Lesson 5
Chapter 10-11
1.
A charge or claim that attaches to real property and lessens its value or impairs its
value is an example of a(n)
a.
depreciation
b.
lien
c.
encumbrance
d.
assessment
2.
The existence of a lien
a.
prohibits the transfer of title to a property
b.
does not prohibit sale, but runs with the land until paid and cleared
c.
requires a court order to remove the lien prior to sale
d.
none of these
3.
Liens are given priority
a.
tax liens and special assessment, then mortgages, and then all others by
date filed
b.
date filed, then tax liens and special assessments
c.
tax liens and special assessments, and all others by date filed
d.
only by date filed
4.
What is the tax liability on a $150,000 house with an assessed value of $100,000
when the tax rate is 125 mills?
a.
$12,500
b.
$125
c.
$18,750
d.
$1250
e.
can not be determined
Use this information for the following two questions.
The county has decided to pave the dirt road that runs the 150 feet length of your
property. The total length to be paved is one mile and it is estimated to cost $750,000.
Your tax bill will be calculated as ½ the frontage times the cost / foot.
5.
This type of tax levy is called
a.
b.
c.
d.
6.
special assessment
voluntary tax
attachment
mechanic’s lien
How much would your tax be?
a.
b.
$1,125
$21,306
c.
d.
e.
$10,653
can not be determined
none of these
7.
1 mill equals
a.
1/1000 or .001
b.
1/10,000 or .0001
c.
1/100 or .01
d.
has no standard decimal value, it is the ratio of assessed value to market
value
8.
An express contract
a.
must be written
b.
exists when the parties state their intentions in words
c.
may be written or oral
d.
none of these
e.
b & c only
9.
An offer may be terminated by
a.
a counter offer
b.
rejection by the offeror
c.
revocation by the offeree
d.
all of these
e.
none of these
10.
You have finally found the house of your dreams. The agent tells you that there
are a lot of people interested in the house and suggests that you put a deposit
down. You put down $1 and it is accepted by the agent.
a.
you have entered an express contract to buy the house
b.
you have entered an implied contract to buy the house
c.
you have entered a unilateral contract to buy the house
d.
b&c
e.
none of these
11.
From the information in question 3, the $1 you gave
a.
is consideration
b.
is not a sufficient amount to be consideration in any contract
c.
shows that you are not a legally competent party
d.
none of these
12.
Bob and Alice enter into a contract. Later, Alice finds Sally to take over all of her
rights and responsibilities under the contract. Bob agrees to release Alice from the
contract and accept Sally.
This is an example of a (n)
a.
breech of contract
b.
novation
c.
d.
assignment
illegal action
13.
Jack and Gail enter into a contract. Gail finds Sally to take over all of her rights.
This is acceptable to Jack, and a new contract is written This is an example of a(n)
a.
breech of contract
b.
novation
c.
assignment
d.
illegal action
14.
Given the information in question 5 & 6 above, if Sally failed to carry out her
responsibilities
I.
Alice would have to carry out the contract with Bob
II.
Gail would have to carry out the contract with Jack
III.
Gail no longer has a contract with Jack and is “ off the hook ”, Sally and
Jack have the contract
a.
b.
c.
d.
II only
I & II
III only
I and III
15.
A contract that contains the complete agreement between a buyer and seller of
real estate is known as
a.
an offer to purchase
b.
a contract of purchase and sale
c.
a purchase agreement
d.
a deposit receipt
e.
all of these
16.
When a broker uses an earnest money deposit for his own use, this is
a.
acceptable, it is part of her commission
b.
unacceptable, known as commingling, the broker is in violation of the
state licensing laws
c.
unacceptable, known as conversion, the broker is in violation of the state
licensing laws
d.
acceptable, as long as she keeps complete and accurate records
e.
none of these
17.
A change to the content of an existing contract is called
a.
addendum
b.
amendment
c.
assignment
d.
novation
e.
none of these
18.
General real estate taxes are also known as
a.
special assessments.
b.
ad valorem taxes.
c.
appropriation funds.
d.
general, voluntary liens.
19.
Gordon has defaulted in the payment of several of his debts, and the court has
ordered his property sold to satisfy them. A title search revealed several
outstanding liens against the property. Which of the following has highest
priority?
a.
An outstanding first mortgage lien dated and recorded one year ago
b.
A real estate tax lien for the current year
c.
A judgment lien rendered and recorded last month
d.
A mechanic’s lien for work started two months before the mortgage was
recorded
20.
Priority of mechanic’s liens is based on
a.
federal law.
b.
state law.
c.
common law.
d.
case law.
21.
John is involved in a lawsuit. He owns a rental home which is free of any
mortgage. What can a creditor obtain to prevent John from selling the rental home
before the lawsuit is settled?
a.
a judgment
b.
a foreclosure notice
c.
a seizure notice
d.
a writ of attachment
22.
Special assessments initiated by a public agency are known as
a.
general liens.
b.
voluntary liens.
c.
equitable liens.
d.
statutory liens.
23.
Broker Kenneth arrives to present a purchase offer to Dorita, an invalid, and finds
her son and his wife also present. In the presence of Broker Kenneth, both
individuals persistently urge Dorita to accept the offer, even though it is much
lower than the price she has been asking for her home. If Dorita accepts the offer,
she may later claim that
a.
b.
Kenneth should not have brought her such a low offer for her property.
she was under duress from her son and daughter-in-law, and therefore, the
contract is voidable.
c.
d.
Kenneth defrauded her by allowing her son and his wife the see the
purchase offer he brought to her.
her consumer protection rights have been usurper by her son and daughterin-law.
24.
To assign a contract for the sale of real estate means
a.
record the contract with the county recorder’s office.
b.
permit another broker to act as agent for the principal,
c.
transfer one’s rights under contract.
d.
allow the seller and buyer to exchange positions.
25.
At the time a buyer was negotiating the purchase of a lot on which to build a new
home, the seller represented that the soil was firm enough to support the
construction of a building when, in fact, the seller knew it was not. This contract
is
a.
void.
b.
voidable by the buyer because of fraud.
c.
voidable by the seller because of the mistake.
d.
voidable by neither party because no harm was done yet.
26.
A lease agreement is signed by a lessee who is 16 years of age. Which of the
following is true?
a.
a 16-year-old person cannot sigh a lease.
b.
The lease agreement is voidable.
c.
The lease agreement is valid provided the security deposit is increased.
d.
The lease agreement is void.
27.
Which of the following best describes a voidable contract?
a.
A contract that has no legal effect and never had any
b.
An oral contract with no witnesses to the agreement
c.
A contract that may be either enforced or declared void by one of the
parties.
d.
A contract that has been accepted but the acceptance has not been
communicated to the offeror.
28.
The right of a defaulted taxpayer to recover property before its sale for unpaid
taxes is the
a.
statutory right of reinstatement.
b.
equitable right of appeal.
c.
statutory right of assessment.
d.
equitable right of redemption.
29.
A seller sold a buyer a parcel of real estate. Title has passed, but to date the buyer
has not paid the purchase price in full, as originally agreed on. If the seller wants
to force payment, which of the following remedies would the seller be entitled to
seek?
a.
b.
c.
d.
Attachment
Mechanic’s lien
Lis pendens
Judgment
30.
Which of the following statements is true of both a mortgage lien and a judgment
lien?
a.
They must be entered by the court.
b.
They involve a debtor-creditor relationship.
c.
They are general liens.
d.
They are involuntary liens.
31.
Priority of liens refers to which of the following?
a.
Order in which a debtor assumes responsibility for payment of obligations
b.
Order in which liens will be paid if property is sold to satisfy debt
c.
Date liens are filed for record
d.
Fact that specific liens have greater priority than general liens
32.
A general contractor recently filed suit against a homeowner for nonpayment. The
contractor now learns that the homeowner has listed the property for sale with a
real estate broker. In this situation, which of the following will the contractor’s
attorney use to protect the contractor’s interest?
a.
Seller’s lien
b.
Buyer’s lien
c.
Assessment
d.
Lis pendens
33.
Which of the following is a specific, involuntary, statutory lien?
a.
Real estate tax lien
b.
Income tax lien
c.
Estate tax lien
d.
Judgment lien
34.
A legally enforceable agreement under which two parties promise to do
something for each other is known as a(n)
a.
escrow agreement.
b.
legal pledge.
c.
valid contract.
d.
option agreement.
35.
An option to purchase binds which of the following parties?
a.
Buyer only
b.
Seller only
c.
Neither buyer nor seller
d.
Both buyer and seller
36.
During the period of time after a real estate sales contract is signed, but before
title actually passes, the status of the contract is
a.
voidable.
b.
executory.
c.
unilateral.
d.
implied.
37.
Nick and Kelly sign a contract under which Nick will convey Raptor Manor to
Kelly. Nick changes his mind, and Kelly sues for specific performance. What is
Kelly seeking in this lawsuit?
a.
Money damages
b.
New contract
c.
Deficiency judgment
d.
Conveyance of the property
38.
A contract for the sale of real estate that does not state the consideration to be paid
for the property and is not signed by the parties is considered to be
a.
voidable.
b.
executory.
c.
void.
d.
enforceable.
39.
A contract is said to be bilateral if
a.
one of the parties is a minor.
b.
the contract has yet to be fully performed.
c.
only one party to the agreement is bound to act.
d.
all parties to the contract exchange binding promises.
40.
The sales contract says a buyer will purchase only if an attorney approves the sale
by the following Saturday. The attorney’s approval is a
a.
contingency.
b.
reservation.
c.
warranty.
d.
consideration.
Essay questions are for your convenience to prepare for the midterm and final. You do
not have to turn them in for a grade.
1.
Discuss the process the government uses to determine the amount of property
taxes a property owner must pay.
2.
Compare and contrast liens and encumbrances.
3.
List and describe the elements of a valid contract.
4.
Compare and contrast unenforceable, void, voidable & valid contracts.
5.
Explain how a contract may be discharged.