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The Motto in any business:
'By Heart'
The Motto in any business:
'By Heart'
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Click here to return to the course page.Correct answers are highlighted in green.
Incorrect Answers are highlighted in red.
Quiz 21
1. An easement in gross:
A. Benefits dominant land;
B. Burdens servient land;
C. Cannot be owned separately from an interest in land;
D. Burdens dominant land.
2. Easements are terminated by all of the following, except:
A. Prescription by the owner of the servient tenement;
B. Merger of the dominant and servient tenement;
C. Revocation by the owner of the servient tenement;
D. Release by the owner of the dominant tenement.
3. Private restrictions on land can be conveyed by:
A. Deed;
B. Written agreement;
C. General plan restrictions in subdivisions;
D. All of the above.
4. A formal declaration, not an oath, that a statement is true or that the declarer will tell the truth is:
A. An affidavit;
B. An acknowledgment;
C. Verification;
D. An affirmation.
5. Following proper action by the local authorities, the zoning on a vacant lot was changed from "commercial" to
"residential." Such an action is called:
A. Retroactive zoning;
B. Down zoning;
C. Spot zoning;
D. Blended zoning.
6. A change in a zoning ordinance could be initiated by:
A. A subdivider/developer;
B. A local government agency;
C. The owner of a property;
D. All of the above.
7. The right or power to sell a property in the event of a default under the terms of the trust deed is given by:
A. Trustee to the trustor;
B. Buyer to the beneficiary;
C. Buyer to the seller;
D. Trustor to the trustee.
8. Installment notes often include an "or more" clause. Such a clause would:
A. Allow an accelerated payoff;
B. Indicate that the note has several makers;
C. Provide for a loan moratorium in the event of a disaster;
D. Make it possible to borrow additional money on the same note and trust deed.
9. When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the
amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately
larger for the first lots that are sold. The reason for this practice is:
A. To increase the security value of the remaining lots;
B. To compensate for the loss of the security as the lots under the blanket encumbrance are removed;
C. To compensate for the loss of security due to the best lots being sold first;
D. All of the above.
10. Another name for an estate of inheritance is:
A. Fee simple defeasible;
B. Estate at sufferance;
C. Estate in fee;
D. Probate estate.
By definition.
11. An acceleration clause is inserted in a note that is otherwise negotiable. The addition of this clause:
A. Causes the note to lose its negotiability;
B. Is required for negotiability;
C. Does not reduce the negotiability of the note;
D. Has no effect on negotiability, but is of no benefit.
12. An "open-end" provision in a mortgage would benefit the borrower the most if he:
A. Prepaid the loan;
B. Allowed a subsequent buyer to assume the loan;
C. Had a loan subordinated to a construction loan;
D. Borrowed additional money.
13. When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made:
A. By the lender, as to the current balance due to pay off a real estate loan;
B. Designating the one who will receive the property in the event of the borrower's death;
C. By the insurer, stating the amount that will be paid to the policyholder if the improvements are destroyed;
D. By the property owner, listing the beneficial features of an assumable loan.
14. Once a judgment has been obtained against real property, a plaintiff would obtain which of the following in
order to cause the property to be sold:
A. An attachment;
B. A lis pendens;
C. A writ of execution:
D. An estoppel.
15. Authorization to sell a parcel of real property in the event of a default is given by:
A. Trustor to beneficiary;
B. Trustor to trustee;
C. Beneficiary to trustee;
D. Beneficiary to trustor.
16. In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with
"desk cost." Which of the following most nearly represents the correct way to calculate desk cost:
A. Add the total of all the furniture for each salesperson;
B. Calculate the gross annual profit for the firm, less the expenses, divided by the number of salespersons;
C. Divide the total cost of rent, utilities, and advertising by the number of salespersons;
D. Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of
salespersons.
17. When a title company issues a California standard policy of title insurance, the policyholder is insured against
loss which occurs because of:
A. Unrecorded liens and encumbrances;
B. The rights of parties in possession;
C. Forgery in the chain of recorded title;
D. A defect in the chain of title, already known by the insured prior to the issuance of the policy.
18. The "Code of Ethics and Professional Conduct" is considered to be:
A. One of the Real Estate Commissioner's regulations which applies to all real estate licensees;
B. Of relevance for brokers only;
C. Recommended, but not required for all real estate professionals;
D. A model office policy manual.
19. Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building
needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a
newspaper that says, "Three bedroom, Victorian. You won't believe the price! Move right in. Davis -234-5678." This
advertisement is bad because:
A. It is unethical to advertise a property that is over-priced;
B. If someone buys the house on the basis of the advertisement, the publisher could be held liable;
C. Since Davis knows that the property needs major repairs, it is deceptive and misleading;
D. It doesn't tell the asking price as required by Regulation Z.
20. If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three
bedroom, two-bath, pool and spa, large lot-$167,000. 555-1234."
A. This is false advertising;
B. This is misleading advertising;
C. This violates Regulation Z;
D. This is blind advertising.
21. Which of the following actions by a real estate salesperson is not within the "Beneficial Conduct" guidelines of
the Real Estate Commissioner's Code of Ethics and Professional Conduct:
A. Disputes between brokers being settled by arbitration rather than court hearings;
B. Treating all parties to the transaction fairly;
C. Complete records of all real estate transactions being maintained by a salesperson;
D. Approval by a broker of pocket listings taken by salespersons in his employ.
thics.
22. Of the following, which is considered a violation of fair housing laws in regards to periodic tenancy:
A. A landlord requiring that each and every tenant have a good credit rating and the assurance of a steady source of
income;
B. The requirement of a landlord that all tenants furnish references from their previous landlord;
C. The requirement of a landlord of a co-signer exclusively for tenants who are single;
D. A landlord that requires all tenants pay first, second and last month's rent in advance.
23. When a loan broker advertises for investors who wish to invest in "secured" loans on real property, such
advertising would be regarded as misleading unless:
A. The advertiser offered a personal guarantee to each investor;
B. Each borrower were furnished a standard policy of title insurance covering the properties to be liened;
C. The broker secured the borrower's signature on the loan disclosure statement;
D. The advertising fully explained the extent to which such funds would be secured.
24. Dr. Smith gave Broker Jones $25,000 to invest in second trust deeds. He agreed to pay Broker Jones a 2%
commission on the gross profits and Broker Jones agreed to guarantee Dr. Smith a 6% return on his money, even if it came out
of his own pocket. This:
Congratulations, you passed the quiz with a score of 100%!
Click here to return to the course page.Correct answers are highlighted in green.
Incorrect Answers are highlighted in red.
Quiz 20
1. An estate is granted to "A" for the life of "X." "A" dies while "X" is still living. The estate
A. Ceases to exist;
B. Reverts to the original grantor;
C. Vests in "X" for his life;
D. Vests in the heirs or devisees of "A."
2. Tyson owns a store building which he leased to Crown for seven years. Crown's estate in the store building is:
A. Personal property;
B. Estate for years;
C. A chattel real;
D. All of the above.
3. An instrument which usually transfers possession of real property, but does not transfer ownership is:
A. A mortgage;
B. A sublease;
C. A security agreement;
D. An easement.
4. Which of the following would be considered real property?
A. A maturing grape crop which is under a sales contract and to be harvested later;
B. Trade fixtures that a tenant has installed but which are removable without damage;
C. A built-in refrigerator in a mobile home that is not attached to a permanent foundation;
D. A bearing wall in a single-family house.
5. Personal property can never:
A. Become real property;
B. Be hypothecated;
C. Be alienated;
D. None of the above.
6. Jones conveyed his ranch to Brown using a land contract. The ranch was serviced by a mutual water company, and
Jones was a stockholder in the company. The stock which Jones owned was appurtenant to the land. Does Brown have to enter
into a separate contract for the stock of the mutual water company:
A. Yes, since stock is always personal property and therefore not included in land contracts;
B. No, because land in California cannot be sold without water rights;
C. Yes, because real property is not always accompanied by water rights;
D. No, because the stock was appurtenant to the land and therefore part of the real property and part of the land
contract.
7. The law permits a real estate licensee to act as an agent in the sale of some mobile homes. All of the following
acts are rounds for discipline by the Real Estate Commissioner against a real estate salesperson's license, except:
A. Selling, as agent, a mobile home which is greater than 8 feet in width and 40 feet in length;
B. Failing to provide for the delivery of a properly-endorsed certificate of ownership from the seller to the buyer;
C. Advertising a used mobile home for sale as "new";
D. Submitting a check to the Department of Housing and Community Development for any fee in connection with the
title transfer if the check is thereafter refused payment by the bank.
8. Which of the following is always required in joint tenancy ownership of real property:
A. The clause, "With right of survivorship";
B. Equal shares of interest in the property by each of the joint tenants;
C. A husband and wife relationship;
D. All of the above.
9. When a pest control company discovers no evidence of infestation of termites, but discovers conditions which may
lead to such infestation, the cost of correction such conditions is paid by:
A. The seller in all cases;
B. The buyer in all cases;
C. The seller and the buyer, each paying one-half of the cost;
D. The buyer only of he chooses to have the condition corrected.
10. To alienate title to property, one:
A. Encumbers the title;
B. Clouds the title;
C. Records a homestead;
D. Conveys title.
11. When real property is sold, a copy of the structural pest control report must be given, if requested, to:
A. The buyer;
B. The lender;
C. The broker;
D. The escrow company.
12. Legally and technically, property is defined as:
A. Freehold estates;
B. Things which buyers and sellers own;
C. Rights or interests which a person has in the thing owned;
D. Only personal property.
13. A deed:
A. When recorded, gives actual notice of its contents;
B. If recorded, will not give the grantee the usual protection of the recording laws if it is a quitclaim deed;
C. Can only be recorded in one county;
D. Does not have to be recorded to transfer title.
14. A primary justification for zoning ordinances is to:
A. Maintain conformity to buildings in the zoned area;
B. Prevent an oversupply of certain types of businesses;
C. Promote the public health, safety, morals, and general welfare;
D. Control the quality of building construction.
15. The main purpose of a deed is to:
A. Provide evidence of the terms of a real property transaction;
B. Evidence the change in title or transfer of an interest in real property;
C. Identify the parties involved in a real property transfer;
D. Provide a written instrument that can be recorded.
16. When a valid grant deed is prepared, title passes when it is:
A. Acknowledged;
B. Delivered;
C. Signed;
D. Recorded.
17. Which of the following persons would usually be in the weakest position against loss of property due to a claim
of title by an outside person:
A. The holder of a recorded deed who rents the property;
B. The holder of a certificate of title to property issued by a title company;
C. The holder of an unrecorded quitclaim deed who occupies the property;
D. The holder of an unrecorded quitclaim deed who does not occupy the property.
18. An easement could be created for what length of time:
A. Perpetuity;
B. The lifetime of a person;
C. A term of years;
D. Any of the above.
19. The land that is benefited by an easement is called the:
A. Defeasible fee;
B. Subjective property;
C. Dominant tenement;
D. Servient tenement.
20. The requisites of a grant deed when compared to a land contract of sale may differ with respect to:
A. Interest conveyed;
B. Signatures of the principal parties;
C. Designation of purchase price;
D. All of the above.
21. Land that is subject to an easement is said to be:
A. Appurtenant thereto;
B. Encroached upon;
C. Encumbered;
D. Restricted.
22. Mr. and Mrs. Winters hired the Superb Construction Company to install a swimming pool on their residential
premises. In the event the construction company was unpaid and it was necessary for them to file a lien for payment of the
contract, the encumbrance created would be:
A. A specific lien;
B. A general lien;
C. A voluntary lien;
D. None of the above.
23. If there has not been an agreement to the contrary, all of the following would qualify as a negotiable
instrument, except:
A. An installment note;
B. A personal check;
C. A mortgage securing a promissory note;
D. A band draft.
24. A straight note, same term and interest rate, would:
A. Involve more interest than an installment note;
B. Involve less interest than an installment note including interest;
C. Involve less interest than a joint and several installment note that is payable plus interest;
D. Involve the same amount of interest as an installment note plus interest.
25. Which of the following is not a true statement about easements;
A. An easement in gross is a right in another's land created for the benefit of adjacent land;
B. An easement is a non-possessory interest;
C. An owner cannot have an easement in his own land;
D. Because of an easement, one may be restricted in the use of his own land.
A. Is not allowed by law;
B. Would require Broker Jones to file a loan broker's statement;
C. Would involve a bond;
D. None of the above.
25. Mike Coogan, a new real estate salesperson, made strong efforts to obtain listings in a non-integrated
community. He found success by insinuating to property owners that should minorities move into the area, the value of their
homes would decrease. Which of the following terms best describes the activities of Salesperson Coogan:
A. Steering;
B. Panic peddling;
C. Blockbusting
D. Both "B" and "C".
Click here to return to the course page.Correct answers are highlighted in green.
Incorrect Answers are highlighted in red.
Quiz 21
1. An easement in gross:
A. Benefits dominant land;
B. Burdens servient land;
C. Cannot be owned separately from an interest in land;
D. Burdens dominant land.
2. Easements are terminated by all of the following, except:
A. Prescription by the owner of the servient tenement;
B. Merger of the dominant and servient tenement;
C. Revocation by the owner of the servient tenement;
D. Release by the owner of the dominant tenement.
3. Private restrictions on land can be conveyed by:
A. Deed;
B. Written agreement;
C. General plan restrictions in subdivisions;
D. All of the above.
4. A formal declaration, not an oath, that a statement is true or that the declarer will tell the truth is:
A. An affidavit;
B. An acknowledgment;
C. Verification;
D. An affirmation.
5. Following proper action by the local authorities, the zoning on a vacant lot was changed from "commercial" to
"residential." Such an action is called:
A. Retroactive zoning;
B. Down zoning;
C. Spot zoning;
D. Blended zoning.
6. A change in a zoning ordinance could be initiated by:
A. A subdivider/developer;
B. A local government agency;
C. The owner of a property;
D. All of the above.
7. The right or power to sell a property in the event of a default under the terms of the trust deed is given by:
A. Trustee to the trustor;
B. Buyer to the beneficiary;
C. Buyer to the seller;
D. Trustor to the trustee.
8. Installment notes often include an "or more" clause. Such a clause would:
A. Allow an accelerated payoff;
B. Indicate that the note has several makers;
C. Provide for a loan moratorium in the event of a disaster;
D. Make it possible to borrow additional money on the same note and trust deed.
9. When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the
amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately
larger for the first lots that are sold. The reason for this practice is:
A. To increase the security value of the remaining lots;
B. To compensate for the loss of the security as the lots under the blanket encumbrance are removed;
C. To compensate for the loss of security due to the best lots being sold first;
D. All of the above.
10. Another name for an estate of inheritance is:
A. Fee simple defeasible;
B. Estate at sufferance;
C. Estate in fee;
D. Probate estate.
By definition.
11. An acceleration clause is inserted in a note that is otherwise negotiable. The addition of this clause:
A. Causes the note to lose its negotiability;
B. Is required for negotiability;
C. Does not reduce the negotiability of the note;
D. Has no effect on negotiability, but is of no benefit.
12. An "open-end" provision in a mortgage would benefit the borrower the most if he:
A. Prepaid the loan;
B. Allowed a subsequent buyer to assume the loan;
C. Had a loan subordinated to a construction loan;
D. Borrowed additional money.
13. When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made:
A. By the lender, as to the current balance due to pay off a real estate loan;
B. Designating the one who will receive the property in the event of the borrower's death;
C. By the insurer, stating the amount that will be paid to the policyholder if the improvements are destroyed;
D. By the property owner, listing the beneficial features of an assumable loan.
14. Once a judgment has been obtained against real property, a plaintiff would obtain which of the following in
order to cause the property to be sold:
A. An attachment;
B. A lis pendens;
C. A writ of execution:
D. An estoppel.
15. Authorization to sell a parcel of real property in the event of a default is given by:
A. Trustor to beneficiary;
B. Trustor to trustee;
C. Beneficiary to trustee;
D. Beneficiary to trustor.
16. In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with
"desk cost." Which of the following most nearly represents the correct way to calculate desk cost:
A. Add the total of all the furniture for each salesperson;
B. Calculate the gross annual profit for the firm, less the expenses, divided by the number of salespersons;
C. Divide the total cost of rent, utilities, and advertising by the number of salespersons;
D. Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of
salespersons.
17. When a title company issues a California standard policy of title insurance, the policyholder is insured against
loss which occurs because of:
A. Unrecorded liens and encumbrances;
B. The rights of parties in possession;
C. Forgery in the chain of recorded title;
D. A defect in the chain of title, already known by the insured prior to the issuance of the policy.
18. The "Code of Ethics and Professional Conduct" is considered to be:
A. One of the Real Estate Commissioner's regulations which applies to all real estate licensees;
B. Of relevance for brokers only;
C. Recommended, but not required for all real estate professionals;
D. A model office policy manual.
19. Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building
needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a
newspaper that says, "Three bedroom, Victorian. You won't believe the price! Move right in. Davis -234-5678." This
advertisement is bad because:
A. It is unethical to advertise a property that is over-priced;
B. If someone buys the house on the basis of the advertisement, the publisher could be held liable;
C. Since Davis knows that the property needs major repairs, it is deceptive and misleading;
D. It doesn't tell the asking price as required by Regulation Z.
20. If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three
bedroom, two-bath, pool and spa, large lot-$167,000. 555-1234."
A. This is false advertising;
B. This is misleading advertising;
C. This violates Regulation Z;
D. This is blind advertising.
21. Which of the following actions by a real estate salesperson is not within the "Beneficial Conduct" guidelines of
the Real Estate Commissioner's Code of Ethics and Professional Conduct:
A. Disputes between brokers being settled by arbitration rather than court hearings;
B. Treating all parties to the transaction fairly;
C. Complete records of all real estate transactions being maintained by a salesperson;
D. Approval by a broker of pocket listings taken by salespersons in his employ.
thics.
22. Of the following, which is considered a violation of fair housing laws in regards to periodic tenancy:
A. A landlord requiring that each and every tenant have a good credit rating and the assurance of a steady source of
income;
B. The requirement of a landlord that all tenants furnish references from their previous landlord;
C. The requirement of a landlord of a co-signer exclusively for tenants who are single;
D. A landlord that requires all tenants pay first, second and last month's rent in advance.
23. When a loan broker advertises for investors who wish to invest in "secured" loans on real property, such
advertising would be regarded as misleading unless:
A. The advertiser offered a personal guarantee to each investor;
B. Each borrower were furnished a standard policy of title insurance covering the properties to be liened;
C. The broker secured the borrower's signature on the loan disclosure statement;
D. The advertising fully explained the extent to which such funds would be secured.
24. Dr. Smith gave Broker Jones $25,000 to invest in second trust deeds. He agreed to pay Broker Jones a 2%
commission on the gross profits and Broker Jones agreed to guarantee Dr. Smith a 6% return on his money, even if it came out
of his own pocket. This:
Congratulations, you passed the quiz with a score of 100%!
Click here to return to the course page.Correct answers are highlighted in green.
Incorrect Answers are highlighted in red.
Quiz 20
1. An estate is granted to "A" for the life of "X." "A" dies while "X" is still living. The estate
A. Ceases to exist;
B. Reverts to the original grantor;
C. Vests in "X" for his life;
D. Vests in the heirs or devisees of "A."
2. Tyson owns a store building which he leased to Crown for seven years. Crown's estate in the store building is:
A. Personal property;
B. Estate for years;
C. A chattel real;
D. All of the above.
3. An instrument which usually transfers possession of real property, but does not transfer ownership is:
A. A mortgage;
B. A sublease;
C. A security agreement;
D. An easement.
4. Which of the following would be considered real property?
A. A maturing grape crop which is under a sales contract and to be harvested later;
B. Trade fixtures that a tenant has installed but which are removable without damage;
C. A built-in refrigerator in a mobile home that is not attached to a permanent foundation;
D. A bearing wall in a single-family house.
5. Personal property can never:
A. Become real property;
B. Be hypothecated;
C. Be alienated;
D. None of the above.
6. Jones conveyed his ranch to Brown using a land contract. The ranch was serviced by a mutual water company, and
Jones was a stockholder in the company. The stock which Jones owned was appurtenant to the land. Does Brown have to enter
into a separate contract for the stock of the mutual water company:
A. Yes, since stock is always personal property and therefore not included in land contracts;
B. No, because land in California cannot be sold without water rights;
C. Yes, because real property is not always accompanied by water rights;
D. No, because the stock was appurtenant to the land and therefore part of the real property and part of the land
contract.
7. The law permits a real estate licensee to act as an agent in the sale of some mobile homes. All of the following
acts are rounds for discipline by the Real Estate Commissioner against a real estate salesperson's license, except:
A. Selling, as agent, a mobile home which is greater than 8 feet in width and 40 feet in length;
B. Failing to provide for the delivery of a properly-endorsed certificate of ownership from the seller to the buyer;
C. Advertising a used mobile home for sale as "new";
D. Submitting a check to the Department of Housing and Community Development for any fee in connection with the
title transfer if the check is thereafter refused payment by the bank.
8. Which of the following is always required in joint tenancy ownership of real property:
A. The clause, "With right of survivorship";
B. Equal shares of interest in the property by each of the joint tenants;
C. A husband and wife relationship;
D. All of the above.
9. When a pest control company discovers no evidence of infestation of termites, but discovers conditions which may
lead to such infestation, the cost of correction such conditions is paid by:
A. The seller in all cases;
B. The buyer in all cases;
C. The seller and the buyer, each paying one-half of the cost;
D. The buyer only of he chooses to have the condition corrected.
10. To alienate title to property, one:
A. Encumbers the title;
B. Clouds the title;
C. Records a homestead;
D. Conveys title.
11. When real property is sold, a copy of the structural pest control report must be given, if requested, to:
A. The buyer;
B. The lender;
C. The broker;
D. The escrow company.
12. Legally and technically, property is defined as:
A. Freehold estates;
B. Things which buyers and sellers own;
C. Rights or interests which a person has in the thing owned;
D. Only personal property.
13. A deed:
A. When recorded, gives actual notice of its contents;
B. If recorded, will not give the grantee the usual protection of the recording laws if it is a quitclaim deed;
C. Can only be recorded in one county;
D. Does not have to be recorded to transfer title.
14. A primary justification for zoning ordinances is to:
A. Maintain conformity to buildings in the zoned area;
B. Prevent an oversupply of certain types of businesses;
C. Promote the public health, safety, morals, and general welfare;
D. Control the quality of building construction.
15. The main purpose of a deed is to:
A. Provide evidence of the terms of a real property transaction;
B. Evidence the change in title or transfer of an interest in real property;
C. Identify the parties involved in a real property transfer;
D. Provide a written instrument that can be recorded.
16. When a valid grant deed is prepared, title passes when it is:
A. Acknowledged;
B. Delivered;
C. Signed;
D. Recorded.
17. Which of the following persons would usually be in the weakest position against loss of property due to a claim
of title by an outside person:
A. The holder of a recorded deed who rents the property;
B. The holder of a certificate of title to property issued by a title company;
C. The holder of an unrecorded quitclaim deed who occupies the property;
D. The holder of an unrecorded quitclaim deed who does not occupy the property.
18. An easement could be created for what length of time:
A. Perpetuity;
B. The lifetime of a person;
C. A term of years;
D. Any of the above.
19. The land that is benefited by an easement is called the:
A. Defeasible fee;
B. Subjective property;
C. Dominant tenement;
D. Servient tenement.
20. The requisites of a grant deed when compared to a land contract of sale may differ with respect to:
A. Interest conveyed;
B. Signatures of the principal parties;
C. Designation of purchase price;
D. All of the above.
21. Land that is subject to an easement is said to be:
A. Appurtenant thereto;
B. Encroached upon;
C. Encumbered;
D. Restricted.
22. Mr. and Mrs. Winters hired the Superb Construction Company to install a swimming pool on their residential
premises. In the event the construction company was unpaid and it was necessary for them to file a lien for payment of the
contract, the encumbrance created would be:
A. A specific lien;
B. A general lien;
C. A voluntary lien;
D. None of the above.
23. If there has not been an agreement to the contrary, all of the following would qualify as a negotiable
instrument, except:
A. An installment note;
B. A personal check;
C. A mortgage securing a promissory note;
D. A band draft.
24. A straight note, same term and interest rate, would:
A. Involve more interest than an installment note;
B. Involve less interest than an installment note including interest;
C. Involve less interest than a joint and several installment note that is payable plus interest;
D. Involve the same amount of interest as an installment note plus interest.
25. Which of the following is not a true statement about easements;
A. An easement in gross is a right in another's land created for the benefit of adjacent land;
B. An easement is a non-possessory interest;
C. An owner cannot have an easement in his own land;
D. Because of an easement, one may be restricted in the use of his own land.
A. Is not allowed by law;
B. Would require Broker Jones to file a loan broker's statement;
C. Would involve a bond;
D. None of the above.
25. Mike Coogan, a new real estate salesperson, made strong efforts to obtain listings in a non-integrated
community. He found success by insinuating to property owners that should minorities move into the area, the value of their
homes would decrease. Which of the following terms best describes the activities of Salesperson Coogan:
A. Steering;
B. Panic peddling;
C. Blockbusting
D. Both "B" and "C".
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| 21n20n19-withans.doc |
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Quiz 21
1. An easement in gross:
A. Benefits dominant land;
B. Burdens servient land;
C. Cannot be owned separately from an interest in land;
D. Burdens dominant land.
Any easement is a burden on servient land. because an easement in gross belongs to a person, there is not a dominant tenement, but the land burdened by the easement would be a servient tenement.
2. Easements are terminated by all of the following, except:
A. Prescription by the owner of the servient tenement;
B. Merger of the dominant and servient tenement;
C. Revocation by the owner of the servient tenement;
D. Release by the owner of the dominant tenement.
The owner of the servient tenement may take proper action to terminate the easement, but unilaterally revoking the easement by the servient tenement, fails to terminate the easement.
3. Private restrictions on land can be conveyed by:
A. Deed;
B. Written agreement;
C. General plan restrictions in subdivisions;
D. All of the above.
Private restrictions are limitations on the use of property placed on the property by prior owners, including the subdivider/developer, and may be conveyed (i.e., transferred) by deed, by written agreement (i.e., contract), or included in the developer's "Declaration of Restrictions,"
4. A formal declaration, not an oath, that a statement is true or that the declarer will tell the truth is:
A. An affidavit;
B. An acknowledgment;
C. Verification;
D. An affirmation.
An affirmation is a formal declaration, not under oath, that a statement is true, or that the declarer will tell the truth.
5. Following proper action by the local authorities, the zoning on a vacant lot was changed from "commercial" to "residential." Such an action is called:
A. Retroactive zoning;
B. Down zoning;
C. Spot zoning;
D. Blended zoning.
Such a change would appropriately be called down zoning, because it is going from a higher use to a more restrictive use.
6. A change in a zoning ordinance could be initiated by:
A. A subdivider/developer;
B. A local government agency;
C. The owner of a property;
D. All of the above.
A subdivider/developer or an owner of a property could request a change in zoning, and certainly a local government agency could.
7. The right or power to sell a property in the event of a default under the terms of the trust deed is given by:
A. Trustee to the trustor;
B. Buyer to the beneficiary;
C. Buyer to the seller;
D. Trustor to the trustee.
In the trust deed, the trustor (borrower) gives the trustee (holder of the title) the to the property, with the right to sell the property in the event of a default.
8. Installment notes often include an "or more" clause. Such a clause would:
A. Allow an accelerated payoff;
B. Indicate that the note has several makers;
C. Provide for a loan moratorium in the event of a disaster;
D. Make it possible to borrow additional money on the same note and trust deed.
The "or more" clause permits the borrower to pay off the debt created by the promissory note in advance of when the debt is due without having to pay a penalty.
9. When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately larger for the first lots that are sold. The reason for this practice is:
A. To increase the security value of the remaining lots;
B. To compensate for the loss of the security as the lots under the blanket encumbrance are removed;
C. To compensate for the loss of security due to the best lots being sold first;
D. All of the above.
All three of these are good reasons for requiring larger repayment when the first lots are sold under a blanket mortgage.
10. Another name for an estate of inheritance is:
A. Fee simple defeasible;
B. Estate at sufferance;
C. Estate in fee;
D. Probate estate.
By definition.
11. An acceleration clause is inserted in a note that is otherwise negotiable. The addition of this clause:
A. Causes the note to lose its negotiability;
B. Is required for negotiability;
C. Does not reduce the negotiability of the note;
D. Has no effect on negotiability, but is of no benefit.
A note is negotiable when is can be sold or transferred to another person. The fact that the note has clauses in it will not affect its negotiability. It will still be capable of being sold or conveyed to someone else.
12. An "open-end" provision in a mortgage would benefit the borrower the most if he:
A. Prepaid the loan;
B. Allowed a subsequent buyer to assume the loan;
C. Had a loan subordinated to a construction loan;
D. Borrowed additional money.
An open-end provision in a mortgage allows the borrower to borrow additional amounts in the future without rewriting the loan documents.
13. When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made:
A. By the lender, as to the current balance due to pay off a real estate loan;
B. Designating the one who will receive the property in the event of the borrower's death;
C. By the insurer, stating the amount that will be paid to the policyholder if the improvements are destroyed;
D. By the property owner, listing the beneficial features of an assumable loan.
The beneficiary's statement is a statement is a statement by the beneficiary (lender) of the balance due to pay off the loan in full.
14. Once a judgment has been obtained against real property, a plaintiff would obtain which of the following in order to cause the property to be sold:
A. An attachment;
B. A lis pendens;
C. A writ of execution:
D. An estoppel.
A writ of execution is a court order providing for the forced sale of the property.
15. Authorization to sell a parcel of real property in the event of a default is given by:
A. Trustor to beneficiary;
B. Trustor to trustee;
C. Beneficiary to trustee;
D. Beneficiary to trustor.
In agreements found in a deed of trust, the trustor (borrower) gives the trustee (third party) the power to sell the property given as security for the note, in the event the trustor defaults in his payments to the lender. There are many additional agreements in such a trust deed establishing the condition under which the trustee can exercise this power of sale.
16. In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with "desk cost." Which of the following most nearly represents the correct way to calculate desk cost:
A. Add the total of all the furniture for each salesperson;
B. Calculate the gross annual profit for the firm, less the expenses, divided by the number of salespersons;
C. Divide the total cost of rent, utilities, and advertising by the number of salespersons;
D. Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the number of salespersons.
Desk cost is the total of the operating expenses of the firm, divided by the number of salespersons employed by that firm. It is the "break-even" amount each person must produce in gross commissions for the firm in order for the firm to stay in business.
17. When a title company issues a California standard policy of title insurance, the policyholder is insured against loss which occurs because of:
A. Unrecorded liens and encumbrances;
B. The rights of parties in possession;
C. Forgery in the chain of recorded title;
D. A defect in the chain of title, already known by the insured prior to the issuance of the policy.
A standard policy protects against forgery; extended coverage would protect against unrecorded liens or rights of parties in possession; no policy protects against defects already known by the insured.
18. The "Code of Ethics and Professional Conduct" is considered to be:
A. One of the Real Estate Commissioner's regulations which applies to all real estate licensees;
B. Of relevance for brokers only;
C. Recommended, but not required for all real estate professionals;
D. A model office policy manual.
The Code of Ethics and Professional Conduct is a regulation that was promulgated by the Real Estate Commissioner. Naturally, it applies to all real estate licensees.
19. Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a newspaper that says, "Three bedroom, Victorian. You won't believe the price! Move right in. Davis -234-5678." This advertisement is bad because:
A. It is unethical to advertise a property that is over-priced;
B. If someone buys the house on the basis of the advertisement, the publisher could be held liable;
C. Since Davis knows that the property needs major repairs, it is deceptive and misleading;
D. It doesn't tell the asking price as required by Regulation Z.
When a building needs major structural repairs, it is misleading to advertise it as being in "move-in" condition.
20. If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three bedroom, two-bath, pool and spa, large lot-$167,000. 555-1234."
A. This is false advertising;
B. This is misleading advertising;
C. This violates Regulation Z;
D. This is blind advertising.
Since this ad has no wording in it which indicates that it was placed by an agent rather than an owner, it would be considered blind advertising.
21. Which of the following actions by a real estate salesperson is not within the "Beneficial Conduct" guidelines of the Real Estate Commissioner's Code of Ethics and Professional Conduct:
A. Disputes between brokers being settled by arbitration rather than court hearings;
B. Treating all parties to the transaction fairly;
C. Complete records of all real estate transactions being maintained by a salesperson;
D. Approval by a broker of pocket listings taken by salespersons in his employ.
Pocket listing (refusing to cooperate with other licensees), as a matter of custom, are not approved in the Code of Ethics.
22. Of the following, which is considered a violation of fair housing laws in regards to periodic tenancy:
A. A landlord requiring that each and every tenant have a good credit rating and the assurance of a steady source of income;
B. The requirement of a landlord that all tenants furnish references from their previous landlord;
C. The requirement of a landlord of a co-signer exclusively for tenants who are single;
D. A landlord that requires all tenants pay first, second and last month's rent in advance.
Answer "C" specifies that the landlord has singled out tenants who are single; therefore, this landlord is discriminating. All the other answers indicate that the landlord is placing requirements that pertain to all tenants, which is not discriminatory.
23. When a loan broker advertises for investors who wish to invest in "secured" loans on real property, such advertising would be regarded as misleading unless:
A. The advertiser offered a personal guarantee to each investor;
B. Each borrower were furnished a standard policy of title insurance covering the properties to be liened;
C. The broker secured the borrower's signature on the loan disclosure statement;
D. The advertising fully explained the extent to which such funds would be secured.
The Commissioner's regulations require this disclosure.
24. Dr. Smith gave Broker Jones $25,000 to invest in second trust deeds. He agreed to pay Broker Jones a 2% commission on the gross profits and Broker Jones agreed to guarantee Dr. Smith a 6% return on his money, even if it came out of his own pocket. This:
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Quiz 20
1. An estate is granted to "A" for the life of "X." "A" dies while "X" is still living. The estate
A. Ceases to exist;
B. Reverts to the original grantor;
C. Vests in "X" for his life;
D. Vests in the heirs or devisees of "A."
As long as "X" (the designated person) lives, the life estate belongs to "A" (the life tenant) or the heirs of "A."
2. Tyson owns a store building which he leased to Crown for seven years. Crown's estate in the store building is:
A. Personal property;
B. Estate for years;
C. A chattel real;
D. All of the above.
An estate for years must be for a designated period as given in the question; this is personal property because it is temporary. It is also known as a chattel real, and is a less-than-freehold estate.
3. An instrument which usually transfers possession of real property, but does not transfer ownership is:
A. A mortgage;
B. A sublease;
C. A security agreement;
D. An easement.
A sublease transfers possession of property from the lessor to the lessee. A mortgage and a security agreement are used in borrowing money and an easement gives the right to use someone else's property. With an easement, that right use is usually not an exclusive right to use nor a right to possess.
4. Which of the following would be considered real property?
A. A maturing grape crop which is under a sales contract and to be harvested later;
B. Trade fixtures that a tenant has installed but which are removable without damage;
C. A built-in refrigerator in a mobile home that is not attached to a permanent foundation;
D. A bearing wall in a single-family house.
Since a bearing wall is part of the structure of a house, and the house is real property, the bearing wall would also be real property.
5. Personal property can never:
A. Become real property;
B. Be hypothecated;
C. Be alienated;
D. None of the above.
Personal property sometimes becomes real property when it is affixed to real property. It can be hypothecated, as when a person borrows on a car and hypothecates the title. It can be alienated or conveyed to someone else.
6. Jones conveyed his ranch to Brown using a land contract. The ranch was serviced by a mutual water company, and Jones was a stockholder in the company. The stock which Jones owned was appurtenant to the land. Does Brown have to enter into a separate contract for the stock of the mutual water company:
A. Yes, since stock is always personal property and therefore not included in land contracts;
B. No, because land in California cannot be sold without water rights;
C. Yes, because real property is not always accompanied by water rights;
D. No, because the stock was appurtenant to the land and therefore part of the real property and part of the land contract.
Stock in a mutual water company is an appurtenance to the land, and appurtenances run with the land to the new owner.
7. The law permits a real estate licensee to act as an agent in the sale of some mobile homes. All of the following acts are rounds for discipline by the Real Estate Commissioner against a real estate salesperson's license, except:
A. Selling, as agent, a mobile home which is greater than 8 feet in width and 40 feet in length;
B. Failing to provide for the delivery of a properly-endorsed certificate of ownership from the seller to the buyer;
C. Advertising a used mobile home for sale as "new";
D. Submitting a check to the Department of Housing and Community Development for any fee in connection with the title transfer if the check is thereafter refused payment by the bank.
Real estate licensees can act as agents in the sale of a mobile home only when it has been registered for at least one year (or has become real property); and the payment of fees with a bad check is obviously grounds for discipline. A licensee may serve as agent in the sale of a mobile home which is greater than 8 feet wide and 40 feet long.
8. Which of the following is always required in joint tenancy ownership of real property:
A. The clause, "With right of survivorship";
B. Equal shares of interest in the property by each of the joint tenants;
C. A husband and wife relationship;
D. All of the above.
A joint tenancy requires four unities: time, title, interest and possession. The third one, interest, means that the percentage of ownership must be equal among all of the owners. The other items are not requirements for a joint tenancy
9. When a pest control company discovers no evidence of infestation of termites, but discovers conditions which may lead to such infestation, the cost of correction such conditions is paid by:
A. The seller in all cases;
B. The buyer in all cases;
C. The seller and the buyer, each paying one-half of the cost;
D. The buyer only of he chooses to have the condition corrected.
This would not be the seller's responsibility since there is no evidence of termites at the present time. The buyer may take preventative action if he wishes to do so.
10. To alienate title to property, one:
A. Encumbers the title;
B. Clouds the title;
C. Records a homestead;
D. Conveys title.
To alienate means to transfer or to convey.
11. When real property is sold, a copy of the structural pest control report must be given, if requested, to:
A. The buyer;
B. The lender;
C. The broker;
D. The escrow company.
The law specifically states that if the buyer requests it, a copy of the termite report must be give to the buyer.
12. Legally and technically, property is defined as:
A. Freehold estates;
B. Things which buyers and sellers own;
C. Rights or interests which a person has in the thing owned;
D. Only personal property.
Property is legally defined as the rights that a person has in the thing owned. This refers to the Bundle of Rights theory.
13. A deed:
A. When recorded, gives actual notice of its contents;
B. If recorded, will not give the grantee the usual protection of the recording laws if it is a quitclaim deed;
C. Can only be recorded in one county;
D. Does not have to be recorded to transfer title.
A deed does not have to be recorded to transfer title. A deed is valid and effective when it is delivered and accepted. It does its job in transferring title at that point. Recording simply gives notice to the world of the contents of that document.
14. A primary justification for zoning ordinances is to:
A. Maintain conformity to buildings in the zoned area;
B. Prevent an oversupply of certain types of businesses;
C. Promote the public health, safety, morals, and general welfare;
D. Control the quality of building construction.
Zoning laws are an exercise of the police powers which are for the public health, safety, morals, and general welfare. No compensation need be paid in exercise of police power, as they are for the public protection.
15. The main purpose of a deed is to:
A. Provide evidence of the terms of a real property transaction;
B. Evidence the change in title or transfer of an interest in real property;
C. Identify the parties involved in a real property transfer;
D. Provide a written instrument that can be recorded.
A deed need not, and usually does not, spell out the terms of a real estate transaction. The parties to a deed must be properly described. this is an " essential element" of a deed, one of the necessary ingredients, but it is not the purpose of the deed. the purpose is to provide evidence of the title/interest transferred. recording laws are generally permissive laws, and the recording of a deed is not a requirement for enforceability of the document.
16. When a valid grant deed is prepared, title passes when it is:
A. Acknowledged;
B. Delivered;
C. Signed;
D. Recorded.
voluntary delivery and acceptance of a valid deed makes it enforceable unless fraud can be proven. recording presumes a voluntary delivery and acceptance. before any document can be recorded, the maker(s) must acknowledge their signature(s) and this is usually done in the presence of a notary.
17. Which of the following persons would usually be in the weakest position against loss of property due to a claim of title by an outside person:
A. The holder of a recorded deed who rents the property;
B. The holder of a certificate of title to property issued by a title company;
C. The holder of an unrecorded quitclaim deed who occupies the property;
D. The holder of an unrecorded quitclaim deed who does not occupy the property.
A quitclaim deed simply relinquishes any claim that the grantor may have in the property. He may have none. Also, in this instance, because it is unrecorded and the owner is not living on the property, constructive notice has not been given.
18. An easement could be created for what length of time:
A. Perpetuity;
B. The lifetime of a person;
C. A term of years;
D. Any of the above.
An easement can be created for any length of time.
19. The land that is benefited by an easement is called the:
A. Defeasible fee;
B. Subjective property;
C. Dominant tenement;
D. Servient tenement.
the dominant tenement is the land that is benefited by the easement. the servient tenement is the land that is burdened by the easement.
20. The requisites of a grant deed when compared to a land contract of sale may differ with respect to:
A. Interest conveyed;
B. Signatures of the principal parties;
C. Designation of purchase price;
D. All of the above.
a grant deed and a contract of sale differ in the signatures of the principals, as a grant deed requires only the signature of the grantor, but the contract of sale requires the signatures of the vendor and vendee. they generally do not disclose the purchase price in a grant deed, but must in the contract of sale because it is a contract. a grant deed has implied warranties, and the contract of sale has no implied warranties.
21. Land that is subject to an easement is said to be:
A. Appurtenant thereto;
B. Encroached upon;
C. Encumbered;
D. Restricted.
an easement is an encumbrance. the easement is appurtenant to the land, not the land to the easement. liens and deed restrictions are also encumbrances, but of a different type.
22. Mr. and Mrs. Winters hired the Superb Construction Company to install a swimming pool on their residential premises. In the event the construction company was unpaid and it was necessary for them to file a lien for payment of the contract, the encumbrance created would be:
A. A specific lien;
B. A general lien;
C. A voluntary lien;
D. None of the above.
this would be a mechanic's lien, and mechanic's liens are always specific liens because they apply to that one parcel of property and not all of the property of the owner.
23. If there has not been an agreement to the contrary, all of the following would qualify as a negotiable instrument, except:
A. An installment note;
B. A personal check;
C. A mortgage securing a promissory note;
D. A band draft.
a mortgage is not a negotiable instrument. the promissory note that goes with it is a negotiable instrument. a negotiable instrument must be a promise to pay money.
24. A straight note, same term and interest rate, would:
A. Involve more interest than an installment note;
B. Involve less interest than an installment note including interest;
C. Involve less interest than a joint and several installment note that is payable plus interest;
D. Involve the same amount of interest as an installment note plus interest.
straight notes involve more interest than installment notes. this is true because the interest is computed on the unpaid balance of the loan, and with an installment note, the principal is decreased (amortized during the life of the loan. this is not the case with a straight term note because the entire principal amount is not paid until the end of the term, so interest must be paid on the entire principal borrowed.
25. Which of the following is not a true statement about easements;
A. An easement in gross is a right in another's land created for the benefit of adjacent land;
B. An easement is a non-possessory interest;
C. An owner cannot have an easement in his own land;
D. Because of an easement, one may be restricted in the use of his own land.
an easement in gross only involves a servient tenement; there is no dominant tenement which benefits from the easement. an easement in gross belongs to a person, so adjacent land would not be involved.
A. Is not allowed by law;
B. Would require Broker Jones to file a loan broker's statement;
C. Would involve a bond;
D. None of the above.
Broker Jones would be a real property securities dealer and would have to post a bond with the Real Estate Commissioner, according to Article 6. A loan broker's statement is involved in arranging a loan under Article 7, which is not involved in this case.
25. Mike Coogan, a new real estate salesperson, made strong efforts to obtain listings in a non-integrated community. He found success by insinuating to property owners that should minorities move into the area, the value of their homes would decrease. Which of the following terms best describes the activities of Salesperson Coogan:
A. Steering;
B. Panic peddling;
C. Blockbusting
D. Both "B" and "C".
Such activity is described as both panic peddling and blockbusting.
