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test 1
real estate principles
237
Finance
Undergraduate 3
10/31/2016
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Term
may be willed.
 Definition
Property owned in severalty
Term
one person
 Definition
An estate in severalty is one held by
Term
ownership severed from any other ownership interest.
 Definition
An estate in severalty means
Term
property is owned by one person.
 Definition
Ownership in severalty occurs when
Term
Ownership in severalty
 Definition
Which of the following forms of property ownership offers the greatest flexibility for the investor wishing to sell his interest?
Term
in severalty.
 Definition
A corporation, composed of many stockholders, desired to take title to real property. They would most likely take title
Term
as tenants in common.
 Definition
A couple purchased a condominium taking title as joint tenants. Regarding the other owners, interest in the common areas would be held
Term
tenants in common.
 Definition
A deed grants a parcel of land to Betty and Art, with no further distinction as to tenancy. Betty and Art would own the property as
Term
whoever is designated in the decedent’s will.
 Definition
When property is held by two or more owners as tenants in common, upon the death of one owner, that person’s ownership interest would pass to
Term
ownership.
 Definition
With regard to real property estates, tenancy in common refers to
Term
can sell his interest separately.
 Definition
A tenant in common
Term
each tenant must have a separate deed to his/her share.
 Definition
All of the following are true of a tenancy in common EXCEPT
Term
each co-owner has the right to use the entire property.
 Definition
The term “undivided interest” means
Term
title
 Definition
Four unities are required for the creation of joint tenancy. They are time, possession, interest, and
Term
co-ownership.
 Definition
Sylvia and Bart, sister and brother, purchased a parcel of real property. Each had an undivided one-half interest. This could be an example of
Term
at the same time.
 Definition
Joint tenants must acquire their interests in jointly held property
Term
include 2 or more people.
 Definition
Concurrent interests in real property must
Term
all will have equal interests in the property
 Definition
Three people are going to purchase an investment property as co-owners, and will take title as joint tenants. As joint tenants,
Term
Survivorship exists among joint tenants.
 Definition
Which of the following is required to create a joint tenancy?
Term
obtain no satisfaction since the property is now owned by the brother
 Definition
A brother and sister owned property in joint tenancy. All of their other affairs were separate. The sister died penniless, leaving many unsecured debts. Her creditors could
Term
right of survivorship.
 Definition
The most widely recognized aspect of joint tenancy is the
Term
death extinguishes the interest of the deceased.
 Definition
One of the most outstanding characteristics of joint tenancy is that
Term
the surviving co-tenants.
 Definition
When a person who owns property in joint tenancy dies, his share goes to
Term
joint tenancy.
 Definition
The phrase “a poor man’s will” has often been applied to
Term
The broker may collect commission from the husband only.
 Definition
A man has separated from his wife and filed for divorce. They own property as tenants by the entirely. He signs an exclusive right to sell listing agreement. The wife does not sign. The broker then brings a full price offer which the husband accepts. The wife does not sign. Which is true?
Term
earnest money agreement and the deed.
 Definition
In states recognizing tenancy by the entirety for married couples, in order to legally sell property, a husband and wife must both sign the
Term
Hallie who owns the entire estate.
 Definition
Hallie and Wally, husband and wife, owned property as tenants by the entirely. Wally sold the property without his wife’s signature. One day later, he died. The property goes to
Term
as tenancy by the entirely.
 Definition
The surviving co-owner may automatically inherit the deceased co-owner’s share when the property is held
Term
tenants by the entirety.
 Definition
Sara Jane, a married woman, and Don Dudley, a single man, may NOT own real estate as
Term
property acquired before marriage and maintained with community funds.
 Definition
Community property could include
Term
T
 Definition
The greatest advantage of sole ownership is flexibility.
Term
T
 Definition
With tenants in common, if nothing is said regarding the size of each co-owner’s interest, the law presumes that all interests are equal.
Term
F

joint tenancy
 Definition
Because of the survivorship feature, tenancy in common has loosely been labeled a “poor man’s will.”
Term
T
 Definition
One of the key characteristics of a tenancy by the entireties is that neither spouse has a disposable interest in the property during the lifetime of the other.
Term
T
 Definition
Separate property can be conveyed or mortgaged without the signature of the owner’s spouse.
Term
F

separate property
 Definition
Property owned before marriage and property acquired after marriage by gift, inheritance, or purchase with separate funds are all considered the couple’s community property.
Term
F

each partner has unlimited liability
 Definition
In a general partnership, each partner can loose no more than what he has invested in the partnership.
Term
T
 Definition
In a limited partnership, the partners provide the bulk of the invested capital, have little to say in the day-to-day management of the partnership, share in the profit and losses, and contract with the general partners to limit their financial liability.
Term
T
 Definition
Because a corporation is an entity (or legal being) in the eyes of the law, the corporation must pay income taxes on its profits.
Term
T
 Definition
Most real estate investors shun corporations because of the double taxation feature and because the tax benefits of owning real estate are trapped inside the corporation.
Term
T
 Definition
If a limited partner becomes too involved in the management of the partnership he may become a general partner’s operation of law and have more liability than he bargained for.
Term
F

very popular
 Definition
Subchapter S corporations are not popular as a method of organization for real estate brokers and developers.
Term
F

to a trustee.
 Definition
A trust is an arrangement whereby title to real and/or personal property is transferred by its owner (the Trustor) to a beneficiary.
Term
F

An owner cannot be the trustor and trustee at the same time.
 Definition
In several states, a land trust allows an owner to create a trust wherein he is both the trustor and the trustee.
Term
T
 Definition
Real Estate Investment Trusts (REITs) pool the money of many investors for the purchase of real estate, much as mutual funds do with stocks and bonds.
Term
F

One advantage of a REIT is that it does not require a large investment.
 Definition
Typically an investment in a REIT requires a large amount of money.
Term
F

husband and wife are equal partners.
 Definition
The basic concept of community property law is that the husband and wife are merged into one by marriage.
Term
T
 Definition
In community property states, property not held as community property is designated as separate property.
Term
F

Real property acquired before marriage is separate property
 Definition
In a state recognizing community property, real property acquired before marriage is brought into the marriage as community property.
Term
F

a single business project.
 Definition
A joint venture is a partnership to carry out numerous business projects.
Term
severalty
 Definition
When a property is held by one person, it is called an estate in ____________________.
Term
tenants in common
 Definition
In nearly all states, if two or more persons are named as owners, and there is no indication as to how title was taken, they are presumed to be ______________________________.
Term
survivorship
 Definition
The most distinguishing characteristic of joint tenancy is the right of ____________________.
Term
married
 Definition
Some states automatically assume that a tenancy by the entirety is created when ____________________ persons buy real estate.
Term
illiquidity
 Definition
In regard to a partnership, ____________________ refers to the possibility that it may be difficult to sell one’s partnership interest on short notice in order to raise cash.
Term
single
 Definition
A joint venture is a partnership formed to carry out a ____________________ business venture.
Term
trustee
 Definition
A trust is an arrangement whereby title to real and/or personal property is transferred by its owner (the trustor) to a ____________________.
Term
beneficiaries
 Definition
Investors in real estate investment trusts are called ____________________.
Term
Syndication
 Definition
____________________ is a broad term that simply refers to two or more individuals who have combined to pursue an investment enterprise too large for any of them to undertake individually.
Term
limited partnership
 Definition
composed of general partners who mainly organize and operate the partnership and limited partners who provide the capital
Term
tenancy by the entirety
 Definition
a form of joint ownership with the right of survivorship which is reserved for married persons
Term
unity of possession
 Definition
the joint tenants must enjoy the same undivided possession of the whole property
Term
S corporation
 Definition
provides the liability protection of a corporation with profit-and-loss pass-through of a partnership
Term
community property
 Definition
husband and wife share equally in any property purchased during marriage
Term
inter vivos trust
 Definition
takes effect during the life of its creator
Term
poor man’s will
 Definition
a label given to joint tenancy because of its right of survivorship feature
Term
unity of title
 Definition
joint tenants must acquire their interests from the same source i.e., the same deed or will
Term
general partnership
 Definition
a method of combining the capital and expertise of two or more persons, each retaining financial liability
Term
limited liability company
 Definition
organization of members or managers with little formal organization and limited liability
Term
concurrent ownership
 Definition
ownership by two or more persons at the same time
Term
unity of time
 Definition
each joint tenant must acquire his or her ownership interest at the same moment
Term
estate in severalty
 Definition
owned by one person; sole ownership
Term
right of survivorship
 Definition
surviving joint tenants automatically acquire all the rights of the deceased joint tenant
Term
unity of interest
 Definition
each joint tenant has exactly the same rights as all other joint tenants
Term
separate property
 Definition
property acquired before marriage in a community property state
Term
illiquidity
 Definition
the possibility that it may be difficult to sell one’s partnership interest on short notice
Term
joint tenancy
 Definition
form of property co-ownership that features the right of survivorship
Term
tenants in common
 Definition
shared ownership of a single property with no right of survivorship
Term
undivided interest
 Definition
ownership by two or more persons that gives each the right to use the entire property
Term
allodial system of land ownership.
 Definition
Property taxes are characteristic of the
Term
eminent domain
 Definition
The power of governments to appropriate private property for the public welfare is known as
Term
Condemnation
 Definition
By what action does the government take property for public use?
Term
Police power
 Definition
By what power do government bodies enforce zoning?
Term
escheat.
 Definition
The government receives the authority to take the property of one who dies without a will and without heirs by virtue of
Term
escheat to the state
 Definition
A woman who lived in a retirement home and had no relatives, told her friend that she wanted her to have all of her property after she died, however she never made a will. Upon her death, her estate would
Term
a fee simple estate.
 Definition
The greatest estate or ownership in real property is
Term
Fee simple estate
 Definition
Which estate is the most complete estate to own?
Term
violate building, health and safety codes.
 Definition
A property owner who holds fee simple title to land will have all of the following “sticks” in his bundle of rights EXCEPT the right to
Term
an easement in gross.
 Definition
An example of an encumbrance would be
Term
special assessments.
 Definition
An encumbrance which becomes a lien on real property could be created by
Term
when the purpose of the easement no longer exists.
 Definition
Termination of an easement appurtenant may be accomplished
Term
by merger of the dominant and servient estates.
 Definition
An easement appurtenant may be terminated
Term
the servient tenement
 Definition
An easement may be cancelled by all of the following EXCEPT
Term
runs with the land.
 Definition
An easement
Term
runs with the land and will pass to Martha automatically.
 Definition
Alice has an easement over Betty’s adjoining property. Alice sells her property to Martha. The easement will
Term
by necessity.
 Definition
Developers avoid land locked properties by creating an easement
Term
continuous use.
 Definition
An easement by prescription may be created by
Term
a right of way.
 Definition
A woman allowed her neighbor to drive over her property to get to his own. The woman may have given her neighbor
Term
A power company
 Definition
Which entity would be most likely to hold an easement in gross?
Term
an easement in gross.
 Definition
A power company wants to lay a service line across customer properties and must acquire an irrevocable right to do so. This right would be called
Term
neighbors to remove the encroachment.
 Definition
After purchasing a property, the buyers found a neighbor’s fence was two feet inside of their property line. If discussion fails to resolve the problem, the buyers should consider filing suit against the
Term
private control of land.
 Definition
Deed restrictions are examples of
Term
Mortgages
 Definition
Which of the following is a lien on real property?
Term
a restrictive covenant in a deed.
 Definition
All of the following may constitute a lien on real property EXCEPT
Term
an involuntary lien.
 Definition
A judgment, when properly recorded, becomes
Term
can sell it.
 Definition
Mrs. Wallock has a life estate for the duration of her own life. She
Term
Tenancy for years
 Definition
Which of the following is a non-freehold estate?
Term
tenancy at will.
 Definition
A property owner leases a house to a tenant until a buyer is found for the house. Such a tenancy is called a
Term
tenancy for years.
 Definition
A holdover tenancy is most likely created after the expiration of a
Term
T
 Definition
Under the feudal system of land ownership, the responsibility for providing services, determining land use, etc., was held by the king.
Term
F
 Definition
Government rights limit private rights in real property by the use of appropriation.
Term
T
 Definition
When real property is taken by means of eminent domain, the government has to pay the landowner fair market value.
Term
T
 Definition
Railroads have the right to condemn private property for public use.
Term
T
 Definition
A family had a lion as a pet at their home outside the city. When the area became incorporated, the city made him get rid of the lion by their use of police power.
Term
F

escheat
 Definition
A government may acquire ownership of privately held land by patent.
Term
F
 Definition
If title to real property is said to be fee simple, it can NOT be alienated.
Term
T
 Definition
A fee simple estate in real property may not be transferred with a bill of sale.
Term
T
 Definition
The greatest estate in real property is a fee simple estate.
Term
F
 Definition
The bundle of rights includes the right of escheat.
Term
F
 Definition
An encumbrance affects the loan to value ratio
Term
T
 Definition
An easement may be created by a written document granting the right to another.
Term
T
 Definition
An easement may be removed from county records by a quit claim deed signed by the owner of the easement.
Term
T
 Definition
When a parcel of real property is sold in foreclosure, the easement rights transfer with title.
Term
T
 Definition
An easement appurtenant passes with the title to the dominant estate.
Term
T
 Definition
A private road on Don’s property has often been used by fishermen as a walkway to the lake. If Don wishes to break the fishermen’s claim to an easement by prescription, while still allowing the use, he must give notice of his consent to their use of the property.
Term
F
 Definition
The legal right of a utility company to maintain power lines along the back of a lot is called adverse possession.
Term
F
 Definition
The best way to determine whether a property has an encroachment is to search the title.
Term
F
 Definition
A property owner lived in an area newly zoned for business but his deed contains a restriction against commercial usage. In this case the zoning laws would prevail.
Term
T
 Definition
The type of lien used by someone who does work or supplies materials for a home and has not been paid is called a mechanic’s lien.
Term
allodial system
 Definition
The system under which individuals are given the right to own land is the _________________________.
Term
Eminent domain
 Definition
The power of _________________________ can be used to take land for a public road, public parking or an irrigation district.
Term
police powers
 Definition
A property owner who suffers from a government’s exercise of its _________________________ will not be compensated for her loss.
Term
fee simple
 Definition
An estate, which is indefinite in duration, inheritable and transferable, is called a _________________________ estate.
Term
bundle
 Definition
The entitlements of fee simple ownership, which exclude those without rights from interfering, are the ____________________ of rights.
Term
encumbrance
 Definition
A properly recorded easement on real property is an ____________________.
Term
run
 Definition
Concerning the duration of deed restrictions, they ____________________ with the land.
Term
title
 Definition
The person who conveys a life estate to a life tenant controls who receives ____________________ after the death of the life tenant.
Term
terminated
 Definition
A leasehold estate, which may be ____________________ by either party at any time, is an estate from period to period.
Term
chattel
 Definition
A ____________________ mortgage lien could not result in the sale of a debtor’s real property in order to gain funds for the satisfaction of a debt.
Term
eminent domain
 Definition
the right of government to take privately held land for fair compensation
Term
life estate
 Definition
the conveyance of fee title for the duration of someone’s life
Term
consequential damages
 Definition
an award to a property owner whose land is not taken but which suffers because of a nearby public land use
Term
property taxes
 Definition
taxes levied against privately held land based on its value
Term
essor
 Definition
the landlord or fee owner
Term
chattel
 Definition
an article of personal property
Term
police power
 Definition
the right of government to enact law and enforce them for the order, safety, health, morals, and general welfare of the public
Term
freehold estate
 Definition
an estate in land that is held in fee or for life
Term
severance damages
 Definition
compensation for the loss in market value that results from splitting up a property in condemnation proceeding
Term
fee simple
 Definition
the largest, most complete bundle of rights one can hold in land, land ownership
Term
periodic tenancy
 Definition
a tenancy that provides for continuing automatic renewal until canceled
Term
common law
 Definition
law that develops from custom and usage over long periods of time
Term
feudal system
 Definition
all land ownership rests in the name of the king
Term
allodial system
 Definition
one in which individuals are given the right to own land
Term
deed restrictions
 Definition
provisions placed in deeds to control how future landowners may or may not use the property
Term
homestead protection
 Definition
state laws that protect against the forced sale of a person’s home
Term
easement
 Definition
the right or privilege one party has to use land belonging to another for a special purpose
Term
encumbrance
 Definition
any impediment to a clear title such as a lien, lease or easement
Term
encroachment
 Definition
the unauthorized intrusion of a building or other improvement onto another person’s land
Term
community property
 Definition
spouses are treated as equal partners with each owning a one-half interest
Term
Mulberry bush
 Definition
Which of the following are considered to be real estate?
Term
Swing set from Wal-Mart set in concrete
 Definition
Which of the following is real property?
Term
air rights can be granted by deed.
 Definition
Regarding real property,
Term
attachment
 Definition
Improvements made to real property become part of the real property because of
Term
the intent of the parties.
 Definition
The best determinant of whether an item is real or personal property is
Term
Electric fan plugged in
 Definition
Which of the following is personal property?
Term
Bill of sale
 Definition
To transfer ownership of personal property, which document should be used?
Term
value of the item.
 Definition
Tests of a fixture include all of the following EXCEPT
Term
agreement of the parties.
 Definition
The most important factor in determining whether an item has become a fixture is the
Term
emblements belong to the person who plants and cultivates them.
 Definition
A cultivated crop, not yet harvested, should be carefully noted on a listing agreement because
Term
Cultivated crops
 Definition
A farm, consisting of 160 acres of cultivated land, is sold. Which of the following requires an expressed agreement, in addition to the deed, in order to transfer ownership?
Term
appurtenances.
 Definition
Easements, rights of way, and condominium parking stalls are examples of
Term
any description that adequately describes and distinguishes the property will apply.
 Definition
When there are two valid property descriptions of a piece of real property,
Term
a full legal description.
 Definition
The most accurate way to uniquely locate and bound a parcel of real property is to use
Term
allodial method.
 Definition
All of the following are acceptable means of describing real property EXCEPT
Term
To describe irregularly shaped parcels
 Definition
When would a metes and bounds survey be preferred?
Term
point of beginning.
 Definition
A metes and bounds survey begins at the point of beginning and ends at the
Term
altitude and elevation.
 Definition
The primary purpose of benchmarks is to indicate
Term
because of the curvature of the earth.
 Definition
Correction lines, which occur at intervals in the rectangular survey system, are necessary
Term
west of section 17.
 Definition
Within any given township, section 18 can be found
Term
114.75’
 Definition
A parcel of land contains 1,020 square yards. The front foot measurement is 80’. How deep is the parcel.
Term
303’ × 144’
 Definition
Which of the following contains more than one acre of land?
Term
20 acres
 Definition
A parcel of land measuring 1,320’ × 660’ would contain how much land?
Term
$50,000
 Definition
If Mr. Howard paid $2,500 per acre for the W 1/2 of the SE 1/4 of the NW 1/4 of section 10, how much did he pay?
Term
Ten acres
 Definition
How many acres does a parcel of land 660’ by 660’ contain?
Term
10,560 feet.
 Definition
The number of feet of wire required to enclose 1/4 of 1/4 of a section of land with two strands of wire is
Term
Lot and Block system
 Definition
Which of the following will always involve a plat?
Term
Lot and block
 Definition
Most subdivision plats make use of which type of land description?
Term
T
 Definition
Any thing affixed to land with the intent of being permanent is considered real property.
Term
T
 Definition
Air rights may be included in the definition of real property.
Term
F
 Definition
Air rights are defined as rights of the property owner extending form the center of the earth to a reasonable height above the land.
Term
T
 Definition
Examples of improvements that have become part of the real property would include fences, roads, and pipelines.
Term
T
 Definition
Land ownership includes improvements, air rights and subsurface rights but not personal property.
Term
F
 Definition
Mineral rights are considered personal property.
Term
F
 Definition
A TV antenna attached to the chimney would be considered the property of the sellers and could be removed by them.
Term
T
 Definition
Prior to offering his property for sale, Sal was within his rights in removing the sink from the master bath.
Term
T
 Definition
A lessee of a book store may legally remove his bookshelves at any time before the lease expires.
Term
T
 Definition
A farmer owns a 60 acre farm planted in potatoes. The potatoes are always personal property
Term
T
 Definition
An easement for the adjacent property owner is appurtenant to real estate.
Term
F

Riparian rights
 Definition
The right to use water from a stream that is on or adjacent to your land is referred to as accretion.
Term
F
 Definition
The littoral system is a valid way of describing real estate.
Term
T
 Definition
“That land bounded by Elk Lake and the western boundary of Ware County running from the lake to the southern boundary of said county” might be considered too vague, imprecise and subject to change to be a valid legal description.
Term
T
 Definition
A point of beginning must be included in a metes and bounds land description.
Term
F
 Definition
In the term “metes and bounds”, metes can best be described as an indication of meters.
Term
T
 Definition
Monuments and points of beginning are used with the metes and bounds type of land description.
Term
T
 Definition
In the rectangular survey system of land description, principal meridians run in a north-south direction
Term
F
 Definition
Comparing sections and townships, a township is 6 square miles.
Term
F

43,560
 Definition
One acre contains most nearly 42,000 square feet.
Term
land
 Definition
Buildings or other improvements do not need to be mentioned in the deed because they are considered to be part of the ____________________.
Term
separately
 Definition
Mineral rights can be conveyed separately but riparian rights cannot be conveyed ____________________.
Term
personal
 Definition
Timber on land becomes ____________________ property.
Term
sales contract
 Definition
If a listing agreement mentions a refrigerator as part of real estate offering it should still be mentioned in the ____________________.
Term
tenant
 Definition
A fixture may be removed by a ____________________ with the landlord’s permission.
Term
landlord
 Definition
A residential tenant wants to build a bookcase next to the fireplace in his leased townhouse. The book case can be removed with prior permission of the ____________________.
Term
lessee
 Definition
Any damage caused by the removal of the fixtures is the responsibility of the ____________________.
Term
appurtenance
 Definition
A condominium parking stall would be considered to “run with the land” and would be considered to be an ____________________.
Term
ground water
 Definition
One uniform policy across the United States stipulates that water beneath the land surface is called ____________________.
Term
locate
 Definition
A proper legal description of land must uniquely ____________________ and bound the parcel.
Term
improvements
 Definition
any form of land development, such as buildings, roads, fences, and pipelines
Term
bench marks
 Definition
fixed mark of known location and elevation
Term
vertical land descriptions
 Definition
type of measurement necessary when air rights need to be described
Term
recorded plat
 Definition
a subdivision map filed in the county recorder’s office
Term
scarcity
 Definition
the shortage of land in an area where there is a great demand for land
Term
datum
 Definition
a point, line, or surface from which a vertical height or depth is measured
Term
adaptation
 Definition
manner in which a specific item is custom made to adapt to a certain piece of real estate
Term
personal property
 Definition
a right or interest in things of a temporary or movable nature
Term
acre
 Definition
a parcel of land containing 43,560 square feet
Term
water table
 Definition
upper limit of percolating water below the earth’s surface
Term
nonhomogenity
 Definition
the fact that no two parcels of land are exactly alike
Term
situs
 Definition
location preference
Term
fixity
 Definition
the fact that land and buildings require long periods of time to pay for themselves
Term
real estate
 Definition
land and improvements in a physical sense as well as the rights to own and use them
Term
appurtenance
 Definition
right or privilege or improvement that belongs to and passes with the land
Term
informal references
 Definition
easily understood but not precise method of land description
Term
agreement
 Definition
possibly the most significant test of the existence of a fixture
Term
base line
 Definition
latitude line that intercepts a principal meridian
Term
government survey
 Definition
also known as rectangular survey or U.S. public land survey
Term
quadrangle
 Definition
24-by-24 mile area created by the guide meridians and correction lines
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