Midterm 1


Mid Term FIN 365 Quiz on Midterm 1, created by nvelazco on 03/04/2016.
Quiz by nvelazco, updated more than 1 year ago
Created by nvelazco almost 7 years ago

Resource summary

Question 1

Which of the following sources would be the least satisfactory for obtaining a legal description of a parcel of real property?
  • Deeds
  • Preliminary title reports
  • Escrow instructions
  • Real property tax bills
  • A real property tax bill usually identifies the property by the tax assessor's parcel number. While the bill may also include a legal description of the property, that's often an abbreviated description instead of the complete legal description.

Question 2

The land description method that makes reference to sections, townships, and ranges is the
  • government survey method
  • recorded map method
  • metes and bounds method
  • Torrens system

Question 3

A ranch is 36 miles square. What is the number of townships contained in the ranch?
  • 1
  • 6
  • 36
  • 1296

Question 4

Which of the following is not considered to be appurtenant to land?
  • Watercourses
  • Fences
  • Dwellings
  • Trade fixtures

Question 5

When a title company issues an ALTA policy, it will extend the risk beyond that which is covered by a standard policy, to include all of the following, except:
  • the rights of parties in possession
  • unrecorded easements
  • the effect of zoning regulations
  • unrecorded mechanic's liens

Question 6

The right to use and enjoy another person's property that falls short of an estate is a/an:
  • easement
  • leasehold
  • deed
  • devise

Question 7

A seller accepted a proper offer in writing to purchase his property. He then refused to complete the transaction. If the buyer were to bring suit for failure to perform the contract, under the statute of limitations he would need to do so within:
  • 1 year
  • 2 years
  • 3 years
  • 4 years

Question 8

A city passes a bond issue to improve streets in a particular neighborhood. The properties in that area will be burdened:
  • according to the value of the property
  • according to the size of the lot
  • in proportion to the benefits that the land will receive
  • identically

Question 9

Al willed his property to his three children (Barry, Chris, and Dara) as joint tenants. Barry then died, leaving behind a will stating that his share of the property would pass to his daughter Mary. Dara then sold her portion of the property to her friend Vera. At this point, how is the property owned?
  • Mary and Chris own it as joint tenants
  • Vera and Chris own it as tenants in common
  • Mary, Vera, and Chris own it as tenants in common
  • Mary and Chris own their shares as joint tenants, while Vera owns her share as a tenant in common

Question 10

A person was judicially declared incompetent and then was willed a parcel of real property by his brother. Can he take title to this property?
  • He can accept title only if it is placed with a trustee
  • He can accept title to real property that passes to him by will
  • He cannot accept title because he is incompetent
  • He can accept title to personal property but not real property

Question 11

Which of the following statements concerning estates is correct?
  • A life estate is a leasehold estate
  • An estate may be held with another estate in the same property
  • Title to an estate must pass using a grant deed
  • An estate always gives the right of immediate possession

Question 12

How many acres are in a property that is described as the "S 1/2 of the NW 1/4 of the NE 1/4 of the NE 1/4 of Section 23"?
  • 5
  • 10
  • 20
  • 40

Question 13

A buyer consented to purchase a property, but his consent was induced by fraudulent statements made by the seller's broker. The buyer's purchase agreement would be: A. valid
  • valid
  • voidable
  • void
  • illegal

Question 14

A reversionary interest would be held by a:
  • state government under the right of eminent domain
  • mortgagee in the event of default by the borrower
  • lessor under the terms of a lease
  • person who gained title through adverse possession

Question 15

A minor who owns property asks a broker to assist in the sale of the property. The broker may not accept a listing from the minor because:
  • a minor is incapable of appointing an agent
  • the minor may be able to disaffirm a real estate contract later
  • a broker is incapable of a fiduciary relationship with a minor
  • it is illegal for a minor to enter into any sort of contract

Question 16

Which of the following is not a consideration in determining whether or not an item is a fixture?
  • Relationship between parties
  • Intention of annexor
  • Manner of annexation
  • Time of annexation

Question 17

If the owner of a large parcel of property plans to subdivide it, what is the minimum number of parcels that would make the project subject to the Subdivided Lands Law?
  • 2
  • 3
  • 4
  • 5

Question 18

A lessee has all of the following, except:
  • a less-than-freehold estate
  • a leasehold estate
  • a chattel real
  • a freehold estate

Question 19

What document would be used to convey possessory rights without conveying ownership rights?
  • License
  • Mortgage
  • Patent
  • Sublease

Question 20

A broker misrepresented his principal's property when showing it to a buyer. The actions of the broker may subject his principal to:
  • rescission of the sale by the buyer
  • court action for damages resulting from fraud
  • civil liability for the broker's misrepresentations
  • All of the above

Question 21

A salesperson working for a listing broker:
  • owes fiduciary duties to the seller
  • owes fiduciary duties to the buyer
  • is limited by the terms of the power of attorney
  • is not limited by the broker's scope of authority

Question 22

A neighborhood that was originally zoned to allow multiple-unit dwellings was rezoned to allow only single-family dwellings. What effect would this have on an already existing apartment building in the neighborhood?
  • It would be in violation of the zoning laws
  • It would have to be demolished immediately
  • It would need to be issued a variance
  • It could probably continue as a nonconforming use

Question 23

A corporation may not hold title to a property as a joint tenant because:
  • no corporation may hold title to real property
  • it is prohibited by Securities and Exchange Commission regulations
  • only a husband and wife may hold property in joint tenancy
  • a corporation has a potentially perpetual existence

Question 24

Which of the following persons would be responsible to her employer for results only?
  • Employee
  • Independent contractor
  • Principal
  • Stockholder

Question 25

Adam leased a property from Casey for a five-year term. Casey died, at which point Adam found out that Casey had only a life estate in the property, with Casey's life as the measuring life. The lease is:
  • valid for the remaining five years
  • valid until invalidated by the executor of Casey's estate
  • valid only during the life of Casey
  • invalid since it is fraudulent and illegal to lease a life estate

Question 26

Cities and counties regulate land use by limiting building size, lot size, and setbacks through:
  • the Subdivided Lands Law
  • zoning restrictions
  • covenants, conditions, and restrictions
  • community redevelopment agreements

Question 27

Chen gave his son a power of attorney to sell his house. Which of the following statements is false?
  • The power of attorney must describe the property that will be conveyed
  • Chen's son may legally deed the property to himself
  • The attorney in fact may sign the name of his principal
  • The attorney in fact may encumber the property with a deed of trust where another person is the beneficiary

Question 28

Which of the following is a type of lien?
  • An easement
  • An attachment
  • A restriction
  • All of the above

Question 29

A builder submitted plans that included several minor deviations from the building standards required by local building codes. If the local building department decided this inconsistency did not constitute a health or safety hazard and permitted construction to continue, it would be known as a/an:
  • exception
  • variance
  • infraction
  • permit

Question 30

Ownership rights to a property are determined through which of the following legal actions?
  • Quiet title
  • Interdiction
  • Declaratory relief
  • Injunction

Question 31

Of the following, which is a means by which a person might gain title to real property?
  • Riparian rights
  • Accession
  • Appurtenance
  • Mortgage

Question 32

Delia died leaving no known heirs. In her will, she left her real property to her friend Ed. However, at the time of Delia's death, Flora was in possession of the property under the terms of a one-year lease. The probate court then found that Delia's will had not been properly witnessed and was invalid. What happens to Delia's real property?
  • It passes to Ed, since that was clearly Delia's intent
  • It passes to Flora, since she is in possession
  • It is immediately sold at a court auction
  • It passes according to statutory provisions, overseen by a court of proper jurisdiction

Question 33

Proper acknowledgment of a deed may be taken by a notary public who is:
  • the grantee of the deed
  • a mortgagee in a mortgage being acknowledged
  • the grantor of the deed
  • an employee of the corporation that is the grantor, if he has no personal interest in the property

Question 34

When a document concerning title to real property is recorded, it gives all of the following except:
  • constructive notice of the contents of the document
  • constructive notice of the rights and interests conveyed in the document
  • actual notice of the conveyance of title
  • None of the above

Question 35

Tim has been judicially declared incompetent. His best friend then deeds him a parcel of real property. The deed is:
  • invalid, as an incompetent grantee cannot take title to real property
  • invalid, since the title must pass to Tim's guardian or conservator
  • valid, since a grantee does not have to be legally competent to receive title
  • valid only if placed in trust until such time that Tim is declared competent

Question 36

Which would a court disregard in deciding whether an item of personal property has become real property?
  • Agreement between the parties
  • Permanence of annexation
  • Cost of the item
  • Relationship of the parties

Question 37

Which of the following is not a necessary element in the formation of a contract?
  • Offer
  • Acceptance
  • Performance
  • Consideration

Question 38

A lis pendens action is effective:
  • during the time that an action is pending
  • until the action is dismissed
  • until a final judgment is rendered
  • All of the above

Question 39

Most real estate syndicates in California are organized as:
  • corporations
  • general partnerships
  • limited partnerships
  • real estate investment trusts

Question 40

A tenant wants to sublease or assign a leased property. If the lease is silent on this issue, then the:
  • property cannot be sublet or assigned
  • property cannot be sublet or assigned without the landlord's permission
  • tenant may go ahead and sublease or assign the property
  • tenant may sublease the property but may not assign it

Question 41

Which of the following statements regarding options is correct?
  • If a lease containing an option to purchase is assigned, the option right will pass along with the lease
  • An option creates a fiduciary relationship between optionor and optionee much like the relationship between agent and principal
  • An optionor may give another option to a second optionee before the first option period expires
  • An option is the same thing as a right of first refusal

Question 42

A broker took a listing that did not expressly authorize him to accept a deposit. When the broker found a prospective buyer, the buyer gave him a personal check as the deposit on the property. With regard to the deposit, the broker would be:
  • agent to the buyer
  • agent to the seller
  • a dual agent
  • agent to the escrow company

Question 43

Jaime sold his landlocked property, which had an easement appurtenant for access to the road. The deed he gave the buyer gave an adequate legal description of the property but did not mention the easement. The buyer:
  • has a cloud on the title
  • takes title without the easement but receives a new easement by necessity
  • loses the easement to the servient tenement
  • has the same right to the easement that Jaime did

Question 44

Which of the following easements runs with the land and is binding on all subsequent owners?
  • Easement appurtenant
  • Easement in gross
  • Prescriptive easement
  • Easement by implication

Question 45

Which of the following would be important in the process of filing a mechanic's lien?
  • Notice of nonresponsibility
  • Notice of completion
  • Notice of cessation of labor
  • All of the above

Question 46

A broker takes a listing. The seller accepts an offer from a buyer who's being represented by a salesperson who works for the listing broker. The broker is now classified as a:
  • buyer's agent
  • general agent
  • dual agent
  • subagent

Question 47

A prospective buyer submitted an offer to Broker Randolph that met the asking price. As Randolph was on his way out of the office to present the offer to the seller, one of Randolph's salespersons brought in another offer on the same property that was $5,000 less. Randolph should:
  • inform the salesperson that the property already has sold on the seller's terms and conditions
  • present the offers in the order they were received
  • present the two offers at the same time
  • present the second offer only if the first offer is turned down

Question 48

When industrial space is rented, the landlord customarily promises that:
  • the property is up to current code at the time of the lease
  • the property was constructed according to code when it was built
  • the property shall be in habitable condition
  • the property shall be never be subject to condemnation

Question 49

The Alquist-Priolo Special Studies Zone Act requires a subdivider to disclose to potential purchasers:
  • underground storage tanks
  • location in a flood plain
  • water quality reports
  • earthquake fault lines

Question 50

Basic responsibility for zoning decisions lies with the:
  • planning commission
  • city engineer's office
  • county assessor
  • board of equalization

Question 51

A vacant lot sold for $50,000, with the buyer assuming an existing $30,000 loan as part of this selling price. The documentary transfer tax rate is 55 cents per $500. How much would the documentary transfer tax on this transaction be?
  • $88
  • $22
  • $33
  • $55

Question 52

Which of the following is not a way through which an individual can acquire an interest in real property?
  • Patent
  • Escheat
  • Prescription
  • Accession

Question 53

A grant deed is executed if it has been:
  • signed by the grantor
  • acknowledged
  • delivered to the grantee
  • recorded

Question 54

Which of the following statements regarding the power of eminent domain is true?
  • The proposed use must be practical and just compensation must be paid
  • The proposed use must be a public use and just compensation must be paid
  • The proposed use must be practical and a public use
  • The government must offer the property owner a property of comparable value and utility

Question 55

The government has the authority to enact zoning ordinances because these ordinances:
  • maintain the quality of building construction
  • promote the public health, safety, morals, and welfare
  • prevent oversupply of certain types of uses
  • encourage conformity within particular zones

Question 56

Who is generally responsible for the installation of the curbs, streets, and public utilities in a new subdivision?
  • The developer
  • City or county planning office
  • Bonding companies serving the developer
  • Improvement districts formed by lot purchasers

Question 57

A mechanic's lien against real property may be filed by:
  • contractors and subcontractors
  • landscape architects
  • suppliers of materials
  • All of the above

Question 58

The police power is the power of the state to:
  • regulate federal lands for the public good
  • levy taxes
  • enact and enforce laws to protect the safety, health, morals, and welfare of the public
  • take private land

Question 59

The Real Estate Commissioner has primary authority regarding new subdivisions that includes:
  • drainage and sewage
  • street layout
  • financial arrangements necessary to complete improvements
  • All of the above

Question 60

A possessory ownership right or interest in real property is a/an:
  • lien
  • encumbrance
  • fixture
  • estate

Question 61

Which of the following instances would not terminate an offer to purchase real property?
  • Death or insanity of the offeror
  • The offeror revokes the offer after the offeree has accepted the offer
  • The offeree does not respond to the offer before a deadline for acceptance
  • The offeree makes a counteroffer

Question 62

Which of the following would not be considered real property?
  • Rights to unextracted oil
  • An easement appurtenant
  • An uncultivated stand of trees
  • A leasehold estate in a rental house

Question 63

When a counteroffer is made:
  • the offeree becomes the offeror
  • the offeror is accepting the terms without modification
  • the original offer is amended
  • the offeree can later go back and accept the original offer

Question 64

Alienation is most nearly the opposite of:
  • abrogation
  • acquisition
  • acceleration
  • amortization

Question 65

A contract that is executory is a:
  • binding written contract
  • contract that contains a promise for a promise
  • contract that has not yet been fully performed
  • contract that has been fully performed

Question 66

In some bilateral contracts, the parties exchange a promise for a promise. Each promise would be:
  • partial performance
  • an acceptance
  • consideration for the contract
  • a novation

Question 67

How is the maximum commission rate a broker may charge established?
  • It is set by the local multiple listing service
  • It is mandated by the state Real Estate Law
  • It must be within limits prescribed by real estate professional associations' ethical codes
  • It is set by agreement between principal and broker

Question 68

On Thursday, Angie decided to accept Harry's counteroffer for the purchase of his house, signed the purchase agreement, and placed it in the mail. On Friday, Harry decided that he had asked too low a price for the house, and faxed Angie stating that the offer was withdrawn. On Saturday, Harry received her acceptance in the mail. Under the mailbox rule, which of the following is true?
  • Harry withdrew his offer, so no contract is formed
  • Harry did not withdraw his counteroffer in time, so a contract is formed
  • Harry may not make a counteroffer
  • Harry's withdrawal was ineffective since it was not in writing

Question 69

Before the seller's acceptance of an offer has been communicated to a buyer, the buyer may withdraw the offer:
  • if the offer was not stated to be irrevocable
  • if the offer was not scheduled to remain open until a particular date
  • if the offer was not accompanied by a good faith deposit
  • for any reason

Question 70

An attachment lien is good for:
  • 1 year
  • 2 years
  • 3 years
  • 4 years

Question 71

In which of the following circumstances would a deed always be void?
  • A forged deed in the hands of a bona fide purchaser
  • A deed signed by an incarcerated convict
  • A deed signed by an unmarried person under age 18
  • A deed that is not supported by consideration

Question 72

A broker sells a used mobile home that is subject to registration requirements. The Department of Housing and Community Development must be notified within:
  • 3 days
  • 7 days
  • 10 days
  • 20 days

Question 73

Which of the following organizations is considered to be an artificial person?
  • Joint venture
  • Corporation
  • Partnership
  • All of the above

Question 74

Title will be delivered on a different day than the day the buyer plans to take possession on. The parties should use a/an:
  • interim occupancy agreement
  • quitclaim deed
  • assignment of rents
  • option agreement

Question 75

A broker is working under an open listing. When prospective buyers are shown the property, the broker should:
  • withhold disclosure of latent defects
  • notify the multiple listing service
  • require each prospect to sign an agreement to pay a commission if they purchase the property
  • notify the seller of the prospects' names

Question 76

A seller accepted an offer on a property and communicated her acceptance to the buyer. However, before the deal went to escrow, the seller received a second, all-cash offer. The seller rescinded the first acceptance in order to accept the second offer. A court would find that:
  • the broker is not entitled to compensation since the transaction did not go to escrow
  • the buyer is entitled to return of the good faith deposit but has no further claim against the seller
  • the acceptance of the second offer was void because a contract for the sale of the property already existed
  • the broker was entitled to a commission as soon as the first offer was accepted

Question 77

If a broker is authorized through an agency agreement to negotiate a sale of property, but the seller strikes the portion of the listing form that provides for the authority to accept a buyer's deposit, then the broker:
  • is therefore implicitly authorized to accept a buyer's deposit
  • may accept a buyer's deposit but becomes the buyer's agent in regard to the deposit
  • will violate the Real Estate Law if he accepts a buyer's deposit without the express authority to do so
  • must be given express permission by the seller before being able to accept the buyer's deposit

Question 78

Which of the following is a requirement for a tenancy in common relationship to exist?
  • The tenants in common must have the right of survivorship
  • Each tenant in common must have an equal interest
  • There must be unity of possession
  • Each tenant must take title to the property at the same time

Question 79

A land contract was recorded by the seller. The buyer defaulted on the payments. If a quitclaim deed were to be used in order to clear the cloud from the title, it would be executed by:
  • the buyer
  • the seller
  • both the buyer and the seller
  • the lender

Question 80

The payment of a commission to a real estate broker based only on an oral listing is:
  • illegal
  • contrary to public policy
  • permissible if the seller elects to do so
  • prohibited by the Commissioner's regulations

Question 81

A seller's agent owes which of the following duties to the buyer?
  • The duty of confidentiality
  • Only the duty to disclose latent defects
  • The duty of honesty and good faith
  • All of the same fiduciary duties

Question 82

With a purchase agreement, the date of formation of the contract is:
  • when acceptance is communicated to the offeror
  • the date the contract is prepared
  • the date the buyer signs
  • the date the offer is made

Question 83

A buyer and seller of a house initialed a liquidated damages provision in a standard residential purchase agreement. The buyer defaulted. The damages money will usually be:
  • divided equally between seller and listing agent
  • limited to 5% of purchase price
  • retained entirely by the seller
  • returned to the buyer, less any seller's expenses

Question 84

Which of the following methods would create an easement that would be easiest to terminate for nonuse?
  • Express reservation
  • Implication
  • Prescription
  • Quitclaim deed

Question 85

Broker Stevens listed a property. Broker Yamasaki located a buyer for the property. Under a unilateral offer of subagency, Yamasaki would be a/an:
  • buyer's agent
  • inadvertent dual agent
  • agent of Broker Stevens
  • dual agent

Question 86

What is the most common way for a corporation to generate additional funds?
  • Sell common stock
  • Authorize preferred stock
  • Order a bond issue
  • Take on additional limited partners

Question 87

How do riparian rights differ from littoral rights?
  • Riparian rights are associated with water; littoral rights are associated with land
  • Riparian rights are only use rights; littoral rights are possessory rights
  • Riparian rights relate to streams and rivers; littoral rights relate to lakes and oceans
  • Riparian rights are appurtenant to the land; littoral rights are not

Question 88

Who would be in the weakest position to protect himself against a loss of property to another claimant?
  • A holder of a recorded deed who rents the property out
  • A holder of an unrecorded deed who occupies the property
  • A holder of a certificate of title issued by a title company
  • A holder of an unrecorded quitclaim deed who does not occupy the property

Question 89

Leo purchased a mobile home, which is now located in a mobile home park and properly registered. He wants to hire a broker to list the home. Which of the following is true?
  • A broker could not list it since the land is not being sold with it
  • A broker could not sell it without a mobile home sales permit from the DMV
  • A broker could arrange a sale of the home and a sublease of the land
  • A broker could list the mobile home only if it has been registered for more than one year

Question 90

An appurtenant easement is:
  • a possessory interest in another person's land
  • a right held by condominium owners to use property owned in common
  • an interest in land capable of being transferred by the owner of the easement
  • incapable of being sold because it is intangible

Question 91

On March 1, Craig paid $100 for a 60-day option to purchase a property. The option stated, "Upon exercise of option, optionee is to purchase within 30 days." On March 15, he sold and assigned the option to Sharon for $10,000. On April 20, Sharon informed the seller that she intended to purchase the property on May 15. What is the status of the option?
  • Valid, since an option may be assigned, but Sharon will need to purchase the property before April 30
  • Valid, since Sharon will purchase within 30 days after the exercise of the option
  • Invalid, since an option may not be assigned
  • Invalid, since the purchase date will be after the option has expired

Question 92

A buyer's agent has a fiduciary duty to:
  • advise the buyer on how best to take title
  • use utmost care when dealing with the buyer
  • instruct the buyer which title insurance company to use
  • disclose to the seller the maximum the buyer will pay for the property

Question 93

A farm was sold where a field of corn was growing; there was no discussion between buyer and seller as to who would own the corn. If there was a dispute as to who could harvest the corn, a court would find:
  • the corn is real property, so the buyer is entitled to it
  • the seller receives the corn because it has been constructively severed from the land
  • the seller may return to harvest the corn under the doctrine of emblements
  • the seller may harvest the corn because his intention is the controlling factor

Question 94

The Springers hired a contractor to build a swimming pool for their house. If the Springers did not pay for the construction and the contractor filed a lien, the resulting encumbrance would be a:
  • general lien
  • specific lien
  • voluntary lien
  • None of the above

Question 95

Barry hired Broker Teri to find a warehouse to lease. Carrie hired Teri to find a lessee for her warehouse. Each party agreed to pay Teri a commission. Teri negotiated a lease between the two parties. Barry knew Teri also represented Carrie, but Carrie didn't know that Teri represented Barry. Which of the following is correct?
  • Barry and Carrie are both liable for commissions
  • Barry is liable for a commission
  • Carrie is liable for a commission
  • Neither party may be liable for a commission

Question 96

How can a homestead recorded under California law be invalidated?
  • Destruction of the improvements on the property by fire
  • A declaration of homestead is filed on another property
  • Moving to another property
  • Moving to another state

Question 97

Broker Arbogast had an open listing on a residential property. He verbally agreed to pay one-half of any commission to Broker Bates if Bates found a buyer. Bates succeeded in arranging a sale of the property, but Arbogast refused to pay half of his commission to Bates. How would a court decide this case?
  • Bates would not be able to collect because of the open listing
  • Bates would not be able to collect because verbal commission split agreements are unenforceable
  • The matter would be referred to the Real Estate Commissioner for arbitration
  • Bates would be able to file a civil action and collect his commission

Question 98

An agent fails to do a visual inspection of a house as required by law. How many years after occupying the property can the buyer bring an action against the agent for failure to inspect the property?
  • 1 year
  • 2 years
  • 5 years
  • 7 years

Question 99

If an owner obtains riparian rights to a property:
  • he may take as much water from the stream as he likes
  • he may use the water only with a government permit
  • he has absolute ownership of the stream
  • the riparian rights apply only to the property that is adjacent to the stream and that is located within the watershed

Question 100

In which of the following ways are joint tenancy and community property similar?
  • Both are limited to husband and wife
  • Both require that the property be owned by no more than two parties
  • Both involve equal ownership interests
  • Both require the signature of all parties to sell any interest in the property
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