California Real Estate Practice Exam

An "agreement in a deed" would best match up with:

1. covenant

2. option

3. prescription

4. subrogation

The correct answer is: covenant

An agreement in a deed is best identified as a covenant. A covenant is a formal agreement or promise within a deed that guarantees that certain actions will or will not be taken concerning the property. This legal instrument is used to impose restrictions or obligations on the owner of the property, ensuring that specific conditions are met or maintained. For example, a common scenario might involve a covenant that restricts the types of structures that can be built on the land or requiring maintenance of certain aesthetic standards. This creates a binding obligation for future owners, ensuring that the terms agreed upon in the deed are upheld over time. The other options represent different legal concepts that do not directly relate to agreements made within a deed. An option typically refers to a contract that grants the right to purchase or lease property at a future date. Prescription pertains to acquiring a right or property through continuous and open use over time. Subrogation involves the substitution of one creditor for another regarding debt recovery, which does not align with the concept of a covenant in a deed.