Under the Uniform Commercial Code (UCC) Article 3 principles taught in real estate financing, a negotiable instrument (e.g., a promissory note) must be an unconditional promise or order to pay a fixed amount of money. Thus, if it does not contain an order to pay, it must contain a promise to pay. The amount must be fixed (not “flexible”), and while signatures are required for enforceability, notarization is not a UCC requirement for negotiability.
[References: Maryland pre-licensing curriculum topic “Real Estate Financing” (promissory notes and negotiable instruments; UCC Article 3 elements for negotiability)., ]
Question 9
Options:
A.
By advising the client on landlord/tenant responsibilities
B.
By describing the legal implications of contract clauses in detail
C.
By drafting new contract language to suit the client’s needs
D.
By explaining the general purpose of the contract clause without interpreting its legal impact
Licensees are permitted to explain the purpose and factual content of real estate contracts but may not interpret legal implications or draft custom clauses, which constitutes the unauthorized practice of law. The Maryland course teaches that to stay compliant, a salesperson should explain what a clause does in general terms and refer clients to a licensed attorney for legal interpretation.
[Reference: Maryland 60-Hour Principles and Practices – “Real Estate Contracts”; Maryland Real Estate Brokers Act, §17-322 – Prohibited Acts (Unauthorized Practice of Law)., , ]
Question 10
What happens when personal property is attached to real property?
When personal property (chattel) is physically attached to real property in such a way that it becomes part of the real estate, it becomes a fixture. Fixtures transfer with the property upon sale unless specifically excluded in the contract. The determination depends on attachment, adaptation, and intent. Maryland’s course addresses fixtures under “Real Property and the Law,” emphasizing how they affect ownership and conveyance.
[Reference:Maryland 60-Hour Principles and Practices Course – “Real Property and the Law” Topic; Maryland Real Property Article §1-101(b)., , , ]
Question 11
Options:
A.
Loan terms may be as long as 38 years.
B.
They mirror the requirements for conventional loans.
The U.S. Department of Agriculture (USDA) Rural Development Loan Program provides financing for low- to moderate-income borrowers in rural areas.
The Maryland course teaches that Section 502 Direct Loans may offer repayment terms of up to 38 years, depending on borrower income and property location.
These loans are designed to promote homeownership in eligible rural communities and may include payment assistance or subsidies to reduce monthly payments.
[Reference: Maryland 60-Hour Principles and Practices – “Real Estate Financing” module; USDA Rural Development Loan Program, Section 502 Direct Loan Guidelines., , , ]
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