New York Real Estate Salesperson — All Questions

Which statement about a tenancy in common is correct?

• a.It automatically includes a right of survivorship among all of the co-owners
• b.Each co-owner holds an undivided interest that can pass to heirs by will✓
• c.Only legally married couples are permitted to hold title in this manner in New York
• d.It always requires that every co-owner hold an exactly equal fractional ownership share

In a tenancy in common, co-owners hold undivided interests that need not be equal, and there is no right of survivorship. When a tenant in common dies, that share passes by will or intestate succession to heirs, not to the other co-owners.

If one joint tenant sells their interest to an outside third party, the new owner generally holds title as a:

• a.Life tenant for the seller's lifetime
• b.Tenant in common with the remaining owners✓
• c.Tenant by the entirety with the remaining owners
• d.Joint tenant with the remaining owners, keeping survivorship

Selling a joint tenant's interest destroys the unity of the parties and severs the joint tenancy as to that share. The buyer takes title as a tenant in common, while any remaining original owners continue to hold their shares in joint tenancy among themselves.

An owner of a condominium unit in New York typically holds:

• a.A life estate in the unit that automatically terminates whenever the owner moves away
• b.Shares of stock in a cooperative corporation together with a proprietary lease to occupy the unit
• c.A renewable long-term ground lease of the land with no ownership of the structure itself
• d.Fee simple title to the unit plus an undivided interest in the common elements✓

A condominium owner holds fee simple (real property) title to their individual unit and shares an undivided interest in the common elements with the other owners. This differs from a cooperative, where the resident owns shares of stock and a proprietary lease rather than real property.

A purchaser of a cooperative apartment in New York City actually acquires:

• a.Shares in the cooperative corporation and a proprietary lease to the unit✓
• b.An undivided fractional ownership interest in the underlying land parcel only
• c.A condominium unit deed together with an undivided share of the building's common elements
• d.Fee simple title to the physical apartment unit, recorded as a deed with the county clerk

A cooperative buyer does not receive real property title; instead they buy shares of stock in the corporation that owns the building and receive a proprietary lease giving the right to occupy a specific unit. The interest is legally personal property, not real property.

A distinctive feature of buying into a New York cooperative, compared with a condominium, is that:

• a.The cooperative's board of directors may interview and approve or reject the prospective buyer✓
• b.No monthly maintenance or common charges are ever owed once the shares are purchased
• c.The buyer always receives a recorded deed conveying real property to the individual unit
• d.The purchase can never involve any financing because shares cannot be pledged as collateral

Cooperative boards typically have the power to interview prospective purchasers and approve or reject them, subject to fair housing law. Condominium boards usually have only a limited right of first refusal, so co-op purchases involve more buyer scrutiny.

A deed conveys land 'so long as it is used as a public library,' with title reverting automatically if that use ever ends. This creates a:

• a.Fee simple absolute
• b.Fee simple determinable✓
• c.Nonfreehold leasehold estate renewed each year
• d.Conventional life estate measured by the librarian's life

Language such as 'so long as' creates a fee simple determinable, a defeasible estate that ends automatically if the stated condition is violated. The grantor retains a possibility of reverter, so title returns to the grantor without the need for a lawsuit.

In a life estate, the third party who receives full title when the measuring life ends is the:

• a.Reversion holder
• b.Foreclosure trustee
• c.Remainderman✓
• d.Servient lot

When a life estate ends, title passes to the remainderman if a third party was named to receive it. If instead the property returns to the original grantor, the grantor is said to hold a reversion rather than a remainder.

An owner whose land borders a large lake or the ocean holds which type of water rights?

• a.Prior appropriation rights
• b.Riparian rights
• c.Percolating water rights
• d.Littoral rights✓

Littoral rights belong to owners of land bordering large, static bodies of water such as lakes, seas, and oceans, generally extending to the mean high-water mark. Riparian rights, by contrast, apply to land along flowing watercourses like rivers and streams.

A contractor who is not paid for improvements made to a property may protect the debt by filing a:

• a.Lis pendens
• b.Mechanic's lien against the property✓
• c.Satisfaction of mortgage discharging the existing lien
• d.Estoppel certificate confirming the unpaid mortgage balance

A mechanic's lien is a specific, statutory lien that secures payment for labor or materials furnished to improve real property. In New York the lien must be filed within statutory time limits, and it attaches only to the improved property.

Which of the following is a general lien rather than a specific lien?

• a.A judgment lien attaching to all of the debtor's property in the county✓
• b.A first mortgage recorded against one particular parcel pledged as loan security
• c.A mechanic's lien for construction work performed on a single named property
• d.A general real estate tax lien assessed against one specific lot for the year

A general lien attaches to all of a debtor's property rather than a single parcel. A money judgment, once docketed, becomes a general lien against real property the debtor owns in that county. Mortgages, mechanic's liens, and property tax liens are specific liens tied to one property.

In a typical priority contest among liens, which usually takes priority regardless of when it was recorded?

• a.The first mortgage recorded by the lender
• b.A general real estate (ad valorem) tax lien✓
• c.A mechanic's lien filed by the contractor
• d.A judgment lien docketed against the owner before any other claim

Real estate tax and special assessment liens generally take priority over other liens regardless of recording date. Most other liens follow the 'first to record, first in right' rule, so a purchase-money first mortgage typically outranks later liens.

A mortgage is best classified as a:

• a.Involuntary lien
• b.Voluntary, specific lien✓
• c.Involuntary, specific lien imposed without consent
• d.Statutory, general lien on every property owned

A mortgage is voluntary because the owner willingly pledges the property, and it is specific because it attaches only to the described parcel. Involuntary liens, such as tax or judgment liens, arise by law without the owner's agreement.

A landlocked parcel with no access to a public road may obtain the right to cross a neighboring parcel through an:

• a.Easement by necessity✓
• b.Estate at sufferance
• c.Encroachment across the boundary line
• d.Easement in gross held by a utility company

An easement by necessity is created when a parcel would otherwise be landlocked, giving the owner a legal right of access across adjoining land. Courts imply it because land must have a means of ingress and egress to be usable.

An easement acquired through open, continuous, and hostile use of another's land for the statutory period is an:

• a.Easement by prescription✓
• b.Easement by reservation
• c.Easement in gross granted to a pipeline company
• d.Easement appurtenant created by express written grant

A prescriptive easement arises when someone uses another's land openly, notoriously, continuously, and without permission for the statutory period, which is ten years in New York. Unlike adverse possession, it grants a use right rather than ownership.

A neighbor's fence built two feet over the boundary onto the adjoining lot is an example of an:

• a.Annual emblement
• b.Easement in gross
• c.Appurtenance
• d.Encroachment✓

An encroachment is an unauthorized physical intrusion of an improvement onto adjoining property. It is usually revealed by a survey and can cloud title or affect marketability until it is resolved.

A ballgame ticket that grants temporary, revocable permission to enter another's land is best described as a:

• a.Fee simple interest
• b.Easement appurtenant
• c.Profit
• d.License✓

A license is personal permission to use another's land for a specific purpose; it is revocable, does not transfer with the land, and creates no ownership interest. An easement, by contrast, is a more permanent right that usually runs with the land.

A property owner who wants to build in a way that does not meet a zoning setback requirement would typically seek a:

• a.Certificate of occupancy
• b.Spot rezoning of the parcel by the mayor
• c.Special warranty deed limiting the grantor's title covenants
• d.Variance from the zoning board of appeals✓

A variance is permission to deviate from a specific zoning requirement, such as a setback or height limit, granted by the zoning board of appeals when strict compliance would cause hardship. It does not change the underlying zoning classification.

A lawful commercial building that no longer matches a newly adopted residential zoning classification becomes a:

• a.Legal nonconforming use, often called 'grandfathered'✓
• b.Variance holder allowed to deviate from the rules
• c.Spot zone singled out for inconsistent treatment
• d.Parcel subject to escheat because its use now conflicts with the zoning

A legal nonconforming use is a use that was lawful before a zoning change but no longer conforms to the new rules. It is typically allowed to continue ('grandfathered'), though expansion or rebuilding after damage may be restricted.

A church or school permitted in a residential zone under specified conditions usually operates under a:

• a.Private deed restriction
• b.Nonconforming use
• c.Special use permit✓
• d.Use variance for hardship

A special use permit (conditional use) allows a use that the zoning ordinance expressly permits in a district when specified conditions are met, such as a school or house of worship. It is planned for in the ordinance rather than being an exception to it.

The illegal practice of rezoning a single small parcel in a way inconsistent with the surrounding area is called:

• a.Buffer zone
• b.Inverse condemnation
• c.Downzoning an entire district
• d.Spot zoning✓

Spot zoning is the improper singling out of one parcel for treatment different from the surrounding area, benefiting that owner without regard to the comprehensive plan. Courts often strike it down as arbitrary and inconsistent with sound planning.

Local zoning ordinances are an exercise of which government power?

• a.Police power✓
• b.Escheat
• c.Taxation
• d.Eminent domain

Zoning is an exercise of police power, the government's authority to regulate for the health, safety, morals, and general welfare of the community. Unlike eminent domain, police power does not require compensation for reasonable regulation.

Before a newly constructed home may be legally occupied, the municipality generally must issue a:

• a.Satisfaction piece
• b.Certificate of reasonable value
• c.Certificate of occupancy✓
• d.Estoppel certificate from the lender

A certificate of occupancy is issued by the local building department after inspections confirm the structure complies with building codes and is safe to occupy. Occupying a building without a required certificate can lead to penalties.

In deciding whether an item is a fixture (real property) or personal property, courts weigh all of the following EXCEPT the:

• a.Original retail price the buyer paid for the item✓
• b.Method of attachment to the real estate
• c.Intention of the party who installed it
• d.Adaptation of the item to the property's specific use

The classic fixture tests are attachment (annexation), adaptation to the real estate, and the intention of the party who installed the item, with an agreement between the parties often controlling. The price originally paid is not part of the legal test.

Shelving and equipment a commercial tenant installs to operate their business are typically:

• a.Emblements belonging to the next tenant
• b.Permanent fixtures that must remain with the landlord after the term
• c.Real property that transfers to the landlord upon installation
• d.Trade fixtures the tenant may remove before the lease ends✓

Trade fixtures are items a commercial tenant attaches to run their business, and the tenant generally may remove them before the lease ends, repairing any damage. If the tenant fails to remove them in time, they may become the landlord's property by accession.

Annual crops planted by a tenant farmer, known as emblements, are generally treated as:

• a.Real property that stays with the land when title transfers
• b.Fixtures that pass to a buyer of the land at closing
• c.The landlord's personal property, passing to the owner at lease end
• d.The tenant's personal property, which the tenant may harvest✓

Under the doctrine of emblements, crops a tenant plants and cultivates are treated as the tenant's personal property, and the tenant retains the right to re-enter and harvest them even after the tenancy ends. Perennial or naturally growing plants are usually treated as real property.

The right to use the space above the surface of a parcel, which can be sold or leased separately, is called:

• a.Prior appropriation rights
• b.Air rights✓
• c.Gas rights
• d.Subsurface rights

Air rights are the rights to use the space above a parcel, and in dense areas like New York City they can be sold or leased separately, for example transferable development rights over rail yards. Owners may not use air space in a way that unlawfully interferes with aircraft.

The right to extract minerals, oil, or gas from beneath a parcel is part of the owner's:

• a.Police power
• b.Subsurface (mineral) rights✓
• c.Littoral rights along a lake or sea
• d.Air rights above the surface

Subsurface or mineral rights include the right to extract minerals, oil, and gas beneath the land. Like air rights, these rights can be sold or leased separately from the surface, splitting ownership of a single parcel.

A legal description that refers to a lot and block number on a recorded subdivision map uses the:

• a.Metes and bounds system
• b.Lot and block (recorded plat) system✓
• c.Monument-only system defined by landmarks alone
• d.Rectangular government survey of townships and ranges

The lot and block system describes property by referencing a lot and block number on a subdivision plat recorded in the public records. It is the most common method for platted subdivisions, including many in New York.

In a metes and bounds description, a fixed reference point such as an iron pin or a natural landmark is called a:

• a.Baseline
• b.Township line
• c.Monument✓
• d.Benchmark datum

In a metes and bounds description, monuments are fixed physical points of reference, either natural (a tree or stream) or artificial (an iron pin or marker), used to fix boundaries. The description always closes back at the point of beginning.

Which characteristic is NOT one of the seven classes protected under the federal Fair Housing Act?

• a.Marital status✓
• b.Race and color
• c.Familial status
• d.Physical or mental disability

The federal Fair Housing Act protects race, color, religion, national origin, sex, disability, and familial status. Marital status is not a federally protected class, though it is protected under New York State law.

Under fair housing law, 'familial status' protects:

• a.Households with children under 18 and pregnant persons✓
• b.Only couples who are legally married
• c.Individuals based on their family's ancestry
• d.Unrelated adults who choose to share a dwelling as roommates

Familial status protects families with one or more children under 18, as well as pregnant persons and those securing custody of a child. It bars discrimination against households simply because children live there, subject to limited housing-for-older-persons exemptions.

The familial status protection has a limited exemption for:

• a.Detached single-family homes, which are entirely exempt from every fair housing rule
• b.Owner-occupied duplexes in which the resident owner rents out the other living unit
• c.Any apartment building whose owner simply adopts an internal no-children rental policy
• d.Qualified housing for older persons, such as 55-and-over or 62-and-over communities✓

Housing that qualifies as housing for older persons (generally 62-and-over, or 55-and-over meeting specific criteria) is exempt from the familial status protection. This narrow exemption must meet strict federal requirements to apply.

Which of the following is a protected class under New York's Human Rights Law but NOT under the federal Fair Housing Act?

• a.Religion, which the federal Fair Housing Act already covers
• b.Lawful source of income, such as a housing voucher✓
• c.Race, which federal fair housing law now covers
• d.Disability, which the federal Fair Housing Act already covers

New York's Human Rights Law adds protected classes beyond the federal list, including lawful source of income, age, marital status, sexual orientation, gender identity, and military status. Refusing a tenant because they will pay with a voucher can violate the source-of-income protection.

In New York, refusing to rent to an otherwise qualified applicant solely because they would pay with a Section 8 housing voucher is:

• a.Required by federal law whenever a voucher is presented
• b.A violation of the state's lawful source-of-income protection✓
• c.Permitted, because the voucher program is optional for landlords
• d.Allowed for cooperatives but prohibited for condominium rentals

New York protects lawful source of income as a class, so a landlord generally may not reject an otherwise qualified applicant just because they intend to pay rent with a Section 8 voucher or other lawful assistance. Screening must apply neutral, income-source-blind standards.

A lender's refusal to make loans in a particular neighborhood based on its racial composition is called:

• a.Steering by protected class
• b.Puffery
• c.Redlining✓
• d.Blockbusting

Redlining is the illegal practice of denying or restricting loans, insurance, or services in specific areas based on the racial or ethnic makeup of the neighborhood rather than the applicant's qualifications. It violates fair housing and fair lending laws.

Which advertising phrase would most likely violate fair housing law?

• a.Spacious three-bedroom with a recently updated eat-in kitchen
• b.Convenient to transit, highways, and parks
• c.Available immediately; pets considered
• d.Ideal for a mature Christian couple, no children✓

Advertising that expresses a preference or limitation based on a protected class, such as religion or familial status, violates fair housing law. Describing the property's features is fine, but 'Christian' and 'no children' signal prohibited preferences.

Reasonable accommodations and reasonable modifications for persons with disabilities in housing are required primarily by the:

• a.Sherman Antitrust Act
• b.Fair Housing Act✓
• c.Truth in Lending
• d.Statute of Frauds

The Fair Housing Act requires housing providers to allow reasonable accommodations in rules and reasonable modifications to the premises so persons with disabilities can use the housing. The Americans with Disabilities Act separately addresses access to public accommodations.

In real estate, the term 'improvement' refers to:

• a.The seller's written disclosure of completed repairs
• b.Any general increase in a property's market price over a period of time
• c.A tax abatement granted by the municipality to reduce the owner's levy
• d.A man-made addition to land, such as a building, fence, or road✓

An improvement is a permanent, man-made addition to land, such as a building, fence, driveway, or utility line. Improvements are part of the real property and generally transfer with the land unless specifically excluded.

'Real property' is best distinguished from 'real estate' because real property also includes:

• a.The bundle of legal rights and interests in the real estate✓
• b.The furniture and appliances kept inside the building
• c.Only the physical soil, rocks, and minerals inside the boundaries
• d.The movable trade fixtures that a commercial tenant has installed

Real estate refers to the physical land and its permanent improvements, while real property adds the bundle of legal rights and interests that come with owning that real estate, such as possession, control, and disposition.

Covenants, conditions, and restrictions (CC&Rs) in a subdivision are typically enforced by:

• a.The New York Department of State
• b.The county tax assessor's office
• c.The Federal Housing Administration when it insures the loans
• d.The homeowners association or other lot owners✓

Private CC&Rs are enforced by the homeowners association or by other owners in the subdivision, typically through injunctions or lawsuits, not by a government agency. Courts will not enforce restrictions that are illegal or discriminatory.

The physical characteristic of land meaning that no two parcels are exactly alike is:

• a.Scarcity of usable land
• b.Uniqueness (nonhomogeneity)✓
• c.Indestructibility of the land
• d.Immobility of a parcel of land

Uniqueness, also called nonhomogeneity or heterogeneity, means no two parcels are identical because each occupies its own location. Along with immobility and indestructibility, it is one of the three physical characteristics of land.

Which of the following is an economic characteristic of land?

• a.Scarcity✓
• b.Leverage
• c.Uniqueness
• d.Indestructibility

The economic characteristics of land are scarcity, improvements (modification), permanence of investment, and situ(area preference). Immobility, indestructibility, and uniqueness are the physical characteristics.

The right in the bundle of rights that allows an owner to sell, gift, or will the property is the right of:

• a.Exclusion
• b.Quiet possession
• c.Disposition✓
• d.Enjoyment

The right of disposition lets an owner transfer the property by sale, gift, or will. It is one of the core sticks in the bundle of rights, along with possession, control, enjoyment, and exclusion.

Acquiring title by openly and continuously occupying another's land without permission for the statutory period is:

• a.Adverse possession✓
• b.Accretion by natural deposit
• c.Novation of the contract
• d.Escheat to a state

Adverse possession lets an occupant gain title by possessing land in a way that is hostile, actual, open and notorious, exclusive, and continuous for the statutory period, which is ten years in New York. The use must be without the true owner's permission.

Recording a deed in the county land records provides:

• a.No legal effect until the property is resold
• b.A government guarantee of marketable title
• c.Constructive notice to the world of the owner's interest✓
• d.Actual notice, but only to those who personally signed the deed

Recording gives constructive (legal) notice to the world of the recorded interest, so later purchasers are presumed to know of it. Recording does not itself guarantee title; that protection comes from title insurance.

Compared with riparian rights, the doctrine of prior appropriation allocates water based on:

• a.Who first put the water to beneficial use under a state permit✓
• b.An equal pro rata share among neighboring owners
• c.The parcel's mere physical adjacency to the watercourse or lake
• d.The relative size of each parcel of land

Under prior appropriation, water rights are granted by the state to those who first put water to beneficial use ('first in time, first in right'), independent of land location. Riparian rights, by contrast, belong to owners whose land borders the watercourse.

Which encumbrance is a non-money encumbrance that affects use rather than a claim for payment?

• a.A property tax lien for unpaid taxes
• b.A deed restriction limiting building height✓
• c.A mortgage lien securing the purchase loan
• d.A judgment lien docketed after a money award

Encumbrances fall into money encumbrances (liens securing a debt) and non-money encumbrances that affect the use or physical condition of the property, such as easements and deed restrictions. A height restriction limits use rather than securing a debt.

A recorded notice that a lawsuit affecting title to a property is pending is a:

• a.Satisfaction of mortgage
• b.Lis pendens✓
• c.Lien waiver
• d.Certificate of occupancy

A lis pendens ('litigation pending') is a recorded notice that a lawsuit that could affect title is underway, warning potential buyers and lenders. It clouds the title until the litigation is resolved or the notice is removed.

A single wall that straddles the boundary line of and is shared by two adjoining owners is a:

• a.An encroachment that must be torn down
• b.A fixture belonging to whichever owner paid to build it
• c.A prescriptive easement in gross benefiting a utility
• d.Party wall, with an easement for mutual support✓

A party wall is a shared wall on the boundary between two properties, and each owner typically has an easement in the other's half for mutual support. The owners usually share the cost of maintaining the wall.

Which estate is a freehold estate rather than a leasehold estate?

• a.Fee simple absolute✓
• b.Estate for years
• c.Periodic tenancy renewing automatically
• d.Tenancy at will terminable at any time

Freehold estates involve ownership of indefinite duration and include fee simple and life estates. Estate for years, periodic tenancy, and tenancy at will are leasehold (nonfreehold) estates that give possession without ownership.