CSLB General Building (B) — All Questions

Which of the following is considered real property rather than personal property?

• a.A tenant's freestanding refrigerator brought into an apartment
• b.A built-in central heating system permanently attached to the building✓
• c.A car parked in the driveway
• d.Loose furniture staged for a showing

Real property includes land and anything permanently affixed to it, such as a built-in heating system. Items that are movable and not attached, like a refrigerator brought in by a tenant, are personal property (chattel). The test of a fixture looks at attachment, adaptation, and intent.

The bundle of rights in real property ownership does NOT typically include which of the following?

• a.The right to use the property
• b.The right to violate local zoning laws✓
• c.The right to exclude others
• d.The right to sell or transfer the property

The bundle of rights includes possession, control, enjoyment, exclusion, and disposition. It never includes a right to break the law, so violating zoning ordinances is not part of ownership rights. All ownership rights remain subject to government limits such as police power.

A fee simple absolute estate is best described as:

• a.A lease that lasts for 99 years
• b.A right to use land owned by another
• c.An estate that automatically ends when the owner dies
• d.The highest and most complete form of ownership, with unlimited duration✓

Fee simple absolute is the greatest interest one can hold in real property, lasting indefinitely and freely inheritable and transferable. A life estate ends at death and an easement is only a right to use another's land. It remains subject to government powers such as taxation and eminent domain.

An easement appurtenant benefits:

• a.A specific individual regardless of land ownership
• b.Only the government
• c.The dominant tenement, and it transfers with that parcel of land✓
• d.The servient tenement exclusively

An easement appurtenant runs with the land and benefits the dominant tenement while burdening the servient tenement. When the dominant parcel is sold, the easement transfers automatically. An easement in gross, by contrast, benefits a person or entity rather than a parcel.

Which government power allows the taking of private property for public use with just compensation?

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

Eminent domain is the power to take private property for public use, exercised through condemnation, and it requires payment of just compensation. Escheat transfers property to the state when an owner dies without heirs. Police power regulates use for public welfare, such as zoning.

The process by which the state acquires property when an owner dies leaving no will and no heirs is called:

• a.Accretion
• b.Adverse possession
• c.Eminent domain
• d.Escheat✓

Escheat returns property to the state when a person dies intestate with no identifiable heirs, preventing land from being ownerless. Adverse possession is a private acquisition through hostile, open use over time. Accretion is the gradual addition of land by natural deposit of soil.

A form of co-ownership that includes the right of survivorship is:

• a.Joint tenancy✓
• b.Tenancy in common
• c.Ownership in severalty
• d.A leasehold estate

Joint tenancy carries the right of survivorship, so a deceased owner's share passes automatically to the surviving joint tenants rather than to heirs. Tenancy in common has no survivorship, and each share passes by will or inheritance. Ownership in severalty means a single owner holds title alone.

Which of the following describes an encumbrance on real property?

• a.The complete absence of any ownership interest
• b.A claim, lien, or restriction that affects the title or use of property✓
• c.A synonym for fee simple ownership
• d.The physical dimensions of a parcel

An encumbrance is any claim or liability attached to property that may affect its value or use, such as a lien, easement, or deed restriction. It does not prevent transfer of title but travels with the property. Buyers usually want title free of undisclosed encumbrances.

A physical feature of a property that reduces its value, such as an outdated floor plan, is an example of:

• a.Functional obsolescence✓
• b.Economic obsolescence
• c.Physical accretion
• d.Highest and best use

Functional obsolescence is a loss in value caused by outdated or poorly designed features within the property itself, like a bad floor plan. Economic (external) obsolescence comes from factors outside the property, such as a nearby nuisance. Both are forms of depreciation considered in the cost approach.

The principle that a property's maximum value is achieved when it is used in the way that produces the greatest return is called:

• a.Highest and best use✓
• b.Substitution
• c.Regression
• d.Contribution

Highest and best use is the legally permissible, physically possible, financially feasible, and maximally productive use of a site. Appraisers analyze it because value is tied to the most profitable reasonable use. Substitution, regression, and contribution are other valuation principles.

Under the principle of substitution, a buyer will pay no more for a property than:

• a.The cost of the most expensive comparable in the market
• b.The assessed value for tax purposes
• c.The original construction cost
• d.The cost of acquiring an equally desirable substitute property✓

The principle of substitution holds that value is set by the cost of an equally desirable alternative. This idea underlies the sales comparison approach to appraisal. A rational buyer will not overpay when a comparable substitute is available for less.

A metes and bounds legal description relies on:

• a.Lot and block numbers on a recorded plat
• b.The street address alone
• c.Township and range grid lines
• d.Distances, directions, and monuments to define boundaries✓

Metes and bounds describes a parcel by measured distances and compass directions between reference points and monuments, always returning to the point of beginning. The lot and block system uses recorded subdivision plats. The rectangular survey system uses township and range grids.

The gradual increase of land along a shoreline caused by the deposit of soil is called:

• a.Erosion
• b.Reliction
• c.Avulsion
• d.Accretion✓

Accretion is the slow buildup of land by natural deposits of soil or sediment, and the new land belongs to the adjacent owner. Erosion is the gradual loss of land. Avulsion is a sudden loss or change of land, such as from a flood.

Which type of depreciation is generally considered incurable?

• a.External (economic) obsolescence caused by a nearby factory✓
• b.Deferred maintenance such as peeling paint
• c.A broken window
• d.A worn carpet

External or economic obsolescence stems from factors outside the property, such as a neighboring nuisance, which the owner cannot fix, so it is typically incurable. Deferred maintenance and many functional issues can be corrected at reasonable cost. Curability depends on whether the fix adds value at least equal to its cost.

A private limitation placed in a deed that controls how an owner may use their property is known as a:

• a.Easement in gross
• b.Restrictive covenant✓
• c.Prescriptive easement
• d.Mechanic's lien

A restrictive covenant is a private limitation in a deed or subdivision declaration that controls land use, such as prohibiting commercial activity. It runs with the land and binds future owners. Courts will not enforce covenants that are illegal or discriminatory.

In real estate valuation, the term 'situs' refers to:

• a.A type of mortgage
• b.The soil composition of a lot
• c.The chain of title
• d.The preference or economic attractiveness of a location✓

Situs is the economic attractiveness of a location, reflecting people's preference for one area over another. It is one reason location so strongly influences value. Because land is immobile, its situs cannot be moved, only the surrounding conditions can change.

Which of the following is a physical characteristic of land?

• a.Scarcity
• b.Immobility✓
• c.Situs
• d.Permanence of investment

The physical characteristics of land are immobility, indestructibility, and uniqueness (nonhomogeneity). Scarcity, situs, permanence of investment, and improvements are economic characteristics. These traits explain why land markets are local and why no two parcels are identical.

A life estate is an ownership interest that:

• a.Lasts forever and passes to heirs
• b.Automatically converts to a lease after ten years
• c.Is always held by a corporation
• d.Lasts for the duration of a specified person's life✓

A life estate grants ownership for the lifetime of a named person, after which title passes to the remainderman or reverts to the grantor. The life tenant may use and profit from the property but cannot commit waste. It cannot be willed because it ends at death.

Riparian rights refer to a landowner's rights concerning:

• a.Mineral deposits beneath the surface
• b.The use of water in a river or stream adjacent to the land✓
• c.Air space above the property
• d.Underground utility easements

Riparian rights govern an owner's use of water from a flowing watercourse such as a river or stream bordering the land. Littoral rights apply to owners bordering large, static bodies of water like lakes or oceans. Both are appurtenant to the land.

The concept that property value tends to be maximized when there is reasonable similarity among properties in a neighborhood is called:

• a.Anticipation
• b.Conformity✓
• c.Change
• d.Competition

The principle of conformity states that homes maintain and increase value when they are reasonably similar in style, size, and quality to surrounding properties. Sharp differences can drag value through regression or lift it through progression. Anticipation ties value to expected future benefits.

When a lower-value home gains value because it is located among higher-value homes, this illustrates the principle of:

• a.Progression✓
• b.Regression
• c.Contribution
• d.Substitution

Progression is the increase in a lesser property's value due to the presence of better, higher-value properties nearby. Regression is the reverse, where a superior property loses value among lesser ones. Both flow from the broader principle of conformity.

An appurtenance is best defined as:

• a.A movable item of personal property
• b.A temporary license to enter land
• c.A lien recorded against the title
• d.A right or improvement that belongs to and transfers with the land✓

An appurtenance is a right, privilege, or improvement that attaches to and passes with the land when it is conveyed, such as an easement or water right. It is included in a sale unless specifically excluded. A license, by contrast, is a revocable personal permission that does not transfer.