Is the owner of a sole proprietorship obligated to file as a business with the secretary of state's office?

No, a sole proprietorship need not file with the secretary of states office

Why are subsurface rights considered dominant over surface rights?

owners of subsurface rights must have access to surface of property

To avoid liability, should listing agents accept the sellers word when they provide information about their property

It is always best to verify from an independent source what a seller says

A Tenant in Common partnership holding land in name of partnership sells the property. How many partners must sign?

One signature by any of the partners

Even if a name and number are on the do-no-call list, the individual may be contacted if the person

has had a business relationship with the company in the past 18 months

Could a motorcycle rider of an outlaw gang claim discrimination if an agent refused to show a property in a quiet area?

No, motorcycle riders are not a protected class

A construction boom drives down the supply of drywall so it has to be imported, what should brokers & agents be aware of

That the imported drywall may not meet building codes or national standards

Does the obligation to be honest with all parties extend to a sales agent when asked by a buyer why seller is selling?

No the sales agent should provide no information unless seller approves

Client refuses to pay builder for work done on a lake house. Can the builder file claim on both lake house & main home?

No, the builder may only file a specific lien against the lake house

What is a net listing?

One that specifies the amount of the seller is to receive from the sale

Must a broker or sales agent have a written listing agreement to sell a property in Texas?

No listing agreement is necessary unless you want to assure commission

When a government entity such as HUD transfers ownership of a home, is a property disclosure required?

Government entities are no required to provide disclosure

If a older person is granted "conventional life estate", what happens to property when they die?

When the tenant dies, the estate ends & property reverts to original owner

Under Texas law, can a property be sold to someone who is NOT a US citizen?

Citizenship is not a required element of a valid contract

Must newspapers comply with fair housing advertising laws?

Yes newspapers must make sure real estate advertisements comply with law

A listing agent colludes with seller to provide false or misleading information to buyer, is that grounds for discipline

Yes, the listing agent has a duty to be honest and fair to the buyer

Landowners adjacent to a body of water, like a lake, may pull water from the lake as long as

they have permission of the Texas Commission on Environmental Quality

How has fair housing law impacted the brokerage community?

Brought in more buyers to compete for properties boosting prices

Real estate brokers and sales agents are allowed to give legal advice because

they are not allowed unless also a licensed attorney in Texas

When a complaint against a license holder is received, an investigation is conducted by

The Texas Real Estate Commission (TREC)

The Texas Association of Real Estate Inspectors is primarily responsible for

enhancing the education and development of professional property inspectors

Datums and benchmarks are terms exclusively used to describe

an elevation point for the purpose of establishing air rights

Color, race, nat'l origin, religion, gender, familial status, people with mental/ physical handicaps are protected when

selling/renting residential property under Fair Housing Act 1968

What might be the role of a real estate broker in the event a homeowner seeks to overturn a property appraisal?

Might be able to offer actual appraisals & sales prices of comparable homes

Rules and regulations adopted by government agencies

are used to implement and enforce legislative acts

Which of the following would likely be considered a fixture included in the sale?

Plush wall-to-wall carpeting in a living room

Must a real estate agent show someone a specific home when not financially qualified to purchase that home?

No the agent is not obligated to show a home to anyone not qualified to buy

If a listing agent advertises a property as "the cutest house on the street" do those claims have to be backed up?

This claim is an example of puffery & generally acceptable in advertising

If something happens to a borrower who has mortgage insurance, who gets paid?

The lending institution that has the mortgage

May a broker conduct performance reviews with independent contractors?

Yes, brokers may review all aspects of work of independent contractors

Under what circumstances may a consumer collect from real estate recovery trust account if the accused is NOT licensed

Consumer may collect if the accused works for a brokerage

Which action on the part of the license holder does NOT violate antitrust laws?

Telling prospective client that commission is based on the services offered

Is it permissible to blend pieces of a section together in a land transaction?

Yes, Adjoining sections may be combined with an accurate legal description

What is an example of discharging a contract because of impossibility of performance?

When one principal dies before the contract can be signed

A home seller's tax bills are useful to a real estate agent because they give

agents for both buyers & sellers an idea of direction of property values

The legal rights of a Texas property purchaser, called the "bundle of legal rights", means that the owner is exempt from

demands by nonlegal authorities to come onto the property

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RELE 1301 Principles of RE I (F1 F4)

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Answers

1
Is the owner of a sole proprietorship obligated to file as a business with the secretary of state's office?
Yes, a sole proprietorship must file with the secretary of states office
No, but must file with Dept. of Business Licensing & Texas Dept. of Revenue
No, a sole proprietorship need not file with the secretary of states office
Must file with the secretary of states office after completing one year
2
If clients want to buy a specific home but falls short of the ratios needed, will they automatically be disqualified?
Yes, Fannie Mae and Freddie Mac will bar the purchase
Yes, federal law will prohibit the purchase
Yes, FDIC bank rules will prohibit the purchase
No
3
A broker representing a seller would be what kind of agent?
General
Informal
Special
Formal
4
Why are subsurface rights considered dominant over surface rights?
subsurface rights commonly are sold at multiples of other kinds of rights
subsurface rights involve minerals typically more expensive to extract
owners of subsurface rights must have access to surface of property
subsurface rights are not dominant under Texas law
5
To avoid liability, should listing agents accept the sellers word when they provide information about their property
Checking details of the listing agreement is a buyer chore not an agent one
It is always best to verify from an independent source what a seller says
It is important to have seller fill out information & agent remain silent
The listing agent must challenge every detail provided by seller
6
A Tenant in Common partnership holding land in name of partnership sells the property. How many partners must sign?
Just the attorney representing the partnership
All the partners
One signature by any of the partners
Just the senior partner
7
Even if a name and number are on the do-no-call list, the individual may be contacted if the person
has had a business relationship with an affiliated company in past 6 months
has had a business relationship with the company in the past 18 months
fits a statistical profile suggesting they may be interested in real estate
has had a business relationship with a competing company
8
Could a motorcycle rider of an outlaw gang claim discrimination if an agent refused to show a property in a quiet area?
Yes could claim discrimination based on label "the wrong kind" for the area
Yes, they could claim discrimination because of club membership
Yes, motorcycle riders are entitled to equal protection
No, motorcycle riders are not a protected class
9
A construction boom drives down the supply of drywall so it has to be imported, what should brokers & agents be aware of
That the imported drywall may not meet building codes or national standards
Builders may try to increase home prices because of replacement materials
That drywall prices will soon fall making housing marginally less expensive
That there is enough to cover a project without gaps
10
Does the obligation to be honest with all parties extend to a sales agent when asked by a buyer why seller is selling?
Yes, if property is on the market because of personal hardship
Yes, if a property is on the market because of financial hardship
No, information may only be released to an agent working with a buyer
No the sales agent should provide no information unless seller approves
11
Client refuses to pay builder for work done on a lake house. Can the builder file claim on both lake house & main home?
No, the builder may only file a specific lien against the lake house
No, a lake house is personal property, not real estate
No, the builder may only file on main homestead and no other owned property
Yes, the builder may place a lien on all properties owned by client
12
What is a net listing?
One that specifies the amount of the commission to be paid to the broker
One that specifies the amount of the seller is to receive from the sale
One that specifies the total amount of the sale and the commission
None of these
13
Must a broker or sales agent have a written listing agreement to sell a property in Texas?
No, many properties change hands each year without a listing agreement
Yes listing agreement & purchase contract are the only two documents needed
No listing agreement is necessary unless you want to assure commission
Yes, only a written listing agreement can be used to transfer property
14
When a government entity such as HUD transfers ownership of a home, is a property disclosure required?
Yes, Texas law requires full disclosure
Federal regulations state no disclosures will be provided on HUD homes
Government entities are no required to provide disclosure
Disclosure is only required if property has been destroyed by fire
15
If a older person is granted "conventional life estate", what happens to property when they die?
When the tenant dies, the estate ends & property reverts to original owner
Cannot be inherited but must be sold at end of life
The person may live on property until end of life then transfers to State
Like any other property, it goes to heirs
16
For an entrepreneur to set up a real estate brokerage as a sole proprietorship, they must first
No preliminary regulations, but a license will be required after 10th sale
register with the Texas Association of REALTORS
File a territorial application with TREC so it can determine need
have a valid broker's license
17
Under Texas law, can a property be sold to someone who is NOT a US citizen?
Citizenship is not a required element of a valid contract
No, anyone buying property in Texas must be able to prove citizenship
Yes but noncitizens must prove intent to remain in US for at least 7 yrs
Noncitizens may purchase property only if the TDFR approves the sales
18
Must newspapers comply with fair housing advertising laws?
Only those that carry real estate advertising every day must comply
No, only those run by the government are required to abide
Yes newspapers must make sure real estate advertisements comply with law
No, under the 1st Amendment to Constitution, they are protected
19
A listing agent colludes with seller to provide false or misleading information to buyer, is that grounds for discipline
No, as long as listing agent is acting on sellers wishes it is permissible
Yes, the listing agent has a duty to be honest and fair to the buyer
No, floating misleading information is similar to puffery
If the information could earn windfall profit then it is illegal
20
Landowners adjacent to a body of water, like a lake, may pull water from the lake as long as
they have the permission of abutting landowners
they need it, without restriction from government controls
they have permission of Environmental Protection Agency
they have permission of the Texas Commission on Environmental Quality
21
All are tests for determining a fixture EXCEPT
adaptation of the item to the real estate
intention of the parties
method and permanence of attachment of the item
size of the item
22
Land may be modified or improved at any time. All of the following would be considered improvements to land EXCEPT
sewers
roads
annual crops
utilities
23
From the Texas Real Estate Broker-Lawyer Committee, how many members must be appointed by the Commission?
All of them
Eight
Ten
Six
24
How has fair housing law impacted the brokerage community?
Drive down value because more low-income people are allowed to buy property
It has had no impact
It has hurt because commissions are down
Brought in more buyers to compete for properties boosting prices
25
When a four-acre piece of property is offered at $3 sq. ft., what is the asking price?
$436,360
$522,720
$624,860
None of these
26
Real estate brokers and sales agents are allowed to give legal advice because
they are not allowed unless also a licensed attorney in Texas
they do not have to be a lawyer to give legal advice in Texas
part of licensing is a course that focuses on real estate law
salespeople work on legal contracts all the time and are familiar with law
27
When a complaint against a license holder is received, an investigation is conducted by
The Texas Bar Association
The Texas Real Estate Commission (TREC)
The Texas Attorney General
The Texas Association of REALTORS
28
Naturally growing plants and trees that do NOT require cultivation are classified as which kind of property?
Real
Personal
Fruits of labor
Fruits of industry
29
The Texas Real Estate License Act was first passed in
1949
1939
1947
1919
30
The Texas Association of Real Estate Inspectors is primarily responsible for
making sure real estate contracts comply with FCFPB
teaching supervising brokers how to investigate contracts for fraud
enhancing the education and development of professional property inspectors
teaching mortgage brokers how to investigate contracts for fraud
31
Datums and benchmarks are terms exclusively used to describe
the originating point of an oil or gas pipeline
an elevation point for the purpose of establishing air rights
the headwaters of a river
the originating point of a circle (datum) and distance (benchmark)
32
Color, race, nat'l origin, religion, gender, familial status, people with mental/ physical handicaps are protected when
selling/renting residential property under the Civil Rights Act 1964
selling/renting residential property under Americans Disabilities Act 1990
selling/renting residential property under the Civil Rights Act 1866
selling/renting residential property under Fair Housing Act 1968
33
States bordering Texas all permit which kind of legal description that Texas does NOT permit?
Texas Department of Interior map
Recorded subdivision
Rectangular survey system
Metes-and-bounds
34
What might be the role of a real estate broker in the event a homeowner seeks to overturn a property appraisal?
Might offer the attorney for the local board of REALTORS for help
Might leverage local lenders with an interest in keeping taxes low
Might be able to offer actual appraisals & sales prices of comparable homes
Might testify about current market conditions and direction of home prices
35
Real estate fees and commissions are set by
the local board of REALTORS in conjunction with the state assocation
individual companies
the Texas Association of REALTORS
the Texas Real Estate Commission
36
Rules and regulations adopted by government agencies
are used to implement and enforce legislative acts
are considered a precedent for future rules and regulations
may not prescribe penalities for violations
do not have the force and effect of legislative acts
37
Which of the following would likely be considered a fixture included in the sale?
A large mirror hanging on the wall
Matching Tiffany shades on light fixtures
Plush wall-to-wall carpeting in a living room
Persian rugs on hardwood floors
38
Must a real estate agent show someone a specific home when not financially qualified to purchase that home?
Yes, buyers are allowed to browse through homes when up for sale
Yes, if the family insists, the agent is obligated to show them
No the agent is not obligated to show a home to anyone not qualified to buy
Yes, federal law says it isn't up to the agent to decide what to show
39
If a listing agent advertises a property as "the cutest house on the street" do those claims have to be backed up?
once popular, these types of claims have been outlawed by CFPB
claims do not have to be proven, but agents should have some measured basis
claims must be based on unbiased measures and offered in full disclosure
This claim is an example of puffery & generally acceptable in advertising
40
If something happens to a borrower who has mortgage insurance, who gets paid?
The lending institution that has the mortgage
The real estate broker for the buyer
The borrower/owner of the property
The Texas Real Estate Commission
41
The method used to describe real estate by distance and direction is
the rectangular survey method
the metes-and-bounds method
the recorded subdivision plat method
the lot-block-tract method
42
May a broker conduct performance reviews with independent contractors?
No, independent contractors are free from reviews
Yes, Independent contractors may only be reviewed on clerical duties
Yes, brokers may review all aspects of work of independent contractors
Yes, brokers may review sales performance but may not terminate
43
Under what circumstances may a consumer collect from real estate recovery trust account if the accused is NOT licensed
The consumer can go to state court and obtain a judges order for funds
Consumer may collect if the accused works for a brokerage
The consumer can go to federal court and obtain a judges order for funds
The consumer cannot collect if the individual did not have a license
44
Which action on the part of the license holder does NOT violate antitrust laws?
Telling prospective client that commission is in line with others
Arranging with another broker to operate exclusively in a specific area
Agreeing with another broker to deny access to listings of discount brokers
Telling prospective client that commission is based on the services offered
45
Is it permissible to blend pieces of a section together in a land transaction?
Yes, Adjoining sections may be combined with an accurate legal description
Yes, in urban areas with populations in excess of 1.5 million
No, Sections must always maintain their boundary integrity
Yes, but only if the abutting pieces are at least 1/4 of a section
46
What is an example of discharging a contract because of impossibility of performance?
When one principal dies before the contract can be signed
When the seller does not legally own the property being sold
When the principal agrees to fraudulently move boundarys to claim more land
When the buyer conceals that he does not have funds to close
47
All are categories of the uses of real property EXCEPT
residential
industrial
agricultural
developmental
48
A home seller's tax bills are useful to a real estate agent because they give
a listing agent a target for setting the home price
a listing agent an idea of how much commission the seller can afford
potential home buyers a negotiating strategy
agents for both buyers & sellers an idea of direction of property values
49
The legal rights of a Texas property purchaser, called the "bundle of legal rights", means that the owner is exempt from
federal law, but must abide by Texas and local laws
federal state and local laws; must abide by neighborhood association bylaws
demands by nonlegal authorities to come onto the property
federal, state, and local laws
50
Which is a misleading or deceptive practice according to DTPA?
Claiming that repairs have been made when they have not
Claiming that something is new when it is not
Advertising a property with no intention of selling as advertised
All of these
51
Land plus permanent, human made additions plus interests, benefits, & rights inherent in the ownership of real estate is
Property
Real Property
Real Estate
Land
52
Which of the following is TRUE about a license holder when committing housing discrimination?
They are subject to potential civil action and disciplinary action
None of these
They are subject to potential civil action but no disciplinary action
They are not subject to potential civil or disciplinary action
53
Sales agents who have mastered an understanding of agency relationships
are exempt from lawsuits from other brokerages & those who are not clients
may represent clients without the supervision of a broker
may act as an attorney for their clients in court cases
realize their limitations in working with clients and customers
54
Why does TREC insist brokerages provide & display information about brokerage services when all services are NOT offered
TREC feels consumers should understand what they are being billed for
None of these
TREC believes consumers should decide who they want to do business with
TREC believes consumers should understand the basics of agency law
55
The basic premise of the Community Reinvestment Act is
lenders can enhance reputations in the community when appear friendlier
banks can charge higher interest rates if they invest locally
government will appear to be taking low-income neighborhoods seriously
a holistic approach to revitalization is better than single efforts
56
The License Act is administered by
The Texas Bar Association
The Texas Sunset Commission
The Texas Real Estate Commission
The Texas Legislature
57
Which is generally NOT subject to ad valorem real estate taxes?
Senior citizens
City park lands
Banks
Farms
58
Fixtures are
removable by a tenant before the expiration of the lease
chattels
real property
emblements
59
When demand decreases, real estate prices
decrease
remain stable
none of these
increase
60
The economic term demand is defined as
the pent-up consumer demand for specific goods in the marketplace
the amount of goods people are willing and able to buy at a given price
the amount of money people are willing to borrow
the amount of money people are willing to pay
61
What kind of estate establishes complete ownership and may be inherited, given away, or sold by the owner?
Fee simple
Conventional lift
Defeasible fee estate
Legal life
62
Which of the following is TRUE about regulations passed by governmental agencies?
They expand on the law but do not have the effect of law
None of these
They are merely advisory but do not have the effect of law
They expand on the law and have the effect of law
63
Before Texas residents can receive a real estate license, they must submit to TREC
a list of family members, highlighting anyone who committed a crime
a high school graduation photo from a Texas high school
a set of fingerprints that will be used for a background check
a DNA sample to be matched with open criminal cases
64
Must salesperson working for builders or developers have real estate licenses?
Paid employees of builders or developers do not need to be licensed
Anyone working for a builder needs a special license different from TREC
Rules change from county to county
Yes, anyone selling property in Texas must be licensed
65
A period of renewed growth after a depression represents which stage of the business cycle?
Recession
Depression
Revival
Expansion
66
All would affect supply EXCEPT
government controls
the labor force
population
construction costs
67
Must a buyer's agent show a very small house to a family with many children who live together?
Yes it is not the agent's decision about how many people can live in a home
The buyers agent should calculate family size by number of bedrooms & size
Yes the familial section of fair housing requires families be given options
No if local occupancy standards are prohibitive the house need not be shown
68
May a broker subtract desk expenses from an independent contractor's commission?
Brokers and sales agents should operate under a signed work agreement
Brokers always are entitled to recoup office expenses from commissions
No, brokers must pay independent contractors the full amount of commission
Desk expenses are considered a cost of doing business & come of commission
69
The sum to be paid to an aggrieved party from the real estate recovery trust account is determined by
The court
The Broker-Lawyer Committee
The Texas Real Estate Commission
The local association of REALTORS
70
Which is a physical characteristic of land?
Nonhomogeneity
Area preference
Permanence of investment
Relative scarcity
71
A swimming pool adds what kind of value to a property?
State-assigned value
Neighborhood value
Subjective value
No added value
72
Which statement BEST describes the relationship of supply and demand in the real estate market?
Supply and price move in opposite directions
When both supply and demand increase, real estate prices rise
When supply goes up, price goes up
Demand and price move in opposite directions
73
Under what circumstances can property owners take back their land after it has be taken under eminent domain?
When not redeveloped or reused within 10 yrs, original owner may buy back
Legal owner may pollute or destroy before transfer so it is not desirable
If former owner squats on the land and authorities do not attempt to remove
There are no scenarios where a landowner may recover property
74
Can a judgment lien be placed on both real and personal property?
No, only against personal property
Yes, with exemptions for commercial and recreational properties
Yes, against both real and personal property
No, only against real property, not possessions
75
Properties in a community that is built out from city limit to city limit will likely see property values
fall, because interested consumers will be forced to look elsewhere
fall, because no more buildable properties are available
remain stable, because supply and demand are in equilibrium
rise, because no more buildable properties are available
76
What is the primary selling point of a modular home?
They usually come with swimming pools
They are built in a factory under controlled conditions
They can be moved from place to place
They typically come furnished
77
Which act extended full citizenship and civil rights to African Americans?
14th Amendment
Emancipation Proclamation
Dred-Scott decision
Glass-Steagall Act
78
Lived in home for 1.5 yrs out of last 5 but forced out 6 mo because of flooding. Can they claim capital gains exemption?
Yes, capital gains rules do not include time forced out for flooding
If the property was 50% destroyed and fully restored to original condition
No, properties in flood plains are never exempt
No, owner must live in property 2 full years out of last 5 to qualify
79
Flood insurance will cover damage to
Farm equipment in a field, if there is an insured structure on the property
only structures
lawns, if there is an insured structure on the property
Livestock, if there is an insured structure on the property
80
What form of agency is illegal in Texas?
Buyer agency
Dual agent
Listing agency
Single agency
81
Why does TREC approve or promulgate, or both, specific forms to be used in real estate transactions?
Because the federal CFPB has ordered TREC to provide forms
Most transactions are similar in nature & standardization helps protect all
So that it can collect a royalty each time a form is used
Because lenders require transactions be recorded via computer
82
Does a driller have right to access a well when years have passed, land has been subdivided sold & resold & no easements
If nothing else, there is an easement by prescription
If nothing else, there is an easement by implication
No the well is clearly abandoned & new easements will need to be negotiated
If nothing else, there is an easement in gross
83
A coinsurance clause requires an insured minimum of ? of replacement cost to collect full replacement cost for damages
50%
100%
80%
75%
84
Under Fair Housing Act, real estate organizations, such as MLS, may NOT do which when someone is in a protected group?
All of these
Ask the age of prospective clients
Refuse membership or put conditions on participation
Discriminate in the listing or sale of commercial properties
85
A homeowner's rights to live in a newly purchased house if the right of
possession
control
enjoyment
disposition
86
The Texas Real Estate License Act is administered by
the U. S. Department of Housing and Urban Development
the Texas Commission on Professional Business Licensure
the National Association of REALTORS
the Texas Real Estate Commission
87
If a homeowner defaults on a medical debt, can a hospital foreclose on an individual's home?
No, medical bills cannot force the sale of a homestead
If homeloan insured by Fannie Mae/Freddie Mac & bills covered by Medicare
Only if the hospital bills exceed $1 million
Yes, sale of homestead may be forced to help pay medical bills
88
The Texas Real Estate Commission may _____ against an owner, potential buyer, landlord, or potential tenant.
only place on probation the license of someone who discriminates
suspend or revoke the license of someone who discriminates
make a license holder pay punitive damages if they discriminate
suspend, but not revoke the license of someone who discriminates
89
An agreement in which the buyer and seller have agreed to meet specific obligations is called
an executory agreement
an executed agreement
a nonvoidable agreement
an anticipatory agreement
90
Which duty requires a broker to inform the principal that the asking price is too low for improving market conditions?
Disclosure
Obedience
Loyalty
Accounting
91
How many acres would be contained in the following parcel of land: N 1/2 of SW 1/4 of NE 1/4 of Section 3?
160 acres
20 acres
10 acres
320 acres
92
What kind of insurance will cover a neighbor's child while playing in the backyard if the property owner is at fault?
Homeowner's warranty
Personal property
Liability
Property
93
The federal rules concerning lead-based paint require
disclosure
removal
abatement
testing
94
Even if your intention is only to assist buyers and seller of real estate, what is studied to receive a license
A course on how to do a detailed home inspection
How to become a successful sales agent and make a competitive salary
A course on self-defense
Property management and establishing landlord policies
95
Which is co-ownership with the right of survivorship?
All of these
Community property
Joint tenancy
Tenancy in common
96
The primary purpose of the US Constitution and individual state constitutions is to establish the rights of citizens
and delineate governmental authority's rights
and delineate governmental authority's privileges
and delineate governmental authority's limits
and delineate governmental authority's advantages
97
Even if the owner sells the property without the help of the broker, the broker gets credit for the sale in
an exclusive right-to-sell listing
an exclusive agency listing
a net listing
an open listing
98
What is the classification of a warehouse property that has a number of unauthorized condominium unit conversions?
Residential
Commercial
Mixed use
Industrial
99
Which of the following advertisements would be a violation of fair housing laws?
"Park, trees, and playgrounds across the street"
"Recreation center within walking distance"
"Kids OK"
"Close to schools"
100
Which is considered personal property?
Permanently attached bathtub
None of these
Trade Fixture
Fixture

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