76 Principles & Ownership Practice Questions & Answers

1. 1. Which estate represents the highest and most complete form of private ownership recognized in U.S. real property law?

   • A.Fee simple determinable
   • B.Estate for years
   • C.Life estate
   • D.Fee simple absolute✓ Answer

   Fee simple absolute is the highest and most complete estate a person can own; it is of indefinite duration and is also called an estate of inheritance because it passes freely to heirs. The other choices are limited either by a life, a condition, or a fixed term.

   Ref QB-UR2Y65Source: National principles — freehold estates; fee simple absolute (estate of inheritance)Report a problem with this question

2. 2. A grantor conveys land 'to the city so long as it is used as a public park.' What future interest does the grantor retain, and how does title revert if the condition fails?

   • A.A possibility of reverter that returns title automatically✓ Answer
   • B.A reversion that requires the grantor's death first
   • C.A remainder that passes to a third party
   • D.A right of re-entry that must be exercised in court

   The words 'so long as' create a fee simple determinable, which ends automatically when the stated condition is violated; the grantor holds a possibility of reverter and title returns without any court action. 'But if/provided that' language instead creates a condition subsequent requiring an affirmative right of re-entry.

   Ref QB-C985S5Source: National principles — fee simple defeasible; determinable vs. condition subsequentReport a problem with this question

3. 3. A deed states, 'but if alcohol is ever sold on the premises, the grantor may re-enter and reclaim the property.' What estate does this create?

   • A.Life estate pur autre vie
   • B.Fee simple determinable
   • C.Fee simple subject to a condition subsequent✓ Answer
   • D.Fee simple absolute

   The 'but if ... may re-enter' language creates a fee simple subject to a condition subsequent; unlike a determinable estate, title does not end automatically — the grantor must affirmatively exercise the right of re-entry to reclaim the property.

   Ref QB-VRDAC6Source: National principles — fee simple subject to condition subsequent; right of re-entryReport a problem with this question

4. 4. A grant reads, 'to Alice for life, then to Bob.' What is Bob's interest during Alice's lifetime?

   • A.A reversion
   • B.A remainder✓ Answer
   • C.A possibility of reverter
   • D.An estate at will

   When a life estate is followed by a gift to a named third party, that third party holds a remainder. A reversion, by contrast, is the interest that returns to the grantor (or the grantor's heirs) when no third-party remainderman is named.

   Ref QB-996592Source: National principles — life estate; remainder vs. reversionReport a problem with this question

5. 5. An owner conveys property 'to Carla for life,' saying nothing about what happens after Carla dies. Upon Carla's death, where does title go?

   • A.To the grantor or the grantor's heirs by reversion✓ Answer
   • B.To Carla's tenants by survivorship
   • C.To the state by escheat
   • D.To Carla's heirs by remainder

   Because no remainderman was named, the grantor retained a reversion; at the end of the measuring life the property automatically returns to the grantor or the grantor's heirs. Escheat applies only when an owner dies with no will and no heirs.

   Ref QB-SRBAU2Source: National principles — life estate; reversion to grantorReport a problem with this question

6. 6. What primarily distinguishes a freehold estate from a leasehold (less-than-freehold) estate?

   • A.A freehold requires a recorded lease; a leasehold does not
   • B.A freehold has indefinite duration, but a leasehold has a set term✓ Answer
   • C.A freehold cannot be inherited, but a leasehold can
   • D.A leasehold conveys legal title, while a freehold conveys only possession

   Freehold estates (fee simple and life estates) are of indefinite or uncertain duration, whereas leasehold estates are possessory interests held for a determinable term. This duration distinction, not recording or inheritance, is the defining line.

   Ref QB-A9HFE3Source: National principles — freehold vs. leasehold estatesReport a problem with this question

7. 7. A tenant signs a lease running from January 1 to December 31 of a single year, with a definite beginning and ending date. Which leasehold estate is this?

   • A.Tenancy at will
   • B.Estate for years✓ Answer
   • C.Tenancy at sufferance
   • D.Periodic tenancy

   An estate for years has a fixed term with definite start and end dates and terminates automatically at the end of the term without any notice required. Its defining feature is the certain, specified duration — even if that duration is less than a year.

   Ref QB-TRPMZ3Source: National principles — leasehold estates; estate for yearsReport a problem with this question

8. 8. A month-to-month rental that automatically renews each period until one party gives proper notice to terminate is which type of leasehold?

   • A.Estate for years
   • B.Tenancy at sufferance
   • C.Periodic tenancy✓ Answer
   • D.Fee simple defeasible

   A periodic tenancy renews automatically from period to period (such as month-to-month) and continues until one party gives proper advance notice to terminate. Unlike an estate for years, it has no predetermined ending date.

   Ref QB-B2E4XSSource: National principles — leasehold estates; periodic tenancyReport a problem with this question

9. 9. A tenant's lease has expired, but the tenant remains in possession without the landlord's consent. What estate does the tenant now hold?

   • A.Tenancy at sufferance✓ Answer
   • B.Tenancy at will
   • C.Estate for years
   • D.Periodic tenancy

   A holdover tenant who stays after the lease ends without the landlord's permission holds an estate (tenancy) at sufferance — the lowest leasehold interest. It differs from a tenancy at will, which continues with the landlord's consent.

   Ref QB-UHK9HTSource: National principles — leasehold estates; tenancy at sufferanceReport a problem with this question

10. 10. Which four unities must be present to create a valid joint tenancy?

    • A.Time, Title, Interest, Possession✓ Answer
    • B.Time, Transfer, Intent, Property
    • C.Title, Trust, Interest, Possession
    • D.Title, Interest, Purpose, Possession

    A joint tenancy requires the four unities of Time, Title, Interest, and Possession (TTIP) — the co-owners must take the same interest, from the same deed, at the same time, with equal rights to possess the whole. Breaking any unity destroys the joint tenancy.

    Ref QB-WMXNZZSource: National principles — joint tenancy; four unities (TTIP)Report a problem with this question

11. 11. Two people own property as joint tenants. One dies leaving a will that tries to give her share to a friend. What happens to her interest?

    • A.It passes to the surviving joint tenant✓ Answer
    • B.It passes to her heirs through probate
    • C.It reverts to the original grantor
    • D.It passes to the friend named in the will

    Joint tenancy carries the right of survivorship, so a deceased joint tenant's interest passes automatically to the surviving joint tenant(s) and cannot be devised by will. This avoids probate, and the will's gift of the share is ineffective.

    Ref QB-D5SGEZSource: National principles — joint tenancy; right of survivorshipReport a problem with this question

12. 12. When co-owners hold undivided fractional interests with no right of survivorship, and each share passes by will to the owner's heirs, this is which form of co-ownership?

    • A.Joint tenancy
    • B.Tenancy in common✓ Answer
    • C.Severalty
    • D.Tenancy by the entirety

    Tenancy in common gives each owner an undivided fractional interest with only the unity of possession and no survivorship; a deceased tenant's share passes by will or to heirs. It is the default form when co-owners are unmarried or the deed is silent.

    Ref QB-VMKBUYSource: National principles — tenancy in common; default co-ownershipReport a problem with this question

13. 13. A married couple takes title in a way that gives each spouse survivorship rights and prevents either from conveying the property alone. This describes which form of ownership?

    • A.Tenancy by the entirety✓ Answer
    • B.Severalty
    • C.Tenancy in common
    • D.Joint tenancy among strangers

    Tenancy by the entirety is available only to a married couple; it carries the right of survivorship and neither spouse may convey or encumber the whole property acting alone. This unity-of-person feature distinguishes it from an ordinary joint tenancy.

    Ref QB-C5E69YSource: National principles — tenancy by the entiretyReport a problem with this question

14. 14. One individual holds title to a parcel entirely alone, with no co-owners. This form of ownership is called:

    • A.Tenancy by the entirety
    • B.Severalty✓ Answer
    • C.Tenancy in common
    • D.Community property

    Ownership in severalty means title is held by one person or one legal entity alone, 'severed' from all others. Despite the name suggesting 'several,' it refers to sole ownership, not multiple owners.

    Ref QB-UM8ZNXSource: National principles — ownership in severaltyReport a problem with this question

15. 15. Three joint tenants own a property. One of them sells his interest to an outside buyer. What is the buyer's relationship to the remaining two owners?

    • A.The buyer becomes a joint tenant with all three unities intact
    • B.The sale is void because joint tenancy cannot be severed
    • C.The buyer is a tenant in common, and the other two stay joint tenants✓ Answer
    • D.All three owners automatically become tenants in common

    Selling one joint tenant's share severs the joint tenancy as to that share only, because the new owner lacks the unities of time and title. The buyer holds as a tenant in common, while the two original owners remain joint tenants with survivorship between themselves.

    Ref QB-B53U3XSource: National principles — severance of joint tenancyReport a problem with this question

16. 16. In community-property states, property acquired by either spouse during the marriage (other than by gift or inheritance) is generally treated as:

    • A.The property of the state until divorce
    • B.Automatically held in joint tenancy with survivorship
    • C.The separate property of the acquiring spouse
    • D.Owned equally by both spouses as community property✓ Answer

    In community-property jurisdictions, most property acquired by either spouse during the marriage is owned equally (one-half each) as community property, regardless of who earned or holds title. Property acquired by gift or inheritance, or owned before marriage, remains separate property.

    Ref QB-TMVNGWSource: National principles — community propertyReport a problem with this question

17. 17. Under the MARIA fixture test, which factor is generally considered the most important in deciding whether an item has become a fixture?

    • A.The cost of the item
    • B.Whether the item is visible
    • C.The method of attachment
    • D.The installer's intention✓ Answer

    The MARIA test weighs Method of attachment, Adaptability, Relationship of parties, Intention, and Agreement; courts treat the installer's intention as the controlling, most heavily weighted factor. The other elements are largely evidence of that intent.

    Ref QB-A5QGWVSource: National principles — fixtures; MARIA test (intention controlling)Report a problem with this question

18. 18. A restaurant tenant bolts commercial ovens and counters into a leased space to run the business. At lease end, how are these items generally treated?

    • A.As fixtures that must stay with the landlord
    • B.As emblements belonging to the landlord
    • C.As trade fixtures removable before lease end✓ Answer
    • D.As real property permanently annexed to the land

    Items a business tenant installs to conduct trade are trade fixtures; they remain the tenant's personal property and may be removed before the lease ends (with the tenant repairing any damage). If left behind, they may become the landlord's by accession.

    Ref QB-2NCZP6Source: National principles — trade fixturesReport a problem with this question

19. 19. A tenant farmer plants and cultivates an annual corn crop. Under the doctrine of emblements, these growing crops are classified as:

    • A.Real property that passes with the land
    • B.Trade fixtures subject to accession
    • C.Personal property the tenant may harvest✓ Answer
    • D.Fixtures owned by the landlord

    Emblements are annually cultivated crops produced through a tenant's labor; they are treated as the tenant's personal property, and the doctrine lets the tenant re-enter to harvest even after the tenancy ends. Perennial or naturally growing vegetation, by contrast, is real property.

    Ref QB-H57U46Source: National principles — emblementsReport a problem with this question

20. 20. Which of the following BEST describes real property?

    • A.Any movable item a person owns
    • B.Crops that a tenant farmer harvests each year
    • C.Only the physical soil and minerals beneath a parcel
    • D.Land, its permanent attachments, and its rights✓ Answer

    Real property is land plus everything permanently attached (fixtures) plus the appurtenant 'bundle of rights' — possession, control, enjoyment, exclusion, and disposition. Movable items are personal property (chattels), and annual crops are personalty.

    Ref QB-ZPXTH5Source: National principles — real property; bundle of rightsReport a problem with this question

21. 21. A homeowner unbolts and removes a chandelier, intending to keep it when the house sells. What has happened to the chandelier's legal classification?

    • A.It remains real property because it was once a fixture
    • B.It became personal property by severance✓ Answer
    • C.It automatically transfers to the buyer by accession
    • D.It becomes an emblement

    Removing a fixture from the land is called severance, which converts real property back into personal property; conversely, attaching personal property to land (annexation) can turn it into a fixture. Real property is transferred by deed, personal property by bill of sale.

    Ref QB-H75Z46Source: National principles — severance; real vs. personal property conversionReport a problem with this question

22. 22. A recorded easement that allows a parcel to use a shared driveway passes automatically to the next buyer of that parcel. This right is an example of which of the following?

    • A.An appurtenance✓ Answer
    • B.A trade fixture
    • C.A revocable license
    • D.An emblement

    A right that benefits and is attached to the land — such as an appurtenant easement — is an appurtenance that 'runs with the land' and transfers automatically with each conveyance of the parcel. A license, by contrast, is personal and revocable and does not run with the land.

    Ref QB-YPKGC4Source: National principles — appurtenances; rights running with the landReport a problem with this question

23. 23. Parcel A has a recorded right to cross Parcel B to reach the road. Parcel A is the dominant tenement and Parcel B is the servient tenement. What type of easement is this?

    • A.Easement in gross
    • B.License
    • C.Easement by estoppel only
    • D.Easement appurtenant✓ Answer

    An easement appurtenant involves two adjoining parcels — a dominant tenement that benefits and a servient tenement that is burdened — and it runs with the land, passing to future owners. The presence of a dominant and servient estate is the hallmark that distinguishes it from an easement in gross.

    Ref QB-G7SNX4Source: National principles — easement appurtenant; dominant/servient tenementReport a problem with this question

24. 24. A utility company holds a recorded right to run power lines across many private parcels, but it owns no neighboring 'dominant' parcel that benefits. This right is best classified as:

    • A.Encroachment
    • B.Easement appurtenant
    • C.Easement in gross✓ Answer
    • D.Fee simple determinable

    An easement in gross benefits a person or entity (commonly a utility) rather than a parcel of land, so there is no dominant tenement. Distinguishing it from an appurtenant easement — which requires an adjoining benefited parcel — is one of the most commonly tested points.

    Ref QB-3QNGV7Source: National principles — easement in grossReport a problem with this question

25. 25. A neighbor has openly, continuously, and without permission used a path across an owner's land in a manner adverse to the owner for the required statutory period. This may create an easement by:

    • A.Necessity
    • B.Estoppel by deed
    • C.Express grant
    • D.Prescription✓ Answer

    An easement by prescription arises from use that is open, notorious, continuous, and hostile (without permission) for the statutory period; the use must be adverse to the owner, similar to adverse possession but yielding a use right rather than title. An easement by necessity, by contrast, arises when a landlocked parcel needs access.

    Ref QB-K7UNF8Source: National principles — easement by prescription (open, notorious, continuous, hostile)Report a problem with this question

26. 26. An owner sells the back half of a parcel that has no access to any public road except across the front half he keeps. What type of easement will typically be recognized for the landlocked back parcel?

    • A.Easement in gross
    • B.License
    • C.Easement by necessity✓ Answer
    • D.Easement by prescription

    When a parcel is landlocked as a result of a conveyance that splits it from road access, courts recognize an easement by necessity so the owner can reach a public way. It is grounded in public policy against rendering land unusable, not in adverse or long-standing use.

    Ref QB-2QA6Q6Source: National principles — easement by necessity (landlocked)Report a problem with this question

27. 27. A landowner gives a friend verbal permission to fish in her pond, and she can withdraw that permission at any time. This arrangement is a:

    • A.Profit that runs with the land
    • B.Easement appurtenant
    • C.License✓ Answer
    • D.Easement by prescription

    A license is a revocable personal privilege to use another's land; it is not an interest in land, does not run with the land, and can be withdrawn at will. This distinguishes it from an easement, which is an irrevocable interest.

    Ref QB-J7GBA7Source: National principles — license vs. easementReport a problem with this question

28. 28. A survey reveals that a neighbor's new garage wall extends two feet over the boundary onto the adjoining owner's lot. This unauthorized physical intrusion is called a(n):

    • A.Encroachment✓ Answer
    • B.Easement
    • C.License
    • D.Lien

    An encroachment is an unauthorized physical intrusion of an improvement (such as a wall, fence, or roof overhang) onto adjoining property; it is an encumbrance typically discovered by a survey or spot survey. It can cloud title and interfere with the neighbor's use.

    Ref QB-VPHGUYSource: National principles — encroachmentReport a problem with this question

29. 29. Which of the following is NOT an encumbrance on real property?

    • A.An easement
    • B.A fee simple estate✓ Answer
    • C.A deed restriction
    • D.A mortgage lien

    An encumbrance is a claim, charge, or restriction that burdens another's title — liens, easements, restrictions, and encroachments all qualify. A fee simple ownership interest is the possessory estate itself, not a burden on it, so it is not an encumbrance.

    Ref QB-D7QNEZSource: National principles — encumbrances vs. possessory interestsReport a problem with this question

30. 30. A deed restriction is written so that if the buyer ever violates it, the grantor can reclaim title to the property. This type of restriction is a:

    • A.Condition that can cause loss of title✓ Answer
    • B.Covenant enforceable only by injunction or damages
    • C.License personal to the grantor
    • D.Lien for money owed

    A deed restriction phrased as a condition can result in loss or reversion of title if violated, whereas a covenant is enforced only through an injunction or money damages and never causes title to be lost. Distinguishing condition from covenant is a frequently tested point.

    Ref QB-23QQ2USource: National principles — deed restrictions; condition vs. covenantReport a problem with this question

31. 31. An owner whose land borders a flowing river holds certain rights to use that watercourse. These are called:

    • A.Riparian rights✓ Answer
    • B.Subsurface rights
    • C.Littoral rights
    • D.Prior appropriation rights

    Riparian rights belong to owners of land bordering a moving watercourse such as a river or stream. Littoral rights, by contrast, attach to land bordering a static body of water like a lake or ocean.

    Ref QB-HJHJFTSource: National principles — riparian rightsReport a problem with this question

32. 32. An owner's land borders the shore of a large lake. The rights to use and enjoy that adjacent water, with ownership generally extending to the mean high-water mark, are called:

    • A.Riparian rights
    • B.Prior appropriation rights
    • C.Mineral rights
    • D.Littoral rights✓ Answer

    Littoral rights belong to owners whose land abuts a static body of water such as a lake or ocean; the owner's rights typically run to the mean high-water mark. Riparian rights, by contrast, involve moving watercourses like rivers and streams.

    Ref QB-33338VSource: National principles — littoral rights; mean high-water markReport a problem with this question

33. 33. Under the doctrine of prior appropriation used in some states, the right to use water is generally allocated on what basis?

    • A.Whoever owns the most acreage
    • B.Ownership of the land beneath the water only
    • C.First in time, first in right✓ Answer
    • D.Equal shares to all landowners along the water

    Prior appropriation allocates water by a state-granted right to use it, following the principle 'first in time, first in right,' so the earliest beneficial user has the senior claim. It does not depend on owning land adjacent to the water, unlike riparian and littoral systems.

    Ref QB-JJVVMUSource: National principles — prior appropriationReport a problem with this question

34. 34. Over many years, a river gradually deposits soil along an owner's bank, slowly increasing the size of the parcel. This gradual gain of land is called:

    • A.Reliction
    • B.Erosion
    • C.Accretion✓ Answer
    • D.Avulsion

    Accretion is the gradual, imperceptible addition of land by the deposit of soil (alluvion) through the action of water, and the new land belongs to the abutting owner. Avulsion, by contrast, is a sudden loss or change of land, and reliction is the gradual receding of water exposing new land.

    Ref QB-Y2Z2QRSource: National principles — accretion, avulsion, relictionReport a problem with this question

35. 35. A city adopts zoning ordinances and building codes to protect public health, safety, and welfare, without paying property owners for the resulting limits on use. This is an exercise of which government power?

    • A.Police power✓ Answer
    • B.Eminent domain
    • C.Escheat
    • D.Taxation

    Police power is the government's authority to regulate land use for the public health, safety, and welfare — through zoning, building codes, and similar measures — and no compensation is owed for these regulations. Eminent domain, by contrast, requires just compensation because the government actually takes property.

    Ref QB-FJTV4RSource: National principles — PETE; police power (no compensation)Report a problem with this question

36. 36. A government agency takes privately owned land to build a public highway, paying the owner fair market value. The power to take the property is eminent domain; the legal process used to take it is called:

    • A.Escheat
    • B.Condemnation✓ Answer
    • C.Adverse possession
    • D.Foreclosure

    Eminent domain is the government's power to take private property for public use, and condemnation is the legal proceeding through which that taking is carried out, with just compensation paid to the owner. The Fifth Amendment requires that compensation.

    Ref QB-Z2CDVSSource: National principles — eminent domain; condemnationReport a problem with this question

37. 37. A government project so severely reduces the usefulness and value of a nearby parcel that the owner sues, arguing a taking has effectively occurred even though no formal condemnation was filed. This claim is known as:

    • A.Spot zoning
    • B.Escheat
    • C.Police power exemption
    • D.Inverse condemnation✓ Answer

    Inverse condemnation is a suit brought by a property owner when a government action takes or destroys the value of property without a formal condemnation proceeding, seeking the just compensation the Constitution requires. It reverses the usual roles — the owner, not the government, initiates the action.

    Ref QB-GJ68ASSource: National principles — inverse condemnationReport a problem with this question

38. 38. Ad valorem property taxes are assessed on what basis, and how do property-tax liens generally rank in priority?

    • A.On the owner's income; they are always junior to mortgages
    • B.On assessed value; they take priority over most other liens✓ Answer
    • C.Based on square footage only; they rank by recording date like all liens
    • D.On a flat per-parcel fee; they have no lien priority

    'Ad valorem' means 'according to value,' so property taxes are assessed based on the property's assessed value; the resulting tax lien is a specific lien that generally takes priority over other liens regardless of recording date. This superior priority is a key exception to the usual first-to-record rule.

    Ref QB-W2ADCPSource: National principles — taxation; ad valorem; tax lien priorityReport a problem with this question

39. 39. Under the government power of escheat, when does real property pass to the state?

    • A.When an owner dies leaving no valid will AND no heirs✓ Answer
    • B.When the government needs land for a public project
    • C.Whenever property taxes are one year overdue
    • D.Whenever an owner abandons a mortgage

    Escheat transfers property to the state only when an owner dies intestate (with no valid will) and leaves no heirs to inherit; both conditions must be met. It prevents property from being left ownerless. Taking land for public projects is eminent domain, not escheat.

    Ref QB-DJ48SNSource: National principles — escheat (no will and no heirs)Report a problem with this question

40. 40. An owner wants to build a garage two feet closer to the lot line than the zoning setback allows, citing a genuine hardship from an unusually shaped lot. She should apply for a:

    • A.Building moratorium
    • B.Variance✓ Answer
    • C.Nonconforming use permit
    • D.Spot rezoning

    A variance is an administratively granted exception that permits a use or dimension that departs from the zoning ordinance because strict enforcement would cause the owner an undue individual hardship. A nonconforming use, by contrast, is a pre-existing use that predates the zoning and is grandfathered in.

    Ref QB-V8WT5NSource: National principles — zoning; variance vs. nonconforming useReport a problem with this question

41. 41. A corner store lawfully operated for years before the area was rezoned strictly residential, and it is allowed to keep operating. This continuing use is best described as a:

    • A.Nonconforming use✓ Answer
    • B.Special use permit
    • C.Variance
    • D.Spot zoning

    A nonconforming use is a use that lawfully existed before a new zoning ordinance prohibited it and is permitted to continue ('grandfathered'). Unlike a variance, it is not a hardship exception granted after the fact but a pre-existing lawful use.

    Ref QB-DR3ZQNSource: National principles — nonconforming use (grandfathering)Report a problem with this question

42. 42. What is the primary purpose of local building codes?

    • A.To decide who may hold title to a property
    • B.To set the maximum sale price of new homes
    • C.To set minimum construction standards✓ Answer
    • D.To collect ad valorem taxes

    Building codes are an exercise of police power that set minimum standards for construction methods, materials, electrical, and plumbing work to protect public health and safety. Compliance is typically verified through permits and inspections; they do not set prices or determine title.

    Ref QB-W896BPSource: National principles — building codes; police powerReport a problem with this question

43. 43. A city council rezones a single small lot for commercial use in the middle of an established residential neighborhood, solely to benefit that one owner. This practice is generally considered:

    • A.A valid variance
    • B.A proper buffer zone
    • C.A lawful nonconforming use
    • D.Illegal spot zoning✓ Answer

    Rezoning a single parcel in a way inconsistent with the surrounding area and comprehensive plan, for the benefit of one owner, is illegal spot zoning. It violates the requirement that zoning serve the general public welfare and be applied uniformly.

    Ref QB-EREBWPSource: National principles — spot zoning (illegal)Report a problem with this question

44. 44. When a developer divides raw land into building lots, streets, and common areas, the local government's authority over this process — including approval of the recorded plat map — is exercised through:

    • A.Title insurance underwriting
    • B.Escheat proceedings
    • C.Subdivision regulation✓ Answer
    • D.Prior appropriation

    Subdivision regulations are local land-use controls governing how raw land is divided into lots and common areas, including street layout, utilities, and approval and recording of the plat map. They are an exercise of the government's police power over orderly development.

    Ref QB-X8MGGQSource: National principles — subdivision regulationReport a problem with this question

45. 45. A homestead exemption generally protects a portion of an owner's equity in a primary residence from which of the following?

    • A.Certain claims of unsecured (general) creditors✓ Answer
    • B.The mortgage used to buy the home
    • C.A recorded mechanic's lien for work on the home
    • D.Property tax liens

    Homestead protection shields some of an owner's equity in the primary residence from the claims of unsecured or general creditors. It does not protect against liens the owner voluntarily or specifically incurred on the home, such as the mortgage, property-tax liens, or mechanic's liens.

    Ref QB-FRSN3RSource: National principles — homestead exemption (unsecured creditors)Report a problem with this question

46. 46. A legal description uses compass directions, distances, and physical monuments, and it always closes by returning to the point of beginning. Which method of legal description is this?

    • A.Rectangular (government) survey
    • B.Lot and block
    • C.Assessor's parcel number
    • D.Metes and bounds✓ Answer

    The metes-and-bounds method describes a parcel by starting at a defined point of beginning and tracing directions (bearings) and distances between monuments, always closing back at the point of beginning. It is the oldest method and is common where land was not laid out on the rectangular survey grid.

    Ref QB-Y8YTNRSource: National principles — metes and bounds; point of beginningReport a problem with this question

47. 47. The rectangular (government) survey system locates land by reference to which two sets of intersecting lines?

    • A.Principal meridians and base lines✓ Answer
    • B.Metes and bounds
    • C.Section lines and plat lines
    • D.Lot lines and block lines

    The rectangular or government survey system (PLSS) references north-south principal meridians and east-west base lines to form a grid of townships and sections. This grid method contrasts with metes-and-bounds and with lot-and-block subdivision descriptions.

    Ref QB-GR5Z8SSource: National principles — rectangular (government) survey; meridians and base linesReport a problem with this question

48. 48. In the rectangular survey system, one section contains how many acres?

    • A.640 acres✓ Answer
    • B.160 acres
    • C.36 acres
    • D.5,280 acres

    One section equals one square mile, which contains 640 acres. This is a fixed rote constant candidates must memorize, along with the fact that 36 sections make up a township.

    Ref QB-R8GGFGSource: National principles — section = 1 sq mile = 640 acresReport a problem with this question

49. 49. A township in the rectangular survey system is a square measuring 6 miles by 6 miles. How many sections does it contain?

    • A.36 sections✓ Answer
    • B.24 sections
    • C.640 sections
    • D.6 sections

    A township is 6 miles by 6 miles, so it contains 36 sections (6 × 6), each one mile square. This is a fixed constant of the government survey system that does not change over time.

    Ref QB-9RNN2HSource: National principles — township = 36 sections (6 mi × 6 mi)Report a problem with this question

50. 50. How many square feet are in one acre?

    • A.43,560 square feet✓ Answer
    • B.36,000 square feet
    • C.5,280 square feet
    • D.640 square feet

    One acre contains exactly 43,560 square feet — a fixed rote figure candidates must memorize because it is not provided at the test center. (Note 5,280 feet is the number of feet in a mile, a common distractor.)

    Ref QB-YAWYNRSource: National principles — 1 acre = 43,560 sq ftReport a problem with this question

51. 51. A property in a subdivision is described simply as 'Lot 12, Block 4' of a named recorded subdivision map. This is an example of which legal description method?

    • A.Metes and bounds
    • B.Rectangular government survey
    • C.Prior appropriation
    • D.Lot and block✓ Answer

    The lot-and-block method (also called the recorded plat or subdivision method) identifies a parcel by its lot and block numbers on a plat map recorded in the public records. It is the most common method for describing property in cities and platted subdivisions.

    Ref QB-FTQT3RSource: National principles — lot-and-block (recorded plat)Report a problem with this question

52. 52. A seller conveys land by general warranty deed. Years later, an error in the deed's legal description comes to light, and the buyer asks the seller to sign a corrective document. Which covenant obligates the seller to sign it?

    • A.Covenant of the right to convey
    • B.Covenant of further assurance✓ Answer
    • C.Covenant of quiet enjoyment
    • D.Covenant against encumbrances

    The covenant of further assurance is the grantor's promise to sign any additional documents reasonably needed to perfect the grantee's title, such as a correction of a faulty legal description. The covenant of quiet enjoyment is a different promise: that no one with superior title will disturb the grantee's possession. It does not require the grantor to sign curative paperwork.

    Ref QB-XAJNGQSource: General warranty deed covenants (seisin, right to convey, against encumbrances, quiet enjoyment, warranty forever, further assurance); Pearson VUE national outline II.BReport a problem with this question

53. 53. A corporation sells a building using a special (limited) warranty deed. After closing, the buyer discovers an unreleased lien created by an owner two transfers before the corporation acquired the property. Is the corporation liable under the deed's warranties?

    • A.Yes; its warranties extend back through the full chain of title
    • B.Yes; every deed warrants against all liens recorded before the sale
    • C.No; it warranted only against defects arising during its ownership✓ Answer
    • D.No; a special warranty deed carries no warranties of any kind

    A special warranty deed covers only defects or encumbrances that arose while the grantor held title. A lien created by an earlier owner falls outside that period, so the corporation is not liable. Coverage back through the entire chain of title is what a general warranty deed gives, not a special warranty deed. A special warranty deed does still carry warranties, but only for the grantor's own period of ownership.

    Ref QB-ETCGWPSource: Special (limited) warranty deed vs general warranty deed; Pearson VUE national outline II.B; PSI national outline, Transfer of TitleReport a problem with this question

54. 54. The personal representative named in a decedent's will, and confirmed by the probate court, sells the estate's house to a buyer. Which deed does this fiduciary typically deliver?

    • A.A sheriff's deed
    • B.An executor's deed✓ Answer
    • C.A trustee's deed
    • D.An administrator's deed

    A representative named in the will is an executor, and the executor conveys estate real property by an executor's deed. An administrator's deed is used when the court appoints a representative because there is no will or no named executor is able to serve. A sheriff's deed follows a court-ordered execution sale. A trustee's deed follows a deed-of-trust foreclosure sale or a sale out of a trust.

    Ref QB-2BMNZTSource: Deeds executed by fiduciaries / court-ordered deeds (executor's deed); CA DRE content outline, Transfer through Court Supervision; Pearson VUE II.BReport a problem with this question

55. 55. A grandmother signs and delivers a deed conveying land to her 9-year-old grandson, and the boy's parent accepts it on his behalf. The grandmother later claims the deed fails because of the grantee's age. Which statement is correct?

    • A.The deed is voidable until the grandson signs it at adulthood
    • B.The deed is invalid until a court approves a transfer to a minor
    • C.The deed is void; a grantee must be of legal age to take title
    • D.The deed is valid; a grantee need not have legal capacity✓ Answer

    Only the grantor must be legally competent. The grantee only has to exist and be identifiable, so a minor can receive title. Delivery to the grandson and acceptance through his parent passed title. The rule that a grantee must be of legal age confuses the grantee with the grantor. The grantee never signs the deed, and a gift deed to a minor needs no court approval to be valid.

    Ref QB-HTEGETSource: Essential elements of a valid deed (competent grantor; identifiable grantee; delivery and acceptance); Pearson VUE national outline II.BReport a problem with this question

56. 56. A grantor signs and delivers a deed, and the grantee accepts it, but the grantor's signature is never acknowledged before a notary. What is the main consequence of the missing acknowledgment?

    • A.The deed is effective only against later good-faith purchasers
    • B.Title passes only after the grantee signs the deed as well
    • C.The deed is void because notarization is an essential element
    • D.The deed passes title but generally cannot be recorded✓ Answer

    Acknowledgment is not one of the essential elements of a valid deed. Between the parties, title passes on delivery and acceptance. Recording offices, however, generally accept only acknowledged instruments, so the grantee cannot record and loses the protection that recording gives against third parties. Treating notarization as an essential element is the classic mistake of confusing validity with recordability. The grantee does not sign the deed.

    Ref QB-ZA9BUSSource: Acknowledgment required for recording, not for validity between the parties; Uniform recording-act principles; Pearson VUE national outline II.BReport a problem with this question

57. 57. An owner signs a deed naming his daughter as grantee, locks it in his desk, and tells her she will receive it when he dies. He later dies without a will, and the daughter then finds the deed. Who most likely holds title to the land?

    • A.The daughter, since a signed deed passes title when it is signed
    • B.His heirs, since the deed was never acknowledged or recorded
    • C.The daughter, since she took possession of the deed after his death
    • D.His heirs, since the deed was never delivered during his life✓ Answer

    Title passes only when the grantor delivers the deed during his lifetime with intent to pass title now. Keeping control of the deed and intending it to take effect at death is not delivery; that result requires a will or a transfer-on-death deed. The land therefore passes to his heirs by intestate succession. The heirs take because there was no delivery, not because the deed was unacknowledged or unrecorded, since neither is required for validity.

    Ref QB-GT369SSource: Delivery and acceptance during grantor's lifetime with present intent; Pearson VUE national outline II.B; PSI national outline IX.C (when transfer of ownership becomes effective)Report a problem with this question

58. 58. Before buying a house, a buyer searches the public records and confirms the seller is the record owner, but never visits the property. A tenant lives there under an unrecorded written lease with four years remaining. Is the buyer bound by the tenant's lease?

    • A.No, because an unrecorded lease gives no notice to anyone
    • B.No, because the buyer lacked actual knowledge of the lease
    • C.Yes, because occupancy puts a buyer on inquiry notice✓ Answer
    • D.Yes, because recording gives constructive notice of all leases

    Possession by someone other than the seller puts a buyer on inquiry notice. The buyer is charged with whatever a reasonable inspection and inquiry of the occupant would have revealed, so the buyer takes subject to the tenant's lease. Lacking actual knowledge does not help, because inquiry notice substitutes for actual knowledge. Constructive notice from recording does not apply, because this lease was never recorded.

    Ref QB-UAGNYKSource: Actual vs constructive vs inquiry notice (possession as inquiry notice); Uniform recording-act principles; Pearson VUE national outline II.BReport a problem with this question

59. 59. On June 1, O deeds a parcel to A, who does not record right away. On June 10, O deeds the same parcel to B, who pays value and knows nothing of A's deed. A records on June 12 and B records on June 15. In a race-notice jurisdiction, who has priority?

    • A.B, because B paid value without notice of A's deed
    • B.A and B, who hold title together as tenants in common
    • C.B, because a later deed always revokes the earlier one
    • D.A, because B failed to record before A recorded✓ Answer

    Under a race-notice statute, a later purchaser beats an earlier unrecorded grantee only if the later purchaser both buys for value without notice AND records first. B qualified as a good-faith purchaser but recorded after A, so A keeps priority. The result that B wins because B paid value without notice is the outcome under a pure notice statute, which does not require the later buyer to win the race to record.

    Ref QB-BTAGDKSource: Recording acts: race, notice, and race-notice statutes (e.g., California Civil Code §1214 is race-notice); Pearson VUE national outline II.BReport a problem with this question

60. 60. A title search turns up a decades-old recorded claim against a parcel by a person who cannot be located and therefore cannot sign a release. What legal remedy is typically used to remove this cloud on title?

    • A.A partition action
    • B.A quiet title action✓ Answer
    • C.A notice of lis pendens
    • D.A writ of execution

    A quiet title action asks a court to determine ownership and extinguish adverse claims. Once the judgment is recorded, the cloud is removed even when the claimant cannot be found, since service can be made by publication. A partition action ends co-ownership among co-owners and does nothing to clear an outside claim. A lis pendens only gives notice that a lawsuit is pending; it does not resolve the claim.

    Ref QB-3DW57VSource: Cloud on title cured by quiet title action; CA DRE Salesperson Examination Content Outline, Transfer of Property (title); Pearson VUE national outline II.BReport a problem with this question

61. 61. A buyer's attorney reviews a condensed history of every recorded conveyance and encumbrance affecting a parcel and then issues an opinion on whether title is good. The condensed history the attorney reviews is called:

    • A.A certificate of title
    • B.A preliminary title report
    • C.An abstract of title✓ Answer
    • D.A title insurance policy

    An abstract of title is a summary of the recorded documents in the chain of title, and an attorney's opinion of title is based on reviewing it. A preliminary title report is a title company's offer to insure, listing the exceptions it will make. It is not a history the attorney reviews to form an opinion. A title insurance policy is a contract of indemnity, not a summary of records.

    Ref QB-KV3BSVSource: Chain of title, abstract of title, attorney's opinion of title; Pearson VUE national outline II.B (title and recording)Report a problem with this question

62. 62. At closing, a buyer purchases an owner's title insurance policy and, as the lender requires, a lender's policy. Ten years later the buyer pays off the loan in full but still owns and lives in the house. Which coverage remains in force?

    • A.Both, until the annual premium stops being paid
    • B.Neither, because both policies expire after ten years
    • C.Only the owner's policy remains in force✓ Answer
    • D.Only the lender's policy remains in force

    An owner's policy protects the insured owner, and the owner's heirs or devisees, for as long as they hold an interest in the property. A lender's policy protects only the lender up to the unpaid loan balance and ends when the loan is paid off. Both are bought with a single one-time premium at closing. There are no annual premiums, and neither policy has a fixed ten-year term.

    Ref QB-2DJTZTSource: ALTA Owner's Policy and ALTA Loan Policy (duration of coverage, one-time premium); Pearson VUE national outline II.BReport a problem with this question

63. 63. A buyer obtained a standard-coverage owner's title policy and ordered no survey. After closing, it turns out the neighbor's garage extends three feet onto the buyer's lot. Why will a claim under the policy most likely be denied?

    • A.An owner's policy ends once the deed is recorded
    • B.Title policies cover only defects that arise after closing
    • C.Encroachments are covered only by a lender's policy
    • D.Standard coverage excludes matters a survey would reveal✓ Answer

    Standard coverage insures recorded matters plus certain off-record risks such as forgery and incapacity. It excludes items that only a survey or physical inspection would reveal, including encroachments, boundary disputes, and rights of parties in possession. Extended coverage, issued after a survey, adds those risks. Title insurance actually covers defects existing before the policy date, not future ones, so the claim that policies cover only post-closing defects is backwards.

    Ref QB-JVQYKUSource: Standard vs extended title insurance coverage (ALTA standard/extended; CLTA standard in CA); Pearson VUE national outline II.BReport a problem with this question

64. 64. During escrow, the buyer asks the escrow officer whether to take title as joint tenants or tenants in common. Separately, the seller asks the officer to release the buyer's deposit early without the buyer's consent. How should the escrow officer respond?

    • A.Recommend joint tenancy, since escrow agents act on behalf of the buyer
    • B.Advise the buyer on vesting, but refuse the seller's early release request
    • C.Decline both; act only on joint instructions and give no legal advice✓ Answer
    • D.Release the deposit, since the seller is the party who ultimately receives it

    An escrow holder is a neutral stakeholder with limited agency. It carries out only the parties' mutual written instructions, so it cannot release funds on one party's demand, and it may not give legal or tax advice such as how to hold title. Advising the buyer on vesting crosses into legal advice even if the officer correctly refuses the early release. The escrow holder does not represent either party.

    Ref QB-ZC7GUSSource: Escrow holder as neutral limited agent bound by mutual instructions; PSI national outline IX.C (settlement procedures and parties); CA DRE content outline, Transfer of Property (escrow)Report a problem with this question

65. 65. A buyer deposited earnest money when the purchase contract was signed, and those funds are applied toward the price at closing. On the closing statement, how does the deposit appear?

    • A.As a debit to the buyer
    • B.As a credit to the seller
    • C.As a debit to the seller
    • D.As a credit to the buyer✓ Answer

    On a closing statement, a credit is something a party has already paid or is owed, and it reduces what that party must bring to closing. The buyer already paid the earnest money, so it is credited to the buyer. It does not appear as a seller entry, because the seller's credit is the full purchase price, which already includes the deposit. Debiting the buyer would charge the buyer twice for the same funds.

    Ref QB-HVCNETSource: Closing statement debits and credits (earnest money credited to buyer); Pearson VUE national outline VII.D (settlement and closing); PSI IX.CReport a problem with this question

66. 66. An owner dies without a valid will, survived by a spouse and two adult children. The owner held a house in severalty. How does title to the house pass?

    • A.Under the state's statutes of descent and distribution✓ Answer
    • B.Automatically to the state through escheat proceedings
    • C.Through a devise confirmed by the probate court
    • D.Entirely to the spouse by right of survivorship

    When someone dies intestate, real property passes to heirs under the state's statutes of descent and distribution, usually through probate with a court-appointed administrator. Escheat applies only when there are no heirs at all, and here there are a spouse and children. Right of survivorship arises only from a form of co-ownership such as joint tenancy, not from sole ownership. A devise requires a will.

    Ref QB-YCU5PRSource: Intestate succession / statutes of descent and distribution; probate administration; CA DRE content outline, Transfer of Property (transfer at death); PSI IX.DReport a problem with this question

67. 67. A landlord is renting a two-bedroom apartment in a building constructed in 1962 on a one-year lease. Under the federal lead-based paint disclosure rule, what must the landlord do before the tenant is obligated under the lease?

    • A.Have a certified inspector test the unit for lead before signing
    • B.Allow the tenant a 10-day period to arrange a lead risk assessment
    • C.Provide the EPA lead pamphlet and disclose any known lead hazards✓ Answer
    • D.Abate all lead-based paint in the unit before the tenant moves in

    For target housing built before 1978, a lessor must give the EPA pamphlet 'Protect Your Family From Lead in Your Home', disclose known lead-based paint and hazards (with any available reports), and include the Lead Warning Statement in the lease before the tenant is obligated. The 10-day opportunity to conduct a risk assessment is given only to purchasers, not tenants. The rule requires disclosure only; it does not require testing or abatement.

    Ref QB-GVZA9SSource: 40 CFR 745.107 and 745.110 (lessor disclosure; purchaser-only 10-day opportunity); 24 CFR 35.88 and 35.90Report a problem with this question

68. 68. Which of the following transactions is exempt from the federal lead-based paint disclosure requirements?

    • A.Lease of a 1970 senior-housing unit where a 4-year-old will live
    • B.Lease of a 1970 studio unit that has no separate bedroom at all✓ Answer
    • C.Two-year lease of a two-bedroom house that was built in 1960
    • D.Sale of a 1975 house that the seller never personally lived in

    The rule excludes zero-bedroom dwellings such as studios, efficiencies and dormitories, because young children are unlikely to live there. Housing for the elderly loses its exemption when a child under 6 resides or is expected to reside in the unit, so the senior-housing lease is still covered. Whether the seller lived in the home does not matter, and leases longer than 100 days are covered.

    Ref QB-XCGTGQSource: 40 CFR 745.101 and 745.103 (exemptions: 0-bedroom dwellings; elderly/disabled housing unless a child under 6 resides; leases of 100 days or less); 24 CFR 35.82Report a problem with this question

69. 69. A licensee takes a listing on a house built in 1972. The seller says, 'I don't want to hand buyers any lead-paint paperwork.' What is the licensee's obligation under the federal lead disclosure rule?

    • A.Order a lead-paint inspection and attach the results to the listing
    • B.Inform the seller of the disclosure duties and ensure they are met✓ Answer
    • C.Proceed, provided the purchase contract says the home is sold as is
    • D.Proceed, since the rule puts all liability on the seller, not agents

    Agents must tell the seller or lessor of their obligations under the rule and ensure compliance. An agent who fails to do so shares liability, so the rule does not put all liability on the seller. An 'as is' clause cannot waive a federal disclosure duty. The rule requires disclosure, not testing, so ordering an inspection does not satisfy it.

    Ref QB-FVNY3RSource: 40 CFR 745.115 (agent responsibilities); 24 CFR 35.94Report a problem with this question

70. 70. A buyer's radon test of the basement of a home under contract averages 6 pCi/L. Which response is consistent with EPA guidance?

    • A.Replace the drywall, since radon is absorbed into interior finishes
    • B.No fix is needed, since EPA's action level for basements is 10 pCi/L
    • C.No fix is needed unless a retest also finds radon on upper floors
    • D.Fix the home, typically by venting soil gas from beneath the slab✓ Answer

    Radon is a radioactive gas from the natural decay of uranium in soil and rock. It enters through foundation cracks and openings and is usually highest at the lowest level. The EPA recommends fixing a home at or above 4 pCi/L, typically with sub-slab depressurization, which uses a vent pipe and fan to draw soil gas from under the slab and exhaust it outdoors. There is no separate 10 pCi/L basement standard, and radon in the lowest lived-in level matters on its own.

    Ref QB-QGXBYSSource: EPA, A Citizen's Guide to Radon and Home Buyer's and Seller's Guide to Radon (action level 4 pCi/L; sub-slab depressurization)Report a problem with this question

71. 71. A 1968 home has intact vinyl floor tiles that contain asbestos and are in good condition. Which approach generally reflects EPA guidance?

    • A.Have them removed at once, since federal law bans asbestos in homes
    • B.Leave them undisturbed or encapsulate them, and monitor condition✓ Answer
    • C.Remove them before listing, since a sale needs asbestos-free status
    • D.Sand the tiles smooth and repaint them to lock in any loose fibers

    Asbestos becomes a health hazard when the material is friable or disturbed and fibers become airborne. The EPA advises that intact material in good condition is often best left alone or sealed (encapsulated) and checked periodically. Removal can release fibers and should be done only by trained abatement professionals. No federal law requires existing asbestos to be removed from homes or makes asbestos-free status a condition of sale. Sanding disturbs the material and is exactly what to avoid.

    Ref QB-7ZR6DSSource: EPA, Protect Your Family from Exposures to Asbestos (leave intact material alone; repair by encapsulation or enclosure; removal by trained professionals)Report a problem with this question

72. 72. An investor buys a vacant industrial lot without doing any environmental investigation. The EPA later finds solvents that a prior owner dumped there decades earlier. Under CERCLA, what is the investor's exposure?

    • A.The investor's liability is capped at the price paid for the lot
    • B.The investor can be liable for all cleanup costs as current owner✓ Answer
    • C.The investor is liable only for contamination after the purchase
    • D.Only the prior owner who dumped the solvents can be held responsible

    CERCLA makes the current owner of a facility a potentially responsible party. Liability is strict (no fault needed), joint and several (any one PRP can be made to pay the whole cost) and retroactive, so the investor can be liable for contamination it did not cause. The prior owner is also liable, but not exclusively. Liability is not capped at the property's value. Because the investor made no 'all appropriate inquiries' before buying, it cannot claim the innocent landowner or bona fide prospective purchaser defenses.

    Ref QB-RGAP5USource: CERCLA Section 107(a), 42 U.S.C. 9607(a) (current owner and operator as PRP; strict, joint and several liability)Report a problem with this question

73. 73. A commercial buyer wants to qualify for CERCLA's innocent landowner or bona fide prospective purchaser protection. What must the buyer do before acquiring the property?

    • A.Obtain a written seller indemnity covering any contamination
    • B.Complete all appropriate inquiries, usually via a Phase I ESA✓ Answer
    • C.Purchase an owner's title insurance policy covering the parcel
    • D.Prepare a NEPA environmental impact statement for the purchase

    SARA added the innocent landowner defense, and the 2002 Brownfields Act added bona fide prospective purchaser status. Both require 'all appropriate inquiries' into past ownership and use before acquisition. The EPA's AAI rule recognizes the ASTM E1527-21 Phase I environmental site assessment, which reviews records and site history without sampling, as meeting that standard. An EIS is a NEPA document for major federal projects, not a buyer's defense. A seller indemnity is a private contract that does not bind the EPA, and title insurance does not cover environmental liability.

    Ref QB-8Z4HJTSource: CERCLA Sections 101(35)(B) and 101(40), 42 U.S.C. 9601; All Appropriate Inquiries rule, 40 CFR Part 312 (recognizing ASTM E1527-21)Report a problem with this question

74. 74. While previewing a 1950s listing, a licensee notices a capped fill pipe and a vent pipe in the yard, suggesting a buried heating-oil tank the seller has not mentioned. What should the licensee do?

    • A.Probe the yard and test the soil personally before disclosing anything
    • B.Disclose the tank only if a buyer specifically asks about buried tanks
    • C.Disclose it and advise evaluation by a qualified tank professional✓ Answer
    • D.Say nothing, since home heating-oil tanks are exempt from federal rules

    Heating-oil tanks used on the premises are excluded from the federal UST regulations. That exclusion does not remove the licensee's duty to disclose known or suspected material facts. A leaking buried tank can contaminate soil and groundwater, and state or local rules may apply. The licensee's role is to disclose the red flag and refer the parties to qualified professionals, not to test the site personally or wait for the buyer to ask.

    Ref QB-SGNZAVSource: 40 CFR 280.12 (UST definition excludes tanks storing heating oil for consumptive use on the premises); state material-fact disclosure duties of licenseesReport a problem with this question

75. 75. A buyer is financing a home with an FHA-insured loan. The house is in FEMA Zone AE in a community that participates in the NFIP. The buyer says a '100-year flood' happens only once a century. Which statement is correct?

    • A.Flood insurance is required only if the home flooded in the past century
    • B.Flood insurance is optional; a standard homeowner policy covers floods
    • C.Flood insurance is optional; flooding is expected only once per century
    • D.Flood insurance is required; the zone has a 1% chance of flooding yearly✓ Answer

    Zones A and V, including AE, are Special Flood Hazard Areas with a 1% chance of flooding in any given year, which works out to roughly a 26% chance over a 30-year mortgage. The '100-year' label describes probability, not a schedule. Federal law requires flood insurance on federally backed or regulated loans for buildings in an SFHA in a participating community, whatever the home's flood history. Standard homeowner policies exclude flood damage.

    Ref QB-9ZFUQUSource: Flood Disaster Protection Act, 42 U.S.C. 4012a (mandatory purchase in SFHAs); FEMA, Flood Zones definitions (1% annual chance)Report a problem with this question

76. 76. A seller had a roof leak that caused mold on a bedroom ceiling. The leak was repaired and the stain was painted over. The home is being sold 'as is.' What should the listing agent do?

    • A.Skip disclosure unless levels exceed EPA's federal mold exposure limit
    • B.Disclose the leak and mold history even though the sale is as is✓ Answer
    • C.Skip disclosure, since an as-is clause shifts all defect risk to buyers
    • D.Inspect the ceiling personally and certify it mold-free for the buyer

    Known water intrusion and mold are material facts and a latent defect hidden under paint. An 'as is' clause does not excuse concealing or misrepresenting a known defect. The EPA has set no federal numeric standard or exposure limit for mold, so there is no threshold to rely on. A licensee is not an inspector, should never certify a property as hazard-free, and should recommend a qualified inspection instead.

    Ref QB-TGZBGWSource: EPA, A Brief Guide to Mold, Moisture, and Your Home (no federal mold standards; fix moisture source); common-law and state statutory duty to disclose known material latent defectsReport a problem with this question

Practice questions cover the uniform national portion of the real estate exam. Your state adds a state-law portion — study your state's official materials before testing. Licensing info (ARELLO) →