1. Property Ownership
The main difference between joint tenancy and tenancy in common is that joint tenancy: A » is inheritable to the heirs B » has a right of transfer C » carries the right of survivorship D » has a unity of possession
(C) Joint tenancy does carry the right of survivorship which means if an owner dies, the surviving owners receive that person`s share. (A) Tenancy in common is inheritable to the heirs, not joint tenancy. (B) Both joint tenancy and tenancy in common allow for a right of transfer. (D) While joint tenancy does have a unity of possession, this is not the main difference.
T. gave a neighbor the right to cross over his property. T's property would be referred to as: A » a licensed property B » an encroached upon property C » the servient tenement D » the dominant tenement
(C) Land that is burdened by an easement (has an easement crossing it) is called the servient tenement. (A) A license is personal permission and is not a right. (B) An encroachment is using someone else`s property without permission. (D) The dominant tenement is the land in favor of the easement (T's neighbor).
Which of the following would transfer legal use but not ownership of a property? A » A deed restriction B » An encroachment C » An easement D » A lien
(C) An easement is a legal right to cross over a property without owning it. (A) A deed restriction is placed by a private property restricting certain uses of a property, such as certain types of roofs or fences. (B) An encroachment is trespassing on another`s property, such as building a fence on a neighbor's property. (D) A lien is a money encumbrance (burden) on a property, such as a tax lien.
A neighbor had encroached on a property but the owner did not complain within the legally specified time period. The neighbor would obtain rights to the land by: A » license B » easement by necessity C » easement by prescription D » easement in gross
(C) An encroachment (fence, tree limb, etc.) that remains for a lengthy period can become an easement by prescription (continuous, open, notorious). (A) License must be given by permission. (B) Easements by necessity are created if a land is landlocked. (D) Gross easements are non-appurtenant (utility, railroads).
What interest does a condominium owner have in common with other condominium owners? A » Divided interest in the common properties B » Undivided interest in the limited common properties C » Undivided interest in the common areas D » Undivided interest in the master deed plan
(C) Condominium owners are tenants in common in the common areas (pool, halls, etc) thus having an undivided interest in them (each owner has the right to use any of the common areas). Common areas, not (A) & (B) common properties is the correct term. Master deed (D) is the document which creates the condominium entity.
Which is a voluntary lien against a person's property? A » Mortgage lien B » Mechanic's lien C » Judgment lien D » Property tax lien
(A) A "voluntary" lien is placed on a property by the owners themselves. A mortgage is given voluntarily to a lender in order to secure a note. (B) A mechanic`s lien is placed by a worker who was not paid for work on a property. (C) A judgment lien is obtained by someone to whom an owner owes a debt. (D) A property tax lien is placed on a property when the owner owes real estate taxes.
On July 1, a contractor started work. On August 15, the work was completed. The general contractor was paid but the material vendor was not. On Oct. 1, the material vendor filed a mechanic's lien. What is the effective date for the mechanic's lien? A » July 1 B » Aug. 15 C » Oct. 1 D » A material vendor cannot file a mechanic's lien
(A) A mechanic`s lien takes priority based on the date the work was started, which was July 1, not (B) Aug. 15 when the work was completed, or (C) Oct. 1 when the lien was filed. (D) It can be filed for either work OR materials that are unpaid.
An easement giving a person the right of ingress and egress would be BEST classified as an:
(A) An appurtenant easement gives a neighboring property owner the right to go in and out (ingress and egress). (B) Emblements are growing crops that belong to the person who planted and tended them. (C) License is permission to use the property of another but can be revoked at any time (unlike an easement). (D) An encroachment is an improvement that extends across the property line (such as a fence or tree limb).
A builder owns a large piece of property. The builder decides to turn the property into a subdivision of homes but decides to keep the lake frontage on all the lots for himself. What would a buyer of one of the lots prefer to have? A » Easement appurtenance B » Easement in gross C » Easement by prescription D » License
(A) An appurtenant easement would give the buyer access to the lake, thereby making the property more valuable. (B) An easement in gross is primarily for entities such as utilities and railroads. (C) An easement by prescription is created through long term use. (D) A license is permission.
A trespass of an improvement is which of the following? A » Encroachment B » Easement C » License D » Lien
(A) An improvement that crosses a property line is an encroachment. (B) Easement is the right to use another`s property. (C) License is permission to use another's property. (D) Lien is a money encumbrance recorded on a property.
What is the greatest type of interest an owner can receive in a condominium? A » Fee simple B » Leasehold C » Right of free use D » Stock
(A) Condominiums are a form of ownership. Fee simple is the maximum rights an owner can have. (B) Leasehold would be used in a cooperative as would (D) stock. (C) Right of free use is not a real estate term.
Condominium ownership would NOT be used on which of the following? A » An apartment building B » A cooperative apartment C » Townhouses D » An office park
(B) A cooperative and a condominium are two different things. In a cooperative, the tenants in the apartment own stock in the property and have a proprietary lease. (A) An apartment building could be converted to condominium ownership. (C) Townhouses and (D) an office park could also be condominiums. Owning your own space and sharing common areas is a typical idea of a condominium.
Condominium ownership would NOT be used on which of the following? A » An apartment building B » A cooperative apartment C » Townhouses D » An office park
(B) A cooperative and a condominium are two different things. In a cooperative, the tenants in the apartment own stock in the property and have a proprietary lease. (A) An apartment building could be converted to condominium ownership. (C) Townhouses and (D) an office park could also be condominiums. Owning your own space and sharing common areas is a typical idea of a condominium.
A person that has stock ownership in an apartment and a proprietary right to lease that space would be participating in a: A » condominium B » cooperative C » time share D » alienation
(B) A cooperative involves owning stock of a corporation that gives a person a proprietary lease right in an apartment. (A) A condominium involves fee simple title ownership in a unit. (C) A time share has fee simple title to a unit for a set time period each year. (D) Alienation means transfer in a real estate context.
A fixture would be defined as: A » chattel B » an item that is attached to a building C » personal property D » covenants that run with the land
(B) A fixture at one time was personal property but is now attached to a building. (A) Chattel refers to personal property. (C) A fixture is not personal property but is rather real property as the item has been affixed to a building. (D) Covenants (or deed restrictions) deal with issues such as a property must have a certain type of roof or fence.
A property that has an easement crossing it is called: A » appurtenant tenement B » servient tenement C » dominant tenement D » gross easement
(B) A servient tenement is the land burdened by the easement. (A) Appurtenant tenement is not a real estate term.(C) The dominant tenement is the land benefiting by the easement. (D) Gross easement is a non- appurtenant easement (utility, railroads, billboards).
Converting real property into personal property would be called a(n): A » chattel B » annexation C » severance D » fixture
(C) A severance is going from real to personal property, such as cutting down a tree. (A) Chattel is another word for personal property. (B) Annexation is adding on to something or someplace. (D) A fixture is going from personal to real property, such as attaching a ceiling fan to a property.
Time share ownership would be most evidenced by: A » joint tenancy B » tenancy in common C » tenancy in the entireties D » cooperative ownership
(B) A time share involves different owners owning a unit in a condominium as tenants in common (which is inheritable to the heirs). Each owner owns a different period of time, often referred to as interval ownership. (A) Joint tenancy carries the right of survivorship stating if one owner dies, the ownership transfers to the surviving owners. (C) Tenancy in the entireties signifies ownership by married couples only. (D) Cooperative ownership is where people own stock in a corporation, thus granting a leasehold estate.
An improvement which crosses over the property line without permission is: A » easement B » encroachment C » license D » right-of-way
(B) An encroachment (fence, tree limb, etc.) crosses the line without permission. (A) An easement is a right to use another`s property. (C) License is personal permission to use another's property (hunt, fish, etc.). (D) Right of way is a type of easement.
Which of the following items would be considered an encroachment? A » A note of estoppel B » A fence that crosses over the property line between two different owners C » An easement between 2 properties D » Verbal permission for one party to cross over another's property
(B) An encroachment is an improvement that crosses over the property line, such as a fence. (A) A note of estoppel is generally used in stating a current loan balance when a note is sold. (C) An easement gives the right of ingress and egress and is not an encroachment. (D) Verbal permission to cross over another`s property is called a license.
Harvesting of crops that require annual planting means that the crops are considered to be: A » real property B » personal property C » fixtures D » trade fixtures
(B) Annual crops are called emblements; these are classified as personal property and can be harvested even after the sale of property. (A) Real property is land plus all appurtenances. (C) Fixtures are personal property items that are attached to a building, thus making the items real property, such as a ceiling fan. (D) Trade fixtures are items attached by a commercial tenant for their business and are considered to be personal property.
Which of the following items would automatically transfer with the sale of property? A » Trade fixtures B » Plumbing fixtures C » A free standing appliance D » Emblements
(B) Plumbing fixtures would be considered fixtures or real property and would transfer with the sale of property. (A) Trade fixtures are items installed by a commercial tenant for business use and are considered personal property. (C) A free standing appliance would be personal property and would not automatically transfer with the property. (D) Emblements are growing crops in the field and are considered to be personal property.
A buyer made an offer on a house and the seller accepted the offer as written. The buyer wanted some of the seller's personal property to remain with the house. The personal property would transfer to the buyer under which of the following conditions? A » If it fit into a particular spot in the house B » If it was included in the contract C » If it was verbally stated by the listing broker D » If it was verbally agreed to between the seller and buyer
(B) The statute of frauds requires that all terms of a contract be in writing to be enforceable. (A) The fact that it fit does not normally make any difference. (C) & (D) Verbal agreements are unenforceable.
A condominium development with a long standing established homes association would be governed by the: A » long established tenants B » association of unit owners C » developer of the condominium D » state licensing agency
(B) The unit owners govern themselves through a homes association. (A) There are no tenants in a condominium. (C) The developer establishes the homes association to oversee the condominium. (D) The state licensing agencies don`t govern condominiums.
In a life estate situation, what happens to ownership of the property when the life tenant dies? A » The life tenant's heirs would get the property B » The current title holder or heirs would get the property C » The state government would get the property D » Whoever had the mortgage on the property would get the property
(B) When a life tenant dies, the property goes to the current title holder; either back to the original grantor or a third party remainderman. If the original grantor or remainderman are no longer living, then the heirs would get the property. (A) The tenant`s heirs do not get the property as a life estate is non-inheritable. (C) The state government only gets the property when a person dies with no will and no heirs (escheat). (D) The mortgage holder only has a mortgage against the life estate.
The main difference between a cooperative and condominium is that:
(C) A condominium owner does own and finance their own space. (A) A condominium owner receives fee simple title to a unit, not a cooperative owner. (B) A condominium owner pays their own taxes and mortgage, not a cooperative owner. (D) A cooperative owner receives a proprietary lease, not a condominium owner.
A property that has added value making it a better buy due to the benefit of an easement is called: A » appurtenant tenement B » servient tenement C » dominant tenement D » gross easement
(C) A dominant tenement is the land benefitting from the use of an easement across the servient tenement (B). The easement is appurtenant (tied to) the land of the dominant tenement. Gross easement (D) is a non-appurtenant easement (such as utility, railroads). Appurtenant tenement (A) is not a real estate term.
Which of the following scenarios would require an easement by necessity? A » A railroad has to reroute tracks around a piece of land if not allowed to go straight through. B » A gas company having to run gas lines around a property C » An owner was landlocked and could not gain access to his property D » A utility company had no access to a subdivision
(C) A landlocked owner is the best example of where an easement by necessity would be granted. i.e., it is necessary to have an easement - otherwise, the owner could not ever use the property. (A) A railroad having to re-route, (B) a gas company having to re-route or (D) a utility company without access may have to purchase an easement, but it would not normally fall under the easement by necessity category.
Which of the following would NOT be an appurtenance? A » Garage apartment B » Easement on an adjacent property C » Mortgage lien D » Pipeline on a property
(C) A mortgage lien is an encumbrance, not an appurtenance. An appurtenance is a right, privilege or improvement that runs with the land, such as (A) a garage apartment, (B) an easement and (D) a pipeline on a property.
The main difference a manager would need to realize between managing a condominium and an apartment complex is that in a condominium: A » the manager would not have to maintain the common areas B » the need for swimming pool regulations would not be as great C » the people who reside there are unit owners D » the residents are still considered to be tenants
(C) People who reside in a condominium have fee simple title (ownership) to their units. (A) Common areas would still need to be maintained in a condominium. (B) Swimming pool regulations are still needed in a condominium. (D) The residents in a condominium are not tenants, but rather owners.
The main difference a manager would need to realize between managing a condominium and an apartment complex is that in a condominium: A » the manager would not have to maintain the common areas B » the need for swimming pool regulations would not be as great C » the people who reside there are unit owners D » the residents are still considered to be tenants
(C) People who reside in a condominium have fee simple title (ownership) to their units. (A) Common areas would still need to be maintained in a condominium. (B) Swimming pool regulations are still needed in a condominium. (D) The residents in a condominium are not tenants, but rather owners.
A right or privilege one has to use the land of another is best referred to as a(n): A » lien B » encroachment C » servitude D » condominium
(C) Servitude is the right to use the land of another (such as an easement or license). (A) A lien is a money encumbrance (such as a mortgage or judgment). (B) Encroachment is an improvement that extends across the property line (such as a fence or tree limb). (D) Condominium is ownership of a particular space in a large improvement (such as ownership of an apartment unit).
A contractor failed to pay subcontractors for work performed on a property. What could the subcontractors do? A » Sue the contractor for fraud B » Remove the materials from the improved property C » File a mechanic's lien on the improved property D » Petition the attorney general for the money
(C) Sub-contractors can file mechanic`s liens on improved property if the sub-contractor was not paid. (A) There's no evidence of fraud in the question. (B) One cannot remove materials from the improved property. (D) Petitioning the attorney general is not the correct step to take.
An appurtenant easement can be terminated by: A » the death of the dominant tenement B » the death of the servient tenement C » merger of the properties D » destruction of property
(C) The merger of two properties would terminate an appurtenant easement as one cannot have an easement across a property one owns. (A) Death of either the dominant tenement (the land owner that is benefitted) or (B) servient tenement (the land owner that is burdened) does not affect the appurtenant easement - the easement runs with the land. (D) Destruction of the property would not affect the easement.
Two persons own a property under tenancy in common. Which statement would be correct assuming one of the owners dies? A » The probate court would have to make the final determination B » The other owner would receive ownership under right of survivorship C » The heirs of the deceased would inherit the property D » The administrator would determine the rightful owner
(C) Under tenancy in common, when one dies, the heirs receive the property. (A) Probate court makes a determination only if a person dies without a valid will. (B) Joint tenancy carries the right of survivorship, meaning if one dies, the ownership goes to the surviving owners. (D) The administrator is court appointed to oversee the distribution per the probate court judge.
Which of the following statements would be the best definition of a fixture? A » An item that is easily movable B » Chattel C » Crops D » A physical attachment to the real estate
(D) A fixture at one time was personal property but is now attached to the real estate, such as a ceiling fan. (A) An item easily movable would be personal property. (B) Chattel is another word for personal property. (C) Crops are usually called emblements and are personal property.
One main difference between an easement and a lien is that: A » an easement makes a property unmarketable B » an easement can only be granted by the government C » a lien requires money to be set aside in escrow D » an easement gives the right to cross over another's property to the holder of the easement
(D) An easement does give a person the right to cross over another`s property. (A) Unmarketable refers to a property with a cloudy title, such as an ownership dispute. (B) An easement can be granted by private parties or the government. (C) A lien does not require escrow money.
The common areas in a condominium are owned by the unit owners under: A » joint tenancy B » severalty C » tenancy in the entireties D » tenancy in common
(D) Common areas are owned under tenancy in common, which is inheritable to the heirs. (A) Joint tenancy carries the right of survivorship. (B) Severalty is ownership by one person or entity. (C) Tenancy in the entireties refers to ownership by a married couple.
Which of the following statements is true regarding a condominium? A » Stock is used to transfer ownership B » The owners have a proprietary lease C » Ownership must be done under joint tenancy D » The owners have an undivided interest in the common areas
(D) In a condominium, the owners do have an undivided interest (share possession) in the common areas (pool, hallways, etc.). (A) Stock is used with a cooperative. (B) A cooperative uses a proprietary lease. (C) Ownership in a condominium does not have to be done under joint tenancy.
Which of the following items would NOT be an appurtenance? A » Right B » Privilege C » Improvement D » Reversion
(D) Reversion is the right of an owner to get a property back after a life estate or lease terminates. (A), (B) and (C) simply define the three elements of an appurtenance: Right, Privilege or Improvement permanently attached to the land.
When ownership is conveyed through the transfer of shares of stock, this is: A » joint tenancy B » tenants in common C » condominium D » cooperative
(D) Stock is used to transfer rights in a cooperative. (A) Joint tenancy carries the right of survivorship and requires the unities of time, title, interest and possession. (B) Tenancy in common refers to co-ownership where if one dies, the interest goes to the heirs. (C) A condominium is where one owns a unit in a multi-unit building.
Which of the following transactions would be governed by securities laws? A » An adjustable rate mortgage with the interest rate tied to the one-year treasury bills B » A broker selling shares in a Real Estate Investment Trust (REIT) C » The Federal Housing Administration in insuring loans for lenders D » A lending institution selling mortgages to Freddie Mac
A security is an investment in the ownership of paper (as opposed to the ownership of the property itself). A Real Estate Investment Trust sells shares of paper. Then the REIT buys the property itself. Selling shares in the REIT then requires a securities license because a person is buying part of the REIT, not the real estate itself.