Nominee

### What is the primary role of a nominee in real estate transactions? - [x] To act temporarily on behalf of another person - [ ] To own the property permanently - [ ] To finance the real estate purchase - [ ] To manage real estate properties > **Explanation:** A nominee acts temporarily on behalf of another person, holding property rights and representing the actual owner. ### Can a nominee be held personally liable for a mortgage on the property they hold? - [ ] Yes, always - [x] No, generally, they are not personally liable if the mortgage contract specifies - [ ] Not unless stated otherwise in the deed - [ ] Only if the property value depreciates > **Explanation:** Generally, if a nominee holds property "subject to" a mortgage, they are not personally liable for the mortgage but the property serves as collateral. ### Is a nominee responsible for paying property taxes? - [ ] No, they have no financial responsibilities - [ ] It depends on state laws - [x] Yes, typically they are expected to fulfill provisional responsibilities - [ ] Only if the principal defaults > **Explanation:** While a nominee may not be ultimately liable for financial obligations, they often manage the full scope of property responsibilities, including taxes, temporarily. ### Which documentation formally recognizes a nominee’s role in property transactions? - [ ] Lease Agreement - [ ] Property Lease - [x] Deed or Nominee Agreement - [ ] Mortgage Application > **Explanation:** A deed or nominee agreement formally acknowledges the individual's temporary custodianship over the property. ### What must be included in the legal documentation when property is transferred to a nominee? - [x] Terms defining the nominee’s temporary role - [ ] Exclusive ownership rights to the nominee - [ ] Details on mortgage repayments - [ ] References to previous owners > **Explanation:** Legal documentation must clearly define the nominee's temporary role, establishing transparency and agreement on the terms. ### What is a common reason for utilizing a nominee in property transactions? - [ ] Financial convenience - [ ] To avoid paying taxes - [x] To ensure confidentiality or simplification of a transaction - [ ] Nominees increase property value > **Explanation:** Often, nominees are used to maintain confidentiality or simplify specific transactions processes. ### Can a nominee sue for ownership rights of the property they hold? - [ ] Yes, if they can prove possession over time - [ ] Only if they occupy the property for several years - [x] No, their role is predetermined as temporary and representative - [ ] Yes, after paying off any debts attached to the property > **Explanation:** The nominee’s role is understood to be representative and temporary, and not to transition to full ownership rights. ### What is the principal advantage of using a nominee for an investor? - [ ] Enhances property value - [ ] Provides financial incentives - [x] Grants confidentiality and often streamlines the transaction process - [ ] Guarantees low-interest rates > **Explanation:** An investor benefits primarily from the confidentiality and streamlined processes provided by engaging a nominee. ### What outlines the legal agreement between a nominee and the principal? - [ ] Mortgage Statement - [x] Nominee Agreement - [ ] Utility Bills - [ ] Property Tax Receipts > **Explanation:** A Nominee Agreement outlines the terms and the extent of the nominee's fiduciary responsibility towards the principal. ### How does acting as a nominee affect a person's credit score? - [ ] It always positively impacts it - [ ] There is no effect - [x] The nominee not being financially liable means no direct effect on their credit score - [ ] It generally lowers it > **Explanation:** As nominees are not financially liable for any repayment under the mortgage unless specified otherwise, their credit score is typically unaffected.