Legal Real Estate Final Study
The statute or act that requires a contract for the sale of land to be in writing is the... - Statute of Frauds. - Real Estate Licensing Act. - Statute of Writing. - Written Recording Act.
Because the real estate purchase and sale agreement is subject to the - Statute of Frauds, the agreement must be in writing to legally exist.
A brokerage trust account - must be maintained in a recognized financial institution in the state of California. - must be opened in the brokers name as trustee as it appears on the brokers license. - may be interest bearing with the appropriate disclosures and consent. - All of the above.
All of the above. If a brokerage decides that it will maintain its own trust account for trust funds rather than depositing them into a neutral escrow depository, the account must be opened in the broker's name as it appears on the broker's license in a recognized financial institution in California. The account must be designated as a trust account with the broker as the trustee. The account may not be an interest bearing account except, at the request of the trust fund owner, the broker may open a separate interest bearing trust account, as long as the broker discloses how the interest is to be calculated, who pays the service charges, and how the interest is to be paid and to whom. The broker may not receive any of the interest.
Which of the following would entitle a spouse to hold a property as separate property? - The property was received by will or gift to that one spouse only. - The property was owned prior to the marriage. - The property was purchased with the proceeds of other separate property. - All of the above
All of the above. In order for property to be separate between spouses in a community property state, the property must be owned prior to the marriage, the property may be received by inheritance, will, or gift to that one spouse only, the property was procured solely with the proceeds of other separate property, or the property was received as income from separate property. Chapter 4, Community Property, Page 97
A non-financial encumbrance created by the intrusion of some structure or object across the property boundary is known as a/an... encroachment. license. profit. easement.
An encroachment is a form of encumbrance created by the intrusion of some structure or object across the property boundary line. Common examples are a fence, a roofline, tree limbs, a driveway, or bushes. Chapter 10, Encroachments, Page 271
A type of listing agreement entered into with several licensees that provides for payment of a commission to the licensee who brings the buyer is known as: - an exclusive agency listing. - an open listing. - a net listing. - an exclusive right to sell listing.
An open listing agreement allows the seller (the property owner) to employ any number of brokers at the same time. However, the seller would only owe a commission to the actual broker who sells property. Chapter 2, History of Agency as it Relates to the Real Estate Brokerage Business, Page 19
Which one of the following is MOST correct? - A listing is a contract between the seller and the salesperson. - A broker is bound to accept any listing taken by a salesperson. - A broker's only role in the listing process is to acknowledge receipt of a salesperson's listing by initialing the listing agreement. - A broker may refuse to approve a listing taken by a salesperson.
A broker may refuse to approve a listing taken by a salesperson. A supervising broker can reject a listing agreement procured by a salesperson. The agreement is between the broker and the seller, not between the salesperson and the seller. Chapter 2, Subagent, Page 29
Which one of the following is TRUE about a California real estate broker? - A broker may not hire unlicensed personnel such as a bookkeeper to maintain the client trust account. - A broker is not required to supervise affiliated licensees if they are hired as independent contractors. - Brokers are not liable for the actions of affiliated licensees if supervision and control is not adequately exerted. - A broker should establish a policy and procedures manual.
A broker should establish a policy and procedures manual. Each brokerage company operating in California should have a Policy and Procedure Manual. The broker must be active in a supervisory role, whether the licensee is an employee or independent contractor, and may hire unlicensed personnel as long as they do not engage in licensed real estate activity.
The simplest form of business ownership is a: - sole proprietorship. - partnership. - corporation. - syndicate.
A business owned by one individual is known as a - sole proprietorship. The individual can operate the business under his or her own name, or may elect to operate the business under an assumed or trade name. It is the simplest form of business ownership because there is only one owner.
"An agreement between competent parties upon legal consideration creating legally enforceable duties and obligations" is a definition of... - specific performance. - a contract. - an offer. - legality of object.
A contract is an agreement between competent legal parties to do some legal act or to refrain from doing some legal act in exchange for consideration.
Which one of the following is FALSE regarding the formation of a contract? - A party must be identifiable and exist at the time of notification of the acceptance of an offer. - If a person dies prior to notification of acceptance of an offer, the contract is void. - A contract in the name of an entity that does not legally exist is valid.
A contract in the name of an entity that does not legally exist is valid. If a contract is entered into in the name of a legal entity that does not actually exist, such as a corporation that has no legal status, then the contract is void. Chapter 5, Identifiable Parties, Page 111
Which statement regarding California's Homestead Law is TRUE? - A homestead exemption protects a homeowner only from efforts by judgment creditors who elect to foreclose a debt not secured by the home at the time the debt originated. - A boat occupied as a dwelling is not eligible. - $50,000 of an owner's equity in his/her primary residence is exempt from judgment creditors. - A homestead need not be an owner-occupied dwelling.
A homestead exemption protects a homeowner only from efforts by judgment creditors who elect to foreclose a debt not secured by the home at the time the debt originated. The homestead exemption protects a homeowner from efforts by judgment creditors who elect to foreclose a debt that was not secured by the home at the time the debt originated. Chapter 10, Homestead Law, Page 259 and 260
Which one of the following is correct with respect to a licensee's role in preparing a purchase and sale agreement for a buyer? - A licensee can fill in the blanks and sign the standard form agreement for his buyer if a house is found that meets the criteria of the buyer while the buyer is out of town. - A licensee can fill in the blanks of the standard form agreement and prepare addenda at the request of the buyer. - A licensee can prepare a contract for a client that is not on a preprinted form. - A licensee should have the client fill in the blanks on the standard form agreement.
A licensee can fill in the blanks of the standard form agreement and prepare addenda at the request of the buyer. Real estate licensees are permitted to fill in the blanks in printed, standardized forms in connection with, and with respect to, transactions handled in the usual course of business. The licensee is to fill in the blanks or prepare addenda at the direction of the buyer. Chapter 6, Avoiding the Unauthorized Practice of Law, Page 147
Which one of the following is FALSE? - salesperson is an agent of the broker and a subagent of a buyer or seller represented by the salesperson. - A listing agreement is a contract between the salesperson and the seller. - A subagent is an agent of an agent.
A listing agreement is a contract between the salesperson and the seller. A listing agreement is a contract between the seller and the salesperson's supervising broker. It is not an agreement between the seller and the salesperson. The subagent is the agent of an agent. Any licensee who is licensed under a broker is an agent of the broker who is the agent of the client. Chapter 6, Agency Relationship, page 145 and Chapter 2, Subagent, Page 27
Which one of the following statements regarding community property is FALSE? - A spouse's separate property requires the consent of the remaining spouse if it is to be transferred or encumbered. - Property conveyed to a married couple is presumed to be community property. - If community funds are used to maintain or improve separate property, the property may lose its status as separate property. - Neither spouse can make a gift of community property to a third party without the consent of the other.
A spouse's separate property requires the consent of the remaining spouse if it is to be transferred or encumbered. spouse's separate property is free from the interests and claims of the other spouse and it may be encumbered or transferred without the permission of the other spouse. Chapter 4, Community Property, Page 97
Which statement/s is/are TRUE? A. A counter offer is a rejection of the first offer and is a new offer. B. A slight change made to the buyer's offer by the seller, such as changing the escrow company, does not create a counter offer.
A. A counter offer is a conditional rejection that attempts to change, add to, or qualify the terms of the offeror's initial offer. Any change to the offeror's original offer is a counter offer. Upon making a counteroffer, the original offer is no longer open for acceptance by the offeree and has become a new offer.
The DRE has adopted regulations that prohibit licensees from discriminatory behavior based upon a person's.... ancestry. marital status. religion. All of the above
All of the above. A number of regulations have been adopted by the Commissioner of the California Department of Real Estate to ensure that licensees do not engage in discriminatory behavior in the practice of their profession. These rules and regulations prohibit any discriminatory conduct on the part of a real estate licensee based upon race, color, sex, religion, ancestry, physical handicap, marital status, or national origin. Chapter 13, Department of Real Estate Commissioner's Regulations, Page 373
Under single agency representation, which of the following IS NOT a common law fiduciary duty owed to the principal? Compassion Loyalty Obedience Care Accounting Disclosure
Compassion The common law fiduciary responsibilities owed during a single agency relationship are care, loyalty, accounting, accounting, obedience, and disclosure. Chapter 2, Fiduciary Responsibilities Owed To the Principal, Pages 34 to 36
Which one of the following statements is FALSE regarding a planned unit development (PUD)? - It is a subdivision in which the unit and the land under it are owned by each individual purchaser. - Condominiums are considered to be PUDs. - Common areas are owned by all of the unit owners as tenants in common.
Condominiums are considered to be PUDs. A planned unit development is a subdivision with the unit and the land under it owned by the individual owner. The common areas, such as the recreational facilities, open space, and other amenities, are owned by all the owners as tenants in common. The distinguishing factor between a planned unit development and a condominium is that in a planned unit development each property owner actually owns the land upon which their unit is situated. In a condominium, the unit owner only owns the airspace within their unit and not the land upon which it is situated. Chapter 4, Planned Unit Development, Page 108
Which is not a test to determine whether personal property is a fixture? Annexation Cost Intent Adaptation
Cost. Cost is not a test for determining if an item is a fixture. The tests used to determine if personal property has become a fixture include annexation, adaptation, and intention.
When transactions involving the sale of real estate are placed in escrow, this means... - the seller's agent holds the papers until the registration of title is completed. - a designated agent agreed to by the parties holds the necessary documents until the terms are met. - they are completed in secrecy. - the buyer's agent is no longer involved.
a designated agent agreed to by the parties holds the necessary documents until the terms are met. Escrow is the depositing of funds, documents, and other instruments by a buyer, seller, or lender with a neutral third party for delivery upon completion of the terms of the escrow instructions. Chapter 12, Introduction, Page 317
The best way to discover defects on a title is by: calling the county surveyor. a search of title. taking out property insurance. hiring a lawyer
a search of title. A title search will reveal the chain of title and any defects that may exist against the title. Chapter 12, Preliminary Commitment for Title Insurance, Page 325
Which one of the following parties does NOT contribute to the completion of the Transfer Disclosure Statement? Seller Selling agent Listing agent Escrow agent
Escrow agent The seller is the one who is mainly responsible for completing the TDS, but the listing agent and selling agent must disclose facts that they know about the property, even if the seller doesn't include it on the TDS. The escrow agent is a neutral third party that does not participate in completing the TDS.
Police power is the right of the government to seize private property for public use. True False
F Police power relates to the government's right to enact laws to protect the health, safety, morals, and general welfare of the community. The right to seize property for public use is called eminent domain. Chapter 1, Local Ordinances, Page 6
Which one of the following is NOT the unauthorized practice of law? - Giving counsel on the meaning of legal documents or phrases within those documents. - Filling in the blanks on standardized real estate documents. - Giving advice on how title should be taken. - Rendering opinions of the tax implication of a 1031 exchange.
Filling in the blanks on standardized real estate documents. A real estate licensee may fill in the blanks of a real estate purchase and sale agreement, a promissory note for earnest money, rental agreements, and most lease agreements. The licensee, however, is to fill in the blanks at the direction of a party to the transaction such as the seller or buyer. Chapter 6, Avoiding the Unauthorized Practice of Law, Page 147
Which action CANNOT be performed by an escrow agent? - Record documents. - Draft legal documents. - Order the title insurance report and policies. - Disburse funds as authorized by both principals.
Draft legal documents. Among others, an escrow agent performs the following services in most real estate closings: - Orders the preliminary report - Disburses all funds to the appropriate parties - Records the necessary documents, such as deeds, powers of attorney, and substitutions of liability and reconveyances, once all the conditions of the transaction have been met An escrow officer cannot do any of the following, including but not limited to: - Offer legal advice regarding a transaction - Correct or otherwise alter documents relating to a transaction Chapter 12, Duties of the Escrow Agent, Page 319 and 320
Which one of the following is FALSE regarding dual agency? - Dual agency exists when a salesperson represents both the buyer and seller in the same transaction. - Dual agency exists when the same salesperson represents two buyers making an offer for the same property. - Dual agency relationships are legal. - Dual agency does not require written disclosure as long as the agent verbally explains the nature of the relationship to the parties.
Dual agency does not require written disclosure as long as the agent verbally explains the nature of the relationship to the parties. Any agency relationship, whether single agency or dual agency, requires a written disclosure of the agency relationships. This is assigned in California Civil Code 2079.14. Chapter 2, Dual Agency Representation, Page 48 and 49
Which one of the following is FALSE regarding the Transfer Disclosure Statement? - No TDS is required if a property is being sold "as is." - Any transaction regarding the sale, transfer, lease, or exchange of one-to-four residential units requires the seller to provide a TDS. - All mobilehomes must be treated as realty for TDS disclosure purposes. - Transfers arising out of default or foreclosure do not require a TDS.
No TDS is required if a property is being sold "as is." The TDS applies to the sale, transfer, lease, or exchange of residential property of one-to-four units. The TDS is required in all of these residential transactions, even if the property is being sold as is or without a covenant or warranty of the property's physical condition. Mobile homes, although deemed personal property, must be treated as realty for TDS disclosure purposes. Transfers resulting from foreclosure or default do not require a TDS. Chapter 7, Real Estate Transfer Disclosure Statement, Page 208
Which one of the following statements about referral fees is TRUE? - In California, an unlicensed person can be paid a finder's fee for introducing a client to a licensee. - A licensee cannot pay a finders fee to an unlicensed person under any circumstances. - In California, a licensee can receive referral fees directly from licensees other than their employing broker. - A salesperson can pay a referral fee directly to another licensee.
In California, an unlicensed person can be paid a finder's fee for introducing a client to a licensee. There is no prohibition under California law so long as the finder does not perform any services requiring a license. Chapter 6, Finder's Fee Agreements, Page 158
Which is FALSE regarding a promissory note used in connection with a mortgage or trust deed? - It is the written evidence of the debt owed. - It is a negotiable instrument. - It insures that the debt will be paid. - It is the promise to pay the loan debt.
It insures that the debt will be paid. The promissory note, outside of the promises given in the note, does not ensure that the debt will be paid.
When prorating California real property taxes in a closing statement, what date is used as the beginning of the tax year? July 1 November 15 January 1 May 31
July 1
The legal right of a property owner to the natural support provided by the land surrounding the property is known as __________ support. - contingent - lateral - subjacent
Lateral support refers to the right that an owner has to the natural support provided by the land surrounding his or her property, including the right to insist that an adjacent property owner does nothing to cause the land to collapse.
Which would cause a deed to be invalid in its inception? - Legal incompetence of the grantee - Legal incompetence of the grantor - Failure to state a monetary consideration on the deed - Failure to record the deed
Legal incompetence of the grantor.. Any contract or conveyance of real property with a person declared incompetent prior to entering into the contract is void.
Which one of the following statements is FALSE regarding listing contracts? - A listing contract can contain an automatic renewal provision. - A listing contract is subject to the Statute of Frauds. - A listing contract must contain a definite expiration date. - A listing contract must be in writing.
Listing contracts cannot contain automatic renewal clauses. Chapter 6, General Listing Contract Requirements, Page 152
In California, a married girl under age 18: A. is considered to be a minor and any contract she now enters into is voidable. B. can disaffirm any contract she enters into until a reasonable time after reaching the age of majority.
Neither 1 nor 2 In California, a minor is an unmarried, unemancipated person under the age of 18. A person considered of majority is any person 18 years of age or older, or any married person even if under the age of 18. Since this individual is married, she is no longer considered to be a "minor" and is of majority. This means her contracts are not voidable simply because of her age, and she cannot disaffirm any contact she enters into even though she is under 18.
An easement across Smith's property is... an encroachment a lien. a non-financial encumbrance. a license.
Nonfinancial encumbrances are those that limit or restrict the use of property itself. Nonfinancial encumbrances include such things as easements, profits, and private restrictions. Chapter 10, Nonfinancial Encumbrances, Page 266
In a township, there are... 26 square miles. 18,000 acres. 23,040 acres. 32 square miles.
A township is six miles by six miles or 36 square miles, and contains approximately 23,040 acres.
The main California state agency charged with the enforcement of the real estate law is the... - Real Estate Division (RED). - Office of Real Estate Appraisers. - Department of Business Oversight (DBO). - Department of Real Estate (DRE).
Department of Real Estate (DRE). The California Department of Real Estate (DRE) is dedicated to administering and enforcing the state's real estate licensing law. Chapter 1, State Statutes are Enacted by California Legislature, Page 5
What does an owner receive when purchasing a condominium?? - Tenancy in common in the building and common interest in other areas. - Fee simple title in airspace within the unit and tenancy in common in common areas. - Title in an apartment and tenancy in common of undeveloped land. - Tenancy in common in the building and tenancy in severalty in the common areas.
Fee simple title in airspace within the unit and tenancy in common in common areas. In a condominium, the interior space within each unit is owned by each individual owner in fee simple. The common spaces, such as the buildings themselves, parking, elevators, recreation areas, and so forth are owned as tenants in common with all other unit owners. Chapter 4, Condominiums, Page 106
The lien date for real property taxes in California is... November 1. January 1. July 1. September 1.
January 1.
The most common type of listing agreement for residential real estate is the: - exclusive agency listing. - open listing. - exclusive right to sell listing. - net listing.
Most residential real estate listings will be an - exclusive right to sell listing. Chapter 2, History of Agency as it Relates to the Real Estate Brokerage Business, Page 20
In California, Real Estate Law is enforced by - the District Attorney of each county. - the Attorney General. - the Real Estate Commissioner. - the Legislature.
The Real Estate Commissioner's duties are to implement and enforce the California real estate laws.
The highest court, also known as the court of last resort, is... - the Ninth Circuit Court of Appeals. - the United States Supreme Court.
The United States Supreme Court is the court of last resort. It generally operates under discretionary review, meaning that it can pick and choose cases (through grants of writ of certiorari) and hear only the non-frivolous appeals that present truly novel issues. Chapter 1, Federal Court System, Page 6
Which deed is the most common one used to convey property in California? Bargain and Sale Deed Grant Deed Deed of Trust Special Warranty deed
The most common deed form used in California is the grant deed. Chapter 9, Deed Types, Page 244
A Lead-Based Paint Disclosure must be provided to a buyer by the seller if the seller's home was built prior to __________ . 1978 1980 1990 1992
The seller must disclose the presence of any know lead-based paint and/or lead-based paint hazard in any house built prior to 1978. Chapter 8, Lead-Based Paint Hazards Disclosure, Page 223 and 224 10.
Which statements are TRUE concerning unit ownership? 1. Ownership in a cooperative usually requires purchase of shares of stock in the cooperative corporation. 2. Individual units in a condominium are conveyed and are financed as if they were single-family dwellings on separate pieces of land.
both A cooperative is created by forming a corporation, or less frequently a limited partnership, which sells shares to the unit owners. In a condominium, each unit owner secures individual financing to buy their unit and receives a deed conveying ownership. Chapter 4, Cooperatives, Page 107
As defined in local zoning ordinances, a zone placed between two incompatible uses is... known as a depth. setback. frontage. buffer zone.
buffer zone.
Consideration in a contract... - can be an exchange of promises. - is not essential. - is always more than 10% of the purchase price. - All of the above
promises Consideration is something of value provided by one person in exchange for something of value from another. Consideration can be mutual promises (i.e., a promise for a promise), a promise for an act, a promise in exchange for a forbearance to act, or love and affection.
The north-south lines that are parallel to the prime meridian are known as... standard prime parallelograms. township lines. base lines. range lines.
range lines. Range lines are the north-south lines that are parallel to the prime meridian. Chapter 3, Range lines, Page 72
The document that a seller must provide to a buyer about the condition of the property being sold is called the: - Optional Disclosure Disclaimer - Property Condition Disclosure Document. - Real Estate Transfer Disclosure Statement. - Seller's Disclosure Statement.
Real Estate Transfer Disclosure Statement. The California Civil Code Sections 1102-1102.17 provide that a buyer (transferee) is entitled to receive a statement from the seller (transferor) that provides information relating to the condition of the property the buyer is intending to purchase. This disclosure is to be made on a form known as the Real Estate Transfer Disclosure Statement (TDS). Chapter 8, Real Estate Transfer Disclosure Statement, Page 207
In a lease agreement, which of the following is a promise that the tenant can use the property for the purpose for which it was rented without interference from the landlord? - Adaptability - Right to quiet enjoyment - Estoppel - Alienation
Right to quiet enjoyment. The right to quiet enjoyment is a promise that the tenant may use the property for the purposes for which it was rented without interference from the landlord. Sometimes this clause is inserted in the lease. If not specifically stated in the lease, the tenant under the common law, enjoys the implied right of quiet enjoyment during the lease term.
Many civil lawsuits result in settlement once the discovery stage has been completed. T or F
T At the end of the discovery stage, each side evaluates the strength of its case. At this stage the case may be resolved by settlement offers. Chapter 1, Step 2 - Discovery, Page 11
California is the location of the Federal Circuit Court for the Ninth Judicial Circuit. True False
T The federal court system is divided into 13 regions, known as circuits. Each circuit has District Courts and an Appellate Court known as a Circuit Court. California is the location of the Circuit Court for the Ninth Judicial Circuit. Chapter 1, Federal Court System, Page 6
Under California law, property acquired by spouses during their marriage is owned as community property. True False
T Under community property law, property acquired during a marriage is owned equally by a husband and wife. California is a community property state. Chapter 4, Community Property, Page 91
Which is a warranty given in a grant deed? - That there are no encroachments - That the grantor has not transferred title to anyone else - There is a cloud on title - A warranty that the grantor has no interest in the property
That the grantor has not transferred title to anyone else. These warranties are that the grantor has not previously conveyed the title to the property to anyone else, and that there are no encumbrances on the property, such as liens, other than those the grantor has already disclosed to the grantee.
Which is FALSE regarding the sale of a business opportunity? - Most sales will include stock in trade, fixtures, and goodwill. - The licensee should have a strong background in accounting and business law in addition to principles of real estate. - California licensees are permitted to sell business opportunities. - They must involve the sale of real property for a licensee to receive a commission.
They must involve the sale of real property for a licensee to receive a commission. California real estate licensees are permitted to sell business opportunities. Most sales of a business opportunity will include the sale of stock in trade, fixtures, and the goodwill of the business. Licensees engaged in the sale of business opportunities should have a strong background in accounting and business law as well as the principles of real estate. Chapter 15, Business Opportunity Sales, Page 421
Which is true regarding the advertising of a mobilehome for sale by a real estate licensee? - The mobilehome must be less than one year old to be advertised by a licensee. - The advertisement must include location information for the mobilehome park - The mobilehome must be at least 40 feet long by 8 feet wide. - The mobilehome must be in an established mobilehome park or on a lot where its use may continue for a least one year.
The mobilehome must be in an established mobilehome park or on a lot where its use may continue for a least one year. It is unlawful for a licensee to advertise or offer for sale a mobilehome that is not in an established mobilehome park or on a lot where its use may continue for at least one year. Chapter 15, Mobilehomes, Page 427
Which statement is FALSE regarding tenants of mobilehomes? - Rental agreements may not contain a clause prohibiting a mobile home owner from keeping at least one pet. - They must be given 30 days' notice if there is to be a rent increase. - They must be given a 60-day notice to terminate. - They are entitled to a 12-month lease at the prevailing month-to-month rate.
They must be given 30 days' notice if there is to be a rent increase. Rent increase notices must be a minimum of 90 days. Chapter 14, Mobilehome Park Issues, Page 390
An exclusive agency listing can best be described as: - a type of listing agreement that guarantees the listing broker a commission no matter who brings the buyer. - a listing agreement between a seller and broker wherein the seller agrees to pay a commission to the listing broker, unless the seller finds the buyer. - a type of listing agreement wherein the seller agrees to pay the listing broker any amount remaining after the seller has received a predetermined amount from the sale.
a listing agreement between a seller and broker wherein the seller agrees to pay a commission to the listing broker, unless the seller finds the buyer. An exclusive agency type of listing contract gave the exclusive right to market a property to one broker. The listing broker would be paid a commission by the seller and, in turn, would split the commission with the competing broker who found the buyer. This type of listing, however, still allowed a seller to sell the property himself without owing a fee to the listing broker. Chapter 2, History of Agency as it Relates to the Real Estate Brokerage Business, Page 19
A trust deed is... a general voluntary lien. a specific voluntary lien. a specific involuntary lien. a general involuntary lien.
a specific voluntary lien Voluntary liens are contractual liens. They are voluntarily placed on the property by the owner. As a result, they are sometimes referred to as elective liens. Common examples of this type of lien are mortgages and trust deeds. Most liens are secured (specific) liens. Examples are mortgages, trust deeds, property taxes, special assessments, and construction liens.
A type of written agreement that forms a contractual agency relationship between a licensee and a buyer is known as: - an exclusive right to sell agreement. - a buyer's broker agreement. - a multiple listing agreement. - an open listing agreement.
a buyer's broker agreement. A buyer's broker agreement is somewhat similar to a listing agreement in that it is a contract of employment between a broker and a buyer. The buyer's broker agreement relates to the buyer and property to be purchased. Chapter 6, Buyer Representation Service Agreements, Page 159
A real estate purchase and sale agreement is... - a legal contract enforceable immediately upon the signature of the seller. - a legal contract enforceable immediately upon the signatures of the buyer and seller. - a legal contract that becomes binding immediately upon delivery of the seller's acceptance to the buyer. - an option to buy, which the purchaser may accept or reject.
a legal contract that becomes binding immediately upon delivery of the seller's acceptance to the buyer. A real estate purchase and sale agreement requires an offer, acceptance of the offer by the seller, and the delivery of the acceptance to the buyer.
Chain of title is... - a listing of all recorded instruments affecting the subject property. - the heir named in a will to inherit property after a death of a testator. - a certificate of title issued under the Torrens system. - a list of all previous owners.
a list of all previous owners. The listing of grantor/grantee records is known as the chain of title.
A means of acquiring title where the occupant has been in actual, open, notorious, exclusive and continuous occupation of property under a claim of right for the statutory period is known as... eminent domain. escheat. prescription. adverse possession.
adverse possession. The basic requirements for a claim of adverse possession include possession of the land being actual, open and notorious.
In general, a buyer may not withdraw an offer to purchase the seller's property... - after the seller's acceptance of offer but before the buyer is notified. - before it is presented to the seller. - after receiving proper notification of the seller's acceptance of the offer. - after an earnest money deposit has been given.
after receiving proper notification of the seller's acceptance of the offer. Typically a buyer may not withdraw an offer on a property after the seller has agreed to all of the terms of the contract (i.e., mutual assent). There are some exceptions that may allow a buyer to back out of an accepted contract such as misrepresentation or mutual mistake.
A type of mortgage with interest rate changes during the life of the loan based upon a specified index is known as... an adjustable rate mortgage. a graduated payment mortgage. a budget mortgage. a growing equity mortgage.
an adjustable rate mortgage. An adjustable rate mortgage (ARM) is one wherein interest rate changes occur during the life of the loan generally based upon a specified index. Chapter 11, Adjustable Rate Mortgage (ARM), Page 295
An enforceable agency relationship can be entered into by... - an individual appointed by the court to represent the interests of one who does not have legal capacity. - a minor. - an obviously intoxicated person. - All of the above
an individual appointed by the court to represent the interests of one who does not have legal capacity. Agreements that are entered into while one party is intoxicated or when a party is a minor (who doesn't have the legal authority to appoint another as an agent) can be voided. A person who is appointed by a court to represent one who doesn't have the legal capacity to act for himself/herself can enter into an agency relationship. Chapter 2, Creating an Agency Relationship, Page 28
The Homeowner's Guide to Earthquake Safety must be delivered as soon as is practicable before transfer of title to any buyer of: - any single-family residence located in California. - any residential wood frame dwelling built prior to 1980. - any residential dwelling consisting of one-to-four units built prior to 1960 that are of conventional light-frame construction. - any apartment complex with more than eight units.
any residential dwelling consisting of one-to-four units built prior to 1960 that are of conventional light-frame construction. The delivery of the homeowner's guide is required in conjunction with the sale or transfer of any real property improved with a residential dwelling that was built prior to January 1, 1960, and consisting of one-to-four units that are of conventional light-frame construction. Chapter 8, Earthquake Guides, Page 232
In order to be enforceable, a listing contract must meet all of the following requirements, EXCEPT - be in writing. - be signed by all parties in title and the broker. - be recorded at the county recorder's office. - state a definite expiration date.
be recorded at the county recorder's office. Listing contracts must be in writing, state a definite expiration date, and be signed by the seller(s) and broker. They do not need to be recorded.
Which statements are TRUE regarding the Mello-Roos Community Facilities Act? - The act authorizes the levying of special taxes to finance specific public facilities and services. - Special taxes may be levied that create a lien on real property of a seller of one-to-four dwelling units.
both The Mello-Roos Act authorized the formation of community facilities districts, the issuance of bonds, and the levying of special taxes to finance the specific public facilities and services. These special taxes become a lien on the property. Chapter 8, Mello-Roos Bonds and Assessments, Page 232
The recording system... - requires acknowledgements to prevent forgery in recorded documents. - is designed to provide public notice concerning the documents affecting the title to real estate
both The signature(s) of the grantor(s) must be acknowledged if the deed is to be recorded. It should be recorded as recording gives constructive notice to the world that the deed exists.
An easement appurtenant... - runs with the dominant estate as a property right. - involves a dominant and servient estate.
both When an easement appurtenant is created, one parcel of land will benefit or receive the right of use, and is known as the dominant tenement or estate. The adjacent parcel of land that is burdened or must allow the use is known as the servient tenement or estate. The right created by the easement appurtenant attaches to the dominant tenement as a right and attaches to the servient tenement as a burden. As a result, a future transfer of either property transfers the easement with the passage of title. Thus, the phrase running with the land is often used when describing an easement appurtenant.
A security instrument wherein the seller is the lender for the buyer and gives actual title to the buyer in exchange for the buyer promising to pay the seller a specified amount of money over time is known as... a land sales contract. purchase money mortgage. an installment sales contract. a contract for deed.
purchase money mortgage. The purchase money mortgage is when a seller is extending credit to a buyer with respect to the purchase of real estate. The buyer will sign a promissory note and execute a mortgage in favor of the seller. In essence, the buyer is promising to pay the seller a specified amount of money for the purchase of the seller's property over time, and is giving the seller a mortgage that becomes a security instrument for the buyer's promise to pay. Chapter 11, Purchase Money Mortgage, Page 291
A quitclaim deed is frequently used to... - convey a fee title to property - remove a cloud on a title - convey an after acquired interest in real property - remove an escrow
remove a cloud on a title A quitclaim deed is used to release any interest the grantor may have in the property on the date of the deed.
The Costa-Hawkins Rental Housing Act greatly reduced the impact of rent control with respect to - new housing, when the certificate of occupancy was issued after February 1, 1990. - apartment buildings located in Los Angeles. - single-family dwellings. - None of the above
single family dwellings. The California Legislature passed the Costa-Hawkins Rental Housing Act preempts local rent control laws with respect to the following properties: - New housing units with a certificate of occupancy issued after February 1, 1995 - Single-family dwellings - Multi-unit dwellings in areas with vacancy control, except where the tenancy is terminated by the landlord's service of a termination notice or a change in the tenancy's terms Chapter 14, Rent Control, Page 393
An exclusive right to sell listing contract... - guarantees a commission to the listing broker no matter who brings the buyer if a sale occurs during the listing period. - provides the least protection for the listing broker. - guarantees that the listing agent will receive all money received from the sale that exceed the seller's desired net proceeds.
guarantees a commission to the listing broker no matter who brings the buyer if a sale occurs during the listing period. Under the exclusive right to sell listing, the seller employs one broker for a specific period. That broker is entitled to a commission regardless of how the listing is sold or by whom. This type of listing should be viewed as the most advantageous type of listing for both the broker and the seller. The net listing agreement provides that the broker can take any amount of sale proceeds over and above the agreed upon net sale price due the seller. Chapter 2, History of Agency as it Relates to the Real Estate Brokerage Business, Page 20
A copy of an executed offer to purchase must be given to the offeror - within three business days. - once the seller has accepted it. - before the good faith money has been deposited. - immediately upon obtaining the offeror's signature on the offer.
immediately upon obtaining the offeror's signature on the offer. Failing to give a copy of any contract to the person signing it at the time of signing may result in disciplinary action. Chapter 15, Grounds for Disciplinary Action, Page 426
The water rights for a property abutting a lake or the sea are known as __________ rights. riparian appurtenant appropriative littoral
littoral. Rights to water arising from a lake or the sea are known as littoral rights. Chapter 3, Riparian Rights, Page 58
The type of lease that requires the tenant to pay a set amount, plus some or all of the building operating expenses, is known as a __________ lease. percentage net gross indexed
net lease, the tenant pays a set amount of rent and some or all of the expenses of operating the building for maintenance, repairs, etc.
A pre-existing conflicting use of property that is permitted to continue after a new zoning ordinance is enacted would be considered a... conditional use. variance. spot zone. non-conforming use.
non-conforming use. When a new zoning ordinance is enacted, particularly when property is down zoned, a conflict is frequently created between the new ordinance and land uses already in existence. When this occurs, the preexisting conflicting use is referred to as a nonconforming use. To be legal, the new zoning ordinance must allow these uses to continue, at least for a period. Chapter 13, Zoning, Page 358
An agency relationship is NOT terminated: - if either the principal or the agent dies or becomes legally incapacitated. - when the principal and agent mutually agree. - once a suit for specific performance is instituted. - when the purpose for which it was created has been fulfilled.
once a suit for specific performance is instituted. Agency relationships are personal in nature. A personal service contract cannot be used for a specific performance suit. The other three listed options are ways that a personal contract can be terminated. Chapter 2, Terminating an Agency Relationship, Page 42 and 43
Under the rectangular survey system, the legal description of a particular land unit is based on... - one township line. - one principal meridian and one baseline. - one range. - metes and bounds.
one principal meridian and one baseline. This system is also sometimes referred to as the Government Survey System.
Right-of-way easements, such as those acquired by public utilities, are usually called... - easements by prescription. - easements of necessity. - implied easements. - commercial easements in gross.
commercial easements in gross. If the easement in gross is commercial it is not revocable and can be assigned. Common examples are sewer lines, gas lines, power lines, cable lines, and railroad tracks. Chapter 10, Easement Appurtenant, Page 268
A contractual provision making the sale subject to the buyer qualifying for a particular kind of loan is called a... - novation. - covenant. - curtesy. - contingency.
contingency. Contingencies allow the benefited party time to obtain the necessary information or time for the crucial event to occur prior to becoming obligated to perform under the contract. A buyer usually needs more information regarding the condition of the property and time to qualify both the buyer and the property for financing.
An executory contract is always a... - contract that has been fully performed. - contract with an executor of an estate. - written contract that cannot be altered by an oral agreement. - contract that will be performed.
contract that will be performed. An executory contract is one that has not yet been fully performed. An executed contract is one that has been fully performed by both parties.
Governmental rights retained in private property do NOT include: deed restrictions in a subdivision. the right of taxation. eminent domain. land use controls.
deed restrictions in a subdivision. The rights the government retained are the following: - Right of Taxation - Eminent Domain - Land Use Controls - Environmental Laws and Regulations Chapter 13, Introduction, Page 344
An example of commingling is - a broker using the client funds for personal use. - depositing personal money with money being held on behalf of clients. - failure to reconcile the trust account monthly. - neglecting to make all trust fund entries in chronological order.
depositing personal money with money being held on behalf of clients. Commingling personal money and/or property with the money or property being held on behalf of the client. Chapter 15, Grounds for Disciplinary Action, Page 408
The holder of a life estate may do all of the following, EXCEPT... - devise it. - sell it. - rent it. - mortgage it. A life estate is an estate of non-inheritance; terminates upon the death of the estate holder; and cannot be willed (devised).
devise A life estate is an estate of non-inheritance; terminates upon the death of the estate holder; and cannot be willed (devised).
The transfer of title by descent and distribution means the owner... - transferred his property interest by sale. - died intestate and property passes to his heirs. - transferred his property interest by gift. - died testate, and property passes to his heirs.
died intestate and property passes to his heirs. When one dies intestate, distribution of the property will be according to the provisions of California's laws of descent and distribution. This law sets forth the order in which the legal beneficiaries inherit. Chapter 9, Conveyances or Transfer of Title by Will, Page 250
Mello-Roos disclosures refer to... - foreign investment in real property. - military ordinance locations. - disclosure of notice concerning special tax or assessments. - sexual predator database.
disclosure of notice concerning special tax or assessments. Mello-Roos authorized the formation of community facilities districts, the issuance of bonds, and the levying of special taxes to finance the specific public facilities and services. The seller of one-to-four dwelling units must make a good faith effort to obtain from the community facilities district a disclosure notice concerning the special tax and deliver that notice to the prospective buyer.
Ownership in severalty occurs when... - property is owned by one person. - two or more persons have identical interests in the same property at the same time. - a husband and wife share ownership of the same property. - two or more persons own the property in any form of title.
property is owned by one person. Ownership in severalty is also referred to as tenancy in severalty. This simply means that a property is owned by one person only; ownership is "severed" from all others.
Cases relating to real estate matters are first brought at the... appellate court level. trial court level.
trial court level. Cases regarding real estate matters or real estate-related issues are first brought at the trial court level. Chapter 1, State Court System, Page 8
The Easton case led the California legislature to require expanded duties of a real estate licensee to a third party to include all of the below, EXCEPT: - utmost loyalty and lawful obedience. - the duty of a real estate licensee to conduct a reasonably competent and diligent visual inspection of the property offered for sale. - to disclose all material facts to third parties that a licensee knows or should have known if a reasonable and diligent inspection had been performed. - honest and fair dealing and to act in good faith.
utmost loyalty and lawful obedience. A real estate licensee is required to conduct a reasonably competent and diligent visual inspection of the property for sale and to disclose the facts to third parties that such an investigation would reveal. Licensees are required to disclose any material facts that he/she knows about the property or could easily know of, and to treat third parties with honesty and good faith. Chapter 2, Duties Owed to the Third Party, Page 38
If known, which of the following must be disclosed on the real estate Transfer Disclosure Statement? Radon Formaldehyde Asbestos Underground fuel storage tank
All of the above The seller must include any environmental hazards he/she knows about on the TDS, including things such as lead-based paint, asbestos, radon, formaldehyde, underground storage tanks, and contaminated soil or water.
Who enforces the Truth-in-Lending Law? Department of Real Estate Federal Trade Commission Secretary of State Fair Housing Commission
Federal Trade Commission The Truth in Lending Act is enforced by the Federal Trade Commission. Chapter 11, Truth in Lending (Regulation Z), Page 307
The most common type of note used in real estate loans is the... note will call feature. balloon payment note. straight note. amortized note.
amortized note. The most common type of note used in real estate loan is the amortized note, sometimes referred to as an installment note.
Under the Subdivision Map Act, a subdivision divided into five or more parcels requires the filing of... tentative and final parcel maps. a plat map. a plot map. a partition map.
tentative and final parcel maps.
When a purchase and sale agreement has been signed by the buyer and given to the seller's agent along with an earnest money check, the... - earnest money must be returned to the buyer if the buyer withdraws the offer after the seller signs the agreement. - buyer can sue for specific performance if the seller refuses to sign the agreement. - transaction is considered an offer until the seller accepts the agreement and the acceptance is communicated to the buyer. - transaction becomes a valid contract.
transaction is considered an offer until the seller accepts the agreement and the acceptance is communicated to the buyer. A real estate purchase and sale agreement is just an offer until the seller accepts the buyer's agreement and that acceptance is communicated back to the buyer.
A broker with a trust account must deposit trust funds received promptly. within 24 hours. within three business days. within two business days.
within three business days. A broker accepting trust funds from a client or customer must deposit them within three business days of receipt into a neutral escrow depository or a trust account maintained by the broker in a bank or other recognized depository. Chapter 15, Handling Trust Funds, Page 416
A resident apartment manager is required when there are 16 or more units. 25 or more units. 10 or more units. 20 or more units.
16 Every residential property containing 16 or more units must have a resident manager. Chapter 14, Notices and Management, Page 378
The maximum amount of security deposit allowed for a furnished residential property is two month's rent three month's rent one month's rent $5,000.
3 months The maximum amount of a security deposit that can be demanded for an unfurnished unit is two months' rent, and for a furnished unit it is three months' rent. Chapter 14, Security Deposits and Fee, Page 379
If a tenant has lived in a leased property for at least 12 months, the landlord must give a ____ day notice to terminate the tenancy. 30 45 60 75
60 If a tenant has lived on the property at least 12 months, the landlord must give a 60-day notice to terminate. The tenant may still terminate the tenancy by giving a 30-day notice. Chapter 14, Periodic Tenancy, Page 391 6.
An item that was once personal property but has become real property is known as: - a fixture. - a license. - a trade fixture. - an easement.
A fixture is an item that was once personal property but which has become real property by its permanent attachment to the real property.
Which one of the following contracts is a unilateral contract? - Land sales contract. - Option. - Mortgage. - Trust deed.
An option is a unilateral contract by which a buyer is given the right to purchase a specified property at a specified price within a fixed period.
California's real estate law is found in the - Corporate and Franchise Code. - Uniform Commercial Code. - Sherman Antitrust Act. - Business and Professions Code.
Business and Professions Code. Real estate laws and requirements for licensing are derived from the state's exercise of its police power to enact laws for the protection of the public's health, safety, and welfare. The California legislature responded to this need by enacting Business and Professions Code Sections 10000 to 11288. Chapter 15, History of California Real Estate Law, Page 394
Which is the right of a government to take ownership of privately held property for public use against the wishes of the owner? Dedication Public grant Police power Eminent domain
Eminent domain is the right of the government to take ownership of privately held property against the wishes of the owner. Chapter 9, Eminent Domain, Page 252
Under a trust deed, once the trustor has paid the beneficiary in full, the trustee will be instructed to record... a deed of reconveyance. a satisfaction of mortgage. a grant deed. a quit claim deed.
If the trustor (borrower) pays off the loan in full, as agreed, the beneficiary will direct the trustee to issue and sign deed of reconveyance or reconveyance deed. Chapter 11, Loan Paid in Full As Agreed, Page 290
A licensee can advertise for a seller under a listing agreement without including a licensee designation and employing broker's identity when - the advertisement is a flyer describing the interior of the listed property. - Never - requested to do so by the seller in the listing agreement. - the licensee's broker authorizes the licensee to do so in writing.
Never Failing to include a licensee designation and employing broker's identity in advertisements may result in disciplinary action. Chapter 15, Grounds for Disciplinary Action, Page 408
Which is an exclusive right belonging to the tenant? Future ownership Possession Retaliation Remodeling
Poss The lease agreement is a legally enforceable contract where an agent or owner of a property gives to another the exclusive right of possession of the property for an agreed-upon amount of time in return for money. Chapter 14, The Lease/Rental Agreement, Page 377
Which one of the following is NOT a common contingency used for the benefit of the buyer? - Subject to the sale of buyer's current house - Subject to an inspection - Subject to the sale of the seller's property - Subject to obtaining a mortgage
Subject to the sale of the seller's property. Some of the more common contingencies are approving of the property inspection, mortgage contingencies (i.e., can the buyer get a loan), and the sale of the buyer's existing property.
A landlord does NOT have to give a 24-hour notice to a tenant to arrange access to a rented premises to inspect the premises. to make agreed to repairs. in an emergency. to show the premises to a prospective tenant.
The landlord does not have to give a 24-hour notice for access in emergencies. Chapter 14, The Landlord's Rights and Responsibilities, Page 383
In most cases, lien priority is established by the... Statute of Limitation. Statute of Frauds. date of recording. amount of the lien.
The recording date and time generally determines the priority of claims filed against a property.
A right of use that runs with the land and cannot be separated from it is known as... a leasehold estate. a license an easement appurtenant. an estate for years.
The right created by the easement appurtenant attaches to the dominant tenement as a right and attaches to the servient tenement as a burden. As a result, a future transfer of either property transfers the easement with the passage of title. Thus, the phrase running with the land is often used when describing an easement appurtenant. In other words, easements are normally perpetual and indestructible unless terminated voluntarily by the dominant tenant. Chapter 10, Easement Appurtenant, Page 267
Who normally puts Covenants, Conditions, and Restrictions (CC&Rs) on a property's deed in a subdivision? - The purchaser - The Department of Real Estate (DRE) - The local planning board - The subdivision developer
The subdivision developer. When a subdivision is created by a developer, the developer drafts the full text of the CC&Rs and records them in the county recorder's office, which are given a record number that can be used to reference them in the future. Chapter 10, Restrictive Covenants, Page 272
Under an assignment of lease, the tenant... - sublets the rental space to a third party. - may assign the lease to a third party without the consent of the landlord. - remains liable under the original lease agreement. even if the landlord consents to the assignment. - assigns and transfers all of the rights and responsibilities to a third party.
assigns and transfers all of the rights and responsibilities to a third party. With an assignment of lease, the tenant assigns and transfers all rights and responsibilities under the lease to a third party. If the landlord consents to the assignment, which cannot be unreasonably withheld, the tenant is no longer bound by the terms of the lease.
Under California Civil Code, a licensee is considered to be an "arranger of credit" and must follow specific disclosure requirements when the licensee is involved in the negotiation and completion of the credit documents for compensation in a transaction... - where the seller extends credit to a purchaser that is to be paid off by written agreement in three installments not including the down payment. - involving residential dwellings of one to four units where the seller extends credit to the buyer under a written agreement that provides for a finance charge. - where the seller extends credit to the purchaser of an apartment complex.
involving residential dwellings of one to four units where the seller extends credit to the buyer under a written agreement that provides for a finance charge. The seller carry-back disclosure requirements only apply to the following transactions: Residential dwellings of one-to-four units where the seller extends credit to the buyer through a written agreement that provides for a finance charge. Chapter 11, Seller Carry-Back Financing, Page 311
When a real estate sales transaction is to be closed in escrow, the escrow officer... - represents the interest of the party paying for the title insurance. - represents the interest of the client of the real estate agent who selected the escrow officer. - always represents the interest of the seller. - is neutral with respect to the interest of each party to the transaction.
is neutral with respect to the interest of each party to the transaction. In their capacity as a dual agent, the escrow agent must always be neutral or impartial. Chapter 12, The Relationship of an Escrow Agent to the Parties, Page 318
At settlement, all of the following items will usually be prorated between buyer and seller EXCEPT... association dues interest on an assumed loan. mortgagee's title insurance premium. real property taxes.
mortgagee's title insurance premium. Prorations apply to any charge that one party to a transaction may have incurred prior to the sale, or to charges that cover a period after the sale. Typical prorate items are: - Real property taxes - Personal property taxes - Utilities - Homeowner's association dues - Tax and insurance impound accounts - Interest on existing or new loans - Rent Chapter 12, Escrow Instructions, Page 317
In California, the statutory right of redemption following judicial foreclosure under a mortgage is... 180 days. 240 days. 9 months. one year.
one year. The amount of time that the defaulting mortgagor has to redeem the property after the date of the sheriff's sale is known as the statutory right or statutory period of redemption. The amount of time is one year. Chapter 11, Statutory Right of Redemption, Page 285
With certain exceptions, a property tax lien has priority over other interests in real property... - only if the property owner agrees to assume the obligations. - based on when the tax law was passed. - according to the date they were recorded. - regardless of when they were recorded.
regardless of when they were recorded. Property taxes and special assessments are a priority lien ahead of all others regardless of the recording date or the year for which the taxes or assessments are due.
The Real Estate Settlement Procedures Act (RESPA) provides... - that real estate syndicates must obey 'blue-sky' laws. - that the borrower must be given full disclosure of the closing costs before the time of closing. - that real estate advertisements must include the annual percentage rate, including all charges. - a secondary market for mortgage loans.
that the borrower must be given full disclosure of the closing costs before the time of closing. The law regulates the closing of most residential loans with the main goal of the legislation to provide borrowers with full disclosure as to their closing costs so they can effectively choose the best loan options. Chapter 11, Real Estate Settlement Procedures Act (RESPA), Page 308
A deed that has been executed and delivered but not recorded is... unenforceable. valid. voidable. void.
valid. Recording the deed does not change its validity. Recording the deed creates a presumption that the document is valid.
Select from the following the most correct meaning of the phrase, ad valorem. Value received as in consideration An assessment According to value A property tax
According to value Property taxes in California are assessed under a system referred to as ad valorem, a Latin term meaning "according to value." Chapter 13, Real Property Taxes, Page 344
In California, an agricultural lease can not be longer than 30 years. 51 years. 99 years. 1 year.
Agricultural land cannot be leased for more than 51 years. Chapter 14, Tenancy for Year, Page 375
Lead-based paint disclosures must be made in which of the following transactions? - The purchase of single-family residential structure - A property sold at foreclosure - Rental property certified under a federal program as lead-based paint free - The purchase of a duplex
1 and 4 only Properties build before 1978 and sold at foreclosure and properties that are certified "lead-based paint free" by a federally authorized program are exempt from lead paint disclosure rules.
Which of the following in a lease agreement prohibits the tenant from destroying or damaging the property? - Alienation clause - Hold harmless clause - Maintenance clause - Waste clause
Waste clause Most rental or lease agreements have a provision against committing waste. To commit waste is to destroy or damage a property to the extent of decreasing its value.
The CLTA standard form title insurance policy insures against... - water and mineral rights. - unrecorded rights of eminent domain. - forgery of a deed. - changes in zoning which affects the use of the property.
forgery of a deed.
A clause in a promissory note that allows the lender to demand the entire principal due in the event of default is the... alienation clause. acceleration clause. defeasance clause. due on sale clause.
acceleration clause. In the event a borrower defaults on the note, the acceleration clause allows the lender to accelerate the payment of the loan by requiring that the entire principal balance of the note be immediately due and payable. Chapter 11, Acceleration clause, Page 300
Which of the following must be disclosed in the Real Estate Transfer Disclosure Statement (TDS)? - Easements affecting the property - A broken oven - Additions or alterations made without a permit - Neighborhood noise or nuisance problems
all The seller must disclose on the TDS such things as additions made without a building permit, easements, encroachments, the existence and functionality of appliances, fill dirt use, zoning problems, and neighborhood noise or nuisance problems.
An offer can be terminated by rejection by the offeree. a counter offer. revocation by the offeror.
all three A seller (i.e., the offeree) can accept the offer as written, reject the offer outright, reject the offer by making a written counter offer, or do nothing and let the offer expire. The buyer (i.e., the offeror) can revoke the offer presented to the offeree if it has not been accepted.
Easements CANNOT be terminated: - by written release of the easement by the dominant tenement. - by the merging of the dominant and servient tenements into one tract. - by written withdrawal of the easement by the servient tenement. - by the purpose for which the easement was created ceasing to exist.
by written withdrawal of the easement by the servient tenement. Easements may be terminated by any one of the following ways: + By written release of the easement by the dominant owner + By the merging of the dominant and servient lands into one parcel + By abandonment of the easement by the dominant owner +By the purpose for which the easement was created ceasing to exist + By prescription if the servient tenant prevents the dominant tenant from using the easement for a statutory ten-year period + By an expiration of the time for which the easement was created Chapter 10, The Creation and Termination of Easements, Page 270
The real estate broker's commission is usually shown as an expense to the seller on the... - closing statement. - credited to the buyer on the closing statement.
closing The real estate broker's commission is usually shown as an expense to the seller on the closing statement.
A lease CANNOT legally be terminated by expiration. destruction of the premises. surrender. constructive eviction. The California Code of Civil Procedure establishes the procedures necessary for a legal eviction. An owner must follow these procedures and not resort to constructive eviction, which is illegal. Chapter 14, The Termination of a Lease Agreement, Page 387
constructive eviction. The California Code of Civil Procedure establishes the procedures necessary for a legal eviction. An owner must follow these procedures and not resort to constructive eviction, which is illegal. Chapter 14, The Termination of a Lease Agreement, Page 387
The warranty of habitability means that the landlord of a rented residential property must provide - hot and cold running water. - stairways maintained in good repair. - adequate weatherproofing. - All of the above
All of the above. The warranty of habitability means that the premises must contain the following: - Adequate weatherproofing, including unbroken windows and doors - Plumbing and/or gas lines that conformed to local building codes when installed and have been maintained in proper working order - Hot and cold running water, with fixtures and sewage disposal system approved under applicable law - Heating system that conforms to applicable law when installed and maintained in proper working order - Electrical lighting and other systems with equipment and wiring that conformed to building codes when installed and maintained in proper working order - Building and grounds clean, sanitary, and free of debris, rubbish, rodents, and vermin at the onset of the lease and any areas under the control of the landlord be so maintained during the term of the lease - Floors, stairways, and railings maintained in repair Chapter 14, The Landlord's Rights and Responsibilities, Page 384 Back To Test OverviewNext Page Progress: 90%
Which one of the following statements about a limited partnership is FALSE? - Only general partners can be active in the management and control of the partnership. - All partners, whether general or limited, are jointly and severally liable for the debts of the partnership. - There must be one or more general partners and one or more limited partners.
All partners, whether general or limited, are jointly and severally liable for the debts of the partnership. The general partners in a limited partnership are jointly and severally liable for the debts of the partnership. As a limited partner, that partner can only be liable for the debts of the partnership up to the value or extent of their ownership interest in the partnership. Chapter 4, Limited Partnership, Page 102
In California, real estate syndicates are regulated by the Real Estate Commissioner. Commissioner of Business Oversight California Attorney General. Real Estate Investment Trust Act.
All real estate syndicates, no matter what their form, are regulated and controlled by the Commissioner of Business Oversight. Chapter 15, Real Estate Syndicates and Investment Trusts, Page 424
Trade fixtures: A. are intended to remain the property of the tenant. B. may be removed at the end of the lease if not prohibited in the terms of the lease.
Both A and B Trade fixtures are generally considered to be the personal property of the tenant and can be removed by the tenant at the expiration of the lease unless otherwise agreed in the terms of the lease.
The California law requiring project developers to submit environmental impact reports is... CEQA. EIR. CERCLA. NEPA.
CEQA does not directly regulate land use, but instead requires project developers to submit environmental impact reports that analyze any adverse impacts the project may have on the environment and possible alternatives that may reduce the project's environmental impact. Chapter 13, Environmental Laws and Regulations, Page 369
Which one of the following is FALSE regarding agency agreements? - They are personal service contracts. - The death, legal incompetency or bankruptcy of either the principal or agent will terminate the agreement. - They may not be assigned. - If either the principal or agent terminates the agreement, the remaining party can force the terminating party to perform.
If either the principal or agent terminates the agreement, the remaining party can force the terminating party to perform. In the case of personal service contracts, if either the principal or agent terminates the agency agreement, neither party can force the other to perform. Chapter 2, Terminating an Agency Relationship, Page 42 and 43
Which does NOT accurately reflect the duties of escrow agents? - They must act as fiduciaries until escrow is closed. - In reviewing legal documents, they are to provide any missing clauses. - They are to act impartially for both the buyer and seller. - They must follow escrow instructions.
In reviewing legal documents, they are to provide any missing clauses. The escrow agent has equal fiduciary duties to all the interested parties and cannot advocate or lobby for one party as opposed to any other. In their capacity as a dual agent, the escrow agent must always be neutral or impartial. Authorized by both the seller and the buyer, escrow instructions can be viewed as the blueprint that provides the written authorization for the escrow company as to how the transaction will take place. Chapter 12, The Relationship of an Escrow Agent to the Parties, Page 318
Which of the following statements best describes the concept of land ownership? - Your rights are limited to the surface. - You have lateral support but no rights to underground minerals unless specifically granted to you. - You only own the surface of the property and no portion of the airspace. - Ownership includes the land, fixtures, plus air space above and downward to the center of the earth.
Ownership includes the land, fixtures, plus air space above and downward to the center of the earth. Ownership includes the land, all things natural and manmade permanently attached to it, plus a volume of space that extends from the surface boundaries of the property down to the center of the earth. The upper limits of the space owned are today defined as a reasonable distance into the atmosphere.
Which is FALSE regarding special assessments? - Special assessments do not create a lien on real property. - Only properties which benefit from a specific improvement are taxed proportionally to pay for improvements. - They are imposed to pay for improvements such as construction of sewers, access to public utilities, widening of a street, etc. - A benefit assessment is not deductible for federal and state tax purposes.
Special assessments do not create a lien on real property. Special assessments create a lien on the real property and, if not paid, the government can foreclose on the property. Chapter 13, Special Assessments, Page 347
A lawsuit begins when a plaintiff files a complaint with the court. True False
T A lawsuit begins when a plaintiff files a complaint with the court. A complaint describes the claim and the relief requested. Chapter 1, Step 1 - Filing, Page 10
In most cases, a decision rendered in an arbitration proceeding is binding upon the parties. True False
T Arbitration is an alternative dispute resolution process in which an impartial third party hears the positions of the parties to a dispute and renders a decision. In most cases, the decision is binding. Chapter 1, Arbitration, Page 15
California's community property law originated with Spanish civil law. True False
The concept of community property was imported from Spain.
Party A entered into a contract with Party B after being coerced by Party B. The contract between Party A and Party B is: - voidable at the option of Party A. - invalid. - voidable at the option of Party B. - voidable at the option of either party. The contract can be voidable at the option of Party A.
The contract can be voidable at the option of Party A.
The person who hires another and delegates authority to that person to act on their behalf is known as... - a customer. - an agent. - a principal. - a third party.
The principal is the individual who hires another, the agent, and delegates to that agent the authority of representing the principal's interests. Chapter 2, Principal, Page 26
Which one of the following statements is FALSE regarding Metes and Bounds legal descriptions? - They always start from some physical marker known as the point of beginning. - "Bounds" refers to natural or artificial boundaries. - An actual survey of the property is usually necessary. - There is no point of beginning.
There is no point of beginning. In the metes and bounds system, the deed boundaries are given as direction and distances from some physical marker known as the point of beginning (POB).
Which one of the following is FALSE pertaining to solid mineral rights? - They cannot be sold separately from the land. - Minerals, such as gold, are considered real property until they are extracted from the earth. - Real property ownership rights start at the center of the earth and extend to the surface, which includes mineral rights to the subsurface land and any profit that may be derived therefrom.
They cannot be sold separately from the land. Real property ownership rights start at the center of the earth and extend out through the surface for a reasonable distance into the air space above. Minerals are considered real property until they are extracted from the earth, at which time they become personal property. It is important to remember that mineral rights can be sold separately from the land. Chapter 3, Solid Mineral Rights, Page 59
Which one of the following statements is FALSE about a tenancy in partnership? - Only one title is issued for the property. - The property can be conveyed only if all the partners join in the conveyance. - Each partner will hold an equal and undivided interest. - Title must be taken by the partners at the same time.
Title must be taken by the partners at the same time. In California, title to property can be held in the partnership's name or in the name of one or more partners as long as reference to the partnership is made in the deed, and can be taken at any time. Each partner has a equal, undivided interest in the property, can pass his/her interest on to the surviving partners, and can convey the property if all of the partners join in the conveyance. Chapter 4, Partnerships, Page 94
If there is a difference in the degree of restriction between zoning restrictions and deed restrictions, which has priority? Zoning restrictions Deed restrictions Whichever is more restrictive Neither has priority
Whichever is more restrictive Often, zoning requirements and restrictive covenants may address the same issue and therefore, may be in conflict with each other. When this is the case, the more restrictive of the two must be met.
