Question

A property is subject to taxation at a rate of $2.69485 per $100 of value. If the property has an assessed value $275,000 the tax amount due would be?

a. $74,108.38 b. $ 741.08 c. $7,410.84 d. $7,425.00 e. $7,140.84

Which of the following describes a Gross Lease?

a. A lease in which the tenant pays rent plus defined operating expenses related to the property.

b. An agreement in which the tenant pays a fixed amount of rent and some or all of the utilities while the landlord/property owner is responsible for payment of all taxes, insurance and expenses related to the property.

c. A lease in which the tenant pays the landlord a percentage of the monthly income derived from the property.

d. An agreement allowing the tenant to terminate the lease should certain conditions near the premises become intolerable.

e. An agreement in which the tenant pays a fixed amount plus their share of taxes, insurance and operating expenses.

Which of the following transactions is BEST described as involving a ground lease?

a. A tenant agrees to pay a base amount for the property plus a percentage of business generated income

b. A landowner charges a commercial tenant separate amounts for the land and the leased restaurant facility.

c. A property owner negotiates terms with a prospective occupant to purchase the subject property at a fixed rate of $500 per month for a period of 10 years.

d. A property owner negotiates terms charging rent for a period of 50 years, allowing the tenant to improve the property with a restaurant building. After the 50 year period, the property and improvements return to the property owner.

e. A tenant agrees to pay a proportionate amount of rent, increasing on annual third-party appraisals of the leased property.

Lenders who make funds available directly to borrowers for the purchase of property include all of the following EXCEPT:

a. Commercial Banks b. Credit Unions c. Fannie Mae d. Savings Associations e. Endowment Funds

The following are requirements for a valid lease EXCEPT:

a. Capacity to contract b. Legal Objective c. Offer and Acceptance d. Attorney Approval e. Consideration

Answer 1

Answer :- Option (c) $7,410.84

( Explanation:- Tax rate = $2.69485/ $100 = 0.0269485. So,  Tax amount on $275,000 will be $275,000 x 0.0269485 = $7410.8375 or $7410.84 )

Answer :- Option (b) An agreement in which the tenant pays a fixed amount of rent and some or all of the utilities while the landlord/property owner is responsible for payment of all taxes, insurance and expenses related to the property.

( Explanation:- The above statement defines the Gross Lease)

Answer :- Option (b) A landowner charges a commercial tenant separate amounts for the land and the leased restaurant facility.

( Explanation:- The above statement best describes as the inclusion of the case of ground lease )

Answer :- Option (c) Fannie Mae

( Explanation:- Fannie Mae does not initiate the mortgage loans. but instead they help in keeping the flow of the funds to lenders by purchasing or guaranteeing mortgages issued by credit unions, banks and other financial institutions.So, they do not make funds available directly to borrowers for the purchase of property.)

Answer :- Option (d) Attorney Approval

( Explanation:- As the leases are the legal documents so the following are requirements for a valid lease:-

• Capacity to contract
• Legal objectives
• Offer and acceptance
• Consideration

So, Attorney approval is not a requirement of a valid lease)