California Real Estate Practice Exam

All the following statements are incorrect, except:

1. a real property security can be created from a note on a home not located in any subdivision.

2. real property securities and real property sales contracts are interchangeable terms.

3. real property securities are always secured by installment sales contracts.

4. out-of-state subdivisions offered in California for sale need not comply with Article 6 of the California Real Estate Law.

The correct answer is: a real property security can be created from a note on a home not located in any subdivision.

A is correct because it accurately describes that a real property security can indeed be established from a note related to a home that is not situated in a subdivision. This aligns with the understanding that real property securities are not inherently limited to properties within subdivisions, as they can encompass various types of real estate transactions. The other statements misrepresent key aspects of real estate terminology and law. For instance, real property securities and real property sales contracts are distinct concepts; they refer to different types of legal instruments and cannot be used interchangeably. Additionally, not all real property securities are backed by installment sales contracts, indicating a lack of understanding of how different financial instruments function in real estate. Lastly, Article 6 of the California Real Estate Law addresses specific regulations that must be followed, and out-of-state subdivisions marketed in California must comply with these regulations to ensure consumer protections. This highlights the importance of adherence to state laws regardless of property location.