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Certified Property Appraiser Exam study materials
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Certified Property Appraiser Exam practice questions

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Question 1Property Valuation Principles and Approaches

In the cost approach, which component of depreciation is attributable to factors external to the property, such as changes in neighborhood demand or zoning?

  1. Functional obsolescence
  2. Physical deterioration
  3. External obsolescence Correct answer.
  4. Deferred maintenance

Explanation

External obsolescence, also called economic obsolescence, arises from forces outside the property itself, such as adverse zoning, market decline, or neighborhood nuisances. It is generally considered incurable because the owner cannot correct the external cause. Physical deterioration and functional obsolescence originate within the property.

Question 2Property Valuation Principles and Approaches

An appraiser values a property using the sales comparison approach and adjusts comparable sales to the subject. A comparable sold for $300,000 and is superior to the subject by $15,000 in lot size. What adjustment applies to the comparable's price?

  1. Add $15,000
  2. Subtract $15,000 Correct answer.
  3. Add $30,000
  4. No adjustment is made

Explanation

Adjustments are made to the comparable to make it equivalent to the subject. When the comparable is superior in a feature, its price is adjusted downward to reflect what the subject would command. A $15,000 superiority therefore produces a $15,000 subtraction.

Question 3Property Valuation Principles and Approaches

Which principle holds that a property's maximum value is realized when it is put to the use that is legally permissible, physically possible, financially feasible, and maximally productive?

  1. Conformity
  2. Substitution
  3. Highest and best use Correct answer.
  4. Contribution

Explanation

Highest and best use is the reasonably probable and legal use that is physically possible, appropriately supported, and financially feasible, resulting in the highest value. The four tests are legal permissibility, physical possibility, financial feasibility, and maximum productivity. It anchors value in all three approaches.

Question 4Property Valuation Principles and Approaches

Using the income approach, a property generates a net operating income of $48,000 and the market-derived capitalization rate is 8%. What is the indicated value?

  1. $384,000
  2. $4,800,000
  3. $600,000 Correct answer.
  4. $540,000

Explanation

Under direct capitalization, value equals net operating income divided by the capitalization rate. Dividing $48,000 by 0.08 yields $600,000. This converts a single year's income into an indication of value.

Question 5Property Valuation Principles and Approaches

Which valuation approach is most appropriate for a special-purpose property such as a public library that rarely sells and produces no income?

  1. Cost approach Correct answer.
  2. Gross rent multiplier approach
  3. Income capitalization approach
  4. Sales comparison approach

Explanation

The cost approach is most reliable when a property is new or nearly new, has limited comparable sales, and its improvements do not generate income. Special-purpose properties like libraries, churches, and schools fit this profile. The approach estimates value as land value plus depreciated improvement cost.

Question 6Property Valuation Principles and Approaches

A property has a potential gross income of $90,000, a vacancy and collection loss of 5%, and operating expenses of $30,000. What is its net operating income?

  1. $85,500
  2. $60,000
  3. $52,500
  4. $55,500 Correct answer.

Explanation

Effective gross income is potential gross income less vacancy and collection loss: $90,000 minus $4,500 equals $85,500. Subtracting operating expenses of $30,000 yields net operating income of $55,500. Debt service is excluded from operating expenses.

Question 7Property Valuation Principles and Approaches

The principle of substitution underlies which valuation approach most directly?

  1. Income capitalization approach
  2. Cost approach
  3. Sales comparison approach Correct answer.
  4. Land residual technique

Explanation

The sales comparison approach rests on substitution: a buyer will pay no more for a property than the price of a comparable substitute. Comparable sales establish the benchmark value. The principle is also relevant to the other approaches but is most directly embodied in sales comparison.

Question 8Property Valuation Principles and Approaches

In the sales comparison approach, an adjustment for a difference in market conditions between the sale date and the effective date of appraisal is best described as which type of adjustment?

  1. Conditions of sale adjustment
  2. Time adjustment Correct answer.
  3. Location adjustment
  4. Physical characteristic adjustment

Explanation

A time, or market conditions, adjustment accounts for changes in market prices between the comparable's sale date and the appraisal date. It is applied in the sequence of adjustments after property rights and financing considerations. It reflects market movement, not physical differences.

Question 9Property Valuation Principles and Approaches

An appraiser estimates a building's replacement cost at $400,000, its land value at $100,000, and total accrued depreciation at $60,000. What is the indicated value by the cost approach?

  1. $500,000
  2. $340,000
  3. $440,000 Correct answer.
  4. $460,000

Explanation

The cost approach adds depreciated improvement cost to land value. Depreciated improvement cost is $400,000 minus $60,000, or $340,000. Adding land value of $100,000 yields $440,000.

Question 10Property Valuation Principles and Approaches

Which method of estimating accrued depreciation measures the difference between the reproduction cost new of the improvements and their present value as indicated by market data?

  1. Market extraction method Correct answer.
  2. Economic age-life method
  3. Age-life method
  4. Breakdown method

Explanation

Market extraction derives total depreciation by comparing the sale price of a property, less land value, with the reproduction or replacement cost new of its improvements. The shortfall represents total accrued depreciation. It is an empirical, market-based method.

Question 11Property Valuation Principles and Approaches

A property's gross income multiplier is 8.5 and its monthly gross rent is $2,000. Using the gross rent multiplier, what is the indicated value?

  1. $170,000
  2. $153,000
  3. $17,000
  4. $204,000 Correct answer.

Explanation

The gross rent multiplier converts gross rent into value by multiplication. Monthly gross rent of $2,000 multiplied by a monthly GRM of 8.5 yields $17,000; annualizing the rent to $24,000 and applying the multiplier gives $204,000. The multiplier must be matched to the rent period.

Question 12Property Valuation Principles and Approaches

Which of the following is a curable item of functional obsolescence in a single-family residence?

  1. An outdated kitchen layout that can be remodeled at a cost below the value it would add Correct answer.
  2. Foundation settlement causing structural cracks
  3. A high-tension power line adjacent to the lot
  4. A one-car garage in a neighborhood where all homes have two-car garages

Explanation

Functional obsolescence is curable when the cost to correct a deficiency is less than or equal to the value the correction adds. A remodeled kitchen whose cost is recovered in value qualifies. The other choices involve incurable functional or external items or physical deterioration.

Question 13Property Valuation Principles and Approaches

In highest and best use analysis, which test is applied first when evaluating a potential use of a site as though vacant?

  1. Legal permissibility Correct answer.
  2. Financial feasibility
  3. Maximum productivity
  4. Physical possibility

Explanation

The four tests are applied in sequence: legal permissibility, physical possibility, financial feasibility, and maximum productivity. A use that is not legally permissible is eliminated before the other tests are considered. Each subsequent test screens the surviving uses.

Question 14Property Valuation Principles and Approaches

An appraiser uses the allocation method to estimate land value. The subject's total value is $500,000 and the typical land-to-building ratio in the area is 25% land to 75% building. What is the indicated land value?

  1. $125,000 Correct answer.
  2. $100,000
  3. $250,000
  4. $375,000

Explanation

The allocation method applies a typical land-to-value ratio derived from the market to the total property value. Twenty-five percent of $500,000 is $125,000. This method is a form of land valuation support, not a primary approach.

Question 15Property Valuation Principles and Approaches

Which statement best describes the relationship between effective age and actual age?

  1. Effective age reflects the condition and utility of improvements and may differ from actual age Correct answer.
  2. Effective age always equals actual age in a well-maintained building
  3. Effective age is the chronological age since construction regardless of condition
  4. Actual age is a better measure of depreciation than effective age

Explanation

Effective age is based on the observed condition and utility of the improvements, reflecting maintenance and modernization. A well-maintained older building may have an effective age lower than its actual age. Effective age, not actual age, drives the age-life depreciation estimate.

Question 16Property Valuation Principles and Approaches

A comparable property sold for $250,000 with seller financing at below-market interest rates, which affected the price. To use this sale in the sales comparison approach, the appraiser should make which adjustment?

  1. A physical characteristics adjustment
  2. A property rights adjustment
  3. A market conditions adjustment
  4. A financing or cash-equivalent adjustment Correct answer.

Explanation

When a sale involves atypical financing such as below-market seller financing, the price may not reflect cash-equivalent market value. A financing adjustment converts the price to its cash-equivalent basis. This adjustment is applied before other property adjustments.

Question 17Property Valuation Principles and Approaches

In the income approach, which of the following is treated as a capital expenditure rather than an operating expense when estimating net operating income?

  1. Property insurance
  2. Replacement of a building roof Correct answer.
  3. Real estate taxes
  4. Property management fees

Explanation

Capital expenditures are nonrecurring costs that extend the useful life of the improvements, such as roof replacement. They are not deducted as operating expenses in net operating income but are accounted for through reserves or capitalization. Insurance, management fees, and taxes are recurring operating expenses.

Question 18Property Valuation Principles and Approaches

Which of the following best describes the difference between reproduction cost and replacement cost?

  1. Reproduction cost uses current materials and methods; replacement cost replicates the original exactly
  2. Replacement cost is always higher because modern materials cost more
  3. Reproduction cost replicates the original using identical materials and design; replacement cost uses modern materials and methods to achieve equivalent utility Correct answer.
  4. Both terms are interchangeable in appraisal practice

Explanation

Reproduction cost estimates the cost to construct an exact replica using the same materials, design, and workmanship. Replacement cost estimates the cost to build a substitute with equivalent utility using current materials and standards. Replacement cost is commonly used because it reflects what a buyer would actually build today.

Question 19Property Valuation Principles and Approaches

An appraiser values a property with a net operating income of $60,000 using a capitalization rate built from a 7% discount rate, a 2% recapture rate, and a 1% effective tax rate. What is the indicated value?

  1. $750,000
  2. $857,143
  3. $600,000 Correct answer.
  4. $1,000,000

Explanation

The overall capitalization rate is the sum of the discount rate, recapture rate, and effective tax rate, which is 10%. Dividing net operating income of $60,000 by 0.10 yields $600,000. The band-of-investment or summation technique builds the rate from its components.

Question 20Property Valuation Principles and Approaches

An appraiser is reconciling value indications and must decide which approach deserves the greatest weight. Which factor is most relevant to that decision?

  1. The number of pages in the appraisal report
  2. The appraiser's personal preference for one approach
  3. The quantity and reliability of data available for each approach and the property type Correct answer.
  4. The age of the appraiser's license

Explanation

Reconciliation weighs each approach by the quality and quantity of data supporting it and by how well the approach fits the property type and market. The approach best supported by reliable market evidence receives the greatest weight. Personal preference and report format are not valid bases.

Question 21Property Valuation Principles and Approaches

A property's potential gross income is $120,000, vacancy and collection loss is 6%, operating expenses are $40,000, and annual debt service is $25,000. Using a 10% capitalization rate applied to net operating income, what is the indicated value?

  1. $550,000
  2. $800,000
  3. $1,128,000
  4. $728,000 Correct answer.

Explanation

Effective gross income is $120,000 minus 6% ($7,200), or $112,800. Subtracting operating expenses of $40,000 yields net operating income of $72,800. Dividing by 0.10 gives $728,000; debt service is excluded from net operating income.

Question 22Property Valuation Principles and Approaches

An appraiser must estimate the value of a property whose highest and best use as vacant differs from its highest and best use as improved. Which principle explains that the existing improvement may still contribute value despite not representing the site's optimal use?

  1. Contribution
  2. Increasing and decreasing returns Correct answer.
  3. Balance
  4. Anticipation

Explanation

The principle of increasing and decreasing returns holds that adding improvements or investment produces value increases up to a point, after which returns diminish. An existing improvement can contribute value even if it is not the site's optimal use, as long as it adds to value. This principle bears directly on interim use analysis.

Question 23Property Valuation Principles and Approaches

In the cost approach, an appraiser finds a building with 1,200 square feet of excess space that is functionally obsolete. Replacement cost is $150 per square foot, and the excess space is incurable. The typical cost to rent equivalent space is $18 per square foot per year, and the remaining economic life is 20 years with a 10% capitalization rate. What is the indicated incurable functional obsolescence from the excess space?

  1. $216,000 Correct answer.
  2. $180,000
  3. $21,600
  4. $43,200

Explanation

For incurable functional obsolescence from excess space, the rental loss is capitalized. Annual rent loss is 1,200 square feet times $18, or $21,600; dividing by the 10% capitalization rate yields $216,000. This is the capitalized value of the rent loss attributable to the excess space.

Question 24Property Valuation Principles and Approaches

An appraiser values a leased fee interest in a property subject to a long-term lease with below-market rent. Compared with the fee simple interest, the leased fee value is most likely to be:

  1. Lower, because the contract rent is below market Correct answer.
  2. Unrelated to the lease terms
  3. Equal, because the lease does not affect value
  4. Higher, because the lease guarantees occupancy

Explanation

The leased fee interest is the owner's interest subject to a lease. When contract rent is below market, the owner's income stream is constrained, reducing value relative to fee simple. The difference reflects the leasehold advantage held by the tenant.

Question 25Property Valuation Principles and Approaches

An appraiser analyzes a proposed subdivision and estimates that the completed lots will sell for $4,200,000. Development costs total $1,800,000, and the developer requires a 20% entrepreneurial profit on total costs. Using the subdivision development method, what is the indicated land value?

  1. $2,400,000
  2. $2,040,000 Correct answer.
  3. $1,560,000
  4. $1,700,000

Explanation

Entrepreneurial profit is 20% of total costs of $1,800,000, or $360,000. Total required costs plus profit equal $2,160,000. Subtracting that from the $4,200,000 gross sales yields an indicated land value of $2,040,000, before considering timing and discounting.

Question 26Property Valuation Principles and Approaches

Which valuation approach derives an indication of value by converting anticipated future benefits of ownership into a present value?

  1. The income approach Correct answer.
  2. The cost approach
  3. The extraction method
  4. The sales comparison approach

Explanation

The income approach capitalizes or discounts the future income a property is expected to produce, treating expected net operating income as the benefit of ownership. The other approaches rely on market transactions or current construction cost rather than anticipated income.

Question 27Property Valuation Principles and Approaches

An appraiser analyzing a comparable sale notes that the comparable has a two-car garage while the subject has a one-car garage. In the sales comparison approach, this difference is handled by which type of adjustment?

  1. A physical characteristics adjustment applied to the comparable's price Correct answer.
  2. A market conditions adjustment applied to the subject's price
  3. A property rights adjustment applied to the subject's price
  4. A financing adjustment applied to the comparable's price

Explanation

Differences in features such as garage capacity are physical characteristics that are adjusted on the comparable to make it equivalent to the subject. The appraiser adds or subtracts the market-derived contributory value of the feature to the comparable's sale price.

Question 28Property Valuation Principles and Approaches

Which statement correctly describes the treatment of land in the cost approach?

  1. Land is valued separately and is not depreciated Correct answer.
  2. Land is valued at its original acquisition cost
  3. Land is depreciated at the same rate as the improvements
  4. Land is excluded from the cost approach entirely

Explanation

In the cost approach, land value is estimated as though the site were vacant and available for its highest and best use. Because land is not subject to physical deterioration and is treated as non-depreciable, only the improvements receive depreciation.

Question 29Property Valuation Principles and Approaches

An appraiser is estimating the gross income multiplier for a market segment. Which data set is sufficient to calculate it?

  1. Sale price and gross monthly or annual rent for each comparable Correct answer.
  2. Sale price and net operating income for each comparable
  3. Effective gross income and operating expenses for each comparable
  4. Replacement cost and accrued depreciation for each comparable

Explanation

A gross income multiplier is the ratio of sale price to gross rent, so only the sale price and the gross rent of each comparable are needed. Net operating income is used with overall capitalization rates, not with gross multipliers.

Question 30Property Valuation Principles and Approaches

An appraiser estimates a property's net operating income at $84,000 and selects an overall capitalization rate of 7.0% from comparable sales. What value does the income approach indicate?

  1. $588,000
  2. $1,176,000
  3. $1,200,000 Correct answer.
  4. $1,428,000

Explanation

Value is net operating income divided by the capitalization rate, so $84,000 divided by 0.07 equals $1,200,000. The rate expresses the relationship between a single year's income and price in the market.

Question 31Property Valuation Principles and Approaches

A subject property suffers from a layout deficiency that would cost $18,000 to cure, but curing it would add only $11,000 to market value. How should the appraiser classify this deficiency?

  1. Incurable functional obsolescence, measured as the cost to cure less the value added Correct answer.
  2. Curable functional obsolescence, measured as the full cost to cure
  3. External obsolescence, measured by rent loss capitalization
  4. Physical deterioration, measured by the age-life method

Explanation

A deficiency is curable only when the cost to cure is justified by the value it adds. Because the $18,000 cure adds just $11,000 in value, the item is incurable and is measured as the excess of cost over the value added, or $7,000.

Question 32Property Valuation Principles and Approaches

An appraiser is testing whether a proposed retail use is legally permissible, physically possible, financially feasible, and maximally productive. Which order of tests is applied in highest and best use analysis?

  1. Maximally productive, financially feasible, physically possible, legally permissible
  2. Legally permissible, physically possible, financially feasible, maximally productive Correct answer.
  3. Physically possible, maximally productive, legally permissible, financially feasible
  4. Financially feasible, legally permissible, maximally productive, physically possible

Explanation

The four tests are applied in sequence, with legal permissibility screened first, then physical possibility, then financial feasibility, and finally maximum productivity among the feasible uses. A use that fails an earlier test is eliminated before later tests are considered.

Question 33Property Valuation Principles and Approaches

An appraiser uses the land residual technique. The completed building is expected to generate a net operating income of $150,000, the building value is $1,000,000, the building capitalization rate is 9%, and the land capitalization rate is 8%. What land value does the technique indicate?

  1. $1,000,000
  2. $1,875,000
  3. $750,000 Correct answer.
  4. $500,000

Explanation

Income attributable to the building is $1,000,000 times 9%, or $90,000. Residual income to land is $150,000 minus $90,000, or $60,000, which capitalized at 8% indicates land value of $750,000.

Question 34Property Valuation Principles and Approaches

An appraiser values a property using a discounted cash flow analysis with a holding period of five years. Which cash flow is included in the final year that does not appear in earlier years?

  1. The annual operating expenses
  2. The annual base rent collected
  3. The annual vacancy and collection loss
  4. The net proceeds from resale of the property Correct answer.

Explanation

A discounted cash flow analysis projects periodic net cash flows over the holding period and adds the net reversion, the proceeds of sale less selling costs, at the end of the holding period. Operating income and expenses recur each year, whereas the reversion occurs only once.

Question 35Property Valuation Principles and Approaches

An appraiser is analyzing a sale in which the buyer paid above market price because the property adjoined the buyer's existing parcel. Which adjustment is required in the sales comparison approach?

  1. An upward adjustment to the comparable for market conditions
  2. An upward adjustment to the comparable for property rights conveyed
  3. A downward adjustment to the comparable for conditions of sale Correct answer.
  4. A downward adjustment to the comparable for physical characteristics

Explanation

A price inflated by a buyer's special motivation, such as assembling adjoining parcels, reflects atypical conditions of sale. The comparable's price is adjusted downward to remove that premium so it reflects an arm's-length transaction.

Question 36Property Valuation Principles and Approaches

A building has an effective age of 8 years and a total economic life of 40 years. Using the age-life method, what percentage of total depreciation has accrued?

  1. 8%
  2. 20% Correct answer.
  3. 32%
  4. 25%

Explanation

The age-life method divides effective age by total economic life to estimate the proportion of depreciation accrued. Eight divided by forty equals 0.20, or 20% of total depreciation.

Question 37Property Valuation Principles and Approaches

An appraiser is estimating the cost of a building using the comparative unit method. Which statement best describes how this method works?

  1. It subtracts accrued depreciation from the sale price of a new building
  2. It sums the quantities of materials and labor for each building component
  3. It applies a known cost per unit of area or volume derived from similar buildings Correct answer.
  4. It multiplies the number of plumbing fixtures by a unit cost

Explanation

The comparative unit method applies a cost per square foot or cubic foot obtained from comparable buildings to the subject's area or volume. It is less detailed than the quantity survey method but more reliable than a simple unit-in-place shortcut.

Question 38Property Valuation Principles and Approaches

An appraiser is reconciling value indications from the cost, sales comparison, and income approaches for an older, owner-occupied residence in a neighborhood of similar homes. Which approach generally warrants the greatest weight?

  1. Equal weight to all three approaches regardless of property type
  2. The income approach, because owner-occupants consider rental income
  3. The cost approach, because depreciation is difficult to measure
  4. The sales comparison approach, because recent sales of similar homes reflect buyer behavior Correct answer.

Explanation

For owner-occupied residential property, buyers rely on prices of similar homes, making the sales comparison approach the most reliable indicator. The cost approach is weak for older buildings because accrued depreciation is hard to measure, and the income approach is less relevant when rental income is not the motivation for ownership.

Question 39Property Valuation Principles and Approaches

An appraiser values a property subject to a lease with several years remaining at a rent below market. Compared with the fee simple interest, how is the leased fee interest affected?

  1. Its value is lower because the contract rent is below market rent Correct answer.
  2. Its value is higher because the lease guarantees occupancy
  3. Its value is higher because the tenant pays all operating expenses
  4. Its value is unchanged because the lease does not affect ownership

Explanation

The leased fee interest is the owner's interest subject to an existing lease, and its value reflects the contract rent rather than market rent. When contract rent is below market, the leased fee value is lower than the fee simple value, which assumes market rent.

Question 40Property Valuation Principles and Approaches

An appraiser is estimating external obsolescence for a property located next to a newly constructed elevated highway that generates continuous traffic noise. Which method is most appropriate for measuring this loss?

  1. Capitalizing the rent loss attributable to the highway noise Correct answer.
  2. Estimating the cost of soundproofing the building
  3. Applying the age-life ratio to the building's replacement cost
  4. Comparing the cost to cure the noise with the value added

Explanation

External obsolescence arises from forces outside the property and is typically measured by capitalizing the loss in rent or income caused by the adverse condition. Because the highway is off-site, the loss cannot be cured by the owner and is not measured by the age-life method.

Question 41Real Estate and Personal Property Law

A property owner grants a neighbor the right to cross the owner's parcel to reach a public road, and the right is tied to the neighbor's adjoining land rather than to the neighbor personally. This arrangement is best described as which type of easement?

  1. A license
  2. An easement in gross
  3. A profit à prendre
  4. An easement appurtenant Correct answer.

Explanation

An easement appurtenant benefits and burdens particular parcels of land, so it runs with the dominant and servient estates when they are transferred. Because the right here attaches to the neighbor's adjoining land, it is appurtenant rather than personal.

Question 42Real Estate and Personal Property Law

An appraiser is classifying property for an ad valorem tax roll. Which item is properly treated as real property rather than personal property?

  1. A tenant's trade fixtures installed for a business
  2. Growing crops that are severable by annual harvest
  3. A portable generator stored in the garage for emergency use
  4. A built-in heating system integrated into the dwelling Correct answer.

Explanation

Items permanently affixed to and integrated into the structure, such as a built-in heating plant, are fixtures and therefore part of the realty. Portability and manner of attachment are the key tests distinguishing personalty from real property.

Question 43Real Estate and Personal Property Law

Which estate is characterized by a fixed duration measured by the life of a specified person?

  1. Fee simple determinable
  2. Life estate Correct answer.
  3. Estate for years
  4. Estate at will

Explanation

A life estate endures only for the lifetime of a named individual, either the holder or another measuring life. It is a freehold estate of potentially indefinite but non-inheritable duration.

Question 44Real Estate and Personal Property Law

A deed conveys title but the grantor has not yet delivered it to the grantee. Under the delivery requirement, the conveyance is:

  1. Effective once recorded by the grantor
  2. Effective because consideration was recited in the deed
  3. Not effective because delivery with intent to convey is missing Correct answer.
  4. Effective because the deed was signed and acknowledged

Explanation

A valid deed requires delivery with present intent to convey; signing, acknowledgment, or recording alone does not transfer title. Without delivery the grantee acquires no interest, even if the instrument is otherwise complete.

Question 45Real Estate and Personal Property Law

Which covenant in a general warranty deed promises that the grantor will defend the grantee's title against lawful claims?

  1. Covenant against encumbrances
  2. Covenant of quiet enjoyment Correct answer.
  3. Covenant of further assurance
  4. Covenant of seisin

Explanation

The covenant of quiet enjoyment includes the covenant of warranty, obligating the grantor to defend the grantee against lawful claims of superior title. It is a present covenant that runs with the land.

Question 46Real Estate and Personal Property Law

In a lien theory state, a mortgage is best characterized as:

  1. An absolute conveyance subject to defeasance
  2. A leasehold interest held by the lender
  3. A security interest creating a lien while the borrower retains title Correct answer.
  4. A transfer of legal title to the lender until repayment

Explanation

Under lien theory the mortgagor retains legal title and the mortgage creates only a lien securing the debt. Title theory states, by contrast, treat the mortgage as a transfer of title to the mortgagee.

Question 47Real Estate and Personal Property Law

A person occupies land openly, continuously, exclusively, and adversely to the record owner for the statutory period. This doctrine is known as:

  1. Prescription
  2. Adverse possession Correct answer.
  3. Escheat
  4. Eminent domain

Explanation

Adverse possession transfers title to an occupier who satisfies statutory elements, including open, notorious, continuous, exclusive, and hostile use for the required period. Prescription applies the analogous principle to acquire an easement rather than title.

Question 48Real Estate and Personal Property Law

Under the doctrine of part performance, an oral agreement to convey land may be enforced when the buyer has:

  1. Taken possession and made substantial improvements in reliance on the agreement Correct answer.
  2. Paid a nominal deposit and inspected the parcel
  3. Signed a written memorandum after the oral agreement
  4. Recorded a notice of the oral agreement

Explanation

Part performance removes an oral land contract from the statute of frauds when acts unequivocally refer to the agreement, typically possession plus substantial improvements or payment. Mere preliminary steps do not suffice.

Question 49Real Estate and Personal Property Law

A landowner grants a utility company an easement allowing poles and lines across the parcel, and the right is not tied to any neighboring property. This easement is:

  1. A profit
  2. Appurtenant
  3. A restrictive covenant
  4. In gross Correct answer.

Explanation

An easement in gross benefits a particular holder rather than a dominant estate, which is typical of utility easements. It runs to the holder and may be assignable depending on its commercial character.

Question 50Real Estate and Personal Property Law

A tenant installs shelving and a walk-in cooler for a restaurant business. In a dispute with the landlord, these items are presumptively:

  1. The tenant's trade fixtures, removable before lease termination Correct answer.
  2. The landlord's real property because they are attached
  3. The landlord's personal property
  4. Easements belonging to the tenant

Explanation

Trade fixtures are items a tenant attaches for business purposes and may remove before the lease ends, provided removal does not cause material damage. The presumption favors the tenant despite annexation.