MGRADES EXAMS
Champion School of Real Estate-Law of
Contracts UPDATED Exam Questions and
CORRECT Answers
Texas Real Estate Commission - CORRECT ANSWER - TREC-created by the Legislature
in 1949. 9 member commission whose primary purpose is to carry out the provision of the
License Act
Real Estate Recovery Trust Account - CORRECT ANSWER - administered by TREC. the
purpose of the account is to protect aggrieved individuals who suffer monetary loss due to illegal
acts of license holders
unlawful practice of law - CORRECT ANSWER - license holder is not qualified to add
provisions to contracts that go beyond factual business details.
Promulgated Forms - CORRECT ANSWER - residential contract forms that are
mandatory for license holder
Deceptive trade practices Act - CORRECT ANSWER - Texas law that applies to trade and
commerce that was passed in 1973. Part of the Texas Business and Commerce code
Land - CORRECT ANSWER - surface of the earth extending downward to the center and
upward above the surface to infinity
Real Estate - CORRECT ANSWER - all that encompassed in land with the addition of all
man-made additions to the land (improvements)
Real Property - CORRECT ANSWER - goes beyond physical real estate and includes the
rights that a person has in the land.
Bundle of Rights - CORRECT ANSWER - rights that a person has in the land
,MGRADES EXAMS
severable - CORRECT ANSWER - different rights can be separate
Surface Rights - CORRECT ANSWER - the ability to develop the surface and to use
resources extracted from or near the surface
Subsurface Rights - CORRECT ANSWER - rights to oil, gas and minerals, are commonly
conveyed through a lease, mineral deed or reservation
Air Rights - CORRECT ANSWER - extend above the surface without limitations
improvements - CORRECT ANSWER - man-made additions to the land that is permanent
and is considered to become part of the land
personalty/chattel - CORRECT ANSWER - personal property
bill of sale - CORRECT ANSWER - used to accomplish the transfer of personal property,
accompanies the deed
Fixture - CORRECT ANSWER - personal property that has become attached to the land
annexation - CORRECT ANSWER - personal property that becomes real property
severance - CORRECT ANSWER - removing fixtures to become personal property
Physical Characteristics of Land - CORRECT ANSWER - Indestructibility-cannot be
destroyed
Immobility-cannot be moved
Non-homogeneity-no two parcels are the same
, MGRADES EXAMS
Economic Characteristics of Land - CORRECT ANSWER - Scarcity-supply and demand
Modification-value is affected by man made changes
Fixity-additions take long periods of time to pay
Situs-location, location, location
Estate in Severalty - CORRECT ANSWER - ownership by one individiual
Co-Ownership - CORRECT ANSWER - ownership by two or more
Trust - CORRECT ANSWER - ownership conveyed to a trustee for the benefit of others
tenancy in common - CORRECT ANSWER - ownership by 2 or more with undivided
interests
Partition - CORRECT ANSWER - own a distinct tract of land
Joint Tenacy - CORRECT ANSWER - type of co-ownership with the right of surviorship
Right of surviorship - CORRECT ANSWER - when joint tenant dies right of property are
equally divided among surviving owners
community property - CORRECT ANSWER - marriage is regarded as a partnership rather
than husband and wife become one.
separate property - CORRECT ANSWER - property owned by a married person that is not
community property
Champion School of Real Estate-Law of
Contracts UPDATED Exam Questions and
CORRECT Answers
Texas Real Estate Commission - CORRECT ANSWER - TREC-created by the Legislature
in 1949. 9 member commission whose primary purpose is to carry out the provision of the
License Act
Real Estate Recovery Trust Account - CORRECT ANSWER - administered by TREC. the
purpose of the account is to protect aggrieved individuals who suffer monetary loss due to illegal
acts of license holders
unlawful practice of law - CORRECT ANSWER - license holder is not qualified to add
provisions to contracts that go beyond factual business details.
Promulgated Forms - CORRECT ANSWER - residential contract forms that are
mandatory for license holder
Deceptive trade practices Act - CORRECT ANSWER - Texas law that applies to trade and
commerce that was passed in 1973. Part of the Texas Business and Commerce code
Land - CORRECT ANSWER - surface of the earth extending downward to the center and
upward above the surface to infinity
Real Estate - CORRECT ANSWER - all that encompassed in land with the addition of all
man-made additions to the land (improvements)
Real Property - CORRECT ANSWER - goes beyond physical real estate and includes the
rights that a person has in the land.
Bundle of Rights - CORRECT ANSWER - rights that a person has in the land
,MGRADES EXAMS
severable - CORRECT ANSWER - different rights can be separate
Surface Rights - CORRECT ANSWER - the ability to develop the surface and to use
resources extracted from or near the surface
Subsurface Rights - CORRECT ANSWER - rights to oil, gas and minerals, are commonly
conveyed through a lease, mineral deed or reservation
Air Rights - CORRECT ANSWER - extend above the surface without limitations
improvements - CORRECT ANSWER - man-made additions to the land that is permanent
and is considered to become part of the land
personalty/chattel - CORRECT ANSWER - personal property
bill of sale - CORRECT ANSWER - used to accomplish the transfer of personal property,
accompanies the deed
Fixture - CORRECT ANSWER - personal property that has become attached to the land
annexation - CORRECT ANSWER - personal property that becomes real property
severance - CORRECT ANSWER - removing fixtures to become personal property
Physical Characteristics of Land - CORRECT ANSWER - Indestructibility-cannot be
destroyed
Immobility-cannot be moved
Non-homogeneity-no two parcels are the same
, MGRADES EXAMS
Economic Characteristics of Land - CORRECT ANSWER - Scarcity-supply and demand
Modification-value is affected by man made changes
Fixity-additions take long periods of time to pay
Situs-location, location, location
Estate in Severalty - CORRECT ANSWER - ownership by one individiual
Co-Ownership - CORRECT ANSWER - ownership by two or more
Trust - CORRECT ANSWER - ownership conveyed to a trustee for the benefit of others
tenancy in common - CORRECT ANSWER - ownership by 2 or more with undivided
interests
Partition - CORRECT ANSWER - own a distinct tract of land
Joint Tenacy - CORRECT ANSWER - type of co-ownership with the right of surviorship
Right of surviorship - CORRECT ANSWER - when joint tenant dies right of property are
equally divided among surviving owners
community property - CORRECT ANSWER - marriage is regarded as a partnership rather
than husband and wife become one.
separate property - CORRECT ANSWER - property owned by a married person that is not
community property
