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26 Cards in this Set
- Front
- Back
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152. Which one of the following occupiers of real property would NOT be liable, by statute, for the real property taxes?
(1) the registered owner of a life estate (2) the registered holder of a long-term lease (3) the registered owner of an estate in fee simple (4) the registered holder of an agreement for sale |
(2) the registered holder of a long-term lease
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153. Larry and Theresa orally agree that Theresa will lease 10 acres of farmland owned by Larry for 5 years. As part of the agreement Larry agrees to build a barn which he does at a cost, to him, of $10,000. Which one of the following statements is true?
(1) The lease agreement is not enforceable by Larry because it is neither in writing nor signed by Theresa as is required by section 59 of the Law and Equity Act. (2) Section 59 of the Law and Equity Act does not apply to lease agreements. (3) The lease agreement may be enforceable by Larry because he has altered his position by spending $10,000 on a new barn in reliance on the lease. (4) The lease agreement is void because it is not in writing. |
(3) The lease agreement may be enforceable by Larry because he has altered his position by spending $10,000 on a new barn in reliance on the lease.
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154. Which of the following statements is FALSE under the common law of agency?
(1) An agency relationship is created when two persons agree that one will act on behalf of the other. (2) Where the agent does not disclose that she is an agent and enters into a contract with a third party, the principal can have no liability for the contract. (3) An agent who would not have capacity to enter a contract herself may be able to make a valid contract on her principal's behalf. (4) An agency agreement may be either written or oral or partly written and partly oral. |
(2) Where the agent does not disclose that she is an agent and enters into a contract with a third party, the principal can have no liability for the contract.
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155. There are many reasons why a property might sell for a price which is different from its current appraised value. Which of the following could be a reason?
(1) The property is in a state of long-term disrepair. (2) The property is located beside a fertilizer plant. (3) The appraisal was done by the cost method. (4) All of the above |
(3) The appraisal was done by the cost method.
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159. The practice of recognizing expenses as they are incurred, rather than when they are paid for, is a characteristic of:
(1) the cost principle. (2) the recognition principle. (3) the matching principle. (4) the conservation principle. |
(3) the matching principle.
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160. Lenders seldom extend amortization periods beyond 50 years mainly because:
(1) the borrower's income and financial position cannot be reasonably forecasted over longer periods. (2) the trend to short term loans has made long term loans unpopular. (3) the economic life of the property would likely be less than the loan amortization period. (4) further extensions have little impact on the size of the payment required. |
(4) further extensions have little impact on the size of the payment required.
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156. Calculate the monthly payment required for the following mortgage:
Principal of $40,000; 14% per annum, compounded semi-annually; amortization period of 20 years. (1) $486.47 (2) $486.08 (3) $469.56 (4) $497.41 |
(2) $486.08
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157. Jason Buyer offers $147,000 to purchase a house, subject to obtaining an acceptable first mortgage. A lender has appraised the property at $140,000, requires an 80% loan to value ratio, and a 27% gross debt service ratio. Net taxes are $917.00 per annum and Mr. Buyer's gross income is $70,750 per year.
What is the maximum amount this lender will advance if the rate is j2 = 17.5%, the amortization period is 25 years, and payments are to be made monthly? (1) $112,000 (2) $106,020 (3) $111,367 (4) $110,250 |
(2) $106,020
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162. A property is listed for $133,333 but the market value, as estimated in a recent appraisal is $125,000. The property's lending value is estimated to be $120,000. Jay and Joan purchase the home for $128,500 subject to a mortgage of $84,000. What loan to value ratio was applied by the lender with whom Jay and Joan negotiated the mortgage? (Assume that the loan to value ratio was the binding constraint on the loan size.)
(1) 67.5% (2) 70% (3) 72% (4) 75% |
(2) 70%
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164. Which one of the following statements is FALSE?
(1) The doctrine of precedent provides uniformity to the common law system. (2) The Supreme Court of Canada is not required to hear all appeals. (3) The Supreme Court of British Columbia may exercise both common law and equitable jurisdiction. (4) An appeal by a taxpayer to reduce a tax assessment would fall within the sphere of private law. |
(4) An appeal by a taxpayer to reduce a tax assessment would fall within the sphere of private law.
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166. A potential borrower with an annual income of $24,000 and net real property taxes of $1,000 per annum has been told by a mortgage lender that the largest loan available will be $52,171. What is the maximum gross debt service ratio allowed by the lender given that the loan has monthly payments and is to be written at 10% per annum, compounded semi-annually and amortized over 25 years?
(1) 25% (2) 27.5% (3) 28.5% (4) 30% |
(2) 27.5%
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167. Which one of the following is NOT a remedy for breach of contract?
(1) damages (2) specific performance (3) injunction (4) rectification |
(4) rectification
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169. The fact that a joint tenant's interest does not pass to a personal representative on death is referred to as:
(1) an estate in inheritance. (2) a tenancy in common. (3) the right of survivorship. (4) a life estate. |
(3) the right of survivorship
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171. John Jones has just received an offer to purchase his house. The terms of the offer are $5,000 down payment to be paid on the possession date, $20,000 six months after the possession date and a final payment of $95,000 one year after the possession date. Current mortgage rates are 13% per annum, compounded semiannually.
What is the market value of the offer? (1) $102,536.97 (2) $107,536.97 (3) $120,170.16 (4) $125,170.16 |
(2) $107,536.97
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177. Victor is selling his house to Paula with an adjustment date and a possession date of August 16th, and a completion date of August 14th. He is concerned about the fact that he just filled his oil tank. Which one of the following is TRUE?
(1) The conveyancer will give Victor a debit on the statement of adjustments for the oil in the tank. (2) Victor will lose the cost of his oil. He should not have filled the tank. (3) Victor could arrange to have a reading done on the adjustment date and make an adjustment privately with Paula for the cost of the oil remaining in the tank on that date. (4) The cost of oil remaining in the tank must be calculated as at the completion date and Paula must reimburse Victor for that amount. |
(3) Victor could arrange to have a reading done on the adjustment date and make an adjustment privately with Paula for the cost of the oil remaining in the tank on that date.
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179. A loan in the amount of $99,000 bears interest at 19.5% per annum, compounded monthly. The loan has a 15-year amortization period and term. Payments are to be made monthly and are to be rounded up to the next higher dollar. The amount of the final payment required to fully amortize the loan is:
(1) $935.91 (2) $920.95 (3) $906.22 (4) $831.35 |
(1) $935.91
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182. An option to purchase the mortgaged property given by the borrower to the lender at the time the mortgage is negotiated is:
(1) enforceable if the borrower has independent legal advice. (2) void. (3) enforceable in all cases. (4) a collateral advantage. |
(2) void.
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183. A mortgage contract with a face value of $75,418.15 requires monthly payments of $1,125.00 over a 20 year
period. However, the mortgage broker advances only $73,900 after deducting a commission of $1,000, legal fees of $218.85, and an appraisal fee of $300. Calculate the cost of funds advanced for the borrower. (1) j1= 19.0781576914% (2) j = 18.7709231308% 1 (3) j = 18.2458775706% 1 (4) j = 19.2405298693% |
(4) j = 19.2405298693%
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184. After an order nisi of foreclosure is granted to a petitioner and the respondent borrower fails to pay the amount due as required by the order, the petitioner may apply for:
(1) an order absolute of foreclosure. (2) a judicial sale. (3) an equitable charging order. (4) either (1) or (2). |
(4) either (1) or (2).
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186. The Muscular Development Company has arranged a mortgage loan in the amount of $450,000. This mortgage bears interest at 17.5% per annum, compounded monthly. Monthly payments are to be made on the first day of each month of the amortization period, the first payment being made on June 1st. If the funds are advanced on March 20th, what would the interest adjustment charge made on May 1st be? Assume that it is NOT a leap year.
(1) $9,086.73 (2) $2,577.70 (3) $8,906.87 (4) $8,868.26 |
(1) $9,086.73
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187. Which one of the following statements is correct?
(1) Contracts of purchase and sale can always be assigned. (2) Contracts of purchase and sale can never be assigned. (3) Contracts of purchase and sale can only be assigned with the permission of the vendor. (4) Contracts of purchase and sale can be assigned as long as the rights of the other party are not prejudiced. |
(4) Contracts of purchase and sale can be assigned as long as the rights of the other party are not prejudiced.
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188. With respect to an insured mortgage loan, which one of the following statements is FALSE?
(1) Default insurance is paid for by the borrower. (2) The rate of interest on insured loans tends to be lower than on comparable uninsured loans. (3) If the borrower defaults, the insurance company will guarantee that the lender will recover all capital invested. (4) The lender has only the personal covenant of the borrower and the value of the property for security. |
(4) The lender has only the personal covenant of the borrower and the value of the property for security.
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191. In applying the income method of appraisal, depreciation is excluded from operating expenses in the
calculation of net operating income. Which one of the following statements is an explanation of the reason depreciation is excluded? (1) Depreciation measures a loss in value which occurs despite regular repairs and maintenance. (2) Depreciation affects only the building component of the property. (3) Depreciation expense is excluded from calculations for income tax purposes. (4) The life of a building is primarily determined by economic factors rather than physical condition. |
(4) The life of a building is primarily determined by economic factors rather than physical condition.
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195. There are two ways to surrender a lease under a commercial tenancy. One is by an act of the parties; the
other is: (1) by operation of law. (2) by the order of an arbitrator. (3) by the order of the Public Trustee. (4) not described above. |
(1) by operation of law.
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Real Estate Trading Services Licensing Course 47
Examination Study Guide 197. How much should an investor be willing to pay for a property that is expected to sell for $60,000 in three years if he desires a yield of not less than j2 = 14%? (1) $40,498.29 (2) $36,648.83 (3) $39,980.53 (4) $48,977.87 |
(3) $39,980.53
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198. Which one of the following BEST describes the effect that profitable operations have on the balance sheet of a business?
(1) owner's equity is increased (2) assets are increased (3) cash is increased (4) liabilities are decreased |
(1) owner's equity is increased
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