California Real Estate Salesperson — All Questions

In California, general property tax liens are significant because they generally:

• a.Take priority over most other liens✓
• b.Require the property owner's written consent to be valid
• c.Attach only after a court has entered a formal judgment
• d.Are junior to any earlier recorded private mortgage

General real property tax liens hold a priority position ahead of most private liens, regardless of recording date. Unpaid property taxes can lead to a tax sale. Their super-priority makes them a primary concern for lenders and buyers.

To preserve mechanic's lien rights, many California claimants must first serve a:

• a.Writ of attachment issued by the county superior court
• b.Notice of default
• c.Lis pendens recorded against the entire subdivision
• d.Preliminary notice✓

Many contractors, subcontractors, and suppliers must serve a preliminary notice, usually within 20 days of first furnishing labor or materials, to preserve later mechanic's lien rights. The lien itself must be recorded and enforced within statutory deadlines. Missing these steps can forfeit the lien.

A recorded document giving notice of a pending lawsuit that affects title to real property is a:

• a.Lis pendens✓
• b.Estoppel certificate confirming the terms of a lease
• c.Judgment
• d.Deed of reconveyance releasing a deed of trust lien

A lis pendens, or notice of pending action, is recorded to warn that litigation could affect title. It clouds title and can prevent a clean sale until resolved. An improperly recorded lis pendens can be expunged by the court.

Recording an abstract of judgment creates a lien on the debtor's real property that is:

• a.A priority lien superior even to the property tax lien
• b.A non-monetary encumbrance similar to an easement
• c.A specific, voluntary lien on one identified parcel
• d.A general, involuntary lien✓

An abstract of judgment, when recorded, creates a general involuntary lien on all real property the debtor owns in that county. It is involuntary because it arises from a court judgment, not the owner's consent. It attaches to after-acquired property in the county as well.

A Mello-Roos special tax that funds community facilities in a California development is:

• a.A lien that must be disclosed to buyers✓
• b.A federal income tax collected directly by the IRS
• c.A voluntary charge that buyers may simply decline to pay
• d.A one-time fee paid only by the original subdivision developer

Mello-Roos Community Facilities District taxes fund infrastructure and appear as a lien and ongoing special tax on the property. Sellers must provide a Mello-Roos disclosure to buyers. The tax obligation transfers with ownership.

The priority of most voluntary liens against real property is generally determined by:

• a.The credit score of the borrower at the time of closing
• b.The dollar amount of each lien, with the largest ranking first
• c.Alphabetical order of the lienholders' business names
• d.The order in which they are recorded✓

Under California's race-notice recording system, lien priority is generally set by recording order ('first in time, first in right'), with exceptions such as property tax liens. Recording promptly protects a lienholder's priority. Subordination agreements can change the normal order by consent.

A homeowners association's recorded claim against an owner for unpaid assessments is:

• a.An involuntary lien on the owner's unit✓
• b.A general lien on all of the owner's property statewide
• c.A non-monetary deed restriction unrelated to any money
• d.A voluntary lien that the owner elects to grant

Unpaid HOA assessments can become a lien on the owner's property under the CC&Rs and the Davis-Stirling Act, and the association may ultimately foreclose. It is involuntary as to the delinquent owner. Statutory procedures govern how the HOA perfects and enforces the lien.

A recorded federal tax lien for unpaid income taxes attaches to:

• a.Only the specific parcel identified in the lien notice
• b.Personal property but never any real estate holdings
• c.Property the taxpayer acquires only after the debt is paid
• d.All of the taxpayer's property in the filing area✓

A recorded federal tax lien is a general lien attaching to all real and personal property the taxpayer owns in the filing jurisdiction. It can complicate a sale until released or subordinated. Priority against other creditors depends on filing dates and federal rules.

An encumbrance that limits how an owner may use land but does not secure a debt is a:

• a.General lien reaching all of the owner's other assets
• b.Non-monetary encumbrance✓
• c.Specific lien enforceable through a foreclosure sale
• d.Voluntary mortgage securing a residential home loan

Non-monetary encumbrances include easements, deed restrictions, and encroachments; they affect use or title but do not secure money. Liens, by contrast, secure payment of a debt. Both are encumbrances that can affect marketability.

A prejudgment writ of attachment recorded against real property creates:

• a.A super-priority claim ranking ahead of property taxes
• b.A voluntary security interest chosen by the owner
• c.A permanent easement running across the property
• d.A temporary lien pending the lawsuit's outcome✓

An attachment lien is a prejudgment remedy that holds the debtor's property as security while a lawsuit is pending, becoming meaningful if the plaintiff prevails. It is involuntary. If the plaintiff loses, the attachment is released.

A landlocked owner who needs access across a neighbor's parcel may obtain an:

• a.Easement by necessity✓
• b.Encroachment that eventually ripens into fee ownership
• c.Estate at sufferance created by holding over after a lease
• d.Easement in gross that benefits a utility company

An easement by necessity can arise when a parcel is landlocked and access is strictly necessary, typically where the parcels were once under common ownership. It ensures the owner can reach a public road. It ends if another legal access becomes available.

An easement is terminated by merger when:

• a.The easement has been used continuously for many years
• b.The servient owner records a new deed of trust on the land
• c.The dominant and servient parcels come under one owner✓
• d.The dominant owner sells the benefited parcel to a stranger

Merger extinguishes an easement when the same person acquires both the dominant and servient tenements, since one cannot hold an easement over one's own land. If the parcels are later separated, a new easement must be created. Merger is one of several ways easements end.

A revocable, personal permission to use another's land that creates no interest in the land is a:

• a.Easement appurtenant that runs with the land
• b.Prescriptive easement gained through long hostile use
• c.License✓
• d.Lease

A license is mere permission to use land for a specific purpose, is generally revocable, and does not transfer with the land. An easement, by contrast, is an interest in land that usually survives transfers. Permission is the hallmark of a license, distinguishing it from a prescriptive easement.

A wall built on the boundary line and shared by two adjoining owners is a:

• a.Deed restriction imposed by the original subdivider
• b.Party wall✓
• c.Encroachment subject to removal by a court order
• d.Trespass

A party wall stands on the line between two properties and is used by both owners, each typically having an easement in the other's half for support. Maintenance duties are usually shared. Party wall agreements clarify rights and responsibilities.

An easement created when an owner sells part of a parcel and expressly keeps a right-of-way across the sold portion is created by:

• a.Prescription after years of open and hostile use
• b.Condemnation by a government agency for public use
• c.Estoppel
• d.Reservation✓

An easement by reservation is created when a grantor conveys land but reserves an easement over the conveyed parcel for the benefit of the retained land. An easement by grant, by contrast, is expressly given to the grantee. Both are express easements stated in the deed.

A prescriptive easement in California may be lost if the holder stops using it for the statutory period, a termination by:

• a.Condemnation under the power of eminent domain
• b.Abandonment through nonuse✓
• c.Merger of the dominant and the servient estates
• d.An express written release recorded by the holder

A prescriptive easement can be extinguished by abandonment shown through nonuse for the prescriptive period plus intent to abandon. Easements created by grant are generally not lost by mere nonuse. Different creation methods affect how an easement can end.

The parcel burdened by an easement appurtenant is the:

• a.Dominant tenement that enjoys the benefit
• b.Servient tenement✓
• c.Leasehold estate created for a fixed term of years
• d.Reversionary interest retained by the grantor

In an easement appurtenant, the servient tenement bears the burden of the easement while the dominant tenement receives the benefit. The easement runs with both parcels. Identifying which parcel is burdened is essential to understanding the easement.

A developer's recorded subdivision map that dedicates streets to public use creates public access through:

• a.Adverse possession asserted against the local government
• b.A prescriptive easement gained gradually by public use
• c.Reversion
• d.Dedication✓

Dedication is the voluntary transfer of private land or an interest, such as streets or parks, to the public, often through a recorded subdivision map. Acceptance by the public agency completes the dedication. It is a common way public rights-of-way are created.

A legal description that uses distances, directions, and boundary markers beginning and ending at the same point is the:

• a.Rectangular survey system of townships and sections
• b.Metes and bounds method✓
• c.Lot and block system referencing a recorded map
• d.Assessor's parcel number used only for taxation purposes

The metes-and-bounds method describes a parcel by its measured distances (metes) and directions or boundaries (bounds), beginning and closing at the point of beginning. It is common for irregular parcels. Each call must connect back to enclose the land.

In the U.S. government rectangular survey system, a standard section contains:

• a.640 acres✓
• b.36 square miles making up an entire township
• c.5,280 feet along each one of its four sides
• d.80 acres

A section is one square mile and contains 640 acres. There are 36 sections in a township. These fixed relationships let surveyors describe land quickly under the rectangular survey system.

A township in the rectangular survey system is composed of:

• a.One square mile of surveyed government land
• b.36 sections✓
• c.160 acres
• d.640 acres divided evenly among four quarters

A township measures six miles by six miles and is divided into 36 sections, each one square mile. Townships are located by reference to principal base lines and meridians. This grid underlies land descriptions in survey-system states.

A legal description reading 'Lot 12, Block 4, Tract 908, as recorded in the county' uses the:

• a.Metes and bounds method of measured directional calls
• b.Vertical datum
• c.Government rectangular survey of townships and ranges
• d.Lot and block system✓

The lot-and-block (recorded map or subdivision) system describes property by reference to a recorded subdivision map showing numbered lots and blocks. It is common in developed urban and suburban areas. The recorded map supplies the detailed dimensions.

In the rectangular survey system, land is located by principal meridians running north-south and:

• a.Metes-and-bounds monuments set by a surveyor
• b.Recorded subdivision maps kept on file locally
• c.Base lines running east-west✓
• d.Township roads laid out by the county government

The rectangular survey system uses principal meridians running north-south and base lines running east-west as reference lines, from which townships and ranges are numbered. California uses meridians such as Mount Diablo and San Bernardino. This framework fixes each parcel's grid position.

A quarter of a quarter section of land contains how many acres?

• a.10 acres
• b.640 acres
• c.40 acres✓
• d.160 acres

A section has 640 acres; a quarter section is 160 acres; and a quarter of a quarter is 40 acres. Dividing sections into aliquot parts is standard in the survey system. These fractions appear frequently in rural land descriptions.

Describing the elevation of a condominium unit or air-rights parcel typically requires reference to a:

• a.Datum or benchmark✓
• b.Range line within the rectangular survey system
• c.Point of beginning used in a metes-and-bounds call
• d.Recorded subdivision block and tract number

Vertical measurements, needed to describe condominium units, air rights, or subsurface rights, are made from a datum, a fixed reference plane, using benchmarks. Horizontal systems alone cannot fix a three-dimensional space. Surveyors combine horizontal descriptions with vertical datum references.

The fixed starting point to which all metes-and-bounds calls must return is the:

• a.Base line running east-west through the township
• b.Point of beginning✓
• c.Benchmark used for establishing vertical control
• d.Principal meridian of the surrounding survey area

A metes-and-bounds description must start and end at the point of beginning so the described boundary closes and encloses the parcel. If the calls do not return to it, the description is defective. The point of beginning is usually a monument or referenced location.

An assessor's parcel number (APN) is used primarily to:

• a.Identify property for tax assessment✓
• b.Serve as a complete legal description within a deed
• c.Establish the recording priority of competing liens
• d.Guarantee that title is clear and marketable

The APN is an identifier the county assessor assigns for taxation and record-keeping, and it helps locate a parcel, but it is not a substitute for a full legal description in a deed. Deeds rely on metes-and-bounds, lot-and-block, or survey descriptions. The APN aids identification, not conveyance.

Personal property that has become permanently attached to real property is a:

• a.Trade fixture
• b.Chattel
• c.Fixture✓
• d.Emblement

A fixture is personal property that has been so attached or adapted to real property that it is considered part of the real estate and passes with a sale. Whether an item is a fixture affects what conveys. Buyers and sellers should specify uncertain items in the contract.

Which test is commonly used to determine whether an item is a fixture?

• a.The color and style of the item relative to the home
• b.Whether the item was manufactured in the United States
• c.Method of attachment and intention of the parties✓
• d.The original purchase price that was paid for the item

Courts weigh factors such as method of attachment, adaptability to the property's use, relationship of the parties, intention, and any agreement, sometimes recalled by the acronym MARIA. Intention is often the most important factor. A written agreement can settle disputes in advance.

Equipment a commercial tenant installs to run a business and may remove before the lease ends is a:

• a.Encroachment
• b.Trade fixture✓
• c.Permanent fixture that transfers to the landlord
• d.Emblement belonging to the tenant who grew a crop

Trade fixtures are items a business tenant attaches for commercial use, such as shelving or equipment, and they remain the tenant's personal property, removable before the lease ends if damage is repaired. Ordinary fixtures pass with the real estate. The commercial context distinguishes trade fixtures.

Growing annual crops produced by a tenant farmer's labor and treated as personal property are called:

• a.Fixtures
• b.Riparian rights that attach to the bordering parcel
• c.Emblements✓
• d.Appurtenances that run with the underlying property

Emblements are annual crops produced by cultivation; they are considered the personal property of the tenant who planted them, who may re-enter to harvest after the tenancy ends. This doctrine protects a farmer's labor. It is an exception to the rule that plants are part of the land.

California allocates the right to divert water from rivers and streams for use elsewhere mainly under the doctrine of:

• a.Appropriation✓
• b.Littoral rights tied to lakefront property ownership
• c.Emblements
• d.Accretion from the gradual deposit of soil over time

California follows a hybrid system, but appropriative rights allow diverting water for beneficial use away from the watercourse, subject to a permit and the priority 'first in time, first in right.' Riparian rights, by contrast, attach to land bordering the water. The state regulates water use closely.

Ownership of land generally includes the right to the airspace above it, known as:

• a.Littoral rights running along a lake's shoreline
• b.Accretion
• c.Prescriptive rights gained through hostile use
• d.Air rights✓

Air rights are part of the bundle of rights and can be sold or leased separately, as with development above a building. They are limited by public navigation rights and regulation. Subsurface, or mineral, rights are the counterpart below the surface.

Land added gradually to a waterfront parcel by the deposit of soil is acquired through:

• a.Accretion✓
• b.Condemnation by a public agency for public use
• c.Avulsion, which is a sudden loss or shift of land
• d.Erosion

Accretion is the gradual, imperceptible buildup of soil (alluvion) along a watercourse, and the new land generally belongs to the adjoining owner. Avulsion, by contrast, is a sudden change that does not shift boundaries. These doctrines govern how water-related boundaries change.

For a deed to be valid in California, it must include a competent grantor and a:

• a.Payment of the documentary transfer tax in advance
• b.Notary acknowledgment obtained before the deed is signed
• c.Recording at the county recorder's office before delivery
• d.Grantee named with reasonable certainty✓

A valid deed requires a competent grantor, an identifiable grantee, a granting clause, an adequate property description, and delivery and acceptance. Acknowledgment and recording are needed to record but not for validity between the parties. A deed missing an essential element may be void.

Title actually passes to the grantee when the deed is:

• a.Notarized by a duly commissioned notary public
• b.Signed by the grantor in front of two witnesses
• c.Delivered and accepted✓
• d.Recorded at the county recorder's office of record

A deed transfers title upon delivery by the grantor and acceptance by the grantee, showing present intent to convey. Recording gives notice but is not required to pass title between the parties. Without delivery and acceptance, the deed is ineffective.

A deed signed by a grantor who was legally incompetent at the time is generally:

• a.Fully valid once it is promptly recorded
• b.Void or voidable✓
• c.Enforceable if the grantee paid fair market value
• d.Automatically cured after a three-year period passes

A grantor must have legal capacity; a deed from an incompetent grantor may be void or voidable depending on the circumstances, such as an adjudicated incompetent versus temporary incapacity. A forged deed is void and conveys nothing. Capacity requirements protect vulnerable owners.

A deed used to convey property sold at a trustee's foreclosure sale is a:

• a.Trustee's deed✓
• b.Warranty deed
• c.Grant deed carrying full implied warranties of title
• d.Quitclaim deed releasing an interest among family

A trustee's deed, or trustee's deed upon sale, conveys title to the successful bidder after a nonjudicial foreclosure of a deed of trust. It passes whatever title the trustor had, without broad warranties. Similar special deeds include sheriff's deeds and tax deeds.

The clause in a deed that defines the extent of the estate being granted, often beginning 'to have and to hold,' is the:

• a.Acknowledgment
• b.Granting clause that names the parties to the deed
• c.Habendum clause✓
• d.Reddendum clause reserving a rent or a right

The habendum clause follows the granting clause and describes the quantity of the estate conveyed, such as a fee simple or a life estate. If it conflicts with the granting clause, the granting clause usually controls. It clarifies exactly what interest the grantee receives.

When a trust deed loan is fully repaid, the trustee records a document releasing the lien called a:

• a.Sheriff's deed following a court money judgment
• b.Deed of reconveyance✓
• c.Grant deed conveying full ownership to the borrower
• d.Trustee's deed issued after a foreclosure sale

Upon full payment, the beneficiary directs the trustee to record a deed of reconveyance, or full reconveyance, which releases the deed of trust lien and clears title. Failure to reconvey can cloud title. Borrowers should confirm the reconveyance is recorded.

A forged deed in the chain of title is:

• a.Valid if the grantee had no knowledge of the forgery
• b.Voidable but valid until a court cancels it
• c.Enforceable once the statute of limitations has run
• d.Void and conveys no title✓

A forged deed is void from the start and passes no title, even to a later good-faith purchaser. This differs from a merely voidable deed, which is valid until set aside. Forgery is a serious defect that title insurance and careful examination aim to catch.

A deed given without monetary consideration, such as between family members, is often a:

• a.Trustee's deed following a nonjudicial foreclosure
• b.Gift deed✓
• c.Tax deed
• d.Sheriff's deed issued after a judgment sale

A gift deed transfers property for love and affection rather than money and is valid if properly executed and delivered. Nominal or no consideration does not invalidate a deed between the parties. Creditors' rights and gift tax rules may still apply.

Which of the following is NOT required for a deed to be valid?

• a.An adequate description of the property being conveyed
• b.Delivery of the deed to the grantee during the grantor's life
• c.A granting clause showing an intent to convey title
• d.Recording at the county recorder's office✓

Recording is not necessary for a deed to be valid between grantor and grantee; it provides constructive notice to third parties. Validity requires a competent grantor, named grantee, granting clause, description, and delivery and acceptance. Recording protects priority, not basic validity.

The signature required on a deed to convey title is that of the:

• a.Grantor✓
• b.Escrow officer who is handling the closing
• c.Grantee who is accepting the property
• d.Notary

Only the grantor must sign a deed to convey title, since the grantor is the party giving up the interest. The grantee need not sign. A notary acknowledges the grantor's signature to permit recording.

Title that is reasonably free from doubt and defects, such that a prudent buyer would accept it, is called:

• a.Constructive title arising merely from possession
• b.Equitable title held by a buyer under a contract
• c.Color of title
• d.Marketable title✓

Marketable title is free from significant defects, undisclosed encumbrances, or reasonable doubt, so a prudent buyer would accept it. Purchase contracts typically require the seller to deliver marketable title. Serious clouds must be cleared before closing.

A lawsuit brought to remove a cloud on title and confirm clear ownership is an action to:

• a.Partition
• b.Foreclose a delinquent deed of trust on the land
• c.Quiet title✓
• d.Condemn the property for a public purpose

A quiet title action asks a court to resolve competing claims and confirm the plaintiff's ownership, removing clouds such as old liens or disputed interests. The resulting judgment clears the record. It is commonly used after boundary disputes or defective conveyances.

Compared with a standard CLTA owner's policy, an ALTA extended title policy generally provides:

• a.Protection against future declines in market value
• b.A guarantee that the property taxes will never increase
• c.Coverage only for the lender and never for the owner
• d.Broader coverage, including certain unrecorded and physical matters✓

An ALTA extended policy covers additional risks a standard CLTA policy excludes, such as certain unrecorded liens, survey matters, and rights of parties in possession, often requiring an inspection or survey. Lenders frequently require ALTA coverage. Title insurance addresses defects, not market or tax changes.

The condensed recorded history examined to confirm a seller's ownership is called an:

• a.Acknowledgment taken before a notary public
• b.Abstract of title✓
• c.Estoppel certificate signed by an existing tenant
• d.Assignment of the seller's existing mortgage loan

An abstract of title is a condensed history of recorded documents affecting a property, used to evaluate the chain of title. An attorney or title officer reviews it to form an opinion or issue insurance. Today, title insurance largely replaces sole reliance on an abstract.

A buyer who purchases in good faith, for value, and without notice of prior unrecorded claims is a:

• a.Bona fide purchaser✓
• b.Adverse possessor claiming by long and hostile use
• c.Remainderman awaiting the end of a life estate
• d.Trustee holding bare legal title for a lender

A bona fide purchaser buys for value in good faith without notice of others' unrecorded interests and is protected by the recording laws against those hidden claims. Recording promptly protects one's own interest against later purchasers. This concept underlies California's race-notice system.

Under California's race-notice recording system, priority generally goes to the party who:

• a.Pays the highest purchase price for the property
• b.Signs the purchase contract earliest in time
• c.Takes possession of the property before anyone else
• d.Records first without notice of a prior claim✓

In a race-notice jurisdiction, a subsequent purchaser prevails only if they take without notice of a prior interest and record first. This encourages prompt recording and protects good-faith purchasers. Failure to record can subordinate an earlier interest to a later purchaser who records.