TEXAS CONTRACT LAW EXAM QUESTIONS AND ANSWERS
A property sells for $25,000, and the dwelling built thereon is only valued at $2,500. What does Section
5.008 of the Texas Property Code say about this situation? - CORRECT ANSWER✅✅It requires the seller
to provide a written notice of the property's condition
Which of the following is NOT a promulgated TREC form? - CORRECT ANSWER✅✅Bill of Sale
What does the Broker-Lawyer Committee do? - CORRECT ANSWER✅✅Drafts contracts
According to the Texas Real Estate License Act, which of the following requires that a licensee be a
practicing attorney? - CORRECT ANSWER✅✅Advising a person regarding the validity of title to real
property
How many promulgated contracts does TREC issue? - CORRECT ANSWER✅✅6
When is the seller's disclosure notice required to be delivered to a purchaser? - CORRECT
ANSWER✅✅Any time prior to the contract becoming binding on the purchaser
A seller wants to close using a contract for deed. Which of the following is MOST correct? - CORRECT
ANSWER✅✅This type of contract must be drafted by an attorney.
Which of the following is NOT a TREC-promulgated addendum? - CORRECT ANSWER✅✅Addendum for
Seller's Right to Terminate
Which of the following types of properties trigger the requirement for owners to provide a written
seller's disclosure notice? - CORRECT ANSWER✅✅Residential property comprising not more than one
dwelling unit
How many commissioners are on the Texas Real Estate Commission? - CORRECT ANSWER✅✅9
,When should a buyer review the written seller's disclosure notice? - CORRECT ANSWER✅✅Prior to
writing an offer
The TREC Seller's Disclosure of Property Condition form is - CORRECT ANSWER✅✅an approved
optional/voluntary use form.
Which of the following is TRUE regarding community property rights? - CORRECT ANSWER✅✅Any
property acquired during a marriage is considered to be obtained by mutual effort
Three people were concurrent owners of a parcel of real estate. When one owner died, her interest,
according to her will, became part of her estate. The deceased was a - CORRECT ANSWER✅✅tenant in
common
Which of the following is personal property? - CORRECT ANSWER✅✅Emblements
Which of the following laws in Texas govern condominiums? - CORRECT ANSWER✅✅Uniform
Condominium Act
Which of the following is TRUE about community property? - CORRECT ANSWER✅✅The married couple
are equal partners in the marriage
In condominium ownership, the owner of each unit holds - CORRECT ANSWER✅✅fee simple title
The unities of possession, interest, time, and title are associated with which of the following? - CORRECT
ANSWER✅✅Joint tenancy
A surviving spouse owns at least ____ of the property upon death of the spouse. - CORRECT
ANSWER✅✅one half
Which statement BEST applies to joint tenancy? - CORRECT ANSWER✅✅The last survivor becomes a
severalty owner.
, Which of the following transfers the rights or duties under a contract? - CORRECT
ANSWER✅✅Assignment
A retail developer wants to build a strip center in town and has found the best site available for it. The
developer negotiates a contract with the landowner but needs a favorable zoning change for the
property. The developer decides to have the current owners get the zoning change and executes a
contract that allows the developer the right to purchase the property for a set amount and for a fixed
period of time that is only enforceable if the landowner is successful in getting the needed zoning
changes. This is - CORRECT ANSWER✅✅an option contract
An option to purchase binds which of the following parties? - CORRECT ANSWER✅✅Seller only
A person has a one-year leasehold interest in a house. The interest automatically renews itself at the
end of each year. The person's interest is called an estate - CORRECT ANSWER✅✅from period to period
A tenant transfers all leasehold interest to another person who is legally obligated for all the promises
the original tenant made in the lease. This is an example of - CORRECT ANSWER✅✅an assignment.
A contract may be discharged under substantial performance when - CORRECT ANSWER✅✅one party
does not complete all the details exactly as the contract requires but has to a large extent performed on
the contract, which may be enough to force payment
All the following are true about novation EXCEPT - CORRECT ANSWER✅✅parties' intent is to discharge
the new obligation
The following statements about improvements to a leased space are true EXCEPT - CORRECT
ANSWER✅✅trade fixtures can be removed by the tenant after the lease expires.
The monthly rental payment in the lease contract is BEST defined as - CORRECT
ANSWER✅✅consideration for the use of the property.
Which of the following is TRUE with a contract for deed? - CORRECT ANSWER✅✅The buyer generally
could get a new mortgage loan and pay off the contract.
A property sells for $25,000, and the dwelling built thereon is only valued at $2,500. What does Section
5.008 of the Texas Property Code say about this situation? - CORRECT ANSWER✅✅It requires the seller
to provide a written notice of the property's condition
Which of the following is NOT a promulgated TREC form? - CORRECT ANSWER✅✅Bill of Sale
What does the Broker-Lawyer Committee do? - CORRECT ANSWER✅✅Drafts contracts
According to the Texas Real Estate License Act, which of the following requires that a licensee be a
practicing attorney? - CORRECT ANSWER✅✅Advising a person regarding the validity of title to real
property
How many promulgated contracts does TREC issue? - CORRECT ANSWER✅✅6
When is the seller's disclosure notice required to be delivered to a purchaser? - CORRECT
ANSWER✅✅Any time prior to the contract becoming binding on the purchaser
A seller wants to close using a contract for deed. Which of the following is MOST correct? - CORRECT
ANSWER✅✅This type of contract must be drafted by an attorney.
Which of the following is NOT a TREC-promulgated addendum? - CORRECT ANSWER✅✅Addendum for
Seller's Right to Terminate
Which of the following types of properties trigger the requirement for owners to provide a written
seller's disclosure notice? - CORRECT ANSWER✅✅Residential property comprising not more than one
dwelling unit
How many commissioners are on the Texas Real Estate Commission? - CORRECT ANSWER✅✅9
,When should a buyer review the written seller's disclosure notice? - CORRECT ANSWER✅✅Prior to
writing an offer
The TREC Seller's Disclosure of Property Condition form is - CORRECT ANSWER✅✅an approved
optional/voluntary use form.
Which of the following is TRUE regarding community property rights? - CORRECT ANSWER✅✅Any
property acquired during a marriage is considered to be obtained by mutual effort
Three people were concurrent owners of a parcel of real estate. When one owner died, her interest,
according to her will, became part of her estate. The deceased was a - CORRECT ANSWER✅✅tenant in
common
Which of the following is personal property? - CORRECT ANSWER✅✅Emblements
Which of the following laws in Texas govern condominiums? - CORRECT ANSWER✅✅Uniform
Condominium Act
Which of the following is TRUE about community property? - CORRECT ANSWER✅✅The married couple
are equal partners in the marriage
In condominium ownership, the owner of each unit holds - CORRECT ANSWER✅✅fee simple title
The unities of possession, interest, time, and title are associated with which of the following? - CORRECT
ANSWER✅✅Joint tenancy
A surviving spouse owns at least ____ of the property upon death of the spouse. - CORRECT
ANSWER✅✅one half
Which statement BEST applies to joint tenancy? - CORRECT ANSWER✅✅The last survivor becomes a
severalty owner.
, Which of the following transfers the rights or duties under a contract? - CORRECT
ANSWER✅✅Assignment
A retail developer wants to build a strip center in town and has found the best site available for it. The
developer negotiates a contract with the landowner but needs a favorable zoning change for the
property. The developer decides to have the current owners get the zoning change and executes a
contract that allows the developer the right to purchase the property for a set amount and for a fixed
period of time that is only enforceable if the landowner is successful in getting the needed zoning
changes. This is - CORRECT ANSWER✅✅an option contract
An option to purchase binds which of the following parties? - CORRECT ANSWER✅✅Seller only
A person has a one-year leasehold interest in a house. The interest automatically renews itself at the
end of each year. The person's interest is called an estate - CORRECT ANSWER✅✅from period to period
A tenant transfers all leasehold interest to another person who is legally obligated for all the promises
the original tenant made in the lease. This is an example of - CORRECT ANSWER✅✅an assignment.
A contract may be discharged under substantial performance when - CORRECT ANSWER✅✅one party
does not complete all the details exactly as the contract requires but has to a large extent performed on
the contract, which may be enough to force payment
All the following are true about novation EXCEPT - CORRECT ANSWER✅✅parties' intent is to discharge
the new obligation
The following statements about improvements to a leased space are true EXCEPT - CORRECT
ANSWER✅✅trade fixtures can be removed by the tenant after the lease expires.
The monthly rental payment in the lease contract is BEST defined as - CORRECT
ANSWER✅✅consideration for the use of the property.
Which of the following is TRUE with a contract for deed? - CORRECT ANSWER✅✅The buyer generally
could get a new mortgage loan and pay off the contract.
