Free California Property Practice Test — LicenseIQ

Question 1

A life estate is measured by:

Accepted Answer

A life estate lasts for the duration of a specified person's life, then passes to the remainderman or reverts to the grantor. A fixed term describes an estate for years (a leasehold).

Question 2

The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

Accepted Answer

The duty of accounting requires the agent to track, report on and properly handle all funds and documents belonging to the client.

Question 3

A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

Accepted Answer

Taxes = $6,000 / 12 = $500; insurance = $1,200 / 12 = $100. PITI = $1,193.54 + $500 + $100 = $1,793.54.

Question 4

An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

Accepted Answer

Cap rate = NOI / value = $63,000 / $900,000 = 0.07 = 7%.

Question 5

A property owner who wants to deviate from a zoning requirement (e.g., a setback) would seek a:

Accepted Answer

A variance grants relief from a specific zoning requirement; a setback deviation is an area variance. A building permit only authorizes construction that complies with the rules.

Question 6

A person believes a property manager discriminated against her. Under California law, by when must she file an administrative complaint with the Civil Rights Department?

Accepted Answer

CRD housing complaints are generally due within one year. A civil lawsuit may be filed within two years, and filing with CRD first is not required.

Question 7

In a mortgage, the borrower who pledges the property as security is the:

Accepted Answer

The mortgagor (borrower) gives the mortgage to the mortgagee (lender) in exchange for the loan.

Question 8

Until when may a California borrower reinstate a defaulted trust deed loan by curing the arrears?

Accepted Answer

Civil Code §2924c allows reinstatement until five business days before the sale. After that point, the borrower must pay off the loan in full to stop the sale.

Question 9

When an owner dies with no will and no heirs, the property passes to the state through:

Accepted Answer

Escheat transfers ownerless property to the state when there is no will and no heirs.

Question 10

A wife inherits a rental house from her mother during the marriage. How is it classified?

Accepted Answer

Family Code §770 makes property acquired by gift, bequest, devise, or inheritance separate property, even during marriage. Its rents are also separate property.

Question 11

Recording a deed in the county records primarily serves to:

Accepted Answer

Recording provides public (constructive) notice, protecting the owner's interest against later claims.

Question 12

A property sells for $545,000. The buyer assumes the seller's existing $245,000 loan. What is the county documentary transfer tax?

Accepted Answer

Liens remaining on the property are excluded: $545,000 − $245,000 = $300,000. $300,000 ÷ $500 = 600 units. 600 × $0.55 = $330.

Question 13

A lease in which the tenant pays a fixed rent and the landlord pays all property expenses is a:

Accepted Answer

In a gross lease the tenant pays flat rent and the landlord covers taxes, insurance and maintenance; in a net lease the tenant pays some or all of those expenses.

Question 14

Property taxes are paid in arrears (after the tax period). At a mid-year closing, the seller's share of unpaid taxes appears as:

Accepted Answer

When taxes are paid in arrears, the buyer will pay the full bill later, so the seller is charged (debit) and the buyer credited for the seller's portion.

Question 15

A married man dies without a will. He leaves community property, separate property, his wife, and three children. How is his separate property distributed?

Accepted Answer

Under Probate Code §6401, the spouse takes one-third of separate property when the decedent leaves more than one child. The surviving spouse receives all of the community property.

Question 16

A property is assessed at $200,000 and the tax rate is $2.50 per $100 of assessed value. What is the annual tax?

Accepted Answer

$200,000 / 100 = 2,000 units; 2,000 x $2.50 = $5,000.

Question 17

In a deed, the party conveying title is the ____ and the party receiving title is the ____.

Accepted Answer

The seller (grantor) conveys to the buyer (grantee). A deed is the document; title is the ownership rights it transfers.

Question 18

Which transfer is EXCLUDED from reassessment as a change in ownership?

Accepted Answer

Interspousal transfers are excluded. After Prop 19, only a family home that the child occupies qualifies for the parent-child exclusion. Rentals and vacation homes are reassessed.

Question 19

A lender's title insurance policy protects:

Accepted Answer

A lender's (mortgagee's) policy protects the lender's interest up to the loan amount and declines as the loan is paid. An owner's (fee) policy protects the owner.

Question 20

A $4,000,000 sewer project is assessed against properties with a combined assessed value of $160,000,000, payable over 5 years. What is the ANNUAL assessment on a property assessed at $240,000?

Accepted Answer

Rate = $4,000,000 / $160,000,000 = $0.025 per $1. Total = $240,000 x 0.025 = $6,000; annual = $6,000 / 5 = $1,200.

Question 21

When must a listing agent give the seller the 'Disclosure Regarding Real Estate Agency Relationship' form?

Accepted Answer

Civil Code §2079.14 requires the seller's agent to provide the form before the listing agreement is signed and to obtain a signed acknowledgment of receipt.

Question 22

A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

Accepted Answer

Money belonging to others goes into a trust account; depositing it in an operating account is commingling.

Question 23

An individual landlord owns one duplex, her only rental property. A prospective tenant who is an active-duty service member applies. What is the maximum security deposit?

Accepted Answer

The small-landlord exception (natural persons owning no more than two properties with four or fewer units) allows two months' rent, but it does not apply to a service member, who is capped at one month.

Question 24

What is the maximum criminal penalty for an individual who acts as a real estate broker without a license in California?

Accepted Answer

Section 10139 sets an individual penalty of up to $20,000 and/or up to six months in county jail. The $60,000 maximum fine applies to corporations.

Question 25

Under Proposition 13, the general property tax rate (excluding voter-approved debt) is limited to:

Accepted Answer

Article XIII A limits the ad valorem tax to 1% of full cash value, plus voter-approved bonded indebtedness.

California real estate property practice test

1. A life estate is measured by:

2. The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

3. A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

4. An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

5. A property owner who wants to deviate from a zoning requirement (e.g., a setback) would seek a:

6. A person believes a property manager discriminated against her. Under California law, by when must she file an administrative complaint with the Civil Rights Department?

7. In a mortgage, the borrower who pledges the property as security is the:

8. Until when may a California borrower reinstate a defaulted trust deed loan by curing the arrears?

9. When an owner dies with no will and no heirs, the property passes to the state through:

10. A wife inherits a rental house from her mother during the marriage. How is it classified?

11. Recording a deed in the county records primarily serves to:

12. A property sells for $545,000. The buyer assumes the seller's existing $245,000 loan. What is the county documentary transfer tax?

13. A lease in which the tenant pays a fixed rent and the landlord pays all property expenses is a:

14. Property taxes are paid in arrears (after the tax period). At a mid-year closing, the seller's share of unpaid taxes appears as:

15. A married man dies without a will. He leaves community property, separate property, his wife, and three children. How is his separate property distributed?

16. A property is assessed at $200,000 and the tax rate is $2.50 per $100 of assessed value. What is the annual tax?

17. In a deed, the party conveying title is the and the party receiving title is the .

18. Which transfer is EXCLUDED from reassessment as a change in ownership?

19. A lender's title insurance policy protects:

20. A $4,000,000 sewer project is assessed against properties with a combined assessed value of $160,000,000, payable over 5 years. What is the ANNUAL assessment on a property assessed at $240,000?

21. When must a listing agent give the seller the 'Disclosure Regarding Real Estate Agency Relationship' form?

22. A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

23. An individual landlord owns one duplex, her only rental property. A prospective tenant who is an active-duty service member applies. What is the maximum security deposit?

24. What is the maximum criminal penalty for an individual who acts as a real estate broker without a license in California?

25. Under Proposition 13, the general property tax rate (excluding voter-approved debt) is limited to:

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