Unit 4: Interests in Real Estate Test

1. Fee simple : The highest interest in real estate recognized by law in which the holder is entitled to all rights to the property by law

2. Remainder interest : The person named by the creator of a life estate to receive the property when the life estate ends.

1. Freehold estates last for a specified length of time, such as one year. (False)

2. Unlike other freehold estates, a life estate is not inheritable. It passes to future owners according to the provisions of the life estate. (Ture)

1. Easement : The right to use the land of another for a particular purpose, including the airspace above or a right-of-way across the land

2. Deed Restriction : Private rule that limits the use of the property and is binding to all grantees.

3. Lien : A charge against property providing security for a debt or an oblihation of the owner

4. License : A personal privilege to enter the land of another for a specific purpose; differs from an easement in that it can be terminated or canceled

5. Encum...

1. An encumbrance is not an estate, so it does NOT allow possession. (True)

2. Covenants, conditions, and restrictions (CC&Rs) are police powers that affect land use. (False)

Escheat

- Transfer to the state when an owner dies and no heir can be found

Police power

- Building codes

- Zoning

Eminent domain

- Taking private land through condermnation

1. Condemnation is the right of the government to acquire privately owned real estate for public use. Eminent domain is the process by which the government exercises this right, by either judicial or administrative proceedings. (False)

2. Escheat is a process by which the state may acquire privately owned real or personal property. (Ture)

Q : A property on Main Street that was formerly a retail store will become the site of a new city hall, made possible by the government's power of

A : eminent domain.
(Explanation : The answer is eminent domain. Eminent domain is the right of the government to acquire privately owned real estate for public use.)

Q : A person who has complete control of a parcel of real estate is said to own a
A : fee simple estate.
(Explanation : The answer is fee simple estate. The highest interest in real estate recognized by law is the fee simple or fee simple absolute estate, providing the holder all rights to the property.)

Q : A license is an example of a(n)

A : personal privilege.
(Explanation : The answer is personal privilege. A license is a personal, revocable right of use. It is temporary in that it can be withdrawn at will by the one who issued it.)

Q : A landowner has divided much of his land into smaller parcels and has recently sold a tract near a nature preserve that is landlocked and cannot be entered except through one of the other tracts. The buyer of that property will probably be granted what type of easement by court action?

A : Easement by necessity

(Explanation : The answer is easement by necessity. An easement by necessity arises when there is no ingress or egress (entry or exit) from one piece of property without crossing over a...)

Q : A person has permission from a property owner to hike on the owner's property during the autumn months. The hiker has

A : a license.

(Explanation : The answer is a license. Such permission given to an individual is personal, nontransferable, and can be withdrawn.)

Q : A property owner who has the legal right to use a neighbor's land holds a(n)

A : easement.

(Explanation : The answer is easement. An easement is a right of use or passage, not of ownership—nor is it is an example of encroachment or the exercise of police power.)

Q : A property owner dies without a will or lawful heirs. By what process does the property revert back to the government?

A : escheat

(Explanation : The answer is escheat. State laws provide for ownership to transfer, or escheat, to the state when an owner dies and leaves no heirs (as defined by state law) and there is no will or living trust instrument that directs how the real estate is to be distributed.)

Q : A statutory right that a family has in its residence is called

A : homestead.

(Explanation : The answer is homestead. A homestead is a legal life estate that ensures that the home (or part of it) is protected from creditors during the occupants' lifetime.)


Q : A homestead is a legal life estate in real estate that is

A : occupied as the family home.

(Explanation : The answer is occupied as the family home. In many states, a portion of the area or value of this land is protected or exempt from judgments for debts other than those secured by the property.)

Q : An owner conveys ownership of his residence to his church but reserves for himself a life estate in the residence. The future interest held by the church is a
A : remainder.
(Explanation : The answer is remainder. Until the owner dies, the church will have a remainder interest. The owner reserved for himself a life estate. The church may legally sell its future (remainder) interest, even during the lifetime of the life tenant.)

Q : An owner has a fence on his property. By mistake, the fence extends one foot over the lot line onto a neighbor's property. The fence is an example of a(n)

A : encroachment.

(Explanation : The answer is encroachment. To build over a property line is to encroach on the property of another.)

Q : An easement appurtenant

A : runs with the land.

(Explanation : The answer is runs with the land. An easement appurtenant can only be created if the adjacent properties have different owners. This easement runs with the land and transfers with the deed.)

Q : All of the following will terminate an easement EXCEPT

A : release of the right of easement to the dominant tenement.

(Explanation : The answer is release of the right of easement to the dominant tenement. An easement is terminated when the owner of the dominant tenement releases that right to the owner of the servient tenement.)

Q : Because a homeowner failed to pay the real estate taxes on time, the taxing authority imposed a claim against the homeowner's property. This claim is known as a(n)

A : lien.

(Explanation : The answer is lien. Unpaid real estate taxes are a lien on the property because they are a charge against the property that provides security for a debt or an obligation of the property owner.

Q : Condemnation is the process by which the government exercises the right of
A : eminent domain.
(Explanation : The answer is eminent domain. Condemnation is the process by which the government exercises the right of eminent domain.)


Q : Escheat is intended to prevent property being
A : ownerless or abandoned.

(Explanation : The answer is ownerless or abandoned. Escheat is intended to prevent property from being ownerless or abandoned.)

Q : One who has ownership rights of real estate that could continue forever and which provide that no other person can claim to be the owner of or have any ownership control over the property has

A : fee simple interest.

(Explanation : The answer is fee simple interest. Fee simple is an absolute ownership—an inheritable interest "with no strings attached." A life estate is noninheritable; fee on condition subsequent and determinable fees are both estates involving another person with an interest called "possibility of (either reverter or) re-entry.")

Q : Regulations that govern the use, occupancy, size, location, and construction of real estate also fall within the government's police
A : power
(Explanation : The answer is power. Regulations that govern the use, occupancy, size, location, and construction of real estate also fall within the government's police power.)

Q : The state's power to regulate land use is

A : not absolute.

(Explanation : The answer is not absolute. The state's power to regulate land use is not absolute, just like the rights of ownership.)

Q : The process by which government takes control of a property after the owner dies without a will or lawful heirs is
A : escheat.
(Explanation : The answer is escheat. Escheat is a process by which the state may acquire privately owned real or personal property. State laws provide for ownership to transfer, or escheat, to the state when an owner dies and leaves no heirs (as defined by the law) and there is no will or living trust instrument that directs how the real estate is to be distributed.)

Q : The right of a government body to take ownership of real estate for public use is called
A : eminent domain.
(Explanation : The answer is eminent domain. The right is eminent domain; the process by which the right is exercised is condemnation. Escheat and police power are other examples of government limitations on rights of private ownership.)

Q : The type of easement that is a right-of-way for a utility company's power lines is a(n)
A : easement in gross.

(Explanation : The answer is easement in gross. Easements in gross are individual rights to use someone's land, as in the case of the utility company. An easement in gross can be assigned, conveyed, and inherited.)

Q : Which of the following is NOT an example of governmental power?

A : Remainder

(Explanation : The answer is remainder. The four governmental powers that limit private rights to ownership of land are represented by the acronym PETE (police power, eminent domain, taxation, and escheat).

Q : Which of the following has an indeterminable duration?
A : Freehold estate
(Explanation : The answer is freehold estate. Freehold estates, which last an indeterminable length of time, include fee simple, defeasible fee, and life estates.)


Q : Which of the following is a legal life estate?
A : Homestead
(Explanation : The answer is homestead. Homestead rights are granted by statute in some states to provide some protection to debtors and their families against the execution of judgment liens on their homes by the action of unsecured creditors.)