b Income taxes are deferred.
