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 P a g e 1 | 46 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 (1) 13. When broker Bob exercised his option to buy White acre, he presented to the owner of White acre a written statement of his expected profit in the transaction. The seller agreed to proceed with the sale. This conduct is A. acceptable B. mandated C. discouraged P a g e 2 | 46 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 P a g e 5 | 46 (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 (3) 1. A fee simple estate and life estate are A. freehold estates B. fee simple estates P a g e 6 | 46 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 d. no interest - ANS a life estate (3) 7. If Greenacre is deeded by Lou to Mary for Mary's life, Lou has a. a life estate b. an estate in remainder c. an estate in reversion d. no interest - ANS an estate in reversion (3) 8. When Aunt Winifred died, she left a life estate in Whiteacre to her nephew George. When George dies, Whiteacre will go to George's daughter Elizabeth. Elizabeth is a a. reversioner b. remainderman c. holder of a life estate d. joint tenant with right of survivorship - ANS remainderman P a g e 7 | 46 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 P a g e 10 | 46 (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) 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 P a g e 11 | 46 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 A fictitious name is any name than that of a? - ANS real estate licensee What is DBA? - ANS doing business as A form which is unique to the entity that created it is called? - ANS proprietary Wording that is dictated by law is called? - ANS statutory language A mobile home dealer license is obtained from the? - ANS Department of Housing and Community Development (HCD) A mortgage loan originator (MLO) must register annually on the? - ANS Nationwide Mortgage Licensing System & Registry (NMLS) The benefit derived from the business's favorable relationship with its customers is called? - ANS goodwill A stock transfer requires a ? license, as set out in the ? Code - ANS Corporations What year did California become a state? - ANS 1850 Real Property is often described as a bundle of rights. What are the 5 major rights? (PUEED) - ANS possession, use, enjoyment, exclude, dispose 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) P a g e 12 | 46 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 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 P a g e 15 | 46 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 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 P a g e 16 | 46 (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 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 P a g e 17 | 46 (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 (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 P a g e 20 | 46 c. extraordinary care and skill d. dual representation - ANS loyalty (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 P a g e 21 | 46 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 P a g e 22 | 46 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 (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 P a g e 25 | 46 (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 P a g e 26 | 46 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. 1.75% of the loan b. variable c. negotiable P a g e 27 | 46 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 P a g e 30 | 46 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 P a g e 31 | 46 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) a. abstract of title b. certificate of title c. guarantee of title d. policy of title insurance - ANS abstract of title (10) 16. A title plant consists of a. all possible title records b. a title company's lot books and general indexes c. recorded and unrecorded title information d. duplicates of county recorder's records - ANS title company's lot books and general indexes (10) 17. Title insurance is paid as of the day a. escrow opens b. the sales contract is executed c. of closing d. the buyer takes possession - ANS of closing (10) 18. Title insurance protects a buyer against a. all claims from any source b. all claims except those excluded from coverage c. claims arising from the buyer's future actions d. any claims the buyer already knows about - ANS all claims except those excluded from coverage (10) 19. Water rights are excluded from coverage in a. a standard policy of title insurance b. an extended coverage policy of title insurance c. a warranty deed d. all residential title insurance policies - ANS standard policy of title insurance (10) 20. Lender's title insurance typically is paid by the a. buyer b. seller c. lender d. broker - ANS buyer (11) 1. Property taxes are ad valorem taxes, which means that they are a. charged in relation to the value of the property taxes b. charged once at the time of a property transfer c. use taxes P a g e 32 | 46 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 P a g e 35 | 46 (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 (12) 6. Lulu landlord wants to give Tom Tenant's apartment to her nephew Ken. Lulu tries do drive Tom out by constantly phoning him, visiting him, and insisting that his apartment be used to show prospective tenants for other units what the building is like. Lulu is violating Tom's a. right to use property without interference b. covenant to repair c. covenant of quiet enjoyment d. warranty of habitability - ANS covenant of quiet enjoyment (12) 7. A landlord has a right of entry a. in an emergency b. only to show the premises to prospective tenants c. only when the tenant agrees d. any time - ANS in an emergency (12) 8. Transfer of all of a tenant's rights under a lease is a(n) a. assignment b. sublease c. freehold estate d. estate at will - ANS assignment (12) 9. A lease may be renewed automatically only if a. the landlord prepared the lease b. the tenant and landlord are unable to agree on any other term c. the automatic renewal provision is noted in a separate document referenced in the lease d. all of the statutory requirements are met - ANS all of the statutory requirements are met (12) 10. A dwelling is untenantable if it substantially lacks a. a heating unit b. windows in every room c. a trash compactor P a g e 36 | 46 d. freeway access - ANS a heating unit (12) 11. Because a tenant complains about the condition of the building, the landlord may a. evict the tenant b. raise the tenant's rent c. shut off the tenant's utilities d. investigate the complaint - ANS investigate the complaint (12) 12. Which may be considered in choosing a tenant a. Marital status b. National ancestry c. Whether the prospective tenant is on welfare d. Tenant's income - ANS tenant's income (12) 13. On May 15, Jacquie Jones notified her landlord that she would be vacating her retail store location on June 30. Jacquie has a month to month periodic tenancy. Until what date will she incur rent a. June 15 b. June 30 c. July 15 d. July 30 - ANS June 30 (12) 14. A landlord must follow the legal requirements for an eviction a. from leased premises b. but can shorten the notice required if the tenant agrees c. unless the tenant can be physically removed d. unless the housing is government subsidized - ANS from leased premises (12) 15. A landlord may begin eviction proceedings with a(n) a. notice of termination b. notice of abandonment c. notice to pay or quit d. order of eviction - ANS notice to pay or quit (12) 16. The sheriff or marshal can forcibly remove a tenant by a a. judgment of eviction b. writ of possession c. notice of eviction d. notice to pay or quit - ANS writ of possession (12) 17. Harry's Haberdashery has a percentage lease based on 5% of gross income of up to $25,000 per month and 2.5% of gross income above that amount. The minimum Harry must pay is $1,000 per month. For a month in which Harry has a gross income of $47,000, what will be his rent payment a. $1,800 b. $4,675 c. $2,800 P a g e 37 | 46 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 (13) 18. The gross rent multiplier for most single family residences in Sally Murphy's neighborhood is 268. What is the market value of Sally's house using the GRM, if the house rents for $1,975 per month a. $736,940 b. $525,350 c. $529,300 d. $568,800 - ANS $529,300 P a g e 40 | 46 (13) 19. The step in which the appraiser arrives at a final opinion of value is called a. equilibrium b. reconciliation c. substitution d. equalization - ANS reconciliation (13) 20. The most comprehensive method of conveying the result of an appraisal is the a. self contained report b. form report c. restricted use report d. summary report - ANS self contained report (14) 1. In contracting for any work on someone else's property, a contractor's license is NOT needed a. by an attorney b. by a real estate broker c. by a real estate salesperson d. if the work costs less than $500 - ANS if the work costs less than $500 (14) 2. A contractor's license can be suspended or revoked for a. abandoning a project b. violating building laws c. breaching a construction contract d. all of these - ANS abandoning a project, violating building laws, breaching a construction contract (14) 3. A type of roof with two steeply pitched planes is called a a. gambrel roof b. flat roof c. gable roof d. salt box roof - ANS gable roof (14) 4. A Dutch colonial house is distinguished by a a. hip roof b. shed roof c. gable roof d. gambrel roof - ANS gambrel roof (14) 5. Ornate exterior woodwork is usually found on a a. Colonial American house b. Queen Anne Victorian house c. contemporary house d. California ranch house - ANS Queen Anne Victorian house (14) 6. An architectural style in which homes share a common wall is called P a g e 41 | 46 a. Colonial American b. Victorian c. Spanish d. a town house - ANS town house (14) 7. The location of a house on its site is called its a. view b. architecture 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 P a g e 42 | 46 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 a. advisory agency b. planning commission c. Real Estate Commissioner d. California Bureau of Real Estate - ANS Real Estate Commissioner (15) 14. A final subdivision public report has an initial term of a. one year b. two years c. four years d. five years - ANS five years (15) 15. The Subdivision Map Act allows a. the state to have a say in how property is subdivided b. local jurisdictions to determine whether a subdivision is desirable c. developers to dictate how subdivision will take place d. neighboring landowners to petition to have land subdivided - ANS local jurisdictions to determine whether a subdivision is desirable (15) 16. A proposed subdivision is covered by the a. Subdivision Map Act b. Subdivided Lands Law c. Contractors' License Law d. Contractors' State License Board - ANS Subdivided Lands Law P a g e 45 | 46 (15) 17. Disclosure of the fact that property is located in a special studies zone must be made by the a. city council or board of supervisors b. property buyer c. real estate agent who represents the seller d. seller, in addition to the real estate agent - ANS real estate agent who represents the seller (15) 18. Discrimination in housing is prohibited by a. federal law b. state law c. both state and federal laws d. neither state nor federal law - ANS both state and federal law (15) 19. A homeowner whose property is exempt from the requirements of the Federal Fair Housing Act will still be subject to the a. 1866 Civil Rights Act b. Housing Financial Discrimination Act c. Subdivision Map Act d. Subdivided Lands Law - ANS 1866 Civil Rights Act (15) 20. The broadest prohibition against all forms of discrimination in the sale of residential real estate is found in a. the Federal Housing Act b. Jones vs Mayer c. California law d. the Civil Rights Act of 1968 - ANS California law P a g e 46 | 46