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17 Cards in this Set

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1. A man signed a lease for six months. This is an example of a(n)

1. estate for years.
2. periodic estate.
3. tenancy at will.
4. tenancy at sufferance.
1. (1) An estate for years is a lease with a definite duration. (148)
2. You purchased the right to live in an apartment in a resort for the 32nd complete week of each calendar year for the next 30 years. The type of interest you have is called a(n)

1. joint tenancy.
2. time-share estate.
3. tenancy in common.
4. estate for years.
2. (2) A time-share use is a right under which the developer owns the real estate; a time-share estate is a fee-simple or leasehold interest in condominium ownership. (150)
1. hold a fee-simple title on his or her unit.
2. have an undivided proportionate interest in the common elements.
3. have to pay mortgages, taxes, and assessments that are liens against other units in the project.
4. have a real property interest.
3. (3) The financial hazard of having to pay liens against other units exists in a cooperative development. (149)
4. Which of the following statements does NOT correctly describe a cooperative development?

1. Title to the land and building is owned by a corporation.
2. Mortgage and taxes are liens against the corporation.
3. Each buyer of an apartment becomes a shareholder in the corporation.
4. The buyer holds a real property interest.
4. (4) The buyer of a cooperative unit receives stock in the a corporation that actually owns the unit. The owner/tenant has a proprietary lease, and it is considered a personal property interest. (149)
5. You have entered into a lease that requires you to pay all or part of the landlord's operating expenses. You have signed a(n)

1. index lease.
2. gross lease.
3. net lease.
4. graduated lease.
5. (3) The lessee is responsible for paying all or part of the landlord's expense. (148)
6. A woman's two-year lease had expired when she decided to continue living in her apartment without the consent of her landlord. The woman now has a(n)

1. estate for years.
2. periodic estate.
3. tenancy at will.
4. tenancy at sufferance.
6. (4) In a tenancy at sufferance, the tenant is a trespasser. (148)
7. A man bought undeveloped land and divided it into smaller lots for sale. The man would be classified as a(n)

1. appraiser.
2. broker.
3. developer.
4. subdivider.
7. (4) A developer improves land, constructs buildings on the land, and sells them. (150)
8. Which of the following statements does NOT correctly describe the Interstate Land Sales Full Disclosure Act?

1. It regulates unimproved parcels sold through an interstate sale.
2. It is aimed at avoiding fraudulent marketing schemes.
3. It covers subdivisions with fewer than 25 lots.
4. It requires developers to file reports with HUD prior to offering unimproved lots in interstate commerce by telephone.
8. (3) The Interstate Land Sales Full Disclosure Act covers subdivisions with 25 or more lots. (150)
9. Which of the following is NOT an advantage of investing in real estate?

1. It serves as a hedge against inflation.
2. It does not require active management.
3. It allows for leverage.
4. It produces a rate of return that exceeds the average rate of return.
9. (2) Real estate investments require active management. (152)
10. The term boot is related to

1. appreciation in the value of an investment.
2. cash flow generated by income property.
3. pyramiding.
4. an exchange.
10. (4) Boot is any additional cash or personal property needed to even out an exchange. (152)
11. Using borrowed money to finance an investment is known as

1. appreciation.
2. cash flowing.
3. leverage
4. pyramiding.
11. (3) Cash flow refers to spendable income generated by an income property. Pyramiding is selling or refinancing currently owned properties in order to purchase additional properties. (152)
12. Which of the following may NOT be depreciated?

1. A motel
2. Land
3. An office building
4. An apartment building
12. (2) Buildings are depreciated. It is assumed that land value will be recovered at the end of the economic life of the property. (152)
13. Inventory and equipment sold as part of a business would be transferred to the buyer by a

1. bargain and sale deed.
2. bill of sale.
3. quitclaim deed.
4. warranty deed.
13. (2) A deed is used to convey title to real property; personal property is often conveyed by a bill of sale. (150)
14. The law that governs documents and forms when personal property is used as security for a loan is the

1. Interstate Land Sales Full Disclosure Act.
2. Horizontal Property Act.
3. Real Estate Settlement Procedures Act.
4. Uniform Commercial Code.
14. (4) The Horizontal Property Act is related to condominium development. (151)
15. Standing timber is legally considered to be

1. emblements.
2. chattels.
3. real property.
4. personal property.
15. (3) Emblements and chattels are considered to be personal property. (153)
16. At the time of harvest, crops such as corn and soybeans that require annual planting and harvesting are considered personal property and are called

1. codicils.
2. laches.
3. emblements.
4. future interest.
16. (3) Emblements are considered personal property and therefore the property of the entity that planted them regardless of any change in ownership. (153)
17. What government law regulates the sale of an actual business and its personal property apart from the real estate?

1. FTC
2. FCC
3. UCC
4. DNR
17. (3) The Uniform Commercial Code is the governmental law that regulates commercial law business transactions including chattel mortgages and bulk transfers (i.e., all trade fixtures, chattels, and merchandise). (151-152)