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 P a g e 1 | 49 (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. discouraged D. prohibited - ANS prohibited (1) 12. Broker Luis has an exclusive listing agreement with the Pierces. The listing will terminate "when the parties agree". This practice is A. acceptable B. mandated C. discouraged D. prohibited - ANS prohibited P a g e 2 | 49 (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 P a g e 5 | 49 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 P a g e 6 | 49 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 (3) 1. A fee simple estate and life estate are A. freehold estates B. fee simple estates C. leasehold estates D. estates of tenancy - ANS freehold estates (3) 2. The highest form of ownership is the A. life estate B. real estate syndicate C. fee simple absolute D. estate at will - ANS fee simple absolute (3) 3. Victor and Karen are not married but together own community property because they are A. brother and sister B. joint tenants C. registered domestic partners D. holders of a life estate - ANS registered domestic partners (3) 4. A fee simple estate that may be lost when some act is performed is a A. life estate B. fees simple absolute C. remainder D. fee simple on condition subsequent - ANS fee simple on condition subsequent (3) 5. A fee simple estate that has no conditions is a A. life estate B. remainder C. fee simple on condition subsequent D. fee simple absolute - ANS fee simple absolute (3) 6. If Green acre is deeded by Lou to Mary for Mary's life, Mary has A. a life estate b. an estate in remainder c. an estate in reversion P a g e 7 | 49 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 P a g e 10 | 49 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 (4) 12. Elena's friend Carl, who was a prior owner of a piece of property, gave her a phony deed to the property in question. Elena, who does not know the deed is phony, has a. a worthless document b. color of title c. a good title d. to share title with Mike - ANS color of title (4) 13. The right to travel over the property of someone else is a. an easement b. equitable estoppel c. a fixture d. statutory dedication by deed - ANS an easement (4) 14. A cotenant who wants property that is co-owned to be sold would bring a(n) P a g e 11 | 49 a. foreclosure action b. action for declaratory relief c. action to quiet title d. partition action - ANS partition action (4) 15. In the event of default, real property may be sold without court action if the mortgage or other lien contains a a. trust deed b. power of sale c. tax deed d. right of entry - ANS power of sale (4) 16. The court order following a judgment for money is a a. certificate of sale b. special limitation c. writ of execution d. trustee in bankruptcy - ANS writ of execution (4) 17. The power of the state to take private property for public use is called a. eminent domain b. equitable estoppel c. a public grant d. abandonment - ANS eminent domain (4) 18. To be effective, a deed must be a. made on a printed form b. signed by the grantor c. delivered to the grantee by the grantor personally d. all of these - ANS signed by the grantor (4) 19. The transfer of title from grantor to grantee, and from that grantee to a subsequent grantee, and so on, is called a. a cloud on the title b. the chain of title c. delivery and acceptance d. an acknowledgment - ANS the chain of title (4) 20. Legal title conveyed by a deed of trust may be regained by a a. warranty deed b. trust deed c. reconveyance deed d. sheriff's deed - ANS reconveyance deed What power of the state allows it to license real estate agents? - ANS police power P a g e 12 | 49 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 P a g e 15 | 49 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 trust created by the terms of a will to care for the decedent's children until they reach adulthood is called a? - ANS testamentary trust The type of trust which hold various forms of real estate or mortgages for the benefit of 100+ investors who own shares of the trust is called a? - ANS (REIT) real estate investment trust The legal determination of property ownership of a person who dies without having a will is called? - ANS intestate succession A document made by an owner of property who is legally competent to do so, to pass title to the property to another after death is called a? - ANS will A person who makes a will is called a? - ANS testator A person who dies leaving a will, is said to die? - ANS testate The transfer of real property by will is called? - ANS devise The person receiving property by will is called a? - ANS devisee The transfer of personal property by will is referred to as? - ANS the bequest of a legacy The recipient of personal property by will is called a? - ANS legatee A document used to amend a will is called a? - ANS codicil Every word of a holographic will must be in the testator's handwriting? - ANS Yes How many witnesses must be present for a witnessed will? - ANS 2 The court appointed person named to act of behalf of the decedent? - ANS administrator The decedent's representative named in a will? - ANS executor The process by which rainfall wears away the surface of the soil is called? - ANS errosion Want are the 3 ways to acquire property by using it without the owner's permission? - ANS adverse possession, prescription and abandonment What are the 5 steps to acquire property by adverse possession? (ONCHA) - ANS open, notorious, continuous, hostile and adverse If you buy real estate at an execution sale, you will receive a? - ANS sheriff's deed What are the 7 requirements for a valid deed? - ANS (1) in writing (2) description of parties (3) grantor legally capable (4) adequate description of PIQ (5) granting clause (6) signed by grantor (7) delivered and accepted P a g e 16 | 49 Is it a legal requirement that a deed be dated? - ANS No, but advised Are love and affection the only consideration needed for a valid deed? - ANS Yes A document is executed when it is ? - ANS signed The only form of deed that conveys after acquired title is a ? - ANS grant deed In order for a deed to be recorded it must be ? - ANS acknowledged A person who dies without a will dies? - ANS intestate The testator names a(an)? - ANS executor or executrix Someone who receives real property by will is called a ? - ANS devisee (5) 1. A cloud on the title is ? a. not important b. easily remedied c. no impediment to a property sale d. a possible impediment to a property sale - ANS a possible impediment to a property sale (5) 2. A mechanics lien may be filed by a a. laborer b. tenant c. advertiser d. customer - ANS laborer (5) 4. When required, preliminary notice of intent to file a mechanic's lien should be given a. 90 days after notice of completion b. 60 days after notice of completion c. within 10 days of the starting time d. within 20 days of the starting time - ANS within 20 days of the starting time (5) 5. A notice of cessation is appropriate 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 P a g e 17 | 49 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 c. secret agent d. subagent - ANS special agent (6) 4. An independent contractor is distinguished by a. responsibility for Social Security and other payments b. no flexibility in setting work hours c. little control over work methods d. no legal obligation to employer - ANS responsibility for Social Security and other payments (6) 5. The California Real Estate Law treats a real estate salesperson as a(n) a. independent contractor of the broker b. employee of the broker c. sole proprietor d. partner of the broker - ANS employee of the broker (6) 6. A salesperson is a broker's a. principal b. agent c. subagent d. third person - ANS agent (6) 7. An agency agreement to perform an act that requires a writing a. must itself be in writing b. may be oral or written c. cannot be an express agreement d. violates the statute of frauds - ANS must itself be in writing P a g e 20 | 49 (6) 8. To be enforceable, all real estate sales contracts a. may be oral or written b. must be in writing c. must comply with the equal equities rule d. must be completed within 90 days of origination - ANS must be in writing (6) 9. As a contract, a real estate agency agreement a. can have any objective b. needs only to be made by parties with the capacity to contract c. does not need to be supported by consideration d. must meet the requirements for a valid contract - ANS must meet the requirements for a valid contract (6) 10. Real estate commission rate a. are established by the California Bureau of Real Estate b. should be no lower than 2% c. should be no higher than 10% d. are not fixed by law - ANS are not fixed by law (6) 11. All real estate agency agreements must a. expire in 90 days b. be in writing c. be signed before a buyer is solicited d. be approved by the California Bureau of Real Estate - ANS be in writing (6) 12. The most commonly used form of real estate listing agreement is the a. open listing b. exclusive agency listing c. exclusive authorization and right to sell listing d. net listing - ANS exclusive authorization and right-to-sell listing (6) 13. A real estate agent owes duties to a. the principal b. the third person c. the subagent d. all of these - ANS principal, third person, subagent (6) 14. The agent owes the principal the duty of a. loyalty b. compensation c. extraordinary care and skill d. dual representation - ANS loyalty P a g e 21 | 49 (6) 15. A real estate agent must make full disclosure of a. all material facts known to the agent b. all material facts revealed by the owner of the property c. material facts that are known by the agent or that would be revealed by a reasonable inspection of the property d. all actual or potential property defects, of whatever kind - ANS material facts that are know to the agent or that would be revealed by a reasonable inspection of the property (6) 16. The principal owes the 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 P a g e 22 | 49 b. printing takes precedence over typing c. handwriting takes precedence over both typing and printing d. typing takes precedence over handwriting - ANS handwriting takes precedence over both typing and printing (7) 16. A property description including the words "250 acres, more or less" is a. fatally defective b. not definite enough c. sufficient if reasonably close to the exact acreage d. incomplete without a metes and bounds description - ANS sufficient if reasonably close to the exact acreage (7) 17. A well-drafted real estate purchase contract will include provisions for a. the buyer's possession of the property b. the financing terms c. prorations of property taxes d. all of these - ANS buyer's possession of the property, financing terms, prorations of property taxes (7) 18. Unless the seller provides the necessary documentation, part of the proceeds of a sale of real property must be withheld for federal tax purposes as provided by a. FHA b. Fannie Mae c. FIRPTA d. IRS - ANS FIRPTA (7) 19. Liquidated damages paid on default by the buyer of a single family residence who intended to occupy the dwelling cannot exceed what percentage of the purchase price a. 1 b. 3 c. 7 d. 10 - ANS 3 (7) 20. Haji Ababe received an offer of $610,00 for his house. His asking price is $635,000. Haji countered with $625,000. If the buyer rejects the counteroffer, may Haji accept the $610,000? a. Yes b. No c. Yes, if he does so within 24 hours d. Only if he redrafts the original offer - ANS No (7) 8. Which is Not a way to terminate a contract a. rescission b. release c. verification d. novation - ANS verification P a g e 25 | 49 (5) 3. Which is not a mechanic a. An engineer b. An architect c. An apartment lessor d. An equipment lessor - ANS an apartment lessor (8) 1. A $450,000 house can be purchased with a $90,000 down payment using the principle of a. borrowed funds b. leveraging c. partial financing d. home equity - ANS leveraging (8) 2. The Fed can increase or decrease the amount of money in circulation by all of the following EXCEPT a. establishing the discount rate b. issuing government securities c. raising or lowering reserve requirements d. buying and selling government securities - ANS issuing government securities (8) 3. Federal savings and loan activities are overseen by the a. FHLMC b. Office of the Comptroller of the Currency c. Federal Reserve Board d. FDIC - ANS Office of the Comptroller of the Currency (8) 4. California usury laws apply primarily to a. financial institutions 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 P a g e 26 | 49 (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 P a g e 27 | 49 b. VA c. CalVet d. Ginnie Mae - ANS FHA (9) 9. A veteran can have a loan guaranteed by a. FHA b. VA c. CalVet d. Fannie Mae - ANS VA (9) 10. The certificate of reasonable value sets the upper limit of value for the a. purchase price b. loan c. guarantee d. None of the above - ANS guarantee (9) 11. Using the benefit of the GI Bill, a veteran cannot buy a a. house b. condominium c. farm d. manufactured home - ANS farm (9) 12. A veteran can be given a home loan on property owned by a. FHA b. VA c. CalVet d. Fannie Mae - ANS CalVet (9) 13. A CalVet purchase loan must be applied for a. within one year of property purchase b. before closing c. before a contract of sale is signed d. before talking to a property owner - ANS before a contract of sale is signed (9) 14. CalVet loans are NOT available for a. single family homes b. manufactured homes c. working farms d. commercial property - ANS commercial property (9) 15. Many seller financed purchases are examples of a. institutional lending b. creative financing c. mortgage backed securities P a g e 30 | 49 d. blended rate mortgages - ANS creative financing (9) 16. An installment sales contract is also called a 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 P a g e 31 | 49 (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 P a g e 32 | 49 a. April 15 b. December 10 c. January 1 d. July 1 - ANS January 1 (11) 5. When all past due property taxes are paid, the county tax collector issues a a. receipt for unpaid taxes b. letter of credit c. certificate of redemption d. release of equity - ANS certificate of redemption (11) 6. The buyer of property at an auction by the tax collector receives a a. certificate of sale b. release of equity c. quitclaim deed d. tax deed - ANS tax deed (11) 7. A benefit assessment also may be called a a. tax credit b. special assessment c. community assessment d. documentary transfer tax - ANS special assessment (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 P a g e 35 | 49 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 P a g e 36 | 49 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 P a g e 37 | 49 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 P a g e 40 | 49 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 P a g e 41 | 49 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 a. market comparison approach b. cost approach c. income approach d. sales comparison approach - ANS cost approach (13) 16. Vacancy and collection losses are subtracted from potential gross income to derive a. net operating income b. gross operating income c. effective gross income d. capitalization rate - ANS effective gross income (13) 17. An office building with an annual gross income of $70,175 sold for $800,000. What is the building's gross income multiplier a. 11.4 b. 1.147 c. .0877 d. 12 - ANS 11.4 P a g e 42 | 49 (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 P a g e 45 | 49 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 P a g e 46 | 49 b. lease c. financing d. all of these - ANS sale, lease, financing (15) 7. The subdivided lands law applies to subdivisions of land into a. 2 or more parcels b. 5 or more parcels c. 12 or more parcels d. 25 or more parcels - ANS 5 or more parcels (15) 8. An out of state subdivider of California land a. must procure a public report b. need not procure a public report c. can decide whether to procure a public report d. needs a public report only to finance a California subdivision - ANS must procure a public report (15) 9. A standard subdivision includes a. single family residences and condominiums b. no common interests c. only residential property d. no irregular shaped parcels - ANS no common interests (15) 10. A subdivision consisting of individually owned lots as well as areas owned in common is a a. planned development b. community apartment project c. condominium project d. stock cooperative - ANS planned development (15) 11. A subdivision consisting of individual ownership of airspace and areas owned in common is a a. planned development b. community apartment project c. condominium project d. stock cooperative project - ANS condominium project (15) 12. A corporation holds title to property and shareholders having a right of occupancy to part of the property own the corporation in a a. planned development b. community apartment project c. condominium project d. stock cooperative project - ANS stock cooperative project (15) 13. The subdivision public report is issued by the P a g e 47 | 49