Final Exam: Impact Fees and Property Taxes in Real Estate Development, Exams of Business Systems

Download Final Exam: Impact Fees and Property Taxes in Real Estate Development and more Exams Business Systems in PDF only on Docsity! Quiz: Final Exam  Due Mar 8 at 11:59pm    Points 100    Questions 50    Time Limit 240 Minutes Instructions The exam:  Covers the Textbook material from Module 8: Week 8.  Contains 50 multiple-choice, short answer, and true/false questions.  Is limited to 4 hours.  Allows 1 attempt.  Is worth 100 points.  Open book / open notes Submit this assignment by 11:59 p.m. (ET) on Monday of Module 8: Week 8. Attempt History Attempt Time Score LATEST Attempt 1 104 minutes 56 out of 100 * * Some questions not yet graded  Correct answers are hidden. Score for this quiz: 56 out of 100 * Submitted Mar 8 at 3:55pm This attempt took 104 minutes.   IncorrectQuestion 1 0 / 2 pts Strong Construction accepted bids for its bid to build homes in the Hillcrest Development.  Fred’s Framing submitted a bid that Strong used in his bid. Strong got the project and then Fred’s backed out of its bid.  Which of the following is correct with respect to Strong’s rights?    Fred’s only made an offer, so it is free to withdraw      Fred’s is bound to perform for the bid price submitted      Fred’s is bound to perform, but can raise the price      Fred’s is bound to perform if Strong accepted     Question 2 2 / 2 pts Saxon Estates is a subdivision of single-family homes.  All of the homes in Saxon Estate are the same color on the outside stucco with the same flat-tile roofs.  When the real estate market experienced a downturn in 2008, the builder went bankrupt and 27 lots remained in Saxon Estates with no houses on them.  As individuals began to buy the lots from the bankruptcy trustee and build homes on those lots, they were using colors different from the one color and not all were installing tile roofs.  The existing homeowners are concerned about the effect these homes with different external components will have on the value of their homes.  Which of the following best describes their situation?    Unless there were CCRs requiring the external design elements there is nothing the homeowners can do      Schools.      Fire departments.      Sports complex for a minor league baseball team.     Question 7 2 / 2 pts The county assessor for Cuyahoga County has determined that a property located in the downtown area of Cleveland, which is currently being used as a storage facility, could be used as a casino and its revenue would be triple its current gross revenue. As a result, the assessor increased the property’s valuation by 20%. Which method of valuation is the assessor using?    Market approach      Income approach      Cost approach      Basis of the property approach     Question 8 2 / 2 pts The tax assessor for Clark County sent a delinquent notice to Rob Newton at the property address. There was no response to the notice of delinquency. The assessor had a different address for Mr. Newton but sent it only to the property address. Rob challenged the tax sale for lack of notice.    As long as Clark County complied with its required procedures the sale is valid.      Under recent court rulings, Clark County cannot ignore the alternate address.      The sale cannot be set aside as long as the sale brought a reasonable amount for the property.      Under recent court rulings, the notification to the property address is all that is required of the assessor.     IncorrectQuestion 9 0 / 2 pts What is the effect on the assessment of a contaminated property after having the contamination removed?    Generally no effect because increased taxes would be a disincentive for owners to clean up the property      Generally an increase in assessed value for the clean property      Assessors are not permitted under CERCLA to increase the assessed value of property that has had the contamination removed      Assessors have no way of knowing about contamination or clean-ups.     Question 10 2 / 2 pts In which of the following do all investors have limited liability?    LLC      General partnership      Sole proprietorship      General partnership with one corporate partner     Question 11 2 / 2 pts Which of the following is correct about impact fees?    They can be assessed for general purposes.      They can be added as part of a city’s zoning plan.      The fees can go into the city’s general fund.      They can be a condition for approval of a development.     IncorrectQuestion 12 0 / 2 pts The bid notice is:    The offer from the owner.    Partnership      Limited partnership      Corporation     Question 17 2 / 2 pts Under the cost approach of valuation for assessment:    The value of the property is based on sales of similar property.      The value of the property is based on the prospective income that will be earned by the land.      The value of the property is based on the replacement cost of the buildings on the property.      The value of the revenue stream for the property.     Question 18 2 / 2 pts Which of the following will cause a limited partner to lose limited liability status?    Participation in discussions and voting on partnership decisions      Use of name in firm name      Contribution greater than other limited partners      Employment with the partnership     Question 19 2 / 2 pts Which of the following would be the type of issue to which substantial performance would apply?    The builder installed the wrong color of cabinets      The grading on the property is done improperly and the backyard floods      The foundation was not sprayed for termites and the home becomes infested      The roof is constructed with defective lumber and collapsed     IncorrectQuestion 20 0 / 2 pts Under the market approach to valuation which of the following information is not examined?    Recent closings on property sales in the area      Income generation of the property      Building replacement cost      Depreciation     IncorrectQuestion 21 0 / 2 pts Taxpayers always have the right to challenge the assessed value of their property.    True      False     IncorrectQuestion 22 0 / 2 pts An investor is "at-risk" only for the amount actually invested.    True      False     Question 23 2 / 2 pts To qualify as an LLC with limited liability, there must first be a filing as a corporation.    True    True      False     Question 31 2 / 2 pts Bids submitted by subs are offers.    True      False     Question 32 2 / 2 pts Covenants must touch and concern the land to be enforceable.    True      False     Question 33 2 / 2 pts Annexation is a means for obtaining governmental services for a planned development.    True      False     Question 34 2 / 2 pts Impact fees are unconstitutional.    True      False     Question 35 2 / 2 pts HUD cannot provide federal money for local neighborhood stabilization programs.    True      False     Question 36 2 / 2 pts The environmental clean-up of a property has no impact on the assessed valuation under protections afforded under CERCLA for property clean-ups.    True      False     Question 37 2 / 2 pts It is the landowner’s responsibility to be certain that the assessor and tax collector have correct notice information for communication regarding property taxes.    True      False     Question 38 2 / 2 pts Property developed without annexation to a city or town carries fewer regulations and restrictions.    True      False     Question 39 2 / 2 pts The failure to enforce restrictive covenants can result in the loss of those protections.    True      False     Question 40 2 / 2 pts Impact fees are not taxes or permit fees. 1. Did the contractor make a good-faith effort to comply with the contract?  This question assesses the contractor's intent. If the contractor intentionally deviated from the contract without a valid reason, the doctrine of substantial performance may not apply. 2. Are the deviations from the contract minor and not substantial?  The deviations from the contract should not significantly affect the project's overall purpose or functionality. If the deviations are substantial, the contractor may not be entitled to full payment. 3. Does the completed work essentially provide the benefits promised in the contract?  The completed work should essentially fulfill the contract's purpose. If the work does not provide the benefits promised in the contract, the doctrine of substantial performance may not apply. 4. Would it be unreasonable or disproportionately costly to correct the deviations?  If correcting the deviations would be unreasonably costly or difficult, this may support a finding of substantial performance.   Question 44 Not yet graded / 2 pts Define impact fees and describe when they can be collected from developers. Your Answer: Impact fees are charges that local governments impose on new development projects. These fees are designed to offset the costs of providing public services to the new development. The rationale behind impact fees is that new development often increases the demand for public services, such as roads, schools, and parks. Therefore, it is fair for the developers who profit from the development to bear some of the costs of these services. Impact fees can be collected from developers at various stages of the development process, but they are typically collected at the time of building permit issuance. Here are some common scenarios:  At the time of building permit issuance: This is the most common time for collecting impact fees. The local government will calculate the impact fee based on the size and type of the development, and the developer must pay the fee before the building permit is issued.  At the time of development approval: In some cases, the local government may collect the impact fee at the time the development is approved. This is less common than collecting the fee at the time of building permit issuance, but it can happen in certain situations.  At the time of certificate of occupancy issuance: In some jurisdictions, the impact fee may be collected at the time the certificate of occupancy is issued. This is the final stage of the development process, and the certificate of occupancy signifies that the building is ready for use.   Question 45 Not yet graded / 2 pts The state of Superior’s tax sale statute requires that the notice of sale be sent to the property owners’ “last known address.” The Auditor of Jefferson County sent Emiliano and Daniela Abaroa a notice of sale, which was returned by the post office for an incorrect address. However, the auditor had access to the Abaroas’ current address through public records. No follow-up mailing was made. When the Abaroas protested the sale, the statute of limitations had expired. They claim they were denied due process because they did not receive the notice. Are they correct? Your Answer: The Due Process Clauses of the Fifth and Fourteenth Amendments to the U.S. Constitution require that individuals be given notice and an opportunity to be heard before the government takes away their property. This principle is generally applicable in other jurisdictions as well. In the context of a tax sale, the notice of sale is a critical part of due process. It informs the property owner of the impending sale and gives them an opportunity to pay the outstanding taxes and avoid the sale. The requirement that the notice be sent to the property owner's "last known address" is intended to ensure that the notice is sent to a location where the property owner is likely to receive it. If the notice is returned undelivered and the auditor has access to a more current address, it could be argued that the auditor should have made a reasonable effort to send the notice to that address. The Abaroas claim that they were denied due process because they did not receive the notice. If it can be proven that the auditor had access to their current address through public records and made no attempt to resend the notice, they may have a valid claim. The fact that the statute of limitations had expired may not be relevant if they were not given proper notice in the first place.   Question 46 Not yet graded / 2 pts Name at least three (3) major types of taxes affecting land ownership and transfer. Your Answer: There are several types of taxes that can affect land ownership and transfer. Here are three major ones: 1. Property Tax 2. Capital Gains Tax 3. Land Tax 1. Property Tax Property tax, also known as real estate tax, is a tax on property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located. This can be a national government, a federated state, a county or geographical region, or a municipality. 2. Capital Gains Tax Capital gains tax is a tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value. It's the gain you make that's taxed, not the amount of money you receive. In the context of land ownership, if the land has increased in value since you bought it, you may be liable for capital gains tax on the profit when you sell it. 3. Land Tax  Land Tax is a tax on properties bought in England and Northern Ireland. You’ll need to pay it when you buy a residential property that costs more than 125,000, or when you buy a non- residential property that costs more than 150,000. The tax applies whether the property is bought outright, with a mortgage, or through a shared ownership scheme.   Question 47 Not yet graded / 2 pts Offer your best advice for handling change orders during construction. Your Answer: Communicate frequently, and openly with your customer during the course of the construction process. It will avoid any questions, or miscommunications about time lines, permits etc.    Question 48 Not yet graded / 2 pts Gatlin, Inc. is a dry wall (sheetrock) firm that has submitted a bid to Kalil Homes to do the dry wall work on the new Kalil subdivision of 280 homes. Kalil accepts Gatlin's bid and after 10 homes are completed substantially changes the specs on the homes.  Gatlin needs to charge more money in order to still earn a profit.  Kalil maintains Gatlin is bound by the original contract price.  Who is correct? Your Answer: In contract law, the party that changes the specifications of a contract after it has been agreed upon and work has begun is typically responsible for any additional costs that arise due to these