Test bank for Real Estate Principles A Value Approach 4th edition Wayne Archer
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Multiple Choice Questions
[QUESTION]
1. A
principal definition of real estate is as a bundle of rights associated with
the possession, use, and disposition of property. Each of the following is a
fundamental characteristic of property rights EXCEPT:
A.
They are enforceable by the government.
B.
They apply only to tangible assets.
C.
They are nonrevocable.
D.
They are enduring.
Ans:
B
Difficulty:
Basic
Learning
Objective: 1
[QUESTION]
2.
Property rights can be divided into two classes, real and personal. Which of
the following is an example of real property?
A.
Vehicles
B.
Stocks and bonds
C.
Patents
D.
Commercial building
Ans:
D
Difficulty:
Basic
Learning
Objective: 1
[QUESTION]
3. A
fixture is an object that formerly was personal property but has become real
property. Of the following four rules for determining whether an object has
become a fixture, which is the most dominant (i.e. if there is a conflict,
which rule prevails)?
A.
Manner of the attachment
B.
Character of the article and manner of adaptation
C.
Intention of the parties
D.
Relation of the parties
Ans:
C
Difficulty:
Intermediate
Learning
Objective: 1
[QUESTION]
4. Based on your understanding
of the rules for determining when an object becomes a fixture, which of the
following items would most likely be considered a fixture at the time of sale?
A.
Custom (built-in) bookshelves
B.
Refrigerator in a single-family residence being sold
C.
Fence installed by the tenant of a rental property
D. Curtains
Ans: A
Difficulty: Intermediate
Learning Objective: 1
[QUESTION]
5. Property
rights can be dismantled into lesser bundles, referred to as interests, which
can then be held by different individuals. Interests in real property that
include possessions are referred to as:
A. fixtures
B. townships
C. licenses
D. estates
Ans: D
Difficulty: Basic
Learning Objective: 2
[QUESTION]
6.
Which of the following types of ownership estates is the most complete bundle
of rights, and therefore carries the greatest value?
A. Fee simple absolute
B. Fee simple conditional
C. Ordinary life estate
D. Legal life estate
Ans: A
Difficulty: Intermediate
Learning Objective: 2
[QUESTION]
7. Suppose an older homeowner
lives adjacent to an expanding university that is interested in acquiring her
residence for future university use. To allow the homeowner to continue to
retain all rights of exclusive possession, use, and enjoyment during her
lifetime, yet provide the university with the right of disposition, the
university may want to purchase a(n):
A
legal life estate with remainder interest
B.
conditional fee absolute with reverter interest
C.
ordinary life estate with remainder interest
D.
tenancy for years
Ans:
C
Difficulty:
Advanced
Learning
Objective: 2
[QUESTION]
8. While
leasehold interests are considered estates, they differ from freehold estates
in all of the following respects EXCEPT:
A. Leasehold estates are limited in time.
B. The right of disposition is diminished with a leasehold
estate.
C. Leasehold estates are not titled interests.
D. Leasehold estates are possessory interests
Ans: D
Difficulty: Intermediate
Learning Objective: 2
[QUESTION]
9. Nonposessory
interests (i.e. bundles of real property rights that do not include possession)
include all of the following EXCEPT:
A. leasehold interests
B. easements
C. restrictive covenants
D. liens
Ans: A
Difficulty: Intermediate
Learning Objective: 3
[QUESTION]
10. An
easement is the right to use land for a specific and limited purpose. Which of
the following easements involves a relationship between two parcels of land, is
a permanent feature of both parcels involved, and gives the dominant parcel
some intrusive use of the servient parcel?
A. Affirmative easement appurtenant
B. Negative easement appurtenant
C.
Easement in gross
D.
License
Ans:
A
Difficulty:
Basic
Learning
Objective: 3
[QUESTION]
11. Which
of the following is an example of a negative easement appurtenant?
A. A
driveway easement across one parcel to another.
B.
Rights-of-way for roads.
C. A
common drive easement where owners of adjoining lots must permit each other to
use a driveway lying on their shaped property line.
D. A
scenic easement used to restrict construction on adjacent parcels so as to
preserve a valued view.
Ans: D
Difficulty: Intermediate
Learning Objective: 3
[QUESTION]
12. An important distinction
both practically and conceptually is the difference between an easement and a
license. All of the following characteristics pertain to a license EXCEPT:
A.
A license is revocable by the grantor.
B.
A license can be granted orally.
C.
A license is enduring.
D.
A license grants permission to use
another’s land for a specific and limited purpose.
Ans:
C
Difficulty:
Basic
Learning
Objective: 3
[QUESTION]
13. A
lien is an interest in real property that serves as security for an obligation.
Which of the following is an example of a general lien?
A. Property tax and assessment lien
B. Mortgage lien
C. Lien arising from a court judgment unrelated to
ownership of the property
D. Mechanics’ lien
Ans: C
Difficulty: Intermediate
Learning Objective: 5
[QUESTION]
14. Which of the following types of liens is automatically
superior to any other lien?
A. Property tax and assessment lien
B. Mortgage lien
C. Lien arising from a court judgment unrelated to
ownership of the property
D. Mechanics’ lien
Ans: A
Difficulty: Intermediate
Learning Objective: 5
[QUESTION]
15.
Co-ownership can occur in a variety of ways, with significant variation in how
the bundle of rights is jointly held. All of the following entities are forms
of direct co-ownership
EXCEPT:
A. Tenancy in common
B. Tenancy by the entirety
C. Condominium
D. Partnership
Ans: D
Difficulty: Basic
Learning Objective: 6
[QUESTION]
16. Direct co-ownership implies
that each co-owner holds a titled interest in the property, but without
exclusive possession with respect to the other co-owners. Which of the
following types of direct co-ownership is considered the closest to the fee simple
absolute estate?
A.
Tenancy in common
B.
Tenancy by the entirety
C.
Condominium
D.
Tenancy at Will
Ans:
A
Difficulty:
Intermediate
Learning
Objective: 6
[QUESTION]
17. Which of the following
types of direct co-ownership is a form of joint tenancy for husband and wife
created by marriage that protects each spouse from liens arising from either
spouse alone?
A.
Tenancy in common
B.
Tenancy by the entirety
C.
Condominium
D.
Tenancy at Will
Ans:
B
Difficulty:
Basic
Learning
Objective: 6
[QUESTION]
18.
Which of the following types of direct co-ownership combines single person
ownership with tenancy in common?
A. Cooperative
B. Tenancy by the entirety
C. Condominium
D. Partnership
Ans: C
Difficulty: Basic
Learning Objective: 6
[QUESTION]
19. Which
of the following forms of co-ownership, historically used for apartment
buildings, is not considered a form of true direct co-ownership, but rather
qualifies as a proprietary corporation?
A. Cooperative
B. Tenancy by the entirety
C. Condominium
D. Partnership
Ans: A
Difficulty: Basic
Learning Objective: 6
[QUESTION]
20. Property
rights created from marriage have a clear implication for real estate
transactions. Which of the following marital property rights gives a spouse a
one-half claim on all property acquired “from the fruits of the marriage?”
A. Dower
B. Curtesy
C. Elective share
D. Community property
Ans: D
Difficulty: Basic
Learning Objective: 7
[QUESTION]
21. Restrictive covenants
impose constraints on the use of the land, yet are limited in terms of their
enforcement. All of the following are true regarding the enforcement of
restrictive covenants EXCEPT:
A. Courts have been reluctant
to maintain restrictive covenants for an unreasonably long time and in some
cases states have enacted a time limit on their applicability.
B. Courts may refuse to enforce
restrictive covenants due to changing neighborhood character.
C. Courts may refuse to enforce
restrictive covenants due to abandonment of the property.
D. Restrictive covenants are
public in nature and therefore can be enforced by those who do not hold a legal
interest in the property.
Ans:
D
Difficulty:
Advanced
Learning
Objective: 4
[QUESTION]
22. When
multiple individuals have use of a property, but their interests are not
simultaneous, this type of co-ownership is referred to as a:
A. Cooperative
B. Tenancy by the entirety
C. Condominium
D. Timeshare
Ans: D
Difficulty: Basic
Learning Objective: 8
[QUESTION]
23.
In some states, mining companies are deemed to own not only the minerals but
also the space the minerals occupied before they were removed, thereby earning
the distinction of ownership states. However, when the owner of an oil or gas
well is able to claim all that is pumped from it, regardless of whether the oil
or gas migrated from adjacent property, this is referred to as a _____________
state.
A.
Manner of attachment
B.
Law of capture
C.
Intention of the parties
D.
Relation of the parties
Ans: B
Difficulty: Advanced
Learning Objective: 1
[QUESTION]
24. Bill and
Mike go in together to purchase 342 acres of land to use for hunting and family
vacations. Ten years later, Bill dies
and Bill's wife wants to sell his half of the land. Mike informs her that,
unfortunately, she has no claim to the land and that upon Bill’s death, his
ownership interest transferred to Mike. What
type of co-ownership did Bill and Mike have?
A. Tenancy by the entireties
B. Tenancy in common
C. Joint tenancy
D. Condominium
Ans: C
Difficulty: Advanced
Learning Objective: 6
[QUESTION]
25.
The City of Grand Rapids installed a new water main on Oak Street. The city
then decided to charge the property owners along Oak Street a proportional cost
of the new water main. If a property owner refuses to pay their proportional
share of the cost, the city may file a(n):
A. property tax lien.
B. assessment lien.
C. general lien.
D. mechanics' lien.
Ans: B
Difficulty: Advanced
Learning Objective: 5
[QUESTION]
26. Jeff owns 150 acres between
a highway and a public beach. The state would like to build a road directly
from the highway to the beach across a number of beach front properties
including Jeff’s. The space for this road would be considered a(n):
A. implied
easement
B. easement
in gross.
C. negative
easement appurtenant.
D. positive easement appurtenant.
Ans: B
Difficulty:
Advanced
Learning
Objective: 3
[QUESTION]
27. Brian just began graduate school at the local university
and is looking to rent an apartment. A family friend has decided to lease him a
two bedroom, one bathroom cottage through an oral agreement with no definite
lease period outlined. Which of the following leasehold estates best describes
Brian’s situation?
A. Tenancy for years
B. Tenancy at sufferance
C. Periodic tenancy
D. Tenancy by the entirety
Ans:
C
Difficulty:
Advanced
Learning
Objective: 6
[QUESTION]
28. Tom recently purchased a home in a residential
subdivision. While mowing his lawn and planting new shrubs for the first time
since moving in, Tom’s neighbor came outside to inform him that he was
violating one of the subdivision’s rules which required the use of a specific
professional lawn service for all property landscaping needs. Assuming this
requirement can be enforced by the subdivision authority, this would be an
example of a(n):
A. easement
B. restrictive
covenant
C. lien
D. estate
Ans:
B
Difficulty:
Advanced
Learning
Objective: 4
[QUESTION]
29. When identifying an easement appurtenant, the parcel of
land that benefits from the right to use the land in question is referred to as
the:
A. Dominant
parcel
B. Servient
parcel
C. Licensed parcel
D. Gross parcel
Ans:
A
Difficulty:
Basic
Learning
Objective: 3
[QUESTION]
30. Real estate can be viewed
as a bundle of rights. How these bundles of rights are grouped together
determines the type of ownership interest an individual (or group of individuals)
can stake claim to. In an ordinary life estate with remainder interests, which
of the following rights is detached from the traditional bundle of rights that
typically defines a fee simple absolute interest?
A.
Possession
B.
Use
C.
Disposition
D.
Enjoyment
Ans:
C
Difficulty:
Intermediate
Learning
Objective: 2
[QUESTION]
31. Many states have enacted
laws that determine the flow of ownership rights of real property in the case
of the owner’s death. For example, in the state of Florida if a family
residence is declared a homestead and the owner of the property passes away,
the surviving spouse and children will have automatic interests in the
property. This type of estate is more commonly referred to as:
A.
Legal life estate with remainder interest
B.
Ordinary life estate with remainder interest
C.
Fee simple conditional interest
D.
Periodic tenancy
Ans:
A
Difficulty:
Intermediate
Learning
Objective: 2
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