All of the following are used for legal descriptions of property in Virginia EXCEPT
• a government survey system.
• metes and bounds based on natural monuments.
• metes and bounds based on artificial monuments.
• lot and block.
The government survey system is not used in Virginia. Virginia accepts metes-and-bounds descriptions based on natural or artificial monuments and landmarks, adjacent boundaries, or lines of existing tracts. In most urban areas, the lot and block system prevails.
In the application for a broker’s license, actively engaged is defined as performing real estate activities for an average of
• 20 hours per week.
• 30 hours per week.
• 40 hours per week.
• 40 hours per month.
In order to qualify for a broker’s license, a salesperson must have been actively engaged for an average of 40 hours per week as of January, 1999,
The purpose of Virginia real estate law is to
• provide uniformity of real estate practice.
• protect the public interest.
• encourage real estate practice.
• discipline real estate professionals.
Legislation is passed for the protection of the public. Uniformity of practice is prohibited by the Federal Trade commission. The decision to practice real estate is made by each individual. Discipline is handled by the Real Estate Board.
The rights of the owner of property located along the banks of a river are called:
• riparian rights.
• prior appropriation rights.
• hereditament.
• littoral rights.
Riparian rights apply to properties adjacent to flowing bodies of water like rivers and streams. Riparian rights govern the use and accessibility of the water. Littoral rights concern properties abutting an ocean, sea, or lake rather than a river or stream. Littoral rights are usually concerned with the use and enjoyment of the shore. An easy way to remember these is that riparian rights have to do with water that is moving in a direction, and littoral rights have to do with water that does not have a direction.
A landlord asks for two months’ security deposit on all rentals and requires all tenants to pay the cost of renters and damage insurance (premiums) available from the landlord. If the premiums total $100 per year per unit and all units rent for $995 per month, what is the maximum the landlord can receive as a security deposit?
• $1,790
• $1,890
• $1,990
• $2,090
The answer is $1,990 (2 × $995). A landlord cannot charge more than two month’s rent as a security deposit, even if insurance premiums are to be charged. The combination of insurance premiums and security deposit cannot exceed two months’ rent.
A landlord could safely decline renting to
• a wheelchair-bound person wishing to live on the top floor of a three-story walkup.
• a handicapped person requiring major modifications at the landlord’s expense.
• an ex-drug user currently in a rehab program.
• a blind veteran with no guide dog.
The answer is a handicapped person requiring major modifications at the landlord’s expense. Reasonable modifications must be allowed but at the tenant’s expense and may be required to be restored to present condition at termination of the lease.
Under an exclusive agency listing, a broker advertises a home for sale. The owner finds a buyer and sells the home prior to the expiration of the listing. The broker is entitled to:
• nothing.
• the full commission.
• half of the commission.
• expenses only.
Since the listing was an Exclusive Agency Listing, the seller may find their own buyer without paying a commission. This is different than an Exclusive Right-to-Sell Listing, in which the listing broker is guaranteed a commission regardless of who procures the buyer.
The Bates family purchased the largest and most expensive house in a new subdivision. Three years later, when they were ready to move, they discovered that the value of their home had gone up proportionately less than the other houses in the neighborhood. This phenomenon is an example of the principle of:
• substitution.
• diminishing return.
• regression.
• change.
The principle of regression is the reason people are cautioned against owning the most expensive house in the neighborhood. It’s an observation of the fact that lower priced homes (and commercial buildings) have a much greater downward pull on the value of higher-end properties. In this case, the less expensive homes in the neighborhood would have increased additionally in value because they were next to the Bates home, while the Bates home would have increased less in value because it was next to lower-end properties.
A landlord will be in violation of the Virginia Fair Housing Law if he refuses to rent his two-bedroom apartment for any of the following reasons EXCEPT
• the couple applying are from Nigeria.
• the couple has two small children.
• the applicant is 65 years old.
• the applicants do not have adequate income.
The answer is the applicants do not have adequate income. Refusing a rental applicant on the basis of inadequate income is allowed.
If an alleged fair housing discriminatory act has taken place, the injured party must file a complaint with
the REB within
• three months.
• six months.
• nine months.
• one year.
The answer is one year. An injured party has one year to file a complaint with the REB if an alleged fair housing discriminatory act has taken place.
The law that requires real estate contracts to be in writing to be enforceable is
• the law of descent and distribution.
• the parol evidence rule.
• the statute of limitations.
• the statute of frauds.
The answer is the statute of frauds. The statute of frauds requires real estate contracts to be in writing to be enforceable. An oral contract, although unenforceable, can still be valid between the parties if they fulfill its terms.
What is an “executed contract”?
• A contract that is dead in the water.
• A contract that has been terminated by both the listing agent and the home owner.
• A contract in which all parties have fulfilled their promises and performed the contract.
• A contract terminated by either party.
An executed contract is one in which all parties have fulfilled their promises in the original contract, and thus performed the contract.
A month-to-month lease is considered a(n):
• estate at sufferance.
• periodic tenancy.
• life estate.
• estate for years.
A periodic tenancy is a lease that continues from period to period until one of the parties gives notice of termination. A periodic tenancy has no definite termination date.
Arron and Ben are joint tenants. Ben sells his interest to George. What is the relationship of Arron and George?
• They are tenants in common.
• They are joint tenants.
• There is no relationship because Ben cannot sell to George.
• Arron owns a two-thirds interest and George owns a one-third interest.
The answer is they are tenants in common. When joint tenants sell their interest in the jointly held property, the unities of time and title are destroyed. The new owner, George, becomes a tenant in common with Arron.
Within a few weeks of buying their home, the James family learned that the roof leaked during heavy rains. When the house was listed with ABC Real Estate Company, the seller had told the their ABC broker that the roof leaked. ABC Real Estate Company claims the James family did not ask about the roof. What actions can be taken in this situation?
• the buyer cannot do anything because this fact should have been discovered during home inspection
• the buyer can sue the broker for non-disclosure
• the buyer cannot sue the broker under the license law
• the buyer cannot sue the seller under the license law
Disclosure IS required by license law, thus the James family can sue the broker for nondisclosure. The broker is required by law to disclose any fact that would materially affect the buyer’s decision to make an offer, such as a leaky roof.
A condominium community has a swimming pool, tennis courts, and a biking trail. These facilities are MOST likely owned by
• the condominium board.
• the corporation in which the unit owners hold stock.
• the unit owners in the form of percentage undivided interests.
• the unit owners in the form of proportional divided interests.
The answer is the unit owners in the form of percentage undivided interests. Common areas, including amenities such as swimming, biking, and tennis areas, are owned by the unit owners in undivided percentage interests as tenants in common.
A man owned two acres of land. He sold one acre to a neighbor and reserved for himself an appurtenant easement over his neighbor’s land for ingress and egress. The man’s land
• is the servient tenement.
• is the dominant tenement.
• can be cleared of the easement when the man sells the withheld acre to a third party.
• is subject to an easement in gross.
The answer is is the dominant tenement. The man’s parcel benefits from the easement and is the dominant tenement. The neighbor’s tract, over which the easement runs, is the servient tenement.
In order for a deed to be valid,
• the signature of the grantee must be witnessed.
• the deed must be recorded.
• the grantee must sign the deed.
• the grantor must be legally competent.
The answer is the grantor must be legally competent. Competency of the grantor is one of the requirements for a valid deed. The grantor must be of lawful age and sound mind. Witnessing the grantee’s signature is never needed as the grantee does not sign the deed and recording a deed is not
required for validity of the deed.
If an appraiser were appraising a residence built in 1910 using the cost replacement approach, which of the following would be used:
•Original cost of materials in 1910
•Cost of living index which increased from 95 to 128
•Today’s cost of reproduction less depreciation
•Cost of living index of 1910
Cost approach is the process of estimating the value of a property by adding to the estimated land value the appraiser’s estimate of the replacement cost of the building, less depreciation. The replacement cost of improvements is the cost to replace an improvement with another improvement having the same utility. Therefore when conducting an appraisal for 1910 home, the current cost to reproduce the home would probably be a factor of the utmost importance and relevance.
A right or privilege tied to real property, although not necessarily part of the property, is called a(n)
• emblement.
• trade fixture
• appurtenance.
• deed
An appurtenance is a right or privilege association with a property, although not necessarily a part of it. An emblement or trade fixture is a tangible item on the property. The deed is a document that transfers title.
A landlord has a house for rent and placed the following ad on the supermarket bulletin board: “SF house for rent, $2,200 per month, no children, no smokers, no old folks.” If the landlord is found guilty of discrimination, he could be fined
• $25,000.
• $50,000.
• $75,000.
• $100,000.
The answer is $100,000. The maximum amount would be $100,000 for two violations at $50,000 each; both familial status and the elderly are protected.
A landlord is also a licensee and has had a fair housing complaint filed against her. Her hearing will be held before
• the nine-member REB.
• the 11-member FHB.
• the VRLTA Board.
• a combined session of both the FHB and REB.
The answer is the nine-member REB. All complaints filed against licensees are heard by the REB.
ADA standards must be met in all of the following EXCEPT
• the entry lobby to a condominium.
• the common area swimming pool.
• the second floor residence in a building without an elevator.
• the real estate sales office.
The answer is the second floor residence in a building without an elevator. ADA standards are only required for the first floor in buildings without an elevator.
A young handicapped woman needs the skills of her service spider monkey. With rent of $1,550, her landlord can charge a pet deposit of
• $55.
• $310.
• $1,550.
• none of these.
The answer is none of these. A service animal is not considered to be a pet; no pet deposit may be charged.
A man leases a store space to open a restaurant. He installs ovens, booths, counters, and other equipment. When would these items become real property?
• At lease expiration, if the man does not remove them
• After they are installed
• After the man defaults on his rental payments
• After the lease takes effect
The answer is at lease expiration, if the man does not remove them. Trade fixtures are personal property, but if they are not removed by the tenant, they become part of the real property.
Assuming that the listing broker and the selling broker in a transaction split their commission equally, what was the sales price of the property if the commission rate was 6.5% and the listing broker received $12,593.50?
• $139,900
• $387,492
• $256,200
• $193,746
The answer is $387,492. Two steps: (1) Find the entire commission by doubling listing broker’s half (2 ×$12,953.50 = $25,907). (2) Find the sales price by dividing the entire commission by the brokerage rate ($25,907 ÷ 6.5% = $387,492).
When grantors do NOT wish to convey certain property rights, they
• must note the exceptions in a separate document.
• may not do so because the deed conveys the entire premises.
• may note the exceptions in the deed of conveyance.
• must convey the entire premises and have the grantee reconvey the rights to be retained by the
grantor.
The answer is may note the exceptions in the deed of conveyance. If the grantors convey less than their complete interest, the wording in the granting clause must indicate this limitation. Mineral rights, water rights, and easements are frequently retained by grantors.
Office buildings and retail space are examples of
•commercial real estate.
•special use real estate.
•residential property.
•industrial property.
Office buildings and retail space are examples of commercial real estate. Special use property includes churches and dormitories; industrial property includes warehouses and factories.
The appraisal approach most likely to be used in valuing a public library building would be
•the cost approach.
•residual method.
•market data analysis.
•income approach.
The cost approach of appraisal is most often used for buildings where actual income or comparative commercial value are unavailable, such as schools and libraries.
Which of the following is the BEST way to ensure that there are no encroachments and verify the boundaries of a parcel of land?
• Get a spot survey
• Write a legal description
• Find the monuments
• Verify the benchmarks
The answer is get a spot survey. A spot survey shows the location of all improvements on a property and whether they extend over the property lines.
The federal law requiring unrestricted access to public accommodations is the:
• Public Accommodations Act
• Real Estate Settlement Procedures Act.
• Americans with Disabilities Act.
• Fair Housing Act.
The Americans with Disabilities Act gives civil rights protection to individuals with disabilities, similar to those provided to individuals on the basis of race, color, sex, national origin, age, and religion. It guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, state and local government services, and telecommunications services.
A fair housing violation case was forwarded to the attorney general. The court may now do any of the following EXCEPT
• award preventive relief to the complainant.
• assess a penalty of up to $50,000 on the defendant if this is a first violation.
• sentence the defendant to up to five years in jail.
• award the prevailing party reasonable attorney’s fees and costs.
An independent contractor is a representative, not an agent, and is the only type of non-agency relationship recognized by Virginia law.
The types of agency relationship that are recognized under Virginia agency law include all of the following EXCEPT
• standard agent.
• limited service agent.
• independent contractor.
• designated agent.
The answer is sentence the defendant to up to five years in jail.
Which of the following is NOT a test to identify a fixture?
• Intent of the parties
• Method of attachment of the item
• Size of the item
• Adaptation of the item to the real estate
The answer is size of the item. The overall test to identify a fixture is intent, which is determined by method of attachment, adaptation, or agreement.
A father conveyed the family home to his daughter by will as a pur autre vie estate for the life of her mother. If the daughter should die before the mother, who gains possession of the property?
• Remainderman
• Mother
• Father’s other children
• Daughter’s heirs
The answer is daughter’s heirs. A life estate based on the lifetime of a person other than the life tenant is called an estate pur autre vie. The daughter is the life tenant, but the measuring life is the mother’s. The daughter’s heirs will inherit the daughter’s life estate, but it will end when the mother dies.
A farmer owns the W½ of the NW¼ of the NW¼ of a section. The adjoining property can be purchased for $2,300 per acre. Owning all of the NW¼ of the section would cost the farmer
• $600,000.
• $322,000.
• $120,000.
• $480,000.
The answer is $322,000. If a person wishes to own the entire quarter (160 acres) of a 640-acre section in which that person already owns 20 acres (½ × ¼ × ¼ = 1/32 and 640 × 1/32 = 20), then the portion of the section still to be acquired is 140 acres (160 acres – 20 = 140). At a cost per acre of $2,300, the adjoining property will cost $322,000 (140 × $2,300 = $322,000).
Because a couple no longer needs their large house, they decide to sell it and move into a cooperative apartment building. In a cooperative, they will
• own their individual apartment.
• become shareholders in a corporation.
• own the common elements.
• receive a 20-year lease to their apartment.
The answer is become shareholders in a corporation. In a cooperative, a corporation holds title to the land and building and offers shares of stock.
A woman conveys a life estate to her grandson and stipulates that upon her death the estate will pass to her son-in-law. The son-in-law has
• a reversionary interest.
• an estate for years.
• a remainder interest.
• a legal life estate.
The answer is a remainder interest. When a life estate ends, it is replaced by a fee simple estate. The future interest the woman’s son-in-law has in the fee simple estate that will convey to him when the life estate ends is called a remainder interest.
A trust that is established after the death of the owner is called
• a testamentary trust.
• a trust by will.
• a beneficial trust.
• a living trust.
The answer is a testamentary trust. A trust established by will after the owner’s death is called a testamentary trust, as opposed to a trust created by agreement during the owner’s lifetime, which is called a living trust.
Jamal and Tina bought a store building and took title as joint tenants. Tina died testate. Jamal now owns the store
• as a joint tenant with rights of survivorship.
• in severalty.
• as a tenant in common with the dead woman’s heirs.
• in trust.
The answer is in severalty. Joint tenancy includes the right to survivorship, to the property passing to the other owner(s) upon the death of one tenant. In this case, Jamal and Tina took title as joint tenants, meaning that upon one’s death, there is only one owner who owns the property in severalty. In a tenancy in common, the owners own an undivided fractional interest in the property and that interest is passed on according to the owner’s will, to heirs, or to a trust.
A woman owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would
provide the greatest protection for a prospective lot purchaser?
• Appurtenant easement
• Easement in gross
• Easement by necessity
• License
The answer is appurtenant easement. An appurtenant easement is annexed to the ownership of one parcel and allows the owner use of the neighbor’s land. The easement transfers with the title and so provides the greatest protection for a prospective purchaser.
What is the principal difference between an estate for years and an estate from period to period?
• An estate for years cannot be terminated.
• An estate from period to period must be in writing.
• An estate from period to period has no expiration date.
• An estate for years is a life estate.
The answer is estate from period to period has no expiration date. An estate from period to period, or periodic tenancy, does not have a specific expiration date as it automatically renews until notice is given by the tenant or landlord. An estate (tenancy) for years has specific beginning and ending dates. Neither estate is a life estate. Each can be terminated. Both an estate for years and an estate from period to period must be in writing to be enforceable.
Which of the following is an NOT an example of a legal life estate?
• Dower
• Curtesy
• Homestead
• Remainder
The answer is remainder. Legal life estates are dower, curtesy, and homestead.
An appraiser estimated the replacement cost new of a building at $560,000. The building has an estimated economic life of 40 years and an estimated remaining life of 30 years. What is the current value of the building?
• $420,000
• $140,000
• $392,000
• $560,000
The answer is $420,000.
30 years remaining life ÷ 40 years economic life = 75%; $560,000 replacement cost × 75% = $420,000 current value.
The term improvements, when referring to real estate, includes
• shrubbery.
• trees.
• lawns.
• sidewalks.
The answer is sidewalks. An improvement is an artificial thing attached to the land. A sidewalk is a man-made addition.
A woman held fee simple title to a vacant lot adjacent to a business. She was persuaded to make the lot available to the business. She had her attorney prepare a deed that conveyed ownership of the lot to the business “so long as it is used for commercial purposes.” After the completion of the gift, the business will own
• a life estate.
• a tenancy for years.
• a periodic tenancy.
• a determinable fee estate.
The answer is a determinable fee estate. The words “so long as” create a fee simple determinable that limits use of the property for commercial purposes. The former owner retains the possibility of reverter.
A prospective homebuyer with four children asks about a listing in an area of predominately single and married couples without children. What should the broker say to this prospect?
• “I’ll be pleased to show you houses in any area that you’re interested in.”
• “I’d be happy to show you homes in other areas where there are more children.”
• “The residents here have expressed a desire to keep the area quiet and without children.”
• “You wouldn’t want to live in this area because the neighbors don’t like children and may be
disrespectful to your family.”
The answer is “I’ll be pleased to show you houses in any area that you’re interested in.” The broker must not channel home seekers toward or away from particular neighborhoods based on familial status. This practice is called steering.
A suburban home with four bedrooms and only one bathroom suffers from what condition?
• Curable physical deterioration
• Incurable physical deterioration
• External obsolescence
• Functional obsolescence
The answer is functional obsolescence. Because a four-bedroom home would be expected to have more than one bathroom, a home that does not suffers from functional obsolescence; it is lacking in the usual amenities of properties of its size.
Tina buys a cat and keeps it in her apartment, even though her apartment lease includes a clause that prohibits tenants from owning a pet. She does not remove the cat even after the landlord gives her a written reminder of the lease agreement and insists that she remove the pet from the apartment. Tina refuses, saying that the cat is very small and will cause no damage to the apartment. The landlord decides to remove Tina due to the breach of the lease agreement. The legal process to remove the tenant is known as
• actual eviction.
• eminent domain.
• constructive eviction.
• partial eviction.
The answer is actual eviction. A tenant’s breach of a lease can result in a court action known as actual or judicial eviction. Constructive eviction occurs when a tenant abandons a property because the landlord has breached the lease. Eminent domain is the government’s power to take land for public
use.
Fair housing laws allow exceptions for all of the following EXCEPT
• private clubs.
• religious organizations.
• retirement communities.
• racial discrimination.
The answer is racial discrimination. The case of Jones v. Mayer in 1968 upheld the Civil Rights Act of 1866 and prohibits racial discrimination without exception. Private clubs, religious organizations, and retirement communities are not exempt from fair housing laws’ prohibitions against housing
discrimination based on race.
To assign a contract for the sale of real estate means to
• record the contract with the county recorder’s office.
• permit another broker to act as agent for the principal.
• transfer one’s rights under the contract.
• allow the seller and the buyer to exchange positions.
The answer is transfer one’s rights under the contract. In an assignment, rights are assigned to a third party, but the original party remains primarily liable unless specifically released.
A home mortgage loan closed on July 1 for $765,000 at 5.5% interest amortized over 25 years at $4,697.77 per month. Using a 360-day year, what would the principal amount be after the monthly payment was made August 1?
• $764,936.30
• $764,106.25
• $754,275.00
• $763,808.48
The answer is $763,808.48.
Four steps:
(1) Find annual interest based on the interest rate and principal balance ($765,000 × 5.5% = $42,075).
(2) Find one month’s interest by dividing the annual interest by 12 ($42,075 ÷ 12 = $3,506.25).
(3) Find the amount of the first monthly payment remaining after paying interest ($4,697.77 – $3,506.25 = $1,191.52).
(4) Find the principal balance after paying $1,191.52 against the balance ($765,000 – $1,191.52 = $763,808.48).
Rights or privileges that are connected with real property are
• improvements.
• appurtenances.
• not conveyed with the real estate.
• restricted to air and water rights.
The answer is appurtenances. Appurtenances are rights or privileges associated with the property and generally convey with the sale.
Frances lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, Frances owns stock in the corporation and has a lease on his apartment. This type of ownership is called a(n):
• time-share.
• condominium.
• planned unit development.
• cooperative.
The answer is cooperative. Although often confused, a condominium owner holds title to his individual unit. A co-op owner, on the other hand, is technically a renter. It’s her stock in the corporation holding title to the property that gives her the right to lease the unit as well as sell that right to another.
A person owned a parcel of land. Subsequent to the owner’s death, the probate court determined the distribution of the land in accordance with the state’s statutes. This process is called
• escheat.
• condemnation.
• adverse possession.
• probate.
The answer is probate. Probate is a formal judicious process whose purpose is to see that the assets are distributed correctly. Probate courts distribute assets according to statute only when no other reasonable alternative, such as a valid will, exists.