CALIFORNIA REAL ESTATE EXAM - PRACTICE QUESTIONS COMPLETE WITH 100% VERIFIED ANSWERS

CALIFORNIA REAL ESTATE EXAM - PRACTICE QUESTIONS COMPLETE WITH 100% VERIFIED ANSWERS 1. In reference to Property Taxes, "basis" or "cost" is: A) The original purchase price only B) The assessed value determined by the county C) Purchase price of property plus cost of improvements D) The fair market value at time of sale Correct Answer: C) Purchase price of property plus cost of improvements Explanation: Basis or cost for property tax purposes includes the original purchase price plus the cost of any capital improvements made to the property. This forms the basis for calculating capital gains when the property is sold. ________________________________________ 2. How is a condominium unit owned? A) As a tenancy in common B) As joint tenancy with other unit owners C) As a separate interest D) As community property Correct Answer: C) As a separate interest Explanation: Each condominium unit owner holds a separate interest in their individual unit, which can be sold, mortgaged, or transferred independently of other units in the complex. ________________________________________ 3. How are common interests in a condo owned? A) In proportion to unit size B) Equally in undivided interest C) By the homeowners association only D) By the original developer Correct Answer: B) Equally in undivided interest Explanation: Common areas in a condominium (hallways, pools, roofs, etc.) are owned equally by all unit owners as tenants in common, with each having an undivided interest in these shared spaces. ________________________________________ 4. Subdivided Land Laws refer to: A) Any division of land into 2 or more parcels B) Subdivisions of 5+ parcels on 160 acres, regulated marketing & financing, and requires disclosures in public report C) Only commercial property divisions D) Land divisions of any size in urban areas Correct Answer: B) Subdivisions of 5+ parcels on 160 acres, regulated marketing & financing, and requires disclosures in public report Explanation: The Subdivided Lands Law applies to subdivisions creating 5 or more parcels on 160 or more acres, and requires specific disclosures and a public report for consumer protection. ________________________________________ 5. How long is a disclosure in public report for Subdivided Land Laws good for? A) 1 Year B) 3 Years C) 5 Years D) 10 Years Correct Answer: C) 5 Years Explanation: The public report issued under the Subdivided Lands Law is valid for 5 years from the date of issuance, after which it must be updated or renewed. ________________________________________ 6. When does a tax year run? A) January 1 - December 31 B) April 1 - March 31 C) July 1 - June 30 D) October 1 - September 30 Correct Answer: C) July 1 - June 30 Explanation: In California, the property tax year runs from July 1 through June 30, with tax bills typically due in two installments. ________________________________________ 7. Legally combining smaller, adjacent parcels of land to form a larger parcel is called: A) Subdividing B) Accretion C) Plottage or assemblage D) Reliction Correct Answer: C) Plottage or assemblage Explanation: Plottage (or assemblage) is the process of combining smaller adjacent parcels to create a larger, more valuable parcel. The resulting value often exceeds the sum of the individual parcels' values. ________________________________________ 8. Separating large parcels into smaller lots is called: A) Plottage B) Subdividing or separating C) Accretion D) Condemnation Correct Answer: B) Subdividing or separating Explanation: Subdivision is the process of dividing a large parcel of land into smaller lots for development or sale, subject to local government regulations and approvals. ________________________________________ 9. Amount or size of land being increased by natural forces such as deposits by wind or water is called: A) Reliction B) Avulsion C) Accretion D) Erosion