PEARSON VUE REAL ESTATE EXAM: 205 PRACTICE QUESTIONS COMPLETE WITH ANSWERS & EXPLANATIONS

PEARSON VUE REAL ESTATE EXAM: 205 PRACTICE QUESTIONS COMPLETE WITH ANSWERS & EXPLANATIONS 1. Real property interests include... A) A chattel that is movable B) A trade fixture installed by a tenant C) An appurtenance that goes with the land D) An emblement grown by a farmer Correct Answer: C Explanation: An appurtenance is a right, privilege, or improvement that attaches to and passes with the land (e.g., water rights, easements, buildings). ________________________________________ 2. Which form of ownership is restricted to husbands and wives? A) Joint tenancy B) Tenancy in common C) Tenancy by the entirety D) Severalty ownership Correct Answer: C Explanation: Tenancy by the entirety is available only to married couples. Each spouse owns the whole property, and neither can convey their interest without the other's consent. Upon death, the survivor owns the property outright. Divorce converts this to tenancy in common. ________________________________________ 3. What would result from a condition in a deed stating the property is granted "for as long as it is used as a church"? A) Fee simple absolute B) Defeasible fee C) Chattels real D) Nonfreehold estate Correct Answer: B Explanation: A defeasible fee (specifically a fee simple determinable) is an estate that can be lost upon the happening of a specified condition. The language "for as long as" creates this type of estate. ________________________________________ 4. J installed central air-conditioning in his home. The compressor unit, which was located outside the home, would be regarded as what? A) Personal property B) Trade fixture C) Real property D) Emblement Correct Answer: C Explanation: The compressor is attached to the property and is considered real property because it is a permanent improvement that passes with the land. ________________________________________ 5. An investor's personal assets could be subject to a creditor's claim in a... A) Limited partnership (as a limited partner) B) Corporation C) General partnership D) Limited liability company Correct Answer: C Explanation: In a general partnership, each general partner has unlimited personal liability for the debts of the partnership. Any general partner can obligate the others. ________________________________________ 6. How does an S corporation differ from other corporations? A) Its investors have no personal liability B) It is taxed as a separate entity C) It cannot have more than one shareholder D) It requires a board of directors Correct Answer: A Explanation: Like a regular corporation, an S corporation provides limited liability to its shareholders. However, it differs in that profits pass through to shareholders' personal tax returns, avoiding double taxation. ________________________________________ 7. A tenant in a commercial building installed a large sign that was anchored to the building with steel rods. Which term properly describes the sign? A) Fixture B) Trade fixture C) Real property D) Emblement Correct Answer: B Explanation: A trade fixture is installed by a tenant for business purposes. The tenant may remove it before the lease ends but is liable for any damage caused by removal. ________________________________________ 8. What type of real property description would include reference to an iron stake? A) Lot and block B) Government rectangular survey C) Metes and bounds D) Reference to a recorded plat Correct Answer: C Explanation: Metes and bounds descriptions use monuments as reference points. Artificial monuments include iron stakes, fences, and roads. Natural monuments include trees, rocks, and rivers. ________________________________________ 9. A tenancy in common differs from a joint tenancy in that... A) Tenants in common have survivorship rights B) Tenants in common may have unequal interests C) Joint tenants must be married D) Joint tenants cannot sell their interest Correct Answer: B Explanation: In a tenancy in common, owners may hold unequal shares (e.g., 50%, 25%, 25%). Joint tenancy requires equal interests among all owners. ________________________________________ 10. Chattels real differ from appurtenances in that they... A) Are real property B) Are personal property C) Attach to the land D) Cannot be removed Correct Answer: B Explanation: Chattels real refer to leasehold interests and are considered personal property. Appurtenances are real property interests that run with the land. ________________________________________ 11. Rights, benefits, and improvements that go with the land are known as... A) Chattels B) Emblements C) Appurtenances D) Trade fixtures Correct Answer: C Explanation: Appurtenances include easements, water rights, mineral rights, and improvements that are permanently attached and pass with the property. ________________________________________