Unit 8 A Quiz

1. What must a property manager deliver to the

tenant when renting a residential property that was

constructed prior to 1978?

A. A lead paint addendum attached to the lease

B. A copy of the federal Fair Housing Law

C. An environmental site assessment

D. A list of the last three tenants

A
A lead paint addendum attached to the lease is required to inform tenants about potential lead-based paint hazards.

2. Which of the following is commonly found in minute

airborne particles when it becomes friable?

A. Radon

B. Asbestos

C. Carbon monoxide

D. Urea-formaldehyde

A

Asbestos is a hazardous mineral that, when disturbed, can release particles into the air, posing serious health risks.

3. Mold can be associated with:

A. airtight windows

B. insulation

C. inferior grade building materials

D. low moisture conditions

A. airtight windows

4. A property is designated as being within a Superfund

site, but the property receives water from wells that

are NOT contaminated. The broker must:

A. not disclose that it is within a Superfund site

B. make the disclosure but can provide information

about the water

C. not make the disclosure because the broker

represents the seller

D. refer the buyer to the Environmental Protection Agency

B. make the disclosure but can provide information about the water without being liable for the Superfund status, as long as it's accurate and clear.

5. A broker selling a property that was built in 1952

must be sure that the buyer receives a notice

concerning:

A. radon

B. asbestos

C. formaldehyde

D. lead-based paint

D

based paint, as properties built before 1978 may contain lead-based paint hazards that need to be disclosed to protect buyers.

6. The Comprehensive Environmental Response

Compensation and Liability Act (CERCLA) established:

A. a homeowner’s responsibility to clean up polluted

property

B. the Environmental Protection Agency

C. Superfunds to bear costs of cleaning up

contaminated sites

D. state environmental standards

C. Superfunds to bear costs of cleaning up contaminated sites, providing federal funds to assist in the cleanup of hazardous waste sites and ensure responsible parties are held liable.

7. A method used to treat asbestos is called:

A. ventilation

B. encapsulation

C. capping

D. evaporation

B. encapsulation, a process where asbestos-containing materials are sealed to prevent the release of fibers into the air.

8. A brownfield that causes a loss in value to

neighboring properties is an example of:

A. economic obsolescence

B. economic quality

C. economic life

D. functional obsolescence

A. economic obsolescence, which refers to a decrease in property value due to external factors, such as environmental issues from a nearby brownfield, that negatively impact surrounding properties.

9. Under the Comprehensive Environmental Response

Compensation and Liability Act (CERCLA) with

regards to the cleanup of toxic waste spills, the

current and previous owners have what type of

responsibility?

A. Single liability

B. Several liability

C. Strict liability

D. Fractional liability

C. Strict liability, meaning that current and previous owners can be held responsible for cleanup costs regardless of fault or negligence.

10. What is the time period that a home buyer has to

inspect the property when receiving the lead-based

paint disclosure?

A. 10 days

B. 14 days

C. 30 days

D. By close of escrow

A
The time period a home buyer has to inspect the property for lead-based paint is A. 10 days, allowing buyers to conduct inspections before finalizing the purchase.

11. Which is used to establish premiums for flood

insurance?

A. Elevation certificate

B. Wetlands designation

C. WQARF map

D. Superfund map

A. Elevation certificate, which provides information about the elevation of a property in relation to flood risk, is used to determine the premiums for flood insurance.

12. A septic tank inspection report is valid for:

A. 1 month

B. 3 months

C. 6 months

D. 12 months

C. 6 months, indicating the duration for which the inspection report can be considered accurate before needing a new assessment.

13. Who is required to complete the ADEQ notice of

transfer for an on-site wastewater treatment facility?

A. Buyer

B. Seller

C. Broker

D. Escrow agent

A

14. The notice of transfer form for a septic system must

be filed with the ADEQ within:

A. 15 days after the inspection

B. 15 days after closing

C. 6 months after the inspection

D. 6 months after closing

B. 15 days after closing, which ensures timely notification of ownership change to regulatory authorities.

15. Water Quality Assurance Revolving Fund sites

are another way of describing environmentally

contaminated sites that are regulated by:

A. the Arizona Department of Environmental Quality

B. the Comprehensive Environmental Response

Clean-up Liability Act

C. Arizona’s assured water supply regulations

D. Federal Superfund

A. the Arizona Department of Environmental Quality, which oversees the management and remediation of contaminated sites in Arizona.

16. Which type of business would be LEAST LIKELY to

have a contamination problem?

A. Dry cleaner

B. Retail jewelry store

C. Dairy farm

D. Sign painter

B
Retail jewelry store, which typically does not engage in activities that pose significant environmental risks compared to other listed businesses.

7. CERCLA liability generally attaches four broad

categories of parties responsible for the cleanup of

a particular contaminated site. All of the following

parties would be responsible EXCEPT:

A. current owners and operators of the site

B. past owners or operators at the time of sale

C. persons who arranged for the disposal of

hazardous substances

D. real estate brokerage who arranged the

transaction

D. real estate brokerage who arranged the transaction, as they are typically not held responsible for cleanup under CERCLA.

18. Which of the following would NOT be considered an

environmental hazard?

A. Proximity to a dump area

B. Air pollution

C. Prior use of the property by a dry cleaner

D. Leaking underground water storage tanks

B. Air pollution, which while harmful, is generally considered an environmental issue rather than a specific hazard associated with a property.

9. Radon gas would primarily be found in which of the

following substances?

A. Insulation material

B. Lead-based paint

C. Underground minerals

D. Building materials containing formaldehyde

C. Underground minerals, as radon gas is a naturally occurring radioactive gas that is released from the decay of uranium in soil, rock, and water.

20. What would MOST LIKELY cause a mold hazard?

A. Backed up sewer

B. Well-ventilated area

C. Decaying rock

D. Insufficient insulation

A. Backed up sewer, as it can create damp conditions ideal for mold growth.

21. Land that is abandoned, idled, or underused because

redevelopment and/or expansion is complicated by

environmental contamination is a:

A. greenfield

B. grayfield

C. brownfield

D. blackfield

C. brownfield, which refers to previously developed land that may be contaminated and is often eligible for cleanup and redevelopment.

22. In reviewing an offer, the buyer asks the agent about

the tax consequences. The agent should:

A. have the offer reviewed by an estate planner

B. suggest the buyer see an accountant or tax

attorney

C. prepare the offer with a tax contingency clause

D. have the broker review the offer

B. suggest the buyer see an accountant or tax attorney, as they can provide professional advice on the tax implications related to the offer.

23. Income from salaries or commissions is:

A. ordinary income

B. short-term income

C. capital gain income

D. pass-through income

A. ordinary income, as it represents the regular earnings received by an individual from their employment or business activities.

24. On a personal residence, what is the maximum loan

amount on which interest may be deducted for tax

purposes?

A. $250,000

B. $500,000

C. $750,000

D. $1,000,000

C

The maximum loan amount on a personal residence for which interest may be deducted for tax purposes is $750,000, according to current tax laws.

25. When a limited liability company has net income:

A. the LLC pays tax on the income

B. the income passes through to the individual

members

C. no tax is paid by the LLC or its members

D. only 50% of the income is passed through to the

members

B. the income passes through to the individual members, meaning the LLC itself is not taxed on its income but rather the income is reported on the members' personal tax returns.

26. What is NOT considered to be an operating expense

on income property?

A. Property tax

B. Insurance

C. Repairs and maintenance

D. Mortgage payments

D. Mortgage payments are not considered operating expenses on income property, as they are financing costs rather than direct operational costs.

27. Unlike-kind property received or given in an

exchange is:

A. excess rent

B. boot

C. net income

D. cash flow

B
additional property or money received in a like-kind exchange that is not considered qualifying property.

28. To qualify for the exclusion of capital gain tax on the

sale of a personal residence:

A. the seller must purchase another property of equal

or greater value

B. the seller must be over 65 years of age

C. all proceeds must be reinvested in another home

D. the seller must have owned and lived in the house

for 2 out of the previous 5 years

D. the seller must have owned and lived in the house for at least 2 out of the last 5 years to qualify for the exclusion of capital gains tax on the sale of a personal residence.

29. The maximum amount of gain that would be tax-

free to a married couple who sells their personal

residence would be:

A. $125,000

B. $250,000

C. $500,000

D. unlimited

C. $500,000 is the maximum amount of capital gains that a married couple can exclude from taxation when selling their personal residence, provided they meet certain ownership and use requirements.

30. A property owner may take depreciation for income

tax purposes on all of the following EXCEPT:

A. a home rented to friends

B. an apartment building

C. a vacant duplex

D. land held for future profit

D. land held for future profit is not subject to depreciation for income tax purposes, as only improvements to property can be depreciated.

31. In order to qualify for a tax-deferred exchange, the

properties must be:

A. same monetary value

B. like-kind

C. matching equities

D. equal mortgage amounts

B. like-kind properties must be exchanged in order to qualify for a tax-deferred exchange under IRS rules.

32. When a person declares a tax-free gain on a personal

residence, the minimum holding period is:

A. 12 months

B. 18 months

C. 2 years

D. none required

C. 2 years is the minimum holding period required for a taxpayer to qualify for a tax-free gain on the sale of their personal residence.