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50 Cards in this Set
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Many states determine the order of water rights according to which users of the water hold a recorded beneficial use permit. This allocation of water rights is determined by: |
The correct answer is "D - the doctrine of prior appropriation. " All terms relate to water rights, with "riparian" -- the right to use water adjacent to one's property -- being the most common in sections of the U.S. where water is abundant. However, in states where water is more scarce, a form of "prior appropriation" applies. Also known as "first in time is first in right," it grants water rights to divert a specific amount of water from a specific source to irrigate a specific piece of property. Those rights are then assigned a priority based on when the right was first used or applied for. In periods of peak demand, they give those whose claim is the oldest the right to get their water first.
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The right to control one's property includes all of the following EXCEPT: |
The correct answer is "B - the right to exclude the utilities meter reader. " This right to enter and work on a property is granted to utility companies (water, sewer, gas and electric) as well as telephone and cable companies. Essentially, if a company provides a service and owns the equipment (e.g., phone and cable lines), they are usually granted an easement.
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Which of the following types of ownership CANNOT be created by operation of law, but must be created by the parties' expressed intent? |
The correct answer is "D - tenancy by the entireties " Tenancy by the entireties is a form of ownership that husbands and wives can choose or create by deciding to do so and declaring it as such in contracts and deeds. Tenancy in common is put in motion by state law. Community Property is a law of ownership that exists in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and some other states. Tenancy by the Entireties is an estate that is recognized in some states between husband and wife, who have equal right of possession and enjoyment during their joint lives and with the right of survivorship--that is when one dies, the property goes to the surviving tenant. (In many states, if couples do not specify "Joint Tenancy," this form of ownership will be automatically assumed.) Tenancy in Common is a type of joint ownership by parties NOT married, that allows a person to sell his share or leave it in a will without the consent of the other owners. If a person dies without a will, his share goes to his heirs, not to the other owners. |
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Which of the following is/are considered to be personal property? |
The correct answer is "D - patio furniture " The concept of personal property typically comes into play at the time of sale. Things that are part of the house--bathroom fixtures, fireplaces, carpeting and such--go with the sale. (Unless specifically excluded, as can happen in the case of a dining room chandelier or one or two other objects with which the owners have an emotional attachment.) Furniture, rugs, lamps and other portable items that are not "nailed down" constitute personal property and are not included in the sale.
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The word "improvement" would refer to all of the following EXCEPT: |
The correct answer is "C - trade fixtures. " The term "trade fixture" refers to an item installed by a tenant in a rented commercial property that he or she removes at the end of the occupancy. More on this topic follows. |
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All of the following are physical characteristics of land EXCEPT: |
The correct answer is "D - scarcity. " Scarcity is a fundamental economic concept that holds that the rarer and more desirable something is, the more valuable it will be. For example, professional athletes are highly paid because only the smallest percentage of people have the ability to perform at that level. Land is "scarce" because there is a finite amount available and, as Will Rogers once said, "They ain't making any more of it."
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Certain items on the premises that are installed by the tenant and are related to the tenant's business are called: |
The correct answer is "C - trade fixtures. " The term is usually applied to a commercial tenant and refers to items installed in connection with his or her business, such as stoves and refrigerators in a restaurant or display cases in a retail shop. |
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Personal property includes all of the following EXCEPT: |
The correct answer is "D - fixtures. " "Chattel" is a legal term that means personal property. Emblements and fructus industriales refer to profit from crops that are grown as a result of a person's labor, such as corn, as opposed to those that occur naturally, such as grass or minerals. By the custom of English common law, they are considered personal property. By contrast, a fixture is considered attached to a property and thus part of the structure. |
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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) life estate. D) defeasible fee estate. |
The correct answer is "B - fee simple estate. " All the other options have conditions attached. A leasehold estate is, as the name implies, leased property. Similarly, a life estate gives a person ownership or control of a property only for the duration of his or her natural life. "Defeasible estates" give a person or entity control over a property only so long as certain conditions are met or avoided. For example, a community might be deeded a property on the condition that it be used only for building a school, or land willed to a child on the condition it never be used for commercial development. If the community tries to use the property for a recreation complex or the heir tries to sell to a retail developer, control would automatically revert to another party and the deed would become void.
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A portion of Wendell's building was inadvertently built on Ginny's land. This is called an:
A) accretion. B) avulsion. C) encroachment. D) easement. |
The correct answer is "C - encroachment. " The principal attributes of an encroachment are: 1) It is accidental and 2) it involves only part of a structure. Typically, the issue would be resolved by selling Wendell an easement or a lease or, if practical, actually moving the structure.
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The purchase of a ticket for a professional sporting event gives the bearer what? |
The correct answer is "B - a license to enter and claim a seat for the duration of the game " Easements grant access, not use. Commercial licenses, such as those required to sell beverages, souvenirs or services, cover extended periods. Although tickets to sporting events, concerts, shows and the like are technically licenses, they differ from most in their degree of restriction. For example, a concert ticket does not give the bearer the right to sit anywhere he or she chooses or wander backstage to meet the performers.
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If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, what happens? |
The correct answer is "C - The easement is terminated. " "Dominant" and "servient" tenements involve two adjacent properties in which an easement is involved. For example, let's say Bridle Creek Farms and Barnstable Farms are separate parcels divided by a country lane that provides access to the county road system. The lane is owned by Bridle Creek, but the deeds of both properties stipulate that Barnstable Farms shall have unrestricted access for the purpose of accessing county roads. That access is an easement. Thus, if the owner of Barnstable Farms buys Bridle Creek Farms, the need for the easement disappears. |
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Homeowner Ginny acquired the ownership of land that was deposited by a river running through her property by: |
The correct answer is "D - accretion. " Accretion means the addition to a parcel of land by sand or soil deposits due to the action of a river or other body of water over time. Avulsion refers to the loss of land as a result of its being washed away by sudden or unexpected action of nature, such as a flash flood that re-routes a river.
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The rights of the owner of property located along the banks of a river are called:
A) littoral rights. B) prior appropriation rights. C) riparian rights. D) hereditament. |
The correct answer is "C - riparian rights. " "Littoral" and "prior appropriation" are different kinds of water rights: in the first case, navigation rights to an ocean or other large body of water; in the second, the right to use a water source for irrigation. A hereditament is any inheritable property. |
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The local utility company dug up Frank's garden to install a natural gas line. The company claimed it had a valid easement and proved it through the county records. Frank claimed the easement was not valid because he did not know about it. The easement: |
The correct answer is "A - Was valid even though the owner did not know about it. " Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks. As such, they "attach" to a deed or lease and remain in effect, until specifically lifted.
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Jim and Sandy are next-door neighbors. Sandy tells Jim that he can store his camper in her yard for a few weeks until she needs the space. Sandy did not charge Jim rent for the use of her yard. Sandy has given Jim a(n) what? |
The correct answer is "D - license " Granting the use of property for a defined period for a specific purpose is almost always a form of licensing. Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks.
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Your neighbors use your driveway to reach their garage on their property. Your attorney explains that the ownership of the neighbors' real estate includes an easement appurtenant giving them the driveway right. Your property is the: |
The correct answer is "C - servient tenement. " An "easement appurtenant" allows the holder of one property to benefit from another's. In this case, your property is "servient" because it is the one burdened by the easement while your neighbor's is "dominant" since it is the one that benefits. |
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Quintin owned two acres of land. He sold one acre to Frank and reserved for himself an appurtenant easement over Frank's land for ingress and egress. Frank's land: |
The correct answer is "B - Is the servient tenement. " Frank's land interest is the one burdened by the easement; therefore it is the servient property.
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Ginny owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective purchaser? |
The correct answer is "B - an appurtenant easement " Appurtenant easements afford the most protection since they are generally a permanent feature of the property. Thus, in the case of sale, the lake access passes to any new owners. By contrast, an "easement in gross" is between two individuals, which would severely limit the attractiveness and value of the property if the original owner wished to sell.
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Sam and Nancy bought a store building and took title as joint tenants. Nancy died testate. Sam now owns the store:
A) as a joint tenant with rights of survivorship. B) in severalty. C) as a tenant in common with Nancy's heirs. D) in trust. |
The correct answer is "B - in severalty. " Joint tenancy means that two parties have an undivided interest in a particular property and, upon the death of one party, full ownership automatically goes to the survivor. Despite the way it sounds, "in severalty" means as sole owner.
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When real estate under an estate for years is sold, what happens to the lease? |
The correct answer is "B - It binds the new owner. " Tenancy for years is the common form of rental agreements and binds all future owners for the term of the lease.
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Evan lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, Evan owns stock in the corporation and has a lease on his apartment. This type of ownership is called a(n):
A) condominium. B) planned unit development. C) time-share. D) cooperative. |
The correct answer is "D - cooperative. " This is the distinguishing characteristic that differentiates cooperative from condominium ownership. Although often confused, a condominium owner holds title to his individual unit. A co-op owner, on the other hand, is technically a renter. It's his stock in the corporation holding title to the property that gives him the right to lease the unit as well as sell that right to another. |
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Tom leases store space to Kim for a restaurant, and Kim installs her ovens, booths, counters, and other equipment. When do these items become real property? |
The correct answer is "D - when the lease expires, if the items are not taken by the tenant " Kim is free to move these fixtures at the end of her lease. However, if she chooses to leave them behind, they are considered a permanent part of the structure (just like a dining room chandelier in a home) and revert to Tom. |
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Jim, Manny and Harry are joint tenants owning a parcel of land. Harry conveys his interest to his long-time friend Wendell. After the conveyance, Jim and Manny:
A) become tenants in common. B) continue to be joint tenants with Harry. C) become joint tenants with Wendell. D) remain joint tenants owning a two-thirds interest. |
The correct answer is "D - remain joint tenants owning a two-thirds interest. " Because joint tenancy must be declared, Jim and Manny remain joint tenants with a two-thirds interest while Wendell, because of his passive acquisition of his share of the property, becomes a tenant in common with Jim and Manny. The difference between the two forms is that Jim and Manny's share retains the right of survivorship provisions but Wendell's does not. |
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In a gift of a parcel of real estate, one of the two owners was given an undivided 60 percent interest and the other received an undivided 40 percent interest. The two owners hold their interests as what? |
The correct answer is "D - tenants in common " In order to create joint tenancy, some form of relationship must exist between the parties involved, whether business, spousal or other. Because their interests were acquired as a gift, the parties in this instance become tenants in common, with all the ownership benefits of joint tenancy, but not the survivorship rights.
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To create a joint tenancy relationship in the ownership of real estate, there must be unities of:
A) grantees, ownership, claim of right, and possession. B) title, interest, encumbrance, and survivorship. C) possession, time, interest, and title. D) ownership, possession, heirs, and title. |
The correct answer is "C - possession, time, interest, and title. " This essentially means that all parties to the agreement share equally in all aspects of the property, including the length of time it's been held. That means if one party sells or transfers interest in a joint tenancy relationship, his or her place is taken by another in the same capacity.
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What is a Schedule of Exceptions on a title policy?
A) encumbrances B) tax liens C) list of things not insured in the policy D) defects |
The correct answer is "C - list of things not insured in the policy " Almost no title insurance policy protects against all conceivable events. As the name suggests, the Schedule of Exceptions is a specific list of items not covered and can include things such as unrecorded mechanic's liens, assessments, water rights and mining claims.
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When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n):
A) deficiency judgment. B) lis pendens. C) estoppel certificate. D) mechanic's lien. |
The correct answer is "D - mechanic's lien. " A mechanic's lien is the first, and usually most cost-effective, step for a person providing labor and/or materials to a homeowner to recover monies owed--in large part because of the pressure it puts on the homeowner to settle quickly and without costly court involvement.
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Which of the following liens does not need to be recorded to be valid?
A) materialman's lien B) real estate tax lien C) judgment lien D) mechanic's lien |
The correct answer is "B - real estate tax lien " The requirement for individuals to record liens is due in part to the necessity of correctly identifying the complainant. For example, not just "Jones Contracting," but the specific Jones Contracting that performed the work and is owed the money. Because they bear the authority of government and are easily identified, liens by taxing authorities do not need to be recorded. |
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The system of ownership of real property in the United States is what?
A) incorporeal B) allodial C) inchoate D) feudal |
The correct answer is "B - allodial " "Allodial" is the modern form of ownership and is often contrasted with "feudal" in which land is held on the condition of rent or service due the government. For example, a medieval knight held property subject to coming to his baron's service when called. Similarly, the baron's land holdings were conditional on his raising an army and fighting for the king in times of conflict. Failure of any party to "perform as promised" was cause for holdings to be confiscated, often as a preliminary step to more extreme actions.
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A mechanic's lien would be properly classified as a(n):
A) equitable lien. B) voluntary lien. C) general lien. D) statutory lien. |
The correct answer is "D - statutory lien. " A "statutory lien" is one that arises out of specific law (otherwise known as statutes). By contrast, an "equitable lien" has its roots in common law or custom. A "voluntary lien" is one entered with the property owner's knowledge and consent, such as a mortgage. A "general lien" grants a creditor the right to file a claim against all of a debtor's assets, not just a particular property.
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Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt?
A) real estate tax lien B) mechanic's lien C) judgment lien D) assessment lien |
The correct answer is "C - judgment lien " Most liens are against a specific property, such as a primary residence. Thus, a contractor seeking payment for a new deck cannot have a homeowner's car attached in settlement. A judgment lien, however, is a decision directed by the courts and can apply to whatever assets it deems appropriate.
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A homeowner owned a house on a lot. The front ten feet of the lot were taken by eminent domain for a sidewalk. Would the homeowner be entitled to compensation? |
The correct answer is "A - Yes. The land was taken for public use by eminent domain. " Governments and municipalities can only seize property (other than in criminal cases) for the public good and through eminent domain, which is a process, not an arbitrary action. Part of that process involves determining fair compensation to the owner.
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The covenant in a deed which states that the grantor is the owner and has the right to convey the title is called:
A) covenant of further assurance. B) covenant of warranty forever. C) covenant of seisin. D) covenant against encumbrances. |
The correct answer is "C - covenant of seisin. " Another outgrowth of the feudal system, "seisen" derives from the French meaning to "sit upon or own" and gives owners the right to sell or transfer property at will. |
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The recording of a deed:
A) Is all that is required to transfer the title to real estate. B) Gives constructive notice of the ownership of real property. C) Insures the interest in a parcel of real estate. D) Warrants the title to real property. |
The correct answer is "B - Gives constructive notice of the ownership of real property. " Recording a deed does not convey, insure or warrant ownership. However, it does protect the owner's interest in a property by serving notice that the recorded owner is the only recognized holder of title. This places a larger burden of proof and process on someone trying to assert a prior ownership interest and/or claiming a deedholder's title is clouded.
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Which of the following instruments proves a marketable title?
A) certificate of title B) title insurance C) abstract of title D) general warranty deed |
The correct answer is "D - general warranty deed " A general warranty deed stipulates that the ownership being conveyed is free of any hidden liens, encumbrances or other claims. Further, it states that if some unknown encumbrance should arise in the future, the person conveying the deed will make appropriate compensation. (This guarantee, however, is no substitute for title insurance.) |
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What do liens and easements have in common?
A) Both are encumbrances. B) Both must be on public record to be valid. C) Neither can be done without the consent of the owner. D) Both are money claims against the property. |
The correct answer is "A - Both are encumbrances. " Liens are, of course, serious in that they indicate the owner has failed to pay a debt secured directly or indirectly by the property. Easements, on the other hand, are generally a practical necessity for most residential properties.
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The title to real estate passes when a valid deed is:
A) signed and recorded. B) delivered and accepted. C) filed and microfilmed. D) executed and mailed. |
The correct answer is "B - delivered and accepted. " Fundamentally, real estate transactions only involve two parties--the buyer and the seller. All that's necessary to create a legal sale is for one party to make an offer the other accepts. Recording, escrow, real estate licensees, mortgage companies and the like facilitate and support the transaction process but are not requirements of a legal sale. |
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The primary purpose of a deed is to:
A) Prove ownership. B) Transfer title rights. C) Give constructive notice. D) Prevent adverse possession. |
The correct answer is "B - Transfer title rights. " A deed is the instrument by which ownership of a property is transferred from one person to another, while a title is evidence of that ownership.
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A special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed:
A) Applies only to a definite limited time. B) Covers the time back to the original title. C) Is implied and is not written in full. D) Protects all subsequent owners of the property. |
The correct answer is "A - Applies only to a definite limited time. " The more common deed in most states is the general warranty, because it establishes the ownership trail and validity of title going back to the original recorded ownership (for example, the purchase of Manhattan Island and all subsequent divisions, subdivisions and resales). Under a special warranty deed, an owner transfers property guaranteeing the quality of title only during the period of his or her ownership, leaving subsequent buyers vulnerable to prior claims.
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How many days do landlords have under current California law to return the unused portion of a security deposit? |
The correct answer is "C - They have twenty-one days. " Deductions may be taken only be for actual damages, not normal wear and tear such as carpet stains. Further, all deductions must be include "line item" details.
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Who enforces the California State Housing Act?
A) The FHA and the VA. B) Local officials regulating the issuance of building permits. C) The Real Estate Commissioner. D) Local health officers. |
The correct answer is "B - Local officials regulating the issuance of building permits. " This act pertains largely to discrimination based on physical handicaps. It is administered by those who control building permits since that is often the quickest means of correcting problems of non-compliance. |
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Which of the following is generally considered the best choice as a hedge against inflation?
A) Equity assets such as housing. B) Government-backed trust deeds on mortgages. C) Long-term government bonds. D) Savings accounts. |
The correct answer is "A - Equity assets such as housing. " Inflation results when the value of money decreases relative to the things people want to buy -- with the effect being that prices go up. The kinds of investments generally viewed as the best hedges against inflation are durable assets of high perceived value… with houses, gold and investment-grade diamonds among the traditional favorites. For most people, housing is far and away the best of those options, since successful hedging with gold and diamonds generally requires specialized expertise.
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What is the opposite of "alienation?"
A) Acquisition. B) Subrogation. C) Hypothecation. D) Subordination. |
The correct answer is "A - Acquisition. " Acquisition means just what you think -- to acquire or receive something. The legal definition of "alienation," however, is to transfer. Thus, "alienation of affection" in divorce proceedings doesn't mean a person has caused one spouse to dislike the other (though often a result), but rather to transfer his or her affection away from their partner to another party. |
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The city wishes to use property owned by Pacific Coast Construction to accommodate an airport expansion. All the studies have been completed, the project is "green lighted" to move forward, and the city makes an offer to Pacific Coast. However, the company does not want to sell. What other method may the city use acquire the property?
A) Adverse possession. B) Eminent domain. C) Police power. D) Presumptive right to acquire. |
The correct answer is "B - Eminent domain. " Eminent domain involves a jurisdiction condemning or otherwise expropriating private property in the name of the public good. Usually that means major projects such as airport expansions, highways, schools and such… though there have been cases of using eminent domain to condemn well-ordered middle-class neighborhoods to make way for high-end developments that will provide a higher tax base. In most cases, the federal, state or local jurisdiction is required to pay the owner fair market value for their property. |
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Which of the following "plats" is the least economical plan for building a new subdivision? |
The correct answer is "C - Short blocks. " Short blocks increase many expenses, including those for additional roads, intersections, sewer connections, traffic control devices and lighting.
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Which of these acts provides for punitive action against businesses accused of discrimination based on sex, color, religion, ancestry or national origin?
A) The Rumford Act. B) The Civil Rights Act of 1968. C) The Unruh Act. D) The Civil Rights Act of 1996. |
The correct answer is "C - The Unruh Act. " Named for Jesse Unruh, author of the 1959 act, it provides for specific remedies against hotels, restaurants, hospitals -- virtually any public business or organization -- for discriminating on the basis of sex, race, color or other personal characteristic.
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Paul Stonington is a broker who has been found guilty of violating the Unruh Act. What penalty or penalties is he subject to?
A) Payment to the victim for actual damages he or she incurred. B) Payment of exemplary damages to the victim. C) Neither a nor b. D) Both a and b. |
The correct answer is "D - Both a and b. " In addition to actual and exemplary (or punitive) damages, Paul may also be ordered to pay emotional damages and served with a cease and desist order. |
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Which act allows the California Department of Fair Employment and Housing to take action against public or private housing entities that discriminate? |
The correct answer is "A - The Rumford Act. " While the Unruh act provides protection against discrimination by businesses, this act provides protection against discrimination in housing by landlords, apartment owners, housing developers, mortgage companies and real estate firms.
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Which of the following tends to happen to conventional mortgages in tight money markets?
A) Because of increased competition among lenders, buyers pay lower origination fees. B) Buyers pay more in upfront costs such as origination fees and points as well as higher interest rates. C) Because of competition among lenders, interest rates drop. D) Origination and borrowing costs remain stable but qualifying becomes more difficult. |
The correct answer is "B - Buyers pay more in upfront costs such as origination fees and points as well as higher interest rates. " "Tight money" means there is less available to lend, so the costs of borrowing tend to rise and qualifying standards get tougher.
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