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 P a g e 1 | 51 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. 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 P a g e 2 | 51 (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 P a g e 5 | 51 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 P a g e 6 | 51 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 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 P a g e 7 | 51 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 P a g e 10 | 51 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 P a g e 11 | 51 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) 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 P a g e 12 | 51 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 P a g e 15 | 51 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 P a g e 16 | 51 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 P a g e 17 | 51 (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 P a g e 20 | 51 (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 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 P a g e 21 | 51 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 (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 P a g e 22 | 51 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 P a g e 25 | 51 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 d. 20 years - ANS 4 years (7) 15. The rule for preprinted contracts is a. handwriting takes precedent only over printing 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 P a g e 26 | 51 (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 (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 P a g e 27 | 51 (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 P a g e 30 | 51 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 d. determined by lender - ANS 1.75% of the loan (9) 4. For an existing structure, the maximum FHA mortgage loan term is a. 15 years and 32 days b. 25 years c. 30 years d. 40 years - ANS 30 years (9) 5. One discount point will increase a lender's effective yield by approximately a. 1/4 % b. 1/8 % c. 1/2 % d. 1% - ANS 1/8 % (9) 6. Four discount points will increase a lender's effective yield by approximately a. 1/4 % b. 1/8 % c. 1/2 % d. 4% - ANS 1/2 % (9) 7. On FHA loans, seller contributions, including discounts and closing costs, cannot exceed a. $5,000 b. 4% c. five points d. 6% of acquisition cost - ANS 6% of acquisition cost (9) 8. Five different graduated payment mortgages are approved by a. FHA b. VA c. CalVet d. Ginnie Mae - ANS FHA P a g e 31 | 51 (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 d. blended rate mortgages - ANS creative financing P a g e 32 | 51 (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) 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 P a g e 35 | 51 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 d. sales taxes - ANS charged in relation to the value of the property taxes (11) 2. The Smiths' sale of their residence is a a. release of equity b. reassessment event c. local assessment d. notice of change of ownership - ANS reassessment event (11) 3. The property tax year runs from P a g e 36 | 51 a. January 1 through December 31 b. April 10 through December 10 c. July 1 through June 30 d. December 10 through December 9 - ANS July 1 through June 30 (11) 4. A lien in the amount of tax due is placed on all assessed real property on 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 P a g e 37 | 51 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 (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 P a g e 40 | 51 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 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) P a g e 41 | 51 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 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 P a g e 42 | 51 (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 (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 P a g e 45 | 51 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 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 P a g e 46 | 51 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 P a g e 47 | 51 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 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 P a g e 50 | 51 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 (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 51 | 51