FIN 365

Fall 2013
MIDTERM QUESTIONS

1. Kinneys ability to take out the loan, and build a driveway on the property arises from his:
A. Estate
B. Equity
C. Credit history
D. Tenure

2. When Kinney and his wife took title to the property as "Kinney and Mrs. Kinney, husband and
wife with right of survivorship," they hold title to the property as:
A. joint tenants
B. tenants in common
C. community property
D. life tenants

3. Based on Kinneys lease of the property to Robert, which statement best describes the
present and future interests?
A. Robert has a defeasible fee which expires after five years. Kinney has a remainder.
B. Robert has a leasehold estate and Kinney has a reversion.
C. Roberts lease is void since Kinney cannot transfer an interest greater than his own.
D. Robert has fee simple absolute for five years and Kinney has a contingent remainder.

4. Which statement below correctly describes the present and future interests created by the
1997 grant deed from Overton?
A. The FPC owns the building in fee simple absolute. Jenny has no interest in the property.
B. The FPC has a leasehold estate which ends when Jenny needs the property back.
C. The FPC has a life estate. Jenny has a destructible remainder. Overton has a reversion.
D. The FPC has a defeasible fee. Jenny has a contingent remainder.

5. The encumbrance created by Overtons unpaid contactor would be a:
A. general lien
B. specific lien
C. voluntary lien
D. None of the above

6. Which of the following constitutes Overtons real property?
A. The land and the house
B. Natural, immovable objects only
C. An easement or right-of-way on an adjacent property
D. All of the above

7. Assume the loan officer had approved the home equity loan, and Kinney failed to pay it.
When foreclosure occurs, which of the following is true?
A. The lender could deduct the payments from Kinneys checking account as long as it was at
the same bank
B. The lender could collect the delinquent payments from any other assets Kinney owns, as
long as they are listed in the recording system
C. If the foreclosure were a judicial foreclosure, then Kinney could owe the difference
between the fair market value of the property and the amount of the outstanding liens
D. If the foreclosure were a non-judicial foreclosure, it would be a longer, more complex
process than a judicial foreclosure.

8. Mrs. Kinney cannot dispose of her interest in the property through a:
A. will
B. lease
C. gift
D. sale

9. The recording of the prior deeds gives Kinney what kind of notice about the property
entitlements and appurtenances regarding his lot:
A. effective notice
B. actual notice
C. constructive notice
D. positive notice

10. The tract map is a
A. Patent
B. Deed
C. Will
D. Conquest

11. Before Three Arch Investment could sell the lots in the subdivision created by the tract map,
it must provide evidence to the Real Estate Commissioner that:
A. all lots would be connected to necessary utilities
B. parcels of land will be used for the purpose stated by Three Arch
C. assessment bonds will not be used for off-site improvements
D. appropriate measures to mitigate geological hazards have been taken

12. For purposes of lien priority, the date of the lien in favor of the contractor who built the
fence would be:
A. the date work on the fence was begun
B. the date the fence was completed
C. the date work on the fence stopped for more than one week
D. the date work on the fence was finally completed



13. How long can the owner of Lot 653 wait to bring a court action to remove Overtons fence,
if it encroaches on Kinneys property:
A. two years
B. three years
C. four years
D. five years

14. If Kinney has an easement that entitles him to use Overtons property to build a driveway
onto Sunset Avenue, his easement must be a/an:
A. restricted easement
B. non-possessory encroachment
C. easement in gross
D. easement appurtenant

15. By itself, the 1958 deed of reconveyance to Jones does not mean:
A. Her loan was paid off
B. Kinneys easement is terminated
C. The trustees holding of the power of sale is terminated
D. The lenders financial interest in the property is terminated

16. Kinney believes he has a prescriptive easement over Overtons property for the driveway.
His belief is:
A. True
B. False

17. Which of the following statements describes the effect of the quitclaim deed from
Sternberg to Overton?
A. It created Kinneys easement, but is invalid because it does not use Overtons name.
B. It terminated Kinneys easement
C. It transferred any interest Sternberg had to Overton
D. It had no effect.

18. In this situation, which statement best describes Kinneys rights under his title insurance
policy?
A. It might provide coverage if Overton seeks to terminate the easement based on her fence
having been built in 1997
B. It provides no coverage related to the easement








19. The easement Kinneys lot had under the original tract map and deeds was:
a. An easement by necessity
b. An express easement
c. A prescriptive easement
d. An implied easement

20. When the county issued its notice of abandonment, which statement best describes its
effect?
a. It terminated the access easement
b. It notified the owners that the county would not build the road
c. It allowed Overton to build the fence
d. It devalued Kinneys property

21. Which statement best describes the reason the Subdivision Map Act does not apply to
Kinneys plan to build a second house on his property?
a. Kinney is not a professional real estate developer
b. Kinney is dividing one lot into two
c. Kinney does not have a buyer for the second lot
d. Kinney needs a loan for the construction

22. If FPC decides to assert a claim of adverse possession for the fenced area Overton created,
which of the following is not a weakness of its claim?
a. Overton built the fence, not FPC
b. There is nothing to suggest Overton paid taxes on the fenced area
c. The original owner of Kinneys lot may have given Overton permission for the fence
d. FPCs claim of adverse possession has no weakness

23. The quitclaim deed from Sternberg to Overton transferred:
a. Any interest which Sternberg later acquired after the deed was signed
b. Any interest Stenberg had at the time the deed was signed
c. Any interest Sternberg had under the lease with Overton
d. No interest because a quitclaim deed can only be used to correct a mistake

24. Which of the following statements best describes the relationship between foreclosure and
bankruptcy?
A. Foreclosure is more drastic because nothing can stop foreclosure if the payments are not
current
B. Bankruptcy can prevent an eviction but not a foreclosure
C. Bankruptcy is a federal system which stops foreclosure with an automatic stay until lifted
D. Bankruptcy stops the loss of possession, but the borrower will still owe the money