Real Estate Principles 10a Online

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Which of the following liens covers all the property of a person? (a) Specific lien (b) Mechanic's lien (c) General lien (d) None of the above

Spanish settlement of California began with the establishment of (a) Military forts. (b) Maritime ports. (c) Missions. (d) Indian reservations.

Who usually creates deed restrictions? (a) Developer (b) Cities and counties (c) State government (d) Federal government

(a) Developer

An agent owes which of the following to a third party? (a) Duty of disclosure (b) Duty of representation (c) Fiduciary duties (d) Duty of trust

(a) Duty of disclosure

Commingling is one of the greatest single causes for loss of license. Which of the following would NOT be considered commingling? (a) Holding an uncashed deposit check after acceptance of an offer when directed to do so by the seller. (b) Cashing a deposit check (made out to the broker) and placing the money in the broker's safe, properly identified as being the deposit received from the buyer. (c) Depositing either cash or a check received as a deposit in the broker's personal account to be held until called for by the escrow officer. (d) Depositing money received by his/her client in the broker's personal account to pay miscellaneous expenses.

(a) Holding an uncashed deposit check after acceptance of an offer when directed to do so by the seller.

The diversity of California's population and economy makes the state unique compared to the rest of the country. Which statistic shows the greatest disparity between the state and the nation? (a) Home values (b) Household income (c) Population (d) Growth

(a) Home values

Which of the following is considered a "less than freehold estate"? (a) Lease (b) Life estate (c) Fee simple estate (d) Fee simple subject to power of termination

(a) Lease

Which of the following has had the LEAST influence on California history and the real estate market? (a) Natural hazards (b) Cultural forces (c) Political forces (d) Economic forces

(a) Natural hazards

Which of the following describes "mutual consent?" (a) Offer and acceptance (b) Tender (c) Counter offer (d) None of the above

(a) Offer and acceptance

A holder of which of the following ownership interests can devise her share of the property to someone else? (a) Tenancy in Common (b) Joint Tenancy (c) Tenancy in Partnership (d) Community Property with rights of survivorship

(a) Tenancy in Common

The four unities of joint tenancy are (a) Time, Title, Interest, Possession (b) Time, Interest, Possession, and Liability (c) Title, Interest, Possession, and Ability (d) Time, Possession, Liability, and Interest

(a) Time, Title, Interest, Possession T - time T - title I - interest P - possession

A form of business organization in which the co-owners are fully liable for the company's debts is (a) a general partnership. (b) a limited partnership. (c) a corporation. (d) all of the above.

(a) a general partnership.

A prohibition in a deed against a property use is known as (a) a restriction (b) an easement (c) a condition (d) an encroachment

(a) a restriction

Something that is used with the land for its benefit, such as a roadway or a waterway, is known as (a) an appurtenance (b) personal property (c) a fixture (d) an encumbrance

(a) an appurtenance

Failure to perform any of the terms or conditions of a contract is called (a) breach. (b) novation. (c) break. (d) addendum.

(a) breach.

The Real Estate Law allows a business opportunity to be sold (a) by a real estate licensee. (b) by the financial planner. (c) by a PRLS licensee. (d) with a special endorsement.

(a) by a real estate licensee.

A promise by a property owner NOT to do something is called a (a) covenant (b) prescription (c) restriction (d) restraint on alienation

(a) covenant

When a landowner has the right to travel over the property of an adjoining landowner, the property that benefits from the easement right is called the (a) dominant tenement (b) servient tenement (c) life tenant (d) tenant at will

(a) dominant tenement

The eave of your neighbor's new house hangs six inches over your land. This describes a(n) (a) encroachment. (b) easement. (c) private nuisance. (d) encumbrance.

(a) encroachment.

The MOST commonly used form of listing agreement is the (a) exclusive right to sell (b) the exclusive agency (c) open agreement (d) net agreement

(a) exclusive right to sell

In medieval England, the highest form of ownership was the: (a) freehold estate. (b) estate for years. (c) life estate. (d) leasehold estate.

(a) freehold estate.

If a person dies without leaving a will, that person dies (a) intestate (b) statutorily (c) testate (d) administratively

(a) intestate

When acting as agent for seller Jones, real estate broker Smith (a) is obligated to render faithful service to Jones. (b) can modify the terms of any contract that Jones enters into. (c) can give Jones legal advice. (d) can eliminate any offers on Jones's property that Smith believes are not good enough.

(a) is obligated to render faithful service to Jones.

There are three principal baselines and meridians in California. The intersection of the Humboldt Baseline and Meridians is in (a) northern California (b) central California (c) southern California (d) a state other than California

(a) northern California

Under an exclusive agency listing, a broker advertises a home for sale. The owner sells the home prior to the expiration of the listing. The broker is entitled to (a) nothing. (b) the full commission. (c) half of the commission. (d) expenses only.

(a) nothing.

California real estate law originated from (a) Calbre regulations. (b) Spanish law. (c) English common law. (d) European law.

The test for a fixture does NOT include (a) origin of manufacture (b) method of attachment (c) intent of the parties (d) relationship of the parties

(a) origin of manufacture M - method of attachment A - Adaptability of the thing for the land's ordinary use (house key) R - Relationship of the parties I - Intent in placing the item on the land A - Agreement of the parties

The Real Estate Transfer Disclosure Statement (TDS) provides information regarding the (a) physical condition of the property. (b) property's chain of title. (c) agency relationships between the parties to the transaction. (d) commission split between real estate agents.

(a) physical condition of the property.

A real estate broker works for the (a) principal (b) third party (c) Bureau of Real Estate (d) real estate board

(a) principal

Today, more than 50 percent of California is owned by the (a) private sector (b) federal government (c) municipalities (d) state government

(a) private sector

A system providing for surveying and describing land by reference to principal meridians and base lines is known as the (a) rectangular survey system. (b) metes and bounds system. (c) property address system. (d) lot and block system.

(a) rectangular survey system.

A condition that would prohibit a property owner from transferring title to the property is known as a (a) restraint on alienation (b) writ of attachment (c) restriction (d) judgement

(a) restraint on alienation

A person authorized by a principal to perform a particular act or transaction is a (a) special agent. (b) subagent. (c) general agent. (d) single agent.

(a) special agent.

A real estate salesperson is supervised by (a) the employing broker only (b) any licensed broker (c) the seller (d) the buyer or seller

(a) the employing broker only

You enter into a contract with a person not knowing he was judicially declared incompetent. The incompetence of one of the parties to this agreement would make the contract (a) void. (b) valid. (c) enforceable. (d) valid until voided by the court.

(a) void.

A holographic will does NOT have to be (a) witnessed (b) entirely handwritten (c) signed (d) dated

(a) witnessed

The S 1/2 of the NW 1/4 of the SE 1/4 [of Section X] contains (a) 40 acres. (b) 20 acres. (c) 10 acres. (d) 5 acres.

(b) 20 acres. Go backwards: First: Find the SE 1/4. (640/4 = 160) Second: Find the NW 1/4 of the first area. (160/4 = 40) Third: Find the S 1/2 of the second area. (40/2 = 20) This area contains 20 acres.

Which of the following is an example of actual fraud? (a) An inadvertent omission of a material fact by a subcontractor (i.e., termite company). (b) A promise made without any intention of performing it. (c) An unfulfilled promise to hold a certain number of open houses without deliberate intent to deceive. (d) An accidental slip of the tongue without the intent to deceive.

(b) A promise made without any intention of performing it.

Which of the following statements concerning deed restrictions is correct? (a) A covenant includes conditions and equitable servitudes. (b) A violation of a condition can result in forfeiture of title to real property. (c) Private restrictions must be for public health, safety, and general welfare. (d) Covenants are more restrictive and costly for the owner than conditions.

(b) A violation of a condition can result in forfeiture of title to real property.

Which of the following is required to operate as a Prepaid Rental Listing Service (PRLS) agent? (a) A real estate broker's license. (b) A written contract with prospective tenants. (c) A real estate salesperson's license. (d) Access to the Multiple Listing Service.

(b) A written contract with prospective tenants.

Steve owns Greenacre but does not want Bob to know. One day, when Steve, Bob, and Mark are together, Bob asks Steve and Mark if one of them owns Greenacre. Mark says yes he owns Greenacre, and Steve (the real owner) doesn't object. Bob then pays Mark for Greenacre. Which of the following is correct? (a) Steve still owns Greenacre since he is the real owner. (b) Bob owns Greenacre based on the doctrine of equitable estoppel. (c) Steve still owns Greenacre and Mark is prosecuted for fraud. (d) Bob cannot transfer title to Greenacre since he does not own it.

(b) Bob owns Greenacre based on the doctrine of equitable estoppel.

Most of the laws dealing with the formation of an agency relationship are found in the (a) Business & Professions Code. (b) California Civil Code. (c) Commissioner's Regulations. (d) Real Estate Law.

(b) California Civil Code.

What usually happens to a person's property who died intestate? (a) It escheats to the state (b) It is distributed to his/her heirs (c) It is distributed according to his/her will (d) None of the above

(b) It is distributed to his/her heirs "intestate" = The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs as provided in the state's law of descent.

The most heavily weighted subject matter on the salesperson and broker examination is (a) Property Ownership and Land Use Controls and Regulations. (b) Practice of Real Estate and Mandated Disclosures. (c) Valuation and Market Analysis. (d) Contracts.

(b) Practice of Real Estate and Mandated Disclosures.

A form of ownership by which investors purchase certificates of ownership in a trust, which in turn invests the money in real property and then distributes any profits to the investors free of corporate tax is called a(n) (a) Land Contract Sales Trust (LCST). (b) Real Estate Investment Trust (REIT). (c) Pooled Mortgage Investment Trust (PMIT). (d) Flow-through Investment Trust (FIT).

(b) Real Estate Investment Trust (REIT).

Which of the following best describes a "dual agency?" (a) An agent only represents one principal. (b) The agent acts concurrently for both the buyer and seller in a transaction with the full knowledge and consent of both parties. (c) The agent is authorized to do all acts connected with a particular trade, business or employment. (d) The agent is only authorized to perform only those acts specifically authorized by the principal.

(b) The agent acts concurrently for both the buyer and seller in a transaction with the full knowledge and consent of both parties.

All of the following are true about professional trade organizations EXCEPT (a) They help shape the law and the industry by establishing and enforcing standards of practice. (b) They enforce the real estate law much like the real estate commissioner. (c) They provide sources of information, training, and contact with other professionals. (d) They provide an effective lobbying voice for their members.

(b) They enforce the real estate law much like the real estate commissioner.

The applicant for a real estate salesperson's license must complete how many college-level courses before taking the licensing examination? (a) One (b) Three (c) Five (d) Seven

(b) Three

A person who has executed a document can make a declaration, called a(n) _____, that the execution is the person's own act. (a) execution (b) acknowledgment (c) declaration (d) assertion

(b) acknowledgment

The seizure of property prior to a judgment is known as (a) excessive force. (b) an attachment. (c) a seizure execution. (d) serving the judgment.

(b) an attachment. An attachment is the process by which real or personal property of a defendant in a lawsuit is seized and retained in the custody of the law for satisfaction of the judgment.

The right of an owner of a parcel of land to travel over an adjoining parcel of land is known as (a) a restriction (b) an easement (c) a covenant (d) an encroachment

(b) an easement

For tax purposes, a sales person can work for the broker as (a) a dual agent (b) an independent contractor (c) a subagent (d) a partner

(b) an independent contractor

Land is torn away by the action of water in the process called (a) evolution (b) avulsion (c) accretion (d) reliction

(b) avulsion

In most cases, an offer may be revoked (a) prior to close of escrow. (b) before it is accepted, as long as the revocation is communicated directly to the offeree. (c) at any time, for any reason, as long as the revocation is in writing. (d) at any time as long as consideration has changed hands.

(b) before it is accepted, as long as the revocation is communicated directly to the offeree.

While ownership of real property is usually transferred by deed, ownership of personal property usually is transferred by (a) land contract. (b) bill of sale. (c) trust deed. (d) voucher.

(b) bill of sale.

California provides homeowners with a special protection from creditors called the "homestead" law. This law protects the homeowner's equity from (a) all creditors of record. (b) claims of unsecured creditors. (c) tax liens. (d) foreclosure.

(b) claims of unsecured creditors.

If an owner devotes land to a public use, such as a roadway, a transfer occurs by (a) condemnation (b) common law dedication (c) partition (d) escheat

(b) common law dedication A common-law dedication occurs when a landowner devotes land to a public use, as when a roadway is opened to public use or described as such in the deeds to adjoining parcels.

The recording of an instrument gives (a) actual notice. (b) constructive notice. (c) positive notice. (d) passive notice.

(b) constructive notice.

A document used to transfer legal title from the trustee back to the borrower (trustor) after the debt has been repaid is called a (a) quitclaim deed. (b) deed of reconveyance. (c) payoff deed. (d) deed of confirmation.

(b) deed of reconveyance.

If a tract is landlocked — that is, there is no road access to any part of it, the owner of such tract has a(n) (a) easement by prescription. (b) easement by necessity. (c) easement in gross. (d) appurtenant easement.

(b) easement by necessity.

Prescription most nearly pertains to (a) use. (b) easements. (c) title. (d) conveyance.

(b) easements.

The right of a government agency to take private property for a public use is called (a) a quiet title action (b) eminent domain (c) a partition action (d) escheat

(b) eminent domain

Under the Real Estate Law, a real estate salesperson works for a broker as an (a) independent contractor. (b) employee (c) agent (d) associate broker

(b) employee

Liens are classified as (a) writs of attachment (b) encumbrances (c) easements (d) encroachments

(b) encumbrances

The real estate commissioner is appointed by the Governor and charged with (a) creating and interpreting the real estate law. (b) enforcing the real estate law. (c) advising the governor on changing the real estate law. (d) All of the above.

(b) enforcing the real estate law.

The right of possession is restricted under a: (a) fee simple qualified. (b) fee simple subject to a power of termination. (c) freehold estate. (d) life estate with a right of revision.

(b) fee simple subject to a power of termination.

According to the statute of limitations, an action based on a written real estate sales contract must be brought within (a) five years. (b) four years. (c) three years. (d) one year.

(b) four years.

A salesperson tells his broker that he is quitting and plans to go to work for another broker. His present employing broker should (a) notify the Real Estate Commissioner and hold the license until further notice from the Commissioner. (b) give the salesperson his license and notify the Real Estate Commissioner immediately in writing. (c) request cancellation of the salesperson's license. (d) call the other broker to confirm the change.

(b) give the salesperson his license and notify the Real Estate Commissioner immediately in writing.

Someone who receives real property is known as the: (a) mortgagee. (b) grantee. (c) devisor. (d) grantor.

(b) grantee.

Community property is property owned by (a) churches. (b) husband and wife. (c) the municipality. (d) the community.

(b) husband and wife.

When executing a grant deed, the grantor makes certain assertions about the property that the grantee must assume to be true, or the deed would be meaningless. These assertions are called (a) covenants (b) implied warranties. (c) nonverbal assertions. (d) CC&Rs.

(b) implied warranties.

In their dealings with clients and with each other, real estate agents generally act as (a) employees. (b) independent contractors. (c) subcontractors. (d) attorneys-in-fact.

(b) independent contractors.

A method of land description where each parcel in a subdivision is identified by tract, lot, and block numbers is called (a) plat map. (b) lot and block. (c) metes and bounds. (d) government survey.

(b) lot and block.

One of the MOST important duties of agent to principal is the duty of (a) salesmanship (b) loyalty (c) beneficial conduct (d) hard work

(b) loyalty

Real estate commission rates are (a) fixed by law (b) negotiable (c) subject to cancellation (d) always 4 percent

(b) negotiable

What is it called when one person is substituted for another in a contract? (a) redaction (b) novation (c) subordination (d) hypothecation

(b) novation

A listing that is retained and secretly marketed by the listing broker or salesperson, and is not made available to other brokers in the office or to other multiple-listing service members is called a (a) secret listing. (b) pocket listing. (c) double-ended listing. (d) ostensible listing.

(b) pocket listing.

A property owner would post a notice of nonresponsibility to (a) perfect a security instrument. (b) protect against unauthorized work. (c) protect against judgments. (d) All of the above

(b) protect against unauthorized work.

California real estate acquired by an out-of-state married person that would have been considered community property if it had been acquired by a resident of California is considered (a) separate individual property (b) quasi-community property (c) jointly held personal property. (d) distance owned real property.

(b) quasi-community property

The term real estate means the same thing as (a) personal property (b) real property (c) ownership (d) intangible personal property

(b) real property

In order to be valid, a grant deed does NOT require (a) a granting clause (b) recording (c) the signature of the grantor (d) a proper writing

(b) recording

The right of the future holder of what is currently a life estate is a: (a) fee simple defensible. (b) remainder. (c) fee simple conditional. (d) fee simple subject to a power of termination.

(b) remainder.

Mark gives a life estate to Charlie. Mark's interest is (a) personal property (b) reversionary. (c) leasehold. (d) remainder.

(b) reversionary. Mark's interest reverts back to him after the death of Charlie.

In a Chapter 7 bankruptcy liquidation, the court takes possession of the assets of the debtor and (a) reduces the total debt to a manageable level. (b) sells the assets to pay off creditors on a pro rata basis. (c) reorganizes debtor's personal financial situation to the satisfaction of creditors. (d) forgives all debt that existed at the time of filing.

(b) sells the assets to pay off creditors on a pro rata basis.

The four unities of joint tenancy do NOT include: (a) time (b) severance (c) interest (d) possession

(b) severance

In a real estate listing agreement, the commission is earned when (a) the listing expires, regardless of acceptance of an acceptable offer. (b) the broker finds a buyer who is ready, willing, and able to purchase the subject property on the seller's original terms. (c) the down payment is deposited in escrow. (d) an acceptable offer is accepted by the seller.

(b) the broker finds a buyer who is ready, willing, and able to purchase the subject property on the seller's original terms.

Before taking the licensing examination, the applicant must successfully complete (a) a 3 hour course in Ethics. (b) three college-level courses. (c) a course in office administration. (d) a course in fair housing.

(b) three college-level courses.

When a real estate license expires, licensed activity must cease but the license may be renewed up to (a) one year later (b) two years later (c) three years later (d) four years later

(b) two years later

Agent Jones has an offer on a listing contingent on the buyer's uncle approving the property since he will be financing the loan. Agent Jones hasn't discussed this with the buyers, but assures the seller that there will be no problems regarding the uncle. After the seller accepts the offer, the buyers tell the agent that the uncle is out of town and they don't know when he will return. By failing to explain the meaning and probable significance of the contingency in the offer, the agent has engaged in (a) unethical conduct. (b) unlawful conduct. (c) practical conduct. (d) proper conduct.

(b) unlawful conduct.

A contract signed under duress is (a) void. (b) voidable. (c) illegal. (d) enforceable.

(b) voidable.

When a real estate licensee accepts trust funds from his/her client in connection with the purchase of real property, the licensee must place these funds into the proper place (a) by the next working day following receipt. (b) within three business days following receipt. (c) by midnight of the current business day. (d) by midnight of the third business day following receipt.

(b) within three business days following receipt.

One of the steps necessary to acquire title to real estate by adverse possession is to occupy the property "hostile" to the true owner. In this context, (a) without hiding the fact. (b) without permission. (c) by force. (d) in secret.

(b) without permission.

A member of a family unit of two or more persons qualifies a homeowner for a (a) $50,000 homestead exemption. (b) $75,000 homestead exemption. (c) $100,000 homestead exemption. (d) $150,000 homestead exemption.

The letters CMBA stand for (a) California Monetary Bankers Association. (b) California Metropolitan Brokers Association. (c) California Mortgage Bankers Association. (d) California Managers & Brokers Association.

Among the principles involved in the "Bundle of Rights" is the right to (a) Build, tax, destroy, and rebuild. (b) Design, plan, implement, and profit. (c) Possession, use, enjoy, exclude others, dispose. (d) All of the above

Every real estate broker must be licensed by the Department of (a) Corporations. (b) State. (c) Real Estate. (d) Housing.

Which type of deed would be used when the purchaser pays off a loan secured by the real estate? (a) Trust deed (b) Quitclaim deed (c) Reconveyance deed (d) Grant deed

Which of the following does NOT require a real estate license? (a) Negotiating a lease (b) Presenting an offer (c) Selling your own property (d) Taking a listing

Which of the following events is arguably the most important single event with respect to the exploration and settlement of the western frontier and California? (a) The Mexican/American war (b) The Treaty of Guadalupe Hidalgo (c) The discovery of gold at Sutter's Mill (d) The creation and upholding of Mexican land grants

Which of the following deeds is a security instrument? (a) Quitclaim deed (b) Grant Deed (c) Trust Deed (d) Sheriff's deed

After California became a state, the legislature redefined what was necessary to evidence transfer of California land. The modern evidence of transfer of ownership is (a) a physical aspect of the land (i.e. twig, dirt) stored at the county recorder's office. (b) a date stamped photograph of the subject property filed at the county recorder's office. (c) a deed that is filed in the county recorder's office to show transfer of ownership. (d) physical possession.

The highest form of modern land ownership is known as: (a) a life estate. (b) a real estate trust. (c) a fee simple absolute. (d) an estate for years.

A valid deed must contain (a) evidence of recordation. (b) a date. (c) a granting clause. (d) the signature of the grantee.

A notice of nonresponsibility would protect an owner from (a) a foreclosure (b) an eviction (c) a mechanic's lien (d) trespassers

Ownership in severalty is: (a) concurrent ownership. (b) a joint tenancy. (c) a separate ownership. (d) community property.

All of the following are grounds for revocation or suspension of a real estate license EXCEPT (a) knowingly participating in the sale of a stolen mobile home. (b) knowingly concealing a material fact in an application for registration of a mobile home. (c) accidentally overpaying taxes on a mobile home. (d) failing to deliver a properly endorsed certificate of title from the seller to the buyer.

The building up of new soil adjacent to a river is called (a) avulsion. (b) reliction (c) accretion. (d) alluvion.

Community Property is: (a) all property acquired during marriage. (b) all property acquired by the husband during marriage. (c) all property acquired during marriage that is not separate. (d) the only form of ownership during marriage.

Accretion is the process of accumulating new soil (a) next to a lake (b) adjacent to an ocean (c) along a flowing body of water (d) close to a baseline

A water company's right to run a water line through private property would most likely be (a) riparian rights. (b) correlative rights. (c) an easement in gross. (d) a dominant tenement.

A nonexclusive listing agreement is also known as (a) a net listing (b) an option listing (c) an open listing (d) an agency listing

Personal property is usually transferred by a (a) will (b) deed (c) bill of sale (d) purchase contract

The sale or lease of a business, including all or most of the assets or stock of the business is termed a (a) bankruptcy. (b) acquisition. (c) business opportunity. (d) discount sale.

All of the following are factors considered when determining whether an item of personal property has become real property, EXCEPT (a) agreement between the parties. (b) method of attachment. (c) cost of the article. (d) relationship of the parties.

The transfer of privately owned land to the public under approval of the Map Act is called (a) gifting. (b) condemnation. (c) dedication. (d) government taking.

The classical definition of property ownership is ownership of (a) the surface only. (b) horizontal and vertical areas above and below the property. (c) everything below the property in the shape of an inverted pyramid with its apex at the center of the earth and infinite airspace. (d) all that one can perceive.

(c) everything below the property in the shape of an inverted pyramid with its apex at the center of the earth and infinite airspace.

The transfer of property by private grant is also called a (a) note. (b) lien. (c) grant deed. (d) gift.

The general rule regarding corrections to preprinted forms is (a) typed corrections take precedence over handwritten insertions. (b) corrections and/or written additions are not allowed on preprinted forms. (c) handwritten insertions take precedence over both typed and preprinted material. (d) preprinted insertions take precedence over handwritten insertions.

An agency relationship may be terminated by (a) expiration of the term. (b) death of the agent. (c) agreement. (d) All of the above

(d) All of the above

In addition to the prelicense education requirements to become a real estate broker, an applicant must also (a) be an attorney and a member of the California state bar. (b) show proof of a master's degree in a related field. (c) have been actively engaged as a real estate salesperson for at least two of the preceding five years, or equivalent. (d) show proof of at least two years experience as a CEO, manager, or small business owner.

The liability of a limited partner for business debts is limited to (a) the same as the general partners. (b) any amount agreed to in the partnership agreement. (c) his/her contribution to the firm. (d) the amount of the debts equally divided among all the partners.

According to the real estate law, a real estate salesperson must work under the supervision of (a) the city council. (b) the Department of Business Oversight. (c) his/her employing broker. (d) the Department of Consumer Affairs.

In the sale of a business, bulk transfer laws pertain to (a) fixtures. (b) goodwill. (c) inventory. (d) All of the above

Under the Spanish rule, land was owned primarily by the (a) missions (b) peasants (c) king (d) conquistadors

When an agent represents both the buyer and seller in the same transaction, this action is (a) against the law (b) an example of subagency (c) known as dual agency (d) prohibited by the MLS

Freehold estate includes (a) estates for years. (b) leasehold estates. (c) life estates (d) All of the above

(c) life estates Any estate in real or personal property that is limited in duration to the life of its owner or the life of some other designated person.

A real estate broker's license may be obtained by any of the following except a (a) sole proprietorship (b) corporation (c) limited liability company (d) partnership

A broker wanted to operate a real estate office under the fictitious name MLB Realty. Before operating under a fictitious name, the broker must (a) publish the fictitious name in a newspaper of general circulation. (b) file under the Secretary of state. (c) obtain a DRE license bearing the fictitious business name. (d) file with the city as a fictitious business.

Seller A let buyer B assume that Broker C was his agent. This type of agency relationship is an example of: (a) ratification. (b) Estoppel. (c) ostensible authority. (d) None of the above.

(c) ostensible authority. Ostensible authority is that authority which a third person reasonably believes an agent possesses because of the acts or omissions of the principal. Ratification is the adoption or approval of an act performed on behalf of a person without previous authorization, such as the approval by a principal of an agent, after the acts have been performed. Estoppel is a legal doctrine which prevents a person from alleging something to be true or a fact which is contrary to a previous affirmation or allegation made by that same person.

When speaking about contract obligations, the word "execute" means (a) signing of the document. (b) death of one party to the contract. (c) performance of contract obligations. (d) cancellation of the contract prior to performance.

A mechanic's lien requires (a) a deed (b) a promissory note (c) preliminary notice (d) a servient tenement

In California the term "real property" means the same thing as (a) personal property. (b) community property. (c) real estate (d) quasi-personal property

A covenant in Johnson's deed states that he may not operate a dog kennel on the property. Johnson proceeds to build a commercial dog kennel. Adjoining land owners would have recourse by (a) taking Johnson's property. (b) suing Johnson for damages. (c) seeking an injunction. (d) filing criminal charges.

What is the maximum amount that could be recovered from the Recovery Fund for one salesperson? (a) $50,000 (b) $40,000 (c) $80,000 (d) $250,000

(d) $250,000

Buyer Frank sued broker Sam for a misrepresentation in the sale of a single family residence. He was awarded a judgment in the amount of $60,000. Broker Sam was bankrupt and unable to pay the judgment. Buyer Frank appealed to the Real Estate Recovery Account. Assuming the Recovery account agrees to pay Frank, he will receive a maximum of (a) $10,000. (b) $20,000. (c) $30,000. (d) $50,000.

(d) $50,000.

How many sections are in a township? (a) 6 (b) 18 (c) 24 (d) 36

(d) 36

A section contains ____ acres. (a) 80 (b) 160 (c) 320 (d) 640

(d) 640

A licensee must take 45 hours of continuing education in order to renew the license. The 45 hours must include (a) Agency and Trust Fund Handling. (b) Ethics and Fair Housing. (c) Risk Management and Management & Supervision. (d) All of the above

(d) All of the above

A listing agreement is (a) a promise for a promise. (b) a bilateral contract. (c) an employment contract. (d) All of the above

(d) All of the above

An agent is liable to third persons for (a) any tort (physical injury or property damage). (b) fraudulent misrepresentation. (c) torts or other acts committed by the principal in which the agent acquiesces. (d) All of the above

(d) All of the above

In addition to the actual authority specified in the agency agreement, an agent also has inherent authority regarding activities the agent needs to perform that are not mentioned in the contract such as, (a) distributing fliers in the neighborhood. (b) posting signs at nearby intersections. (c) advertising. (d) All of the above

(d) All of the above

There is no legal requirement that a deed (a) be witnessed. (b) that the grantor's signature be verified by any third person. (c) be supported by consideration. (d) All of the above

(d) All of the above

Using only a street address to identify real estate can be problematic because (a) rural, undeveloped land may not have a street address. (b) street names may change. (c) a driveway may be moved. (d) All of the above

(d) All of the above

Which of the following is a potential penalty for fraud? (a) Loss or suspension of a real estate license (b) Money damages (c) Criminal prosecution resulting in a fine and/or imprisonment (d) All of the above

(d) All of the above

Which of the following may file a valid mechanic's lien? (a) Architect (b) Truck driver (c) Subcontractor (d) All of the above

(d) All of the above

Which of the following types of contracts must be in writing under the Statute of Frauds? (a) listing agreement (b) an agreement that will not be completed within one year (c) a lease of real property for more than one year (d) All of the above

(d) All of the above

A licensee cannot lead an owner of real property, during listing negotiations, to believe that the licensee is precluded from charging less than the commission or fee quoted (a) Due to the law (b) As a result of DRE regulations (c) Because of the rules of an organization (d) All of the above.

(d) All of the above.

According to the Real Estate Commissioner's suggestions for professional conduct, which of the following would be considered "desirable conduct?" (a) Attempting to settle disputes with other licensees through mediation or arbitration. (b) Submitting all written offers in a prompt and timely manner. (c) Never claiming to be an expert in an area of specialization when in fact you are not. (d) All of the above.

(d) All of the above.

An agency relationship may be created by (a) agreement. (b) ratification. (c) accepting an offer of subagency. (d) All of the above.

(d) All of the above.

Which of the following individuals are exempt from the real estate licensing requirements? (a) A person selling his or her own property. (b) An attorney-at-law rendering services in the performance of his or her duties as attorney. (c) Anyone holding a duly executed power of attorney from the owner of property. (d) All of the above.

(d) All of the above.

California's Real Estate Law is found in the (a) Civil Code (b) Financial Code (c) Government Code (d) Business and Professions Code

(d) Business and Professions Code

Which of the following could NOT file a mechanic's lien? (a) Contractor (b) Equipment lessor (c) Architect (d) Home improvement lender

(d) Home improvement lender

The process through which disciplinary action is taken by the Department of Real Estate starts with an audit or an investigation of the licensee's activities or alleged misconduct. What is the next step in the disciplinary process? (a) A hearing is held before an Administrative Law Judge to examine evidence and hear testimony. (b) The commissioner makes a decision to impose a penalty or dismiss the charges. (c) The licensee can elect to appeal the findings of the investigation or audit. (d) If warranted, an accusation is filed against the licensee.

(d) If warranted, an accusation is filed against the licensee.

What type of background check does the Real Estate Commissioner and Appraisal Commissioner use? (a) Late rental payments (b) Personal habits (c) Credit history (d) Late child support

(d) Late child support

Any individual who, for compensation or gain, takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan application, must be licensed as a (a) real estate salesperson. (b) real estate broker. (c) bank employee. (d) Mortgage Loan Originator (MLO).

(d) Mortgage Loan Originator (MLO).

If an "exclusive authorization and right to sell listing" does not contain a complete legal description, (a) the listing is void. (b) it is a violation of the Real Estate Law. (c) the listing is unenforceable. (d) None of the above

(d) None of the above

Which of the following accurately describes a listing agreement which allows the broker to either find a prospective buyer, or purchase the home himself/herself? (a) Exclusive authorization and right to sell (b) Open listing (c) Net listing (d) Option listing

(d) Option listing

Which of the following statements is most nearly correct concerning buyer's agency? (a) It is not legal in California. (b) In buyer's agency, the seller is forbidden to pay any commission, directly or indirectly, to the buyer's agent. (c) Buyer's agency often gives rise to disputes over who is the "procuring cause." (d) The buyer's broker has no agency relationship with the seller or the listing broker, and is therefore not liable for their actions.

(d) The buyer's broker has no agency relationship with the seller or the listing broker, and is therefore not liable for their actions. A buyer-broker does not represent the seller or listing broker and therefore is not liable for their statements or actions.

Which of the following is NOT appurtenant to real estate? (a) Growing trees (b) Buildings (c) Fences (d) Trade fixtures

(d) Trade fixtures

The rectangular survey system is also known as the (a) metes and bounds system (b) Torrens system (c) lot, block, and tract system (d) U.S. government survey system.

(d) U.S. government survey system. The rectangular survey system also is called the section and township system or U.S. government survey system.

All of the following are ways to terminate an easement EXCEPT (a) Abandonment of a prescriptive easement (b) Merger of the easement with the servient tenement (c) Destruction of the servient tenement (d) Unilateral action by the dominant tenement

(d) Unilateral action by the dominant tenement ELA EMDAE E - Express Agreement. L - Lawsuit. A - Abandonment. E - Estoppel. M - Merger of dominant and servient tenements. D - Destruction of servient tenement. A - Adverse possession. E - Excessive use.

A man appointed by the court to settle the estate of a person who has died intestate is called a(n) (a) devisee. (b) testator. (c) executor. (d) administrator.

(d) administrator.

Private land can be conveyed for public use or ownership by all of these methods EXCEPT (a) deed (b) statutory dedication (c) common law dedication (d) adverse possession

(d) adverse possession

An "S" corporation (a) is taxed as a partnership. (b) avoids corporate taxation. (c) passes tax liability through to shareholders. (d) all of the above.

(d) all of the above.

The real Estate Law DOES NOT require licensing for (a) the resident manager of an apartment building or complex. (b) the manager of a hotel. (c) a real estate assistant who does not perform acts that require a real estate license. (d) all of the above.

(d) all of the above.

Real property includes (a) land. (b) appurtenances to land. (c) fixtures. (d) all of these.

(d) all of these.

The Real Estate Law treats a salesperson as (a) a dual agent (b) a general agent (c) an independent contractor (d) an employee of the broker

(d) an employee of the broker

A licensee was farming a non-integrated neighborhood which was next to an integrated neighborhood by telling the owners that if minority people moved into their neighborhood, their property values would go down. This is an example of (a) steering. (b) panic selling. (c) Blockbusting. (d) both (b) and (c).

(d) both (b) and (c).

With an exclusive listing, a broker may be subject to disciplinary action for (a) failing to give accurate tax advice. (b) failing to give a copy to the seller. (c) failing to include a definite termination date. (d) both (b) and (c).

(d) both (b) and (c).

An improvement that extends onto an adjacent property without permission is an (a) easement (b) avulsion (c) encumbrance (d) encroachment

(d) encroachment

Real Estate licenses are renewable for a period of (a) one year. (b) two years. (c) three years. (d) four years.

(d) four years.

An easement created by express grant or express reservation is a (a) license agreement. (b) subdivision filing. (c) quitclaim deed. (d) grant deed.

(d) grant deed.

California exercises its police power to promote the public (a) trust. (b) image. (c) tax base. (d) health, safety, and general welfare.

(d) health, safety, and general welfare.

A will written in the testator's own handwriting is called a (a) sealed will. (b) gift certificate. (c) nontransferable will. (d) holographic will.

(d) holographic will.

An attorney-in-fact can best be described as a(n) (a) duly authorized person who has been granted both actual and implied powers to act as a principal for another. (b) properly authorized party who is acting as a dual agent. (c) attorney appointed by the court to administer an estate of a deceased person. (d) legally competent person who has been given the power of attorney by another competent person.

(d) legally competent person who has been given the power of attorney by another competent person.

A "safety clause" is found in a (a) deposit receipt. (b) loan broker's statement. (c) lease. (d) listing agreement.

(d) listing agreement.

An easement differs from a license in that a license (a) must be created by written instrument. (b) is of indefinite duration. (c) may be assigned. (d) may be revoked.

(d) may be revoked.

A large, densely populated metropolitan area, consisting of a number of major urban areas is referred to as a(n) (a) apex statistical area. (b) county. (c) urban region. (d) megalopolis.

(d) megalopolis.

Which of the following is NOT considered concurrent ownership: (a) joint tenancy. (b) tenancy in common. (c) community property. (d) ownership in severalty.

(d) ownership in severalty.

Tenants in common have equal right of (a) time. (b) title. (c) interest. (d) possession.

(d) possession.

An agent is authorized to act in place of the principal by a (a) purchase contract (b) multiple listing clause (c) listing agreement (d) power or attorney

(d) power or attorney

Both parties to a contract wish to terminate their agreement, restoring them to their original positions. This is called (a) release (b) novation (c) breach (d) rescission

(d) rescission

The rights of a landowner whose property line touches on a river or other flowing stream are called (a) sub-surface rights. (b) correlative user rights. (c) high-low water rights. (d) riparian rights.

(d) riparian rights.

A person holding title to property in severalty would most likely have (a) a life estate. (b) an estate for years. (c) ownership in common with others. (d) sole ownership.

(d) sole ownership. "in severalty" = Separate ownership; ownership of property by one person only.

An agent who tries to sell a property that is currently listed for sale by the original (listing) agent is called a (a) buyer's agent. (b) general agent. (c) delegated agent. (d) subagent.

(d) subagent.

Since an encumbrance can limit the transferability or use of property, it may affect the property's (a) title. (b) equity. (c) structure. (d) value.

(d) value.

Deed restrictions based upon race are (a) enforceable. (b) voidable. (c) valid. (d) void.

(d) void.

A court order directing the county sheriff or another officer to satisfy a judgment out of the debtor's property is called a (a) sheriff's sale. (b) community sale. (c) foreclosure. (d) writ of execution.

(d) writ of execution.

Homeowner Clive Lentil is trying to sell his house without the assistance of a real estate agent. After four months in which he receives no offers on the house, Clive places an ad in the newspaper that states, "Three percent commission paid to buyer's agent at closing." Salesperson Sally phones Clive, identifies herself as a real estate agent, and makes an appointment to show Clive's house to one of her clients. Do Sally and Clive have an agreement? If Clive accepts the offer made by Sally's client, and the offer does not mention any commission for Sally, do Sally and Clive have an agreement? At closing, is Clive obliged to pay Sally the 3% commission? If the purchase offer that Clive accepted stipulates that Sally will receive a 3% commission on the transaction, will Clive and Sally have had an agreement at that point?

After Sally's first phone call to Clive, they do not have an agreement because they have no writing. If Clive accepts an offer that does not mention a commission for Sally, she still has no written agreement, and Clive is not obligated to pay her a commission. If the purchase offer accepted by Clive had stipulated a commission for Sally, she could have used that as the basis for her claim for a commission from Clive.

Floyd would like to own the acreage next to Mustang Canyon. The Hendersons own the land but rarely visit it. Floyd moves onto the property, builds a shack, fences in 50 acres, and places a sign, "Floyd's Ranch," over the locked entrance gate. Whenever anyone asks about his use of the property, he tells them, "It's mine." Floyd pays the property taxes and lives only on the property. After two years, Floyd sells "all my right, title, and interest of whatever kind" in the ranch to Jud, giving Jud a deed. Floyd moves off the ranch and Jud promptly moves in, bringing his spouse and six children with him. Jud pays the property taxes and proclaims to everyone that he now owns Floyd's Ranch. After about three years, Jud sells Floyd's Ranch to Aria, who in good faith records the deed Jud gives her and moves onto the land. A few months later, Harry Henderson shows up and is quite upset over what he finds. It has been more than five years since Floyd first moved onto the land. Who owns the land?

Aria owns the land. The adverse possession begun by Floyd and continued by Jud and Aria under color of title ripened into good title at the end of five years. Aria will have to bring a legal action to quiet title (discussed later in this unit) to get the court decree she needs to give notice to the world of the validity of her title.

Landlord Inosencia Rivera saw a contractor's truck outside her small apartment building on Sacramento Street. When she inquired, Inosencia was told by a man in a painter's jumpsuit, "The building is being remodeled." Inosencia never agreed to remodel the building, and she manages the building herself. What can she do?

As soon as possible, but at least within 10 days, Inosencia should post a notice of nonresponsibility at the entrance to the building and file a copy of the notice in the county recorder's office.

Broker Murphy meets Paula Phillips, who is looking for a house in Murphy's area. Paula describes what she wants, and Murphy realizes that his neighbor's house meets Paula's specifications exactly. Broker Murphy describes the house to Paula, who makes a special trip to town to see it. He did not tell Paula that the house he has described is not for sale. He is unable to persuade his neighbor that she should put her house up for sale, and he cannot reach Paula in time to call off her trip. Does Murphy have any liability to Paula?

At the least, Murphy will be dealing with a disappointed customer, and he may have to pay her expenses in traveling to his area. At the worst, Paula will complain to the Real Estate Commissioner, who may discipline Murphy for his misrepresentation.

Assuming all other requirements have been met, has a valid deed been created in the following cases? Aunt Nellie is senile and incapable of caring for herself. To help her out, her niece Roberta takes Aunt Nellie into her home. In return, Roberta asks Aunt Nellie to deed her condominium to her. Aunt Nellie does not realize what is happening, and Roberta guides her hand as she signs a deed. Who owns the condo?

Aunt Nellie still owns the condo, for she was incapable of making a valid deed.

Harold and Cynthia have a $95,000 mortgage on their houseboat, which has a market value of $130,000. If creditors try to force the sale of the houseboat, are they likely to succeed?

Because the equity the Potters have in their houseboat does not exceed the total amount of their mortgage balance and the $100,000 homestead exemption, creditors probably will not succeed in forcing a sale of their home.

Broker Rice has received an offer on the Marlow house along with a deposit check for $1,000, which his agency agreement authorizes him to receive. It is early evening when Rice receives the check, and he will present the offer to the seller the next morning. What should Rice do with the check in the meantime?

Because the offer is to be presented the next day, Frank should hold on to the check. If the offer is not accepted, he can simply return the check to the buyer. If the offer is accepted, he then can deposit the check in an escrow account. He should take precautions to safeguard the check while it is in his possession, as he could be liable for its loss.

George and Helen, who married in 2008, purchased a house in 2012. Who will the law presume to own the house and in what form of ownership?

Both Helen and George own the property as community property.

Salesperson Sam signs a broker-salesperson contract with Broker Bob. Sam is to use due diligence in handling the listings of Broker Bob's company. In return, Salesperson Sam will receive a percentage of the commission on every sale he makes. What is Broker Bob's obligation under the contract? What is Broker Bob's obligation if Salesperson Sam fails to sell, lease, or rent any listings?

Broker Bob will pay Salesperson Sam a share of the commission received on a completed transaction. Broker Bob has no obligation to pay Sam unless Sam brings about a sale or other transaction.

Broker Cindy Carroll of ABC Realty would like to list the Meyer estate. She offers to handle the sale at a commission of 5% of the selling price. Meyer, a widow, signs a listing agreement with Carroll. Carroll discusses the Meyer estate with an investor she knows. She agrees to bring the investor's offer to Meyer and, if the offer is accepted, to represent the investor when he resells the property, which will take place immediately after the first sale. The investor offers somewhat less than the asking price, but Carroll persuades Meyer to accept the offer. A few weeks after the sale, Carroll sells the property for the investor, who makes a 20% profit on the transaction. She earns two commissions. Comment on broker Carroll's activities.

Broker Carroll, in agreeing to act in the future for a buyer, has breached her fiduciary duty to Mrs. Meyer. At the very least she owes Mrs. Meyer the duty of full disclosure of her dealings with the buyer. She should have informed Mrs. Meyer of both her relationship with the buyer and the intent of the buyer in making an offer. By actively working against Mrs. Meyer's best interest in persuading her to accept the investor's offer, Carroll may be liable for fraud.

C. L. Drake is general contractor on the Bigelow Building remodeling job. C. L. signed a written agreement for the work with Busby Bigelow, the property's owner. Busby Bigelow, a wealthy but eccentric individual, decided halfway through the project that the design was "all wrong." It has been two months since Busby stopped the project. He has not filed either a notice of completion or a notice of cessation. C. L. is owed a considerable amount for materials he furnished and wages he paid. What can he do?

C. L. Drake has 90 days to file a mechanic's lien claim and 90 days after that to begin a foreclosure action, if necessary. These deadlines are in effect because work was stopped 60 days ago and neither a notice of completion nor a notice of cessation was filed.

What form of ownership does each person have in the property described? Fred and Alita own their home as spouses. No form of ownership was specified in their deed, as Fred and Alita have not yet consulted an attorney.

COMMUNITY PROPERTY

What form of ownership does this example illustrate? The Spice Company owns a processing plant and leases dock space for its shipments. The company is doing very well, and it paid an excellent dividend to shareholders last year.

CORPORATION

Harvey gives Cecilia a one-year lease and an option to buy his house, in exchange for $5,000 and monthly lease payments of $3,000. Before the year is up, Harvey decides to give the house to his son Hal. Harvey notifies Cecilia by certified mail, enclosing a money order for $5,000. Does Cecilia still have an option to buy the house? What can Cecilia do?

Cecilia still has a valid option contract but will have to return the $5,000 to Harvey. If she delays, she may be understood as approving his revocation of the agreement. If Cecilia had already decided—or decides when she gets the $5,000—that she will not exercise the option, she is $5,000 richer than she would have been had Harvey not returned her money. Either way, Cecilia should talk to her attorney.

Salesperson Sam is a good friend of the Patels, who ask Sam to help them find a small office building for their mail-order business. The Patels tell Sam they will pay him $1,000 as a fee if within 30 days he can find a suitable building available for occupancy. The Patels and Sam sign a written agency agreement to that effect. The next day, Salesperson Sam is approached by Jim Nelson, who wishes to sell an office building that meets the Patels' specifications exactly. Can Sam sign an agency agreement on behalf of his broker with Jim Nelson? In other words, can he list the Nelson property for sale? If Sam lists the Nelson property, can he then show that property to the Patels? Should he?

Certainly, Sam can sign a listing agreement on behalf of his broker for any property that he feels his firm is qualified to handle. If Sam does list the Nelson property, by showing the property to the Patels he would be acting in a dual agency capacity. Sam's broker then would be an agent for both the Patels and Jim Nelson. Sam should undertake such a representation only after fully informing Jim Nelson of the existence of his agreement with the Patels, informing the Patels of his agreement with Jim Nelson, and discussing the matter with his broker.

Assuming all other requirements have been met, has a valid deed been created in the following cases? Angela Dell agrees to sell her farm to her friend Diego. The deed from Angela describes the property as "the old Dell place, including 100 acres, more or less." Does Diego have a problem?

Diego has a problem. The property description may be adequate, but only if there is no ambiguity as to the references parcel.

Identify the type of ownership interest in land: A renter has lived at 316 Iowa Street for 15 years on a month-to-month lease term. Although his rent has been increased every few years, the landlord has never drawn up a lease agreement. What kind of estate does the renter have in the residence on Iowa Street?

ESTATE OF TENANCY

Al, Sara, and Joe are all owners of Paradise Acres, a mountain retreat. They own a fee simple estate as tenants in common. Each has a one-third share of Paradise Acres. Gibbon Properties manages Paradise Acres. Who pays the management fee? Who gets the profits, if any?

Each of the tenants in common is responsible for one-third of the management fee. Each will take one-third of the profits, if any, after the management fee and expenses are paid.

Identify the type of ownership interest in land: The Middle Falls School has sole possession of Whiteacre on the condition that it is used for educational purposes.

FEE SIMPLE ESTATE subject to a condition subsequent

Identify the type of ownership interest in land: The town of Merry Meadows has a beautiful library building. The building is a former mansion that was donated to the town with the stipulation that it be used only as a library. What kind of estate does the town have?

FEE SIMPLE ESTATE subject to a condition subsequent

What type of deed would most likely be used in the following situations? Conveyance from grandfather to grandson in consideration of grandson's "love and affection"

Gift deed or Grant deed

Gladys Street sued Len Flimflam in a California court, claiming that Len had defrauded her of $100,000 in a real estate scam. Gladys won her lawsuit, and the judge awarded her damages of $100,000 plus interest. Len did not appeal the decision but has not volunteered any money to Gladys. Now what?

Gladys can file her judgment in any county in which Len has sufficient property to cover what she is owed. If Len persists in ignoring the judgment, Gladys can ask for a writ of execution to sell enough of his nonexempt property to cover her award.

What type of deed would most likely be used in the following situations? All-cash sale of a single-family residence

Grant deed

Harvey Lock, feeling no pain after six margaritas, gripes at a party that he is so fed up with his job he will sell his house to the first person who offers him a motor home in trade for it so he can fulfill his lifelong dream of visiting all 50 states. Sue Wilson offers Harvey her well-used "Minnie-Winnie" in exchange for his Beverly Hills home. Harvey, amid much laughter, accepts the offer and tells Sue to get the paperwork ready to sign the next day. Sue shows up at Harvey's the next day with her attorney. Now what?

Harvey, who only vaguely remembers the "deal" of the night before, can do one of two things. He can disaffirm the contract because he was intoxicated at the time and lacked the capacity to enter an agreement. Or he can thank Sue for the terrific motor home as he signs the deed that her attorney has prepared.

George married Helen in January 2008. In March 2010, Helen's father died, leaving Helen his condominium in Palm Springs. Who owns the condominium and in what form of ownership?

Helen owns the condominium as separate property.

Uncle Henry died without a will. Did he die testate? What is the name of the legal process by which his property will be distributed to his heirs?

Henry died intestate. The law of intestate succession will be enforced through the legal process known as probate.

Aria is very concerned that her neighborhood retain its quiet, well-maintained atmosphere. Herb, her neighbor, has his house up for sale. He promises Aria that he will require anyone who buys the house to care for it properly. Can he do that?

Herb could make the upkeep of the property a condition of the deed he gives his grantee (the buyer). He also could impose a covenant or restriction to that effect, but the condition, covenant, or restriction would terminate when the grantee conveyed the property. Practically speaking, Herb might have a difficult time finding a buyer willing to accept such an encumbrance.

Broker Al Teller knows that his neighbor Woody is trying to sell a small lot in the downtown area that is zoned for commercial use. Because of its size, the lot is worth about $5,000. Al offers to find a buyer if he is given a 10% commission. Woody does not make a commitment but says he will think it over. The next day at a Chamber of Commerce luncheon, Joe Everett mentions to Al that he is looking for a small lot downtown to open a sandwich shop. Al tells Joe about his neighbor's property, and Joe is enthusiastic. Later that day Al brings Joe to see the lot, and Joe states that he is willing to offer $4,500 for it. Al brings Joe's offer to Woody. If Woody accepts Joe's offer, will he have to pay Al a commission?

If Woody accepts the offer he will ratify an agency agreement with Al, on the terms discussed earlier.

A married couple own Sunny Acres as community property. The couple have no children. Who will have title to Sunny Acres if one of the spouses dies without a will? If the couple have eight children and one spouse dies without a will, who will receive title to Sunny Acres?

If a spouse dies without a will specifying otherwise, that spouse's half of the community property, including Sunny Acres, will go to the surviving spouse, regardless of the number of children. The surviving spouse already owns the other half of Sunny Acres, because it is community property. When the first spouse dies, the other surviving spouse will own all of Sunny Acres.

Jim and Janet Day make an offer, through broker Luis, to purchase the Castle estate. The Days love the furniture in the family room and want to purchase that as well. Their offer is countered by the Castles, and after considerable negotiation a purchase price of $347,000 is agreed on. Somewhere along the line, the request for the family room furnishings is omitted, and the signed purchase offer does not include them. What can the Days do?

If the omission was inadvertent (a mistake), the Days may be able to reform the contract to conform to the understanding of the parties. A separate agreement and bill of sale for personal property, stating at least a nominal consideration (such as $10), is preferable.

Broker Bob is the exclusive agent for the O'Connors, who are selling a four-unit apartment building. The MLS has not been authorized and is not being used, although the property is being advertised for sale. If a cooperating broker brings in a buyer, what is the relationship of that broker to the O'Connors and Broker Bob?

In this case, a cooperating broker would be the subagent of Broker Bob and have no direct relationship with the O'Connors.

What form of ownership does each person have in the property described? Jane and her brother own a farm and have a right of survivorship.

JOINT TENANCY

Jessica and Sophie are cousins. Ten years ago they bought a house as joint tenants. Their deed did not include the words "with right of survivorship." Sophie married Trevor and moved out of the house she shared with Jessica. Before Jessica and Sophie could sell the house, as they had agreed, Sophie died unexpectedly. Who owns the house?

Jessica is sole owner of the house. Jessica and Sophie had taken title as joint tenants. Because one of the characteristics of a joint tenancy in California is the right of survivorship, those words do not need to be written into the deed transferring title to the joint tenants. Even if Sophie had made a will leaving all of her property to Trevor, the will would be ineffective as to her share of property held in joint tenancy.

Max owns Blackacre but does not want Jose to know. One day, when Max, Jose, and Carlo are together, Jose asks Max and Carlo if one of them owns Blackacre. Carlo says he owns Blackacre, and Max doesn't object. Jose then pays Carlo for Blackacre. Who owns Blackacre?

Jose owns Blackacre. Max is equitably estopped from denying Jose's ownership. By his conduct, Max allowed Jose to believe he was buying Blackacre from Carlo. Max will be left with an action for damages against Carlo, who has pocketed the money Jose paid for Blackacre.

Identify the type of ownership interest in land: Dennis has sole possession of Blackacre for as long as he lives.

LIFE ESTATE

Linda and Sheila, twin sisters, own a house as tenants in common. Linda wants to sell her share but can't find a buyer, and Sheila doesn't want to sell. What can Linda do?

Linda can bring a partition action in court. The court will sell the house unless the property can be divided into two equal parcels, and it will distribute the proceeds to the two sisters.

Aria has decided to move to Alaska and give her home in California to her nephew. Aria is very concerned that the neighborhood's appearance be kept up for the benefit of her old neighbors. Her deed to her nephew stipulates that she must approve any future transfer of the property. Can she do that?

Mary cannot impose such a condition on her nephew's ownership of the property because it is a restraint on his free alienation of the property-that is, his right to sell it.

Let's say you want to find the total area of a parcel described as the North 1/2 and the Southeast 1/4 of Section 17.

Method #1 640 x ½ = 320 acres 640 x ¼ = 160 acres 320 + 160 = 480 acres The described parcel has 480 acres. Method #2 In the problem above, you would go through the following steps. (1/2 + 1/4) x 640 acres = (2/4 + 1/4) x 640 acres = 3/4 x 640 acres = 480 acres Method #3 If all else fails, you can draw the equivalent section(s), mark the parcels to be added, determine the number of acres in each parcel, and total the number of acres indicated.

Mel Muller owns 100 acres of undeveloped land in San Bernardino County. Hearing that oil might be found in the area, Mel drills a well under his property. He finds nothing, but he thinks he will be successful if he drills a well slanted to reach under his neighbor's ranch. Can Mel do so?

No, because Mel can take from the earth only what is directly under his own land. Mel can capture a fluid substance, such as oil, only when it is found within the boundaries of his property.

Jerry Kramer decides to make an all-cash offer on the Hardecker house. He fills out a standard offer to purchase, giving the street address of the property, and notes that the selling price is to be "agreed to by the parties." If Hardecker signs the contract, can Kramer enforce it?

No, because no purchase price was specified.

Angel knows that "squatters" have moved onto the "back 40" of his ranch and have even put up a fence, but Angel is too busy to do anything about it. Even after he hears that the squatters are building a house, Angel doesn't object. He feels smug that somebody is stupid enough to build a house on his land-and pay taxes, to boot. Six years later, Angel tries to sell his ranch, but the buyer says that he can't get a loan because Angel doesn't have clear title to all of the land. Angel brings an action to quiet title in court. Will he win?

No, because the "squatters" have perfected title to the "back 40" after five years of adverse possession.

Ignacio, a married man, signs a contract to sell the mountain cabin he owns as community property with his spouse, Manuela. Manuela is away on a business trip at the time the contract is drawn up and isn't interested in selling the cabin anyway. Can the buyer enforce the contract?

No, because the cabin is community property. Both spouses must sign any instrument of sale.

When Jerry Kramer is shown the Hardecker house in Pasadena, the listing broker tells him the house was designed by Frank Lloyd Wright. Kramer immediately decides to buy the house. He questions Hardecker on the house's designer, and Hardecker also tells him the designer was Frank Lloyd Wright. Kramer makes an offer that is accepted by Hardecker. Before the sale closes, Kramer checks the city records and learns that Floyd White designed the house. Does Jerry have to go ahead with the sale?

No, because the identity of the house's designer, which would have a significant impact on the purchase price in this case, was misrepresented to him.

Frank Rice, a licensed real estate broker, lists the Marlow house for sale. If Frank becomes ill and is unable to carry out the terms of his agreement, can he delegate that responsibility to another broker?

No. Although Frank can delegate some of the responsibility of the listing agreement, he cannot turn over complete authority to someone else without the express consent of his principal. Frank's personal efforts and supervision of others in carrying out the terms of the listing agreement are what the seller bargained for, and Frank cannot transfer those responsibilities to someone else.

George is a partner in Realty Agents, Inc. The partnership leases office space in four buildings. George needs storage space for some furniture he is giving his son. May he store the furniture in the partnership's office?

No. As a partner, George may not use partnership property for personal purposes.

Broker Rice has been given a deposit check for $2,000 by a buyer. He neglected to tell the buyer to whom to make out the check, and the buyer made the check out to him. The buyer's offer is accepted. Broker Rice deposits the check in his personal account and immediately writes out his own check to the title company that will handle the sale. Has broker Rice acted correctly?

No. Broker Rice has commingled his customer's funds with his own. Rice is subject to sanctions by the Real Estate Commissioner. Depending on when he noticed the error, Rice should have returned the check to the buyer or placed it in his trust account or an escrow depository if one already was stipulated.

George and Helen paid $746,000 for their house in 2012. In 2016, the city offers them $746,000 for the property. Do they have to accept?

No. George and Helen are entitled to the fair market value of their home, which may have appreciated from its initial purchase price. On the other hand, if property values have decreased since they purchased their home, George and Helen would probably be smart to accept the offer.

Assuming all other requirements have been met, has a valid deed been created in the following cases? Gerald Stone is selling Greenacre, the family estate. Gerald is out of the country at the time the sale is to be closed but phones the broker handling the transaction to tell her to go ahead with the sale and deliver possession to the buyer. Gerald intends to sign the deed when he returns.

No. No valid transaction can take place unless and until the grantor signs the deed.

The asking price for the Barino residence is $495,000. John and Jane Murray offer $488,600 for the house. George Barino makes a counteroffer of $492,000. John and Jane reject the counteroffer. George decides $488,600 is not such a bad offer after all and signs the original purchase contract, returning it to the Murrays. Can he do that?

No. Once George made a counteroffer, he effectively turned down the Murrays' original offer. Of course, the Murrays can treat George's "acceptance" as an invitation to remake their original offer and proceed with the transaction on those terms.

Maria Burns wants to rent an apartment. She fills out a rental application at Ocean Villas and is told that she can expect to hear back in two days. The next day, Maria learns that her company is moving its office to Modesto. News of the move appears in the newspaper the same morning and the manager at Ocean Villas sees the article. He phones Maria's place of business and learns that all employees, including Maria, will be relocating to Modesto. Before Maria can get back to Ocean Villas to withdraw her rental application, the manager signs it and faxes a copy of the rental agreement to her. Does the manager have a new tenant?

No. Once he learned of Maria's change of circumstance from a reliable source and verified it with a phone call to her place of business, the manager had sufficient notice of Maria's intended revocation of the application.

A widower died, leaving a life estate in his home to his sister and the remainder to his only son. The sister had been living in an apartment and was very pleased to have the use of the house. The son, upset when he found out what his father had done, insisted on being allowed to live in the house, for it was "really" his. Does the son have that right?

No. The deceased's sister, the life tenant, has the sole right of use and possession of the property while she lives.

A homeowner has remodeled her family room and installed a wood-burning stove. The heavy cast-iron stove sits on a brick base, and the chimney vents through a special opening in the roof. Unexpectedly, the homeowner is transferred by her company and decides to sell her house. The buyers and seller sign a contract of sale that does not specifically mention the stove but does include "all fixtures" in the sale. Can the seller take the stove with her?

No. The installation, permanence, and use of the stove all indicate it is a fixture that should stay with the house. If Mary (or her broker) had thought of it beforehand, she could have stipulated in the contract of sale that the stove would not be included and that Mary would repair any damage caused by its removal. The expense of doing that would probably be greater than the cost of a new stove, however.

No. There is no written agreement between the Simpsons and broker Bonita.

Lester is an excellent surveyor, but he has a careless office assistant. Lester neglected to note that his assistant transposed some measurements on the plans for the Skyway Office Tower. As a result, the foundation for the tower was poured 11 inches inside an adjacent vacant lot's boundary line, along the entire 200-foot width of the building. The building was completed within two years. One year after that, the owner of the vacant lot went forward with her development plans and discovered the unfortunate mistake. Can she force the owner of Skyway to demolish the 50-floor office building (or at least the 11 inches that extend onto her property)

No. To do so would be prohibitively expensive, and courts will not require such an uneconomic outcome, particularly when the cause was inadvertent. The Skyway owner probably will have to pay damages for the encroachment, however. The amount of damages owed could be substantial, particularly if the vacant lot owner's plans must be extensively revised.

Assuming all other requirements have been met, has a valid deed been created in the following cases? Uncle Anthony decides to make a present of his Hillsborough estate to his nephew Richard. He prepares a deed, reciting "love and affection" as the consideration, and places the deed in an envelope marked, "To be opened upon my death." He then places the envelope in his safe-deposit box. Will Richard own the estate when his uncle dies?

Perhaps, but title to the estate will pass through Uncle Anthony's will, if he has one, or by the laws of intestate succession, and not by the deed he prepared. The deed is invalid because it never was delivered to the grantee.

XYZ Realty has listed the Rey house for sale. Mabel Perkins, an aunt of the broker who owns XYZ Realty, wants to make an offer on the Rey house. Can XYZ take the offer to the Reys?

Yes, but the relationship of Mabel Perkins to the broker must be disclosed to the sellers first, regardless of the terms of the offer.

Jim and Janet Day want to buy a house in Woodville. They contact broker Charles Charton, who shows them several houses, including one near a major thoroughfare. The Days talk to the owner, who tells them that the traffic noise will be reduced considerably after the city puts up a cement block wall along the property closest to the roadway. Broker Charton, who is present, knows that such a wall has been proposed to the city council but has not yet been approved. He does not contradict the owner, however. The Days make an offer, which is accepted. Before the close of the sale, they check with the city authorities to find out when the soundproofing wall will be erected. The Days discover the truth. Can the Days back out of their deal with the seller?

Probably, for the seller misrepresented the condition of the property—that the noise problem would be alleviated. Broker Charton knowingly went along with that misrepresentation, for he was present when it was made but did not object. Broker Charton's conduct could be reported to the Real Estate Commissioner.

What type of deed would most likely be used in the following situations? Deed from possible former co-owner of property

Quitclaim deed

What type of deed would most likely be used in the following situations? Deed to someone who has just paid off a home loan

Reconveyance deed

What form of ownership does each person have in the property described? Fred, a married man, inherited a cattle ranch from his uncle. Fred is the uncle's sole heir.

SEPARATE PROPERTY HELD IN SOLE OWNERSHIP

What form of ownership does this example illustrate? Joseph Marine owns World Wide Real Estate. Joseph, a licensed real estate broker, is the only owner of World Wide and reports company income on his personal tax return.

SOLE PROPRIETORSHIP

What form of ownership does this example illustrate? Mountain Properties is a real estate syndicate of 127 investors. Only five members of the syndicate are allowed to participate in investment decisions.

SYNDICATE HELD AS A LIMITED PARTNERSHIP

A property's owners are selling a buildable lot in Palm Springs, and want to receive $143,000 after the commission and all costs are paid. Broker Bob signs a net listing agreement with the owners, specifying that they are to receive $143,000 for their property. What is Broker Bob's commission if the property is sold for $158,000? For $147,000?

Selling Price: $158,000 $147,000 Net Listing Price: -143,000 -143,000 $15,000 $15,000 Cost of Sales: -2,000 -2,000 Broker's Commission: $13,000 $2,000

What type of deed would most likely be used in the following situations? Deed received after purchase of property at a court-ordered sale

Sheriff's deed

Identify the type of ownership interest in land: In her will, Chau left her residence in Palm Springs to her nephew, Simon, for the life of Simon's sister, Annette. On Annette's death, the home is to go to Annette's daughter, Yvonne. What kind of estate does Simon have? What kind of estate does Yvonne have? What happens if Simon dies before Annette does?

Simon has a LIFE ESTATE. Yvonne has a REMAINDER while the life estate is in existence. If Simon dies before Annette, his heirs acquire the life estate until Annette's death. On Annette's death, Yvonne has fee simple estate.

Harold and Cynthia Potter, spouses, own a houseboat docked at Lake Shasta as community property. Do they qualify for a homestead exemption?

So long as the houseboat is their principal dwelling and place of residence, it can qualify as Harold's and Cynthia's homestead.

What form of ownership does each person have in the property described? Cal and Lou, both single men, bought a three-story Victorian home in Sacramento. No form of ownership was specified.

TENANCY IN COMMON

What form of ownership does each person have in the property described? Helen is a partner in Real Estate Consultants, which owns a shopping center.

TENANCY IN PARTNERSHIP

What form of ownership does this example illustrate? When Grandpa Peter died he left his farm to his grandson, but his grandson will not receive title to the farm until he is 25. In the meantime, Cattlemen's Bank will manage and hold title to the property.

TRUST

Broker Bob is engaged by Ramon and Rosa Garcia to sell their home. Broker Bob is a special agent for that purpose. When Broker Bob sells the Garcia home, his agency relationship with the Garcias will terminate. The Garcias, popular magicians who are planning a move to Las Vegas, employ a business manager and give that person full authority to carry out their financial affairs. What kind of agent is that person?

That person is a general agent, because of the broad authority given to the agent by the Garcias.

A week before closing, Jim and Janet Day, who have reconciled their differences, decide against buying the Castle estate. What recourse do the Castles have when informed of the Days' decision?

The Castles can agree to rescind their contract and either keep or return the Days' earnest money deposit. If the Castles keep the deposit, the Days could sue for its return. The Castles could agree to release the Days from their contractual obligation but retain the security deposit as consideration for the release. Or the Castles could sue the Days for specific performance. Most likely, the Castles will sell the property as soon as possible to someone else and sue the Days for any loss in value that might result.

Jim and Janet Day make an offer to purchase the Castle estate. The offer is accepted, and the closing of the sale is to take place in two months. Before the closing date, Jim and Janet decide to dissolve their marriage and live apart. Alone, neither can qualify for a loan to purchase the Castle estate. What can Jim and Janet do to get out of their offer of purchase?

The Days should immediately inform the Castles, who may agree to rescind the contract. If not, the Days could refuse to perform on the grounds of impracticability but should consult an attorney first.

Brad and Richa Turner want to buy a house. They make an offer to purchase the Markham house for $365,000. Ted Markham, who is single, accepts. Before the sale is closed, Brad Turner is seriously injured on the job. The Turners can no longer expect to comfortably make the house payments. What can they do?

The Turners can ask Ted Markham to agree to rescind the contract. If he refuses, they can ask him to release them from their contract obligation on payment of some consideration, perhaps the earnest money deposit. The Turners also could refuse to go ahead with the sale, claiming impracticability of performance; if they succeed, they may be liable for damages.

The Wilsons are in the process of buying the Mulholland farm. Their offer was accepted, and they have received a loan commitment from a lender. Before the closing, however, the Mulhollands inform the Wilsons that they no longer wish to sell their property "for sentimental reasons." What recourse do the Wilsons have?

The Wilsons can agree to rescind the contract if their deposit is returned. The Wilsons could sue for specific performance. Alternatively, they could sue for any damages they may have incurred as a result of the sale being canceled.

Harvey Anderson bought Whiteacre after he married Anna, but Harvey used money from the sale of his separate property to do so. When Harvey sold Whiteacre, he signed the deed as Harvey Anderson, a married man. His spouse did not sign the deed. The grantee of Whiteacre questioned the validity of that conveyance when years later a would-be purchaser was unable to acquire title insurance.

The cloud on the title of the present owner of Whiteacre was cleared by having Anna Anderson sign a quitclaim deed, relinquishing whatever claim she might have in the property.

The Harleys purchased a home from the Davidsons, closing the transaction on March 15, 2007, and moving into the home a week later. In a period of unusually heavy rainfall in November 2009, the Harleys experienced water damage to the living room ceiling. When part of the ceiling was removed, extensive prior water damage and earlier repairs were revealed. The Harleys homeowners' insurance policy does not cover water damage. Do the Harleys have any recourse against the Davidsons?

The condition of the living room ceiling indicates that the Davidsons may have concealed earlier water damage. The Harleys have up to three years from the discovery of the possibly fraudulent conduct to sue the Davidsons to recover the cost of repairs to the ceiling.

Ted gives a deed to Nicole, telling her it will take effect on his death. Is the deed valid?

The deed is not a valid conveyance, even at Ted's death. Delivery means exactly that—the grantor holds nothing back. There can be no conditions.

The Murrays offer to purchase the Barino residence. Their offer to purchase describes the property as the George Barino residence on Gray Street, Meadowville, Yolo County. Is this description adequate? Is it advisable?

The description could be adequate if George Barino owns only one house on Gray Street. It is not advisable, however. Not only could George Belton own more than one house on Gray Street—there is no description of the land involved.

A developer sold a house located at 491 Rose Avenue, which is lot 28 of block 15 of the Tice Elms Subdivision, Walnut Creek, Contra Costa County, California. The subdivision map was recorded August 16, 1968, and can be found in book 38, on page 106. How would the property be described by the developer and in the deed to the buyer?

The developer would describe the property as 491 Rose Avenue, Tice Elms Subdivision, Walnut Creek, Lot 28, Block 15, Contra Costa County, California, as shown in Book 38, Page 106, recorded 08-16-1968. The deed the buyer receives would describe the property as Lot 28 Block 15, Tice Elms Subdivision (as recorded August 16, 1968, Book 38, Page 106 of maps), City of Walnut Creek, County of Contra Costa, State of California.

A rancher gives a 1,000-acre parcel or rural land to the church youth fellowship "on the condition that" there be no sale or manufacture of alcoholic beverages on the property. Years later, the rancher visits property and is surprised to find a reception in progress and a "no host" bar at which drinks are being purchased. What can the rancher do?

The fellowship has broken the condition subsequent to its fee simple right of ownership. The rancher can file a notice of his intent to reenter the property and claim possession or he can bring a legal action against the group.

On Monday, January 6, Sally Berman agreed to a one-year lease on an apartment at Shady Acres. The lease term began on Monday, January 13. Is the oral lease contract valid? Can the management of Shady Acres enforce the oral contract if Sally moves out before the end of the lease term?

The oral lease for a term expiring more than one year from the date of agreement is unenforceable.

Lydia and Miguel own a small resort on the Colorado River with about 200 feet of lawn on a small bluff overlooking the river. Following torrential rains and flooding, Lydia and Miguel find they have only 130 feet of lawn area. What happened to the 70 feet of ground? What is this process called?

The other 70 feet of the property were lost in the flood by a process called avulsion.

Harvey returned home to California after a six-year absence. Harvey went directly to his empty house, a palatial building on 20 acres of land. While touring his property the next morning, Harvey was surprised to find a new power line running across the back of his land, a conspicuous and unwelcome addition. Harvey also noticed a dirt road cutting across a corner of his land to the highway from a little house just off his property. The little house in this exercise is located on a roadway. Can its owner create a new road across Harvey's property? How?

The owner of the little house may have acquired an easement by prescription across Harvey's land, if he has used the new road continuously for five years and fulfilled all of the other requirements for such an easement.

In 2016, George and Helen are notified by the city that their property is being considered as the site of a new sports arena. They protest the city's plans at a public hearing but are unsuccessful in halting the construction. Can the city take their house?

Yes, by the power of eminent domain.

Harvey returned home to California after a six-year absence. Harvey went directly to his empty house, a palatial building on 20 acres of land. While touring his property the next morning, Harvey was surprised to find a new power line running across the back of his land, a conspicuous and unwelcome addition. Harvey also noticed a dirt road cutting across a corner of his land to the highway from a little house just off his property. Can the power company put up such a line? By what authority?

The power company could put up its line if it already owned an easement over Harvey's property, or if that part of Harvey's property was condemned for that purpose. Of course, Harvey would have to be sent a notice of any condemnation proceeding, but it is up to Harvey to make sure that his mail is forwarded so that he receives any such notice.

All of the salespeople at ABC Real Estate work strictly on commission. No deductions are made from their commissions, which they share with ABC. They have no office duties and are billed for any use of secretarial staff, phones, conference rooms, and so on. They do receive referrals from ABC, which they can accept or reject. Describe the relationship between ABC Real Estate and its salespeople.

The salespeople of ABC Real Estate are independent contractors.

CPU Home Loans has a staff of 12 salespeople, all of whom are assigned office time and all of whom are paid a salary plus a commission on sales. CPU deducts income taxes and Social Security from the salaries of all salespeople and also makes payments for unemployment insurance and workers' compensation. For purposes of work assignments and compensation, are the salespeople of CPU Home Loans employees or independent contractors?

The salespeople of CPU Home Loans clearly are employees.

Assuming all other requirements have been met, has a valid deed been created in the following cases? Jed is a high-powered real estate investor. Over the phone he persuades Sol to sell him a 20-unit apartment building in San Diego. Jed is anxious to get the property and tells Sol to convey the property to him over the phone while his secretary takes notes. Jed tells Sol, "Your word is as good as gold."

There has been no conveyance. A deed must be in writing.

Glenda Golden is an unemancipated minor. Her grandparents, who have moved to Retirement City, transferred title to their ranch to a trust established for Glenda, their only heir. Glenda (who is not sentimental) immediately approaches Helen Silver, leading salesperson for XYZ Realty, about selling the ranch. Helen knows the property will sell quickly. Should Helen take the listing?

There is no listing to take. Glenda has no control over the ranch, since title is held in trust for her. Even if Glenda did have title, because she is mentally incompetent she does not have the legal capacity to enter into a contract for the sale of real estate.

Tim Brown holds a mortgage on the house of Sara Nelson, who is having financial difficulties and has missed all of her mortgage payments for the past six months. What can Tim do?

Tim can bring a foreclosure action to force the sale of the property.

What type of deed would most likely be used in the following situations? Loan secured by deed

Trust deed

A developer wants to buy the parcel described in the last example but doesn't want to pay more than $5,000 per acre. What is her maximum purchase price?

We know that a section has 640 acres, so we can multiply 640 acres by the fractional parts of the section that are involved. Section 8: 640 x (1/2) = 320 acres Section 9: 640 x (1/4) = 160 acres The total acreage is 320 plus 160, or 480 acres. At $5,000 per acre, the maximum price the developer will pay is $2,400,000.

Marcy owns a small house in La Jolla, California. Although Marcy's house is on a quiet, meandering residential street, she would prefer to have a more direct way to reach the commercial street that lies on the opposite side of the property behind hers. One day, Marcy discovers that there is just enough room along the side of her neighbor's lot for her to drive her car across her neighbor's property to the commercial street. She proceeds to do just that and does so at least once a day for the next six years. Marcy and her neighbor never discuss her use of what has taken on the appearance of a driveway. One day, when she drives home after work, she discovers that her neighbor has erected a chain link fence across the front of his property, blocking the entrance to the driveway she has been using. Does Marcy have the right to object?

Yes, Marcy can object to the fence her neighbor has built. By her continuing use of the driveway for more than five years, Marcy has acquired an easement by prescription to that portion of her neighbor's property. The neighbor may build a fence, but there will have to be a gate so that Marcy can have access.

Real estate broker Luis hires Sally and agrees to pay her a salary as well as a commission on sales she makes. When showing a house, Sally carelessly neglects to lock the back door. Before the owner returns, someone enters the house and steals a video game player. Is broker Luis liable for the owner's loss?

Yes, because Sally was acting within the scope of her employment while showing the house.

XYZ Realty has an open listing agreement with the Carters. XYZ brings to the Carters a buyer who will pay their asking price and is otherwise qualified financially. While the Carters are considering the offer, a good friend offers to buy their property for $3,000 less than the asking price. Because they will come out ahead if they do not have to pay a sales commission, the Carters accept the offer. Do the Carters owe the XYZ broker a commission?

Yes, because the first acceptable offer came through XYZ Realty. If the offer through XYZ was not at the sellers' original terms, they would be free to accept their friend's offer without obligation to pay a sales commission.

Smith tells Jones that Broker Bob is selling the Smith home. Jones brings an offer to Broker Bob, who prepares a written offer to purchase, listing himself as the broker and stipulating a commission rate. Smith can accept the offer by signing it. If he does so, will an agency be created?

Yes, if Smith accepts the offer, which lists Broker Bob as the selling agent entitled to the sales commission. Smith's acceptance by signing the agreement would satisfy the requirement for a writing.

Ann and Anthony Rush purchased a house in Montrose Manor, which is governed by the Montrose Homeowners Association. Ann and Anthony are aware that there are CC&Rs on their property. They have seen the latest property maintenance standards, which are the ones that appear below. Ann and Anthony have decided to re-landscape their property, so they are "letting it go" until next spring. They now have more weeds than plantings. Do they have a problem? Dwellings: - Building exteriors will be maintained and painted as needed. Prior to altering an existing paint color, a written request and color samples must be reviewed and approved by the Architectural Committee. - Appurtenances, including but not limited to decks, overhangs, lights, attic ventilators, gutters, downspouts, and solar heating equipment, must be properly maintained and promptly repaired. - Broken windows, screens, garage and entry doors, and fences must be repaired or replaced within 30 days of breakage Property: - All lots must be landscaped. Landscaping of every kind and character, including lawn, shrubs, trees, and plantings, must be trimmed, cultivated, weeded, and maintained continuously to provide a safe, clean, and groomed appearance. - Trees and shrubs that overhang on public sidewalks and streets must be trimmed to provide a minimum clearance of seven feet from grade. Open strips of land between fences and sidewalks are the responsibility of the property owners and should be kept neat and weeded. - Accumulations of rubbish, wood, or any other household or garden debris visible from other properties or the street will not be allowed for more than seven days or the next scheduled trash pickup. - Prolonged repair of automobiles on the street or driveway is prohibited. Miscellaneous: - Any other condition not covered above that contributes to the general appearance or disrepair of a property will be addressed by the association on an individual basis.

Yes, the Rushes do have a problem. The property standards specify that all properties must be landscaped, "trimmed, cultivated, weeded, and maintained continuously." The Rushes can expect to hear from the homeowners association soon.

Sara and Sam Schuster decided to move from Laguna Beach to Boise and listed their home for sale with broker Bonita Fish. After an extended vacation in Boise, the Schusters decided to stay in Laguna Beach and notified Fish that they were taking their house off the market. Can they cancel the listing agreement?

Yes, the Schusters can unilaterally cancel the listing agreement. Broker Fish must decide whether she wants to charge the Schusters for any expenses she incurred in marketing their property. If Fish had already found a ready, willing, and able buyer for the Schuster house, she could also insist on payment of her commission on the transaction.

Speedy Service Station has two hydraulic lifts in place in the repair bays. If Speedy's owner decides to sell the station, will the hydraulic lifts be included?

Yes, the hydraulic lifts will be included in a sale of the property (in the absence of an agreement to the contrary). Such fixtures are ordinarily permanent installations.

A family owns a vacation cottage on the Russian River. Over the years, the river has deposited soil at the water line. The property's shoreline now extends one foot farther than the last recorded distance to the nearest landmark, a marker in the roadway. Has there been any increase in the square footage owned by the family?

Yes. A survey would show that the total property has increased due to accretion.

Hearth Homes is offering an extra incentive to agents to attract more buyers to the newest Hearth Homes subdivision. For every sale that is closed before Labor Day, the selling agent will earn an extra $1,000 commission. This offer is advertised in a flyer sent to each brokerage office. Broker Luis brings a client to the Hearth Homes subdivision, and the client purchases a home. The sale is finalized on August 31. Is Luis entitled to the $1,000 bonus?

Yes. Because broker Luis met the terms of the unilateral offer, he is entitled to the extra compensation.

Sally and Tom Benson have listed their house at Lake Shastina for sale with Broker Luis. The asking price is $165,000, and the listing is for three months. Within two months Broker Luis procures an offer from Mary Ivers for $163,750. All other terms are as stipulated by the Bensons, and Broker Luis has determined that Ivers should qualify for the necessary loan. The Bensons accept the offer, and the sale is carried out. Has Broker Luis earned his commission?

Yes. Broker Luis has produced a ready, willing, and able buyer who made an offer that was acceptable to his clients.

Lydia lists her residence for sale. Broker Reina has an MLS clause in her exclusive authorization and right-to-sell listing agreement with Lydia. If broker Bob, a member of the MLS, finds a buyer, does broker Reina deserve a commission?

Yes. Broker Reina is entitled to the listing broker's share of the commission.

Wanda and William South moved to Imperial City but never notified the local waste disposal company to start service at their address. The Souths leave their trash out at the usual pickup time, and it is removed by the disposal company. Can the waste company bill them for the service?

Yes. By making use of the waste disposal company's service, the Souths made an implied contract to pay for the service.

Jim is the neighbor, good friend, and accountant of Clara, who is 82 years old and legally blind. Jim wants to buy Clara's condominium. He tells her that property values are going down, and she should sell her unit while she has the chance. Jim then offers Clara $200,000 for her condo, about $150,000 less than it is worth, based on what similar properties have sold for recently. Because Clara paid $43,000 for her condo in 1977, she is very impressed with the offer and accepts. Shortly after the offer is accepted but before the sale is closed, Clara is visited by her niece. Clara's niece informs her of what a poor deal she has made. Can Clara do anything about it?

Yes. Clara should contact an attorney immediately to disaffirm the contract with Jim. She should have no problem doing so, because the offer Jim persuaded her to take is so obviously inadequate. Clara's attorney should also advise her that it may be in her best interest to seek another accountant.

George decides to leave his half of the community property he owns with Helen to his sister Davida and has a will drawn up to that effect. When George dies, Helen is surprised when Davida claims to own half of "her" home. Can George do that?

Yes. Community Property may be willed by its owner.

Richard and Roberta Simpson have decided to sell their condominium in Long Beach. They talk to Broker Bonita, who does a market analysis for them and recommends a selling price in the $380,000 to $400,000 range. Richard and Roberta tell Broker Bonita they will think it over, but if they decide to sell, they will want to ask for $410,000 so that they will have at least $380,000 left after paying the sales commission and closing costs. The next day Broker Bonita calls the Simpsons and tells them that an out-of-town buyer, anxious to close a deal on a condominium, is in her office and would like to see their home. The Simpsons allow Broker Bonita to bring the prospective buyer through their condominium. The out-of-town buyer makes an offer, through Broker Bonita, of $395,000. The real estate purchase contract, signed by the buyer and Broker Bonita, lists Bonita as selling broker, to receive a 6% commission on the sale. After talking it over, the Simpsons decide the offer is a good one, and they accept it by signing the contract. Is Broker Bonita the Simpsons' agent?

Yes. Now there is a written document, signed by both the Simpsons and broker Bonita, designating Bonita as sales agent. Because a selling price and commission rate had been discussed earlier, unless a different arrangement was specified in the contract, the earlier terms will apply. The Simpsons have ratified Bonita's conduct in bringing a prospective buyer to them.

Real Estate Principles 10a Online

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