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A lease for a three-year term which called for rent to be paid quarterly expired. If at the end of the term, the landlord were to accept another payment of rent, the lease would be: A. Extended another three years B. periodic tenancy C. Extended for a term not to exceed one year D. Cancelled in any event
B. periodic tenancy
Marx gets to one of his barns by driving across McDonald\'s land. He has been making the drive daily for the past six years. McDonald had often asked Marx to stop this practice. Marx now says he has a legal right to continue this use of McDonald\'s land. Marx\'s right, if valid, is an easement by: A. Necessity B. Implied Grant C. prescription D. Defeasance
C. prescription
The general term value means: A. The function of an object B. The average use and function of an object to all people C. The worth, usefulness, or utility of an object to someone for some purpose. D. A good buy
C. The worth, usefulness, or utility of an object to someone for some purpose. A prospective purchaser obtained a four-month option on a parcel of real property by paying $200 to the owner.
All of the following are true EXCEPT: A. The optionee has created a legal interest in the property B. The optionor is totally restricted by having received a \"valuable” consideration. C. The agreement imposes no obligation on the optionee to purchase the property D. unilateral contract has been created.
A. The optionee has created a legal interest in the property An option is not an interest in property; it is a unilateral contract in which the optionor is bound, but the optionee is not.
Race restrictions limiting the sale or lease of property to persons of the Caucasian race were imposed on a subdivision in 1920, due to expire in 2009. The restrictions are presently: A. Valid, as long as the original owner is still alive B. Unenforceable, even if the majority of homeowners want them. C. Enforceable, if the buyer agrees D. Binding
B. Unenforceable, even if the majority of homeowners want them. Racial deed restrictions are unenforceable.
Uniform Settlement Statement required by the Real Estate Settlement Procedures Act by law shall be delivered or mailed to the borrower no later than: A. Ten business days from the date of the loan B. Three business days prior to the closing of the transaction C. One calendar day prior to the closing of the transaction D. On, or before, the date of settlement.
D. On, or before, the date of settlement. Uniform Settlement Statement must be delivered to the borrower at, or before, closing. Should the borrower waive this right, and not be present at closing, the statement should be delivered as soon as possible after the transaction closes.
The tax assessment roll, showing the assessed value of property in an area, would be used to: A. Determine the proportionate share paid by each property owner B. Establish the tax rate C. Establish the tax base for the community D. Equalize the taxes paid by the owners in that area
C. Establish the tax base for the community The assessment roll would produce a total assessed value, which could then be divided by the anticipated cost of government to determine the tax rate. The total value becomes the tax base for the community.
How long does a victim have to file a complaint about discrimination with the Department of Housing and Urban Development? A. Three months B. Six months C. Nine months D. One year
D. One year The Department of Housing and Urban Development enforces fair housing laws on the federal level. Complaints must be filed within one year.
The best synonym for \"value\" is: A. Cost B. Worth C. Uselessness D. Asking price
B. Worth \"Value\" can be defined as \"present worth of future benefits\".
Withholding is required when the seller is: A. A non resident. B. A non resident or corporation with no permanent place of business in California. C. Residents of California. D. All of the above.
D. All of the above. Sales closing after January 1, 2003 require nonresidents, corporations with no permanent place of business in California and residents of California to withhold income tax.
What is real estate withholding? A. Prepayment of state income taxes. B. Prepayment of state sales tax on real estate. C. Both A and B. D. Neither A nor B.
A. Prepayment of state income taxes. Real estate withholding is a prepayment of state income taxes for sellers of California real estate. Taxes are due as you earn income, not at the end of the year when you file your state income tax return.
What are the withholding exemptions for individual sellers? A. Total sales price does not exceed $100,000 B. Sales resulting in a loss for California tax purposes. C. Like-kind exchanges, with the exception of boot (IRC Section 1031) D. All the above
D. All the above Individual withholding exemptions include the following: total sales price that does not exceed $100,000; property is the seller\'s principal residence (IRC Section 121); sales resulting in a loss for California tax purposes; like-kind exchanges, with the exception of boot (IRC Section 1031); involuntary conversions (IRC Section 1033); or certain foreclosures.
Which of the following are certifiable exceptions to the withholding requirement for non-individuals? A. Partnerships or LLC\'s B. Irrevocable trusts with a California trustee C. Both A and B D. Neither A and B
C. Both A and B There is no withholding requirement if non-individual sellers are: corporations with a permanent place of business in California; Partnerships or LLC\'s; Tax exempt entities, insurance companies, IRA\'s, or qualified pension plans; Irrevocable trusts with a California trustee; Estates with a California decedent; or Banks or banks acting as a fiduciary for a trust.
Regarding California real estate withholding, is there a waiver process for individuals? A. No B. Yes C. Yes, in certain situations outside of the exemptions. D. Yes, for sales prices exceeding $100,000.
A. No The waiver process has been eliminated. However, many of the reasons for which waivers were previously granted are now certifiable exemptions.
Can individual sellers who will have a small gain apply for reduced withholding? A. No B. Yes C. 3 percent of the sales price is allowed if there will only be a small gain. D. 2.5 percent of the sales price is allowed if there will only be a small gain.
A. No The new law does not allow individuals to apply for reduced withholding for any real estate transaction. The full 3 1/3 percent of the total sales price must be withheld even though the sale will only result in a small gain.
Will interest be assessed on late payments of withholding? A. No B. Yes
B. Yes The assessment of interest on late payments is mandatory as a compensation for the usage of funds. Interest is computed from the due date of the withholding payment to the date the payment is received.
Regression is defined as the principle of: A. Value appreciation B. No change in value C. Value depreciation D. All of the above
C. Value depreciation Regression means that the value of the best property in the neighborhood is adversely affected by the value of the other properties.
In real estate \"devise\" refers to: A. Conveyance B. An inheritance C. Destruction of man made structures by acts of god D. Probate action when one dies intestate
A. Conveyance In popular usage, devise means death. In real estate, it means to give, grant or transfer an estate by will or lease.
Under federal income tax law, the basis of real property is the property’s: A. Purchase price minus any existing assumed loans B. Assessed value prior to sale C. Fair market value D. Cost
D. Cost Basis, cost, cost basis, and purchase price can all be defined as what was paid for the property.
If you hold an undivided interest in the common areas, and a separate interest in a specific unit of an industrial, commercial or residential building, you would own a: A. Stock Cooperative B. Condominium C. Community Apartment Project D. Land Project
B. Condominium This is the definition of a CONDOMINIUM. The key wording is \"separate interest in the unit.\" A Community Apartment Project allows for use or occupation only of the unit.
A listing agreement is essentially (a) (an): A. Employment contract B. Purchase contract C. Option to sell D. All of the above
A. Employment contract A listing is an employment contract hiring the broker to do a job.
Which of the following is an \"interest\" but not an \"estate\" in real property? A. Remainder B. Mortgage C. Reversion D. Leasehold
B. Mortgage A mortgage is merely an interest in property. An estate refers to an ownership interest in the land.
Which of the following is most correct concerning delinquent taxes and redemption rights? A. The important effect of a \"sale to the state\" by the tax collector is to start the redemption period running, but the delinquent owner\'s possession remains undisturbed B. The homeowner is required to make monthly installment payments to liquidate the delinquent property taxes and accrued penalties which are owed C. In the event the delinquent owner transfers or otherwise alienates the property, the redemption period is automatically terminated D. The property is automatically deeded to the state if the property is not redeemed within one year
A. The important effect of a \"sale to the state\" by the tax collector is to start the redemption period running, but the delinquent owner\'s possession remains undisturbed The important effect of a \"sale to the state\" by the tax collector is that it starts the redemption period running; however, the delinquent owner\'s possession remains undisturbed for five years.
The \"Mortgagor\" is the one who: A. Sells the property B. Signs the note C. Holds the trust D. Takes a mortgage
B. Signs the note The MORTGAGOR (buyer/borrower) would sign the NOTE and MORTGAGE in favor of the lender. The seller, owner or grantor sells the property (A), the trustee holds the title in trust (C) and the MORTGAGEE (lender) takes the mortgage (D).
The majority of money used for loans on real estate comes from: A. Individual savings B. Federal reserves C. Co-op savings D. Government bonds
A. Individual savings The vast majority of money loaned out through banks and savings and loan associations is the depositors\' money placed with their institution. Therefore, the source of the money is individual savings.
In the agency transfer relationship, according to the Civil Code, you must apply it to: A. \"For Sale by owner\" B. 12 unit apartment complex C. Husband and wife who are divorced and are transferring property D. All of the above
C. Husband and wife who are divorced and are transferring property Agency disclosure applies to real estate transactions involving the sale or lease of improved residential real property consisting of one to four units. \"For sale by owner\" means there is no agent, 12 units exceed four (4) units; therefore, (C) is the best answer.
Which of the following is required for a valid escrow in the conveyance of title to real property? A. The services of a licensed real estate broker B. A binding contract between buyer and seller and the conditional delivery of transfer instruments to a third party C. A complete chain of title D. No conditions in the escrow instructions
B. A binding contract between buyer and seller and the conditional delivery of transfer instruments to a third party The two legal requirements for a valid escrow in California are those items listed in choice (B).
A testament is a: A. Will B. Sandwich lease C. Pledge D. Negotiable instrument
A. Will A testament is another word for a will. One who makes a will is a testator
Definitions of market value are least concerned with: A. Material cost B. Value in exchange C. Objective value D. An open market
A. Material cost The original cost of the materials has very little to do with value.
The key factor in a developer\'s decision in choosing the best site to build a new shopping center in a suburban area would be: A. Purchasing power B. Topography C. Traffic count D. Population
A. Purchasing power Population and high traffic count are helpful, but it is important that the residents in the area have good purchasing power.
A voidable contract is one which: A. Is valid now but can be voided by an interested party for due cause B. Is binding on neither party and not subject to ratification C. Has no force or effect D. Is subject to disciplinary action
A. Is valid now but can be voided by an interested party for due cause When a contract is voidable, one of the parties may reject it because there is a deficiency (defect) in the contract that injures him or her. The injured party may proceed With the contract, but also has the option to disaffirm it (have the court terminate the contract).
Which of the following would not be true in the planning and development of a subdivision? A. Minor streets entering major streets at right angles are proper B. Short blocks are economical C. Excessively deep lots are wasteful D. Sharply angled lots create engineering problems
B. Short blocks are economical Short blocks are expensive because more land is devoted to streets.
A lender would look to a borrower\'s personal assets if the borrower were a: A. Limited partnership B. Partnership C. Corporation D. Never
B. Partnership Partners have personal liability in the partnership for debts related to the business. In a corporation, only corporate assets are held accountable; in a limited partnership, the general partner holds all of the personal liabilities for the debts of the limited partnership.
Putting together two or more parcels to form a large parcel under one ownership is called: A. Aggregating B. Compounding C. Turn over D. Assemblage
D. Assemblage It is also called \" plottage.\" In appraising it is an important factor influencing value.
A “Trust Deed\" is: A. The mere incident of the debt B. Security for the note C. Terminated after four years of nonpayment on the loan D. Held by the trustor
B. Security for the note The sole purpose of a TRUST DEED is to secure the note. It is used to place REAL PROPERTY as SECURITY in the event of nonpayment on the note. The NOTE is the INCIDENT of the debt. A TRUST DEED is not held by the TRUSTOR (borrower), but rather, it is given by the TRUSTOR and held by the BENEFICIARY (lender).
Under the Subdivided Lands Act, the questionnaire required for subdividers is provided by: A. Department of Real Estate B. County Planning Commission C. County Recorder D. Department of Housing & Urban Development (HUD)
A. Department of Real Estate The Subdivided Lands Act is administered by the real estate commissioner. The questionnaire is designed to provide certain minimum information about the subdivision, and different questionnaires are supplied for the different types of subdivisions.
When the appraiser is concerned with equilibrium and decline of value in her appraisal, she most likely would apply this to: A. The neighborhood B. Commercial property C. Industrial property D. Agricultural property
A. The neighborhood When an appraiser is concerned with equilibrium and decline of value, she is concerned about the neighborhood; whether it be residential, commercial, industrial or agricultural. The surrounding area is what she would be considering.
A property was sold where the property taxes had been paid for the current tax year. The escrow closed 10/1/2004. However, the contract had allowed the seller to remain on the property for an additional three months after the close of escrow. For the purpose of proration, how would the taxes be treated? A. The seller would be credited for three months taxes B. The seller would be credited for six months taxes C. The buyer would be credited with six months taxes D. The seller would be credited with nine months taxes
D. The seller would be credited with nine months taxes Taxes are PRORATED as of the CLOSE OF ESCROW. The tax year begins July 1 and ends on June 30, which is why the seller would be credited for 9 months, and not three
Property is being sold whereby the purchaser is to continue the payments of an existing amortized loan secured by a first mortgage. In order for the buyer to assume the existing mortgage without penalty, the real estate agent should check to be sure the mortgage does not include: A. An acceleration clause B. Release clause C. Subordination clause D. A requit clause
A. An acceleration clause If a loan has an acceleration clause that allows the lender to call the loan upon alienation of the title, then a buyer cannot assume that loan.
The gross rent multiplier analysis may not be highly reliable: A. If the operating expenses and the costs of ownership of competitive properties are essentially similar to one another B. If a sufficient volume of verified comparable rental data is available C. If prices in a neighborhood in transition tend to be more responsive to change than rentals D. In residential neighborhoods adjacent to military installations
C. If prices in a neighborhood in transition tend to be more responsive to change than rentals When prices of properties rise faster than rents, the gross rent multiplier ceases to be reliable (or needs to be adjusted).
An impound account will benefit: A. The beneficiary and the trustor B. The trustee C. The trustor only D. The beneficiary only
A. The beneficiary and the trustor The beneficiary benefits from an impound account by being assured that the taxes and insurance will be paid. The trustor benefits by being relieved of the responsibility to come up with those major costs when taxes and insurance become due.
An easement in gross: A. Benefits dominant tenement B. Burdens servient tenement C. Cannot be owned separately from an interest in land D. Burdens dominant tenement
B. Burdens servient tenement Any easement is a burden on servient land. Because an easement in gross belongs to a person, adjacent land would not be involved.
A straight note: A. May be used in a real estate transaction B. Is a note providing that the principal owing is to be paid at one time C. May be secured by a mortgage D. May be any of the above
D. May be any of the above A straight note may be secured by a mortgage when it is used in a real estate transaction. It is also a note providing that the entire principal is to be paid at maturity of the loan.
When a judgment is duly recorded, subsequent buyers and innocent purchasers who are ignorant of the recording have received: A. Constructive notice B. Contingent notice C. Actual notice D. Voidable notice
A. Constructive notice Recording gives constructive notice to everyone.
Assume a brother and a sister own title in a parcel of real property as joint tenants. The sister marries and deeds half her interest to her husband. Under these circumstances, the brother now holds title to the property as: A. A joint tenant B. Community property C. Sole owner D. Tenant in common
D. Tenant in common Since the interests are unequal and the fact that the husband acquired title at a later date, it places the brother as tenant in common.
The court order to sell property to satisfy a judgment is: A. Trustee\'s sale B. A Certificate of Sale C. A Writ of Execution D. A Writ of Possession
C. A Writ of Execution Trustee\'s Sale is an out-of-court foreclosure; a Certificate of Sale is issued to the highest bidder at a mortgage foreclosure; a Writ of Possession is issued to the landlord after a successful judgment in an unlawful detainer action.
As defined in the California Subdivision Law: a subdivision of fifty or more lots or parcels having certain stated characteristics is referred to as a Land Project. A subdivision of fifty or more parcels is specifically excluded from treatment as a Land Project when: A. Lots are not offered for sale by means of substantial direct mail advertising, and sales and promotion costs are nominal B. All lots are to be offered for sale to builders or developers only C. All parcels in the subdivision are part of a planned unit development D. Either \"a\" or \"b\" above
D. Either \"a\" or \"b\" above Under the California Subdivision Law, a subdivision of fifty or more lots or parcels is not considered to be a land project if: the lots are not to be offered for sale by means of substantial direct mail advertising, sales promotion costs are nominal; and all lots are to be offered for sale to builders or developers only rather than the general public.
Title to personal property is transferred by: A. Bill of Sale B. Notice of bulk transfer C. Chattel mortgage D. Security agreement
A. Bill of Sale A deed transfers title to real property; a Bill of Sale transfers title to personal property.
The population needed to support a neighborhood shopping center is: A. 3,000 to 5,000 B. 5,000 to 10,000 C. 10,000 to 30,000 D. Over 30,0000
B. 5,000 to 10,000 A neighborhood shopping center requires a population of 5,000 to 10,000 within a one-mile radius.
A rectangular parcel of land has an area of 540 square yards. It has a 45 foot frontage. How deep is the lot? A. 60 feet B. 108 feet C. 1,080 feet D. 200 yards
B. 108 feet One yard = 3 feet. Convert 45 feet to 15 yards. 540 square yards / 15 yards = 36 yards. Convert 36 yards to 108 feet
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