Real Estate Law Overview

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Questions and Answers

What action may be taken if an owner cannot negotiate a settlement regarding an encroachment on their property line?

Sell the property and move

Sue the neighbor for trespass (correct)

Request an easement from the neighbor

Ignore the encroachment and hope it resolves itself

Which type of easement restricts construction that interferes with a solar energy system?

Public easement

Access easement

Solar easement (correct)

Utility easement

Which of the following is an example of a freehold estate?

Life estate (correct)

Rental agreement

Leasehold estate

Temporary housing

What is the total number of square feet in three acres of land?

130,680 Signup and view all the answers

What is the term for a roof where all four sides slope to the eaves?

Hip roof Signup and view all the answers

What does the term 'tenancy' in real property law refer to?

The method of holding interest in real property Signup and view all the answers

What primarily influences the vacancy rate of an apartment building under competitive conditions?

Housing supply and demand in the area Signup and view all the answers

In a contract, what do the terms 'adequate, valuable, good or sufficient' pertain to?

Consideration Signup and view all the answers

What financial instrument does a borrower give a lender as a promise to repay a debt?

A note Signup and view all the answers

When does Regulation Z grant a borrower a 3-day right of rescission?

For loans to refinance the borrower’s personal residence Signup and view all the answers

What does the term 'balloon payment' refer to?

A final payment greater than twice any preceding payment Signup and view all the answers

What is the role of the Federal National Mortgage Association (FNMA)?

To increase the money available to housing Signup and view all the answers

What is a lender who makes loans to borrowers with a FICO score of 500 called?

Subprime lender Signup and view all the answers

What is a foreclosure sale?

An auction to the highest bidder Signup and view all the answers

Which entity does NOT commonly buy loans in the secondary mortgage market?

Federal Housing Administration (FHA) Signup and view all the answers

What is required from a loan broker arranging a home equity loan?

Mortgage loan disclosure statement Signup and view all the answers

What primarily leads to the vacancy rate of an apartment building under normal competitive conditions?

Housing supply and demand in the area Signup and view all the answers

Who would the buyer sue if they found out the house had a septic system instead of a sewer connection as claimed?

The broker and the owner Signup and view all the answers

Which of the following is NOT considered by an appraiser when conducting an appraisal?

The assessed value of a property Signup and view all the answers

What is the first step in the appraisal process?

Define the problem Signup and view all the answers

What represents a violation of fiduciary duty by the seller's broker?

Informing the buyer of the seller's financial status without permission Signup and view all the answers

Which of the following factors should John primarily consider for his modernization program?

Effect on the net income Signup and view all the answers

In the context of housing discrimination, why is disclosing a potential buyer's race considered discriminatory?

It can influence the decision unfairly based on assumptions Signup and view all the answers

What is the term for the property style identified as 'Colonial'?

Colonial Signup and view all the answers

What is the primary source for information regarding sewer assessments and utilities for a vacant lot?

Real Estate Commissioner Signup and view all the answers

Which cost associated with home ownership represents a potential loss?

Loss of interest on owner’s equity Signup and view all the answers

Who is primarily protected by the Uniform Commercial Code in bulk sales?

Creditors Signup and view all the answers

What does the delivery of a Natural Hazard Disclosure Statement (NHD) NOT get triggered by?

Presence of lead-based paint Signup and view all the answers

What kind of lot is defined as being behind other lots, connected by a long and narrow driveway?

Flag lot Signup and view all the answers

Who borrows money secured by a note and trust deed from a lender?

Mortgagor Signup and view all the answers

What constitutional principle does prohibiting “For Sale” signs in residential areas violate?

The First Amendment Signup and view all the answers

What term describes the act of redirecting individuals from one housing community to another based on their characteristics?

Steering Signup and view all the answers

Which state agency is responsible for addressing and preventing housing discrimination based on race in California?

Department of Fair Employment and Housing Signup and view all the answers

What is the width of earthquake fault zones in California that must be disclosed to potential buyers?

0.25 miles wide Signup and view all the answers

Which of the following represents the laws that significantly influence housing and construction sectors in California?

State Housing Law, Local Building Codes, and Contractors License Law Signup and view all the answers

How is a transaction broker best described?

An intermediary who acts on behalf of both parties Signup and view all the answers

What type of ownership is referred to as 'tenancy by the entirety'?

Ownership available only to married couples Signup and view all the answers

Which of the following types of discrimination are prohibited by the Fair Housing Act of 1968?

Religion, National Origin, Number of Children Signup and view all the answers

If a person dies testate and no additional heirs are found, how will their real property be transferred?

By bequest per the will Signup and view all the answers

What is the time requirement for parties to review the HUD statement prior to a real estate closing?

24 hours Signup and view all the answers

Study Notes

Real Estate Law

An encroaching neighbor may be sued for trespass if a friendly settlement cannot be reached
Easements restricting an owner's ability to construct improvements interfering with a neighbor's solar energy system are called solar easements
A life estate is an example of a freehold estate
There are 130,680 square feet in three acres of land
A hip roof is a roof on which all four sides slope to the eaves
"Tenancy" refers to the method or way an owner holds interest in real property
The vacancy rate of an apartment building is primarily determined by the supply and demand of housing in the area
A quiet title action can settle a dispute regarding ownership rights and interests in real property
Estates or fess are the ownership rights and interests in real estate
Location of the improvement on the lot and its relationship to surrounding features is shown on a plot map
An estate of inheritance is an estate with indefinite duration
Land is the first component of real estate that comprises air rights, surface rights, and subsurface rights
The Real Estate Commissioner rescinds their approval of a subdivision by issuing a desist and refrain order
"M" on a zoning map usually indicates Manufacturing
The Real Estate Commissioner is initially concerned with the Small Claims court under the Subdivided Lands Law
Zoning is never retroactive
A lot containing 73,000 square yards equals 15.1 acres
The consideration clause in a contract indicates that the grantor is receiving something in exchange for the property
Adequate, valuable, good or sufficient refers to consideration in a contract
Fraud is an intentional concealment of material facts by an agent

Mortgage Finance

A note is a financial instrument a borrower gives a lender as a promise to repay a debt.
A reverse mortgage customer is generally elderly, owns their home outright, and needs a source of income.
A lender generally will *not enforce the due-on-sale clause in a promissory note when the property is transferred to a spouse or an heir, the property is transferred in a bankruptcy proceeding, or the property is sold to a government agency
The Federal Reserve (the Fed) tightening money policy will increase reserve requirements, which will decrease loan activity
Regulation Z (Reg Z) of the Federal Truth-in-Lending Act (TILA) gives the borrower a 3 day right of rescission when the loan is a loan to refinance the borrower’s personal residence.
A lender makes a beneficiary statement to state the current balance required to pay off a real estate loan.
A loan broker must provide the borrower with a mortgage loan disclosure statement when arranging a home equity loan.
The secondary mortgage market refers to a resale marketplace for existing trust deed loans.
A balloon payment is a final payment on a note which is greater than twice the amount of any one of the six regularly scheduled preceding payments.
A foreclosure sale is an auction sale to the highest bidder.
A subprime lender makes a loan to a borrower with a FICO score of 500.
The Federal National Mortgage Association (FNMA) was created to increase the money available to housing.
Federal Housing Administration (FHA) does not buy loans in the secondary mortgage market.
If Maria defaults before making any principal payments, Syndi should foreclose to enforce payment of the $150,000.
Conformity is not one of the "three C's" of underwriting. The three "C's" are Character, Capacity, and Capital.
The minimum total foreclosure time under a trustee’s sale on a trust deed is four months.

Real Estate Agency

An agency relationship can be established through an express agreement, implied agreement, or ratification
The seller’s broker violated their fiduciary obligation to the seller by acting in excess of their authority by saying the seller was bankrupt and would accept $380,000.
It is discriminatory for an agent to disclose the race, creed, or color of a potential buyer or tenant.
The Real Estate Commissioner is the source that provides information about sewer assessments, liens, utilities to the lot, blanket encumbrances and street maintenance.
The Uniform Commercial Code, pertaining to bulk sale transfers, protects creditors.
A Natural Hazard Disclosure Statement (NHD) needs to be given to a buyer when a natural hazard exists. Lead-based paint does not trigger the delivery of an NHD.
Prohibiting the display of “For Sale” signs in a residential neighborhood violates the First Amendment.
A floor that is not level is an example of a red flag.
Steering is the act of restricting a person from seeking to buy a residential property in a community and redirecting them to other housing.
The Department of Fair Employment and Housing is the California state agency empowered to prevent acts of discrimination against race, color, sex, national origin or ancestry in housing accommodations.
Lori is an agent since she has agreed to transact real estate business on behalf of Alex with Alex’s authority.
A real estate broker's advertisements must include the broker’s business name, the broker’s license number, and whether the broker is a corporation, partnership, or sole proprietor.

Real Estate Appraisal

Demand, utility, scarcity, & transferability are the four essential elements of value
Defining the problem is the first step in the appraisal process
An appraiser does not consider the assessed value when conducting an appraisal.
Loss of interest on owner’s equity is a cost associated with home ownership.
Real estate must be improved to depreciate.
The effect on the net income should be the focus when considering a modernization program for an old apartment building.
Debt service cannot be deducted to determine the net income in the capitalization process
Depreciation is not shown as an expense by a property owner.
Anticipation is not an essential element of value, the four essential elements of value are demand, utility, scarcity, & transferability

Other

The mortgagor borrows money secured by a note and trust deed from a lender.
Martha should deposit the funds with the court.
The transfer tax was $426.80.
Harold funds the mortgage loan while Jennifer finds it; Harold is a mortgage banker while Jennifer is a mortgage broker.
The note rate will decrease and the principal amount will remain the same.
The value of a duplex with a gross rent multiplier (GRM) of 12.5 and a monthly rent of $1,200 per unit is $360,000.
The appraiser should recommend a toxic waste report first.
This kind of lot is referred to as a flag lot.
The Real Estate Recovery Fund is the best choice for Lupe.
The mortgagee lends mortgage money to a borrower.

Specific Examples from the Text

The house has a Colonial style.
None of the statements regarding Nancy's property improvements are correct.
The Department of Fair Employment and Housing is the state agency authorized to address and prevent housing discrimination based on race, color, sex, national origin, or ancestry.
The listing broker is obligated to inform Steven of the unpaid child support due to disclosure.
Earthquake fault zones in California are 0.25 miles wide on average.
The most significant laws influencing the housing and construction sectors in California are the State Housing Law, Local building codes, and the Contractor's License Law.
The DRE is the regulatory body for licensees in California.
A valid deed must be signed, identify the property and parties involved, and be witnessed.
Real estate taxes and Mortgage interest are tax-deductible expenses involved with owning a house.
It is false that the presence of lead paint in a home only needs to be disclosed if the home is being purchased using an FHA loan, it must always be disclosed.
A transaction broker is known as an intermediary, nonagent, or facilitator.
Only a married couple can own property through tenancy by the entirety. In addition, the property cannot be sold without agreement from both parties.
The Fair Housing Act of 1968 prohibits discrimination based on number of children, religion, and national origin.
The sale price of the property was $350,000.
A person who dies testate will transfer their real property through devise after an extensive search for additional heirs.
Parties to a real estate closing must be given 24 hours to review the HUD statement.
The RESPA law makes giving a kickback for a referral illegal.

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Test your knowledge of real estate law concepts with this quiz. Explore topics such as trespass, easements, life estates, and property rights. Perfect for students learning about property management or real estate regulations.