Deck 21: Legal Issues in Land and Economic Development

Question 1

Impact fees are paid by developers to help the federal government pay for government agencies responsible to regulate them.

Answer 1

False

Question 2

Equitable servitudes require privity.

Answer 2

False

Question 3

Equitable servitudes can be used instead of covenants.

Answer 3

True

Question 4

Unimproved land sites must have prior document approval by HUD.

Question 5

Covenants must touch and concern the land to be enforceable.

Question 6

School impact fees are unconstitutional.

Question 7

Once a developer finishes a project, homeowners become responsible for enforcement of deed restrictions.

Question 8

In some cases, courts have enforced a pattern of development as a deed restriction.

Question 9

Equitable servitudes are a doctrine based on patterns of development.

Question 10

A developer can amend deed restrictions up until the final lot or home is sold.

Question 11

Limited partners can have their name used in the partnership name and still have limited liability.

Question 12

Partnerships pay income tax on the profits earned.

Question 13

Partners can deduct their portion of partnership losses from their personal income.

Question 14

The transfer of a limited partner's interest results in the dissolution of the partnership.

Question 15

Under the UPA, partnership profits are split equally.

Question 16

Limited liability companies are authorized in all states.

Question 17

Subchapter S shareholders can deduct corporate losses from their personal income.

Question 18

To qualify for Subchapter S treatment, there must be at least 100 shareholders.

Question 19

Corporate shareholders' liability is limited to the amount of their investment.

Question 20

To qualify as an LLC with limited liability, there must first be a filing as a corporation.

Question 21

REIT investors cannot take REIT losses from their personal income.

Question 22

General partners in a limited partnership have full personal liability for the debts of the limited partnership.

Question 23

The sale of limited partnership interests is not considered the sale of securities.

Question 24

Registration of securities under state law exempts the offeror from federal registration.

Question 25

Under the ULPA, limited partners cannot be employed by the partnership and still enjoy limited liability.

Question 26

In a limited liability company, the profits and losses flow through directly to the owners.

Question 27

The permanent lender and the construction lender are the same parties in the construction project.

Question 28

Calls for bids are offers.

Question 29

Promissory estoppel is used to help subs force generals to use them in the project if their figures were used in the bid.

Question 30

A flow-down clause helps the general contractor get paid.

Question 31

A performance bond is used to protect the owner.

Question 32

In a cost-plus price formula, overhead is not included.

Question 33

Bids submitted by subs are offers.

Question 34

A general who uses a sub's bid in his project offer has accepted the sub's bid.

Question 35

A flow-down clause is a method of assuring payment to subs and suppliers.

Question 36

A bid bond will compensate an owner for damages if a contractor fails to perform at bid price.

Question 37

A performance bond requires the guarantor to complete a project if the covered contractor withdraws.

Question 38

Most courts recognize oral change orders in construction contracts.

Question 39

Change orders require that the contractor be paid additional compensation.

Question 40

The ADA does not apply to buildings built prior to 1988 that are not accessible to the disabled.

Question 41

REIT interests are not considered securities.

Question 42

A subchapter S corporation is a REIT.

Question 43

Planned unit developments can take the place of zoning restrictions.

Question 44

Equitable servitudes pass with the land.

Question 45

Impact fees are unconstitutional.

Question 46

Impact fees cannot be assessed except at the state level.

Question 47

Impact fees are not taxes or permit fees.

Question 48

Master-planned communities have experienced more blight from foreclosure than other types of developments.

Question 49

Planned unit developments include only homes and no amenities.

Question 50

Cities and towns can provide benefits for stalled developments if the cities and towns receive benefits in exchange.

Question 51

A subcontractor can retract a bid used in a general bid at any time.

Question 52

When developments become ghost developments there are federal grant programs to help get the development moving again.

Question 53

Impact fees can be assessed even when there is no reason given for their need.

Question 54

A pattern of development can result in a requirement that development continue to follow the pattern.

Question 55

The failure to enforce restrictive covenants can result in the loss of those protections.

Question 56

Common interest developments are joint efforts of cities and towns and developers.

Question 57

The downside of CIDs is that cities and towns often hold developers liable for the failure of their projects.

Question 58

HUD cannot provide federal money for local neighborhood stabilization programs.

Question 59

Gift clauses are restrictions imposed on helping developers by HUD.

Question 60

Oral change orders are the best way to handle modifications.

Question 61

Annexation is a means for obtaining governmental services for a planned development.

Question 62

Property developed without annexation to a city or town carries fewer regulations and restrictions.

Question 63

Ghost developments are failed developments.

Question 64

Ghost developments cannot be revitalized through zoning changes proposed by those who acquire the rights.

Question 65

FHA and VA approval is automatic if the developer has filed the required documents and disclosures under the ILSFDA.

Question 66

Saxon Construction is developing a subdivision of single- family homes. The real estate market has taken a down turn and Saxon has negotiated a sale of the final eight lots to Whister who will build a 300-unit apartment complex on the lots. There is a deed restriction for the area that limits construction to single-family dwellings. Saxon amends the deed restriction. Which of the following is correct?

A) Saxon cannot amend the deed restrictions
B) Saxon can amend the deed restrictions for those 8 lots
C) The apartments still fit the single-family dwelling description in the restriction
D) The issue is now a zoning issue, not a deed restriction issue

Question 67

Impact fees provide local governments with funds needed for different needs except:

A) Police.
B) Schools.
C) Fire departments.
D) Sports complex for a minor league baseball team.

Question 68

The city of Fredonia is requiring all developers who are proposing subdivisions to the city council to pay a one-time 1% of their contract costs as a fee for school and facilities expansion. Several contractors object to the fee.

A) The fee is unconstitutional
B) A percentage fee is unconstitutional
C) The fee is an impact fee and is valid
D) The fee cannot be used for building new facilities

Question 69

Planned unit development is:

A) The development of an entire community by a developer rather than simply a subdivision.
B) The development of a subdivision by a developer.
C) The development of a subdivision by the planning or zoning board.
D) The development of three types of housing in conjunction with a zoning master plan.

Question 70

A master-planned community:

A) Is unconstitutional.
B) Requires approval of the federal government.
C) May require negotiations with the planning or zoning board to get approval.
D) Involves eminent domain proceedings against developers.

Question 71

Which of the following forms of syndication exposes the investor to personal liability?

A) REIT
B) Partnership
C) Limited partnership
D) Corporation

Question 72

Which of the following will cause a limited partner to lose limited liability status?

A) Participation in discussions and voting on partnership decisions
B) Use of name in firm name
C) Contribution greater than other limited partners
D) Employment with the partnership

Question 73

Which of the following forms of business structure has limited investor liability?

A) General partnership
B) S Corporation
C) Sole proprietorship
D) A corporation in the process of approval

Question 74

In which of the following syndication forms can losses not be deducted by the investors?

A) REITs
B) Partnerships
C) Subchapter S corporations
D) Corporation

Question 75

Which of the following syndication forms pays taxes?

A) REITs
B) Partnerships
C) Corporations
D) Limited liability companies

Question 76

In which of the following do all investors have limited liability?

A) LLC
B) General partnership
C) Sole proprietorship
D) General partnership with one corporate partner

Question 77

Which of the following forms of syndication do not permit investors to recognize losses?

A) Partnership
B) Corporations
C) LLC
D) Limited partnerships

Question 78

The loss reporting mechanism for Subchapter S corporations is most like:

A) A partnership.
B) A corporation.
C) A REIT.
D) Subchapter S corporations do not recognize losses.

Question 79

Which element is required for a covenant to be enforceable?

A) The covenant had to touch and concern the land
B) The covenant must be a temporary restriction on the land
C) The covenant could be enforceable only against the grantor and the grantee
D) The covenant must be tied to a zoning requirement

Question 80

Which of the following constitute offers?

A) Calls for bids
B) Subs' bids to generals
C) Generals' bids to owners
D) City calls for proposals