QUIZ 8

1.The power to adopt the Code of Ethics and

Responsibilities, under the RESA shall be under
the *
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A. Professional Regulatory Board of Real Estate Service
B. Professional Regulation Commission
C. Accredited and Integrated Professional Organization
D. Professional Regulatory Commission

Feedback
The correct answer is A. Professional Regulatory Board of Real Estate
Service

The power to "adopt" is vested upon the PRBRES but the power to
"prescribe and issue" is vested upon the AIPO.
2. Under the then code of ethics, the realty service is
considered the following and not a
*
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A. Profession
B. Business
C. Calling
D. Occupation

Correct answer
B. Business
Feedback
The correct answer is B. Business

Under the code of ethics, Real Estate Service Practice is a noble

profession, calling or occupation but not a business.
3. A person who buys two 1-bedroom condominium
units adjacent to each other within a 12-month
period this year shall be subject to VAT if the total
exceeds
*
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A. P2,500,000
B. P1,500,000
C. P3,199,200
D. P1,919,500

Feedback

The correct answer is C. P3,199,200

The VAT threshold is Php 3,199,200. This means that if you buy a
property whose value falls below this threshold, then it is non-vatable,
and you will not have to pay tax on it. However, if the property you
bought are next to each other, within 12 months, and their combined
value exceeds this threshold amount, then these properties will be
considered vatable.

4. The ground floor of a condominium project shall be

considered as commercial per BIR RR 28-98, how
much rate shall be added to an established
residential zonal value?
*
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A. 25 percent
B. 10 percent
C. 20 percent
D. 50 percent

Correct answer
C. 20 percent
Feedback
The correct answer is C. 20 percent

The ground floor of a building is typically designated as a commercial

area or store. For this reason, it has a higher zonal value compared to
other floors in the same building. In BIR valuation, the ground floor’s
zonal value is 20% higher than that of residential units on the upper
floors. This means that if you have a unit whose zonal value is Php
100,000 per square meter, the ground floor’s zonal valuation will be
Php 120,000.

5. Popularly known as “The Rule of 72”; A Rule of

thumb method that determines a Rate of return
which is given, as 12% per period. How many periods
will it take to double an investment of 12% per
period? *
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A. 4.8
B. 24
C. 6
D. 2.4

Correct answer
C. 6
Feedback
The answer is C. 6

The Rule of 72 is a quick, useful formula that is popularly used to

estimate the number of years required to double the invested money at a
given annual rate of return. It applies to cases of compound interest, not
simple interest.

Expected Rate of Return = 72 / Years To Double

To calculate the expected rate of interest, divide the integer 72 by the

number of years required to double your investment.

Years to Double = 72 / Expected Rate of Return = 72 / 12 = 6 years!

6. It is a certification issued by the Environment

Management Bureau (EMB) certifying that, based on
the submitted project description, the project is not
covered by the EIS system and is not required to
secure an ECC.
*
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A. Environmental Compliance Certificate
B. Environment Impact Statement
C. Certificate of Non-Coverage
D. Initial Environmental Exam Report

Correct answer
C. Certificate of Non-Coverage
Feedback
The correct answer is C. Certificate of Non-Coverage

The keyword here is "not covered", hence the Certificate of Non-

Coverage is the correct answer.

7. The word “Commission” in RA 9646 stands for?

*
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A. Professional Fee
B. Real Estate Board
C. Broker's Commission
D. Professional Regulation Commission

Correct answer
D. Professional Regulation Commission
Feedback
The correct answer is D. Professional Regulation Commission

Be careful. This could be tricky. The word commission in RA 9646

refers to Professional Regulation Commission.

8. The party holding the lien is called ___________.

Examples of which are mortgage lenders, judgment
holders, and tax authorities
*
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A. Lienor
B. Lienator
C. Lienee
D. Lienatee

Correct answer
A. Lienor
Feedback
The correct answer is A. Lienor

The trick here is looking at the root word (lien) and the ending letters. If
it ends with "or," that is the holder. If it ends with "ee," that is the
recipient.

Imagine "donor" vs. "donee," the donor is the holder, or the giver of a
thing, and the donee is the recipient. Another example is the word
mortgagor ends in "or," so the holder or giver of the mortgage, while
the mortgagee end in "ee," is the mortgage recipient. Interesting huh?

9. RA 9646, the Real Estate Service Act of the

Philippines, became effective last.*
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A. June 15, 2009
B. July 30, 2009
C. July 30, 2010
D. June 30, 2010
Feedback
Perfect!

RESA Law was:

Passed by the Senate and the House of Representatives - May 12, 2009
Approved on - June 29, 2009
Became effective on - July 30, 2009

10. The legal term escheat means ___________.*

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A. An agent's license has been revoked.
B. Fraud has been committed.
C. Title has reverted to the state.
D. Mortgage property can be conveyed.

Feedback
You got it!

Escheat is the reversion of property to the state. A good way to

remember this term is the word "cheat". Imagine you've been cheated by
the state because they took your property. The property is considered
abandoned and subject to escheat if the owner cannot be located or has
been deceased for a certain period of time without a will or heirs.

11. What refers to the span of time that appears to

be as a new item or structure, regardless of its
actual age which is either shortened or lengthened
because of its characteristics, condition of
efficiency, it also refers to the number of years of
age indicated by the condition of the building in any
improvement?*
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A. Economic life
B. Productive life
C. Effective Age
D. Influential time

Feedback
Bravo!

Effective age is the age of a property based upon its condition and
physical wear and tear, not its actual age. Actual age is the total years
that have passed since a structure was built. Economic life is the length
of time properties may generate income. Usually, this is less than its
physical life.
12. What law provides designated HLURB as sole
regulatory power in house and lot development,
mandated to encourage greater participation of the
private sector for the low-cost housing liberalization
of development standards, simplification of
regulations and decentralization of licenses and
permits?*
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A. EO 70
B. EO 90
C. PD 457
D. PD 1216

Correct answer
B. EO 90
Feedback
Not quite.

It looks like EO 90 is the clear answer here. PD 1216 defines the OPEN
SPACE requirements in residential developments, while EO 70 and PD
457 are not laws in Real Estate.
13. Which economic characteristic of land shows
that land and building are relatively long-lasting
assets?*
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A. Valuable
B. Durability
C. Divisibility
D. Immobility

Feedback
Awesome!

The answer is durability - the ability to withstand wear, pressure, or

damage, which makes real estate a perfect investment.
14. It is a coastal flood phenomenon of rising water
commonly associated with low pressure weather
system*
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A. Tsunami
B. Storm surge
C. Tidal wave
D. Tectonic wave

Feedback
Awesome!

Tsunami and tectonic wave are incorrect because they relate to rising
water due to earthquakes that originated in the sea. While a tidal wave
sounds like a good answer, it is formed by high winds or seismic
interruption. Storm surge is the rising of water associated with low
pressure. Imagine the flood that typhoon Yolanda (Haiyan) brought to
Tacloban. A storm surge caused it.

15. The following are causes of depreciation,

EXCEPT ____.*
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A. functional obsolescence
B. physical deterioration
C. economic life
D. economic obsolescence

Feedback
Top notch!

There are three causes of depreciation: functional obsolescence,

physical deterioration, and economic or external obsolescence.
Economic life refers to the expected period that property will provide
benefits and is not one of the causes of depreciation.

16. Which refers to any and which has not had any
significant buildings or structures erected on it*
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A. Open space
B. Raw land
C. Reserved space
D. Idle land

Feedback
Excellent!

While it may sound that open space is a good answer, the correct
answer is idle land. Open space is any open piece of land that is
undeveloped (has no buildings or other built structures) and is
accessible to the public. The key word here is "significant"
improvement, mainly referring to idle lands. The government imposes a
maximum 5% penalty for undeveloped properties or no significant
improvement.

17. What law refers to as Comprehensive Agrarian

Reform Program Extension with Reforms (CARPER)?*
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A. RA 9700
B. RA 7160
C. RA 6552
D. RA 6657
Correct answer
A. RA 9700
Feedback
Keep on learning.

RA 9700 - Comprehensive Agrarian Reform Program Extension with

Reforms (CARPER)
RA 7160 - The Local Government Code of 1991
RA 6552 - Realty Installment Buyer Protection Act (Maceda Law)
RA 6657 - Comprehensive Agrarian Reform Program (CARP)

18. What are the four elements of value in real

estate?*
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A. Demand, utility, scarcity. and transferability
B. Utility, scarcity, uniqueness, demand
C. Scarcity, demand, transferability, immobility
D. Demand, utility, immobility, scarcity

Feedback
You got it!

The cue here is the word DUST which stands for:

D = demand
U = utility
S = scarcity
T = transferability

19. The fact that there is a limited amount of land on

earth represents what essential element of value?
*
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A. Demand
B. Utility
C. Scarcity
D. Transferability

Feedback
Remember DUST and your essential elements of value. Demand: This
means the desire to buy and an ability to pay. Utility: The item satisfies
a human need or desire; such as shelter, income, or recreation.
Scarcity: Limited in supply, as supply diminishes, value increases.
Transferability: Able to transfer from one owner to another.

20. Which province is the considered as the

geographic center of the Philippines?
*
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A. Marinduque
B. Romblon
C. Masbate
D. Bohol
Correct answer
A. Marinduque
Feedback
The island province of Marinduque prides itself as being the geographic
center of the Philippines. The Marinduque governor has stated that their
claim to be the Geographical Center of the Philippines has received
notice and support from the National Mapping and Resource
Information Authority (NAMRIA). The Luzon Datum of 1911 in
Marinduque is used as point number one for all map makers in the
country. Interesting huh?

21. Which of the following statements does NOT

correctly describe a fiduciary?
*
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A. A fiduciary must conform to the principal’s legal instructions
B. A fiduciary owes loyalty to the principal
C. A fiduciary is a neutral third party
D. A fiduciary is the highest standard of care in equity or law

Correct answer
C. A fiduciary is a neutral third party
Feedback
A fiduciary is NOT a neutral third party. Fiduciary is a term that refers
to a legal relationship that is confidential between two parties. The
fiduciary responsibility is to protect the privacy of the client and to keep
all of the client’s information confidential. An example of a neutral third
party is an escrow agent is a person or entity that holds property in trust
for third parties while a transaction is finalized or a disagreement is
resolved.
22. Which of the following two real estate contract
clauses protect the lenders in some way, usually by
asking for some form of payment(insurance)?
*
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A. Alienation and Release Clause
B. Acceleration Clause and Release Clause
C. Release Clause and Prepayment Penalty Clause
D. Acceleration Clause and Prepayment Penalty Clauses

Correct answer
D. Acceleration Clause and Prepayment Penalty Clauses
Feedback
The keywords here are lender and payment. Some of these provisions
protect the borrower, lender, or both. The Acceleration Clause and
Prepayment Penalty Clause is the best answer here. The acceleration
clause is a contract provision that requires a borrower to repay all of an
outstanding loan if upon a breach of the contract - which definitely
protects the lenders and their interests by asking for repayment. A
prepayment penalty clause states that a lender can penalize a borrower
if the borrower pays off the mortgage much sooner than usual - This
definitely protects the lenders, their interests, and results in repayment
as well. Within the other answers the clauses may, or may not protect
lenders, or do not require some form of payment or insurance.
23. The increase of value with the passage of time is
best described as:
*
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A. Depreciation
B. Appreciation
C. Return of investment
D. Return on investment

Correct answer
B. Appreciation
Feedback
Appreciation, in general terms, is an increase in the value of an asset
over time. The increase can occur for a number of reasons, including
increased demand or weakening supply, or as a result of changes in
inflation or interest rates.

24. An example of economic obsolescence in real

estate is
*
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A. old kitchen cabinets.
B. a pool built at your mother’s house.
C. a noisy highway built right next to your home.
D. sellers not being able to afford property due to economic factors.

Feedback
Economic obsolescence refers to the loss of property value due to
external factors, meaning things off the property affecting the properties
value. A new noisy highway would be considered economic

obsolescence because it is an external factor. Usually, in these

circumstances, homeowners cannot do anything to prevent it.

25. What is radioactive gas dispersed from natural

decay of mineral in earth (odorless, colorless,
tasteless)?
*
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A. Asbestos
B. Radon
C. Mold
D. Argon

Correct answer
B. Radon
Feedback
Radon is radioactive gas dispersed from natural decay of mineral in
earth. odorless, colorless, tasteless. Rises out of ground and enters
homes through openings in basement where usually found. If trapped
inside a house, can increase to harmful health levels. Small particles
inhaled into lungs can cause cancer. Can also contaminate
groundwater. Radon is usually detected by radon test kits.
26. In real estate, alienation is best described as:
*
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A. denying use of an easement.
B. changing a property from one zoning district to another.
C. the act of transferring bonds, cash, money or any form of currency in
escrow.
D. the act of transferring title, ownership, an estate, or an interest in real
estate from one party to another.

Feedback
The actual transfer of title in a real estate transaction is handled by
lawyers or title agencies, not the agent. However as with other legal
aspects in the transactions a real estate agent needs to understand them.
Alienation is the act of transferring title, ownership, an estate, or an
interest in real estate from one party to another.
27. Which of the following would not be considered
real property?
*
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A. A fixture
B. An easement
C. Mineral rights
D. A mortgage

Feedback
Fixtures, easements, and mineral rights are all examples of real
property - a mortgage is not. Real Property is all things attached to the
land and all the legal rights to it. Real property is usually things that are
immovable such as the home itself or the buildings within the property
line. There are some exceptions of items that can be moved but are still
real property, like for businesses. Business-related items like mineral
rights, or if you own a farming business it would include crops, barns,
and stables. Those are all considered real property because it is part of
the business.
28. What type of ownership model is used for
vacation real estate in which multiple purchasers
own allotments of usage, typically in one-week
increments, for the same property?
*
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A. Condo
B. Timeshare
C. Condominium
D. Ownership in Severalty

Correct answer
B. Timeshare
Feedback
A timeshare is a property with a divided form of ownership or use
rights. These properties are typically resort building units, in which
multiple parties hold rights to use the property, and each owner of the
same accommodation is allotted their period of time. They differ from
regular condominiums as they typically are exclusively for vacations.
29. Complete the following statement. The
rescission of a contract occurs when:
*
1/1
A. a contract is signed.
B. a contract is classified as unenforceable and is terminated.
C. one party wants waive all the remaining duties and wants to terminate
the contract.
D. there is an agreement between the contracting parties to waive all the
remaining duties and to terminate the contract.

Feedback
The rescission of a contract occurs when there is an agreement between
the contracting parties to waive all the remaining duties and to
terminate the contract. Basically, it would be returning the parties to the
same legal position they were in before entering into the contract.

30. What is the general technique of determining

three-dimensional positions of points and the
distances and angles between them?
*
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A. Surveying
B. Subdivision Surveying
C. Sub and Plot Surveying
D. Sewer Lateral Inspecting

Feedback
Surveying is the "general" technique of determining three-dimensional
positions of points and the distances and angles between them. The
point of a survey is to accurately measure land in a legal fair manner.
While subdivision surveying is definitely a form of surveying this
question is asking for the general form, which is just surveying.

31. Usually, the appraiser is hired by the:

*
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A. The buyer
B. The seller
C. The lender
D. the real estate agent

Correct answer
C. The lender
Feedback
Usually, the lender or financing organization will hire the appraiser.
Technically the seller pays for the appraiser since it comes out of the
final sales price, however the hiring aspect is almost always done by the
lender.
32. The cost of public services is distributed among
real estate owners through what?
*
1/1
A. Personal property tax
B. Real property tax
C. Special assessment
D. Sales tax

Feedback
Property tax is an ad valorem tax assessed on real estate by a local
government and paid by the property owner. Public services for real
estate owners are paid by real property tax.

33. One individual or married couple in business

alone (The most common form of business
structure):
*
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A. Sole Proprietorship
B. Limited Partnership
C. Single Co-operation
D. (LLC) or Limited Liability Company

Feedback
A Sole Proprietorship is one individual or married couple in business
alone. Sole proprietorship's are the most common form of business
structure. This type of business is simple to form and operate and may
enjoy greater flexibility of management, fewer legal controls, and fewer
taxes. However, the business owner is personally liable for all debts
incurred by the business. A sole proprietor may purchase property for
both personal and business use through his own name or through the
name of his business. However, only personal property used in direct
relation to business operations is viewed as a tax-deductible business
expense.

34. What is the highest form of real estate ownership

that is recognized by law, in which the owner can
enjoy the property to its fullest extent?
*
1/1
A. Life Estate
B. Fee Simple Absolute
C. Fee Simple Defeasible
D. Estate at Will

Feedback
Fee simple absolute or (fee simple for short) is an estate in land. It is the
highest form of real estate ownership that is recognized by law, in which
the owner can enjoy the property to its fullest extent and is only limited
by government powers which we’ll cover later on. Fee simple absolute
is the greatest interest in a parcel of land that one can possibly own. The
fee simple estate has unlimited duration and can be passed on to heirs.

35. The legal principle under which a person who

does not have legal title to a property acquires legal
ownership based on the continuous occupation of
the property.
*
1/1
A. Condemnation
B. Eminent Domain
C. Adverse Possession
D. Inverse Condemnation

Feedback
Adverse possession is a legal principle under which a person who does
not have legal title to a property acquires legal ownership based on the
continuous occupation of the property. If successful in proving adverse
possession, the person or parties are usually not required to pay the
owner for the land.

36. An example of functional obsolescence in real

estate is
*
1/1
A. outdated plumbing.
B. a house not having a pool.
C. a house in a lower-class area.
D. an agent not being able to sell a property.

Feedback
Functional obsolescence refers to the loss of property value due to an
obsolete design feature. Outdated plumbing would be considered
functionally obsolete because it is outdated. Who determines what is
obsolete or not? Usually the buyer or homeowners. If a neighborhood is
filled houses with new bathrooms and/or new plumbing, and your's isn't,
It would be considered functionally obsolete.

37. What is a written supplement or amendment to

an existing will such as one affecting the transfer of
real estate upon death?
*
1/1
A. Novation
B. Treaty
C. Codicil
D. Option

Feedback
Codicil (pronounced kaa-duh-sl) is a written supplement or amendment
to an existing will such as one affecting the transfer of real estate upon
death. In plain terms it's an addendum of any kind to a will.

38. Commingling is the opposite of what?

*
1/1
A. Separation
B. Contribution
C. Combination
D. Transformation
Feedback
Commingling refers to mixing brokers funds with clients funds. The
opposite of commingling is separation, which is just separating the
funds.

39. When calculating the amount of real estate taxes

owed, calculations are based on what type of value?
*

1/1
A. Assessed value
B. Implied value
C. Market value
D. Appraised value

Feedback
The assessed value is a property's determined valuation to calculate the
appropriate tax rates.

40. The owner of a secluded area adjacent to the

ocean noticed that people from the local town
walked along the shore in front of his property. The
owner learned that the local citizens had been
walking along this beach for half a century. The
owner went to court to try to stop people from
walking along the water's edge in front of his
property. The owner is likely to be:
*
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A. Unsuccessful because the owner's property extends only to the high-
water mark and the public can use the land beyond this point.
B. Unsuccessful because the locals have been doing this for over 5 years
(statute of frauds).
C. Successful because the locals have been doing this for less than 100
years (statute of frauds).
D. Successful because the owner's property extends 100ft into the ocean
per his riparian rights.

Correct answer
A. Unsuccessful because the owner's property extends only to the high-
water mark and the public can use the land beyond this point.

Feedback
A landowner of land which borders a navigable waterway owns the
property up to the high-water mark at the water’s edge. The government
owns the water and land beneath it, and the public has an easement
right to travel on the water. The owner would be unsuccessful because
the owner's property extends only to the high-water mark.
41. In a typical real estate market, if the demand for
commercial office space declines and the supply of
office space also declines at the same ratio, market
rent per square foot should:
*
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A. Increase
B. Decrease
C. Reach thirty
D. Remain the same

Correct answer
D. Remain the same
Feedback
If demand increases more than supply does, we get an increase in price.
If supply rises more than demand, we get a decrease in price. If they rise
or decrease the same amount, the price remains the same.
42. If someone is unlawfully forced to execute a
contract it is called what?
*

0/1
A. Fraud
B. Duress
C. Treason
D. Execution

Correct answer
B. Duress
Feedback
Duress is the unlawful constraint or action exercised upon a person
whereby the person is forced to perform an act against his or her will. A
contract entered into under duress is voidable.
43. Which of the following real estate contract
clauses is typically seen in blanket mortgages and
allows for the freeing of all or part of a property from
a claim through a proportional or full amount of the
mortgage being paid off?
*
0/1
A. The Release Clause
B. The Defeasance Clause
C. The Alienation Clause
D. The Prepayment Penalty Clause

Correct answer
A. The Release Clause
Feedback
A release clause is a contract provision (typically in a blanket
mortgage) that allows for the freeing of all or part of a property from a
claim through a proportional or full amount of the mortgage being paid
off.
44. In the case of a standard tax lien who gets paid
first?
*
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A. the homeowner.
B. the buyer/seller.
C. the commission.
D. the government.

Correct answer
D. the government.

Feedback
Tax liens are imposed by the federal, state, or local government based
upon back property taxes that are due. Not only can these seriously
impact your credit report, but until they're paid off, they can prevent you
from selling the property. Tax liens are involuntary and usually specific.
The important thing to remember is the government always gets paid
first in terms of money distribution.

45. Which of the following can be achieved by

dividing the price of the property by the rent that is
produced?
*
1/1
A. Interest Rate
B. Capitalization Rate
C. The Economic Value
D. Gross Rent Multiplier

Feedback
The Gross Rent Multiplier is found by dividing the price of the property
by its rent.

46. What is the procedure used by a public or private

entity with the powers granted to take privately
owned real estate?
*
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A. Escheat
B. Condemnation
C. Eminent Domain
D. Inverse Condemnation
Correct answer
B. Condemnation
Feedback
Condemnation is the procedure used by a public or private entity with
the powers granted from eminent domain to take privately owned real
estate. Eminent domain is the right which grants the government to take
privately owned land from someone while condemnation is the action of
taking that land.

47. Researching recently sold homes in the area and

homes that haven't been sold in the area and
comparing their prices. Is an example of
*
1/1
A. a comparative market analysis.
B. a research housing study.
C. a home marketing plan.
D. a sellers study.
Feedback
A comparative market analysis is an examination of the prices at which
similar properties in the same area recently sold. Agents can use a
comparative market analysis for their clients to help them determine a
price when selling or buying a home.

48. Joint tenants with a right of survivorship means

*
1/1
A. co-owners have unequal interests in a property.
B. if one owner dies, that owners family has an interest in the property
and can absorb it.
C. if one owner dies, the other owner must sell his half and they divide
the interest among themselves.
D. if one owner dies, that owner's interest in the property will pass to the
surviving owner or owners.

Feedback
When a property is owned by joint tenants, the interest of a deceased
owner automatically gets transferred to the remaining surviving owners.
For example, if three joint tenants own a house and one of them dies,
the
two remaining tenants each obtain a one-half share of the property. This
is called the right of survivorship.

49. The Bundle of Rights include:

*
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A. Possession, ability, illusion, enjoyment, disposition
B. Possession, ability, exclusion, enjoyment, disposition
C. Possession, control, illusion, enjoyment, disposition
D. Possession, control, exclusion, enjoyment, disposition

Correct answer
D. Possession, control, exclusion, enjoyment, disposition
Feedback
Owning real estate carries with it a "bundle of legal rights” The bundle
of rights is the right of possession, the right of control, the right of
exclusion, the right of enjoyment and the right of disposition. When a
person purchases property, he or she is given the rights to the property.
Interestingly the rights can be split up and given to different parties.
Think of the bundle of rights as a bundle of sticks.

50. Which of the following correctly defines the

doctrine of prior appropriation?
*
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A. First-in-time-first-in-right.
B. The person or entity who pays the highest price for the use of the
water source is granted the use rights to the water in the source.
C. The right to use river water adjacent to one's property.
D. The rights to free use of all lake water.

Correct answer
A. First-in-time-first-in-right.
Feedback
The prior appropriation doctrine is a legal concept that evolved in the
American West as a means of establishing the right to use scarce water
from rivers and streams. This doctrine can be summed up as "first in
time is first in line."

51. The owner of a condominium has the use of many

facilities there, including a pool. Under the typical
condominium arrangement, the facilities are owned
by
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A. the corporation in which each of the owners hold stock.
B. the association of homeowners in the condominium.
C. some of the condominium owners in the form of divided interests.
D. all the condominium owners in the form of percentage undivided
interests.

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Condominium often shortened to condo, is a type of living space which
is similar to an apartment but which is independently sellable and
therefore regarded as real estate. Unlike apartments, which are leased
by their tenants, condominium units are owned outright. The answer is
all the condominium owners in the form of percentage undivided
interests because all condominium owners legally own a portion of all
the facilities there.
52. Severalty ownership _____.
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A. is ownership by one person
B. is ownership by several people
C. is ownership by stockholders in a corporation
D. is a ownership with an inherent right of survivorship

Correct answer
A. is ownership by one person
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Ownership in severalty means one person owns the property. Think of
the word “severed,” separated from, rather than the word “several,”
meaning more than one. Ownership in severalty means one person owns
the property.

53. The type of easement that is a right-of-way for a

utility company's power lines is what?
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A. An easement by prescription
B. An easement appurtenant
C. An easement by necessity
D. An easement in gross
Correct answer
D. An easement in gross
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More practice!

An easement in gross is basically selling rights to the land to another

person, but without giving them legal ownership. An example of an
easement in gross is an easement to a utility company to run a power
line across a burdened piece of property.

54. What is an item on a property that is installed by

the tenant, and is related to the tenant's business
classified as?
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A. fixtures
B. trade fixtures
C. easements
D. emblements

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Bravo!
A fixture is any physical property that is permanently attached to real
property. Trade fixtures refer to items installed in connection with the
business, such as stoves or refrigerators in a restaurant.

55. By which of the following can you not lose title to

your property involuntarily?
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A. Adverse possession
B. Foreclosure
C. Dedication
D. AvulsionCorrect answer

C. Dedication
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Not quite.

Dedication in property law means the donation of your land. Dedication

would be considered voluntary, while the others are all involuntarily.
56. Generally speaking, what happens when the
supply of available houses in an area increases
significantly?
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A. The average cost of housing goes down
B. The average cost of housing goes up
C. Commission rates are raised
D. Commission rates are lowered
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You are amazing!

Think of supply and demand like a scale usually if one side raises, the
other will lower or vice versa. Generally, low supply and high demand
increase price. In contrast, the greater the supply and the lower the
demand, the price tends to fall. So in real estate terms, when the supply
of available houses in an area increases significantly the average cost of
housing goes down.

57. An individual owned three hectares of land. When

she sold one hectare to her friend, she reserved for
herself and family an appurtenant easement over the
friend's land for ingress and egress. The friend's land
is what?
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A. Subject to a tenement lawsuit
B. The dominant tenement
C. The servient tenement
D. Is involuntarily committing tax fraud

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Excellent!

Remember. A Dominant Estate is a parcel of real property that has an

easement over another piece of property. A Servient Estate is a parcel of
land that is subject to an easement.

58. Typically, a trust is a THREE party relationship.

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A. One
B. Two
C. Three
D. Four

Correct answer
C. Three
Feedback
Not right.

Trusts can be created during an individual's lifetime, or they can be

established following someone's death. A trust is a three-party
relationship in which the first party, the trustor or settlor, transfers a
property upon the second party for the benefit of the third party, the
beneficiary. The trustee is required to manage the trust property in
accordance with the trustor's wishes and in the beneficiary's best
interests. A trustee can be an individual or a financial institution such as
a bank.

59. Three identical properties in a suburban

neighborhood were listed at the same time in a
market where demand was constant. According to
the law of supply and demand, which property would
have sold for the lowest price?
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A. The first property sold
B. The second property sold
C. The third property sold
D. The properties would all sell for the same price.
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Peanuts!

According to the law of supply and demand, the first property sold
would have sold for the lowest price. Remember generally speaking,
when the supply of houses goes down, the price goes up, and vice versa.

60. The Latin phrase ad valorem comes up often

when talking about property taxes. What does ad
valorem mean?
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A. value
B. added value
C. according to value
D. property value derived from assessment value

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Wrong.

The term “ad valorem” is Latin for “according to value,” which means
that it is flexible and depends on the assessed value of an asset, product,
or service. An ad valorem tax is charged by state and municipal
governments and is based on the assessed value of a product or
property. The most common ad valorem tax is the property tax, which is
charged on real estate and personal property.