NC Real Estate Midterm Exam Questions
and Answers (Graded A+)
What are the essential elements of a valid deed? - Answer- in writing, grantor must
have legal capacity to execute, grantee named with reasonable certainty to be
identified, adequate words of conveyance, accurate legal description, signed by grantor,
delivered to and voluntarily accepted by grantee.
What is the primary purpose of a deed? - Answer- transfer title
Quick claim deed - Answer- Also called a non-warranty deed. Has the least protection
with no covenants; cures cloud on title.
NC special-purpose deed - Answer- Executed by an attorney IE correction deed, deed
of gift or release or in lieu of foreclosure, trustee's deed, timber or mineral deed, deeds
executed pursuant to court order.
Historic preservation zoning - Answer- preserve historic buildings and sites that are
irreplaceable; certificate of appropriateness.
Use of police power - Answer- authority to create regulations to protect public health,
safety and welfare; enabling acts allow power to enact laws authorized by state's police
power to be passed down to municipalities and local governing authorities.
Spot zoning - Answer- one or group of properties rezoned to permit a use different from
neighboring properties use; truly in public interest.
Building permits - Answer- required prior to work and certificate of occupancy proves
compliance. Unpermitted space is a material fact. Building codes provide for minimum
construction standards for safety.
Provisional broker - Answer- must be under supervision of a BIC; paid only through BIC;
cannot advertise without permission of the BIC.
Public land use controls - Answer- police power, zoning ordinances, sub division
regulations, building codes, environmental protection legislation, master plan
, Interstate land sales full disclosure act 1968 - Answer- requires those engaged in
interstate sale or leasing of subdivision/condo/co-op/camps to file a statement of record,
register details of land with HUD.
Excise tax - Answer- Sales tax on price of home. Round price to nearest $500 to
provide whole number tax. Formula: Purchase price/500=excise tax
Types of easements - Answer- Easement appurtenant, easement in gross, easement by
prescription
Easement appurtenant - Answer- easement annexed to the ownership of one parcel of
land (servient) and used for the benefit of another parcel of land (dominant); passes
with title.
Easement in gross - Answer- personal interest in or right to use the land of another; not
appurtenant to land, terminate on death of personal easement owner except
utilities/commercial easement; cannot be inherited/ usually not assignable, easement
transfers to new buyer if recorded.
Easement by necessity - Answer- landlocked owners
homestead estate - Answer- A legal life estate, family home, protected from creditors,
not ad valorem/mortgage.
littoral rights - Answer- unrestricted use of navigable waters, own land adjacent to and
up to mean high water mark of tides.
foreshore - Answer- strip of land between high and low water mark/tides.
riparian rights - Answer- unrestricted right to use water attached to land provided it does
not harm owners up or down stream, non-navigable water way own halfway
across/divided between neighbor.
how often can nc adjust tax rates - Answer- annually
What are three estates of inheritance - Answer- fee simple absolute, fee simple
defeasible (fee simple determinable, fee simple subject to condition subsequent), estate
pur autre vie.
Fee simple absolute - Answer- no limitations; highest form of ownership
fee simple defeasible (2 types) - Answer- may be lost on occurence of spedified event;
obey deed restrictions. Fee simple determinable requires activity or land use to
continue. Fee simple subject to condition subsequent requires activity new owner must
not perform, re-entry rights.
and Answers (Graded A+)
What are the essential elements of a valid deed? - Answer- in writing, grantor must
have legal capacity to execute, grantee named with reasonable certainty to be
identified, adequate words of conveyance, accurate legal description, signed by grantor,
delivered to and voluntarily accepted by grantee.
What is the primary purpose of a deed? - Answer- transfer title
Quick claim deed - Answer- Also called a non-warranty deed. Has the least protection
with no covenants; cures cloud on title.
NC special-purpose deed - Answer- Executed by an attorney IE correction deed, deed
of gift or release or in lieu of foreclosure, trustee's deed, timber or mineral deed, deeds
executed pursuant to court order.
Historic preservation zoning - Answer- preserve historic buildings and sites that are
irreplaceable; certificate of appropriateness.
Use of police power - Answer- authority to create regulations to protect public health,
safety and welfare; enabling acts allow power to enact laws authorized by state's police
power to be passed down to municipalities and local governing authorities.
Spot zoning - Answer- one or group of properties rezoned to permit a use different from
neighboring properties use; truly in public interest.
Building permits - Answer- required prior to work and certificate of occupancy proves
compliance. Unpermitted space is a material fact. Building codes provide for minimum
construction standards for safety.
Provisional broker - Answer- must be under supervision of a BIC; paid only through BIC;
cannot advertise without permission of the BIC.
Public land use controls - Answer- police power, zoning ordinances, sub division
regulations, building codes, environmental protection legislation, master plan
, Interstate land sales full disclosure act 1968 - Answer- requires those engaged in
interstate sale or leasing of subdivision/condo/co-op/camps to file a statement of record,
register details of land with HUD.
Excise tax - Answer- Sales tax on price of home. Round price to nearest $500 to
provide whole number tax. Formula: Purchase price/500=excise tax
Types of easements - Answer- Easement appurtenant, easement in gross, easement by
prescription
Easement appurtenant - Answer- easement annexed to the ownership of one parcel of
land (servient) and used for the benefit of another parcel of land (dominant); passes
with title.
Easement in gross - Answer- personal interest in or right to use the land of another; not
appurtenant to land, terminate on death of personal easement owner except
utilities/commercial easement; cannot be inherited/ usually not assignable, easement
transfers to new buyer if recorded.
Easement by necessity - Answer- landlocked owners
homestead estate - Answer- A legal life estate, family home, protected from creditors,
not ad valorem/mortgage.
littoral rights - Answer- unrestricted use of navigable waters, own land adjacent to and
up to mean high water mark of tides.
foreshore - Answer- strip of land between high and low water mark/tides.
riparian rights - Answer- unrestricted right to use water attached to land provided it does
not harm owners up or down stream, non-navigable water way own halfway
across/divided between neighbor.
how often can nc adjust tax rates - Answer- annually
What are three estates of inheritance - Answer- fee simple absolute, fee simple
defeasible (fee simple determinable, fee simple subject to condition subsequent), estate
pur autre vie.
Fee simple absolute - Answer- no limitations; highest form of ownership
fee simple defeasible (2 types) - Answer- may be lost on occurence of spedified event;
obey deed restrictions. Fee simple determinable requires activity or land use to
continue. Fee simple subject to condition subsequent requires activity new owner must
not perform, re-entry rights.
