PRINCIPLES OF REAL ESTATE 1 FINAL EXAM ACTUAL
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Rule of Capture - ✔✔A landowner with a well is allowed to pump water from under
his property.
✔✔Open Beach Act - ✔✔The public has the free and unrestricted right to use the open
beach.
✔✔Accretion - ✔✔Land is increased in size because of hte natural deposit of rock and
soil
✔✔Alluvion - ✔✔Land that has been created by accretion
✔✔Reliction - ✔✔The dry land that results when water withdraws from the land.
✔✔Avulsion - ✔✔Sudden removal of land by water
✔✔Erosion - ✔✔Gradual wearing away of land or rock by water
✔✔Allodial System - ✔✔Ownership of real property that is independent of superior
landlord.
✔✔PETE - ✔✔Police power, eminent domain, taxation and Escheat
✔✔Police Power - ✔✔Right the state government has to enforce order and to protect
the general welfare, health, safety and morals of the public
✔✔Enabling Acts - ✔✔State rights are passed to the counties through this legislation
✔✔Zoning - ✔✔Separate the use of property
✔✔Eminent Domain - ✔✔Right the government has to take privately owned property for
public use
✔✔Condemnation - ✔✔Process to take land through Eminent Domain
✔✔Severance Damages - ✔✔What the owner receives through Eminent Domain
✔✔Inverse Condemnation - ✔✔When an owner asks to be condemned due to their land
value lowering because of negative changes made by neighboring land by the
government
, ✔✔Escheat - ✔✔When a person dies without a will and without heirs their property will
Escheat to the state
✔✔Ad Valorem - ✔✔Taxing "according to value"
✔✔Special Assessment Taxes/ Improvement Taxes - ✔✔Charged to property owners
who benefit from an improvement
✔✔Central Appraisal District (CAD) - ✔✔Centralized agency established in each county
to appraise each property in the county for ad valorem taxes
✔✔Tax Rate - ✔✔Done by dividing the budget requirements by the total value of all the
property to be taxed.
✔✔Mill Rate - ✔✔Taxes charged per unit. Texas taxes per hundred dollars of value
✔✔Exemption - ✔✔Lowers tax bill by lowering the value of the property.
✔✔Homestead Exemption - ✔✔Exemption for people who live or will live on the
property they own = $15,000
✔✔Age Exemption - ✔✔Exemption for being over 65 = $10,000
✔✔Disability Exemption - ✔✔Exemption given to people with a disability = $10,000
✔✔Rollback tax - ✔✔The difference between the tax paid on the land and the tax that
would have been paid if the agricultural appraisal had not been placed. Plus 7 percent
per year since tax was placed
✔✔Taxpayer Relief Act of 1997 - ✔✔Reduced several federal income taxes on Capital
Gains
✔✔Fee Simple Absolute - ✔✔Gives the owner many rights to the property. Said to be
the greatest type of ownership interest that can be held in the real property.
✔✔Bundle of Rights - ✔✔The rights an owner has for the property they own
✔✔Stick - ✔✔Each right in a bundle
✔✔Freehold Estates - ✔✔Fee Simple Estates, life estates and estates created by
statute.
✔✔Defeasible Fee Estate/ Qualified fee / Simple Fee Defeasible - ✔✔A gift of land by a
person who wishes to control what the property is used for after the land is given.
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Rule of Capture - ✔✔A landowner with a well is allowed to pump water from under
his property.
✔✔Open Beach Act - ✔✔The public has the free and unrestricted right to use the open
beach.
✔✔Accretion - ✔✔Land is increased in size because of hte natural deposit of rock and
soil
✔✔Alluvion - ✔✔Land that has been created by accretion
✔✔Reliction - ✔✔The dry land that results when water withdraws from the land.
✔✔Avulsion - ✔✔Sudden removal of land by water
✔✔Erosion - ✔✔Gradual wearing away of land or rock by water
✔✔Allodial System - ✔✔Ownership of real property that is independent of superior
landlord.
✔✔PETE - ✔✔Police power, eminent domain, taxation and Escheat
✔✔Police Power - ✔✔Right the state government has to enforce order and to protect
the general welfare, health, safety and morals of the public
✔✔Enabling Acts - ✔✔State rights are passed to the counties through this legislation
✔✔Zoning - ✔✔Separate the use of property
✔✔Eminent Domain - ✔✔Right the government has to take privately owned property for
public use
✔✔Condemnation - ✔✔Process to take land through Eminent Domain
✔✔Severance Damages - ✔✔What the owner receives through Eminent Domain
✔✔Inverse Condemnation - ✔✔When an owner asks to be condemned due to their land
value lowering because of negative changes made by neighboring land by the
government
, ✔✔Escheat - ✔✔When a person dies without a will and without heirs their property will
Escheat to the state
✔✔Ad Valorem - ✔✔Taxing "according to value"
✔✔Special Assessment Taxes/ Improvement Taxes - ✔✔Charged to property owners
who benefit from an improvement
✔✔Central Appraisal District (CAD) - ✔✔Centralized agency established in each county
to appraise each property in the county for ad valorem taxes
✔✔Tax Rate - ✔✔Done by dividing the budget requirements by the total value of all the
property to be taxed.
✔✔Mill Rate - ✔✔Taxes charged per unit. Texas taxes per hundred dollars of value
✔✔Exemption - ✔✔Lowers tax bill by lowering the value of the property.
✔✔Homestead Exemption - ✔✔Exemption for people who live or will live on the
property they own = $15,000
✔✔Age Exemption - ✔✔Exemption for being over 65 = $10,000
✔✔Disability Exemption - ✔✔Exemption given to people with a disability = $10,000
✔✔Rollback tax - ✔✔The difference between the tax paid on the land and the tax that
would have been paid if the agricultural appraisal had not been placed. Plus 7 percent
per year since tax was placed
✔✔Taxpayer Relief Act of 1997 - ✔✔Reduced several federal income taxes on Capital
Gains
✔✔Fee Simple Absolute - ✔✔Gives the owner many rights to the property. Said to be
the greatest type of ownership interest that can be held in the real property.
✔✔Bundle of Rights - ✔✔The rights an owner has for the property they own
✔✔Stick - ✔✔Each right in a bundle
✔✔Freehold Estates - ✔✔Fee Simple Estates, life estates and estates created by
statute.
✔✔Defeasible Fee Estate/ Qualified fee / Simple Fee Defeasible - ✔✔A gift of land by a
person who wishes to control what the property is used for after the land is given.
