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50 Cards in this Set
- Front
- Back
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An acceleration clause gives the lender the right to:
A) demand the entire amount owed due and payable upon default. B) adjust the amount of the payments if the interest rates increase. C) increase the interest rate upon assumption. D) charge a pre-payment penalty if the loan is paid off before maturity. |
The correct answer is "A - demand the entire amount owed due and payable upon default. " This is a standard clause to protect the lender's interest in case of a sale (when the loan would no longer be secured by the property), default on payments (Declaring the total amount due is a first step in the foreclosure process.) and other defined circumstances.
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A trust deed gives the lender a right to request that the trustee perform certain tasks in order to fulfill the terms of the trust. The trustee may take action in those circumstances because he holds:
A) naked title. B) equitable title. C) reversionary title. D) public title. |
The correct answer is "A - naked title. " Since the trustee in this case is acting on behalf of the true owner of a property, he holds a "naked title," meaning a title without the usual rights of ownership.
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The instrument that pledges real property as security is:
A) a mortgage or a deed of trust. B) a recorded deed. C) a promissory note. D) a properly executed will. |
The correct answer is "A - a mortgage or a deed of trust. " An old English term derived from two French words ("dead pledge"), the terms mortgage and deed of trust are often used interchangeably.
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Just before the sheriff begins the auction sale of foreclosed property, the delinquent borrower offers to pay the outstanding debt and all costs incurred because of his default. In such a case:
A) The sale must proceed and the property sold to the highest bidder. B) The borrower may pay the judgment and reclaim his property under equitable rights of redemption. C) The borrower may pay the judgment and reclaim his property under the statutory rights of redemption. D) The lender may choose to either accept payment or proceed with the auction. |
The correct answer is "B - The borrower may pay the judgment and reclaim his property under equitable rights of redemption. " Legally, actions that include "equitable" as part of their description, such as "equitable rights of redemption," refer to the inherent fairness of the action.
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Broker Baxter was asked by a purchaser to explain a budget mortgage. His best answer would have been:
A) one you can afford. B) a mortgage with graduated payments. C) a mortgage with interest only payments. D) a mortgage with payments including principal, interest, taxes, and insurance. |
The correct answer is "D - a mortgage with payments including principal, interest, taxes, and insurance. " Until creative financing came along, virtually all mortgages were "budget" in that each monthly payment covered all costs associated with the loan.
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A subdivision developer obtained a loan to purchase twenty lots. What type of clause might she/he be required to agree to in the security instrument (mortgage or deed of trust)?
A) subordination B) partial release C) exculpatory D) safety |
The correct answer is "B - partial release " A partial release clause provides that as payments are made on an accelerated or greater than pro rata rate, specific lots in the subdivision will be partially released from the mortgage.
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Which of the following would be in violation of the federal Truth-in-Lending laws?
A) For sale, $500 down, payments $483.20 per month B) For sale, VA financing available C) For sale, assume large FHA loan D) For sale, seller will carry |
The correct answer is "A - For sale, $500 down, payments $483.20 per month " Regulation Z stipulates that once one financing aspect is advertised, all other aspects must also be disclosed. In this case, that would include the total cost of the property, the interest associated with the monthly payment and any other costs, such as association fees or common charges.
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An $84,000 loan at 10% annual interest had principal and interest payments of $737.16 per month. How much of the second month's payment would be applied to the principal?
A) $37.19 B) $37.47 C) $699.69 D) $700.00 |
The correct answer is "B - $37.47 " You must reduce this loan twice in order to discover the answer to the problem. Step 1 - $84,000.00 X 10% = $8,400.00 a year divided by 12 months = $700.00 a month interest. Step 2 - $737.16 principal and interest payment minus $700.00 =$37.16 principal paid the first month. Step 3 - $84,000.00 minus $37.16 = $83,962.84 principal balance at the end of the first month. Step 4 – Repeat the same process using the new loan amount. $83,962.84 X 10% = $8,396.28 interest a year divided by $699.69 interest a month. Step 5 - $737.16 principal and interest minus $699.69 = $37.47 principal paid the second month. Be very careful when completing a question like this that you don’t make the mistake of using the interest amount monthly for the answer. Look at answers C & D. – Answer B
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A house sold for $42,000. The buyer made a 20% down payment. Monthly interest on the loan was $252. What was the interest rate on the loan?
A) 7% B) 9% C) 13% D) 15% |
The correct answer is "B - 9% " 20% down means the buyer would be carrying a $33,600 mortgage. With a monthly payment of $252, the annual amount of interest paid is $3,024O… which is 9% of the principa and a 9% ratel.
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A buyer received an 80% loan. If the annual interest rate was 8% and the monthly interest paid was $500, what was the total sale price?
A) $75,000 B) $82,500 C) $93,750 D) $104,220 |
The correct answer is "C - $93,750 " At $500 per month, annual interest works out to $6,000. Since the rate is 8%, $6,000 is divided by .08 to yield the mortgage amount of $75,000. Since the loan represents 80% of the value, it's divided by .8 for a total home price of $93,750.
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Total interest paid on a 14-year straight note was $16,856 during the term of the loan. The annual interest rate was 8.6%. What was the loan amount?
A) $8,600 B) $14,000 C) $100,000 D) $196,000 |
The correct answer is "B - $14,000 " Total interest paid divided by the 14-year term yields an annual interest payment of $1,204. Dividing by the 8.6% rate shows the loan amount was $14,000.
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A buyer purchased an $80,000 house with an 80% loan to value ratio. The lender charged 3 discount points to the buyer. Including the down payment, how much must the buyer pay at closing?
A) $1,280 B) $1,920 C) $17,920 D) $18,000 |
The correct answer is "C - $17,920 " At 20%, the buyer's down payment was $16,000. Since each point is 1% of the $64,000 loan value ($80,000-$16,000), 3 points would be 3 x $640 or $1,920. Therefore the buyer's total downpayment costs are $17,920.
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A house sold for $95,000 with a sales commission rate of 7.5%. The listing broker received 50% of the total commission and the selling broker received 50%. How much would the selling salesperson receive if the selling broker kept 60% and gave 40% to the salesperson?
A) $2,137 B) $7,125 C) $3,562 D) $1,425 |
The correct answer is "D - $1,425 " With total commissions of $7,125, the selling and listing broker each receive $3,562.50. At 40% of the selling broker's share, the selling salesperson would receive $1,425.
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A broker was paid a commission of 6% of the first $60,000 of a sale price and 4% of all over $60,000. What would the sale price be if the total commission was $4,375?
A) $60,000 B) $79,375 C) $98,500 D) $19,375 |
The correct answer is "B - $79,375 " The broker's 6% commission came to $3,600 (.06 x $60,000). Subtracted from the total commission of $4,375, it leaves an additional balance of $775. Since that portion was paid at the rate of 4%, dividing $775 by .04 yields the home's second cost component of $19,375. Add that to $60,000 and the home's total selling price was $79,375.
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An owner of a six-family apartment complex pays the property manager an annual salary equal to 12% of the property's annual gross income. If the annual gross income is $ 140,000, the annual expenses are $65,000 and the capitalization rate is 10%, what is the property manager's annual salary?
A) 7,500 B) $8,700 C) $16,800 D) $750,000 |
The correct answer is "C - $16,800 " This question is full of red herrings. The only figures that count are the gross annual income of $140,000 and the property manager's salary of 12% of GAI, which yields annual compensation of $16,800.
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How much will the seller net after paying an 8% commission and paying expenses of $ 475 on a property that sold for $60,000?
A) $55,200 B) $54,725 C) $60,000 D) 59,525 |
The correct answer is "B - $54,725 " At 8%, commissions come to $4,800, plus the $475 in additional expenses. Subtracting those two figures from the $60,000 sale price gives the seller a total net of $54,725.
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A seller closed on his house on November 15, 2008. The annual tax bill for 2008 is $1475, which will be paid in arrears by the buyer. What is the seller's portion of the tax bill if the seller owns the day of closing, the taxes are based on a calendar year, and one uses the 360-day method?
A) $1,291 B) $1,414 C) $185.00 D) Nothing. The taxes were already paid |
The correct answer is "A - $1,291 " Daily proration: $1475 / 360 = $4.0972. Seller's days: January through October = 10 months x 30 days = 300 days; November 1-15 = 15 days; total seller days = 315. Seller's portion: ($4.0972 x 315 days) = $1,291
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A tenant rented a store to use as a real estate school at a base rent of $1,500 a month. Additionally, the tenant agreed to pay 3% of gross annual sales over $200,000. What were the gross sales if the total rent paid for the year was $30,000?
A) $400,000 B) $150,000 C) $600,000 D) $750,000 |
The correct answer is "C - $600,000 " Base rent amounts to $18,000 per year. Subtracted from the $30,000 total rent, it yields a further $12,000 that came from the 3% of sales portion of the agreement. $12,000 divided by 3% is $400,000, plus the first $200,000 that was exempt from the surcharge, means the company had total sales of $600,000.
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The gross income from an office building is $73,500 and the annual expense total is $52,300. If the owner expects to receive an 11% return on his investment, what is the value of the building?
A) $475,454.54 B) $668,181.81 C) $192,727.27 D) $125,800.00 |
The correct answer is "C - $192,727.27 " Net income is $73,500 minus $52,300 or $21,200. The value of the building is calculated by dividing net income ($21,200) by the rate of return (11%) which, in this case, is $192,727.27.
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The loss of value in any property, regardless of the specific cause, in an appraisal, is known as:
A) descent. B) functional obsolescence. C) physical deterioration. D) depreciation. |
The correct answer is "D - depreciation. " Depreciation refers to a GENERAL loss in value, as opposed to "functional obsolescence" or "physical deterioration," which refer to specific types of depreciation or losses in value. "Descent" is a term used in conjunction with inheritances, and is not related to the other terms at all.
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A person who has complete control over a parcel of real estate is said to own a:
A) leasehold estate. B) fee simple estate. C) defeasible fee estate. D) life estate. |
The correct answer is "B - fee simple estate. " Fee Simple, also known as fee simple absolute, is known as the highest degree of ownership. The other "estate" terms are all much more limited forms of ownership. A life estate expires over time, a leasehold estate has a definite term, and a defeasible estate is limited by a certain event happening.
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The law that requires real estate contracts to be in writing to be enforceable is the:
A) statute of frauds. B) statute of limitations. C) law of descent and distribution. D) parole evidence rule. |
The correct answer is "A - statute of frauds. " Under the Statute of Frauds, contracts for sale of real property must be in writing to be enforceable. This is to prevent FRAUD from occurring. Don't confuse this with the statute of limitations, which sets limits on the time in which actions may be brought against a person; constitutional law, which is the law arising from the federal and state constitutions; or descent, a term used in conjunction with inheritances.
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The effort that brings about the desired result in a real estate sale is known as:
A) procuring cause. B) principal. C) procuring broker. D) REALTOR. |
The correct answer is "A - procuring cause. " Procuring cause of sale is the effort that brings about the desired result--in this instance, a ready, willing, and able buyer. The other terms refer to people: A principal is the person for whom the broker works, while a REALTOR is a member of the National Association of REALTORS. The term "procuring broker" isn't a term used in real estate at all.
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A naturally occurring gas that is suspected of causing lung cancer is known as:
A) lead based paint. B) asbestos. C) radon. D) polychlorinated biphenyls (PCBs). |
The correct answer is "C - radon. " While each of these items is an environmental hazard, radon is the radioactive, odorless, tasteless gas produced by the natural decay of other radioactive substances. The rest of the items are not gas hazards, but solid ones: Asbestos is a mineral; lead-based paint is paint (as the name states); and PCBs involve electrical equipment.
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A claim or liability attached to a property is called:
A) a lien. B) an encumbrance. C) an easement. D) a buyer's claim. |
The correct answer is "B - an encumbrance. " Remember that an encumbrance is any claim against a property. Restrictions, liens, and buyer's claims (also known as a vendee's lien) are all FORMS of encumbrances.
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If a property is valued at $87,500 and assessed for 50% of its value, what are the annual taxes if the tax rate is 7.80 per $100 of assessed valuation?
A) $6,825.00 B) $5,608.97 C) $3,412.50 D) $3,187.75 |
The correct answer is "C - $3,412.50 " First divide $87,500 by 50% to find its assessed value and divide again by 100 to find the number of "per $100 of valuation" tax units. In this case, that's 437.5 units. To calculate the tax, multiply the number of units (437.5) times the $7.80 rate for a total tax of $3,412.50.
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A deed would be presumed to have been delivered when which of the following happened?
A) It was subrogated. B) It was notarized. C) It was recorded. D) It was signed. |
The correct answer is "C - It was recorded. " Since a deed transfers ownership to a new party, the fact that it is newly recorded carries with it the presumption it was properly delivered, which means title was properly transferred.
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Which of the following statements BEST shows the difference between an exclusive right to sell and either an open or an exclusive agency?
A) An exclusive right-to-sell agreement enables the seller to negotiate a commission; the others do not B) An exclusive right-to-sell agreement permits the seller to sell his house without paying a fee; the others do not C) An exclusive right-to-sell appoints only one agent; the others do not D) An exclusive right-to-sell guarantees the listing broker a commission if he/she, or any other cooperating broker, procures a ready, willing and able buyer under the seller's terms and conditions; exclusive agency and open listing do not provide the same protection |
The correct answer is "D - An exclusive right-to-sell guarantees the listing broker a commission if he/she, or any other cooperating broker, procures a ready, willing and able buyer under the seller's terms and conditions; exclusive agency and open listing do not provide the same protection " Exclusive agency, in fact, means that the seller will owe no commission if he finds his own buyer. Open listings are even riskier for brokers because they will lose the commission if the buyer or any other broker or salesperson provides a buyer.
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Which of the following events does NOT usually terminate a listing?
A) death of either the listing broker or seller B) expiration of the agreed upon time period C) foreclosure on the listed property D) death of either the selling broker or buyer |
The correct answer is "D - death of either the selling broker or buyer " The old joke, "death is no excuse," has some validity in real estate transactions. In this particular case, however, the matter is straightforward. Listing agreements are with firms and so survive the death of an individual, and the death of one buyer has no direct bearing on the listing agreement at all.
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An owner listed a farm with a broker. Although the owner did not mention it, the broker knew the owner was in poor health. What should the broker tell potential buyers?
A) Tell them of the need to sell to insure a quick sale. B) In order to sell quickly, tell them that the seller is ill (because death would cancel the listing). C) Tell them of the illness but NOT the need to sell. D) Don't tell them anything because it would reduce the seller's bargaining leverage. |
The correct answer is "D - Don't tell them anything because it would reduce the seller's bargaining leverage. " Disclosing the owner's health not only violates the broker's responsibility to help the owner get the best price possible for his property, it also violates his rights of confidentiality.
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In negotiating a sale, a buyer wanted an attached basketball goal to be included in the sale but did not want to pay extra for it. Which would BEST accomplish this?
A) Write up a bill of sale for the basketball goal. B) Make an oral agreement on the side for the transfer of the basketball goal. C) List the basketball goal as a fixture in the sale contract D) Arrange for the basketball goal to be used as security for the loan |
The correct answer is "C - List the basketball goal as a fixture in the sale contract " Since fixtures are automatically included in the sale price, and since the basketball goal is immovable and thus qualifies as a fixture, this is the best solution.
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A broker produces a supposedly ready, willing and able buyer. At closing, the seller is unable to provide marketable title to the property and the buyer cannot come up with the financing to purchase the home. Is the broker due a commission?
A) Yes, because the seller is the one who cannot produce marketable title. B) Yes, because he produced a ready, willing and able buyer. C) No, because he did not produce a ready, willing and able buyer. D) No, because he did not finish closing the transaction. |
The correct answer is "C - No, because he did not produce a ready, willing and able buyer. " By definition, "ready, willing and able" means having the funds in place to complete the transaction. Since that wasn't the case, no commission is due.
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Which of the following duties is NOT applicable to both residential apartment managers and condominium managers?
A) groundskeeping and maintenance B) purchasing supplies C) holding operating expenses down D) occupancy levels |
The correct answer is "D - occupancy levels " Condominiums are generally owner-occupied and so vacancy rates are not relevant. Additionally, the owner of an apartment building would not want to hold a property manager responsible for occupancy rates since that provides an incentive to rent to people whose credit or references indicate they may pose more problems than filling a vacant unit would be worth.
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A property was listed for $100,000. A broker was showing the property to a buyer who wanted to offer $70,000. The broker told the buyer a shopping center would be built down the street within one year and, therefore, the property was worth $100,000. The buyer then purchased the property for $100,000. Five years later, the shopping center still was not built and the buyer was forced to sell the property for $65,000. Could the buyer recover any losses from anyone?
A) Yes, from the people who did not build the shopping center. B) Yes, from the broker because of the misrepresentation about the building of the shopping center. C) No. The broker only made an oral claim, not a written one. D) No, because five years had elapsed. |
The correct answer is "B - Yes, from the broker because of the misrepresentation about the building of the shopping center. " Whether verbal or in writing, unfounded claims that could have a bearing on a property's perceived value and/or a prospective buyer's purchase decision constitute fraud.
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During a listing presentation a seller asked a salesperson to give an opinion of the list price, not disclose the seller's pending divorce, contact the seller at least weekly and give an opinion of the validity of the title. Which of the following should the salesperson NOT do?
A) Give an opinion of the list price. B) Suggest improvements to increase value. C) Contact them at least weekly. D) Give an opinion of the validity of the title. |
The correct answer is "D - Give an opinion of the validity of the title. " Opinions on title require the specialized knowledge of attorneys and title experts and should never be offered by salespeople.
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An owner listed a property with Broker Dole on May 1. On July 1, the owner was declared legally insane. The broker brought a full price offer on July 3 to the seller, which he accepted. How much commission is Broker Dole due?
A) the full commission, as he brought in a ready, willing and able buyer B) the full commission, as the seller accepted the offer C) no commission, since the property was sold within the protected period D) no commission, since the listing was terminated when the owner was declared legally insane |
The correct answer is "D - no commission, since the listing was terminated when the owner was declared legally insane " Since the seller was declared legally insane, he was no longer qualified to be party to any kind of contract and it was automatically rendered void.
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Baird (optionor) gave Dole (optionee) an option to buy a piece of property for 6 months for $300,000. Dole gave Baird $150 for the option. Was this a valid option?
A) Yes, because $150 is considered valuable consideration and the time and sale price were set at the time the option was entered into between the parties. B) Yes, because it is for longer than 90 days. C) No, because options cannot be for a period of longer than 90 days. D) No, because 5% would have to be paid to be considered valuable consideration. |
The correct answer is "A - Yes, because $150 is considered valuable consideration and the time and sale price were set at the time the option was entered into between the parties. " Although normally the cost of such an option would be in the thousands, not hundreds, "valuable consideration" can be whatever both parties agree it is.
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Which of the following is NOT true about an option?
A) The optionee has no interest or estate in the property until the option is exercised. B) The optionor retains the money paid for the option even if unexercised. C) The option rights are assignable unless otherwise noted. D) An unexecuted option creates certain rights to the use of the land by the optionee |
The correct answer is "D - An unexecuted option creates certain rights to the use of the land by the optionee " Whether for property, gold, soybeans or frozen orange juice, an expired or unexercised option carries with it no rights whatsoever.
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Spence Construction Company built a hangar for an airplane, which was kept on the owner's property. The owner did not pay for the hangar, so Spence filed a mechanic's lien on the airplane. Was Spence Construction Company justified in doing this?
A) Yes, because the building of the hangar improved the value of the airplane, so the airplane was attachable. B) Yes, because a mechanic's lien covers all of the homeowner's property. C) No, because a mechanic's lien can only be placed on the improvement. D) No, because a mechanic's lien can NOT be placed on real property. |
The correct answer is "C - No, because a mechanic's lien can only be placed on the improvement. " Mechanic's liens may only be placed on the property worked on, not any other assets the owner may have.
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A seller sold a property to a buyer knowing that a third party had a claim in the property. Would the buyer get marketable title?
A) Yes, because at the time of transfer no claim was made. B) Yes, because he paid the appraised value. C) No, because there was a cloud on the title. D) No. Property cannot be sold if a third party has a claim in the property. |
The correct answer is "C - No, because there was a cloud on the title. " A "marketable title" means a property is free and clear of any other claims. However, the property can still be sold--and, indeed, might be if a willing buyer can be found, the terms are attractive enough and the cloud on the title appeared as though it could be resolved.
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When would a real estate broker most commonly receive a commission from more than one party?
A) When he or she is negotiating a real estate exchange. B) When he or she is negotiating a long-term lease. C) When selling a business. D) When he or she holds an open listing agreement. |
The correct answer is "A - When he or she is negotiating a real estate exchange. " Although a commission from more than one party in a transaction is possible (by written agreement) in any of these situations… it is typical in an exchange since more than one property is being transferred.
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With the boom in second homes and so many work-related transfers, many subdivisions are advertising across a number of states, not just locally. How long must developers give purchasers of properties offered for sale across state lines a right of rescission?
A) Ten days. B) Seven days. C) Five days. D) Three days. |
The correct answer is "B - Seven days. " However, this applies only subdivisions offering twenty-five or more lots for sale across state lines. The rule is by federal statue under the Interstate Land Sales Full Disclosure Act.
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The federal government obtained a lien against a Margot for failing to report a portion of income from a rental property she owns. How would that lien be classified?
A) A specific lien. B) A general lien. C) A trust deed lien. D) A statutory lien. |
The correct answer is "D - A statutory lien. " A statutory lien is one imposed by government statute, especially a tax lien, and applies to all property a person owns, not just real estate. A general lien is much the same, but is usually filed by a creditor rather than the government. A specific lien applies only to a particular property or portion of a property... while a trust deed lien is what secures a mortgage.
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California Coast Homes, Inc. is just opening up a new-home subdivision. To whom must they give copies of the public report?
A) Prospective buyers who make a deposit on a home or parcel. B) Prospective buyers who indicate a strong likelihood of purchasing. C) Every prospective buyer. D) All local newspapers for publication. |
The correct answer is "C - Every prospective buyer. " All subdividers selling homes or lots in California must obtain a public report from the Department of Real Estate. It ensures that the developer is in compliance with all laws and regulations... has made full and proper disclosure of all material facts... and proves that all improvements and representations either have been or will be made.
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How long is a subdivision's preliminary public report valid for?
A) Until a material change in the subdivision occurs. B) Until one year after the date of issuance. C) When the final public report is issued. D) All of the above. |
The correct answer is "D - All of the above. " Preliminary public reports are intended for subdivisions in the early stages of development. They allow lots or sites to be advertised and reservation deposits accepted. However, any funds received by the developer must be fully refundable.
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What options are open to the real estate commissioner if he or she believes a subdivision developer is making fraudulent statements?
A) The commissioner may issue a desist and refrain order. B) The commissioner may revoke the public report. C) The commissioner may issue a restraining order. D) All of the above. |
The correct answer is "A - The commissioner may issue a desist and refrain order. " A desist and refrain order is similar to a restraining order in that it immediately halts the action or actions in question. However, the "desist" order may be issued directly by the commissioner whereas a restraining order typically goes through the courts.
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Which of these documents would be the LEAST RELIABLE in searching for the legal description of a property.
A) A preliminary title report. B) A title insurance policy. C) A tax assessor's bill. D) A deed. |
The correct answer is "C - A tax assessor's bill. " Tax bills only include the assessor's parcel number, not property details. Those details, included in a legal description, cover all aspects of a property necessary to fully and completely define it, including plats, maps and survey information.
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Regarding the sale of subdivision properties governed by the public report regulations, which of these would be of most concern to the Real Estate Commissioner?
A) Sewers. B) Financing of the project and common areas. C) Streets, stop lights and traffic patterns. D) All of the above. |
The correct answer is "B - Financing of the project and common areas. " Streets, sewers, traffic issues and the impact of the subdivision on the community come under the control of local municipalities. It is the intent and willingness of the developer to fulfill all representations made to consumers that's of key importance to the commissioner. Almost always, this boils down to issues of financing.
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Bill and Laura Dunne bought their home for $275,000 three years ago. After adding a pool and patio, they recently sold it for $369,000. In calculating the amount of capital gains, how may they adjust their original "cost basis" to minimize any tax obligations?
A) They may depreciate the pool and patio, plus any other additions. B) They may add the cost of the pool and patio, plus any other improvements, to their original purchase price. C) They may deduct any interest payments for financing the pool, patio and any other improvements. D) They may deduct any interest for financing improvements as well as any mortgage interest. |
The correct answer is "B - They may add the cost of the pool and patio, plus any other improvements, to their original purchase price. " This is a bit of a trick question. Bill and Laura may, of course, deduct any interest associated with owning and improving their home. However, that has nothing to do with the capital gains issue… which is calculated by subtracting the price Bill and Laura originally paid for their home from its selling price. For example, if they'd made no improvements, their capital gain would have been $369,000 minus $275,000, or $94,000. However, if the pool and patio cost $45,000, they're entitled to add that to the original price they paid for the home, bringing their "cost basis" up to $320,000 and thus reducing their capital gain exposure.
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Which of these terms BEST describes a transaction whereby possession of real estate is transferred to another party without transferring ownership?
A) Riparian right. B) Sublease. C) Sale-leaseback. D) Torrens rights. |
The correct answer is "B - Sublease. " Whether to the original tenant or subleased to another, leasing is the most common form of transferring property without transferring ownership. A sale-leaseback works in reverse… ownership is transferred while the original owner continues to occupy the property. Riparian rights, as mentioned previously are water rights, while "Torrens" is an old form of registering land ownership.
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