6. PROPERTY OWNERSHIP (8%) Questions

Jenner purchased his first home, to which he'll have access forever, as far as he knows. Jenner owns a(n) _________. A. Estate for years B. Freehold estate C. Leasehold estate D. Ownership estate

- A FREEHOLD estate: implies ownership for an UNLIMITED amount of TIME. - the "free" refers to the ownership agreement being free of an end date.

Evan bought into a housing cooperative focused on cultural exchange. Each month the co-op residents have dinner meetings and share food and culture from their respective regions. When Evan made his purchase, he received a proprietary lease for his unit. What else did he receive? A. Contract of mortgage B. Deed C. Plat maps D. Shares in the cooperative corporation

- A co-op purchase isn't the same as a property purchase. - CO-OP OWNERS hold shares in the cooperative corporation, which are personal property. - They also receive a PROPRIETARY LEASE that allows them to use the property.

Vicky and Lee vacation in Cancun, Mexico, every year. They purchased the right to stay in a beach condo for the first two weeks in May, in perpetuity. They don't actually own a share of the unit. What did they purchase? A. Condo estate B. Cooperative unit C. Timeshare estate D. Timeshare use

- A timeshare estate is fee simple ownership, conveying all rights of ownership. - A timeshare use doesn't convey ownership, but simply the right to occupy the property for some given amount of time. --> D. Timeshare use

Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he's making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home? A. The chimenea on the back patio B. The area rug in the dining room C. The banker's lamps in the den D. The chandelier in the foyer

- Anything that is built in is likely real property. - Banker's lamps are simply plugged into outlets, so they are considered personal property. - Any overhead light fixtures, however, are usually hardwired in and are thus considered part of the real property. --> D. The chandelier in the foyer

Tiers in the rectangular government survey system are formed by ______. Parallel baselines Parallel principal meridians Parallel range lines Parallel township lines

- East-west lines of a survey, which are parallel to the baseline, are called township lines. - Township lines form strips of land known as tiers, and townships fall within these tiers.

Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that's 225 square feet. The 1,200-square-foot basement is finished. Bonnie's MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials? A. 2,400 B. 1,425 C. 2,850 D. 1,200

- Even without the 450-square-foot upper level, we can't add the main level and basement square footage, because Bonnie's MLS doesn't count below-grade square footage, so option A is out. - The total square footage of the property is 2,850, but we know that we have to eliminate the unfinished area and the basement, so option C is incorrect. - We know that we can't count the entire main floor because a 225-square-foot area is unfinished. - Option D is incorrect. Bonnie should report 1,425 square feet (450 + 1,200 - 225). Option B is correct. Only finished above-ground space should be counted in Bonnie's MLS listing. That means the square footage of the upper floor plus the main floor (minus the unfinished laundry area). Bonnie should report 1,425 square feet (450 + 1,200 - 225).

A seller client received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. If the property was 400' deep, what was the price per front foot of the property? A. $1335.67 B. $2,000.00 C. $598.95 D. $363.64

- First, find the square footage (5.5 x 43,560 = 239,580). - Then, 239,580 ÷ 400' = 598.95 front feet. - To find the price per front foot: $800,000 ÷ 598.95' = $1,335.67 per front foot.

Which of the following is NOT one of the five tests of a fixture? A. Method of accountability B. Agreement of the parties C. Relationship of the parties D. Adaptability of the item

- One mnemonic you can use for determining whether something is a fixture is the MARIA acronym. - The 5 tests are: + M: Method of ANNEXATION, + A: Adaptability of item, + R: Relationship of the parties, + I: Intention in item placement + A: Agreement of the parties. - When it comes to annexation and adaptability, remember that these are relative to the item you're considering. + Annexation: basically means how it's attached to the land or structure. + Adaptability: refers to whether removing the item will change how the land is used. --> When you look at the answer options here, the only one that isn't on the MARIA list is option A, method of accountability.

Sander and Ginny bought an old industrial site with plans to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property? A. Immobility B. Improvements C. Indestructibility D. Uniqueness

- Sander and Ginny bought the property because even though the structures (improvements) were falling down, the land itself had great value. -->This is an example of the indestructibility of land.

Sebastian owns a country house and vacations there every summer and on holiday weekends. As much as he'd like to will it to his niece when he passes, his ownership of the house ends when he dies. What type of estate does Sebastian own? A. Fee simple estate B. Free leasehold estate C. Life estate D. Remainder estate

- Sebastian has a fee simple estate, but it's a very special kind of fee simple estate that ends when the owner dies. It's only applicable while the owner is alive. - And that's your hint right there: it's only good during Sebastian's LIFETIME, which makes this a LIFE ESTATE.

Regina purchases a farm with 80 acres and owns her property in severalty. What does this mean for the company that purchased the mineral rights from the previous owner? A. Regina and the company that purchased the mineral rights are automatically tenants in common, since they share ownership of the property. B. Regina didn't purchase the mineral rights, which have been severed from the property by the previous owner. C. Regina included the mineral rights in her purchase agreement, since she could not otherwise own the property in severalty. D. Regina is the sole owner, and the company must accept a fractional portion of the sales price in return for forfeiting the mineral rights.

- Since the previous owner severed the mineral rights from the property, those rights aren't included in her purchase. - This doesn't affect her ownership of the property in fee simple absolute or her ability to hold title in severalty. --> B. Regina didn't purchase the mineral rights, which have been severed from the property by the previous owner.

subdivision plat

- This description method uses lot-and-block numbers (aka plat or subdivision) that are recorded in a plat book in the applicable county's registry of deeds. - In urban areas, this is the most common method of describing property. - begins with a licensed surveyor or engineer designing a plat map where the land is divided into numbered or lettered blocks (lots) of land, and streets and public access roads are included. - The sizes and other details must be shown completely on the plat map, which must also follow all local requirements and ordinances. - Once the subdivision plat is signed and approved, it must be recorded in the county where that land is located. The plat must be recorded in the public records to qualify as a legally acceptable property description.

Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto his neighbor's lot by a few feet. Kurt owns the ________ estate or tenement. A. Dominant B. Gross C. Prescriptive D. Servient

- Two of the terms here are types of easements, while two others represent the types of estates involved in a given easement. - The correct answer isn't going to be a type of easement—it's going to be an estate. - Think about the 2 main categories of EASEMENTS: + an easement Prescriptive PRESCRIPTIVE: One is granted to a specific piece of property, + an easement in GROSS: is granted to a specific individual or business. This means that options C & B aren't the correct answers. - Now see if you can remember the two types of estates. Here's a hint: One sounds like "dominate" and the other sounds like "serve." Yep, either A or D is the correct answer here. But how do you remember which is which? One easy way is to think about which property serves the other: + the one that SERVES is the SERVIENT estate + the one that BENEFITS is the DOMINANT estate. --> In this case, Kurt is the one who benefits, so his property is the dominant estate, or tenement.

Metes and Bounds Description

- the primary method of legal description in the original 13 colonies, which include North Carolina. - use BOUNDARIES & MEASUREMENTS of the land (of the subject property) to describe the property's dimensions. - The measurement begins at the Point Of Beginning (POB), and follows around the boundaries of the land tract by referring to calls, which are linear measurements and compass directions. Each of these calls begins with the cardinal direction (either "north" or "south") and then the number of degrees east or west based on the surveyor's compass readings. It ends where it began, at the POB.

Tenancy in Common

A form of concurrent ownership with unity possession only. It does not have the other unities that joint tenancy has. There is no automatic writer survivorship, so you could wheelchair HEIRS. EX: If Bob took a property with Bill in this type of ownership. When Bob dies, Bod's heirs could get the property because Bill wouldn't have the right of survivorship It would be a much more appropriate relationship if you're taking the property with a corporation

Which statement is true regarding the rights and duties of landlords and tenants when it comes to leases? A. A landlord must honor a prospective tenant's requested change and document it in writing. B. Oral and written lease agreements equally protect the tenant and the landlord. C. Tenants can be excused from honoring a lease if they didn't understand or read it before they signed. D. A lease signed by both parties is a binding legal contract, and any party who defaults on the terms can be sued

A lease signed by both parties is a legal, binding contract. Either party can be sued if they default on the terms.

Joint Tenancy

A type of concurrent ownership with unities of time, title, interest, and possession by two or more parties. It is the right to survivorship, meaning if 1 owner dies, the survivor(s) continuing to hold all such property and take the remaining interest. EX: If Bob and Bill have this type of ownership together. When Bob dies, Bill gets the property. Bob can't will it to his heirs. For that same reason, you should not take this type of ownership with a corporation because corporations don't die, so the writer survivorship theory would not really work well with a corporation

Because of the topography of their yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What is Elsie's fence? A. Easement in gross B. Encroachment C. Servient estate D. Visible easement

An encroachment: is a fixed intrusion onto another person's property, which is exactly what is happening here with Elsie's fence.

Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own? A. Apartment B. Condominium C. Cooperative D. Townhouse

Ownership of a CONDO is real property ownership, but only of the unit and the space inside the unit, as well as shared ownership of common areas.

Sandra and Dwight are neighbors who share a common driveway, but the driveway is on Dwight's property. What kind of ownership rights does Dwight have of the driveway? Absolute Non-possessory Possessory Temporary

Possessory: the driveway is on Dwight's property

Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing they did when they surveyed the new neighborhood was to reference what type of description first? A. Plat book B. Metes and bounds description C. Monument D. Map

The lot and block survey system always uses one of two things as a beginning reference: - a rectangular government survey - a metes and bounds description.

Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for? Acceptability of the fixture and agreement of the parties Adaptability of item and accessibility to the property Adaptability of item to land's use and agreement of the parties Allowable use and acceptable use

The two As in MARIA stand for: - Adaptability of the item to the land's use - Agreement of the parties.

Jackie was sued in civil court by one of her creditors. As a result of the judgment against her, her house, car, and art collection are all subject to sale in order to pay the creditor. What type of lien is this? A. General B. Special assessment C. Vendor's D. Voluntary

There are two different ways in which liens can be classified. The first is as a voluntary lien or an involuntary one. - Voluntary liens: ones in which the property owner agrees to have the lien placed—as in taking out a mortgage. - Involuntary liens: can be classified are as specific or general. + Specific liens: attach to a specific piece of property. + General liens: attach to all of an individual's real and personal property. - In Jackie's case, she didn't agree to the judgment, so this isn't a voluntary lien. Answer D isn't correct. - A vendor's lien doesn't apply here, because it refers only to liens placed by contractors who provided goods or services to the property. Answer C isn't correct. - A special assessment is levied by a taxing body, so option B isn't correct. --> That leaves option A, a general lien. This is the type of lien against Jackie's property, as it's against her real AND her personal property.

Beth is considering buying the one and only geodesic dome in her town and turning it into a writer's retreat. The price is a good bit more than she wanted to pay, and the appraiser is having trouble finding good comparables. What physical characteristic of land has likely driven up the price of the property? A. Immobility B. Indestructibility C. Scarcity D. Uniqueness

Think about whether a geodesic dome is immobile, indestructible, or unique. - You could tear down or move a geodesic dome, so options A and B aren't right. - A geodesic dome is definitely unique, so option D is the correct answer.

LaTonya's aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya's sister was even married there. That's why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property? A. Control B. Disposition C. Exclusion D. Possession

This question requires you to distinguish between various ownership rights that are all part of the real estate bundle of rights. Let's look at each one in turn. - CONTROL: is the right to MANAGE the property. - DISPOSITION: is the right to CONVEY the property. - EXCLUSION: is the right to decide who may or may not ACCESS the property. - POSSESSION: is the right to OCCUPY the property. --> In this scenario LaTonya is going to sell the property, which is a conveyance. Option B, disposition, is the correct answer.

Which physical characteristic of land addresses the concept that land isn't interchangeable and one piece of land isn't exactly like another? Immobility Indestructibility Permanence of investment Uniqueness

Uniqueness: - land isn't interchangeable - one piece of land isn't exactly like another

A broker is teaching newly hired salespersons the correct way to complete a listing agreement form. The broker is attempting to show the value of putting the correct property address on the listing. The BEST visual aid to help them learn how to do so accurately would be:

a subdivision plat.

The main difference between tenancy in common & joint tenancy is that with tenancy in common when a co-owner dies,

his undivided interest passes to his heirs

An easement can be terminated by

merger of titles

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow 1 of 2 basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of

prior appropriation

Prior appropriation

says that the first party to physically take water from a source and put it to beneficial household, agricultural, or industrial use will continue to have a claim to the water.

A broker hires a salesperson as an independent contractor. In order for the salesperson to be considered an independent contractor for federal income tax purposes, the broker's written contract with the salesperson MUST specify

that the salesperson will not be treated as an employee for federal income tax purposes.

rectangular (government) survey system

the original 13 colonies, which include North Carolina does NOT use it of legal description.

Legal descriptions using the government survey system are NOT generally used in

the original 13 states