California Real Estate Law and Property Transactions, Exams of Real Estate Management

Download California Real Estate Law and Property Transactions and more Exams Real Estate Management in PDF only on Docsity! California Real Estate Principles-Questions and Answers Graded A+. (1) 1. The Real Estate Law is found in the a. Licensing Code b. Business and Professions Code c. Health and Safety Code d. Corporations Code - ANS Business and Professions Code (1) 2. The Real Estate Commissioner reports to the a. California Bureau of Real Estate B. governor c. Real Estate Advisory Commission D. legislature - ANS governor (1) 3. Salesperson Sam owns 25% of the outstanding shares of Rollo Realty, Inc., and broker Barbara Rollo owns the remaining shares. This division of ownership is? A. acceptable B. mandated C. discouraged D. prohibited - ANS acceptable (1) 4. Salesperson Sam is part owner of Rollo Realty, Inc. In the broker's absence, Sam frequently reviews the work of sales associates. This is? A. acceptable B. mandated C. discouraged D. prohibited - ANS prohibited (1) 5. A real estate business that is a partnership can have more than one office location, provided A. a broker partner obtains an additional license for each location B. all partners are real estate licensees C. there is a designated broker-officer D. there is at least one partner at each location - ANS a broker partner obtains an additional license for each location (1) 6. The sale or transfer of goods ordinarily held for sale in the course of business is governed in California by the? a. Business Opportunity Code b. Commercial Transfer Law c. Uniform Commercial Code d. Real Estate Law - ANS Uniform Commercial Code (1) 7. Todd, an officer of Ajax Corporation and not a real estate licensee, successfully negotiated the purchase of the Smith Widget Plant on behalf of Ajax. Todd received a commission on the sale in addition to his normal salary. Todd A. did not need a real estate license for the deal B. should have had a real estate license C. is exempt from licensing requirements d. None of these - ANS should have had a real estate license (1) 8. If a real estate license is NOT renewed before it expires, the licensee? A. is allowed to complete transactions in progress B. is allowed to finish transactions that are substantially complete C. must cease all real estate activities D. may act under authority of another agent's license for a period not to exceed 60 days - ANS must cease all real estate activities (1) 9. A real estate licensee can offer a mobile home for sale that is? A. in a manufacturing plant, ready for delivery B. transportable under an exemption from the vehicle code C. presold D. in a location where it can legally remain for one year - ANS in a location where it can legally remain for one year (1) 10. The Browns desperately want to move to Pine Bend, and they like the Smith House, which is listed by broker Bob. The Browns tell Bob they will make it worth his while if he can persuade the Smith's to accept the Brown offer on their house, and the Browns send an expensive food basket to Bob as a sign of their good faith. Bob neglects to mention this to the Smiths. This practice is A. acceptable B. mandated C. discouraged D. prohibited - ANS prohibited (1) 11. Broker Bob routinely places earnest money deposits in his personal account for overnight safekeeping. This practice is A. acceptable B. mandated C. crown D. conquistadors - ANS crown (2) 2. The Treaty of Guadalupe Hidalgo ended A. the gold rush b. Spanish rule C. the war with Mexico D. the missions - ANS the war with Mexico (2) 3. Real Estate Law, which relies on court decisions as well as legislation, is based on a. Spanish civil law b. French civil law C. the right of appropriation d. English common law - ANS English common law (2) 4. Land disputes over the Spanish and Mexican land grants were settled by A. the Board of Land Commissioners B. the State of California C. the Spanish legal code D. taking all land for public use - ANS the Board of Land Commissioners (2) 5. In California, the term real estate is synonymous with A. land B. fixtures C. real property D. personal property - ANS real property (2) 6. Real property is NOT A. land B. real estate C. appurtenances to land D. movable - ANS movable (2) 7. The sale of the real property generally is governed by the laws of A. the state where the real property is located B. the state where the owner of the real property resides C. any of the states D. the federal government - ANS the state where the real property is located (2) 8. The sale of personal property generally is governed by the laws of A. the state where the personal property is located B. the state where the owner of the property resides C. any of the states D. the federal government - ANS the state where the owner of the property resides (2) 9. In California, the Uniform Commercial Code governs sales transactions involving A. real estate B. bulk sales of goods C. fixtures to real estate D. riparian rights - ANS bulk sales of goods (2) 10. For real estate to be conveyed, there must be an accurate A. fence line B. description C. soil chemical analysis D. water test - ANS description (2) 11. A subdivision map is A. rarely accurate B. good only to describe the entire subdivision C. never required D. a good reference for a legal description - ANS a good reference for a legal description (2) 12. The most useful method of describing a subdivision parcel is probably the A. lot and block system B. rectangular survey system C. metes and bounds system D. U.S. government survey system - ANS lot and block system (2) 13. The rectangular survey system is also called the A. U.S. government survey system B. province and township system C. subdivision system d. California system - ANS U.S. government survey system (2) 14. California has how many principal baselines a. 1 b. 2 c. 3 d. 4 - ANS 3 (2) 15. A township consists of how many sections a. 12 b. 18 c. 4 d. 36 - ANS 36 (2) 16. A section is A. 640 acres B. six square miles C. 5,000 feet by 5,000 feet d. Three leagues - ANS 640 acres (2) 17. Section 6 lies in what direction from section 1 of a township a. North b. South c. East d. West - ANS West (2) 18. Section 22 lies in what direction from section 17 of a township a. Northeast b. Northwest c. Southeast d. Southwest - ANS Southeast (2) 19. Land described as the South 1/2 of the N 1/2 of Section 18 contains how many acres? a. 80 b. 120 c. 160 d. 320 - ANS 160 (2) 20. The point of beginning is used in A. the rectangular survey system B. the metes and bounds system C. the lot and block system D. all legal descriptions - ANS the metes and bounds system a. joint tenant with the other joint tenant's b. tenant in common with the other joint tenants c. tenant at sufferance d. remainderman - ANS tenant in common with the other joint tenants (3) 14. Community property is a. all property acquired by a spouse or registered domestic partner b. all property acquired by the husband during marriage c. the only form of ownership during marriage d. all property acquired by a spouse or registered domestic partner that is not separate property - ANS all property acquired by a spouse or registered domestic partner that is not separate property (3) 15. One of the forms of concurrent ownership is a. ownership in severalty b. tenancy in partnership c. sole proprietorship d. separate ownership - ANS tenancy in partnership (3) 16. A partner has a. an absolute right to use partnership property b. the right to assign partnership property c. the right to convey partnership property by will d. the right to possession of partnership property for partnership purposes - ANS the right to possession of partnership property for partnership purposes (3) 17. Absolute control, as well as absolute liability, belongs to a a. sole proprietor b. corporate shareholder c. limited partner d. trustee - ANS sole proprietor (3) 18. When doing business in California, a corporation chartered in California is a a. domestic corporation b. foreign corporation c. real estate investment trust d. general partnership - ANS domestic corporation (3) 19. Title to a spouse's marital property can be transferred upon death by use of a(n) a. oral will b. tenancy in common c. living trust d. letter of intent - ANS living trust (3) 20. A limited partner is a. responsible for partnership activities b. a general partner in some instances c. not liable for partnership debts beyond the amount invested d. required to take part in partnership business - ANS not liable for partnership debts beyond the amount invested (4) 1. A person who dies without a will dies a. testate b. intestate c. with an executor d. in eminent domain - ANS intestate (4) 2. The testator names a(n) a. executor or executrix b. testator c. devisor d. administrator - ANS executor or executrix (4) 3. Someone who receives real property by will is called a a. devise b. devisee c. testator d. codicil - ANS devisee (4) 4. A typewritten will must be a. made by a competent b. signed by the testator c. witnessed d. all - ANS made by a competent person, signed by the testator and witnessed (4) 5. A statutory will is a. signed and witnessed b. telegraphic c. oral d. invalid - ANS signed and witnessed (4) 6. A holographic will is a. oral b. telegraphic c. handwritten d. witnessed - ANS handwritten (4) 7. The probate court appoints a(n) a. executor or executrix b. testator c. devisee d. administrator or administratrix - ANS administrator or administratrix (4) 8. When soil is deposited on a riverbank, gradually building out the land, this process is called a. accretion b. alluvion c. avulsion d. subsidence - ANS accretion (4) 9. When flood conditions cause land to be washed away, this is known as a. accretion b. alluvion c. avulsion d. accession - ANS avulsion (4) 10. When water recedes, creating a new shoreline, the process is called a. accretion b. alluvion c. avulsion d. reliction - ANS reliction (4) 11. Elena moves onto Mike's land, builds a home, pays property taxes, and claims she owns the property. When will she have good title, even against Mike a. After 1 year b. After 3 years c. After 5 years d. After 10 years - ANS After 5 years Real property is composed of what 4 elements? (lAAF) - ANS land, fixtures, anything incidental or appurtenant to the land, anything immovable on the land Underground water that is not confined to a defined stream is? - ANS percolating water The upper limit of percolating water below the earth's surface, at a depth of a few feet or hundreds of feet is called? - ANS water table (groundwater level) What is considered to "run with the land"? - ANS appurtenances Cultivated crops are called? - ANS emblements The listing agreement between seller and buyer should identify the items the seller wants to ? - ANS remove What are the 5 tests to determine if a specific thing is a fixture? (MARIA) - ANS method, adaptability, relationship, intent, agreement An item attached for use in a trade or business is called a? - ANS trade fixture Can a court of another state decide an issue involving California real estate? Yes/No - ANS No What are the 3 types of legal description of land? - ANS metes and bounds, lot and block, section and township What direction in the section and township method of describing land runs east-west? - ANS base line What direction in the section and township method of describing land runs north-south? - ANS meridian How many square miles is a township? - ANS 36 How many square miles in a section? - ANS 1 How many acres are in a section? - ANS 640 Townships run north-south in groups called? - ANS tiers Townships run east-west in groups called? - ANS ranges The sections composing a township are numbered starting in what corner of the township. - ANS northeast One acre contains how many square feet? - ANS 43,560 One mile is how may feet long? - ANS 5,280 How many feet in a rod? - ANS 16.5 One league is how many miles? - ANS 3 One furlong is how many rods? - ANS 40 A subdivision map may also be referred to as a? - ANS plat map What type of fixture remains the personal property of a business? - ANS trade fixture An interest in property is called an? - ANS estate If the right of possession is restricted in some way, it is a fee simple subject to a? - ANS power of termination If the right of possession returns to the original property owner when a life estate ends, the original owner has a ? - ANS reversion If the right of possession goes to a third person when the life estate ends, that person has a ? - ANS remainder Who holds an estate in remainder during the existence of the life estate and a fee simple estate on termination of the life estate? - ANS remainderman The holder of a life estate is called the? - ANS life tenant Is a life tenant responsible for mortgage interest? - ANS yes Those who rent or lease property from landlords are called ? - ANS tenants A conveyance of real estate is called a ? - ANS grant The person (the owner) conveying the property is the ? - ANS grantor The person receiving property conveyed to them is the ? - ANS grantee Advising someone on how to take title has tax consequences. Such advice should come from ? - ANS attorney or CPA What are the 4 unities of joint tenancy? (TTIP) - ANS time, title, interest and possession Can real estate agent give advice on how to acquire title? - ANS No Property that was a married persons separate property before marriage remains separate property after marriage. - ANS Yes As of July 1, 2001, spouses can take title to property as community property with right of survivorship. Yes/No - ANS Yes Any California real estate acquired by an out-of-state married person that would have been considered community property if it had been acquired by a resident of California is called? - ANS Quasi-Community Property Any California real estate acquired in exchange for real or personal property located anywhere, when the California real estate would have been considered community property if it had been acquired by a California resident is called? - ANS Quasi- Community Property Property owned by the partnership is actually owned by the individual partners as a? - ANS tenancy in partnership A partner's right in property owned by the partnership can be community property? Yes/No - ANS No All partners are liable for debts of the partnership. Yes/No - ANS Yes The owners of a corporation are called? - ANS shareholders A nonprofit corporation is owned by? - ANS members Corporations created in the state where they are chartered are called? - ANS domestic corporations Corporations created outside the state where they are chartered are called? - ANS foreign corporations The type of corporation where all shareholders must be individuals with fewer than 100 shareholders is called an? - ANS S corporation Limited partners can take part in management of the partnership. Yes/No - ANS no, and if the do they become a general partner Taxes and fees are higher for an LLC than for a partnership. Yes/No - ANS Yes Using a trust to hold title is a way to keep the true owner's identity hidden. Yes/No - ANS Yes a. when work has stopped for 30 days b. when an improvement is complete c. at any time after the work is substantially completed d. after work has stopped for any number of days - ANS when work has been stopped for 30 days (5) 6. A notice of completion should be filed within a. 20 days after completion of the work of improvement b. 10 days after completion of the work of improvement c. 20 days after work stops d. 10 days after supplies have been received - ANS 10 days after completion of the work of improvement (5) 7. Generally, the action to enforce a mechanic's lien claim must be filed within how many days after the lien is recorded a. 30 b. 60 c. 90 d. 120 - ANS 90 days (5) 8. If unauthorized work is being done, a property owner can a. file a preliminary notice b. file a notice of cessation c. allow the job to be completed and then refuse to pay d. file a notice of non-responsibility - ANS file a notice of non-responsibility (5) 9. Liens and judgments are a. encumbrances b. encroachments c. easements d. void on homestead property - ANS encumbrances (5) 10. The sheriff is directed to sell property by a a. writ of attachment b. writ of execution c. satisfaction d. release - ANS writ of execution (5) 11. The right to use adjacent land to go to and from a roadway is a(n) a. encroachment b. easement c. restriction d. condition - ANS easement (5) 12. Betty's property includes an easement over Al's land. Al's property is the a. dominant tenement b. servient tenement c. easement d. encroachment - ANS servient tenement (5) 13. Betty's property includes an easement over Al's land. Betty's property is the a. dominant tenement b. servient tenement c. easement d. encroachment - ANS dominant tenement (5) 14. George does not own any land but has an easement over Al's and Betty's property to go down to the river. George has an a. easement by necessity b. easement by implication of law c. easement in gross d. encroachment - ANS easement in gross (5) 15. Marilyn's 40-acre tract, purchased from Alan, is landlocked, which means she a. has to enter it by helicopter b. has an easement in gross over any land she chooses c. has an easement by implication of law over any land she chooses d. can get an easement by necessity over Alan's adjoining land. - ANS can get an easement by necessity over Alan's adjoining parcel (5) 16. Al sold Blackacre to Betty, giving her an easement over Whiteacre. Years later, Al bought Blackacre back from Betty. What effect did his purchase have on the easement a. The easement stayed with Betty b. The easement is owned by Al c. The purchase terminated the easement d. The purchase had no effect on the easement - ANS the purchase terminated the easement (5) 17. The maximum homestead exemption may be claimed by any homeowner who is a. a member of a family unit b. older than 65 years of age c. married d. single - ANS older than 65 years of age (5) 18. A family unit is a. defined by law b. limited in size c. limited to the relatives of one's spouse d. at least 3 people - ANS defined by law (5) 19. The homestead exemption for a single person is at Least a. $175,000 b. $100,000 c. $75,000 d. $50,000 - ANS $75,000 (5) 20. The homestead exemption for a homeowner who is a member of a family unit is at least a. $175,000 b. $150,000 c. $125,000 d. $100,000 - ANS $100,000 (6) 1. Generally an agent works for the a. principal b. third person c. subagent d. California Bureau of Real Estate - ANS principal (6) 2. A minor a. may be a licensed real estate agent b. is anyone younger than 21 years of age c. may be a licensed real estate salesperson d. is anyone younger than 18 years of age - ANS Is anyone younger than 18 years of age (6) 3. Someone appointed to carry out a particular transaction is a a. general agent b. special agent a. only the duty of compensation b. the duty of obedience c. the duty of care d. the duties of a fiduciary - ANS the duty of care (6) 17. A real estate seller must disclose a. only visible property defects b. structural additions or repairs only if made by the seller c. material facts concerning the property's value or desirability d. only defects that would be revealed by a property - ANS material facts concerning the property's value or desirability (6) 18. Exaggerating a property's value or desirability a. is permissible b. is expected in the average transaction c. is justifiable as harmless "puffing" d. is never permitted - ANS is never permitted (6) 19. The Recovery Account is available to a. brokers b. salespeople c. people victimized by a real estate licensee d. real estate licensees victimized by their clients - ANS people victimized by a real estate licensee (6) 20. An agency relationship may NOT be terminated by a. completion of the agreement b. expiration of the terms of the agreement c. agreement of the parties d. someone outside the agency relationship - ANS someone outside the agency relationship (7) 1. Sue is 17 years old. She can contract as an adult if she is a. is living away from her parents b. Is emancipated c. is an orphan d. has an adult cosign with her - ANS emancipated (7) 2. Fred owns and runs his one-man shoe repair shop as a(n) a. sole proprietor b. partner c. executor d. administrator - ANS sole proprietor (7) 3. Mary persuaded her elderly Aunt Agnes to buy a grossly overpriced condominium. Mary knew the price was to high, but she received a commission on the sale from the seller. Aunt Agnes may complain of a. actual fraud and undue influence b. negligent misrepresentation c. constructive fraud d. commercial frustration - ANS actual fraud and undue influence (7) 4. The contract Haji Ababe accepted states a purchase price "as appraised on May 12, 2014, by Mike Morton, MAI". Based on this provision, the contract is a. void b. voidable c. unenforceable d. enforceable - ANS enforceable (7) 5. Can broker Bob enforce an oral listing agreement for his neighbor's home a. Yes b. No c. Possibly d. Only if he did not have a contract form handy - ANS No (7) 6. When both parties agree to cancel a contract, they effect a a. rescission b. release c. novation d. reformation - ANS rescission (7) 7. Todd Miller made an offer for the Brown residence, and the Browns accepted the offer. On reconsidering, Todd decides to back out of the deal. The Browns agree to let hi do so. Todd and the Browns then sign a(n) a. novation of the purchase contract b. agreement rescinding the purchase contract c. assignment of the purchase contract d. agreement reforming the purchase contract - ANS agreement rescinding the purchase contract (7) 9. Lonnie and Karen have a contract to buy the Santos house. Following a four-day rainstorm, the Santos house was pushed off its foundation by a mud slide and is now resting halfway over a ravine. The contract probably is a. discharged because performance is impossible b. still in effect c. discharged because performance is impossible d. renegotiable at the discretion of the seller - ANS discharged because performance is impossible (7) 10. If Jane's performance of her sales contract becomes economically impractical, she should a. cancel the contract unilaterally b. ask that the contract be terminated c. claim the purchase is a mistake d. tear up the contract - ANS ask that the contract be terminated (7) 11. Failure to perform a contract is a a. rescission b. breach c. novation d. reformation - ANS breach (7) 12. Fred signed a contract to sell his farm to George. Fred had second thoughts and refused to sell, but the sale went through anyway. How a. George threatened Fred b. George received a court order for specific performance of the contract c. Once signed, a contract cannot be terminated d. Fred increased the purchase price - ANS George received a court order for specific performance of the contract (7) 13. The time period in which a lawsuit can be brought is set by the a. equal dignities rule b. statute of frauds c. statute of limitations d. probate court - ANS statute of limitations (7) 14. The statute of limitations for an action based on a real estate contract is a. unlimited b. 2 years c. 4 years b. all lenders c. nonfinancial institutions d. private lenders - ANS private lenders (8) 5. Real estate is hypothecated by use of a a. promissory note b. negotiable instrument c. security instrument d. pledge - ANS security instrument (8) 6. To be a negotiable instrument, a promissory note must be a. a promise to pay money to the bearer b. an oral agreement c. payable at an indefinite future time d. signed by the bearer - ANS a promise to pay money to the bearer (8) 7. A holder in due course must take a negotiable instrument a. within 90 days of its execution b. with knowledge of all defenses against it c. without notice of any defense against its enforcement d. for cash - ANS without notice of any defense against its enforcement (8) 8. In a mortgage, the lender is the a. mortgagor b. mortgagee c. maker d. holder - ANS mortgagee (8) 9. The highest bidder at a judicial foreclosure receives a a. deed b. contract c. title d. certificate of sale - ANS certificate of sale (8) 10. In a deed of trust, the borrower is the a. trustor b. trustee c. beneficiary d. holder - ANS trustor (8) 11. In a deed of trust, the lender is the a. trustor b. trustee c. beneficiary d. holder - ANS beneficiary (8) 12. The first step in bringing about a trustee's sale is to prepare a a. declaration of default b. notice of levy c. request for notice d. notice of default - ANS declaration of default (8) 13. There is no right of redemption following a a. strict foreclosure b. trustee's sale c. judicial foreclosure d. mortgage foreclosure - ANS trustee's sale (8) 14. An ARM is a a. graduated payment mortgage b. growing equity mortgage c. mortgage in which the interest rate changes periodically based on an index d. reverse annuity mortgage - ANS mortgage in which the interest rate changes periodically based on a index (8) 15. MOST adjustable rate mortgages are a. assumable b. not assumable c. held by the sellers d. not allowed for federal institutions - ANS assumable (8) 16. Interest rate and payment can change every three to five years in a a. graduated payment mortgage b. renegotiable-rate mortgage c. growing equity mortgage d. reverse annuity mortgage - ANS renegotiable-rate mortgage (8) 17. The TILA-RESPA law applies to a. HELOCs b. construction-only loans c. loans made by a person who makes five or fewer mortgages in a calendar year d. reverse mortgages - ANS construction-only loans (8) 18. RESPA covers the a. listing agreement b. broker's commission c. Closing Disclosure form d. loan application form - ANS closing disclosure form (8) 19. David Yoo bought Whiteacre and is making the former owner's original loan payments. If David defaults, the seller will be obligated on the loan. Which statement is TRUE a. David bought the loan b. David bought the property subject to the loan c. David is subject to a due-on-sale clause d. David does not have title to Whiteacre - ANS David bought the property subject to the loan (8) 20. A lender that discriminates against a loan applicant because of race has violated the a. Equal Dignities Rule b. Truth in Lending Act c. Equal Credit Opportunity Act d. Lender's Law - ANS Equal Credit Opportunity Act (9) 1. A California veteran might have a home loan insured by a. FHA b. VA c. CalVet d. Fannie Mae - ANS FHA (9) 2. FHA appraisal value is used to set the upper limit of the a. purchase price b. loan amount c. construction cost d. seller contribution - ANS loan amount (9) 3. In addition to a monthly charge, FHA mortgage insurance includes a one time payment on a purchase loan that is a. GEM b. GPM c. land contract d. bill of sale - ANS land contract (9) 17. In a sale leaseback a. land is never sold b. buildings are always sold c. both land and buildings can be sold d. only a leasehold interest is sold - ANS both land and buildings can be sold (9) 18. The secondary mortgage market does NOT deal in a. primary mortgage market instruments b. junior liens c. issuing loans d. mortgage backed securities - ANS issuing loans (9) 19. Which is NOT a part of the primary mortgage market a. FHA b. VA c. CalVet d. Fannie Mar - ANS Fannie Mae (9) 20. Ginnie Mae securities are NOT backed by a. FHA insured loans b. VA guaranteed loans c. Farmer Mac guaranteed loans d. CalVet loans - ANS CalVet loans (10) 1. To create an escrow, there must be a. a binding contract b. unconditional delivery c. real property d. all of these - ANS a binding contract (10) 2. Escrow instructions can be a. changed by oral agreement b. only unilateral c. changed only by written agreement of both parties d. all of these - ANS changed only by written agreement of both parties (10) 3. The escrow holder acts in the capacity of a. mediator b. agent of both parties c. advisor on the transaction d. surety - ANS agent of both parties (10) 4. Which must be licensed as escrow agents to perform such services a. Attorneys b. Title Insurance Companies c. Banks d. Escrow Companies - ANS Escrow Companies (10) 5. In Southern California, escrows are MOST often held by a. savings and loan associations b. escrow companies c. title insurance companies d. attorneys - ANS escrow companies (10) 6. By law a licensed escrow agent must a. pay a referral fee to a real estate agent b. disclose information concerning the transaction to outside parties c. be a corporation d. have a real estate brokers license - ANS be a corporation (10) 7. A real estate broker can serve as an escrow a. through associates b. with other brokers c. when he or she represents one of the parties to the transaction d. under a fictitious business name - ANS when he or she represents one of the parties to the transaction (10) 8. The legal action that may be brought by an escrow holder is a. quiet title b. interpleader c. adverse possession d. injunction - ANS interpleader (10) 9. Providing a copy of any buyer broker agreement is the responsibility of the a. buyer b. seller c. escrow agent d. real estate agent - ANS buyer (10) 10. Providing tenant information is the responsibility of the a. buyer b. seller c. escrow agent d. real estate agent - ANS seller (10) 11. Prorations at closing on amounts other than interest payments usually are based on a. a 30 day month b. a 31 day month c. the actual calendar number of days d. the number of days indicated by the buyer - ANS 30 day month (10) 12. If closing is on May 19, what amount will be charged to the buyers on a total property tax of $4,320 paid by the sellers for the current tax year? Remember to use the standard number of days in the month. a. $492 b. $504 c. $1,584 d. $1,728 - ANS $504 (10) 13. Closing is on June 15, and rent of $2,400 has been prepaid for the current month. What amount will the seller be debited at closing if the buyer receives credit for the day of closing? a. $1,280 b. $1,200 c. $1,350 d. $2,200 - ANS $1,280 (10) 14. A buyer's settlement statement includes a. only prorations chargeable to the buyer b. the borrower's loan application c. loan origination fees d. all encumbrances of record - ANS loan origination fees (10) 15. The MOST thorough method of title check results in a(n) (11) 8. The use of property assessments was expanded by the a. Senior Citizens' Tax Act b. Mello-Roos Community Facilities Act c. State Board of Equalization d. Housing Economic Recovery Act - ANS Mello-Roos Community Facilities Act (11) 9. A deed may show on its face that which of the following was paid a. Release of equity b. Gift tax c. Deed tax d. Documentary transfer tax - ANS Documentary transfer tax (11) 10. Sales and use tax are the responsibility of the a. Internal Revenue Service b. Franchise Tax Board c. State Board of Equalization d. Department of Housing and Community Development - ANS State Board of Equalization (11) 11. In California there is a state sales tax on a. food b. buildings to be removed from land by the buyer as part of a transaction c. fixtures sold as part of a business d. inventory sold as part of a business - ANS fixtures sold as part of a business (11) 12. The State of California collects a. federal income tax b. gift tax c. state income tax d. inheritance tax - ANS state income tax (11) 13. A gift is made a. by a donor to a beneficiary b. when an individual voluntarily transfers property for anything less than its fair market value c. any time property is transferred between parent and child d. when like kind property is exchanged - ANS when an individual voluntarily transfers property for anything less than its fair market value (11) 14. Gift tax is payable when the total value of the gift to an individual in one year is more than a. $8,000 b. $14,000 c. $15,000 d. $28,000 - ANS $14,000 (11) 15. Sam gave his friend Joe $15,000 for his tuition at Old Ivy, sending the money directly to the school. Must a gift tax return be filed a. Yes, because this is a gift b. No, because this gift has an exemption c. Yes, so that the exemption can be claimed d. No, because this is not considered a gift - ANS No, because this is not considered a gift (11) 16. Mario died in 2014, leaving only his separate property estate valued at $500,000. Must an estate tax return be filed a. Yes b. No c. Only if Mario was a widower d. Only if the estate is probated - ANS yes (11) 17. The rate of federal income tax paid depends on the taxpayer's a. tax bracket b. state income tax paid c. location d. source of income - ANS tax bracket (11) 18. Property that can be depreciated for income tax purposes is called a. recovery property b. tax basis c. boot d. like kind property - ANS recovery property (11) 19. With respect to investment property, an investor can make use of a. the residence replacement rule b. exclusion from taxation c. property tax postponement d. mortgage interest deductions from property income - ANS mortgage interest deductions from property income (11) 20. For 2013, all of the following were deductions from a homeowner's gross income for purposes of federal income taxation EXCEPT a. mortgage interest on a loan of $75,000 b. PMI on a loan that originated in 2013 c. mortgage interest on combined first and second home loans totaling $935,000 d. depreciation based on a 39 year schedule - ANS depreciation based on a 39 year schedule (12) 1. An apartment in San Francisco can be leased for a term of no more than a. 150 years b. a reasonable time c. 99 years d. 51 years - ANS 99 years (12) 2. An office in Los Angeles can be leased for a term of no more than a. 150 years b. a reasonable time c. 99 years d. 51 years - ANS 99 years (12) 3. Agricultural land can be leased for a term of no more than a. 150 years b. a reasonable time c. 99 years d. 51 years - ANS 51 years (12) 4. A security deposit on furnished residential property can be no more than a. two month's rent b. three month's rent c. a reasonable amount d. $2,000 - ANS 3 months rent (12) 5. If a question arises as to the validity of a landlord's claim against a tenant's security deposit a. the landlord is presumed to be entitled to the security deposit b. the tenant is presumed to be entitled to the security deposit c. the security deposit is forfeited to the state d. there is no presumption regarding ownership of the security deposit - ANS tenant is presumed to be entitled to the security deposit b. $4,675 c. $2,800 d. $3,675 - ANS $1,800 (12) 18. The owner of 417 Main, an office building, receives a guaranteed monthly income from her tenants and pays no expenses. She has a a. gross lease b. trust lease c. percentage lease d. net lease - ANS net lease (12) 19. A property manager a. must be a real estate broker b. is the property owner's agent c. is the tenant's agent d. is not an agent - ANS is the property owner's agent (12) 20. James moved out of his apartment at the end of the lease term. The landlord will be allowed to increase the rent for a new tenant to reflect the current market value because the local rent control ordinance a. provides for vacancy control b. provides for vacancy decontrol c. is based on an index d. is favorable to the tenant - ANS provides for vacancy decontrol (13) 1. A house is appraised at $423,000, even though it cost $435,000 to build 3 years earlier. Which factor could NOT have contributed to the loss in value a. Regression b. Gentrification c. Functional obsolescence d. Supply and demand - ANS gentrification (13) 2. Ed Wilson owns a vacant lot and employs an appraiser to determine the property's a. growth b. reproduction cost c. replacement cost d. highest and best use - ANS highest and best use (13) 3. Since the Peterson factory closed, houses in Sunny Acres are taking longer to sell, and prices have gone down. This is a result of a. highest and best use b. supply and demand c. contribution d. conformity - ANS supply and demand (13) 4. A house that benefits from the desirability of its neighboring properties is an example of the principle of a. balance b. contribution c. progression d. regression - ANS progression (13) 5. Charlie Addison has a deluxe five bedroom house in a neighborhood of modest 3 bedroom houses. How the value of Charlie's house will be affected is an example of a. substitution b. scarcity c. progression d. regression - ANS regression (13) 6. An improvement to a house may or may not create a corresponding increase in the house's market value. This is an example of a. balance b. progression c. contribution d.regression - ANS contribution (13) 7. The Miejas are looking forward to eventually retiring on the profit they will make from selling their house. Their attitude is an example of a. progression b. growth c. acquisition d. anticipation - ANS anticipation (13) 8. House A sold for $867,000 and is comparable to the house being appraised, but it has and extra garage valued at $47,000. What is the adjusted value of house A a. $767,000 b. $813,000 c. $820,000 d. $914,000 - ANS $820,000 (13) 9. To calculate the market value of a 19th century San Francisco Victorian style mansion using the cost approach, you probably would use a. reproduction cost b. replacement cost c. historical building cost d. cost averaging - ANS replacement cost (13) 10. The cubic foot method of estimating construction cost is best used for a. single family residences b. manufactured homes c. industrial properties d. multi family residential properties - ANS industrial properties (13) 11. Appraiser Hansen estimated all direct and indirect construction costs of the Harley Building separately, then totaled them. She used the a. unit in place method b. index method c. quantity survey method d. cost averaging method - ANS quantity survey method (13) 12. A single family residence with a one car garage may be an example of a. external obsolescence b. functional obsolescence c. economic obsolescence d. environmental obsolescence - ANS functional obsolescence (13) 13. Houses adjacent to a new highway will probably suffer from a. curable external obsolescence b. incurable functional obsolescence c. curable functional obsolescence d. incurable external obsolescence - ANS incurable external obsolescence (13) 14. Which is not a form of depreciation a. Physical deterioration b. Straight line method c. Economic obsolescence d. Functional obsolescence - ANS straight line method (13) 15. The upper limit of a property's value usually is determined by the c. orientation d. floor plan - ANS orientation (14) 8. The sun's arc in the sky is highest in a. summer b. fall c. winter d. spring - ANS summer (14) 9. A good floor plan has a. the kitchen near the garage b. bedrooms near living areas c. one bathroom for every three bedrooms d. no closets in the bedrooms, to conserve space - ANS kitchen near the garage (14) 10. Earthquake protection is provided by a. anchor bolts b. cross-bracing c. plywood sheathing d. all of these - ANS anchor bolts, cross-bracing, plywood sheathing (14) 11. A two story platform house is built a. with studs that extend from the first floor to the ceiling of the second floor b. one story at a time c. with posts within the house that support beams d. with no interior supporting walls - ANS one story at a time (14) 12. The vertical supports in a wood frame house are called a. studs b. plates c. joists d. beams - ANS studs (14) 13. A post and beam frame house is built a. with studs that extend from the first floor to the ceiling of the second story b. one story at a time c. with posts within the house that support beams d. with interior supporting walls - ANS posts within the house that support beams (14) 14. A brick or stone exterior finish is called a. glazing b. paneling c. veneer d. tile - ANS veneer (14) 15. The main roof supports are the a. soffits b. rafters c. gutters d. eaves - ANS rafters (14) 16. A window that opens out is called a a. double hung window b. horizontal sliding window c. casement window d. fixed window - ANS casement window (14) 17. A relatively inexpensive and easy to install interior wall finish a. plasterboard b. drywall c. wallboard d. all of these - ANS plasterboard, drywall, wallboard (14) 18. Heat from sunlight reaching water filled containers is used in a. active solar heating systems only b. passive solar heating systems c. most homes d. air-conditioning systems - ANS passive solar heating systems (14) 19. Every house sold on or after January 1, 1986, must have at LEAST a. three bedrooms b. two bathrooms c. one smoke detector d. one garage - ANS one smoke detector (14) 20. All water heaters must be a. cemented in place b. braced, anchored, or strapped c. at least 80 gallons in capacity d. warranted by the state - ANS braced, anchored, or strapped (15) 1. Land use policies and goals are established through the a. general plan b. subdivision report c. preliminary report d. notice of intention - ANS general plan (15) 2. The general plan must consider a. housing at current market rates b. only present land uses and hazards c. the needs of all applicants for development permits d. housing at all income levels - ANS housing at all income levels (15) 3. Planning for future development does NOT include consideration of a. solid waste management b. conservation of natural resources c. safety d. Contractors' License Law - ANS Contractors' License Law (15) 4. Zoning ordinances are an exercise of a government's a. power of eminent domain b. power of condemnation c. police power d. judicial power - ANS police power (15) 5. A property owner deprived by a zoning ordinance of the privileges enjoyed by owners of other property in the vicinity may apply for a a. conditional use permit b. variance c. master plan exception d. nonconforming use permit - ANS variance (15) 6. Land may be subdivided for purpose of a. sale b. lease c. financing d. all of these - ANS sale, lease, financing (15) 7. The subdivided lands law applies to subdivisions of land into