Real Estate Law Final UPDATED
Questions and CORRECT Answers
Due on sale - CORRECT ANSWER -Clause found in a mortgage that prohibits the sale of
the real property described in the mortgage without the lender's consent. A sale in violation of
this provision is a default of the mortgage.
Deed - CORRECT ANSWER -Written document that transfers ownership of real property
from one person to another.
Bill of sale - CORRECT ANSWER -Legal document that transfers ownership to personal
property.
Special warranty deed - CORRECT ANSWER -Deed wherein the grantor covenants and
warrants only against the lawful claims of people claiming by, through, or under the grantor.
Zoning - CORRECT ANSWER -Legitimate police power of government to regulate the
use of real property.
Fee simple - CORRECT ANSWER -Estate of real property with infinite duration and no
restrictions on use.
Execution - CORRECT ANSWER -Signature of a party to a legal document.
Partition - CORRECT ANSWER -Method by which co-owners of real property can divide
the common property into separate ownerships. Partition may be by voluntary agreement or by
court action.
Statute of frauds (1677, England) - CORRECT ANSWER -Provides that certain contracts
are not enforceable unless there exists some written memorandum or agreement that is signed by
the party charged to the obligation. Basically requires that different types of contracts must be
written. a) a contract to answer for the debt of another person b) an agreement made on
, consideration of marriage c) any agreement that is not performed within one year from the date
thereof d) any contract for sale of land
Option - CORRECT ANSWER -A contract by which an owner of property (optionor), and
another person (optionee), that the optionee shall have the right to purchase the owner's real
property at a fixed price within a certain time on agreed terms and conditions.
Affidavit - CORRECT ANSWER -Written statement of fact that is sworn by the person
making the statement under oath as a true statement of facts.
Liquidated damages - CORRECT ANSWER -Amount of money agreed on by the parties
to a contract to be the damages in the event of a default of contract.
Reversionary - CORRECT ANSWER -The remnant of an estate that the grantor holds
after granting a life estate to another person.
Remainder - CORRECT ANSWER -An interest in an estate that becomes effective in
possession only when a prior interest (devised at the same time) ends.
Prescriptive easement - CORRECT ANSWER -Easement created when a person uses real
property for a period of time without the owner's permission
Tenancy in common - CORRECT ANSWER -Co-ownership of real property by two or
more persons. Each owner's interest in the property is capable of inheritance.
Escrow - CORRECT ANSWER -Agreement that requires the deposit of a document or
money into the possession of a third party to be held by that party until certain conditions are
fulfilled.
Mortgage loss payable clause - CORRECT ANSWER -Endorsement to a policy of fire or
hazard insurance whereby the owner of the insure property and the insurance company agree that
Questions and CORRECT Answers
Due on sale - CORRECT ANSWER -Clause found in a mortgage that prohibits the sale of
the real property described in the mortgage without the lender's consent. A sale in violation of
this provision is a default of the mortgage.
Deed - CORRECT ANSWER -Written document that transfers ownership of real property
from one person to another.
Bill of sale - CORRECT ANSWER -Legal document that transfers ownership to personal
property.
Special warranty deed - CORRECT ANSWER -Deed wherein the grantor covenants and
warrants only against the lawful claims of people claiming by, through, or under the grantor.
Zoning - CORRECT ANSWER -Legitimate police power of government to regulate the
use of real property.
Fee simple - CORRECT ANSWER -Estate of real property with infinite duration and no
restrictions on use.
Execution - CORRECT ANSWER -Signature of a party to a legal document.
Partition - CORRECT ANSWER -Method by which co-owners of real property can divide
the common property into separate ownerships. Partition may be by voluntary agreement or by
court action.
Statute of frauds (1677, England) - CORRECT ANSWER -Provides that certain contracts
are not enforceable unless there exists some written memorandum or agreement that is signed by
the party charged to the obligation. Basically requires that different types of contracts must be
written. a) a contract to answer for the debt of another person b) an agreement made on
, consideration of marriage c) any agreement that is not performed within one year from the date
thereof d) any contract for sale of land
Option - CORRECT ANSWER -A contract by which an owner of property (optionor), and
another person (optionee), that the optionee shall have the right to purchase the owner's real
property at a fixed price within a certain time on agreed terms and conditions.
Affidavit - CORRECT ANSWER -Written statement of fact that is sworn by the person
making the statement under oath as a true statement of facts.
Liquidated damages - CORRECT ANSWER -Amount of money agreed on by the parties
to a contract to be the damages in the event of a default of contract.
Reversionary - CORRECT ANSWER -The remnant of an estate that the grantor holds
after granting a life estate to another person.
Remainder - CORRECT ANSWER -An interest in an estate that becomes effective in
possession only when a prior interest (devised at the same time) ends.
Prescriptive easement - CORRECT ANSWER -Easement created when a person uses real
property for a period of time without the owner's permission
Tenancy in common - CORRECT ANSWER -Co-ownership of real property by two or
more persons. Each owner's interest in the property is capable of inheritance.
Escrow - CORRECT ANSWER -Agreement that requires the deposit of a document or
money into the possession of a third party to be held by that party until certain conditions are
fulfilled.
Mortgage loss payable clause - CORRECT ANSWER -Endorsement to a policy of fire or
hazard insurance whereby the owner of the insure property and the insurance company agree that
