NALA Real Estate Law & Transactions 3

Question 1

What distinguishes a joint tenancy from a tenancy in common?

Accepted Answer

Joint tenancy includes the right of survivorship; tenancy in common does not

Answer

The defining feature of joint tenancy is the right of survivorship, meaning a deceased joint tenant's share passes automatically to the surviving joint tenants, bypassing probate.

Question 2

A deed must be delivered and accepted to be effective. Which scenario best illustrates a valid delivery?

Accepted Answer

Grantor hands the signed deed to the grantee, who accepts it

Answer

Valid delivery requires the grantor to intend to transfer title presently and the grantee to accept; handing the deed directly to an accepting grantee satisfies both requirements.

Question 3

Under RESPA, which fee is a lender permitted to charge before providing the Loan Estimate?

Accepted Answer

Credit report fee

Answer

RESPA/TRID rules prohibit collecting any fee before the consumer receives the Loan Estimate, with the sole exception of a bona fide and reasonable credit report fee.

Question 4

What is the primary purpose of a subordination agreement in a real estate transaction?

Accepted Answer

To make a senior lien subordinate to a later-recorded lien

Answer

A subordination agreement is a contract in which a lienholder agrees to allow its lien to have lower priority than a subsequently recorded lien, often required when refinancing.

Question 5

Which doctrine allows a buyer to rescind a real estate contract when the seller knew of a material defect and deliberately concealed it?

Accepted Answer

Active fraud or fraudulent concealment

Answer

While caveat emptor historically placed the risk on buyers, active fraud or fraudulent concealment of a known material defect by the seller gives the buyer grounds to rescind the contract.

(NALA) National Association of Legal Assistants Certification Practice Test

(NALA) National Association of Legal Assistants Certification Practice Test

NALA Real Estate Law & Transactions 3