TEXAS REAL ESTATE STATE EXAM - PRACTICE QUESTIONS COMPLETE WITH 100% CORRECT ANSWERS

TEXAS REAL ESTATE STATE EXAM - PRACTICE QUESTIONS COMPLETE WITH 100% CORRECT ANSWERS 1. What is the term for personal property that has been attached to real property in such a way that it becomes real property? A) Chattel B) Trade Fixture C) Annexation D) Fixture Correct Answer: D) Fixture Explanation: A fixture is personal property that has been attached to real property in such a way that it becomes real property. The key distinction is that once personal property is attached (annexation), it transforms into a fixture and is considered real property. Chattel (A) refers to personal property that remains movable. Trade Fixtures (B) are a special category of personal property used for business purposes. Annexation (C) is the process itself, not the resulting property classification. ________________________________________ 2. Which of the following is NOT one of the three physical characteristics of land? A) Nonhomogeneity B) Immobility C) Indestructibility D) Situs Correct Answer: D) Situs Explanation: The three physical characteristics of land are nonhomogeneity (no two parcels are exactly alike), immobility (land cannot be moved), and indestructibility (land is durable and will always be there). Situs is actually one of the four economic characteristics of land, along with scarcity, modification, and fixity. Location preference (situs) relates to economic value rather than physical attributes. ________________________________________ 3. A legal description that uses a point of beginning that is also the ending point is known as: A) Lot, Block, and Subdivision B) Rectangular Government Survey C) Metes and Bounds D) Township and Range Correct Answer: C) Metes and Bounds Explanation: Metes and Bounds is the oldest method of legal description, used originally in the 13 colonies. It always has a point of beginning that is also the ending point, using natural or artificial monuments as reference points. Lot, Block, and Subdivision (A) uses recorded plat maps. Rectangular Government Survey (B) uses base lines, meridians, townships, and sections. Township and Range (D) is part of the government survey system. ________________________________________ 4. How many acres are in one section of land under the Rectangular Government Survey System? A) 43,560 B) 160 C) 640 D) 36 Correct Answer: C) 640 Explanation: Under the Rectangular Government Survey System, one section contains 640 acres and is exactly one square mile. A township consists of 36 sections. 43,560 (A) is the number of square feet in one acre. 160 acres (B) is a quarter section. 36 (D) is the number of sections in a township. ________________________________________ 5. A limitation on property rights that may be referred to as a "cloud on title" is called: A) Lien B) Encumbrance C) Easement D) Encroachment Correct Answer: B) Encumbrance Explanation: An encumbrance is any limitation on property rights that may affect the title, often referred to as a "cloud on title." This broad category includes liens, easements, and restrictions. A lien (A) is a specific type of encumbrance involving a financial claim. An easement (C) is a specific right to use another's property. An encroachment (D) is a physical intrusion onto another's property. ________________________________________ 6. Which type of lien is created by the borrower's actions, such as taking out a mortgage? A) Involuntary Lien B) General Lien C) Voluntary Lien D) Specific Lien Correct Answer: C) Voluntary Lien Explanation: A voluntary lien is created by the property owner's actions, such as voluntarily taking out a mortgage or granting a deed of trust. An involuntary lien (A) is created by law, such as a tax lien or judgment lien. A general lien (B) attaches to all property of the debtor. A specific lien (D) attaches to one or more specific properties, but the key distinction here is whether the lien was voluntarily created by the owner's actions. ________________________________________ 7. An easement that benefits a particular parcel of land and runs with the land is called: A) Easement in Gross B) License C) Easement Appurtenant D) Equitable Servitude Correct Answer: C) Easement Appurtenant Explanation: An easement appurtenant benefits a particular parcel of land (the dominant estate) and runs with the land, meaning it transfers automatically when the property is sold. An easement in gross (A) belongs to a person or corporation rather than a parcel of land, such as a utility easement. A license (B) is merely permission to do something, not a property right. An equitable servitude (D) is a non-possessory interest enforced by equity. ________________________________________ 8. Under the government powers in land (PETE), which power allows the government to regulate and control the character and use of property for public health, safety, and welfare? A) Eminent Domain B) Taxation C) Escheat D) Police Power Correct Answer: D) Police Power Explanation: Police Power is the government's authority to regulate and control the character and use of property for the health, safety, and general welfare of the public. Zoning is a common example of police power. Eminent Domain (A) is the right to take private property for public use through condemnation. Taxation (B) is the power to levy property taxes. Escheat (C) is the reversion of property to the state when an owner dies with no will, heirs, or kindred. ________________________________________ 9. If a property owner receives a new sidewalk from the government and is charged a tax specifically for this improvement, this is called: