+0601 Unit 6: The Remaining Promulgated Forms
Under paragraph 13 of the TREC Residential Condominium Contract, who is responsible to pay for any special condominium assessment due and unpaid at closing?
Seller
Which of the following is NOT considered a construction document in the TREC New Home Contract (Incomplete Construction)? A) Survey B) Plans C) Specifications D) Finish out schedules
Survey
Exceptions to the application of the rollback tax:
-if the change of use occurs as a result of a sale for a right-of-way; -a condemnation; -a transfer of the property to the state or a political subdivision of the state to be used for a public purpose; -several others, including ownership by or dedication for a cemetery by a nonprofit cemetery organization.
Buyer and seller enter into a contract for buyer to purchase sellers condominium unit using the TREC Residential condominium contract with an effective date of January 31. The roof of the complex is partially destroyed by fire on February 3. Seller notified by her on February 5 of the fire. What is the latest date buyer can terminate the contract because the fire?
February 12
Under the TREC New Home Contract (Incomplete Construction) how are change orders that result in a lower sales price addressed in the contract? A) The amount financed is reduced. B) The amounts paid in cash and financed are reduced proportionately. C) The amount is deducted from the earnest money and refunded to buyer. D) The amount paid in cash is reduced.
The amounts paid in cash and financed are reduced proportionately.
The property paragraph is different in each of the TREC promulgated contract forms. True False
True
Under the TREC Residential Condominium Contract, what type of interest does a unit owner have in the common elements? A) Undivided B) Qualified C) Divided D) Special
Undivided
Sale for Right-of-Way
Exempt from Rollback taxes
The New Home Contracts are required to be used for the sale of all new homes in Texas. True False
False
Resale Certificate
Non-receipt of this equals right to cancel contract
Auto Termination of Contract (Residential Condominium Contract)
Right of First refusal is excercised
mineral rights
Rights to subsurface land and its profits
Buyer and seller enter into an agreement for builder to sell to buyer a new home using the TREC New Home Contract (Incomplete Construction). Buyer wants to make major changes to the plans and builder is concerned it will affect the builder's ability to sell the home if the contract terminates with this buyer. What are builder's options under the contract? A) Seller can do nothing. B) Seller need not agree to the changes. C) Seller must agree to the changes as long as buyer is willing to pay for them. D) Seller may request payment for the changes upfront before closing
Seller need not agree to the changes.
Which TREC promulgated contract form has a spot for information about exception documents and surface leases? A) The One to Four Family Residential Contract B) The New Home Contract (Completed Construction) C) The Farm and Ranch Contract D) The Unimproved Property Contract
The Farm and Ranch Contract
surface leases
A lease that addresses rights to the surface of the earth and does not include rights to the air above the property (air rights) or the minerals below the surface (subsurface rights).
What is a rollback tax?
A tax that can be assessed when the property zoning is changed
rollback tax
A tax that is assessed on Texas property when agriculturally exempted property is converted from agricultural use to another use
What does a statement on page 9 of the TREC farm and ranch Contract indicate regarding payment a brokers fees?
Brokers fees, or the sharing of these between brokers, are not fixed, controlled, recommended, suggested or maintained by the Texas real estate commission.
Under paragraph 13 of the TREC residential condominium contract which of the following is true?
Cash reserves from regular condominium assessments for deferred maintenance established by the association will not be credited to seller.
Under the TREC Farm and Ranch Contract, who has the right to harvest all growing crops until delivery of possession of the property?
The seller
The TREC Contract Forms say that if the property is damaged by fire or other casually prior to closing, the
The seller will be obligated to restore the property prior to closing
If as a result of a condemnation of a portion of the property by the local municipality, the use of the property went from residential to commercial, thus increasing the value of the property substantially, which of the following would be TRUE?
There would be no rollback taxes because property condemned is not subject to rollback taxes.
Under the TREC Unimproved Property Contract, why must a buyer of an unimproved building lot carefully research availability of utilities? A) They are not negotiable if not already in place. B) Utilities are unsustainable. C) Utilities are not transferrable. D) They may affect the suitability of the lot for the buyer's intended use.
They may affect the suitability of the lot for the buyer's intended use.
Under the TREC Unimproved Property Contract, why should an adequate termination option be purchased? A) To provide a sufficient amount of time to make absolutely certain that the property is suitable B) To compensate the agents C) To provide incentive to the seller D) To act as an incentive to the buyer
To provide a sufficient amount of time to make absolutely certain that the property is suitable
The Farm and Ranch Contract addresses items that are not included in the other TREC promulgated contract forms, such as crops and equipment. True False
True
The Property Condition paragraph of the Unimproved Property Contract provides that the buyer should determine if the available utilities are suitable for the buyer's needs. True False
True
The Unimproved Property Contract addresses rollback taxes. True False
True
Despite the additional cost, the buyer has decided the flooring material in his under-construction home should be clear Hawaii-sourced koa wood rather than the red oak specified by the construction documents. Both the buyer and the contractor should insist on
a detailed change order.
Rollback taxes are discussed in A) Farm and Ranch Contract. B) both New Home Contracts. C) Unimproved Property Contract. D) all of these.
all of these.
How is paragraph 2 of the unimproved property form different than some paragraphs found in the other forms?
It is less complicated due to the lack of fixtures and accessories found in an unimproved property
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500 acre ranch using the TREC Farm and Ranch Contract. On page nine of the contract, who is responsible for payment of the commission to the listing broker?`
It is negotiated by the parties
Under the TREC Residential Condominium Contract, how old can the resale certificate be?
It must have been prepared no more than three months before the date it is delivered to buyer.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 5. Seller delivers the condominium documents three days after the effective date. Assuming no option period, what is the latest date on which buyer may cancel the contract and still get her earnest money refunded? A) January 11 B) January 13 C) January 8 D) January 5
January 13
Paragraph 3 allows a __________.
price adjustment (cannot exceed 10%)
The deadline to cancel for non-receipt of certificate is on the _______ day.
sixth
Paragraph 2 of the Residential Condominium Contract describes which of the following...? Parties Notices Financing Property and condominium documents
Property and condominium documents
Which of the following contracts should be used when purchasing a condominium apartment...? One to Four Family Residential Contract - Resale Multi-family Residential Contract - Resale Residential Condominium Contract - Resale TREC Residential Apartment Contract - Resale
Residential Condominium Contract - Resale
timber interests
Rights to trees grown for timber that can be negotiated in the sale of a property. Normally growing trees are considered real estate and remain with a property when it sells.
In what way is paragraph 2 in the TREC Farm and Ranch Contract different from paragraph 2 of the One to Four Family Residential Contract? A) The Farm and Ranch Contract calls for a metes-and-bounds legal description rather than reference to a recorded plat. B) The Farm and Ranch Contract calls for a tiers and range legal description rather than reference to a recorded plat. C) The Farm and Ranch Contract has no property description. D) The Farm and Ranch Contract references a recorded plat rather than a metes-and-bounds legal description.
The Farm and Ranch Contract calls for a metes-and-bounds legal description rather than reference to a recorded plat.
Which TREC contract should be used to purchase a newly constructed home that has tenants residing in the house? A) The builder's contract B) The TREC New Home Contract (Completed Construction) C) The TREC New Home Contract (Currently Occupied) D) The One to Four Family Residential Contract
The One to Four Family Residential Contract
incomplete construction
For purposes of TREC-promulgated forms, a new home that is in the process of being built but is not complete
completed construction
For the purposes of TREC-promulgated forms, a new home that is finished and ready for move-in.
Which of the following is NOT in the Seller's Disclosure in the TREC Unimproved Property Contract? A) Endangered species B) Foundation problems C) Dumpsites D) Wetlands
Foundation problems
Buyer and seller enter into an agreement for buyer to purchase seller's farm using the TREC Farm and Ranch Contract. Buyer wants to harvest the corn that is currently growing. What should buyer's agent advise the buyer? A) Advise buyer that seller always gets to harvest any growing crops. B) Advise buyer that contract provides that buyer gets to harvest all crops. C) Advise buyer that seller get to harvest only certain listed crops. D) Get an agreement from seller in writing acknowledging that buyer gets to harvest the corn.
Get an agreement from seller in writing acknowledging that buyer gets to harvest the corn.
Buyer and seller enter into a contract for buyer to purchase sellers condominium using the TREC residential condominium contract with an effective date of February 1. Seller timely delivers the condominium documents five days after the effective date. Assuming the buyer give timely notice, what happens when she terminate the contract?
The earnest money will be refunded to the buyer
r-value
A measure of insulation. The higher the R-value, the better resistance to the transfer of heat. The TREC-promulgated contracts address the R-factors in the Property condition paragraph. Other topics that should be addressed include the following: - Construction documents - Cost adjustments - Buyer selections - Completion dates - Possible delays - Warranties
What type of home is typically purchased using the TREC New Home Contract (Completed Construction)? A) A new home as a back-up B) A new home without warranties C) A spec home D) A new home under a lease
A spec home
Which of the following is NOT listed in paragraph 22 of the TREC Farm and Ranch Contract? A) Addendum for Reservation of Oil, Gas, and Other Minerals B) Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum C) Addendum for Coastal Area Property D) Addendum for Back-Up Contract
Addendum for Reservation of Oil, Gas, and Other Minerals
Which of the following is considered an accessory to a condominium unit...? Window air conditioning unit Stove Door keys All of the above
All of the above
A buyer and seller enter into an agreement for buyer to purchase seller's property using the TREC Unimproved Property Contract. The buyer intends to develop the property for commercial use. Which of the following has the biggest impact on buyer's decision to purchase? A) All of these B) Zoning ordinances C) Restrictive covenants D) Availability of utilities
All of these
Right of First Refusal causes...(Residential Condominium Contract)
Amendment to the effective date of the contract
Rollback Tax
Applied retroactively. The difference between the tax paid on the land and the tax that would have been paid if the agricultural appraisal had not been placed. Plus 7 percent per year since tax was placed
How is paragraph 14 different in the Residential Condominium Contract? A) Casualty loss is not addressed in the condominium contract. B) The paragraph does not address the common elements. C) Because the seller owns a single unit only, casualty loss addresses that situation. D) It is advised that the buyer seek the advice of an attorney due to the complexity of the casualty loss paragraph.
Because the seller owns a single unit only, casualty loss addresses that situation.
What does the statement on page nine of the TREC Farm and Ranch Contract indicate regarding payment of brokers' fees? A) Brokers' fees or the sharing of fees between brokers are maintained by the Texas Real Estate Commission. B) Brokers' fees or the sharing of fees between brokers are controlled by the Texas Real Estate Commission. C) Brokers' fees or the sharing of fees between brokers are fixed by the Texas Real Estate Commission. D) Brokers' fees or the sharing of fees between brokers are not fixed, controlled, recommended, suggested or maintained by the Texas Real Estate Commission.
Brokers' fees or the sharing of fees between brokers are not fixed, controlled, recommended, suggested or maintained by the Texas Real Estate Commission.
Under paragraph 12A(4) of the TREC Residential Condominium Contract, who pays for any deposits for reserves required at closing by the Association?
Buyer
Under paragraph 12A(4) of the TREC Residential Condominium Contract, who pays for any deposits for reserves required at closing by the Association? A) Buyer B) Title company C) It is negotiated D) Seller
Buyer
water rights
Common law rights held by owners of land adjacent to rivers, lakes, or oceans; includes restrictions on those rights and land ownership
A form of ownership of real property that consists of individual ownership of some aspects and co-ownership in other aspects of the property is known as a...? Condominium Tenancy in common Cooperative Time-share
Condominium
Buyer and seller enter into an agreement for builder to sell a buyer a new home using the TREC new home contract (incomplete construction). Buyer wants to upgrade the title in the kitchen and complete a change order. Which set of documents includes change orders?
Construction documents
What the contract refers to as the 'documents' (Residential Condominium Contract)
Declarations, bylaws and rules of the association.
New Home Contract (Completed Construction) is the only contract form to include a notice that the contract is subject to Chapter 27 of the Texas Property Code. True False
False
The Casualty Loss paragraph reads the same for the Residential Condominium Contract and the One to Four Family Residential Contract. True False
False
The Farm and Ranch Contract requires the sales price to be adjusted if the survey reveals a difference in the number of acres being conveyed. True False
False
The Residential Condominium Contract includes survey provisions in paragraph 6, and the One to Four Family Residential Contract does not. True False
False
The TREC promulgated contract forms are the same with the exception of their titles. True False
False
Which TREC contract should be used to buy or sell a new home if closing will happen before the builder is finished building the house? A) The Unimproved Property Contract B) The New Home Contract (Incomplete Construction) C) None of the TREC contracts are suitable for this transaction D) The New Home Contract (Completed Construction)
None of the TREC contracts are suitable for this transaction
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 5. Seller delivers the condominium documents before the effective date. Assuming no option period, what is the latest date in which buyer may cancel the contract based on the documents and still get her earnest money refunded? A) January 8 B) January 11 C) January 5 D) January 14
The answer is January 11. The contract provides that buyer may cancel the contract before the sixth day after buyer receives the documents by hand-delivering or mailing written notice of cancellation to seller by certified United States mail, return receipt requested.
Buyer and seller enter into an agreement for buyer to purchase seller's lot using the TREC Unimproved Property Contract. Buyer has paid earnest money to the escrow agent. Buyer is unable to find financing and gives proper notice to seller. Buyer terminates the contract and requests a release of the earnest money. Which of the following is TRUE with respect to escrow agent's payment of the earnest money to buyer? A) The escrow agent may deduct buyer's unpaid expenses before refunding the earnest money to buyer. B) The escrow agent may not deduct buyer's unpaid expenses before refunding the earnest money to buyer. C) The escrow agent may deduct all unpaid expenses before refunding the earnest money to buyer. D) The escrow agent may only deduct seller's unpaid expenses before refunding the earnest money to buyer.
The escrow agent may deduct buyer's unpaid expenses before refunding the earnest money to buyer.
A new home builder is selling a spec house that she briefly lived in before listing it in the local MLS. The buyer is interested in making an offer on the house. Which TREC contract should the buyers agent advised the buyer to use to submit the offer?
The one to four family residential contract
Metes and Bounds is used as the legal description in....
larger tracts of land
A buyer and seller enter into an agreement for buyer to purchase seller's lot, which is currently used for grazing, using the TREC Unimproved Property Contract. The buyer intends to develop the property for commercial use. Who pays for any rollback taxes in this case?
Buyer -The party changing the usage is responsible for the rollback assessment
A buyers offer to purchase sellers ranch using the TREC farm and ranch Contract. Seller is willing to except buyers offer but wants to keep a hunting blind that is currently placed on the property. What should sellers agent advise the seller?
Counteroffer by listing the hunting blind as an exclusion
Paragraph 2's Treatment of "property" (Residential Condominium Contract)
Includes undivided interest in common elements
Which of the following is not listed as a farm and ranch improvement in paragraph 2 the TREC Farm and Ranch Contract? A) Fences B) Gates C) Barns D) Irrigation equipment
Irrigation equipment
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500 acre ranch using the TREC Farm and Ranch Contract. On page nine of the contract, who is responsible for payment of the commission to the listing broker? A) Buyer B) Seller C) The parties split the payment proportionally D) It is negotiated by the parties
It is negotiated by the parties
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 15. Seller timely delivers the resale certificate three days after the effective date. Assuming no option period, what is the latest date on which buyer may cancel the contract based on the resale certificate and still get her earnest money refunded? A) January 23 B) January 21 C) January 18 D) January 31
January 23
Which paragraph from the One to Four Family Residential Contract changes in only one of the promulgated forms?
Paragraph 14. This paragraph is different only in the Condominium Contract because it deals with damage to the condo unit before closing, rather than the entire property of which the condo is a part.
Which paragraph is different in all six TREC contracts? A) Paragraph 23 B) All paragraphs are different C) Paragraph 1 D) Paragraph 2
Paragraph 2
In what way are the Condominium Contract and the Farm and Ranch Contract different from the other four contract forms? A) Paragraph 3 is different in both B) Paragraph 5 is different in both C) They are the same as the other forms D) Paragraph 6 is different in both
Paragraph 6 is different in both
In what way are the condominium contract and the farm and ranch Contract different from the other four contract forms?
Paragraph 6 is different in both
The definition of property in paragraph two of the TREC farm and ranch Contract address all of the following except?
Parking
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500-acre ranch using the TREC Farm and Ranch Contract. Seller was denied a special use valuation by the county that resulted in assessments. Who is responsible for payment of the assessments? A) Buyer B) Seller C) Buyer and seller proportionally D) Neither buyer nor seller
Seller
How long does the buyer have to terminate the contract after he receives the condominium documents in the TREC Residential Condominium Contract? A) Six days after delivery of the documents B) Seven days after the effective date C) The buyer may not terminate the contract based in the condominium documents. D) Three days after delivery of the documents
Six days after delivery of the documents
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of February 1. Seller timely delivers the condominium documents five days after the effective date. Assuming the buyer gives timely notice, what happens when she terminates the contract?
The earnest money will be refunded to the buyer.
Under paragraph 12A(3) of the TREC Residential Condominium Contract, who pays association fees or other charges resulting from the transfer of the property? A) The seller B) The title company C) The parties negotiate the payment D) The buyer
The parties negotiate the payment
Which of the following is NOT defined as a "Document" in the TREC Residential Condominium Contract? A) Bylaws B) The Declaration C) The resale certificate D) Rules of the Association
The resale certificate
How is paragraph 7 different in both New Home Contracts, the Unimproved Property Contract, and the Farm and Ranch Contract from the residential contract?
There are different seller's disclosures required depending on the type of property.
How is paragraph 7 different in both New Home Contracts, the Unimproved Property Contract, and the Farm and Ranch Contract from the residential contract? A) There are different inspections provided for depending on the type of property. B) They each address property condition the same but different from the one to four residential contract. C) There are different seller's disclosures required depending on the type of property. D) Access to the property is different depending on the type of property.
There are different seller's disclosures required depending on the type of property.
How is paragraph 13 different in the New Home Contracts, the Unimproved Property Contract, and the Farm and Ranch Contract? A) Taxes for the current year are not prorated. B) Taxes for the current year are prorated differently. C) Maintenance fees are not prorated through the closing date. D) There is a possibility of the assessment of rollback taxes.
There is a possibility of the assessment of rollback taxes.
Under the TREC Unimproved Property Contract, why must a buyer of an unimproved building lot carefully research restrictive covenants? A) They are always assumed to prohibit commercial use. B) They are always assumed to permit residential use only. C) They may affect the suitability of the lot for the buyer's intended use. D) They remain in place indefinitely and may not be removed.
They may affect the suitability of the lot for the buyer's intended use.
Under the TREC Unimproved Property Contract, why must a buyer of an unimproved building lot carefully research zoning ordinances? A) Zoning for unimproved property is always assumed for residential use. B) Zoning for unimproved property is always assumed for industrial use. C) They may affect the suitability of the lot for the buyer's intended use. D) Zoning for unimproved property is always assumed for commercial use.
They may affect the suitability of the lot for the buyer's intended use.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract. The seller timely notifies buyer that the roof of the complex has been partially destroyed by hail. Buyer timely gives notice that she will terminate the contract because of the damage unless she receives written confirmation from the association that the roof will be restored to its previous condition within a reasonable time at no cost to buyer. How long does the association have to provide the confirmation?
Within seven days of getting the notice
Paragraph 2 is the only paragraph that is _________ in every contract.
different
Seller's disclosure of lead-based paint is
included in the One to Four Family Residential Contract but not the New Home Contracts.
Seller's disclosure of lead-based paint is A) included in the New Home Contracts but not in the One to Four Family Residential Contract. B) included in the One to Four Family Residential Contract but not the New Home Contracts. C) not included in the One to Four Family Residential Contract or the New Home Contracts. D) included in the One to Four Family Residential Contract and the New Home Contracts.
included in the One to Four Family Residential Contract but not the New Home Contracts.
Construction Documents are defined as
plans and specifications, the finish out schedules, any change orders, and any allowances related to the plans and specifications, finish out schedules, and change orders
The TREC contract forms say that if the property is damaged by fire or other casualty prior to closing, the A) seller will be obligated to restore the property prior to closing. B) buyer may terminate the contract as is. C) buyer must accept an assignment of the insurance funds. D) buyer is obligated to restore the property after closing.
seller will be obligated to restore the property prior to closing.
Paragraph 6G(8) of the Farm and Ranch Contract informs the consumer that if the property is subject to a private transfer fee A) the seller must notify the buyer. B) the agent must notify the buyer. C) the title company must notify the buyer. D) notification is not needed as it is public information
the seller must notify the buyer.
Rollback taxes can be assessed when A) tax rates have been upgraded. B) zoning is changing and the property no longer qualifies for a previous exemption. C) property values have been reappraised. D) property values are increasing quickly.
zoning is changing and the property no longer qualifies for a previous exemption.