Chapter 2: Estates in Real Property and Forms of Ownership

A deed in which the grantor states, "To Paul Grey for his life, and then to Sean Casey" creates what type of interest for Sean Casey?

an estate in remainder When a grantor stipulates that the property will go to a person other than the grantor at the end of the measuring life, the other person has an estate in remainder and is known as the remainderman.

A leasehold estate for a fixed term is an:

estate for years. An estate for years is any leasehold estate that has a fixed term of tenancy, e.g. a week, a month, six months, etc.

The highest and most complete form of ownership estate in land is called:

fee simple absolute estate. Fee simple absolute is the highest and most complete form of ownership.

An estate that can be voluntarily transferred by a will is a:

fee simple estate. What distinguishes a fee simple estate from all others is that it may be transferred by a will.

The type of concurrent ownership that requires unity of interest, unity of title, unity of time, and unity of possession that includes the right of survivorship is known as:

joint tenancy. In a community property state, each spouse has the right to will their 50% ownership interest to someone other than their spouse, and a tenancy in common has no right of survivorship. Therefore, joint tenancy is the only correct answer.

Reversion, as applied to life estates, means the property:

returns to the grantor. Reversion always refers to the property reverting or returning to the grantor of the life estate. The grantor's interest in the property is known as an interest in reversion.

In California, condominium projects are generally regulated as:

subdivisions. To establish a condominium, a developer must record a condominium plan and declaration. The rules and regulations establishing a condominium are generally quite similar to those rules and regulations that apply to the creation of subdivisions.

All of the following statements are true regarding condominiums, EXCEPT:

the seller's interest in common elements will be sold separately from the unit. A condominium owner's interest in the common elements always transfers automatically to the purchaser upon the sale of the unit.

Which following statement(s) are true regarding cooperatives?

A corporation owns the whole project and the persons who occupy the individual units are shareholders with a tenancy right to a particular unit under a proprietary lease. The shares purchased by a cooperative unit possessor are personal property. The interests of the shareholder in the unit are possessory rights under a proprietary lease. One blanket mortgage is taken out by the corporation for the entire project with the payments financed by the long term purchase of shares. Thus, a defaulting payment on the purchase of shares renders a portion of the underlying blanket loan in default which must be cured by the remaining tenants or shareholders.

When an apartment building is converted to a condominium, which of the following is TRUE?

Each apartment tenant must be given 180 days notice of the conversion. One regulation designed to protect the current tenants when an apartment building is converted to a condominium project requires that each tenant must be given 180 days' written notice of the conversion.

Which one of the following is NOT a characteristic of a fee simple estate?

It is free of all encumbrances. A fee simple estate may be freely encumbered. It does not have to be free of all encumbrances.

A type of partnership created for a single transaction or series of transactions is known as a:

Joint Venture. Joint ventures are formed for a single or series of individual business transactions. It is not intended to be a relationship of indefinite duration.

Which statement about a corporation is FALSE?

Shareholders in a corporation are personally liable for corporate debt. Individual shareholders in a corporation share in the profits but have no personal liability for corporate debt.

Which of the following statements concerning a life estate is false?

The duration of a life estate is always the governing lifetime of the life tenant. The duration of a life estate can be the lifetime of any individual named by the grantor. It does not need to be the lifetime of the life tenant.

A Real Estate Investment Trust (REIT):

avoids double taxation as long as at least 90% of its income is distributed to the shareholders who pay tax on the income. is an unincorporated syndicate to finance large real estate projects. involves one or more trustees who manage property for others, who are called beneficiaries. All of the above

In California, unless otherwise provided for, married couples will take title to real property as:

community property. California is a community property state and, as such, all property acquired during the marriage is community property except property acquired by inheritance, will, or gift.

An ownership interest in real property that has an indefinite (indeterminable) duration is known as a:

fee simple absolute. The fee simple estate is of indefinite duration. The word "absolute" describes how the owner's title is vested in the deed. The fee simple absolute is a type of freehold estate, but not every freehold estate has an indefinite period (e.g., a life estate).

Condominium ownership means that an owner:

owns the space within his/her unit and owns the surrounding common areas as a tenant in common with the other unit owners. In a condominium, the interior space within each unit is owned by each individual owner in fee simple. The common spaces, such as the buildings themselves, parking, elevators, recreation areas and so forth are owned as tenants in common with all other unit owners.

The most basic form of concurrent ownership for unmarried persons recognized in California is:

tenancy in common. Any two unmarried persons with an undivided interest in a property but retain the right to will the interest to another take title to the property as tenants in common

Ownership in severalty occurs when:

the property is owned by only one person. Ownership in severalty is ownership by one person to the exclusion of all others, or "severed" from the ownership of all others.