Chapter 5, Unit 4 Quiz

The Statute of Limitations requires that parties to a contract who have been damaged or who question the contract's provisions do what? a. Act within a statutory period. b. Select a specific, limited course of action for recouping their losses. c. Arbitrate prior to taking court action. d. Wait a statutory period before they may take legal action.

a. Act within a statutory period.

What document is used to make adjustments to an existing sales contract? a. Addendum b. Repeal c. Side bar d. Adjunct

a. Addendum

Which contract provision allows for the transfer of the contract to another person? a. Assignment of a Contract b. Operation of Law c. Transfer Clause d. Execute Clause

a. Assignment of a Contract

Buyer Bill has agreed to pay for a computer system after all hardware has been installed and operational. What type of contract does Bill hold? a. Executory b. Lateral c. Executed d. Open Option

a. Executory

Which kind of lease increases at specified intervals? a. Graduated b. Gross c. Percentage d. Net

a. Graduated

Which of the following is a characteristic of land leases? a. Inherently long-term leases b. Inherently short-term leases c. Tax advantage limitations d. Reduction in finance options

a. Inherently long-term leases

What kind of lease contains a recapture clause? a. Percentage b. Net c. Provisional d. Graduated

a. Percentage

What does a rescission contract do? a. Releases all parties from any present and future liability. b. Makes the buyers liable for damages if they default for no good reason. c. Specifies the terms under which either party may sue the other in a default. d. Releases the sellers from any responsibility for returning the buyers' earnest money deposit.

a. Releases all parties from any present and future liability.

What do we call the right of a person to have the first opportunity to purchase or lease a property? a. Right of first refusal b. First right to buy c. Right to resend d. Right to counteroffer

a. Right of first refusal

In which provision would a landlord describe what activities can take place on the property? a. Use of the Premises b. Property Order c. Location Use d. Property Regulations

a. Use of the Premises

A lease is a. both an instrument of conveyance and a contract. b. neither an instrument of conveyance nor contract. c. a promise note. d. a document that conveys legal title.

a. both an instrument of conveyance and a contract.

The best practice is to a. have the buyers take possession on the day of the transaction close. b. have the buyers take possession at least 2 days after the day of the transaction close. c. have the seller remain on the property at least 2 days after the closing date. d. have the sellers move from the property at least 5 business days before the close date.

a. have the buyers take possession on the day of the transaction close.

Which of the following best defines a marketable title? a. A title that has been recorded at the county court house b. A title to a property that is free from encumbrances, litigation, and other defects and that can be readily be sold or mortgaged c. A title that has been reviewed by an attorney d. A title that has at least one lien attached to the property

b. A title to a property that is free from encumbrances, litigation, and other defects and that can be readily be sold or mortgaged

In which contract provision would the length of the lease be outlined? a. Statement of Limits b. Clear Statement of Term c. Clear Notice of Terms d. Order of Terms

b. Clear Statement of Term

In which of these contracts is the payment of all or part of the sale price deferred? a. Lease b. Contract for deed c. Option d. Contract of sale

b. Contract for deed

Which kind of lease has no time limit? a. Estate for years b. Estate at will c. Estate from period to period d. Estate at sufferance

b. Estate at will

Bill has informed his landlord that he will be moving in 30 days. What action has Bill taken regarding his lease requirement? a. He has provided an advance order of moving. b. He has given notice. c. He has given due process. d. He has given notice of vacating.

b. He has given notice.

How might a voidable contract become valid? a. If neither party agrees to the terms. b. If the party who has reason to disaffirm the contract elects instead to perform it. c. If the party who wants to enforce the contract seeks legal relief. d. If the party who wants to enforce the contract seeks damages.

b. If the party who has reason to disaffirm the contract elects instead to perform it.

What is one important difference between a sublease and a lease assignment? a. In an assignment, responsibility for the original lease is transferred completely to the assignee. b. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract. c. A sublease does not convey any of the leasehold interest. d. A sublease conveys the entire leasehold interest.

b. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.

Buyer Jim agreed to a 20-day window to get a survey done. A number of problems have occurred and after 20 days from the signed contract date, buyer Jim has yet to have a survey completed. What is now the status of the sales contract? a. A hold will be put on the contract, until a survey is completed. b. Jim has defaulted on his contract. c. The seller must now order a property survey. d. A new contract must now be written for the sale to proceed.

b. Jim has defaulted on his contract.

Landlord Frank terminated Jerry's lease because gross sales did not meet expectations. Jerry agreed to what type of lease? a. Retail Level Lease b. Percentage Lease c. Reorder Lease d. Market Level Lease

b. Percentage Lease

What is an important legal characteristic of an option to buy agreement? a. The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed. b. The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. c. The contract can be executed at no cost to the optionee. d. It is a bilateral agreement.

b. The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.

Jim has part ownership in a house. He has decided to sell his interest. He signs an agreement with a local real estate broker without informing the other two owners. Jim is most likely holding his part ownership as a. tenant at-large. b. joint tenant c. shared tenant d. partnership tenant

b. joint tenant

A contract which neither party can enforce is called a. voidable b. void c. open d. denied

b. void

Which statement best defines the concept of "quiet enjoyment?" a. A tenant's requirement to comply with contract obligations b. A landlord's obligation to provide the tenant with egress c. A landlord's obligation to provide the tenant with reasonable privacy and freedom from interference d. A tenant's requirement to allow access for inspections and repairs

c. A landlord's obligation to provide the tenant with reasonable privacy and freedom from interference

Which of the following contracts must be in writing to be enforceable? a. A parol contract b. A six-month lease c. A two-year lease d. An executory contract

c. A two-year lease

According to contract law, every valid contract is also what? a. Void b. Enforceable c. Enforceable or unenforceable d. Voidable

c. Enforceable or unenforceable

Jim signed a six months lease. What type of lease did Jim sign? a. Estate at will b. Estate for time c. Estate for years d. Estate at sovereignty

c. Estate for years

Which of the following statements best defines closing costs? a. Marketing expenses incurred to sell the property b. All listing fees c. Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction d. Expenses not paid by the brokerage

c. Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction

Which statement is FALSE? a. A single joint owner or tenant in common can sell his or her own interest in a property without the consent of the other owners. b. When one of the parties to a real estate transaction is a partnership, the names of all the general partners and their spouses should be entered into the contract. c. In a community property state, if a husband owns property separately from his wife, he cannot sell the property without her permission. d. If the property being sold is part of a trust, the trustee must be the one to sign all the appropriate documents.

c. In a community property state, if a husband owns property separately from his wife, he cannot sell the property without her permission.

Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of lease does Jim have? a. Revolving Lease b. Wholesale Lease c. Index Lease d. Leading Indicator Lease

c. Index Lease

A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, what is the status of the offer? a. It's an accepted offer; therefore a valid contract. b. It's an invalid contract. c. It's still an offer. d. It's an invalid offer.

c. It's still an offer.

When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease? a. Gross b. Periodic c. Net d. Graduated

c. Net

Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy? a. Lease b. Recission c. Option d. Purchase

c. Option

Most home sales are a. not contingent on financing. b. covered by FDIC insurance. c. contingent on financing. d. based on a cash sale.

c. contingent on financing.

Issues that are not covered in the purchase and sale agreement itself are usually dealt a. through verbal agreements. b. via handwritten notes. c. using preprinted riders. d. using a schedule of changes.

c. using preprinted riders.

Which of these items is not included in a lease agreement? a. Use provisions b. Demising clause c. Description of premises d. Alienation clause

d. Alienation clause

Which of the following is a good example of a unilateral contract? a. A listing agreement b. A personal services agreement c. A sale contract d. An option to buy

d. An option to buy

Buyers Sam and Linda Pope are entering into a contract with sellers, Jim and Alana Jones in which part of the sale price of the property will be deferred. What kind of contract is it? a. Contract of Sale b. Option to buy c. Lease d. Installment sales contract

d. Installment sales contract

Which contract element indicates a mutual agreement? a. Description and Order b. Terms c. Dissolution d. Offer and Acceptance

d. Offer and Acceptance

Which party has legal authority to sign a sales contract for a property that is part of an estate? a. The trust committee b. The listing broker c. A judge in the county where the property is located d. The executor of the estate

d. The executor of the estate

Which of the following summarizes the general terms of a ground lease? a. The landlord sells the ground to another, then leases it back. b. A tenant buys the landlord's ground, then leases the improvements. c. The landlord leases the ground floor of the building to a commercial tenant. d. The tenant leases the ground from the landlord and owns the improvements.

d. The tenant leases the ground from the landlord and owns the improvements.

A contract that conveys an interest in real estate must a. include a title closing entity. b. contain default penalties. c. include all outstanding liens against the property. d. contain a legal description of the property.

d. contain a legal description of the property.

A lease conveys exclusive use and a. requires recording of a leasehold conveyance. b. is also called an exclusive freehold estate. c. is not a binding contract upon agreement. d. it may also restrict some uses.

d. it may also restrict some uses.