Business Law in Canada, 11e (Yates)
Chapter 14 Real and Personal Property and Protection of the Environment
1) Zack, Virgil, and Craig have been friends for several years and are all worried about the
alarming rise in land prices. They want to go in together and buy a four-acre parcel of land in the
country. There is a small cabin on it. They hope that the land value will appreciate, and they
want to sell it in a few years to help finance a house of their own. Read each of the following
separately and indicate which is true with regard to their ownership of this property.
A) If they do not indicate on the transfer documents the nature of the co-ownership, the law
presumes they will be joint tenants.
B) In Canada, in strict legal terms, the only owner of land is the Crown, and if they buy land free
and clear, they are only getting a life estate.
C) Ownership of the fee simple does not guarantee their right to everything below the surface of
their property.
D) If they buy the land and do not take possession, in some provinces they could lose their right
to claim possession and their rights become a fee simple estate.
E) Ownership of the property entitles them not only to the surface of the earth between the
boundaries, but also to the infinite airspace above and everything below the surface of their
property.
Answer: C
Diff: 2 Type: MC Page Ref: 468
Topic: Ch. 14 - Real Property
Skill: Applied
Objective: Chapter 14: 1. Distinguish real and personal property.
Bloom's Taxonomy: Knowledge
2) Which of the following is not considered personal property in legal terms?
A) Intangible property or chose in action
B) A claim against someone that has value
C) Intellectual property (ideas and creative work)
D) Chattels
E) A good affixed to real property
Answer: E
Diff: 1 Type: MC Page Ref: 486
Topic: Ch. 14 - Personal Property
Skill: Recall
Objective: Chapter 14: 1. Distinguish real and personal property.
Bloom's Taxonomy: Knowledge
,3) Which of the following is the correct definition of a chattel?
A) A chattel is a name used to describe the land registration system in place in the Western
provinces.
B) Chattel is an intangible form of personal property, such as a debt or claim.
C) Chattel refers to intellectual property such as patents and copyrights.
D) Chattel is the term used to describe tangible personal property or movables.
E) The term chattel is the broad term used to describe any kind of property interest.
Answer: D
Diff: 1 Type: MC Page Ref: 486
Topic: Ch. 14 - Personal Property
Skill: Recall
Objective: Chapter 14: 1. Distinguish real and personal property.
Bloom's Taxonomy: Knowledge
4) Which of the following is considered real property in legal terms?
A) Intangible property or chose in action
B) A claim against someone that has value
C) Intellectual property (ideas and creative work)
D) Chattels
E) Land
Answer: E
Diff: 2 Type: MC Page Ref: 467
Topic: Ch. 14 - Real Versus Personal Property
Skill: Recall
Objective: Chapter 14: 1. Distinguish real and personal property.
Bloom's Taxonomy: Knowledge
5) An option agreement is
A) a contract transferring the fee simple to a new owner.
B) a contract by which the offeror of property promises to hold his offer open for a period of
time during which the offeree can accept the offer and the property can't be sold to another.
C) a contract by which an offeree promises to buy the property offered at a later date set in the
contract.
D) a contract that provides that a seller will retain the title in the property until the buyer has
made all of the required payments.
E) a contract that provides that a debtor will transfer title in the property to a creditor as security
for repayment of the debt.
Answer: B
Diff: 1 Type: MC Page Ref: 468
Topic: Ch. 14 - Real Property
Skill: Recall
Objective: Chapter 14: 2. Describe the various estates in land.
Bloom's Taxonomy: Knowledge
,6) Which of the following is false with regard to condominiums and cooperatives?
A) The owner of a condominium has a fee simple interest in his unit within the condominium
structure.
B) The owner of a condominium owns a share in the common areas.
C) The owner of a condominium can be forced to pay a fee levied by the condominium
association governing the condominium.
D) The owner of a condominium can mortgage his interest.
E) An owner of a cooperative, like the owner of a condominium, has a real property interest in
the suite.
Answer: E
Diff: 1 Type: MC Page Ref: 468
Topic: Ch. 14 - Real Property
Skill: Recall
Objective: Chapter 14: 2. Describe the various estates in land.
Bloom's Taxonomy: Knowledge
7) If a person habitually crosses property over a number of years with permission of the owner,
he can, in some provinces, acquire a right to cross that property even though there has been no
actual documented grant of such a right. Acquiring such a right is this manner is called
A) adverse possession.
B) profit a prendre.
C) an easement by prescription.
D) a dominant tenement.
E) an estate in land.
Answer: C
Diff: 1 Type: MC Page Ref: 468
Topic: Ch. 14 - Real Property
Skill: Applied
Objective: Chapter 14: 2. Describe the various estates in land.
Bloom's Taxonomy: Knowledge
, 8) Jack and Joan got married. It was the second marriage for both of them, and each brought one
teenaged child into the marriage. They bought a house in Regina as joint tenants. They worked
very hard to create a loving home, but when the children had disputes, it always affected the
relationship between Jack and Joan because of the loyalty to their own child. Joan now thinks
that it was a mistake to buy the house as joint tenants and wants her share in the house to go to
her child in the event of her death. Which of the following will bring about such a change?
A) Jack and Joan cannot sever the joint tenancy.
B) Joan could have a will drawn up by which her share in the house would be left to her child.
C) Joan could purchase an option agreement to lease her interest in the house to herself.
D) Joan could lease her interest in the house.
E) Joan could sell her interest in her house to her uncle and have him sell it back to her.
Answer: E
Diff: 3 Type: MC Page Ref: 468
Topic: Ch. 14 - Real Property
Skill: Applied
Objective: Chapter 14: 2. Describe the various estates in land.
Bloom's Taxonomy: Knowledge
9) Which of the following is true with regard to real property law?
A) The essential characteristic of an estate in land is that the owner of the estate, whether it is a
fee simple, life estate, or leasehold, has exclusive possession.
B) A true interest less than estate, whether properly registered or not, runs with the land and
therefore is an exception to the privity of contract rule.
C) A profit a prendre is a type of restrictive covenant attaching to all the properties within a
particular development plan.
D) An easement acquired by prescription must be restrictive in nature to be binding on
subsequent purchasers of land.
E) A contract for land in which a person sells the property with a restriction that the new owner
not sell to any person of a certain race cannot be challenged by the courts because it is a
restrictive covenant that runs with the land.
Answer: A
Diff: 2 Type: MC Page Ref: 468
Topic: Ch. 14 - Real Property
Skill: Recall
Objective: Chapter 14: 2. Describe the various estates in land.
Bloom's Taxonomy: Knowledge
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